<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
</TABLE>
[ ] 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
INFINITY BROADCASTING CORPORATION
--------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
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</TABLE>
<PAGE> 2
Infinity Logo
-------------------------------
Infinity Broadcasting Corporation
Notice of 2000 Annual Meeting
and Proxy Statement
May 3, 2000
<PAGE> 3
Infinity Logo
Infinity Broadcasting Corporation
40 West 57th Street
New York, N.Y. 10019
March 30, 2000
Dear Shareholder:
You are cordially invited to attend Infinity Broadcasting Corporation's
Annual Meeting of Shareholders. The meeting will be held at the Sheraton New
York Hotel, located at 811 Seventh Avenue (at 52nd Street), New York, New York,
on Wednesday, May 3, 2000, beginning at 3:30 p.m., local time. The accompanying
Notice of Annual Meeting and Proxy Statement describes the business to be
transacted at the meeting.
During the meeting, I will report to you on Infinity's operations during
1999. We will then take action on the items described in the proxy statement.
You are urged to read the accompanying proxy statement for a discussion of the
matters to be voted on at the meeting.
It is important that your shares be represented at the Annual Meeting.
Whether or not you plan to attend, please complete, sign, date and return your
proxy card as soon as possible. Your vote is important to the Board of
Directors. Thank you for your time and attention to the accompanying proxy
statement.
I look forward to seeing you at the meeting.
Sincerely,
/s/ Mel Karmazin
--------------------------
Mel Karmazin
Chairman, President and
Chief Executive Officer
1
<PAGE> 4
INFINITY BROADCASTING CORPORATION
NOTICE OF ANNUAL MEETING
MAY 3, 2000
The 2000 Annual Meeting of Shareholders of Infinity Broadcasting
Corporation will be held at the Sheraton New York Hotel, located at 811 Seventh
Avenue (at 52nd Street), New York, New York, on Wednesday, May 3, 2000,
beginning at 3:30 p.m., local time. The purposes of the meeting are to consider
and act upon:
(1) the election of two directors to hold office until the 2003 Annual
Meeting of Shareholders in accordance with the Company's Restated
Certificate of Incorporation;
(2) the approval of the Company's Executive Annual Incentive Plan;
(3) the approval of the Company's 1998 Long-Term Incentive Plan; and
(4) such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 8, 2000 as
the record date for determining those shareholders who are entitled to receive
notice of and to vote at the meeting and any adjournment thereof.
The vote of each shareholder is important, and the Board of Directors urges
you to complete, sign, date and return your proxy card as promptly as possible.
In this way, if you are unable to attend, your shares can nevertheless be voted
at the meeting. A return envelope is enclosed for your convenience. Your proxy
may be revoked by delivering a later-dated and signed proxy or written notice of
revocation to the Secretary of the Company prior to the time voting is declared
closed, or by attending the meeting and voting your shares in person.
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE KEEP THE ADMISSION TICKET
THAT IS ATTACHED TO THE PROXY CARD ACCOMPANYING THIS NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT, AND ALSO CHECK THE APPROPRIATE BOX ON YOUR PROXY CARD.
SHAREHOLDERS WHO OWN SHARES THROUGH BANKS OR BROKERS AND WHO PLAN TO ATTEND MUST
SEND A WRITTEN NOTIFICATION, ALONG WITH PROOF OF OWNERSHIP (SUCH AS A BANK OR
BROKERAGE FIRM ACCOUNT STATEMENT), TO THE SECRETARY'S OFFICE, 51 WEST 52ND
STREET, NEW YORK, N.Y. 10019. THE NAMES OF THOSE SHAREHOLDERS INDICATING THEY
PLAN TO ATTEND WILL BE PLACED ON AN ADMISSION LIST HELD AT THE REGISTRATION DESK
AT THE ENTRANCE TO THE MEETING. ADMISSION TICKETS WILL NOT BE MAILED IN ADVANCE
OF THE MEETING.
On Behalf of the Board of
Directors,
/s/ Angeline C. Straka
-----------------------------
Angeline C. Straka
Secretary
New York, New York
March 30, 2000
YOUR VOTE IS IMPORTANT. ACCORDINGLY, PLEASE COMPLETE, SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
2
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
Election of Directors.................................. 5
The Board of Directors and Its Committees.............. 11
Director Compensation.................................. 11
Related Party Transactions............................. 12
Security Ownership..................................... 14
Principal Shareholders................................. 16
Executive Compensation................................. 17
Summary Compensation Table..................... 17
Option Grants.................................. 18
Option Exercises and Fiscal Year-End Values.... 19
Pension Benefits............................... 19
Compensation and Severance Arrangements........ 20
Compensation Committee Report on Executive
Compensation................................... 21
Shareholder Return Performance Graph................... 24
Proposal to Approve the Company's Executive Annual
Incentive Plan....................................... 24
Proposal to Approve the Company's 1998 Long-Term
Incentive Plan....................................... 28
New Plan Benefits...................................... 35
Voting Information..................................... 35
Shareholder Proposal Submissions for 2001 Annual
Meeting of Shareholders.............................. 36
Solicitation of Proxies................................ 36
</TABLE>
3
<PAGE> 6
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 3, 2000
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Infinity Broadcasting Corporation ("Infinity" or the
"Company") of proxies for the 2000 Annual Meeting of Shareholders to be held on
Wednesday, May 3, 2000, and all adjournments thereof. This proxy statement and
the accompanying proxy card are first being sent to shareholders on or about
March 30, 2000. Only holders of record of common stock of the Company ("Common
Stock") at the close of business on March 8, 2000, are entitled to receive
notice of and to vote at the meeting and any adjournments or postponements
thereof. On that date, 393,169,487 shares of Class A Common Stock were
outstanding, each of which entitles the holder to one vote on each matter to
come before the meeting, and 700,000,000 shares of Class B Common Stock were
outstanding, each of which entitles the holder to five votes on each matter to
come before the meeting. All of the shares of Class B Common Stock are held by
CBS Broadcasting Inc., a wholly-owned subsidiary of CBS Corporation ("CBS
Broadcasting"). Class A Common Stock and Class B Common Stock vote together as a
single class on all matters properly brought before the meeting (unless
otherwise required by law or by the Company's Restated Certificate of
Incorporation).
On September 6, 1999, CBS Corporation ("CBS") and Viacom Inc. ("Viacom")
entered into an Agreement and Plan of Merger, as amended, pursuant to which CBS
would merge (the "Merger") with and into Viacom (or a wholly-owned subsidiary of
Viacom). The Merger is expected to close in the first half of 2000. Viacom is a
diversified entertainment company. Upon consummation of the Merger, the Company
will become a majority-owned subsidiary of Viacom. CBS Broadcasting, which will
be a wholly-owned subsidiary of Viacom, will continue to hold all of the Class B
Common Stock of the Company.
It is the practice of the Company to submit to its shareholders the
election of the Company's independent auditors. However, in light of the
proposed Merger and the pending selection of independent auditors for the
combined company after the Merger (and the fact that the combined company's
independent auditors would be the most likely candidate to serve as Infinity's
auditors), the Board of Directors has determined that it is not able to make a
recommendation regarding the independent auditors for Infinity for 2000 at this
time. The Board of Directors intends to submit a recommendation to shareholders
for election of the Company's independent auditors for calendar year 2001 at the
2001 Annual Meeting of Shareholders. KPMG LLP ("KPMG") served as the Company's
independent auditors for 1999 and are currently continuing to do so. A
representative of KPMG will be present at the 2000 Annual Meeting of
Shareholders and will have an opportunity to make a statement. He or she will
also respond to any appropriate questions.
The bylaws of the Company provide that shareholders will be provided
permanent confidentiality in all voting, except as may be necessary to meet
applicable legal requirements.
The principal executive offices of the Company are at 40 West 57th Street,
New York, New York 10019.
4
<PAGE> 7
1. ELECTION OF DIRECTORS
(Item 1 on proxy card)
The Restated Certificate of Incorporation of Infinity ("Restated
Certificate") provides for a classified board of directors. The Board of
Directors of the Company currently consists of ten members and is divided into
three classes. Each class of directors is elected to a three-year term with the
term of one class expiring each year.
With respect to the class consisting of three directors whose terms expire
at the 2000 Annual Meeting of Shareholders, Mr. Richard R. Pivirotto and Dr.
Paula Stern will be leaving the CBS board of directors at the time of the Merger
and, therefore, will not be standing for re-election to the Infinity Board at
the 2000 Annual Meeting. The Board wishes to thank Mr. Pivirotto and Dr. Stern
for their dedication and service to the Company. As a result of this decision,
the Board has determined to reduce the size of the class whose term expires at
the 2003 Annual Meeting of Shareholders to two directors. Accordingly, the Board
of Directors proposes for election Messrs. David T. McLaughlin and Jeffrey
Sherman to serve for terms expiring at the 2003 Annual Meeting of Shareholders
in accordance with the Restated Certificate. Mr. Sherman is currently a director
of the Company. Mr. McLaughlin is currently Chairman and a director of CBS. It
is anticipated that Mr. McLaughlin, as well as current Infinity directors
Messrs. Karmazin, Conrades and Walter, will serve as members of the board of
directors of Viacom upon the consummation of the Merger.
Information about the nominees and about the directors with terms
continuing to 2001 and 2002 is set forth on pages 6 through 10.
The persons named in the enclosed proxy card (Messrs. Karmazin and Suleman)
have advised that, unless a contrary direction is indicated on the proxy card,
they intend to vote for the election of the proposed nominees. They have also
advised that in the event any or all of the nominees is or are not available for
election, they will vote for the election of such substitute nominee or
nominees, if any, as the Board may propose. Alternatively, in such
circumstances, the Board may reduce the number of directors in accordance with
the Restated Certificate.
The Company has been advised that CBS Broadcasting, which owns all of the
outstanding shares of Infinity's Class B Common Stock representing approximately
90.4% of the combined voting power of the outstanding shares of Common Stock,
intends to vote for the election of the two nominees proposed by the Board.
Accordingly, the affirmative vote of CBS Broadcasting is sufficient to elect the
named nominees to the Board.
5
<PAGE> 8
NOMINEES PROPOSED BY THE BOARD OF DIRECTORS
-------------------------------------------
DAVID T. MCLAUGHLIN PHOTO DAVID T. MCLAUGHLIN, 68
Chairman of the Board
CBS Corporation
Chairman and Chief Executive Officer
Orion Safety Products (consumer safety products)
New London, New Hampshire
Mr. McLaughlin has been chairman of CBS since January 1999. Mr. McLaughlin
has served as chairman and chief executive officer of Orion Safety Products
(formerly Standard Fusee Corporation) since 1988. From 1987 to 1988, Mr.
McLaughlin was chairman of The Aspen Institute and was appointed president and
chief executive officer in 1988. Upon his retirement from The Aspen Institute in
1997, he was named president emeritus. From 1981 to 1987, Mr. McLaughlin served
as president of Dartmouth College. From 1970 to 1981, Mr. McLaughlin served in
various management positions at The Toro Company, being named chairman and chief
executive officer in 1977. In addition to Orion Safety Products, Mr. McLaughlin
is a director of Atlantic Richfield Company, Atlas Air, Inc., and PartnerRe Ltd.
Mr. McLaughlin was first elected to the CBS Board in 1979.
JEFFERY SHERMAN PHOTO JEFFREY SHERMAN, 51
Chairman and Chief Executive Officer
Federated Direct
(catalog and e-commerce business)
New York, New York
Mr. Sherman was appointed chairman and chief executive officer of Federated
Direct, a division of Federated Department Stores, on March 23, 2000. Federated
Direct encompasses the direct-to-customer catalog and e-commerce operations of
Bloomingdale's, Macy's and the Fingerhut businesses. Prior to his current
appointment, Mr. Sherman served as president and chief operating officer of
Bloomingdale's since March 1989. Mr. Sherman joined Bloomingdale's in 1971, and
has had comprehensive experience in finance, store management, operations and
merchandising. Mr. Sherman is a trustee of the Pension & Profit Sharing
Committee of Federated Department Stores Inc., an advisory board member of the
Laboratory Institute of Merchandising and a director of the United Way of New
York City. He is also a member of the New York City Comptroller's Economic
Advisory Committee. He served as a director of Infinity Broadcasting Corporation
before its acquisition by CBS in December 1996. Mr. Sherman has been a director
of the Company since February 1999.
6
<PAGE> 9
DIRECTORS WITH TERMS CONTINUING TO 2001
---------------------------------------
MEL KARMAZIN PHOTO MEL KARMAZIN, 56
Chairman, President and Chief Executive Officer
Infinity Broadcasting Corporation
President and Chief Executive Officer
CBS Corporation
New York, New York
Mr. Karmazin has been chairman, president and chief executive officer of
the Company since September 1998. Mr. Karmazin was elected chief executive
officer of CBS in January 1999, having served as president and chief operating
officer of CBS since April 1998. Mr. Karmazin joined CBS in December 1996 as
chairman and chief executive officer of CBS Radio. In May 1997, he also assumed
responsibility for CBS's owned television stations and became chairman and chief
executive officer of the CBS Station Group. Prior to joining CBS, he was
president and chief executive officer of Infinity Broadcasting Corporation from
1981 until its acquisition by CBS in December 1996. Mr. Karmazin is a director
of CBS, Westwood One, Inc. and the New York Stock Exchange and a member of the
Board of Trustees for the Museum of Television and Radio. Mr. Karmazin has been
a director of the Company since September 1998 and has served as a director of
CBS since 1997.
ARTURO R. MORENO PHOTO ARTURO R. MORENO, 53
Chief Executive Officer
Infinity Outdoor, Inc.
Phoenix, Arizona
Mr. Moreno has served as chief executive officer of Infinity Outdoor, Inc.
(formerly Outdoor Systems, Inc.) since December 1999, when Outdoor Systems was
acquired by the Company. Prior to December 1999, Mr. Moreno served as president
and chief executive officer of Outdoor Systems beginning in April 1984. Mr.
Moreno has 27 years of experience in the outdoor advertising industry. Prior to
joining Outdoor Systems, Mr. Moreno was president and general manager of Gannett
Outdoor of New Jersey from 1981 to 1984. Mr. Moreno has been a director of the
Company since December 1999.
7
<PAGE> 10
ROBERT D. WALTER PHOTO ROBERT D. WALTER, 54
Chairman and Chief Executive Officer
Cardinal Health, Inc. (healthcare services provider)
Dublin, Ohio
Mr. Walter is the founder, chairman and chief executive officer of Cardinal
Health, Inc. Since 1971, through internal growth and acquisitions, he has built
Cardinal into one of the country's leading healthcare services providers with
annual sales in 1998 of approximately $16 billion. Mr. Walter is a director of
CBS, Cardinal Health, Inc. and Bank One Corporation. Mr. Walter is also a member
of the board of trustees of Battelle Memorial Institute and Ohio University in
Athens, Ohio. Mr. Walter has been a director of the Company since December 1998
and has served as a director of CBS since 1994.
BRUCE S. GORDON PHOTO BRUCE S. GORDON, 54
Group President, Enterprise Business
Bell Atlantic Corporation (telecommunications)
New York, New York
Mr. Gordon has served as group president, enterprise business with Bell
Atlantic Corporation since December 1998. He served as group president, consumer
and small business services of Bell Atlantic from 1993 to August 1997, and as
group president, retail from August 1997 to December 1998. Mr. Gordon is a
director of Southern Company Services, Inc., the Bartech Group and Bestfoods. He
is a trustee of Gettysburg College, chairman of the National Eagle Leadership
Institute and serves as a member of the Executive Leadership Council and the
Consortium of Information and Telecommunications Executives. Mr. Gordon has been
a director of the Company since September 1999.
8
<PAGE> 11
DIRECTORS WITH TERMS CONTINUING TO 2002
---------------------------------------
GEORGE H. CONRADES PHOTO GEORGE H. CONRADES, 61
Chairman and Chief Executive Officer
Akamai Technologies, Inc. (Internet service company)
Cambridge, Massachusetts
Since April 1999, Mr. Conrades has served as chairman and chief executive
officer of Akamai Technologies, Inc., a global Internet content, streaming
media, and applications delivery company. He also serves as a partner with
Polaris Venture Partners, which he joined in August 1998, specializing in early
stage information technology and health sciences. Mr. Conrades has broad
experience in the computer, Internet and telephony industries beginning in 1961
when Mr. Conrades joined International Business Machines (IBM) and subsequently
as he held a number of management positions in the United States and Asia. Mr.
Conrades left IBM in 1992 as senior vice president and a member of the Corporate
Management Board. In 1994, he was named president and chief executive officer of
BBN Corporation, a leading provider of Internet services, products and
application solutions and in 1995, was appointed chairman of the board. In 1997,
in connection with GTE Corporation's acquisition of BBN Corporation, Mr.
Conrades joined GTE Corporation as executive vice president and as president of
its new Internet organization, GTE Internetworking. He left GTE Corporation in
1998. Mr. Conrades is a director of CBS and Cardinal Health, Inc. He is also a
trustee of The Scripps Research Institute and Ohio Wesleyan University, and is a
member of the interim Board of ICANN, the non-profit corporation being
established to oversee the administration of Internet names and addresses. Mr.
Conrades has been a director of the Company since December 1998 and a director
of CBS since 1994.
WILLIAM S. LEVINE PHOTO WILLIAM S. LEVINE, 68
Chairman of the Board
Infinity Outdoor, Inc.
Phoenix, Arizona
Mr. Levine currently serves as chairman of Infinity Outdoor, Inc. (formerly
Outdoor Systems, Inc.). Mr. Levine, a founder of Outdoor Systems, has been the
chairman and a director of Outdoor Systems since its formation in 1980. In
December 1999, Outdoor Systems was acquired by the Company. Mr. Levine has 20
years experience in the outdoor advertising industry. He is an owner and officer
of numerous privately-owned firms. Mr. Levine is also a director of
International Leisure Hosts Ltd. Mr. Levine has been a director of the Company
since December 1999.
9
<PAGE> 12
FARID SULEMAN PHOTO FARID SULEMAN, 48
Executive Vice President, Chief Financial Officer
and Treasurer
Infinity Broadcasting Corporation
Senior Vice President, Finance and Treasurer
CBS Corporation
New York, New York
Mr. Suleman has been executive vice president, chief financial officer and
treasurer of the Company since September 1998. Mr. Suleman was elected senior
vice president, finance of CBS in August 1998 and was elected treasurer of CBS
in May 1999. Mr. Suleman joined CBS in December 1996 as senior vice president
and chief financial officer of CBS Radio. In June 1997, he became senior vice
president and chief financial officer of the CBS Station Group. Prior to joining
CBS, Mr. Suleman was executive vice president, finance, chief financial officer
and a director of Infinity Broadcasting Corporation from 1986 until its
acquisition by CBS in December 1996. Mr. Suleman has also been the executive
vice president, chief financial officer, secretary and a director of Westwood
One, Inc. since February 1994 and is a director of USA Digital Radio and
Hollywood.com, Inc. Mr. Suleman has served as a director of the Company since
September 1998.
10
<PAGE> 13
THE BOARD OF DIRECTORS AND ITS COMMITTEES
In 1999, there were 7 meetings of the Board. Each director attended at
least 90% of all meetings of the Board and its committees on which the director
served. At the present time there are ten members of the Board.
There are currently two Board committees: the Audit Committee and the
Compensation Committee. The Board does not have a nominating committee.
The Audit Committee reviews and reports to the Board with respect to the
selection, termination and terms of engagement of the Company's independent
auditors, and maintains communications among the Board, the independent auditors
and the Company's internal accounting staff with respect to accounting and audit
procedures. The Audit Committee also reviews, with management and the Company's
independent auditors, the Company's annual financial statements, the adequacy of
the Company's internal accounting and control procedures and policies and
related matters. Mr. Sherman is chair of this committee and Mr. Gordon is a
member. The Audit Committee met twice in 1999.
The Compensation Committee is responsible for administering the Company's
stock plans and reviewing and making decisions with respect to the other
compensation of key executives of the Company. Mr. Conrades is chair of this
committee and Mr. Walter is a member. The Compensation Committee met three times
in 1999.
A shareholder may recommend a Board candidate for consideration by the
Board by furnishing to the Secretary a resume of the experience and
qualifications of the proposed candidate and a written statement signed by the
proposed candidate consenting to be nominated for election to the Board and to
serve if elected. A shareholder may appear at the 2001 Annual Meeting of
Shareholders to nominate a candidate or to propose other business to be
considered by the shareholders (other than pursuant to a shareholder proposal
included in the proxy materials sent by the Company) by sending a notice to the
Secretary at the principal executive offices of Infinity for receipt between
January 3, 2001 and February 2, 2001 setting forth the information required by
the Company's bylaws.
DIRECTOR COMPENSATION
Directors who are employees of the Company, CBS, or any of their
subsidiaries are not compensated for service on the Board. For services during
1999, non-employee directors received an annual director's fee of $30,000 in
cash and stock options for 4,500 shares of the Company's Class A Common Stock,
adjusted as determined by the Company for directors serving less than a full
year. The exercise price of the stock options is set at the fair market value of
the Class A Common Stock on the grant date. The stock options vest over three
years. Non-employee directors may defer all or a portion of their cash fees.
Director deferrals receive interest at the one-year U.S. treasury bill rate or
such other rate as the Compensation Committee may determine, reset every
January. Deferrals are paid in five annual installments upon termination of
service as a director. The Compensation Committee has determined to accelerate
the vesting of options received in 1999 and 2000 by directors who are leaving
the Board in connection with the Merger.
For services during 2000, non-employee directors will receive an annual
director's fee of $30,000 in cash and stock options for the Company's Class A
Common Stock having a value on the grant date of $30,000 (based on the
Black-Scholes option pricing model or other reasonable method).
11
<PAGE> 14
RELATED PARTY TRANSACTIONS
In December 1998, Infinity completed its initial public offering of Class A
Common Stock (the "IPO"). After the IPO, CBS beneficially owned 95.8% of the
combined voting power and 81.8% of the equity of Infinity. On March 8, 2000,
primarily as a result of Infinity's acquisition of Outdoor Systems, Inc., now
known as Infinity Outdoor, Inc. ("Infinity Outdoor"), using Infinity's Class A
Common Stock, CBS beneficially owned approximately 90.4% of the combined voting
power and approximately 65.2% of the equity of Infinity.
In connection with the IPO, the Company entered into an intercompany
agreement with CBS pursuant to which CBS provides Infinity with a number of
services (the "Intercompany Agreement"), including, among others, certain legal,
financial, administrative and executive services (including the services of
Messrs. Karmazin and Suleman). The costs of these services are allocated
according to established methodologies determined by CBS on an annual basis. For
1999, allocated expenses of $8,000,000 relating to these services were included
in the consolidated statement of earnings of the Company.
The Intercompany Agreement also requires each party to make available at
favorable rates or without charge advertising time and space for promotional
purposes in a manner substantially consistent with past practice. In general,
Infinity and CBS have provided each other with promotional time and space
without charge in circumstances where the party providing the time or space
concludes that doing so would not significantly impact its potential revenues.
CBS has received, and is likely to continue to receive, more time under this
arrangement than the Company. Certain of the Company's radio stations also have
received and will continue to receive certain CBS television programming in
exchange for running promotional spots for CBS during those broadcasts. While it
is not possible to quantify the amounts involved in these arrangements, they
have not had a material impact on the Company's results of operations, and they
are not expected to be material in the future.
The Intercompany Agreement provides that the parties will use their best
efforts in appropriate situations to cooperate in jointly marketing their
products and services to potential advertisers and to refer advertisers to each
other. Relevant costs and revenues are to be split in a manner which, when
considered in light of their overall relationship, is intended to be fair to
both parties, as determined by CBS in its sole discretion after consultation
with the Company. The revenues associated with such sales were not significant
in 1999.
In addition, at the time of the IPO, the Company entered into a tax sharing
agreement with CBS (the "Tax Sharing Agreement") which sets forth certain
agreements between the parties with respect to Infinity's tax returns and which
provides that Infinity will pay to CBS an amount equal to the amount of income
taxes Infinity would pay as a separate income tax filer. Reference is made to
the full text of the Intercompany and Tax Sharing Agreements, copies of which
have been filed with the Securities and Exchange Commission.
During 1999, CBS closed on a number of strategic investments focused on
growing its Internet based operations. CBS received an equity interest in these
Internet based companies, in exchange for future promotional time on CBS and
Infinity properties. During the later half of 1999, Infinity provided
advertising and promotional time to some of these companies in exchange for the
right to an economic interest in these Internet investments.
12
<PAGE> 15
The Company owns a minority equity interest in Westwood One, Inc.
("Westwood One"). Many of Infinity's radio stations are affiliated with Westwood
One and Westwood One distributes nationally certain of the Company's network
programming. In connection with these arrangements, the Company receives
affiliation fees as well as programming cost reimbursements and in certain
instances shares in revenue from the sale of Infinity's programming. In
addition, an officer and non-executive employee of the Company serve as officers
of Westwood One for which the Company receives a management fee which includes
warrants to purchase Westwood One common stock. Revenue and expense
reimbursements from these arrangements recorded by the Company in 1999 totaled
approximately $67,000,000. Mr. Karmazin is a director of Westwood One and Mr.
Suleman is the executive vice president, chief financial officer and secretary
and a director of Westwood One.
Infinity Outdoor, a wholly-owned subsidiary of the Company, is a party to a
Services Agreement with Williams Manufacturing, Inc. ("WMI") and J&L Industries,
Inc. ("J&L"), companies controlled by Mr. William S. Levine, a director of the
Company and Chairman of Infinity Outdoor. Pursuant to the agreement, WMI and J&L
made at least a majority of Mr. Levine's business time available to Infinity
Outdoor for which Infinity Outdoor paid WMI and J&L an aggregate of $450,000 in
1999.
In addition, certain partnerships controlled by Mr. Levine or in which Mr.
Levine is partner lease certain sites to Infinity Outdoor on which the Company
has placed advertising displays. Infinity Outdoor made aggregate lease payments
to such partnerships of approximately $139,000 in 1999. In connection with the
acquisition of Infinity Outdoor by the Company, these leases were renegotiated
and new leases, on substantially identical terms, were entered into for terms
commencing January 1, 2000 through December 31, 2004. The Company believes that
these leases are on terms at least as favorable as would be available with
unrelated third parties through arms-length negotiations.
13
<PAGE> 16
SECURITY OWNERSHIP
The following table sets forth the number of shares of Infinity Class A
Common Stock and CBS common stock beneficially owned as of March 1, 2000 by each
director of the Company, by the director nominee, by each of the executive
officers named in the Summary Compensation Table on page 17 (the "named
executive officers"), and by the directors and executive officers of the Company
as a group, as reported by each such person. Each person has sole voting and
investment power over the shares reported except as noted. No other equity
securities of the Company, its parent or its subsidiaries were beneficially
owned, directly or indirectly, by any director, director nominee or executive
officer on March 1, 2000.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership Amount and Nature of
Infinity Percent Beneficial Ownership Percent
Name Class A Common Stock of Class CBS Common Stock of Class
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
W. Apfelbaum 63,333 shares(1) * 278,429 shares(2) *
G. H. Conrades 21,500 shares(1) * 36,842 shares(2)(3)(4) *
B. S. Gordon 500 shares(1) * 0
M. Karmazin 108,333 shares(1) * 8,151,480 shares(2)(5) 1.06%
W. S. Levine 39,034,557 shares(6) 9.92% 11,000 shares(7) *
D. Mason 47,118 shares(1) * 475,073 shares(2) *
D. T. McLaughlin 500 shares * 72,626 shares(2)(3)(4) *
A. R. Moreno 39,906,348 shares(1)(8) 10.14% 10,000 shares *
R. R. Pivirotto 2,500 shares(1) * 28,255 shares(2)(3)(4) *
J. Sherman 1,500 shares(1) * 20,200 shares(2) *
P. Stern 2,500 shares(1) * 23,619 shares(2)(3)(4) *
F. Suleman 58,333 shares(1) * 1,485,490 shares(2) *
R. D. Walter 21,500 shares(1) * 71,514 shares(2)(3)(4) *
All directors and
executive officers as a
group 79,313,522 shares(1)(6)(8) 20.16% 11,768,892 shares(2)(3)(4)(5)(9) 1.53%
</TABLE>
- --------------------------------------------------------------------------------
* Represents less than 1% of the class.
(1) Includes the following shares of Infinity Class A Common Stock which
the indicated executive officers or directors had the right to acquire
within 60 calendar days through the exercise of stock options:
Apfelbaum 33,333; Conrades 1,500; Gordon 500; Karmazin 58,333; Mason
33,333; Moreno 723,817; Pivirotto 1,500; Sherman 1,500; Stern 1,500;
Suleman 33,333; and Walter 1,500.
(2) Includes the following shares of CBS common stock which the indicated
executive officers, directors or director nominee had the right to
acquire within 60 calendar days through the exercise of stock options
or warrants: Apfelbaum 33,333; Conrades 10,408; Karmazin 4,058,533;
Mason 474,500; McLaughlin 35,563; Pivirotto 10,408; Stern 9,658;
Suleman 1,419,369; and Walter 9,658.
14
<PAGE> 17
(3) Includes the following CBS common stock equivalents owned by the
indicated directors under the CBS Deferred Compensation and Stock Plan
for Directors: Conrades 418; McLaughlin 3,209; Pivirotto 3,209; Stern
1,183; and Walter 103.
(4) The indicated directors have deferred all or part of their cash
compensation as CBS directors. As a result of these deferrals, at a
future date, these directors will be entitled to receive the following
number of shares of CBS common stock, which are reflected in the table,
or cash for all or part thereof: Conrades 6,663; McLaughlin 21,446;
Pivirotto 9,993; Stern 6,533; and Walter 3,021.
(5) Includes (i) 2,047,503 shares of CBS common stock as to which Mr.
Karmazin has sole voting power but no investment power; and (ii) 24,189
shares of CBS common stock held by the Karmazin Foundation and 472,311
shares held by the Karmazin Charitable Lead Annuity Trust, as to which
Mr. Karmazin disclaims beneficial ownership, except, in the case of the
Trust to the extent of his pecuniary interest.
(6) Includes the following shares of Infinity Class A Common Stock: (i)
1,923,077 shares held in a Rabbi Trust for the benefit of Mr. Moreno,
as to which Mr. Levine has sole voting power but no investment power
and as to which he disclaims beneficial ownership; (ii) 36,863,449
shares held by Levine Investments Limited Partnership as to which Mr.
Levine disclaims beneficial ownership except to the extent of his
partnership interest; and (iii) 246,250 shares owned by the William S.
and Ina Levine Foundation, as to which Mr. Levine has shared voting and
investment power and as to which he disclaims beneficial ownership.
(7) Includes 9,000 shares of CBS common stock held by Levine Investments
Limited Partnership as to which Mr. Levine disclaims beneficial
ownership except to the extent of his partnership interest.
(8) Includes the following shares of Infinity Class A Common Stock: (i)
4,291,745 shares which Mr. Moreno holds jointly with his spouse; (ii)
5,151,582 shares held by BRN Properties Limited Partnership as to which
Mr. Moreno disclaims beneficial ownership except to the extent of his
interest in the partnership; and (iii) 62,500 shares held by the Moreno
Family Foundation as to which Mr. Moreno disclaims beneficial
ownership.
(9) Includes 1,083,332 stock options for CBS common stock owned by
executive officers of Infinity who are not named executive officers and
110 shares of CBS common stock owned by family members of executive
officers of Infinity who are not named executive officers, who disclaim
beneficial ownership of these shares.
15
<PAGE> 18
PRINCIPAL SHAREHOLDERS
Except as set forth below and in the immediately preceding table, Infinity
does not know of any person who beneficially owns more than 5% of any class of
the Company's Common Stock as of March 6, 2000.
<TABLE>
<CAPTION>
Shares and Class of
Name and Address Common Stock Percent
Beneficial Owner Beneficially Owned of Class
- --------------------------------------------------------------------------------------
<S> <C> <C>
CBS Broadcasting Inc. 700,000,000 100%
51 West 52nd Street Class B
New York, New York 10019
Janus Capital Corporation 22,052,037 5.9%(*)
100 Fillmore Street Class A
Denver, Colorado 80206
FMR Corp. 31,396,467 8.5%(*)
82 Devonshire Street Class A
Boston, Massachusetts 02109
Massachusetts Financial Services 20,804,010 5.6%(*)
Company Class A
500 Boylston Street
Boston, Massachusetts 02116
Putnam Investments, Inc. (1) 42,354,630 11.4%(*)
One Post Office Square Class A
Boston, Massachusetts 02109
- --------------------------------------------------------------------------------------
</TABLE>
* Based on the number of shares of Class A Common Stock reported as
beneficially owned as of December 31, 1999.
(1) According to the Schedule 13G, dated March 6, 2000, filed with the
Securities and Exchange Commission jointly by Putnam Investments, Inc.
("PII"), Marsh & McLennan Companies, Inc. ("MMC"), Putnam Investment
Management, Inc., the investment adviser to PII's mutual funds ("PIM"),
and The Putnam Advisory Company, Inc., the investment adviser to PII's
institutional clients ("TPAC"), at December 31, 1999, PII, a
wholly-owned subsidiary of MMC, was the beneficial owner of 42,354,630
shares of common stock in its capacity as the sole parent of PIM and
TPAC, owners of 40,404,883 and 1,949,747 shares of Common Stock,
respectively. The Schedule 13G indicates that both subsidiaries have
dispository power over the shares as investment managers, but each of
the mutual funds' trustees have voting power over the shares held by
each fund, and TPAC has shared voting power over the shares held by the
institutional client. Each of PII and MMC disclaims the power to vote
or dispose of, or to direct the vote or disposition of, such shares.
16
<PAGE> 19
EXECUTIVE COMPENSATION
Year 1999: The following table sets forth information with respect to
compensation paid to the Company's chief executive officer and its other
executive officers (the "named executive officers") during 1999 by Infinity and
its subsidiaries. In addition to the amounts set forth below, Messrs. Karmazin
and Suleman were compensated during 1999 by CBS for services to CBS and its
subsidiaries (other than Infinity and its subsidiaries).
Year 1998: Prior to the Infinity IPO in December 1998, Infinity was a
wholly-owned subsidiary of CBS. Therefore, for 1998, the table reflects
compensation paid by CBS and its subsidiaries to the named executive officers
for services rendered in all capacities to CBS or any of its subsidiaries
(including Infinity and its subsidiaries).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
All Other
Annual Compensation Long-Term Compensation Compensation
--------------------------------------- ---------------------------------------- ------------
Awards Payouts
----------------------- --------------
Restricted Securities
Name and Other Annual Stock Underlying LTIP
Principal Position Year Salary Bonus Compensation Award Options Pay-Outs
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
M. Karmazin 1999 $ 500,000(1) $6,000,000(2) N/A 0 177,05(3) 0 $3,620,293(5)
Chairman, 1998 $1,000,000 $3,000,000 N/A 0 250,000(4) 0 $2,004,294
President & Chief
Executive Officer
F. Suleman 1999 $ 560,000(1) $1,125,000(2) N/A 0 102,051(3) 0 $ 4,132(5)
Executive VP, 1998 $ 600,000 $1,250,000 N/A 0 100,000(4) 0 $ 2,574
Chief Financial
Officer & Treasurer
D. Mason 1999 $ 815,000 $ 750,000(2) N/A 0 102,051(3) 0 $ 4,000(5)
VP, Infinity & 1998 $ 815,000 $ 535,000 N/A 0 60,000(4) 0 $ 2,994
President, Infinity
Radio Group
W. Apfelbaum 1999 $ 950,000 $2,000,000(2) N/A 0 102,051(3) 0 $ 1,964(5)
Chairman & CEO, 1998 $ 950,000 $1,500,000 N/A 0 50,000(4) 0 $ 3,278
TDI Worldwide, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This amount represents 50% of Mr. Karmazin's and 80% of Mr. Suleman's annual
base salary, which was allocated to Infinity under the Intercompany
Agreement.
(2) Represents incentive compensation awarded by Infinity for 1999.
(3) Represents grants of non-qualified stock options to acquire shares of
Infinity Class A Common Stock and includes a grant of 2,051 options granted
under the Company's broad-based "Fund the Future" stock option program.
(4) Represents grants of non-qualified stock options to acquire common stock of
CBS. No options to acquire Infinity Common Stock were granted or outstanding
in 1998.
(5) The amounts shown in this column consist of: (i) Company contributions to
savings program accounts of the indicated executive officers: Mr. Karmazin
$4,000; Mr. Suleman $4,000; and Mr. Mason $4,000; (ii) imputed income with
respect to executive life insurance for the indicated executive officers:
Mr. Karmazin $354; Mr. Suleman $132; and Mr. Apfelbaum $1,964; (iii) for Mr.
Karmazin, $115,939 of interest earned during 1999 on the portion of his 1998
special award which was subject to mandatory deferral and (iv) for Mr.
Karmazin, a $3,500,000 special award for his significant contributions
during 1999 beyond that reflected by specific performance goals.
17
<PAGE> 20
OPTION GRANTS
The following table shows grants in 1999 to the named executive officers of
options to purchase shares of Infinity Class A Common Stock. All of the stock
options were granted to the named executive officers on February 24, 1999 except
for 2,051 stock options granted to each of the named executive officers on April
1, 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% of Total
Options Grant Date
Granted to Exercise Present Value (2)
Options Employees in or Base Expiration ----------------------
Name Granted (1) Fiscal Year Price Date Per share Total
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M. Karmazin.......... 175,000 3.144% $25.9375 02/23/09 $12.92 $2,261,000
2,051 .037% $26.8125 03/31/09 $13.40 $ 27,483
F. Suleman........... 100,000 1.796% $25.9375 02/23/09 $12.92 $1,292,000
2,051 .037% $26.8125 03/31/09 $13.40 $ 27,483
D. Mason............. 100,000 1.796% $25.9375 02/23/09 $12.92 $1,292,000
2,051 .037% $26.8125 03/31/09 $13.40 $ 27,483
W. Apfelbaum......... 100,000 1.796% $25.9375 02/23/09 $12.92 $1,292,000
2,051 .037% $26.8125 03/31/09 $13.40 $ 27,483
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Options have a term of 10 years from the date of grant or such lesser term
as may be determined by the Infinity Compensation Committee. The exercise
price under each option may not be less than the fair market value of
Infinity Class A Common Stock on the option grant date. Except for 2,051
Fund the Future options included for each named executive officer which are
not exercisable until April 1, 2002, generally an option becomes exercisable
in thirds, beginning on the first, second, and third anniversaries of the
grant date.
(2) These values were derived using the following common assumptions: stock
price volatility 38%; interest rate 5.146% for the options granted on
February 24, 1999 and 5.224% for the options granted on April 1, 1999; risk
of forfeiture discount 5.9%; and for each option, 8 years expected term to
exercise and full exercise price. There were no adjustments made for
non-transferability. The values and assumptions were based on the
Black-Scholes option pricing model. The actual value, if any, that an
executive officer may realize from stock options (assuming that they are
exercised) will depend solely on the gain in stock price over the exercise
price when the shares are sold.
18
<PAGE> 21
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides information as to stock options to purchase
Infinity Class A Common Stock exercised during 1999 by the named executive
officers; the unexercised options to purchase Infinity Class A Common Stock
(including options granted in 1999) owned by the named executive officers; and
the value of Infinity stock options held by them at year-end.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at Fiscal Year-End Options at Fiscal Year-End (1)
Acquired on Value ------------------------------- -------------------------------
Name Exercise Realized Exercisable Unexercisable (2) Exercisable Unexercisable (2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M. Karmazin.......... 0 N/A 0 177,051 $0 $1,814,772.75
F. Suleman........... 0 N/A 0 102,051 $0 $1,046,022.75
D. Mason............. 0 N/A 0 102,051 $0 $1,046,022.75
W. Apfelbaum......... 0 N/A 0 102,051 $0 $1,046,022.75
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on the closing price of Infinity Class A Common Stock as reported on
the New York Stock Exchange composite transactions tape on December 31, 1999
($36.1875).
(2) These options are unexercisable because as of December 31, 1999 they had not
yet vested under their terms.
PENSION BENEFITS
Mr. Karmazin has a vested benefit under an Infinity pension plan which was
frozen in November 1987. He has not accrued any additional benefits under this
plan since November 1987. As of December 31, 1999, the estimated monthly benefit
amount payable to Mr. Karmazin upon retirement at normal retirement age under
this frozen pension plan is $1,408.
Messrs. Suleman and Apfelbaum do not participate in any tax-qualified
defined benefit pension plan sponsored by the Company or CBS.
On April 1, 1999, Mr. Mason became a participant in the cash balance
component of the CBS Combined Pension Plan (the "cash balance plan"). The cash
balance plan annually credits Mr. Mason's hypothetical account with 2% of
base/benefit pay (subject to a maximum of $550,000), as well as interest credits
and a transition credit. For 1999, Mr. Mason's transition credit was 0.70% of
base/benefit pay (which increases by 10% each year, subject to certain limits).
The cash balance plan is non-contributory. All employer contributions are
actuarially determined. Mr. Mason also has a vested benefit under the
Westinghouse Executive Pension Plan, which was frozen effective March 31, 1999.
He has not accrued any additional benefits under this plan since March 31, 1999.
As of December 31, 1999, the estimated monthly benefit amount payable to Mr.
Mason upon retirement at normal retirement age under this frozen pension plan is
$5,345.75, offset by any amounts he receives under the cash balance plan.
19
<PAGE> 22
COMPENSATION AND SEVERANCE ARRANGEMENTS
Messrs. Karmazin and Suleman render services to both CBS and Infinity
pursuant to the terms of the Intercompany Agreement referred to under the
heading "Related Party Transactions."
MEL KARMAZIN
Mr. Karmazin entered into an employment agreement with CBS that became
effective on December 31, 1996 and terminates on December 31, 2000. The
agreement provides for a starting annual base salary of $925,000, subject to
merit review and annual increases (but not decreases) at the sole discretion of
the CBS Compensation Committee and that Mr. Karmazin has the opportunity to
receive performance-based annual incentive bonuses with a target award
opportunity of $1,500,000. The agreement also provides that Mr. Karmazin's
employment is terminable for cause upon the occurrence of any: (i) action
involving willful malfeasance or gross misconduct in connection with such
employment having a material adverse effect on CBS; (ii) substantial and
continuing refusal to perform ordinary duties of a chief executive officer; or
(iii) felony conviction. In the event that Mr. Karmazin's employment is
terminated without cause or CBS otherwise breaches the agreement, Mr. Karmazin
would be entitled to receive a lump-sum payment equal to the compensation,
including annual incentive compensation, that otherwise would have been paid to
Mr. Karmazin for the remainder of the term of the agreement.
DANIEL MASON
In May 1996, Mr. Mason entered into an employment agreement with CBS
Broadcasting, a subsidiary of CBS, effective as of November 28, 1995. The
agreement was amended as of January 29, 1997. The employment agreement, which
terminated on November 27, 1999, provided for an initial annual base salary of
$575,000, which increased to $815,000 as of January 1, 1997, and, thereafter,
was subject to merit review. The employment agreement also provided that Mr.
Mason have the opportunity to receive performance-based annual incentive bonuses
with a target award opportunity of 40% of his annual base salary. Mr. Mason
continues to serve as a Vice President of the Company and President of the
Infinity Radio Group.
WILLIAM APFELBAUM
In December 1989, Mr. Apfelbaum entered into an employment agreement with
TDI Worldwide, Inc. ("TDI") that was restated in November 1998 to reflect all
amendments made to such agreement prior thereto. The employment agreement will
terminate on March 25, 2001. The employment agreement provides for an annual
base salary of $950,000 and that Mr. Apfelbaum will have the opportunity to
receive performance-based annual incentive bonuses with a target award
opportunity of $1,000,000. Mr. Apfelbaum's employment is terminable for cause or
by the board of directors of TDI other than for cause. In the event that Mr.
Apfelbaum's employment is terminated by the board of directors, TDI would be
obligated to pay to Mr. Apfelbaum his base salary and benefits for the remainder
of the contract in accordance with the terms of the employment agreement. Mr.
Apfelbaum will leave his position, effective April 30, 2000, as Chairman and
Chief Executive Officer of TDI and will serve as a consultant to the Company.
20
<PAGE> 23
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company has
furnished the following report on executive compensation for 1999. The
Compensation Committee, which is composed entirely of outside independent
directors, reviews, evaluates and approves the design and implementation of the
Company's compensation system for executive officers. For executives providing
services to both CBS and Infinity, the Infinity Compensation Committee also
considers the actions of the CBS Compensation Committee and allocations made to
Infinity by CBS under the Intercompany Agreement.
THE INFINITY EXECUTIVE COMPENSATION PROGRAM
The Infinity executive compensation program is a performance and rewards
compensation system consisting of base salaries and incentives (annual and
long-term) that pays executives for the achievement of levels of performance
designed to increase the shareholder value of the Company. The system enables
the Company to hire, retain and motivate high-quality executives who meet the
immediate business challenges and improve the long-term performance of the
Company. The system is designed to provide total compensation opportunities
which are competitive as measured against industry norms and which reflect the
individual performance of each executive officer.
BASE SALARIES
Executive officers are paid base salaries which take into consideration the
level of responsibility involved, the knowledge and skill required, and
competitive data. The chief executive officer makes recommendations with respect
to salary adjustments for all executive officers. These recommendations are
reviewed by the Compensation Committee and approved with any modifications the
Committee deems appropriate.
ANNUAL INCENTIVES
The Compensation Committee administers the Company's annual incentive plan
under which incentive compensation may be paid to key executives of the Company.
Early in 1999, the Compensation Committee approved performance goals for
individual executive officers. These performance goals were based on increases
in the Company's free cash flow. The year 1999 reflected very strong performance
by the Company's executive officers. The Company met its maximum performance
goals, permitting maximum awards to be made to executives.
After reviewing the financial performance as well as the performance of the
individual executive officers, the chief executive officer made recommendations
with respect to incentive awards. These recommendations were reviewed with and,
to the extent determined appropriate, approved by the Compensation Committee.
LONG-TERM INCENTIVES
Long-term incentives are a significant component of total compensation. The
Compensation Committee believes that awarding long-term incentives to executive
officers in the form of stock options serves to promote a sense of ownership and
to further align the interests of the Company's executive officers with those of
its shareholders, as the options have value only as the Company's stock price
increases.
21
<PAGE> 24
For 1999, the Compensation Committee granted long-term incentive
opportunities to executive officers in the form of non-qualified stock option
grants. The level of option grants to executives for 1999 was based on the
executive's level of responsibility, individual performance, and the above-
referenced competitive data.
COMPENSATION ARRANGEMENTS
From time to time, the Company enters into employment contracts or other
compensation arrangements with executive officers when appropriate for
competitive or other business reasons. Contractual compensation arrangements
with individual executive officers named in the Summary Compensation Table are
summarized under the heading "Compensation and Severance Arrangements."
1999 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Individual Performance and Contribution. Total compensation for Mel
Karmazin, the chairman, president and chief executive officer of the Company
during 1999, was based on a variety of factors as discussed below. A significant
factor which was taken into account by the Compensation Committee was the
Board's evaluation of Mr. Karmazin's performance as chief executive officer and
his significant contribution to the Company and its shareholders in 1999.
Mr. Karmazin's total compensation reflects the Board's positive evaluation
of his significant strategic accomplishments in the operation and growth of the
Company into one of the world's leading out-of-home media companies during the
Company's first full year of operation after the IPO, which accomplishment has
been reflected in the significant increase in shareholder value over the course
of the year.
Base Salary. The Compensation Committee reviewed and concurred in the
allocation by CBS to Infinity, pursuant to the Intercompany Agreement, of
$500,000 of Mr. Karmazin's total $1,000,000 annual base salary for 1999.
Annual Incentive. As an annual incentive for 1999, the Compensation
Committee awarded Mr. Karmazin a bonus of $6,000,000 under the Company's
Executive Annual Incentive Plan based on accomplishment of the maximum
performance goals established by the Compensation Committee in early 1999.
Long-term Incentive. Long-term incentives during 1999 consisted of a grant
of options for 175,000 shares of Infinity Class A Common Stock. Mr. Karmazin's
grant level was established considering his level of responsibility, previously
discussed competitive data and the Compensation Committee's evaluation of his
performance and role in increasing shareholder value.
Special 1999 Award. After reviewing and evaluating the Company and
executive performance for 1999, the Compensation Committee approved a special
award of $3,500,000 to Mr. Karmazin for his significant contributions to the
Company. In making the award, the Compensation Committee noted that a number of
significant goals had been achieved during the year, in addition to the
established 1999 performance goals, including record revenue increases at the
Company's operating segments, the successful operation of the Company as one of
the leading out-of-home media companies in its first full year of operation
after the Company's IPO, continued expansion of the TDI outdoor advertising
business in Europe and the acquisition of Outdoor Systems, resulting in the
Company becoming the largest outdoor advertising company in North America as
well as one of the world's leading outdoor advertising companies.
22
<PAGE> 25
POLICY ON DEDUCTIBILITY OF COMPENSATION
It is the Compensation Committee's policy to establish measurable,
quantifiable performance targets in connection with incentive plans as part of
the Company's performance and rewards compensation system for executive
officers. In the case of annual incentives, the Compensation Committee
establishes performance measures for that year's incentives that are designed to
increase the shareholder value of the Company. In the case of stock options, the
options only have value as the Company's stock price increases.
Under the federal tax laws, beginning in 1994, compensation for certain
individual executive officers ("covered executives") is not deductible to the
extent that the officer's compensation for that year exceeds $1,000,000, after
excluding qualifying performance-based compensation that meets certain specified
criteria. The Compensation Committee believes, based on information currently
available, that the Company's annual incentive awards and stock options to its
covered executive officers (other than the special award paid to Mr. Karmazin
for his performance during 1999 described above) will qualify for exclusion and
not be subject to the $1,000,000 limitation. The Compensation Committee has
reviewed and will continue to review tax consequences as well as other relevant
considerations when making compensation decisions.
COMPENSATION COMMITTEE
George H. Conrades, Chair
Robert D. Walter
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Conrades and Walter, independent outside directors, were the sole
members of the Compensation Committee during 1999. Also during 1999, no
Compensation Committee interlocks existed.
23
<PAGE> 26
SHAREHOLDER RETURN PERFORMANCE GRAPH
The Company's Class A Common Stock commenced trading on the New York Stock
Exchange on December 10, 1998. Set forth below is a line graph comparing the
total returns (assuming reinvestment of any dividends) of the Company's Class A
Common Stock, the Standard & Poor's 500 Stock Price Index ("S&P 500") and the
Standard & Poor's Broadcasting Index ("S&P Broadcasting Index"). In addition,
the line graph depicts the total return of the Company's Class A Common Stock
from December 9, 1998, the date of the Company's IPO, to December 31, 1999.
COMPARISON OF CUMULATIVE TOTAL RETURN*
INFINITY CLASS A COMMON STOCK, S&P 500 AND S&P BROADCASTING INDEX
<TABLE>
<CAPTION>
INFINITY IPO INFINITY S&P 500 S&P BROADCASTING
------------ -------- ------- ----------------
<S> <C> <C> <C> <C>
12/9/98 100.00
12/10/98 100.00 100.00 100.00
12/31/98 118.70 105.59 112.39
12/31/99 176.52 156.91 127.81 196.32
</TABLE>
*Assumes that the value of the investment in Infinity Class A Common Stock
and in each index was $100 on December 9 or 10, 1998, as applicable, and that
any dividends were reinvested.
2. PROPOSAL TO APPROVE THE COMPANY'S EXECUTIVE ANNUAL INCENTIVE PLAN
(Item 2 on proxy card)
Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations promulgated thereunder (together, "Section
162(m)"), compensation paid to certain executive officers ("covered employees")
in excess of $1,000,000 is not deductible by the Company unless such
compensation is performance-based, as defined by Section 162(m), and certain
other requirements are met. The Executive Annual Incentive Plan, as amended from
time to time (the "Plan"), was adopted by the Board and approved by CBS (as the
sole shareholder of Infinity) prior to the IPO. The Board is submitting the Plan
for shareholder approval so that the award of annual incentives to covered
employees will continue to comply with the requirements of Section 162(m).
24
<PAGE> 27
Because executive officers (who may also be members of the Board) are
eligible to be designated as participants and to receive awards under the Plan,
each of them has an interest in the adoption of this proposal.
SUMMARY OF THE PLAN
The following is a general description of the principal features of the
Plan. It is qualified in its entirety by reference to the complete text of the
Plan, which is attached to the proxy statement as Exhibit A and is incorporated
herein by reference.
TERM. The Plan was effective as of December 7, 1998. The Plan has no fixed
expiration date. However, because the Committee (as defined below) has
discretion under the Plan to fix performance goals annually, current applicable
law requires that the Plan be submitted to shareholders for approval every five
years in order to continue to permit payment of incentives that qualify as
performance-based compensation under Section 162(m).
ADMINISTRATION. The Plan is administered by a committee ("Committee") of
at least two outside directors (as defined under Section 162(m)). The Committee
has the exclusive authority to interpret, administer, and make determinations
under the Plan, including the exclusive authority to select participants and
approve incentive awards under the Plan.
PARTICIPANTS. Participation in the Plan is limited to key executives of
the Company and/or its subsidiaries who are designated by the Committee as
participants for a given performance period (a calendar year or other period
designated by the Committee). Approximately 10 executives are currently eligible
to be selected by the Committee. The granting of awards under the Plan is at the
discretion of the Committee; therefore, it is not possible to indicate which
executives will receive awards under the Plan or the amount of the awards. As in
the past, it is anticipated that participants will generally be executive
officers of the Company who could potentially be "covered employees" within the
meaning of Section 162(m) and who do not receive annual incentives pursuant to a
separate agreement.
AWARDS. Under the Plan, the Committee will establish one or more objective
performance goals for each year (or other performance period), based on one or
more of the following criteria as applied to the relevant business unit or
units, to a specified portion or portions of the Company or to the Company as a
whole, or to any combination thereof: revenues; earnings before interest, taxes,
depreciation and amortization ("EBITDA"); earnings before interest and taxes
("EBIT"); free cash flow; earnings per share; ratings; cost reductions; capital
expenditures; and stock price. The Committee will also establish target and
maximum incentive award opportunities for the performance period for each
participant and will establish the objective formula or standard that the
Committee will use to determine the amount of incentive compensation that may be
payable, if and to the extent that the performance goals are achieved.
Appropriate adjustments may be made by the Committee to reflect the impact of
acquisitions, divestitures, changes in accounting standards, or unusual or
extraordinary events. The maximum amount that any one participant can be awarded
under the Plan for any given performance period is $10,000,000 (with an annual
adjustment based on increases in the consumer price index).
After the close of the performance period, the Committee will determine the
extent to which the performance goal or goals have been achieved and incentive
compensation that may be payable. The Committee then has the discretion to
approve awards as it deems appropriate up to these amounts. That is, the
Committee may exercise its discretion to reduce, but not to increase, the
incentive award or awards that would be payable on the basis of the level of
performance achieved.
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FORM OF PAYMENT; SHARES OF STOCK. Once the Committee has determined the
amounts of any incentive awards, the Committee also determines the form of
payment. Incentive awards can be paid in cash, shares of stock, stock options
for or stock appreciation rights related to stock of the Company ("Stock
Options" and "Stock Appreciation Rights"), other securities of the Company
(including but not limited to derivative securities), or in any other form that
the Committee may determine, or in any combination of such forms, and can be
paid in one or more installments and/or on a deferred basis or on such other
basis as the Committee may determine ("deferrals"), all as and on such terms and
conditions as are set forth in the Plan and otherwise as the Committee
determines. The maximum number of shares of stock subject to incentive stock
options and Stock Options that may be issued under the Plan is 10,000,000 and
the maximum number of such shares of stock subject to Stock Options and Stock
Appreciation Rights granted to any one participant under the Plan in any one
performance period is 1,000,000.
As of March 23, 2000, the closing price of the Company's Class A Common
Stock as reported on the New York Stock Exchange composite transactions tape was
$35.8750.
PAYMENT IN STOCK OPTIONS OR STOCK APPRECIATION RIGHTS. If the Committee
decides that all or a portion of an incentive award will be paid in Stock
Options or Stock Appreciation Rights, the number of Stock Options or Stock
Appreciation Rights granted will be determined by dividing the amount of the
award to be paid in the form of a grant of Stock Options or Stock Appreciation
Rights by the value, as determined by the Committee, of a Stock Option or Stock
Appreciation Right, as the case may be, of one share of stock on the relevant
date.
Stock Options or Stock Appreciation Rights granted under the Plan will be
evidenced by a written agreement containing such terms and conditions as are set
forth in the Plan and otherwise as the Committee from time to time determines.
The exercise or reference price, however, will not be less than the fair market
value of the stock on the Stock Option or Stock Appreciation Right grant date.
Stock Appreciation Rights may be granted in tandem with or independent of Stock
Options. Stock Appreciation Rights are only exercisable when the fair market
value of the stock exceeds the reference price of the Stock Appreciation Right.
FEDERAL INCOME TAX CONSEQUENCES -- STOCK OPTIONS AND STOCK APPRECIATION
RIGHTS. Under the provisions of the Code and regulations promulgated
thereunder, the federal income taxation of Stock Options and Stock Appreciation
Rights granted under the Plan is generally as follows:
Stock Options. No taxable income will be recognized by a participant upon
the granting of a Stock Option. Upon the exercise of a Stock Option, however,
the participant will generally recognize taxable compensation in the year of
exercise in an amount equal to the difference between the exercise price and the
fair market value of the shares on the date of exercise. The participant's tax
basis in the shares will be the sum of the exercise price plus any income
recognized upon exercise and the holding period will begin on the day after the
tax basis is determined. At the time of any subsequent sale or other disposition
of the shares, the participant will generally realize capital gain (or loss)
equal to the difference between the amount received for the shares and the
participant's tax basis in such shares. If certain requirements are met, any
capital gain recognized on a subsequent sale of the shares will be taxed at a
maximum rate of 20%.
If previously owned shares are used to exercise a Stock Option, the
participant will recognize taxable income in an amount equal to the sum of the
fair market value of any shares received in excess of the number of previously
owned shares and any cash received by the participant. The participant's tax
basis and holding period of the previously owned shares will be carried over to
the equivalent number of shares received on exercise. The tax basis of the
additional shares will be equal, in the
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aggregate, to the taxable compensation recognized by the participant. The
holding period will begin on the day after the tax basis of the shares is
determined.
Stock Appreciation Rights. No taxable income will be recognized by a
participant upon the granting of a Stock Appreciation Right. Upon exercise of a
Stock Appreciation Right, the amount of taxable compensation will be equal to
the cash received and the fair market value (as of the date of exercise) of any
shares issued to the participant in lieu of cash.
Infinity Tax Deduction. The Company will be entitled to a deduction for
federal income tax purposes at the same time and in the amount the participant
recognizes ordinary income under the rules described above. Tax deductions
resulting from the exercise by participants of Stock Options or Stock
Appreciation Rights granted by the Committee under the Plan are intended to
qualify for the exclusion.
The foregoing is a summary only and applies only to U.S. federal income
taxes. The law on which the above discussion is based is subject to change at
any time.
OTHER PROVISIONS. In the event of a change in control, as defined and
determined by the Committee, the Committee may deem all or part of any incentive
award opportunities to have been earned and/or may waive or modify all or any
part of any restrictions or conditions, all on such basis as the Committee
determines, and incentive awards and outstanding derivative securities and
deferrals may then be paid and Stock Options, Stock Appreciation Rights and
other derivative securities may then be modified, all on such basis, at such
time, in such form, and subject to such terms and conditions as the Committee
may prescribe. During a participant's lifetime, payments or distributions under
the Plan may be received only by the participant or his or her legal
representative. Shares of restricted stock during the applicable restriction
period, Stock Options, Stock Appreciation Rights, other derivative securities,
rights to receive deferral payments and any other rights or benefits under the
Plan are not transferable or assignable other than certain limited transfers on
the participant's death, provided that the Committee, in its sole discretion,
may permit the transfer of Stock Options (including any tandem Stock
Appreciation Rights) to a limited class of permissible transferees (mainly the
participant's immediate family). The shares available under the Plan and the
terms of incentive award opportunities, Stock Options, Stock Appreciation
Rights, other derivative securities and deferrals are subject to adjustment to
reflect certain changes in the Company's stock and/or corporate structure. The
Plan also provides for tax withholdings and for non-uniform determinations by
the Committee, and also permits the Committee to accelerate the time at which
all or any part of Stock Options, Stock Appreciation Rights and/or other
derivative securities may be exercised or the time when all or any part of
deferrals and/or derivative securities will be paid and permits the Company and
its subsidiaries to compensate any key executives and/or employees under
separate bonus or incentive plans or other compensation arrangements outside of
the Plan.
The Board of Directors or the Committee can amend the Plan from time to
time; however, certain amendments to the material terms of the Plan would
require shareholder approval for purposes of qualifying payments under the Plan
under Section 162(m) of the Code. The Plan can be terminated or suspended at any
time by the Board of Directors or the Committee.
The persons named in the enclosed proxy card (Messrs. Karmazin and Suleman)
have advised that they intend to vote to approve the Plan unless a contrary
direction is indicated on the proxy card.
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THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
COMPANY'S EXECUTIVE ANNUAL INCENTIVE PLAN.
The affirmative vote of a majority of the shares of Common Stock present,
either in person or by proxy, and entitled to vote on the matter at the 2000
Annual Meeting, is required to approve the Plan. The Company has been advised
that CBS Broadcasting, which owns all of the outstanding shares of Infinity's
Class B Common Stock representing approximately 90.4% of the combined voting
power of the shares of Common Stock outstanding as of March 8, 2000, intends to
vote for the approval of the Executive Annual Incentive Plan. Accordingly, the
affirmative vote of CBS Broadcasting is sufficient to approve the Executive
Annual Incentive Plan.
3. PROPOSAL TO APPROVE THE COMPANY'S 1998 LONG-TERM INCENTIVE PLAN
(Item 3 on proxy card)
Under Section 162(m), compensation paid to certain executive officers
("covered employees") in excess of $1,000,000 is not deductible by the Company
unless such compensation is performance-based, as defined by Section 162(m), and
certain other requirements are met. The 1998 Long-Term Incentive Plan, as
amended from time to time (the "1998-Plan"), was adopted by the Board and
approved by CBS (as the sole shareholder of Infinity) prior to the IPO. The
Board is submitting the 1998-Plan for shareholder approval so that awards
granted to covered employees will continue to comply with the requirements of
Section 162(m). The Board believes that the 1998-Plan provides an important
means of attracting, retaining and motivating key management employees. The
Board also believes that the 1998-Plan helps to foster and promote the long-term
financial success of the Company and increase shareholder value.
Because executive officers (who may also be members of the Board) are
eligible to receive awards under the 1998-Plan, each of them has a personal
interest in the adoption of this proposal.
SUMMARY OF THE 1998-PLAN
The following general description of certain features of the 1998-Plan is
qualified in its entirety by reference to the complete text of the 1998-Plan,
which is attached to the proxy statement as Exhibit B and is incorporated herein
by reference.
TERM. The 1998-Plan was effective on December 7, 1998. The 1998-Plan has
no fixed expiration date; however, no awards may be granted after December 6,
2008. Awards previously made may extend beyond that date and reload options
provided for with respect to options outstanding prior to that date may
continue.
ADMINISTRATION. The 1998-Plan is administered by a committee or its
authorized delegates, as appropriate ("Committee") of at least two outside
directors (as defined under Section 162(m)). The Committee has the authority to
interpret, administer and make determinations under the 1998-Plan, including the
authority to select participants for the 1998-Plan and to make awards under the
1998-Plan.
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PARTICIPANTS. Participation in the 1998-Plan is limited to persons who are
selected by the Committee and who are officers or salaried employees of the
Company; its parent or their subsidiary corporations; or who are independent
contractors of the Company at the time the award is granted. Approximately 600
executives would be eligible to be selected by the Committee for executive
grants under the 1998-Plan. The granting of awards under the 1998-Plan is at the
discretion of the Committee; therefore, it is not possible to indicate which
employees may receive awards under the 1998-Plan or the amount of the awards.
Stock options were granted under the 1998-Plan during 1999. See "Executive
Compensation - Option Grants."
TYPES OF AWARDS. Awards under the 1998-Plan may be in the form of any of
the following: (A) Incentive Stock Options and Non-statutory Stock Options; (B)
Stock Appreciation Rights and Participant Limited Stock Appreciation Rights; (C)
Performance Awards; and (D) Restricted Stock and Restricted Units.
SHARES AVAILABLE FOR AWARDS AND CLOSING QUOTATION. The maximum number of
shares of the Company's Class A Common Stock or formula value stock, as
described below (collectively referred to as "Stock") which may be issued for
all purposes under the 1998-Plan (including Stock issued pursuant to the
exercise of Incentive Stock Options) is 25,000,000, increased on January 1 of
each calendar year from and including January 1, 2001 by 10,000,000. The maximum
number of shares subject to options to purchase Stock, Stock Appreciation Rights
and Participant Limited Stock Appreciation Rights under the 1998-Plan awarded to
any one participant may not exceed 3,500,000 shares plus unused share amounts
that could have been awarded to that participant in previous calendar years. The
Company expects that the majority of the shares authorized by the 1998-Plan will
be granted in the form of stock options based on its current assessment of
business, accounting and tax issues.
As of March 23, 2000, the closing price of the Company's Class A Common
Stock as reported on the New York Stock Exchange composite transactions tape was
$35.8750.
STOCK OPTIONS. Options may be issued to purchase either the Company's
Class A Common Stock or formula value stock. Formula value stock would be a
special class or classes of stock, the value of which is derived from a formula
established by the Committee which reflects financial measures determined by the
Committee. The Committee may award Incentive Stock Options and Non-statutory
Stock Options. Each award of a Stock Option will be evidenced by a written
agreement in such form and containing such terms and conditions as the Committee
may require. The options shall become exercisable at such time or times as the
Committee may specify. The Committee may at any time accelerate the time at
which any option may be exercised and may also provide for the deferral of
delivery of any shares for which the option may be exercisable until a specified
date or dates. The purchase price for the Stock under each option will not be
less than the fair market value of the stock on the date the option is awarded.
Subject to certain restrictions, the Committee can amend or cancel existing
stock options or other awards. If a participant's service with the Company
terminates other than as a result of retirement, death or disability, or with
the Committee's consent, then all outstanding Stock Options terminate
immediately.
The Committee may also grant "reload" options to participants who use
currently-owned stock to exercise an option. The net shares obtained by the
participant must be held for one year. The reload option will be to purchase, at
fair market value as of the date the original option was exercised, a number of
shares of stock equal to the number of whole shares used by the participant to
exercise the original option. The reload option will be exercisable only until
the date of expiration of the original option, and it may contain additional
terms and conditions as the Committee may require. The Committee may cancel any
reload feature.
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If so provided in the stock option agreement, in the event of a change in
control of the Company, as defined in the 1998-Plan, the Company will have the
right (a "Company Limited Right") to cancel any portion of an unexercised option
(whether vested or nonvested) in exchange for a cash payment equal to the number
of shares of Class A Common Stock as to which the option remains unexercised
multiplied by the excess over the related option exercise price of the higher of
(i) the highest gross price paid or to be paid for a share involved in the
change in control, or (ii) the highest reported closing sale price of a share of
the Company's Class A Common Stock on the New York Stock Exchange, in each case
during the sixty-day period before the date on which the Company Limited Right
is exercised. The Company Limited Right may be exercised at any time during the
thirty-day period following the occurrence of a change in control.
STOCK APPRECIATION RIGHTS. A stock appreciation right ("SAR") entitles a
participant to a payment in cash or Stock, as determined by the Committee,
generally equal to the appreciation in the fair market value of the Stock
between the date of exercise and the date the SAR was granted. The Committee may
also place limits on the amount of this payment. SARs may be awarded in
connection with stock options ("Tandem SARs") or independently of options
("Independent SARs"). SARs will be evidenced by either a stock option agreement
or a separate written agreement in such form and containing such terms and
conditions as the Committee may determine.
Except as otherwise provided, Tandem SARs are exercisable only at the same
time, to the same extent and subject to the same conditions as the related
option is exercisable, and only when the fair market value of the Stock to which
it relates exceeds the option exercise price. Exercise of a SAR cancels the
related option. Independent SARs become exercisable on such conditions as the
Committee may specify.
Except as otherwise provided, all SARS will automatically be exercised on
the last trading day prior to the expiration date set by the Committee at the
time of the award for the SAR, or in the case of a Tandem SAR, for the related
option, so long as exercise on such date will result in a payment to the
participant. Unless otherwise determined by the Committee, no SAR shall become
exercisable or will be automatically exercised for six months following the date
on which it was granted or the effective date of the 1998-Plan, whichever is
later and each SAR shall expire on the first to occur of: (i) the expiration
date set by the Committee at the time of an award, (ii) the termination of the
related option in the case of Tandem SARs, (iii) expiration of the six-month
period following the participant's termination of service to the Company with
the consent of the Committee or as a result of his or her death, disability or
retirement, or (iv) the participant ceasing to be an eligible person for any
other reason.
PARTICIPANT LIMITED RIGHTS. The Committee may award Participant Limited
Stock Appreciation Rights ("Participant Limited Rights") to the holder of a
stock option. A Participant Limited Right may be exercised only during the
thirty-day period beginning on the first day following a change in control of
the Company, as defined in the 1998-Plan, and only when the fair market value of
the stock exceeds the option exercise price of the related option. Upon the
exercise of a Participant Limited Right, the holder shall receive cash equal to
the product of the number of shares of Class A Common Stock as to which such
Participant Limited Rights are being exercised multiplied by the excess over the
related option exercise price of the higher of (i) the highest gross price paid
or to be paid for a share involved in the change in control, or (ii) the highest
reported closing sale price of a share of the Company's Class A Common Stock on
the New York Stock Exchange, in each case during the sixty-day period before the
date on which the Participant Limited Right is exercised. Each Participant
Limited Right shall be exercisable only to the same extent that the related
option is exercisable and in no event after termination of the related option.
Upon the exercise of Participant Limited Rights, the related option
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<PAGE> 33
shall be considered to have been exercised to the same extent. Upon exercise or
termination of the related option, the Participant Limited Rights with respect
to such option shall be considered to have been exercised or terminated.
PERFORMANCE AWARDS. The Committee may, upon such terms and conditions as
it determines, grant Performance Awards which provide for the recipient to
receive cash or stock or a combination thereof (as determined by the Committee)
following the attainment of performance goals that the Committee may deem
appropriate. Regardless of the degree to which performance goals are attained,
the awards will be paid only when, if and to the extent that the Committee
determines to make such payment.
The Committee will also have the authority at the time any other type of
award is granted under the 1998-Plan to impose the condition (in addition to
other conditions) that performance goals be met prior to the participant's
realization of any payment or benefit under the award.
RESTRICTED STOCK AND RESTRICTED UNITS. The Committee may make Restricted
Stock Awards with a restriction period and such other terms and conditions as it
may prescribe. A certificate representing the number of shares of common stock
of the Company designated as a Restricted Stock Award is registered in the
recipient's name, but deposited with the Company along with a stock power
endorsed in blank. The Committee may also make Restricted Unit Awards which are
awards of a contractual right to receive Stock (or, at the discretion of the
Committee, cash in an amount based on the fair market value of the Stock, or a
combination of Stock and cash) which would become vested and nonforfeitable upon
the completion of a period of service determined by the Committee. Awards of
Restricted Stock and Restricted Units will be evidenced by a written agreement
in such form and containing such terms and conditions as the Committee may
determine. Except as otherwise provided, shares of Restricted Stock and
Restricted Units may not be sold, assigned, transferred, pledged or otherwise
encumbered. Subject to such transfer restrictions, the recipient of Restricted
Stock will have the rights of an owner of the shares during the restriction
period. Upon expiration of the restriction period and satisfaction of any other
conditions of the award, or waiver by the Committee, the Restricted Stock will
be redelivered to the participant or, in the case of Restricted Units, the
Company will pay out such units as provided in the Restricted Unit agreement.
The Committee may provide that dividends with respect to Restricted Stock
be accumulated during the restriction period and be subject to the same
forfeiture provisions as the Restricted Stock. The Committee will also determine
whether, and to what extent, dividends are to be paid to a recipient of
Restricted Units.
Unless otherwise determined by the Committee, in the event a participant's
service with the Company is terminated due to death, disability or retirement or
with the consent of the Committee, the restrictions on the Restricted Stock or
Restricted Units will lapse with respect to such number of shares or units as
are determined by the Committee, with any remaining shares or units being
forfeited. In the event a participant's employment is terminated for any other
reason, all Restricted Stock or Restricted Unit Awards will be forfeited.
DEFERRAL. The Committee may designate certain awards or types of awards as
eligible for deferral, and a participant may elect to defer payment of such
awards within such limits and subject to such terms and conditions as the
Committee may establish. Deferred awards are deemed to have been awarded in cash
and the cash deferred. Payment of deferred amounts may be in cash, Stock, or a
combination thereof, at the Committee's discretion, and at such times as the
Committee may determine.
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FEDERAL INCOME TAX CONSEQUENCES. Under the provisions of the Code and
regulations promulgated thereunder, the federal income taxation of Options,
SARs, Performance Awards, Restricted Stock and Restricted Units granted under
the 1998-Plan is generally as follows:
Non-statutory Stock Options. No taxable income will be recognized by a
participant upon the granting of a Non-statutory Stock Option (including a
"reload option"). Upon the exercise of a Non-statutory Stock Option, however,
the participant will recognize taxable compensation in the year of exercise in
an amount equal to the difference between the option price and the fair market
value of the shares on the date of exercise. The participant's tax basis in the
shares will be the sum of the option price plus any income recognized upon
exercise and the holding period will begin on the day after the tax basis is
determined.
At the time of any subsequent sale or other disposition of the shares, the
participant will realize capital gain (or loss) equal to the difference between
the amount received for the shares and his or her tax basis in such shares. If
certain requirements are met, any capital gain recognized on a subsequent sale
of the shares will be taxed at a maximum rate of 20%. The capital gain or loss
will be long-term or short-term, depending on the participant's holding period
for such shares.
SARs and Performance Awards. No taxable income will be recognized by a
participant upon the granting of an SAR (including a Participant Limited Right)
or Performance Award. Upon exercise of an SAR or the receipt of a payment with
respect to a Performance Award, the amount of taxable compensation will be equal
to the cash received and the fair market value (as of the date of exercise for
an SAR or of receipt for a Performance Award) of any shares issued to the
participant in lieu of cash.
Participants who elect under the terms of the 1998-Plan to defer receipt of
Performance Awards by participating in the deferral provisions of the 1998-Plan
will, on the basis of existing court decisions, not recognize federal taxable
income (with exception of FICA and Medicare taxes) until payment of the putative
convertible debentures is made to the participant, at which time the payments
will be treated as ordinary taxable income in the same manner as described
above.
Incentive Stock Options. Under present federal income tax law and
regulations promulgated thereunder, there generally will be no federal income
tax consequences (other than those relating to the Alternative Minimum Tax) to
either the Company or a participant when an Incentive Stock Option is granted or
exercised. There are, however, federal income tax consequences when the stock is
disposed of through a sale or otherwise. If a participant retains the shares
acquired upon exercise of an Incentive Stock Option for the requisite holding
period, any gain or loss realized by the participant upon a subsequent
disposition will constitute long-term capital gain or loss, measured by the
difference between the amount realized on the disposition and the option price
paid for the stock. The requisite holding period is the later of two years after
an Incentive Stock Option is granted or more than one year after the shares are
transferred to the participant. If the participant disposes of the shares prior
to the expiration of the requisite holding period (a "Disqualifying Disposal"),
taxable compensation will be recognized by the participant in an amount equal to
the excess of the fair market value or the shares at the time of exercise over
the option price paid for the shares. Any gain that is recognized in excess of
the ordinary income recognized on disposition is taxed as capital gain, which
will be long-term or short-term depending upon the participant's holding period.
If the amount realized upon a sale or exchange is less than the fair market
value of the stock at the time of exercise of the option, the amount of
compensation income recognized by the participant is limited to the amount
realized upon such sale or exchange over the option price. If the proceeds
received upon a disqualifying disposition are less than the option price, the
participant will recognize either a long-term or short-term capital loss
depending on how long the shares are held before disposition. In general, if a
participant makes a
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Disqualifying Disposition, the Company is entitled to a tax deduction in the
year and in an amount equal to the compensation income recognized by the
participant.
Stock Swaps. If previously owned shares are used to exercise Non-statutory
Stock Options, the participant will recognize taxable income (a) to the extent
that property other than the shares subject to the Non-statutory Stock Option,
including money, is received by the participant in the exchange and (b) in an
amount equal to the fair market value of any shares received in excess of the
number of previously owned shares. The participant's tax basis and holding
period of the previously owned shares will be carried over to the equivalent
number of shares received on exercise. The tax basis of the additional shares
will be equal, in the aggregate, to the taxable compensation recognized by the
participant. The holding period will begin on the day after the tax basis of the
shares is determined. However, if the previously owned shares had been acquired
on the exercise of an Incentive Stock Option and the holding period requirement
for those shares was not satisfied at the time they were used to exercise this
option, such use would constitute a disposition of such previously owned shares
resulting in the recognition of ordinary income as described above.
Restricted Stock. No income tax will result to a participant upon the
receipt of shares of Restricted Stock under the 1998-Plan. When the restrictions
on ownership and transferability lapse and the shares of Restricted Stock vest,
the participant will recognize compensation income in an amount equal to the
fair market value of the Restricted Stock on the date of vesting. However, the
participant may make an election within 30 days of the date of grant under
Section 83(b) of the Code to recognize the fair market value of the Restricted
Stock as taxable income at the time of grant. If, however, the restrictions on
transferability are not satisfied and the shares are forfeited, no taxable loss
will be recognized. Dividends paid to a participant on Restricted Stock prior to
vesting are taxable as compensation income in the year received.
At the time of any subsequent sale or other disposition of the shares, the
participant will realize capital gain (or loss) equal to the difference between
the amount received for the shares and his or her basis in such shares. The
participant's basis in the shares will be equal to the amount of compensation
income recognized in connection with the vesting of the Stock. The capital gain
or loss will be long-term or short-term, depending on the participant's holding
periods for such shares.
Restricted Units. No taxable income will be recognized by a participant
upon the granting of a Restricted Unit. When the restrictions on ownership and
transferability lapse and the shares of Stock (or in the discretion of the
Committee, cash in an amount based on the fair market value of the Stock, or a
combination of Stock and cash), the Participant will recognize compensation
income in an amount equal to any cash received plus the fair market value of the
Stock on the date of vesting. Dividends paid to a participant on Restricted
Stock prior to vesting are taxable as compensation income in the year received.
Infinity Tax Deduction. Generally, the Company will be entitled to a
deduction for federal income tax purposes in the year and in an amount equal to
the compensation income recognized by the participant under the rules described
above. Section 162(m) places a $1,000,000 cap on the amount of compensation paid
to certain executives that may be deducted by the Company. However, excluded
from the $1,000,000 deduction limitation are certain shareholder approved
performance-based compensation plans, provided certain conditions are met. 1999
tax deductions resulting from the exercise by participants of non-statutory
options granted by the Committee under the Plan are intended to qualify for the
exclusion.
The foregoing is a summary only and applies only to United States federal
income taxes. The law on which the above discussion is based is subject to
change at any time.
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OTHER PROVISIONS. In the event that the Committee has determined that a
change in control, as defined in the 1998-Plan, has occurred, then,
notwithstanding any other provision of the 1998-Plan, if so provided in the
respective stock option agreements, all Options, Company Limited Rights and,
subject to certain exercise provisions, Participant Limited Rights (but not
stock appreciation rights) become immediately exercisable, all Performance
Awards may be deemed earned on such basis as the Committee may determine and may
be paid or deferred, all Restricted Stock and Restricted Unit Awards may be
deemed earned and restricted periods may be deemed expired on terms determined
by the Committee, and all amounts deferred under the 1998-Plan may be paid on
such terms as the Committee may determine. Unless the Committee determines
otherwise, the rights of a participant with respect to any award under the
1998-Plan, other than Participant Limited Rights, are subject, to the condition
that the participant not engage in any business activity competitive with any
business conducted by the Company and that the participant be available for
consultation at management's request. No Option, SAR, Performance Award,
Restricted Stock, Restricted Unit or deferred amount under the 1998-Plan shall
be transferable by a participant other than by will or laws of descent and
distribution or, if permitted by the Company, by transfer to a properly
designated beneficiary in the event of death; provided, however, that the
Committee may, in its sole discretion and subject to the terms and conditions it
determines, permit the transfer of a Non-Statutory Stock Option to a Permissible
Transferee (as defined in the 1998-Plan). The 1998-Plan also provides for
adjustments upon certain changes in the Stock and/or the corporate structure of
the Company, for tax withholdings and for non-uniform determinations by the
Committee.
The Board of Directors or the Committee may at any time amend, suspend or
terminate the 1998-Plan provided no amendment shall, without shareholder
approval, effectuate a change for which shareholder approval is required for the
1998-Plan to continue to qualify under Section 162(m) of the Code and Rule 16b-3
under the Securities Exchange Act of 1934, as amended.
The persons named in the enclosed proxy card (Messrs. Karmazin and Suleman)
have advised that they intend to vote to approve the 1998-Plan unless a contrary
direction is indicated on the proxy card.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
ADOPTION OF THE 1998 LONG-TERM INCENTIVE PLAN.
The affirmative vote of a majority of the shares of Common Stock present,
either in person or by proxy, and entitled to vote on the matter at the 2000
Annual Meeting, is required to approve the 1998 Long-Term Incentive Plan. The
Company has been advised that CBS Broadcasting, which owns all of the
outstanding shares of Infinity's Class B Common Stock representing approximately
90.4% of the combined voting power of the outstanding shares of Common Stock,
intends to vote for the approval of the 1998 Long-Term Incentive Plan.
Accordingly, the affirmative vote of CBS Broadcasting is sufficient to approve
the 1998 Long-Term Incentive Plan.
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NEW PLAN BENEFITS
As indicated above, the granting of awards under each of the Executive
Annual Incentive Plan and the 1998 Long-Term Incentive Plan (collectively, the
"Plans") is subject to the discretion of the Committees administering the Plans.
Therefore, as of the date of this proxy statement, benefits or awards that will
be received by or allocated to persons under the Plans in the future are not
presently determinable. The following table sets forth the awards made under the
Executive Annual Incentive Plan in 1999 and the total number of options granted
under the 1998 Long-Term Incentive Plan to each of the following persons:
<TABLE>
<CAPTION>
Executive Annual 1998 Long-Term
Incentive Plan Incentive Plan
---------------- ---------------------
Number of Shares
Name and Position Dollar Value ($) Subject to Options(1)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
M. Karmazin, Chairman, President and Chief
Executive Officer $6,000,000 843,718
F. Suleman, Executive Vice President, Chief
Financial Officer and Treasurer $1,125,000 252,051
D. Mason, Vice President, Infinity and
President Infinity Radio Group $ 750,000 202,051
W. Apfelbaum, Chairman and Chief Executive
Officer, TDI Worldwide, Inc. $2,000,000 102,051
Executive Officer Group $9,875,000 1,399,871
Non-Executive Director Group(2) 0 0
Non-Executive Officer Employee Group(3) 0 4,227,500
- ----------------------------------------------------------------------------------------
</TABLE>
(1) Neither the director nominee nor any associate of any director, director
nominee or executive officer received options pursuant to the 1998 Long-Term
Incentive Plan. In addition, except as set forth above, no other person
received or is to receive 5% of the options issued pursuant to the 1998
Long-Term Incentive Plan.
(2) Non-employee directors are not eligible to participate in the Executive
Annual Incentive Plan or the 1998 Long-Term Incentive Plan.
(3) Employees who are not executive officers of the Company are not eligible to
participate in the Executive Annual Incentive Plan.
VOTING INFORMATION
Under Delaware law and the Company's Restated Certificate and bylaws, the
presence of a quorum is required to transact business at the 2000 Annual Meeting
of Shareholders. A quorum is defined as the presence, either in person or by
proxy, of a majority of the combined voting power of the outstanding shares of
Common Stock entitled to vote in the election of directors at the meeting.
Abstentions, votes withheld from director nominees and broker-dealer non-votes
will be counted for purposes of determining a quorum.
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Assuming the presence of a quorum, the two nominees for director receiving
the highest number of votes will be elected directors. Under applicable Delaware
law, abstentions from voting on the election of directors (including broker
non-votes) will be disregarded and have no effect on the outcome of the vote.
The affirmative vote of a majority of the shares of Common Stock present, either
in person or by proxy, and entitled to vote is required for the approval of the
Company's Executive Annual Incentive Plan and the 1998 Long-Term Incentive Plan.
Under applicable Delaware law, in determining whether the approval of the
Company's Executive Annual Incentive Plan or approval of the 1998 Long-Term
Incentive Plan has received the requisite number of affirmative votes,
abstentions and broker non-votes will be counted and, therefore, will have the
same effect as a vote against the proposal.
SHAREHOLDER PROPOSAL SUBMISSIONS FOR 2001 ANNUAL MEETING OF SHAREHOLDERS
To be considered for inclusion in the proxy materials relating to the 2001
Annual Meeting of Shareholders, shareholder proposals should be sent to the
Secretary and must be received at the principal executive offices of Infinity on
or before November 30, 2000.
SOLICITATION OF PROXIES
This solicitation of proxies is made on behalf of the Board of Directors of
the Company. Solicitation will be by mail, except for any personal solicitation
made orally or in writing by or under the direction of directors, officers or
employees of Infinity. The cost of solicitation, including the cost of any such
personal solicitation, will be paid by the Company. Infinity may request persons
such as brokers, nominees and fiduciaries holding stock in their names to
forward proxy materials to the beneficial owners, and it will reimburse such
persons for their reasonable expenses incurred in doing so.
A shareholder giving a proxy has the power to revoke the proxy by
delivering a later dated and signed proxy or written notice of revocation to the
Secretary prior to the time voting is declared closed or by attending the
meeting and voting in person. All proxies will be voted if properly signed,
received by the Secretary prior to the time voting is declared closed and not
revoked prior to that time.
As of the time of preparation of this proxy statement, the Board knows of
no matter, other than those described in this proxy statement, that will be
presented at the 2000 Annual Meeting of Shareholders. However, if any other
matters properly come before the meeting or any adjournment thereof, the person
or persons voting the proxies will vote them in accordance with their best
judgment.
March 30, 2000
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EXHIBIT A
INFINITY BROADCASTING CORPORATION
EXECUTIVE ANNUAL INCENTIVE PLAN
SECTION 1. PURPOSE
1.1 The purpose of the Infinity Broadcasting Corporation Executive Annual
Incentive Plan is to provide competitive annual or other incentive opportunities
that foster and promote the financial success of the Company by: (a) aiding the
Company in attracting and retaining key executives of outstanding ability; (b)
strengthening the Company's capability to develop, maintain and direct a
competent management team; and (c) motivating key executives who are in a
position to contribute materially to the success of the Company to achieve
measurable performance goals. The Plan is intended to permit the Company to pay
to Participants who are Covered Employees annual incentives that qualify as
performance-based compensation for purposes of Section 162(m) of the Internal
Revenue Code and that are fully deductible by the Company under the Code.
1.2 Certain terms used in the Plan are defined in Section 10.
SECTION 2. EFFECTIVE DATE
2.1 The Plan is effective as of December 7, 1998, as amended.
SECTION 3. ELIGIBILITY; SELECTION FOR PARTICIPATION
3.1 Participation in the Plan will be limited to key executives of the
Company and/or its subsidiaries who are designated by the Committee as
Participants for a given Performance Period. In making this designation, the
Committee may give consideration to the functions and responsibilities of the
executive, his or her past, present and potential contributions to the Company,
and such other factors as the Committee deems relevant.
SECTION 4. AWARDS
4.1 The Committee may award incentives to Participants with respect to
Performance Periods, subject to the terms and conditions set forth in the Plan.
4.2 The Committee will establish one or more objective performance goals
for a given Performance Period. Such performance goal or goals will be based on
one or more of the following business criteria, as applied to the relevant
business unit or units, to a specified portion or portions of the Company, to
the Company as a whole, or to any combination thereof: revenues; earnings before
interest, taxes, depreciation and amortization ("EBITDA"); earnings before
interest and taxes ("EBIT"); free cash flow; earnings per share; ratings; cost
reductions; capital expenditure; and stock price.
4.3 The Committee will also establish target and maximum incentive award
opportunity amounts for each Participant for the given Performance Period and
the objective formula or standard that will be used by the Committee to
determine the amount of incentive compensation that may be payable to such
Participant under the Plan if and to the extent that the established performance
goal or goals are achieved; provided, however, that in no event may the maximum
incentive award opportunity or the maximum incentive award for any one
Participant for any Performance Period exceed the amount of ten million dollars
($10,000,000). This maximum amount will be adjusted annually to reflect
increases in the Consumer Price Index-U published by the Bureau of Labor
Statistics, or any successor to such index, for each twelve-month period
commencing January 1.
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4.4 After the close of the Performance Period, the Committee will determine
the extent to which the preestablished performance goal or goals for that
Performance Period have been achieved and the extent to which incentive
compensation for each Participant would be payable based on such performance and
the preestablished formula or method. Regardless of the degree to which a
performance goal or goals are achieved, incentive awards under the Plan will be
paid only when and if the Committee, in its sole discretion, determines to
approve the award or awards. The Committee, in its sole discretion, may reduce
(but may not increase) the amount which would otherwise be payable as incentive
compensation based on the extent to which the preestablished performance goal or
goals have been achieved and the preestablished formula or method, in which case
the Participant will receive only the reduced amount as an incentive award,
which may be zero, even if the performance goal or goals were achieved.
4.5 Appropriate adjustments may be made by the Committee in performance
goals, target and maximum incentive award opportunities, formulas or standards,
and/or in the measurement of the extent of achievement of performance goals to
reflect the impact of acquisitions, divestitures, changes in accounting
standards, or unusual or extraordinary events.
SECTION 5. FORM OF PAYMENT; SHARES OF STOCK
5.1 The Committee will also determine the time, form and manner of payment
of any incentive awards it may approve for payment under the Plan. Incentive
awards may be paid in cash, in shares of Stock, in Stock Options, in Stock
Appreciation Rights, in other Derivative Securities, in other securities of the
Company, or in any other form that the Committee may determine, or in any
combination of such forms, and may be paid in one or more installments and/or on
a deferred basis or on such other basis as the Committee may determine
("deferrals"), all on such terms and conditions as are set forth in the Plan and
otherwise as the Committee may from time to time determine.
5.2 The maximum number of shares of Stock subject to incentive stock
options and Stock Options that may be issued under the Plan is ten million
(10,000,000); and the maximum number of such shares of Stock subject to Stock
Options and Stock Appreciation Rights granted to any one Participant under the
Plan in any one Performance Period is one million (1,000,000); in each case
subject to adjustment and substitution as set forth in this Section 5.
5.3 Shares of Stock issued under the Plan may be in whole or in part
authorized and unissued or treasury shares of Stock. No fractional shares will
be issued, and the Committee will determine the manner in which fractional share
value will be treated.
5.4 Any shares of Stock that are issued pursuant to the Plan and are
subsequently forfeited, any shares of Stock subject to a Stock Option, Stock
Appreciation Right and/or other Derivative Security which is canceled or
terminates without any shares having been issued pursuant thereto, any shares of
Stock tendered by a Participant to pay the Exercise Price of a Stock Option or
other Derivative Security, and any shares of Stock tendered or withheld to
satisfy withholding tax requirements will automatically become available again
for use under the Plan; provided, however, this Section 5.4 will apply only to
the 10,000,000 share limit set forth in Section 5.2 (as adjusted in accordance
with the Plan).
5.5 If there is any change in the Stock and/or the corporate structure of
the Company, through merger, consolidation, division, share exchange,
combination, reorganization, recapitalization, stock dividend, stock split,
spin-off, split-up, dividend in kind or other change in the corporate structure
or distribution to the shareholders, appropriate adjustments may be made by the
Committee (or, if the Company is not the surviving corporation in any such
transaction, by the board of directors (or a committee thereof consisting solely
of Outside Directors) of the surviving corporation) in the aggregate
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number and kind of shares subject to the Plan, and the number and kind of shares
and the price per share subject to outstanding Stock Options, Stock Appreciation
Rights and other Derivative Securities or which may be issued under outstanding
deferrals. Appropriate adjustments may also be made by the Committee in the
terms of any incentive award opportunities under the Plan to reflect such
changes and to modify any of the terms of any outstanding Stock Options, Stock
Appreciation Rights or other Derivative Securities or deferrals.
SECTION 6. PAYMENT IN STOCK OPTIONS OR STOCK APPRECIATION RIGHTS
6.1 The Committee may, from time to time, subject to the provisions of the
Plan and such other terms and conditions as the Committee may prescribe,
determine that an incentive award or a portion of an incentive award will be
paid in the form of Stock Options or Stock Appreciation Rights. Stock
Appreciation Rights may be granted in tandem with Stock Options or independently
of Stock Options. The number of Stock Options or Stock Appreciation Rights will
be determined by dividing the amount of the incentive award to be paid in the
form of Stock Options or Stock Appreciation Rights by the value, as determined
by the Committee, of a Stock Option or Stock Appreciation Right, as the case may
be, for one share of Stock on the relevant date.
6.2 All Stock Options and all Stock Appreciation Rights will be evidenced
by a signed written agreement, with any amendments thereto, containing such
terms and conditions as are set forth in the Plan and otherwise as the Committee
may from time to time determine. Stock Appreciation Rights granted in tandem
with Stock Options will be evidenced by the Stock Option agreement. The
Committee may also at any time and from time to time provide for the deferral of
delivery of any shares and/or cash for which the Stock Option or Stock
Appreciation Right may be exercisable until a date or dates and subject to terms
and conditions determined by the Committee.
6.3 The purchase price per share of Stock under each Stock Option and the
reference price per share of the Stock to which a Stock Appreciation Right
relates (in either case, "Exercise Price") will not be less than the Fair Market
Value of such Stock on the date the Stock Option is granted. A Stock
Appreciation Right may be exercised only when the Fair Market Value of the Stock
to which it relates exceeds the Exercise Price.
6.4 The holder of a Stock Option, Stock Appreciation Right or other
Derivative Security will not have any of the rights of a shareholder with
respect to any shares of Stock that may be subject or relate thereto unless and
until such shares are issued by the Company following its exercise or otherwise.
SECTION 7. ADMINISTRATION
7.1 Subject to the terms of the Plan, the Committee will have the sole and
complete authority: (a) to designate Participants, to approve incentive awards,
to determine the time, form and manner of payment of any incentive awards it may
approve, and to impose such limitations, restrictions and conditions thereon as
the Committee deems appropriate; (b) to interpret the Plan and the terms of any
document relating to the Plan and to adopt, amend and rescind administrative
guidelines and other rules and regulations relating to the Plan; (c) to
accelerate the time at which all or any part of Stock Options, Stock
Appreciation Rights and/or other Derivative Securities may be exercised or the
time when all or any part of deferrals and/or Derivative Securities will be
paid; (d) to otherwise amend or cancel incentive award opportunities, Stock
Options, Stock Appreciation Rights or other Derivative Securities or deferrals
under the Plan in whole or in part, except that the Committee may not, unless
otherwise provided in the Plan or unless the Participant affected thereby
consents, take any action under this clause that would adversely affect the
rights of such Participant with respect to outstanding Stock Options, Stock
Appreciation Rights or other Derivative Securities or deferrals under the Plan,
and
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<PAGE> 43
except that the Committee may not, unless otherwise provided in the Plan, take
any action to amend any outstanding Stock Option or Stock Appreciation Right
under the Plan in order to decrease the Exercise Price of such Stock Option or
Stock Appreciation Right; and (e) to make all other determinations and to take
all other actions necessary or advisable for the interpretation, implementation
and administration of the Plan.
7.2 The Committee's determinations on matters within its authority will be
conclusive and binding upon the Company and all other persons unless and until
the Committee determines otherwise.
SECTION 8. GENERAL PROVISIONS
8.1 No employee or other person will have any claim or right to be
designated as a Participant or to receive an incentive award under the Plan.
Participation in the Plan will not be construed as a right to employment or
other relationship(s) with the Company and/or its subsidiaries, and the Company
retains the right to terminate the employment or other relationship(s) of an
individual with the Company and/or its subsidiaries for any reason, with or
without cause.
8.2 During a Participant's lifetime, payments or distributions under the
Plan may be received only by the Participant or his or her legal representative.
Shares of restricted Stock during the applicable restriction period, Stock
Options, Stock Appreciation Rights, other Derivative Securities, rights to
deferral payments and any other rights or benefits under the Plan will not be
transferable or assignable by a Participant other than by will, by the
applicable laws of descent and distribution, or, if permitted by the Committee,
by transfer to a Properly Designated Beneficiary in the event of death;
provided, however, that the Committee may, in its sole discretion, permit the
transfer of Stock Options (including any tandem Stock Appreciation Rights) by a
Participant to Permissible Transferees, subject to such terms and conditions as
the Committee may determine. Any transfer or assignment contrary to these
provisions will be null and void.
8.3 The Company will collect, through withholdings or otherwise, an amount
sufficient to satisfy all applicable statutory federal, state and local
withholding tax requirements with respect to payments made pursuant to the Plan.
8.4 The Committee's determinations under the Plan, including without
limitation, (a) the selection of Participants, (b) the form, amount, timing and
payment of incentive awards, (c) the terms and provisions of incentive awards
and the payment thereof, and (d) any agreements evidencing the same, need not be
uniform and may be made by it selectively among Participants who receive, or who
are eligible to receive, incentive awards, whether or not such Participants are
similarly situated.
8.5 The Committee may, but need not, establish or authorize the
establishment of procedures not inconsistent with Section 8.2 under which a
Participant may designate a beneficiary or beneficiaries in the event of the
Participant's death.
8.6 The Company will not be required to establish any special or separate
fund or to segregate any assets for purposes of the Plan.
8.7 Nothing contained in the Plan will be deemed to limit or restrict the
right of the Company and its subsidiaries to compensate any of their key
executives and/or employees in whole or in part under separate bonus or
incentive plans or other compensation arrangements.
8.8 The Plan and all agreements or other documents relating to the Plan
will be construed in accordance with and governed by the laws of the State of
Delaware, without regard to the principles of conflict of laws.
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SECTION 9. CHANGE IN CONTROL
9.1 Upon the determination of the Committee that a change in control has
occurred for purposes of the Plan, the Committee may deem all or any part of any
incentive award opportunity to have been earned on such basis as the Committee
may determine, and incentive awards and outstanding Derivative Securities and
deferrals may then be paid and Stock Options, Stock Appreciation Rights and
other Derivative Securities may then be modified, and all or any part of any
restrictions or conditions may be waived or modified, all on such basis, at such
time (which may, in the case of incentive awards, be prior to the end of the
Performance Period), in such form and subject to such terms and conditions as
the Committee may prescribe.
SECTION 10. CERTAIN DEFINITIONS
10.1 The following terms or phrases will have the meanings set forth below.
- "Board" means the Board of Directors of the Company.
- "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, or any successor statute or statutes.
Reference to any specific Code section will include any successor
section.
- "Committee" means the Compensation Committee of the Board (or a
subcommittee thereof) or any successor committee (or a subcommittee
thereof) established by the Board; provided, however, the Committee must
consist of at least two members and each member of the Committee must be
an Outside Director.
- "Company" means Infinity Broadcasting Corporation, a Delaware
corporation, and any successor thereto.
- "Covered Employee" means a person who is a covered employee within the
meaning of Section 162(m) of the Code and regulations promulgated
thereunder.
- "Derivative Security" means a derivative security with respect to an
equity security of the Company, where "derivative security" has the
meaning set forth in Rule 16a-1(c) under the Exchange Act, as such rule
may be amended from time to time, or any successor rule.
- "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
- "Exercise Price" has the meaning assigned to it in Section 6.3.
- "Fair Market Value" means the mean of the high and low prices of the
Stock as reported by the Composite Tape of the New York Stock Exchange
(or such successor reporting system as may be selected by the Committee)
on the relevant date or, if no sale of the Stock has been reported for
that day, the average of such prices on the next preceding day and the
next following day for which there were reported sales.
- "Immediate Family" has the meaning set forth in Rule 16a-1(e) under the
Exchange Act, as such rule may be amended from time to time, or any
successor rule.
- "Outside Director" means an outside director as that term is defined by
Section 162(m) of the Code and regulations promulgated thereunder.
- "Participant" means a key executive of the Company and/or its
subsidiaries who is designated by the Committee as a Plan participant for
a given Performance Period in accordance with Section 3.1.
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- "Performance Period" means a calendar year or other fiscal year of the
Company or other longer or shorter period designated by the Committee
with respect to which incentive awards may be paid.
- "Permissible Transferee" means any of the following: (1) a member of the
Participant's Immediate Family; (2) a trust solely for the benefit of the
Participant and/or the Participant's Immediate Family; and (3) a
partnership or limited liability company whose only partners or members,
as the case may be, are the Participant and/or Permissible Transferees as
otherwise identified in this definition.
- "Plan" means the Company's Executive Annual Incentive Plan, as amended
from time to time.
- "Properly Designated Beneficiary" means a beneficiary or beneficiaries
designated by a Participant pursuant to Section 8.5 in the event of the
Participant's death, if such designation is permitted by the Committee.
- "Stock" means the Class A Common Stock and any other equity stock of the
Company, other than Class B Common Stock.
- "Stock Appreciation Right" means a right to receive, on exercise, an
amount, in cash or Stock or a combination thereof (such form to be
determined by the Committee), determined by reference to appreciation in
Stock value.
- "Stock Option" means a non-statutory stock option (that is, a Stock
Option which is not an incentive stock option as defined in Section
422(b) of the Code) to purchase shares of Stock for the purchase price
set forth in the relevant Stock Option Agreement, all in accordance with
the terms of the Plan.
10.2 Except where otherwise indicated by the context, references to
sections will mean the Sections of the Plan and the definition of any term
herein in the singular will also include the plural. Section or subsection
headings are inserted for convenience only. Such headings will not affect the
meaning of any of the provisions of the Plan and will not be deemed a part of
the Plan.
SECTION 11. AMENDMENT, SUSPENSION AND/OR TERMINATION OF PLAN
11.1 The Board of Directors or the Committee may at any time and from time
to time amend the Plan, in whole or in part, for any purpose, or may at any time
or from time to time suspend or terminate the Plan.
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EXHIBIT B
INFINITY BROADCASTING CORPORATION
1998 LONG-TERM INCENTIVE PLAN
ARTICLE I
GENERAL
1.1 PURPOSE
The purposes of the 1998 Long-Term Incentive Plan, as amended from time to
time (the "Plan"), for key personnel of Infinity Broadcasting Corporation
("Corporation") and its subsidiaries (the Corporation and its subsidiaries
severally and collectively referred to in the Plan as the "Company") are to
foster and promote the long-term financial success of the Company and materially
increase stockholder value by (i) attracting and retaining key personnel of
outstanding ability, (ii) strengthening the Company's capability to develop,
maintain and direct a competent management team, (iii) motivating key personnel,
by means of performance-related incentives, to achieve long-range performance
goals, (iv) providing incentive compensation opportunities competitive with
those of other major companies and (v) enabling key personnel to participate in
the long-term growth and financial success of the Company.
1.2 ADMINISTRATION
(a) The Plan will be administered by a committee of the Board of Directors
of the Corporation ("Committee") which will consist of two or more members. Each
member will be a "non-employee director," as that term is defined by Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as such rule may be amended, or any successor rule, and an "outside
director," as that term is defined by Section 162(m) of the Internal Revenue
Code of 1986, as amended. The members will be appointed by the Board of
Directors, and any vacancy on the Committee will be filled by the Board of
Directors or in a manner authorized by the Board.
(b) Subject to the limitations of the Plan, the Committee will have the
sole and complete authority: (i) to select in accordance with Section 1.3
persons who will participate in the Plan ("Participant" or "Participants")
(including the right to delegate authority to select as Participants persons who
are not required to file reports with respect to securities of the Company
pursuant to Section 16(a) of the Exchange Act ("Nonreporting Persons")); (ii) to
make Awards and payments in such forms and amounts as it may determine
(including the right to delegate authority to make Awards to Nonreporting
Persons within limits approved from time to time by the Committee), (iii) to
impose such limitations, restrictions and conditions upon such Awards as the
Committee, or, with respect to Awards to Nonreporting Persons, the Committee's
authorized delegates, deems appropriate; (iv) to interpret the Plan and the
terms of any document relating to the Plan and to adopt, amend and rescind
administrative guidelines and other rules and regulations relating to the Plan;
(v) to amend or cancel an existing Award in whole or in part (including the
right to delegate authority to amend or cancel an existing Award to a
Nonreporting Person in whole or in part within limits approved from time to time
by the Committee), except that the Committee and its authorized delegates may
not, unless otherwise provided in the Plan, or unless the Participant affected
thereby consents, take any action under this clause that would adversely affect
the rights of such Participant with respect to the Award, and except that the
Committee and its authorized delegates may not, unless otherwise provided in the
Plan, take any action to amend any outstanding Option under the Plan in order to
decrease the Option Price under such Option; and (vi) to make all other
determinations and to take all other actions necessary or
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advisable for the interpretation, implementation and administration of the Plan.
The Committee's determinations on matters within its authority will be
conclusive and binding upon the Company and all other persons.
(c) The Committee will act with respect to the Plan on behalf of the
Corporation and on behalf of any subsidiary issuing stock under the Plan,
subject to appropriate action by the board of directors of any such subsidiary.
All expenses associated with the Plan will be borne by the Corporation subject
to such allocation to its subsidiaries and operating units as it deems
appropriate.
1.3 SELECTION FOR PARTICIPATION
Participants selected by the Committee (or its authorized delegates) must
be Eligible Persons, as defined below. "Eligible Persons" are key persons who
are officers or salaried employees of the Company or its parent or their
subsidiaries. Eligible Persons will also include independent contractors of the
Company as to an Award if the person is an independent contractor at the time
the Award is granted. In making this selection and in determining the form and
amount of Awards, the Committee may give consideration to the functions and
responsibilities of the Eligible Person, his or her past, present and potential
contributions to the Company and such other factors as the Committee deems
relevant.
1.4 TYPES OF AWARDS UNDER PLAN
Awards ("Awards") under the Plan may be in the form of any one or more of
the following: (i) Incentive Stock Options ("ISOs") and Non-statutory Stock
options ("NSOs") (Incentive Stock Options and Non-statutory Stock Options
severally and collectively referred to in the Plan as "Options"), as described
in Article II; (ii) Stock Appreciation Rights ("SARs") and Participant Limited
Stock Appreciation Rights ("Participant Limited Rights"), as described in
Article II; (iii) Performance Awards ("Performance Awards") as described in
Article IV; and (iv) Restricted Stock ("Restricted Stock") and Restricted Units
("Restricted Units"), each as described in Article V.
1.5 SHARES SUBJECT TO THE PLAN
(a) Shares of stock issued under the Plan may be in whole or in part
authorized and unissued or treasury shares of the Corporation's Class A Common
Stock, par value $0.01 per share ("Common Stock"), or "Formula Value Stock" as
defined in Section 8.12(d) (Common Stock and Formula Value Stock severally and
collectively referred to in the Plan as "Stock").
(b) The maximum number of shares of Stock which may be issued for all
purposes under the Plan (including but not limited to shares issued pursuant to
the exercise of ISOs) will be 25,000,000, increased on January 1 of each
calendar year from and including January 1, 2001 by 10,000,000 shares. The
maximum number of such shares subject to options to purchase Stock, SARs and
Participant Limited Rights under the Plan awarded to any one Participant in any
one calendar year may not exceed 3,500,000 shares plus unused share amounts that
could have been awarded to that Participant in previous calendar years.
(c) Except as otherwise provided below, any shares of Stock subject to an
Option or other Award which is canceled or terminates without any shares having
been issued pursuant thereto having been exercised will again be available for
Awards under the Plan. Shares subject to an Option canceled upon the exercise of
an SAR will not again be available for Awards under the Plan except to the
extent the SAR is settled in cash. To the extent that an Award is settled in
cash, shares of Stock subject to that Award will again be available for Awards.
Shares of Stock tendered by a Participant or withheld by the Company to pay the
exercise price of an Option or to satisfy the tax withholding obligations of the
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exercise or vesting of an Award will be available again for Awards under the
Plan. Shares of Restricted Stock forfeited to the Company in accordance with the
Plan and the terms of the particular Award will be available again for Awards
under the Plan.
(d) No fractional shares will be issued, and the Committee will determine
the manner in which fractional share value will be treated.
ARTICLE II
STOCK OPTIONS
2.1 AWARD OF STOCK OPTIONS
(a) The Committee may, from time to time, subject to the provisions of the
Plan and such other terms and conditions as the Committee may prescribe, award
to any Participant ISOs and NSOs to purchase Stock.
(b) The Committee may provide with respect to any option to purchase Stock
that, if the Participant, while an Eligible Person, exercises the option in
whole or in part using already-owned Stock, the Participant will, subject to
this Section 2.1 and such other terms and conditions as may be imposed by the
Committee, receive an additional option ("Reload Option"). The Reload Option
will be to purchase, at Fair Market Value as of the date the original option was
exercised, a number of shares of Stock equal to the number of whole shares used
by the Participant to exercise the original option. The Reload Option will be
exercisable only between the date of its grant and the date of expiration of the
original option.
(c) A Reload Option will be subject to such additional terms and conditions
as the Committee may approve, which terms may provide that the Committee may
cancel the Participant's right to receive the Reload Option and that the Reload
Option will be granted only if the Committee has not canceled such right prior
to the exercise of the original option. Such terms may also provide that, upon
the exercise by a Participant of a Reload Option while an Eligible Person, an
additional Reload Option will be granted with respect to the number of whole
shares used to exercise the first Reload Option.
2.2 STOCK OPTION AGREEMENTS
The award of an option will be evidenced by a written agreement ("Stock
Option Agreement") in such form and containing such terms and conditions as the
Committee may from time to time determine. The Committee may also at any time
and from time to time provide for the deferral of delivery of any shares for
which the option may be exercisable until a specified date or dates and subject
to terms and conditions determined by the Committee.
2.3 OPTION PRICE
The purchase price of Stock under each Option ("Option Price") will not be
less than the Fair Market Value of such Stock on the date the Option is awarded.
2.4 EXERCISE AND TERM OF OPTIONS
(a) Except as otherwise provided in the Plan, Options will become
exercisable at such time or times as the Committee may specify. The Committee
may at any time and from time to time accelerate the time at which all or any
part of the Option may be exercised.
(b) The Committee will establish procedures governing the exercise of
options and will require that notice of exercise be given. Stock purchased on
exercise of an option must be paid for as follows:
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(1) in cash or by check (acceptable to the Company in accordance with guidelines
established for this purpose), bank draft or money order payable to the order of
the Company or (2) if so provided by the Committee (not later than the time of
grant, in the case of an ISO) (i) through the delivery of shares of Stock which
are then outstanding and which have a Fair Market Value on the date of exercise
equal to the exercise price, (ii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (iii) by any combination of the
permissible forms of payment.
2.5 TERMINATION OF ELIGIBILITY
Unless the Committee provides otherwise: (a) in the event the Participant
is no longer an Eligible Person and ceased to be such as a result of termination
of service to the Company with the consent of the Committee or as a result of
his or her death, retirement or disability, each of his or her outstanding
Options (whether held by the Participant or, if the Option is an NSO that has
been transferred to a Permissible Transferee (as defined in Section 8.12) in
accordance with Section 8.1, by that Permissible Transferee) will be exercisable
by the Participant (or his or her legal representative or designated
beneficiary) or Permissible Transferee, as the case may be, to the extent that
such Option was then exercisable, at any time prior to an expiration date
established by the Committee at the time of award, but in no event after such
expiration date; and (b) if the Participant ceases to be an Eligible Person for
any other reason, all of the Participant's then outstanding Options (whether
held by the Participant or, if the Option is an NSO that has been transferred to
a Permissible Transferee in accordance with Section 8.1, by that Permissible
Transferee) will terminate immediately.
2.6 COMPANY LIMITED RIGHTS
(a) If so provided in the Stock Option Agreement, as it may be amended from
time to time, in the event of a Change in Control (as defined in Article VII of
the Plan), the Company will have the right to cancel any portion of the Option
(whether vested or nonvested) that remains unexercised on the date the Company
exercises its Company Limited Right pursuant to this Section 2.6 (or the entire
Option if no part of the Option has yet been exercised) in exchange for a
payment in cash of an amount equal to the number of shares of Common Stock as to
which the Option remains unexercised at the time the Company exercises such
right multiplied by the excess of (a) the higher of (x) the Minimum Price Per
Share (as defined below), or (y) the highest reported closing sale price of a
share of the Common Stock on the New York Stock Exchange at any time during the
period beginning on the sixtieth (60th) day prior to the date on which the
Company exercises such right and ending on the date on which the Company
exercises such right, over (b) the Option Price per share.
(b) For purposes of this Section 2.6, unless otherwise provided in the
relevant Stock Option Agreement, the term "Minimum Price Per Share" will mean
the highest gross price (before brokerage commissions and soliciting dealers'
fees) paid or to be paid for a share of Common Stock (whether by way of
exchange, conversion, distribution upon liquidation or otherwise) in any Change
in Control which is in effect at any time during the period beginning on the
sixtieth (60th) day prior to the date on which the Company exercises such right
and ending on the date on which the Company exercises such right. For purposes
of this definition, if the consideration paid or to be paid in any such Change
in Control consists, in whole or in part, of consideration other than cash, then
the Board will take such action as in its judgment it deems appropriate to
establish the cash value of such consideration.
(c) The Company's right to cancel an Option pursuant to Section 2.6 may be
exercised at any time until the end of the thirtieth (30th) day following the
occurrence of the Change in Control.
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ARTICLE III
STOCK APPRECIATION RIGHTS AND LIMITED RIGHTS
3.1 AWARD OF STOCK APPRECIATION RIGHT
(a) An SAR is an Award entitling the recipient on exercise to receive an
amount, in cash or Stock or a combination thereof (such form to be determined by
the Committee), determined in whole or in part by reference to appreciation in
Stock value.
(b) In general, an SAR entitles the Participant to receive, with respect to
each share of Stock as to which the SAR is exercised, the excess of the share's
Fair Market Value on the date of exercise over its Fair Market Value on the date
the SAR was granted.
(c) SARs may be granted in tandem with options granted under the Plan
("Tandem SARS") or independently of Options ("Independent SARs"). An SAR granted
in tandem with an NSO may be granted either at or after the time the Option is
granted. An SAR granted in tandem with an ISO may be granted only at the time
the Option is granted.
(d) SARs awarded under the Plan will be evidenced by either a Stock Option
Agreement (when SARs are granted in tandem with an Option) or a separate written
agreement between the Company and the Participant in such form and containing
such terms and conditions as the Committee may from time to time determine.
(e) Except as otherwise provided herein, a Tandem SAR will be exercisable
only at the same time and to the same extent and subject to the same conditions
as the Option related thereto is exercisable, and the Committee may prescribe
additional conditions and limitations on the exercise of the SAR. The exercise
of a Tandem SAR will cancel the related Option. Tandem SARs may be exercised
only when the Fair Market Value of Stock to which it relates exceeds the Option
Price.
(f) Except as otherwise provided herein, an Independent SAR will become
exercisable at such time or times, and on such conditions, as the Committee may
specify, and the Committee may at any time accelerate the time at which all or
any part of the SAR may be exercised.
The Committee may provide, under such terms and conditions as it may deem
appropriate, for the automatic grant of additional SARs upon the full or partial
exercise of an Independent SAR.
Any exercise of an Independent SAR must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by any other
documents required by the Committee.
(g) Except as otherwise provided herein, all SARs will automatically be
exercised on the last trading day prior to the expiration date established by
the Committee at the time of the award for the SAR, or, in the case of a Tandem
SAR, for the related Option, so long as exercise on such date will result in a
payment to the Participant.
(h) Unless otherwise provided by the Committee, no SAR will become
exercisable or will be automatically exercised for six months following the date
on which it was granted or the effective date of the Plan, whichever is later.
(i) At the time of award of an SAR, the Committee may limit the amount of
the payment that may be made to a Participant upon the exercise of the SAR. The
Committee may further determine that, if the amount to be received by a
Participant in any year is limited pursuant to this provision, payment of all or
a portion of the amount that is unpaid as a result of the limitation may be made
to the Participant at a subsequent time. No such limitation will require a
Participant to return to the Company any amount theretofore received by him or
her upon the exercise of an SAR.
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(j) Payment of the amount to which a Participant is entitled upon the
exercise of an SAR will be made in cash, Stock, or partly in cash and partly in
Stock, as the Committee may determine. To the extent that payment is made in
Stock, the shares will be valued at their Fair Market Value on the date of
exercise of the SAR. The Committee may also at any time and from time to time
provide for the deferral of delivery of any shares and/or cash for which the SAR
may be exercisable until a specified date or dates and subject to terms and
conditions determined by the Committee.
(k) Unless otherwise determined by the Committee, each SAR will expire on
the first to occur of the following: (i) the expiration date set by the
Committee at the time of an award of an SAR, (ii) in the case of a Tandem SAR,
termination of the related option, (iii) expiration of a period of six months
after the Participant's ceasing to be an Eligible Person as a result of
termination of service to the Company with the consent of the Committee or as a
result of his or her death, retirement or disability, or (iv) the Participant
ceasing to be an Eligible Person for any other reason.
3.2 PARTICIPANT LIMITED RIGHTS
(a) The Committee may award Participant Limited Rights pursuant to the
provisions of this Section 3.2 to the holder of an Option to purchase Common
Stock granted under the Plan (a "Related Option") with respect to all or a
portion of the shares subject to the Related Option. A Participant Limited Right
may be exercised only during the period beginning on the first day following a
Change in Control, as defined in Article VII of the Plan, and ending on the
thirtieth day following such date. Each Participant Limited Right will be
exercisable only to the same extent that the Related Option is exercisable, and
in no event after the termination of the Related Option. Participant Limited
Rights will be exercisable only when the Fair Market Value (determined as of the
date of exercise of the Participant Limited Rights) of each share of Common
Stock with respect to which the Participant Limited Rights are to be exercised
exceeds the Option Price per share of Common Stock subject to the Related
option.
(b) Upon the exercise of Participant Limited Rights, the Related Option
will be considered to have been exercised to the extent of the number of shares
of Common Stock with respect to which such Participant Limited Rights are
exercised. Upon the exercise or termination of the Related Option, the
Participant Limited Rights with respect to such Related Option will be
considered to have been exercised or terminated to the extent of the number of
shares of Common Stock with respect to which the Related Option was so exercised
or terminated.
(c) The effective date of the grant of a Participant Limited Right will be
the date on which the Committee approves the grant of such Participant Limited
Right. Each grantee of a Participant Limited Right will be notified promptly of
the grant of the Participant Limited Right in such manner as the Committee
prescribes.
(d) Upon the exercise of Participant Limited Rights, the holder thereof
will receive in cash an amount equal to the product computed by multiplying (i)
the excess of (a) the higher of (x) the Minimum Price Per Share (as hereinafter
defined), or (y) the highest reported closing sales price of a share of Common
Stock on the New York Stock Exchange at any time during the period beginning on
the sixtieth day prior to the date on which such Participant Limited Rights are
exercised and ending on the date on which such Participant Limited Rights are
exercised, over (b) the Option Price per share of Common Stock subject to the
Related Option, by (ii) the number of shares of Common Stock with respect to
which such Participant Limited Rights are being exercised.
(e) For purposes of this Section 3.2, the term "Minimum Price Per Share"
will mean the highest gross price (before brokerage commissions and soliciting
dealers' fees) paid or to be paid for a share of Common Stock (whether by way of
exchange, conversion, distribution upon liquidation or otherwise) in any Change
in Control which is in effect at any time during the period beginning on the
sixtieth day
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prior to the date on which such Participant Limited Rights are exercised and
ending on the date on which such Participant Limited Rights are exercised. For
purposes of this definition, if the consideration paid or to be paid in any such
Change in Control will consist, in whole or in part, of consideration other than
cash, the Board will take such action, as in its judgment it deems appropriate,
to establish the cash value of such consideration.
ARTICLE IV
PERFORMANCE AWARDS
4.1 NATURE OF PERFORMANCE AWARDS
A Performance Award provides for the recipient to receive an amount in cash
or Stock or a combination thereof (such form to be determined by the Committee)
following the attainment of Performance Goals. Performance Goals may be related
to personal performance, corporate performance (including corporate stock
performance), departmental performance or any other category of performance
deemed by the Committee to be important to the success of the Company or may be
related to the occurrence of any triggering event or events that the Committee
may deem appropriate. The Committee will determine the Performance Goals, the
period or periods during which performance is to be measured or otherwise
determined and all other terms and conditions applicable to the Award.
Regardless of the degree to which Performance Goals are attained, a Performance
Award will be paid only when, if and to the extent that the Committee determines
to make such payment.
4.2 OTHER AWARDS SUBJECT TO PERFORMANCE CONDITION
The Committee may, at the time any Award described in this Plan is granted,
impose the condition (in addition to any conditions specified or authorized in
the Plan) that Performance Goals be met prior to the Participant's realization
of any payment or benefit under the Award.
ARTICLE V
RESTRICTED STOCK AND RESTRICTED UNITS
5.1 AWARDS OF RESTRICTED STOCK AND RESTRICTED UNITS
(a) The Committee may award to any Participant shares of Stock subject to
this Article V and such other terms and conditions as the Committee may
prescribe, such Stock referred to herein as "Restricted Stock." Each certificate
for Restricted Stock will be registered in the name of the Participant and
deposited by him or her, together with a stock power endorsed in blank, with the
Corporation.
(b) The Committee may also award to any Participant Restricted Units
subject to this Article V and such other terms and conditions as the Committee
may prescribe. For purposes hereof, a "Restricted Unit" will mean any award of a
contractual right granted under this Article V to receive Stock (or, at the
discretion of the Committee, cash in an amount based on the Fair Market Value of
the Stock, or a combination of Stock and cash) which would become vested and
nonforfeitable, in whole or in part, upon the completion of such period of
service as may be determined by the Committee.
5.2 RESTRICTED STOCK/RESTRICTED UNIT AGREEMENT
Awards of Restricted Stock and Restricted Units under the Plan will be
evidenced by a written agreement in such form and containing such terms and
conditions as the Committee may determine.
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5.3 RESTRICTION PERIOD; DIVIDEND EQUIVALENTS
(a) At the time of award of Restricted Stock or Restricted Units, there
will be established for each Participant a "Restriction Period" of such length
as the Committee determines. The Restriction Period may be waived by the
Committee. Shares of Restricted Stock and Restricted Units may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as hereinafter
provided.
(b) Subject to such restrictions on transfer, the Participant as owner of
such shares of Restricted Stock will have the rights of the holder of such
Restricted Stock, except that the Committee may provide at the time of the Award
that any dividends or other distributions paid with respect to such Stock during
the Restriction Period will be accumulated and held by the Company and will be
subject to the same forfeiture provisions and the same restrictions on transfer
as apply to the shares of Restricted Stock with respect to which they were paid.
(c) Upon the expiration or waiver by the Committee of the Restriction
Period and the satisfaction (as determined by the Committee) of any other
conditions determined by the Committee, restrictions applicable to the
Restricted Stock or Restricted Units will lapse and the Corporation will, in the
case of Restricted Stock, redeliver to the Participant (or his or her legal
representative or designated beneficiary) the shares deposited pursuant to
Section 5.1 free and clear of all restrictions except as may be imposed by law
and, in the case of Restricted Units, will pay out such units as provided in the
Restricted Unit Agreement.
5.4 TERMINATION OF ELIGIBILITY
(a) Unless otherwise determined by the Committee, in the event the
Participant is no longer an Eligible Person and ceased to be such as a result of
termination of service to the Company with the consent of the Committee, or as a
result of his or her death, retirement or disability, the restrictions imposed
under this Article V will lapse with respect to such number of the shares of
Restricted Stock and with respect to such number of Restricted Units previously
awarded to him or her as may be determined by the Committee. All other shares of
Restricted Stock and Restricted Units previously awarded to him or her which are
still subject to restrictions, along with any dividends or other distributions
thereon that have been accumulated and held by the Company, will be forfeited,
and in the case of Restricted Stock, the Corporation will have the right to
complete the blank stock power.
(b) Unless otherwise determined by the Committee, in the event the
Participant ceases to be an Eligible Person for any other reason, all shares of
Restricted Stock and all Restricted Units previously awarded to him or her which
are still subject to restrictions, along with any dividend or other
distributions on Restricted Stock that have been accumulated and held by the
Company, will be forfeited, and, in the case of Restricted Stock, the
Corporation will have the right to complete the blank stock power.
5.5 DIVIDEND EQUIVALENTS
The Committee will determine whether and to what extent, if any, to credit
to the account of, or to pay currently to, each recipient of Restricted Units,
an amount equal to any dividends or other distributions paid during the
Restriction Period with respect to the corresponding number of shares of Stock
covered thereby ("Dividend Equivalent"). To the extent provided by the Committee
at or after the date of grant, any Dividend Equivalents with respect to cash
dividends on the Stock credited to a Participant's account will be deemed to
have been invested in shares of Stock on the record date established for the
related dividend and, accordingly, a number of additional Restricted Units shall
be credited to such Participant's account equal to the greatest whole number
which may be obtained by
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dividing (x) the value of such Dividend Equivalent on the record date by (y) the
Fair Market Value of a share of Stock on such date.
ARTICLE VI
DEFERRAL OF PAYMENTS
6.1 DEFERRAL OF AMOUNTS
(a) If the Committee makes a determination to designate Awards or, from
time to time, groups or types of Awards, eligible for deferral hereunder, a
Participant may, subject to such terms and conditions and within such limits as
the Committee may from time to time establish, elect to defer the receipt of
amounts due to him or her under the Plan. Amounts so deferred are referred to
herein as "Deferred Amounts." The Committee may also permit amounts now or
hereafter deferred or available for deferral under any present or future
incentive compensation program or deferral arrangement of the Company to be
deemed Deferred Amounts and to become subject to the provisions of this Article.
Awards which are so deferred will be deemed to have been awarded in cash and the
cash deferred as Deferred Amounts.
(b) The period between the date on which the Participant's Deferred Amount
would have been payable absent deferral and the final payment of such Deferred
Amount will be referred to herein as the "Deferral Period."
6.2 PAYMENT OF DEFERRED AMOUNTS
Payment of Deferred Amounts will be made on such terms and conditions as
the Committee may determine and will be made at such time or times, and may be
in cash, Stock, or partly in cash and partly in Stock, as the Committee in its
sole discretion may from time to time determine.
ARTICLE VII
CHANGES IN CONTROL
7.1 EFFECT OF CHANGE IN CONTROL
Upon the occurrence of a change in control (a) as defined in the relevant
agreement for an Award or (b) as may be determined by the Committee (each of (a)
and (b) a "Change of Control"), then notwithstanding any other provisions of the
Plan:
(i) if so provided in the respective Stock Option Agreements, as they may
be amended from time to time, Options and, subject to the exercise
provisions of Section 3.2(a) of the Plan, Participant Limited Rights, but
not SARs, outstanding and unexercised on the date of the Change in Control
will become immediately exercisable;
(ii) if so provided in the respective Stock Option Agreements, as they may
be amended from time to time, Company Limited Rights will become
immediately exercisable;
(iii) Performance Awards will be deemed to have been earned if so
determined by the Committee and may be paid on such basis as the Committee
may prescribe.
(iv) Restricted Stock and Restricted Units may be deemed to be earned and
the Restriction Period may be deemed to be expired on such terms and
conditions as the Committee may determine; and
(v) amounts deferred under this Plan may be paid on such terms as the
Committee determines.
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ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-TRANSFERABILITY
No Option, Participant Limited Right, SAR, Performance Award, Restricted
Unit or share of Restricted Stock or Deferred Amount under the Plan will be
transferable other than by will, by the applicable laws of descent and
distribution, or, if permitted by the Company, by transfer to a properly
designated beneficiary in the event of death; provided, however, that the
Committee may, in its sole discretion, permit the transfer of an NSO Option
(including any Tandem SARs or Participant Limited Rights but not any right to
receive a Reload Option upon exercise of the NSO Option) by a Participant to a
Permissible Transferee (as defined in Section 8.12) subject to such terms and
conditions as the Committee may, from time to time, determine. All Awards and
Deferred Amounts will be exercisable or received during the Participant's
lifetime only by such Participant or his or her legal representative or, in the
case of an NSO Option (including any Tandem SARs or Participant Limited Rights)
that has been transferred to a Permissible Transferee in accordance with this
Section 8.1, by that Permissible Transferee. Any transfer contrary to this
Section 8.1 will nullify the option, Participant Limited Right, SAR, Performance
Award, Restricted Unit or share of Restricted Stock, and any attempted transfer
of a Deferred Amount contrary to this Section 8.1 will be void and of no effect.
8.2 BENEFICIARIES
The Committee may, but need not, establish or authorize the establishment
of procedures not inconsistent with Section 8.1 under which a Participant may
designate a beneficiary or beneficiaries to hold, exercise and/or receive
amounts due under an Award or with respect to Deferred Amounts in the event of
the Participant's death.
8.3 ADJUSTMENTS UPON CHANGES IN STOCK
If there is any change in the Stock and/or the corporate structure of the
Company, through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split up, dividend in kind or other change in the
corporate structure or distribution to the stockholders, appropriate adjustments
may be made by the Board of Directors of the Company (or if the Company is not
the surviving corporation in any such transaction, the board of directors of the
surviving corporation) in the aggregate number and kind of shares subject to the
Plan, and the number and kind of shares and the price per share subject to
outstanding Options or which may be issued under outstanding Performance Awards
or Awards of Restricted Stock. Appropriate adjustments may also be made by the
Board of Directors or the Committee in the terms of any Awards under the Plan to
reflect such changes and to modify any other terms of outstanding Awards,
including modifications of performance targets and changes in the length of
Performance Periods.
8.4 CONDITIONS OF AWARDS
(a) Unless the Committee determines otherwise, either by waiving the
condition(s) or by limiting or otherwise amending the condition(s) with respect
to any specified Award or group of Awards, the rights of a Participant with
respect to any Award received under this Plan will be subject to the conditions
that, until the Participant has fully received all payments, transfers and other
benefits under the Award, he or she will (i) not engage, either directly or
indirectly, in any manner or capacity as advisor, principal, agent, partner,
officer, director, employee, member of any association or otherwise, in any
business or activity which is at the time competitive with any business or
activity conducted by the Company and (ii) be available, unless he or she has
died, at reasonable times for consultations at
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the request of the Company's management with respect to phases of the business
with which he or she is or was actively connected during the time he or she was
an officer, employee or independent contractor, but such consultations will not
(except in the case of a Participant whose active service was outside the United
States) be required to be performed at any place or places outside of the United
States of America or during usual vacation periods or periods of illness or
other incapacity. In the event that either of the above conditions is applicable
(or is applicable as modified by the Committee) and is not fulfilled, the
Participant will forfeit all rights to any unexercised Option or SAR, or any
Performance Award or Stock held which has not yet been determined by the
Committee to be payable or unrestricted (and any unpaid amounts equivalent to
dividends or other distributions or amounts equivalent to interest relating
thereto) as of the date of the breach of condition. Any determination by the
Board of Directors of the Corporation, which will act upon the recommendation of
the Chief Executive Officer, that the Participant is, or has, engaged in a
competitive business or activity as aforesaid or has not been available for
consultations as aforesaid or, if the Committee has modified such condition(s)
with respect to the Participant's Award, that the Participant has not complied
with such condition(s) as modified by the Committee will be conclusive.
(b) This Section 8.4 will not apply to Participant Limited Rights.
8.5 USE OF PROCEEDS
All cash proceeds from the exercise of Options will constitute general
funds of the Company.
8.6 TAX WITHHOLDING
(a) The Company will collect, through withholding or otherwise, an amount
sufficient to satisfy any applicable statutory federal, state and local
withholding tax requirements (the "withholding requirements") with respect to
payments made pursuant to the Plan.
(b) In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy any
applicable statutory withholding requirements, or make other arrangements
satisfactory to the Committee with regard to such requirements, prior to the
delivery of any Stock. If and to the extent that such withholding is required,
the Committee may permit the Participant or such other person to elect at such
time and in such manner as the Committee provides to have the Company hold back
from the shares to be delivered, or to deliver to the Company, Stock having a
value calculated to satisfy the statutory withholding requirement. In the
alternative, the Committee may, at the time of grant of any such Award, require
that the Company withhold from any shares to be delivered Stock with a value
calculated to satisfy any applicable statutory tax withholding requirements.
(c) If at the time an ISO is exercised the Committee determines that the
Company could be liable for statutory withholding requirements with respect to a
disposition of the Stock received upon exercise, the Committee may require as a
condition of exercise that the person exercising the ISO agree (i) to inform the
Company promptly of any disposition of Stock received upon exercise, and (ii) to
give such security as the Committee deems adequate to meet the potential
liability of the Company for the statutory withholding requirements and to
augment such security from time to time in any amount reasonably deemed
necessary by the Committee to preserve the adequacy of such security.
8.7 NON-UNIFORM DETERMINATIONS
The Committee's determinations under the Plan, including without
limitation, (i) the determination of the Participants to receive Awards, (ii)
the form, amount, timing and payment of such Awards,
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(iii) the terms and provisions of such Awards and (iv) the agreements evidencing
the same, need not be uniform and may be made by it selectively among
Participants who receive, or who are eligible to receive, Awards under the Plan,
whether or not such Participants are similarly situated.
8.8 LEAVES OF ABSENCE; TRANSFERS
The Committee will be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan with respect to any leave
of absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Committee will be entitled to determine (i)
whether or not any such leave of absence will be treated as if the Participant
ceased to be an Eligible Person and (ii) the impact, if any, of any such leave
of absence on Awards under the Plan. In the event a Participant transfers within
the Company, such Participant will not be deemed to have ceased to be an
Eligible Person for purposes of the Plan.
8.9 GENERAL RESTRICTION
(a) Each Award under the Plan will be subject to the condition that, if at
any time the Committee determines that (i) the listing, registration or
qualification of shares of Stock upon any securities exchange or under any state
or federal law, (ii) the consent or approval of any government or regulatory
body or (iii) an agreement by the Participant with respect thereto, is necessary
or desirable, then such Award will not be consummated in whole or in part unless
such listing, registration, qualification, consent, approval or agreement has
been effected or obtained free from any conditions not acceptable to the
Committee.
(b) Shares of Common Stock for use under the provisions of this Plan will
not be issued until they have been duly listed, upon official notice of
issuance, upon the New York Stock Exchange and such other exchanges, if any, as
the Board of Directors of the Corporation determines, and a registration
statement under the Securities Act of 1933 with respect to such shares has
become, and is, effective.
8.10 EFFECTIVE DATE
(a) The Plan is effective on December 7, 1998, as amended.
(b) No Award may be granted under the Plan after December 6, 2008, but
Awards previously made may extend beyond that date and Reload Options and
additional Reload Options provided for with respect to original options
outstanding prior to that date may continue unless the Committee otherwise
provides and subject to such additional terms and conditions as the Committee
may provide except that all Reload Options issued after that date will be NSOs,
and the provisions of Article VI of the Plan will survive and remain effective
as to all present and future Deferred Amounts until such later date as the
Committee or the Board of Directors may determine.
(c) The adoption of the Plan will not preclude the adoption by appropriate
means of any other stock option or other incentive plan for officers or
employees.
8.11 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN
The Board of Directors or the Committee may at any time or times amend the
Plan for any purpose which may at the time be permitted by law, or may at any
time suspend or terminate the Plan as to any further grants of Awards.
55
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8.12 CERTAIN DEFINITIONS
(a) The terms "retirement" and "disability" as used under the Plan will
have the meanings determined from time to time by the Committee.
(b) The term "Fair Market Value" as it relates to Common Stock means the
average of the high and low prices of the Common Stock as reported by the
Composite Tape of the New York Stock Exchange (or such successor reporting
system as the Committee may select) on the relevant date or, if no sale of the
Common Stock has been reported for that day, the average of such prices on the
next preceding day and the next following day for which there were reported
sales. The term "Fair Market Value" as it relates to Formula Value Stock will
mean the value determined by the Committee.
(c) "subsidiary" means any corporation, partnership or other entity of
which shares of voting stock sufficient to elect a majority of the Board of
Directors, or other persons performing similar functions, is owned by the
Corporation, either directly or indirectly through one or more subsidiaries.
(d) "Formula Value Stock" means shares of a class or classes of stock the
value of which is derived from a formula established by the Committee which
reflects such financial measures as the Committee may determine. Such shares
will have such other characteristics as may be determined at time of their
authorization.
(e) Unless otherwise determined by the Committee, "Permissible Transferee"
means any of the following: (1) a member of the Participant's Immediate Family;
(2) a trust solely for the benefit of the Participant and/or the Participant's
Immediate Family; and (3) a partnership or limited liability company whose only
partners or members, as the case may be, are the Participant and/or Permissible
Transferees of the Participant as otherwise identified in this definition.
"Immediate Family" has the meaning set forth in Rule l6a-1(e) under the Exchange
Act, as such rule may be amended from time to time, or any successor rule.
8.13 GOVERNING LAW.
The Plan and all agreements or other documents relating to the Plan will be
construed in accordance with and governed by the laws of the State of Delaware,
without regard to the principles of conflict of laws.
56
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<PAGE> 60
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<PAGE> 61
Infinity Logo
Broadcasting
Corporation INF-PS-2000
<PAGE> 62
INFINITY BROADCASTING
CORPORATION
c/o EquiServe
P.O. Box 9398
Boston, MA 02205-9398
---------------------------------------------------
ADMISSION TICKET
---------------------------------------------------
2000 Annual Meeting
of
Shareholders
of
INFINITY BROADCASTING CORPORATION
Wednesday, May 3, 2000
3:30 p.m.
Sheraton New York Hotel
811 Seventh Avenue (at 52nd Street)
New York, New York
DETACH HERE
<TABLE>
<CAPTION>
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE
- ------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1,2 AND 3.
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Election of two directors, each for a three-year term,
NOMINEES: David T. McLaughlin and Jeffrey Sherman
FOR AGAINST ABSTAIN
FOR WITHHOLD 2. Proposal to approve the Company's [ ] [ ] [ ]
ALL FROM ALL Executive Annual Incentive Plan.
NOMINEES [ ] NOMINEES [ ] FOR AGAINST ABSTAIN
3. Proposal to approve the Company's [ ] [ ] [ ]
1998 Long-Term incentive Plan.
[ ]
--------------------------------------
For all nominees except as noted above MARK HERE [ ] MARK HERE [ ]
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS
SPECIFIED ABOVE, BUT IF NO SPECIFICATION IS MADE THEY WILL BE
VOTED FOR ITEMS 1, 2 AND 3 AND AT THE DISCRETION OF THE
PROXIES ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE
MEETING.
Please sign exactly as your name appears on your stock
certificate. If the stock is registered in the names of two or
more persons, each should sign. Executors, administrators,
trustees, guardians and attorney's-in-fact should add their
titles. If signer is a corporation, please give full corporate
name and have duly authorized officer sign, stating title.
If signer is a partnership, please sign in partnership name by
authorized person.
Please sign, date and return promptly in the accompanying
envelope.
Signature:_________________________________ Date: ___________ Signature: ______________________________ Date: ____________
</TABLE>
<PAGE> 63
DETACH HERE
PROXY
INFINITY BROADCASTING CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 3, 2000
(SEE PROXY STATEMENT FOR DISCUSSION OF ITEMS)
The undersigned hereby appoints Mel Karmazin and Farid Suleman, and each of
them jointly and severally, as proxies, with power of substitution, to vote all
shares of Infinity Broadcasting Corporation Class A Common Stock which the
undersigned is entitled to vote on all matters which may properly come before
the 2000 Annual Meeting of Shareholders of Infinity Broadcasting Corporation, or
any adjournment thereof. Attendance of the undersigned at the meeting or any
adjourned session of the meeting will not be deemed to revoke this proxy unless
the undersigned affirmatively indicates the intention of the undersigned to vote
the shares represented by this proxy in person before the exercise of this
proxy.
If you are a participant in an employee savings plan (or 401(k) Plan)
through which you own an interest in Infinity Class A common stock, this proxy
card will also constitute your voting instructions to the trustee under that
plan.
- ------------ -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------ -----------
