**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

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**FORM 10-K/A**

 

**(Amendment No. 1)**

 

** (Mark One)**

 

| **x**      | ** ** | **ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934** |
|------------|------------|------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | ** **                                                                                           |
| ** ** | ** ** | **   For the  fiscal year ended December 31, 2008**                              |

 

**or**

 

| **o**      | ** ** | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934** |
|------------|------------|----------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | ** **                                                                                               |
| ** ** | ** ** | **   For the  transition period from:  Not Applicable**                         |

 

**Commission file number 1-14776**

 

**Hearst-Argyle Television, Inc.**

(Exact Name ofRegistrant as Specified in Its Charter)

 

| **Delaware**                                                     | ** ** | **74-2717523**                                             |
|------------------------------------------------------------------|------------|------------------------------------------------------------|
| (State  or other jurisdiction of  incorporation or organization) | ** ** | (I.R.S. Employer  Identification No.)            |
| ** **                                                       | ** ** | ** **                                                 |
| **300 West 57****th**** Street  New York, NY 10019**        | ** ** | **(212) 887-6800**                                         |
| (Address  of principal executive offices)                        | ** ** | (Registrant’s  telephone number, including area code) |

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OFTHE ACT:

 

 
| **Title of Each Class**                             | ** ** | **Name of Each Exchange On Which Registered** |
|-----------------------------------------------------|------------|-----------------------------------------------------------------------------|
| Series A Common Stock, par value$.01 per share |       | New York Stock Exchange                                                |

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OFTHE ACT:

**None**

 

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act. Yes o    No x

 

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section 15(d) ofthe Act. Yes o     No x

 

Indicate by checkmark whether the registrant (1) has filed all reports required to be filedby Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the Registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes x     No o

 

Indicate by check mark whether the registrant has submitted electronicallyand posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T(§ 232.405 of this chapter) during the preceding 12 months (or for such shorterperiod that the registrant was required to submit and post such files).Yes o     No o

 

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-Kis not contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K.o

 

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer,a non-accelerated filer or a smaller reporting company.  See the definitions of “large acceleratedfiler”, “accelerated filer” and “smaller reporting company” in Rule 12b-2of the Exchange Act.

 
| Large accelerated filer  o |   | Accelerated Filer  x |   | Non-accelerated  filer  o |   | Smaller reporting  company  o |
|--------------------------------------|--------|--------------------------------|--------|-------------------------------------|--------|-----------------------------------------|

 

Indicate by checkmark whether the registrant is a shell company. Yes o     No x

 

The aggregatemarket value of the registrant’s voting and non-voting common stock held bynon-affiliates on June 30, 2008 based on the closing price for theregistrant’s Series A Common Stock on such date as reported on the NewYork Stock Exchange (the “NYSE”), was approximately $127,281,312.

 

Shares of theregistrant’s Common Stock outstanding as of February 17, 2009: 93,672,572shares (consisting of 52,373,924 shares of Series A Common Stock and41,298,648 shares of Series B Common Stock).

 

 **DOCUMENTS INCORPORATED BY REFERENCE:**None.

 

 

 

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**Explanatory Note**

 

Hearst-Argyle Television, Inc.(“HTV” or the “Company”) is filing this Amendment to its Annual Report on Form 10-Kfor the fiscal year ended December 31, 2008, as originally filed with theSecurities and Exchange Commission on February 27, 2009 (the “2008 AnnualReport”), solely for the purpose of amending and supplementing Part III ofthe 2008 Annual Report.  This amendmentchanges our 2008 Annual Report only by including information required by Part III(Items 10, 11, 12, 13 and 14) that was previously omitted from the 2008 AnnualReport in reliance upon General Instruction G(3) to Form 10-K.General Instruction G(3) to Form 10-K allows such omitted informationto be filed as an amendment to the original Form 10-K or incorporated byreference from the Company’s definitive proxy statement which involves theelection of directors not later than 120 days after the end of the fiscal yearcovered by the original 2008 AnnualReport. As of the date of this amendment, the Company does not intend tofile a definitive proxy statement containing the information required in Part IIIwithin such 120-day period.  Accordingly,the Company is filing this amendment to include such omitted information aspart of the original 2008 Annual Report.  Inaddition, as required by Rule 12b-15 under the Securities Exchange Act of1934, as amended, new certifications by our principal executive officer andprincipal financial officer are filed as exhibits under Item 15 of Part IVhereof.

 

This amendment should be read in conjunction with theoriginal 2008 Annual Report andthe Company’s other filings with the SEC. This amendment consists solely of thepreceding cover page, this explanatory note, Part III (Items 10, 11, 12,13 and 14), the signature page and the certifications required to be filedas exhibits to this amendment. No other amendments are being made to the 2008Annual Report.  Except as otherwiseexpressly stated below, this Amendment does not reflect events occurring afterthe date of the 2008 Annual Report nor does it modify or update the disclosurecontained in the 2008 Annual Report in any way other than as required toreflect the amendments discussed above and reflected below.

 

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**PART III**

 

 **ITEM 10.   ****DIRECTORS, EXECUTIVE OFFICERS ANDCORPORATE GOVERNANCE**

 

**Board ofDirectors**

 

Our Amended andRestated Certificate of Incorporation provides for classified directors andstaggered director terms.  The holders ofSeries A Common Stock elect two directors (the “Series A Directors”)and Hearst Broadcasting, as the sole holder of the Series B Common Stock,elects the balance of the directors (the “Series B Directors”).

 

The Board ofDirectors is divided into two classes, Class I and Class II, with oneSeries A Director in each class. Each director serves for a term ending onthe second annual meeting date following the annual meeting at which thatdirector was elected.  The followingtable lists the name, age, class and series designation for each directorserving on the Board as of December 31, 2008:

 
| **Name**                    | ** ** | **Age** | ** ** | **Director****Class****Designation** | ** ** | **Director****Series****Designation** |
|-----------------------------|------------|---------|------------|--------------------------------------|------------|---------------------------------------|
| David J. Barrett            |       | 60      |       | II                                   |       | B                                     |
| Frank A.  Bennack, Jr. |       | 76      |       | I                                    |       | B                                     |
| John G. Conomikes           |       | 76      |       | I                                    |       | B                                     |
| Ken J. Elkins               |       | 71      |       | II                                   |       | B                                     |
| George R.  Hearst, Jr. |       | 81      |       | I                                    |       | B                                     |
| William R. Hearst III       |       | 59      |       | II                                   |       | B                                     |
| Bob Marbut                  |       | 73      |       | I                                    |       | B                                     |
| Gilbert C. Maurer           |       | 80      |       | I                                    |       | B                                     |
| David Pulver                |       | 67      |       | II                                   |       | A                                     |
| Caroline L. Williams        |       | 62      |       | I                                    |       | A                                     |

 

**DavidJ. Barrett** hasserved as our Chief Executive Officer since January 1, 2001, as ourPresident since June 1999 and as a Director since August 29,1997.  Mr. Barrett served asCo-Chief Executive Officer from June 1999 to December 31, 2000.  Prior to his appointment as President andCo-Chief Executive Officer, he served as our Executive Vice President and ChiefOperating Officer beginning on August 29, 1997.   Prior to this time, he served as a VicePresident of Hearst and Deputy General Manager of Hearst’s broadcast groupsince January 1991.  Mr. Barrettserved as General Manager of the WBAL Division of Hearst in Baltimore, Marylandfrom November 1989 to January 1991. He joined Hearst in 1984 as General Manager of Hearst’s radio propertiesand continued in that position until 1989. Mr. Barrett is also a member ofHearst’s Board of Directors, a Trustee of the Trust established under the Willof William Randolph Hearst and a Director of both the William Randolph HearstFoundation and The Hearst Foundation.

 

 **Frank A. Bennack, Jr.** has served asone of our Directors since the consummation of the Hearst Transaction on August 29,1997, and as the Chairman of our Board since September 2008.  Mr. Bennack has served as the ChiefExecutive Officer of Hearst since June 2008.  He previously served as President and ChiefExecutive Officer of Hearst from January 1979 through May 2002.  Since June 1, 2002, Mr. Bennack hasserved as Vice Chairman of Hearst’s Board of Directors and Chairman of Hearst’sExecutive Committee.  He is also aTrustee of the Trust established under the Will of William Randolph Hearst anda Director of both the William Randolph Hearst Foundation and The HearstFoundation.  Mr. Bennack is also aDirector of Polo Ralph Lauren Corporation and was a Director of Wyeth until February 28,2006 and of J.P. Morgan Chase & Co. until July 1, 2004.

 

**JohnG. Conomikes** hasserved as one of our Directors since the consummation of the Hearst Transactionon August 29, 1997.  From June 1999to November 2002, Mr. Conomikes served as Senior Vice President ofHearst.    Mr. Conomikes also servedas our President and Co-Chief Executive Officer from August 1997 to June 1999.  Prior to this time, he served as a VicePresident of Hearst and the General Manager of Hearst’s broadcast group since March 1983.  From January 1981 to March 1983, Mr. Conomikesserved as Hearst’s General Manager of Television and from February 1970 toJanuary 1981, served as Vice President and General Manager of WTAE inPittsburgh, Pennsylvania.  Mr. Conomikesjoined Hearst in 1959 at WTAE where he served in various positions beforeassuming the Vice President and General Manager positions at the station.  Mr. Conomikes currently is serving as aconsultant to Hearst. 

 

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Mr. Conomikes isalso a member of Hearst’s Board of Directors, a Trustee of the Trustestablished under the Will of William Randolph Hearst and a Director of boththe William Randolph Hearst Foundation and The Hearst Foundation.

 

**KenJ. Elkins** has servedas one of our Directors since the consummation of the merger of PulitzerPublishing Company (“Pulitzer”) with and into the Company (the “Pulitzer Merger”)on March 18, 1999.  From March 1999to June 2005, Mr. Elkins served as a Director of Pulitzer Inc., thesuccessor company to Pulitzer’s newspaper operations.   Prior to the Pulitzer Merger, Mr. Elkinsserved as Senior Vice President—Broadcasting Operations and Director ofPulitzer and President and Chief Executive Officer of Pulitzer Broadcasting Company.  In addition, he served as VicePresident—Broadcast Operations from April 1984 through March 1986 andprior to that time served as a general manager of certain of Pulitzer’stelevision stations.  Mr. Elkins wasinitially nominated by our Board of Directors and appointed to serve as aDirector in 1999 in accordance with a Board Representation Agreement, dated May 25,1998.  The Board Representation Agreementis no longer in effect.

 

**GeorgeR. Hearst, Jr.**has served as one of our Directors since the consummation of the HearstTransaction on August 29, 1997.  Mr. Hearsthas served as the Chairman of the Board of Directors of Hearst since March 1996.  From April 1977 to March 1996, Mr. Hearstserved as a Vice President of Hearst and headed its real estateactivities.  He is also a Trustee of theTrust established under the Will of William Randolph Hearst, a Director of theWilliam Randolph Hearst Foundation and the President and a Director of TheHearst Foundation.  Mr. Hearst is acousin of William R. Hearst III.

 

**WilliamR. Hearst III** hasserved as one of our Directors since the consummation of the Hearst Transactionon August 29, 1997.  Mr. Hearstis a limited partner in the Menlo Park, California venture capital firm ofKleiner, Perkins, Caufield and Byers, which he joined in January 1995.  From October 1984 to December 1994,Mr. Hearst served as Publisher of the San Francisco Examiner newspaper,then owned by Hearst.  Mr. Hearst isa member of Hearst’s Board of Directors, a Trustee of the Trust establishedunder the Will of William Randolph Hearst, President and Director of theWilliam Randolph Hearst Foundation and Vice President and a Director of TheHearst Foundation.  Mr. Hearst is acousin of George R. Hearst, Jr.

 

**BobMarbut** served asCo-Chief Executive Officer and Chairman of our Board of Directors from August 29,1997 through December 31, 2002 and has served as one of our Directorssince the consummation of the Hearst Transaction on August 29, 1997.  Mr. Marbut currently serves as ChiefExecutive Officer of Argyle Security, Inc., a NASDAQ company in theelectronic security business. Previously, Mr. Marbut served as the Co-Founder, Chairman and ChiefExecutive Officer of Argyle Television, Inc. from August 1994 until August 29,1997.  In addition to Argyle Security, Inc.,Mr. Marbut is also a Director of the Tupperware Brands Corporation andValero Energy Corporation.

 

**GilbertC. Maurer** hasserved as one of our Directors since the consummation of the Hearst Transactionon August 29, 1997.  Mr. Maurerserved as Chief Operating Officer of Hearst from March 1990 until March 1998and as Executive Vice President of Hearst from June 1985 until September 1998.  Mr. Maurer currently is serving as aconsultant to Hearst.  Mr. Maurer isa member of Hearst’s Board of Directors, a Trustee of the Trust establishedunder the Will of William Randolph Hearst and a Director of both the WilliamRandolph Hearst Foundation and The Hearst Foundation.

 

 **David Pulver** has served as one of our Directors since December 1994. Since 1982, Mr. Pulver has beenPresident of Cornerstone Capital Inc., a private investment company that isinvolved in a wide range of investments, including public securities, privateequity, venture capital and real estate. Since 1999, Mr. Pulver has been a member of the Advisory Board ofFLAG Capital Management, a venture capital/private equity/real assets fund offunds.  Since 2002, Mr. Pulver hasserved as Chairman of Colby College’s Investment Committee and as a Directorand Chairman of the Audit Committee of Carter’s Inc., an NYSE listedcompany.  Mr. Pulver served asCo-CEO and Chairman of The Children’s Place from 1968 to 1984.

 

**CarolineL. Williams** hasserved as one of our Directors since 1994. From May 2001 to June 2005, Ms. Williams served as ChiefFinancial and Investment Officer of The Nathan Cummings Foundation.  Ms. Williams currently serves asPresident of Grey Seal Capital, an investment and consulting firm.  Ms. Williams also serves on the Board ofDirectors of the Foundation for the Global Compact, a non- profit organizationestablished in April 2006 to help raise funds to support the work of theUN Global Compact Office and Global Compact-related activities.

 

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**InformationRegarding the Board of Directors and its Committees**

 

Our Board ofDirectors held a total of five meetings in 2008.  Each director attended (either in person orby telephone) at least 75% of the total number of meetings held by the Board ofDirectors.  Each director attended(either in person or by telephone) at least 75% of the total number of meetingsheld by all Board committees on which he or she served.   Members of our Board are also invited andencouraged to attend our annual meeting of stockholders.  Nine of our then 11 Board members attendedlast year’s annual meeting.

 

Our Board ofDirectors has a standing Audit Committee, Compensation Committee, ExecutiveCommittee and Retirement Plan Investment Committee.  Because Hearst Broadcasting controls amajority of our voting stock, we qualify as a “controlled company” under NewYork Stock Exchange (“NYSE”) listing standards. As a controlled company, we are not subject to certain NYSE listingstandards which regulate the composition of listed company boards and compensationcommittees.   As a controlled company, wealso are exempt from the NYSE listing requirement to have, and we do not have,a standing nominating committee.

 

*AuditCommittee.*    TheAudit Committee consists of Ken J. Elkins, David Pulver and Caroline L. Williams.  The Audit Committee assists our Board ofDirectors in its oversight of our financial reporting practices and the qualityand integrity of our financial statements. The Audit Committee also retains the independent auditors (subject tostockholder ratification) to audit our financial statements and consults withour independent auditors and with personnel from the internal financial staffwith respect to corporate accounting, reporting and internal control practices.  The Board of Directors has determined thateach member of the Audit Committee is financially literate in accordance withNYSE listed company standards.  Inaddition, the Board of Directors has determined that each member of the AuditCommittee is independent in accordance with NYSE listed company standards,including the enumerated criteria in NYSE Rule 303A.02(b), and hasaffirmatively determined that no member of the Audit Committee has a “materialrelationship” with the Company as defined in NYSE Rule 303A.02(a).  In making this determination, the Board notedthat Caroline Williams and David Pulver have not had any relationship with theCompany other than as a director, and that, while Ken Elkins was an officer ofPulitzer prior to joining the Company’s Board, that relationship was not deemedmaterial because the Company acquired Pulitzer over ten years ago and Mr. Elkinsceased to be an employee of Pulitzer at that time.   Our Board has further determined that DavidPulver, Chair of the Audit Committee, qualifies as an “audit committeefinancial expert” as defined in SEC Regulation S-K (see “Election of DirectorsProposal” above for a description of David Pulver’s relevant experience).  The Audit Committee met ten times during2008.  Our Audit Committee Charter isavailable on our Website at www.hearstargyle.com.  You may also request a copy of our AuditCommittee Charter by writing to us at Investor Relations, Hearst-ArgyleTelevision, Inc., 300 West 57th Street, New York, New York 10019.

 

*CompensationCommittee.*    TheCompensation Committee consists of Frank A. Bennack, Jr., David Pulver andCaroline L. Williams.  Victor F. Ganzi.,our former director, served on the Compensation Committee until his resignationfrom the Board on October 7, 2008.  Ms. Williamsserves as Chair of the Compensation Committee. The Compensation Committee reviews and approves salary and bonus levelsfor executive officers and total compensation for our senior executiveofficers.  The Compensation Committeealso has the power to recommend to the Board (and in limited circumstances tomake) stock option and restricted stock awards to participants in our incentivecompensation plans.  The CompensationCommittee met six times during 2008.  OurCompensation Committee Charter is available on our Website at www.hearstargyle.com.  You may also request a copy of ourCompensation Committee Charter by writing to us at Investor Relations,Hearst-Argyle Television, Inc., 300 West 57th Street, New York, New York 10019.

 

*ExecutiveCommittee.*    TheExecutive Committee consists of David J. Barrett, Frank A. Bennack, Jr.,John G. Conomikes, George R. Hearst, Jr., Bob Marbut and David Pulver.Victor F. Ganzi., our former director, served on the Executive Committee untilhis resignation from the Board on October 7, 2008.   Mr. Conomikes serves as Chair of theExecutive Committee.  During theintervals between meetings of the Board of Directors, the Executive Committeemay exercise all of the powers of our Board of Directors in the direction andmanagement of the business and affairs of the Company.  The Executive Committee did not meet during2008.

 

*Retirement Plan Investment Committee*. The Retirement Plan Investment Committee consists of David J. Barrett,Frank A. Bennack, Jr., George R. Hearst, Jr., William R. Hearst, IIIand Gilbert C. Maurer.  Victor F. Ganzi,our former director, served on the Retirement Plan Investment Committee untilhis resignation from the Board on October 7, 2008.  Mr. Bennack serves as Chair of theRetirement Plan Investment Committee. The Retirement Plan 

 

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Investment Committeereviews and makes recommendations to our Board concerning the investmentperformance of our pension plan assets. The Retirement Plan Investment Committee did not meet during 2008.

 

*Non-Managementand Independent Directors Meetings.*   Our non-management directors, who consistof all of the members of our Board of Directors except for David J. Barrett,met in executive session four times during 2008.  In addition, those directors whom our Boardof Directors has determined are independent, David Pulver, Caroline L. Williamsand Ken Elkins, met in executive session once in 2008.   Frank A. Bennack, Jr. served as thepresiding director over executive sessions of the non-management members of ourBoard of Directors until September 22, 2008.  David Pulver has served as the presidingdirector since that time.  The presidingdirector also addresses matters related to our corporate governance.  Any stockholder, employee or other interestedperson wishing to express concerns to the non-management directors on our Boardabout (a) our operations, (b) our financial reporting or (c) anyother matter related to us, may submit information that describes his or herconcerns by mail to Presiding Director, Hearst-Argyle Television, Inc.,300 West 57th Street, New York, New York 10019, or byphoning us at our ReportLine discussed on the following page.

 

*DirectorQualification Standards and Nomination Process*.  Because weare a controlled company as defined by NYSE listing standards, we are notrequired to have, and do not have, a standing nominating committee.  Our Amended and Restated Certificate ofIncorporation provides for classified directors — the holders of Series ACommon Stock elect the two Series A Directors and Hearst Broadcasting, asthe sole holder of the Series B Common Stock, elects the balance of thedirectors, who are designated as the Series B Directors.  The Board selects nominees to be consideredfor election in accordance with our Corporate Governance Guidelines, which areavailable on our Website at www.hearstargyle.com.

 

While we have reliedprimarily on recommendations from management and members of our Board toidentify director nominee candidates, our Board will also consider any candidatewho is timely recommended by a stockholder as a nominee to serve as a Series ADirector.  Stockholders wishing tosuggest a candidate for director nomination for the 2009 Annual Meeting shouldmail their suggestions to Secretary, Hearst-Argyle Television, Inc., 300West 57th Street, New York, New York 10019.  Suggestions must be received by the Secretaryno later than December 6, 2009.  OurBoard will evaluate director nominee candidates suggested by stockholders inthe same manner in which they evaluate candidates recommended by other sources.

 

**Section 16(a) Beneficial OwnershipReporting Compliance**

 

The SEC requiresthat each registrant’s executive officers and directors, and beneficial ownersof more than 10% of any class of equity security registered pursuant to theExchange Act, make certain filings on a timely basis under Section 16(a) ofthe Exchange Act.  We believe that duringthe past fiscal year all of our officers, directors and greater than 10%beneficial holders reported on a timely basis all transactions required to bereported by Section 16(a) during fiscal year 2008, except for LydiaG. Brown, our Corporate Controller, who joined the Company in October 2005,but whose initial Form 3 was filed in October 2008 due toadministrative error.

 

**Code ofBusiness Conduct and Ethics**

 

We have a Code ofBusiness Conduct and Ethics that applies to all our employees, including ourChief Executive Officer, our Chief Financial Officer and our Controller.  The Code of Business Conduct and Ethics isavailable on our Website at www.hearstargyle.com.  You may also request a copy of our Code ofBusiness Conduct and Ethics by writing to us at Investor Relations,Hearst-Argyle Television, Inc., 300 West 57th Street, New York, New York 10019.

 

**CorporateGovernance Guidelines**

 

We have adoptedCorporate Governance Guidelines that set the framework within which the Boardand management fulfill their respective responsibilities.  The Corporate Governance Guidelines areavailable on our Website at www.hearstargyle.com.  You may also request a copy of our CorporateGovernance Guidelines by writing to us at Investor Relations, Hearst-ArgyleTelevision, Inc., 300 West 57th Street, New York, New York 10019.

 

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**ReportLine**

 

We have atelephone hotline for employees and others to submit their concerns regarding apossible violation of our Code of Business Conduct and Ethics, questionableaccounting or auditing matters, or other concerns.  To submit a concern, you may call our ReportLineat 1-800-450-4209.  You may choose todirect your concerns to the Board, to the non-management members of the Board,or to the Audit Committee.  Any concernsregarding accounting or auditing matters will be automatically directed to ourAudit Committee.  All communications thatwe receive from our ReportLine will be kept confidential, and anonymous callswill be accepted.  Information about ourReportLine is also available on our Website at www.hearstargyle.com.

 

**ExecutiveOfficers**

 

Our executive officersas of January 1, 2009, are as follows:

 
| **Name**           | ** ** | **Age** | ** ** | **Position**                                          |
|--------------------|------------|---------|------------|-------------------------------------------------------|
| David J. Barrett*  |       | 60      |       | President and Chief  Executive Officer                |
| Harry T. Hawks     |       | 55      |       | Executive Vice  President and Chief Financial Officer |
| Philip M. Stolz    |       | 61      |       | Senior Vice President                                 |
| Frank C. Biancuzzo |       | 49      |       | Senior Vice President                                 |
| Roger B. Keating   |       | 47      |       | Senior Vice President,  Digital Media                 |

 

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| * |   | Member of the Board of  Directors. See “Board of Directors” for additional information. |
|---|--------|---------------------------------------------------------------------------------------------------|

 

**HarryT. Hawks** hasserved as our Executive Vice President and Chief Financial Officer since February 2000and as our Senior Vice President and Chief Financial Officer from theconsummation of the Hearst Transaction on August 29, 1997 until February 2000.  Prior to this time and since August 1994,he served as our Chief Financial Officer and Treasurer.  Mr. Hawks served as VicePresident—Finance of Argyle Television Holding, Inc. (a television companyunrelated to our present business) from March 1993 until June 1993,and from June 1993 to April 1995 he served as its Chief FinancialOfficer.  Prior to joining ArgyleTelevision Holding, Inc., Mr. Hawks co-founded Cumberland CapitalCorporation, a merchant banking firm, where he served as President and as aDirector from 1989 until 1992.

 

**PhilipM. Stolz** hasserved as our Senior Vice President since December 1998.  Prior to his appointment as Senior VicePresident, Mr. Stolz served as Vice President and General Manager ofWBAL-TV, our television station in Baltimore, Maryland, from February 1991to December 1998. He joined Hearst as Vice President and General Managerof WDTN, our former television station in Dayton, Ohio, in October 1987and continued in that position until 1991.

 

**Frank C.Biancuzzo** hasserved as our Senior Vice President since February 2007.  Prior to his appointment as Senior VicePresident, Mr. Biancuzzo served as President and General Manager ofWISN-TV, our television station in Milwaukee, Wisconsin from April 2002 toJanuary 2007, and as our Vice President of Marketing and Promotion from August 1997to March 2002.  Before joiningHearst Broadcasting as Director of Promotion and Marketing in 1995, Mr. Biancuzzowas Vice President of Marketing Research and Consultation at Frank N. MagidAssociates, where he provided strategic planning for an international clienteleof local television stations, broadcast groups and networks from November 1988to December 1994.

 

**Roger B.Keating** hasserved as our Senior Vice President, Digital Media since July 2008.  Before joining Hearst-Argyle Television,Mr. Keating was an executive at Time Warner starting in December 2000,first with their AOL division as Senior Vice President, Interactive Propertiesuntil July 2002, and then with the Time Warner Cable division in a varietyof operating roles, as President of the National Division until March of2003, President of the Los Angeles Division until September 2005, andfinally as Corporate Executive Vice President, Los Angeles Region.  Mr. Keatingfounded and was CEO of a streaming video start-up called Zatso from March 1998until December 2000.

 

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**ITEM11.   EXECUTIVE COMPENSATION**

 

**CompensationDiscussion and Analysis**

 

Thisdiscussion addresses our compensation with respect to fiscal 2008 for our namedexecutive officers (“NEOs”), who are:

 

·                  David J.Barrett,  President and Chief ExecutiveOfficer;

 

·                  Harry T.Hawks,  Executive Vice President andChief Financial Officer;

 

·                  Philip M.Stolz,  Senior Vice President; and

 

·                  Frank C.Biancuzzo, Senior Vice President.

 

Inaddition, Steven A. Hobbs served as our Executive Vice President, Chief Legaland Development Officer until March 31, 2008, and Terry Mackin served asour Executive Vice President until February 29, 2008.

 

Inthe first section, we discuss our compensation philosophy and objectives; inthe second section, we discuss how we implement those objectives; in the thirdsection, we review the components of NEO compensation packages; and in thefourth section, we discuss NEO compensation for 2008.

 

**Our******Compensation Philosophy and Objectives**

 

Our CompensationCommittee, which is composed of directors who are not Hearst-Argyle employees,reviews and approves compensation packages for all of Hearst-Argyle’s executiveofficers, as well as other corporate officers and certain general managers ofthe television stations that Hearst-Argyle owns or manages.  As such, the Compensation Committee overseesthe design, development and implementation of the compensation program for ourNEOs.

 

***Generally. ***Our objectiveis to compensate Hearst-Argyle’s NEOs in the manner best designed to createlong-term value for its stockholders. Our philosophy is that there is apositive correlation between long, productive careers, long-term operating andfinancial performance and long-term stockholder value.  To that end, the primary objectives of our executive compensation programare to (1) attract talented NEOs to manage and lead the Company, (2) rewardthem for near-term operating and financial performance and (3) incentivizethem to achieve excellent operating and financial results for the Company andits stockholders over the longer term. To achieve these objectives, we maintain a compensation structureconsisting of a mix of elements designed to allow us to appropriately rewardnear-term performance while simultaneously encouraging both retention andlonger term operating success.  Theseelements consist of salary, annual cash bonus, equity incentive compensation,and retirement and other benefits.  Manyof these elements simultaneously meet both our near-term and long-termcompensation goals.

 

Within thisframework we consider each of the elements of our compensation package for eachNEO, combining them in the manner we believe will best meet our statedobjectives on a cost-effective basis and incentivize that NEO’sperformance.  When deciding on the mixand amount of compensation for each NEO, we consider many factors, includingcurrent compensation levels and future compensation and/or careeropportunities, the Company’s recent, current and projected operating andfinancial performance, as well as the tax and accounting consequences to theCompany of different compensation elements. As described below, significant portions of the various components ofour NEO compensation arrangements are intended to be tied to the Company’soperating and financial performance and stock price, which in turn aligns theirinterests with the long-term interests of our stockholders.

 

***RewardingResults***.  Key elements of compensation that we use toreward NEOs’ performance include:

 

·                  a competitive base salary that reflects the depth ofthe NEO’s expertise and management experience, as well as continued performanceand service to the Company;

 

·                  a cash bonus that is based on an assessment of the NEO’sperformance against the achievement of certain targets based on financialmetrics, such as operating income and free cash flow (defined as net cashprovided by operating activities less average capital expenditures), and onquantitative and qualitative measures; and

 

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·                  equity incentive compensation in the form of stockoptions and restricted stock, the value of which is contingent upon theperformance of our Series A Common Stock, and the receipt of which issubject to vesting schedules that require continued service with the Company.

 

Base salary and potentialbonus levels are established to be commensurate with the NEO’s scope ofresponsibilities, demonstrated leadership abilities, and management experienceand effectiveness, and to reward annual achievements, while the Company’sequity compensation program is designed to motivate and challenge the NEO toachieve superior operating and financial results over the longer term.

 

***AligningNEO and Stockholder Interests.***  Within theabove-described structure we also seek to align the interests of the NEOs withthose of our stockholders by evaluating executive performance on the basis ofkey financial measurements which we believe closely correlate to long-termstockholder value, including operating income and free cash flow.  Also, awards of stock options and restrictedstock with vesting schedules of several years are key elements of compensationdesigned to align the interests of the NEOs with stockholders because they linka significant portion of compensation to stockholder value:  the value of our NEOs’ total compensationpackages are determined by the performance of our Series A Common Stockbecause the value of these equity awards is contingent upon the appreciation invalue of that stock over a period of several years.

 

***ContinuedService and Education***.  We also seek to encourage theCompany’s NEOs to remain with the Company by conditioning portions of theircompensation on continued service and investing in their continuingprofessional development.  Key elementsof compensation that require continued service to receive any, or maximum,payout include:

 

·                  the extended vesting terms on elements of equityincentive compensation, i.e., stock options and restricted stock; and

·                  our Supplemental Retirement Plan, which does notentitle executives to any benefit unless they remain employed with the Companyfor at least five years, and the amount of which benefit is determined by thenumber of years that the NEO is employed by the Company.

 

The Company hasmade a significant investment in education and development programs for ourNEOs, including the Hearst Management Institute.  These programs focus on general leadershipissues, as well as specific issues affecting the media industry, and aredesigned to ensure that the Company’s NEOs remain among the most informed andrespected in their field.

 

**How WeImplement our C****ompensation Objectives**

 

***Generally***. We determine compensation after carefully evaluating each NEO’sperformance during the year against the goals that we established for each ofthem for that year, their demonstrated leadership in discharging managementresponsibilities, the extent to which the NEO contributed to the Company’soperating and financial performance in the most recent year and over the lengthof the NEO’s career, current and prior compensation arrangements, and the NEO’slong-term potential to enhance stockholder value.  Specific factors that we consider when makingbonus and equity compensation decisions for the NEOs include:

 

·                  key measurements of the Company’s operating andfinancial performance, including revenues, operating income, share of revenuesand audience ratings (in the case of certain NEOs who supervise televisionstations), and free cash flow;

·                  the NEO’s contributions to strategic objectives, aswell as project-specific initiatives;

·                  the NEO’s achievement of specific operational goals;

·                  the NEO’s efforts in launching new content orservices, leadership in the industry and ability to enable the Company toattract and retain audiences and advertisers, in each case where applicable;

·                  the NEO’s commitment to fostering the Company’s valuesand culture with employees; and

·                  the NEO’s emphasis on our ethics policies, as well ascommitment to best practices for corporate compliance, community leadership anddiversity.

 

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When determiningbonus and equity awards, we also consider the Company’s operating and financialperformance in the context of the Company’s financial performance in priorperiods and in light of events and trends in our industry and in the economygenerally.   In addition, the Committeeutilizes a multi-year compensation matrix which includes a tally sheet thatitemizes and totals all material elements of each NEO’s compensation from themost recently completed fiscal year and prior years.

 

We considercompetitive market compensation paid by our peers and other media companies indetermining NEO salaries, bonuses and equity compensation awards, but we do notattempt to maintain a certain target percentile within a peer group orotherwise place undue reliance on that information.  In addition, we use formulas to assist us insetting financial goals and consider the achievement of those goals in determiningcompensation levels, in particular our cash bonus awards.  However, we do not adhere rigidly to formulaswhen doing so would force us to overreact to near-term changes in businessperformance or otherwise set inappropriate compensation levels.  We maintain flexibility in our compensation programin order to take into consideration the evolving business environment and thecyclical nature of the television business, in which odd- and even-yearfinancial results may differ considerably due to the presence or absence ofpolitical (and, to a lesser extent, Olympic) advertising revenues, as well asother economic conditions.

 

We strive toachieve an appropriate mix between cash and equity incentive awards in order tomeet our objectives.  The mix ofcompensation elements, and relative proportion of each, that we select for eachNEO is designed to simultaneously reward recent results and motivate long-termperformance.

 

***The Role of the Compensation Committee and CEO*****. **The Compensation Committee evaluates the performanceof the CEO in terms of the Company’s operating and financial performance anddetermines CEO compensation in the context of the goals and objectives of thecompensation program.  The CEO and theCompensation Committee together assess the performance of the other NEOs anddetermine their compensation, based on initial recommendations from the CEO andanalysis of the tally sheets and other factors described above.  The other NEOs do not play a role in theirown compensation determination, other than discussing their individualperformance objectives, and the subsequent achievement of those objectives,with the CEO.

 

***The Role of Compensation Consultants.*** Neither the Company nor the Compensation Committee has any contractualarrangement with any compensation consultant who determines or recommends theamount or form of compensation for any individual NEO or director.  However, as discussed above, we doperiodically consider competitive market compensation paid by our peers andother media companies in determining NEO compensation, and the Company and theCompensation Committee periodically have consulted Towers Perrin on this peerinformation, as well as the structure of the NEO compensation programgenerally.  In 2008, Towers Perrinprovided consultation services to the Committee pursuant to a formal Scope ofWork.  Towers Perrin provided, and theCompensation Committee considered, compensation market data drawn from a totalsample of over 100 companies in the Towers Perrin CDB Media Database, which includescorporate, group and operating company positions at TV station groups and otherbroadcasting, publishing and on-line media properties.

 

When consulted,Towers Perrin also provides the Compensation Committee with industry data andinformation concerning compensation trends along with their general views onspecific compensation elements and/or programs. In addition, the Company participates annually in Towers Perrin’sindustry wide long-term incentive survey which provides data concerningexternal market practices and from which data is provided to the Company on anaggregated basis by Towers Perrin. Except for the foregoing, the Company does not receive any otherservices from Towers Perrin and the Company’s NEOs did not participate in theselection of Towers Perrin.  The Companyhas not used the services of any other compensation consultant in mattersaffecting NEO or director compensation. However, either the Company or theCompensation Committee may do so in the future.

 

***NEO Employment Agreements****.*  The Company maintains employment agreementswith the NEOs.  The CEO’s employmentagreement is negotiated between the CEO and the Compensation Committee whilethe other NEOs’ employment agreements are negotiated between the individual NEOand the CEO, in consultation with the Compensation Committee as to specificcompensation elements and terms.   Eachemployment agreement sets forth the base salary, as well as the maximum bonusopportunity (expressed as a percentage of base salary), payable to the NEO foreach year of the employment agreement’s term. The material terms of these agreements are summarized briefly below.

 

*David J. Barrett — President and Chief Executive Officer. *As of January 1, 2009, the Company entered intoan employment agreement with Mr. Barrett for a term commencing on January 1,2009 and ending on December 31, 2010.   

 

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For calendar year 2008,and pursuant to his prior employment agreement, Mr. Barrett’s annual basesalary was $1,125,000 and his maximum bonus opportunity was 110% of his annualbase salary.  For calendar years 2009 and2010, Mr. Barrett’s employment agreement provides for an annual basesalary of $1,125,000 and a maximum bonus opportunity of 110% of his annual basesalary for each year.  In determining Mr. Barrett’ssalary amounts for the contract period, the Compensation Committee consideredthe factors and compensation objectives discussed above, including currenteconomic conditions, as well as the tax consequences to the Company of the$1,000,000 limit on deductibility of non-performance based compensation under Section 162(m) ofthe Internal Revenue Code of 1986, as amended. The Committee determined that, in light of all the factors considered,maintaining annual base salary at the 2008 level was appropriate for thecontract period.  Mr. Barrett’semployment agreement also contains a provision under which he would receivecertain payments upon certain circumstances involving a change in control ofthe Company, which is described further below.

 

*Harry T. Hawks— Executive Vice President and Chief Financial Officer.*As of January 1, 2008, the Companyentered into an employment agreement with Mr. Hawks for a term commencingon January 1, 2008 and ending on December 31, 2010.  For calendar year 2008, Mr. Hawks’annual base salary was $600,000 and his maximum bonus opportunity was 75% ofhis annual base salary.   For calendaryears 2009 and 2010, Mr. Hawks’ annual base salary is $625,000, and hismaximum bonus opportunity is 75% of his annual base salary for each year.  The Committee determined that, in light ofcurrent economic conditions, maintaining Mr. Hawks’ annual base salary atthe 2009 level for 2010 was appropriate. Mr. Hawks’ employment agreement also contains a provision underwhich he would receive certain payments upon certain circumstances involving achange in control of the Company, which is described further below.

 

*Philip M.Stolz —Senior Vice President.*As of January 1, 2009, the Company entered intoan employment agreement with Mr. Stolz for a term commencing on January 1,2009 and ending on December 31, 2009. For calendar year 2008, and pursuant to his prior employment agreement, Mr. Stolz’sannual base salary was $555,000 and his maximum bonus opportunity was 75% ofhis annual base salary.   For calendaryear 2009, Mr. Stolz’s annual base salary is $555,000, and his maximumbonus opportunity is 75% of his annual base salary.

 

*Frank C.Biancuzzo — Senior Vice President.*As of January 1, 2009, the Company entered intoan employment agreement with Mr. Biancuzzo for a term commencing on January 1,2009 and ending on December 31, 2010. For calendar year 2008, and pursuant to his prior employment agreement, Mr. Biancuzzo’sannual base salary was $475,000 and his maximum bonus opportunity was 75% ofhis annual base salary.  For calendaryears 2009 and 2010, Mr. Biancuzzo’s employment agreement provides for anannual base salary of $500,000 and $510,000, respectively, and a maximum bonusopportunity of 75% of his annual base salary in each year.

 

*Steven A.Hobbs — Executive Vice President and Chief Legal and Development Officer.* For calendar year 2008, the CompensationCommittee set an annual base salary of $600,000 for Mr. Hobbs and amaximum bonus opportunity of 75% of his annual base salary.  Mr. Hobbs resigned from his positionwith the Company as of March 31, 2008, in order to take a position withour controlling stockholder, Hearst. During the remainder of 2008, Mr. Hobbs provided managementoversight and legal services to the Company in connection with ourretransmission consent negotiations. The Company paid Hearst $200,000 in 2008for those services.

 

*TerryMackin — Executive Vice President. *For calendar year 2008, the CompensationCommittee set an annual base salary of $730,000 for Mr. Mackin and amaximum bonus opportunity of 75% of his annual base salary.  Mr. Mackin resigned from his positionwith the Company as of February 29, 2008.

 

The employmentagreements may be terminated by the Company upon the death of the executiveofficer or for “cause” as defined in the agreements and, with respect to Messrs. Barrettand Hawks, by either the Company or the executive officer within 60 daysfollowing a “change in control” (as defined below).

 

***PotentialPayments Upon Change in Control. ***None of the NEO’s current employmentagreements except for that of Messrs. Barrett and Hawks contain provisionsthat would entitle the NEO to payments upon a change in control.  If either Mr. Barrett’s or Mr. Hawks’employment agreement is terminated in connection with a change in control(which under the agreements will only be deemed to occur if the Company ceasesto be controlled by, or under common control with, Hearst or its affiliates),he will be entitled under certain circumstances to receive his base salary forthe duration of the term of his employment agreement as if no termination hadoccurred, as well as any accrued but unpaid bonus and any future unpaid bonus,payable at 50% of his maximum potential bonus award.

 

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Assuming a changein control occurred on December 31, 2008 and Messrs. Barrett’sand  Hawks’ employment agreements wereterminated on that date, they would be entitled to receive under certaincircumstances their base salaries for 2009 and 2010, the duration of the termof their employment agreements, plus 50% of their maximum potential bonusawards for 2009 and 2010.  The Committee’sobjective in providing the CEO and CFO with the change in control provision wasto enable them to consider and review possible change in control transactionsin an independent and objective manner, without the influence of self-interest,by providing a reasonable, but not excessive, payment in the event that theiremployment is terminated as a result of a change in control transaction.

 

In addition, theCompany’s equity compensation plans provide for the full and immediate vestingof all outstanding and unvested awards of options and restricted stock for allemployees, including the NEOs, upon a change in control of the Company.  A change in control is defined in the plansto include, among other things, Hearst ceasing to control the Company or agoing private transaction.

 

The followingtable sets forth the amounts that each NEO would have received assuming (1) achange in control occurred on December 31, 2008, when the closing price ofthe Company’s Series A Common Stock on the New York Stock Exchange was$6.06 per share; and (2) Messrs. Barrett’s and Hawks’ employment wasterminated as of that date:

** **
| **NEO**             | ** ** | **Salary** | ** ** | **Bonus** | ** ** | **Options** | ** ** | **Restricted  Stock** | ** ** | **Total** | ** ** |
|---------------------|------------|------------|------------|-----------|------------|-------------|------------|-----------------------|------------|-----------|------------|
| David J. Barrett    |       | $          | 2,250,000  |      | $          | 1,237,500   |       | $                     | 0          |      | $          | 246,884 |   | $ | 3,734,384 |   |
| Harry T. Hawks      |       | $          | 1,250,000  |      | $          | 468,750     |       | $                     | 0          |      | $          | 102,869 |   | $ | 1,821,619 |   |
| Frank C.  Biancuzzo |       | —     |       | —    |       | $           | 0          |                  | $          | 73,647    |       | $ | 73,647 |   |
| Philip M. Stolz     |       | —     |       | —    |       | $           | 0          |                  | $          | 92,585    |       | $ | 92,585 |   |
| Steven A. Hobbs     |       | —     |       | —    |       | —      |       | —                |       | —    |       |
| Terry Mackin        |       | —     |       | —    |       | —      |       | —                |       | —    |       |

 

***Equity Award Practices.*** Typically, the Compensation Committee considersequity awards for NEOs and other key employees at its regularly scheduled December meeting,and recommends those awards to the full Board for approval at its regularlyscheduled December meeting.  Theexercise price of each stock option awarded to our NEOs is determined inaccordance with the long term incentive compensation plan under which it wasawarded.  The exercise price of optionsgranted under the Amended and Restated 1997 Stock Option Plan and the Amendedand Restated 2007 Long Term Incentive Compensation Plan is the closing price ofthe Company’s Series A Common Stock on the date of award, while theexercise price of options granted under the 2004 Long Term IncentiveCompensation Plan is the closing price of the Company’s Series A CommonStock on the trading day preceding the award. The award date for stock options awarded to NEOs under the plans is thedate on which the Board (or in limited circumstances, such as a new hire, theCompensation Committee) approves them.

 

The Company isalso permitted under the terms of the 2004 Long Term Incentive CompensationPlan and the Amended and Restated 2007 Long Term Incentive Compensation Plan toaward restricted stock to NEOs and certain other key employees.  These awards are also considered, recommendedand approved at these December meetings, and their award date is also thedate that such awards are approved by the Board (or the Compensation Committee,if applicable).

 

Board andcommittee meetings are generally scheduled well in advance and schedulingdecisions are made without regard to anticipated earnings or other majorannouncements by the Company.  TheCompany’s long term incentive compensation plans do not permit the repricing ofstock options, and the Company has not awarded any equity compensationretroactively.

 

***$1 Million Limit on Deductibility of Executive Compensation*****.**   Section 162(m) ofthe Code generally limits the amount that a public company may deduct forcompensation paid to executive officers other than the CFO named in the SummaryCompensation Table to $1 million, unless certain requirements are met.  Specifically, this limitation does not applyto compensation that meets the requirements under Section 162(m) for “qualifyingperformance-based” compensation (i.e., compensation paid only if the individual’sperformance meets pre-established objective goals based on performance criteriaapproved by stockholders).

 

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Generally, theCompany currently awards cash bonuses to NEOs pursuant to its IncentiveCompensation Plan and equity compensation awards pursuant to its Amended andRestated 2007 Long Term Incentive Compensation Plan.  The Company’s Incentive Compensation Plan isstructured with the intent that compensation attributable to bonuses that maybe awarded under the plan will not be subject to the Section 162(m) limitationon deductibility.  The Amended andRestated 2007 Long Term Incentive Compensation Plan is also structured with theintent that compensation attributable to equity compensation awarded under theplan is not subject to the Section 162(m) limitation ondeductibility.  For 2008, the payments ofannual bonuses (with the exception of the CEO, as discussed above) and theawards of stock options (but not awards of restricted stock) were designed withthe intent to satisfy the above requirements for deductible compensation.  In the case of any NEO who is expected by theCompensation Committee to be a “covered employee” within the meaning of Section 162(m) ofthe Code for the year for which an award is made, the awards are approved by asubcommittee of the Compensation Committee consisting solely of “outsidedirectors” for purposes of Section 162(m) of the Code.

 

As required underthe tax rules, the Company must obtain stockholder approval every five years ofthe material terms of the performance goals for qualifying performance-basedcompensation, including annual bonuses awarded under the Incentive CompensationPlan and certain equity awards under our long term incentive compensationplan.  Our stockholders re-approved thematerial performance goals under our Incentive Compensation Plan at our 2008Annual Meeting.

 

***Stock Ownership.*** The NEOs’ stock ownership is shown in the PrincipalStockholders table on page 26. * *The Company has not implemented astock ownership policy or requirement for its NEOs or directors.

 

**Componentsof NEO Compensation**

 

The primarycomponents of our NEO compensation packages are (1) salary, (2) abonus opportunity and (3) equity compensation.  In addition, our NEO compensation includesretirement and other benefits.

 

***Salary****.*  Each NEO’ssalary is established either (1) in that executive’s employment agreementwith the Company, as described in the section “Employment Agreements” above or (2) bythe Compensation Committee.  TheCompensation Committee determined the salary set forth in Mr. Barrett’semployment agreement, and the Compensation Committee in consultation with Mr. Barrettdetermined the salaries set forth in the employment agreements of the otherNEOs.

 

In establishingbase salary levels, the Compensation Committee reviews the salary levels for similarpositions in broadcasting and media companies, and other companies comparableto the Company in terms of revenues and cash flow.  The Compensation Committee does not establisha specific formula targeting compensation at any particular level, but ratherdetermines salary levels by subjectively evaluating the position and theindividual’s performance and accomplishments. The Compensation Committeeconsiders the scope of the NEO’s responsibilities, his performance, and theperiod over which he has performed those responsibilities.  Decisions regarding salary increases takeinto account the NEO’s current salary and the amounts paid to his peers withinand outside the Company. Additionally, the Compensation Committee takes intoaccount other components of compensation, such as bonus and previous stockoption awards, in setting the salary levels. The Compensation Committee also considered the ongoing economic downturnand its effects on the Company’s financial results and stock performance.  We believe that we have appropriately set thesalary levels for the NEOs to achieve our stated compensation objectives.  The salaries paid to the NEOs in 2008 areshown in the Summary Compensation Table on page 18.

 

***BonusOpportunity.***  The Compensation Committee (in consultationwith the CEO, except with respect to his own bonus opportunity) determines eachexecutive’s annual cash-based bonus opportunity, which is set forth in theiremployment agreements and described above. Generally, each NEO’s employment agreement specifies a maximumpercentage of the individual’s base salary, typically ranging from 75% to 110%(depending on the position), that may be payable as a cash bonus award.

 

Each February, theCEO reviews with the Compensation Committee the Company’s full-year financialresults against the financial, strategic and operational goals established forthe year, and the Company’s financial performance in prior periods, as well asthe achievement of individual goals. Based on that review, the Compensation Committee determines the cashbonus amounts and authorizes their payment to the NEOs.

 

The bonus amountthat each NEO receives depends upon

 

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·                  the Company’s achievement of certain financialperformance measures of the Company (and of individual television stations inthe case of NEOs who have supervisory responsibility for individual televisionstations); and

 

·                  for each NEO other than the CEO, the achievement ofindividual performance goals.

 

In 2007 thefinancial performance measures the Compensation Committee used to determine NEObonus amounts were Adjusted EBITDA and cash flow from continuingoperations.   In 2008, the CompensationCommittee determined to use the financial performance measures operating incomeand free cash flow (defined as net cash provided by operating activities lessaverage capital expenditures).  TheCommittee chose to use these metrics instead of Adjusted EBITDA and cash flowfrom continuing operations because operating income and free cash flow moreclosely align our incentive compensation with Company priorities andobjectives, as operating income and free cash flow are important metrics thatmanagement and the television industry use to monitor performance.  We typically provide a reconciliation of anynon-GAAP metric we use in our public disclosures to the nearest GAAP metric(e.g., for Adjusted EBITDA, we reconcile to Net Income) in our quarterlyearnings releases, which are filed with the SEC and posted to our Companywebsite.

 

The Company setsand the Committee approves threshold, target and maximum benchmarks offinancial performance for the Company, the achievement of which determines thepercentage of potential cash bonus to be awarded to each NEO.  The Company seeks to set challenging butachievable benchmarks in light of the Company’s anticipated operating andfinancial performance (as well as other relevant factors).  Generally, threshold benchmarks represent thelower range of the Company’s estimation of the relevant year’s forecastedoperating results, while target and maximum benchmarks represent the mid toupper ranges of those forecasts.  Forexample, for 2008, the Company utilized operating income and free cash flow(defined as net cash provided by operating activities less average capitalexpenditures) as key performance measures and set its threshold, target andmaximum benchmarks at the following levels, in millions:

 
| ** **       | ** ** | **Threshold** | ** ** | **Target** | ** ** | **Maximum** | ** ** |
|------------------|------------|---------------|------------|------------|------------|-------------|------------|
| Operating Income |       | $             | 197.8      |       | $          | 232.7       |       | $ | 267.6 |   |
| Free Cash Flow   |       | $             | 128.9      |       | $          | 151.6       |       | $ | 174.3 |   |

 

Actual operatingincome and free cash flow for 2008 were approximately $151.0 million and $118.1million respectively.

 

Each of the NEOs’individual performance goals is intended to reflect his relative contributionto specific near-term and long-term financial, strategic and/or managementgoals applicable to the executive. Except in the case of the CEO, 75% of the NEO’s bonus opportunity isdependent upon the Company’s and/or individual television stations’ financialperformance and achievement of the pre-established financial benchmarks, and25% of the NEO’s bonus opportunity is dependent upon the NEO’s achievement ofhis performance goals.  All of the CEO’sbonus opportunity is dependent on the Company’s financial performance andachievement of the pre-established financial benchmarks.  In addition, the Company’s incentivecompensation plan permits the Compensation Committee, in its discretion, toaward additional bonus amounts if circumstances warrant.  In doing so, the Compensation Committee, withinput from the CEO with respect to the other NEOs, evaluates the overallperformance of the Company, the performance of the business or function thatthe NEO leads, and an assessment of each NEO’s performance againstexpectations, which were established at the beginning of the year.  We believe that the annual bonus awards ourNEOs receive incentivize them to achieve growth over both the near and longerterm.  The annual bonuses awarded to theNEOs for fiscal year 2008 are discussed below in the section “2008 Compensation”and are shown in the Summary Compensation Table on page 18.

 

***EquityCompensation.***  Equity compensation is a significantlong-term component of our compensation program.  The Compensation Committee recommends to theBoard, and the Board approves, the types of equity compensation awards, thenumber of shares subject to those awards, and the terms, conditions,restrictions and limitations of those awards, in accordance with the Company’slong term incentive compensation plan.

 

The CompensationCommittee recommends, and the Board approves, equity awards to NEOs (and ourother key employees) in the fourth quarter of each year at their regularlyscheduled meetings in December, based upon the 

 

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individual’s position andperformance, as well as the Company’s performance.  As discussed above in the section “EquityAward Practices,” the exercise price of options is determined by the planpursuant to which the options were awarded: under the Amended and Restated 2007Long Term Incentive Compensation Plan, the exercise price is the closing priceon the date of the option award (the exercise price under the 2004 Long TermIncentive Compensation Plan is the closing price on the trading day precedingthe date of award).

 

The Company’sequity incentive compensation program is designed to recognize scope ofresponsibilities, reward demonstrated performance and leadership, motivatefuture superior performance, align the interests of the executive with those ofour stockholders and retain the executives through the term of the awards. Weconsider the award size and the appropriate combination of stock options andrestricted stock when making equity award decisions.  The amount of equity incentive compensationawarded in 2008 reflects the NEOs’ position and expected contributions to theCompany’s future success, as well as the decline in the Company’s stock priceand operating performance during the year.

 

From the Company’sinception in 1997 to 2005, the equity component of NEO compensation consistedsolely of stock option awards.  In 2006,the Compensation Committee recommended, and the Board of Directors approved,that shares of restricted stock be awarded to executive officers insubstitution for a portion (50%) of the typical annual stock option awards, asauthorized by the 2007 Long Term Incentive Compensation Plan.  The Company determined to award restrictedstock in addition to options in order to provide a balance between upsidepotential and volatility in the Company’s equity performance.  Restricted stock was substituted at a ratioof one share of restricted stock for 4 options, a .25 ratio.  (For example, our CEO received 120,000options in 2005 and in 2006, he received 60,000 options and 15,000 shares ofrestricted stock.)  The number of stockoptions and restricted stock awarded to NEOs for 2007 was determined byretaining the typical number of stock options awarded in 2006 and increasingthe number of restricted shares by using a ratio of one share of restrictedstock for 3.5 options, a .286 ratio, instead of the .25 ratio used in 2006.(For example, our CEO received 60,000 options and 17,160 shares of restrictedstock in 2007.)  We revised the ratio toincrease the restricted stock award in 2007 after weighing several factors,including the value of restricted stock irrespective of volatility or a declinein our stock price, as opposed to options, the value of which is dependent uponthe market price exceeding the option exercise price.  In 2008, we determined to maintain the ratioof restricted stock to options at the 2007 level (one share of restricted stockfor 3.5 options); however, given the economic downturn’s effect on our stockprice and operating results, we determined to reduce the number of options andrestricted stock awards to one-half of the 2007 award levels.  (For example, our CEO received 30,000 optionsand 8,580 shares of restricted stock in 2008.) We believe that the mix of stock options and restricted stock werecommended, and the Board approved, will serve to retain and incentivize NEOswhile they work to provide long-term value to our stockholders.

 

Generally, stockoptions awarded since 2000 vest after a three-year period, and the optionsawarded to NEOs in 2008 likewise vest three years after their award date.  Provided the executives continue employmentwith the Company or its affiliates, the restrictions on the restricted stockawarded to them also lapse three years after their award date.  During the restricted period, each share ofrestricted stock accumulates dividends at the same rate as dividends receivedby all stockholders, thereby recognizing both the current income generation andfuture change in stock price consistent with our stockholders.  Under the terms of the Company’s long-termincentive plan, unvested stock options and restricted stock (and the attendantdividends) are forfeited if the NEO voluntarily ceases to be employed by theCompany or its affiliates, and are generally vested if the NEO retires afterreaching age 65 prior to the scheduled vesting. (All restrictions lapse on restricted stock and a portion of theunvested stock options vest, representing the number of months that the retireeworked from the grant date to his retirement date, upon retirement afterreaching age 65.)  We believe that thesevesting and forfeiture provisions appropriately aid the Company in retainingexecutives and motivating longer-term performance.

 

The Company hasexpensed stock option awards underStatement of Financial Accounting Standards No. 123(R),*Share-Based Payment* (“SFAS 123(R)”),since January 1, 2006.  Whendetermining the appropriate combination of stock options and restricted stock,we weigh the cost of these awards against their potential benefits as acompensation tool.  We believe thatproviding combined awards of stock options and restricted stock effectivelybalances our objective of focusing the NEOs on delivering long-term value tostockholders with our objectives of retaining and incentivizing the NEOs .

 

The equitycompensation awarded to the NEOs for fiscal year 2008 is discussed below in thesection “2008 Compensation” and is shown in the Summary Compensation Table on page 18.

 

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***Retirement Benefits.***Webelieve that the Company’s pension plans are a key component in achieving ourstated objective of NEO retention.  The Company provides annual retirementbenefits to NEOs under the Hearst-Argyle Television, Inc. Retirement Plan(which benefits are also generally available to the Company’s employees) andsupplements those benefits with the Hearst-Argyle Television, Inc.Supplemental Retirement Plan.

 

The RetirementPlan is a broad-based tax-qualified plan under which employees generally areeligible to retire with reduced benefits at age 55 or later (if they havecompleted 10 years of service), and at full benefits at age 65.  The Supplemental Retirement Plan, which iscurrently available to each of our NEOs, increases the retirement benefitsabove amounts available under the Retirement Plan.  Unlike the Retirement Plan, the SupplementalRetirement Plan is an unfunded, unsecured obligation of the Company and is notqualified for tax purposes.  Both theRetirement Plan and the Supplemental Retirement Plan are strong retention toolsbecause executives are generally not eligible for such benefits unless theyremain employed with the Company for at least five years and the amount of thebenefit that they will ultimately receive is determined by the number of yearsthat they remain with the Company.

 

As pension plansgenerally are more costly components of our compensation packages, we attemptto balance the effectiveness of the Supplemental Retirement Plan as acompensation and retention tool with the cost to the Company of providing it.

 

***Other Compensation Elements*****.** We also provide our NEOs with other benefits, which are reflected in theAll Other Compensation column in the Summary Compensation Table on page 18,that we believe are reasonable and consistent with the stated objectives of theCompany’s NEO compensation program, and which we believe will allow ourexecutives to perform their responsibilities more efficiently.  These benefits, which are a relatively smallpercentage of overall NEO compensation, include premiums paid on life insurancepolicies and executive medical plans, as well as a car allowance, reimbursementfor membership to certain clubs and Company contributions to qualified savingsplans.

 

**2008Compensation**

 

The discussion below details the compensationpackages we awarded to the Company’s NEOs for fiscal year 2008.  This discussion should be reviewed inconjunction with the Summary Compensation Table on page 18, as well as theexecutive compensation tables and narratives that follow it.  In addition, the Company’s 2008 operating and financial resultsare disclosed in the Company’s 2008 Annual Report.  A detailed analysis of the Company’soperating and financial performance is contained in the Management’s Discussion &Analysis section of the 2008 Annual Report.

 

***CEO Compensation.*** As described above, Mr. Barrett’s salary isdetermined in advance and set forth in his employment agreement.  For 2008, and in accordance with hisemployment agreement, Mr. Barrett’s annual salary level was$1,125,000.  Also as described above, Mr. Barrett’scash bonus opportunity is dependent upon the Company’s operating and financialperformance and is not tied to the achievement of individual performancegoals.  The Compensation Committee mayaward additional bonus amounts in its discretion.  For 2008, the Company’s operating andfinancial performance goals were not met and the Committee awarded adiscretionary bonus of $225,000 to the CEO to reflect his contributions to theCompany’s long term business strategy and development.  In addition, based on Mr. Barrett’sleadership and his potential to restore long-term stockholder value, theCompensation Committee recommended, and the Board approved, an award to Mr. Barrettof 30,000 stock options and 8,580 shares of restricted stock. The terms of thestock options and restricted stock awarded are previously described.  The growth in Mr. Barrett’s accruedpension value was $1,005,400 and all other compensation was $84,744 making thetotal compensation for Mr. Barrett in 2008 $2,443,246.  We believe that Mr. Barrett’s 2008compensation is consistent with the Company’s stated compensation objectives.

 

***Other NEOs.***  In determiningthe compensation of Messrs. Hawks, Stolz, Biancuzzo, Hobbs and Mackin for2008, the Compensation Committee considered the Company’s 2008 operating andfinancial performance and the achievement of the performance benchmarksdiscussed above.  The CompensationCommittee also compared each NEO’s achievements against the individualperformance objectives established for each of them at the beginning of theyear, including pre-established goals related to the specific area of theCompany’s business for which each is responsible.  For all of the NEOs except Messrs. Hobbsand Mackin, who left the Company in the first quarter of 2008, the CompensationCommittee awarded additional bonus amounts to reflect the contributions ofthose NEOs during 2008 to the Company’s long term business strategy anddevelopment.

 

16

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In 2008, Mr. Hawks’base salary, which is set forth in his employment agreement, was $600,000.  In consideration of the Company’s financialperformance and his contributions and achievement of individual performancegoals, Mr. Hawks was awarded a bonus payment of $120,000, of which $13,125was a discretionary amount not calculated based upon the Company’s financialperformance.  In addition, theCompensation Committee recommended, and the Board approved, an award to Mr. Hawksof 12,500 stock options and 3,575 shares of restricted stock.  The growth in Mr. Hawks’ accrued pensionvalue was $204,500 and all other compensation was $58,102, making the 2008total compensation for Mr. Hawks $983,895. We believe that Mr. Hawks’ 2008 compensation is consistent with theCompany’s stated compensation objectives.

 

In 2008, Mr. Stolz’sbase salary, which is set forth in his employment agreement, was $555,000.  In consideration of the Company’s financialperformance and his contributions and achievement of individual performancegoals, Mr. Stolz was awarded a bonus payment of $85,000, of which $19,441was a discretionary amount not calculated based upon the Company’s financialperformance.  In addition, theCompensation Committee recommended, and the Board approved, an award to Mr. Stolzof 11,250 stock options and 3,218 shares of restricted stock.  The growth in Mr. Stolz’s accruedpension value was $387,800 and all other compensation was $46,411, making the2008 total compensation for Mr. Stolz $1,075,374.  We believe that Mr. Stolz’s 2008compensation is consistent with the Company’s stated compensation objectives.

 

In 2008, Mr. Biancuzzo’sbase salary, which is set forth in his employment agreement, was $475,000.  In consideration of the Company’s financialperformance and his contributions and achievement of individual performancegoals, Mr. Biancuzzo was awarded a bonus payment of $85,000, of which$20,875 was a discretionary amount not calculated based upon the Company’sfinancial performance.  In addition, theCompensation Committee recommended, and the Board approved, an award to Mr. Biancuzzoof 11,250 stock options and 3,218 shares of restricted stock.  The growth in Mr. Biancuzzo’s accruedpension value was $138,600 and all other compensation was $38,934, making the2008 total compensation for Mr. Biancuzzo $738,697.  We believe that Mr. Biancuzzo’s 2008compensation is consistent with the Company’s stated compensation objectives.

 

In 2008, Mr. Hobbs’annual base salary, which was set forth in his employment agreement, was$600,000.  Because Mr. Hobbs leftthe Company on March 31, 2008, he was ineligible for bonus and equityawards, which are conditioned upon employment at the time of award.  From January 1, 2008 to March 31,2008, the growth in Mr. Hobbs’ accrued pension value was $10,200 and allother compensation was $7,337 making the 2008 total compensation for Mr. Hobbs$163,200.  We believe that Mr. Hobbs’2008 compensation was consistent with the Company’s stated compensationobjectives.

 

In 2008, Mr. Mackin’sannual base salary, which was set forth in his employment agreement, was$730,000.  Because Mr. Mackin leftthe Company on February 29, 2008, he was ineligible for bonus and equityawards, which are conditioned upon employment at the time of award. The growthin Mr. Mackin’s accrued pension value was $152,200 and all othercompensation was $4,892, making the 2008 total compensation for Mr. Mackin$275,867.  We believe that Mr. Mackin’s2008 compensation was consistent with the Company’s stated compensationobjectives.

 

**Compensation Committee Interlocks and InsiderParticipation**

 

During the fiscalyear ended December 31, 2008, the Compensation Committee consisted ofFrank A. Bennack, Jr., David Pulver and Caroline L. Williams.  Victor F. Ganzi, our former director, servedon the Compensation Committee until his resignation from the Board on October 7,2008.  Mr. Bennack serves as ViceChairman and Chief Executive Officer of Hearst. Until June, 2008, Mr. Ganzi was President and Chief ExecutiveOfficer of Hearst.  We also have enteredinto transactions with Hearst and its affiliates from time to time.    See “Certain Relationships and RelatedTransactions.”  Mr. Barrett, ourPresident and Chief Executive Officer, is a Director of Hearst, but is not amember of Hearst’s compensation committee.

 

**CompensationCommittee Report**

 

The CompensationCommittee has reviewed the Compensation Discussion and Analysis and discussedthat Analysis with management.  Based onits review and discussions with management, the Committee recommended to ourBoard of Directors that the Compensation Discussion and Analysis be included inthe Company’s Annual Report on Form 10-K for 2008.  This report is provided by the followingdirectors, who comprise the Compensation Committee:

 

17

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Caroline L. Williams,Chairperson

Frank A. Bennack, Jr.

David Pulver

 

**CompensationTables**

 

*SummaryCompensation Table*

 

The following table setsforth certain compensation information awarded to, paid to or earned by ourChief Executive Officer, Chief Financial Officer and our other executiveofficers (the “NEOs”) for the fiscal years ended December 31, 2008, 2007and 2006.  For fiscal year 2008, our NEOsother than our CEO and CFO, were Philip Stolz, Frank Biancuzzo and, for aportion of 2008, Steven Hobbs and Terry Mackin. For fiscal year 2007, our NEOs other than our CEO and CFO, were StevenHobbs and Terry Mackin.  For fiscal year2006, our NEOs other than our CEO and CFO, were Steven Hobbs, Terry Mackin andPhilip Stolz.

 
| **Name and  Principal Position** | ** ** | **Year** | ** ** | **Salary  ($)** | ** ** | **Bonus  ($)(1)** | ** ** | **Stock  Awards  ($)(2)** | ** ** | **Option  Awards  ($)(3)** | ** ** | **Non-Equity  Incentive Plan  Compensation  $(4)** | ** ** | **Change  in  Pension Value  and Nonqualified  Deferred  Compensation  Earnings  ($)(5)** | ** ** | **All  Other  Compensation  ($)(6)** | ** ** | **Total  ($)** | ** ** |
|----------------------------------|------------|----------|------------|-----------------|------------|-------------------|------------|---------------------------|------------|----------------------------|------------|----------------------------------------------------|------------|-------------------------------------------------------------------------------------------|------------|--------------------------------------|------------|----------------|------------|
|                             |       |     |       |            |       |              |       |                      |       |                       |       |                                               |       |                                                                                      |       |                                 |       |           |       |
| David Barrett                    |       | 2008     |       | 1,125,000       |       | 225,000           |       | 1,416                     |       | 1,686                      |       | —                                             |       | 1,005,400                                                                                 |       | 84,744                               |       | 2,443,246      |       |
| President and  Chief Executive   |       | 2007     |       | 1,125,000       |       | 275,000           |       | 9,505                     |       | 9,083                      |       | —                                             |       | 239,400                                                                                   |       | 74,243                               |       | 1,732,231      |       |
| Officer                          |       | 2006     |       | 1,050,000       |       | —            |       | 8,781                     |       | 12,573                     |       | 500,000                                            |       | 791,500                                                                                   |       | 73,088                               |       | 2,435,942      |       |
|                             |       |     |       |            |       |              |       |                      |       |                       |       |                                               |       |                                                                                      |       |                                 |       |           |       |
| Harry Hawks                      |       | 2008     |       | 600,000         |       | 13,125            |       | 590                       |       | 703                        |       | 106,875                                            |       | 204,500                                                                                   |       | 58,102                               |       | 983,895        |       |
| Executive Vice  President and    |       | 2007     |       | 575,000         |       | 51,891            |       | 3,960                     |       | 3,785                      |       | 98,109                                             |       | 57,200                                                                                    |       | 54,594                               |       | 844,539        |       |
| Chief Financial  Officer         |       | 2006     |       | 550,000         |       |              |       | 3,659                     |       | 5,239                      |       | 220,000                                            |       | 130,300                                                                                   |       | 46,654                               |       | 955,852        |       |
|                             |       |     |       |            |       |              |       |                      |       |                       |       |                                               |       |                                                                                      |       |                                 |       |           |       |
| Philip Stolz                     |       | 2008     |       | 555,000         |       | 19,441            |       | 531                       |       | 632                        |       | 65,559                                             |       | 387,800                                                                                   |       | 46,411                               |       | 1,075,374      |       |
| Senior Vice  President           |       | 2006     |       | 520,000         |       | —            |       | 3,293                     |       | 4,715                      |       | 195,000                                            |       | 292,300                                                                                   |       | 37,381                               |       | 1,052,689      |       |
|                             |       |     |       |            |       |              |       |                      |       |                       |       |                                               |       |                                                                                      |       |                                 |       |           |       |
| Frank Biancuzzo                  |       | 2008     |       | 475,000         |       | 20,875            |       | 531                       |       | 632                        |       | 64,125                                             |       | 138,600                                                                                   |       | 38,934                               |       | 738,697        |       |
| Executive Vice  President        |       |     |       |            |       |              |       |                      |       |                       |       |                                               |       |                                                                                      |       |                                 |       |           |       |
|                             |       |     |       |            |       |              |       |                      |       |                       |       |                                               |       |                                                                                      |       |                                 |       |           |       |
| Steven Hobbs                     |       | 2008     |       | 150,000         |       | —            |       | —                    |       | —                     |       | —                                             |       | 10,200                                                                                    |       | 7,337                                |       | 163,200        |       |
| Executive Vice  President        |       | 2007     |       | 575,000         |       | 49,734            |       | 3,960                     |       | 3,785                      |       | 100,266                                            |       | 10,900                                                                                    |       | 43,643                               |       | 787,288        |       |
|                             |       | 2006     |       | 550,000         |       | —            |       | 3,659                     |       | 5,239                      |       | 220,000                                            |       | 12,400                                                                                    |       | 28,378                               |       | 819,676        |       |
|                             |       |     |       |            |       |              |       |                      |       |                       |       |                                               |       |                                                                                      |       |                                 |       |           |       |
| Terry Mackin                     |       | 2008     |       | 121,667         |       | —            |       | —                    |       | —                     |       | —                                             |       | 152,200                                                                                   |       | 4,892                                |       | 275,867        |       |
| Executive Vice  President        |       | 2007     |       | 730,000         |       | 24,051            |       | 3,960                     |       | 3,785                      |       | 95,949                                             |       | 44,500                                                                                    |       | 53,457                               |       | 955,702        |       |
|                             |       | 2006     |       | 705,000         |       |              |       | 3,659                     |       | 5,239                      |       | 250,000                                            |       | 103,200                                                                                   |       | 43,009                               |       | 1,110,107      |       |

 

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| (1) |   | The Company awarded  cash bonuses to the NEOs in February 2009 for services rendered in 2008.  In addition to amounts awarded for the satisfaction of criteria established  under the 2003 Incentive Compensation Plan (which are disclosed in the column  captioned “Non-Equity Incentive Plan Compensation”), the Compensation  Committee awarded the discretionary amounts reflected in this column. Total  bonus payments to the NEOs, including both discretionary amounts and amounts  paid pursuant to the 2003 Incentive Compensation Plan were as follows: David  Barrett: $225,000; Harry Hawks: $120,000; Philip Stolz: $85,000; and Frank  Biancuzzo: $85,000. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | The Company awarded  restricted stock to the NEOs in December of 2008, 2007 and 2006 pursuant  to its Amended and Restated 2007 Long Term Incentive Compensation Plan, 2007  Long Term Incentive Compensation Plan and 2004 Long Term Incentive  Compensation Plan, respectively. The amounts in this column represent the  dollar amount recognized in each of 2008, 2007 and 2006 for financial  statement reporting purposes calculated in accordance with SFAS  123(R) for the grants awarded in those years. For additional information  concerning the                                                                                                                    |

 

18

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|   |   | assumptions  used in the valuation of the restricted stock awards,  please refer to Footnote 11 (“Employee  Stock Plans”) to the Company’s financial statements included in its 2008  Annual Report on Form 10-K, as filed with the SEC.  The details of the restricted stock awards  are set forth in “Compensation  Discussion and Analysis.”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)    |   | The Company granted  non-qualified stock options to the NEOs in each of December 2008, 2007  and 2006 pursuant to its Amended and Restated 2007 Long Term Incentive  Compensation Plan, 2007 Long Term Incentive Compensation Plan and its 2004  Long Term Incentive Compensation Plan, respectively. The amounts in this  column represent the dollar amount recognized in each of 2008, 2007 and 2006  for financial statement reporting purposes computed in accordance with SFAS  123(R) for the grants awarded in those years. For additional  information concerning the assumptions used in the valuation of the stock  options, please refer to Footnote 11 (“Employee Stock Plans”) to the  Company’s financial statements included in its 2008 Annual Report on  Form 10-K, as filed with the SEC. The details of the stock option grants  are set forth in “Compensation  Discussion and Analysis.” |
| (4)    |   | The Company awarded  cash bonuses to the NEOs in February 2009 for services rendered in 2008.  The amounts reflected in this column were paid as a result of the satisfaction  of criteria established under the 2003 Incentive Compensation Plan. The 2003  Incentive Compensation Plan and the parameters of the 2008 bonus plan are  described in the section captioned “Compensation Discussion and Analysis.”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (5)    |   | The Company did not pay  non-qualified deferred compensation earnings in 2008, 2007 and 2006. Because  the Company was required to change its pension plan measurement date from  September 30 to December 31 effective December 31, 2008, the  difference in present value of benefits was for a 15-month period  (September 30, 2007 through December 31, 2008). We have reflected  the annualized change in present value for 2008 by recognizing 80% (12/15) of  the total difference for this 15-month period for the four NEOs who are active  as of December 31, 2008. For the two NEOs who were not active as of  December 31, 2008, we have reflected the change in present value from  the prior measurement date (September 30, 2007) through their date of  termination/transfer, which in both cases, is under 12 months.                                                                         |
| (6)    |   | Amounts in this column  consist of dollar values of perquisites consisting of premiums for life  insurance and executive medical plans, automobile and parking allowances,  club membership reimbursements, tax preparation expense reimbursements,  payments for tax gross-ups, car services and amounts contributed by the  Company on behalf of the NEOs to our 401(k) Savings Plan (a  non-discriminatory retirement plan established pursuant to  Section 401(k) of the Code), as further set forth in the Perquisites  table below.                                                                                                                                                                                                                                                                                                                                                                                               |

 

**Perquisites**

 
| **Name**         | ** ** | **Year** | ** ** | **Life  Insurance  Premiums  ($)** | ** ** | **Executive  Medical Plan  ($)** | ** ** | **Auto  Allowance  ($)** | ** ** | **Club Membership  Reimbursement  ($)** | ** ** | **Miscellaneous  ($)** | ** ** |
|------------------|------------|----------|------------|------------------------------------|------------|----------------------------------|------------|--------------------------|------------|-----------------------------------------|------------|------------------------|------------|
| David J. Barrett |       | 2008     |       | 14,559                             |       | 17,349                           |       | 18,000                   |       | 20,246                                  |       | 14,590                 | (1)        |
|             |       | 2007     |       | 10,677                             |       | 12,226                           |       | 18,000                   |       | 19,390                                  |       | 13,950                 | (2)        |
|             |       | 2006     |       | 10,943                             |       | 11,644                           |       | 18,000                   |       | 18,701                                  |       | 13,800                 | (3)        |
|             |       |     |       |                               |       |                             |       |                     |       |                                    |       |                   |       |
| Harry T. Hawks   |       | 2008     |       | 7,504                              |       | 17,349                           |       | 10,800                   |       | 12,549                                  |       | 9,900                  | (4)        |
|             |       | 2007     |       | 5,231                              |       | 12,226                           |       | 10,800                   |       | 16,587                                  |       | 9,750                  | (4)        |
|             |       | 2006     |       | 5,420                              |       | 11,644                           |       | 10,800                   |       | 9,190                                   |       | 9,600                  | (4)        |
|             |       |     |       |                               |       |                             |       |                     |       |                                    |       |                   |       |
| Philip M. Stolz  |       | 2008     |       | 10,162                             |       | 17,349                           |       | 12,000                   |       | —                                  |       | 6,900                  | (5)        |
|             |       | 2006     |       | 8,337                              |       | 11,644                           |       | 10,800                   |       | —                                  |       | 6,600                  | (5)        |
|             |       |     |       |                               |       |                             |       |                     |       |                                    |       |                   |       |
| Frank Biancuzzo  |       | 2008     |       | 2,685                              |       | 17,349                           |       | 12,000                   |       | —                                  |       | 6,900                  | (5)        |
|             |       |     |       |                               |       |                             |       |                     |       |                                    |       |                   |       |
| Steven A. Hobbs  |       | 2008     |       | —                             |       | 4,337                            |       | 3,000                    |       | —                                  |       | —                 |       |
|             |       | 2007     |       | 1,605                              |       | 12,226                           |       | 12,000                   |       | —                                  |       | 17,812                 | (6)        |
|             |       | 2006     |       | 1,434                              |       | 11,644                           |       | 12,000                   |       | —                                  |       | 3,300                  | (5)        |
|             |       |     |       |                               |       |                             |       |                     |       |                                    |       |                   |       |
| Terry Mackin     |       | 2008     |       | —                             |       | 2,892                            |       | 2,000                    |       | —                                  |       | —                 |       |
|             |       | 2007     |       | 4,280                              |       | 12,226                           |       | 12,000                   |       | 18,201                                  |       | 6,750                  | (5)        |
|             |       | 2006     |       | 3,445                              |       | 11,644                           |       | 12,000                   |       | 10,420                                  |       | 5,500                  | (5)        |

 

19

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| (1) |   | Amount in this column  represents $6,900 contributed by the Company on behalf of Mr. Barrett to  our 401(k) Savings Plan, a parking space provided to Mr. Barrett  from Hearst Corporation valued at $6,090 and personal car services valued at  $1600.                                                             |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Amount in this column  represents $6,750 contributed by the Company on behalf of Mr. Barrett to  our 401(k) Savings Plan, a parking space provided to Mr. Barrett  from Hearst Corporation valued at $6,000 and personal car services provided  to Mr. Barrett valued at $1,200.                               |
| (3) |   | Amount in this column  represents $6,600 contributed by the Company on behalf of Mr. Barrett to  our 401(k) Savings Plan, a parking space provided to Mr. Barrett  from Hearst Corporation valued at $6,000 and personal car services provided  to Mr. Barrett valued at $1,200.                               |
| (4) |   | Amount in this column  represents amounts contributed by the Company on behalf of Mr. Hawks to  our 401(k) Savings Plan and a $3,000 reimbursement to Mr. Hawks for  tax preparation expenses.                                                                                                                      |
| (5) |   | Amount in this column  represents amounts contributed by the Company on behalf of the NEO to our  401(k) Savings Plan.                                                                                                                                                                                                        |
| (6) |   | Amount in this column  represent $6,750 contributed by the Company on behalf of Mr. Hobbs to  our 401(k) Savings Plan, and a payment of $6,450 made to Mr. Hobbs  and the associated tax gross up amount of $4,612 due to an error in  calculating Mr. Hobbs’ 2006 401(k) Savings Plan contribution. |

 

*Grants of Plan-Based Awards*

 

The following table setsforth grants of non-equity and equity plan-based awards to our NEOs for ourfiscal year ended December 31, 2008:

** **
| ** **      | ** ** | ** **     | ** ** | **Estimated Future Payouts Under Non-  Equity Incentive Plan Awards (1)** | ** ** | **All Other  Stock  Awards:  Number of  Shares of  Stock or** | ** ** | **All Other  Options  Awards:  Number of  Securities  Underlying** | ** ** | **Exercise or  Base Price  of Option** | ** ** | **Grant Date Fair  Value of Stock  and Option** | ** ** |
|-----------------|------------|----------------|------------|---------------------------------------------------------------------------|------------|---------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|----------------------------------------|------------|-------------------------------------------------|------------|
| **Name**        | ** ** | **Grant Date** | ** ** | **Threshold  ($)**                                                        | ** ** | **Target  ($)**                                               | ** ** | **Maximum  ($)**                                                   | ** ** | **Units  (#) (2)**                     | ** ** | **Option  (#) (2)**                             | ** ** | **Awards  ($/Sh)** | ** ** | **Awards  ($) (3)** | ** ** |
| David Barrett   |       | 2/20/2008      |       | —                                                                    |       | 495,000                                                       |       | 1,237,500                                                          |       |                                   |       |                                            |       |   |   |   |   |
|            |       | 12/11/2008     |       |                                                                      |       |                                                          |       |                                                               |       | 8,580                                  |       |                                            |       |   |   | 50,965 |   |
|            |       | 12/11/2008     |       |                                                                      |       |                                                          |       |                                                               |       |                                   |       | 30,000                                          |       | $ | 5.94 |   | 60,708 |   |
| Harry Hawks     |       | 2/20/2008      |       | 112,500                                                                   |       | 247,500                                                       |       | 450,000                                                            |       |                                   |       |                                            |       |   |   |   |   |
|            |       | 12/11/2008     |       |                                                                      |       |                                                          |       |                                                               |       | 3,575                                  |       |                                            |       |   |   | 21,236 |   |
|            |       | 12/11/2008     |       |                                                                      |       |                                                          |       |                                                               |       |                                   |       | 12,500                                          |       | $ | 5.94 |   | 25,295 |   |
| Philip Stolz    |       | 2/20/2008      |       | 104,063                                                                   |       | 228,937                                                       |       | 416,250                                                            |       |                                   |       |                                            |       |   |   |   |   |
|            |       | 12/11/2008     |       |                                                                      |       |                                                          |       |                                                               |       | 3,218                                  |       |                                            |       |   |   | 19,115 |   |
|            |       | 12/11/2008     |       |                                                                      |       |                                                          |       |                                                               |       |                                   |       | 11,250                                          |       | $ | 5.94 |   | 22,766 |   |
| Frank Biancuzzo |       | 2/20/2008      |       | 89,063                                                                    |       | 195,938                                                       |       | 356,250                                                            |       |                                   |       |                                            |       |   |   |   |   |
|            |       | 12/11/2008     |       |                                                                      |       |                                                          |       |                                                               |       | 3,218                                  |       |                                            |       |   |   | 19,115 |   |
|            |       | 12/11/2008     |       |                                                                      |       |                                                          |       |                                                               |       |                                   |       | 11,250                                          |       | $ | 5.94 |   | 22,766 |   |

 

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(1)  The Companyawards cash bonuses pursuant to the 2003 Incentive Compensation Plan.  This plan provides for the award of annualcash bonuses based upon target and maximum bonus payouts and individualperformance goals established by the Compensation Committee of the Board ofDirectors during the first quarter of each fiscal year.  Amounts reflected assume 100% achievement ofindividual performance goals.  The actualamount that was paid to each NEO in 2009 pursuant to the plan for the fiscalyear ended December 31, 2008 is set forth in the Summary CompensationTable under the column titled “Non-Equity Incentive Plan Compensation.”

(2)  The Companyawarded options and restricted stock pursuant to the Amended and Restated 2007Long Term Incentive Compensation Plan in December 2008.  The dollar amount recognized in 2008 forfinancial statement reporting purposes (calculated in accordance with SFAS123(R)) of the restricted stock awarded and options granted to each NEOpursuant to the plan for the fiscal year ended December 31, 2008 is setforth in the Summary Compensation Table under the columns titled “Stock Awards”and “Option Awards,” respectively.

 

20

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(3)  The grant datefair values of restricted stock awarded and options granted on December 11,2008 are calculated in accordance with SFAS 123(R). The exercise price ofoptions is determined by the plan pursuant to which the options were granted.Under the Amended and Restated 2007 Long Term Incentive Compensation Plan, theexercise price is the closing price on the date of grant.

 

 *Outstanding Equity Awardsat Fiscal Year-End*

 

The following table setsforth information concerning unexercised options, stock that has not vested,and equity incentive plan awards for each NEO as of the fiscal year ended December 31,2008, except for Terry Mackin whose equity awards were forfeited and canceledas of his termination date, February 29, 2008:

 

21

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| ** **      | ** ** | ** **      | ** ** | **Option  Awards**                                                                 | ** ** | **Stock  Awards**                                                                    | ** ** |
|-----------------|------------|-----------------|------------|------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------|------------|
| **Name**        | ** ** | **Grant  Date** | ** ** | **Number  of  Securities  Underlying  Unexercised  Options (#)  Exercisable  (1)** | ** ** | **Number  of  Securities  Underlying  Unexercised  Options (#)  Unexercisable  (1)** | ** ** | **Equity Incentive  Plan Awards:  Number of  Securities  Underlying  Unexercised  Unearned  Options (#)  Unexercisable** | ** ** | **Option  Exercise  Price ($)** | ** ** | **Option  Expiration  Date** | ** ** | **Number  of  Shares or  Units of Stock  That Have  Not Vested  (#)  (2)** | ** ** | **Market  Value  of Shares or  Units of Stock  That Have Not  Vested ($)** | ** ** | **Equity  Incentive Plan  Awards:  Number of  Unearned  Shares, Units  or Other Rights  That Have Not  Vested (#)** | ** ** | **Equity  Incentive  Plan Awards:  Market or Payout  Value of  Unearned Shares,  or Units or Other  Rights That Have  Not Vested ($)** | ** ** |
| David Barrett   |       | 6/24/1999       |       | 35,000                                                                             |       | —                                                                               |       | — |   | 26.81 |   | 6/24/2009 |   |   |   |   |   | — |   | — |   |
|            |       | 12/8/2000       |       | 351,000                                                                            |       | —                                                                               |       | — |   | 18.56 |   | 12/8/2010 |   |   |   |   |   | — |   | — |   |
|            |       | 12/6/2001       |       | 117,000                                                                            |       | —                                                                               |       | — |   | 21.06 |   | 12/6/2011 |   |   |   |   |   | — |   | — |   |
|            |       | 12/4/2002       |       | 117,000                                                                            |       | —                                                                               |       | — |   | 24.10 |   | 12/4/2012 |   |   |   |   |   | — |   | — |   |
|            |       | 12/3/2003       |       | 117,000                                                                            |       | —                                                                               |       | — |   | 25.28 |   | 12/3/2013 |   |   |   |   |   | — |   | — |   |
|            |       | 12/1/2004       |       | 117,000                                                                            |       | —                                                                               |       | — |   | 25.70 |   | 12/1/2014 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2005       |       | 120,000                                                                            |       | —                                                                               |       | — |   | 24.06 |   | 12/7/2015 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2006       |       | —                                                                             |       | 60,000                                                                               |       | — |   | 25.64 |   | 12/7/2016 |   | 15,000 |   | 90,900 |   | — |   | — |   |
|            |       | 12/6/2007       |       | —                                                                             |       | 60,000                                                                               |       | — |   | 19.94 |   | 12/6/2017 |   | 17,160 |   | 103,990 |   | — |   | — |   |
|            |       | 12/11/2008      |       | —                                                                             |       | 30,000                                                                               |       | — |   | 5.94 |   | 12/11/2018 |   | 8,580 |   | 51,995 |   |   |   |   |   |
| Harry Hawks     |       | 12/8/2000       |       | 90,000                                                                             |       | —                                                                               |       | — |   | 18.56 |   | 12/8/2010 |   |   |   |   |   | — |   | — |   |
|            |       | 12/6/2001       |       | 40,000                                                                             |       | —                                                                               |       | — |   | 21.06 |   | 12/6/2011 |   |   |   |   |   | — |   | — |   |
|            |       | 12/4/2002       |       | 50,000                                                                             |       | —                                                                               |       | — |   | 24.10 |   | 12/4/2012 |   |   |   |   |   | — |   | — |   |
|            |       | 12/3/2003       |       | 50,000                                                                             |       | —                                                                               |       | — |   | 25.28 |   | 12/3/2013 |   |   |   |   |   | — |   | — |   |
|            |       | 12/1/2004       |       | 50,000                                                                             |       | —                                                                               |       | — |   | 25.70 |   | 12/1/2014 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2005       |       | 50,000                                                                             |       | —                                                                               |       | — |   | 24.06 |   | 12/7/2015 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2006       |       | —                                                                             |       | 25,000                                                                               |       | — |   | 25.64 |   | 12/7/2016 |   | 6,250 |   | 37,875 |   | — |   | — |   |
|            |       | 12/6/2007       |       | —                                                                             |       | 25,000                                                                               |       | — |   | 19.94 |   | 12/6/2017 |   | 7,150 |   | 43,329 |   | — |   | — |   |
|            |       | 12/11/2008      |       |                                                                               |       | 12,500                                                                               |       |   |   | 5.94 |   | 12/11/2018 |   | 3,575 |   | 21,665 |   |   |   |   |   |
| Steven Hobbs    |       | 3/5/2004        |       | 40,000                                                                             |       | —                                                                               |       | — |   | 26.22 |   | 3/5/2014 |   |   |   |   |   | — |   | — |   |
|            |       | 12/1/2004       |       | 40,000                                                                             |       | —                                                                               |       | — |   | 25.70 |   | 12/1/2014 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2005       |       | 50,000                                                                             |       | —                                                                               |       | — |   | 24.08 |   | 12/7/2015 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2006       |       | —                                                                             |       | 25,000                                                                               |       | — |   | 25.64 |   | 12/7/2016 |   | 6,250 |   | 37,875 |   | — |   | — |   |
|            |       | 12/6/2007       |       | —                                                                             |       | 25,000                                                                               |       | — |   | 19.94 |   | 12/6/2017 |   | 7,150 |   | 43,329 |   | — |   | — |   |
| Philip Stolz    |       | 12/8/2000       |       | 105,000                                                                            |       | —                                                                               |       | — |   | 18.56 |   | 12/8/2010 |   |   |   |   |   | — |   | — |   |
|            |       | 12/4/2002       |       | 40,000                                                                             |       | —                                                                               |       | — |   | 24.10 |   | 12/4/2012 |   |   |   |   |   | — |   | — |   |
|            |       | 12/3/2003       |       | 40,000                                                                             |       | —                                                                               |       | — |   | 25.28 |   | 12/3/2013 |   |   |   |   |   | — |   | — |   |
|            |       | 12/1/2004       |       | 40,000                                                                             |       | —                                                                               |       | — |   | 25.70 |   | 12/1/2014 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2005       |       | 45,000                                                                             |       | —                                                                               |       | — |   | 24.06 |   | 12/7/2015 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2006       |       | —                                                                             |       | 22,500                                                                               |       | — |   | 25.64 |   | 12/7/2016 |   | 5,625 |   | 34,088 |   | — |   | — |   |
|            |       | 12/6/2007       |       | —                                                                             |       | 22,500                                                                               |       | — |   | 19.94 |   | 12/6/2017 |   | 6,435 |   | 38,996 |   | — |   | — |   |
|            |       | 12/11/2008      |       | —                                                                             |       | 11,250                                                                               |       | — |   | 5.94 |   | 12/11/2018 |   | 3,218 |   | 19,501 |   | — |   | — |   |
| Frank Biancuzzo |       | 12/4/2002       |       | 20,000                                                                             |       | —                                                                               |       | — |   | 24.10 |   | 12/4/2012 |   |   |   |   |   | — |   | — |   |
|            |       | 12/3/2003       |       | 20,000                                                                             |       | —                                                                               |       | — |   | 25.28 |   | 12/3/2013 |   |   |   |   |   | — |   | — |   |
|            |       | 12/1/2004       |       | 20,000                                                                             |       | —                                                                               |       | — |   | 25.70 |   | 12/1/2014 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2005       |       | 20,000                                                                             |       | —                                                                               |       | — |   | 24.06 |   | 12/7/2015 |   |   |   |   |   | — |   | — |   |
|            |       | 12/7/2006       |       | —                                                                             |       | 10,000                                                                               |       | — |   | 25.64 |   | 12/7/2016 |   | 2,500 |   | 15,150 |   | — |   | — |   |
|            |       | 12/6/2007       |       | —                                                                             |       | 22,500                                                                               |       | — |   | 19.94 |   | 12/6/2017 |   | 6,435 |   | 38,996 |   | — |   | — |   |
|            |       | 12/11/2008      |       | —                                                                             |       | 11,250                                                                               |       | — |   | 5.94 |   | 12/11/2018 |   | 3,218 |   | 19,501 |   | — |   | — |   |

 

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(1) The followingchart provides the vesting schedules for each of the options granted to ourNEOs, according to grant date:

 
| **Grant  Date** | ** ** | **Vesting Schedule**                                                                 |
|-----------------|------------|--------------------------------------------------------------------------------------|
| 6/24/1999       |       | One-half vested  12/31/2000; one-half vested 12/31/2007.                             |
| 12/8/2000       |       | One-third vested  12/7/2001; one-third vested 12/7/2002; one-third vested 12/7/2003. |

 

22

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| 12/6/2001  |   | 12/6/2004  |
|------------|--------|------------|
| 12/4/2002  |   | 12/4/2005  |
| 12/3/2003  |   | 12/3/2006  |
| 3/5/2004   |   | 3/5/2007   |
| 12/1/2004  |   | 12/1/2007  |
| 12/7/2005  |   | 12/7/2008  |
| 12/7/2006  |   | 12/7/2009  |
| 12/6/2007  |   | 12/6/2010  |
| 12/11/2008 |   | 12/11/2011 |

 

(2) The restrictionson the restricted stock awarded to each of our NEOs on December 11, 2008lapse on December 11, 2011.  Therestrictions on the restricted stock awarded to each of our NEOs on December 6,2007 and December 7, 2006 lapse on December 6, 2010 and December 7,2009, respectively.

 

*OptionsExercised and Stock Vested*

 

The following table setsforth information concerning options exercised by our NEOs during the fiscalyear ended December 31, 2008:

 
| ** **      | ** ** | **Option Awards**                               | ** ** | **Stock Awards**                    | ** ** |
|-----------------|------------|-------------------------------------------------|------------|-------------------------------------|------------|
| **Name**        | ** ** | **Number of Shares  Acquired on  Exercise (#)** | ** ** | **Value Realized on  Exercise ($)** | ** ** | **Number of Shares  Acquired on Vesting  (#)** | ** ** | **Value Realized on  Vesting ($)** | ** ** |
| David Barrett   |       | —                                          |       | —                              |       | NA |   | NA |   |
| Harry Hawks     |       | 10,000                                          |       | 38,372                              |       | NA |   | NA |   |
| Steven Hobbs    |       | —                                          |       | —                              |       | NA |   | NA |   |
| Terry Mackin    |       | 40,000                                          |       | 63,361                              |       | NA |   | NA |   |
| Philip Stolz    |       | —                                          |       | —                              |       | NA |   | NA |   |
| Frank Biancuzzo |       | —                                          |       | —                              |       | NA |   | NA |   |

 

*Post-EmploymentCompensation — Pension Benefits Table*

 

Each of our NEOsparticipated in the Hearst-Argyle Television, Inc. Retirement Plan, ourtax-qualified pension plan (the “Tax-Qualified Plan”) as of December 31,2008.  Our Pension Plan is designed toprovide a benefit of 11⁄2% for each year of credited service (excluding the firstyear of employment) multiplied by the participant’s average annual compensation(as defined in the Pension Plans) for the participant’s five highestconsecutive full calendar years, and has a 40 year maximum. The highest amountof compensation that may be considered under federal law with respect todetermining pension benefits is $230,000 as of December 31, 2008, asadjusted for the cost of living each year (except that any increase that is nota multiple of $5,000 is rounded to the next lowest multiple of $5,000). Thecompensation used in determining Pension Plan benefits includes salary andbonus of the executive officers, as indicated in the Summary CompensationTable.

 

In addition five of ourNEOs participated in the Hearst-Argyle Television, Inc. SupplementalRetirement Plan, our non-qualified retirement plan (the “Supplemental Plan”) asof December 31, 2008. This Pension Plan was adopted on January 1,1999 and provides the benefits that would have been payable to the executiveofficers under the Tax-Qualified Plan, except for the application of certainlegal limits.

 

Named executives mayretire with full pension benefits at age 65 and may retire as early as age 55with 10 years of service from their hire date. Benefits payable for retirementprior to age 65 are reduced according to the following schedule in order toadjust for the longer expected years of payments.

 
| **Retirement Age** | ** ** | **% of Full Benefit** | ** ** | **Retirement Age** | ** ** | **% of Full Benefit** | ** ** |
|--------------------|------------|-----------------------|------------|--------------------|------------|-----------------------|------------|
| 64                 |       | 94                    | %          | 59                 |       | 66                    | %          |
| 63                 |       | 88                    | %          | 58                 |       | 62                    | %          |

 

23

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| 62 |   | 82 | % | 57 |   | 58 | % |
|----|--------|----|---|----|--------|----|---|
| 61 |   | 76 | % | 56 |   | 54 | % |
| 60 |   | 70 | % | 55 |   | 50 | % |

 

Lastly, benefits from theTax-Qualified Plan are payable as a monthly annuity over the life of the participantwhile benefits from the Supplemental Plan are payable in full as a single lumpsum at retirement.

 

The credited service and present value reported in the below table isas of December 31, 2008. This coincides with the measurement date theCompany used to disclose the Projected Benefit Obligations in theDecember 31, 2008 financial statements:

** **
| **Name**        | ** ** | **Plan Name**       | ** ** | **Number of Years of  Credited Service  (#)** | ** ** | **Present Value of  Accumulated Benefit  ($)** | ** ** | **Payments During Last  Fiscal Year  ($)** | ** ** |
|-----------------|------------|---------------------|------------|-----------------------------------------------|------------|------------------------------------------------|------------|--------------------------------------------|------------|
| David Barrett   |       | HTV Retirement Plan |       | 23 years 8 months                             |       | 620,700                                        |       | —                                     |       |
|            |       | HTV SERP            |       | 23 years 8 months                             |       | 3,678,100                                      |       | —                                     |       |
| Frank Biancuzzo |       | HTV Retirement Plan |       | 12 years 11 months                            |       | 165,600                                        |       | —                                     |       |
|            |       | HTV SERP            |       | 12 years 11 months                            |       | 250,900                                        |       | —                                     |       |
| Harry Hawks     |       | HTV Retirement Plan |       | 11 years 0 months                             |       | 210,100                                        |       | —                                     |       |
|            |       | HTV SERP            |       | 11 years 0 months                             |       | 617,200                                        |       | —                                     |       |
| Steve Hobbs     |       | HTV Retirement Plan |       | 3 years 2 months                              |       | 41,500                                         |       | —                                     |       |
| Terry Mackin    |       | HTV Retirement Plan |       | 7 years 10 months                             |       | 114,900                                        |       | —                                     |       |
|            |       | HTV SERP            |       | 7 years 10 months                             |       | 503,000                                        |       | —                                     |       |
| Phil Stolz      |       | HTV Retirement Plan |       | 20 years 0 months                             |       | 534,500                                        |       | —                                     |       |
|            |       | HTV SERP            |       | 20 years 0 months                             |       | 1,393,200                                      |       | —                                     |       |

 

Messrs. Barrett,Biancuzzo and Stolz became participants in the Tax-Qualified Plan effective August 29,1997 and in the Supplemental Plan effective January 1, 1999.  Mr. Hawks became a participant in theTax-Qualified Plan effective as of January 1, 1998 and in the SupplementalPlan effective as of January 1, 1999. Mr. Mackin became a participant in the Tax-Qualified Plan effectiveJune 1, 2000 and in the Supplemental Plan effective May 1, 2000 andterminated employment as of February 29, 2008.  Mr. Hobbs became a participant in theTax-Qualified Plan effective February 1, 2005 and transferred from theCompany to Hearst on March 31, 2008. As of December 31, 2008, Messrs. Barrett, Biancuzzo, Hawks andStolz are currently eligible for early retirement.

 

Further information onassumptions used to determine these values can be found in the Retirement Plansand Other Post-Retirement Benefit section of the Company’s 2008 Annual Report.

 

**Compensationfor Directors in 2008**

 

Our Board ofDirectors sets the compensation for directors upon the recommendation of theCEO and the Chairman of the Board.  In2008, our directors’ fees were as follows:

 

·                  $40,000 annually

·                  $20,000 annually for service as a committeechairperson

·                  $6,000 annually for service on a committee

·                  $1,500 for every Board meeting attended

·                  $1,000 for every committee meeting attended

·                  4,000 options annually

·                  1,143 shares of restricted stock annually

·                  2,000 additional options for service as a committeechairperson

·                  571 additional shares of restricted stock for serviceas a committee chairperson

 

24

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In making thesecompensation decisions, the Board attempted to maintain fair and competitivecompensation levels commensurate with the directors’ responsibilities.

 

The following table setsforth information concerning compensation to our directors for the fiscal yearended December 31, 2008, excluding David J. Barrett, our Chief ExecutiveOfficer, who serves on our Board, but is not compensated for his boardservice.  Compensation for Mr. Barrettis set forth in the Summary Compensation Table on page 18.  In addition, Frank A. Bennack, Jr., theChairman of our Board, began waiving compensation for his board service when hebecame the Chief Executive Officer of Hearst in June 2008.

 
| **Name**                     | ** ** | **Fees Earned or Paid  in Cash  ($)(1)** | ** ** | **Stock Awards  ($)(2)** | ** ** | **Option Awards  ($)(3)** | ** ** | **Total  ($)** | ** ** |
|------------------------------|------------|------------------------------------------|------------|--------------------------|------------|---------------------------|------------|----------------|------------|
| Bob Marbut                   |       | 52,000                                   |       | 4,893                    |       | 4,368                     |       | 61,261         |       |
| Frank Bennack                |       | 19,285                                   |       | —                   |       | —                    |       | 19,285         |       |
| John Conomikes               |       | 73,500                                   |       | 7,338                    |       | 6,552                     |       | 87,390         |       |
| Ken Elkins                   |       | 61,500                                   |       | 8,896                    |       | 8,815                     |       | 79,211         |       |
| Victor Ganzi                 |       | 47,000                                   |       | —                   |       | —                    |       | 47,000         |       |
| George R.  Hearst, Jr.  |       | 52,000                                   |       | 4,893                    |       | 4,368                     |       | 61,261         |       |
| William Randolph  Hearst III |       | 47,500                                   |       | 4,893                    |       | 4,368                     |       | 56,761         |       |
| Gilbert Maurer               |       | 47,500                                   |       | 4,893                    |       | 4,368                     |       | 56,761         |       |
| Caroline  Williams(4)        |       | 94,000                                   |       | 7,338                    |       | 6,552                     |       | 107,890        |       |
| David Pulver(4)              |       | 98,500                                   |       | 7,338                    |       | 6,552                     |       | 112,390        |       |

 

----

(1) Thiscolumn reports the total amount of cash compensation received for 2008 Boardand committee service.

(2) Non-Employee Directors were awardedrestricted stock in 2008 pursuant to the Company’s Amended and Restated 2007Long Term Incentive Compensation Plan. The amounts in this column represent thedollar amount recognized in 2008 for financial statement reporting purposescalculated in accordance with SFAS 123(R) for the grants awarded in those years.  For additional information concerning theassumptions used in the valuation of the restricted stock awards,  please refer to Footnote 11 (“Employee StockPlans”) to the Company’s financial statements included in its 2008 AnnualReport on Form 10-K, as filed with the SEC.  As of December 31, 2008, the directorshad the following aggregate number of shares of restricted stockoutstanding:  Mr. Marbut: 2,143; Mr. Bennack:1,000; Mr. Conomikes: 3,214; Mr. Elkins: 2,143; Mr. Ganzi: 0; Mr. GeorgeR. Hearst, Jr.: 1,143; Mr. William Randolph Hearst III: 2,143; Mr. Maurer:2,143; Mr. Pulver: 3,214; Ms. Williams: 3,214.

(3) Non-Employee Directors were grantednon-qualified stock options in 2008 pursuant to the Company’s Amended andRestated 2007 Long Term Incentive Compensation Plan.  The amounts in this column represent the dollaramount recognized in 2008 for financial statement reporting purposes computedin accordance with SFAS 123(R) for the grants awarded in those years.  For additional informationconcerning the assumptions used in the valuation of the stock options,  please refer to Footnote 12 (“Employee StockPlans”) to the Company’s financial statements included in its 2008 AnnualReport on Form 10-K, as filed with the SEC.  As of December 31, 2008, the directorshad the following aggregate number of options (vested and unvested)outstanding: Mr. Marbut: 27,000; Mr. Bennack: 4,000; Mr. Conomikes:12,000; Mr. Elkins: 44,000; Mr. Ganzi: 0; Mr. George R. Hearst, Jr.:4,000; Mr. William Randolph Hearst III: 43,000; Mr. Maurer: 8,000; Mr. Pulver:60,500; Ms. Williams: 60,500.

(4) CarolineWilliams and David Pulver also participate in our employee medical plans on thesame terms as are available to employees generally.

 

**ITEM 12.** **SECURITY OWNERSHIP OFCERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

 

The followingtable sets forth information as of March 13, 2009 regarding the beneficialownership of our Series A Common Stock and the Series B Common Stockby (i) each person who is known by us to own beneficially more than 5% ofthe outstanding shares of Common Stock; (ii) each director and executiveofficer named in the Summary Compensation Table; and (iii) all of ourdirectors and executive officers as of December 31, 2008 as a group.  Unless otherwise indicated below, to ourknowledge, all persons listed below have sole voting and investment power withrespect to their shares of Common Stock. The number of shares set forth belowincludes shares of restricted stock, 

 

25

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which are outstanding but subject to forfeiture untilrestrictions lapse, and shares issuable pursuant to options and conversionrights that are exercisable within 60 days of March 13, 2009.

 
| ** **                                                                | ** ** | **Series A Common Stock  Beneficial Ownership(2)** | ** ** | **Series B Common Stock  Beneficial Ownership** | ** ** |
|---------------------------------------------------------------------------|------------|---------------------------------------------------------|------------|------------------------------------------------------|------------|
| **Name and Address (1)******                                              | ** ** | **Number**                                              | ** ** | **Percent  of Series**

**(%)**                      | ** ** | **Number** | ** ** | **Percent  of Series  (%)** | ** ** |
| David J. Barrett(3)                                                       |       | 1,018,350                                               |       | 1.9                                                  | %          | — |   | — |   |
| Harry T. Hawks(4)(5)                                                      |       | 420,924                                                 |       | *                                                    |       | — |   | — |   |
| Frank Biancuzzo(6)                                                        |       | 92,153                                                  |       | *                                                    |       |   |   |   |   |
| Philip M. Stolz(7)                                                        |       | 297,257                                                 |       | *                                                    |       | — |   | — |   |
| Bob Marbut(4)(8)                                                          |       | 73,296                                                  |       | *                                                    |       | — |   | — |   |
| Frank A.  Bennack, Jr.                                               |       | 26,000                                                  |       | *                                                    |       | — |   | — |   |
| John G.  Conomikes                                                        |       | 23,214                                                  |       | *                                                    |       | — |   | — |   |
| Ken J. Elkins(9)                                                          |       | 55,203                                                  |       | *                                                    |       | — |   | — |   |
| George R.  Hearst, Jr.                                               |       | 16,143                                                  |       | *                                                    |       | — |   | — |   |
| William Randolph  Hearst III(10)                                          |       | 48,143                                                  |       | *                                                    |       | — |   | — |   |
| Gilbert C.  Maurer                                                        |       | 12,143                                                  |       | *                                                    |       | — |   | — |   |
| David Pulver(4)(11)                                                       |       | 119,870                                                 |       | *                                                    |       | — |   | — |   |
| Caroline L.  Williams(12)                                                 |       | 67,160                                                  |       | *                                                    |       | — |   | — |   |
| All Company  directors and executive officers as a group (13 persons)(13) |       | 2,269,856                                               |       | 4.3                                                  | %          | — |   | — |   |
| Hearst  Broadcasting, Inc.(14)                                       |       | 35,501,980                                              |       | 67.2                                                 | %          | 41,298,648 | (15) | 100 | % |
| Private Capital  Management(16)                                           |       | 7,754,525                                               |       | 14.7                                                 | %          | — |   | — |   |

 

----

| *    |   | Represents beneficial  ownership of less than 1% of the issued and outstanding shares of  Series A Common Stock.                                                                                                                                                                                                                                                      |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)  |   | Unless otherwise  indicated, the address of each person or entity named in the table is c/o  Hearst-Argyle Television, Inc., 300 West 57th Street, New  York, New York 10019.                                                                                                                                                                                    |
| (2)  |   | Number and percent of  outstanding Series A Common Stock does not include any shares of  Series A Common Stock issuable upon the conversion of the Series B  Common Stock.                                                                                                                                                                                  |
| (3)  |   | Includes 974,000 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009.                                                                                                                                                                                                                              |
| (4)  |   | Indicates that such  person is a party to a Registration Rights Agreement with the Company dated  as of August 29, 1997.                                                                                                                                                                                                                                              |
| (5)  |   | Includes 330,000 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009.                                                                                                                                                                                                                              |
| (6)  |   | Includes 80,000 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009.                                                                                                                                                                                                                               |
| (7)  |   | Includes 270,000 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009, and 50,000 shares subject to a  conventional pledge agreement.                                                                                                                                                               |
| (8)  |   | Includes 19,000 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009.                                                                                                                                                                                                                               |
| (9)  |   | Includes 40,000 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009.                                                                                                                                                                                                                               |
| (10) |   | Includes 35,000 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009.                                                                                                                                                                                                                               |
| (11) |   | Includes 48,500 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009.                                                                                                                                                                                                                               |
| (12) |   | Includes 48,500 shares  of Series A Common Stock issuable pursuant to stock options exercisable  within 60 days of March 13, 2009.                                                                                                                                                                                                                               |
| (13) |   | Includes 1,845,000  shares of Series A Common Stock issuable pursuant to stock options  exercisable within 60 days of March 13, 2009.                                                                                                                                                                                                                            |
| (14) |   | The Hearst Family Trust  is the sole common stockholder of Hearst, which is the sole stockholder of  Hearst Holdings, which is the sole stockholder of Hearst Broadcasting. The  address of The Hearst Family Trust is 300 West 57th Street, New  York, New York 10019. The address of Hearst, Hearst Holdings and Hearst  Broadcasting is 300 West 57th Street, |

 

26

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|   |   | New York, New York  10019.                                                                                                                                                                                                                                                                                               |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (15)   |   | Indicates the number of  shares of Series B Common Stock held by Hearst Broadcasting. The shares  of Series B Common Stock are convertible at any time at the option of  the holder on a share-for-share basis into shares of Series A Common  Stock.                                                     |
| (16)   |   | Based on the Schedule  13G, Amendment No. 5, filed by Private Capital Management, L.P. (“PCM”)  on February 13, 2009 reporting beneficial ownership of our Series A  Common Stock as of December 31, 2008. The address of PCM is 8889 Pelican  Bay Blvd, Suite 500, Naples, FL 34108. |

 

**EquityCompensation Plans**

 

The followingtable is included to summarize information concerning our equity compensationplans as of December 31, 2008:

 
| ** **                                                  | ** ** | **EQUITY  COMPENSATION PLAN INFORMATION**                                                                                                                 | ** ** |
|-------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Plan Category**                                      | ** ** | **Number of securities to be  issued upon exercise of  outstanding options,  warrants and rights  (1)** | ** ** | **Weighted average  exercise price of  outstanding options,  warrants and rights** | ** ** | **Number of securities remaining  available for future issuance  (2)** | ** ** |
| Equity  compensation plans approved by security holders     |       | 7,096,828                                                                                                                                                 | (1)        | $ | 22.53 |   | 4,790,686 | (2) |
| Equity  compensation plans not approved by security holders |       | N/A                                                                                                                                                       |       | N/A |   | N/A |   |
| Total                                                       |       | 7,096,828                                                                                                                                                 | (1)        | $ | 22.53 |   | 4,790,686 | (2) |

 

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| (1)    | Includes  shares of Series A Common Stock to be issued upon exercise of stock  options granted under the Company’s Amended and Restated 1997 Stock Option  Plan, the Company’s 2004 Long Term Incentive Compensation Plan and the  Company’s Amended and Restated 2007 Long Term Incentive Plan. The Company has  also awarded 150,679 shares of restricted stock under the 2004 Long Term  Incentive Compensation Plan and 293,238 shares of restricted stock under the  Amended and Restated 2007 Long Term Incentive Compensation Plan. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (2)    | Includes  1,170,756 shares of Series A Common Stock available for future stock  option and restricted stock grants under the Company’s Amended and Restated  2007 Long Term Incentive Compensation Plan and 3,619,930 shares of  Series A Common Stock reserved for future issuance under the Company’s  Employee Stock Purchase Plan.                                                                                                                                                                                                     |

 

**ITEM13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, ANDDIRECTOR INDEPENDENCE**

 

**CertainRelationships and Related Transactions**

 

**Hearst**.   Hearst holds through asubsidiary 100% of the outstanding shares of our Series B Common Stock and67.3% of our Series A Common Stock, constituting approximately 81.6% ofour total outstanding common stock as of the Record Date.  In addition, the Chairman of our Board ofDirectors, Frank A. Bennack, Jr., is the Vice Chairman and Chief ExecutiveOfficer of Hearst, and David Barrett, our President and Chief Executive Officerand one of our directors, is a director of Hearst.   John G. Conomikes, George R. Hearst. Jr.,William R. Hearst III and Gil Maurer are also members of the Boards ofDirectors of both Hearst-Argyle and Hearst. In addition, Victor F. Ganzi was amember of the Boards of Directors of both Hearst-Argyle and Hearst, and thePresident and Chief Executive Officer of Hearst, until his resignation fromHearst in June 2008.  Mr. Ganziresigned from our Board on October 7, 2008.

 

*December 2001Private Placement.*    Inconnection with the private placement of the $200 million principal amount of7.5% Series A Convertible Preferred Securities due 2016 (the “7.5% Series APreferred Securities”) and 7.5% Series B Convertible Preferred Securitiesdue 2021 (the “7.5% Series B Preferred Securities,” and, together with theSeries A Preferred Securities, the “7.5% Preferred Securities”), on December 20,2001, we entered into a Securities Purchase Agreement with our wholly-ownedunconsolidated subsidiary, the Hearst-Argyle Capital Trust, Hearst Broadcastingand certain other purchasers named therein. The Securities Purchase Agreement provides, among other things, that (i) theHearst-Argyle Capital Trust issue and sell to Hearst Broadcasting and the otherpurchasers an aggregate of 4,000,000 of its 7.5% Preferred Securities, in twoseries, consisting of its 7.5% Series A Preferred Securities, and of its7.5% Series B Preferred Securities, and (ii) the proceeds of the saleof the 7.5% Preferred Securities be invested in our 7.5% Convertible JuniorSubordinated Deferrable Interest Debentures, Series A, due 2016 and 7.5%Convertible Junior Subordinated Deferrable Interest Debentures, Series B,due 2021 (the “Subordinated Debentures”). In connection with the execution of the Securities Purchase Agreement,we, Hearst Broadcasting and certain other parties named therein, also enteredinto a Registration Rights Agreement, pursuant to which we granted HearstBroadcasting and the other holders of the 7.5% Preferred Securities certainrights to require us to register with the SEC the Series A Common Stockissuable upon conversion of the 7.5% Preferred Securities and the SubordinatedDebentures for resale.  We redeemed the7.5% Series A Preferred Securities on December 31, 2004 and the 7.5% Series BPreferred Securities on June 23, 2008.

 

*ManagementServices Agreement.*    Weand Hearst are parties to a Management Services Agreement pursuant to which weprovide certain management services (i.e., sales, news, programming, legal,financial, accounting, engineering and promotion services) with respect toWMOR-TV (a Hearst-owned television station in Tampa, Florida), WBAL-AM andWIYY-FM (Hearst-owned AM/FM radio stations in Baltimore, Maryland), and WPBF-TV(a Hearst-owned television station in West Palm Beach, Florida) and KCWE-TV (aHearst-owned television station in Kansas City, Missouri).  Hearst has the right, but not the obligation,to add to such managed stations any additional broadcast stations that it mayacquire (or for which it enters into a time brokerage agreement) during theterm of the Management Services Agreement.

 

The annualmanagement fee for the services provided to these stations is an amount equalto the greater of (i) (x) $50,000 for Hearst’s radio stations(counted as a single property) and $50,000 for KCWE-TV, and (y) for allothers (including WMOR-TV and WPBF-TV), $100,000 per station, or (ii) 33.33%of the positive broadcast cash flow from each such property.  Hearst also reimburses us for our direct operatingcosts and expenses incurred with unrelated third parties and amounts paid onbehalf of a managed station under the Services Agreement described below.  Corporate overhead is not reimbursed exceptto the extent it had historically been treated as an operating expense byHearst in calculating broadcast cash flow for a station.  The term of the Management Services Agreementcommenced at the consummation of the Hearst Transaction and will continue foreach station, respectively, until the earlier of (i) Hearst’s 

 

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divestiture of the station to a third party; (ii) ifapplicable, the exercise of the option granted to us to acquire certain of thestations pursuant to the Television Station Option Agreement described below;or, (iii) December 31, 2009; provided, however, that Hearst will havethe right to terminate the Management Services Agreement as to a particularstation covered by an option or right of first refusal under the TelevisionStation Option Agreement at any time upon 90 days’ prior written notice if theoption period or right of first refusal period, as applicable, has expiredwithout having been exercised. The Management Services Agreement will alsoterminate if Hearst ceases to own a majority of our voting common stock or tohave the right to elect a majority of our directors.  In 2008, we recorded revenues ofapproximately $3.9 million pursuant to the Management Services Agreement withHearst.

 

*TelevisionStation Option Agreement.*    We and Hearst are parties to a TelevisionStation Option Agreement pursuant to which Hearst has granted to us an optionto acquire WMOR-TV and KCWE-TV, at their fair market value asdetermined by the parties, or by an independent third-party appraisal, subjectto certain specified parameters (and we may withdraw any option exercise afterwe receive the third-party appraisal). However, if Hearst elects to sell either station during the optionperiod, we will have a right of first refusal to acquire that station substantiallyon the terms agreed upon between Hearst and the potential buyer.  We also have a right of first refusal topurchase WPBF-TV if Hearst proposes to sell the station to a third party  We will exercise any option or right of firstrefusal related to these properties by action of our independentdirectors.  The option periods and therights of first refusal expire December 31, 2009.

 

*Hearst**Tower**Lease*.  On May 5, 2006 we entered into a LeaseAgreement with Hearst to lease one floor of the newly constructed Hearst Towerin Manhattan for our corporate offices. Under the terms of the lease we are entitled to a tenant improvementallowance of $1.9 million.  In 2008, werecorded approximately $1.7 million in rent expense under the terms of theLease Agreement with Hearst, net of the tenant improvement allowance, which isamortized over the lease term.

 

*RadioFacilities Lease.*    Weand Hearst are parties to a Studio Lease Agreement pursuant to which Hearstleases from us premises for WBAL-AM and WIYY-FM, Hearst’s Baltimore, Maryland,radio stations.  The lease was enteredinto on August 29, 1997 and subsequently extended.  The lease for each radio station willcontinue until the earlier of (i) Hearst’s divestiture of the radiostation to a third party, in which case either party (i.e., the Company or thebuyer of the station) will be entitled to terminate the lease with respect tothat station upon certain prior written notice or (ii) December 31,2009.   In 2008, Hearst paid us anaggregate amount of approximately $0.8 million pursuant to the Studio LeaseAgreement.

 

*Inter-CompanyServices.*    Weand Hearst are parties to a Services Agreement pursuant to which Hearstprovides us with certain administrative services, including accounting,auditing, financial, legal, insurance, data processing and employee benefitsadministration. The fees for such services are based on fixed and variabletransaction amounts negotiated between Hearst and us. The current term of theServices Agreement will expire on December 31, 2009,****butis thereafter renewable, pursuant to the provision of the Services Agreementthat allows for one year renewals unless terminated on six months’ priornotice.  Although we believe that suchterms are reasonable, there can be no assurance that more favorable terms wouldnot be available from unaffiliated third parties.  In 2008, we incurred expenses ofapproximately $6.8 million pursuant to the Services Agreement with Hearst.

 

*NewEngland Cable News*.  Hearst-Argyle also provides services to Hearstwith respect to Hearst’s investment in New England Cable News (“NECN”), aregional cable channel jointly owned by Hearst Cable News, Inc., anindirect wholly-owned subsidiary of Hearst, and Comcast MO Cable News, Inc.  In this regard, David J. Barrett, our CEO,has served as Hearst’s representatives on the management board of NECN since July 2004,and in 2008, Hearst paid $2,000 per month as compensation to the Company forhis service.  Our former executiveofficer, Steven Hobbs, also serves on the management board of NECN and, for theperiod January 1, 2008 to March 31, 2008, Hearst paid $2,000 permonth as compensation to the Company for his service.

 

*WideOrbit, Inc.  *In November 2004,we entered into an agreement with Wide Orbit, Inc. (“Wide Orbit”) forlicensing and servicing of Wide Orbit’s Traffic Sales and Billing Solutionssoftware.  Hearst owns approximately 7.3%of Wide Orbit, Inc.  In 2008, wepaid Wide Orbit approximately $1.8 million under the agreement.

 

*ESPN*.  During 2008,certain of our stations paid fees in the amount of approximately $2.0 millionin the aggregate to ESPN in exchange for the right to broadcast certain sportsprograms.  Hearst owns approximately 20%of ESPN, and Frank A. Bennack, Jr., the Chairman of our Board ofDirectors, was elected to the Board of ESPN on February 25, 2009.

 

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*RetransmissionConsent Agreement.*   We have agreements with Lifetime Entertainment Services, an entity owned 50% byan affiliate of Hearst and 50% by The Walt Disney Company, whereby for certainperiods of time (i) we have assisted Lifetime in securing distribution andsubscribers for the Lifetime Television, Lifetime Movie Network and/or LifetimeReal Women programming services; and/or (ii) Lifetime has acted as ouragent with respect to the negotiation of our agreements with cable, satelliteand certain other multi-channel video programming distributors.  In 2008, we recorded revenue of approximately$23 million in compensation from Lifetime. In addition, Steven Hobbs, our former executive officer, providedmanagement oversight and legal services to the Company in connection with ourretransmission consent negotiations. The Company paid Hearst $200,000 in 2008for those services.

 

*Dividendon Common Stock.*  In 2008, ourBoard of Directors declared quarterly cash dividends of $0.07 per share on our Series Aand Series B Common Stock, for a total amount of $26.3 million.  Included in this amount was $21.1 millionpayable to Hearst.

 

*InterestExpense, Net – Capital Trust.*  We incurred interest expense, net, relating to theSubordinated Debentures issued to the Hearst-Argyle Capital Trust, of $8.6million in the year ended December 31, 2008.  The Hearst-Argyle Capital Trust then paidcomparable amounts to its Redeemable Convertible Preferred Securities holdersof which $1.7 million was paid to Hearst, as Hearst held $40 million of thetotal $200 million Redeemable Convertible Preferred Securities issued in December 2001by the Capital Trust.  We redeemed theRedeemable Convertible Preferred Securities on June 23, 2008, anddissolved the Capital Trust as of January 5, 2009.

 

*OtherTransactions with Hearst*.  During 2008, we recorded netrevenue of approximately $0.1 million relating to advertising sales to Hearston behalf of Good Housekeeping, which is owned by Hearst.  In addition, in his capacity as a consultant to Hearst Corporation, John G.Conomikes, one of our directors, receives secretarial services which we providebut for which we are reimbursed by Hearst. The value of these secretarial services was approximately $7,200 in2008.

 

**SmallBusiness Television.**    Weutilize Small Business Television Inc.’s (“SBTV”) services to providetelevision stations with additional revenue through the marketing and sale ofcommercial time to smaller businesses that do not traditionally use televisionadvertising.  In 2008, these salesgenerated revenue of approximately $1.1 million, of which approximately $0.5million was distributed to SBTV and approximately $0.6 million was distributedto us.  Mr. Dean Conomikes, the sonof director John G. Conomikes, is the owner of SBTV.

 

**Internet Broadcasting Systems, Inc.**    As of December 31,2008, we owned 37.6% of Internet Broadcasting Systems, Inc. (“InternetBroadcasting”) on a fully diluted basis. Internet Broadcasting operates a national network of station Internetsites and designs, develops and operates station Internet sites under operatingagreements.   We also havevarious agreements with Internet Broadcasting pursuant to which we paidInternet Broadcasting $10.5 million during 2008.  In addition, Internet Broadcasting provideshosting services for our corporate Internet site for a nominal amount.  Harry T. Hawks and Roger Keating, two of ourexecutive officers, serve on the Board of Directors of Internet Broadcasting,from which they did not receive compensation for their Board service.

 

**RDE.** In 2008, the Company made an additionalinvestment of $3.4 million in Ripe Digital Entertainment, Inc. (“RDE”), inthe form of a Convertible Promissory Note. As of December 31, 2008, the Company owned 23.4% of RDE on a fullydiluted basis.  During 2008, the Companyearned nominal rental income from RDE for office space in our former Corporateheadquarters.   Harry T. Hawks, one ofour executive officers, serves, and Steve A. Hobbs, one of our former executiveofficers, serve on the Board of Directors of RDE, from which they did notreceive compensation for their Board service.

 

**CertainEmployees.**    During2008, we awarded stock options and restricted stock to certain employees of thestations which are owned by Hearst and managed by us (which employees alsoreceive other compensation directly from Hearst).  During 2008 we awarded these employees anaggregate of 19,063 stock options and 4,812 shares of restricted stock.  In addition, Michael E. Pulitzer, Jr.,the son of our former director Michael E. Pulitzer, is the StationManager/Program Director at WXII-TV, our television station in Winston-Salem,North Carolina.  He has been employed atthis station since 1990 and his cash compensation in 2008 was approximately$208,376. He received no stock options or shares of restricted stock in 2008.

 

**RelatedParty Transaction Approval Policy. **Our AuditCommittee Charter provides that the Audit Committee, which is composed ofindependent directors, shall review and approve, ratify or make recommendations to 

 

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our Board of Directors regarding material relatedparty transactions, including material transactions between the Company and anyof its 5% or greater stockholders.  Inaddition, we have a Code of Business Conduct and Ethics that applies to alltransactions between our directors, officers and employees.  The Code of Business Conduct and Ethics isavailable on our Web site at www.hearstargyle.com.

 

**DirectorIndependence**.  Because Hearst Broadcasting controls amajority of our voting stock, we qualify as a “controlled company” under NYSElisting standards.  As a controlledcompany, we are not subject to certain NYSE listing standards which regulatethe composition of listed company boards. The Board of Directors has determined that Ken Elkins, David Pulver,Caroline Williams are independent in accordance with NYSE listed companystandards, including the enumerated criteria in NYSE Rule 303A.02(b), andhas affirmatively determined that none of them has a “material relationship”with the Company as defined in NYSE Rule 303A.02(a).  In making this determination, the Board notedthat Caroline Williams and David Pulver have not had any relationship with theCompany other than as a director, and that, while Ken Elkins was an officer ofPulitzer prior to joining the Company’s Board, that relationship was not deemedmaterial because the Company acquired Pulitzer over ten years ago and Mr. Elkinsceased to be an employee of Pulitzer at that time. (See also information underthe caption “Information Regarding the Board of Directors and its Committees”in Item 10 of this Report.)

 

**ITEM14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES**

 

Deloitte &Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respectiveaffiliates, (collectively, the “Deloitte Entities”) audited our annualconsolidated financial statements for the year ended December 31, 2008 andreviewed our interim financial statements included in our Quarterly Reports on Form 10-Qfor the year ended December 31, 2008.

 

*Audit andOther Fees*

 

The fees billed by theDeloitte Entities for various types of professional services and relatedexpenses during the years ended December 31, 2008 and December 31,2007 were approximately as follows:

 
| **Type of  Service** | ** ** | **For the year ended  December 31, 2008** | ** ** | **For the year ended  December 31, 2007** | ** ** |
|----------------------|------------|------------------------------------------------|------------|------------------------------------------------|------------|
| Audit Fees           |       | $                                              | 2,063,825  |                                           | $          | 1,873,870 |   |
| Audit-Related  Fees  |       | $                                              | 216,300    |                                           | $          | 144,500 |   |
| Tax Fees             |       | —                                         |       | —                                         |       |
| All Other Fees       |       | —                                         |       | —                                         |       |

 

Audit fees in 2008 and 2007 consisted of fees for theaudits of the annual consolidated financial statements, reviews of thestatements included in our quarterly reports on Form 10-Q and professionalservices rendered for the audit of the effectiveness of internal control overfinancial reporting.   Fees foraudit-related services in 2008 and 2007 consisted of the audits of our employeebenefit plans.  In 2008 and 2007, therewere no fees paid to the Deloitte Entities for tax or other services.

 

*AuditCommittee’s Pre-Approval Policies and Procedures*

 

The AuditCommittee Charter requires that the Audit Committee pre-approve all auditingservices and permitted non-audit services provided to us or our subsidiaries byour independent auditors.

 

The AuditCommittee has determined that the provision of audit services for the employeebenefit plans during 2008 and 2007 were compatible with the maintenance of theindependence of the Deloitte Entities.   For the year ended December 31, 2008,the Audit Committee pre-approved all services rendered by the DeloitteEntities.

 

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**PART IV**

 

**ITEM15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

 

(a)(3)                                The following exhibits are filed as apart of this report:

 
| **Exhibit  No.** | ** ** | **Description**                                                                                                                                                                                                        |
|------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |       |                                                                                                                                                                                                                   |
| 31.1             |       | Certification by David  J. Barrett, President and Chief Executive Officer, pursuant to  Section 302 of the Sarbanes Oxley Act of 2002.                                                                            |
|             |       |                                                                                                                                                                                                                   |
| 31.2             |       | Certification by Harry  T. Hawks, Executive Vice President and Chief Financial Officer, pursuant to  Section 302 of the Sarbanes Oxley Act of 2002.                                                               |
|             |       |                                                                                                                                                                                                                   |
| *32.1            |       | Certification by David  J. Barrett, President and Chief Executive Officer, and Harry T. Hawks,  Executive Vice President and Chief Financial Officer, pursuant to  Section 906 of the Sarbanes Oxley Act of 2002. |

 

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*Exhibit 32.1shall not be deemed filed with the Securities and Exchange Commission, norshall it be deemed incorporated by reference in any filing with the Securitiesand Exchange Commission under the Securities Exchange Act of 1934 or theSecurities Act of 1933, whether made before or after the date hereof andirrespective of any general incorporation language in any filings.

 

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**SIGNATURES**

 

Pursuantto the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the Company has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized.

 
|   | HEARST-ARGYLE  TELEVISION, INC. |
|--------|---------------------------------|
|   |                            |   |
|   | By:                             | /s/    JONATHAN  C. MINTZER |
|   | ** **                      | **Name: Jonathan C. Mintzer** |
|   |                            | **Title:   Vice President, General Counsel  and Secretary** |
|   |                            |   |
|   | Dated:                          | April 30, 2009 |

 

**POWER OF ATTORNEY**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the Company in thecapacities indicated.

 
| **Signatures**                        |       | **Title**                                                                           |   | **Date**             |
|---------------------------------------|------------|-------------------------------------------------------------------------------------|--------|----------------------|
|                                  |       |                                                                                |   |                 |
| *                                     |       | President, Chief  Executive Officer and Director (Principal Executive Officer)      |   | April 30,  2009 |
| **David  J. Barrett**                 |       |                                                                                |   |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Executive Vice  President and Chief Financial Officer (Principal Financial Officer) |   | April 30,  2009 |
| **Harry  T. Hawks**                   |       |                                                                                |   |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Corporate  Controller (Principal Accounting Officer)                                |   | April 30,  2009 |
| **Lydia  G. Brown**                   |       |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     | ** ** | Chairman of the  Board                                                              |   | April 30,  2009 |
|  **Frank A.  Bennack, Jr.** | ** ** |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Director                                                                            |   | April 30,  2009 |
|  **John G.  Conomikes**          |       |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Director                                                                            |   | April 30,  2009 |
|  **Ken J.  Elkins**              |       |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     | ** ** | Director                                                                            |   | April 30,  2009 |
| **George  R. Hearst, Jr.**       | ** ** |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Director                                                                            |   | April 30, 2009  |
| **William  R. Hearst III**       |       |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Director                                                                            |   | April 30,  2009 |
| **Bob  Marbut**                       |       |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Director                                                                            |   | April 30,  2009 |
| **Gilbert  C. Maurer**                |       |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Director                                                                            |   | April 30,  2009 |
| **David  Pulver**                     |       |                                                                                |   |                 |
|                                  |       |                                                                                |   |                 |
| *                                     |       | Director                                                                            |   | April 30,  2009 |
| **Caroline  L. Williams**             |       |                                                                                |   |                 |

 
| *By:   | /s/ JONATHAN C. MINTZER |   |   |   |
|--------|-------------------------|--------|--------|--------|
|   | Jonathan C. Mintzer,    |   |   |   |
|   | Attorney-in- Fact       |   |   |   |

 

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