AGM 2021

Jun 28, 2021

Greetings and welcome to Sinclair Broadcast Group June twenty twenty Annual Shareholders Meeting. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Ripley, President and Chief Executive Officer. Thank you. You may begin. Thank you. Good morning. I'm Chris Ripley, President and Chief Executive Officer of Sinclair Broadcast Group Incorporated. And as directed by the Board, I will be the Acting Chairman of this Annual Shareholders Meeting. It's my pleasure to welcome you whether you are attending remotely or in person to the Annual Meeting of Shareholders. It's 10AM 06/28/2021. And in accordance with the notice of the meeting, I call the Annual Meeting of Shareholders to order. While more people are receiving the novel coronavirus vaccine COVID-nineteen has not been eradicated and new variants have emerged. As such, the Board of Directors and management continues to remain diligent in protecting the health and safety of our shareholders, employees and community. To minimize the risk to shareholders, employees and the community, we strongly encourage all shareholders to access the annual meeting via the live teleconference or webcast rather than attend the meeting in person. Instructions for accessing the teleconference and webcast will provided in the proxy statement. As always, we encourage all shareholders to vote their shares prior to the annual meeting. On 04/29/2021, we issued our notice to this annual meeting and proxy statement in which all company shareholders of record were notified of the date and time of the annual meeting of shareholders. And even though we encourage remote attendance, as I just noted, all were invited to attend the annual meeting. Please note that any shareholders not in attendance will not be able to vote or revoke a proxy through the teleconference or webcast nor participate actively. Therefore to ensure your vote is counted at the annual meeting we recommend to everyone whether in attendance or not to vote their shares using one of the methods indicated in the proxy materials or through your broker, bank or other nominees voting instructions form. Shareholders of record may attend the meeting and revoke their proxy at any time before it is voted. If you elected to attend the annual meeting in person, please note while there are no current executive orders in the state of Maryland limiting gathering sizes we continue to follow recommendations provided by the World Health Organization and the Center for Disease Control and Prevention. For those shareholders attending the meeting in person when you registered this morning, each of you received a written copy of the rules of conduct for our annual meeting. Any shareholder introducing a proposal or making a presentation today has also received a written copy of the rules of conduct for our annual meeting. As previously indicated, shareholders attending the meeting via the live teleconference or webcast are not permitted to participate actively and therefore have not received a copy of the rules of conduct. This meeting shall be conducted in accordance with those rules. Ted Weiner, the representative of the Inspector of Elections has elected to attend the meeting in person to make his presentation. We appreciate your continued support and we hope you and yours will stay safe and healthy. We are closely monitoring developments with the COVID-nineteen pandemic and we urge all including our shareholders to follow the recommendations provided by your state of residence, the World Health Organization and the U. S. CDC. Attending today's Annual Meeting either in person or remotely are David D. Smith, Director and Executive Chairman, attending in person Frederick G. Smith, Director and Vice President, attending in person Jay Duncan Smith, Director, Vice President and Secretary, attending in person Robert E. Smith, Director, attending remotely Laurence E. McKenna, Director, attending in person Daniel C. Keith, Director, attending in person Martin R. Leader, Director, attending in person Howard E. Friedman, Director, Attending in Person Benson E. Legg, Director, Attending in Person Lori R. Beyer, Director, Attending in Person Lucy A. Rieshauser, Executive Vice President, Chief Financial Officer, Attending in Person Dave Bohanek, Senior Vice President, Chief Accounting Officer attending remotely David B. Gibber, Senior Vice President and General Counsel attending in person Steve Zinker, Vice President Investor Relations attending in person and Billy Joe McIntyre, Director Investor Relations, attending in person. At this time, I would like to give a brief state of the union on Sinclair Broadcast Group, highlighting our achievements of the past year, our resolve throughout the COVID-nineteen pandemic and the incredible building blocks we have laid that will guide us through the future. As a reminder, certain matters discussed on this call may include forward looking statements including future operating results, which are subject to a number of risks and uncertainties. I remind you that actual results in the future could differ materially as a result of various factors, which can be found in our SEC reports, including the risk factors in our annual report on Form 10 ks. The company undertakes no obligation to update these forward looking statements. Thank you, Steve. The past year tested us in some of the most profound ways imaginable. And despite these immense challenges, Sinclair employees rose to the occasion and faced each headwind with grace determination. I am forever grateful for the resolve shown by all of our employees spanning all our businesses. Thanks to their hard work and dedication, we not only managed through the COVID storm, but we set ourselves up for success for years to come. Entering 2020, amid the integration of our recently acquired portfolio of regional sports networks, we expected it would be a transformative year for Sinclair. But we certainly could not have foreseen the unprecedented external challenges that arose not only for us, but for the entire world. Overnight, our company transitioned thousands of employees to seamlessly work remotely, ensure that Sinclair's important and timely content relied upon by audiences and advertisers alike was not disrupted by the pandemic. 2020 was also a reminder to us all that we are stronger together and we share a duty to help our neighbors when they are in need. Our continued long standing partnership with the Salvation Army in tandem with support of our local TV stations, RSNs and digital properties helped raise over $35,000,000 throughout 2020 to assist communities impacted by the pandemic, natural disasters and other causes. From the ongoing pandemic to historic presidential elections to nationwide social justice movements, 2020 served as a reminder of the importance and necessity of unbiased local news. We continue our commitment to deliver the best in investigative reporting with our newsrooms across the country carrying out a critical public service. For its efforts Sinclair's newsrooms were awarded more than three fifty news awards in 2020 alone including Emmy Awards, Regional and National Edward R. Murrow Awards and the Investigative Reporters and Editors Awards. Constantly on the lookout to expand our content to more audiences, we decided to launch a new program, The National Desk, leveraging our incredible local assets to create new viewing experiences for millions of Americans. Sinclair also forged ahead on initiatives that will benefit the entire broadcast industry most notably the promotion of next gen broadcasting powered by ATSC three point zero transmission standard, which we helped create. We participated in numerous next gen TV market launches over the last year. And by the 2021, the industry hopes to have advanced broadcast technology reaching approximately half of The U. S. Households. With next gen TV enabled television sets beginning to come to market, we now anticipate that consumer interest in this technology will drive its nationwide adoption. As you know, local sports has become a significant part of the business, particularly as we charge forward in our mission to connect people with content everywhere with a focus on the most relevant and important local content. On the RSN front, we managed through the months long suspension of live sports. And thanks to a broad portfolio of sports built over years, we were able to quickly pivot and help fill in the void with content shared from our other sports properties including Tennis Channel, Stadium and Ring of Honor. Perhaps the most significant announcement we made in 2020 was our transformative deal with Bally's Corporation. As part of this agreement 19 of our RSNs have been rebranded under the Bally Sports name. There will also be integration and sponsorship opportunities between Valleys and our broadcast assets as well as STIRR and Stadium. In addition to the RSN receiving revenue for the naming rights and committed advertising spend from Valleys, including sports and options to acquire equity interest in Valleys. The new Valleys sports brand will bring about significant changes to live sports viewing experience. Going far beyond legalized sports betting, this partnership will enable us to realize our ultimate sports goal, the gamification of the viewing experience. We believe we have incredible opportunity to change the way people experience sports content, to transform one dimensional viewing into a highly interactive and personalized activity. The first step in realizing this ultimate goal of gamification, we have developed and launched a new and enhanced digital app for the RSNs that will allow significantly increased functionality enabling viewers to have an enhanced viewing watching sorry an enhanced experience watching their hometown sports teams. Free to play contests and sports betting opportunities where legal in conjunction with the Valley Bet app enhanced sports news content and the ability to watch highlights or replay the entire game on their mobile devices will engage fans like ever before. While this experience is only available to authenticated viewers this year, we expect to roll out a direct to consumer product in 2022 that will enable all fans in team's local territories to subscribe to their corresponding RSNs directly. I also want to mention that in the past year, we have made good progress on numerous initiatives around our Environmental, Social and Governance or ESG efforts, including launching programs around measuring the current impact of our activities in the ESG space, formed committees to more formally address our efforts going forward, made key hires including a Chief Compliance Officer and added our first female Board member. In conclusion, rather than allow the challenges of 2020 to hold us back, we charge forward and begin 2021 focused on the strengths of our company, diversification, resilience and innovation. We have set ourselves up for success in a post COVID world and are prepared to meet the challenges brought on by the changing media landscape. As the world evolves around us, we continue to identify ways to adapt and grow while meeting the challenges the changing needs and desires of our customers, viewers and partners. Through Sinclair's exceptional local reporting, we will continue to deliver critical and timely information to communities nationwide. Through our innovative sports content, we will continue to engage fans in more meaningful ways, providing increased interactivity and heightened viewing experiences. Finally, we will continue to dedicate our time, energy and resources into meeting Sinclair's long term goals for success and ensuring that the company's position as a leader in broadcast television, local news and sports remains steadfast. Mr. J. Duncan Smith, Corporate Secretary of the company, will you now report on the mailing of notice and other formalities? Thank you, Chris. I wish to submit the following: a copy of the printed notice of this meeting dated 04/09/2021 stating the time, purpose and place of meeting a copy of the press release dated 06/09/2021 confirming the meeting and how to attend remotely. The complete list certified by the company's transfer agent of holders of shares of common stock of the company as of the close of business on 04/16/2021, which is also recorded date fixed by the Board of Directors where the shareholders entitled to notice of and to vote at this meeting. The affidavit of the company's transfer agent is showing that a copy of the notice of this annual meeting was mailed in accordance with the bylaws of the company to all shareholders of record. I now order that materials submitted by the Secretary be made part of this meeting. American Stock Transfer and Trust Company LLC has been appointed as Inspector of Elections to tabulate the shares of common stock represented in person or by proxy at this meeting, as well as to tabulate the votes cast for each proposal to come before the meeting. I would like to introduce Ted Weiner, the representative of American Stock Transfer and Trust Company LLC. As indicated earlier, Mr. Weiner is attending in person in this meeting. Mr. Weiner, are you prepared to report on the number of shares of common stock that are present either in person or by proxy? Mr. Chairman, as of the record date 04/15/2021, there were 51,561,164 shares of Class A common stock and 23,775,056 shares of Class B common stock entitled to vote on each of the proposals. Each Class A share entitled to one vote on each of the proposals and each Class B share is entitled to 10 votes on each of the proposals. There are 67,990,890 Class A and Class B shares present in Percival representing MedVal proxy at the meeting. As noted in the proxy statement, shareholders attending this meeting via the live conference or webcast are not being present at the meeting unless they are represented by a valid proxy. Based on the report of Mr. Weiner, I hereby declare that a quorum is present at this meeting. The four proposals submitted for shareholder action at this meeting are fully explained in the proxy statement dated 04/29/2021. As noted in the proxy statement, shareholders attending this meeting via the live teleconference or webcast are not able to vote via the live teleconference or webcast nor are they able to revoke their proxy. However, any previously submitted proxies are deemed voted and will be included in the tabulation of the balloting. The next order of business is the election of 10 directors to serve for one year and until their successors are duly elected and qualified. The 10 directors who receive the most votes will be elected. This is called a plurality. If you have withheld your vote on the proxy card your vote will not count for or against the nominee. Broker non votes are not counted as votes cast for nominees and will not affect the outcome of the proposal. I will call upon Secretary, Jay Duncan Smith, who will present the names of those persons nominated by management. Chairman. Those nominated for election as directors of the company to serve for the term of one year and until their successors are duly elected and qualified are the following: to David D. Smith, Frederick G. Smith, J. Duncan Smith, Robert E. Smith, Laurie R. Byer, Howard E. Freeman, Daniel C. Keefe, Martin R. Leader, Vincent E. Legg, Lawrence E. McKenna. You've heard the motion. Are there any other nominations? Hearing none, I declare the nominations closed. Is there a second? Second motion. We will now move forward with the vote. The next proposal originally submitted to the shareholders for action is the ratification of the Audit Committee's appointment of PricewaterhouseCoopers LLP as independent auditors of the company. The affirmative vote of a majority of the votes cast is required to ratify this proposal. If you abstain from voting your abstention will not count as a vote for or against the proposal. Broker non votes are not counted as votes cast for this proposal and will not affect the outcome of the voting. The Audit Committee has previously recommended to the Board of Directors that it ratify the Audit Committee's appointment of PricewaterhouseCoopers LLP as the company's independent auditors for the year ending 12/31/2021 and the directors have unanimously done so. I now call upon Lawrence E. Makena, the Chairman of the Audit Committee to further address the shareholders at this time. The Audit Committee was assigned the responsibility of appointing the independent auditor for the company. The Audit Committee discussed the proposal received from PricewaterhouseCoopers LLP with members of the firm and was satisfied that they have qualifications and experience to handle the audit of the company and its various subsidiaries. Based on these discussions, the Audit Committee agreed that it was in the best interest of the company to engage Pricewaterhouse Coopers as its independent auditors and so notified the Board of its decision. Based upon the recommendations of the Audit Committee, the Board unanimously ratified the appointment and has recommended PricewaterhouseCoopers as the independent auditors for the company and its subsidiaries for the year ending December 3121. The Audit Committee will continue to work closely and regularly with the company's independent auditors and will periodically evaluate their work to assure its quality under the ratification by the shareholders of the Point of PricewaterhouseCoopers as the independent auditors of the company and its subsidiaries. You have heard the motion for ratification of the Audit Committee's recommendation. Are there any questions or further discussion needed? Hearing none, is there a second? I second the motion. Thank you. We will now move forward with the vote. The company is requesting that stockholders approve in its entirety the amendment and restatement of the Sinclair Broadcast Group 1998 Employee Stock Purchase Plan, the ESPP, as approved by the Competition Committee of the Board of Directors. The approval of this amendment and restatement of the ESPP will increase the maximum number of shares of our Class A common stock authorized for issuance under the ESPP by 1,000,000 shares plus an annual increase for ten years commencing on 01/01/2022 and ending on 01/01/2031. Under the ESPP, shares of our Class A common stock will be available for purchase by eligible employees who elect to participate in the ESPP. Eligible employees will be entitled to purchase by means of payroll deductions limited amounts of our Class A common stock during periodic payroll deduction periods. The amendment restatement of ESPP will not be effective without stockholder approval. The Compensation Committee believes that the amendment and restatement of the will help the company retain and motivate eligible employees and further align our interests of eligible employees with interest of our stockholders. More specifics on the ESPP were presented in the proxy statement. The Board has unanimously recommended that the stockholders vote for the approval of the amendment and restatement of the employee stock purchase plan. For the reasons stated in the proxy statement, the Board unanimously recommends a vote for this proposal three. The affirmative vote of the majority of votes cast is required to ratify this proposal three. If you abstain from voting, your abstention will not count as a vote for or against the proposal. Broker non votes are not counted as votes cast for this proposal and will not affect the outcome of the voting. You heard the proposal three. Are there any questions or further discussions needed? Hearing none, is there a second? I second the motion. Thank you. We will now move forward with the vote. The company is also seeking stockholder approval to amend our 1996 long term incentive plan to increase the number of shares of common sorry Class A common stock authorized for issuance under thereunder by 5,000,000 shares to bring the total number of shares reserved for issuance under the LTIP to $19,000,000 The company believes that offering incentive awards under the long term incentive plan is critical to its ability to attract, motivate and retain qualified personnel. The LTIP was initially adopted by the Board of Directors in 1996 and has been amended by stockholder vote in 1998 to increase the number of shares reserved for issuance and again in 2014 to reflect changes in the law. The share reserve under the LTIP is now 14,000,000 shares. If stockholders approve this proposal, the amendment to the LTIP will become effective as of the date of the stockholder approval. If stockholders do not approve this approval this proposal, the amendment to the LTIP will the amendment to the LTIP to increase the available shares thereunder will not take effect and the LTIP will continue to be administered in its current form until such time as the shares available for issuance thereunder have been depleted or until the LTIP is terminated, whereupon the company will be unable to maintain our current equity grant practices and will be at a significant competitive disadvantage in attracting, motivating and retaining talented individuals who contribute to our success. In such an event, we will also be compelled to replace long term incentive awards with cash awards, which may not as effectively align the interests of our employees with those of our stockholders. For the reasons stated in the proxy statement, the Board annually recommends a vote for this proposal for. The affirmative vote of the majority of votes cast is required to ratify this proposal for. If you abstain from voting your abstention will not count as a vote for or against the proposal. Broker non votes are not counted as votes cast for this proposal and will not affect the outcome of the voting. You have heard the proposal before. Are there any questions or further discussion needed? Hearing none, is there a second? I second the motion. Thank you. We will now move forward with the vote. Will the representative of the inspectors of election please report the results of voting? Proposal one, each nominee for director nominated by the Board of Directors has received a plurality of the votes present in person or represented by proxy entitled to vote on each election of directors that are duly elected. Proposal number two, the majority of the shares present in person or represented by proxy and entitled to vote have been voted to ratify the appointment of PWC LLP and the twenty twenty Senate Argers for the fiscal year end 12/31/2021. Proposal number three, a majority of the shares present in person were represented by proxy and entitled to vote have been voted for approval of proposed amendments and restated ESGP. Proposal four, majority of the shares present in person were represented by proxy entitled to vote have voted for proposal before approving the proposed amendment to the company in 1996. I now declare that one, the nominees for directors have been duly elected two, the appointment of PricewaterhouseCoopers LLP to audit the financial statements of the company and its subsidiaries for the year ending 12/31/2021 has been ratified. Three, the proposed amended and restated employee stock purchase plan was approved. And four, the proposed amendment to the company's 1996 long term incentive plan was approved. I direct that results certified by the inspectors of elections be attached to the minutes of this meeting and made a part thereof. We generally now come to that part of the agenda for general questions and discussion. Now does anyone present have questions? If so please submit them now or raise your hand to be recognized. If we are prohibited from responding now or in recognition or in recognizing that you are at this meeting please reach out to your Investor Relations our Investor Relations department for your inquiry. Questions? Nobody? Okay. We got a quiet crew. All right. If there are no other business the chair will entertain a motion to adjourn. Is there a second? I second the motion. All in favor? Aye. Before the adjournment, I would like to express my sincere appreciation to the shareholders who attended in person or remotely as well as those who have submitted their proxies and were unable to be present in person or remotely. We appreciate your support. Please be safe and stay healthy. The meeting is adjourned. This does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful