The Palm Beach Post from West Palm Beach, Florida • Page 23

The Palm Beach Post PAGE SB- Codes for POSTLINES Ol fK BOD updates mm The Film Bech PoM PAGE 6B THURSDAY, SEPTEMBER 28, 1995 Ted Turner's 5-year deal for $100 million upsets some directors third major shareholder, Tele-Communications to win that company's approval for the merger with Time Warner. Executives familiar with the details said that the proposed five-year contract for Turner has three key components: an annual salary and bonus of $5 million slightly less than Levin's pay; a long-term performance incentive worth $10 million a year, and options for 2.2 million Time Warner shares. Turner would receive 1 million of those options immediately and would receive 300,000 for each of the four successive years in the contract. Executives from Time Warner told the Turner directors that the stock options were worth from $50 million to $75 Add that to the $75 million in salary, bonus and long-term compensation, and these executives esti-f mated that Turner's total package would be worth anywhere from $125 million to $150 million. "That's not a bad package, even for a said Graef Crystal, an adjunct professor at the University of California at Berkeley's Haas School of' Business and an expert in executive compensation.

Crystal calculated a smaller current value for" Turner's stock options: $36 million, vs. $50 million to' $75 million. But he said that Turner could make as: much as $118 million on his options, if he exercised all of them in eight years and if Time Warner's stock price increased at a rate in line with Wall expectations. the New York Times Ted Turner claims he has no trouble playing second fiddle. That's small wonder.

In the orchestra Time Warner is creating, second fiddle can pay a whole lot more than first violin. As the new vice chairman of Time Warner Turner is to receive a five-year compensation package worth well in excess of $100 million, according to executives familiar with the details of the plan. Even deducting the value of his stock options, Turner is to earn $15 million a year. Gerald Levin, the chairman of Time Warner and Turner's pew boss, earned $5.3 million in 1994. Time Warner said last week that it had agreed to acquire Turner Broadcasting System Inc.

for $7.5 bil lion in stock. At the board meeting last Thursday in which Turner's directors voted to approve the merger, Turner's compensation became a hot issue. Some Turner directors asked why Time Warner would grant such a rich package to Turner when his chief lieutenants were offered no long-term contracts. Executives said Turner's compensation is not likely to derail the deal. But it could raise some eyebrows, especially since Turner is already to receive $2.6 billion in Time Warner stock in return for his controlling stake in Turner Broadcasting.

Moreover, two major Turner investors, Comcast Corp. and Continental Cablevision protested last week that Turner gave preferential treatment to a ale of WPEC L-20 anal I Christa McAuliffe yrxSv II Middle School srfi Nsj BOYNTON jf BEACH 1 1 1... Rnynton.Baach.Blvd I II II brings at least $150 million ii ii. nmpmu ii. .3 By MITCH McKENNEY Palm Beach Post Staff Writer WEST PALM BEACH Freedom Communications, a newspaper chain with five small TV stations, surprised bigger media suitors and won a bidding war for WPEC-Channel 12.

The price was not released Wednesday, but one would-be Wpec Sold buyer said he bid slightly over $150 million and lost. Federal Communications Commission approvals are likely to take six months, putting the sale in early 1996. 1991 NEW YORK TIMES FILE PHOTO Brothers Gourmet Coffee will sell the 224-store Gloria Jean's coffee bar chain, which was named for original owner Gloria Jean Kvetko and husband, Edward. Brothers selling Gloria Jean's coffee bars to Canadian firm Dreyfoos KEY DATES in the life of WPEC-TV Channel 12: 1955: Signs on as ABC affiliate WEAT. 1963: Sold to Palm Beach Gardens developer John D.

MacArthur, along with radio station WEAT-AM, for total of $2.1 million. 1973: Sold for $3.5 million to Palm Beacher Alex Dreyfoos, who changes call letters to match initials of his Photo Electronics Corp. 1989: Changes to CBS affiliate in swap brought on by Miami stations. 1996: Sold to Freedom Communications for more than $150 million (pending regulatory approval). Brothers Coffee 6-month performance.

Aberdeen getting new developer By LINUS CHUA Palm Beach Post Staff Writer BOYNTON BEACH Left dangling after owner UDC Homes Inc. filed for Chapter 11 bankruptcy protection in May, Aberdeen Golf and Country Club has found a new developer to build on the remaining 900 home sites. Transeastern Properties of South Florida a Coral Springs home builder, said Wednesday it paid UDC $18.3 million for the sites. Transeastern hopes to build the homes, which feature five different product lines from single-family homes to condominiums, in the next four years, President Art Falcone said. Prices for the homes will range from $140,000 to $500,000, and existing residents will have the first opportunity to buy them.

Aberdeen's residents said in May they were concerned about the property's fate after Tempe, UDC filed for bankruptcy protection to reorganize its $444.5 million debt. After the filing, UDC said it wanted to sell properties in the Southeast, including Aberdeen, a retiree country club community. Aberdeen is the second Palm Beach County project for Transeastern, which also built homes at the Sunset Pointe on Lake Wellington. Aberdeen was picked for its location and the community's facilities, Falcone said. "Its location is superior and it has a great reputation as a seniors country club," he said.

"We only have to do very little renovation to it." Ongoing renovations include the clubhouse, the community's entrances, the guard gates and landscaping. High $15.25 10 Low $3.75 "This is the largest transaction we've ever done," said Alan Bell, president of Freedom's broadcast division, who said the station would become the company's broadcast flagship. He answered questions from WPEC employees for more than an hour Wednesday afternoon. The contract includes a clause protecting their jobs for "a number of months" after Freedom takes over, said Bill Peterson, general manager of WPEC and president of its parent company, Photo Electronics Corp. Bell said he knew "the mice would have to find a way to sneak beneath the radar" and win the bidding for the station that owner Alex Dreyfoos put in play in late July.

"I would not have thought of them," said Meredith Corp. broadcast group President Phil Jones, the self-described "bridesmaid" in the bidding. He said his bid was more than 15 times the station's annual cash flow, and he estimated Freedom's bid at $160 million. "That's a huge number," he said. Paxson Communications Corp.

last year bought WPBF-Channel 25, an ABC affiliate, for $32 million. But WPEC's VHF signal and cry from its 52-week high of $15.25 a share in March. Parkland resident Vic Fein-stein, an investor holding about 20,000 shares of Brothers' stock, said he. wasn't happy about the sale. "It's my opinion that they manipulate the market," Fein-stein said.

"In other words, the rumor comes in, a market maker pushes out a load of stock, and then people get sucked in because people buy it and then bingo, it drops." "I'm totally fed up with what is going on with this company," he added. Company spokesmen could not be reached for comment late Thursday. However, in recent interviews executives have said all of their announcements including the possible sale of Gloria Jean's were real events. If the sale goes through in October as planned, Brothers will have 10 coffee bars left under the Brothers Coffee name. By DANIELLE HERUBIN Palm Beach Post Staff Writer BOCA RATON Brothers Gourmet Coffees Inc.

said Wednesday it has a buyer for its Gloria Jean's coffee bars. Second Cup Canada's largest specialty coffee retailer, will double the size of its business by buying the 224-store Gloria Jean's chain. The company, which has 225 coffee stores in Canada and 10 U.S. shops in the Southwest, also will be gaining a large foothold in the U.S. coffee market.

Although both companies refused to reveal the purchase price, a Brothers' executive recently told investors that they planned to get about $35 million for the chain. Analysts on Wednesday were more conservative, estimating the sale at about $30 million. Brothers paid $38.5 million for the Gloria Jean's chain a few years ago. Brothers new management team, brought in as the company posted record losses over 55 616 728 98 5 1995 SOURCE: Bloomberg Business News close competition for ratings with WPTV-Channel 5 made it attractive. "Florida network affiliates aren't sold that often, and when they are, they're in demand," Channel 25 General Manager Doug Barker said.

And Dreyfoos knows he benefited from the hype surrounding the Time Warner deal to buy Turner Broadcasting System which came during the two months he had his for-sale sign out. "Our timing, without our knowing it, turned out to be ex? Please see WPEC 1 OB STAFF GRAPHIC the past year, have worked hard to sell the chain. The coffee bars contributed mightily to a recent quarterly loss that was close to 100 times what it was a year ago $46.5 million compared with $500,000 for the second quarter. But Wall Street appeared unimpressed with the good news. The stock moved up only 13 cents to close at $5.13, a far In Brief PALM BEACH POST STAFF AND WIRE REPORTS 7.00 6.90 6.80 6.70 6.60 6.50 6.40 9-7 9-21 6-29 7-13 7-27 8-10 8-24 Auction Dates Not scheduled Oct.

12 Monday Monday Trading Ylds: 6.57 5.68 5.58 5.40 30-Year: 1-Year: 6-Month: 3-Month: Report: may cut 20,000 jobs NEW YORK Corp. may cut more than 20,000 jobs by late next year as part of its planned breakup into three companies, The Wall Street Journal reported Wednesday. But the company said it's just beginning to consider the restructuring, which was announced last week, and couldn't say how many jobs would be cut. "It is far too early to come up with an estimate," spokesman Jim Byrnes said. McDonald's to sell stock directly NEW YORK McDonald's latest offering isn't a new McSandwich but McDirect Shares, a stock purchase plan that allows shareholders to buy stock directly from McDonald's.

As part of the plan, the fast-food giant is seeking permission to issue an additional 11.5 million shares, according to a filing made last week with the Securities and Exchange Commission. The plan goes into effect Dec. 31. Correction Because of a reporting error by The New York Times, The Palm Beach Post Wednesday incorrectly reported the status of an investigation by the Justice Department and Mark E. Whitacre, former executive of Archer-Daniels-Midland Co.

No deal has been accepted by the government. Banking bills wind through Congress WASHINGTON Congressional committees moved forward Wednesday with separate bank and thrift reform proposals, with House Republicans agreeing to bring to the floor a major bill that allows banks and Wall Street firms to combine. House Speaker Newt Gingrich, met with chairmen from the House Rules, Banking and Commerce committees and reached an agreement to bring the Glass Steagall reform bill to a floor vote. The proposal passed the House Banking Committee in May but has been in legislative limbo for several months as House Banking Chairman Jim Leach, R-Iowa, tried to appease the feuding insurance and bank lobbies. Elsewhere, the House Banking subcommittee on consumer credit voted 15-1 for a bill that would rescue the Savings Association Insurance Fund, or SAIF.

The thrift fund rescue plan calls for the industry to make a one-time $6 billion payment to revive the fund then merge it with the bank insurance fund. In the Senate, the banking committee passed a deregulation bill that eliminates certain credit disclosures for home mortgages and streamlines rules on hiring bank officers and directors. Morrison Restaurants rose $2.50 to $20.25: Microsoft, Visa announce plan Microsoft and Visa International proposed an industry software standard for on-line payments and financial transactions Wednesday, but opposition from key companies could lead to a standards war that impedes the rollout of electronic commerce over the Internet. Critics of the proposal said that instead of an "open" technical standard that would be freely available for use by any company, the partners were attempting to promote technology that would make the rest of the on-line world beholden to Microsoft and Visa. IBM also objected, saying that the Microsoft-Visa approach could lead to a welter of competing technologies for electronic commerce that might make it difficult for merchants to serve all customers.

CliniCorp hires chairman, CEO WEST PALM BEACH CliniCorp Inc. said Wednesday it has secured financing and hired a new chairman and CEO. The money $2 million from a private placement and $2.4 million borrowed against accounts receivable will keep the company going. The new chairman and CEO, Dr. Lawrence Markson, also is chairman of Markson Management Services a chiropractic management company that handles about 1,000 clinics.

The company also is trying to get another $1.5 million in equity financing. CliniCorp' chiropractic clinics are being converted to integrated health care centers which will provide a variety of services to patients. The Mobile, based company said it will split into three separate public companies. It will retain its specialty restaurant division and distribute ownership of its family dining and health-care businesses to its shareholders. Profits in the first quarter ended Sept.

2 fell to 27 cents per share from 67 cents. Last year's profit included a gain of 7 1 cents per share and a charge of 33 cents for business consolidation. Ryder System Inc. fell 50 cents to $25.38: The Miami-based transportation company said it expects to post a decline in third-quarter net income. A year earlier, Ryder earned $42 million, or 53 cents a share, on $1.19 billion of revenue In the third quarter.

Ryder said it expects revenues to be higher than a year ago. Analysts were expecting earnings of 51 cents a share for the latest third quarter, according to a survey by First Call Inc..