OBIE MEDIA CORPORATION
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
JUNE 15, 1999
<PAGE>
OBIE MEDIA CORPORATION
4211 West 11th Avenue
Eugene, Oregon 97402
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 15, 1999
To the shareholders of
Obie Media Corporation:
The annual meeting of the shareholders of Obie Media Corporation, an
Oregon corporation (the "Company"), will be held at 3 p.m. on June 15, 1999 at
the offices of the Company, located at 4211 West 11th Avenue, Eugene, Oregon,
for the following purposes:
1. To elect two Class 1 directors to serve until the 2002 annual
meeting of shareholders.
2. To transact such other business as may be properly brought before
the meeting.
The foregoing items of business are more fully described in the
proxy statement accompanying this notice.
All shareholders are invited to attend the meeting. Shareholders of
record at the close of business on May 7, 1999, the record date fixed by the
Board of Directors, are entitled to notice of and to vote at the meeting.
Shareholders may vote in person or by proxy.
By order of the Board of Directors
Dolores M. Mord
Secretary
Eugene, Oregon
May 14, 1999
YOUR VOTE IS IMPORTANT. Whether or not you intend to be present at the meeting,
please sign and date the enclosed proxy and return it in the accompanying
envelope to ensure that your shares will be voted
<PAGE>
OBIE MEDIA CORPORATION
PROXY STATEMENT
1999 Annual Meeting of Shareholders
INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of
Obie Media Corporation (the "Company" or "Obie Media"), to be used at the annual
meeting of shareholders to be held at 3 p.m. on June 15, 1999, and at any
adjournment or postponement thereof. The meeting will be held at the Company's
offices located at 4211 West 11th Avenue, Eugene, Oregon 97402. A copy of the
notice of the meeting is attached. The Company expects to mail this proxy
statement and the proxy to shareholders on or about May 14, 1999.
The persons named in the enclosed proxy will vote in the
manner directed and, in the absence of such direction, will vote for the
election of both of the named nominees for director. As to other items of
business that may arise at the meeting, they will vote in accordance with their
best judgment.
Any proxy submitted by a shareholder may be revoked by the
shareholder at any time before its use by giving notice of such revocation to
the Secretary of the Company. If a shareholder attends the meeting and desires
to vote in person, his or her proxy will not be used.
The solicitation of proxies is being handled by the Company at
its own cost, principally through the use of the mails. Brokers, dealers, banks
and other nominees will be requested to forward soliciting material to the
beneficial owners of the shares and to obtain authorization for the execution of
proxies. The Company will reimburse brokerage firms, banks and other custodians,
nominees and fiduciaries for their reasonable expenses incurred in forwarding
proxies and proxy material to the beneficial owners of stock held of record by
such persons.
A copy of the Company's Annual Report to Shareholders for the
fiscal year ended November 30, 1998 is enclosed. Its Form 10-KSB, filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), may be
obtained without charge from James W. Callahan, the Company's Chief Financial
Officer, at 4211 West 11th Avenue, Eugene, Oregon 97402.
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VOTING RIGHTS
All holders of record of the Company's Common Stock, without
par value ("Common Stock"), at the close of business on May 7, 1999 will be
entitled to vote in person or by proxy at the annual meeting. On that date,
4,322,949 shares of Common Stock were outstanding and entitled to vote. The
holders of the Common Stock are entitled to one vote for each share of Common
Stock held. The presence, in person or by proxy, of a majority of the
outstanding shares of Common Stock at the annual meeting will constitute a
quorum for the transaction of business. "Abstentions" and "withheld" votes, as
well as broker non-votes, will be counted toward the quorum requirement for the
meeting but will not be counted for or against any proposal.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table shows, as of April 15, 1999, the number
and percentage of outstanding shares of the Company's Common Stock beneficially
owned by each person known by the Company to beneficially own 5% or more of the
Company's Common Stock, by each director, by each of the executive officers
named in the Summary Compensation Table, and by all directors and executive
officers of the Company as a group.
Name and Address Amount and Nature Percentage of
of Beneficial Owner of Beneficial Ownership(1) Common Stock
- ------------------- ----------------------- -------------
Brian B. Obie 2,094,970 (2)(3) 48.5%
Eugene, Oregon
Dolores M. Mord 426,471 (2)(3) 9.9
Eugene, Oregon
Douglas D. Obie 288,118 (4) 6.3
Seattle, Washington
Christine Obie-Barrett 283,278 (5) 6.2
Eugene, Oregon
Wayne P. Schur 82,500 (6) 1.9
Langhorne, Pennsylvania
Randall C. Pape 14,740 (6) *
Eugene, Oregon
Stephen A. Wendell 10,890 (2)(6) *
Eugene, Oregon
Richard C. Williams 32,828 (2)(6) *
Eugene, Oregon
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Steven F. Grover 12,100 (6) *
Eugene, Oregon
James W. Callahan 9,680 (6) *
Eugene, Oregon
All officers and directors
as a group (8 persons) 2,686,677 (2)(3)(6) 61.7
- ------------------
*Less than 1 percent of the outstanding shares.
(1) A person is considered to "beneficially own" any shares: (a) over which such
person exercises sole or shared voting or investment power; or (b) of which such
person has the right to acquire ownership at any time within 60 days (e.g.,
through exercise of stock options). Voting and investment power relating to the
shares referenced in the table above is exercised solely by the beneficial
owner, except as indicated otherwise.
(2) Includes shares owned by the spouses of the named persons as follows: Brian
B. Obie, 20,250 shares; Dolores M. Mord, 103,713 shares; Stephen A. Wendell,
3,520 shares; Richard C. Williams, 4,707 shares; and for all officers and
directors as a group, 132,190 shares. All named persons disclaim beneficial
ownership of shares owned by their spouses.
(3) Includes 13,113 shares owned by the Company's profit sharing and 401(K)
plan. Brian B. Obie and Dolores M. Mord serve on the administrative committee
with responsibility for plan decisions.
(4) Includes 48,176 shares held by Douglas D. Obie as trustee for the benefit of
Christine Obie-Barrett's minor children. Also includes 8,969 shares beneficially
owned by Douglas D. Obie's minor children, which are held by Christine
Obie-Barrett as trustee.
(5) Includes 8,969 shares held by Christine Obie-Barrett as trustee for the
benefit of Douglas D. Obie's minor children. Also includes 48,176 shares
beneficially owned by Christine Obie-Barrett's minor children, which are held by
Douglas D. Obie as trustee.
(6) Includes shares subject to options exercisable within 60 days after April
15, 1999, as follows: Wayne P. Schur, 27,500 shares; Randall C. Pape, 2,640
shares; Stephen A. Wendell, 2,640 shares; Richard C. Williams, 2,640 shares;
Stephen F. Grover, 12,100 shares; James W. Callahan, 7,260 shares; and for all
officers and directors as a group, 54,780 shares.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation (the "Articles")
provide that, when the Company has six or more directors, the Board of Directors
will be divided into three classes (Class 1, Class 2 and Class 3), with the
members of each class serving for staggered three-year terms. The Company has
six directors, and the Chief Executive Officer, as authorized by the Articles,
has made the initial designation of directors to each of the three classes.
Accordingly, at each annual meeting of the Company's shareholders, the number of
directors equal to the number of the directors in the class whose term expires
at the time of the meeting will be elected to hold office until the third
succeeding annual meeting. The Articles limit the number of directors to nine.
Class 1, Class 2 and Class 3 directors serve for terms expiring at the annual
meeting of Obie Media shareholders in 1999, 2000 and 2001, respectively.
Two Class 1 directors will be elected at the annual meeting. They
will serve until the annual meeting of shareholders in 2002, or until their
respective
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successors are elected and qualified. Management's nominees for Class 1 director
are Delores Mord and Wayne Schur. Ms. Mord and Mr. Schur are presently members
of the Board.
Any nomination for director submitted by a shareholder must be made
in accordance with the Company's Bylaws. Under the Company's Bylaws, any
nomination for director submitted by a shareholder must be received by the
Secretary no later than May 24, 1999. A shareholder submitting a director
nomination must set forth as to each person whom the shareholder proposes to
nominate: (i) the name, age, business address and residence address of the
nominee; (ii) the principal occupation or employment of the nominee; (iii) the
class or series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by the nominee; and (iv) any other
information relating to the nominee that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act, and the rules and regulations promulgated thereunder. The
shareholder notice must be accompanied by a signed written consent of each
proposed nominee to being named as a nominee and to serve as a director if
elected. If shareholders wish to submit nominations for consideration at any
subsequent annual shareholder meeting, such submission must be received by the
Company's Secretary not less than 30 days before the date of that annual
meeting.
A quorum being present at the shareholder meeting, the two nominees
for Class 1 director receiving the most votes cast in person or by proxy will be
elected as directors for a three-year term. There is no cumulative voting.
Shareholders cannot vote for more than two directors. Directors will hold office
until the 2002 annual meeting of Obie Media shareholders or until their
successors are duly elected and qualified. Both nominees for director have
agreed to serve if elected. If either nominee should become unavailable to serve
as a director prior to the annual meeting, the persons named in the enclosed
proxy will vote for such substitute nominee as may be designated by the Board of
Directors.
Certain information with respect to each person nominated for
election as a director at the annual meeting and each person whose term of
office as a director will continue after the meeting is set forth below:
Director
Name Principal Occupation Age Since
- ---- -------------------- --- -----
Class 1 Nominees - Terms to Expire in 2002:
Delores M. Mord Vice President of Obie Industries 65 1987
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Incorporated ("Obie Industries")
Wayne P. Schur Executive Vice President of 54 1998
the Company
Class 2 Directors - Terms Expire in 2000
Randall C. Pape President and Chief Executive 48 1996
Officer of The Pape Group
President and Chief Executive
Officer of Liberty Financial Group
Stephen A. Wendell Registered Representative and Investment 58 1996
Advisory Agent with
KMS Financial Services, Inc.
Class 3 Directors - Terms Expire in 2001:
Brian B. Obie Chairman of the Board, 57 1987
President and Chief Executive
Officer of the Company
Richard C. Williams President and Chief Executive 59 1996
Officer of Centennial Bancorp
Nominees for Class 1 Directors - Terms to Expire in 2002
Dolores M. Mord is a co-founder of Obie Media and has served as the
Company's Secretary and as a director since the Company's inception in 1987. She
served as Vice President of Obie Media until 1996. Ms. Mord has served as an
officer (currently as Vice President) and a director of Obie Industries since
its formation in 1960. Obie Industries, which now operates as a real estate
management company, was Obie Media's parent corporation until 1996. Ms. Mord has
37 years of experience in the out-of-home advertising industry.
Wayne P. Schur was appointed Executive Vice President of Obie Media in
September 1998. He was appointed a director of Obie Media in October 1998 and is
also a director of P & C, one of the Company's wholly owned subsidiaries. He was
the President and sole or principal shareholder of P & C from 1981 to September
1998, when P & C was acquired by Obie Media. He continues as President of P & C.
Mr. Schur has 25 years of experience in the out-of-home advertising industry.
Class 2 Directors - Terms Expire in 2000
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Randall C. Pape became a director of Obie Media in 1996. In 1981, he
was named President of Pape Bros., Inc., and since 1990 he has held the position
of President and Chief Executive Officer of The Pape Group, Inc., a supplier of
capital equipment and services, which operates as a holding company for Pape
Bros., Inc., Flightcraft, Inc., Hyster Sales Company, Pape Properties, Inc. and
Industrial Finance Company. Since 1973, he has been President and Chief
Executive Officer of Liberty Financial Group, which is a holding company for
Liberty Federal Bank, SB, EcoSort LLC, Sanipac, Inc. and Commercial Equipment
Lease Corporation. Mr. Pape has also served as a director of Northwest Natural
Gas Company, a distributor of natural gas in Oregon and Washington, since 1996.
Stephen A. Wendell became a director of Obie Media in 1996. Since
November 1998, Mr. Wendell has been a registered representative and investment
advisory agent with KMS Financial Services, Inc., an independent privately owned
financial services firm based in Seattle, Washington. From 1995 to February
1998, he was Chief Financial Officer and a director of Umpqua Feather Merchants,
Inc., a manufacturer and distributor of fishing flies and related accessories.
From 1992 to 1995, Mr. Wendell served as a consultant to Umpqua Feather
Merchants, Inc. and other companies, including companies providing advertising
and food services. Since 1993, Mr. Wendell has been the principal shareholder
and President of Continental Land and Cattle Company, a residential real estate
development company.
Class 3 Directors - Terms Expire in 2001
Brian B. Obie is the Chairman of the Board, President and Chief
Executive Officer of Obie Media. He is a co-founder of Obie Media and has served
as its President and as a director since its inception in 1987. Since January
1998, he has served as the Treasurer of Obie Media Limited, a British Columbia
corporation and one of its wholly owned subsidiaries, and, since September 1998,
as a director of P & C. Mr. Obie is also employed by and is a director of Obie
Industries, where he has served as President since 1968. Mr. Obie has 39 years
of experience in the out-of-home advertising industry. He has been Chairman of
the Board of Centennial Bancorp, a bank holding company, since 1981. He is a
former mayor of Eugene, Oregon.
Richard C. Williams became a director of Obie Media in 1996. He has
served as President, Chief Executive Officer and a director of Centennial
Bancorp since 1981. He has served as Vice Chairman of Centennial Bank, a wholly
owned subsidiary of Centennial Bancorp, since 1992, was its Chief Executive
Officer from 1992 until January 1998, and was its President from 1977 to 1992.
He has been a director of Centennial Bank since 1977. Mr. Williams
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also recently became a director of Elmer's Restaurants, Inc., a franchisor and
operator of full-service, family-oriented restaurants.
Board Committees
- ----------------
The Company maintains two standing committees, an Audit Committee and a
Compensation Committee, but does not maintain a standing nominating committee.
The Audit Committee reviews and makes recommendations to the Board of
Directors with respect to the engagement and discharge of the Company's
independent auditors and the terms of such engagement, reviews the policies and
procedures of the Company and management with respect to maintaining the
Company's books and records, and reviews with the independent auditors the
results of the auditing engagement and any recommendations the auditors may have
with respect to the Company's financial, accounting or auditing systems. Stephen
Wendell, Randall Pape and Richard Williams serve on the Audit Committee, with
Mr. Wendell serving as Chair. The Committee did not formally meet during fiscal
1998, but the results of the Company's audit were reviewed at the Company's
regular Board meetings.
The Compensation Committee determines compensation for elected officers
of the Company and prepares such reports with respect to such compensation as
may be required by law. The Compensation Committee also grants awards under, and
administers the Company's 1996 Stock Incentive Plan and considers matters of
director compensation. Richard Williams, Randall Pape and Stephen Wendell serve
on the Compensation Committee, with Mr. Williams serving as Chair. The Committee
met once during fiscal 1998.
Board Meetings during 1998 Fiscal Year
- --------------------------------------
The Board of Directors met four times during the 1998 fiscal year. In
fiscal 1998, each director attended at least 75% of the meetings of the Board of
Directors and the committees on which the director served.
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Compensation of Directors
- -------------------------
Executive officers receive no compensation for serving as directors of
Obie Media. All non-employee directors receive $5,000 for each year they serve
as a director. Upon becoming a director, Obie Media grants to each nonemployee
director a nonqualified stock option to purchase 5,000 shares of Common Stock
under the Company's Restated 1996 Stock Incentive Plan (the "Stock Plan"). On
the date of each annual shareholder meeting, each nonemployee director is
granted an additional option to purchase 1,000 shares. Options granted to
nonemployee directors have a term of 15 years and an exercise price equal to the
fair market value of the Company's Common Stock on the grant date. The options
become exercisable by the director at the rate of 20% per year of service.
EXECUTIVE OFFICERS
Each officer serves at the discretion of the Company's Board of
Directors. No officer, other than Mr. Schur, is subject to an agreement that
requires the officer to serve Obie Media for a specified number of years. Mr.
Schur and Mr. Grover are subject to non-competition agreements. There are no
family relationships among any of the Company's directors or executive officers,
except that Mr. Obie and Ms. Mord are cousins.
The executive officers of the Company as of the date of this proxy
statement are as follows:
Has Served in
Name Age Office Present Office
Brian B. Obie 57 Chairman of the Board, Since 1987
President and
Chief Executive
Officer
Wayne P. Schur 54 Executive Since 1998
Vice President
Stephen F. Grover 58 Vice President Since 1996
and General Since 1994
Manager
James W. Callahan 46 Chief Financial Officer Since 1996
See "Election of Directors" for biographical information concerning
Mr. Obie and Mr. Schur.
Stephen F. Grover was appointed Vice President of Obie Media in
September 1996 and has served as Obie Media's General Manager since 1994.
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Since July 1998, he has also served as President of Obie Media Limited. He was
Obie Media's General Sales Manager from 1993 to 1994 and a Regional Manager from
1991 to 1992. Mr. Grover has 32 years of experience in the out-of-home
advertising industry.
James W. Callahan was appointed Chief Financial Officer and Treasurer
of Obie Media in 1996. Since September 1998, he has served as a director and as
Secretary and Treasurer of P & C. From 1994 to 1996, he was a consultant filling
the role of chief financial officer of Obie Media. From 1994 to 1997, Mr.
Callahan also served in the capacity of chief financial officer of Obie
Industries and its subsidiaries. From 1990 to 1994, he served as Chief Financial
Officer of Springfield Forest Products, Inc. Mr. Callahan was employed by Arthur
Andersen LLP from 1975 to 1990, most recently as a tax partner.
Executive Compensation
- ----------------------
The following table summarizes the compensation Obie Media paid during
each of the last three fiscal years to its Chief Executive Officer and other
executive officers whose salary and bonus exceeded $100,000 during fiscal 1998,
together with Wayne Schur, who became the Company's Executive Vice President on
September 1, 1998 in connection with the P & C acquisition (the "Named Executive
Officers"):
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<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Awards
-
Securities All Other
Fiscal Salary Bonus Underlying Compensation
Name and Principal Position Year ($) ($) Options ($)(1)
- --------------------------- -------- ----------- ----------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Brian B. Obie, 1998 $166,632 $25,000 456 $3,749
Chairman of the Board, President 1997 157,200 25,000 - 3,568
and Chief Executive Officer 1996 130,001 - - 5,270
Stephen F. Grover, 1998 $109,360 $25,774 11,324 $3,558
Vice President and 1997 96,000 18,000 - 3,020
General Manager 1996 74,750 20,000 30,250 4,997
James W. Callahan, 1998 $84,270 $16,000 236 $2,326
Chief Financial Officer and 1997 79,500 15,000 - -
Treasurer 1996 79,500 30,000 18,150 -
Wayne P. Schur, 1998 $37,500 - 137,500 $ 250
Executive Vice President (2) 1997 - - - -
1996 - - - -
</TABLE>
(1) Represents contributions made by the Company under its profit sharing and
401(k) plan on behalf of the applicable Named Executive Officers.
(2) Mr. Schur did not receive any compensation from the Company during fiscal
1996 or 1997 and only received salary from the Company for the last three months
of fiscal 1998. P & C paid him an annual base salary of $200,000 in each of
calendar years 1997 and 1998 (paid through August 31, 1998), with bonuses of
$110,000 and $30,000 in 1997 and 1998, respectively. In addition, P & C
contributed $4,000 and $4,396 on his behalf under a P & C profit sharing and
401(k) plan for 1997 and 1998, respectively. Pursuant to Mr. Schur's employment
agreement with the Company, his annual salary from September 1998 to September
1999 is $150,000, with his salary increasing by $25,000 each year through the
five-year term of his employment agreement.
Stock Option Information
- ------------------------
None of the Named Executive Officers exercised any options during
fiscal 1998.
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The following table sets forth certain information regarding options
granted to the Named Executive Officers during fiscal 1998:
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable Value at
% of Total Market Assumed Annual Rates of Stock
Options Per Price Price Appreciation for Option
Granted to Share on Term
Options Employee Exercise Grant Expiration
Name Granted in 1998 Price Date Date 0% ($) 5% ($) 10% ($)
- --------------------------------- ------------ --------- -------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Brian B. Obie 456 (1) 0.2% $ 9.55 $9.55 1/1/13 - $ 4,699 $ 13,836
Stephen F. Grover 11,000 (2) 5.2% 12.73 12.73 7/8/13 - 151,082 444,910
324 (1) 0.2% 9.55 9.55 1/1/13 - 3,338 9,831
James W. Callahan 236 (1) 0.1% 9.55 9.55 1/1/13 - 2,432 7,161
Wayne P. Schur 126,500 (3) 59.4% 7.92 10.91 9/1/13 $378,235 1,246,182 2,577,783
11,000 (3) 5.2% 9.32 10.91 9/1/13 17,490 92,964 208,755
</TABLE>
(1) These options have a 15-year term and the shares subject to the options
become exercisable at a rate of 25%, 35% and 40%, respectively, on the third,
fourth and fifth anniversaries of the date of grant.
(2) This option has a 15-year term and becomes exercisable at a rate of 20% of
the shares subject to the option each year beginning on the first anniversary of
the date of grant.
(3) Mr. Schur's options have a 10-year term and become exercisable at the
following rate: 20% of the shares subject to the option immediately upon date of
grant; 22% of the shares subject to the option per year on each of the first,
second and third anniversaries of the date of grant; and 14% of the shares
subject to the option on the fourth anniversary of the date of grant.
The following table sets forth certain information regarding options
held by the Named Executive Officers at November 30, 1998:
Aggregated Option Values at End of Fiscal Year
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
November 30, 1998 November 30, 1998 ($)(1)
---------------------------- -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
----------- -------------- ------------ ---------------
Brian B. Obie - 456 - $ 2,029
Stephen F. Grover 12,100 29,474 $102,850 169,687
James W. Callahan 7,260 11,126 61,710 93,615
Wayne P. Schur 27,500 110,000 167,200 653,400
1) On November 30, 1998, the market price of the Company's Common Stock was
$14.00 per share. For purposes of the foregoing table, stock options with an
exercise price less than that amount are considered to be "in-the-money" and are
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considered to have a value equal to (i) the difference between that amount and
the exercise price of the option multiplied by (ii) the number of the shares
covered by the stock option.
Restated 1996 Stock Incentive Plan
- ----------------------------------
The Company's Stock Plan provides for the issuance of 363,000 shares of
Common Stock to the Company's employees, directors and consultants. Shares may
be issued pursuant to: (i) incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended ("ISOs"); (ii) nonqualified
stock options ("NSOs"); (iii) stock bonuses; and (iv) direct sales of stock.
ISOs may be issued only to the Company's employees and will have a maximum term
of 10 years from the date of grant. The exercise price for ISOs may not be less
than 100% of the fair market value of the Company's Common Stock at the time of
the grant, and the aggregate fair market value (as determined at the time of the
grant) of shares issuable upon the exercise of ISOs for the first time in any
one calendar year may not exceed $100,000. In the case of ISOs granted to
holders of more than 10% of the Company's Common Stock, the exercise price may
not be less than 110% of the fair market value of the Company's Common Stock at
the time of the grant, and the term of the option may not exceed five years.
Under the Stock Plan, NSOs have a maximum term of 15 years from the date of
grant and must be granted at an exercise price not less than 85% of the fair
market value of the Company's Common Stock at the date of grant. Options become
exercisable in whole or in part from time to time as determined by the Board's
Compensation Committee, which administers the Stock Plan.
At November 30, 1998, options covering 191,461 shares were outstanding
under the Stock Plan, with a weighted average exercise price of $7.45 per share,
and an additional 159,560 shares remained available for future issuances under
the Stock Plan.
SCHUR EMPLOYMENT AND NONCOMPETITION AGREEMENT;
CHANGE-IN-CONTROL ARRANGEMENT
Schur Employment and Noncompetition Agreement
- ---------------------------------------------
In connection with Obie Media's acquisition of P & C in September 1998,
the Company entered into a five-year employment and noncompetition agreement
with Wayne Schur, the Executive Vice President and a director of Obie Media and
the former shareholder of P & C. The agreement contains noncompetition and
nondisclosure provisions. Under the agreement, Mr. Schur's annual salary
initially is $150,000 and will increase by $25,000 in each of the second through
fifth years of his employment. The agreement provides that the Company may
terminate Mr. Schur's contract at any time after
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September 1, 2001 without "cause," as defined in the agreement. In that case,
the Company generally would be liable to Mr. Schur for a severance benefit
payment equal to his annual salary for the then upcoming contract year. The
agreement further provides that the Company may terminate his contract at any
time for cause. In such case, the Company would be liable to him only for salary
and benefits earned by him through the date of such termination. Pursuant to Mr.
Schur's employment agreement, on September 1, 1998, the Company granted him an
NSO for 137,500 shares of the Company's Common Stock (the "Option Shares"), of
which 27,500 Option Shares were exercisable upon the grant date. The remaining
110,000 Option Shares will be exercisable in equal increments on the first,
second, third and fourth anniversaries of September 1, 1998. If Mr. Schur
terminates his employment with Obie Media during the first three years of his
employment agreement, other than for breach of the agreement by the Company, he
will forfeit any Option Shares not exercisable as of the date of such
termination. Termination of Mr. Schur's employment for any other reason will not
affect his right to acquire the Option Shares.
Change-in-Control Arrangement
- -----------------------------
Under the terms of the acquisition agreement by which the Company
acquired all of the outstanding stock of P & C from Mr. Schur, $1.5 million of
the base purchase price and 82,500 shares of Common Stock payable to Mr. Schur
were deferred. The acquisition agreement provides that a portion of the deferred
base purchase price is payable by the Company annually, with the final payment
to be made to Mr. Schur no later than January 1, 2003. However, the agreement
further provides that the entire unpaid purchase price (cash and stock) is
immediately payable to Mr. Schur upon a "Change of Management" of Obie Media
(other than a Change of Management which results from the death or disability of
Brian Obie). Under the agreement, the term "Change of Management" means that Mr.
Obie no longer serves as the Company's Chief Executive Officer or that Mr. Obie
(directly or indirectly through immediate family members) fails to own at least
25% of the Company's outstanding Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our policy for transactions with affiliates, adopted following the
Company's initial public offering in November 1996, provides that all proposed
transactions by the Company with its directors, officers, 5% shareholders and
their affiliates be entered into only if such transactions are (i) on terms no
less favorable to Obie Media than could be obtained from unaffiliated parties,
(ii) reasonably expected to benefit Obie Media and (iii) approved by a majority
of the disinterested, independent members of the Company's Board of Directors.
Set forth below are descriptions of certain transactions between Obie Media and
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its directors, officers or 5% shareholders or their affiliates since December 1,
1996:
Outdoor Advertising Displays
- ----------------------------
Until December 31, 1997, Obie Media leased outdoor advertising displays
from MO Partners, in which Brian Obie and Delores Mord hold partnership
interests of approximately 85% and 15%, respectively. The lease agreement
required monthly payments of a minimum base rent plus additional rent equal to
5% of the gross revenues derived by Obie Media from advertising on the displays.
The minimum base rental payments were $9,000 per month in calendar 1997. The
lease expired at the end of 1997. Total lease expenses were $108,000 and $18,000
in fiscal 1997 and 1998, respectively. On December 31, 1997, the Company
exercised its option, granted in fiscal 1996, to purchase the outdoor
advertising displays of MO Partners for $698,000. Prior to the purchase of the
outdoor displays from MO Partners, Obie Media had guaranteed certain
indebtedness of MO Partners, the outstanding balance of which was $415,000 at
November 30, 1997. The Company paid for the displays with a promissory note.
Upon the note's payment in full in April 1998, the Company's guaranty of the MO
Partners debt was released. The Company believes the option price was at least
as favorable to Obie Media as would have been available from an unrelated party
through arms-length negotiations.
MO Partners also leases land to the Company for two outdoor advertising
displays. Lease payments for these properties equal 20% of the annual revenues
Obie Media derives from these displays. Lease payments were $12,000 in each of
fiscal 1997 and 1998. The Company believes that the terms of these leases are at
least as favorable to Obie Media as would be available with an unrelated third
party through arms-length negotiations.
Office and Production Space
- ---------------------------
Prior to April 1997, Obie Media rented office and production space in
three locations in Eugene, Oregon from Obie Industries, Obie Media's parent
until 1996, and from another affiliated company. In April 1997, the Company
consolidated the Company's operations in Eugene in a headquarters building at
one of these locations. The headquarters building is leased from Obie Industries
at market rates. The Company's rental and lease payments on these properties
were $123,000 and $171,000 in fiscal 1997 and 1998, respectively.
Personal Services
- -----------------
Brian Obie, the Company's Chairman of the Board, President and Chief
Executive Officer, provides limited services to Obie Industries and its
subsidiaries. Mr. Obie is the President, a director and the controlling
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shareholder of Obie Industries. It is estimated that Mr. Obie spends on average
less than 5% of his time working on Obie Industries matters.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers,
directors and more than 10% shareholders to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the
"Commission"). Officers, directors and more than 10% shareholders are required
by Commission regulations to furnish the Company with all Section 16(a) forms
they file.
Based solely on the Company's review of the copies of such forms that
the Company received and written representations from the Company's officers and
directors, the Company believes that all required forms were timely filed with
respect to fiscal 1998, except that Stephen Wendell filed one report late
(covering three purchases of shares) and Richard Williams filed one report late
(covering two purchases of shares).
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, examined the
financial statements of the Company for fiscal 1998. Representatives of Arthur
Andersen LLP will be at the annual meeting and will have an opportunity to make
a statement if they desire to do so and answer any appropriate questions
concerning their report. However, management has been advised that the
representatives of Arthur Andersen LLP do not plan to make a statement.
The Company will appoint at a later date independent public accountants
to audit the Company's financial statements for the 1999 fiscal year. The Board
of Directors or the Audit Committee will review the scope of any such audit and
other assignments given to the auditors to assess whether such assignments would
affect their independence.
SHAREHOLDER PROPOSALS
Shareholders may only bring business before an annual meeting if the
shareholder proceeds in compliance with the Company's Bylaws. For business to be
properly brought before the 1999 annual meeting by a shareholder, notice of the
proposed business must be given to the Secretary of the Company, in writing, on
or before the close of business on May 24, 1999. In order to be valid, a
shareholder's notice to the Secretary must set forth as to each matter the
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shareholder proposes to bring before the annual meeting: (i) a brief description
of the matter proposed to be brought before the meeting; (ii) the name and
record address of such shareholder; (iii) the number of shares of the Company's
Common Stock which are owned beneficially or of record by such shareholder; and
(iv) any material interest of the shareholder in the matter. The presiding
officer at an annual meeting will determine whether any matter was properly
brought before the meeting in accordance with the above provisions. If the
presiding officer determines that any matter has not been properly brought
before the meeting, he or she will so declare at the meeting, and any such
matter will not be considered or acted upon.
To be eligible for inclusion in the Company's proxy materials for the
Year 2000 annual meeting of shareholders, a proposal intended to be presented by
a shareholder for action at that meeting must, in addition to complying with the
shareholder eligibility and other requirements of the rules of the Commission
governing such proposals, be received no later than November 14, 1999 by the
Secretary of the Company at the Company's executive offices at 4211 West 11th
Avenue, Eugene, Oregon 97402.
With respect to shareholder nominations of directors, the procedures
prescribed by the Bylaws are described under "Election of Directors" above.
OTHER MATTERS
While the notice of the annual meeting of shareholders provides for the
transaction of such other business as may properly come before the meeting,
management does not know of any matters to be presented other than the matter
set forth in this proxy statement. If any further business is presented to the
meeting, the persons named in the proxies will vote the shares represented by
such proxies according to their best judgment.
Eugene, Oregon
May 14, 1999
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OBIE MEDIA CORPORATION
Proxy solicited on behalf of the Board of Directors
Annual Meeting of Shareholders June 15, 1999
The undersigned hereby appoints Brian B. Obie and James W. Callahan as
proxies with full power of substitution, to represent and vote, as designated
below, on behalf of the undersigned, all shares which the undersigned may be
entitled to vote at the annual meeting of shareholders of OBIE MEDIA CORPORATION
on June 15, 1999, and any adjournment or postponement thereof, with all powers
that the undersigned would possess if personally present. Either or both of the
proxies may exercise all powers granted hereby.
1. ELECTION OF DIRECTORS
VOTE FOR both nominees for Class 1 director listed below (except
---- as marked to the contrary)
WITHHOLD AUTHORITY to vote for both nominees listed below
----
(Instruction: To withhold authority to vote for either individual
nominee, strike a line through the nominee's name below)
Delores M. Mord Wayne P. Schur
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF
NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED FOR CLASS 1 DIRECTOR. IN ADDITION, THE PROXIES MAY VOTE IN THEIR
DISCRETION AS TO OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Please date and sign exactly as your name or names appear below. If
more than one name appears, all should sign. Persons signing as attorney,
executor, administrator, trustee, guardian, corporate officer or in any other
official or representative capacity, should also provide full title. If a
partnership, please sign in full partnership name by authorized person.
Dated: , 1999
-------------------------
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Signature or Signatures
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
