SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary 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 240.14a-11(c) or 240.14a-12
INFINITY BROADCASTING CORPORATION
--------------------------------------------------
(Name of Registrant as Specified In Its Charter)
INFINITY BROADCASTING CORPORATION
--------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[x] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------
2) Form, Schedule or Registration Statement No:
---------------------------------
3) Filing Party:
---------------------------------
4) Date Filed:
---------------------------------
<PAGE>
INFINITY BROADCASTING CORPORATION
600 Madison Avenue
New York, New York 10022
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------------------
The Annual Meeting of Stockholders of Infinity Broadcasting
Corporation (the "Company") will be held at the Le Parker Meridien Hotel, 118
West 57th Street, New York, New York 10019, on July 10, 1996, at 10:00 a.m.
Eastern Time, for the following purposes:
1. To elect directors for the ensuing year;
2. To vote upon a proposal to amend the Company's Restated
Certificate of Incorporation to increase the number of
authorized shares of the Company's Class A Common Stock, par
value $.002 per share, from 200,000,000 to 300,000,000 shares;
3. To vote upon the ratification of the adoption of the
Company's 1996 Long-Term Incentive Plan;
4. To vote upon the approval of certain amendments to the
Company's Cash Bonus Compensation Plan;
5. To vote upon the ratification of the appointment of
independent auditors for 1996; and
6. To transact such other business as may properly come before
the meeting.
Only stockholders of record as of the close of business on May
14, 1996, will be entitled to notice of and to vote at the meeting and any
adjournments. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, STOCKHOLDERS ARE
REQUESTED TO DATE, SIGN, AND RETURN THE ENCLOSED PROXY CARD IN THE RETURN
ENVELOPE FURNISHED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN
THE UNITED STATES.
A copy of the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, which report contains consolidated financial
statements and other information of interest with respect to the Company and its
stockholders, is enclosed.
By Order of the Board of Directors,
/s/ Michael A. Wiener
___________________________________
Michael A. Wiener
May 14, 1996 Co-Chairman of the Board and Secretary
<PAGE>
INFINITY BROADCASTING CORPORATION
600 Madison Avenue
New York, New York 10022
--------------------------------
PROXY STATEMENT
May 14, 1996
--------------------------------
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Infinity
Broadcasting Corporation (the "Company") for use at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at the Le Parker
Meridien Hotel, 118 West 57th Street, New York, New York 10019, on July 10,
1996, at 10:00 a.m. Eastern Time, and any adjournment thereof. This Proxy
Statement and the enclosed proxy form are scheduled to be mailed to the
stockholders commencing on May 21, 1996.
Holders of record of shares of each class of the Company's
common stock at the close of business on May 14, 1996 are entitled to notice of
and to vote at the Annual Meeting. The presence in person or by proxy of the
holders of a majority of the combined voting power of the issued and outstanding
shares entitled to vote shall constitute a quorum. Abstentions and broker
non-votes (that is, shares held for customers of a broker but not voted because
of a lack of instructions from the broker's customers) will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. As of the close of business on April 15, 1996, 76,416,065 shares of
Class A Common Stock, par value $.002 per share (the "Class A Shares"),
8,319,045 shares of Class B Common Stock, par value $.002 per share (the "Class
B Shares"), and 1,116,257 shares of Class C Common Stock, par value $.002 per
share (the "Class C Shares" and, together with the Class A Shares and the Class
B Shares, the "Common Stock"), were issued and outstanding. On March 18, 1996,
the Company declared a three-for-two stock split in the form of a stock dividend
payable on April 11, 1996 to holders of record of each class of the Common Stock
on March 28, 1996 (the "Stock Dividend"). The Proxy Statement reflects the
effect of the Stock Dividend.
Under the Company's Restated Certificate of Incorporation, in
the election of directors, the holders of the Class A Shares are entitled by
class vote, exclusive of all other stockholders, to elect two of the Company's
directors, with each Class A Share being entitled to one vote. In addition, the
holders of the Class C Shares are entitled by class vote, exclusive of all other
stockholders, to elect two of the Company's directors, with each Class C Share
being entitled to one vote. With respect to the election of the other five
directors and other matters submitted to the stockholders for vote, (other than
with respect to the proposed amendment to the Company's Restated Certificate of
Incorporation) the holders of all classes of the Common Stock shall vote as a
single class, with each Class A Share and each Class C Share being entitled to
one vote and each Class B Share being entitled to ten votes. With respect to the
proposed amendment to the Company's Restated Certificate of Incorporation, the
holders of all classes of Common Stock shall vote as a single class, with each
Class A Share and each Class C Share being entitled to one vote and each Class B
Share being entitled to ten votes, and the holders of the Class A Shares shall
vote separately as a class.
Shares represented by a proxy in the enclosed form of proxy,
unless previously revoked, will be voted at the meeting if the proxy is executed
and returned to the Company in sufficient time to permit the necessary
examination and tabulation of the proxy before a vote is taken. The form of
proxy permits a specification as to whether or not shares represented by the
proxy are to be voted for the election of all nominees for director or are to be
withheld from certain nominees for director. The form of proxy divides the
nominees into groups to be voted upon (1) by the holders of the Class A Shares,
(2) by the holders of the Class C Shares and (3) by the holders of all classes
of Common Stock. A separate specification is provided for each such group of
nominees. Only the Class A Shares are publicly traded.
<PAGE>
The Class B Shares are held solely by Gerald Carrus, Michael A. Wiener and Mel
Karmazin and their "affiliates", as defined in the Company's Restated
Certificate of Incorporation. The Class C Shares are held solely by certain
merchant banking partnerships (the "Lehman Investors") affiliated with Lehman
Brothers Holdings, Inc.
The form of proxy also permits the specification of approval,
disapproval or abstention as to the proposal to amend the Company's Restated
Certificate of Incorporation to increase the number of authorized Class A Shares
from 200,000,000 to 300,000,000 shares. The holders of all classes of Common
Stock voting as single class and the holders of the Class A Shares voting
separately as a class are entitled to vote upon the proposal to amend the
Company's Restated Certificate of Incorporation.
The form of proxy also permits the specification of approval,
disapproval or abstention as to (1) the proposal to ratify the adoption of the
Company's 1996 Long-Term Incentive Plan and (2) the proposal to approve certain
amendments to the Company's Cash Bonus Compensation Plan. The holders of all
classes of Common Stock are entitled to vote upon such proposals.
The form of proxy also permits the specification of approval,
disapproval or abstention as to the proposal to ratify KPMG Peat Marwick LLP as
the independent certified public accountants to audit the Company's books and
records for the year ending on December 31, 1996. The holders of all classes of
Common Stock are entitled to vote upon the proposals to ratify KPMG Peat Marwick
LLP's appointment.
The shares represented by all valid proxies received will be
voted in the manner specified on the proxies. Where specific choices are not
indicated, the shares represented by all valid proxies received shall be voted
(1) for the nominees for director named in this Proxy Statement, (2) for
approval of the amendment to the Company's Restated Certificate of
Incorporation, (3) for ratification of the adoption of the Company's 1996
Long-Term Incentive Plan, (4) for the approval of certain amendments to the
Company's Cash Bonus Compensation Plan, and (5) for ratification of the
appointment of KPMG Peat Marwick LLP as the Company's independent
certified public accountants. If a completed form of proxy is returned and
specifies a vote for or against nominees to be elected by a holder of a class
of shares not held by the person executing such proxy, the improper
specification will be disregarded. In all other respects, however, the shares
represented by such proxy will be voted as specified on the form of proxy,
or, in the absence of further specification, as noted in this paragraph.
A stockholder who gives a proxy may revoke it at any time
before it is exercised, by written notice to the Secretary or by voting in
person at the Annual Meeting.
Management knows of no other matter to be presented at the
meeting. If any other matter should be presented at the meeting upon which a
vote properly may be taken other than for the election of directors, it is
intended that shares represented by proxies in the accompanying form will be
voted with respect thereto in accordance with the judgment of the person or
persons voting such shares. Gerald Carrus and Michael A. Wiener, or either of
them, each with full power of substitution, have been designated as proxies to
vote the shares solicited hereby.
ELECTION OF DIRECTORS
The Board of Directors has nominated the nine incumbent
directors named below for election as directors at the Annual Meeting, each to
hold office until the annual meeting of stockholders to be held in 1997 and
until his successor has been elected and has qualified. It is intended that
shares represented by proxies in the accompanying form will be voted FOR THE
ELECTION OF ALL OF THE NOMINEES NAMED IN THE FOLLOWING PAGES, UNLESS A CONTRARY
DIRECTION IS INDICATED.
2
<PAGE>
If any of the nominees should not be available for election,
shares represented by proxies in the accompanying form will be voted FOR SUCH
OTHER PERSON AS THE MANAGEMENT OF THE COMPANY MAY SELECT. The Board has no
reason to believe that any nominee named below will be unavailable for election.
Nominees for election to the Board of Directors shall be approved by
the following vote:
o FOR NOMINEES TO BE ELECTED BY THE HOLDERS OF THE CLASS A
SHARES: by a plurality of the votes cast by holders of Class A
Shares present in person or by proxy at the meeting, with each
share being entitled to one vote.
o FOR NOMINEES TO BE ELECTED BY THE HOLDERS OF THE CLASS C
SHARES: by a plurality of the votes cast by holders of Class C
Shares present in person or by proxy at the meeting, with each
share being entitled to one vote.
o FOR NOMINEES TO BE ELECTED BY THE HOLDERS OF ALL CLASSES OF
COMMON STOCK: by a plurality of the votes cast by holders of
all classes of Common Stock present in person or by proxy at
the meeting, with each Class A Share and each Class C Share
being entitled to one vote and each Class B Share being
entitled to ten votes.
Abstentions from voting on the election of directors,
including broker non-votes, will have no effect on the outcome of the election
of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF THE
NOMINEES NAMED BELOW.
The following biographical and employment information with
respect to the nominees for election as directors has been furnished to the
Company by such nominees. Except as indicated, each of the nominees has had the
same principal occupation for the last five years. Each of the nominees was
elected to his present term of office at the last Annual Meeting of
Stockholders.
NOMINEES TO BE ELECTED BY THE HOLDERS OF ALL CLASSES OF THE COMMON STOCK:
GERALD CARRUS AGE 70 DIRECTOR SINCE 1979
Mr. Carrus is Chairman of the Board of Directors and was Co-Chairman
from mid-1988 to 1994. Mr. Carrus has also been the Treasurer of the
Company since 1979 and he was President of the Company from 1979 until
mid-1988. Mr. Carrus is also a director of Cronin Fasteners, Inc.,
Ensemble Music, Inc., Pudgies Chicken, Inc., The Carrus Corporation
and Best Buys, Inc.
MICHAEL A. WIENER AGE 58 DIRECTOR SINCE 1972
Mr. Wiener is Co-Chairman of the Board of Directors and was Chairman
from 1979 to 1994. Mr. Wiener has also been the Secretary of the
Company since 1979. Mr. Wiener is also a director of Ensemble Music,
Inc., The Wiener Foundation, Central Synagogue (as Trustee), the
Samuel Waxman Cancer Research Foundation and Best Buys, Inc.
MEL KARMAZIN AGE 52 DIRECTOR SINCE 1984
Mr. Karmazin is President and Chief Executive Officer of the Company
and has held these offices since mid-1988. He was Executive Vice
President of the Company from 1981 until mid-1988. Mr. Karmazin has
also been the Chief Executive Officer and a director of Westwood One,
Inc., an affiliate of the Company, since February 1994.
3
<PAGE>
FARID SULEMAN AGE 44 DIRECTOR SINCE FEBRUARY 1992
Mr. Suleman is Vice President-Finance and Chief Financial Officer of
the Company and has held these offices since 1986. He has also been
the Chief Financial Officer and a director of Westwood One, Inc., an
affiliate of the Company, since February 1994.
STEVEN A. LERMAN AGE 49 DIRECTOR SINCE FEBRUARY 1992
Mr. Lerman has been a partner in the Washington, D.C. law firm of
Leventhal, Senter & Lerman since 1986. He and his firm regularly serve
as outside counsel to the Company with respect to certain matters,
particularly regulatory matters before the Federal Communications
Commission. Mr. Lerman also is a director of Westwood One, Inc.
NOMINEES TO BE ELECTED BY THE HOLDERS OF THE CLASS A SHARES:
ALAN R. BATKIN AGE 51 DIRECTOR SINCE APRIL 1992
Mr. Batkin is Vice Chairman of Kissinger Associates, Inc., a privately
held firm that provides strategic geopolitical advice to a broad range
of corporate clients. Mr. Batkin has been with Kissinger Associates
since 1990. He served as a Managing Director of Lehman Brothers, Inc.
from 1976 to 1990. He is also a director of Hasbro, Inc.
JEFFREY SHERMAN AGE 47 DIRECTOR SINCE 1994
Mr. Sherman is the President and Chief Operating Officer of
Bloomingdales, a division of Federated Department Stores. Mr. Sherman
has been with Bloomingdales since 1971.
NOMINEES TO BE ELECTED BY THE HOLDERS OF THE CLASS C SHARES:
JAMES L. SINGLETON AGE 40 DIRECTOR SINCE 1990
Mr. Singleton has been a Vice Chairman of The Cypress Group Inc. since
April 1994. Mr. Singleton was a Managing Director of Lehman Brothers,
a division of a subsidiary of Lehman Brothers Holdings, Inc., from
1992 to 1994 and from 1990 to 1992, he was a Senior Vice President of
Lehman Brothers, working in the Merchant Banking Group.
JAMES A. STERN AGE 45 DIRECTOR SINCE 1990
Mr. Stern has been a Chairman of The Cypress Group Inc. since April
1994. From 1984 to 1994 he served as a Managing Director of Lehman
Brothers, a division of a subsidiary of Lehman Brothers Holdings, Inc.
and from 1989 to 1994, he also headed the Merchant Banking Group of
Lehman Brothers. Mr. Stern is also a director of K & F Industries,
Inc., R.P. Scherer Corp., Noel Group, Inc. and Lear Seating
Corporation.
Additional information about the current directors and officers
of the Company (which include all of the nominees for election to the Board),
including information with respect to their ownership of Common Stock and their
compensation, appears in the following sections of this Proxy Statement.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met five times and took one action by
unanimous written consent in 1995. In 1995, each director attended all of the
meetings of the Board of Directors and all committees of the Board of Directors
on which such director served, with the exception of Mr. Singleton, who attended
four of such meetings.
4
<PAGE>
The Board of Directors presently has standing Compensation and
Audit Committees. The Company has no nominating committee. In 1995, the
Compensation Committee, consisting of Messrs. Carrus and Wiener, was responsible
for administering the Company's Stock Option Plan (the "Stock Option Plan") and
certain awards under the Company's Deferred Share Plan (the "Deferred Share
Plan"), setting corporate performance goals in connection with the award of
certain cash and equity-based incentive compensation for executive officers, and
for the determining amounts to be awarded upon the Company's achievement of such
goals. The Compensation Committee held one meeting in 1995.
The Company's Audit Committee consists of Messrs. Batkin and
Sherman. The functions of the Audit Committee are to review and report to the
Board of Directors with respect to the selection and the terms of engagement of
the Company's independent certified public accountants. In addition, the
committee communicates with such independent certified public accountants and
the Company's internal accounting staff with respect to accounting and audit
procedures, the implementation of recommendations by such independent certified
public accountants, the adequacy of the Company's internal controls and related
matters. The Audit Committee met twice in 1995 to review, among other things,
the terms of the Company's engagement of KPMG Peat Marwick LLP as the Company's
independent certified public accountants and the procedures, internal controls
and policies followed by the Company and the procedures of KPMG Peat Marwick LLP
in connection with audits of the Company's financial statements.
Directors of the Company do not receive compensation for their
services as such, except for Messrs. Batkin and Sherman who in 1995 received
retainers at an annualized rate of $20,000.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the
Company's Chief Executive Officer and the Company's three other executive
officers (the "named executive officers") for the three fiscal years ended
December 31, 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
--------------------------
<CAPTION>
NAME AND PRINCIPAL POSITION ANNUAL COMPENSATION LONG-TERM COMPENSATION
Restricted
Stock All
Bonus Award(s) Options Other
YEAR SALARY ($) ($) ($) (#) COMPENSATION 1
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald Carrus, ........................ 1995 250,000 - - - 3,778
Chairman of the Board 1994 250,000 - - - 6,078
and Treasurer 1993 250,000 - - - 3,712
Michael A. Wiener, .................. 1995 250,000 - - - 5,455
Co-Chairman of the Board 1994 250,000 - - - 2,565
and Secretary 1993 250,000 - - - 2,019
Mel Karmazin, ........................ 1995 925,000 2,325,000 417,513 2 265,689 3,863
President, Chief Executive 1994 925,000 1,500,000 - 295,070 3,840
Officer and Director 1993 925,000 1,000,000 - 168,750 798
Farid Suleman,......................... 1995 350,000 500,000 - - 0
Vice President of Finance, 1994 300,000 400,000 - 258,750 0
Chief Financial Officer 1993 298,230 300,000 - 362,813 0
and Director
5
<PAGE>
<FN>
NOTES TO SUMMARY COMPENSATION TABLE:
1. Reported amounts represent premiums paid on whole life insurance policies,
the cash values of which are used by the Company solely to pay premiums on
the policies.
2. This amount reflects the fair value of 29,704 Class B Deferred Shares granted
to Mr. Karmazin in January 1995, all of which were vested as of their date
of grant. Such fair value was determined by the closing price of the
Company's Class A Shares on the date of grant. The value of such Class B
Deferred Shares as of December 29, 1995 was $737,550, assuming each Class B
Deferred Share had a fair market value equal to $24.83, which was the
closing price of the Company's Class A Shares on December 29, 1995, as
reported on the New York Stock Exchange. No other Deferred Share awards to
executive officers were outstanding as of December 31, 1995.
</FN>
</TABLE>
OPTION GRANTS IN 1995
The following table sets forth certain information, as required
by the rules of the Securities and Exchange Commission (the "SEC"), regarding
stock options granted to the named executive officers during the Company's 1995
fiscal year. The amounts shown as "Potential Realized Value" in the table below
are the result of calculations at the 5% and 10% rates set by the SEC and
therefore are not intended to forecast possible future appreciation of the
Company's stock price. The actual value, if any, that an optionee will realize
upon exercise of an option will depend on the excess of the market value of the
Common Stock on the date the option is exercised over the exercise price. In all
cases, the appreciation is calculated from the award date to the end of the
option term.
<TABLE>
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------------------------
<CAPTION>
Potential Realized Value at
Number of % of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Exercise OPTION TERM
Options Employees Price ($) Expiration
Name Granted (#) in 1995 Per Share Date 5% ($) 10% ($)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald Carrus 0 -- -- -- -- --
Michael A. Wiener 0 -- -- -- -- --
Mel Karmazin 265,689 1 100 $14.05 1/30/05 $2,347,620 $5,949,330
Farid Suleman 0 -- -- -- -- --
<FN>
Notes to Table:
1. Represents award of option for the purchase of 265,689 Class B Shares,
which were exercisable immediately upon grant.
</FN>
</TABLE>
6
<PAGE>
AGGREGATED OPTION EXERCISES IN 1995 AND OPTION VALUES AS OF DECEMBER 31, 1995
The following table provides information on option exercises in
1995 by the named executive officers, and the value of each such officer's
unexercised options at December 31, 1995.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT FISCAL MONEY OPTIONS AT FISCAL
YEAR-END (#) YEAR-END ($) 1
-------------------------------- --------------------------------
SHARES
ACQUIRED ON VALUE REAL-
NAME EXERCISE (#) IZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ --------------- ------------- -------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Gerald Carrus.............. 0 0 0 0 0 0
Michael A. Wiener.......... 0 0 0 0 0 0
Mel Karmazin............... 0 0 5,250,311 0 $122,193,161 $ 0
Farid Suleman.............. 0 0 334,126 377,437 6,654,604 5,895,398
<FN>
Note to Option Table:
1. On December 29, 1995, the closing per share price of a Class A
Share on the New York Stock Exchange was $24.83. The Class B
Shares are not publicly listed or traded and may not be held by
any persons other than Messrs. Carrus, Wiener and Karmazin and
their "affiliates", as defined in the Company's Restated
Certificate of Incorporation. Each Class B Share is freely
convertible into one Class A Share at the option of the holder,
and a Class B Share automatically converts into a Class A Share
upon transfer to any person not eligible to hold Class B Shares.
For purposes of this Table, the value of unexercised options to
acquire Class B Shares is reported as if Class A Shares would be
received upon the exercise of such options.
</FN>
</TABLE>
PENSION PLAN
The Infinity Broadcasting Corporation Pension Plan (the "Pension
Plan") was frozen by the Company effective November 30, 1987. As a result, after
November 30, 1987, Participants (as such term is defined in the Pension Plan) in
the Pension Plan do not accrue additional benefits under the Pension Plan,
persons who were not Participants prior to November 30, 1987 do not become
Participants, and the accrued benefits of all persons who were Participants as
of such date will be paid as and when they become due under the Pension Plan. A
Participant retiring at normal retirement age is entitled to a monthly benefit
in the straight life annuity form of 50% of his average monthly compensation
over the three years (prior to November 30, 1987) in which such compensation was
the highest, reduced by 74% of the Participant's Social Security Benefit offset.
Benefits accrued under the Pension Plan as of November 1987 will
be preserved for future distribution. The Company will continue to contribute to
the Pension Plan as required to satisfy the funding requirements imposed by law.
Messrs. Carrus, Wiener and Karmazin are the only directors or
executive officers of the Company eligible to receive a monthly pension under
the terms of the frozen Pension Plan. Assuming retirement at normal retirement
age (age 65) and payment of benefits in the form of a life annuity, Messrs.
Carrus, Wiener and Karmazin would be entitled to an estimated annual benefit
under the frozen Pension
7
<PAGE>
Plan of approximately $66,000, $32,000 and $17,000, respectively. At the time
the Pension Plan was frozen, Messrs. Carrus, Wiener and Karmazin had 9, 9, and 6
years of service credit under the Pension Plan, respectively.
EMPLOYMENT AGREEMENTS
Messrs. Carrus and Wiener have identical ten-year employment
agreements with the Company that took effect on December 31, 1985. Under the
terms of these agreements, Messrs. Carrus and Wiener will be employed as senior
executives of the Company until December 31, 1995. Messrs. Carrus and Wiener
have continued their employment with the Company. The Company intends to enter
into new employment agreements with Messrs. Carrus and Wiener, the terms and
conditions of which have yet to be determined. Compensation for each of them
under their respective agreements is determined by the Company's Board of
Directors, with a minimum annual salary of $250,000 being guaranteed to each.
The term of employment under these agreements terminates upon the disability for
six consecutive months, or the death, of the contracting officer (a "Termination
Event"). Upon a Termination Event, the officer or his estate is entitled to
receive, through the year 2000, an annual payment equal to 50% of the actual
compensation earned by such officer in the fiscal year prior to the year in
which the Termination Event occurred.
In September 1990, the Company entered into a new employment
agreement with Mr. Karmazin. Under such new agreement, Mr. Karmazin is to be
employed for a five-year term, the expiration date of which is extended
automatically by one year on each anniversary of the original effective date of
the agreement (an "Anniversary Date") through the Anniversary Date following the
year in which Mr. Karmazin reaches age 61 (unless the agreement is terminated as
provided therein), as the Company's President and Chief Executive Officer (or
any higher position to which the Board appoints Mr. Karmazin with his consent).
The agreement requires the Company to use its best efforts to cause Mr. Karmazin
to be a member of the Company's Board of Directors throughout his employment
under the agreement, and to include him in the management slate for election as
a director at every stockholders' meeting at which his term as a director would
otherwise expire.
Mr. Karmazin's minimum base compensation under his agreement is
$925,000 per year; a majority of the Board (including for this purpose at least
two-thirds of the members of the Board) (a "Majority") may increase, but may not
decrease, this amount. In addition, the agreement provides for certain incentive
compensation in the form of cash, stock options and deferred shares. As set
forth in the agreement, such incentive compensation is payable if the Company's
annual earnings before interest, taxes, depreciation and amortization ("EBITDA")
meets or exceeds annual EBITDA targets set by Compensation Committee.
Mr. Karmazin's employment agreement was amended further in
February 1992, in conjunction with amendments to the Stock Option Plan and the
Deferred Share Plan that were intended to facilitate those plans' ongoing
compliance with the Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder (the "Exchange Act") by, among other things, making all
awards to executive officers of the Company subject to the discretion of the
Compensation Committee. The 1992 amendment to Mr. Karmazin's employment
agreement provides for certain increased cash incentive compensation in the
event he is not awarded incentive compensation in the form of stock options and
deferred shares that is earned under the employment agreement.
The agreement with Mr. Karmazin may be terminated at any time by
a Majority of the Board of Directors or by Mr. Karmazin, either without cause or
for cause, upon notice. In the event the Company terminates Mr. Karmazin's
employment without cause (as defined in the agreement) or in the event Mr.
Karmazin terminates his employment for good reason (as defined in the
agreement), Mr. Karmazin is entitled to receive incentive compensation for the
period through the termination date of the agreement (as extended) based on the
greater of actual EBITDA and EBITDA in the last fiscal year of the Company
8
<PAGE>
preceding the delivery of the notice of termination, and an amount equal to the
present value of the base compensation payable through the expiration date of
the agreement (as extended). In addition, Mr. Karmazin's agreement terminates
upon Mr. Karmazin's disability for six consecutive months or his death. In the
event of a termination due to disability, Mr. Karmazin is entitled to receive
75% of his base compensation through the termination date of the agreement (as
extended), subject to offset by the value of certain Company-provided disability
benefits; in the event of a termination due to death, his estate or beneficiary
is entitled to receive the present value of his base compensation for the period
ending on the earlier of the first anniversary of his death or the expiration
date of the agreement (as extended). In the event Mr. Karmazin's employment is
terminated for cause (as defined in the agreement) or Mr. Karmazin terminates
his employment for other than good reason (as defined in the agreement), Mr.
Karmazin is entitled to receive base compensation through the date of the notice
of termination (if for cause) or actual termination (if voluntary) and any
previously unpaid incentive compensation attributable to prior years. The
agreement also permits Mr. Karmazin to terminate his employment following a
change in control (as defined in the agreement). In the event of such a
termination, Mr. Karmazin is entitled to receive base compensation and prorated
incentive compensation through the effective date of termination, and any
previously unpaid incentive compensation attributable to prior years.
Under his employment agreement, Mr. Karmazin may participate in
all employee benefit plans of the Company for which he is otherwise eligible. It
is expected that, under any new employment agreements which may be entered into
by Messrs. Carrus and Wiener, each executive will continue to be able to
participate in all employee benefit plans of the Company for which he is
otherwise eligible.
For information regarding the payments that were made to Messrs.
Carrus, Wiener and Karmazin pursuant to the terms of their respective employment
agreements during the past three fiscal years, see the "Summary Compensation
Table", above and "Compensation of Executive Officers -- Report of the Board of
Directors Concerning Executive Compensation", below.
ADDITIONAL MATTERS
Section 16(a) of the Exchange Act requires the Company's
directors, executive officers and holders of more than 10% of the Class A Shares
to file with the SEC initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. The
Company believes that during the year ended December 31, 1995, its executive
officers, directors and holders of more than 10% of the Class A Shares complied
with all Section 16(a) filing requirements. In making this statement, the
Company has relied on copies of filings submitted to the Company and on written
representations of its directors and executive officers.
The Company has executed indemnity agreements with all of its
executive officers and directors, except Messrs. Singleton and Stern. These
agreements require the Company to indemnify the seven covered individuals for
liabilities incurred by them because of any act or omission or neglect or breach
of duty committed while acting in the capacity of an officer or director of the
Company, to the fullest extent permitted by the laws of the State of Delaware.
Certain actions, including acts for which indemnification is found by a court to
be illegal and contrary to public policy, are excluded from the coverage of the
agreements. Mr. Karmazin's employment agreement also requires the Company to
indemnify Mr. Karmazin to the fullest extent permitted by applicable Delaware
law.
In October 1995, the Company obtained a director's and officer's
liability insurance policy with National Union Fire Insurance Company for a
one-year period at a total cost of $245,000. The policy insures up to an
aggregate of $15,000,000 (a) the directors and officers of the Company and its
subsidiaries against certain losses from claims against them in their capacities
as directors and officers to the extent such losses are not indemnified by the
Company or such subsidiaries and (b) the Company and such subsidiaries to the
extent they indemnify such directors and officers for losses permitted under
applicable law. No payments have been made by the insurance company under this
policy or prior policies as of the date hereof.
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1995, the Compensation Committee, consisting of Messrs.
Carrus and Wiener, was responsible only for administering the Option Plan and
for making and administering grants to executive officers of the Company under
the Deferred Share Plan. Neither Mr. Carrus nor Mr. Wiener has ever received an
award under either plan. In 1995, Mr. Karmazin, the Company's President and
Chief Executive Officer (the "CEO"), was responsible for determining the amounts
of salary and bonus payable to the Company's Vice President-Finance and Chief
Financial Officer (the "CFO"). All other matters relating to executive
compensation are determined in accordance with pre-existing employment
agreements with the executive officer. See "Compensation of Executive Officers
- -- Employment Agreements", above and "Compensation of Executive Officers --
Report of the Board of Directors Concerning Executive Compensation", below.
REPORT OF THE BOARD OF DIRECTORS CONCERNING EXECUTIVE COMPENSATION
The Company is one of the largest owners and operators of radio
stations in the United States. The Company's overall strategy is to own and
operate radio stations in the nation's largest radio revenue markets and to
improve its stations' operating cash flow, and it seeks to sustain progressive
growth in long-term value for its stockholders. The Company recently completed
the acquisition of TDI Worldwide, Inc., one of the largest out-of-home media
companies in the U.S. Given the growth and diversity of the Company's
operations, strong visionary leadership at the executive officer level is
essential. The compensation policies utilized by the Board, its Compensation
Committee (which in 1995 made and administered all grants of incentive
compensation to executive officers) and the CEO (who determines the amount of
salary payable to the CFO and also determined the amount of bonus payable to the
CFO in 1995) are intended to enable the Company to attract, retain and motivate
this caliber of management to meet Company goals, using appropriate combinations
of base salary and cash and equity-based incentive compensation.
In 1985, the Company entered into long-term employment
agreements with Messrs. Carrus, Wiener and Karmazin. The Company entered into a
new employment agreement with Mr. Karmazin in 1990. Each agreement provides for
a minimum level of base salary; the Company's agreement with Mr. Karmazin also
provides for certain annual incentive compensation opportunities (see
"Compensation of Executive Officers--Employment Agreements", above).
The decisions of the Compensation Committee and the CEO with
respect to the compensation earned by executive officers in 1995 were generally
based on applicable contractual commitments, corporate performance in relation
to annually-determined earnings targets, the Company's operating and financial
performance in relation to that of other advertising-supported media companies,
the overall growth of the Company (including increases in individual executive
officers' responsibilities in connection therewith) and individual performance
(the foregoing factors are listed in the order of their relative importance).
Mr. Karmazin's base salary for 1995 remained for the third
consecutive year at $925,000, the minimum amount currently payable pursuant to
his employment agreement. The Board's Compensation Committee, consisting of
Messrs. Carrus and Wiener (the "Committee"), met in March 1996 to review the
Company's 1995 and more recent performance, as well as the personal performance
of the CEO and CFO, and to make incentive compensation award determinations for
1995. Upon review of the Company's EBITDA results for 1995, the Committee
certified that the Company's performance had exceeded the target the Committee
had established for 1995. Based on those results, the Committee awarded Mr.
Karmazin options for the purchase of 275,166 Class B Shares, priced at current
fair market value. This award is equivalent in value to an award of an option on
253,125 Class B Shares with an exercise price equal to 85% of the 1995 year-end
closing price, the grant called for by Mr. Karmazin's employment agreement. The
Committee determined that it was in the Company's best interests to award
options priced at current fair market value because, among other considerations,
such options provide a greater incentive for future
10
<PAGE>
performance. As required by Mr. Karmazin's employment agreement, the Committee
also awarded Mr. Karmazin 8,283 Class B Deferred Shares in recognition that the
Company's 1995 EBITDA target was exceeded.
In recognition of Mr. Karmazin's extraordinary recent
performance (including his pivotal roles in the Company's recent transactions),
the increase in the price of the Company's Common Stock, as an incentive to
further superior performance and longevity with the Company, and to reinforce
further the alignment of Mr. Karmazin's interests with those of the Company's
other stockholders, the Committee awarded Mr. Karmazin a special grant of
options for 495,000 Class B Shares at current fair market value. This award
generally vests in three equal cumulative annual installments beginning on March
14, 1997, subject to Mr. Karmazin's continued employment with the Company, and
remains exercisable for ten years from the date of grant.
The Committee awarded Mr. Karmazin the $500,000 cash incentive
bonus required by his employment contract for meeting the 1995 EBITDA target,
plus an additional million dollars in recognition of superior corporate results
and his outstanding personal performance. The Committee also recommended, and
the Board approved, an additional cash bonus award of $825,000 in recognition of
Mr. Karmazin's extraordinary performance in 1995, including his pivotal role in
certain of the Company's recent transactions.
Over a series of meetings in the spring of 1996, the Committee
also considered the upcoming expiration of options issued to Mr. Karmazin in
1988 for a number of Class B Shares that at the time constituted 17% of the
fully diluted Common Stock of the Company (the "1988 Options"). Mr. Karmazin
intends to exercise these options prior to their expiration on June 27, 1998 and
expects to have to sell approximately half the shares to pay the income tax
liability that will be incurred in connection with the exercise of the options.
After extensive consideration of the estimated values of the expiring options
and potential vehicles for continuing to provide Mr. Karmazin with significant
opportunities to participate in the growth of the Company's stock, the
importance of maintaining a significant alignment of Mr. Karmazin's economic
interests with those of the Company's other stockholders, the importance of
providing Mr. Karmazin with strong incentives to continue to commit his
outstanding visionary leadership skills to the Company, the extraordinary
cumulative performance of the Company under Mr. Karmazin's leadership, the
regular and extraordinary long term incentive compensation practices of other
companies in the advertising- supported media industry and other relevant
competitive groups, and the tax benefits the Company will realize upon Mr.
Karmazin's exercise of the 1988 Options and after extensive discussions with
independent compensation consultants and the Company's counsel, the Committee
adopted a resolution, subject to stockholder approval of the Company's 1996
Long-Term Incentive Plan (see "Proposal to Approve 1996 Long-Term Incentive
Plan"), that will provide Mr. Karmazin with an aggregate grant of options for
2,225,000 Class B Shares, as follows.
During the period commencing on the date stockholders approve
the Company's 1996 Long- Term Incentive Plan and ending on June 30, 1998, the
Committee has authorized the grant of options, to be granted in one or more
installments, at an exercise price equal to the full fair market value of a
Class A Share for 2,225,000 Class B Shares on the date of grant. Such grants
will be conditioned on Mr. Karmazin's continued retention (subject to certain
permitted transfer arrangements) of a specified amount of shares of Common Stock
of the Company, and will vest in three cumulative annual installments over the
years 2001 through 2003, subject to Mr. Karmazin's continued employment with the
Company. The grants will include provisions for accelerated vesting in the event
of death, disability or a change in control. This award is intended to preserve
and continue, for the remainder of Mr. Karmazin's career with the Company, the
value of his equity ownership of the Company. Absent extraordinary
circumstances, over the next several years, the Committee does not expect to
make any further equity-based incentive compensation awards to Mr. Karmazin that
are not performance-based.
Because, as noted above, it is the policy of the Board of
Directors to require any person who is a director of the Company to recuse
himself from any decision regarding the amount of such person's
11
<PAGE>
salary or other compensation, Messrs. Carrus and Wiener do not receive awards
under the Cash Bonus Plan, the Option Plan or the Deferred Share Plan, and none
of the executive officers participates in Board decisions regarding the amount
of his own compensation.
Section 162(m) of the Internal Revenue Code generally disallows
an income tax deduction to public companies for compensation over $1,000,000
paid in a year to any one of the CEO or the four most highly compensated other
executive officers, to the extent that this compensation is not "performance
based" within the meaning of Section 162(m). The Compensation Committee and the
Board have determined that their general policy will be to structure the
compensation arrangements for the CEO and other senior executive officers, to
the extent feasible and taking into account all relevant considerations, so as
to satisfy Section 162(m)'s conditions for deductibility. The Compensation
Committee and the Board expect that a significant portion of the compensation
provided to the CEO and the CFO will continue to be performance-based.
Gerald Carrus Farid Suleman Jeffrey Sherman
Michael A. Wiener Steven A. Lerman James L. Singleton
Mel Karmazin Alan R. Batkin James A. Stern
PERFORMANCE GRAPH
The chart below compares the performance of the Class A Shares
with the performance of the Standard & Poor's 500 Index ("S&P 500"), the NASDAQ
Composite Index and a peer group of companies, measuring the changes in common
stock prices from January 31, 1992 to December 31, 1995. The Class A Shares have
been quoted on the New York Stock Exchange, under the symbol INF, since June 22,
1995. Prior to such date, the Class A Shares were quoted on the NASDAQ National
Market System. Due to the change of the market on which the Company's Class A
Shares are traded, the S&P 500 Index has been added to the chart. As required by
the SEC, the values shown assume the reinvestment of all dividends and, in the
case of the peer group, are weighted to reflect the market capitalization of the
component companies. The peer group is comprised of Capital Cities/ABC Inc.,
CBS, Inc., Viacom, Inc., Gannett Co., Inc., Tribune Co. and Clear Channel
Communications, Inc., all of which, like the Company, are major
advertising-supported media and entertainment companies.
Infinity Proxy - 1996
Performance Graph
1/31/92 12/31/92 12/31/93 12/31/94 12/31/95
Nasdaq Composite 100 110 126 123 174
Infinity Broadcasting 100 140 389 405 718
Peer Group 100 122 151 189 201
S & P 500 100 107 114 112 151
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the
beneficial ownership of the Company's common stock as of April 15, 1996, by (1)
each person known to the Company to own beneficially more than 5% of any class
of Common Stock, (2) each director and nominee to serve as a director of the
Company, (3) each executive officer of the Company named in the Summary
Compensation Table and (4) all directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
Percent of
Total
Percent of Percent of Percent of Voting
NAME SHARES 1 CLASS 1 SHARES 1 CLASS ** 1 SHARES 1 CLASS 1 POWER 1
- ---------------------- -------- ------- -------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerald Carrus 2 - - 4,122,777 30.1% - - 25.7%
Michael A. Wiener 2 - - 3,580,062 26.2% - - 22.3%
Mel Karmazin 2 553,278 3 * 5,980,367 4 43.7% - - 28.1%
Farid Suleman 2 406,444 5 * - - - - *
Steven A. Lerman - - - - - - -
Alan R. Batkin 35,438 6 * - - - - *
Jeffrey Sherman 4,500 7 * - - - - *
James L. Singleton - - - - - - -
James A. Stern - - - - - - -
Lehman Investors 8 - - - - 21,221,190 9 100.00% 9 11.7%
The Putnam Advisory 545,895 * - - - - *
Company, Inc 10
Putnam Investment 7,005,300 9.2% - - - - 4.4%
Management, Inc 10
College Retirement 4,856,812 6.4% - - - - 3.0%
Equities Fund 11
The Prudential Insurance 4,840,500 6.3% - - - - 3.0%
Company of America 12
Denver Investment 4,800,355 6.3% - - - - 3.0%
Advisors LLC 13
Jennison Associates 4,699,875 6.2% - - - - 2.9%
Capital Corp. 14
All directors and
executive officers
as a group (9 persons) 999,660 1.3% 13,683,206 100% - - 64.1%
* Less than 1%
** Assumes the exercise of all options and deferred shares for the purchase of
Class B Shares beneficially owned. Such percentages for Messrs. Carrus and
Wiener would be 49.6% and 43.0%, respectively, assuming such options and
deferred shares were not exercised.
13
<PAGE>
<FN>
1. The information as to beneficial ownership is based on statements
furnished to the Company by the beneficial owners. As used in this
Table, "beneficial ownership" means the sole or shared power to vote or
to direct the voting of a security, or the sole or shared investment
power with respect to a security (i.e., the power to dispose of, or to
direct the disposition of, a security). For purposes of this Table, a
person is deemed to have "beneficial ownership" of any security that
such person has the right to acquire within 60 days after April 15,
1996, except that "beneficial ownership" does not include the number of
Class A Shares issuable upon conversion of Class B Shares and Class C
Shares, even though Class B Shares and Class C Shares are freely
convertible into Class A Shares.
2. The address of each person is Infinity Broadcasting Corporation, 600
Madison Avenue, New York, New York 10022.
3. Includes options and warrants exercisable for 199,308 Class A Shares.
4. Includes options and deferred shares exercisable for 5,364,159 Class B
Shares.
5. Includes options exercisable for 334,126 Class A Shares.
6. Includes options exercisable for 30,375 Class A Shares.
7. Includes options exercisable for 4,500 Class A Shares.
8. The general partners of the limited partnerships included in the Lehman
Investors are subsidiaries of Lehman Brothers Holdings, Inc. The
address for each of the Lehman Investors is Three World Financial
Center, New York, New York 10285.
9. Includes warrants exercisable for 20,104,934 Class C Shares.
10. Includes Class A Shares beneficially owned by The Putnam Advisory
Company, Inc. ("PAC") and Putnam Investment Management, Inc. ("PIM") as
reported to the Company on March 11, 1996. PAC and PIM are both
wholly-owned subsidiaries of Putnam Investments, Inc. ("PI"), a
wholly-owned subsidiary of Marsh & McLennan Companies, Inc. ("M&MC").
Of the 545,895 Class A Shares beneficially owned by PAC, 341,220 shares
are owned with shared voting power and all are owned with shared
dispositive power. Of the 7,005,300 Class A Shares beneficially owned
by PIM, all are owned with shared dispositive power. M&MC disclaims
beneficial ownership of the 7,551,195 Class A Shares beneficially owned
by PAC and PIM. The address of PAC, PIM, PI is One Post Office Square,
Boston, Massachusetts 02109 and M&MC is 1166 Avenue of the Americas,
New York, New York, 10036.
11. Includes Class A Shares beneficially owned by College Retirement
Equities Fund ("CREF") as reported to the Company on February 7, 1996.
The address of CREF is 730 Third Avenue, New York, New York 10017.
12. Of the 4,840,500 Class A Shares beneficially owned by The Prudential
Insurance Company of America ("PIC"), 3,927,075 shares are owned with
shared voting power and 4,186,275 shares are owned with shared
dispositive power, as reported to the Company on February 14, 1996. The
address of PIC is Prudential Plaza, Newark, New Jersey 07102.
13. Includes Class A Shares beneficially owned by Denver Investment
Advisors LLC ("DIA") as reported to the Company on February 27, 1996.
The address of DIA is 1225 17th Street, Denver, Colorado 80202.
14. Of the 4,699,875 Class A Shares beneficially owned by Jennison
Associates Capital Corp ("JAC"), 3,782,400 shares are owned with shared
voting power and all are owned with shared dispositive power, as
reported to the Company on February 1, 1996. The address of JAC is 466
Lexington Avenue, New York, New York 10017.
</FN>
</TABLE>
14
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
In December 1995, the Company purchased for $827,000
approximately 7,500 square feet of office space in Boston, Massachusetts from
1265 Realty Company. Gerald Carrus and Michael A. Wiener each owns 35% of 1265
Realty Company. The Company's Boston radio station, WBCN-FM, uses this space for
its studios and offices. The Company obtained an independent appraisal on the
property which concluded that the purchase price was favorable to the Company.
Mr. Lerman is a partner in the law firm of Leventhal, Senter &
Lerman, which represents the Company in certain matters. During 1995, the
Company paid Leventhal, Senter & Lerman approximately $995,210 in respect of
services rendered to the Company in 1994 and 1995.
Transactions between the Company and its officers, directors and
affiliates, and loans made by the Company to such persons, are approved by a
majority of the directors who are not party to such transactions. The Company
intends to continue this policy in the future.
PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED CLASS A SHARES
The Company is proposing to amend ARTICLE FOUR of the Restated
Certificate of Incorporation of the Company to increase the number of authorized
Class A Shares from 200,000,000 to 300,000,000 shares. The full text of the
proposed Certificate of Amendment amending the Restated Certificate of
Incorporation of the Company is set forth as Exhibit A to this Proxy Statement.
Under Section 242(b) of the Delaware General Corporation Law,
the proposed amendment must be approved by the holders of a majority of the
issued and outstanding shares of Common Stock voting as a single class and by
the holders of a majority of the issued and outstanding Class A Shares voting
separately as a class. Abstentions from voting (including broker non-votes) will
have the effect of votes against the proposed amendment.
The holders of the shares of the Class B Stock have indicated to
the Board of Directors that they intend to vote in favor of the proposed
amendment to the Company's Restated Certificate of Incorporation. If such
holders do vote in favor of the proposed amendment, then the proposed amendment
will be approved by the holders of a majority of the issued and outstanding
shares of Common Stock voting as a single class. As a result, only the approval
of the holders of a majority of the Class A Shares, voting separately as a
class, will be required for the approval of the proposed amendment.
REASONS FOR AND CERTAIN EFFECTS OF THE AMENDMENT
The Board of Directors considers the proposed increase in the
number of authorized shares desirable because it would give the Board of
Directors the necessary flexibility to issue Class A Shares in connection with
future acquisitions, financings, stock dividends and splits, employee benefits
and other general corporate purposes, without the expense and delay incidental
to obtaining stockholder approval in each such instance.
Existing stockholders do not have preemptive rights with respect
to future issuances of Class A Shares by the Company and their respective
interests in the Company could be diluted by such issuances with respect to
earnings per share and book and market value per share.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
INCREASE THE NUMBER OF AUTHORIZED CLASS A SHARES.
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<PAGE>
PROPOSAL TO APPROVE THE 1996 LONG-TERM INCENTIVE PLAN
The Board of Directors recommends approval of the Infinity
Broadcasting Corporation 1996 Long-Term Incentive Plan (the "Plan"), which was
adopted by the Board of Directors on April 15, 1996 and will become effective
upon approval of this Proposal.
The following description of the Plan is qualified in its
entirety by reference to the full text of the Plan, a copy of which is attached
as Exhibit B to this proxy statement.
Description of the Plan
PURPOSE. The Plan was created to promote the long-term financial
success of the Company and increase shareholder value by providing to selected
employees an ownership interest in the Company as an incentive for superior
performance. On April 15, 1996, the Board of Directors adopted the Plan, subject
to approval by the stockholders. The Plan shall be effective on the date the
Plan is approved by the stockholders. No award may be granted under the Plan
after April 15, 2006.
ADMINISTRATION. The Plan provides for administration by a
committee (the "Committee"), each member of which must be a "disinterested
person" within the meaning of Rule 16b-3 promulgated by the SEC under the
Exchange Act. Among the powers granted to the Committee are the authority to
interpret the Plan and to establish rules and regulations for its operation.
TYPES OF AWARDS. The Plan provides for the grant of any or all
of the following types of awards: (1) stock options, including incentive stock
options; (2) restricted stock and restricted units; (3) incentive stock and
incentive units; (4) deferred shares and incentive deferred shares; (5) deferred
compensation stock; and (6) stock in lieu of cash (hereinafter collectively
referred to as "Awards").
ELIGIBILITY AND PARTICIPATION. The Plan provides that Awards
will be granted to executive officers, certain non-employee directors and other
key employees selected by the Committee. Non-employee directors who are not and
will not in the next 12 months become members of the Compensation Committee are
eligible to participate in the Plan. Upon stockholder approval, four executive
officers, two directors and approximately 1,000 employees will become eligible
to participate in the Plan.
LIMITATION ON AWARDS. The maximum number of Class A Shares which
shall be available for Awards granted under the Plan during its term shall be
1,500,000, and the maximum number of Class B Shares which shall be available for
Awards granted under the Plan shall be 3,000,000. The maximum number of shares
of Common Stock that may be issued (1) with respect to restricted stock and
restricted units is 1,500,000, (2) with respect to incentive stock and incentive
units is 1,500,000, and (3) with respect to deferred shares and incentive
deferred shares is 1,500,000 (in each case in the proportion that Class A and
Class B Shares are authorized). The maximum aggregate number of shares that can
be issued with respect to restricted stock, restricted units, incentive stock,
incentive units, deferred shares and incentive deferred shares is 1,500,000. The
maximum number of shares for which Awards may be granted to any one participant
in a calendar year is 750,000, except that up to 2,250,000 shares may be awarded
under the Plan to the Chief Executive Officer of the Company at one time. The
maximum number of shares subject to awards of incentive stock, incentive units,
incentive deferred shares and special options to an executive officer in any
calendar year is 750,000. The Plan permits the carryover of the unused portion
of the maximum award to subsequent years, up to 750,000 shares. If any option
expires or is terminated unexercised, or if any other award in respect of shares
is canceled or forfeited, the shares subject to such option or other Award again
will be available for purposes of the Plan.
In the event of a stock dividend, stock split, recapitalization,
merger, consolidation or any other similar event which affects the Common Stock,
the Committee shall make such adjustments in the aggregate number of shares
reserved for issuance, the number of shares covered by outstanding Awards,
limits on individual grants, and the exercise prices for such Awards as are
provided in the Plan.
16
<PAGE>
STOCK OPTIONS. Under the Plan, the Committee may grant Awards in
the form of options to purchase shares of the Company's Common Stock. During the
period commencing on the effective date of the Plan and ending on June 30, 1998,
the Committee will award no less than 2,250,000 options to purchase Class B
Shares to the Chief Executive Officer of the Company, in one or more
installments. With regard to each stock option, the Committee will determine the
number of shares subject to the option, the exercise price and conditions and
limitations on the option's exercise. In no event, however, may the exercise
price be less than the closing price for a Class A Share on a national exchange
("fair market value") on the date of grant, unless otherwise determined by the
Committee. The exercise price of the option is payable in cash or its equivalent
or, as permitted by the Committee, by exchanging shares of Common Stock owned by
the participant, or by a combination of the foregoing. Unless the Committee
establishes a different schedule, each option shall become exercisable in five
cumulative annual installments beginning on the first anniversary of the date
the option is granted. If a participant's employment terminates because of
death, disability, early retirement (with the Committee's consent) or normal
retirement, the participant may exercise any option held at the time of
termination for a period of three years, or such other period determined by the
Committee at the date of grant, but in no event after the date the option
otherwise expires. If a participant's employment is terminated for Cause (as
defined in the Plan), all outstanding options terminate. In the event of
termination for any reason not described above, the option is exercisable for a
period of ninety days after termination. Any stock option granted in the form of
an incentive stock option will satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
RESTRICTED STOCK AND RESTRICTED UNITS. The Plan authorizes the
Committee to grant Awards in the form of restricted stock and restricted units.
For purposes of the Plan, restricted stock is an Award of Common Stock and a
restricted unit is a contractual right to receive Common Stock (or cash based on
fair market value of Common Stock). Such awards will be subject to such terms
and conditions, if any, as the Committee deems appropriate. The Committee will
determine whether and to what extent participants shall be entitled to receive
either currently or at a future date, dividends or other distributions paid with
respect to restricted stock or the corresponding number of shares covered by
restricted units. Restricted stock and restricted units become vested and
nonforfeitable and the restricted period shall lapse in five cumulative annual
installments beginning on the first anniversary of the date of grant unless the
Committee determines otherwise. If a participant's employment terminates because
of death, disability, early retirement (with the Committee's consent) or normal
retirement, during the period in which the transfer of shares is restricted, the
restricted stock or restricted units become vested and nonforfeitable as to that
percentage of the shares based upon the days worked as a percentage of total
days in the restricted period. Unless nonforfeitable on the date of termination
or otherwise determined by the Committee, a restricted stock or restricted unit
award is forfeited on termination.
INCENTIVE STOCK, INCENTIVE UNITS, INCENTIVE DEFERRED SHARES AND
SPECIAL OPTIONS. The Plan allows for the grant of Awards in the form of
incentive stock, incentive units, incentive deferred shares and special options.
For purposes of the Plan, (1) incentive stock is an Award of Common Stock, (2)
an incentive unit and an incentive deferred share is a contractual right to
receive Common Stock, and (3) a special option is an option to purchase Common
Stock. Such awards will be contingent upon the attainment, in whole or in part,
of certain performance objectives over a period to be determined by the
Committee. With regard to a particular performance period, the Committee shall
have the discretion, subject to the Plan's terms, to select the length of the
performance period, the performance objectives to be achieved during such period
and the determination of whether, and to what degree, such objectives have been
attained. The performance objectives established by the Committee may be related
to the performance of (1) the Company, (2) a subsidiary, (3) a division or unit
of the Company or any subsidiary, (4) the participant or (5) any combination of
the foregoing, over a measurement period or periods established by the
Committee. The performance objectives established by the Committee with respect
to such awards shall be related to at least one of the following criteria, which
may be determined solely by reference to the performance of the company or a
subsidiary (or a business unit of either or any combination of the foregoing) or
based on comparative performance relative to other companies: (1) EBITDA, (2)
total return to shareholders, (3) return on equity, (4) operating income or net
income, (5) return on capital, (6) cash
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<PAGE>
flow or (7) fair market value of the Common Stock. The Committee may, generally,
change the performance objectives applicable with respect to any incentive
stock, incentive units, incentive deferred shares, and special options to
reflect such factors.
Unless otherwise determined by the Committee, participants shall
be entitled to receive, either currently or at a future date, all dividends and
other distributions paid with respect to the incentive stock or the
corresponding number of shares covered by incentive units. If a participant's
employment terminates because of death, disability, early retirement (with the
Committee's consent) or normal retirement during the measurement period, an
Award of incentive stock, incentive units or incentive deferred shares shall
become vested and nonforfeitable (and special options shall become exercisable)
as to that percentage of the award that would have been earned based on the
attainment of performance objectives for the days worked as a percentage of
total days in the performance period. Unless nonforfeitable on the date of
termination, any incentive stock, incentive unit, incentive deferred share award
or special option is forfeited on termination.
DEFERRED COMPENSATION STOCK. An Award of deferred compensation
stock confers upon a participant the right to receive shares at the end of a
specified deferral period. On such date or dates established by the Committee
and subject to such terms and conditions as the Committee shall determine, a
participant may be permitted to defer receipt of all or a portion of his annual
compensation and/or annual incentive bonus ("Deferred Annual Amount") and
receive the equivalent amount in elective stock units based on the fair market
value of Common Stock on the date of grant. To the extent determined by the
Committee, a participant may also receive supplemental stock units for a
percentage of the Deferred Annual Amount. If the participant elects to receive
any portion of a bonus in Common Stock in lieu of cash as allowed by the Plan,
the Committee may grant an Award of deferred compensation stock as free standing
stock units, in such number and on such terms as the Committee may determine.
Deferred compensation stock units carry no voting rights until the shares have
been issued. The Committee shall determine whether any dividend equivalents
attributable to deferred units are paid currently or credited to the
participant's account and deemed reinvested in deferred compensation stock
units. Deferred compensation stock units and dividend equivalents with respect
thereto are fully vested at all times. Unless the Committee provides otherwise,
supplemental stock units and dividend equivalents with respect thereto will
become fully vested in five cumulative annual installments beginning on the
first anniversary of the date the corresponding deferred amount would have been
paid, and free standing stock units and dividend equivalents with respect
thereto will become fully vested in five cumulative annual installments
beginning on the first anniversary of the corresponding Common Stock in lieu of
cash Award. Free standing units may be forfeited if the corresponding Common
Stock is not held for a specified holding period.
DEFERRED SHARES. An Award of deferred shares confers upon a
participant the right to receive shares upon the occurrence of certain
triggering events as specified in the Deferred Share Plan. Triggering events
include (1) the first day of the seventh calendar month following the earliest
date on which at least 20 % of the outstanding common stock (on a fully diluted
basis) has been sold in public offerings registered under the Securities Act of
1933, as amended, subject to deferral at the Committee's discretion until the
first day of the thirteenth calendar month following the earliest date on which
such shares sold equal at least 20% of such outstanding shares; (2) merger or
consolidation of the Company into, or acquisition of the Company by, a company
that has sold at least 20% of its outstanding common stock (on a fully diluted
basis) to the public, unless immediately following such transaction the persons
who were shareholders of the Company immediately prior to the transaction own
50% or more of the surviving company (or such controlling entity); (3)
liquidation of the Company; (4) sale or exchange by the Company of all or
substantially all of its outstanding Common Stock, other than such a transaction
with an entity which is a subsidiary of the Company immediately before and after
such transaction, if designated as a triggering event by the Committee; (5)
under certain circumstances, in the case of participants subject to the
provisions of the Amended and Restated Stockholders' Agreement, dated as of
February 5, 1992, among the Company, the Principal Stockholders and the Lehman
Investors (as defined in the Stockholders' Agreement) the availability of
certain registration rights specified therein; and (6) other events as
designated by the Committee. Deferred shares carry no voting rights until the
shares have been issued. Unless the Committee determines otherwise, deferred
shares will vest in five cumulative annual installments beginning on the first
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<PAGE>
anniversary of the date of grant. Unless the Committee determines otherwise,
deferred shares not vested on the date of a participant's termination of
employment will be forfeited.
STOCK IN LIEU OF CASH. The Plan authorizes the Committee to
grant Awards of Common Stock to executive officers in lieu of all or a portion
of an award otherwise payable in cash, pursuant to any bonus or incentive
compensation plan of the Company. The number of shares of Common Stock issued
will be the greatest number of whole shares which has an aggregate fair market
value equal to or less than the amount of cash that otherwise would have been
payable.
CHANGE IN CONTROL. In the event of a Change in Control (as
defined in the Plan), a participant would be entitled to the following treatment
under the Plan: (I) each option would be immediately cashed out on the basis of
the Change in Control Price (as defined in the Plan); (II) restricted stock and
restricted units become nonforfeitable and immediately transferable; (III)
deferred compensation stock and deferred shares become fully vested and the
shares of Common Stock with respect thereto immediately payable. Notwithstanding
the above, no cancellation, acceleration of exercisability, vesting, cash
settlement or other payment shall occur if the Committee determines prior to the
Change in Control that any of the awards shall be honored or new rights
substituted by a Participant's employer immediately following a Change in
Control. The alternative award must be substantially equivalent and based on
stock traded on an established securities market.
AMENDMENT OF THE PLAN. The Board of Directors or the Committee
may amend, suspend or terminate the Plan, except that stockholder approval is
required if the amendment would increase the number of shares of Common Stock
subject to the Plan, change the price at which options may be granted or remove
administration of the Plan from the Committee. Subject to stockholder approval
of the Plan, (1) if the Committee so determines and the holder consents to any
amendment to any outstanding option or deferred share that has an adverse affect
on such holder's rights, the provisions of the Plan relating to options and
deferred shares shall apply to existing option grants and deferred share awards
under the Company's Stock Option Plan and the Company's Deferred Share Plan and,
such options and deferred shares shall be amended to provide such holder with
such additional benefits, and (2) if the Committee so determines, the provisions
of the Plan relating to awards of options and deferred shares shall supersede
all inconsistent provisions of each of the Option Plan and Deferred Share Plan
(other than the provisions of such plans relating to the number of shares
authorized for award thereunder and the maximum awards that may be granted
thereunder for specified periods).
FEDERAL INCOME TAX CONSIDERATIONS
The following is a brief summary of the principal Federal income
tax consequences generally arising with respect to Awards under the Plan. This
summary is not intended to be exhaustive and, among other things, does not
describe state or local tax consequences.
STOCK OPTIONS. A participant who is granted an incentive stock
option does not realize any taxable income at the time of grant or at the time
of exercise. Similarly, the Company is not entitled to any deduction at the time
of grant or at the time of exercise. If the participant makes no disposition of
the shares acquired pursuant to an incentive stock option before the later of
two years from the date of grant of such option and one year from the exercise
of such option, any gain or loss realized on a subsequent disposition of the
shares will be treated as a long-term capital gain or loss. Under such
circumstances, the Company will not be entitled to any deduction for Federal
income tax purposes. For a disposition occurring within two years from the date
of grant or within one year from the date of exercise (a "disqualifying
disposition") in which a loss, if sustained, would be recognized, the
participant generally will recognize ordinary compensation income (and the
deduction taken by the Company) equal to the lesser of (I) the excess of the
fair market value of the shares on the date of exercise over the exercise price,
or (II) the excess of the amount realized on the sale of the shares over the
exercise price. In the case of any other disqualifying disposition the
participant will recognize ordinary income equal to the excess of fair market
value of the
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<PAGE>
shares on the date of exercise over the option exercise price. Any amount
realized on a disqualifying disposition in excess of the amount treated as
ordinary compensation income (or any loss realized) will be a capital gain or
loss. The Company generally will be entitled to a tax deduction on a
disqualifying disposition corresponding to the ordinary compensation income
recognized by the participant.
The participant who is granted a nonstatutory stock option
(including a special option) does not realize any taxable income at the time of
grant, but will be taxed on the gain (as compensation income), measured as the
difference between the exercise price for the shares and the fair market value
of the shares on the date of exercise. The Company is entitled to a
corresponding Federal income tax deduction for the same amount. Upon the sale of
shares acquired by exercise of a nonstatutory stock option, a participant will
have a capital gain or loss in an amount equal to the difference between the
amount realized upon the sale and the participant's adjusted tax basis in the
shares (the exercise price plus the amount of income recognized by the
participant at the time of exercise).
INCENTIVE STOCK, INCENTIVE UNITS AND INCENTIVE DEFERRED SHARES.
A participant who has been granted incentive units, incentive stock or incentive
deferred shares expressed in the form of units of Common Stock will not realize
taxable income at the time of the grant, and the Company will not be entitled to
a deduction at such time. A participant will realize ordinary income at the time
the Award is paid (based, where the award is paid in Common Stock, on the
stock's then fair market value) and the Company will have a corresponding
deduction.
RESTRICTED STOCK AND RESTRICTED UNITS. A participant who has
been granted restricted shares of Common Stock will not realize taxable income
at the time of grant, and the Company will not be entitled to a deduction at the
time of the grant, assuming that the restrictions constitute a substantial risk
of forfeiture for Federal income tax purposes.
When such restrictions lapse, the participant will receive
taxable income in an amount equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such shares. The Company
will be entitled to a corresponding deduction. A participant may, however, elect
under Section 83(b) of the Code, within 30 days after the date of grant, to
recognize ordinary income in the year the restricted stock is awarded in an
amount equal to the fair market value of the Common Stock at that time,
determined without regard to the restrictions and the amount paid for the shares
(if any). In this event the Company will be entitled to a deduction in the same
year, provided the Company complies with applicable withholding requirements for
Federal tax purposes.
A participant who has ben granted restricted units expressed in
the form of units of Common Stock will not realize taxable income at the time of
the grant, and the Company will not be entitled to a deduction at such time. A
participant will realize ordinary income at the time the restricted units are
paid (based, where the restricted units are paid in Common Stock, on the stock's
then fair market value) and the Company will have a corresponding deduction.
DEFERRED SHARES. A participant who has been granted deferred
shares will not realize taxable income at the time of the grant, and the Company
will not be entitled to a deduction at such time. A participant will realize
ordinary income at the time the deferred shares are paid (based on the stock's
then fair market value minus the amount, if any, which the employee must pay to
receive delivery of such shares) and the Company will have a corresponding
deduction.
DEFERRED COMPENSATION STOCK. Awards that are properly deferred
will be taxable when actually or constructively received. At the time a
participant realizes income from an Award, the Company will generally be
entitled to a deduction for Federal income tax purposes equal to the amount of
such income realized by the participant.
SECTION 162(M). Under Section 162(m) of the Code, the Company
may be limited as to Federal income tax deductions to the extent that total
compensation paid to any one "covered employee"
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exceeds $1,000,000 in any one year. The Company can preserve the deductibility
of certain compensation in excess of $1,000,000, however, provided that it
complies with the conditions imposed by Section 162(m) of the Code, including
the payment of "performance based compensation" pursuant to a plan approved by
the shareholders. This Plan is intended to make grants of incentive stock
options, nonstatutory stock options with an exercise price not less than fair
market at the date of grant, incentive stock, incentive units, incentive
deferred shares and special options that meet the requirements of "performance
based compensation" within the meaning of Section 162(m) of the Code.
Approval of the Plan requires the affirmative vote of a majority
of the shares of Common Stock present or represented at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
RATIFY THE ADOPTION OF THE INFINITY BROADCASTING CORPORATION 1996 LONG-TERM
INCENTIVE PLAN.
PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE
CASH BONUS COMPENSATION PLAN
The Board of Directors recommends approval of the material terms
of certain amendments to the Infinity Broadcasting Corporation Cash Bonus
Compensation Plan (the "Bonus Plan"), which was adopted by the Board of
Directors and became effective as of June 13, 1994. The amendments were adopted
by the Board on April 15, 1996, subject to stockholder approval of the amendment
increasing the maximum per-person annual award permitted under the Bonus Plan
(described below).
The Board and the Compensation Committee believe that cash
incentives to senior executives, payable upon the Company's attainment of
specific performance goals, help to reinforce the mutuality of interests between
the Company's executive officers and its shareholders and improve the value of
the Company. Approval of the amendments to the Bonus Plan will enable the
Company to continue to provide such short-term cash bonus incentive compensation
to its senior executive officers and to continue to qualify such compensation
for the performance-based compensation exception to the limitation on the
Company's ability to deduct compensation in excess of $1 million paid to certain
executive officers in taxable years beginning on or after January 1, 1994. If
the Company's stockholders do not approve the amendments to the Bonus Plan, the
Board will continue to have discretion to award cash incentive compensation to
executive officers under the terms of the Bonus Plan in effect prior to the
amendments.
The material features of the Bonus Plan are described below (see
also "New Plan Benefits," below).
The Bonus Plan authorizes the Compensation Committee to
establish annual targets with respect to the Company's EBITDA for fiscal years
of the Company beginning on or after January 1, 1994, and to award cash bonus
compensation to the Company's Chief Executive Officer, the Company's Chief
Financial Officer, and any other senior executive officers of the Company who
are designated by the Board of Directors in advance of the applicable period
(each, an "Eligible Participant"). The EBITDA target must be established in
writing by the Compensation Committee prior to the commencement of the
applicable fiscal year (or by such later date as may be permitted under Section
162(m) for the establishment of goals pursuant to which performance-based
compensation is to be payable for a particular period).
If the Company attains the EBITDA target set by the Compensation
Committee for a fiscal year, the Compensation Committee may make cash bonus
awards to Eligible Participants. The provisions relating to the maximum cash
bonus award that may be made to any Eligible Participant under the Bonus Plan
for a fiscal year are proposed to be amended as described below. The
Compensation Committee has full discretion to award less than the maximum amount
to any Eligible Participant (including the discretion to decline to make any
award to an Eligible Participant notwithstanding the Company's attainment of its
EBITDA target). In deciding whether to award less than the maximum amount, the
Compensation
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Committee may consider factors such as the Eligible Participant's office or
position, levels of compensation paid by the Company's industry peers and
competitors, the Eligible Participant's degree of responsibility for and
contributions to the Company's growth and success, the Eligible Participant's
potential, the Eligible Par- ticipant's conduct, or any other performance
factors the Compensation Committee may consider relevant.
If an award is made for less than a full fiscal year, both the
applicable EBITDA target and the maximum award amount must be prorated.
Awards payable under the Bonus Plan must be made no later than
the thirtieth day after the Company files its report on Form 10-K for the fiscal
year in question with the SEC or, if the award is made for less than a full
fiscal year, no later than the sixtieth day following the end of the last month
taken into account in determining whether the EBITDA target has been met. If,
notwithstanding the Company's attainment of its applicable EBITDA target, the
Compensation Committee does not make an award to an Eligible Participant within
the foregoing time periods, the Compensation Committee will be deemed to have
declined to make an award to the Eligible Participant. However, the Compensation
Committee may permit deferral of an award upon the advance election of the
Eligible Participant.
If an Eligible Participant's employment agreement with the
Company provides for cash bonus compensation, amounts paid to the Eligible
Participant pursuant to the Bonus Plan are deemed to have been paid under that
agreement, so that cash bonus awards will not be duplicated.
The material features of the amendments to the provisions
relating to the maximum awards that may be made under the Bonus Plan are
described below.
Approval of the amendment to the Bonus Plan requires the
affirmative vote of a majority of the shares of Common Stock present or
represented at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE MAXIMUM
PER-PERSON ANNUAL AWARD PROVIDED FOR UNDER THE BONUS PLAN.
AMENDMENTS TO THE MAXIMUM PER-PERSON ANNUAL AWARD
The maximum cash bonus award that may be made to any Eligible
Participant under the Bonus Plan, as amended, for a fiscal year is $5,000,000
with respect to the CEO and $2,000,000 with respect to any other Eligible
Participant. Prior to the amendment, the maximum cash bonus that could be made
to any Eligible Participant under the Bonus Plan for a fiscal year was
$1,500,000 with respect to any Eligible Participant.
Under the Bonus Plan, as amended, if the Compensation Committee
awards an Eligible Participant less than the maximum permitted bonus amount for
a fiscal year, the difference between such maximum bonus amount and the award
actually made can be carried forward to subsequent years to increase the maximum
bonus amount that can be awarded to such Eligible Participant if the Company
attains its EBITDA targets in later years. In no event, however, can more than
$5,000,000 be carried forward with respect to the CEO, and no more than
$2,000,000 with respect to any other Eligible Participant. For example, if the
Company attains its EBITDA target for 1996 and the Compensation Committee awards
an executive officer, other than the CEO, a bonus of $300,000 for 1996, the
maximum bonus that may be awarded to that executive officer if the Company
attains its 1997 EBITDA target will be $3,700,000. If the Compensation Committee
awards the executive officer a bonus of $350,000 for 1997, the maximum bonus
that may be awarded to that executive officer if the Company attains its 1998
EBITDA target will be $4,000,000. (Because no more than $2,000,000 can be
carried forward, $4,000,000 is the highest bonus that could be awarded to any
individual, other than the CEO, for any year under the Bonus Plan if the
Compensation Committee determined that a bonus of such magnitude were
warranted.)
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NEW PLAN BENEFITS
Awards under the Long-Term Incentive Plan and the amended Bonus
Plan are made at the discretion of the Compensation Committee, which has
discretion to award less than the maximum amount permitted under the plans.
Accordingly, the benefits and amounts that will be received by or allocated to
each of the following under the Long-Term Incentive Plan and the Bonus Plan are
not determinable. All awards under the Long-Term Inventive Plan and the Bonus
Plan are granted in consideration of services performed for the Company. Awards
granted to Mr. Karmazin pursuant to the amended provisions of his employment
agreement will be counted against his applicable award limits under the
Long-Term Incentive Plan and Bonus Plan.
Except as noted, the following table, which is required to be
presented under rules of the SEC, identifies, for illustrative purposes, the
cash bonus and option awards received or expected to be received by each of the
following pursuant to the Long-Term Incentive Plan and the Bonus Plan, or the
provisions of an applicable employment agreement in 1996.
Long-Term Incentive
Plan Bonus Plan
NAME AND POSITION NUMBER OF UNITS DOLLAR VALUE ($)
------------------- ----------------- ----------------
Gerald Carrus, Chairman of the Board and 0 0
Treasurer
Michael A. Wiener, Co-Chairman of the Board 0 0
and Secretary
Mel Karmazin, President, Chief Executive 2,250,000 1 $1,500,000 2
Office, and Director
Farid Suleman, Vice President-Finance, Chief 0 0
Financial Officer and Director
Executive Group 2,250,000 $1,500,000
Non-Executive Director Group 0 0
Non-Executive Officer Employee Group 0 0
Notes to New Plan Benefits Table:
1. Represents option on Class B Shares to be granted to Mr. Karmazin over
the period commencing on the effective date of the Long-Term Incentive
Plan and ending on June 30, 1998, in one or more installments during
such period. The exercise price of the options will be equal to the
fair market value of a Class A Share on the date of grant. The options
will be exercisable in three annual installments commencing on June 30,
2001 and will remain exercisable until the end of the month in which
Mr. Karmazin attains age 65. Any additional grants to Mr. Karmazin are
indeterminable. The closing price of a share of Class A Share on the
New York Stock Exchange on April 11, 1996 was $41.625.
2. As the amounts to be awarded under the Bonus Plan are indeterminable,
the amounts shown in the table represent cash bonus incentive
compensation award paid in 1996 pursuant to Mr. Karmazin's employment
agreement (as in effect on such date) upon the Company's attainment of
its 1995 EBITDA performance goal. This amount also includes the special
bonus under the Bonus Plan paid to Mr. Karmazin in March 1996 in
recognition of the Company's performance in 1995 and 1996 (see
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"Compensation of Executive Officers -- Summary Compensation Table" and
"Compensation of Executive Officers -- Report of the Board of Directors
Concerning Executive Compensation", above).
The Board may amend, terminate, alter, suspend or modify the
Long-Term Incentive Plan, except that the approval of the holders of the
outstanding shares of Common Stock, in the manner required by Rule 16b-3, is
necessary to amend, alter or modify the Long-Term Incentive Plan to the extent
required by Rule 16b-3. The Board may terminate, alter, suspend, modify or amend
the Bonus Plan. Mr. Karmazin's employment agreement may be changed, modified or
amended with the affirmative vote of at least two-thirds of the members of the
Board and the written consent of Mr. Karmazin and the Company.
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP has been recommended by the Board of
Directors for reappointment as the independent certified public accountants for
the Company. KPMG Peat Marwick LLP were the auditors for the Company for the
year ended December 31, 1995, and the firm is a member of the SEC Practice
Section of the American Institute of Certified Public Accountants. Subject to
stockholder ratification, the Board of Directors has appointed this firm as the
Company's independent certified public accountants for 1996.
Representatives of the firm will attend the Annual Meeting and
will have an opportunity to make a statement if they so desire and to respond to
appropriate questions from stockholders.
The Company will present to the Annual Meeting the following
resolution:
RESOLVED: That the selection, by the Board of Directors, of KPMG
Peat Marwick LLP as independent certified public accountants to
audit the books of account and other corporate records of the
Company for 1996 be, and hereby is, ratified.
Adoption of this proposal requires approval by a majority of the
votes that could be cast by the holders of the shares of all classes of the
Common Stock who are present in person or by proxy at the Annual Meeting. Spaces
are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal. Abstentions from voting on this
proposal (including broker non-votes) will have the effect of votes against this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
STOCKHOLDER PROPOSALS FOR 1997
Under the rules of the SEC, any stockholder proposal intended
for inclusion in the proxy material for the annual meeting of stockholders to be
held in 1996 must be received by the Company by January 21, 1997 to be eligible
for inclusion in such proxy material. Proposals should be addressed to Michael
A. Wiener, Secretary, Infinity Broadcasting Corporation, 600 Madison Avenue, New
York, N.Y. 10022. Proposals must comply with the proxy rules of the SEC relating
to stockholder proposals in order to be included in the proxy materials.
GENERAL
The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, including consolidated financial statements and other
information (the "1995 Annual Report"), accompanies this Proxy Statement but
does not form a part of the proxy soliciting material. A complete list of the
stockholders of record entitled to vote at the Annual Meeting will be open and
available for examination by any stockholder, for any purpose germane to the
meeting, between 9:00 A.M. and 5:00 P.M. at the
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Company's offices at 600 Madison Avenue, New York, New York from June 28, 1996
to the date of the meeting.
Although the 1995 Annual Report is being provided to
stockholders, in accordance with applicable rules of the SEC, the Company notes
the following:
THE COMPANY WILL PROVIDE EACH OF ITS STOCKHOLDERS, WITHOUT CHARGE, UPON
THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE 1995 ANNUAL
REPORT, REQUIRED TO BE FILED WITH THE COMMISSION PURSUANT TO RULE 13A-1
UNDER THE EXCHANGE ACT FOR THE COMPANY'S MOST RECENT FISCAL YEAR.
EXHIBITS TO THE 1995 ANNUAL REPORT WILL NOT BE SUPPLIED UNLESS
SPECIFICALLY REQUESTED, FOR WHICH THERE MAY BE A REASONABLE CHARGE.
THOSE STOCKHOLDERS WISHING TO OBTAIN A COPY OF THE 1995 ANNUAL REPORT
SHOULD SUBMIT A WRITTEN REQUEST TO: MICHAEL A. WIENER, SECRETARY,
INFINITY BROADCASTING CORPORATION, 600 MADISON AVENUE, NEW YORK, NEW
YORK 10022.
In addition to solicitation by mail, proxies may be solicited in
person, or by telephone or telegraph, by directors and by officers and other
regular employees of the Company. All expenses in connection with the
preparation of proxy material and the solicitation of proxies will be borne by
the Company.
By Order of the Board of Directors
/s/ Michael A. Wiener
-----------------------------------
May 14, 1996 Michael A. Wiener
Co-Chairman of the Board and Secretary
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CERTIFICATE OF AMENDMENT Exhibit A
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
INFINITY BROADCASTING CORPORATION
UNDER SECTION 242 OF THE GENERAL CORPORATION LAW
Infinity Broadcasting Corporation, a corporation organized under
the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
1. The name under which the Corporation originally was
incorporated is Progressive Communication Corporation, and the date of filing of
its original Certificate of Incorporation with the Secretary of State was June
16, 1972.
2. Paragraph 4.1 of the Restated Certificate of Incorporation
of the Corporation is hereby amended in its entirety to read as follows:
4.1 AUTHORIZED SHARES. The total number of shares of capital
stock which the Corporation shall have authority to issue is 348,500,000 shares,
consisting of four classes of capital stock:
(a) 300,000,000 shares of Class A Common Stock, par value $.002
per share (the "Class A Shares");
(b) 17,500,000 shares of Class B Common Stock, par value $.002
per share (the "Class B Shares");
(c) 30,000,000 shares of Class C Common Stock, par value $.002
per share (the "Class C Shares"; and, together with the Class A Shares
and the Class B Shares, the "Common Shares"); and
(d) 1,000,000 shares of Preferred Stock, par value $.01 per
share (the "Preferred Shares").
3. The amendment to the Restated Certificate of Incorporation of
the Corporation set forth in the preceding paragraph has been duly adopted in
accordance with the provisions of Section 242 of the General Corporation Law,
the Board of Directors of the Corporation having adopted resolutions setting
forth such amendment, declaring its advisability, and directing that it be
submitted to the stockholders of the Corporation for their approval; the holders
of outstanding stock having not less than the minimum number of votes necessary
to authorize such amendment having voted in favor of such amendment.
IN WITNESS WHEREOF, the undersigned officers of the Corporation
have executed this certificate on the day of , 1996.
INFINITY BROADCASTING CORPORATION
By:
---------------------------------
Mel Karmazin
President and Chief Executive Officer
ATTEST:
Farid Suleman
Assistant Secretary
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INFINITY BROADCASTING CORPORATION EXHIBIT B
1996 LONG-TERM INCENTIVE PLAN
Section 1. PURPOSE.
The purpose of the Plan is to foster and promote the long-term
financial success of the Infinity Broadcasting Corporation and materially
increase shareholder value by
(A) motivating superior performance by means of performance-related
incentives,
(B) encouraging and providing for the acquisition of an ownership
interest in the Company by Eligible Employees and
(C) enabling the Company to attract and retain the services of an
outstanding management team upon whose judgment, interest and
special effort the successful conduct of its operations is
largely dependent.
Section 2. DEFINITIONS.
"AWARD" shall mean any grant or award under the Plan, as
evidenced in a written document delivered to a Participant as provided in
Section 12(b).
"BOARD" shall mean the Board of Directors of the Company.
"CAUSE" shall mean (I) the willful failure by the Participant to
perform substantially the Participant's duties as an employee of the Company or
gross negligence in the performance of such duties (other than due to physical
or mental illness) after reasonable notice to the Participant of such failure,
(II) the Participant's engaging in serious misconduct that is or is likely to be
injurious to the Company or any Subsidiary, (III) the Participant's having been
convicted of, or entered a plea of NOLO CONTENDERE to, a crime that constitutes
a felony, or (IV) the breach by the Participant of any written covenant or
agreement not to compete with the Company or any Subsidiary.
"CHANGE IN CONTROL" shall mean the occurrence of any of the
following events:
(i) a majority of the members of the Board at any time cease,
for any reason other than due to death or disability, to be persons who
were members of the Board twenty-four months prior to such time (the
"Incumbent Directors"); PROVIDED THAT any director whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the members of the Board then still in
office who are Incumbent Directors shall be treated as an Incumbent
Director; or
(ii) any "person," including a "group" (as such terms are used
in Sections 13(d) and 14(d)(2) of the Exchange Act, but excluding the
Company, its Subsidiaries, any employee benefit plan of the Company or
any Subsidiary, employees of the Company or any Subsidiary, the
Purchasers and their Permitted Transferees (as defined in the
Stockholders' Agreement), or any group of which any of the foregoing is
a member) is or becomes the "beneficial owner" (as defined in Rule
13(d)(3) under the Exchange Act), directly or indirectly, including
without limitation, by means of a tender or exchange offer, of
securities of the Company representing (X) 30% or more of the combined
voting power of the Company's then outstanding securities and (Y) more
of the combined voting power of the Company's then outstanding
securities then owned by the Purchasers and their Permitted Transferees;
or
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(iii) the stockholders of the Company shall approve a definitive
agreement (X) for the merger or other business combination of the
Company with or into another corporation immediately following which
merger or combination (A) the stock of the surviving entity is not
readily tradeable on an established securities market, (B) a majority of
the directors of the surviving entity are persons who (1) were not
directors of the Company immediately prior to the merger and (2) are not
nominees or representatives of the Company or (C) any "person,"
including a "group" (as such terms are used in Sections 13(d) and
14(d)(2) of the Exchange Act, but excluding the Company, its
Subsidiaries, any employee benefit plan of the Company or any
Subsidiary, employees of the Company or any Subsidiary, the Purchasers
and their Permitted Transferees, or any group of which any of the
foregoing is a member), who is or becomes the "beneficial owner" (as
defined in Rule 13(d)(3) under the Exchange Act), directly or
indirectly, of 30% or more of the combined voting power of the then
outstanding securities of the surviving entity and more of the combined
voting power of the then outstanding securities of the surviving entity
then owned by the Purchasers and their Permitted Transferees or (Y) for
the direct or indirect sale or other disposition of all or substantially
all of the assets of the Company, or
(iv) any other event or transaction that is declared by
resolution of the Board to constitute a Change in Control for purposes
of the Plan.
Notwithstanding the foregoing, a "Change in Control" shall not
be deemed to occur in the event the Company files for bankruptcy, liquidation or
reorganization under the United States Bankruptcy Code.
"CHANGE IN CONTROL PRICE" shall mean the highest price per share
paid or offered in any bona fide transaction related to a Change in Control, as
determined by the Committee, EXCEPT THAT, in the case of Incentive Stock
Options, such price shall be the Fair Market Value on the date on which the cash
out described in Section 11(a) occurs.
"CLASS A SHARES" shall mean the Class A Common Stock of the
Company, $.002 par value.
"CLASS B SHARES" shall mean the Class B Common Stock of the
Company, $.002 par value.
"CODE" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations thereunder.
"COMMITTEE" shall mean a committee appointed by the Board and
consisting of two or more members of the Board, each of whom is a "disinterested
person" within the meaning of Rule 16b-3 promulgated under the Exchange Act.
"COMMON STOCK" shall mean the Class A Shares together with the
Class B Shares.
"COMPANY" shall mean Infinity Broadcasting Corporation and any
successor thereto.
"DEFERRED ANNUAL AMOUNT" shall mean, with respect to any year,
the amount of compensation that a Participant elects to defer in exchange for an
award of Elective Units as determined pursuant to Section 8 hereof.
"DEFERRED SHARE" shall mean a contractual right to receive a
share of Common Stock at the time and subject to the conditions set forth in
Section 9 hereof.
"DEFERRED COMPENSATION STOCK" shall mean a contractual right to
receive a share of Common Stock at the time and subject to the conditions set
forth in Section 8 hereof.
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"DISABILITY" shall mean "disability" as defined in Section
22(e)(3) of the Code, or as otherwise defined by the Committee at or after the
date of grant.
"EARLY RETIREMENT" shall mean retirement at or after the
earliest age at which the Participant may retire and receive an immediate, but
actuarially reduced, retirement benefit under any defined benefit pension plan
maintained by the Company or any of its Subsidiaries in which such Participant
participates.
"EBITDA" shall mean the earnings of the Company and its
consolidated subsidiaries before interest, taxes, depreciation and amortization,
as reported in the Company's report on Form 10-K for the applicable Plan Year
or, if for a portion of a Plan Year, as approved by the Board based on the
Company's books and records; PROVIDED HOWEVER, in the event of any stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, acquisition,
disposition or other similar event which affects the financial statements of the
Company such that an adjustment is required to preserve, or to prevent
enlargement of, the benefits or potential benefits made available under this
Plan, then the Committee may, in such manner as the Committee may deem
equitable, make adjustments to EBITDA for purposes of the Plan.
"ELECTIVE UNITS" shall mean an award of Deferred Compensation
Stock made pursuant to Section 8 in respect of a Participant's Deferred Annual
Amount.
"ELIGIBLE EMPLOYEE" shall mean each Executive Officer, each
other key employee of the Company or its Subsidiaries, and each Nonemployee
Director who is not a member of the Committee at the time an Award is to be
granted and will not become a member of the Committee within 12 months after the
grant of an Award.
"EMPLOYMENT" shall mean, for purposes of Sections 5(d), 6(b) and
7(b), continuous and regular salaried employment with the Company or a
Subsidiary and, with respect to a Nonemployee Director, service as a Director,
which shall include (unless the Committee shall otherwise determine) any period
of vacation, any approved leave of absence or any salary continuation or
severance pay period and, at the discretion of the Committee, may include
service with any former Subsidiary of the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"EXECUTIVE OFFICER" shall mean those persons who are officers of
the Company within the meaning of Rule 16a-1(f) of the Exchange Act.
"FAIR MARKET VALUE" shall mean, on any date, the closing price
of a Class A Share, as reported for such day on a national exchange, or, if the
Common Stock is not traded on a national securities exchange, the mean between
the closing bid and asked prices for a share of Common Stock on such date, as
reported on a nationally recognized system of price quotation. In the event that
there are no Class A Share transactions reported on such exchange or system on
such date, Fair Market Value shall mean the closing price on the immediately
preceding date on which Class A Share transactions were so reported. The Fair
Market Value of a Class B Share shall be deemed equal to that of a Class A
Share.
"INCENTIVE DEFERRED SHARE" shall mean any Award of a Deferred
Share granted under Section 7 which is made or becomes vested and nonforfeitable
upon the attainment, in whole or in part, of performance objectives determined
by the Committee.
"INCENTIVE STOCK" shall mean any Award of Common Stock granted
under Section 7 which is made or becomes vested and nonforfeitable upon the
attainment, in whole or in part, of performance objectives determined by the
Committee.
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"INCENTIVE STOCK OPTION" shall mean an Option which is intended
to meet the requirements of Section 422 of the Code and is designated as an
incentive stock option.
"INCENTIVE UNIT" shall mean any Award of a contractual right
granted under Section 7 to receive Common Stock (or, at the discretion of the
Committee, cash based on the Fair Market Value of the Common Stock) which is
made or becomes vested and nonforfeitable upon the attainment, in whole or in
part, of performance objectives determined by the Committee.
"NONEMPLOYEE DIRECTOR" shall mean a member of the Board who is
not an employee of the Company or its Subsidiaries.
"NONSTATUTORY STOCK OPTION" shall mean an Option which is not an
Incentive Stock Option.
"NORMAL RETIREMENT" shall mean retirement at or after the
earliest age at which the Participant may retire and receive a retirement
benefit without an actuarial reduction for early commencement of benefits under
any defined benefit pension plan maintained by the Company or any of its
Subsidiaries in which such Participant participates.
"OPTION" shall mean the right to purchase the number of Class A
and Class B Shares specified by the Committee, at a price and for the term fixed
by the Committee in accordance with the Plan and subject to any other
limitations and restrictions as this Plan and the Committee shall impose.
"PARTICIPANT" shall mean an Eligible Employee who is selected by
the Committee to receive an Award under the Plan.
"PLAN" shall mean the Infinity Broadcasting Corporation 1996
Long-Term Incentive Plan, described herein, and as may be amended from time to
time.
"PLAN YEAR" shall mean any fiscal year of the Company.
"PREDECESSOR PLAN" shall mean each of the Infinity Broadcasting
Corporation Stock Option Plan and the Infinity Broadcasting Corporation Deferred
Share Plan.
"RESTRICTED PERIOD" shall mean the period during which a grant
of Incentive Stock, Restricted Stock, Incentive Units, Restricted Units or
Incentive Deferred Shares is subject to forfeiture or the period during which an
outstanding grant of Options or Special Options is not exercisable.
"RESTRICTED STOCK" shall mean any Award of Common Stock granted
under Section 6 which would become vested and nonforfeitable, in whole or in
part, upon the completion of such period of service as shall be determined by
the Committee.
"RESTRICTED UNIT" shall mean any Award of a contractual right
granted under Section 6 to receive Common Stock (or, at the discretion of the
Committee, cash based on the Fair Market Value of the Common Stock) which would
become vested and nonforfeitable, in whole or in part, upon the completion of
such period of service as shall be determined by the Committee.
"SPECIAL OPTION" shall mean an Option whose exercise price is
not less than 85% of the Fair Market Value of a share of Common Stock on the
date such Option is granted.
"STOCKHOLDERS' AGREEMENT" shall mean the Stockholders'
Agreement, dated as of September 10, 1990, as amended, among the Company, Mel
Karmazin, Michael A. Wiener, Gerald Carrus, and Shearson Lehman Hutton Capital
Partners II L.P., Shearson Lehman Hutton Merchant Banking Portfolio Partnership
L.P., and Shearson Lehman Hutton Offshore Investment Partnership L.P.
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"SUBSIDIARY" shall mean any corporation of which the Company
possesses directly or indirectly fifty percent (50%) or more of the total
combined voting power of all classes of stock of such corporation and any other
business organization, regardless of form, in which the Company possesses
directly or indirectly fifty percent (50%) or more of the total combined equity
interests in such organization.
"SUPPLEMENTAL UNITS" shall mean an award of Deferred
Compensation Stock made pursuant to Section 8 with respect to a number of shares
in excess of the number of shares corresponding to the Participant's Elective
Units.
Section 3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee
shall have the responsibility of construing and interpreting the Plan and of
establishing and amending such rules and regulations as it deems necessary or
desirable for the proper administration of the Plan. Any decision or action
taken or to be taken by the Committee, arising out of or in connection with the
construction, administration, interpretation and effect of the Plan and of its
rules and regulations, shall, to the maximum extent permitted by applicable law,
be within its absolute discretion (except as otherwise specifically provided
herein) and shall be conclusive and binding upon all Participants and any person
claiming under or through any Participant.
Section 4. MAXIMUM AMOUNT OF SHARES AVAILABLE FOR AWARDS.
(a) MAXIMUM NUMBER OF SHARES. The maximum number of Class A
Shares in respect of which Awards may be made under the Plan shall be 1,500,000,
and the maximum number of Class B Shares in respect of which Awards may be made
under the Plan shall be 3,000,000, provided that additional Awards of Class A
Shares may be made up to the total Class B Shares which remain available to be
awarded, in which event the number of Class B Shares remaining shall be reduced
by the number of Class A Shares awarded. Without limiting the generality of the
foregoing, whenever shares are received by the Company in connection with the
exercise of or payment for any Award granted under the Plan or any Option
granted under the Predecessor Plan only the net number of shares actually issued
shall be counted against the foregoing limit or the applicable limit in the
Predecessor Plan. Notwithstanding the foregoing, but subject to the provisions
of Section 4(c), in no event shall the number of shares of Common Stock issued
under the Plan with respect to (I) Restricted Stock and Restricted Units exceed
1,500,000 shares of Common Stock, (II) Incentive Stock or Incentive Units exceed
1,500,000 shares of Common Stock, or (III) Deferred Shares or Incentive Deferred
Shares exceed 1,500,000 (in each case in proportion that Class A and Class B
Shares are authorized); PROVIDED THAT the aggregate number of shares of Common
Stock issued under the Plan with respect to the Awards described in (i), (ii)
and (iii) above shall not exceed 1,500,000. The maximum number of shares of
Common Stock that may be awarded to a Participant in any calendar year,
beginning in 1996, shall not exceed 750,000, except that up to 2,250,000 shares
may be awarded under the Plan once to the Chief Executive Officer of the
Company. Commencing in 1997, the maximum number of shares of Common Stock that
may be awarded to a Participant in any single calendar year shall be (I) 750,000
plus (II) the excess, if any, of (X) the maximum award that could have been made
to such Participant in the most recent calendar year in which such Participant
received an award hereunder over (Y) the total number of shares of Common Stock
as to which awards were made to such Participant in such most recent calendar
year (such excess being referred to as the "Additional Amount"). In no event
shall any Participant's Additional Amount exceed 750,000.
(b) SHARES AVAILABLE FOR ISSUANCE. Shares of Common Stock may be
made available from the authorized but unissued shares of the Company or from
shares held in the Company's treasury and not reserved for some other purpose.
In the event that any Award is payable solely in cash, no shares shall be
deducted from the number of shares available for issuance under Section 4(a) by
reason of such Award. In addition, if any Award in respect of shares is canceled
or forfeited for any reason without delivery of shares of Common Stock, the
shares subject to such Award shall thereafter again be available for award
pursuant to the Plan.
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(c) ADJUSTMENT FOR CORPORATE TRANSACTIONS. In the event that the
Committee shall determine that any stock dividend, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Common
Stock at a price substantially below fair market value, or other similar event
affects the Common Stock such that an adjustment is required to preserve, or to
prevent enlargement of, the benefits or potential benefits made available under
this Plan, then the Committee may, in such manner as the Committee may deem
equitable, adjust any or all of (I) the number and kind of shares which
thereafter may be awarded or optioned and sold, (II) the number and kinds of
shares subject to outstanding Options and other Awards and (III) the grant,
exercise or conversion price with respect to any of the foregoing. Additionally,
the Committee may make provisions for a cash payment to a Participant or a
person who has an outstanding Option or other Award. However, the number of
shares subject to any Option or other Award shall always be a whole number.
Section 5. STOCK OPTIONS.
(a) GRANT. Subject to the provisions of the Plan, the Committee
shall have the authority to grant Options to an Eligible Employee and to
determine (I) the number of shares to be covered by each Option, (II) the
exercise price therefor and (III) the conditions and limitations applicable to
the exercise of the Option; provided however, during the period commencing on
the effective date of the Plan and ending on June 30, 1998, the Committee shall
grant to the Chief Executive Officer of the Company Options for no less than
2,250,000 Class B Shares, which Options may be granted in one or more
installments. Notwithstanding the foregoing, beginning in 1996, in no event
shall the Committee grant any Participant Options in any single calendar year
for more than 750,000 shares of Common Stock, as such number may be adjusted
pursuant to Section 4(c), except that, the Committee may make one grant to the
Chief Executive Officer of the Company of Options for no more than 2,250,000
shares of Common Stock, which options may be granted in one or more
installments, and the annual limitation set forth in the beginning of this
sentence shall apply to all other grants to the Chief Executive Officer.
Commencing in 1997, the maximum number of shares of Common Stock as to which
Options may be granted to a Participant in any single calendar year shall be (I)
750,000 plus (II) the excess, if any, of (X) the maximum award that could have
been made to such Participant in the most recent calendar year in which such
Participant received an award hereunder over (Y) the total number of shares of
Common Stock as to which Options were awarded to such Participant in such most
recent calendar year (such excess being referred to as the "Additional Amount").
In no event shall any Participant's Additional Amount exceed 750,000. The
Committee shall have the authority to grant Incentive Stock Options or
Nonstatutory Stock Options; PROVIDED THAT Incentive Stock Options may not be
granted to any Participant who is not an employee of the Company or one of its
Subsidiaries at the time of grant. In the case of Incentive Stock Options, the
terms and conditions of such grants shall be subject to and comply with Section
422 of the Code and the regulations thereunder. The term of an Option other than
an Incentive Stock Option shall not exceed 15 years from the date of grant.
(b) OPTION PRICE. The exercise price of each Option will not be
less than the Fair Market Value of the underlying stock on the date of grant,
unless otherwise determined by the Committee.
(c) EXERCISE. Each Option shall be exercised at such times and
subject to such terms and conditions as the Committee may specify in the
applicable Award or thereafter; provided, however, that if the Committee does
not establish a different exercise schedule at or after the date of grant of an
Option, such Option shall become exercisable in five cumulative annual
installments beginning on the first anniversary of the date the Option is
granted. The Committee may impose such conditions with respect to the exercise
of Options as it shall deem appropriate, including without limitation, any
conditions relating to the application of federal or state securities laws. The
Committee may provide, at or after the date of grant, for the deferral at the
election of the Participant, until a date or dates determined by the Committee
in its discretion, of the delivery of shares pursuant to the exercise of
Options, subject to the terms and conditions established by the Committee. No
shares shall be delivered pursuant to any exercise of an Option unless
arrangements satisfactory to the Committee have been made to assure full payment
of the option price
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therefor. Without limiting the generality of the foregoing, payment of the
option price may be made in cash or its equivalent or, if and to the extent
permitted by the Committee, by exchanging shares of Common Stock owned by the
optionee (which are not the subject of any pledge or other security interest),
or by a combination of the foregoing, provided that the combined value of all
cash and cash equivalents and the Fair Market Value of any such Common Stock so
tendered to the Company, valued as of the date of such tender, is at least equal
to such option price.
(d) TERMINATION OF EMPLOYMENT. Unless the Committee shall
otherwise determine at or after grant, an Option shall be exercisable following
the termination of a Participant's Employment only to the extent provided in
this Section 5(d). If a Participant's Employment terminates due to the
Participant's (I) death, (II) Disability, (III) Early Retirement with the
consent of the Committee or (IV) Normal Retirement, the Participant (or, in the
event of the Participant's death or Disability during Employment or during the
period during which an Option is exercisable under this sentence, the
Participant's beneficiary or legal representative) may exercise any Option held
by the Participant at the time of such termination, regardless of whether then
exercisable, for a period of three years (or such greater or lesser period as
the Committee shall determine at or after grant), but in no event after the date
the Option otherwise expires. If a Participant's Employment is terminated for
Cause (or, if after the Participant's termination of Employment, the Committee
determines that the Participant's Employment could have been terminated for
Cause had the Participant still been employed or has otherwise engaged in
conduct that is detrimental to the interests of the Company, as determined by
the Committee in its sole discretion), all Options held by the Participant shall
immediately terminate, regardless of whether then exercisable. In the event of a
Participant's termination of Employment for any reason not described in the
preceding two sentences, the Participant (or, in the event of the Participant's
death or Disability during the period during which an Option is exercisable
under this sentence, the Participant's beneficiary or legal representative) may
exercise any Option which was exercisable at the time of such termination for 90
days (or such greater or lesser period as the Committee shall specify at or
after the grant of such Option) following the date of such termination, but in
no event after the date the Option otherwise expires.
Section 6. RESTRICTED STOCK AND RESTRICTED UNITS
(a) GRANT OF RESTRICTED STOCK OR RESTRICTED UNITS. The Committee
may grant Awards of Restricted Stock or Restricted Units to Participants at such
times and in such amounts, and subject to such other terms and conditions, not
inconsistent with the Plan, as it shall determine. Each grant of Restricted
Stock or Restricted Units shall be evidenced by an Award Agreement. Unless the
Committee provides otherwise at or after the date of grant, stock certificates
evidencing any shares of Restricted Stock so granted shall be held in the
custody of the Secretary of the Company until the Restricted Period lapses, and,
as a condition to the grant of any Award of shares of Restricted Stock, the
Participant shall have delivered to the Secretary of the Company a certificate,
endorsed in blank, relating to the shares of Common Stock covered by such Award.
(b) TERMINATION OF EMPLOYMENT. Unless the Committee otherwise
determines at or after grant, the rights of a Participant with respect to an
award of Restricted Stock or Restricted Units outstanding at the time of the
Participant's termination of Employment shall be determined under this Section
6(b). In the event that a Participant's Employment terminates due to the
Participant's (I) death, (II) Disability, (III) Early Retirement with the
consent of the Committee or (IV) Normal Retirement, any award of Restricted
Stock or Restricted Units shall become vested and nonforfeitable on the date of
such termination as to that number of shares which is equal to the number of
shares of Common Stock subject to such Award times a fraction, the numerator of
which is the number of days the Participant was employed during the Restricted
Period (or, in the case of an Award which has previously vested in part (an
"Installment Award"), the number of days worked since the last vesting date) and
the denominator of which is the total number of days during the Restricted
Period (or, in the case of an Installment Award, the number of days between the
last vesting date and the end of the Restricted Period). Unless the Committee
otherwise determines, any portion
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of any Restricted Stock or Restricted Unit Award that has not become
nonforfeitable at the date of a Partici- pant's termination of Employment shall
be forfeited as of such date.
(c) DELIVERY OF SHARES. Upon the expiration or termination of
the Restricted Period and the satisfaction (as determined by the Committee) of
any other conditions determined by the Committee, the restrictions applicable to
the Restricted Stock or Restricted Units shall lapse and a stock certificate for
the number of shares of Common Stock with respect to which the restrictions have
lapsed shall be delivered, free of all such restrictions, except any that may be
imposed by law, to the Participant or the Participant's beneficiary or estate,
as the case may be. No payment will be required to be made by the Participant
upon the delivery of such shares of Common Stock and/or cash, except as
otherwise provided in Section 12(a) or 12(b) of the Plan. At or after the date
of grant, the Committee may accelerate the vesting of any award of Restricted
Stock or Restricted Units or waive any conditions to the vesting of any such
award.
(d) RESTRICTED PERIOD; RESTRICTIONS ON TRANSFERABILITY DURING
RESTRICTED PERIOD. Unless otherwise determined by the Committee at or after the
date of grant, the Restricted Period applicable to any award of Restricted Stock
or Restricted Units shall lapse, and the shares related to such award shall
become freely transferable, in five cumulative annual installments beginning on
the first anniversary of the date of grant. Restricted Stock or Restricted Units
may not be sold, assigned, pledged or otherwise encumbered, except as herein
provided, during the Restricted Period. Any certificates issued in respect of
Restricted Stock shall be registered in the name of the Participant and
deposited by such Participant, together with a stock power endorsed in blank,
with the Company. At the expiration of the Restricted Period with respect to any
award of Restricted Stock, unless otherwise forfeited, the Company shall deliver
such certificates to the Participant or to the Participant's legal
representative. Payment for Restricted Stock Units shall be made by the Company
in shares of Common Stock, cash or in any combination thereof, as determined by
the Committee.
(e) RIGHTS AS A STOCKHOLDER; DIVIDEND EQUIVALENTS. Unless
otherwise determined by the Committee at or after the date of grant,
Participants granted shares of Restricted Stock shall be entitled to receive,
either currently or at a future date, as specified by the Committee, all
dividends and other distributions paid with respect to those shares, provided
that if any such dividends or distributions are paid in shares of Common Stock
or other property (other than cash), such shares and other property shall be
subject to the same forfeiture restrictions and restrictions on transferability
as apply to the shares of Restricted Stock with respect to which they were paid.
The Committee will determine whether and to what extent to credit to the account
of, or to pay currently to, each recipient of Restricted Units, an amount equal
to any dividends paid by the Company during the Restricted Period with respect
to the corresponding number of shares of Common Stock ("Dividend Equivalents").
To the extent provided by the Committee at or after the date of grant, any
Dividend Equivalents with respect to cash dividends on the Common Stock credited
to a Participant's account shall be deemed to have been invested in shares of
Common 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 dividing (X) the value of such Dividend Equivalent on the record date by (Y)
the Fair Market Value of a share of Common Stock on such date.
Section 7. INCENTIVE AND SPECIAL AWARDS.
(a) INCENTIVE STOCK, INCENTIVE UNITS, INCENTIVE DEFERRED SHARES
AND SPECIAL OPTIONS. Subject to the provisions of the Plan, the Committee shall
have the authority to grant Incentive Stock, Incentive Units, Incentive Deferred
Shares or Special Options to any Participant and to determine (I) the number of
shares of Incentive Stock and the number of Incentive Units, Incentive Deferred
Shares or Special Options to be granted to each Participant; and (II) the other
terms and conditions of such Awards; PROVIDED THAT, to the extent necessary to
comply with applicable law, Incentive Stock shall only be awarded to an Eligible
Employee who has been employed for such minimum period of time as shall be
determined by the Committee. The Committee may award Incentive Stock or
Incentive Units, Incentive Deferred Shares or Special Options upon the
attainment of performance objectives (as described in this section 7(a))
established
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by the Committee for such measurement or measurement periods selected by the
Committee, subject to such other terms and conditions, not inconsistent with
this Plan, as it shall determine. Alternatively, the Committee may provide that
the Restricted Period related to Incentive Stock, Incentive Units or Incentive
Deferred Shares shall lapse (or that Special Options shall become exercisable)
upon the determination by the Committee that the performance objectives
established by the Committee have been attained, in whole or in part. The
performance objectives established by the Committee may be related to the
performance of (I) the Company, (II) a Subsidiary, (III) a division or unit of
the Company or any Subsidiary, (IV) the Participant or (V) any combination of
the foregoing, over a measurement period or periods established by the
Committee. The maximum number of shares of Common Stock that may be subject to
any Awards of Incentive Stock, Incentive Units, Incentive Deferred Shares and
Special Options granted to a Participant in any single calendar year, beginning
in 1996, shall not exceed 750,000 as to each such type of Award, as each such
number may be adjusted pursuant to Section 4(c). Commencing in 1997, the maximum
number of shares of Common Stock that may be subject to any Awards of Incentive
Stock, Incentive Units, Incentive Deferred Shares and Special Options to a
Participant granted in any single calendar year shall be (I) 750,000 plus (II)
the excess, if any, of (X) the maximum award that could have been made to such
Participant in the most recent calendar year in which such Participant received
an award hereunder over (Y) the total number of shares of Common Stock as to
which awards of Incentive Stock, Incentive Units, Incentive Deferred Shares and
Special Options were granted to such Participant in such most recent calendar
year (such excess being referred to as the "Additional Incentive Amount"). In no
event shall any Participant's Additional Incentive Amount exceed 750,000. Unless
the Committee otherwise determines at the time of grant of Incentive Stock,
Incentive Units, Incentive Deferred Shares or Special Options to an Executive
Officer, the performance objectives with respect to such Award shall be related
to at least one of the following criteria, which may be determined solely by
reference to the performance of the Company or a Subsidiary (or a business unit
of either or any combination of the foregoing) or based on comparative
performance relative to other companies: (I) EBITDA, (II) total return to
shareholders, (III) return on equity, (IV) operating income or net income, (V)
return on capital, (VI) cash flow or (VII) Fair Market Value of the Common
Stock. Except to the extent otherwise expressly provided herein, the Committee
may, at any time and from time to time, change the performance objectives
applicable with respect to any Incentive Stock, Incentive Units, Incentive
Deferred Shares or Special Options to reflect such factors, including, without
limitation, changes in a Participant's duties or responsibilities or changes in
business objectives (E.G., from corporate to Subsidiary or business unit
performance or vice versa), as the Committee shall deem necessary or
appropriate. In making any such adjustment, the Committee shall adjust the
number of Incentive Stock, Incentive Units, Incentive Deferred Shares or Special
Options or take other appropriate actions to prevent any enlargement or
diminution of the Participant's rights related to service rendered and
performance attained prior to the effective date of such adjustment.
(b) TERMINATION OF EMPLOYMENT. (i) Unless the Committee
otherwise determines at or after grant, the rights of a Participant with respect
to an award of Incentive Stock, Incentive Units, Incentive Deferred Shares or
Special Options outstanding at the time of the Participant's termination of
Employment shall be determined under this Section 7(b)(i) if the Committee has
provided that the Restricted Period with respect to such Award shall lapse (or
that such Award shall become exercisable) upon the determination by the
Committee that performance objectives established by the Committee have been
attained in whole or in part. In the event that a Participant's Employment
terminates due to the Participant's (I) death, (II) Disability, (III) Early
Retirement with the consent of the Committee or (IV) Normal Retirement, any such
award of Incentive Stock, Incentive Units or Incentive Deferred Shares shall
become vested and non- forfeitable (and any such award of Special Options shall
become exercisable) at the end of the measurement period as to that number of
shares which is equal to that percentage, if any, of such award that would have
been earned based on the attainment or partial attainment of such performance
objectives times a fraction, the numerator of which is the number of days the
Participant was employed during the Restricted Period (or, in the case of an
Award which has previously vested in part (an "Installment Award"), the number
of days the Participant was employed since the last vesting date) and the
denominator of which is the total number of days during the Restricted Period
(or, in the case of an Installment Award, the number of days between the last
vesting date and the end of the Restricted Period); PROVIDED THAT, any portion
of any Incentive Stock, Incentive Unit or Incentive Deferred Share award that
does not become vested as of the times set forth in
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this sentence shall be forfeited at such times. In all other cases, any portion
of any such award of Incentive Stock, Incentive Units, Incentive Deferred Shares
or Special Options that has not become nonforfeitable at the date of a
Participant's termination of Employment shall be forfeited as of such date.
(ii) Unless the Committee determines otherwise at or after
grant, the rights of a Participant with respect to all other awards of Incentive
Stock, Incentive Units, Incentive Deferred Shares or Special Options outstanding
at the time of the Participant's termination of Employment shall be determined
in accordance with the applicable principles set forth in Sections 5(d), 6(b),
or 8(b).
(c) AWARDS NONTRANSFERABLE. Incentive Stock or Incentive Units
may not be sold, assigned, pledged or otherwise encumbered, except as herein
provided, during the Restricted Period. Any certificates issued in respect of
Incentive Stock shall be registered in the name of the Participant and deposited
by such Participant, together with a stock power endorsed in blank, with the
Company. At the expiration of the Restricted Period with respect to any award of
Incentive Stock, unless otherwise forfeited, the Company shall deliver such
certificates to the Participant or to the Participant's legal representative.
Payment for Incentive Units shall be made by the Company in shares of Common
Stock, cash or in any combination thereof, as determined by the Committee;
PROVIDED THAT, the Committee may provide, at or after the date of grant, for the
deferral of the delivery until a date or dates established by the Committee of
shares of Common Stock or other payment pursuant to Incentive Units, Incentive
Deferred Shares or Special Options, subject to the terms and conditions
established by the Committee.
(d) RIGHTS AS A STOCKHOLDER; DIVIDEND EQUIVALENTS. Unless
otherwise determined by the Committee at or after the date of grant,
Participants granted shares of Incentive Stock shall be entitled to receive,
either currently or at a future date, as specified by the Committee, all
dividends and other distributions paid with respect to those shares, provided
that if any such dividends or distributions are paid in shares of Common Stock
or other property (other than cash), such shares and other property shall be
subject to the same forfeiture restrictions and restrictions on transferability
as apply to the shares of Incentive Stock with respect to which they were paid.
The Committee will determine whether and to what extent to credit to the account
of, or to pay currently to, each recipient of Incentive Units, an amount equal
to any dividends paid by the Company during the period of deferral with respect
to the corresponding number of shares of Common Stock ("Dividend Equivalents").
To the extent provided by the Committee at or after the date of grant, any
Dividend Equivalents with respect to cash dividends on the Common Stock credited
to a Participant's account shall be deemed to have been invested in shares of
Common Stock on the record date established for the related dividend and,
accordingly, a number of additional Incentive Units shall be credited to such
Participant's account equal to the greatest whole number which may be obtained
by dividing (X) the value of such Dividend Equivalent on the record date by (Y)
the Fair Market Value of a share of Common Stock on such date.
(e) INTERPRETATION. Notwithstanding anything else contained in
this Section 7 to the contrary, if any award of Incentive Stock, Incentive
Units, Incentive Deferred Shares or Special Options is intended, at the time of
grant, to be other performance based compensation within the meaning of Section
162(m)(4)(C) of the Code, to the extent required to so qualify any Award
hereunder, the Committee shall not be entitled to exercise any discretion
otherwise authorized under this Section 7 with respect to such award if the
ability to exercise such discretion (as opposed to the exercise of such
discretion) would cause such award to fail to qualify as other performance based
compensation.
Section 8. DEFERRED COMPENSATION STOCK.
(a) DEFERRED COMPENSATION STOCK AWARDS. On such date or dates as
shall be established by the Committee and subject to such terms and conditions
as the Committee shall determine, a Participant may be permitted to elect to
defer receipt of all or a portion of his annual compensation and/or annual
incentive bonus ("Deferred Annual Amount") payable by the Company or a
Subsidiary and receive in lieu thereof a number of Elective Units equal to the
greatest whole number which may be obtained by dividing (X) the amount of the
Deferred Annual Amount by (Y) the Fair Market Value of a share of Common Stock
on the
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date of grant. No shares of Common Stock will be issued at the time an award of
Deferred Compensation Stock is made and the Company shall not be required to set
aside a fund for the payment of any such award. The Company will establish a
separate account for the Participant and will record in such account the number
of Elective Units awarded to the Participant. To the extent the Committee so
determines, a Participant who receives an award of Elective Units shall receive
that number of Supplemental Units equal to the greatest whole number which may
be obtained by dividing (X) such percentage of the Deferred Annual Amount as is
determined by the Committee at the date of grant by (Y) the Fair Market Value of
a share of Common Stock on the date of grant.
(b) RIGHTS AS A STOCKHOLDER; DIVIDEND EQUIVALENTS. A Participant
shall not have any right in respect of Deferred Compensation Stock awarded
pursuant to the Plan to vote on any matter submitted to the Company's
stockholders until such time as the shares of Common Stock attributable to such
Deferred Compensation Stock have been issued to such Participant or his
beneficiary. The Committee will determine whether and to what extent to credit
to the account of, or to pay currently to, each recipient of a Deferred
Compensation Stock Unit award, any Dividend Equivalents. To the extent provided
by the Committee at or after the date of grant, any Dividend Equivalents with
respect to cash dividends on the Common Stock credited to a Participant's
account shall be deemed to have been invested in shares of Common Stock on the
record date established for the related dividend and, accordingly, a number of
Deferred Compensation Stock Units shall be credited to such Participant's
account equal to the greatest whole number which may be obtained by dividing (X)
the value of such Dividend Equivalent on the record date by (Y) the Fair Market
Value of a share of Common Stock on such date.
(c) VESTING OF DEFERRED COMPENSATION STOCK UNIT AWARDS. The
portion of each Deferred Compensation Stock Unit award that consists of Elective
Units, together with any Dividend Equivalents credited with respect thereto,
shall be fully vested at all times. Unless the Committee provides otherwise at
or after the date of grant, the portion of each Deferred Compensation Stock Unit
award that consists of Supplemental Units, together with any Dividend
Equivalents credited with respect thereto, will become vested in five cumulative
annual installments beginning on the first anniversary of the date the
corresponding Deferred Annual Amount would have been paid absent the
Participant's election to defer provided the Participant remains in the
continuous employ of the Company or a Subsidiary through such date.
Notwithstanding the foregoing, the Committee may accelerate the vesting of any
Deferred Compensation Stock Unit award at or after the date of grant.
(e) SETTLEMENT OF DEFERRED COMPENSATION STOCK. Unless the
Committee determines otherwise at or after the date of grant, a Participant
shall receive one share of Common Stock for each Elective Unit (and related
Dividend Equivalents) as of the date of such Participant's termination of
Employment (or such later date as may be elected by the Participant in
accordance with the rules and procedures of the Committee). Unless the Committee
determines otherwise at or after the date of grant, a Participant shall receive
one share of Common Stock for each Supplemental Unit (and related Dividend
Equivalents) that shall have become vested on or prior to the date of such
Participant's termination of Employment, other than any such termination for
Cause, on the date of such termination of employment (or on such earlier date as
the Committee shall permit or such later date as may be elected by the
Participant in accordance with the rules and procedures of the Committee). In
the event of the termination of a Participant's Employment for Cause, the
Participant shall immediately forfeit all rights with respect to any
Supplemental Units (and Related Dividend Equivalents) credited to his account.
The Committee may provide in the Award Agreement applicable to any Award of
Deferred Compensation Stock that, in lieu of issuing shares of Common Stock in
settlement of the vested portion of such Deferred Compensation Stock Unit, the
Committee may direct the Company to pay to the Participant the cash balance of
such Deferred Compensation Stock.
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Section 9. DEFERRED SHARES.
(a) GRANT OF DEFERRED SHARES. The Committee may grant Awards of
Deferred Shares to Participants at such times and in such amounts, and subject
to such other terms and conditions, not inconsistent with the Plan, as it shall
determine. Each grant of Deferred Shares shall be evidenced by an Award
Agreement.
(b) VESTING OF DEFERRED SHARES. Unless the Committee provides
otherwise at or after the date of grant, each Deferred Share award will become
vested in five cumulative annual installments beginning on the first anniversary
of the date of grant, provided the Participant remains in the continuous employ
of the Company or a Subsidiary through each such date. Notwithstanding the
foregoing, the Committee may accelerate the vesting of any Deferred Share award
at or after the date of grant. Unless the Committee otherwise determines, any
portion of any Deferred Share award that has not become nonforfeitable at the
date of a Participant's termination of Employment shall be forfeited as of such
date.
(c) DELIVERY OF SHARES. Upon the occurrence of a "Triggering
Event" (as defined in Section 2.21 of the Predecessor Plan), and the
satisfaction (as determined by the Committee) of any other conditions determined
by the Committee, a stock certificate for the number of shares of Common Stock
with respect to the vested portion of the Deferred Share Award shall be
delivered as soon as practicable thereafter, free of all such restrictions,
except any that may be imposed by law, to the Participant or the Participant's
beneficiary or estate, as the case may be, PROVIDED THAT, the Committee may
provide, at or after the date of grant, for the deferral of the delivery until a
date or dates established by the Committee of shares of Common Stock pursuant to
Deferred Shares, subject to the terms and conditions established by the
Committee. No payment will be required to be made by the Participant upon the
delivery of such shares of Common Stock, except as otherwise provided in Section
12(a) or 12(b) of the Plan. At or after the date of grant, the Committee may
accelerate the vesting of any award of Deferred Shares or waive any conditions
to the vesting of any such award.
Section 10. STOCK IN LIEU OF CASH.
The Committee may grant Awards or shares of Common Stock in lieu
of all or a portion of an award otherwise payable in cash to an Executive
Officer pursuant to any bonus or incentive compensation plan of the Company. If
shares are issued in lieu of cash, the number of shares of Common Stock to be
issued shall be the greatest number of whole shares which has an aggregate Fair
Market Value on the date the cash would otherwise have been payable pursuant to
the terms of such other plan equal to or less than the amount of such cash.
Section 11. CHANGE IN CONTROL
(a) ACCELERATED VESTING AND PAYMENT. Subject to the provisions
of Section 11(b) below, in the event of a Change in Control, each Option shall
promptly be canceled in exchange for a payment in cash of an amount equal to the
excess of the Change of Control Price over the exercise price for such Option,
the Restricted Period applicable to all shares of Restricted Stock or Restricted
Units shall expire and all such shares shall become nonforfeitable and
immediately transferable and all Deferred Compensation Stock and Deferred Shares
shall become fully vested and the shares of Common Stock with respect thereto
shall be immediately payable.
(b) ALTERNATIVE AWARDS. Notwithstanding Section 11(a), no
cancellation, acceleration of exercisability, vesting, cash settlement or other
payment shall occur with respect to any Award or any class of Awards if the
Committee reasonably determines in good faith prior to the occurrence of a
Change in Control that such Award or class of Awards shall be honored or
assumed, or new rights substituted therefor (such honored, assumed or
substituted award hereinafter called an "Alternative Award") by a Participant's
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employer (or the parent or a subsidiary of such employer) immediately following
the Change in Control, provided that any such Alternative Award must:
(i) be based on stock which is traded on an established
securities market, or which will be so traded within 60 days following
the Change in Control;
(ii) provide such Participant (or each Participant in a class of
Participants) with rights and entitlements substantially equivalent to
or better than the rights and entitlements applicable under such prior
Award, including, but not limited to, an identical or better exercise or
vesting schedule and identical or better timing and methods of payment;
(iii) have substantially equivalent economic value to such prior
Award (determined by the Committee as constituted immediately prior to
the Change in Control, in its sole discretion, promptly after the Change
in Control); and
(iv) have terms and conditions which provide that in the event
that the Participant's employment is involuntarily terminated or
constructively terminated (other than for Cause) upon or following such
Change in Control, any conditions on a Participant's rights under, or
any restrictions on transfer or exercisability applicable to, each such
Alternative Award shall be waived or shall lapse, as the case may be.
For this purpose, a constructive termination shall mean a
termination by a Participant following a material reduction in the Participant's
compensation, a material reduction in the Participant's responsibilities or the
relocation of the Participant's principal place of employment to another
location a material distance farther away from the Participant's home, in each
case, without the Participant's prior written consent.
Section 12. GENERAL PROVISIONS.
(a) WITHHOLDING. The Company shall have the right to deduct from
all amounts paid to a Participant in cash (whether under this Plan or otherwise)
any taxes required by law to be withheld in respect of Awards under this Plan.
In the case of any Award satisfied in the form of Common Stock, no shares shall
be issued unless and until arrangements satisfactory to the Committee shall have
been made to satisfy any withholding tax obligations applicable with respect to
such Award. Without limiting the generality of the foregoing and subject to such
terms and conditions as the Committee may impose, the Company shall have the
right to retain, or the Committee may, subject to such terms and conditions as
it may establish from time to time, permit Participants to elect to tender,
Common Stock (including Common Stock issuable in respect of an Award) to
satisfy, in whole or in part, the amount required to be withheld.
(b) AWARDS. Each Award hereunder shall be evidenced in writing.
The written agreement shall be delivered to the Participant and shall
incorporate the terms of the Plan by reference and specify the terms and
conditions thereof and any rules applicable thereto. To the extent required by
applicable law, with respect to any Award satisfied in the form of Common Stock,
no shares shall be issued unless and until the Participant pays to the Company
the aggregate par value of such Common Stock.
(c) NONTRANSFERABILITY. Unless the Committee shall permit (on
such terms and conditions as it shall establish) an Award to be transferred to a
member of the Participant's family or to a trust or similar vehicle for the
benefit of such family members (collectively, the "Permitted Transferees"), no
Award shall be assignable or transferable except by will or the laws of descent
and distribution, and except to the extent required by law, no right or interest
of any Participant shall be subject to any lien, obligation or liability of the
Participant. All rights with respect to Awards granted to a Participant under
the Plan shall be exercis- able during his lifetime only by such Participant or,
if applicable, the Permitted Transferees.
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(d) NO RIGHT TO EMPLOYMENT. No person shall have any claim or
right to be granted an Award, and the grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or
any Subsidiary. Further, the Company and each Subsidiary expressly reserves the
right at any time to dismiss a Participant free from any liability, or any claim
under the Plan, except as provided herein or in any agreement entered into with
respect to an Award.
(e) NO RIGHTS TO AWARDS, NO SHAREHOLDER RIGHTS. No Participant
or Eligible Employee shall have any claim to be granted any Award under the
Plan, and there is no obligation of uniformity of treatment of Participants and
Eligible Employees. Subject to the provisions of the Plan and the applicable
Award, no person shall have any rights as a shareholder with respect to any
shares of Common Stock to be issued under the Plan prior to the issuance
thereof.
(f) CONSTRUCTION OF THE PLAN. The validity, construction,
interpretation, administration and effect of the Plan and of its rules and
regulations, and rights relating to the Plan, shall be determined solely in
accordance with the laws of the State of New York.
(g) LEGEND. To the extent any stock certificate is issued to a
Participant in respect of shares of Restricted Stock or Incentive Stock awarded
under the Plan prior to the expiration of the applicable Restricted Period, such
certificate shall be registered in the name of the Participant and shall bear
the following (or similar) legend:
"The shares of stock represented by this certificate are subject
to the terms and conditions contained in the Infinity Broadcasting
Corporation 1996 Long-Term Incentive Plan and the Award Agreement, dated
as of _____, between the Company and the Participant, and may not be
sold, pledged, transferred, assigned, hypothecated or otherwise
encumbered in any manner (except as provided in Section 12(c) of the
Plan or in such Award Agreement) until _______________."
Upon the lapse of the Restricted Period with respect to any such
shares of Restricted Stock or Incentive Stock, the Company shall issue or have
issued new share certificates without the legend described herein in exchange
for those previously issued.
(h) EFFECTIVE DATE. Subject to the approval of the shareholders
of the Company (which shall be sought by the Company if so authorized by the
Board), the Plan shall be effective on the date the Plan is approved by
shareholders. No Awards may be granted under the Plan after April 15, 2006.
Subject to shareholder approval of the Plan, (I) if the Committee so determines
and the holder thereof shall consent to any amendment to any outstanding option
or deferred share that has an adverse affect on such holder's rights thereunder,
the provisions of the Plan relating to Options and Deferred Shares shall apply
to, and govern, existing option grants and deferred share awards under each
Predecessor Plan and, such options and deferred shares shall be amended to
provide such holder with such additional benefits, and (II) the provisions of
this Plan relating to Awards of Options and Deferred Shares shall govern and
supersede all inconsistent provisions of each Predecessor Plan (other than the
provisions of such plans relating to the number of shares authorized for award
thereunder and the maximum awards that may be granted thereunder for specified
periods).
(i) AMENDMENT OF PLAN. The Board or the Committee may amend,
suspend or terminate the Plan or any portion thereof at any time, provided that
no amendment shall be made without shareholder approval if such amendment would
(1) increase the number of shares of Common Stock subject to the
Plan, except pursuant to Section 4(c);
(2) change the price at which Options may be granted; or
(3) remove the administration of the Plan from the Committee.
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Without the written consent of an affected Participant, no
termination, suspension or modification of the Plan shall adversely affect any
right of such Participant under the terms of an Award granted before the date of
such termination, suspension or modification.
(j) APPLICATION OF PROCEEDS. The proceeds received by the
Company from the sale of its shares under the Plan will be used for general
corporate purposes.
(k) COMPLIANCE WITH LEGAL AND EXCHANGE REQUIREMENTS. The Plan,
the granting and exercising of Awards thereunder, and the other obligations of
the Company under the Plan, shall be subject to all applicable federal and state
laws, rules, and regulations, and to such approvals by any regulatory or
governmental agency as may be required. The Company, in its discretion, may
postpone the granting and exercising of Awards, the issuance or delivery of
Common Stock under any Award or any other action permitted under the Plan to
permit the Company, with reasonable diligence, to complete such stock exchange
listing or registration or qualification of such Common Stock or other required
action under any federal or state law, rule, or regulation and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Common Stock
in compliance with applicable laws, rules, and regulations. The Company shall
not be obligated by virtue of any provision of the Plan to recognize the
exercise of any Award or to otherwise sell or issue Common Stock in violation of
any such laws, rules, or regulations; and any postponement of the exercise or
settlement of any Award under this provision shall not extend the term of such
Awards, and neither the Company nor its directors or officers shall have any
obligation or liability to the Participant with respect to any Award (or Stock
issuable thereunder) that shall lapse because of such postponement.
(l) DEFERRALS. The Committee may postpone the exercising of
Awards, the issuance or delivery of Common Stock under any Award or any action
permitted under the Plan to prevent the Company or any of its Subsidiaries from
being denied a Federal income tax deduction with respect to any Award other than
an Incentive Stock Option; provided that such deferral shall not result in the
inability of the holder to exercise such award prior to its expiration.
(m) GENDER AND NUMBER. Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.
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AMENDMENT TO THE
CASH BONUS COMPENSATION PLAN OF
INFINITY BROADCASTING CORPORATION
The Plan is amended, effective as of March 18, 1996, in the
manner set forth below:
1. Section 6(b) of the Plan is amended by adding the following
provision at the end thereof:
"; PROVIDED HOWEVER, in the event of any stock dividend,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange
of shares, acquisition, disposition or other similar event which
affects the financial statements of the Company such that an
adjustment is required to preserve, or to prevent enlargement
of, the benefits or potential benefits made available under this
Plan, then the Administrator may, in such manner as the
Administrator may deem equitable, make adjustments to EBITDA for
purposes of the Plan."
2. Section 6(c)(i) of the Plan is amended in its entirety so
that it reads as follows:
"If the EBITDA Target for the Plan Year has been attained as of
the last day of the applicable Plan Year, the Administrator
shall certify the attainment of such target and, following such
certification, may award any Eligible Participant who was
employed by the Company on the last day of the Plan Year a cash
bonus. The maximum cash bonus that may be awarded to any such
Eligible Participant with respect to the first Plan Year in
which such participant is eligible to receive an award hereunder
shall be (X) $5,000,000 with respect to an award to the CEO and
(Y) $2,000,000 with respect to an award to any other Eligible
Participant. The maximum cash bonus that can be awarded to an
Eligible Participant for each succeeding Plan Year shall be the
sum of (X) $5,000,000, with respect to the CEO, and $2,000,000
with respect to any other Eligible Participant, and (Y) the
excess, if any, of (A) the maximum cash bonus that could have
been awarded to such Eligible Participant for the most recent
Plan Year with respect to which such Eligible Participant could
have received an award hereunder over (B) the cash bonus amount
actually awarded to such Eligible Participant with respect to
such most recent Plan Year (such excess being referred to herein
as the Eligible Participant's "Additional Amount"). In no event
shall (X) the CEO's Additional Amount exceed $5,000,000, and (Y)
any other Eligible Participant's Additional Amount exceed
$2,000,000 for any Plan Year."
3. A new Section 6(f) is added to the Plan as follows:
"(f) DEFERRED PAYMENT OF AWARDS. Notwithstanding anything to
the contrary contained herein, the Administrator may permit the
deferral of the payment of any award to an Eligible Participant
upon the advance election of such Eligible Participant, on
terms and conditions established by the Administrator."
IN WITNESS WHEREOF, the Company has caused its duly authorized
officer to execute this Amendment as of _________, 1996.
INFINITY BROADCASTING CORPORATION
By:
------------------------------
Name: Farid Suleman
Title: VP of Finance
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Infinity Broadcasting Corporation Proxy Form
Proxy Solicited on Behalf of the Board of Directors
for the Annual Meeting of Stockholders
July 10, 1996
The undersigned hereby appoint(s) Michael A. Wiener and Gerald Carrus, or either
of them, each with full power of substitution, as proxies to vote all stock in
Infinity Broadcasting Corporation that the undersigned would be entitled to vote
on all matters that may come before the 1996 Annual Meeting of Stockholders and
any adjournments thereof.
Returned proxy forms will be voted: (1) as specified on the matters listed on
the reverse side of this form; (2) in accordance with the Directors'
recommendations where a choice is not specified; and (3) in accordance with the
judgment of the proxies on any other matters that properly come before the
meeting.
Your shares will not be voted unless your signed Proxy Form is returned or you
otherwise vote at the meeting.
SIGNATURE(S)__________________________ Dated: ______________________, 1996
Please sign as registered and return promptly in the enclosed envelope.
Executors, trustees and others signing in a representative capacity should
include their names and the capacity in which they sign.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
_______________________________________________________________________________
_______________________________________________________________________________
The Board of Directors recommends a vote FOR the proposals relating to:
A. Election of Directors (to withhold vote for any nominee,
write his name on the line provided) VOTE
FOR WITHHELD
Nominees for election by holders of all classes of
stock (Michael A. Wiener, Gerald Carrus, [ ] [ ]
Mel Karmazin, Farid Suleman and Steven A. Lerman)
Nominees for election by holders of Class A Shares [ ] [ ]
only (Alan R. Batkin and Jeffrey Sherman)
Nominees for election by holders of Class C Shares only [ ] [ ]
(James A. Stern and James L. Singleton)
For Against Abstain
B. Approval of the amendment to [ ] [ ] [ ]
Infinity Broadcasting Corporation's
Restated Certificate of Incorporation
to increase the number of
authorized Class A Shares.
C. Approval of the Infinity [ ] [ ] [ ]
Broadcasting Corporation 1996
Long-Term Incentive Plan
D. Approval of certain amend- [ ] [ ] [ ]
ments to the Infinity
Broadcasting Corporation
Cash Bonus Compensation Plan.
E. KPMG Peat Marwick as [ ] [ ] [ ]
Independent Auditors
Please complete, sign and date and return promptly.
<PAGE>
