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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
ENTRAVISION COMMUNICATIONS CORPORATION
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(Name of Registrant as Specified In Its Charter
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[LOGO] ENTRAVISION COMMUNICATIONS
-----------------
NOTICE OF 2002 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 2002
To our Stockholders:
You are cordially invited to attend the 2002 Annual Meeting of Stockholders
(the "2002 Annual Meeting") of Entravision Communications Corporation (the
"Company"), which will be held at The Fairmont Miramar Hotel Santa Monica, 101
Wilshire Boulevard, Santa Monica, California 90401, at 10:00 a.m. on Thursday,
May 16, 2002 for the purposes of considering and voting upon:
1. A. A proposal for the Class A and Class B common stockholders to elect
eight directors to the Board of Directors of the Company (the "Board").
B. A proposal for the Class C common stockholders to elect two
directors to the Board.
2. A proposal to ratify the appointment of McGladrey & Pullen, LLP as
independent auditors of the Company for the fiscal year ending December 31,
2002.
These matters are described more fully in the Proxy Statement accompanying
this notice.
The stockholders of the Company will also act upon such other business as
may properly come before the meeting or any adjournment or postponement
thereof. The Board is not aware of any other business to be presented to a vote
of the stockholders at the 2002 Annual Meeting.
The Board fixed the close of business on April 8, 2002 as the record date
(the "Record Date") for determining those stockholders who will be entitled to
notice of and to vote at the 2002 Annual Meeting. The stock transfer books will
remain open between the Record Date and the date of the 2002 Annual Meeting.
Representation of at least a majority in voting interest of the Class A
common stock and the Class B common stock of the Company either in person or by
proxy is required to constitute a quorum for purposes of voting on Proposal 1A.
Representation of at least a majority in voting interest of the Class C common
stock of the Company either in person or by proxy is required to constitute a
quorum for purposes of voting on Proposal 1B. Representation of at least a
majority in voting interest of the Class A common stock, Class B common stock
and Class C common stock of the Company either in person or by proxy is
required to constitute a quorum for the purposes of voting on Proposal 2.
Accordingly, it is important that your shares be represented at the 2002 Annual
Meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE 2002 ANNUAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED
ENVELOPE. Your proxy may be revoked at any time prior to the time it is voted
at the 2002 Annual Meeting.
Please read the accompanying proxy material carefully. Your vote is
important and the Company appreciates your cooperation in considering and
acting on the matters presented.
By Order of the Board of Directors,
/s/ WALTER ULLOA
Walter F. Ulloa
Chairman and Chief Executive Officer
April 16, 2002
Santa Monica, California
Stockholders Should Read the Entire Proxy Statement
Carefully Prior to Returning Their Proxies
-----------------
PROXY STATEMENT
FOR
2002 ANNUAL MEETING OF STOCKHOLDERS
OF
ENTRAVISION COMMUNICATIONS CORPORATION
To Be Held on May 16, 2002
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Entravision Communications Corporation
("Entravision" or the "Company") of proxies to be voted at the 2002 Annual
Meeting of Stockholders (the "2002 Annual Meeting"), which will be held at
10:00 a.m. on May 16, 2002 at The Fairmont Miramar Hotel Santa Monica, 101
Wilshire Boulevard, Santa Monica, California 90401, or at any adjournments or
postponements thereof, for the purposes set forth in the accompanying Notice of
2002 Annual Meeting of Stockholders (the "Notice"). This Proxy Statement and
the proxy card are first being delivered or mailed to stockholders on or about
April 16, 2002. The Company's 2001 Annual Report to Stockholders and the
Company's Annual Report for the year ended December 31, 2001 on Form 10-K
(the "10-K") are being mailed to stockholders concurrently with this Proxy
Statement. Neither the Company's 2001 Annual Report to Stockholders nor the
10-K are to be regarded as proxy soliciting material or as a communication by
means of which any solicitation of proxies is to be made.
VOTING RIGHTS AND SOLICITATION
The close of business on April 8, 2002 was the record date (the "Record
Date") for stockholders entitled to notice of and to vote at the 2002 Annual
Meeting. As of the Record Date, Entravision had 70,023,078 shares of Class A
common stock, par value $0.0001 per share, 27,678,533 shares of Class B common
stock, par value $0.0001 per share, and 21,983,392 shares of Class C common
stock, par value $0.0001 per share, issued and outstanding. All of the shares
of the Company's common stock outstanding on the Record Date are entitled to
vote at the 2002 Annual Meeting. Holders of the Class A common stock and the
Class C common stock of record entitled to vote at the 2002 Annual Meeting will
have one vote for each share of Class A common stock and Class C common stock
so held with regard to each matter to be voted upon by such stockholders.
Holders of the Class B common stock of record entitled to vote at the 2002
Annual Meeting will have ten votes for each share of Class B common stock so
held with regard to each matter to be voted upon by such stockholders.
All votes will be tabulated by the inspector of elections appointed for the
2002 Annual Meeting, who will separately tabulate affirmative and negative
votes, abstentions and broker non-votes.
The holders of a majority in voting interest of the Class A common stock,
Class B common stock and Class C common stock outstanding and entitled to vote
at the 2002 Annual Meeting shall constitute a quorum for the transaction of
business at the 2002 Annual Meeting. The holders of a majority in voting
interest of the Class A common stock and the Class B common stock outstanding
and entitled to vote at the 2002 Annual Meeting shall constitute a quorum for
purposes of voting on Proposal 1A. The holders of a majority in voting interest
of the Class C common stock outstanding and entitled to vote at the 2002 Annual
Meeting shall constitute a quorum for purposes of voting on Proposal 1B.
The voting interest of shares of the Class A common stock, Class B common
stock and Class C common stock represented in person or by proxy will be
counted for purposes of determining whether a quorum is present at the 2002
Annual Meeting. Shares which abstain from voting as to a particular matter will
be treated as shares that are present and entitled to vote for purposes of
determining the voting interest present and entitled to vote with respect to
any particular matter, but will not be counted as votes cast on such matter. If
a broker or nominee holding stock in "street name" indicates on a proxy that it
does not have discretionary authority to vote as to a particular matter, those
shares will not be considered as present and entitled to vote with respect to
such matter and will not be counted as a vote cast on such matter.
1
In voting with regard to the proposals to elect directors (Proposals 1A and
1B), stockholders may vote in favor of all the nominees, withhold their votes
as to all nominees or withhold their votes as to a specific nominee. The vote
required by Proposals 1A and 1B is governed by Delaware law and is a plurality
of the votes cast by the holders of shares entitled to vote, provided a quorum
is present. As a result, in accordance with Delaware law, votes that are
withheld and broker non-votes will not be counted and will have no effect on
the voting for election of directors. Pursuant to a Voting Agreement dated
effective as of August 3, 2000 among Walter F. Ulloa, Philip C. Wilkinson, Paul
A. Zevnik and Entravision (the "Voting Agreement"), Messrs. Ulloa, Wilkinson
and Zevnik have agreed to vote all shares held by them in favor of the election
of Messrs. Ulloa, Wilkinson and Zevnik and Darryl B. Thompson as Class A/B
Directors. Messrs. Ulloa, Wilkinson and Zevnik have in the aggregate the right
to cast 79.81% of the votes entitled to be cast in the election of each of
Messrs. Ulloa, Wilkinson, Zevnik and Thompson as the Class A/B Directors.
In voting with regard to the proposal to ratify the appointment of
independent auditors (Proposal 2), stockholders may vote in favor of the
proposal or against the proposal or may abstain from voting. The vote required
to approve Proposal 2 is governed by Delaware law, and the minimum vote
required is a majority of the total votes cast on the proposal, provided a
quorum is present. As a result, in accordance with Delaware law, abstentions
and broker non-votes will not be counted and will have no effect. Pursuant to
the Voting Agreement, Mr. Zevnik has agreed to cast his votes in the same
manner as both Messrs. Ulloa and Wilkinson on matters, other than the election
of directors, solely in instances when both Messrs. Ulloa and Wilkinson vote
either affirmatively or negatively. In any instance in which Messrs. Ulloa and
Wilkinson vote their shares in different manners, Mr. Zevnik will be free to
vote his shares as he chooses. Messrs. Ulloa, Wilkinson and Zevnik have in the
aggregate the right to cast 75.06% of the votes entitled to be cast on Proposal
2.
Under the rules of the New York Stock Exchange (the "Exchange") that govern
most domestic stock brokerage firms, member brokerage firms that hold shares in
"street name" for beneficial owners may, to the extent that such beneficial
owners do not furnish voting instructions with respect to any or all proposals
submitted for stockholder action, vote in their discretion upon proposals which
are considered "discretionary" proposals under the rules of the Exchange.
Member brokerage firms that have received no instructions from their clients as
to "non-discretionary" proposals do not have discretion to vote on these
proposals. Such broker non-votes will not be considered in determining whether
a quorum exists at the 2002 Annual Meeting and will not be considered as votes
cast in determining the outcome of any proposal.
Shares of the Company's common stock represented by proxies in the
accompanying form which are properly executed and returned to the Company will
be voted at the 2002 Annual Meeting in accordance with the stockholders'
instructions contained therein. In the absence of contrary instructions, shares
represented by such proxies will be voted FOR Proposals 1A or 1B, as
applicable, and Proposal 2. Management does not know of any matters to be
presented at the 2002 Annual Meeting other than those set forth in this Proxy
Statement and in the Notice accompanying this Proxy Statement. If other matters
should properly come before the 2002 Annual Meeting, the proxyholders will vote
on such matters in accordance with their best judgment.
Any stockholder has the right to revoke his, her or its proxy at any time
before it is voted at the 2002 Annual Meeting by giving written notice to the
Secretary of the Company, and by executing and delivering to the Secretary a
duly executed proxy card bearing a later date, or by appearing at the 2002
Annual Meeting and voting in person; provided, however, that under the rules of
the Exchange, any beneficial owner whose shares are held in "street name" by a
member brokerage firm may revoke his, her or its proxy and vote his, her or its
shares in person at the 2002 Annual Meeting only in accordance with the
applicable rules and procedures of the Exchange.
The entire cost of soliciting proxies will be borne by the Company. Proxies
will be solicited principally through the use of the mails, but, if deemed
desirable, may be solicited personally or by telephone, or special letter by
officers and regular Company employees for no additional compensation. In
addition, the Company has retained Mellon Investor Services, LLC, its transfer
agent, to assist in the solicitation of proxies. The Company will bear all
reasonable solicitation fees and expenses of Mellon Investor Services, LLC.
Arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to send proxies and proxy material to the beneficial owners of
the Company's common stock, and such persons may be reimbursed for their
expenses.
2
PROPOSAL 1
ELECTION OF DIRECTORS
Composition of Board of Directors
The Company's Second Amended and Restated Bylaws provide that the Board
shall consist of not less than seven and not more than eleven directors. The
Board currently consists of ten members, eight of whom are elected by the
holders of the Class A and Class B common stock voting together as a class, and
two of whom are elected by the holders of the Class C common stock.
The Company's directors are elected by the stockholders at each annual
meeting of stockholders and will serve until their successors are elected and
qualified, or until their earlier resignation or removal. There are no family
relationships among any of the current directors, the nominees for directors
and executive officers of the Company.
The proxyholders named on the proxy card intend to vote all proxies received
by them in the accompanying form FOR the election of the Class A/B nominees and
the Class C nominees listed below, unless instructions to the contrary are
marked on the proxy. These nominees have been selected by the Board. All of the
nominees are currently members of the Board. If elected, each nominee will
serve until the annual meeting of stockholders to be held in 2003 or until his
or her successor has been duly elected and qualified.
In the event that a nominee is unable or declines to serve as a Class A/B
director at the time of the 2002 Annual Meeting, the proxies will be voted for
any nominee who shall be designated by the present Board to fill the vacancy.
In the event that a nominee is unable or declines to serve as a Class C
director at the time of the 2002 Annual Meeting, the proxies will be voted for
a nominee who shall be designated by the holders of a majority in voting
interest of the Class C common stock or the remaining Class C director to fill
the vacancy. In the event that additional persons are nominated for election as
directors, the proxyholders intend to vote all proxies received by them for the
nominees listed below, unless instructions are given to the contrary. As of the
date of this Proxy Statement, the Board is not aware of any nominee who is
unable or will decline to serve as a director.
PROPOSAL 1A
ELECTION OF CLASS A/B DIRECTORS
The following is certain information as of April 8, 2002 regarding the
nominees for election as Class A/B directors.
Nominees for Election as Class A/B Directors
Name Position Age
---- -------- ---
Walter F. Ulloa Chairman and Chief Executive Officer 53
Philip C. Wilkinson President, Chief Operating Officer and Director 45
Paul A. Zevnik Secretary and Director 51
Darryl B. Thompson Director 40
Amador S. Bustos Director 51
Michael S. Rosen Director 41
Esteban E. Torres Director 72
Patricia Diaz Dennis Director 55
3
Biographical Information Regarding Class A/B Directors
Walter F. Ulloa. Mr. Ulloa, the Chairman and Chief Executive Officer of
Entravision since its inception in 1996, has over 25 years of experience in
Spanish-language television and radio in the U.S. From 1989 to 1996, Mr. Ulloa
was involved in the development, management or ownership of the predecessor
entities to Entravision. From 1976 to 1989, he worked at KMEX-TV, Los Angeles,
California, as operations manager, production manager, news director, local
sales manager and an account executive. Mr. Ulloa has been a director since
February 2000.
Philip C. Wilkinson. Mr. Wilkinson, the President and Chief Operating
Officer of Entravision since its inception in 1996, has over 20 years of
experience in Spanish-language television and radio in the U.S. From 1990 to
1996, Mr. Wilkinson was involved in the development, management or ownership of
the predecessor entities to Entravision. From 1982 to 1990, he worked at the
Univision television network and served in the positions of account executive,
Los Angeles national sales manager and West Coast sales manager. Mr. Wilkinson
has been a director since February 2000.
Paul A. Zevnik. Mr. Zevnik has been the Secretary of Entravision since its
inception in 1996. From 1989 to 1996, Mr. Zevnik was involved in the
development, management or ownership of the predecessor entities to
Entravision. Mr. Zevnik is a partner in the Washington, D.C. office of the law
firm of Zevnik Horton LLP. Mr. Zevnik has been a director since August 2000.
Darryl B. Thompson. Mr. Thompson has been a partner of TSG Capital Group,
L.L.C. since 1993. Mr. Thompson serves on the Board as a representative of TSG
Capital Fund III, L.P. Mr. Thompson also serves on the boards of directors of
several public and private companies, including Urban Brands, Inc., Telscape
International, Inc. and Millennium Digital Media Holdings, L.L.C. Mr. Thompson
has been a director since August 2000.
Amador S. Bustos. Mr. Bustos served as the President of our Radio Division
from August 2000, when Entravision acquired Z-Spanish Media Corporation
("Z-Spanish Media"), until December 31, 2000. From November 1992 until August
2000, Mr. Bustos served as Chairman, Chief Executive Officer and President of
Z-Spanish Media or one of its predecessors. From December 1979 until September
1992, Mr. Bustos held various positions, including general sales manager,
senior account executive and community affairs coordinator, at several radio
stations and a television station in the San Francisco bay area. Mr. Bustos has
been a director since August 2000.
Michael S. Rosen. Mr. Rosen has served as Chairman of our Audit Committee
since November 2000. From July 2001 to present, Mr. Rosen has served as
Chairman and Chief Investment Officer of Context Capital Management, LLC. Mr.
Rosen has also been serving as the Manager of the general partner of Context
Convertible Arbitrage Fund, L.P. since November 2001 to present. He is a board
member of the United Jewish Federation of San Diego. From January 1996, when
The Rochester Funds were acquired by Oppenheimer Funds, Inc., to February 2000,
Mr. Rosen served as President of The Rochester Division of Oppenheimer Funds,
Inc. Prior thereto, Mr. Rosen was President of Rochester Fund Distributors,
Inc., a broker/dealer and principal underwriter of The Rochester Funds and
Managing Director and Portfolio Manager of Rochester Capital Advisors, LP. Mr.
Rosen is a chartered financial analyst. Mr. Rosen has been a director since
November 2000.
Esteban E. Torres. Mr. Torres is currently a consultant for the National
Latino Media Council. In 1999, he was appointed by California Governor Gray
Davis to serve on the California Transportation Commission, which is charged
with overseeing the funding of California's transportation projects. In March
1998, Mr. Torres announced his retirement after a distinguished 16 year career
in the U.S. House of Representatives. Throughout his service as a Congressman,
Mr. Torres has been an active and distinguished leader. From 1992 to 1998, he
served as a Deputy Democratic Whip. He has served as a senior member of the
House Banking Committee and chaired the House Banking Subcommittee on Consumer
Affairs and Coinage. Mr. Torres is a nationally
4
recognized environmental leader, former Ambassador to the United Nations
Education, Scientific and Cultural Organization and served as Special Assistant
to the President for Hispanic Affairs under President Jimmy Carter. Mr. Torres
has been a director since November 2000.
Patricia Diaz Dennis. Patricia Diaz Dennis has been Senior Vice President
of Regulatory and Public Affairs for SBC Communications Inc. ("SBC") since
November 1998. Ms. Dennis serves on the boards of directors of MassMutual/The
Blue Chip Company, UST Inc., Girl Scouts of the USA, Foundation for Women's
Resources and Bexar County Women's Bar Association. Ms. Dennis is also a
trustee for the Radio and Television News Directors Foundation and The Tomas
Rivera Policy Institute. Before joining SBC, Ms. Dennis was appointed to three
federal government positions. Ms. Dennis was named a member of the National
Labor Relations Board by former President Ronald Reagan. Later, President
Reagan appointed Ms. Dennis as a commissioner of the Federal Communications
Commission (the "FCC") where she served from 1986 until 1989. From 1989 to
1991, Ms. Dennis made a brief departure from public service and joined the law
firm of Jones, Day, Reavis & Pogue, where she served as a partner and the head
of the communications department. In 1992 Ms. Dennis left Jones, Day and
returned to public service when she was appointed by former President George
Bush as assistant secretary of state for human rights and humanitarian affairs.
Ms. Dennis has been a director since July 2001.
PROPOSAL 1B
ELECTION OF CLASS C DIRECTORS
The following is certain information as of April 8, 2002 regarding the
nominees for election as Class C directors.
Nominees for Election as Class C Directors
Name Position Age
---- -------- ---
Andrew W. Hobson Director 40
Michael D. Wortsman Director 54
Biographical Information Regarding Class C Directors
Andrew W. Hobson. Mr. Hobson is an Executive Vice President of Univision
Communications Inc. ("Univision"). From 1993 through March 2001, Mr. Hobson was
an Executive Vice President of the Univision television network. Mr. Hobson has
been a director since August 2000.
Michael D. Wortsman. Mr. Wortsman is the Co-President of Univision
Television Group Inc. Before holding this position, Mr. Wortsman served as the
Executive Vice President of Corporate Development for Univision Television
Group Inc. from 1993 to 1996. Mr. Wortsman has been a director since August
2000.
BOARD MEETINGS AND COMMITTEES
The Board held a total of eight meetings and acted by written consent one
time during the 2001 fiscal year. The Board has an Audit Committee and a
Compensation Committee. Univision, the holder of our Class C common stock, has
the right to appoint one member to each of these committees.
The Audit Committee operates under a written charter adopted by the Board on
July 24, 2000, which was amended on December 7, 2001. The Audit Committee's
duties include responsibility for reviewing the Company's accounting practices
and audit procedures. The Audit Committee, which consists of
5
Messrs. Rosen and Torres and Ms. Diaz Dennis, held nine meetings during the
2001 fiscal year. All members of the Audit Committee meet the independence and
knowledge requirements of the Exchange. (See the "Report of Audit Committee"
later in this Proxy Statement, which details the duties and performance of the
Audit Committee.)
The Compensation Committee recommends to the Board the compensation and
benefits of the Company's executive officers, and has established and reviews
general policies relating to compensation of the Company's employees. The
Compensation Committee, which consists of Messrs. Hobson and Thompson, held six
meetings and acted by written consent one time during the 2001 fiscal year. No
member of the Compensation Committee was at any time during the 2001 fiscal
year or at any other time an officer or employee of the Company. No executive
officer of the Company served on the compensation committee of another entity
or on any other committee of the board of directors of another entity
performing similar functions during the 2001 fiscal year. (See the "Report of
Compensation Committee" later in this Proxy Statement, which details the
Compensation Committee's report on executive compensation of the Company for
the 2001 fiscal year.)
DIRECTOR COMPENSATION
Our directors who are not officers or employees are compensated for their
services as follows: (i) an annual grant of an option to purchase 15,000 shares
of Class A common stock under our 2000 Omnibus Equity Incentive Plan; (ii)
$24,000 per year (which may be converted into an option to purchase additional
shares of Class A common stock under a specified formula); (iii) $1,250 for
attendance at a Board meeting in person ($500 if telephonically); and (iv)
$1,000 for attendance at a committee meeting in person ($500 if telephonically
and an additional $250 if serving as the chair of the committee).
Recommendation of the Board
The Board unanimously recommends that stockholders vote FOR election of each
of the Class A/B nominees and each of the Class C nominees identified above.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed the firm of McGladrey & Pullen, LLP to act as
independent public accountants of the Company for the fiscal year ending
December 31, 2002, and has directed that such appointment be submitted to the
stockholders of the Company for ratification at the 2002 Annual Meeting.
McGladrey & Pullen, LLP is considered by management of the Company to be well
qualified. If the stockholders do not ratify the appointment of McGladrey &
Pullen, LLP, the Board will reconsider the appointment.
Audit Fees
Fees for the annual audit, including quarterly reviews, for the 2001 fiscal
year were approximately $807,000.
Other Audit Related Services
Fees for other audit related services were approximately $84,000, relating
to the audit of employee benefit plans, accounting consultations and other
Securities Exchange Commission ("SEC") filings.
6
Fees Paid to RSM McGladrey, Inc.
Fees paid to RSM McGladrey, Inc., an affiliate of McGladrey & Pullen, LLP,
during 2001 are as follows:
Financial Information System Design and Implementation Fees. Financial
information systems design and implementation fees were approximately $216,000
for the 2001 fiscal year.
All Other Fees. All other fees were approximately $879,000 and consisted
primarily of tax preparation and tax consulting services.
Our Audit Committee determined that RSM McGladrey, Inc.'s provision of
non-audit related services in exchange for fees in the 2001 fiscal year was
compatible with maintaining McGladrey & Pullen, LLP's independence.
Representatives of McGladrey & Pullen, LLP will be present at the 2002
Annual Meeting. They will have an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions from
stockholders.
Recommendation of the Board
The Board unanimously recommends that stockholders vote FOR the proposal to
ratify the appointment of McGladrey & Pullen, LLP as independent public
accountants of the Company for the fiscal year ending December 31, 2002.
MANAGEMENT
The following sets forth the names, ages and positions of the Company's
executive officers as of April 8, 2002:
Name Position Age
---- -------- ---
Walter F. Ulloa Chairman and Chief Executive Officer 53
Philip C. Wilkinson President, Chief Operating Officer and Director 45
Jeanette Tully Executive Vice President, Treasurer, Chief Financial Officer and
Assistant Secretary 54
Paul A. Zevnik Secretary and Director 51
Jeffery A. Liberman President, Radio Division 43
Glenn Emanuel President, Outdoor Division 49
Background
Walter F. Ulloa. Mr. Ulloa has been Chairman and Chief Executive Officer of
Entravision since its inception in 1996. See, "Proposal 1A--Election of Class
A/B Directors" for additional biographical information on Mr. Ulloa.
Philip C. Wilkinson. Mr. Wilkinson has been President and Chief Operating
Officer of Entravision since its inception in 1996. See, "Proposal 1A--Election
of Class A/B Directors" for additional biographical information on Mr.
Wilkinson.
Jeanette Tully. Ms. Tully has been Executive Vice President, Chief
Financial Officer and Treasurer of Entravision since September 1996, and has
over 24 years of experience in the media industry. Ms. Tully was the Executive
Vice President and Chief Financial Officer of Alliance Broadcasting Corporation
from 1994 until early
7
1996, when the company was sold to Infinity Broadcasting Corporation. From May
1986 until she joined Alliance Broadcasting Corporation, Ms. Tully was a Vice
President of Communications Equity Associates, where she advised a variety of
broadcast companies on financial matters.
Paul A. Zevnik. Mr. Zevnik has been Secretary of Entravision since its
inception in 1996. See, "Proposal 1A--Election of Class A/B Directors" for
additional biographical information on Mr. Zevnik.
Jeffery A. Liberman. Mr. Liberman, the President of our Radio Division
since May 2001, has been involved in the management and operation of
Spanish-language radio stations since 1974. From 1992 until our acquisition of
Latin Communications Group Inc. ("LCG") in April 2000, Mr. Liberman was
responsible for operating LCG's 17 radio stations in California, Colorado, New
Mexico and Washington D.C.
Glenn Emanuel. Mr. Emanuel has been President of our Outdoor Division since
August 2000. Mr. Emanuel has over 20 years experience in the outdoor
advertising industry. From 1997 until our acquisition of Z-Spanish Media in
August 2000, Mr. Emanuel served as President of Vista Media Group, Inc.
("Vista"), Z-Spanish Media's outdoor advertising group. Before joining Vista,
he served as General Manager of Regency Outdoor Advertising's operations in Los
Angeles for ten years.
8
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of February 28, 2002 by: (i) each person (or
group of affiliated persons) known by us to be the beneficial owner of more
than 5% of the outstanding shares of our common stock; (ii) each of our
directors; (iii) the Chief Executive Officer of the Company and each of the
four other most highly-compensated executive officers of the Company serving as
such as of the end of the last fiscal year whose total annual salary and bonus
exceeded $100,000, for services rendered in all capacities to the Company and
its subsidiaries (such individuals are hereafter referred to as the "Named
Executive Officers"); and (iv) all of our directors and Named Executive
Officers as a group. Because our Class B and Class C common stock and Series A
preferred stock can be converted into Class A common stock at any time, we are
presenting the information below based on such conversions.
Shares of Common
Class of Stock Beneficially
Name and Address of Beneficial Owner(1) Shares Owned Number Percent(2)
--------------------------------------- -------- ------------------ ----------
Univision Communications Inc.(3).................................. A 14,943,231 11.90%
C 21,983,392 17.51%
TSG Capital Group(4).............................................. A 9,364,505 7.46%
Walter F. Ulloa................................................... A 100,425(5) *
B 11,489,365(6) 9.15%
Philip C. Wilkinson............................................... A 101,894(7) *
B 11,489,365(8) 9.15%
Jeanette Tully.................................................... A 349,388(9) *
Paul A. Zevnik.................................................... A 124,957(10) *
B 4,699,803(11) 3.74%
Jeffery A. Liberman............................................... A 30,451(12) *
Glenn Emanuel..................................................... A 315,654(13) *
Andrew W. Hobson(14).............................................. A 211,136(15) *
Michael D. Wortsman(16)........................................... A 56,136(17) *
Darryl B. Thompson................................................ A 9,263,300(18) 7.38%
Amador S. Bustos.................................................. A 1,050,284(19) *
Michael S. Rosen.................................................. A 97,361(20) *
Esteban E. Torres................................................. A 20,861(21) *
Patricia Diaz Dennis.............................................. A -- *
All directors and Named Executive Officers as a group (13 persons) A 11,721,847 9.29%
B 27,678,533 22.05%
--------
* Represents beneficial ownership of less than 1%.
(1) Unless otherwise noted, the address for each person is c/o Entravision
Communications Corporation, 2425 Olympic Boulevard, Suite 6000 West, Santa
Monica, California 90404.
(2) Percentage ownership is based on 125,540,605 shares of common stock
outstanding on February 28, 2002 (assuming conversion of all outstanding
shares of Class B and Class C common stock and Series A preferred stock).
Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to
securities. Shares of common stock subject to options, warrants and
convertible notes currently exercisable or convertible, or exercisable or
convertible within 60 days, are deemed outstanding for determining the
number of shares beneficially owned and for computing the percentage
ownership of the person holding such options, but are not deemed
outstanding for computing the percentage ownership of any other person.
Except as indicated by footnote, and subject to community property laws
where applicable, the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.
(footnotes continued on next page)
9
(footnotes continued from preceding page)
(3) Consists of 14,943,231 shares of Class A common stock and 21,983,392
shares of Class C common stock that may be converted at any time to shares
of Class A common stock. The address for Univision is 1999 Avenue of the
Stars, Suite 3050, Los Angeles, California 90067.
(4) TSG Capital Group consists of TSG Capital Fund II, L.P., TSG Capital Fund
III, L.P., TSG Associates II Inc., TSG Associates III, LLC and TSG
Ventures, L.P. The address for each of these entities is 177 Broad Street,
12th Floor, Stamford, Connecticut 06901. Includes 5,865,102 shares of
Class A common stock reserved for issuance upon conversion of Series A
preferred stock held by TSG Capital Fund III, L.P.
(5) Consists of 425 shares held by Ms. Alexandra Seros (Mr. Ulloa's spouse),
and an option to purchase 100,000 shares of Class A common stock, which is
immediately exercisable by Mr. Ulloa.
(6) Consists of 889,848 shares held by The Walter F. Ulloa Irrevocable Trust
of 1996 and 10,599,517 shares held by Mr. Ulloa personally, and also
includes 68,567 shares of Class B common stock, which are subject to a
right of Entravision to repurchase such shares under certain conditions.
(7) Consists of 1,894 shares held by Mr. Wilknson, personally, and an option
to purchase 100,000 shares of Class A common stock, which is immediately
exercisable by Mr. Wilkinson.
(8) Consists of 9,424,800 shares held by The 1994 Wilkinson Family Trust,
889,848 shares held by The 1994 Wilkinson Children's Gift Trust and
1,174,717 shares held by Mr. Wilkinson personally, and also includes
68,567 shares of Class B common stock, which are subject to a right of
Entravision to repurchase such shares under certain conditions.
(9) Consists of 151 shares held by Ms. Tully, personally, 249,237 shares held
by The Jeanette Tully 1996 Revocable Trust and an option to purchase
100,000 shares of Class A common stock, and also includes 5,667 shares of
Class A common stock, which are subject to a right of Entravision to
repurchase such shares under certain conditions.
(10) Consists of 13,821 shares held by The Zevnik Charitable Foundation and an
option to purchase 111,136 shares of Class A common stock, which is
immediately exercisable by Mr. Zevnik. Mr. Zevnik has shared voting power
in The Zevnik Charitable Foundation.
(11) Consists of 800,666 shares held by The Paul A. Zevnik Irrevocable Trust of
1996, 1,282,321 shares held by The Zevnik Family L.L.C. and 2,616,816
shares held by Mr. Zevnik personally, and also includes 29,014 shares of
Class B common stock, which are subject to a right of Entravision to
repurchase such shares under certain conditions.
(12) Consists of 451 shares held by Mr. Liberman, personally, and an option to
purchase 30,000 shares of Class A common stock, which is immediately
exercisable by Mr. Liberman.
(13) Consists of 285,654 shares held by Mr. Emanuel, personally, and an option
to purchase 30,000 shares of Class A common stock, which is immediately
exercisable by Mr. Emanuel.
(14) Mr. Hobson is an executive officer of Univision.
(15) Consists of 150,000 shares held by Crescent Capital Holdings II, LLC and
an option to purchase 61,136 shares of Class A common stock, which is
immediately exercisable by Mr. Hobson.
(16) Mr. Wortsman is an executive officer of an affiliate of Univision.
(17) Consists of 25,000 shares held by Mr. Wortsman and an option to purchase
31,136 shares of Class A common stock, which is immediately exercisable by
Mr. Wortsman.
(18) Consists of 9,364,505 shares held by TSG Capital Group (see footnote 4
above), excluding 122,341 shares held by TSG Ventures, L.P., and an option
to purchase 21,136 shares of Class A common stock, which is immediately
exercisable by Mr. Thompson. Mr. Thompson is a principal in each of the
TSG Capital Group entities, except for TSG Ventures, L.P. Mr. Thompson may
be deemed to exercise voting and investment power over such shares. Mr.
Thompson disclaims beneficial ownership of such shares, except to the
extent of his proportionate interest therein.
(19) Consists of 1,021,731 shares held by Bustos Asset Management, L.L.C. and
an option to purchase 28,553 shares of Class A common stock, which is
immediately exercisable by Mr. Bustos.
(20) Consists of 76,500 shares held by LJ Holdings, L.L.C. and an option to
purchase 20,861 shares of Class A common stock, which is immediately
exercisable by Mr. Rosen.
(21) Consists of an option to purchase 20,861 shares of Class A common stock,
which is immediately exercisable by Mr. Torres.
10
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain information regarding the
compensation earned during the last three fiscal years by the Named Executive
Officers:
Summary Compensation Table
Long-Term
Annual Compensation(1) Compensation
-------------------- ------------
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus Options Compensation
--------------------------- ---- -------- -------- ------------ ------------
Walter F. Ulloa...................... 2001 $620,833(2) $833,260(3) -- --
Chairman and Chief Executive Officer 2000 $460,000(4) $573,263(5) 500,000 $1,439,900(6)
1999 $360,000 $429,938(7) -- --
Philip C. Wilkinson.................. 2001 $620,833(2) $833,260(3) -- --
President and Chief Operating Officer 2000 $460,000(4) $573,263(5) 500,000 $1,439,900(6)
1999 $360,000 $429,938(7) -- --
Jeanette Tully....................... 2001 $343,125(8) $150,000(3) 100,000(9) --
Chief Financial Officer 2000 $225,000 -- 150,000(9) $3,489,318(6)
1999 $225,000 -- -- --
Jeffery A. Liberman(10).............. 2001 $275,000 $112,500(3) -- --
President, Radio Division 2000 $246,154 $ 40,000(5) 150,000 --
1999 $157,900 $146,250(2) -- --
Glenn Emanuel........................ 2001 $225,000 $ 75,000(3) -- --
President, Outdoor Division 2000 $225,000 $ 75,000(5) 150,000 --
1999 $225,000 $ 75,000(7) -- --
--------
(1) 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.
(2) Salary was $600,000 per annum through July 31, 2001, and was increased
pursuant to the terms of his employment agreement to $650,000 per annum
effective August 1, 2001.
(3) Represents bonuses earned in 2000 and paid in 2001.
(4) Salary was $360,000 per annum through July 31, 2000, and was increased
pursuant to the terms of his employment agreement to $600,000 per annum
effective August 1, 2000.
(5) Represents bonuses earned in 1999 and paid in 2000.
(6) Consists of stock-based awards (see "Certain Relationships and Related
Transactions").
(7) Represents bonuses earned in 1998 and paid in 1999.
(8) Salary was $225,000 per annum through February 15, 2001, and was increased
pursuant to the terms of her employment agreement to $360,000 per annum
effective February 16, 2001.
(9) In January 2001, the Company and Ms. Tully agreed to rescind her option to
purchase 150,000 shares of common stock granted in 2000 for an option to
purchase 100,000 shares of common stock on different vesting terms.
(10) Mr. Liberman was appointed as President of our Radio Division in May 2001.
11
Option Grants in Last Fiscal Year
The following table sets forth information concerning the stock option
grants made to each of the Named Executive Officers during the 2001 fiscal
year. No stock appreciation rights were granted to any of the Named Executive
Officers during the 2001 fiscal year.
Individual Grants
------------------------------------------------ Potential Realizable Value at
Number of Percent of Assumed Annual Rates of
Securities Total Options Stock Price Appreciation for
Underlying Granted to Exercise or Option Term(1)
Options Employees in Base Price Expiration -----------------------------
Name Granted Fiscal 2001 Per Share Date 5% 10%
---- ---------- ------------- ----------- ---------- ---------- ----------
Walter F. Ulloa.... -- -- -- -- -- --
Philip C. Wilkinson -- -- -- -- -- --
Jeanette Tully..... 100,000(2) 8.7% $16.38 1/09/11 $1,030,129 $2,610,550
Jeffery A. Liberman -- -- -- -- -- --
Glenn Emanuel...... -- -- -- -- -- --
--------
(1) There can be no assurance provided to any executive officer or any other
holder of the Company's securities that the actual stock price appreciation
over the 10 year option term will be at the assumed 5% and 10% compounded
annual rates or at any other defined level. Unless the market price of the
common stock appreciates over the option term, no value will be realized
from the option grants made to the Named Executive Officers.
(2) In January 2001, the Company and Ms. Tully agreed to rescind her option to
purchase 150,000 shares of common stock granted in 2000 for an option to
purchase 100,000 shares of common stock on different vesting terms.
Fiscal Year-End Option Values
No options were exercised by any Named Executive Officers during the 2001
fiscal year. No stock appreciation rights were exercised by any of the Named
Executive Officers during the 2001 fiscal year. The following table sets forth
the number of shares of the Company's Class A common stock subject to
exercisable and unexercisable stock options which the Named Executive Officers
held at the end of the 2001 fiscal year.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year-End Fiscal Year-End
--------------------------- ---------------------------
Name Exercisable Non-Exercisable Exercisable Non-Exercisable
---- ----------- --------------- ----------- ---------------
Walter F. Ulloa.... 100,000 400,000 -- --
Philip C. Wilkinson 100,000 400,000 -- --
Jeanette Tully..... -- 100,000 -- --
Jeffery A. Liberman 30,000 120,000 -- --
Glenn Emanuel...... 30,000 120,000 -- --
EMPLOYMENT AND OTHER AGREEMENTS; CHANGE IN CONTROL ARRANGEMENTS
In August 2000, we entered into a five year employment agreement with Mr.
Ulloa pursuant to which he serves as our Chairman and Chief Executive Officer.
The agreement provides for a base salary of $600,000 per year, with an annual
increase of $50,000 per year. Under the terms of the agreement, Mr. Ulloa is
eligible to receive a cash bonus equal to: (i) 75% of his then-current base
salary if our annual growth rate of earnings before
12
interest, taxes, depreciation and amortization ("EBITDA") (pro forma as defined
by our Compensation Committee), exceeds 20% over the previous year, 63% of his
then-current base salary if EBITDA growth rate exceeds 17% over the previous
year and 50% of his then-current base salary if EBITDA growth rate exceeds 14%
over the previous calendar year; and (ii) up to an additional 25% of his
then-current base salary in the discretion of our Compensation Committee.
If Mr. Ulloa's employment is terminated by us without cause, by Mr. Ulloa
for good reason or in connection with a change of control, he will be entitled
to receive all accrued salary and bonuses through the date of termination, plus
an amount equal to the greater of the sum of three times his then-current base
salary plus three times his then-current maximum bonus or his salary or bonuses
for the remainder of the term of his employment agreement, plus a continuation
of all benefit coverages for a period of two years. In addition, upon any such
termination event, all stock options then held by Mr. Ulloa will accelerate and
become immediately exercisable, and any restrictions on restricted stock held
by Mr. Ulloa shall lapse.
In August 2000, we entered into a five year employment agreement with Mr.
Wilkinson pursuant to which he serves as our President and Chief Operating
Officer. The agreement provides for a base salary of $600,000 per year, with an
annual increase of $50,000 per year. Under the terms of the agreement, Mr.
Wilkinson is eligible to receive a cash bonus equal to: (i) 75% of his
then-current base salary if EBITDA exceeds 20% over the previous year, 63% of
his then-current base salary if EBITDA growth rate exceeds 17% over the
previous year and 50% of his then-current base salary if EBITDA growth rate
exceeds 14% over the previous calendar year; and (ii) up to an additional 25%
of his then-current base salary in the discretion of our Compensation Committee.
If Mr. Wilkinson's employment is terminated by us without cause, by Mr.
Wilkinson for good reason or in connection with a change of control, he will be
entitled to receive all accrued salary and bonuses through the date of
termination, plus an amount equal to the greater of the sum of three times his
then-current base salary plus three times his then-current maximum bonus or his
salary or bonuses for the remainder of the term of his employment agreement,
plus a continuation of all benefit coverages for a period of two years. In
addition, upon any such termination event, all stock options then held by Mr.
Wilkinson will accelerate and become immediately exercisable, and any
restrictions on restricted stock held by Mr. Wilkinson shall lapse.
EMPLOYEE BENEFIT PLANS
2000 Omnibus Equity Incentive Plan
We have adopted our 2000 Omnibus Equity Incentive Plan (the "2000 Equity
Incentive Plan") to provide an additional means to attract, motivate, reward
and retain key personnel. The 2000 Equity Incentive Plan gives the
administrator the authority to grant different types of stock incentive awards
and to select participants. Our employees, officers, directors and consultants
may be selected to receive awards under the 2000 Equity Incentive Plan.
Share Limits. A maximum of 11,500,000 shares of our Class A common stock
may be issued under the 2000 Equity Incentive Plan. Options to purchase
7,727,501 shares of Class A common stock have been granted and were outstanding
as of January 31, 2002. Each share limit and award under the 2000 Equity
Incentive Plan is subject to adjustment for certain changes in our capital
structure, reorganizations and other extraordinary events. Shares subject to
awards that are not paid or exercised before they expire or are terminated are
available for future grants under the 2000 Equity Incentive Plan.
Awards. Awards under the 2000 Equity Incentive Plan may be in the form of:
(i) incentive stock options; (ii) non-qualified stock options; (iii) stock
appreciation rights; (iv) restricted stock; or (v) stock units. Awards may be
granted individually or in combination with other awards. Certain types of
stock-based performance awards under the 2000 Equity Incentive Plan will depend
upon the extent to which performance goals set by the
13
administrator are met during the performance period. Awards under the 2000
Equity Incentive Plan generally will be nontransferable, subject to exceptions
such as a transfer to a family member or to a trust, as authorized by the
administrator. Non-qualified stock options and other awards may be granted at
prices below the fair market value of the common stock on the date of grant.
However, non-qualified stock options may not be granted at prices below 85% of
the fair market value on the date of grant. Restricted stock awards can be
issued for nominal or the minimum lawful consideration. Incentive stock options
must have an exercise price that is at least equal to the fair market value of
the common stock, or 110% of fair market value of the common stock for any
owner of more than 10% of our common stock, on the date of grant. These and
other awards may also be issued solely or in part for services.
Administration. The 2000 Equity Incentive Plan is administered by the
Compensation Committee. The administrator of the 2000 Equity Incentive Plan has
broad authority to: (i) designate recipients of awards; (ii) determine or
modify, subject to any required consent, the terms and provisions of awards,
including the price, vesting provisions, terms of exercise and expiration
dates; (iii) approve the form of award agreements; (iv) determine specific
objectives and performance criteria with respect to performance awards; (v)
construe and interpret the 2000 Equity Incentive Plan; and (vi) reprice,
accelerate and extend the exercisability or term, and establish the events of
termination or reversion of outstanding awards.
Change of Control. Upon a change of control event, any award may become
immediately vested and/or exercisable, unless the administrator determines to
the contrary. Generally speaking, a change of control event will be triggered
under the 2000 Equity Incentive Plan: (i) in connection with certain mergers or
consolidations of Entravision with or into another entity where our
stockholders before the transaction own less than 50% of the surviving entity;
(ii) if a majority of the Board changes over a period of two years or less; or
(iii) upon a sale of all or substantially all of our assets if a change in
ownership of more than 50% of our outstanding voting securities occurs. The
administrator of the 2000 Equity Incentive Plan may also provide for
alternative settlements of awards, the assumption or substitution of awards or
other adjustments of awards in connection with a change of control or other
reorganization of Entravision.
Plan Amendment, Termination and Term. The Board may amend, suspend or
discontinue the 2000 Equity Incentive Plan at any time, but no such action will
affect any outstanding award in any manner materially adverse to a participant
without the consent of the participant. Plan amendments will generally not be
submitted to stockholders for their approval unless such approval is required
by applicable law. The 2000 Equity Incentive Plan will remain in existence as
to all outstanding awards until such awards are exercised or terminated. The
maximum term of options, stock appreciation rights and other rights to acquire
common stock under the 2000 Equity Incentive Plan is ten years after the
initial date of award, subject to provisions for further deferred payment in
certain circumstances. No award can be granted ten years after adoption of the
2000 Equity Incentive Plan by the Board.
Payment for Shares. The exercise price of options or other awards may
generally be paid in cash or, subject to certain restrictions, shares of Class
A common stock. Subject to any applicable limits, we may finance or offset
shares to cover any minimum withholding taxes due in connection with an award.
Federal Tax Consequences. The current federal income tax consequences of
awards authorized under the 2000 Equity Incentive Plan follow certain basic
patterns. Generally, awards under the 2000 Equity Incentive Plan that are
includable in the income of the recipient at the time of exercise, vesting or
payment, such as non-qualified stock options, stock appreciation rights and
restricted stock awards, are deductible by us, and awards that are not required
to be included in the income of the recipient, such as incentive stock options,
are not deductible by us. Generally speaking, Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code") provides that a public company
may not deduct compensation, except for compensation that is commission or
performance-based paid to its chief executive officer or to any of its four
other highest compensated officers to the extent that the compensation paid to
such person exceeds $1 million in a tax year. The regulations exclude from
these limits compensation that is paid pursuant to a 2000 Equity Incentive Plan
in
14
effect before the time that a company is publicly-held. We expect that
compensation paid under the 2000 Equity Incentive Plan will not be subject to
Section 162(m) of the Code in reliance on this transition rule, as long as such
compensation is paid or stock options, stock appreciation rights and/or
restricted stock awards are granted before the earlier of a material amendment
to the 2000 Equity Incentive Plan or our annual stockholders meeting in the
year 2004. In addition, we may not be able to deduct certain compensation
attributable to the acceleration of payment and/or vesting of awards in
connection with a change in control event should that compensation exceed
certain threshold limits under Section 280G of the Code.
Non-Exclusive Plan. The 2000 Equity Incentive Plan is not exclusive. Under
Delaware law, the Board may grant stock and performance incentives or other
compensation, in stock or cash, under other plans or authority.
2001 Employee Stock Purchase Plan
On April 4, 2001, the Board adopted the Company's 2001 Employee Stock
Purchase Plan (the "2001 Stock Purchase Plan") and reserved 600,000 shares of
our Class A common stock for initial issuance under the 2001 Stock Purchase
Plan, subject to stockholder approval. The following is only a summary of the
2001 Stock Purchase Plan and is qualified in its entirety by reference to its
full text.
Purpose. The purpose of the 2001 Stock Purchase Plan is to incentivize our
employees by providing them with an opportunity to purchase shares of Class A
common stock, subject to certain restrictions and limitations. These shares
will be provided to our employees at a discount to the prevailing market price
which will provide an incentive for employees to have an ownership interest in
the Company at a minimal cost to us.
Administration. The 2001 Stock Purchase Plan is administered by a committee
appointed by our Board. Unless our Board appoints a different committee, the
committee consists of the members of the Compensation Committee. The committee
has full power to administer and interpret the 2001 Stock Purchase Plan, and
the decisions of the committee are final and binding upon all participants.
Shares Reserved for Issuance. Subject to the adjustments discussed below
for changes in our capital structure or upon a corporate transaction, the
maximum number of shares of Class A common stock that will be made available
for sale under the 2001 Stock Purchase Plan is 600,000, plus an annual increase
of 600,000 shares on the first day of each of the next ten calendar years
beginning on January 1, 2002.
Eligibility. Any of our full-time employees or full-time employees of any
of our subsidiaries designated by the committee who has completed at least six
months of continuous service as an employee (subject to certain permitted
interruptions of up to 90 days) as of an offering date is eligible to
participate in the 2001 Stock Purchase Plan during the relevant offering
period, subject to administrative rules established by the committee. Eligible
employees become participants in the 2001 Stock Purchase Plan by filing with us
at least ten business days prior to the applicable offering period a form
authorizing payroll deductions.
Participation in an Offering. The 2001 Stock Purchase Plan is implemented
by offering periods lasting for six months commencing on each of February 15
and August 15. The first offering period commenced on August 15, 2001. Shares
of Class A common stock are purchased under the 2001 Stock Purchase Plan on the
last day of each offering period, unless the participant withdraws or
terminates employment earlier. To participate in the 2001 Stock Purchase Plan,
each eligible employee must authorize payroll deductions pursuant to the 2001
Stock Purchase Plan in an amount up to 15% of the participant's compensation;
however, no participant may purchase more than 25,000 shares during any
offering period. On each purchase date, each participant who has elected to
participate is automatically deemed to have elected to purchase shares of Class
A common stock with the entire balance of the payroll deductions accumulated
during the relevant offering period in the participant's payroll deduction
account. In addition, no employee is eligible to purchase shares under the 2001
Stock Purchase Plan to the extent that, immediately after the purchase, that
employee would own 5% or more of either the voting power or the value of all
classes of our common stock, and no employee's rights to purchase our common
stock
15
pursuant to the 2001 Stock Purchase Plan may accrue at a rate that exceeds
$25,000 per calendar year. For purposes of the 5% ownership test summarized
above, stock that the participant may purchase under any outstanding option is
treated as owned by the participant, as is stock owned by certain family
members or entities owned by the participant.
Purchase Price, Shares Purchased. Shares of our Class A common stock may be
purchased under the 2001 Stock Purchase Plan at a price equal to 85% of the
fair market value of the Class A common stock on the offering date or the
purchase date, whichever is less. The number of whole shares of our Class A
common stock a participant purchases in each offering period is determined by
dividing the total amount of payroll deductions withheld from the participant's
compensation during that offering period by the purchase price.
Termination of Employment. Termination of a participant's employment for
any reason, including death, immediately terminates his or her participation in
the 2001 Stock Purchase Plan. In such event, the payroll deductions credited to
the participant's account will be returned, without interest, and all existing
stock held for the participant in the 2001 Stock Purchase Plan will be
distributed, to him or her or, in the case of death, to the person or persons
entitled to those deductions and stock.
Adjustments upon Changes in Capitalization, Merger or Sale of Assets. In
the event that the common stock is changed by reason of any stock split, stock
dividend, combination, recapitalization reclassification or other similar
changes in our capital structure effected without the receipt of consideration,
or in the event of a merger in which we are the surviving corporation, the
committee may make appropriate proportional adjustments in the number of shares
of stock subject to the 2001 Stock Purchase Plan.
Amendment and Termination of the Plan. The Board may terminate or amend the
2001 Stock Purchase Plan at any time, except that it may not increase the
number of shares subject to the 2001 Stock Purchase Plan other than as
described in the 2001 Stock Purchase Plan. The 2001 Stock Purchase Plan will
continue until the purchase date that participants become entitled to purchase
a number of shares of common stock greater than the number of reserved shares
remaining available for purchase under the 2001 Stock Purchase Plan.
Withdrawal. Generally, a participant may withdraw from the 2001 Stock
Purchase Plan at any time during an offering period prior to the purchase date.
If a participant elects to withdraw, all of the participant's payroll
deductions credited to the participant's payroll deduction account will be
returned to the participant without interest, and the participant may not make
any further contributions to the 2001 Stock Purchase Plan for the purchase of
shares during that offering period. A participant's voluntary withdrawal during
an offering period will not have any effect upon the participant's eligibility
to participate in the 2001 Stock Purchase Plan during a subsequent offering
period.
New Plan Benefits. Because benefits under the 2001 Stock Purchase Plan will
depend on employees' elections to participate and the fair market value of
common stock at various future dates, it is not possible to determine the
benefits that will be received by executive officers and other employees if the
2001 Stock Purchase Plan is approved by the stockholders. Non-employee
directors are not eligible to participate in the 2001 Stock Purchase Plan.
Federal Income Tax Consequences. The 2001 Stock Purchase Plan qualifies
under the provisions of Sections 421 and 423 of the Code. Under these
provisions, no income will be taxable to a participant until the shares
purchased under the 2001 Stock Purchase Plan are sold or otherwise disposed of.
Upon sale or other disposition of the shares, the participant will generally be
subject to tax and the amount of the tax will depend upon, among other factors,
the participant's holding period for the shares and the manner of disposition.
If the shares are sold or otherwise disposed of in a taxable transaction
occurring more than two years from the applicable offering date and more than
one year from the date of transfer of the shares to the participant, then the
participant generally will recognize ordinary income measured as the lesser of
(i) the excess of the fair market value of the shares at the time of such sale
or disposition over the purchase price, or (ii) an amount equal to 15%
16
of the fair market value of the shares as of the offering date. Any additional
gain should be treated as long-term capital gain. If the shares are sold or
otherwise disposed of before the expiration of this holding period, the
participant will recognize ordinary income generally measured as the excess of
the fair market value of the shares on the date the shares are purchased over
the purchase price. Any additional gain or loss on a sale or disposition will
be long-term or short-term capital gain or loss, depending on the holding
period. As a general rule, we are not entitled to a deduction for amounts taxed
as ordinary income or capital gain to a participant except to the extent
ordinary income is recognized by participants upon a sale or disposition of
shares prior to the expiration of the holding period(s) described above. In all
other cases, no deduction is allowed to us.
The foregoing is only a very general summary of the effect of U.S. federal
income taxation upon the participant and us with respect to the shares
purchased under the 2001 Stock Purchase Plan. It does not discuss the tax
consequences arising in the context of a participant's death or the income tax
laws of any municipality, state or foreign country in which the participant's
income or gain may be taxable or other tax matters may be relevant to
particular participants.
Indemnification of Directors and Executive Officers and Limitation of Liability
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors, to grant indemnity to directors
and officers in terms sufficiently broad to permit indemnification for
liabilities, including reimbursement for expenses incurred, arising under the
Securities Act of 1933, as amended (the "Securities Act"). This indemnification
may, however, be unenforceable as against public policy.
As permitted by Delaware law, our First Restated Certificate of
Incorporation, as amended, includes a provision that eliminates the personal
liability of our directors for monetary damages for breach of fiduciary duty as
a director, except for liability: (i) for any breach of the director's duty of
loyalty to us or our stockholders; (ii) for acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law; (iii)
under Section 174 of the Delaware law regarding unlawful dividends and stock
purchase; or (iv) for any transaction from which the director derived an
improper personal benefit.
As permitted by Delaware law, our First Restated Certificate of
Incorporation provides that: (i) we are required to indemnify our directors and
officers to the fullest extent permitted by Delaware law, so long as the person
being indemnified acted in good faith and in a manner the person reasonably
believed to be in or not opposed to our best interests, and with respect to any
criminal action or proceeding, had no reasonable cause to believe the person's
conduct was lawful; (ii) we are permitted to indemnify our other employees and
agents to the extent that we indemnify our officers and directors, unless
otherwise required by law; (iii) we are required to advance expenses to our
directors and officers incurred in connection with a legal proceeding to the
fullest extent permitted by Delaware law, subject to very limited exceptions;
and (iv) the rights conferred in our First Restated Certificate of
Incorporation are not exclusive. In addition, we have entered into
indemnification agreements with each of our current directors and officers to
give such directors and officers additional contractual assurances regarding
the scope of indemnification set forth in our First Restated Certificate of
Incorporation and to provide additional procedural protections. At present,
there is no pending litigation or proceeding involving any of our directors,
officers or employees regarding which indemnification is sought, nor are we
aware of any threatened litigation that may result in claims for
indemnification.
We maintain directors' and officers' liability insurance.
17
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee during the 2001 fiscal year consisted of Messrs.
Hobson and Thompson. No member of the Compensation Committee was at any time
during the 2001 fiscal year or at any other time an officer or employee of the
Company. No executive officer of the Company served on the compensation
committee of another entity or any other committee of the board of directors of
another entity performing similar functions during the 2001 fiscal year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reorganization. Effective August 2, 2000, the Company completed a
reorganization. As a result of this reorganization, the beneficial ownership of
Entravision immediately prior to the closing of our initial public offering was
virtually identical to the beneficial ownership of Entravision Communications
Company, L.L.C. ("ECC"), its predecessor. This reorganization occurred as
follows:
. Messrs. Ulloa, Wilkinson and Zevnik and each of their trusts and other
related entities exchanged their direct and indirect ownership interests
in ECC for newly-issued shares of Class B common stock;
. each of the stockholders in the seven corporate member entities of ECC
(other than Messrs. Ulloa, Wilkinson and Zevnik and their trusts and
related entities) exchanged their shares in such corporate members for
newly-issued shares of Class A common stock;
. each of the remaining individuals, trusts and other entities holding
direct membership interests in ECC exchanged such interests for
newly-issued shares of Class A common stock; and
. Univision exchanged its subordinated note and option in ECC for shares of
Class C common stock.
Relationship with Univision. In December 1996, Univision invested $10
million in ECC in exchange for a subordinated note and an option to acquire an
approximate 25% ownership interest in ECC. The note was due December 30, 2021
and bore interest at 7.01% per year, for which Univision had agreed to
compensate Entravision in an amount equal to the amount of annual interest due,
in exchange for running Univision's programming.
In April 1999, Entravision acquired television stations KLUZ-TV and KLUZ-LP,
Albuquerque, New Mexico, from Univision in exchange for $1 million in cash and
a 2% increase in Univision's option to acquire an ownership interest in ECC. In
March 2000, Univision invested an additional $110 million in ECC, which
increased the subordinated note to an aggregate of $120 million, and increased
its option to the right to acquire a 40% ownership interest in ECC.
In connection with the reorganization, Univision exchanged its subordinated
note and option for 21,983,392 shares of Class C common stock, or an
approximate 19% ownership interest in Entravision. As long as Univision owns at
least 30% of its initial Class C shares, it will have the right to vote as a
separate class to elect two directors, to appoint a member to any Board
committee and to approve material decisions involving Entravision, including
any merger, consolidation or any other business combination, any dissolution
and any transfer of the FCC licenses for any of our Univision-affiliated
television stations.
Also, pursuant to our Univision network affiliation agreements, Univision
acts as our national advertising sales representative for our television
stations affiliated with Univision's primary network. Class C director Andrew
Hobson is an Executive Vice President of Univision and Class C director Michael
Wortsman is the Co-President of Univision Television Group Inc.
Univision also purchased 6,464,542 shares of Class A common stock directly
from Entravision in our initial public offering, representing approximately 6%
of our outstanding common stock. Univision has subsequently
18
purchased an additional 8,478,689 shares of Class A common stock in open market
purchases, for an aggregate of approximately 32% of our outstanding common
stock as of December 31, 2001.
Voting Agreement. Entravision has entered into the Voting Agreement with
Messrs. Ulloa, Wilkinson, and Zevnik. This agreement will remain in effect with
respect to each of Messrs. Ulloa, Wilkinson and Zevnik as long as each
individual owns 30% of his initial Class B shares.
Transactions with Walter F. Ulloa. Mr. Ulloa and his spouse were the sole
shareholders of Las Tres Campanas Television, Inc., formerly the FCC licensee
of lower-power television stations KELV-LP and KNTL-LP, Las Vegas, Nevada. In
1997, Las Tres Campanas issued a note to a former shareholder in the principal
amount of $262,500. Entravision assumed the payment obligations of Las Tres
Campanas under the note in exchange for Las Tres Campanas' agreement to
contribute to the Company all of its assets, including the licenses to stations
KELV-LP and KNTL-LP. In August 2001, we consummated a transaction with Mr.
Ulloa and his spouse in which we acquired all of the outstanding shares of
capital stock of Las Tres Campanas, reimbursed Mr. Ulloa for business expenses
in the amount of $173,455 and paid the balance of principal and unpaid interest
under the note in the amount of $92,319.
Transactions with Philip C. Wilkinson. In 1996, Cabrillo Broadcasting
Corporation, a predecessor of Entravision, made a loan in the principal amount
of $159,000 to Mr. Wilkinson, which was used by Mr. Wilkinson to purchase
equity in KSMS-TV, Inc., another predecessor of Entravision. As payment for
this obligation, Mr. Wilkinson granted to us the right to acquire radio station
KPVW-FM, Aspen, Colorado from a third party. The transaction was consummated in
January 2002.
Transactions with Paul A. Zevnik. In October 1996, ECC made a loan to Mr.
Zevnik evidenced by a promissory note in the principal amount of $360,366 due
and payable in full in October 2001, which was later extended to October 2002.
Mr. Zevnik used the loan to purchase 10,313 Class A units of ECC, which were
exchanged for 175,321 shares of Class B common stock at the closing of our
initial public offering. As of December 31, 2001, the aggregate outstanding
principal and interest on this loan was approximately $474,000. The entire
balance of principal and interest under the loan was paid in full by Mr. Zevnik
in February 2002. Additionally, Mr. Zevnik is a partner in Zevnik Horton LLP,
which represented us as legal counsel prior to July 2001.
Transactions with Amador S. Bustos. In connection with our acquisition of
Z-Spanish Media, Amador Bustos, a director of the Company, and his affiliates
received approximately 1,536,731 shares of Class A common stock.
We lease certain spaces situated on a broadcast tower located in Sacramento,
California from Mr. Bustos and his spouse. The tower is used by radio stations
owned and operated by Entravision in the Sacramento area. Entravision pays rent
and maintenance in the aggregate amount of $5,000 per year. The lease commenced
in June 2001 and will expire in April 2019.
Pursuant to a second lease that expires in 2019, we also lease a corporate
office building from Mr. Bustos in Sacramento, California for $68,000 per year.
Rent increases annually by five percent per year under this lease.
Transactions with Glenn Emanuel. In connection with our acquisition of
Z-Spanish Media, Glenn Emanuel, the President of our Outdoor Division, received
285,253 shares of Class A common stock.
In August 1997, Mr. Emanuel executed a promissory note in favor of Vista in
the principal amount of $198,315 with an interest rate of 9.75% per year, which
is due and payable in full on August 9, 2002. Mr. Emanuel used the loan to
purchase shares of Vista's common and preferred stock. The loan is secured by
the shares of Class A common stock received by Mr. Emanuel in connection with
our acquisition of Z-Spanish Media. As of December 31, 2001 the outstanding
balance of principal and interest under the loan was approximately $282,000
including accrued interest.
19
Registration Rights. We have entered into an investor rights agreement with
all of the holders of restricted stock at the time of our initial public
offering and with the former stockholders of Z-Spanish Media that received
Entravision stock in connection with our acquisition of Z-Spanish Media. The
investor rights agreement provides these stockholders with rights to require us
to register their stock with the SEC upon certain conditions.
Transactions with TSG Entities and Darryl B. Thompson. Darryl B. Thompson,
a director of the Company, is an equityholder, officer and director of TSG
Capital Fund II, L.P., TSG Capital Fund III, L.P., TSG Associates II, Inc. and
TSG Associates III, L.P.
In April 2000, TSG Capital Fund III, L.P. invested $90 million in ECC in the
form of a convertible subordinated note. The note automatically converted at
the closing of our initial public offering into 5,865,102 of Series A preferred
stock.
In connection with our acquisition of Z-Spanish Media, TSG Capital Fund II,
L.P., TSG Capital Fund III, L.P. and their affiliates received approximately
$169 million in cash and 3,552,902 shares of Class A common stock.
We have also entered into an investor rights agreement with TSG Capital Fund
III, L.P. that provides TSG Capital Fund III, L.P. with rights to require us to
register its shares of Series A preferred stock (upon conversion into Class A
common stock) with the SEC upon certain conditions. Mr. Thompson is a principal
of TSG Capital Fund III, L.P.
Mr. Thompson is also an officer, director and, indirectly, a principal
stockholder, of Urban Brands, Inc., which purchased advertising space, for
approximately $150,000, on certain of the Company's billboards New York City.
We received market rates for this sale in an arms-length transaction.
Class D Membership Units in ECC. ECC granted to each of Messrs. Ulloa and
Wilkinson 6,050 Class D membership units for nominal consideration which were
exchanged for 102,850 shares of Class B common stock at the closing of our
initial public offering. The Class B common stock is held pursuant to
restricted stock agreements that allow for repurchase of the shares for nominal
consideration if Messrs. Ulloa and Wilkinson do not remain employed with
Entravision with such restriction lapsing in one-third increments over three
years. Such restriction also lapses upon a change in control.
ECC also granted to Mr. Zevnik 2,560 Class D membership units for nominal
consideration, which were exchanged for 43,520 shares of Class B common stock
at the closing of the initial public offering. The Class B common stock is held
pursuant to a restricted stock agreement that allows for repurchase of the
shares for nominal consideration if Mr. Zevnik does not remain as an officer or
director of Entravision, with such restriction lapsing in one-third increments
over three years. Such restriction also lapses upon a change in control.
In April 2000, ECC awarded to Jeanette Tully, our Chief Executive Officer,
14,161 Class D membership units, which were exchanged for 240,737 shares of
Class A common stock at the closing of the initial public offering.
Additionally, ECC also granted to Ms. Tully 500 Class D membership units for
nominal consideration, which were exchanged for 8,500 shares of Class A common
stock at the closing of the initial public offering. The 8,500 shares of Class
A common stock are held pursuant to a restricted stock agreement that allows
for repurchase of the shares for nominal consideration if Ms. Tully does not
remain as an employee of Entravision, with such restriction lapsing in
one-third increments over three years. Such restriction also lapses upon a
change in control.
20
REPORT OF COMPENSATION COMMITTEE
The following Report of the Compensation Committee and the Performance Graph
that follows do not constitute soliciting material and should not be deemed
filed or incorporated by reference into any other Company filing under the
Securities Act, or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), except to the extent Entravision specifically incorporates
this report or the performance graph by reference therein.
The Compensation Committee has furnished the following report on executive
compensation for the 2001 fiscal year.
It is the duty of the Compensation Committee to review and determine the
salaries and bonuses of executive officers of the Company, including the Chief
Executive Officer, and to establish the general compensation policies for such
individuals. The Compensation Committee also has the sole and exclusive
authority to make discretionary option grants to the Company's executive
officers under the 2000 Equity Incentive Plan.
The Compensation Committee believes that the compensation programs for the
Company's executive officers should reflect the Company's performance and the
value created for the Company's stockholders. In addition, the compensation
programs should support the short-term and long-term strategic goals and values
of the Company, reward individual contribution to the Company's success and
align the interests of the Company's officers with the interests of the
stockholders. The Company is engaged in a very competitive industry, and the
Company's success depends upon its ability to attract and retain qualified
executives through the competitive compensation packages it offers to such
individuals.
For the 2001 fiscal year, the Company's executive compensation program
consisted of base salary only and no bonuses were considered or granted by the
Compensation Committee. The Compensation Committee believes that the approach
taken in the 2001 fiscal year best serves the short and long-term interests of
the Company and its stockholders.
Factors. The principal factors that were taken into account in establishing
each executive officer's compensation package for the 2001 fiscal year are
described below. However, the Compensation Committee may in its discretion
apply entirely different factors, such as different measures of financial
performance, for future fiscal years.
Chief Executive Officer Compensation. In setting the base salary level
payable for the 2001 fiscal year to the Company's Chief Executive Officer,
Walter Ulloa, the Compensation Committee conducted a detailed performance
evaluation for Mr. Ulloa. The performance evaluation took into consideration
Mr. Ulloa's qualifications, the level of experience brought to his position and
gained while in the position, the Company's goals for which Mr. Ulloa had
responsibility, specific accomplishments to date and the importance of Mr.
Ulloa's individual contributions to the achievement of the Company's goals and
objectives set for the prior fiscal year. In addition, the Compensation
Committee sought to provide him with a level of base salary which it believed,
on the basis of its understanding of the salary levels in effect for other
chief executive officers at similar-sized companies in the industry, to be
competitive with those base salary levels.
In August 2000, we entered into a five year employment agreement with Mr.
Ulloa. The agreement provides for a base salary of $600,000 per year, with an
annual increase of $50,000 per year. Under the terms of the agreement, Mr.
Ulloa is eligible to receive a cash bonus equal to (i) a percentage of his
then-current base salary up to a maximum of 75% based upon the Company's growth
rate of EBITDA and (ii) up to an additional 25% of his then-current base salary
in the discretion of the Compensation Committee (see "Employment and Other
Agreements; Change in Control Arrangements").
Other Executive Officer Compensation. In setting base salaries for
executive officers other than the Chief Executive Officer, the Compensation
Committee considered the salary levels for comparable positions at peer
21
group companies, the individual's personal performance and internal alignment
considerations. The relative weight given to each factor varies with each
individual in the sole discretion of the Compensation Committee. Each executive
officer's (other than Messrs. Ulloa and Wilkinson) base salary is adjusted for
each year on the basis of (i) the Compensation Committee's evaluation of the
officer's personal performance for the year and (ii) the competitive
marketplace for persons in comparable positions.
In August 2000, we entered into a five year employment agreement with Philip
C. Wilkinson, our President and Chief Operating Officer, that provides for a
base salary of $600,000 per year, with an annual increase of $50,000 per year.
Under the terms of the agreement, Mr. Wilkinson is eligible to receive a cash
bonus equal to (i) a percentage of his then current base salary up to a maximum
of 75% based upon the Company's growth rate of EBITDA and (ii) up to an
additional 25% of his then-current base salary in the discretion of the
Compensation Committee (see "Employment and Other Agreements; Change in Control
Arrangements").
Compliance with Code Section 162(m). Section 162(m) of the Code disallows a
tax deduction to publicly-held companies for compensation paid to certain of
their executive officers, to the extent that compensation exceeds $1 million
per covered officer in any fiscal year. The limitation applies only to
compensation which is not considered to be performance-based. Non-performance
based compensation paid to the Company's executive officers for the 2001 fiscal
year did not exceed the $1 million limit per officer, and the Compensation
Committee does not anticipate that the non-performance based compensation to be
paid to the Company's executive officers for the 2002 fiscal year will exceed
that limit. Because it is unlikely that the cash compensation payable to any of
the Company's executive officers in the foreseeable future will approach the $1
million limit, the Compensation Committee has decided at this time not to take
any action to limit or restructure the elements of cash compensation payable to
the Company's executive officers. The Compensation Committee will reconsider
this decision should the individual cash compensation of any executive officer
ever approach the $1 million level.
The Board did not modify any action or recommendation made by the
Compensation Committee with respect to executive compensation for the 2001
fiscal year. It is the opinion of the Compensation Committee that the executive
compensation policies and plans provide the necessary total remuneration
program to properly align the Company's performance and the interests of the
Company's stockholders through the use of competitive and equitable executive
compensation in a balanced and reasonable manner, for both the short and
long-term.
Submitted by the Compensation Committee:
Andrew W. Hobson
Darryl B. Thompson
22
PERFORMANCE GRAPH
The following graph, which was produced by Research Data Group, Inc.,
depicts the Company's monthly performance for the period from August 2, 2000
(the Company's initial trading date on the Exchange) through December 31, 2001,
as measured by total stockholder return on the Company's Class A common stock
compared with the total return of the S&P 500 Index and the S&P Broadcasting
(Television, Radio, Cable) Index. Upon request, the Company will furnish
stockholders a list of the component companies of such indexes.
Note: We caution that the stock price performance shown in the graph below
should not be considered indicative of potential future stock price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG ENTRAVISION COMMUNICATIONS CORPORATION, THE S & P 500 INDEX
AND THE S & P BROADCASTING (TELEVISION, RADIO, CABLE) INDEX
[CHART]
ENTRAVISION COMMUNICATIONS S&P 500 S&P BROADCASTING
CORPORATION (TV, RADIO, CABLE)
8/2/00 100 100 100
9/00 105.3 100.60 94.26
12/00 111.36 92.73 88.90
3/01 60.00 81.74 93.47
6/01 74.55 86.52 101.92
9/01 51.82 73.82 72.87
12/01 72.42 81.71 85.00
Cumulative Total Return
---------------------------------------------
8/2/00 9/00 12/00 3/01 6/01 9/01 12/01
------ ------ ------ ----- ------ ----- -----
Entravision Communications Corporation...... 100.00 105.30 111.36 60.00 74.55 51.82 72.42
S & P 500................................... 100.00 100.60 92.73 81.74 86.52 73.82 81.71
S & P Broadcasting (TV, Radio, Cable)....... 100.00 94.26 88.90 93.47 101.92 72.87 85.00
--------
* Assumes $100 invested on August 2, 2000 in stock or index, including
reinvestment of dividends.
23
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and holders of more than 10% of a registered class of the
Company's equity securities to file with the SEC initial reports of ownership
and reports of changes in ownership of Class A common stock and other equity
securities of the Company. Directors, executive officers and greater than 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) reports they file. Based solely on its review of the
copies of such forms received by it, or written representation from certain
reporting persons that no Form 5s were required for those persons, the Company
believes that all reporting requirements under Section 16(a) for the 2001
fiscal year were met in a timely manner by its directors, executive officers
and greater than 10% beneficial owners, except that Mr. Zevnik made one late
filing for the month of January 2001.
REPORT OF AUDIT COMMITTEE
The following report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act or the Exchange Act, except to
the extent Entravision specifically incorporates this report by reference
therein.
The Audit Committee Charter was adopted by the Board on July 24, 2000, as
amended on December 7, 2001, and reflects the standards set forth in SEC
regulations and the rules of the Exchange.
The Audit Committee's primary duties and responsibilities are:
. Serve as an independent objective party to monitor the Company's financial
reporting process and internal control system.
. Review and appraise the audit efforts of the Company's independent
accountants.
. Provide an open avenue of communication among the independent accountants,
financial and senior management and the Board.
The duties and responsibilities of a member of the Audit Committee are in
addition to his or her duties as a member of the Board.
The Audit Committee has implemented procedures to ensure that during the
course of each fiscal year it devotes the attention that it deems necessary or
appropriate to each of the matters assigned to it under its charter. The Audit
Committee met nine times during the 2001 fiscal year.
In overseeing the preparation of Entravision's financial statements, the
Audit Committee met with both management and Entravision's outside auditors to
review and discuss all financial statements prior to their issuance and to
discuss significant accounting issues. Management advised the Audit Committee
that all financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America, and the Audit
Committee discussed the statements with both management and the outside
auditors. The Audit Committee's review included discussion with the outside
auditors of matters required to be discussed pursuant to Statements on Auditing
Standards No. 61 and 90 (Communication with Audit Committees).
With respect to Entravision's outside auditors, the Audit Committee, among
other things, discussed with McGladrey & Pullen, LLP matters relating to its
independence, including the written disclosures made to the Audit Committee as
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees).
On the basis of these reviews and discussions, the Audit Committee
recommended to the Board that the Board approve the inclusion of Entravision's
audited financial statements in the 10-K for filing with the SEC.
Submitted by the Audit Committee:
Michael S. Rosen
Esteban E. Torres
Patricia Diaz Dennis
24
STOCKHOLDER PROPOSALS
From time to time stockholders present proposals which may be proper
subjects for inclusion in a proxy statement and for consideration at an annual
meeting. Under the rules of the SEC, to be included in the proxy statement for
the 2003 annual meeting of stockholders, proposals must be received by the
Company no later than December 17, 2002.
ANNUAL REPORT ON FORM 10-K
The Company filed the 10-K with the SEC on March 26, 2002. A copy of the
10-K has been mailed to all stockholders along with this Proxy Statement.
Stockholders may obtain additional copies of the 10-K and the exhibits thereto,
without charge, by writing to Michael G. Rowles, Senior Vice President and
General Counsel of the Company, at the Company's principal executive offices at
the 2425 Olympic Boulevard, Suite 6000 West, Santa Monica, California 90404.
OTHER MATTERS
Management does not know of any matters to be presented at the 2002 Annual
Meeting other than those set forth herein and in the Notice accompanying this
Proxy Statement. If a stockholder vote is necessary to transact any other
business at the 2002 Annual Meeting, the proxyholders intend to vote their
proxies in accordance with their best judgment related to such business.
It is important that your shares be represented at the 2002 Annual Meeting,
regardless of the number of shares that you hold. YOU ARE, THEREFORE, URGED TO
EXECUTE PROMPTLY AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE THAT HAS
BEEN ENCLOSED FOR YOUR CONVENIENCE. Stockholders who are present at the 2002
Annual Meeting may revoke their proxies and vote in person or, if they prefer,
may abstain from voting in person and allow their proxies to be voted.
By Order of the Board of Directors,
/s/ WALTER F. ULLOA
Walter F. Ulloa
Chairman and Chief Executive Officer
April 16, 2002
Santa Monica, California
25
ENTRAVISION COMMUNICATIONS CORPORATION
2002 ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ENTRAVISION COMMUNICATIONS CORPORATION
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of 2002 Annual Meeting of Stockholders and the Proxy Statement and
appoints Walter F. Ulloa and Philip C. Wilkinson, and each of them, the
attorneys and proxies of the undersigned, each with full power of substitution,
to vote all the shares of common stock of Entravision Communications Corporation
(the "Company") which the undersigned is entitled to vote, either on his or her
own behalf or on behalf of any entity or entities, at the 2002 Annual Meeting of
Stockholders of the Company (the "2002 Annual Meeting") to be held at The
Fairmont Miramar Hotel Santa Monica, 101 Wilshire Boulevard, Santa Monica,
California 90401 at 10:00 a.m. on May 16, 2002, and at any adjournments or
postponements thereof, with the same force and effect as the undersigned might
or could do if personally present thereat. The shares represented by this Proxy
shall be voted in the manner set forth below:
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE CLASS
---
A/B DIRECTORS AND THE CLASS C DIRECTORS LISTED HEREON AND A VOTE FOR THE LISTED
---
PROPOSAL. IF NO INSTRUCTION TO THE CONTRARY IS INDICATED, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE DIRECTORS LISTED HEREON AND PROPOSAL 2.
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
Please mark [X]
your votes as
indicated in
this example
1. A. To elect Class A/B directors to serve for a 1. B. To elect Class C directors to serve for
term ending at the 2003 Annual Meeting of a term ending at the 2003 Annual Meeting
Stockholders or until his or her of Stockholders or until his
successor is duly elected and qualified. successor is duly elected and qualified.
FOR all nominees WITHHOLD Nominees: 01 Walter F. Ulloa, FOR all nominees WITHHOLD Nominees: 09 Andrew W.
listed at right AUTHORITY 02 Philip C. Wilkinson, listed at right AUTHORITY Hobson, 10 Michael D.
(except as to vote for all 03 Paul A. Zevnik, 04 Darryl B. (except as to vote for all Wortsman
marked to the nominees Thompson, 05 Amador S. Bustos, marked to the nominees
contrary) listed at right 06 Michael S. Rosen, contrary) listed at right (Instruction: To withhold
[_] [_] 07 Esteban E. Torres, [_] [_] authority to vote for any
08 Patricia Diaz Dennis nominee, strike a line
through the nominee's
(Instruction: To withhold name above.)
authority to vote for any nominee,
strike a line through the
nominee's name above.)
2. Ratification of the appointment of McGladrey & Pullen, In their discretion, the proxies are authorized to vote
LLP as independent auditors of the Company for the upon such other business that properly may come before the
2002 fiscal year. 2002 Annual Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[_] [_] [_]
Dated: _______________________________________________, 2002
____________________________________________________________
Signature
____________________________________________________________
Signature if jointly held (if joint or common ownership)
Please sign exactly as name or names appear at left,
including the title "Executor," "Guardian," etc. if the same
is indicated. When joint names appear both should sign. If
stock is held by a corporation, this Proxy should be
executed by a proper officer thereof, whose title should be
given.
. PLEASE MARK, SIGN, DATE AND RETURN THIS CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE TODAY
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FOLD AND DETACH HERE