<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
COX RADIO, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(COX RADIO INC. LOGO)
To the Stockholders of Cox Radio, Inc.
You are invited to attend the Annual Meeting of Stockholders of Cox Radio,
Inc. to be held at Corporate Headquarters, 1400 Lake Hearn Drive, N.E., Atlanta,
Georgia 30319, on Wednesday, May 19, 1999, at 9:30 a.m., local time.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement explain the matters to be voted on at the meeting.
Please read the enclosed Notice of Annual Meeting and Proxy Statement so
you will be informed about the business to come before the meeting. Your vote is
important, regardless of the number of shares you own. On behalf of the Board of
Directors, I urge you to mark, sign and return the enclosed proxy card or take
advantage of our new telephone or Internet voting system as soon as possible,
even if you plan to attend the Annual Meeting. You may, of course, revoke your
proxy by notice in writing to the Corporate Secretary or by using the telephone
or Internet voting procedures at any time before the proxy is voted.
Sincerely,
/s/ ROBERT F. NEIL
Robert F. Neil
President and Chief Executive Officer
Atlanta, Georgia
March 29, 1999
<PAGE> 3
COX RADIO, INC.
1400 LAKE HEARN DRIVE, N.E.
ATLANTA, GEORGIA 30319
(404) 843-5000
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1999
---------------------
To the Stockholders of Cox Radio, Inc.
The Annual Meeting of the holders of Class A Common Stock and Class B
Common Stock of Cox Radio, Inc. ("Cox Radio") will be held at Corporate
Headquarters, 1400 Lake Hearn Drive, N.E., Atlanta, Georgia 30319 on Wednesday,
May 19, 1999, at 9:30 a.m., local time, for the following purposes:
1. To elect a Board of Directors of seven members to serve until the
2000 Annual Meeting of Stockholders or until their successors are duly
elected and qualified;
2. To ratify the appointment by the Board of Directors of Deloitte &
Touche LLP, independent certified public accountants, as Cox Radio's
independent auditors for the year ending December 31, 1999;
3. To approve the adoption of the Cox Radio, Inc. 1999 Employee Stock
Purchase Plan; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed March 19, 1999 as the record date for the
Annual Meeting with respect to this solicitation. Only holders of record of
Class A Common Stock and Class B Common Stock at the close of business on that
date are entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof as set forth in the Proxy Statement.
Cox Radio's Annual Report to stockholders for the year ended December 31,
1998 is enclosed herewith.
By Order of the Board of Directors,
/s/ Andrew A. Merdek
Andrew A. Merdek
Corporate Secretary
Atlanta, Georgia
March 29, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE OR USE OUR
NEW TELEPHONE OR INTERNET VOTING SYSTEM AS PROMPTLY AS POSSIBLE. AS SPECIFIED IN
THE ENCLOSED PROXY STATEMENT, A STOCKHOLDER MAY REVOKE A PROXY AT ANY TIME PRIOR
TO ITS USE.
<PAGE> 4
COX RADIO, INC.
1400 LAKE HEARN DRIVE, N.E.
ATLANTA, GEORGIA 30319
(404) 843-5000
---------------------
PROXY STATEMENT
1999 ANNUAL MEETING OF STOCKHOLDERS
---------------------
SOLICITATION OF PROXIES
The Board of Directors of Cox Radio, Inc. is furnishing this Proxy
Statement to solicit proxies for use at Cox Radio's 1999 Annual Meeting of
Stockholders, to be held on May 19, 1999, at 9:30 a.m., local time, at Corporate
Headquarters, 1400 Lake Hearn Drive, NE, Atlanta, Georgia 30319, and at any
adjournment of the meeting. Each valid proxy received in time will be voted at
the meeting according to the choice specified, if any. A proxy may be revoked at
any time before the proxy is voted as outlined below.
This Proxy Statement and the enclosed proxy card are being first sent for
delivery to stockholders of Cox Radio on or about March 29, 1999. Cox Radio will
pay the cost of solicitation of proxies, including the reimbursement to banks
and brokers for reasonable expenses for sending proxy materials to their
principals.
The shares of Class A Common Stock and Class B Common Stock represented by
valid proxies we receive in time for the Annual Meeting will be voted as
specified in such proxies. Valid proxies include all properly executed written
proxy cards and all properly completed proxies voted by telephone or the
Internet pursuant to this solicitation and not later revoked. Voting your proxy
by mail, telephone or the Internet will not limit your right to vote at the
Annual Meeting if you later decide to attend in person. Executed but unvoted
proxies will be voted:
(1) FOR the election of the Board of Directors' nominees for
directors;
(2) FOR the ratification of the appointment of Deloitte & Touche LLP,
independent certified public accountants, as Cox Radio's independent
auditors for the year ending December 31, 1999; and
(3) FOR the approval of the Cox Radio, Inc. 1999 Employee Stock
Purchase Plan.
If any other matters properly come before the Annual Meeting, the persons
named on the proxies will, unless the stockholder otherwise specifies in the
proxy, vote upon such matters in accordance with their best judgment.
VOTING SECURITIES
Cox Radio has two classes of outstanding voting securities, Class A Common
Stock, par value $1.00 per share, and Class B Common Stock, par value $1.00 per
share. As of March 19, 1999, there were outstanding 9,017,113 shares of Class A
Common Stock and 19,577,672 shares of Class B Common Stock. Only holders of
record of shares of Class A Common Stock or shares of Class B Common Stock at
the close of business on March 19, 1999, which the Board of Directors has fixed
as the record date, are entitled to vote at the meeting.
The Class A Common Stock and Class B Common Stock will vote together as a
single class, with each share of Class A Common Stock being entitled to one
vote, and each share of Class B Common Stock being entitled to ten votes. The
presence in person or by proxy of holders of record of one-third of the issued
and outstanding shares of Class A Common Stock and Class B Common Stock entitled
to vote at the Annual Meeting, which represent a majority of the votes entitled
to be cast by such shares, will constitute a quorum. The affirmative vote of a
majority of the votes entitled to be cast by such shares of the issued and
outstanding Class A Common Stock and Class B Common Stock, voting together as a
single class, present at the Annual Meeting in person or by proxy, and entitled
to vote, is required for the election of directors, the ratification of
appointment of independent auditors and the approval of the Cox Radio, Inc. 1999
Employee Stock Purchase Plan.
<PAGE> 5
In determining whether a proposal is approved, we will count shares that
the stockholder does not vote "for" as a vote "against" the proposal. Thus, an
abstention would have the effect of a vote against the applicable proposal. On
the other hand, broker non-votes are not considered shares entitled to vote on
the applicable proposal and are not included in determining whether such
proposal is approved. A broker non-vote occurs when the nominee of a beneficial
owner with the power to vote on at least one matter does not vote on another
matter because the nominee does not have the discretionary voting power and has
not received instructions from the beneficial owner with respect to such matter.
Accordingly, broker non-votes have no effect on the outcome of a vote on the
applicable proposal.
Stockholders will not have appraisal rights with respect to any of the
proposals to be voted upon at the Annual Meeting.
VOTING BY PROXY
If a stockholder is a corporation or a partnership, a duly authorized
person must sign the accompanying proxy card in the full corporate or
partnership name. If the proxy card is signed pursuant to a power of attorney or
by an executor, administrator, trustee or guardian, the signer's full title must
be given and a certificate or other evidence of appointment must be furnished.
If shares are owned jointly, each joint owner must sign the proxy card.
Instructions for a stockholder of record to vote by telephone or the
Internet are set forth on the enclosed proxy card. The telephone and Internet
voting procedures are designed to authenticate votes cast by use of a personal
identification number. The procedures, which comply with Delaware law, allow
stockholders to appoint a proxy to vote their shares and to confirm that their
instructions have been properly recorded.
Any proxy duly given pursuant to this solicitation may be revoked, by the
stockholder, at any time prior to the voting of the proxy, by written notice to
the Secretary of Cox Radio, by a later-dated proxy either signed and returned by
mail or by using the telephone or Internet voting procedures before the Annual
Meeting, or by attending the Annual Meeting and voting in person. Attendance at
the Annual Meeting will not in and of itself constitute a revocation of a proxy.
As of March 19, 1999, Cox Enterprises, Inc., a Delaware corporation,
through its wholly-owned subsidiary, Cox Broadcasting, Inc., a Delaware
corporation, held approximately 95.6% of the combined voting power of the Class
A Common Stock and Class B Common Stock. Accordingly, Cox Enterprises will have
sufficient voting power to elect all members of the Board of Directors, to
ratify the appointment of independent auditors, to approve the 1999 Employee
Stock Purchase Plan and to control substantially all other actions that may come
before the Annual Meeting.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the meeting, seven directors are to be elected to hold office until the
2000 Annual Meeting of Stockholders or until their respective successors have
been elected and qualified. All nominees currently are directors of Cox Radio.
The seven directors nominated for election at the 1999 Annual Meeting of
Stockholders are: David E. Easterly; Ernest D. Fears, Jr.; Richard A. Ferguson;
Paul M. Hughes; James C. Kennedy; Robert F. Neil; and Nicholas D. Trigony. The
persons named as proxies intend (unless authority is withheld) to vote for
election of all of the nominees as directors.
The Board of Directors knows of no reason why any nominee for director
would be unable to serve as director. If, at the time of the Annual Meeting, any
of the nominees is unable or unwilling to serve as a director of Cox Radio, the
persons named in the proxy intend to vote for such substitutes as may be
nominated by the Board of Directors.
2
<PAGE> 6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES.
The following information regarding the nominees, their principal
occupations, employment history, and directorships in certain companies is as
reported by the respective nominees.
David E. Easterly, 56, has served as a director of Cox Radio since July
1996 and has served as President and Chief Operating Officer of Cox Enterprises
since October 1994. He was President of Cox Newspapers, Inc., a subsidiary of
Cox Enterprises, from May 1986 through October 1994. Mr. Easterly joined Cox
Enterprises in 1970 at the Dayton Daily News, transferring to Atlanta in 1981 as
Vice President of Operations for Cox Newspapers. He was named Publisher of The
Atlanta Journal/Constitution in April 1984. Mr. Easterly is a member of the
Board of Directors of the Associated Press and Mutual Insurance Company, Ltd. He
is also a director of both Cox Enterprises and Cox Communications, Inc., a
majority-owned subsidiary of Cox Enterprises.
Ernest D. Fears, Jr., 66, has served as a director of Cox Radio since
December 1996. He has been a lecturer at Howard University since 1990 and was a
consultant to the National Institute of Health from February to August of 1996.
From June 1992 to August 1992, he was General Manager for radio station XFRM-FM
in San Diego, California/Tijuana, Mexico. Mr. Fears retired in 1987 as General
Manager of American Broadcasting Company's WRQX-FM in Washington, D.C.
Richard A. Ferguson, 53, has served as Vice President and Chief Operating
Officer since April 1997 and as a director of Cox Radio since May 1997.
Previously, Mr. Ferguson served as President, Chief Executive Officer and a
Director of NewCity Communications, Inc. since its organization in 1986. He
served as the President of Katz Broadcasting Company, Inc., a subsidiary of Katz
Communications, Inc., from 1981 to 1986, when he led a management group in
organizing NewCity to purchase all of the stock of Katz Broadcasting Company,
Inc. Prior to 1981, he served as the President of Park City Communications,
Inc., until Park City was acquired by Katz Communications, Inc. Mr. Ferguson is
Chairman of the Joint Board of Directors of the National Association of
Broadcasters ("NAB") and a member of the Radio Operators Caucus.
Paul M. Hughes, 60, has served as a director of Cox Radio since December
1996. He has been President and Chief Operating Officer of OG Holding LTD since
April 1995. From June 1991 through April 1, 1995 he was Chairman of Hughes
Broadcasting Partners, and from April 1995 through December 1998 he was
President of Great Trails Broadcasting, Inc.
James C. Kennedy, 51, has served as a director of Cox Radio since July
1996. He has served as Chairman of the Board of Directors and Chief Executive
Officer of Cox Enterprises since January 1988, and prior to that time was Cox
Enterprises' President and Chief Operating Officer. Mr. Kennedy joined Cox
Enterprises in 1972 and initially worked with Cox Enterprises' Atlanta
newspapers. He is Chairman of the Board of Directors of Cox Communications and a
director of National Service Industries, Inc., Flagler Systems, Inc. and an
advisory director of Chase Bank of Texas, N.A.
Robert F. Neil, 40, has served as President and Chief Executive Officer and
as a director of Cox Radio since July 1996 and was Executive Vice
President -- Radio of Cox Broadcasting from June 1992 to 1996. Previously, he
was Vice President and General Manager of WSB-AM/FM (Atlanta). Mr. Neil joined
Cox Broadcasting in November 1986. Previously, Mr. Neil was Operations Manager
from December 1984 to November 1986 at WYAY-FM (Gainesville). He served as
Operations Manager from October 1983 to December 1984 and as Program Director
from March 1983 to October 1983 at WYYY-FM and WSYR-AM (Syracuse).
Nicholas D. Trigony, 58, has served as Chairman of the Board of Directors
of Cox Radio since July 1996 and has served as President of Cox Broadcasting
since March 1990. Mr. Trigony joined Cox Broadcasting in September 1986 as
Executive Vice President -- Radio and was Executive Vice President -- Broadcast
from April 1989 to March 1990. He is also Chairman of the Board of the National
Association of Television Program Executives and serves on its Executive
Committee. Mr. Trigony is a past chairman and current board member of the
Television Operators Caucus and chairman of the NAB Media Convergence Task
Force.
3
<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table provides information as of March 19, 1999 with respect
to the shares of Class A Common Stock and Class B Common Stock beneficially
owned by each person known by Cox Radio to own more than 5% of any class of the
outstanding voting securities of Cox Radio.
<TABLE>
<CAPTION>
PERCENT OF
VOTE OF ALL
CLASS A CLASS B CLASSES OF
COMMON PERCENT OF COMMON PERCENT OF COMMON
NAME OF BENEFICIAL OWNER STOCK CLASS STOCK CLASS STOCK
- ------------------------ --------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Cox Enterprises, Inc.(1)(2)(3)............. -- -- 19,577,672 100% 95.62%
Massachusetts Financial Services
Company(4)............................... 1,137,274 12.6% -- -- 0.56%
Baron Capital Group, Inc.(5)............... 920,000 10.2% -- -- 0.45%
Citigroup Inc.(6).......................... 670,917 7.44% -- -- 0.33%
Salomon Smith Barney Holdings, Inc.(6)..... 646,017 7.16% -- -- 0.32%
Westport Asset Management, Inc.(7)......... 546,900 6.07% -- -- 0.27%
Mutual Management Corp.(6)................. 543,330 6.0% -- -- 0.27%
College Retirement Equities Fund(8)........ 460,750 5.11% -- -- 0.22%
</TABLE>
- ---------------
(1) The business address for Cox Enterprises is 1400 Lake Hearn Drive, N.E.,
Atlanta, Georgia 30319.
(2) All the shares of common stock of Cox Radio that are beneficially owned by
Cox Enterprises are held of record by Cox Broadcasting. Cox Broadcasting
holds 19,577,672 shares of Class B Common Stock that are convertible into
the same number of shares of Class A Common Stock. All the shares of
outstanding capital stock of Cox Broadcasting are beneficially owned by Cox
Holdings, Inc., and all of the shares of outstanding capital stock of Cox
Holdings, Inc. are beneficially owned by Cox Enterprises. The beneficial
ownership of the outstanding capital stock of Cox Enterprises is described
in footnote (3) below.
(3) There are 202,269,423 shares of common stock of Cox Enterprises outstanding,
with respect to which (i) Barbara Cox Anthony, as trustee of the Anne Cox
Chambers Atlanta Trust, exercises beneficial ownership over 58,316,422
shares (28.8%); (ii) Anne Cox Chambers, as trustee of the Barbara Cox
Anthony Atlanta Trust, exercises beneficial ownership over 58,316,422 shares
(28.8%); (iii) Barbara Cox Anthony, Anne Cox Chambers and Richard L.
Braunstein, as trustees of the Dayton Cox Trust A, exercise beneficial
ownership over 82,745,685 shares (40.9%); and (iv) 235 individuals and
trusts exercise beneficial ownership over the remaining 2,890,894 shares
(1.4%). Thus, Barbara Cox Anthony and Anne Cox Chambers, who are sisters,
together exercise sole or shared beneficial ownership over 199,378,529
shares (98.6%) of the common stock of Cox Enterprises. In addition, Garner
Anthony, the husband of Barbara Cox Anthony, holds beneficially and of
record 14,578 shares of common stock of Cox Enterprises. Barbara Cox Anthony
disclaims beneficial ownership of such shares. Barbara Cox Anthony and Anne
Cox Chambers are the mother and aunt, respectively, of James C. Kennedy, the
Chairman of the Board of Directors and Chief Executive Officer of Cox
Enterprises and a director of Cox Radio.
(4) The information contained in this table with respect to Massachusetts
Financial Services Company is based on a filing on Schedule 13G reporting
ownership as of December 31, 1998. The address for the reporting party is
500 Boylston Street, Boston, Massachusetts 02116.
(5) The information contained in this table with respect to Baron Capital Group,
Inc. is based on a joint filing on Schedule 13G reporting ownership as of
December 31, 1997 by Baron Capital Group, Inc., BAMCO, Inc., Baron Capital
Management, Inc., Baron Asset Fund, and Ronald Baron. The principal business
office of each of the reporting parties is 767 Fifth Avenue, 24th Floor, New
York, New York 10153.
(6) The information contained in this table with respect to Citigroup Inc.,
Mutual Management Corp. and Salomon Smith Barney Holdings, Inc. is based on
a joint filing on Schedule 13G reporting ownership as of December 31, 1998.
The principal address of Mutual Management and Salomon Smith Barney is 388
Greenwich Street, New York, NY 10013, the principal address for Citigroup is
153 East 53rd Street, New York, NY 10043.
4
<PAGE> 8
(7) The information contained in this table with respect to Westport Asset
Management, Inc. is based on a filing on Schedule 13G reporting ownership as
of February 16, 1999. The address of the reporting person is 253 Riverside
Avenue, Westport, CT 06880.
(8) The information contained in this table with respect to College Retirement
Equities Fund is based on a joint filing on Schedule 13G reporting ownership
as of December 31, 1998 by College Retirement Equities Fund, TIAA Separate
Account VA-1 and TIAA-CREF Mutual Funds. The principal business office of
each reporting party is 730 Third Avenue, New York, New York 10017.
SECURITY OWNERSHIP OF MANAGEMENT
"Beneficial ownership" of the Class A Common Stock of Cox Radio and the
common stock of Cox Enterprises by Cox Radio's directors and Named Executive
Officers, and by all directors and executive officers as a group at March 19,
1999 is shown in the following table. None of such persons, individually or in
the aggregate, owns 1% or more of the common stock of Cox Radio or Cox
Enterprises.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
NUMBER OF SHARES OF COX ENTERPRISES
NAME OF BENEFICIAL OWNER CLASS A COMMON STOCK OWNED COMMON STOCK OWNED
- ------------------------ -------------------------- -----------------------
<S> <C> <C>
David E. Easterly............................... 5,000 135,323
Richard A. Ferguson............................. 27,000 --
Robert B. Green................................. 58,704(a) --
James C. Kennedy................................ 53,292 --(b)
Marc W. Morgan.................................. 68,900(c) --
Robert F. Neil.................................. 113,581(d) 3,068
Nicholas D. Trigony............................. 1,000 39,892
Ernest D. Fears, Jr............................. 1,203 --
Paul M. Hughes.................................. 703 --
James T. Morley................................. 27,000 --
All directors and executive officers as a group
(twelve persons, including those named
above)........................................ 393,113(e) 178,283
</TABLE>
- ---------------
(a) Includes 49,805 shares subject to stock options that are exercisable within
60 days.
(b) Mr. Kennedy owns of record no shares of common stock of Cox Enterprises.
Sarah K. Kennedy, Mr. Kennedy's wife and trustee of the Kennedy Trusts,
exercises beneficial ownership over an aggregate of 7,380 shares of common
stock of Cox Enterprises. In addition, as described above, Barbara Cox
Anthony and Anne Cox Chambers, the mother and aunt, respectively, of Mr.
Kennedy, together exercise sole or shared beneficial ownership over
199,378,529 shares of common stock of Cox Enterprises. Also, Mr. Kennedy's
children are the beneficiaries of a trust, of which R. Dale Hughes is the
sole trustee, that beneficially owns 5,385 shares of common stock of Cox
Enterprises. Mr. Kennedy disclaims beneficial ownership of all such shares.
(c) Includes 57,470 shares subject to stock options that are exercisable within
60 days.
(d) Includes 77,786 shares subject to stock options that are exercisable within
60 days.
(e) Includes 203,276 shares subject to stock options that are exercisable
within 60 days.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Cox Radio's
executive officers and directors and persons who own more than 10% of Cox
Radio's Class A Common Stock to file reports of ownership and changes in
ownership of Cox Radio's Class A Common Stock with the Securities and Exchange
Commission and the New York Stock Exchange. Based solely on a review of copies
of such reports and written representations from the reporting person, Cox Radio
believes that from January 1998 through the
5
<PAGE> 9
date of this Proxy Statement, its executive officers, directors and greater than
10% stockholders filed on a timely basis all reports due under Section 16(a) of
the Exchange Act.
BOARD OF DIRECTORS AND COMMITTEES
During 1998, the Board of Directors met three times. The Executive
Committee of the Board of Directors took action by unanimous written consent six
times. The members of the Executive Committee are Nicholas D. Trigony (Chair),
James C. Kennedy, David E. Easterly and Paul M. Hughes.
Cox Radio also has an Audit Committee and a Compensation Committee of the
Board of Directors. The members of the Audit Committee and the Compensation
Committee are Paul M. Hughes and Ernest D. Fears, Jr. Mr. Hughes is the Chair of
the Audit Committee and Mr. Fears is the Chair of the Compensation Committee.
The Audit Committee:
- approves the selection of the independent auditors for Cox Radio;
- approves the services to be performed by the independent auditors;
- reviews the scope and results of the annual audit;
- reviews the independence of the auditors;
- reviews the performance and fees of the independent auditors;
- reviews the adequacy of the system of internal accounting controls;
- reviews the scope and results of internal auditing procedures;
- reviews the activities of Cox Radio's Risk Committee, a Board-created
committee composed of senior financial managers with oversight of
financial risk management; and
- reviews related party transactions, if any.
The Audit Committee met twice in 1998.
The Compensation Committee:
- adopts and oversees the administration of compensation plans for
executive officers and senior management of Cox Radio;
- determines awards granted to executive officers under such plans;
- approves the chief executive officer's compensation; and
- reviews the reasonableness of such compensation.
The Compensation Committee met once in 1998.
COMPENSATION OF DIRECTORS
The directors who are not affiliates of Cox Radio, Paul M. Hughes and
Ernest D. Fears, Jr., are reimbursed for expenses and paid an annual fee of
$20,000. The annual fee is paid as follows: (a) one-half in shares of Class A
Common Stock pursuant to the Cox Radio, Inc. Restricted Stock Plan for
Non-Employee Directors plus (b) one-half in cash. In addition, the non-affiliate
directors receive a meeting fee of $1,000 for every board meeting and committee
meeting attended. The directors of Cox Radio who are affiliates of Cox Radio do
not receive any compensation for serving on the Board of Directors.
Pursuant to the Directors' Restricted Stock Plan, directors who are not
employees of Cox Radio or any of its subsidiaries or affiliates receive 50% of
any annual Board of Directors retainer fee in the form of Class A Common Stock,
subject to certain restrictions and forfeitures prior to the expiration of the
period ending five years after the date of the grant of the award or, if
earlier, the date of death or disability in certain circumstances. The maximum
number of shares of Class A Common Stock that may be granted pursuant to
restricted stock awards under the Directors' Restricted Stock Plan is 25,000.
6
<PAGE> 10
EXECUTIVE OFFICERS
The executive officers of Cox Radio who are not directors are set forth
below. Executive officers of Cox Radio are elected to serve until they resign or
are removed, or are otherwise disqualified to serve, or until their successors
are elected and qualified.
Maritza C. Pichon, 44, has served as Chief Financial Officer of Cox Radio
since July 1996. She was Assistant Controller of Cox Enterprises from June 1990
through June 1996. Previously, she served as manager of accounting, senior
accountant and staff accountant. Ms. Pichon joined Cox Enterprises in September
1984.
Marc W. Morgan, 49, has served as Senior Group Vice President of Cox Radio
since May 1997, has been Vice President and General Manager of WSB Radio since
July 1992 and Regional Vice President of Cox Broadcasting since August 1993.
Previously, Mr. Morgan was Senior Vice President of Cox Radio from July 1996 to
May 1997, and Vice President and General Manager of WCKG-FM (Chicago) from
January 1984 to July 1992.
James T. Morley, 49, has served as Senior Group Vice President of Cox Radio
since April 1997. Previously, he was a Director and Executive Vice President of
NewCity since its organization in 1986. In 1971, he joined RKO General
Broadcasting in Boston, Massachusetts and joined the sales staff of WROR-FM in
February 1972. In October 1975, Mr. Morley became the General Sales Manager of
Plough Broadcasting's Boston Radio stations, WCOP-AM/FM. He became General Sales
Manager of WEZN-FM in November 1978, was elected Vice President of Park City in
May 1979 and became Station Manager of WEZN-FM in November 1979. In August 1981,
he became General Manager of WEZN-FM. From 1981 until 1986, he was Senior Vice
President of the Broadcasting Company, then a subsidiary of Katz Broadcasting
Company, Inc. He is a member of the Board of Directors of the New York Marketing
and Radio Association. Mr. Morley has announced that he will retire effective
April 1, 1999.
Robert B. Green, 45, has served as Group Vice President of Cox Radio since
May 1997 and has been Vice President and General Manager of Cox Radio's Miami
radio stations, WFLC-FM and WHQT-FM, since September 1992. Previously, Mr. Green
was Regional Vice President of Cox Radio from July 1996 to May 1997, and Station
Manager of WSB-AM/FM (Atlanta) from January 1990 to September 1992.
Richard A. Reis, 45, has served as Group Vice President of Cox Radio since
April 1997. Previously, he was a Director and Group Vice President of NewCity
since its organization in 1986. From 1983 to 1984, he served as Vice President
of the Broadcasting Company, then a subsidiary of Katz Broadcasting Company,
Inc., becoming Group Vice President in 1984. He was General Manager of WFTQ-AM
and WAAF-FM in Worcester, Massachusetts from 1981 and 1983, respectively, to
1989. Since 1989, he has served as General Manager of WDBO-AM and WWKA-FM in
Orlando, Florida and of WCFB-FM since 1992. Since July 1996, Mr. Reis has served
as Group Vice President of Cox Radio's seven Orlando Radio Stations (WDBO-AM,
WWKA-FM, WCFB-FM, WPYO-FM, WHOO-AM, WHTQ-FM and WMMO-FM). He is a member of the
Orlando Radio Broadcasters Association and Orlando Ad Federation.
7
<PAGE> 11
EXECUTIVE COMPENSATION
The following table sets forth certain information for the years ended
December 31, 1996, 1997 and 1998, respectively, concerning the cash and non-cash
compensation earned by or awarded to the Chief Executive Officer and the four
most highly compensated executive officers of Cox Radio whose combined salary
and bonus exceeded $100,000 in such periods (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
AWARDS
-------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME AND --------------------------- STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(A)(B) OPTIONS(C) COMPENSATION(D)
- ------------------ ---- -------- -------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Neil................... 1998 $379,500 $303,600 $ -- 26,544 $6,000
President and Chief 1997 345,000 276,000 68,828 26,881 6,000
Executive Officer 1996 300,000 210,000 721,516 113,515 6,000
Marc W. Morgan................... 1998 $265,650 $171,344 $ -- 8,864 $6,000
Senior Group 1997 253,000 177,100 38,720 3,584 6,000
Vice President 1996 236,478 141,887 405,769 53,886 6,000
Richard A. Ferguson.............. 1998 $273,430 $136,715 -- 9,124 6,000
Vice President and 1997(e) 195,308 52,082 -- 8,085 $ 826
Chief Operating Officer
Robert B. Green.................. 1998 $212,307 $131,630 -- 7,017 $6,000
Group Vice President 1997 200,290 89,130 $ 27,971 3,106 6,000
1996 188,953 102,035 293,088 46,699 6,000
James T. Morley.................. 1998 $239,522 $ 98,204 -- 6,000 $6,000
Senior Group 1997(e) 172,733 7,000 -- 6,288 --
Vice President
</TABLE>
- ---------------
(a) The aggregate number of restricted shares held by each Named Executive
Officer as of December 31, 1998 and the aggregate value of such restricted
shares based on the closing price of Class A Common Stock as of that date
($42.25 per share) are:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES VALUE AT 12/31/98
---- ---------------- -----------------
<S> <C> <C>
Robert F. Neil................................ 35,032 $1,480,102
Marc W. Morgan................................ 19,702 832,410
Richard A. Ferguson........................... 0 0
Robert B. Green............................... 14,231 601,260
James T. Morley............................... 0 0
</TABLE>
(b) 1996 restricted stock awards represent units awarded under the Cox
Enterprises, Inc. Unit Appreciation Plan ("UAP") which were converted to an
equivalent award of restricted stock on October 2, 1996. These shares of
restricted stock vested on January 1, 1999. The value of the awards as
stated above is based on the closing price of the Class A Common Stock on
the grant date ($22.75 per share). The number of shares of restricted stock
awarded to Named Executive Officers in 1996 is as follows: Mr. Neil 31,715
shares; Mr. Morgan 17,836 shares; and Mr. Green 12,883 shares.
1997 restricted stock awards represent additional awards made on March 31,
1997 to adjust for the use of an underestimated value of Cox Enterprises in
converting UAP awards to restricted stock awards in 1996. These shares of
restricted stock vested on January 1, 1999. The value of the awards as
stated above is based on the closing price of the Class A Common Stock on
the grant date ($20.75 per share). The number of shares of restricted stock
awarded to Named Executive Officers in 1997 is as follows: Mr. Neil 3,317
shares; Mr. Morgan 1,866 shares; and Mr. Green 1,348 shares.
(c) 1996 option awards represent units awarded in 1996 under the UAP which were
canceled and converted to equivalent awards of options for Class A Common
Stock. 1997 option awards include additional
8
<PAGE> 12
awards made to adjust for the use of an underestimated value of Cox
Enterprises in converting UAP awards to option awards in 1996.
(d) Reflects amounts contributed to the Cox Enterprises, Inc. Savings and
Investment Plan and credited under the Cox Enterprises, Inc. Executive
Savings Plus Restoration Plan.
(e) Reflects compensation earned by Richard A. Ferguson and James T. Morley,
respectively, from date of hire, April 1, 1997, through December 31, 1997.
Long-Term Incentive Plan
The Cox Radio, Inc. Long-Term Incentive Plan (the "LTIP") provides for
various forms of equity-based incentive compensation with respect to Class A
Common Stock, including stock options, stock appreciation rights, stock bonuses,
restricted stock awards, performance units and phantom stock and awards
consisting of combinations of such incentives. The Compensation Committee of Cox
Radio administers the LTIP, and has the discretion to determine the type of
awards to be granted, when, if and to whom awards are granted, the number of
shares covered by each award and the terms and conditions of each award. The
Compensation Committee has delegated to a management committee the
administration of grants to eligible individuals who are not "insiders" for
purposes of reporting obligations under Section 16 of the Securities Exchange
Act of 1934. See "Security Ownership of Management."
The following table discloses for the Named Executive Officers information
regarding options granted under the LTIP during the fiscal year ended December
31, 1998:
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZABLE VALUE
NUMBER OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(B)
OPTIONS EMPLOYEES PRICE PER EXPIRATION ----------------------------
NAME GRANTED(A) IN 1998 SHARE DATE 5% 10%
- ---- ---------- ---------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Neil............. 26,544 14.18% $40.156 01/01/2008 $670,344 $1,698,784
Marc W. Morgan............. 8,864 4.74 40.156 01/01/2008 223,852 567,285
Richard A. Ferguson........ 9,124 4.87 40.156 01/01/2008 230,418 583,925
Robert B. Green............ 7,017 3.75 40.156 01/01/2008 177,208 449,080
James T. Morley............ 6,000 3.21 40.156 01/01/2008 151,524 383,993
</TABLE>
- ---------------
(a) Stock options become exercisable over a five year period, with 60% becoming
exercisable three years from the date of grant and an additional 20%
becoming exercisable each year thereafter. In addition, all options become
immediately and fully exercisable if, no sooner than six months after the
date of grant of the option, the stock price achieves, and maintains for a
period of 10 consecutive trading days, a level equal to or greater than 140%
of the option exercise price.
(b) The dollar amount under the columns are the 5% and 10% rates of
appreciation prescribed by the Securities and Exchange Commission. The 5%
and 10% rates of appreciation would result in per share prices of $65.410
and $104.155, respectively. Cox Radio expresses no opinion regarding
whether this level of appreciation will be realized and expressly disclaims
any representation to that effect.
9
<PAGE> 13
The following table sets forth information related to the number and value
of options held at December 31, 1998 by the Named Executive Officers, two of
whom exercised options in 1998:
1998 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT
SHARES OPTIONS AT DECEMBER 31, 1998 DECEMBER 31, 1998(A)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE RECEIVED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Neil....... 62,610 $1,496,751 77,786 26,544 $1,853,399 $55,575
Marc W. Morgan....... 0 0 57,470 8,864 1,356,849 18,559
Richard A.
Ferguson........... 0 0 8,085 9,124 136,434 19,103
Robert B. Green...... 0 0 49,805 7,017 1,175,880 14,691
James T. Morley...... 6,288 84,310 0 6,000 0 12,562
</TABLE>
- ---------------
(a) The exercisable value represents the value of the exercisable shares times
the difference between the closing price on December 31, 1998 ($42.25 per
share) and the exercise price of $18.50 per share for all 1996 options;
$17.312 per share for all 1/1/97 options; $20.75 per share for all 3/31/97
options; $25.375 per share for all 6/18/97 options; and $40.156 for all
1/1/98 options.
Retirement Plans
Cox Enterprises, Inc. Pension Plan. The Cox Enterprises, Inc. Pension Plan
(the "Pension Plan") is a tax-qualified defined benefit pension plan. The
Pension Plan covers all eligible employees of Cox Enterprises and any of its
affiliates who have adopted the Plan (including certain of the Named Executive
Officers). No employee whose employment commenced after January 1, 1997,
including former NewCity employees, is eligible for participation under the
Pension Plan. The Pension Plan is funded through a tax-exempt trust, into which
contributions are made as necessary based on an actuarial funding analysis.
The Pension Plan provides for the payment of benefits upon retirement,
early retirement, death, disability and termination of employment. Participants
become vested in their benefits under the Plan after completing five years of
vesting service. The Pension Plan benefit is determined under a formula based on
a participant's compensation and years of benefit accrual service. Participants
may elect from several option forms of benefit distribution.
Cox Executive Supplemental Plan. The Cox Executive Supplemental Plan is a
non-qualified defined benefit pension plan providing supplemental retirement
benefits to certain management employees of Cox Enterprises and certain of its
affiliates (including certain of the Named Executive Officers). The Executive
Supplemental Plan is administered by the Management Committee of Cox Enterprises
whose members are appointed by the Cox Enterprises Board of Directors. Such
committee designates management employees to participate in the Executive
Supplemental Plan. No management employee hired from New City participates in
the Executive Supplemental Plan.
The Executive Supplemental Plan monthly benefit formula, payable at normal
retirement, is 2.5% of a participant's average compensation, as calculated in
the Executive Supplemental Plan multiplied by the participant's years of benefit
service credited under the Executive Supplemental Plan. The normal retirement
benefit will not exceed 50 percent of a participant's average compensation at
retirement. Benefits payable with respect to early retirement are reduced to
reflect an earlier commencement date. Special disability, termination of
employment and death benefits also are provided. All benefits payable under the
Executive Supplemental Plan are reduced by benefits payable to the participant
under the Plan. Participants may elect from several optional forms of benefit
distributions.
The Executive Supplemental Plan is not funded currently by Cox Enterprises.
Cox Radio will make annual payments to Cox Enterprises arising from its
employees' participation in this plan as benefits are paid to Cox Radio
employees under the Executive Supplemental Plan. However, all payments of
current and future benefits due to Cox Radio employees will be made from the
general funds of Cox Enterprises.
10
<PAGE> 14
The following table provides estimates of annual retirement income benefits
payable to certain executives under the Pension Plan and the Executive
Supplemental Plan:
PENSION PLAN AND EXECUTIVE SUPPLEMENTAL PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE ----------------------------------------
COMPENSATION 20 OR
(5 YEARS) 5 10 15 MORE
- ----------------------------------------------- ------- -------- -------- --------
<S> <C> <C> <C> <C>
$150,000..................................... $18,750 $ 37,500 $ 56,250 $ 75,000
250,000..................................... 31,250 62,500 93,750 125,000
350,000..................................... 43,750 87,500 131,250 175,000
450,000..................................... 56,250 112,500 168,750 225,000
550,000..................................... 68,750 137,500 206,250 275,000
650,000..................................... 81,250 162,500 243,750 325,000
750,000..................................... 93,750 187,500 281,250 375,000
</TABLE>
The Named Executive Officers participating in the plan have been credited
with the following years of benefit service: Mr. Neil, 12 years; Mr. Morgan, 14
years; and Mr. Green, 8 years. The Pension Plan and the Executive Supplemental
Plan define "compensation" generally to include all remuneration to an employee
for services rendered, including base pay, bonuses, special forms of pay and
certain employee deferrals. Certain forms of additional compensation, including
severance, moving expenses, extraordinary bonuses, long-term incentive
compensation and contributions to employee benefit plans, are excluded from the
definition of compensation. The Pension Plan credits compensation only up to the
limit of covered compensation under Section 401(a)(17) of the Internal Revenue
Code; the Executive Supplemental Plan does not impose this limit on covered
compensation. The definition of "covered compensation" under the Pension Plan
and the Executive Supplemental Plan, in the aggregate, is not substantially
different from the amount reflected in the Annual Compensation column of the
Summary Compensation Table set forth above. The estimates of annual retirement
benefits reflected in such table are based on payment in the form of a
straight-life annuity and are determined after offsetting benefits payable from
Social Security as provided under the terms of the Pension Plan and the
Executive Supplemental Plan.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors determines the
compensation of the executive officers of Cox Radio. The Compensation Committee
currently consists of Paul M. Hughes and Ernest D. Fears, Jr., both of whom are
independent directors.
11
<PAGE> 15
Performance Graph
The following graph compares for the period beginning on September 26,
1996, the date Cox Radio's registration statement became effective and Cox
Radio's initial public offering was priced at $18.50, and ending on December 31,
1998, the cumulative total return on Cox Radio's Class A Common Stock to the
cumulative total returns on Standard & Poor's 500 Stock Index and on an index
consisting of certain peer radio broadcasting companies with which Cox Radio
competes (the "Peer Group Index"). The Peer Group Index is comprised of common
stock of Jacor Communications, Inc., Chancellor Broadcasting Company, Clear
Channel Communications Inc., Emmis Broadcasting Corporation and SFX Broadcasting
Inc. and is weighted for the respective market capitalization of each company.
The Peer Group Index has been modified from the Peer Group Index used for Cox
Radio's 1998 Proxy Statement due to industry consolidation. The comparison
assumes $100 was invested on September 26, 1996 in Cox Radio's Class A Common
Stock and in each of the foregoing indices and that all dividends were
reinvested.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) CXR S&P 500 Peer Group
<S> <C> <C> <C>
9/26/96 100.00 100.00 100.00
12/31/96 94.59 106.57 84.16
6/30/97 138.51 130.95 140.43
12/31/97 217.55 144.80 194.68
6/30/98 233.77 170.45 256.65
12/31/98 228.37 186.18 257.04
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICIES
The Compensation Committee administers compensation for executive officers.
Cox Radio has developed a policy on executive compensation which is described in
this report. This policy formed the basis of compensation decisions made by the
Committee for 1998. This policy reflects Cox Radio's belief that stockholders
are served well by executive pay programs that are competitive with industry
standards, variable with annual performance, and focused on stockholder value.
In developing compensation plans and setting compensation levels, Cox Radio
reviews competitive compensation data provided in the Towers Perrin Media
Industry Survey: Broadcasting Industry Segment. This survey is based upon an
examination of total compensation levels at companies with which Cox Radio
competes for talent in the marketplace. Where necessary, survey information is
supplemented by proxy statement analysis.
12
<PAGE> 16
EXECUTIVE OFFICERS COMPENSATION
The total compensation of executive officers consists of three components:
- base salary;
- annual incentive compensation; and
- long-term incentive awards.
The philosophy of the Committee is that a substantial portion of total
compensation should be at risk, based on Cox Radio's financial and operational
performance. The at-risk components of total compensation are progressively
greater for higher level positions.
BASE SALARY
Base salary is designed to provide meaningful levels of compensation to
executives, while helping Cox Radio manage its fixed costs. Salaries for top
executives are determined annually, and are based on:
- job scope and responsibilities;
- length of service;
- corporate, unit, and individual performance;
- competitive rates for similar positions as indicated by the Towers Perrin
Media Industry Survey; and
- subjective factors.
In general, executive base salaries are targeted to the 75th percentile of the
competitive data. The 1998 base salaries for the Named Executive Officers were
approximately at the targeted 75th percentile of the competitive data.
ANNUAL INCENTIVE COMPENSATION
Short-term incentives for 1998 were provided for executive officers under
the "Annual Incentive Program." Participation in the Annual Incentive Program is
limited to a group of senior managers, including the Named Executive Officers,
who have a material impact on Cox Radio's performance. Awards earned under the
Program are contingent upon employment with Cox Radio through the end of the
year, except for payments made in the event of death, retirement, disability, or
in the event of a change in control.
Payouts under the Annual Incentive Program are determined based on:
- annual base salary;
- a specific percentage of base salary, which increases for higher level
positions commensurate with the greater percentage of compensation at
risk for those with greater responsibilities; and
- actual performance in the areas of operating cash flow, station ratings,
station revenue share and other individual objectives.
In addition, the participant's contribution to results during the year is
considered, and a discretionary award in the form of restricted stock may be
made.
Awards under the Annual Incentive Program are based on the achievement of
goals relating to performance in the fiscal year. Objective performance goals
are set to represent a range of performance, with the level of the associated
incentive award varying with different levels of performance achievement. The
"minimum" goal is set to reflect the minimum acceptable levels of performance
which will warrant payment of incentive awards. The "maximum" goal reflects an
ambitious level of performance which would only be attainable in an outstanding
year.
LONG-TERM INCENTIVE COMPENSATION
Long-term incentive awards typically are granted annually to provide
executive officers with a competitive long-term incentive opportunity and an
identity of interest with Cox Radio. Long-term incentives generally are provided
through annual grants of nonqualified stock options under the LTIP. A stock
option permits the holder to buy Cox Radio stock at a specific price during a
specific period of time. As the price of
13
<PAGE> 17
Cox Radio stock rises, the option increases in value. The intent of such awards
is to provide the recipient with an incentive to perform at levels that will
result in better Cox Radio performance and enhanced stock value. In general,
stock option awards will be issued annually with an exercise price equal to the
market price of Cox Radio's Class A Common Stock at the time of award.
All options issued in 1996, 1997 and 1998 have a ten-year term. To
encourage continued employment with Cox Radio, these options were designed to
vest over a five-year period, with 60% becoming exercisable three years after
the date of grant and an additional 20% becoming exercisable each year
thereafter, except that, no sooner than six months after the date of the grant
of the option, if the stock price achieved, and for a period of ten consecutive
trading days, maintained a level equal to or greater than 140% of the price on
the grant date, vesting would accelerate and these options would become fully
exercisable. Due to the performance of Cox Radio's stock price, all options
issued in 1996 and 1997 have vested, while options issued in 1998 have not yet
vested.
CHIEF EXECUTIVE OFFICER COMPENSATION
The executive compensation policy described above was applied in
establishing Mr. Neil's compensation for 1998. Mr. Neil participated in the same
executive compensation plans available to Cox Radio's other executive officers.
In 1998, Mr. Neil had a base salary of $379,500. On the basis of Cox
Radio's performance versus established goals, and Mr. Neil's individual
performance, the Board of Directors determined that an annual bonus of $303,600
had been earned for 1998. Effective January 1, 1998, Mr. Neil was granted
long-term incentive awards under the LTIP in the form of options for 26,544
shares of Class A Common Stock.
TAX DEDUCTIBILITY CONSIDERATIONS
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation in excess of $1 million paid to the executive officers named in
this proxy statement, unless certain requirements are met. It is the present
intention of the Compensation Committee of Cox Radio to preserve the
deductibility of compensation under Section 162(m) to the extent the Committee
believes that doing so would be consistent with the best interests of
stockholders. As such, long-term incentive compensation awards, particularly
stock option awards, generally are designed to meet the requirements for
deductibility under Section 162(m).
Ernest D. Fears, Jr.
Paul M. Hughes
CERTAIN TRANSACTIONS
Cox Radio has entered into a revolving credit facility with Cox Enterprises
(the "New Cox Enterprises Credit Facility"). Future borrowings under the New Cox
Enterprises Credit Facility will accrue interest at the prime rate (as reported
by The Chase Manhattan Bank N.A.) plus 1.5%.
Cox Enterprises performs day-to-day cash management services for Cox Radio,
whereby Cox Enterprises receives daily notification of Cox Radio's checks
presented for payment and transfers funds from other sources to cover such
checks. Settlements of debit or credit balances between Cox Radio and Cox
Enterprises occur monthly at market interest rates. Certain other management
services have been and will continue to be provided to Cox Radio by Cox
Enterprises. Such services include rent, legal, corporate secretarial, tax,
treasury, internal audit, risk management, purchasing and materials management,
benefits (including pension plan) administration and other support services. In
addition, Cox Interactive Media, Inc., a wholly-owned subsidiary of Cox
Enterprises, has designed, developed and operated Internet sites and other
similar facilities for Cox Radio in exchange for reasonable compensation. Cox
Radio was allocated expenses for the years ended December 31, 1996, 1997 and
1998 of $1.5 million, $2.2 million, and $2.5 million, respectively, for such
services. Allocated expenses are based on Cox Enterprises' estimate of expenses
related to the services provided to Cox Radio in relation to those provided to
other divisions of Cox Enterprises. Rent and occupancy expense is allocated
based on occupied space. We believe that these allocations are made on a
reasonable
14
<PAGE> 18
basis. However, the allocations are not necessarily indicative of the level of
expenses that might have been incurred had Cox Radio operated on a stand-alone
basis. We have not made a study or any attempt to obtain quotes from third
parties to determine what the cost of obtaining such services from third parties
could have been. The fees and expenses to be paid by Cox Radio to Cox
Enterprises are subject to change.
Cox Radio's accounts will be included in the Cox Enterprises consolidated
federal income tax return for periods ended on or prior to October 2, 1996. Cox
Radio's accounts will be included in certain state income tax returns of Cox
Enterprises (or other Cox Enterprises subsidiaries) so long as such
consolidation is advantageous to both Cox Enterprises and Cox Radio, and is
permitted under applicable laws and regulations. Cox Radio has entered into a
tax sharing agreement with Cox Enterprises to, among other things, provide that
current federal (and, if applicable, state) income tax expenses and benefits are
allocated on a separate return basis to Cox Radio based on the current tax year
effects of the inclusion of its income, expenses and credits in the consolidated
income tax returns of Cox Enterprises (or, if applicable, based on separate
state income tax returns).
As of January 4, 1999, Cox Radio purchased 39,952 shares of restricted
stock from 17 participants in the LTIP whose shares vested on January 1, 1999.
These shares of restricted stock were purchased at a price of $41.3125 per
share, the closing price of the Class A Common Stock on January 4, 1999, for an
aggregate purchase price of $1,650,517.
Subsidiaries of Cox Radio have entered into leases with Cox Broadcasting
with respect to studio and tower site properties in Atlanta and Dayton that are
used for Cox Radio's radio operations and Cox Enterprises' television operations
in those markets. The leases have one year terms and the annual rental cost in
the aggregate will be less than $0.5 million.
SELECTION OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
The Board of Directors has selected the firm of Deloitte & Touche LLP,
independent certified public accountants, as our independent auditors for the
year ending December 31, 1999. Deloitte & Touche LLP audited our financial
statements for the fiscal years ended December 31, 1996, December 31, 1997 and
December 31, 1998. Deloitte & Touche LLP (or its predecessors) has audited the
financial statements of Cox Enterprises for many years.
Ratification of this appointment shall be effective upon receiving the
affirmative vote of the holders of a majority of the voting power of Cox Radio's
Class A Common Stock and Class B Common Stock present or represented by proxy
and entitled to vote at the Annual Meeting.
A representative of Deloitte & Touche LLP will be present at the Annual
Meeting, will be offered the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions. In
the event the appointment is not ratified, the Board of Directors will consider
the appointment of other independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
APPROVAL OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN
(PROPOSAL NO. 3)
The Compensation Committee of the Board of Directors adopted the Cox Radio,
Inc. 1999 Employee Stock Purchase Plan, a copy of which is attached hereto as
Appendix A (the "Employee Stock Purchase Plan"), on March 10, 1999, subject to
the approval of the stockholders of Cox Radio at the 1999 Annual Meeting. A
total of 250,000 shares of Class A Common Stock have been authorized for
issuance under the Employee Stock Purchase Plan. The Employee Stock Purchase
Plan is intended to qualify under Section 423 of the Code. Under the terms of
the Employee Stock Purchase Plan, eligible employees may subscribe to purchase
shares of Class A Common Stock in a designated amount (the "Subscription
Amount"). Eligible
15
<PAGE> 19
employees include employees who regularly are scheduled to work at least 20
hours per week and who have been employed by Cox Radio or its subsidiaries since
at least February 1, 1999, including credit for past service performed for a
radio station acquired by Cox Radio or one of its subsidiaries on or before
August 1, 1999, pursuant to an exchange of assets or the purchase of
substantially all of the assets or stock of a company. Approximately 1500
employees will be eligible to participate in the Employee Stock Purchase Plan.
The Grant Date under the Employee Stock Purchase Plan shall be August 2, 1999.
The price of the Class A Common Stock offered to employees will be 85
percent of the fair market value of the Class A Common Stock on the Grant Date.
Shares will be offered to eligible employees for subscription during the period
beginning on the Grant Date and ending 45 days thereafter (the "Subscription
Period"). In order to participate, employees must authorize Cox Radio to
withhold the Subscription Amount from their pay in substantially equal
installments during the 25-month period beginning on the first day of the month
next following the close of the Subscription Period. In no case shall an
employee subscribe for more than $25,000 in Class A Common Stock during the
25-month period. An employee may elect to withdraw from the Employee Stock
Purchase Plan at any time and may request that his or her aggregate
contributions be refunded either in cash or in whole shares of Class A Common
Stock, with any remaining amount refunded in cash or, at the option of the
Compensation Committee, in fractional shares of Class A Common Stock. In the
event the aggregate subscriptions exceed the authorized 250,000 shares of Class
A Common Stock, each participant's subscription will be reduced on a pro rata
basis. The Employee Stock Purchase Plan will be administered by the Management
Committee of Cox Radio, whose members are appointed by the Board of Directors.
Generally, no tax consequences will arise at the time an employee purchases
Class A Common Stock under the Employee Stock Purchase Plan. If an employee
disposes of the Class A Common Stock purchased under the Employee Stock Purchase
Plan less than one year after the Class A Common Stock is transferred to him or
her and within two years of the Grant Date, the employee will be deemed to have
received compensation taxable as ordinary income for the taxable year in which
the disposition occurs in the amount of the difference between the fair market
value of the Class A Common Stock at the time of transfer to the employee and
the amount paid by the employee for the Class A Common Stock. The amount of such
ordinary income recognized by the employee will be added to the employee's basis
in the Class A Common Stock for purposes of determining capital gain or loss
upon the disposition of the Class A Common Stock by the employee.
If an employee does not dispose of the Class A Common Stock purchased under
the Employee Stock Purchase Plan until at least one year after the Class A
Common Stock is transferred to him or her and at least two years after the Grant
Date, the employee will be deemed to have received compensation taxable as
ordinary income for the taxable year in which the disposition occurs in an
amount equal to the lesser of (a) the excess of the fair market value of the
Class A Common Stock on the date of disposition over the purchase price paid by
the employee, or (b) the excess of the fair market value of the Class A Common
Stock on the Grant Date over the purchase price paid by the employee. The amount
of such ordinary income recognized by the employee will be added to the
employee's basis in the Class A Common Stock for purposes of determining capital
gain or loss upon the disposition of the Class A Common Stock by the employee.
If an employee dies before disposing of the Class A Common Stock purchased under
the Employee Stock Purchase Plan, he or she will be deemed to have received
compensation taxable as ordinary income in the taxable year closing with the
employee's death in an amount equal to the lesser of clauses (a) or (b) as set
forth in the first sentence of this paragraph. The employee will not realize any
capital gain or loss at death. Cox Radio generally will not be entitled to a
deduction with respect to the Class A Common Stock purchased by an employee
under the Employee Stock Purchase Plan, unless the employee disposes of the
Class A Common Stock less than one year after the Class A Common Stock is
transferred to the employee or less than two years after the Grant Date.
The Employee Stock Purchase Plan may be amended, modified, or terminated by
the Board of Directors in whole or in part at any time; provided that no such
amendment, modification, or termination of the Employee Stock Purchase Plan may
adversely affect the rights of, or obligations to, the participants without such
participants' consent and any such amendment, modification, or termination will
be subject to the
16
<PAGE> 20
approval of the stockholders to the extent required by any federal or state law
or regulation of any stock exchange.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
OTHER MATTERS
Management does not know of any other matters to be considered at the
Annual Meeting. If any other matters do properly come before the meeting,
persons named in the accompanying form of proxy intend to vote thereon in
accordance with their best judgment, and the discretionary authority to do so is
included in the Proxy.
ANNUAL REPORT ON FORM 10-K
Cox Radio's Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission, is enclosed herewith.
TRANSFER AGENT AND REGISTRAR
Cox Radio's transfer agent and registrar is First Chicago Trust Company of
New York, 525 Washington Blvd., Suite 4694, Jersey City, New Jersey 07310.
SUBMISSION OF STOCKHOLDER PROPOSALS
It is anticipated that the 2000 Annual Meeting of Stockholders of Cox Radio
will be held in May 2000. Any stockholders who intend to present proposals at
the 2000 Annual Meeting of Stockholders, and who wish to have such proposals
included in Cox Radio's Proxy Statement for the 2000 Annual Meeting, must ensure
that such proposals are received by the Corporate Secretary of Cox Radio not
later than December 19, 1999. Such proposals must meet the requirements set
forth in the rules and regulations of the Securities and Exchange Commission in
order to be eligible for inclusion in Cox Radio's 2000 proxy materials.
By Order of the Board of Directors,
/s/ Andrew A. Merdek
Andrew A. Merdek
Corporate Secretary
Atlanta, Georgia
March 29, 1999
17
<PAGE> 21
APPENDIX A
COX RADIO, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN
The purpose of the Cox Radio, Inc. 1999 Employee Stock Purchase Plan (the
"Plan") is to provide a method by which eligible employees of Cox Radio, Inc.
("Company") and its subsidiary corporations may purchase shares of Class A
Common Stock of the Company ("Shares") by payroll deductions and at favorable
prices. By this means, eligible employees will be given an opportunity to
acquire an additional interest in the economic progress of the Company and a
further incentive to promote the best interest of the Company. The Plan is
intended to meet the requirements for an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended, (the "Code") and
is to be interpreted and applied consistent with those requirements. The Plan
shall be effective as of the day it is approved by the shareholders of the
Company.
2. ELIGIBILITY TO PARTICIPATE
Any regular employee of the Company and of its subsidiary corporations who
has been employed by the Company since February 1, 1999 is eligible to
participate in the Plan. For this purpose, prior employment with a radio station
acquired by the Company on or before August 1, 1999 through a purchase or
exchange of assets or a purchase of stock will be counted as employment with the
Company. A "regular employee" means any employee regularly scheduled to work at
least 20 hours per week, including any such person on an authorized leave of
absence. Notwithstanding the foregoing, any employee who, after purchasing
Shares under the Plan, would own 5 percent or more of the total combined voting
power or value of all classes of stock of the Company, or any parent corporation
or subsidiary corporation thereof, is not eligible to participate in the Plan.
Ownership of stock is determined in accordance with the provisions of Section
424(d) of the Code. For all Plan purposes, the terms "parent corporation" and
"subsidiary corporation" have the meanings set forth in Sections 424(e) and (f)
of the Code, respectively.
3. NUMBER OF SHARES TO BE OFFERED
An aggregate 250,000 Shares will be offered for subscription under the
Plan.
4. PURCHASE PRICE
The purchase price per Share offered under this Plan will be 85 percent of
the "Fair Market Value" of a Share determined as of the "Grant Date." "Fair
Market Value" means the average of the closing prices per Share as reflected by
composite transactions on the national securities exchange on which the Shares
are listed throughout a period of the last ten (10) trading days ending on and
including the Grant Date. The "Grant Date" will be August 2, 1999.
5. OFFERING OF SHARES FOR SUBSCRIPTION
Shares will be offered to eligible employees for subscription during the
period beginning with the Grant Date and ending on the date 45 days thereafter
(the "Subscription Period"). To subscribe, an eligible employee must complete,
sign and deliver a subscription agreement to the Company no later than the last
day of the Subscription Period. In the subscription agreement, the employee
shall indicate the dollar amount of Shares for which the employee is subscribing
to purchase (the "Subscription Amount").
6. METHOD OF PAYMENT
Payment of an employee's Subscription Amount will be made through payroll
deductions, and an employee's participation in the Plan is contingent on the
employee providing the Company with written
A-1
<PAGE> 22
authorization to withhold payroll deductions. The Subscription Amount shall be
withheld from the employee's pay in substantially equal installments each pay
day during the 25 month period beginning on the first day of the month next
following the close of the Subscription Period. Notwithstanding the foregoing,
an employee may arrange to pay any installment due for any payroll period
directly to the Company in the event the employee is on an authorized unpaid
leave of absence during such payroll period.
7. LIMIT ON AMOUNT OF SHARES SUBSCRIBED
Notwithstanding an employee's subscription agreement, the maximum amount
that may be withheld from an employee's pay or otherwise paid to the Company for
the purchase of Shares over the 25 month period referenced in Section 6 of the
Plan shall not exceed $25,000. In the event of an oversubscription of Shares,
each employee's subscription shall be reduced on a pro rata basis so that the
total number of Shares subject to subscription does not exceed the maximum
number of Shares authorized under Section 3 of the Plan.
8. PURCHASE OF SHARES
Unless an employee previously has withdrawn from the Plan as provided in
Section 9 or otherwise has had his or her participation terminated as provided
in Section 11, a participating employee will be deemed to have exercised his or
her right to purchase Shares as of the Purchase Date. The "Purchase Date" means
the first day of the month next following the close of the 25 month period
referenced in Section 6 of the Plan. The number of Shares purchased by the
employee generally shall be equal to the whole number of Shares that may be
purchased with the total amount of withheld payments made by the employee under
the Plan that have not been refunded to the employee. Any amount remaining after
the purchase of full Shares will be refunded to the employee without interest;
provided, that the Committee (as defined hereafter in Section 14), to the extent
otherwise permissible, reserves the right to authorize the purchase of
fractional Shares in lieu of such refunds.
9. CHANGE IN PARTICIPATION AND WITHDRAWAL FROM PLAN
A participating employee may reduce his or her Subscription Amount at any
time, but on a prospective basis only, by giving written notice to that effect
to the Company. Such a reduction shall take effect as soon as is
administratively feasible following the date as of which the Company is so
notified. An employee may withdraw from the Plan and cancel his or her
subscription at any time prior to the Purchase Date by giving written notice of
cancellation to the Company. In such event, the employee may elect to have the
entire amount he or she has paid to date applied to the purchase of whole
Shares, with any remaining amount refunded in cash to the employee, or to have
the entire amount paid to date refunded to the employee in cash without
interest. Should any installment be due and unpaid for 30 days (as in the case
of an unpaid leave of absence) without satisfactory arrangement for the payment
being made within such period, the subscription shall be canceled automatically,
the amount previously paid shall be refunded without interest to the employee in
cash and the employee shall have no right to purchase Shares under the Plan.
10. RIGHTS NOT TRANSFERABLE
An employee's rights under the Plan belong to the employee alone and may
not be transferred or assigned to any other person during the employee's
lifetime. After Shares have been issued under the Plan, such Shares may be
assigned or transferred the same as any other Shares.
11. TERMINATION OF RIGHTS
In the case of termination of employment, including retirement or death,
the participating employee or his or her beneficiary may elect within 30 days
after the happening of such event to (i) receive in cash the full amount paid by
the employee, or (ii) have the amount paid applied to the purchase of full
Shares with any remaining funds refunded in cash to the employee or to his or
her beneficiary without interest. A failure to make such election within such 30
day period will be treated as notice of cancellation and the full amount paid
A-2
<PAGE> 23
will be refunded without interest in cash to the employee. Each employee shall
be permitted to designate his or her beneficiary under this Section 11, which
designation shall be made in writing on a form prepared by or satisfactory to
the Company and shall be delivered to the Company. In the event an employee does
not so designate a beneficiary, any election rights under this Section 11
otherwise subject to delegation to a beneficiary will be deemed delegated to the
employee's estate.
12. ISSUANCE OF SHARES
As soon as is administratively feasible after the purchase of any Shares
under the Plan, the employee or beneficiary will be issued a stock certificate
for the number of Shares purchased. The Shares will be issued only in the name
of the participating employee, or if directed by the employee or beneficiary, in
the employee's or beneficiary's name and in the name of one other person as
tenants by the entireties or joint tenants with right of survivorship.
13. APPLICATION OF FUNDS
All funds held or received by the Company under this Plan may be used for
any corporate purpose until applied to the purchase of Shares or refunded to
employees and shall not be segregated from the general assets of the Company.
14. ADMINISTRATION
The Plan shall be administered by the Management Committee appointed by the
Board of Directors of the Company (the "Committee"). The Committee shall
prescribe such rules as it deems necessary to administer the Plan and shall have
the sole and discretionary authority to resolve any questions regarding the
interpretation or application of the terms of the Plan.
15. AMENDMENT OR DISCONTINUANCE OF PLAN
The Board of Directors of the Company shall have the right to amend, modify
or terminate the Plan at any time without notice; provided that no employee's
then existing rights are adversely affected without his or her consent, and
provided further that any amendment of the Plan, except as is provided in
Section 15 of the Plan, shall be subject to shareholder approval to the extent
required by any Federal or state law or the rules of any stock exchange on which
the Shares may be listed.
16. ADJUSTMENT OF SUBSCRIPTIONS
In the event of reorganization, recapitalization, stock split, stock
dividend, merger, consolidation or any other change in the structure of Shares
of the Common Stock of the Company, the Board of Directors of the Company may
make such adjustment as it may deem appropriate in the number, kind and
subscription price of Shares available for purchase under the Plan.
A-3
<PAGE> 24
(COX RADIO INC. LOGO)
<PAGE> 25
COX
RADIO, INC. (LOGO)
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COX RADIO, INC.
FOR ANNUAL MEETING ON MAY 19, 1999
The undersigned hereby appoints Robert F. Neil, Andrew A. Merdek and
Maritza C. Pichon, or any of them, and any substitute or substitutes, to be the
attorneys and proxies of the undersigned at the Annual Meeting of Stockholders
of Cox Radio, Inc. ("Cox") to be held at 9:30 a.m. local time on Wednesday, May
19, 1999, at Corporate Headquarters at 1400 Lake Hearn Drive, NE, Atlanta,
Georgia, or at any adjournment thereof, and to vote at such meeting the shares
of stock of Cox the undersigned held of record on the books of Cox on March 19,
1999, the record date for the meeting. The undersigned hereby revokes any
previous proxies with respect to the matters covered by this proxy.
<TABLE>
<CAPTION>
<S> <C>
(change of address/comments)
ELECTION OF DIRECTORS, NOMINEES:
1. David E. Easterly, 2. Ernest D. Fears, Jr., ----------------------------------------
3. Richard A. Ferguson, 4. Paul M Hughes, ----------------------------------------
5. James C. Kennedy, 6. Robert F. Neil, ----------------------------------------
7. Nicholas D. Trigony ----------------------------------------
</TABLE>
INDEPENDENT AUDITORS: (If you have written in the above space, please mark the
Deloitte & Touche LLP corresponding box on the reverse side of this card)
You are encouraged to specify your choices by marking the
appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes
if you wish to vote in accordance with the Board of Directors'
recommendations. The proxies cannot vote your shares unless you SEE REVERSE
sign and return this card or vote by telephone or Internet. SIDE
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 26
[X] Please mark your
votes as in this
example.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR proposals
1, 2 and 3.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Ratification of [ ] [ ] [ ] 4. In the discretion of Change of Address [ ]
Directors. appointment of the proxies named Comments on
(see reverse) independent herein, the proxies Reverse Side
auditors. are authorized to vote
For, except vote withheld upon other matters as I plan to attend [ ]
from the following nominee(s): 3. Approval of 1999 [ ] [ ] [ ] are properly brought the meeting.
Employee Stock before the meeting.
Purchase Plan.
- ---------------------------------
</TABLE>
All as more particularly described in
the Proxy Statement relating to such
meeting, receipt of which is hereby
acknowledged.
Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
--------------------------------------
--------------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
COX
RADIO, INC. (LOGO)
VOTE BY TELEPHONE OR INTERNET
QUICK * EASY * IMMEDIATE
Cox Radio, Inc. encourages you to take advantage of two new cost-effective and
convenient ways to vote your shares.
You may now vote your proxy 24 hours a day, 7 days a week, using either a
touch-tone telephone or through the Internet. Your telephone or Internet vote
must be received by 8:00 a.m. Eastern time on May 19, 1999.
Your telephone or Internet vote authorizes the proxies named on the above proxy
card to vote your shares in the same manner as if you marked, signed, and
returned your proxy card.
VOTE BY PHONE: ON A TOUCH-TONE TELEPHONE DIAL 1-800-OK2-VOTE
(1-800-652-8683) FROM THE U.S. AND CANADA OR DIAL
1-201-324-0377 FROM OTHER COUNTRIES.
You will be asked to enter the Voter Control Number located
in the box just below the perforation on the proxy card.
Then follow the instructions.
OR
VOTE BY INTERNET: POINT YOUR BROWSER TO THE WEB ADDRESS:
http://www.vote-by-net.com
Click on the "Vote Your Proxy" Icon. You will be asked to
enter the Voter Control Number located in the box just below
the perforation on the proxy card. Then follow the
instructions.
OR
VOTE BY MAIL: Mark, sign and date your proxy card and return it in the
postage-paid envelope. If you are voting by telephone or the
Internet, please do not mail your proxy card.
