LAMAR ADVERTISING CO, S-3, 1996-10-24

LAMAR ADVERTISING CO
S-3, 1996-10-24
ADVERTISING AGENCIES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1996
REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------------------

FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

---------------------

LAMAR ADVERTISING COMPANY
(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 7312 72-1205791
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Classification Code Number) Identification Number)
Organization)
</TABLE>

5551 CORPORATE BLVD.
BATON ROUGE, LOUISIANA 70808
(504) 926-1000

(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

KEVIN P. REILLY, JR.
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
LAMAR ADVERTISING COMPANY
5551 CORPORATE BLVD.
BATON ROUGE, LOUISIANA 70808
(504) 926-1000

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

---------------------

Copies to:
STANLEY KELLER, ESQ. DENNIS J. FRIEDMAN, ESQ.
PALMER & DODGE LLP CHADBOURNE & PARKE LLP
ONE BEACON STREET 30 ROCKEFELLER PLAZA
BOSTON, MASSACHUSETTS 02108 NEW YORK, NEW YORK 10112
(617) 573-0100 (212) 408-5100

---------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

---------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following. / /

---------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
====================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Senior Subordinated Notes due
2006............................ $225,000,000 $68,181.82
====================================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1993.

---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

================================================================================
<PAGE> 2

***************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************

SUBJECT TO COMPLETION, DATED OCTOBER 24, 1996
PROSPECTUS
$225,000,000

LOGO

% SENIOR SUBORDINATED NOTES DUE 2006
------------------

The % Senior Subordinated Notes due 2006 (the "Notes") are being
offered hereby (this "Offering") by Lamar Advertising Company (the "Company").
Interest on the Notes will be payable semi-annually on and
of each year, commencing , 1997. The Notes will
be redeemable at the option of the Company, in whole or in part, on or after
, 2001, at the redemption prices set forth herein plus accrued and
unpaid interest, if any, to the date of redemption. Upon a Change of Control (as
defined herein), each holder of the Notes will have the right to require the
repurchase of such holder's Notes by the Company in cash at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of purchase. In addition, at any time on or prior to
, 1999, the Company may redeem up to $75 million aggregate principal
amount of the Notes with the net proceeds of one or more Public Equity Offerings
(as defined herein) at a redemption price equal to % of the aggregate
principal of each Note so redeemed, plus accrued and unpaid interest, if any, to
the date of redemption; provided however, that immediately after giving effect
to any such redemption, not less than $150 million aggregate principal amount of
the Notes remains outstanding.

The Notes will be senior subordinated unsecured obligations of the Company
and will be subordinated in right of payment to all present and future Senior
Indebtedness (as defined herein) of the Company, pari passu in right of payment
with any future senior subordinated indebtedness of the Company and senior in
right of payment to all existing and any future subordinated indebtedness of the
Company. The amount of Senior Indebtedness outstanding as of July 31, 1996,
after giving effect to the Transactions (as defined herein) and the sale by the
Company in August 1996 of 4,294,041 shares of Class A Common Stock (the "IPO")
and the application of the net proceeds therefrom, would have been approximately
$7.9 million. Pursuant to the New Credit Agreement (as defined herein), the
Company will have the ability to incur additional Senior Indebtedness.

The Notes will be guaranteed (the "Guarantees"), on a joint and several
basis, by all of the Company's significant subsidiaries existing on the closing
date of the Offering (collectively, the "Guarantors"). The Guarantees will be
general unsecured obligations of the Guarantors and will be subordinated in
right of payment to all present and future Senior Indebtedness of the
Guarantors, pari passu in right of payment with any future senior subordinated
indebtedness of the Guarantors and senior in right of payment to any future
subordinated indebtedness of the Guarantors.

Prior to or concurrently with this Offering, the Company is publicly
offering pursuant to a separate prospectus shares of its Class A Common Stock
which are expected to generate net cash proceeds to the Company (assuming the
underwriters' overallotment option is not exercised) of at least $74.4 million.
(the "Common Stock Offering," and together with this Offering, the "Offerings").
The consummation of this Offering is conditioned upon consummation of the Common
Stock Offering with net cash proceeds to the Company of at least $50 million.

The Company does not intend to list the Notes on any securities exchange.
The Underwriters have advised the Company that they intend to make a market in
the Notes but are not obligated to do so and may discontinue any market making
at any time without notice.
------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING AN INVESTMENT IN THE
NOTES.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
==============================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNTS(2) COMPANY(3)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note.................................... % % %
- ----------------------------------------------------------------------------------------------
Total....................................... $ $ $
==============================================================================================
</TABLE>

(1) Plus accrued interest, if any, from the date of issuance.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $ .

The Notes are being offered by the several Underwriters named herein,
subject to prior sale, when, as and if delivered to and accepted by the
Underwriters and subject to certain conditions. It is expected that delivery of
the Notes will be made through the book-entry facilities of the Depository Trust
Company ("DTC") on or about November , 1996.
------------------

SMITH BARNEY INC.
CHASE SECURITIES INC.
CIBC WOOD GUNDY SECURITIES CORP.

, 1996
<PAGE> 3

[COMPANY MAP -- OUTDOOR MARKETS AND LOGO STATES]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere or incorporated by reference in this prospectus. Separate financial
statements of the Guarantors are not included herein because the Guarantors are
jointly and severally liable under the Guarantees, and the aggregate assets,
liabilities, earnings and equity of the Guarantors are substantially equivalent
to the assets, liabilities, earnings and equity of the Company on a consolidated
basis. Unless otherwise indicated, as used herein, the "Company" refers to Lamar
Advertising Company together with its consolidated subsidiaries.

THE COMPANY

Lamar Advertising Company is one of the largest and most experienced owners
and operators of outdoor advertising structures in the United States. It
conducts a business that has operated under the Lamar name since 1902. As of
September 30, 1996, the Company operated approximately 24,000 outdoor
advertising displays in 13 southeastern, midwestern and mid-Atlantic states.
Assuming consummation of the proposed acquisitions of FKM Advertising Co., Inc.
("FKM") and Outdoor East, L.P. ("Outdoor East") described below (the "Pending
Acquisitions"), the Company will operate approximately 29,000 outdoor
advertising displays in 14 states. In each of the Company's existing 35 primary
markets, the Company believes that it is the only full-service outdoor
advertising company serving such markets. The Company also operates the largest
logo sign business in the United States. Logo signs are erected pursuant to
state-awarded franchises on public rights-of-way near highway exits and deliver
brand name information on available gas, food, lodging and camping services. The
Company currently operates logo sign franchises in 15 of the 21 states which
have a privatized logo sign program, and was recently selected to operate the
tourism signing franchise for the province of Ontario, Canada. As of September
30, 1996, the Company maintained over 22,000 logo sign structures containing
over 51,000 logo advertising displays under these franchises. The Company has
recently expanded into the transit advertising business through the operation of
displays on bus shelters, benches and buses in 7 of its 35 existing primary
markets. For the fiscal year ended October 31, 1995, the Company reported net
revenues and EBITDA (as defined herein) of $102.4 million and $41.0 million,
respectively. Assuming all of the Transactions (as defined herein) were
consummated, the Company's net revenues and EBITDA for the twelve months ended
July 31, 1996, would have been $133.4 million and $54.1 million, respectively.

The Company's strategy is to be the leading provider of outdoor advertising
in each of the markets it serves, with an emphasis on markets with a media
industry ranking based on population between 50 and 250. Important elements of
this strategy are the Company's decentralized management structure and its focus
on providing high quality local sales and service. In order to be more
responsive to local market demands, the Company offers a full complement of
outdoor advertising services coupled with local production facilities,
management and account executives through its local offices. While maintaining
its local focus, the Company seeks to expand its operations within existing and
contiguous markets. The Company also pursues expansion opportunities, including
acquisitions, in additional markets. In this regard and as described more fully
below, the Company has acquired or has agreed to acquire several outdoor
advertising companies and is in preliminary negotiations to acquire another such
company. In the logo sign business, the Company's strategy is to maintain its
position as the largest operator of logo signs in the U.S. by expanding through
the addition of state logo franchises as they are awarded and through possible
acquisitions. The Company may also pursue expansion opportunities in transit and
other out-of-home media which the Company believes will enable it to leverage
its management skills and market position.

Management believes that operating in small to medium-sized markets
provides the Company with certain advantages, including a diverse and reliable
mix of local advertisers, geographic diversification and an ability to package
inventory effectively. Local advertising constituted over 81% of the Company's
outdoor advertising net revenues in fiscal 1995, which management believes is
higher than the industry average.

The Company believes that the experience of its senior and local managers
has contributed greatly to its success. Its regional managers have been with the
Company, on average, for 25 years. The average tenure of the Company's 35 local
managers is 11 years. In addition, each of the five regional managers and 31 of
the

3
<PAGE> 5

35 local managers began their careers with the Company as local sales
executives. The Company emphasizes decentralized local management of operations
with centralized support and financial and accounting controls. As a result of
this local focus, the Company maintains an extensive local operating presence
within its markets and employs a total of 110 local account executives. Local
account executives are typically supported by additional local staff and have
the ability to draw upon the resources of the central office and offices in
other markets in the event that business opportunities or customers' needs
support such allocation of resources.

The outdoor advertising industry generated total revenues of approximately
$1.8 billion in 1995, or approximately 1.1% of the total advertising
expenditures in the United States, according to recent estimates by the Outdoor
Advertising Association of America (the "OAAA"), the trade association for the
outdoor advertising industry. This represents growth of approximately 8.2% over
estimated total 1994 revenues and compares favorably to the growth of total U.S.
advertising expenditures of approximately 7.7% during the same period. Outdoor
advertising offers repetitive impact and a relatively low cost-per-thousand
impressions compared to broadcast media, newspapers, magazines and direct mail
marketing, making it attractive to both local businesses targeting a specific
geographic area or set of demographic characteristics and national advertisers
seeking mass market support. Over the past 25 years, outdoor advertising
industry revenues have grown from $0.3 billion in 1971 to $1.83 billion in 1995,
representing a compound annual growth rate of 8.0%. According to the OAAA, in
eleven of the last twenty years, outdoor advertising revenue growth exceeded
total advertising revenue growth. The Company believes that this revenue growth
is primarily the result of long term contracts that are generally renewable, a
broadening client mix, the increased use of vinyl and computer printing and
acquisition opportunities. Outdoor advertising services have recently expanded
beyond billboards to include a wide variety of out-of-home advertising media,
including advertising displays in shopping centers, malls, airports, stadiums,
movie theaters and supermarkets, as well as on taxis, trains, buses and subways.
The OAAA estimates that total out-of-home advertising revenues, including
traditional billboard advertising, exceeded $3.0 billion in 1995.

RECENT ACQUISITION ACTIVITY

The Company has recently entered into agreements to acquire, or has
acquired, the assets or capital stock of several outdoor advertising companies.
The Company believes that these acquisitions will allow the Company to
capitalize on the operating efficiencies and cross-market sales opportunities
associated with operating in or near markets currently served by the Company.

PENDING ACQUISITIONS

The FKM Acquisition

The Company has agreed to acquire all of the outstanding capital stock of
FKM for a cash purchase price of $40 million. Upon completion of the FKM
acquisition, the Company will acquire a total of 122 bulletins and 537 posters
in Youngstown, OH and 553 bulletins located across the state of Pennsylvania on
interstate highways and other primary roads. FKM had approximately $7.5 million
of net revenues for the twelve months ended September 30, 1996.

The acquisition of FKM would expand the Company's operations in Ohio and
give the Company an entry into Pennsylvania. Upon completion of the FKM
acquisition, the Company will operate bulletin structures on non-metropolitan
Pennsylvania interstate and state highways.

The consummation of the FKM acquisition, which is expected to take place
prior to November 15, 1996, is subject to certain conditions, including the
expiration or early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act").

The Outdoor East Acquisition

The Company has agreed to acquire substantially all of the assets of
Outdoor East for a cash purchase price of approximately $60 million. Upon
completion of the acquisition of Outdoor East, the Company will

4
<PAGE> 6

operate an additional 1,780 posters and 2,070 bulletins in seven markets in the
states of Virginia, West Virginia, North Carolina, South Carolina, Georgia and
Florida.

The acquisition of Outdoor East would add advertising displays positioned
along heavily travelled highways serving the eastern U.S. The largest market
included in this acquisition is Columbia, SC, which is the state capital, home
to the University of South Carolina and the 88th largest market in the U.S. The
Outdoor East acquisition would give the Company a presence in additional small
to medium-sized markets, including Harrisonburg, VA, Dublin, VA, Hopewell, VA,
Bluefield, WV, Valdosta, GA and Lumberton, NC. Outdoor East had approximately
$12.2 million in net revenues for the twelve months ended September 30, 1996.

The consummation of the Outdoor East acquisition, which is expected to
occur on or before December 15, 1996, is subject to customary closing
conditions, including the expiration or early termination of the waiting period
under the HSR Act.

COMPLETED ACQUISITIONS

Since July 31, 1996, the Company has also acquired for cash certain assets
of (i) Revere Outdoor Advertising in Corpus Christi, TX and Laredo, TX for $9.3
million, (ii) Southworth Advertising, Inc. in Panama City, FL, Fort Walton, FL
and Albany, GA for $1.8 million, (iii) Colonial Outdoor Advertising, Inc. in
Roanoke, VA for $1.1 million, and (iv) Walz Marketing, Inc. in Lakeland, FL for
$0.8 million. As a result of these additional acquisitions, the Company has
acquired approximately 1,686 outdoor advertising displays consisting of 195
bulletins and 519 posters in Corpus Christi, TX; 87 bulletins and 373 posters in
Laredo, TX; 45 bulletins and 164 posters in Panama City, FL; six bulletins in
Fort Walton, FL; 14 bulletins and 112 posters in Albany, GA; 50 bulletins in
Roanoke, VA and 121 bulletins in Lakeland, FL. Net revenues relating to these
acquired assets totalled approximately $3.5 million based on the most recently
completed fiscal years of the acquired businesses.

OTHER ACQUISITION

The Company is currently in preliminary negotiations for the acquisition of
the assets of an additional outdoor advertising company at a cash purchase price
the Company estimates will be in the range of $70 million to $75 million. There
can be no assurance, however, that these preliminary negotiations will lead to a
definitive acquisition agreement or, if such an agreement is executed, that the
acquisition will be consummated.
FINANCING PLAN

The Company intends to finance its acquisition activity from external
sources. In this regard, the Company is negotiating the terms of a new bank
credit facility (the "New Credit Agreement") which would increase its loan
commitment to $225 million and would provide for additional borrowing of up to
$75 million at the discretion of the lenders. In addition, prior to or
concurrently with this Offering, the Company is offering pursuant to the Common
Stock Offering shares of its Class A Common Stock which are expected to generate
net cash proceeds to the Company of at least $74.4 million. As part of this
financing plan, the Company has commenced a tender offer (the "Tender Offer"
which, together with the Offerings, the Pending Acquisitions and the execution
of the New Credit Agreement, are collectively referred to herein as the
"Transactions") to purchase for cash all of its 11% Senior Secured Notes due May
15, 2003 (the "Existing Notes"), of which $100 million are currently
outstanding, and is soliciting consents to amend the indenture (the "Existing
Note Indenture") and pledge agreement relating to the Existing Notes. The
Pending Acquisitions and the Tender Offer will be financed with the net proceeds
of the Offerings or, to the extent that the Pending Acquisitions close prior to
consummation of the Offerings, borrowings under the New Credit Agreement. This
Offering is conditioned upon the successful completion of the Common Stock
Offering with net cash proceeds to the Company of at least $50 million, but is
not conditioned upon the execution of the New Credit Agreement.

As used in this Prospectus, the term "market" refers to the geographic area
represented by the Spring 1996 Arbitron Radio Metro Market ranking, as
determined by The Arbitron Company, which ranks, according to population of
persons 12 years or older, the largest 261 markets in the U.S. -- from New York,
NY (1) to Casper, WY (261). The Company believes that the Metro Market ranking
is a standard measure of market size used by the media industry.

5
<PAGE> 7

OUTDOOR ADVERTISING

The following table sets forth certain information regarding the Company's
existing primary outdoor advertising markets and the assets proposed to be
acquired in the Pending Acquisitions.

EXISTING OUTDOOR ADVERTISING MARKETS(1)

<TABLE>
<CAPTION>
NUMBER OF DISPLAYS(4) NET
--------------------- REVENUES(5)
STATE/PRIMARY MARKET MARKET RANK(3) BULLETINS POSTERS --------------
- ------------------------------------------------------- -------------- --------- ------- (IN THOUSANDS)
<S> <C> <C> <C> <C>
LOUISIANA
Baton Rouge.......................................... 81 419 684 $ 7,280
Shreveport........................................... 126 268 730 3,389
Lafayette............................................ 97 154 353 2,035
Lake Charles......................................... 202 189 285 1,915
Monroe............................................... 226 123 508 1,534
Alexandria........................................... 198 49 224 757
Houma(2)............................................. -- 40 164 --
----- ------ ----------
Total.......................................... 1,242 2,948 16,910
TENNESSEE
Nashville............................................ 44 643 1,174 7,488
Knoxville............................................ 69 694 896 7,171
Clarksville.......................................... -- 98 357 1,533
----- ------ ----------
Total.......................................... 1,435 2,427 16,192
FLORIDA
Pensacola............................................ 125 250 662 3,113
Lakeland............................................. 104 554 372 2,875(6)
Panama City.......................................... 225 268 470 2,262(6)
Fort Myers........................................... 77 133 297 2,153
Tallahassee.......................................... 167 121 302 1,908
Fort Walton.......................................... 207 157 220 1,643(6)
Daytona Beach........................................ 93 54 339 1,456
----- ------ ----------
Total.......................................... 1,537 2,662 15,410
ALABAMA
Mobile............................................... 84 381 630 4,755
Montgomery........................................... 142 248 499 3,598
----- ------ ----------
Total.......................................... 629 1,129 8,353
TEXAS
Brownsville.......................................... 63 204 873 2,577
Beaumont............................................. 127 204 308 2,165
Corpus Christi....................................... 128 195 519 1,707(6)
Wichita Falls........................................ 235 89 165 902
Laredo............................................... 216 87 373 868(6)
----- ------ ----------
Total.......................................... 779 2,238 8,219
MISSISSIPPI
Jackson.............................................. 118 268 698 4,420
Gulfport............................................. 134 207 559 2,953
----- ------ ----------
Total.......................................... 475 1,257 7,373
GEORGIA
Savannah............................................. 154 344 604 3,307
Augusta.............................................. 107 261 471 2,482
Albany............................................... 243 106 383 1,109(6)
----- ------ ----------
Total.......................................... 711 1,458 6,898
VIRGINIA
Richmond............................................. 56 309 616 4,288
Roanoke.............................................. 101 262 450 1,958(6)
----- ------ ----------
Total.......................................... 571 1,066 6,246
KENTUCKY
Lexington............................................ 105 117 507 3,127
WEST VIRGINIA
Wheeling............................................. 213 261 551 2,626
COLORADO
Colorado Springs..................................... 98 141 355 2,486
OHIO
Dayton............................................... 52 3 529 1,960
----- ------ ----------
Subtotal....................................... 7,901 17,127 $ 95,800
----- ------ ----------
</TABLE>

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<PAGE> 8

PENDING ACQUISITIONS(7)

<TABLE>
<CAPTION>
NUMBER OF DISPLAYS(4) NET
--------------------- REVENUES(5)
STATE/PRIMARY MARKET MARKET RANK(3) BULLETINS POSTERS --------------
- -------------------- -------------- --------- ------- (IN THOUSANDS)
<S> <C> <C> <C> <C>
PENNSYLVANIA
Statewide Highways(*)................................ N/A 553 0 4,713(8)
SOUTH CAROLINA
Columbia(+).......................................... 88 338 571 3,725(8)
NORTH CAROLINA
Statewide Highways(+)................................ N/A 924 112 2,472(8)
WEST VIRGINIA
Bluefield(+)......................................... -- 306 281 1,863(8)
VIRGINIA
Dublin(+)............................................ -- 99 221 --(9)
Harrisonburg(+)...................................... 253 9 123 --(9)
Hopewell(+).......................................... -- 56 291 --(9)
------ ------ ----------
Total.......................................... 164 635 1,632(8)(9)
GEORGIA
Valdosta(+).......................................... -- 338 181 1,289(8)
OHIO
Youngstown(*)........................................ 90 122 537 243(8)
------ ------ ----------
Subtotal....................................... 2,745 2,317 $ 15,937
------ ------ ----------
TOTAL.................................................. 10,646 19,444 $ 111,737
====== ====== ==========
</TABLE>

LOGO SIGN FRANCHISES

The following table sets forth certain information regarding the Company's
logo business operations. As of September 30, 1996, the Company operated 51,140
logo advertising displays.
<TABLE>
<CAPTION>
# LOGO
YEAR ADVERTISING
AWARDED FRANCHISE DISPLAYS
- ------- ------------------------ -----------
<C> <S> <C>
1989 Nebraska................ 788
1989 Oklahoma................ 1,120
1990 Utah.................... 1,494
1991 Missouri(10)............ 8,254
1992 Ohio.................... 5,686
1993 Texas................... 2,177
1993 Mississippi............. 2,866
1995 Georgia................. 9,240

<CAPTION>
# LOGO
YEAR ADVERTISING
AWARDED FRANCHISE DISPLAYS
- ------- ------------------------ -----------
<C> <S> <C>
1995 Minnesota(11)........... 2,491
1995 South Carolina.......... 1,982
1996 Virginia................ 7,658
1996 Michigan................ 1,376
1996 Tennessee............... 1,792
1996 Kansas.................. 4,216
1996 New Jersey(12).......... --
</TABLE>

- ---------------

(1) Includes additional or outlying markets served by the office in the
applicable market.
(2) Houma was established as a separate primary market in fiscal 1995, and,
therefore, net revenues are not included.
(3) Indicates the Spring 1996 Arbitron Radio Metro Market ranking within which
the office is located, as determined by The Arbitron Company. The Company
believes that Metro Market ranking, which ranks, according to population of
persons 12 years or older, the largest 261 markets in the U.S., is a
standard measure of market size used by the media industry. Where no market
ranking is shown, such market is not ranked by Arbitron.
(4) The two standardized types of industry displays are bulletins and posters.
See "Business -- Company Operations." The display count is as of October
31, 1995, pro forma for acquisitions completed within the last twelve
months.
(5) Except as otherwise noted, represents net revenues for fiscal year ended
October 31, 1995 attributable to each outdoor advertising market. These
revenues, together with logo sign and transit advertising revenues and
production revenue, comprise outdoor advertising net revenues shown in the
Company's consolidated statements of earnings (loss).
(6) Reflects net revenues for the most recently completed applicable fiscal
year with respect to acquisitions completed by the Company since July 31,
1996. See "The Transactions -- Recent Acquisition Activity -- Completed
Acquisitions."
(7) Reflects assets proposed to be acquired by the Company through the
acquisitions of FKM (*) and Outdoor East (+).
(8) Represents net revenues for the most recently completed applicable fiscal
year attributable to the outdoor advertising market proposed to be acquired
by the Company. See "The Transactions -- Recent Acquisition
Activity -- Pending Acquisitions."
(9) Net revenues for specific markets proposed to be acquired in the state of
Virginia are not available.
(10) Franchise operated by a 66.7% owned partnership.
(11) Franchise operated by a 95.0% owned partnership.
(12) The Company was recently awarded the New Jersey franchise, and,
accordingly, no logo signs had been erected as of September 30, 1996.

The Company's address is 5551 Corporate Boulevard, Baton Rouge, Louisiana
70808. Its telephone number is (504) 926-1000.

7
<PAGE> 9

THE OFFERING

Securities Offered............ $225,000,000 aggregate principal amount of
% Senior Subordinated Notes due
, 2006.

Maturity Date................. , 2006.

Interest Payment Dates........ and , commencing
, 1997.

Optional Redemption........... The Notes will be redeemable at the Company's
option, in whole or in part, at any time on or
after , 2001 at the redemption
prices set forth herein plus accrued and unpaid
interest, if any, to the date of redemption. In
addition, at any time on or prior to
1999, the Company may redeem up to $75 million
aggregate principal amount of the Notes with
the net proceeds of one or more Public Equity
Offerings at a redemption price equal to %
of the aggregate principal of each Note so
redeemed, plus accrued and unpaid interest, if
any, to the date of redemption; provided,
however, that immediately after giving effect
to any such redemption, not less than $150
million aggregate principal amount of the Notes
remains outstanding. See "Description of
Notes -- Optional Redemption."

Ranking....................... The Notes will be senior subordinated unsecured
obligations of the Company and will be
subordinated in right of payment to all
existing and future Senior Indebtedness of the
Company, including indebtedness under the New
Credit Agreement, pari passu in right of
payment with any future senior subordinated
indebtedness of the Company and senior in right
of payment to all existing and any future
subordinated indebtedness of the Company. As of
July 31, 1996, on a pro forma basis after
giving effect to the Transactions and the IPO
and the application of the net proceeds
therefrom, the aggregate amount of Senior
Indebtedness of the Company on a consolidated
basis that would have ranked senior to the
Notes was approximately $7.9 million. Pursuant
to the New Credit Agreement, the Company will
have the ability to incur additional Senior
Indebtedness.

Guarantees.................... The Notes will be guaranteed, on a joint and
several basis, by the Guarantors. The
Guarantees will be general unsecured senior
subordinated obligations of the Guarantors and
will be subordinated in right of payment to all
existing and future Senior Indebtedness of the
Guarantors including guarantees of indebtedness
outstanding under the New Credit Agreement,
pari passu in right of payment with any future
senior subordinated indebtedness of the
Guarantors and senior in right of payment to
any future subordinated indebtedness of the
Guarantors.

Change of Control............. In the event of a Change of Control, the
Company will be obligated to make an offer to
purchase all outstanding Notes at a purchase
price of 101% of the principal amount thereof
plus accrued interest, if any. See "Description
of Notes -- Change of Control."

Asset Sale Proceeds........... The Company will be obligated in certain
instances to offer to purchase Notes at a
purchase price of 100% of the principal

8
<PAGE> 10

amount thereof plus accrued interest, if any,
with the net cash proceeds of certain sales or
other dispositions of assets.

Certain Covenants............. The indenture governing the Notes (the
"Indenture") will impose certain other
limitations on the ability of the Company and
certain of its subsidiaries to, among other
things, incur additional indebtedness, pay
dividends or make certain other restricted
payments and investments, consummate certain
transactions with affiliates, incur liens,
merge or consolidate with any other person or
sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all
of the Company's assets. The Indenture will
also impose limitations on the Company's
ability to restrict the ability of subsidiaries
to pay dividends or make certain payments to
the Company or its subsidiaries.

Concurrent Common Stock
Offering...................... Prior to or concurrently with this Offering,
the Company is publicly offering shares of its
Class A Common Stock pursuant to the Common
Stock Offering which are expected to generate
net cash proceeds to the Company of at least
$74.4 million. The consummation of the Common
Stock Offering, with net cash proceeds to the
Company of at least $50 million, is a condition
precedent to this Offering.

Use of Proceeds............... The net proceeds from this Offering, together
with the net proceeds
of the Common Stock Offering, will be used to
repay existing indebtedness and for general
corporate purposes, including acquisitions. See
"Use of Proceeds."

9
<PAGE> 11

SUMMARY CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA

<TABLE>
<CAPTION>
PRO FORMA
AS ADJUSTED
PRO FORMA NINE MONTHS TWELVE
AS ADJUSTED ENDED MONTHS
YEAR ENDED OCTOBER 31, YEAR ENDED JULY 31, ENDED
--------------------------------------------------- OCTOBER 31, ------------------- JULY 31,
1991 1992 1993 1994 1995 1995(1) 1995 1996 1996(1)
-------- ------- -------- -------- -------- ----------- -------- -------- -----------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenues............... $ 62,262 $61,955 $ 66,524 $ 84,473 $102,408 $ 118,872 $ 76,726 $ 88,165 $ 133,365
Operating expenses:
Direct advertising
expenses................ 22,143 22,783 23,830 28,959 34,386 39,783 26,564 30,969 44,947
General and administrative
expenses................ 17,703 18,225 19,504 24,239 27,057 31,679 20,636 22,842 34,320
Depreciation and
amortization............ 8,826 8,881 8,924 11,352 14,090 22,241 9,954 10,568 22,855
-------- ------- -------- -------- -------- --------- -------- -------- ---------
Total operating
expenses.............. 48,672 49,889 52,258 64,550 75,533 93,703 57,154 64,379 102,122
-------- ------- -------- -------- -------- --------- -------- -------- ---------
Operating income........... 13,590 12,066 14,266 19,923 26,875 25,169 19,572 23,786 31,243
-------- ------- -------- -------- -------- --------- -------- -------- ---------
Interest expense........... 11,650 10,454 11,502 13,599 15,783 23,835 11,948 11,957 23,804
Earnings before income
taxes and extraordinary
item...................... 936 2,625 1,677 5,227 8,308 (2,021) 6,069 10,897 5,019
Income tax expense
(benefit)(2).............. 207 270 476 (2,072) (2,390) (6,067) (2,480) 4,420 1,717
Net earnings
(loss)(3)(4).............. 729 2,355 (653) 7,299 10,698 4,046 8,549 6,477 3,302
Net earnings (loss)
applicable to common
stock..................... 729 2,355 (653) 7,299 10,698 4,046 8,549 6,203 3,028
Earnings per common share
before extraordinary
item(5)................... $ .02 $ .07 $ .03 $ .21 $ .32 $ .10 $ .26 $ .23 $ .08
======== ======= ======== ======== ======== ========= ======== ======== =========
Net earnings (loss) per
common share(5)........... $ .02 $ .07 $ (.02) $ .21 $ .32 $ .10 $ .26 $ .23 .08
======== ======= ======== ======== ======== ========= ======== ======== =========
OTHER DATA:
EBITDA(6).................. 22,416 20,947 23,190 31,275 40,965 47,410 29,526 34,354 54,098
EBITDA margin.............. 36% 34% 35% 37% 40% 40% 39% 39% 41%
Ratio of EBITDA to interest
expense................... 1.9x 2.0x 2.0x 2.3x 2.6x 2.0x 2.5x 2.9x 2.3x
Ratio of net debt to
EBITDA(7)................. 4.9x 5.0x 4.6x 4.7x 3.4x -- -- -- 3.2x
Ratio of total debt to
EBITDA.................... 4.9x 5.0x 5.0x 4.9x 3.6x -- -- -- 4.7x
Ratio of earnings to fixed
charges(8)................ 1.1x 1.2x 1.0x 1.3x 1.4x 1.0x 1.4x 1.7x 1.2x
Capital expenditures:
Outdoor advertising....... 1,847 1,695 2,374 4,997 6,643 10,251 4,786 4,922 10,359
Logos..................... 629 3,056 2,009 2,761 1,567 1,567 924 7,989 8,096
Cash flows from operating
activities(9)............. 10,328 12,930 12,411 15,214 25,065 -- 10,752 15,595 --
Cash flows from investing
activities(9)............. (4,236) (7,273) (10,064) (53,569) (17,817) -- (11,049) (28,798) --
Cash flows from financing
activities(9)............. (5,133) (6,734) 6,802 37,147 (9,378) -- (5,751) 9,287 --
Number of outdoor
advertising displays(10).. 18,829 17,835 17,659 22,369 22,547 27,605 22,512 23,089 28,147
Number of logo advertising
displays(10).............. 5,027 11,371 13,820 18,266 24,219 24,219 22,431 48,362 48,362
Cumulative logo sign
franchises(10)............ 4 5 7 7 11 11 8 15 15
</TABLE>

10
<PAGE> 12

<TABLE>
<CAPTION>
AS OF JULY 31, 1996
----------------------------
PRO FORMA
AS ADJUSTED
FOR THE IPO AND
THE
ACTUAL TRANSACTIONS
-------- ---------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.............................................................. $ 1,965 $ 81,395
Working capital........................................................................ 1,479 83,134
Total assets........................................................................... 150,267 347,072
Total debt (including current maturities).............................................. 160,007 252,910
Total long-term obligations............................................................ 156,674 250,800
Stockholders' equity (deficit)......................................................... (25,289) 78,401
</TABLE>

- ---------------

(1) For purposes of the pro forma adjusted financial information (i) the
statement of earnings of the Company for its fiscal year ended October 31,
1995 has been combined with the statements of earnings of Outdoor East and
FKM for their fiscal year ended December 31, 1995, (ii) the statement of
earnings of the Company for the twelve month period ended July 31, 1996 has
been combined with the statements of earnings of Outdoor East and FKM for
the twelve months ended September 30, 1996 and (iii) effect has been given
to the IPO and the Transactions. For a more complete description of the pro
forma impact on the Company's results of operations see "Pro Forma
Unaudited Condensed Consolidated Financial Statements."
(2) The benefit of the Company's net operating loss carryforward was fully
recognized as of October 31, 1995, resulting in the income tax expense
shown for the nine months ended July 31, 1996, compared to the income tax
benefit for the same period in the prior year.
(3) Includes, in 1993, an extraordinary loss on debt extinguishment, net of an
income tax benefit, of $1.9 million.
(4) Pro forma financial information for the year ended October 31, 1995 and the
twelve months ended July 31, 1996 does not give effect to extraordinary
loss from the extinguishment of debt of $8,335 and $8,570, respectively.
(5) After giving effect to the approximately 778.9 for 1 split of the Company's
then-existing common stock and the redesignation of such stock as Common
Stock.
(6) "EBITDA" is defined as operating income before depreciation and
amortization. EBITDA represents a measure which management believes is
customarily used to evaluate the financial performance of companies in the
media industry. However, EBITDA is not a measure of financial performance
under generally accepted accounting principles and should not be considered
an alternative to operating income or net earnings as an indicator of the
Company's operating performance or to net cash provided by operating
activities as a measure of its liquidity.
(7) "Net debt" consists of debt less cash and cash equivalents.
(8) The ratio of earnings to fixed charges was computed by dividing earnings by
fixed charges. For this purpose, earnings consist of income from continuing
operations, before income taxes and fixed charges of the Company and its
subsidiaries plus the Company's share of the distributed income of less
than 50% owned persons. Fixed charges consist of the Company's and its
subsidiaries' interest expense (including interest costs capitalized) and
the portion of rent expense representative of an interest factor.
(9) Cash flows from operating, investing and financing activities are obtained
from the Company's consolidated statements of cash flows prepared in
accordance with generally accepted accounting principles.
(10) As of the end of the period.

11
<PAGE> 13

RISK FACTORS

In addition to the other information contained and incorporated by
reference in this prospectus, the following factors should be considered
carefully in evaluating an investment in the Notes offered hereby.

This Prospectus contains forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in such forward-looking statements. Factors that might cause
such a difference include, but are not limited to, those discussed below. Such
forward looking statements include those assuming the completion of this
Offering, the Common Stock Offering, the Pending Acquisitions, the Tender Offer
and the New Credit Agreement, all of which have yet to be completed and any of
which may not be completed. The failure of the Company to complete any of these
transactions will impact the Company's capital structure and could have certain
other effects, many of which are more fully described herein.

SUBSTANTIAL INDEBTEDNESS OF THE COMPANY

The Company presently has substantial indebtedness ($154.7 million at July
31, 1996) and contemplates increasing its indebtedness in connection with the
Pending Acquisitions. In addition, the Company is offering $225 million
aggregate principal amount of Notes pursuant to this Offering and is currently
negotiating the terms of the New Credit Agreement, which would increase the
Company's loan commitment to $225 million and would provide for possible
additional borrowing of up to $75 million at the discretion of the lenders. The
execution of the New Credit Agreement is not a condition precedent to the
consummation of this Offering and there can be no assurance that the New Credit
Agreement will be entered into. Additionally, as of July 31, 1996, the Company
had $3.6 million of Class A Preferred Stock, $638 par value per share (the
"Class A Preferred Stock"), outstanding which is entitled to a cumulative
preferential dividend of $364,903 annually. At July 31, 1996, after giving
effect to the Transactions and the IPO and the application of the net proceeds
therefrom, the Company's indebtedness would have been approximately $248.8
million. The Company's ratio of total debt to EBITDA for the twelve months ended
July 31, 1996 (on a pro forma basis after giving effect to the Transactions and
the IPO and the application of the net proceeds therefrom) was 4.7x. A
substantial part of the Company's cash flow from operations will be dedicated to
debt service and will not be available for other purposes. Further, if the
Company's net cash provided by operating activities were to decrease from
present levels, the Company could experience difficulty in meeting its debt
service obligations without additional financing. There can be no assurance
that, in the event the Company were to require additional financing, such
additional financing would be available or, if available, would be available on
favorable terms. In addition, any such additional financing may require the
consent of lenders under the Company's current bank credit facility (the
"Existing Credit Agreement") or the New Credit Agreement, as the case may be, or
holders of other debt of the Company. Certain of the Company's competitors
operate on a less leveraged basis and may have greater operating and financial
flexibility than the Company. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources," "Description of Indebtedness" and "Description of Notes."

SUBORDINATION OF THE NOTES

The Notes are subordinated to all existing and future Senior Indebtedness
of the Company and the Guarantors. Subject to certain limitations, the Indenture
will permit the Company and the Guarantors to incur additional indebtedness,
including Senior Indebtedness. In addition, the indebtedness to be outstanding
under the New Credit Agreement will be secured by liens on the stock of all of
its subsidiaries. In a liquidation, bankruptcy, reorganization or similar
proceeding involving the Company, its assets would be available to pay
obligations on the Notes only after all Senior Indebtedness has been paid in
full, and, in such event, there may not be sufficient assets to pay in full
amounts due on the Notes. After giving effect to the Transactions and the IPO
and the application of the net proceeds therefrom, the amount of Senior
Indebtedness outstanding as of July 31, 1996 would have been approximately $7.9
million. The Company will be able to incur additional Senior Indebtedness under
either the Existing Credit Agreement or the New Credit Agreement and will be
permitted to incur additional Senior Indebtedness under the Indenture. See
"Description of Notes" and "Description of Other Indebtedness."

12
<PAGE> 14

DEPENDENCE ON CASH FLOW FROM SUBSIDIARIES; FRAUDULENT CONVEYANCE CONCERNS

The Company is a holding company which derives all of its operating income
from its subsidiaries. The Company must rely on dividends and other
distributions from its subsidiaries to generate the funds necessary to meet its
obligations, including the payment of principal and interest on the Notes. The
ability of the Company's subsidiaries to pay such dividends or make such
distributions will be subject to, among other things, applicable state laws and
restrictions contained in its existing and future debt instruments. There can be
no assurance that the Company's subsidiaries will be in a position to make such
dividend or distributions.

While the Notes will be guaranteed on a senior subordinated basis by the
Guarantors the Guarantees may be subject to limitation under federal and state
fraudulent conveyance law. To the extent that a court were to find that (x) a
Guarantee was incurred by a Guarantor with intent to hinder, delay, or defraud
any present or future creditor, or the Guarantor contemplated insolvency with a
design to prefer one or more creditors to the exclusion in whole or in part of
others, or (y) such Guarantor did not receive fair consideration or reasonable
equivalent value for issuing its Guarantee and such Guarantor (i) was insolvent,
(ii) was rendered insolvent by reason of the issuance of such Guarantee, (iii)
was engaged or about to engage in a business or transaction for which the
remaining assets of such Guarantor constituted unreasonably small capital to
carry on its business, or (iv) intended to incur, or believed that it would
incur, debts beyond its ability to pay such debts as they matured, a court could
avoid or subordinate such Guarantee in favor of the Guarantor's other creditors.
Among other things, a legal challenge of a Guarantee on fraudulent conveyance
grounds may focus on the benefits, if any, realized by each Guarantor as a
result of the issuance by the Company of the Notes. The measure of insolvency
for purposes of the foregoing will vary depending on the law of the jurisdiction
being applied. Generally, however, an entity would be considered insolvent if
the sum of its debts (including contingent or unliquidated debts) is greater
than all its property at a fair valuation or if the present fair saleable value
of its assets is less than the amount that will be required to pay its probable
liability on its existing debts as they become absolute and matured. The
obligations of each Guarantor will be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor (including, without limitation, any guarantees of Senior Indebtedness)
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in respect of the obligations of such other Guarantor
under its Guarantee or pursuant to its contribution obligations under the
Indenture, result in the obligations of such Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.

To the extent any Guarantee is avoided or subordinated as a fraudulent
conveyance, limited as described above, or held unenforceable for any other
reason, holders of the Notes would, to such extent, cease to have a claim in
respect of such Guarantee and, to such extent, would be creditors solely of the
Company and any Guarantor whose Guarantee was not avoided, subordinated,
limited, or held unenforceable. In such event, the claims of the holders of the
Notes against the issuer of an avoided, subordinated, limited or unenforceable
Guarantee wold be subject to the prior payment of all liabilities of such
Guarantor. There can be no assurance that, after providing for all prior claims,
there would be sufficient assets to satisfy the claims of the holders of the
Notes.

Based upon the financial and other information currently available to it,
management of the Company and the Company's subsidiaries believe that the Notes
and the Guarantees are being incurred for proper purposes and in good faith and
that the Company and each of its subsidiaries is solvent and will continue to be
solvent after issuing the Notes or its Guarantee, as the case may be, will have
sufficient capital for carrying on its business after such issuance and will be
able to pay its debts as they mature. In rendering their opinions on the
validity of the Notes and the Guarantees, counsel for the Company and the
Underwriters will express no opinion as to federal or state laws relating to
fraudulent transfers.

RESTRICTIONS IMPOSED BY NEW CREDIT AGREEMENT; NONCOMPLIANCE WITH COVENANTS

The Existing Credit Agreement and the Existing Note Indenture contain and
the New Credit Agreement and the Indenture will contain covenants which will
restrict, among other things, the ability of the Company to dispose of assets,
incur or repay debt, create liens, and make certain investments. In addition,
the Existing

13
<PAGE> 15

Credit Agreement requires, and the New Credit Agreement is expected to require,
the Company to maintain specified financial ratios and levels including cash
interest coverage, fixed charge coverage and total debt ratios. The ability of
the Company to comply with the foregoing restrictive covenants will depend on
its future performance, which is subject to prevailing economic, financial and
business conditions and other factors beyond the Company's control. See
"Description of Indebtedness -- New Credit Agreement."

FLUCTUATIONS IN ECONOMIC AND ADVERTISING TRENDS

The Company relies on sales of advertising space for its revenues, and its
operating results are therefore affected by general economic conditions, as well
as trends in the advertising industry. A reduction in advertising expenditures
available for the Company's displays could result from a general decline in
economic conditions, a decline in economic conditions in particular markets
where the Company conducts business or a reallocation of advertising
expenditures to other available media by significant users of the Company's
displays. Although the Company believes that in recent years outdoor advertising
expenditures have increased more rapidly than total U.S. advertising
expenditures, there can be no assurance that this trend will continue or that in
the future outdoor advertising expenditures will not grow more slowly than the
advertising industry as a whole.

REGULATION OF OUTDOOR ADVERTISING

The outdoor advertising business is subject to regulation by federal, state
and local governments. Federal law requires states, as a condition to federal
highway assistance, to restrict billboards on federally-aided primary and
interstate highways to commercial and industrial areas and imposes certain
additional size, spacing and other limitations on billboards. Some states have
adopted standards more restrictive than the federal requirements. Local
governments generally control billboards as part of their zoning regulations,
and some local governments prohibit construction of new billboards and
reconstruction of substantially damaged billboards or allow new construction
only to replace existing structures. In addition, some jurisdictions (including
certain of those within the Company's markets) have adopted amortization
ordinances under which owners and operators of outdoor advertising displays are
required to remove existing structures at some future date, often without
condemnation proceeds being available. Federal and corresponding state outdoor
advertising statutes require payment of compensation for removal by governmental
order in some circumstances. Ordinances requiring the removal of a billboard
without compensation, whether through amortization or otherwise, have been
challenged in various state and federal courts on both statutory and
constitutional grounds, with conflicting results. Although the Company has been
successful in the past in negotiating acceptable arrangements in circumstances
in which its displays have been subject to removal or amortization, there can be
no assurance that the Company will be successful in the future and what effect,
if any, such regulations may have on the Company's operations. In addition, the
Company is unable to predict what additional regulation may be imposed on
outdoor advertising in the future. Legislation regulating the content of
billboard advertisements has been introduced in Congress from time to time in
the past, although no laws which, in the opinion of management, would materially
and adversely affect the Company's business have been enacted to date. Changes
in laws and regulations affecting outdoor advertising at any level of government
may have a material adverse effect on the Company's results of operations. See
"-- Declining Tobacco Advertising" for a discussion of recent federal executive
action concerning tobacco advertising.

ACQUISITION AND GROWTH STRATEGY RISKS

The Company's growth has been enhanced materially by strategic acquisitions
that have substantially increased the Company's inventory of advertising
displays. One element of the Company's operating strategy is to make strategic
acquisitions in markets in which it currently competes as well as in new
markets. While the Company believes that the outdoor advertising industry is
highly fragmented and that significant acquisition opportunities are available,
there can be no assurance that suitable acquisition candidates can be found, and
the Company is likely to face competition from other outdoor advertising
companies for available acquisition opportunities. In addition, if the prices
sought by sellers of outdoor advertising displays continue to rise, as
management believes may happen, the Company may find fewer acceptable
acquisition opportunities.

14
<PAGE> 16

There can be no assurance that the Company will have sufficient capital
resources to complete acquisitions or be able to obtain any required consents of
its bank lenders or that acquisitions can be completed on terms acceptable to
the Company. In addition, the Company recently has entered into the transit
advertising business and, while the Company believes that it will be able to
utilize its expertise in outdoor advertising to operate this business, it has
had limited experience in transit advertising and there is no assurance that it
will be successful.

Since July 31, 1996, the Company has completed the acquisition of, and has
entered into agreements to acquire, six complementary businesses. The process of
integrating these businesses into the Company's operations may result in
unforeseen operating difficulties and could require significant management
attention that would otherwise be available for the development of the Company's
existing business. Moreover, there can be no assurance that the Company will
realize anticipated benefits and cost savings or that the Pending Acquisitions
or any future acquisitions will be consummated. See "The Transactions -- Recent
Acquisition Activity" for a description of the Company's recent acquisition
activity and a discussion of certain pending transactions.

DECLINING TOBACCO ADVERTISING

Approximately 9% of the Company's outdoor advertising net revenues in
fiscal 1995 came from the tobacco products industry, compared to 7% for fiscal
1994 and 1993, 12% for fiscal 1992 and 17% for fiscal 1991. The percentage for
the nine months ended July 31, 1996, on a historical basis and on a pro forma
basis giving effect to the Pending Acquisitions, was approximately 9%.
Manufacturers of tobacco products, principally cigarettes, were historically
major users of outdoor advertising displays. Beginning in 1992, the leading
tobacco companies substantially reduced their domestic advertising expenditures
in response to societal and governmental pressures and other factors. There can
be no assurance that the tobacco industry will not further reduce advertising
expenditures in the future either voluntarily or as a result of governmental
regulation or as to what affect any such reduction may have on the Company. See
"Business -- Company Operations -- Categories of Business." Tobacco advertising
is currently subject to regulation and legislation has been introduced from time
to time in Congress that would further regulate advertising of tobacco products.
In August 1996, President Clinton signed an executive order adopting rules
proposed by the United States Food and Drug Administration which would prohibit
the use of pictures and color in tobacco advertising and restrict the proximity
of outdoor tobacco advertising to schools and playgrounds. Although certain
advertising industry and tobacco industry organizations have filed lawsuits
challenging these rules and certain members of Congress have indicated that they
may sponsor legislation to prevent these rules from going into effect, there can
be no assurance that such lawsuits will be successful or that such legislation,
if proposed, will be adopted. Subject to the outcome of litigation or
legislative action, these rules would become effective in August 1997. Further,
there can be no assurance that national or local legislation or regulations
restricting tobacco advertising will not be adopted in the future, or as to the
effect any such legislation or the voluntarily curtailment of advertising by
tobacco companies would have on the Company. See "Business -- Regulation."

COMPETITION

In addition to competition from other forms of media, including television,
radio, newspapers and direct mail advertising, the Company faces competition in
its markets from other outdoor advertising companies, some of which may be
larger and better capitalized than the Company. The Company also competes with a
wide variety of other out-of-home advertising media, the range and diversity of
which have increased substantially over the past several years to include
advertising displays in shopping centers, malls, airports, stadiums, movie
theaters and supermarkets, and on taxis, trains and buses. The Company believes
that its local orientation, including the maintenance of local offices, has
enabled it to compete successfully in its markets to date. However, there can be
no assurance that the Company will be able to continue to compete successfully
against current and future sources of outdoor advertising competition and
competition from other media or that the competitive pressures faced by the
Company will not adversely affect its profitability or financial performance. In
its logo sign business, the Company currently faces competition for state
franchises from four other national logo sign providers as well as local
companies. Competition from these sources is

15
<PAGE> 17

encountered both when a franchise is first privatized and upon renewal
thereafter. See "Business -- Competition."

POTENTIAL LOSSES FROM HURRICANES

A significant portion of the Company's structures are located in the
mid-Atlantic and Gulf Coast regions of the United States. These areas are highly
susceptible to hurricanes during the late summer and early fall. In the past,
severe storms have caused the Company to incur material losses resulting from
structural damage, overtime compensation, loss of billboards that could not
legally be replaced and reduced occupancy because billboards are out of service.
The Company has determined that it is not economical to obtain insurance against
losses from hurricanes and other storms. The Company has developed contingency
plans to deal with the threat of hurricanes, including plans for early removal
of advertising faces to permit the structures to better withstand high winds and
the replacement of such faces after storms have passed. As a result of these
contingency plans, the Company has experienced lower levels of losses from
recent storms and hurricanes. Structural damage attributable to Hurricane Andrew
in 1992 was less than $500,000, and three hurricanes caused aggregate structural
damage of less than $1,000,000 in 1995. There can be no assurance, however, that
the Company's contingency plans will continue to be effective.

RISKS IN OBTAINING AND RETAINING LOGO SIGN FRANCHISES

Logo sign franchises represent a growing portion of the Company's revenues
and operating income. The Company cannot predict the number of remaining states,
if any, that will initiate logo sign programs or convert state-run logo sign
programs to privately operated programs. Competition for new state logo sign
franchises is intense and, even after a favorable award, franchises may be
subject to challenge under state contract bidding requirements, resulting in
delays and litigation costs. In addition, state logo sign franchises are
generally, with renewal options, ten to twenty-year franchises subject to
earlier termination by the state, in most cases upon payment of compensation.
Typically, at the end of the term of the franchise, ownership of the structures
is transferred to the state without compensation to the Company. None of the
Company's logo sign franchises are due to terminate in the next two years; only
two are subject to renewal during that period and, in one case, the state
authority has verbally agreed to renew the franchise for five years. There can
be no assurance that the Company will be successful in obtaining new logo sign
franchises or renewing existing franchises. Furthermore, following the receipt
by the Company of a new state logo sign franchise, the Company generally incurs
significant start-up capital expenditures and there can be no assurance that the
Company will continue to have access to capital to fund such expenditures.

RELIANCE ON KEY EXECUTIVES

The Company's success depends to a significant extent upon the continued
services of its executive officers and other key management and sales personnel,
in particular Kevin P. Reilly, Jr., the Company's Chief Executive Officer, the
Company's five regional managers and the manager of its logo sign business.
Although the Company believes it has incentive and compensation programs
designed to retain key employees, the Company has no employment contracts with
any of its employees, and none of its executive officers are bound by
non-compete agreements. The Company does not maintain key man insurance on its
executives. The unavailability of the continuing services of any of its
executive officers and other key management and sales personnel could have an
adverse effect on the Company's business. See "Management."

MANAGEMENT DISCRETION OVER USE OF NET PROCEEDS

A portion of the net proceeds of the Offerings will be available for
general corporate purposes. Accordingly, management will have considerable
discretion over the use of such proceeds and may use them without stockholder
approval. See "Use of Proceeds."

16
<PAGE> 18

ABSENCE OF PUBLIC MARKET FOR THE NOTES

The Notes are a new issue of securities for which there is currently no
public market. The Underwriters have informed the Company that, subject to
applicable laws and regulations, they currently intend to make a market in the
Notes. However, the Underwriters are not obligated to do so, and any such market
making may be discontinued at any time without notice. Therefore, no assurance
can be given as to whether an active trading market will develop for the Notes.
The Company does not intend to apply for listing of the Notes on any securities
exchange. See "Underwriting."

17
<PAGE> 19

THE TRANSACTIONS

RECENT ACQUISITION ACTIVITY

PENDING ACQUISITIONS

The FKM Acquisition

On September 25, 1996, the Company entered into a Stock Purchase Agreement
with the shareholders of FKM pursuant to which it agreed to acquire all of the
outstanding capital stock of FKM for a cash purchase price of $40 million. Upon
completion of the FKM acquisition, the Company will acquire a total of 122
bulletins and 537 posters in Youngstown, OH and 553 bulletins located across the
state of Pennsylvania on interstate highways and other primary roads. FKM had
approximately $7.5 million of net revenues for the twelve months ended September
30, 1996.

The Outdoor East Acquisition

On October 9, 1996, the Company entered into a Contract to Sell and
Purchase with Outdoor East pursuant to which the Company agreed to acquire
substantially all of the assets of Outdoor East for a cash purchase price of
approximately $60 million. Upon completion of the acquisition of Outdoor East,
the Company will operate an additional 1,780 posters and 2,070 bulletins in
seven markets in the states of Virginia, West Virginia, North Carolina, South
Carolina, Georgia and Florida.

COMPLETED ACQUISITIONS

18
<PAGE> 20

in Albany, GA; 50 bulletins in Roanoke, VA and 121 bulletins in Lakeland, FL.
Net revenues relating to these acquired assets totalled approximately $3.5
million based upon the most recently completed fiscal years of each of the
acquired businesses.

OTHER ACQUISITION

THE TENDER OFFER

On October 17, 1996, the Company commenced a tender offer for all of the
Existing Notes and a solicitation of consents from the holders of the Existing
Notes to (i) eliminate or modify certain covenants and other provisions
contained in the Existing Note Indenture in order to improve the financial
flexibility of the Company, (ii) amend the Pledge Agreement to release the
collateral securing the Existing Notes, thereby making the Existing Notes
unsecured obligations of the Company and (iii) release the Subsidiary Guarantors
(as defined in the Existing Note Indenture) from their obligations as guarantors
under the Existing Note Indenture. The consummation of the Tender Offer is
conditioned on the valid tender of a majority of the outstanding Existing Notes
and the Company having obtained the requisite financing for payment of the
tendered Existing Notes. The Tender Offer will expire on November 19, 1996,
unless extended, at which time the Company expects to purchase all of the
Existing Notes validly tendered.

THE NEW CREDIT AGREEMENT

The Company is currently negotiating a New Credit Agreement which is
expected to be executed on or prior to the closing of this Offering. The New
Credit Agreement is expected to contain a $225 million commitment and provide
for additional borrowing of up to $75 million at the discretion of the lenders.
The execution of the New Credit Agreement is not a condition precedent to the
consummation of this Offering and there can be no assurance that the New Credit
Agreement will be entered into. See "Description of Indebtedness -- New Credit
Agreement" for a discussion of the terms of the agreement.

THE COMMON STOCK OFFERING

Prior to or concurrently with this Offering, the Company is publicly
offering pursuant to the Common Stock Offering shares of its Class A Common
Stock which are expected to generate net cash proceeds to the Company (assuming
the underwriters' overallotment option is not exercised) of at least $74.4
million. The consummation of the Common Stock Offering with net cash proceeds to
the Company of at least $50 million is a condition precedent to this Offering.

19
<PAGE> 21

USE OF PROCEEDS

The net proceeds to the Company from this Offering are estimated to be
approximately $218.5 million after deducting estimated underwriting discounts
and commissions and offering expenses. The net proceeds of this Offering,
together with the net proceeds of the Common Stock Offering, will be used as
follows:

<TABLE>
<CAPTION>
(DOLLARS
IN
THOUSANDS)
----------
<S> <C>
Sources of Funds:
Gross Proceeds of this Offering......................................... $225,000
Gross Proceeds of the Common Stock Offering(1).......................... 78,650
--------
Total sources................................................... $303,650
========
Uses of Funds:
Repay Existing Credit Agreement......................................... $ 9,500(2)
Repurchase Existing Notes(3)............................................ 110,000(4)
Purchase Price of the Pending Acquisitions(3)........................... 100,500
Financing Fees and Expenses............................................. 17,820
Cash(1)(5).............................................................. 65,830
--------
Total uses...................................................... $303,650
========
</TABLE>

- ---------------

(1) The consummation of the Common Stock Offering with net cash proceeds to the
Company of at least $50 million is a condition precedent to this Offering.
To the extent the Common Stock Offering yields gross proceeds less than
$78.7 million ($74.4 million net proceeds), cash will be reduced by the
difference in net proceeds.

(2) Represents amounts outstanding at July 31, 1996 under the Existing Credit
Agreement, as adjusted to give effect to the IPO.

(3) Prior to the consummation of this Offering, to the extent necessary, the
Company intends to borrow amounts under the New Credit Agreement to finance
the repurchase of Existing Notes and a portion of the aggregate purchase
price of the Pending Acquisitions. To the extent the Company borrows such
amounts under the New Credit Agreement, the Company intends to pay off any
such borrowings with the net proceeds from this Offering. The New Credit
Agreement is expected to bear interest computed as a margin over either the
lender's base rate or the London Interbank Offered Rate. See "Description of
Other Indebtedness -- New Credit Agreement."

(4) Does not reflect the payment of $5.5 million of interest to be paid on
November 15, 1996. Assumes the tender of all of the Existing Notes. The
Existing Notes mature on May 15, 2003 and were issued in May 1993 in an
aggregate principal amount of $100 million, all of which are currently
outstanding. The Existing Notes bear interest at the rate of 11% per annum.
See "Description of Other Indebtedness -- Existing Notes."

(5) This amount, together with the $225 million commitment under the New Credit
Agreement, will be available for general corporate purposes, including
future acquisitions and working capital. This amount does not reflect $14.4
million of net proceeds from the IPO and ($0.8) million net adjustments
related to the Pending Acquisitions.

20
<PAGE> 22

CAPITALIZATION

The following table sets forth (i) the capitalization of the Company as of
July 31, 1996 and (ii) the pro forma capitalization of the Company adjusted for
the IPO and the Transactions.

<TABLE>
<CAPTION>
AS OF JULY 31, 1996
------------------------
PRO FORMA
AS ADJUSTED
FOR THE
IPO AND THE
ACTUAL TRANSACTIONS
-------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents............................................. $ 1,965 $ 81,395
======== ========
Current maturities of long-term debt.................................. $ 5,326 $ 4,103
======== ========
Long-term debt, less current maturities
11% Senior Secured Notes............................................ $100,000 $ --
% Senior Subordinated Notes....................................... -- 225,000
Notes payable to bank group......................................... 34,250 --
Revolving credit facility........................................... 15,500 --
Other long-term debt................................................ 4,931 5,807
New Credit Agreement................................................ -- --
Ten-year subordinated notes......................................... -- 18,000
-------- --------
Total long-term debt, less current maturities............... 154,681 248,807
Stockholders' equity (deficit)
Class A Preferred Stock, $638 par value, 10,000 shares authorized,
5,719.49 issued and outstanding.................................. 3,649 3,649
Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no
shares issued and outstanding.................................... -- --
Class A Common Stock, $0.001 par value, 50,000,000 shares
authorized, 10,180,483 actual shares issued and outstanding,
17,034,524 issued and outstanding, pro forma, as adjusted........ 10(1) 16
Class B Common Stock, $0.001 par value, 25,000,000 shares
authorized, 14,301,537 actual shares issued and outstanding,
13,941,537 issued and outstanding, pro forma, as adjusted........ 14(1) 14
Additional paid-in capital.......................................... -- 112,209
Accumulated deficit................................................. (28,962) (37,487)
-------- --------
Total stockholders' equity (deficit)........................ (25,289) 78,401
-------- --------
Total capitalization........................................ $134,718 $331,311
======== ========
</TABLE>

- ---------------

(1) Gives effect to the approximate 778.9 for 1 stock split and recapitalization
effected after July 31, 1996.

21
<PAGE> 23

SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA

The selected consolidated statement of operations and balance sheet data
presented below are derived from the consolidated financial statements of the
Company. The financial statements of the Company for the three years ended
October 31, 1995 and as of October 31, 1994 and 1995 were audited by KPMG Peat
Marwick LLP, independent auditors, as indicated in their report included
elsewhere in this Prospectus. The consolidated statement of operations and
balance sheet data as of and for the nine months ended July 31, 1995 and 1996
are derived from unaudited financial statements. The unaudited financial
statements include all adjustments, consisting of normal recurring adjustments,
which management considers necessary for a fair presentation of the financial
position and the results of operations for these periods. The results of
operations for any such period are not necessarily indicative of the results of
operations for a full year. The data presented below should be read in
conjunction with the audited consolidated financial statements, related notes,
Management's Discussion and Analysis of Financial Condition and Results of
Operations and other financial information included herein.

<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA NINE MONTHS ENDED TWELVE
YEAR ENDED OCTOBER 31, YEAR ENDED JULY 31, MONTHS ENDED
------------------------------------------------------- OCTOBER 31, -------------------- JULY 31,
1991 1992 1993 1994 1995 1995(1) 1995 1996 1996(1)
-------- ------- -------- -------- -------- ----------- -------- -------- ------------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Revenues:
Net advertising
revenues....... $ 60,834 $60,760 $ 65,365 $ 83,627 $101,871 $ 118,335 $ 76,295 $ 87,647 $132,741
Management
fees........... 827 623 595 334 31 31 23 45 53
Rental income.... 601 572 564 512 506 506 408 473 571
-------- ------- -------- -------- -------- -------- -------- -------- --------
Total net
revenues... 62,262 61,955 66,524 84,473 102,408 118,872 76,726 88,165 133,365
-------- ------- -------- -------- -------- -------- -------- -------- --------
Operating
expenses:
Direct
advertising
expenses....... 22,143 22,783 23,830 28,959 34,386 39,783 26,564 30,969 44,947
General and
administrative
expenses....... 17,703 18,225 19,504 24,239 27,057 31,679 20,636 22,842 34,320
Depreciation and
amortization... 8,826 8,881 8,924 11,352 14,090 22,241 9,954 10,568 22,855
-------- ------- -------- -------- -------- -------- -------- -------- --------
Total
operating
expenses... 48,672 49,889 52,258 64,550 75,533 93,703 57,154 64,379 102,122
-------- ------- -------- -------- -------- -------- -------- -------- --------
Operating
income........... 13,590 12,066 14,266 19,923 26,875 25,169 19,572 23,786 31,243
-------- ------- -------- -------- -------- -------- -------- -------- --------
Non-operating
expense (income):
Interest
income......... (213) (96) (218) (194) (199) (211) (133) (140) (230)
Interest
expense........ 11,650 10,454 11,502 13,599 15,783 23,835 11,948 11,957 23,804
Loss (gain) on
disposition of
assets......... 216 (1,309) 729 675 2,328 2,560 1,004 818 2,146
Other expense.... 1,001 392 576 616 655 1,006 684 254 504
-------- ------- -------- -------- -------- -------- -------- -------- --------
Total
non-operating
expense... 12,654 9,441 12,589 14,696 18,657 27,190 13,503 12,889 26,224
-------- ------- -------- -------- -------- -------- -------- -------- --------
Earnings (loss)
before income
taxes and
extraordinary
item............. 936 2,625 1,677 5,227 8,308 (2,021) 6,069 10,897 5,019
Income tax expense
(benefit)(2)..... 207 270 476 (2,072) (2,390) (6,067) (2,480) 4,420 1,717
-------- ------- -------- -------- -------- -------- -------- -------- --------
Extraordinary loss
on debt
extinguishment,
net of income tax
benefit of $98... -- -- (1,854) -- -- -- -- -- --
-------- ------- -------- -------- -------- -------- -------- -------- --------
Net earnings
(loss)(3)........ 729 2,355 (653) 7,299 10,698 4,046 8,549 6,477 3,302
Preferred stock
dividends........ -- -- -- -- -- -- -- 274 274
-------- ------- -------- -------- -------- -------- -------- -------- --------
Net earnings
(loss) applicable
to
common stock..... 729 2,355 (653) 7,299 10,698 4,046 8,549 6,203 3,028
======== ======= ======== ======== ======== ======== ======== ======== ========
Earnings per
common share
before
extraordinary
item(4).......... $ .02 $ .07 $ .03 $ .21 $ .32 $ .10 $ .26 $ .23 $ .08
======== ======= ======== ======== ======== ======== ======== ======== ========
Net earnings
(loss) per common
share(4)......... $ .02 $ .07 $ (.02) $ .21 $ .32 $ .10 $ .26 $ .23 $ .08
======== ======= ======== ======== ======== ======== ======== ======== ========
OTHER DATA:
EBITDA(5)......... 22,416 20,947 23,190 31,275 40,965 47,410 29,526 34,354 54,098
EBITDA margin..... 36% 34% 35% 37% 40% 40% 39% 39% 41%
Ratio of EBITDA to
interest
expense.......... 1.9x 2.0x 2.0x 2.3x 2.6x 2.0x 2.5x 2.9x 2.3x
Ratio of net debt
to EBITDA(6)..... 4.9x 5.0x 4.6x 4.7x 3.4x -- -- -- 3.2x
Ratio of total
debt to EBITDA... 4.9x 5.0x 5.0x 4.9x 3.6x -- -- -- 4.7x
Ratio of earnings
to fixed
charges(7)....... 1.1x 1.2x 1.0x 1.3x 1.4x 1.0x 1.4x 1.7x 1.2x
Capital
expenditures:
Outdoor
advertising.... 1,847 1,695 2,374 4,997 6,643 10,251 4,786 4,922 10,359
Logos............ 629 3,056 2,009 2,761 1,567 1,567 924 7,989 8,096
Cash flows from
operating
activities(8).... 10,328 12,930 12,411 15,214 25,065 -- 10,752 15,595 --
Cash flows from
investing
activities(8).... (4,236) (7,273) (10,064) (53,569) (17,817) -- (11,049) (28,798) --
Cash flows from
financing
activities(8).... (5,133) (6,734) 6,802 37,147 (9,378) -- (5,751) 9,287 --
Number of outdoor
advertising
displays(9)...... 18,829 17,835 17,659 22,369 22,547 27,605 22,512 23,089 28,147
Number of logo
advertising
displays(9)...... 5,027 11,371 13,820 18,266 24,219 24,219 22,431 48,362 48,362
Cumulative logo
sign
franchises(9).... 4 5 7 7 11 11 8 15 15
BALANCE SHEET
DATA(9):
Cash and cash
equivalents...... 1,152 75 9,224 8,016 5,886 -- 1,968 1,965 81,395
Working capital... (2,876) (7,557) 7,274 1,691 1,737 -- 178 1,479 83,134
Total assets...... 81,737 78,649 92,041 130,008 133,885 -- 130,119 150,267 347,072
Total debt
(including
current
maturities)...... 110,350 104,222 115,380 153,929 146,051 -- 148,552 160,007 252,910
Total long-term
obligations...... 111,267 103,567 122,774 147,957 143,944 -- 142,433 156,674 250,800
Stockholders'
equity
(deficit)........ (43,787) (41,870) (43,249) (37,352) (28,154) -- (29,178) (25,289) 78,401
</TABLE>

22
<PAGE> 24

- ---------------

(2) The benefit of the Company's net operating loss carryforward was fully
recognized as of October 31, 1995, resulting in the income tax expense shown
for the nine months ended July 31, 1996, compared to the income tax benefit
for the same period in the prior year.

(3) Pro forma financial information for the year ended October 31, 1995 and the
twelve months ended July 31, 1996 does not give effect to extraordinary loss
from extinguishment of debt net of tax of $8,335 and $8,570, respectively.

(4) After giving effect to the approximately 778.9 for 1 split of the Company's
then-existing common stock and the redesignation of such stock as Common
Stock.

(5) "EBITDA" is defined as operating income before depreciation and
amortization. It represents a measure which management believes is
customarily used to evaluate the financial performance of companies in the
media industry. However, EBITDA is not a measure of financial performance
under generally accepted accounting principles and should not be considered
an alternative to operating income or net earnings as an indicator of the
Company's operating performance or to net cash provided by operating
activities as a measure of its liquidity.

(6) "Net debt" consists of debt less cash and cash equivalents.

(7) The ratio of earnings to fixed charges was computed by dividing earnings by
fixed charges. For this purpose, earnings consist of income from continuing
operations, before income taxes and fixed charges of the Company and its
subsidiaries plus the Company's share of the distributed income of less than
50% owned persons. Fixed charges consist of the Company's and its
subsidiaries' interest expense (including interest costs capitalized) and
the portion of rent expense representative of an interest factor.

(8) Cash flows from operating, investing and financing activities are obtained
from the Company's consolidated statements of cash flows prepared in
accordance with generally accepted accounting principles.

(9) As of the end of the period.

23
<PAGE> 25

LAMAR ADVERTISING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following sets forth unaudited pro forma condensed consolidated
financial information for the Company. The unaudited pro forma condensed
consolidated statements of earnings for the year ended October 31, 1995, the
nine month period ended July 31, 1996 and for the twelve month period ended July
31, 1996 give effect to (i) the consummation of the IPO and the application of
the net proceeds therefrom, (ii) the Pending Acquisitions, (iii) the New Credit
Agreement and the Offerings and the application of the estimated net proceeds
therefrom, and (iv) the Tender Offer, as if each had occurred on the first date
of each such period. The unaudited pro forma condensed consolidated balance
sheet as of July 31, 1996 has been prepared as if the IPO, the Pending
Acquisitions, the New Credit Agreement, the Offerings and the Tender Offer had
occurred on July 31, 1996.

For purposes of the pro forma financial information (i) the statement of
earnings of the Company for its fiscal year ended October 31, 1995 has been
combined with the statements of earnings of Outdoor East and FKM for their
fiscal year ended December 31, 1995, (ii) the statement of earnings of the
Company for the nine months ended July 31, 1996 has been combined with the
statements of earnings of Outdoor East and FKM for the nine months ended
September 30, 1996, (iii) the statement of earnings of the Company for the
twelve month period ended July 31, 1996 has been combined with the statements of
earnings of Outdoor East and FKM for the twelve months ended September 30, 1996
and (iv) the balance sheet of the Company as of July 31, 1996 has been combined
with the balance sheets of Outdoor East and FKM as of September 30, 1996.

The unaudited pro forma condensed consolidated financial statements give
effect to the Pending Acquisitions under the purchase method of accounting.

The unaudited pro forma condensed consolidated financial statements have
been prepared by the Company's management. The unaudited pro forma data is not
designed to represent and does not represent what the Company's results of
operations or financial position would have been had the aforementioned
transactions been completed on or as of the dates assumed, and are not intended
to project the Company's results of operations for any future period or as of
any future date. The unaudited pro forma condensed consolidated financial
statements should be read in conjunction with the audited and unaudited
consolidated financial statements and notes of the Company and certain acquired
businesses included elsewhere or incorporated by reference herein.

24
<PAGE> 26

LAMAR ADVERTISING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
YEAR ENDED OCTOBER 31, 1995
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
ADJUSTMENTS
INITIAL EQUITY FOR THE
OFFERING ACQUISITION COMMON STOCK
LAMAR ADJUSTMENTS FKM OUTDOOR EAST ADJUSTMENTS OFFERING
---------- -------------- ------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Outdoor advertising, net...... $ 101,871 $ 4,956 $ 11,508
Rental income................. 506 --
Management fees from related
and affiliated parties...... 31 --
Other income.................. -- 45 -- (45)(10)
Interest income............... -- 12 -- (12)(9)
---------- --------- ------- -------- ------- ----------
102,408 5,013 11,508 (57)
---------- --------- ------- -------- ------- ----------
Direct expenses
Direct advertising expenses... 34,386 1,513 3,884
General and administrative
expenses.................... 27,057 1,119 3,548 (45)(10)
Depreciation and
amortization................ 14,090 1,823 2,675 2,565(2)
---------- --------- ------- -------- ------- ----------
75,533 4,455 10,107 2,520
---------- --------- ------- -------- ------- ----------
Operating income................ 26,875 558 1,401 (2,577)
---------- --------- ------- -------- ------- ----------
Other expense (income)
Interest income............... (199) 0 (12)(9)
Interest expense.............. 15,783 (2,337)(1)(8) 1,039 2,060 (3,085)(3)
Loss on disposition of
assets...................... 2,328 232 --
Other expenses................ 655 7 344
---------- --------- ------- -------- ------- ----------
18,567 (2,337) 1,278 2,404 (3,097)
---------- --------- ------- -------- ------- ----------
Earnings (loss) before income
taxes......................... 8,308 2,337 (720) (1,003) 520
Income tax expense
(benefit)................... (2,390) 935(13) (192) 165(13)
---------- --------- ------- -------- ------- ----------
Net earnings (loss)............. $ 10,698 $ 1,402 $ (528) $ (1,003) $ 355 $
========== ========= ======= ======== ======= ==========
Net earnings per common share... $ 0.32
==========
Weighted average number of
shares outstanding............ 33,772,107 4,710,250 2,285,714
========== ========= ==========

<CAPTION>
NEW CREDIT
AGREEMENT
AND TENDER ADJUSTMENTS PRO FORMA
OFFER PRO FORMA FOR THIS COMBINED AS
ADJUSTMENTS COMBINED OFFERING ADJUSTED
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Outdoor advertising, net...... $ 118,335 $ 118,335
Rental income................. 506 506
Management fees from related
and affiliated parties...... 31 31
Other income.................. 0 0
Interest income............... 0 0
------- ----------- ------- -----------
118,872 118,872
------- ----------- ------- -----------
Direct expenses
Direct advertising expenses... 39,783 39,783
General and administrative
expenses.................... 31,679 31,679
Depreciation and
amortization................ 435(6) 21,588 653(7) 22,241
------- ----------- ------- -----------
435 93,050 653 93,703
------- ----------- ------- -----------
Operating income................ (435) 25,822 (653) 25,169
------- ----------- ------- -----------
Other expense (income)
Interest income............... (211) (211)
Interest expense.............. (275)(4) 13,185 10,650(5) 23,835
Loss on disposition of
assets...................... 2,560 2,560
Other expenses................ 1,006 1,006
------- ----------- ------- -----------
(275) 16,540 10,650 27,190
------- ----------- ------- -----------
Earnings (loss) before income
taxes......................... (160) 9,282 (11,303) (2,021)
Income tax expense
(benefit)................... (64)(13) (1,546) (4,521)(13) (6,067)
------- ----------- ------- -----------
Net earnings (loss)............. $ (96) $ 10,828 $(6,782) $ 4,046
======= =========== ======= ===========
Net earnings per common share... $ 0.27 $ 0.10
=========== ===========
Weighted average number of
shares outstanding............ 40,768,071 $40,768,071
=========== ===========
</TABLE>

25
<PAGE> 27

LAMAR ADVERTISING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
NINE MONTHS ENDED JULY 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
ADJUSTMENTS
INITIAL EQUITY FOR THE
OFFERING ACQUISITION COMMON STOCK
LAMAR ADJUSTMENTS FKM OUTDOOR EAST ADJUSTMENTS OFFERING
---------- -------------- ------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Outdoor advertising, net...... $ 87,647 $ $5,924 $ 9,130 $ $
Rental income................. 473
Management fees from related
and affiliated parties...... 45 100 (100)(11)
Other income.................. 80 -- (80)(10)
Interest income............... 20 -- (20)(9)
----------- ---------- ------ -------- ------- ----------
88,165 6,024 9,230 (200)
----------- ---------- ------ -------- ------- ----------
Direct expenses
Direct advertising expenses... 30,969 1,744 3,004
General and administrative
expenses.................... 22,842 1,352 2,699 (80)(10)
Depreciation and
amortization................ 10,568 1,975 2,192 1,129(2)
----------- ---------- ------ -------- ------- ----------
64,379 5,071 7,895 1,049
----------- ---------- ------ -------- ------- ----------
Operating income................ 23,786 953 1,335 (1,249)
----------- ---------- ------ -------- ------- ----------
Other expense (income)
Interest income............... (140) (20)(9)
Interest expense.............. 11,957 (1,871)(1)(8) 1,589 2,160 (3,738)(3)
Loss on disposition of
assets...................... 818
Other expenses................ 254 6 790 (716)(12)
----------- ---------- ------ -------- ------- ----------
12,889 (1,871) 1,595 2,950 (4,474)
----------- ---------- ------ -------- ------- ----------
Earnings (loss) before income
taxes......................... 10,897 1,871 (642) (1,615) 3,225
Income tax expense
(benefit)................... 4,420 748(13) (120) -- 847(13)
----------- ---------- ------ -------- ------- ----------
Net earnings (loss)............. $ 6,477 $ 1,123 $ (522) $ (1,615) $ 2,378 $
========== ====== ======== ======= ==========
Preferred stock dividends....... 274
Net earnings (loss) applicable
to common stock............... 6,203
===========
Net earnings per common share... $ 0.23
===========
Weighted average number of
shares outstanding............ 27,068,544 4,710,250 2,285,714
=========== ========== ==========

<CAPTION>
NEW CREDIT
AGREEMENT
AND TENDER PRO FORMA ADJUSTMENTS PRO FORMA
OFFER COMBINED AS FOR THIS COMBINED AS
ADJUSTMENTS ADJUSTED OFFERING ADJUSTED
----------- ----------- ----------- -----------
<S> <C><C> <C> <C> <C>
Revenues
Outdoor advertising, net...... $ $ 102,701 $ $ 102,701
Rental income................. 473 473
Management fees from related
and affiliated parties...... 45 45
Other income.................. -- --
Interest income............... -- --
------- ---------- ------- ----------
103,219 103,219
------- ---------- ------- ----------
Direct expenses
Direct advertising expenses... 35,717 35,717
General and administrative
expenses.................... 26,813 26,813
Depreciation and
amortization................ 260(6) 16,124 490(7) 16,614
------- ---------- ------- ----------
260 78,654 490 79,144
------- ---------- ------- ----------
Operating income................ (260) 24,565 (490) 24,075
------- ---------- ------- ----------
Other expense (income)
Interest income............... (160) (160)
Interest expense.............. (206) (4) 9,891 7,987(5) 17,878
Loss on disposition of
assets...................... 818 818
Other expenses................ 334 334
------- ---------- ------- ----------
(206) 10,883 7,987 18,870
------- ---------- ------- ----------
Earnings (loss) before income
taxes......................... (54) 13,682 (8,477) 5,205
Income tax expense
(benefit)................... (22)(13) 5,874 (3,391)(13) 2,483
------- ---------- ------- ----------
Net earnings (loss)............. $ (32) $ 7,808 $(5,086) $ 2,722
======= =======
Preferred stock dividends....... 274 274
----------
Net earnings (loss) applicable
to common stock............... 7,534 2,448
========== ==========
Net earnings per common share... $ 0.22 $ 0.07
========== ==========
Weighted average number of
shares outstanding............ 34,064,508 34,064,508
========== ==========
</TABLE>

26
<PAGE> 28

LAMAR ADVERTISING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
TWELVE MONTHS ENDED JULY 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
INITIAL ADJUSTMENTS
EQUITY FOR THE
OFFERING OUTDOOR ACQUISITION COMMON STOCK
LAMAR ADJUSTMENTS FKM EAST ADJUSTMENTS OFFERING
----------- -------------- ------ ------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Outdoor advertising, net............. 113,223 7,376 12,142
Rental income........................ 571 -- --
Management fees from related and
affiliated parties................. 53 -- 100 (100)(11)
Other income......................... -- 85 -- (85)(10)
Interest income...................... -- 24 -- (24)(9)
---------- --------- ----- ------ ------ ---------
113,847 7,485 12,242 (209)
---------- --------- ----- ------ ------ ---------
Direct expenses
Direct advertising expenses.......... 38,791 2,214 3,942
General and administrative
expenses........................... 29,263 1,632 3,510 (85)(10)
Depreciation and amortization........ 14,704 2,453 2,941 1,669(2)
---------- --------- ----- ------ ------ ---------
82,758 6,299 10,393 1,584
---------- --------- ----- ------ ------ ---------
Operating income....................... 31,089 1,186 1,849 (1,793)
---------- --------- ----- ------ ------ ---------
Other expense (income)
Interest income...................... (206) (24)(9)
Interest expense..................... 15,792 (2,377)(1)(8) 1,965 2,672 (4,623)(3)
Loss on disposition of assets........ 2,142 4 0
Other expenses....................... 225 10 985 (716)(12)
---------- --------- ----- ------ ------ ---------
17,953 (2,377) 1,979 3,657 (5,363)
---------- --------- ----- ------ ------ ---------
Earnings (loss) before income taxes.... 13,136 2,377 (793) (1,808) 3,570
Income tax expense (benefit)......... 4,510 951(13) (157) 998(13)
---------- --------- ----- ------ ------ ---------
Net earnings (loss).................... 8,626 1,426 (636) (1,808) 2,572
========= ===== ====== ====== =========
Preferred stock dividends.............. 274
----------
Net earnings (loss) applicable to
common
stock................................ 8,352
==========
Net earnings per common share.......... $0.25
==========
Weighted average number of shares
outstanding.......................... 32,862,355 4,710,250 2,285,714
========== ========= =========

<CAPTION>
NEW CREDIT
AGREEMENT
AND TENDER ADJUSTMENTS PRO FORMA
OFFER PRO FORMA FOR THIS COMBINED
ADJUSTMENTS COMBINED OFFERING AS ADJUSTED
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues
Outdoor advertising, net............. 132,741 132,741
Rental income........................ 571 571
Management fees from related and
affiliated parties................. 53 53
Other income......................... 0 0
Interest income...................... 0 0
------ ----------- ------- -----------
133,365 133,365
------ ----------- ------- -----------
Direct expenses
Direct advertising expenses.......... 44,947 44,947
General and administrative
expenses........................... 34,320 34,320
Depreciation and amortization........ 435(6) 22,202 653(7) 22,855
------ ----------- ------- -----------
435 101,469 653 102,122
------ ----------- ------- -----------
Operating income....................... (435) 31,896 (653) 31,243
------ ----------- ------- -----------
Other expense (income)
Interest income...................... (230) (230)
Interest expense..................... (275)(4) 13,154 10,650(5) 23,804
Loss on disposition of assets........ 2,146 2,146
Other expenses....................... 504 504
------ ----------- ------- -----------
(275) 15,574 10,650 26,224
------ ----------- ------- -----------
Earnings (loss) before income taxes.... (160) 16,322 (11,303) 5,019
Income tax expense (benefit)......... (64)(13) 6,238 (4,521)(13) 1,717
------ ----------- ------- -----------
Net earnings (loss).................... (96) 10,084 (6,782) 3,302
====== =======
Preferred stock dividends.............. 274 274
----------- -----------
Net earnings (loss) applicable to
common
stock................................ 9,810 3,028
=========== ===========
Net earnings per common share.......... $ 0.25 $ 0.08
=========== ===========
Weighted average number of shares
outstanding.......................... 39,858,319 39,858,319
============ ===========
</TABLE>

27
<PAGE> 29

LAMAR ADVERTISING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JULY 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
INITIAL EQUITY COMMON
OFFERING ACQUISITION STOCK
LAMAR ADJUSTMENTS FKM OUTDOOR EAST ADJUSTMENTS OFFERING
-------- -------------- ------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Current assets
Cash and cash equivalents......... $ 1,965 $ 14,396(15) $ 80 $ 1,026 $(102,402)(15) $74,368(15)
Net receivables................... 15,491 668 1,951 (2,025)(16)
Other current assets.............. 2,905 620 853 (853)(17)
-------- -------- ------- -------- --------- -------
Total current assets........ 20,361 14,396 1,368 3,830 (105,280) 74,368
-------- -------- ------- -------- --------- -------
Property, plant & equipment
Property, plant and equipment,
net............................. 105,185 7,209 15,566 25,275(18)
-------- -------- ------- -------- --------- -------
Other assets
Intangibles....................... 16,891 (299)(19) 8,676 4,219 40,656(19)
Other assets...................... 7,830 1,689 775 (2,618)(20)
-------- -------- ------- -------- --------- -------
Total assets................ $150,267 $ 14,097 $18,942 $ 24,390 $ (41,967) $74,368
======== ======== ======= ======== ========= =======
Current liabilities
Current maturities of long-term
debt............................ 5,326 (1,500)(21) 1,490 867 (2,080)(21)
Other current liabilities......... 13,556 386 1,157 (1,331)(22)
-------- -------- ------- -------- --------- -------
18,882 (1,500) 1,876 2,024 (3,411)
-------- -------- ------- -------- --------- -------
Long-term liabilities
Long-term debt.................... 154,681 (22,250)(23) 15,748 22,943 (37,815)(23)
Deferred income................... 779 -- --
Other liabilities................. 1,214 -- --
-------- -------- ------- -------- --------- -------
Total liabilities........... 175,556 (23,750) 17,624 24,967 (41,226)
-------- -------- ------- -------- --------- -------
Stockholders' equity (deficit)...... (25,289) 37,847(24) 1,318 (577) (741)(24) 74,368(24)
-------- -------- ------- -------- --------- -------
Total liabilities and
stockholders' deficit..... $150,267 $ 14,097 $18,942 $ 24,390 $ (41,967) $74,368
======== ======== ======= ======== ========= =======

<CAPTION>
NEW CREDIT
AGREEMENT
AND TENDER ADJUSTMENTS PRO FORMA
OFFER PRO FORMA FOR THIS COMBINED AS
ADJUSTMENTS COMBINED OFFERING ADJUSTED
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Current assets
Cash and cash equivalents......... $ 16,500(15) $ 5,933 $75,462(15) $ 81,395
Net receivables................... 16,085 16,085
Other current assets.............. 3,525 3,525
--------- -------- ------- ---------
Total current assets........ 16,500 25,543 75,462 101,005
--------- -------- ------- ---------
Property, plant & equipment
Property, plant and equipment,
net............................. 153,235 153,235
--------- -------- ------- ---------
Other assets
Intangibles....................... 2,792(19) 72,935 6,538(19) 79,473
Other assets...................... 5,683(20) 13,359 13,359
--------- -------- ------- ---------
Total assets................ $ 24,975 $265,072 $82,000 $ 347,072
========= ======== ======= =========
Current liabilities
Current maturities of long-term
debt............................ 4,103 4,103
Other current liabilities......... 13,768 13,768
--------- -------- ------- ---------
17,871 17,871
--------- -------- ------- ---------
Long-term liabilities
Long-term debt.................... 33,500(23) 166,807 82,000(23) 248,807
Deferred income................... 779 779
Other liabilities................. 1,214 1,214
--------- -------- ------- ---------
Total liabilities........... 33,500 186,671 82,000 268,671
--------- -------- ------- ---------
Stockholders' equity (deficit)...... (8,525)(24) 78,401 78,401
--------- -------- ------- ---------
Total liabilities and
stockholders' deficit..... $ 24,975 $265,072 $82,000 $ 347,072
========= ======== ======= =========
</TABLE>

28
<PAGE> 30

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

For purposes of determining the pro forma effect of the Transactions
described in the previous pages on the Company's unaudited Condensed
Consolidated Statements of Earnings for the year ended October 31, 1995, the
nine months ended July 31, 1996, and the twelve months ended July 31, 1996, the
following adjustments have been made:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED TWELVE MONTHS
YEAR ENDED JULY 31, ENDED
OCTOBER 31, 1995 1996 JULY 31, 1996
---------------- ----------- -------------
<S> <C> <C> <C>
(1) Represents the elimination of interest
expense on bank loans under the Existing
Credit Agreement as a result of the
application of the net proceeds from the
IPO.......................................... $ (3,864) $(3,031) $(3,904)

(2) Represents incremental amortization and
depreciation due to the application of
purchase accounting. Depreciation and
amortization are calculated using accelerated
and straight line methods over the estimated
useful lives of the assets................... 2,565 1,129 1,669

(3) Represents the net effect on interest expense
resulting from (i) additional borrowings
required to finance the acquisitions and (ii)
the elimination of interest expense on debt
not assumed in the acquisitions.............. (3,085) (3,738) (4,623)

(4) To eliminate historical interest expense on
the Existing Notes and to record interest
expense on the New Credit Agreement at an
assumed interest rate of 7.5%. (A difference
of .125% in the assumed rate of interest
would have changed income by $1,788, $1,341
and $1,788 for the year ended October 31,
1995, the nine months ended July 31, 1996 and
the twelve months ended July 31, 1996,
respectively.)
Interest expense on
borrowings under New
Credit Agreement
(Based on borrowing
of $143,000)........ 10,725 8,044 10,725
Interest expense on
the Existing
Notes............... (11,000) (8,250) (11,000) (275) (206) (275)
------- ------- -------

(5) To eliminate interest expense relating to the
New Credit Agreement and record interest
expense on the Notes at an assumed rate of
9.5%. (A difference of .125% in the assumed
rate of interest would have changed income by
$2,813, $2,109 and $2,813 for the year ended
October 31, 1995, the nine months ended July
31, 1996 and the twelve months ended July 31,
1996, respectively.)
</TABLE>

29
<PAGE> 31

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Interest expense on
this Offering........ 21,375 16,031 21,375
Interest expense on
the Existing Credit
Agreement............ (10,725) (8,044) (10,725) 10,650 7,987 10,650
------- ------- -------

(6) The incremental increase in amortizing debt
issuance costs associated with the New Credit
Agreement over the Existing Notes amortization...
Amortization under
New Credit
Agreement........... 1,000 750 1,000
Amortization on
Existing Notes...... (565) (490) (565) 435 260 435
------- ------- -------

(7) The increase in amortization related to Notes
issuance costs............................... 653 490 653

(8) Interest expense on the $20 million ten year
subordinated notes issued to existing
shareholders at the time of the IPO.......... 1,527 1,160 1,527

(9) To reclassify interest income in order to
conform to the Company's presentation........ (12) (20) (24)

(10) To reclassify other income in order to
conform to the Company's presentation........ (45) (80) (85)

(11) To eliminate management fee income on Outdoor
East historical financial statements, which
would not have been earned had the Pending
Acquisitions been consummated on November 1,
1994......................................... -- (100) (100)

(12) To eliminate costs associated with the sale
and reorganization of Outdoor East which
would not have been incurred had the Pending
Acquisitions been consummated on November 1,
1994......................................... -- (716) (716)

(13) To record the tax effect on pro forma
statements for:
IPO....................................... 935 748 951
Pending Acquisitions...................... 165 847 998
New Credit Agreement...................... (64) (22) (64)
This Offering............................. (4,521) (3,391) (4,521)

(14) The accompanying pro forma results of
operation do not give effect to the
extraordinary loss on the extinguishment of
debt of $8,335, $8,525 and $8,570 for the
year ended October 31, 1995, for the nine
months ended July 31, 1996 and for the twelve
months ended July 31, 1996; respectively,
however, such amounts have been reflected as
an adjustment to pro forma retained earnings.
</TABLE>

30
<PAGE> 32

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For purposes of determining the pro forma effect of the Transactions on the
Company's unaudited Condensed Consolidated Balance Sheet as of July 31, 1996,
the following adjustments have been made:

<TABLE>
<CAPTION>
ADJUSTMENTS NEW CREDIT
FOR THE AGREEMENT AND ADJUSTMENTS
IPO ACQUISITION COMMON STOCK TENDER OFFER FOR THIS
ADJUSTMENTS ADJUSTMENTS OFFERING ADJUSTMENTS OFFERING
----------- ----------- ------------ -------------- -----------
<C> <S> <C> <C> <C> <C> <C>
(15) Cash:
Net proceeds of offering........ $ 63,146 $ 74,368 $ 136,000 $ 218,462
Use of proceeds of offering..... (48,750) (119,500) (143,000)
Represents purchase of FKM...... $ (40,000)
Payoff of receivable from
shareholder -- FKM............ 74
Represents purchase of Outdoor
East.......................... (60,500)
To record payoff of note
assumed -- Outdoor East....... (950)
To remove cash not purchased
from Outdoor East............. (1,026)
--------- --------- -------- ---------- ---------
$ 14,396 $(102,402) $ 74,368 $ 16,500 $ 75,462
========= ========= ======== ========== =========
(16) Net receivables:
Payoff of receivable from
shareholder -- FKM............ $ (74)
To remove net receivables not
purchased from Outdoor East... (1,951)
---------
$ (2,025)
=========
(17) Other current assets:
To remove net receivables not
purchased from Outdoor East... $ (853)
=========
(18) Property, plant and equipment:
To record the net increase in
property, plant and equipment
from the allocation of the
purchase price of the FKM
acquisition................... $ 5,421
To record the net increase in
structures from the allocation
of the purchase price of the
Outdoor East acquisition...... 19,854
---------
$ 25,275
=========
</TABLE>

31
<PAGE> 33

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
ADJUSTMENTS NEW CREDIT
FOR THE AGREEMENT AND ADJUSTMENTS
IPO ACQUISITION COMMON STOCK TENDER OFFER FOR THIS
ADJUSTMENTS ADJUSTMENTS OFFERING ADJUSTMENTS OFFERING
----------- ----------- ------------ ------------- -----------
<C> <S> <C> <C> <C> <C> <C>
(19) Intangibles:
To reclassify additional
offering fees................. $ (299)
To record net intangible assets
from purchase of FKM.......... $ 17,730
To record net intangible assets
from purchase of Outdoor East
assets........................ 22,926
To record capitalized fees of
the New Credit Agreement...... $ 7,000 $
To record capitalized fees of
this Offering................. 6,538
To remove issuance costs of
Existing Notes................ (4,208)
--------- --------- ---------- ---------
$ (299) $ 40,656 $ 2,792 $ 6,538
========= ========= ========== =========
(20) Other assets:
To eliminate other assets not
purchased from Outdoor East... $ (775)
To record reduction of deferred
tax asset after giving effect
to FKM acquisition............ (1,843)
To record tax effect of loss on
early extinguishment of
debt.......................... 5,683
--------- ----------
$ (2,618) 5,683
========= ==========
(21) Current maturities of long-term
debt:
To record payoff of borrowings
under the Existing Credit
Agreement..................... $ (3,500)
To record ten year subordinated
note payable, current
portion....................... 2,000
To remove liabilities not
assumed in FKM acquisition.... $ (1,467)
To record net current maturities
of long-term debt related to
Outdoor East acquisition...... (613)
--------- ---------
$ (1,500) $ (2,080)
========= =========
(22) Other current liabilities:
To remove liabilities not
assumed from Outdoor East..... $ (1,157)
To remove liabilities not
assumed from FKM.............. (174)
---------
$ (1,331)
=========
</TABLE>

32
<PAGE> 34

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
ADJUSTMENTS NEW CREDIT
FOR THE AGREEMENT AND ADJUSTMENTS
IPO ACQUISITION COMMON STOCK TENDER OFFER FOR THIS
ADJUSTMENTS ADJUSTMENTS OFFERING ADJUSTMENTS OFFERING
----------- ----------- ------------ -------------- -----------
<C> <S> <C> <C> <C> <C> <C>
(23) Long-term debt:
To record payoff of loans under
the Existing Credit
Agreement..................... $ (40,250) $ (9,500)
To record ten year subordinated
note payable, long-term
portion....................... 18,000
To remove net liabilities not
assumed from FKM.............. $ (15,733)
To remove net liabilities not
assumed from Outdoor East..... (22,082)
To record proceeds of the New
Credit Agreement.............. $ 143,000
To record effect of Tender
Offer......................... (100,000)
To record effect of the issuance
of the Notes.................. $ 225,000
To record payoff of Credit
Agreement..................... (143,000)
--------- --------- ---------- ---------
$ (22,250) $ (37,815) $ 33,500 $ 82,000
========= ========= ========== =========
(24) Stockholders' deficit:
Net proceeds of the IPO and the
Offering...................... $ 62,847 $ 74,368
Consideration related to
previous stock redemptions.... (25,000)
To reverse historical equity in
connection with the Pending
Acquisitions.................. (741)
To record effect on equity due
to loss on early
extinguishment of debt........ $ (8,525)
--------- --------- ---------- ----------
$ 37,847 $ (741) $ 74,368 $ (8,525)
========= ========= ========== ==========
</TABLE>

33
<PAGE> 35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the consolidated financial condition and
results of operations of the Company for the three fiscal years ended October
31, 1995, and for the nine months ended July 31, 1996 compared to the same
period for the prior year. This discussion should be read in conjunction with
the consolidated financial statements of the Company and the related notes, and
the pro forma condensed consolidated statements of the Company and the related
notes, included in and incorporated by reference to this Prospectus. References
herein to specific years refer to the Company's fiscal year ending on October 31
of such years.

OVERVIEW

The Company's net revenues, which represent gross revenues less commissions
paid to advertising agencies that contract for the use of advertising displays
on behalf of advertisers, are derived primarily from the sale of advertising on
outdoor advertising displays owned and operated by the Company. In recent years,
the Company's logo sign business has expanded rapidly and may in the future have
an increasing impact on the Company's revenues and operating income.

The Company has grown significantly during the last three years, primarily
as the result of (i) internal growth in its existing outdoor advertising
business resulting from construction of additional outdoor advertising displays,
general improvements in occupancy and operating efficiency and increases in
advertising rates, (ii) acquisitions of outdoor advertising businesses and
structures, the most significant of which was the Company's acquisition of the
50.6% interest that it did not already own in Lamar Holding Corporation ("LHC")
in 1994, and (iii) the rapid expansion of the Company's logo sign business. The
Company's net advertising revenues increased by $36.4 million, representing a
compound annual growth rate of 24.8%, from $65.4 million for the fiscal year
ended October 31, 1993 to $101.9 million for the fiscal year ended October 31,
1995. During the same period, operating cash flow increased $17.8 million,
representing a compound annual growth rate of 32.9%, from $23.2 million for the
fiscal year ended October 31, 1993 to $41.0 million for the fiscal year ended
October 31, 1995.

The Company plans to continue a strategy of expanding through both internal
growth and acquisitions. As a result of acquisitions, principally the LHC
acquisition, the operating performance of certain markets and of the Company as
a whole are not necessarily comparable on a year-to-year basis. All recent
acquisitions have been accounted for using the purchase method of accounting
and, consequently, operating results from acquired operations are included from
the respective dates of those acquisitions. The Company has recently acquired
logo sign franchises in Kansas and Tennessee for an aggregate cash purchase
price of $1.4 million and has acquired certain outdoor advertising properties
for an aggregate cash cost of approximately $13 million. In addition, the
Company has executed agreements to purchase two additional outdoor advertising
companies, FKM and Outdoor East, for an aggregate cash purchase price of
approximately $100 million and is in preliminary negotiations for an acquisition
of the assets of an additional outdoor advertising company at a cash purchase
price expected to be in the range of $70 million to $75 million. The Company
intends to finance its acquisition activities from external sources, including
the proceeds of the Common Stock Offering, the proceeds of this Offering and
borrowings under the New Credit Agreement. See "The Transactions."

The Company relies on sales of advertising space for its revenues, and its
operating results are therefore affected by general economic conditions, as well
as trends in the advertising industry. The Company believes that in recent years
outdoor advertising expenditures have increased more rapidly than total U.S.
advertising expenditures, but there can be no assurance that this trend will
continue or that in the future outdoor advertising will not grow more slowly
than the advertising industry as a whole.

Manufacturers of tobacco products, primarily cigarettes, were historically
major users of outdoor advertising displays. Due to societal and governmental
pressures and other factors, in the early 1990's, leading tobacco manufacturers
substantially reduced their domestic advertising expenditures. The Company's
tobacco revenues, as a percentage of total net revenues, declined from 17% in
fiscal 1991 to 12% in fiscal 1992, 7% in

34
<PAGE> 36

fiscal 1993 and 1994 and 9% in fiscal 1995. During this period, the Company has
replaced the reduced tobacco advertising by diversifying its customer base and
increasing sales to local advertisers.

Growth of the Company's business requires significant capital expenditures
to finance internal growth, acquisitions and the up-front costs associated with
new logo sign franchises. The Company expended $7.6 million on capital
expenditures in fiscal 1993, $13.4 million in fiscal 1994 and $14.0 million in
fiscal 1995. Of these amounts, $2.0 million, $2.8 million and $1.6 million,
respectively, were attributable to the logo sign business. See "-- Liquidity and
Capital Resources."

In the fiscal years ended October 31, 1994 and 1995, the Company recognized
an income tax benefit from a net operating loss carryforward. The benefit of the
Company's net operating loss carryforward was fully recognized as of October 31,
1995, resulting in the recognition of income tax expense for the nine months
ended July 31, 1996.

The following table presents certain items in the Consolidated Statements
of Earnings (Loss) as a percentage of net revenues for the years ended October
31, 1993, 1994 and 1995 and for the nine months ended July 31, 1995 and 1996:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED OCTOBER 31, ENDED JULY 31,
------------------------- ---------------
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net revenues............................... 100.0% 100.0% 100.0% 100.0% 100.0%
Operating expenses
Direct advertising expenses.............. 35.8 34.3 33.6 34.6 35.1
General & administrative expenses........ 29.3 28.7 26.4 26.9 25.9
Operating cash flow........................ 34.9 37.0 40.0 38.5 39.0
Depreciation and amortization.............. 13.4 13.4 13.8 13.0 12.0
Operating income........................... 21.4 23.6 26.2 25.5 27.0
Interest expense........................... 17.3 16.1 15.4 15.6 13.6
Other expense.............................. 18.9 17.4 18.1 17.6 14.6
Net earnings (loss)........................ (1.0) 8.6 10.4 11.1 7.3
</TABLE>

EFFECTS OF THE PENDING ACQUISITIONS

The Pending Acquisitions will result in the addition of 2,745 bulletins and
2,317 posters, or a total of 5,062 outdoor advertising displays, to the
Company's inventory, which represents a 21% increase in its outdoor advertising
displays. The Company has also acquired an additional 1,686 outdoor advertising
displays since July 31, 1996.

The FKM acquisition will expand the Company's operations in Ohio through
the addition of the Youngstown market and will give the Company a presence in
Pennsylvania through the operation of FKM's inventory of bulletins located on
interstate highways and other primary roads in that state. The Outdoor East
acquisition will add a billboard operation with structures positioned along
heavily travelled highways serving the Eastern U.S. It will also add the
Columbia, SC market, which is ranked as the 88th largest market in the U.S., as
well as several smaller markets and displays located along North Carolina
interstate highways and primary roads.

On a pro forma basis for the twelve months ending July 31, 1996, the
Pending Acquisitions add $19.5 million in net outdoor advertising revenues to
the Company's $113.2 net outdoor advertising revenues for the period, which
constitutes an increase of 17%. The Company expects to be able to achieve
certain operating efficiencies through the addition of outdoor advertising
businesses operating in or near markets currently served by the Company.

ANTICIPATED RESULTS

Based upon preliminary information, the Company estimates its net revenue
will be approximately $ million for the fiscal year ended October 31, 1996,
representing a % increase from net revenue of

35
<PAGE> 37

$ million for the fiscal year ended October 31, 1995. This increase in
revenue is primarily the result of . In addition, EBITDA for the
fiscal year ended October 31, 1996, is expected to be approximately $
million compared to $ million for the same period in 1995, representing a
% increase. The resulting EBITDA margin would be % for 1996 compared
to % for 1995. This improvement in EBITDA margin is the result of
. Net income for the fiscal year ended October 31, 1996 is
expected to be approximately $ million compared to $ million for the
same period in 1995. This subsection contains forward looking statements and
estimates which could prove inaccurate. The fiscal year has not yet ended;
consequently, the estimates contained in this subsection are subject to change
depending on the results during the remainder of the year and could be effected
by the factors identified in "Risk Factors."

NINE MONTHS ENDED JULY 31, 1996 COMPARED TO NINE MONTHS ENDED JULY 31, 1995

Net revenues increased $11.4 million or 14.9% to $88.2 million for the nine
months ended July 31, 1996 compared to $76.8 million for the same period in
1995. This increase was primarily a result of the $6.8 million increase in
outdoor advertising net revenues, principally attributable to increases in
number of displays of approximately 600 and advertising rates at an average of
6%, with occupancy rates remaining relatively steady, and a $4.3 million
increase in logo sign revenue due to the continued development of that program.
Net outdoor advertising revenue for the period was $77.5 million and logo sign
revenue was $9.0 million.

Operating expenses, exclusive of depreciation and amortization, increased
$6.6 million or 14.0% for the nine months ended July 31, 1996 as compared to the
same period in 1995. This increase was the result of an increase in health
insurance rates, increases in personnel costs, sign site rent, graphics expense,
other costs related to the increase in revenue and additional operating expenses
related to outdoor asset acquisitions and the continued development of the logo
sign business.

Depreciation and amortization expense increased $0.6 million or 6.2% from
$10.0 million for the nine months ended July 31, 1995 to $10.6 million for nine
months ended July 31, 1996.

Due to the above factors, operating income increased $4.2 million or 21.5%
to $23.8 million for the nine months ended July 31, 1996 from $19.6 million for
the same period in 1995.

Interest expense remained relatively constant for both periods.

Income tax expense for the nine months ended July 31, 1996 increased $6.9
million over the same period in 1995. For the past several years the Company has
had a substantial net operating loss carryforward. The benefit of the Company's
net operating loss carryforward was fully recognized as of October 31, 1995.

As a result of the foregoing factors, net earnings for the nine months
ended July 31, 1996 decreased $2.1 million as compared to the same period in
1995.

YEAR ENDED OCTOBER 31, 1995 COMPARED TO YEAR ENDED OCTOBER 31, 1994

Net revenues increased $17.9 million or 21.2% to $102.4 million for the
twelve months ended October 31, 1995 from $84.5 million for the same period in
1994. This increase was predominantly attributable to higher outdoor advertising
net revenues, which rose $17.9 million or 23.0% during this period. The increase
in outdoor advertising net revenues was principally attributable to increases in
number of displays and advertising rates, with occupancy rates remaining
relatively steady. Operations acquired subsequent to fiscal 1993 generated $9.1
million of this increase in outdoor advertising net revenues. This increase in
net revenues was partially offset by a decrease in management fees resulting
from the LHC acquisition. Continued development of the logo sign business
resulted in logo advertising revenue increasing $0.3 million or 5.5% for the
twelve months ended October 31, 1995 as compared to the prior fiscal year.

Operating expenses, exclusive of depreciation and amortization, increased
$8.2 million or 15.5% to $61.4 million for the twelve months ended October 31,
1995 from $53.2 million for the same period in 1994. The LHC operations acquired
in May 1994 generated $5.5 million of this increase in operating expenses; the
remaining $2.7 million of the increase was generated by previously existing
operations. This $2.7 million

36
<PAGE> 38

increase was primarily the result of acquisitions which caused an expansion of
the Company's work force, which required higher aggregate commissions, workers'
compensation costs and employee benefit expenses.

Depreciation and amortization expense increased $2.7 million or 24% from
$11.4 million for the year ended October 31, 1994 to $14.1 million for the year
ended October 31, 1995. This increase in depreciation and amortization was
generated by the assets purchased during fiscal years 1994 and 1995.

Because the Company's operating expenses declined as a percentage of net
revenues to 73.8% for fiscal 1995 from 76.4% for fiscal 1994, operating income
increased $7.0 million or 34.9% from $19.9 million for the twelve months ended
October 31, 1994 to $26.9 million for the twelve months ended October 31, 1995.

Interest expense increased $2.2 million or 16.1% to $15.8 million for the
twelve months ended October 31, 1995 from $13.6 million for the same period in
1994. Approximately $1.8 million of the increase in interest expense reflected
an additional $35.0 million in debt incurred in May 1994 to finance the LHC
acquisition. The remaining $0.4 million increase in interest expense was due to
increased working capital borrowings throughout fiscal 1995.

The Company had a significant net operating loss carryforward and,
therefore, income tax expense for this period reflected the alternative minimum
tax, state income tax and the recognition in the current year of the deferred
tax benefit generated by the net operating loss carryforward.

As a result of the foregoing factors, net earnings increased $3.4 million
or 46.6% to $10.7 million for the twelve months ended October 31, 1995 from $7.3
million for the same period in 1994.

YEAR ENDED OCTOBER 31, 1994 COMPARED TO YEAR ENDED OCTOBER 31, 1993

Net revenues increased $18.0 million or 27.0% to $84.5 million for the
twelve months ended October 31, 1994 from $66.5 million for the same period in
1993. Higher outdoor advertising net revenues contributed $16.6 million of this
increase, resulting from increases in number of displays, occupancy rates and
advertising rates. Logo advertising revenues increased $1.4 million or 34% from
$4.3 million for the twelve months ended October 31, 1993 to $5.7 million for
the twelve months ended October 31, 1994. The increase in revenues from logo
advertising was generated by the build-out of logos in Texas and Mississippi and
the continued expansion of the existing systems.

Operating expenses, exclusive of depreciation and amortization, increased
$9.9 million or 22.8% to $53.2 million for the twelve months ended October 31,
1994 from $43.3 million for the same period in 1993. This increase was
approximately evenly split between existing operations and those acquired after
fiscal 1993.

Depreciation and amortization expense increased $2.4 million or 27.2% to
$11.4 million for the twelve months ended October 31, 1994 from $8.9 million for
the twelve months ended October 31, 1993. $1.8 million of such increase was
attributable to operations acquired after fiscal 1993, with $1.2 million
representing depreciation of newly acquired boards and $0.6 million representing
amortization related to intangibles capitalized as part of such acquisitions.

Because revenue growth outpaced increases in expenses, operating income
increased $5.7 million or 39.7% to $19.9 million for the twelve months ended
October 31, 1994 from $14.3 million for the same period in 1993.

Interest expense increased $2.1 million or 18.2% to $13.6 million for the
twelve months ended October 31, 1994 from $11.5 million for the twelve months
ended October 31, 1993. Approximately $1.4 million of such increase reflects an
additional $35.0 million of debt incurred in connection with the May 1994 LHC
acquisition. The remaining $0.7 million of the increase in interest expense was
due to the issuance in May 1993 of $100 million in aggregate principal amount of
Existing Notes with a fixed interest rate of 11.0%. Prior to the issuance of the
Existing Notes, the Company's debt consisted primarily of variable rate bank
financing with a lower net interest cost.

As a result of the foregoing factors, net earnings increased $8.0 million
to $7.3 million for the twelve months ended October 31, 1994 from a net loss of
$0.7 million for the same period in 1993.

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<PAGE> 39

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically satisfied its working capital requirements
with cash from operations and revolving credit borrowings. Its acquisitions have
been financed primarily with borrowed funds.

On August 7, 1996, the Company completed the IPO pursuant to which the
Company sold 4,000,000 shares of its Class A Common Stock and selling
stockholders sold 735,000 shares at a price of $16.00 per share. The net
proceeds to the Company from the sale of the 4,000,000 shares was approximately
$58.8 million after deducting estimated expenses and underwriting discounts.

The Company used a portion of the net proceeds from the IPO to repay
existing indebtedness in the aggregate principal amount of approximately $43.8
million, consisting of (i) bank term loans of $37.8 million and (ii) $6.0
million of outstanding loans under a revolving credit facility. The Company used
approximately $5.0 million of the net proceeds from the IPO to pay a portion of
the contingent consideration payable to stockholders whose shares of common
stock were repurchased by the Company in October 1995 and March 1996. The
Company issued to such stockholders $20.0 million aggregate principal amount of
ten-year subordinated notes as the balance of the contingent consideration.

In addition, on August 15, 1996, the Underwriters' over-allotment option to
purchase an additional 294,041 shares from the Company was exercised, yielding
net proceeds to the Company of approximately $4.4 million.

The remaining net proceeds from the IPO are available for general corporate
purposes, including possible acquisitions and repayment of indebtedness. In
August 1996, the Company used net proceeds from the IPO to purchase certain
outdoor advertising properties for an aggregate cash price of $12.2 million.

The Company's net cash provided by operating activities increased to $15.2
million in fiscal 1994 from $12.4 million in fiscal 1993 due primarily to the
increase in net earnings. Net cash used in investing activities increased from
$10.1 million in fiscal 1993 to $53.6 million in fiscal 1994, due primarily to
the LHC acquisition. Net cash used in financing activities increased from $6.8
million in fiscal 1993 to $37.1 million in fiscal 1994 due primarily to the
incurrence of indebtedness pursuant to a new $35.0 million bank term loan used
to complete the LHC acquisition.

The Company's net cash provided by operating activities increased to $25.1
million in fiscal 1995 due primarily to a $3.4 million increase in net earnings
and the addition of non-cash items, including a $2.7 million increase in
depreciation and amortization. Net cash used in investing activities decreased
from $53.6 million in fiscal 1994 to $17.8 million in fiscal 1995 due primarily
to a $37.6 million decrease in purchase of new markets attributable to the
inclusion of the LHC acquisition in fiscal 1994, offset by a $1.8 million
increase in capital expenditures and purchases of intangibles. Net cash used in
financing activities decreased $46.5 million in fiscal 1995 due to a $44.5
million decrease in proceeds from issuance of long term debt compared to fiscal
1994.

For the nine months ended July 31, 1996, net cash provided by operating
activities was $15.6 million, a $4.8 million increase from $10.8 million in the
corresponding period of 1995. The increase occurred, despite a $2.1 million
decrease in net earnings, due primarily to a $5.6 million increase in deferred
taxes due to the benefit of the Company's net operating loss carryforward having
been fully recognized at year end October 31, 1995, and a $1.9 million increase
in deferred income generated by the additional logo sign franchises offset by a
$1.9 million increase in receivables. Net cash used in investing activities
increased $17.7 million for the nine months ended July 31, 1996 as compared to
the same period in 1995 due to a $8.9 million increase in capital expenditures
primarily due to the build-out of the Company's new logo sign franchises, a $7.1
million increase in purchase of new markets, a $1.0 million increase in purchase
of intangible assets and a $0.7 increase in notes receivable. Net cash provided
by financing activities increased $15.0 million for the nine months ended July
31, 1996 as compared to the same period in 1995. The increase was due to the
increase in borrowings of $15.5 million under revolving credit facilities to
finance capital expenditures, purchase new markets and meet seasonal operating
requirements. A $2.8 million decrease in principal payments on long-term debt
was partially offset by the $3.0 million stock redemption in March 1996.

38
<PAGE> 40

During the three fiscal years ended October 31, 1995, the Company's
aggregate capital expenditures, as shown in the Consolidated Statements of Cash
Flow, were $35.0 million. Of this amount, the Company spent in the fiscal years
1993, 1994 and 1995 approximately $2.4 million, $5.0 million and $6.6 million,
respectively, to build and maintain structures within its existing markets and
$2.0 million, $2.8 million and $1.6 million, respectively, to meet the capital
expenditures requirements of state logo sign franchise operations.

During fiscal 1995, the Company was awarded new state logo sign franchises
in the following four states: Georgia, Minnesota, South Carolina and Virginia.
During fiscal 1996, the Company was awarded new contracts in New Jersey and
Michigan as well as the expansion of the existing Texas program which it
currently operates. It also acquired the Kansas and Tennessee franchises from
one of its competitors. Due to the capital needed to fund these new franchises,
the Company amended its existing bank credit agreement effective October 1995,
partially deferring short-term principal payments. In December 1995, the Company
entered into a $15 million reducing credit line with its bank group. This line
may only be used to finance the cost of logo sign franchises awarded to the
Company after October 31, 1995. As of July 31, 1996, the Company had borrowed
approximately $9.5 million to finance the cost of these logo sign franchises. In
addition, the Company is currently negotiating with its existing lenders the
terms of the New Credit Agreement, which would increase the amount of the bank
loan commitment to the Company to $225 million.

Effective May 1, 1994, the Company completed the LHC acquisition in a
transaction accounted for as a purchase for a price of $43.5 million, which was
financed with the proceeds of a bank term loan in the amount of $35.0 million,
with the remainder financed from the Company's revolving credit facilities.

On May 19, 1993, the Company issued $100 million in aggregate principal
amount of Existing Notes. Simultaneously with the sale of the Existing Notes,
the Company entered into a new bank credit agreement which provided an $8
million term loan and a $20 million working capital line of credit. The majority
of the net proceeds from the issuance of Existing Notes was utilized to
extinguish existing variable rate debt prior to maturity and pay related
expenses. See "Description of Other Indebtedness -- Existing Notes." On October
17, 1996, the Company commenced a cash Tender Offer for all of the Existing
Notes. To the extent the New Credit Agreement is entered into prior to the
consummation of this Offering, the Company intends to finance the Tender Offer
with borrowings under the New Credit Agreement and then to pay off such
borrowings with a portion of the net proceeds from this Offering.

The Company expects to pursue a policy of continued growth through
acquisitions. In this regard, the Company recently acquired logo sign franchises
in Kansas and Tennessee for an aggregate cash purchase price of $1.4 million.
Since July 31, 1996, the Company has also acquired outdoor advertising
properties for an aggregate cash cost of approximately $13 million and has
executed agreements to purchase two additional outdoor advertising companies for
an aggregate cash purchase price of approximately $100 million. In addition, the
Company currently is in preliminary negotiations for an acquisition of the
assets of an additional outdoor advertising company at a cash purchase price
expected to be in the range of $70 million to $75 million. The Company intends
to finance its acquisition activities from external sources, including the
proceeds of the Common Stock Offering, the proceeds of this Offering and
borrowings under the New Credit Agreement. See "The Transactions."

The Company believes that internally generated funds and funds available
for borrowing under its bank credit facilities will be sufficient for the
foreseeable future to satisfy all debt service obligations and to finance its
current operations.

INFLATION

In the last three years, inflation has not had a significant impact on the
Company.

SEASONALITY

The Company's revenues and operating results have exhibited some degree of
seasonality in past periods. Typically, the Company experiences its strongest
financial performance in the fourth fiscal quarter and its lowest revenues in
the first fiscal quarter. The Company expects this trend to continue in the
future. Because a

39
<PAGE> 41

significant portion of the Company's expenses are fixed, a reduction in revenues
in any quarter is likely to result in a period to period decline in operating
performance and net earnings.

NEW ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board has issued SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," which established a new accounting principle for accounting for
the impairment of certain loans, certain investments in debt and equity
securities, long-lived assets that will be held and used including certain
identifiable intangibles and goodwill related to those assets and long-lived
assets and certain identifiable intangibles to be disposed of. This statement is
effective for fiscal years beginning after December 15, 1995. While the Company
has not completed its evaluation of the impact that will result from adopting
this statement, it does not believe that adoption of the statement will have a
significant impact on the Company's financial position and results of
operations.

The Financial Accounting Standards Board also issued SFAS No. 123,
"Accounting for Stock Based Compensation," effective also for fiscal years
beginning after December 15, 1995. The new statement encourages, but does not
require, companies to measure stock-based compensation cost using a fair value
method, rather than the intrinsic value method prescribed by the Accounting
Principles Board (APB) Opinion No. 25. Companies choosing to continue to measure
stock-based compensation using the intrinsic value method must disclose on a pro
forma basis net earnings per share as if the fair value method were used.
Management is currently evaluating the requirements of SFAS No. 123. Management
does not believe that SFAS No. 123 will have a material impact on operating
income.

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<PAGE> 42

BUSINESS

GENERAL

Lamar Advertising Company is one of the largest and most experienced owners
and operators of outdoor advertising structures in the United States. It
conducts a business that has operated under the Lamar name since 1902. As of
September 30, 1996, the Company operated approximately 24,000 outdoor
advertising displays in 13 southeastern, midwestern and mid-Atlantic states.
Assuming consummation of the Pending Acquisitions, the Company will operate
approximately 29,000 outdoor advertising displays in 14 states. In each of the
Company's existing 35 primary markets, the Company believes that it is the only
full-service outdoor advertising company serving such markets. The Company also
operates the largest logo sign business in the United States. Logo signs are
erected pursuant to state-awarded franchises on public rights-of-way near
highway exits and deliver brand name information on available gas, food, lodging
and camping services. The Company currently operates logo sign franchises in 15
of the 21 states which have a privatized logo sign program and in October 1996
was selected to operate a tourism signing franchise for the province of Ontario,
Canada. As of September 30, 1996, the Company maintained over 22,000 logo sign
structures containing over 51,000 logo advertising displays under these
franchises. The Company has recently expanded into the transit advertising
business through the operation of displays on bus shelters, benches and buses in
7 of its 35 primary markets. For the fiscal year ended October 31, 1995, the
Company reported net revenues and EBIDTA of $102.4 million and $41.0 million,
respectively. Assuming all of the Transactions were consummated, the Company's
net revenues and EBITDA for the twelve months ended July 31, 1996, would have
been $133.4 million and $54.1 million, respectively.

INDUSTRY OVERVIEW

Outdoor Advertising

The outdoor advertising industry generated total revenues of approximately
$1.8 billion in 1995, or approximately 1.1% of the total advertising
expenditures in the United States, according to recent estimates by the OAAA.
This represents growth of approximately 8.2% over estimated total 1994 revenues
and compares favorably to the growth of total U.S. advertising expenditures of
approximately 7.7% during the same period. Outdoor advertising offers repetitive
impact and a relatively low cost-per-thousand impressions (a standard
measurement of the cost-effectiveness of an advertising medium) compared to
broadcast media, newspapers, magazines and direct mail marketing, making it
attractive to both local businesses targeting a specific geographic area or set
of demographic characteristics and national advertisers seeking mass market
support. Over the past 25 years, outdoor advertising industry revenues have
grown from $0.3 billion in 1971 to

41
<PAGE> 43

$1.83 billion in 1995, representing a compound annual growth rate of 8.0%.
According to OAAA, in eleven of the last twenty years, outdoor advertising
revenue growth exceeded total advertising revenue growth. The Company believes
that this revenue growth is primarily the result of long term contracts that are
generally renewable, a broadening client mix, the increased use of vinyl and
computer printing and acquisition opportunities.

Advertisers purchase outdoor advertising for a variety of reasons. Outdoor
advertising is a highly targeted medium that can be used to concentrate on a
particular geographic location or demographic group. In the case of local
businesses such as hotels, restaurants, service stations and other roadside
businesses, the use of outdoor advertising generates a message that reaches
potential customers close to the point of sale and provides ready directional
information. Similarly, national advertisers often use outdoor advertising when
test marketing a product because of the medium's ability to reach a broad
audience in a specific market. In addition, outdoor advertising is attractive
because of its constant repetition and comparatively low cost-per-thousand
impressions as compared to broadcast media, magazines, newspapers and direct
mail marketing. As a result, advertisers desiring to build brand awareness and
develop mass-market support often find outdoor advertising effective in
generating high visibility in a cost-effective manner. Outdoor advertising is
also often combined with other media to reinforce messages being provided to
consumers.

Outdoor advertising, which began in the late 19th century when advertising
"bills" were pasted or "posted" on rented wooden boards, has evolved over the
years to its present form with two types of standardized displays -- posters in
standard and junior sizes and more permanent fixed and rotary bulletins. The
outdoor advertising industry continues to evolve as a result of a number of
factors. The category of out-of-home advertising (advertising transmitted other
than through the print and broadcast media) now includes more than just
traditional billboard and roadside displays. The use of displays in shopping
centers, malls, airports, stadiums, movie theaters and supermarkets has
expanded, and the presence of advertising on subways, buses, taxicabs and
transit shelters is now commonplace. In addition, while tobacco product
companies, historically the largest users of outdoor advertising, have reduced
their reliance on the medium, the outdoor advertising industry has continued to
grow through increasing visibility and attractiveness to local advertisers and
national retail and consumer products companies. Also, advances in production
technology, such as computer printing, vinyl advertising copy and improved
lighting techniques, have facilitated a more creative and effective use of the
medium and a more durable product. These technological improvements also permit
outdoor advertising companies to respond more promptly to customer needs,
operate more efficiently and make greater use of advertising copy used in other
print media, thus providing advertisers the opportunity to present a unified
campaign. Finally, the outdoor advertising industry has benefitted from the
increase in automobile travel time for business and leisure due to increased
highway congestion and the movement of businesses and residences from cities to
outlying suburbs. A study recently published by the Office of Highway
Information Management of the Federal Highway Administration indicated that,
during the period from 1983 to 1990, licensed drivers in the United States
increased by 11%, vehicles owned increased by 15%, the number of vehicle trips
increased by 25% and vehicle miles increased by 40%. The Company believes that
these trends demonstrate that consumer exposure to existing billboard structures
also increased during this period.

According to media publications, the top ten categories of business ranked
by outdoor advertising expenditures for 1995 were entertainment and amusements,
tobacco products, retail establishments, business and consumer services,
automotive, travel and hotels, publishing and media, beer and wine, insurance
and real estate, and drugs and remedies. The Company's sales by category of
business is described under "Company Operations" below.

The outdoor advertising industry is comprised of several large outdoor
advertising and media companies with operations in multiple markets, as well as
many smaller and local companies operating a limited number of displays in a
single or a few local markets. The OAAA estimates that there are approximately
1,000 companies in the industry operating a total of approximately 396,000
displays. There has been a trend toward consolidation in the outdoor advertising
industry in recent years and the Company expects this trend to continue.

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<PAGE> 44

Logo Signs

Throughout the 1970's and 1980's many states developed logo sign programs
using state and federal highway matching dollars. Logo signs provide brand name
information on available gas, food, lodging and camping services near highway
exits. Brand name advertising display plates are posted on logo sign structures
to provide this information to highway travellers. In 1985, Minnesota became the
first state to privatize its logo sign program by contracting with a private
firm for the construction, marketing, administration and maintenance of logo
signs in lieu of using government resources. Since then 20 other states have
awarded contracts for privatized logo sign programs, and several others are
considering such privatization programs.

Conversion of state-run logo sign programs to privately owned and operated
programs is attractive to state governments, in part because of the efficiencies
offered by private contractors.

Transit

A relatively new opportunity within the out-of-home advertising industry is
transit advertising. Increasing numbers of local governments are providing
transit shelters and benches to enhance the service and image of local transit
systems. New government regulations pertaining to the Americans with
Disabilities Act, as well as demands by the public, are creating a need for bus
shelter locations which are practical and accessible by handicapped individuals.
These locations, as well as buses, are increasingly being used for out-of-home
advertising.

As with state-awarded logo sign franchises, municipalities have begun to
issue contracts for transit displays on bus shelters, benches and buses to
private enterprises. Under these contracts, the private party constructs the
shelters or benches, which it can use for advertising displays. In some cases,
the rights for bus displays are also included under the contract. The primary
benefits of privatizing transit advertising are the avoidance of capital
expenditures by the municipality, the prospect of additional revenue for the
municipality, the consistent quality that a coordinated transit program can
provide and the benefits of regular cleaning and maintenance undertaken by
private enterprises.

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<PAGE> 45

MARKETS

The following table sets forth certain information regarding the Company's
existing primary outdoor advertising markets and the assets proposed to be
acquired in the Pending Acquisitions.

OUTDOOR ADVERTISING

EXISTING OUTDOOR ADVERTISING MARKETS(1)

TENNESSEE
Nashville............................................... 44 643 1,174 7,488
Knoxville............................................... 69 694 896 7,171
Clarksville............................................. -- 98 357 1,533
----- ------ --------
Total............................................. 1,435 2,427 16,192

FLORIDA
Pensacola............................................... 125 250 662 $ 3,113
Lakeland................................................ 104 554 372 2,875(6)
Panama City............................................. 225 268 470 2,262(6)
Fort Myers.............................................. 77 133 297 2,153
Tallahassee............................................. 167 121 302 1,908
Fort Walton............................................. 207 157 220 1,643(6)
Daytona Beach........................................... 93 54 339 1,456
----- ------ --------
Total............................................. 1,537 2,662 15,410

ALABAMA
Mobile.................................................. 84 381 630 4,755
Montgomery.............................................. 142 248 499 3,598
----- ------ --------
Total............................................. 629 1,129 8,353

TEXAS
Brownsville............................................. 63 204 873 2,577
Beaumont................................................ 127 204 308 2,165
Corpus Christi.......................................... 128 195 519 1,707(6)
Wichita Falls........................................... 235 89 165 902
Laredo.................................................. 216 87 373 868(6)
----- ------ --------
Total............................................. 779 2,238 8,219

MISSISSIPPI
Jackson................................................. 118 268 698 4,420
Gulfport................................................ 134 207 559 2,953
----- ------ --------
Total........................................... 475 1,257 7,373

GEORGIA
Savannah................................................ 154 344 604 3,307
Augusta................................................. 107 261 471 2,482
Albany.................................................. 243 106 383 1,109(6)
----- ------ --------
Total............................................. 711 1,458 6,898
</TABLE>

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<PAGE> 46

<TABLE>
<CAPTION>
NUMBER OF DISPLAYS(4) NET
--------------------- REVENUES(5)
STATE/PRIMARY MARKET MARKET RANK(3) BULLETINS POSTERS --------------
- -------------------- -------------- --------- ------- (IN THOUSANDS)
<S> <C> <C> <C> <C>
VIRGINIA
Richmond................................................ 56 309 616 4,288
Roanoke................................................. 101 262 450 1,958(6)
------ ------ --------
Total............................................. 571 1,066 6,246

KENTUCKY
Lexington............................................... 105 117 507 3,127

WEST VIRGINIA
Wheeling................................................ 213 261 551 2,626

COLORADO
Colorado Springs........................................ 98 141 355 2,486

OHIO
Dayton.................................................. 52 3 529 1,960
------ ------ --------
Subtotal.......................................... 7,901 17,127 $ 95,800
------ ------ --------
PENDING ACQUISITIONS(7)

PENNSYLVANIA
Statewide Highways(*)................................... N/A 553 0 4,713(8)

SOUTH CAROLINA
Columbia(+)............................................. 88 338 571 3,725(8)

NORTH CAROLINA
Statewide Highways(+)................................... N/A 924 112 2,472(8)

WEST VIRGINIA
Bluefield(+)............................................ -- 306 281 1,863(8)

VIRGINIA
Dublin(+)............................................... -- 99 221 --(9)
Harrisonburg(+)......................................... 253 9 123 --(9)
Hopewell(+)............................................. -- 56 291 --(9)
------ ------ --------
Total............................................. 164 635 1,632(8)

GEORGIA
Valdosta(+)............................................. -- 338 181 1,289(8)

OHIO
Youngstown(*)........................................... 90 122 537 243(8)
------ ------ --------
Subtotal.......................................... 2,748 2,317 $ 15,937
------ ------ --------
TOTAL..................................................... 10,646 19,444 $111,737
====== ====== ========
</TABLE>

LOGO SIGN FRANCHISES

45
<PAGE> 47

- ---------------
(1) Includes additional or outlying markets served by the office in the
applicable market.
(2) Houma was established as a separate primary market in fiscal 1995, and,
therefore, net revenues are not included.
(3) Indicates the Spring 1996 Arbitron Radio Metro Market ranking within which
the office is located, as determined by The Arbitron Company. The Company
believes that Metro Market ranking, which ranks, according to population of
persons 12 years or older, the largest 261 markets in the U.S., is a
standard measure of market size used by the media industry. Where no market
ranking is shown, such market is not ranked by Arbitron.
(4) The two standardized types of industry displays are bulletins and posters.
See "Business -- Company Operations." The display count is as of October
31, 1995 pro forma for acquisitions completed within the last twelve
months.
(5) Except as otherwise noted, represents net revenues for fiscal year ended
October 31, 1995 attributable to each outdoor advertising market. These
revenues, together with logo sign and transit advertising revenues and
production revenue, comprise outdoor advertising net revenues shown in the
Company's consolidated statements of earnings (loss).
(6) Reflects net revenues for the most recently completed applicable fiscal
year with respect to acquisitions completed by the Company since July 31,
1996. See "The Transactions -- Recent Acquisition Activity -- Completed
Acquisitions."
(7) Reflects assets proposed to be acquired by the Company through the
acquisitions of FKM (*) and Outdoor East (+).
(8) Represents net revenues for the most recently completed applicable fiscal
year attributable to the outdoor advertising market proposed to be acquired
by the Company. See "The Transactions -- Recent Acquisition Activity."
(9) Net revenues for specific markets proposed to be acquired in the state of
Virginia are not available.
(10) Franchise operated by a 66.7% owned partnership.
(11) Franchise operated by a 95.0% owned partnership.
(12) The Company was recently awarded the New Jersey franchise, and,
accordingly, no logo signs had been erected as of September 30, 1996.

BUSINESS STRATEGY

OUTDOOR ADVERTISING

The Company's overall business strategy is to be the leading provider of
outdoor advertising in each of the markets it serves, with an emphasis on
markets with a population ranking between 50 and 250. This strategy includes the
following elements:

Operating Strategy

Small and Medium-Sized Market Focus. The Company's leading position in each
of its 35 primary outdoor advertising markets is a result of a successful
operating strategy dedicated to growth and acquisitions primarily within the
target range of markets having a population ranking between 50 and 250.
Management believes that operating in these markets provides certain advantages,
including the benefits of a diverse and reliable mix of local advertisers,
geographic diversification and an ability to package inventory effectively.

High Quality Local Sales and Service. The Company identifies and closely
monitors the needs of its customers and seeks to provide them with quality
advertising products at a lower cost than competitive media. The Company
believes it has a reputation for providing excellent customer service and
quality outdoor advertising space and displays.

The Company's 110-person sales force is supported by 35 full-service
offices. In each primary market, the Company has recruited and trained a skilled
sales force, placing an emphasis on market research and use of artistic
creativity. Each salesperson is compensated under a performance-based
compensation system and supervised by a local sales manager executing a
coordinated marketing plan. Art departments assist local customers in the
development and production of creative, effective advertisements. The Company
believes repeat sales are evidence that the Company delivers quality products
and services.

Centralized Control/Decentralized Management. Management believes that, in
its existing 35 primary markets, the Company is the only full-service outdoor
advertising company offering a full complement of outdoor advertising services
coupled with local production facilities, management and account executives.
Local offices operate in defined geographic areas and function essentially as
independent business units, consistent with senior management's philosophy that
a decentralized organization is more responsive to particular local market
demands.

The Company maintains centralized accounting and financial control over its
local operations, but local managers are responsible for the day-to-day
operations in each local market and are compensated according to that market's
financial performance. Each local manager reports to one of five regional
managers who in turn

46
<PAGE> 48

report to the Company's Chief Executive Officer. Management believes empowering
local management and sales personnel to respond to market conditions has been a
major factor in the Company's success.

Effective Inventory Management. The Company believes that the local
presence of sales personnel contributes to the Company's ability to increase
occupancy rates by attracting and servicing local customers. Additionally, a
national sales office at corporate headquarters allows the Company to package
inventory effectively to take advantage of national advertising campaigns in the
Company's markets. The Company's inventory is managed by state-of-the-art
mapping, charting and accounting software.

GROWTH STRATEGY

Internal Growth. Within its existing markets, the Company enhances revenue
and cash flow growth by employing highly targeted local marketing efforts to
improve display occupancy rates and by selectively increasing advertising rates.
This strategy is facilitated through its local sales and service offices which
allow management to respond quickly to the demands of its local customer base.
In addition, the Company routinely invests in upgrading its existing structures
and constructing new display faces in order to provide quality service to its
current customers and to attract new advertisers.

Acquisitions. Aggressive internal growth is enhanced by focused
acquisitions in small to medium-sized markets, resulting in increased operating
efficiencies, greater geographic diversification and increased market
penetration. The Company has demonstrated its ability to grow successfully
through acquisitions, having completed over 80 acquisitions since 1983. In
addition to acquiring positions in new markets, the Company purchases smaller
outdoor advertising properties within existing or contiguous markets.
Acquisitions offer opportunities for inter-market cross-selling and the
opportunity to centralize and combine accounting and administrative functions,
thereby achieving economies of scale.

The table below sets forth certain information regarding acquisitions which
the Company has made or has agreed to make subsequent to the fiscal year ended
October 31, 1993:
<TABLE>
<CAPTION>
YEAR MARKET BULLETINS POSTERS
- ---- -------------------- --------- -------
<C> <S> <C> <C>
1994 Panama City, FL 214 317
1994 Daytona Beach, FL(1) 56 349
1994 Shreveport, LA(1) 271 760
1994 Savannah, GA(1) 357 621
1994 Beaumont, TX(1) 202 302
1994 Fort Myers, FL(1) 122 289
1994 Clarksville, TN(1) 112 325
1994 Lakeland, FL(1) 214 357
1994 Augusta, GA 8 69
1994 Pensacola, FL 49 218
1994 Montgomery, AL 76 33
1994 Beaumont, TX 40 0
1995 Richmond, VA 184 0
1995 Nashville, TN 0 254
1995 Nashville, TN 317 0
1995 Roanoke, VA 129 0
1995 Augusta, GA 98 0

<CAPTION>
YEAR MARKET BULLETINS POSTERS
- ---- -------------------- --------- -------
<C> <S> <C> <C>
1996 Lakeland, FL 249 0
1996 Corpus Christi, TX 195 519
1996 Laredo, TX 87 373
1996 Panama City, FL 45 164
1996 Fort Walton, FL 6 0
1996 Albany, GA 14 112
1996 Lakeland, FL 121 0
1996 Roanoke, VA 50 0
1996 Youngstown, OH(2) 125 534
1996 PA highways(2)(4) 553 0
1996 Valdosta, GA(3) 338 181
1996 Columbia, SC(3) 338 571
1996 Dublin, VA(3) 99 221
1996 Hopewell, VA(3) 56 291
1996 Harrisonburg, VA(3) 9 123
1996 Bluefield, WV(3) 306 281
1996 NC highways(3)(4) 924 112
</TABLE>

- ---------------
(1) Acquired on May 1, 1994 from LHC, which prior to such date was a 49% owned
and managed subsidiary of the Company.
(2) Proposed to be acquired from FKM. See "The Transactions -- Recent
Acquisition Activity -- The FKM Acquisition."
(3) Proposed to be acquired from Outdoor East. See "The Transactions -- Recent
Acquisition Activity -- The Outdoor East Acquisition."
(4) These acquisitions relate to displays located along interstate highways and
other primary roads throughout the states of Pennsylvania and North Carolina
and which are not located within one of the Company's existing markets.

The Company believes that there will be future opportunities for
implementing the Company's acquisition strategy given the industry's
fragmentation and current consolidation trends. Additionally, the small to
medium-sized markets which fit the Company's growth strategy offer a large
number of potential acquisition opportunities.

47
<PAGE> 49

Logo Signs

The Company entered the business of logo sign advertising in 1988. The
Company is now the largest provider of logo sign services in the United States,
having been awarded 15 of the 21 privatized state logo sign franchises awarded
to date. The Company's strategy is to be the leading logo sign provider in the
country. The Company was also selected to operate the tourism signing franchise
for the province of Ontario, Canada in October 1996. The Company is currently
negotiating a definitive agreement with the province with respect to the
franchise, which the Company expects will be executed by December 31, 1996.

Adopting many of the decentralized operational strategies of the outdoor
advertising division, the Company's logo sign division maintains contacts and
local sales offices in each of the states in which it operates. Relationships
with customers are developed and maintained at the state level; accounting, MIS
and certain administrative functions are centralized at the Company's
headquarters.

In competing for state-awarded logo sign franchises, the Company seeks to
form strategic alliances with premier signing contractors in order to present to
state highway departments the combined benefits of entities with substantial
local presence and national resources. As the industry leader, the Company has
gained significant operating experience and compiled a database of information
it believes is unequalled in this industry. The Company shares its knowledge and
database information with state highway departments initiating new logo sign
programs, and believes this interaction provides significant advantages when
seeking new logo sign franchises.

After securing a franchise, the Company generally contracts with an
independent construction firm for the erection and maintenance of the logo sign
structures in order to avoid the expense of staffing and maintaining a
construction presence. The Company then processes orders for logo sign services
through its corporate staff and a small sales force in the state.

The Company maximizes participation and customer satisfaction through the
use of market surveys, coupled with a customer focused sales program to
potential logo sign advertisers. Employing these methods, in Mississippi, for
example, the revenue from logo sign advertising displays increased from $263,100
for the twelve months prior to the Company receiving the state's logo sign
franchise to $621,000 for the twelve months following the Company being awarded
such franchise. This revenue increase was the result of a 57% increase in the
number of logo advertising displays and an increase in advertising rates during
the twelve months following receipt of the franchise.

The Company believes its market-leading position in the logo sign industry
will continue to increase as additional states privatize their logo sign
programs and recognize the track record and core competency of the Company in
building and servicing logo sign programs. The Company anticipates bidding on
logo sign franchises in two additional states during 1996. The Company plans to
pursue additional logo sign franchises, through both new franchise awards and,
possibly, the acquisition of other logo sign franchise operators. Logo sign
opportunities arise periodically, both from states initiating new logo sign
programs and states converting from government owned and operated programs to
privately owned and operated programs. Furthermore, the Company plans to pursue
tourism signing programs in Canada and is seeking to expand into other state-
authorized signage programs, such as those involving directional signs providing
tourist information.

Transit and Other

The Company has recently expanded into the transit advertising business
through the operation of displays on bus shelters, benches and buses in seven of
its 35 primary markets. The Company plans to continue pursuing transit
advertising opportunities that arise in its primary markets and to expand into
other markets.

With the growth in wireless communication, particularly the buildout of
personal communications services systems following the recent FCC allocation of
radio spectrum, the Company is exploring ways to realize additional revenue by
contracting with communications providers for use of the Company's billboard
structures to attach transmission and reception devices. The Company has
agreements with two of the largest potential wireless communication service
providers regarding possible future use of its billboards.

48
<PAGE> 50

COMPANY OPERATIONS

Outdoor Advertising

Sales and Service

The Company conducts its outdoor advertising operations through its 35
local offices. Local offices operate in defined geographic areas and function
essentially as independent business units, consistent with senior management's
philosophy that a decentralized organization is more responsive to particular
local market demands and provides greater incentives to employees. The Company's
management policy is one of centralized accounting and financial control coupled
with decentralized sales and production. Local managers in each of the Company's
primary markets are responsible for the day-to-day operations of their outdoor
office and are compensated according to the Company's financial performance in
that market. Each local manager reports to one of five regional managers who in
turn report to the Company's Chief Executive Officer.

The following is a list of the Company's regional managers and their
experience with the Company and in the outdoor advertising industry as of
September 30, 1996:

<TABLE>
<CAPTION>
YEARS YEARS
WITH IN
NAME REGION COMPANY INDUSTRY
---- ------------------- ------- --------
<S> <C> <C> <C>
Gerald H. Marchand...................... Baton Rouge Region 38 38

Robert E. Campbell...................... Central Region 24 24

Phillip C. Durant....................... Eastern Region 19 21

Thomas F. Sirmon........................ Mobile Region 17 17

Myron A. LaBorde........................ Florida Region 25 25
</TABLE>

The Company's regional managers have been with the Company, on average, for
25 years. The Company's local managers have been with the Company, on average,
for 11 years and have worked in the industry, on average, for 14 years.

Inventory

The Company operates the following types of outdoor advertising displays:

Bulletins generally are 14 feet high and 48 feet wide (672 square
feet) and consist of panels on which advertising copy is displayed. The
advertising copy is either handpainted onto the panels at the Company's
facilities in accordance with design specifications supplied by the
advertiser and attached to the outdoor advertising structure, or printed
with computer-generated graphics on a single sheet of vinyl that is
"wrapped" around the structure. On occasion, to attract more attention,
some of the panels may extend beyond the linear edges of the display face
and may include three-dimensional embellishments. Because of their greater
impact and higher cost, bulletins are usually located on major highways.

Standardized posters generally are 12 feet high by 25 feet wide (300
square feet) and are the most common type of billboard. Advertising copy
for these posters consists of lithographed or silk-screened paper sheets
supplied by the advertiser that are pasted and applied like wallpaper to
the face of the display, or single sheets of vinyl with computer-generated
advertising copy that are wrapped around the structure. Standardized
posters are concentrated on major traffic arteries.

Junior posters usually are 6 feet high by 12 feet wide (72 square
feet). Displays are prepared and mounted in the same manner as standardized
posters, except that vinyl sheets are not typically used on junior posters.
Most junior posters, because of their smaller size, are concentrated on
city streets and target pedestrian traffic.

For the Company's fiscal year ended October 31, 1995, approximately 55% of
the Company's outdoor advertising net revenues were derived from bulletin sales
and 45% from poster sales. Over the same period, bulletin and poster occupancy
averaged approximately 82% and 77%, respectively. The Company regularly donates
unoccupied display space for use by charitable and civic organizations.

49
<PAGE> 51

The physical structures are typically owned by the Company and are built on
locations the Company either owns or leases. In each local office one employee
typically performs site leasing activities for the markets served by that
office. See "-- Company Operations -- Facilities."

Bulletin space is generally sold as individually selected displays which
remain in one location, usually an interstate highway or other main road, for
the duration of the advertising contract. Bulletins may also be sold as part of
a rotary plan where advertising copy is periodically rotated from one location
to another within a particular market. Poster space is generally sold in
packages called "showings," which comprise a given number of displays in a
market area. Posters provide advertisers with access either to a specified
percentage of the general population or to a specific targeted audience.
Displays making up a showing are placed in well-traveled areas and are
distributed so as to reach a wide audience in a particular market.

Production

The Company's production staff in each of its existing 35 primary markets
performs the full range of activities required to create and install outdoor
advertising in all of its markets. Production work includes creating the
advertising copy design and layout, painting the design or coordinating its
printing and installing the designs on displays. The Company provides its
production services to local advertisers and to advertisers that are not
represented by advertising agencies, since national advertisers represented by
advertising agencies often use preprinted designs that require only
installation. The Company's creative and production personnel typically develop
new designs or adopt copy from other media for use on billboards. The Company's
artists also often assist in the development of marketing presentations,
demonstrations and strategies to attract new advertisers.

With the increased use of vinyl and pre-printed advertising copy furnished
to the outdoor advertising company by the advertiser or its agency, outdoor
advertising companies require less labor-intensive production work. In addition,
increased use of vinyl and preprinted copy is also attracting more customers to
the outdoor advertising medium. The Company believes that this trend over time
will reduce operating expenses associated with production activities.

Categories of Business

The following table sets forth the top ten categories of business from
which the Company derived its outdoor advertising revenues for fiscal 1995 and
the respective percentages of such revenue. These business categories accounted
for approximately 73.6% of the Company's total outdoor advertising net revenues
in the fiscal year ended October 31, 1995. No one advertiser accounted for more
than 3.0% of the Company's total outdoor advertising net revenues in that
period.

<TABLE>
<CAPTION>
PERCENTAGE
NET ADVERTISING
COMPANY REVENUES
------- ---------------
<S> <C>
Restaurants.................................................... 14.9%
Retail establishments.......................................... 11.4
Tobacco products............................................... 9.2
Hotels and motels.............................................. 7.3
Entertainment and sports....................................... 5.9
Automotive..................................................... 5.9
Hospitals and medical care..................................... 5.1
Services....................................................... 4.8
Media.......................................................... 4.6
Financial institutions......................................... 4.5
-----
Total................................................ 73.6%
=====
</TABLE>

Beginning in 1992, the leading tobacco companies substantially reduced
their domestic advertising expenditures in response to societal and governmental
pressure and other factors. Because tobacco advertisers

50
<PAGE> 52

tend to occupy displays in highly desirable locations, the Company historically
has been able to attract substitute advertising for space which has become
unoccupied as a result of reduced tobacco product advertisements, and management
believes that the Company will continue to be able to attract such substitute
advertising should tobacco advertisers further reduce their spending in the
future.

Logo Signs

The Company is the largest provider of logo sign services in the United
States and operates over 22,000 logo sign structures containing over 51,000 logo
advertising displays. The Company has been awarded exclusive franchises to erect
and operate logo signs in the states of Georgia, Michigan, Mississippi,
Nebraska, New Jersey, Ohio, Oklahoma, South Carolina, Texas, Utah, Virginia,
through a 66.7% owned partnership in the state of Missouri and through a 95.0%
owned partnership in the state of Minnesota. In addition, the Company has
recently acquired the logo sign franchises in Tennessee and Kansas. In addition,
in October 1996, the Company was also selected to operate the tourism signing
franchise for the province of Ontario, Canada.

State logo sign franchises represent the exclusive contract right to erect
and operate logo signs within a state. The term of the contracts vary, but
generally range from ten to twenty years, including renewal terms. The logo sign
contracts generally provide for termination by the state prior to the end of the
term of the franchise, in most cases with compensation to be paid to the
Company. Typically, at the end of the term of the franchise, ownership of the
structures is transferred to the state without compensation to the Company. None
of the Company's logo sign franchises terminates in the next two years and only
two are subject to renewal during that period. In one of those cases, the state
authority has verbally agreed to the renewal of the term for five years. The
Company expects to be able to compete effectively for retention of franchises
when their terms expire.

The Company also designs and produces logo sign plates for customers
throughout the country, including for use in states which have not yet
privatized their logo sign programs.

EMPLOYEES

The Company employed approximately 815 persons at September 30, 1996. Of
these, 44 were engaged in overall management and general administration at the
Company's management headquarters and the remainder were employed in the
Company's operating offices. Of these, approximately 110 were direct sales and
marketing personnel.

The Company has three local offices covered by collective bargaining
agreements, consisting of painters, billposters and construction personnel. A
union is organized in one other local office, but this union is currently
operating without a collective bargaining agreement. The Company believes that
its relations with its employees, including its 26 unionized employees, are
good, and the Company has never experienced a strike or other labor dispute.

The Company believes its employee retention record evidences its good
employee relations. The average tenure for the Company's employees is six years.
The Company offers most employees a range of benefits including a profit
sharing/401(k) plan and life, health and dental insurance.

FACILITIES

The Company's 53,500 square foot management headquarters is located in
suburban Baton Rouge, Louisiana. The Company occupies approximately 30% of the
space in this facility and leases the remaining space. The Company owns 26 local
operating facilities with front office administration and sales office space
connected to back-shop poster and bulletin production space, and leases an
additional 24 operating facilities at an aggregate lease expense in 1995 of
approximately $775,000.

The Company owns approximately 450 parcels of property beneath outdoor
structures. As of October 31, 1995, the Company had approximately 12,000 active
outdoor site leases accounting for a total annual lease expense of $14.2
million. This amount represented 15.4% of total net outdoor advertising revenues
for that period, which is consistent with the Company's historical lease expense
experience. The Company's leases are for varying terms ranging from
month-to-month to in some cases a term of over ten years, and many provide

51
<PAGE> 53

the Company with renewal options. There is no significant concentration of
displays under any one lease or subject to negotiation with any one landlord.
The Company believes that an important part of its management activity is to
manage its lease portfolio and negotiate suitable lease renewals and extensions.

COMPETITION

Outdoor Advertising

The Company competes in each of its markets with other outdoor advertisers
as well as other media, including broadcast and cable television, radio, print
media and direct mail marketers. In addition, the Company also competes with a
wide variety of out-of-home media, including advertising in shopping centers,
malls, airports, stadiums, movie theaters and supermarkets, as well as on taxis,
trains and buses. Advertisers compare relative costs of available media and
cost-per-thousand impressions, particularly when delivering a message to
customers with distinct demographic characteristics. In competing with other
media, outdoor advertising relies on its relative cost efficiency and its
ability to reach a broad segment of the population in a specific market or to
target a particular geographic area or population with a particular set of
demographic characteristics within that market.

The outdoor advertising industry is highly fragmented, consisting of
several large outdoor advertising and media companies with operations in
multiple markets as well as smaller and local companies operating a limited
number of structures in single or a few local markets. Although some
consolidation has occurred over the past few years, according to the OAAA there
are approximately 1,000 companies in the outdoor advertising industry operating
approximately 396,000 billboard displays. In several of its markets, the Company
encounters direct competition from other major outdoor media companies,
including Outdoor Systems, Inc., Eller Media, Inc. (formerly Patrick Media
Group) and 3M National Advertising Co. (a division of Minnesota Mining and
Manufacturing Company), each of which has a larger national network and greater
total resources than the Company. The Company believes that its strong emphasis
on sales and customer service and its position as a major provider of
advertising services in each of its primary markets enables it to compete
effectively with the other outdoor advertising companies, as well as other
media, within those markets. See "Risk Factors -- Competition."

Logo Signs

The Company faces competition in obtaining new logo sign franchises and in
bidding for renewals of expiring franchises. The Company faces competition from
four other national providers of logo signs in seeking logo franchises. In
addition, local companies within each of the states which solicit bids will
compete against the Company in the open-bid process. Competition from these
sources is also encountered at the end of each contract period. The Company
believes its operations model, which includes local sales offices, comprehensive
databases of information and strategic alliances and its knowledge of the
industry, should provide a competitive advantage in pursuing future franchises.

In marketing logo signs to advertisers, the Company competes with other
forms of out-of-home advertising. The Company believes, however, that logo sign
advertising offers an effective, low-cost directional advertising service, which
makes it attractive to potential advertisers.

REGULATION

Outdoor advertising is subject to governmental regulation at the federal,
state and local levels. Federal law, principally the Highway Beautification Act
of 1965 (the "HBA") regulates outdoor advertising on federally aided primary and
interstate highways. The HBA requires, as a condition to federal highway
assistance, states to restrict billboards on such highways to commercial and
industrial areas, and requires certain additional size, spacing and other
limitations. All states have passed state billboard control statutes and
regulations at least as restrictive as the federal requirements, including
removal at the owner's expense and without compensation of any illegal signs on
such highways. The Company believes that the number of its billboards that may
be subject to removal as illegal is immaterial. No state in which the Company
operates has banned billboards, but some have adopted standards more restrictive
than the federal requirements. Municipal

52
<PAGE> 54

and county governments generally also have sign controls as part of their zoning
laws. Some local governments prohibit construction of new billboards and some
allow new construction only to replace existing structures, although most allow
construction of billboards subject to restrictions on zones, size, spacing and
height.

Federal law does not require removal of existing lawful billboards, but
does require payment of compensation if a state or political subdivision compels
the removal of a lawful billboard along a federally aided primary or interstate
highway. State governments have purchased and removed legal billboards for
beautification in the past, using federal funding for transportation enhancement
programs, and may do so in the future. Governmental authorities from time to
time use the power of eminent domain to remove billboards. Thus far, the Company
has been able to obtain satisfactory compensation for any of its billboards
purchased or removed as a result of governmental action, although there is no
assurance that this will continue to be the case in the future. Local
governments do not generally purchase billboards for beautification, but some
have attempted to force removal of legal but nonconforming billboards
(billboards which conformed with applicable zoning regulations when built but
which do not conform to current zoning regulations) after a period of years
under a concept called "amortization," by which the governmental body asserts
that just compensation is earned by continued operation over time. Although
there is some question as to the legality of amortization under federal and many
state laws, amortization has been upheld in some instances. The Company
generally has been successful in negotiating settlements with applicable
localities for billboards required to be removed. Restrictive regulations also
limit the Company's ability to rebuild or replace nonconforming billboards.

In recent years, bills have been introduced in Congress that would affect
billboard advertising of tobacco or alcohol products. No bills have become law
except those requiring the familiar health hazard warnings appearing on
cigarette packages and advertisements. It is uncertain whether such regulation
will be enacted in the future, what such regulation might provide or what impact
such regulation might have on the Company's business. Federal law generally
prevents state or local restrictions on the content of billboard advertisements.

In August 1996, President Clinton signed an executive order adopting rules
proposed by the U.S. Food and Drug Administration regulating the advertising of
certain tobacco products. These rules, which will become effective on August 22,
1997, prohibit the placement of tobacco products advertising within 1,000 feet
of playgrounds and primary and secondary schools and limit such advertising to a
format consisting of black text on a white background. Certain advertising
industry and tobacco industry organizations have filed lawsuits challenging
these regulations, seeking an injunction to keep them from going into effect. In
addition, some members of Congress have indicated that they may sponsor
legislation to prevent the regulations from going into effect. If these
regulations are not modified or nullified by legislative or judicial action, the
Company's outdoor advertising revenues could be adversely affected.

To date, however, regulations in the Company's markets have not materially
adversely affected its operations. However, the outdoor advertising industry is
heavily regulated and at various times and in various markets can be expected to
be subject to varying degrees of regulatory pressure affecting the operation of
advertising displays. Accordingly, although the Company's experience to date is
that the regulatory environment can be managed, no assurance can be given that
existing or future laws or regulations will not materially and adversely affect
the Company.

LITIGATION

The Company from time to time is involved in litigation in the ordinary
course of business, including disputes involving advertising contracts, site
leases, employment claims and construction matters. The Company is also involved
in routine administrative and judicial proceedings regarding billboard permits,
fees and compensation for condemnations. The Company is not a party to any
lawsuit or proceeding which, in the opinion of management, is likely to have a
material adverse effect on the Company.

53
<PAGE> 55

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company as of October 1, 1996
were as follows:

<TABLE>
<CAPTION>
YEARS WITH
NAME AGE TITLE THE COMPANY
---- --- ----- -----------
<S> <C> <C> <C>
Kevin P. Reilly, Jr........... 42 Chairman, President, Chief Executive 18
Officer and Director

Keith A. Istre................ 44 Chief Financial Officer, Treasurer 18
and Director

Charles W. Lamar, III......... 48 General Counsel, Secretary and 20
Director

Gerald H. Marchand............ 65 Vice President, Regional Manager of 38
Baton Rouge Region, and Director

T. Everett Stewart, Jr........ 42 President of Interstate Logos, Inc., 16
a subsidiary of the Company, and
Director

Robert E. Campbell............ 48 Vice President, Regional Manager of 24
Central Region

Phillip C. Durant............. 50 Vice President, Regional Manager of 19
Eastern Region

Myron A. LaBorde.............. 47 Vice President, Regional Manager of 25
Florida Region

Thomas F. Sirmon.............. 41 Vice President, Regional Manager of 17
Mobile Region

Robert B. Switzer............. 43 Vice President of Operations 20

Dudley W. Coates*............. 65 Director --

Jack S. Rome, Jr.*............ 48 Director --

William R. Schmidt*........... 45 Director --
</TABLE>

- ---------------

* Outside directors

Kevin P. Reilly, Jr. has served as the Company's President and Chief
Executive Officer since February 1989 and as a director of the Company since
February 1984. Mr. Reilly served as President of the Company's Outdoor Division
from 1984 to 1989. Mr. Reilly, an employee of the Company since 1978, has also
served as Assistant and General Manager of the Company's Baton Rouge Region and
Vice President and General Manager of the Louisiana Region. Mr. Reilly received
a B.A. from Harvard University in 1977.

Keith A. Istre has been Chief Financial Officer of the Company since
February 1989 and a director of the Company since February 1991. Mr. Istre
joined the Company as Controller in 1978 and became Treasurer in 1985. Prior to
joining the Company, Mr. Istre was employed by a public accounting firm in Baton
Rouge from 1975 to 1978. Mr. Istre graduated from the University of Southwestern
Louisiana in 1974 with a degree in accounting.

Charles W. Lamar, III joined the Company in 1982 as General Counsel and has
been a director of the Company since June 1973. Prior to joining the Company,
Mr. Lamar maintained his own law practice and was employed by a law firm in
Baton Rouge. Mr. Lamar received a B.A. in Philosophy from Harvard University in
1971, a M.A. in Economics from Tufts University in 1972 and a J.D. from Boston
University in 1975.

Gerald H. Marchand has been Regional Manager of the Baton Rouge Region,
which encompasses operations in Louisiana, Mississippi and Texas, since 1988 and
a director of the Company since 1978. He

54
<PAGE> 56

began his career with the Company in leasing and went on to become President of
the Outdoor Division. He has served as General Manager of the Lake Charles and
Mobile operations. Mr. Marchand received a Masters in Education from Louisiana
State University in 1955.

T. Everett Stewart, Jr. has been President of Interstate Logos, Inc. since
1988, and has recently been named a director. He served as Regional Manager of
the Company's Baton Rouge Region from 1984 to 1988. Previously, he served the
Company as Sales Manager in Montgomery and General Manager of the Monroe and
Alexandria operations. Before joining the Company in 1979, Mr. Stewart was
employed by the Lieutenant Governor of the State of Alabama and by a United
States Senator from the State of Alabama. Mr. Stewart received a B.S. in Finance
from Auburn University in 1976.

Robert E. Campbell has been Regional Manager of the Central Region, which
encompasses operations in Alabama, Colorado, Kentucky, Ohio, Texas and Virginia,
since 1983. Mr. Campbell served from 1972 to 1983 as Sales Manager of the
Company's Mobile operation and as General Manager of the Company's Midland and
Mobile operations. Mr. Campbell received a B.A. in Political Science and History
from the University of South Alabama in 1971.

Phillip C. Durant joined the Company in 1974 in Pensacola, Florida and is
currently the Regional Manager of the Eastern Region, which encompasses
operations in Tennessee and West Virginia. Previously he served as Sales Manager
in Pensacola and General Manager of Monroe, Alexandria, Lake Charles and
Lafayette, Louisiana and Nashville.

Myron A. LaBorde joined the Company in 1972 as an account executive in
Baton Rouge and is currently the Regional Manager of the Florida Region and
General Manager of the Shreveport, Louisiana operation. Previously he served as
General Manager of the Company's Lake Charles, Louisiana and Tallahassee,
Florida operations. Mr. LaBorde received a degree in Marketing from the
University of Southwestern Louisiana.

Thomas F. Sirmon has served the Company as Regional Manager of the Mobile
Region, which encompasses operations in Alabama, Florida and Georgia, since
1990. He began his career with the Company as an Account Executive in the Mobile
operation in 1979. In 1981, he was appointed General Manager in Augusta; in
1984, General Manager in Nashville; and in 1988, General Manager in Mobile. Mr.
Sirmon received a degree in Marketing from the University of South Alabama in
1978.

Robert B. Switzer has been Vice President of Operations of the Company
since 1984. In 1976, he joined the Company as Posting Superintendent in Mobile
and became Operations Manager in Pensacola. Since 1991, he has also served as
General Manager of the Pensacola operation and, since 1993, as General Manager
of the Fort Walton operation. Mr. Switzer received a B.S. in Zoology from the
University of South Florida in 1975.

Dudley W. Coates has been a director of the Company since 1973. Mr. Coates
received a Liberal Arts degree from Yale University in 1953, and, since that
time, has been an investment broker with the firm of Legg Mason, Inc.

Jack S. Rome, Jr. has been a director of the Company since 1974. Since
1988, Mr. Rome has been President of No Fault Industries, Inc., a construction
company specializing in outdoor recreational facilities. Mr. Rome has also
served as President of Jack Rome, Jr. & Associates, Inc., a management
consulting company, since October 1987. Mr. Rome served the Company in various
capacities from 1975 to 1986. Mr. Rome received his B.S. in accounting from
Southeastern Louisiana University in 1971.

William R. Schmidt became a director of the Company in 1994. He is an
Assistant Vice President for Pacific Mutual Life Insurance Company in its
Securities Department, where he has been employed since 1990. He has a B.S. in
Finance from Pennsylvania State University and an MBA from the Amos Tuck School
of Business at Dartmouth College.

Kevin P. Reilly, Jr., Charles W. Lamar, III and Robert B. Switzer are
cousins.

55
<PAGE> 57

BOARD COMMITTEES

The Board of Directors has a Compensation Committee, which makes
recommendations concerning salaries for employees and consultants to the
Company, and an Audit Committee, which reviews the results of the Company's
audit and other services provided by the Company's independent auditors. The
Compensation Committee and the Audit Committee currently consist of Dudley
Coates, Jack S. Rome, Jr. and William R. Schmidt. During fiscal year 1995, the
Compensation Committee consisted of Jack S. Rome, Jr., Mary Lee Lamar Dixon and
Carolyn Sample Abshire, who were directors. Mr. Rome was employed by the Company
from 1975 to 1985.

The Executive Committee, which has authority to operate the affairs of the
Company between Board meetings, currently consists of Kevin P. Reilly, Jr.,
Gerald H. Marchand, Keith A. Istre and Charles W. Lamar, III.

BOARD COMPENSATION

All directors of the Company hold office until the next annual meeting of
stockholders of the Company or until their successors are duly elected and
qualified. Directors who are not employed by the Company receive a fee of $2,500
for each Board meeting attended and are reimbursed for travel expenses incurred
to attend Board meetings. Executive officers of the Company are elected by the
Board of Directors on an annual basis and serve at the discretion of the Board
of Directors.

EXECUTIVE COMPENSATION

The following table sets forth certain compensation information for the
Chief Executive Officer and each of the four most highly compensated executive
officers of the Company for the fiscal year ended October 31, 1995.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1)
-------------------------------------- ---- --------- -------- ------------------
<S> <C> <C> <C> <C>
Kevin P. Reilly, Jr................... 1995 120,000 200,000 5,500
President and Chief 1994 120,000 150,000 5,000
Executive Officer 1993 120,000 100,000

Gerald H. Marchand.................... 1995 106,000 156,543 50,000
Vice President, Regional 1994 106,000 197,443 50,000
Manager of Baton Rouge Region 1993 106,000 75,000

Robert E. Campbell.................... 1995 90,000 96,984 7,500
Vice President, Regional 1994 90,000 73,208 7,500
Manager of Central Region 1993 84,000 61,000

T. Everett Stewart.................... 1995 80,000 116,500 4,500
President of Interstate Logos, Inc. 1994 80,000 65,000 4,000
1993 80,000 50,000

Hollis T. Wood(2)..................... 1995 90,000 93,862 6,500
Vice President, Regional 1994 90,000 89,638 6,000
Manager of Knoxville Region 1993 90,000 40,000
</TABLE>

- ---------------

(1) The reported amounts consist of employer contributions under the Company's
deferred compensation plan.

(2) Mr. Wood is no longer employed by the Company.

56
<PAGE> 58

EMPLOYMENT AGREEMENTS

The Company does not have employment contracts with any of its officers or
employees.

The Company had a consulting agreement with Kevin P. Reilly, Sr., its
former Chairman, which expired on January 15, 1996. Under that agreement, Mr.
Reilly, Sr. received $120,000 in annual consulting fees and was eligible for a
$100,000 annual bonus, which was paid for the fiscal year ended October 31,
1995. The Company continued to pay Mr. Reilly, Sr. his consulting fee on a
month-to-month basis until July 1, 1996. Effective July 1, 1996, the Lamar Texas
Limited Partnership, a subsidiary of the Company, and Reilly Consulting Company,
L.L.C., of which Mr. Reilly, Sr. is the manager and, with his wife, the sole
members, entered into a replacement consulting agreement. This new consulting
agreement has a ten year term and provides for a $120,000 annual consulting fee.
The agreement contains a non-disclosure provision and a noncompetition
restriction which extends for two years beyond the termination of the agreement.

STOCK OPTION PLANS

The Company's 1996 Equity Incentive Plan (the "1996 Plan") was adopted by
the Board of Directors in July 1996. The purpose of the 1996 Plan is to attract
and retain key employees and consultants of the Company, to provide an incentive
for them to achieve long-range performance goals, and to enable them to
participate in the long-term growth of the Company.

The 1996 Plan authorizes the grant of stock options (incentive and
nonstatutory), stock appreciation rights ("SARs") and restricted stock to
employees and consultants of the Company capable of contributing to the
Company's performance. The Company has reserved an aggregate of 2.0 million
shares (subject to adjustment for stock splits and similar capital changes) of
Class A Common Stock for awards under the 1996 Plan. Stock options and SARs may
not be granted at less than fair market value of the Class A Common Stock and
not more than 200,000 shares may be granted in any calendar year to any
participant. Incentive stock options may be granted only to persons eligible to
receive them under the Internal Revenue Code of 1996, as amended. The Company
has granted options to purchase approximately 1.2 million shares of Class A
Common Stock since the IPO.

The Board of Directors has appointed the Compensation Committee (the
"Committee") to administer the 1996 Plan. Awards under the 1996 Plan contain
such terms and conditions not inconsistent with the 1996 Plan as the Committee
in its discretion approves. The Committee has discretion to administer the 1996
Plan in the manner which it determines, from time to time, is in the best
interest of the Company. For example, the Committee will fix the terms of stock
options, SARs and restricted stock grants and determine whether, in the case of
options and SARs, they may be exercised immediately or at a later date or dates.
Awards may be granted subject to conditions relating to continued employment and
restrictions on transfer. The Committee may provide, at the time an award is
made or at any time thereafter, for the acceleration of a participant's rights
or cash settlement upon a change in control of the Company. The terms and
conditions of awards need not be the same for each participant. The foregoing
examples illustrate, but do not limit, the manner in which the Committee may
exercise its authority in administering the 1996 Plan. In addition, all
questions of interpretation of the 1996 Plan are determined by the Committee.

57
<PAGE> 59

CERTAIN TRANSACTIONS

The Company has from time to time made various personal loans to the
persons listed below. The loans bear interest at a rate equal to 100 basis
points above the rate applicable to United States Treasury six-month bills.

<TABLE>
<CAPTION>
LARGEST OUTSTANDING
BALANCE SINCE
BEGINNING OF LAST BALANCE OUTSTANDING AS OF
NAME FISCAL YEAR OCTOBER 31, 1996
---- ------------------- -------------------------
<S> <C> <C>
Jack S. Rome(1)............................ $ 147,230 $ 123,314

Robert B. Switzer(2)....................... 80,592 50,592

Kevin P. Reilly, Sr.(3)(4)................. 154,586 34,030

T. Everett Stewart, Jr.(1)(2).............. 75,000 25,000

Wendell S. Reilly(3)....................... 500,000 0

Anna Reilly Cullinan(3).................... 80,000 0

Gerald H. Marchand(2)...................... 175,000 0

Kevin P. Reilly, Jr.(1)(2)(3).............. 135,000 0

Sean E. Reilly(2).......................... 73,945 0
</TABLE>

- ---------------

(1) The named individual is a director of the Company.
(2) The named individual is an executive officer of the Company.
(3) Member of the Reilly family.
(4) Kevin P. Reilly, Sr. was President and Chairman of the Board of the Company
until January 1992.

In October 1995 and in March 1996, the Company repurchased 3.6% and 12.9%,
respectively, of its then outstanding common stock (1,220,500 and 3,617,884
shares, respectively, after giving effect to the stock split described under
"The Company") from certain of its existing stockholders for an aggregate
purchase price of approximately $4.0 million. The terms of the March 1996
repurchase entitled the selling stockholders to receive additional consideration
from the Company in the event that the Company consummated a public offering of
its common stock at a higher price within 24 months of the repurchase. In
satisfaction of that obligation, upon completion of the IPO in August 1996, the
Company paid the selling stockholders an aggregate of $5.0 million in cash from
the proceeds of the IPO and issued to them $20.0 million aggregate principal
amount of ten-year subordinated notes. Of the total $25.0 million paid on
account of the common stock repurchased, $6.3 million was paid to the Company's
executive officers, directors, beneficial owners of 5% or more of the Company's
common stock and their respective affiliates.

On December 31, 1995, the Company issued 5,719.49 shares of its Class A
Preferred Stock with an aggregate liquidation preference of $3.6 million to
certain of its stockholders in exchange for an equal number of shares of its
then outstanding common stock. See "Description of Capital Stock -- Class A
Preferred Stock." Of the Class A Preferred Stock so issued, 3,134.80 shares were
issued to the Reilly Family Limited Partnership, 1,500 shares to Charles W.
Lamar, III and 1,084.69 shares to Mary Lee Lamar Dixon and trusts for her
children. See "Description of Capital Stock -- Class A Preferred Stock."

In 1993, the Company acquired LHC shares from certain members of the Reilly
family, Charles W. Lamar, III, Mary Lee Lamar Dixon and Robert B. Switzer in
exchange for 8.0% of the then outstanding shares of common stock of the Company.
In 1994, in connection with the Company's acquisition of the interest in LHC
which it did not already own, certain officers and directors of the Company who
were stockholders of LHC received approximately $226,000 from the proceeds of
the transaction.

In May 1993, the Company purchased the outstanding stock of Lamar
Advertising of Wichita Falls, Inc., which was substantially owned by Kevin P.
Reilly, Sr., Kevin P. Reilly, Jr., Charles W. Lamar, III, Gerald H. Marchand and
certain of their relatives. The total consideration for the stock purchase was
approximately $1.2 million, which approximated the book value of the underlying
assets.

In 1993, the Company purchased a building from a joint venture whose
principals included Kevin P. Reilly, Sr., Kevin P. Reilly, Jr., and Charles W.
Lamar, III for $740,000.

The Company has made investments totalling $1.25 million in Wireless One,
Inc., a publicly-held company in the wireless cable business, of which Sean E.
Reilly, a member of the Reilly family and a former director, is Chief Executive
Officer. The current market value of these investments, which are restricted
from sale by the Company until October 1997, exceeds the Company's cost.

58
<PAGE> 60

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the ownership
of the Company's capital stock as of October 1, 1996 (i) by each person known by
the Company to own beneficially five percent or more of any class of the
Company's capital stock, (ii) by each director of the Company, (iii) by each
executive officer of the Company and (iv) by all directors and executive
officers as a group. The capital stock of the Company is owned substantially by
members of four related families.

AMOUNT OF AMOUNT OF BENEFICIAL
BENEFICIAL OWNERSHIP OWNERSHIP AFTER THE
PRIOR TO THE COMMON SHARES COMMON STOCK
STOCK OFFERING(1) BEING OFFERING(1)
-------------------- OFFERED IN ---------------------
PERCENT THE COMMON PERCENT
DIRECTORS, EXECUTIVE OFFICERS NUMBER OF OF STOCK NUMBER OF OF
AND 5% STOCKHOLDERS CLASS(2) SHARES CLASS OFFERING(2) SHARES CLASS
- --------------------------------- ---------- ----------- ------- ----------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
The Reilly Family Limited Common 13,791,389 47.89% 309,950 13,481,439 43.50%
Partnership(3) Preferred 3,134.80 54.81% 0 3,134.80 54.81%
c/o The Lamar Corporation
5551 Corporate Blvd.
Baton Rouge, LA 70808

Charles W. Lamar, III(4) Common 4,470,782 15.54% 109,347 4,361,435 14.07%
c/o The Lamar Corporation Preferred 1,500.00 26.23% 0 1,500.00 26.23%
5551 Corporate Blvd.
Baton Rouge, LA 70808

Mary Lee Lamar Dixon(5) Common 2,087,443 7.25% 51,055 2,036,388 6.57%
c/o the Lamar Corporation Preferred 1,084.69 18.96% 0 1,084.69 18.96%
5551 Corporate Blvd.
Baton Rouge, LA 70808

Dudley W. Coates(6) Common 163,564 * 0 163,564 *

Phillip C. Durant(7) Common 10,000 * 0 10,000 *

Keith A. Istre(6) Common 20,625 * 0 20,625 *

Myron LaBorde(7) Common 11,000 * 0 11,000 *

Gerald H. Marchand Common 155,775 * 0 155,775 *

Jack S. Rome, Jr. Common 1,500 * 0 1,500 *

William R. Schmidt Common 500 * 0 500 *

Robert S. Switzer(9) Common 743,635 2.58% 18,188 725,804 2.34%

Robert E. Campbell(8) Common 21,250 * 0 21,250 *

Thomas F. Sirmon(8) Common 21,875 * 0 21,875 *

T. Everett Stewart(10) Common 25,851 * 0 25,851 *

All Directors and Executive Common 19,437,746 74.51% 437,485 19,000,261 61.30%
Officers
as a Group (13 Persons)(11) Preferred 4,634.80 81.04% 0 4,634.80 81.04%
</TABLE>

- ---------------
* Less than 1%
(1) The persons and entities named in the table have sole voting and investment
power with respect to all shares beneficially owned by them, except as
noted below.
(2) Common shares refer to Class A Common Stock, except with respect to shares
of the Reilly Family Limited Partnership, which refer to shares of Class B
Common Stock. Preferred shares refer to Class A Preferred Stock. Upon the
sale of any shares of Class B Common Stock to a person other than to a
Permitted Transferee (as defined herein), such shares will automatically
convert into shares of Class A Common Stock. See "Description of Capital
Stock." "Shares Being Offered in the Common Stock Offering" does not
include shares that may be sold pursuant to the underwriters' overallotment
option.
(3) These shares are owned by the Reilly Family Limited Partnership. Kevin P.
Reilly, Jr. is the managing general partner of the Reilly Family Limited
Partnership; Wendell S. Reilly, Sean E. Reilly and Anna R. Cullinan are
each general partners; and Kevin P. Reilly, Sr. holds all of the
outstanding preferred interests in the partnership.
(4) Includes shares of Class A Common Stock held in trust for Mr. Lamar's three
children, of which Mr. Lamar is considered the beneficial owner. 1,335,775
shares are currently held by such trusts and 17,483 of such shares are
being offered in the Common Stock Offering.

59
<PAGE> 61

(5) Includes 545,214 shares of Class A Common Stock and 700 shares of Class A
Preferred Stock held in a trust, of which LaBanc & Co. is the nominee of
the trustee, for the benefit of Mrs. Dixon.
(6) Consists of shares which are held in trust for Mr. Coates' three children,
as to which he disclaims beneficial ownership.
(7) Includes 10,000 shares of Class A Common Stock subject to stock options
exercisable within 60 days of October 1, 1996.
(8) Includes 20,000 shares of Class A Common Stock subject to stock options
exercisable within 60 days of October 1, 1996.
(9) Includes 76,336 shares of Class A Common Stock held by Mr. Switzer's wife,
as to which he disclaims beneficial ownership, and 257,028 shares of Class
A Common Stock currently held by Mr. Switzer as custodian for his three
children. 2,797 shares of Class A Common Stock held for each child (8,392
shares in the aggregate) are being offered in the Common Stock Offering.
(10) Includes 19,600 shares of Class A Common Stock subject to stock options
exercisable within 60 days of October 1, 1996.
(11) Includes 99,600 shares of Class A Common Stock subject to stock options
exercisable within 60 days of October 1, 1996. Also includes 1,499,339
shares of Class A Common Stock held in trust for the benefit of the
children of directors and officers of the Company, 76,336 shares of Class A
Common Stock held by the wife of an officer of the Company, and 257,028
shares of Class A Common Stock held by an officer of the Company as
custodian for his three children.

Kevin P. Reilly, Jr. is the Managing General Partner of the Reilly Family
Limited Partnership, owner of all of the issued and outstanding Class B Common
Stock of the Company. The other general partners of the partnership, Mr.
Reilly's three siblings, may by unanimous vote, remove Mr. Reilly and replace
him with one of his siblings.

60
<PAGE> 62

DESCRIPTION OF NOTES

The Notes will be issued under an Indenture, dated as of , 1996
(the "Indenture") among the Company, the Guarantors and , as trustee
(the "Trustee"). The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), as in effect on the date of the
Indenture. The Notes are subject to all such terms, and holders of the Notes are
referred to the Indenture and the Trust Indenture Act for a statement of the
terms therein. The following is a summary of the material terms and provisions
of the Notes. This summary does not purport to be a complete description of the
Notes and is subject to the detailed provisions of, and qualified in its
entirety by reference to, the Notes and the Indenture (including the definitions
contained therein). A copy of the form of Indenture has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part. The
definitions of certain capitalized terms are set forth under "-- Certain
Definitions" or as otherwise defined throughout this description. For purposes
of this description, references to the "Company" include only the Company and
not its Subsidiaries.

GENERAL

The Notes will be limited in aggregate principal amount to $225 million.
The Notes will be general unsecured obligations of the Company, subordinated in
right of payment to Senior Indebtedness of the Company, pari passu, in right of
payment with all future senior subordinated indebtedness of the Company and
senior in right of payment to any existing or future subordinated indebtedness
of the Company.

The Notes will be unconditionally guaranteed, on a senior subordinated
basis, as to payment of principal, premium, if any, and interest, jointly and
severally, by the Guarantors.

MATURITY, INTEREST AND PRINCIPAL

The Notes will mature on , 2006. The Notes will bear interest
at a rate of % per annum from the date of original issuance until maturity.
Interest is payable semi-annually in arrears on and
commencing , 1997, to holders of record of the Notes at the close of
business on the immediately preceding , and , respectively.

The Notes will not be entitled to the benefit of any mandatory sinking
fund.

OPTIONAL REDEMPTION

The Notes will be redeemable at the option of the Company, in whole or in
part, at any time on or after , 2001 at the following redemption
prices (expressed as a percentage of principal amount), together, in each case,
with accrued and unpaid interest to the redemption date, if redeemed during the
twelve-month period beginning on , of each year listed below:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2001.............................................. %

2002.............................................. %

2003.............................................. %

2004 and thereafter............................... %
</TABLE>

Notwithstanding the foregoing, the Company may redeem in the aggregate up
to $75 million aggregate principal amount of Notes at any time and from time to
time prior to , 1999 at a redemption price equal to % of the
aggregate principal amount so redeemed, plus accrued interest to the redemption
date out of the Net Proceeds of one or more Public Equity Offerings; provided
that at least $150 million aggregate principal amount of Notes originally issued
remain outstanding immediately after the occurrence of any such redemption and
that any such redemption occurs within 120 days following the closing of any
such Public Equity Offering.

61
<PAGE> 63

In the event of redemption of fewer than all of the Notes, the Trustee
shall select by lot or in such other manner as it shall deem fair and equitable
the Notes to be redeemed; provided, however, that if a partial redemption is
made with the proceeds of a Public Equity Offering, selection of the Notes for
redemption shall be made by the Trustee only on a pro rata basis, unless such
method is otherwise prohibited. The Notes will be redeemable in whole or in part
upon not less than 30 nor more than 60 days' prior written notice, mailed by
first class mail to a holder's last address as it shall appear on the register
maintained by the Registrar of the Notes. On and after any redemption date,
interest will cease to accrue on the Notes or portions thereof called for
redemption unless the Company shall fail to redeem any such Note.

SUBORDINATION

The indebtedness represented by the Notes, including principal, premium, if
any, and interest, will be, to the extent and in the manner provided in the
Indenture, subordinated in right of payment to the prior payment and
satisfaction in full in cash of all existing and future Senior Indebtedness of
the Company. As of July 31, 1996, after giving pro forma effect to the
Transactions and the IPO and the application of the net proceeds therefrom, the
principal amount of outstanding Senior Indebtedness of the Company, on a
consolidated basis, would have been approximately $7.9 million. The Company will
have the ability to incur additional Senior Indebtedness under either the
Existing Credit Agreement or the New Credit Agreement and will be permitted to
incur additional Senior Indebtedness under the Indenture.

The Indenture provides that no payment (by set-off or otherwise) may be
made by or on behalf of the Company on account of the principal of, premium, if
any, or interest on the Notes, or on account of the redemption provisions of the
Notes, for cash or property (other than Junior Securities), (i) upon the
maturity of any Senior Indebtedness of the Company by lapse of time,
acceleration (unless waived) or otherwise, unless and until all principal of,
premium, if any, and the interest on such Senior Indebtedness are first paid in
full in cash or (ii) in the event of default in the payment of any Senior
Indebtedness of the Company when it becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise (a "Payment
Default"), unless and until such Payment Default has been cured or waived or
otherwise has ceased to exist.

Upon (i) the happening of an event of default (other than a Payment
Default) that permits the holders of Designated Senior Indebtedness to declare
such Designated Senior Indebtedness to be due and payable and (ii) written
notice of such event of default given to the Company and the Trustee by the
representative of the holders of such Designated Senior Indebtedness (a "Payment
Notice"), then, unless and until such event of default has been cured or waived
or otherwise has ceased to exist, no payment (by set-off or otherwise) may be
made by or on behalf of the Company on account of the principal of, premium, if
any, or interest on the Notes, or on account of the redemption provisions of the
Notes, in any such case, other than payments made with Junior Securities.
Notwithstanding the foregoing, unless the Designated Senior Indebtedness in
respect of which such event of default exists has been declared due and payable
in its entirety within 179 days after the Payment Notice is delivered as set
forth above (the "Payment Blockage Period") (and such declaration has not been
rescinded or waived), at the end of the Payment Blockage Period, the Company
shall, unless a Payment Default exists, be required to pay all sums not paid to
the Holders of the Notes during the Payment Blockage Period due to the foregoing
prohibitions and to resume all other payments as and when due on the Notes. Any
number of Payment Notices may be given; provided, however, that (i) not more
than one Payment Notice shall be given within a period of any 360 consecutive
days, and (ii) no default that existed upon the date of such Payment Notice, if
the representative of the holders of Designated Senior Indebtedness that gave
such Payment Notice knew of such default on such date (whether or not such event
of default is on the same issue of Designated Senior Indebtedness), shall be
made the basis for the commencement of any other Payment Blockage Period unless
such default has been cured or waived for a period of at least 90 consecutive
days.

Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshalling of assets or liabilities, (i) the holders of all Senior Indebtedness
of the Company will first be entitled to receive payment in full in cash before
the holders of Notes are entitled to receive any payment on account of principal

62
<PAGE> 64

of, premium, if any, and interest on the Notes (other than Junior Securities)
and (ii) any payment or distribution of assets of the Company of any kind or
character from any source, whether in cash, property or securities (other than
Junior Securities) to which the holders of Notes or the Trustee on behalf of the
holders of Notes would be entitled (by set-off or otherwise), except for the
subordination provisions contained in the Indenture, will be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of such Senior Indebtedness or their
representative to the extent necessary to make payment in full in cash on all
such Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness.

In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee at a time when such payment or distribution is
prohibited by the foregoing provisions, such payment or distribution shall be
held in trust for the benefit of the holders of such Senior Indebtedness, and
shall be paid or delivered by the Trustee to the holders of such Senior
Indebtedness remaining unpaid or unprovided for or to their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness may have been
issued, ratably according to the aggregate principal amounts remaining unpaid on
account of such Senior Indebtedness held or represented by each, for application
to the payment of all such Senior Indebtedness remaining unpaid, to the extent
necessary to pay or to provide for the payment of all such Senior Indebtedness
in full in cash after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness.

By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company who are holders of Senior Indebtedness may recover
more, ratably, than the holders of the Notes, funds which would be otherwise
payable to the holders of the Notes will be paid to the holders of the Senior
Indebtedness to the extent necessary to pay the Senior Indebtedness in full, and
the Company may be unable to meet its obligations fully with respect to the
Notes.

Each Guarantee will, to the extent set forth in the Indenture, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness of the respective Guarantor, including obligations of such
Guarantor with respect to the Senior Credit Facility (including any guarantee
thereof), and will be subject to the rights of holders of Designated Senior
Indebtedness of such Guarantor to initiate blockage periods, upon terms
substantially comparable to the subordination of the Notes to all Senior
Indebtedness of the Company.

If the Company or any Guarantor fails to make any payment on the Notes or
any Guarantee, as the case may be, when due or within any applicable grace
period, whether or not on account of payment blockage provisions, such failure
would constitute an Event of Default under the Indenture and would enable the
holders of the Notes to accelerate the maturity thereof. See "Events of
Default."

A holder of Notes by his acceptance of Notes agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purpose.

GUARANTEES

The Notes are guaranteed on a senior subordinated basis by the Guarantors.
All payments pursuant to the Guarantees by the Guarantors are subordinated in
right of payment to the prior payment in full of all Senior Indebtedness of the
Guarantors, to the same extent and in the same manner that all payments pursuant
to the Notes are subordinated in right of payment to the prior payment in full
of all Senior Indebtedness of the Company.

The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor (including, without limitation, any guarantees of Senior Indebtedness)
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in respect of the obligations of such other Guarantor
under its Guarantee or pursuant to its contribution obligations under the
Indenture, result in the obligations of such Guarantor under the Guarantee

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not constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. In making any calculation relevant to determining such maximum
amount, all Senior Indebtedness shall be deemed to have been incurred prior to
the Issue Date. Each Guarantor that makes a payment or distribution under a
Guarantee shall be entitled to a contribution from each other Guarantor in a pro
rata amount based on the Adjusted Net Assets of each Guarantor. See "Risk
Factors -- Dependence on Cash Flow from Subsidiaries; Fraudulent Conveyance
Concerns."

Upon (i) the release or payment in full of any Indebtedness of such
Guarantor representing a guarantee of Indebtedness of the Company and the
release of all Liens on the property and assets of such Guarantor relating to
any such Indebtedness or (ii) the sale or disposition (whether by merger, sale
of stock or otherwise) of a Guarantor (or substantially all of its assets) to an
entity which is not a Subsidiary of the Company which is otherwise in compliance
with the Indenture (and providing that the guarantee and Liens referred to in
the foregoing clause (i) are also released at such time), such Guarantor shall
be deemed released from all its obligations under the Indenture and its
Guarantee.

CERTAIN COVENANTS

The Indenture will contain, among others, the following covenants.

Limitation on Additional Indebtedness and Preferred Stock of Restricted
Subsidiaries

The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, incur (as defined) any Indebtedness (including Acquired
Indebtedness) other than Permitted Indebtedness, and will not permit any
Restricted Subsidiary to issue any Preferred Stock, unless (a) after giving
effect to the incurrence of such Indebtedness and the issuance of any such
Preferred Stock and the receipt and application of the proceeds thereof, the
Company's Leverage Ratio is less than (i) 6.50 to 1 if such Indebtedness is
incurred or Preferred Stock is issued, as the case may be, on or prior to
, 1999, (ii) 6.25 to 1 if such Indebtedness is incurred or Preferred
Stock is issued, as the case may be, after , 1999 and on or prior to
, 2001 and (iii) 6.00 to 1 if such Indebtedness is incurred or
Preferred Stock is issued, as the case may be, thereafter, and (b) no Default or
Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness. Notwithstanding the
foregoing, Preferred Stock may only be issued by a Restricted Subsidiary of the
Company pursuant to the preceding sentence to the extent such Restricted
Subsidiary is a Guarantor.

Notwithstanding the foregoing, the Company and the Restricted Subsidiaries
may incur Permitted Indebtedness; provided that the Company will not incur any
Permitted Indebtedness that ranks junior in right of payment to the Notes that
has a maturity or mandatory sinking fund payment prior to the maturity of the
Notes.

Limitation on Restricted Payments

The Company will not make, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, make, any Restricted Payment unless:

(a) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;

(b) immediately after giving pro forma effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under the covenant set forth under "Limitation
on Additional Indebtedness"; and

(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after the Issue Date
does not exceed the sum of (1) 100% of the Company's Cumulative EBITDA
minus 1.4 times the Company's Cumulative Consolidated Interest Expense,
plus (2) 100% of the aggregate Net Proceeds and the fair market value of
securities or other property received by the Company from the issue or
sale, after the Issue Date, of Capital Stock (other than Disqualified
Capital Stock or Capital Stock of the Company issued to any Subsidiary of
the Company) of the

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Company or any Indebtedness or other securities of the Company convertible
into or exercisable or exchangeable for Capital Stock (other than
Disqualified Capital Stock) of the Company which has been so converted or
exercised or exchanged, as the case may be, plus (3) $25 million plus (4)
the net reductions in Investments (other than reductions in Permitted
Investments) in any Person resulting from payments of interest on
indebtedness, dividends, repayments of loans, partial or total releases or
discharges of Permitted Unrestricted Subsidiary Obligations, or from
designations of Unrestricted Subsidiaries as Restricted Subsidiaries,
valued in each case at the fair market value thereof, not to exceed the
amount of Investments previously made by the Company and its Restricted
Subsidiaries in such Person. For purposes of determining under this clause
(c) the amount expended for Restricted Payments, cash distributed shall be
valued at the face amount thereof and property other than cash shall be
valued at its fair market value as determined by the Board of Directors
reasonably and in good faith.

The provisions of this covenant shall not prohibit (i) the payment of any
distribution within 60 days after the date of declaration thereof, if at such
date of declaration such payment would comply with the provisions of the
Indenture, (ii) the retirement of any shares of Capital Stock of the Company or
subordinated or pari passu Indebtedness by conversion into, or by or in exchange
for, shares of Capital Stock (other than Disqualified Capital Stock), or out of,
the Net Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other shares of Capital Stock of the Company
(other than Disqualified Capital Stock; provided, however, that the amount of
any such Net Proceeds that are utilized for any such retirement shall be
excluded from clause (c)(2) of the preceding paragraph, (iii) the redemption or
retirement of Indebtedness of the Company subordinated or pari passu in right of
payment to the Notes in exchange for, by conversion into, or out of the Net
Proceeds of, a substantially concurrent sale or incurrence of Indebtedness of
the Company (other than any Indebtedness owed to a Subsidiary of the Company)
that is, with respect to any such subordinated Indebtedness, contractually
subordinated in right of payment to the Notes to at least the same extent as the
subordinated Indebtedness being redeemed or retired, with respect to any such
pari passu Indebtedness, pari passu or subordinated in right of payment to the
Notes and, with respect to any such subordinated or pari passu Indebtedness, (x)
has no Stated Maturity earlier than the 91st day after the Final Maturity Date
or the final maturity date of the Indebtedness being redeemed or retired,
whichever is earlier and (y) has an Average Life to Stated Maturity equal to or
greater than the remaining Average Life to Stated Maturity of the Indebtedness
being redeemed or retired; provided, however, that the amount of any such Net
Proceeds that are utilized for any such redemption or retirement shall be
excluded from clause (c)(2) of the preceding paragraph, (iv) the funding of
loans (but not including the forgiveness of any such loan) to executive
officers, directors and shareholders for relocation loans, bonus advances and
other purposes consistent with past practices or the purchase, redemption or
other acquisition for value of shares of Capital Stock of the Company (other
than Disqualified Capital Stock) or options on such shares held by the Company's
or the Restricted Subsidiaries' officers or employees or former officers or
employees (or their estates or trusts or beneficiaries under their estates or
trusts for the benefit of such beneficiaries) upon the death, disability,
retirement or termination of employment of such current or former officers or
employees pursuant to the terms of an employee benefit plan or any other
agreement pursuant to which such shares of Capital Stock or options were issued
or pursuant to a severance, buy-sell or right of first refusal agreement with
such current or former officer or employee; provided that the aggregate amount
of any such loans funded and cash consideration paid, or distributions made,
pursuant to this clause (iv) do not in any one fiscal year exceed $1 million,
and (v) the making of Investments in Unrestricted Subsidiaries and joint
ventures in an aggregate amount not to exceed $20 million; provided, however,
that the Company or the Restricted Subsidiaries may make additional Investments
pursuant to this clause (v) up to an aggregate amount not to exceed $10 million
if the Company is able, at the time of any such Investment and immediately after
giving effect thereto, to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with the "Limitation on Additional
Indebtedness" covenant; provided, further, that in calculating the aggregate
amount of Restricted Payments made subsequent to the Issue Date for purposes of
clause (c) of the immediately preceding paragraph, amounts expended pursuant to
clause (i) and (v) shall be included in the calculation.

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Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by the covenant "Limitation on Restricted Payments" were computed,
which calculations may be based upon the Company's latest available financial
statements, and that no Default or Event of Default exists and is continuing and
no Default or Event of Default will occur immediately after giving effect to any
Restricted Payments.

Limitation on Other Senior Subordinated Debt

The Company will not, and will not permit any of the Restricted
Subsidiaries to directly or indirectly incur, contingently or otherwise, any
Indebtedness that is both (i) subordinate in right of payment to any Senior
Indebtedness of the Company or any of the Subsidiary Guarantors, as the case may
be, and (ii) senior in right of payment to the Notes or any of the Guarantees,
as the case may be.

Limitations on Liens

The Company will not, and will not permit any of the Restricted
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind (other than Permitted Liens) upon any Property,
assets, income or profit of the Company or any Restricted Subsidiary or any
shares of stock or debt of any Restricted Subsidiary (whether or not any of the
foregoing is now owned or hereafter acquired) unless (i) if such Lien secures
Indebtedness which is pari passu in right of payment with the Notes, then the
Notes are secured on an equal and ratable basis with the obligations so secured
until such time as such obligation is no longer secured by a Lien or (ii) if
such Lien secures Indebtedness which is subordinated in right of payment to the
Notes, any such Lien shall be subordinated to a Lien granted to the Holders of
the Notes in the same collateral as that securing such Lien to the same extent
as such subordinated Indebtedness is subordinated to the Notes.

Limitation on Transactions with Affiliates

The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with any
Affiliate (including entities in which the Company or any of the Restricted
Subsidiaries own a minority interest) or holder of 5% or more of the Company's
Common Stock (each of the foregoing, an "Affiliate Transaction") or extend,
renew, waive or otherwise modify the terms of any Affiliate Transaction entered
into prior to the Issue Date unless the terms of such Affiliate Transaction are
fair and reasonable to the Company or such Restricted Subsidiary, as the case
may be, and the terms of such Affiliate Transaction are at least as favorable as
the terms which could be obtained by the Company or such Restricted Subsidiary,
as the case may be, in a comparable transaction made on an arm's-length basis
between unaffiliated parties. In any Affiliate Transaction involving an amount
or having a value in excess of $1 million the Company must obtain a resolution
of the board of directors approved by a majority of the members of the board of
directors (and a majority of the disinterested members of the board of
directors) certifying that such Affiliate Transaction complies with this
"Limitation on Transactions with Affiliates". In any Affiliate Transaction with
a value in excess of $5 million the Company must obtain a written opinion that
such Affiliate Transaction complies with this "Limitation on Transactions with
Affiliates" from an independent investment banking firm of nationally recognized
standing.

The foregoing provisions will not apply to (i) any Restricted Payment that
is not prohibited by the provisions described under "Limitations on Restricted
Payments", (ii) any transaction between the Company and any of its Restricted
Subsidiaries or between Restricted Subsidiaries or (iii) the payment of
reasonable and customary regular fees to directors of the Company who are not
employees of the Company and any employment and consulting arrangements entered
into by the Company or any Restricted Subsidiary with their executives or
consultants in the ordinary course of business.

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Guarantees of Certain Indebtedness

The Company will not permit any of the Restricted Subsidiaries (other than
the Guarantors) to (a) incur, guarantee or secure through the granting of Liens
the payment of any Indebtedness of the Company or any other Restricted
Subsidiary or (b) pledge any intercompany notes representing obligations of any
of the Restricted Subsidiaries to secure the payment of any Indebtedness of the
Company, in each case unless such Restricted Subsidiary, the Company and the
Trustee execute and deliver a supplemental indenture evidencing such Restricted
Subsidiary's Guarantee under the Indenture. Thereafter, such Restricted
Subsidiary shall be a Guarantor for all purposes of the Indenture.

Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries

The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions to the Company or any Restricted Subsidiary on its Capital Stock,
(b) pay any Indebtedness owed to the Company or any Restricted Subsidiary, (c)
make loans or advances to the Company or any Restricted Subsidiary, (d) transfer
any of its properties or assets to the Company or any Restricted Subsidiary, (e)
grant liens or security interests on the assets of the Company or the Restricted
Subsidiaries in favor of the holders of the Notes, or (f) guarantee the Notes or
any renewals or refinancings thereof, except for Permitted Dividend
Encumbrances.

Limitation on Certain Asset Sales

The Company will not, and will not permit any of the Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such sale or other disposition at least equal to the fair market value thereof
(as determined in good faith by the Company's board of directors, and evidenced
by a board resolution); (ii) not less than 75% of the consideration received by
the Company or such Restricted Subsidiary, as the case may be, is in the form of
cash or cash equivalents (those equivalents allowed under "Temporary Cash
Investments"), provided, however, that the amount of (x) any liabilities of the
Company or any Restricted Subsidiaries that are assumed by the transferee of
such assets and for which the Company and its Restricted Subsidiaries are
released, including any such Indebtedness of a Restricted Subsidiary whose stock
is purchased by the transferee and (y) any notes or other securities received by
the Company or any such Restricted Subsidiary which are converted into cash
within 180 days of such Asset Sale (to the extent of cash received) shall be
deemed to be cash for purposes of this provision; provided, further, that the
Company or such Restricted Subsidiary will not be required to comply with this
clause (ii) with respect to a Permitted Asset Swap; and (iii) the Asset Sale
Proceeds received by the Company or such Restricted Subsidiary are applied (a)
first, to the extent the Company elects, or is required, to permanently prepay,
repay or purchase existing Senior Indebtedness (or Purchase Money Indebtedness
that ranks pari passu in right of payment with the Notes solely to the extent
that such Asset Sale involves property or assets securing such Purchase Money
Indebtedness pursuant to a lien granted pursuant to clause (v) of the definition
of Permitted Liens) within 270 days following the receipt of the Asset Sale
Proceeds from any Asset Sale; provided that any such repayment shall result in a
permanent reduction of the commitments thereunder in an amount equal to the
principal amount so repaid; (b) second, to the extent of the balance of Asset
Sale Proceeds after application as described above, to the extent the Company
elects, to an investment in assets (including Capital Stock or other securities
purchased in connection with the acquisition of Capital Stock or property of
another Person) used or useful in businesses similar or ancillary to the
business of the Company and the Restricted Subsidiaries as conducted at the time
of such Asset Sale, provided that such investment occurs and such Asset Sale
Proceeds are so applied within 270 days following the receipt of such Asset Sale
Proceeds (the "Reinvestment Date"); and (c) third, if on the Reinvestment Date
with respect to any Asset Sale, the Available Asset Sale Proceeds exceed $10
million, the Company shall apply an amount equal to such Available Asset Sale
Proceeds to an offer to repurchase the Notes, at a purchase price in cash equal
to 100% of the principal amount thereof plus accrued and unpaid interest, if
any, to the date of repurchase (an "Excess

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Proceeds Offer"); provided, however, that the Company may, at the time that it
makes any such Excess Proceeds Offer, also offer to purchase, at a price in cash
equal to 100% of the outstanding principal amount thereof plus accrued and
unpaid interest, if any, to the purchase date, any Indebtedness which ranks pari
passu in right of payment to the Notes (a "Pari Passu Excess Proceeds Offer")
and to the extent the Company so elects to make a Pari Passu Excess Proceeds
Offer, Notes and such pari passu Indebtedness shall be purchased pursuant to
such Excess Proceeds Offer and Pari Passu Excess Proceeds Offer, respectively,
on a pro rata basis based on the aggregate principal amount of such Notes and
pari passu Indebtedness then outstanding. To the extent that the aggregate
principal amount of Notes tendered pursuant to an Excess Proceeds Offer is less
than the Available Asset Sale Proceeds, the Company may use such deficiency for
general corporate purposes. To the extent that the aggregate principal amount of
pari passu Indebtedness tendered pursuant to a Pari Passu Excess Proceeds Offer
is less than such pari passu Indebtedness pro rata share of such Available Asset
Sale Proceeds, the Company shall use such remaining Available Asset Sale
Proceeds to purchase any Notes validly tendered and not withdrawn pursuant to
such Excess Proceeds Offer. If the aggregate principal amount of Notes validly
tendered and not withdrawn by holders thereof exceeds the Available Asset Sale
Proceeds or to the extent the Company elects to make a Pari Passu Excess
Proceeds Offer, exceeds the Notes' pro rata share of such Available Asset Sale
Proceeds, then Notes to be purchased will be selected on a pro rata basis. Upon
completion of such Excess Proceeds Offer, the amount of Available Asset Sale
Proceeds shall be reset to zero.

If the Company is required to make an Excess Proceeds Offer, the Company
shall mail, within 30 days following the Reinvestment Date, a notice to the
Holders stating, among other things: (1) that such Holders have the right to
require the Company to apply the Available Asset Sale Proceeds to repurchase
such Notes at a purchase price in cash equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase; (2)
the purchase date, which shall be no earlier than 30 days and not later than 60
days from the date such notice is mailed; (3) the instructions, determined by
the Company, that each Holder must follow in order to have such Notes
repurchased; and (4) the calculations used in determining the amount of
Available Asset Sale Proceeds to be applied to the repurchase of such Notes.

Limitation on Issuances and Sales of Preferred Stock by Restricted
Subsidiaries

The Company (a) will not permit any of its Restricted Subsidiaries to issue
any Preferred Stock (other than to the Company or a Wholly-Owned Restricted
Subsidiary of the Company or as permitted by the first paragraph of "Limitation
on Additional Indebtedness and Preferred Stock of Restricted Subsidiaries") and
(b) will not permit any Person (other than the Company or a Wholly-Owned
Restricted Subsidiary of the Company) to own any Preferred Stock of any
Restricted Subsidiary of the Company; provided, however, that this covenant
shall not prohibit the issuance and sale of (x) all, but not less than all, of
the issued and outstanding Capital Stock of any Restricted Subsidiary of the
Company owned by the Company or any of its Restricted Subsidiaries in compliance
with the other provisions of the Indenture or (y) to the extent mandated by
applicable law, directors' qualifying shares or investments by foreign
nationals.

Line of Business

The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, engage to any
substantial extent in any line or lines of business activity other than that
which, in the reasonable good faith judgment of the Board of Directors of the
Company, is a Related Business.

Payments for Consent

Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of the
Indenture or the Notes unless such consideration is offered to be paid or agreed
to be paid to all holders of the Notes which so consent, waive or agree to amend
in the time frame set forth in the solicitation documents relating to such
consent, waiver or agreement.

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Reports to Holders

So long as the Company is subject to the periodic reporting requirements of
the Exchange Act, it will continue to furnish the information required thereby
to the Commission and to the holders of the Notes. The Indenture provides that
even if the Company is entitled under the Exchange Act not to furnish such
information to the Commission or to the holders of the Notes, they will
nonetheless continue to furnish such information to the Commission, holders of
the Notes and prospective holders of the Notes.

CHANGE OF CONTROL

Upon the occurrence of a Change of Control, the Company shall be obligated
to make an offer to purchase (a "Change of Control Offer"), and shall purchase,
on a business day (the "Change of Control Purchase Date") not more than 60 nor
less than 30 days following the occurrence of the Change of Control, all of the
then outstanding Notes at a purchase price (the "Change of Control Purchase
Price") equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the Change of Control Purchase Date. The Company shall be
required to purchase all Notes properly tendered into the Change of Control
Offer and not withdrawn. The Change of Control Offer is required to remain open
for at least 20 business days and until the close of business on the Change of
Control Purchase Date.

In order to effect such Change of Control Offer, the Company shall, not
later than the 30th day after the occurrence of the Change of Control, mail to
each holder of Notes notice of the Change of Control Offer, which notice shall
govern the terms of the Change of Control Offer and shall state, among other
things, the procedures that holders of Notes must follow to accept the Change of
Control Offer.

The occurrence of the events constituting a Change of Control under the
Indenture will result in an event of default under the Senior Credit Facility
and, thereafter, the lenders will have the right to require repayment of the
borrowings thereunder in full. The Company's obligations under the Senior Credit
Facility will constitute Designated Senior Indebtedness and will represent
obligations senior in right of payment to the Notes. Consequently, the
subordination provisions of the Indenture will have the effect of precluding the
purchase of the Notes by the Company in the event of a Change of Control, absent
consent of the lenders under the Senior Credit Facility or repayment of all
amounts outstanding thereunder (although the failure by the Company to comply
with its obligations in the event of a Change of Control will constitute a
default under the Notes). There can be no assurance that the Company will have
adequate resources to repay or refinance all Indebtedness owing under the Senior
Credit Facility or to fund the purchase of any Notes upon a Change of Control.

The Indenture will provide that, (A) if the Company or any Restricted
Subsidiary has issued any outstanding Indebtedness that is subordinated in right
of payment to the Notes or the Guarantee of such Restricted Subsidiary, as the
case may be, or the Company or any Restricted Subsidiary has issued any
Preferred Stock, and the Company or such Restricted Subsidiary is required to
make a change of control offer or to make a distribution with respect to such
subordinated Indebtedness or Preferred Stock in the event of a change of
control, the Company or such Restricted Subsidiary shall not consummate any such
offer or distribution with respect to such subordinated Indebtedness or
Preferred Stock until such time as the Company shall have paid the Change of
Control Purchase Price in full to the Holders of Notes that have accepted the
Company's Change of Control Offer and shall otherwise have consummated the
Change of Control Offer made to holders of the Notes and (B) the Company or any
Restricted Subsidiary will not issue Indebtedness that is subordinated in right
of payment to the Notes or the Guarantee of such Restricted Subsidiary and the
Company will not issue Preferred Stock with change of control provisions
requiring the payment of such Indebtedness or Preferred Stock prior to the
payment of the Notes in the event of a Change of Control under the Indenture.

In the event that a Change of Control occurs and the holders of Notes
exercise their right to require the Company to purchase Notes, if such purchase
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at that time, the Company will comply with the requirements of Rule 14e-1 as
then in effect with respect to such repurchase.

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MERGER, CONSOLIDATION OR SALE OF ASSETS

The Company will not, in any transaction or series of transactions, merge
or consolidate with or into, or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets as an
entirety to, any person or persons, and the Company will not permit any of its
Restricted Subsidiaries to enter into any such transaction or series of
transactions if such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and assets of the
Company or the Company and its Restricted Subsidiaries, taken as a whole, to any
other person or persons, unless at the time of and after giving effect thereto
(a) either (i) if the transaction or series of transactions is a merger or
consolidation, the Company shall be the surviving person of such merger or
consolidation, or (ii) the person formed by such consolidation or into which the
Company or such Restricted Subsidiary is merged or to which the properties and
assets of the Company or such Restricted Subsidiary, as the case may be, are
transferred (any such surviving person or transferee person being the "Surviving
Entity") shall be a corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia and
shall expressly assume by a supplemental indenture executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all the obligations of
the Company under the Notes and the Indenture, and in each case, the Indenture
shall remain in full force and effect and (b) immediately before and immediately
after giving effect to such transaction or series of transactions on a pro forma
basis (including, without limitation, any Indebtedness incurred or anticipated
to be incurred in connection with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be
continuing and the Company or the Surviving Entity, as the case may be, after
giving effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or series of
transactions), could incur $1.00 of additional Indebtedness pursuant to the
first paragraph of the covenant described under "-- Certain
Covenants -- Limitation on Indebtedness" above (assuming a market rate of
interest with respect to such additional Indebtedness).

In connection with any consolidation, merger or transfer of assets
contemplated by this provision, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an opinion of counsel, each stating that
such consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this provision and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.

EVENTS OF DEFAULT

The following events are defined in the Indenture as "Events of Default":

(a) default in payment of any principal of, or premium, if any, on the
Notes;

(b) default for 30 days in payment of any interest on the Notes;

(c) default by the Company or any Guarantor in the observance or
performance of any other covenant in the Notes or the Indenture for 45 days
after written notice from the Trustee or the holders of not less than 25%
in aggregate principal amount of the Notes then outstanding;

(d) default or defaults under one or more agreements, instruments,
mortgages, bonds, debentures or other evidences of Indebtedness under which
the Company or any Restricted Subsidiary of the Company then has
outstanding Indebtedness in excess of $10 million, individually or in the
aggregate, and either (a) such Indebtedness is already due and payable in
full or (b) such default or defaults have resulted in the acceleration of
the maturity of such Indebtedness; or

(e) any final judgment or judgments which can no longer be appealed
for the payment of money in excess of $10 million (not covered by
insurance) shall be rendered against the Company or any Restricted
Subsidiary and shall not be discharged for any period of 60 consecutive
days during which a stay of enforcement shall not be in effect; and

(f) certain events involving bankruptcy, insolvency or reorganization
of the Company or any Restricted Subsidiary.

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The Indenture provides that the Trustee may withhold notice to the holders
of the Notes of any default (except in payment of principal or premium, if any,
or interest on the Notes) if the Trustee considers it to be in the best interest
of the holders of the Notes to do so.

The Indenture will provide that if an Event of Default (other than an Event
of Default resulting from certain events of bankruptcy, insolvency or
reorganization) shall have occurred and be continuing, then the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding may declare to be immediately due and payable the entire principal
amount of all the Notes then outstanding plus accrued interest to the date of
acceleration and such amounts shall become immediately due and payable;
provided, however, that after such acceleration but before a judgment or decree
based on acceleration is obtained by the Trustee, the holders of a majority in
aggregate principal amount of outstanding Notes may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than nonpayment of accelerated principal, premium or interest, have been
cured or waived as provided in the Indenture, provided, however, that so long as
the Senior Credit Facility shall be in full force and effect, if any Event of
Default shall have occurred and be continuing (other than as specified in clause
(f)), the Notes shall not become due and payable until the earlier to occur of
(x) five business days following the delivery of a written notice of such
acceleration of the Notes to the agent under the Senior Credit Facility and (y)
the acceleration of any Indebtedness under the Senior Credit Facility. In case
an Event of Default resulting from certain events of bankruptcy, insolvency or
reorganization shall occur, the principal, premium and interest amount with
respect to all of the Notes shall be due and payable immediately without any
declaration or other act on the part of the Trustee or the holders of the Notes.

The holders of a majority in principal amount of the Notes then outstanding
shall have the right to waive any existing default or compliance with any
provision of the Indenture or the Notes and to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, subject to
certain limitations specified in the Indenture.

No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless the holders of at least 25% in aggregate principal amount of
the outstanding Notes shall have made written request and offered reasonable
indemnity to the Trustee to institute such proceeding as a trustee, and unless
the Trustee shall not have received from the holders of a majority in aggregate
principal amount of the outstanding Notes a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted for payment on such
Note on or after the respective due dates expressed in such Note.

DEFEASANCE AND COVENANT DEFEASANCE

The Indenture provides the Company may elect either (a) to defease and be
discharged from any and all obligations with respect to the Notes (except for
the obligations to register the transfer or exchange of such Notes, to replace
temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office
or agency in respect of the Notes and to hold monies for payment in trust)
("defeasance") or (b) to be released from their obligations with respect to the
Notes under certain covenants contained in the Indenture some of which are
described above under "Covenants" ("covenant defeasance"), upon the deposit with
the Trustee (or other qualifying trustee), in trust for such purpose, of money
and/or U.S. Government Obligations (as defined in the Indenture) which through
the payment of principal and interest in accordance with their terms will
provide money, in an amount sufficient to pay the principal of, premium, if any,
and interest on the Notes, on the scheduled due dates therefor or on a selected
date of redemption in accordance with the terms of the Indenture. Such a trust
may only be established if, among other things, the Company has delivered to the
Trustee an opinion of counsel (as specified in the Indenture) (i) to the effect
that neither the trust nor the Trustee will be required to register as an
investment company under the Investment Company Act of 1940, as amended, and
(ii) describing either a private ruling concerning the Notes or a published
ruling of the Internal Revenue Service, to the effect that holders of the Notes
or persons in their positions will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be

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subject to federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such deposit, defeasance and
discharge had not occurred.

MODIFICATION OF INDENTURE

From time to time, the Company, the Guarantors and the Trustee may, without
the consent of holders of the Notes, amend the Indenture or the Notes or
supplement the Indenture for certain specified purposes, including providing for
uncertificated Notes in addition to certificated Notes, and curing any
ambiguity, defect or inconsistency, or making any other change that does not
adversely affect the rights of any holder. The Indenture contains provisions
permitting the Company, the Guarantors and the Trustee, with the consent of
holders of at least a majority in principal amount of the outstanding Notes, to
modify or supplement the Indenture or the Notes, except that no such
modification shall, without the consent of each holder affected thereby, (i)
reduce the amount of Notes whose holders must consent to an amendment,
supplement, or waiver to the Indenture or the Notes, (ii) reduce the rate of or
change the time for payment of interest on any Note, (iii) reduce the principal
of or premium on or change the stated maturity of any Note, (iv) make any Note
payable in money other than that stated in the Note, (v) change the amount or
time of any payment required by the Notes or reduce the premium payable upon any
redemption of Notes, or change the time before which no such redemption may be
made, (vi) waive a default on the payment of the principal of, interest on, or
redemption payment with respect to any Note, (vii) amend, alter, change or
modify the obligation of the Company to make and consummate a Change of Control
Offer in the event of a Change of Control or make and consummate an Excess
Proceeds Offer or waive any Default in the performance of any such offers or
modify any of the provisions or definitions with respect to any such offers or
(viii) take any other action otherwise prohibited by the Indenture to be taken
without the consent of each holder affected thereby.

COMPLIANCE CERTIFICATE

The Company will deliver to the Trustee on or before 90 days after the end
of the Company's fiscal year and on or before 45 days after the end of each of
the first, second and third fiscal quarters in each year an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default that has occurred. If they do, the certificate will describe the Default
or Event of Default and its status.

THE TRUSTEE

The Trustee under the Indenture will be the Registrar and Paying Agent with
regard to the Notes. The Indenture provides that, except during the continuance
of an Event of Default, the Trustee will perform only such duties as are
specifically set forth in the Indenture. During the existence of an Event of
Default, the Trustee will exercise such rights and powers vested in it under the
Indenture and use the same degree of care and skill in its exercise as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs.

TRANSFER AND EXCHANGE

Holders of the Notes may transfer or exchange Notes in accordance with the
Indenture. The Registrar under such Indenture may require a holder, among other
things, to furnish appropriate endorsements and transfer documents, and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
is not required to transfer or exchange any Note selected for redemption. Also,
the Registrar is not required to transfer or exchange any Note for a period of
15 days before selection of the Notes to be redeemed.

The registered holder of a Note may be treated as the owner of it for all
purposes.

CERTAIN DEFINITIONS

Set forth below is a summary of certain of the defined terms used in the
covenants contained in the Indenture. Reference is made to the Indenture for the
full definition of all such terms as well as any other capitalized terms used
herein for which no definition is provided.

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"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or assumed in connection with the acquisition of assets from such
Person.

"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser of
(x) the amount by which the fair value of the property of such Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities),
but excluding liabilities under the Guarantee of such Guarantor at such date and
(y) the amount by which the present fair salable value of the assets of such
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Guarantor on its debts (after giving effect to all
other fixed and contingent liabilities and after giving effect to any collection
from any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under the Guarantee), excluding Indebtedness in respect of the
Guarantee, as they become absolute and matured.

"Advertising Displays" mean all posters, signs (including logo sign
structures), billboards and other outdoor advertising displays and related
contracts and sites therefor owned or leased (as lessee) by the Company and the
Restricted Subsidiaries.

"Affiliate" of any specified Person means any other Person which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, such specified Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by," and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.

"Asset Acquisition" means (i) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be consolidated or merged with the
Company or any Restricted Subsidiary or (ii) the acquisition by the Company or
any Restricted Subsidiary of assets of any Person.

"Asset Sale" means the sale, transfer or other disposition (other than to
the Company or any of its Restricted Subsidiaries) in any single transaction or
series of related transactions having a fair market value in excess of
$1,000,000 of (a) any Capital Stock of or other equity interest in any
Restricted Subsidiary, (b) all or substantially all of the assets of any
business owned by the Company or any Restricted Subsidiary or a division, line
of business or comparable business segment of the Company or any Restricted
Subsidiary thereof or (c) any other assets or property of the Company or of any
Restricted Subsidiary, (whether real or personal property). For purposes of this
definition, the term "Asset Sale" shall not include any sale, transfer or other
disposition that is governed by and made in accordance with the provisions
described under "Merger, Consolidation or Sale of Assets" or any sale, transfer
or other disposition to the Company or a Wholly-Owned Restricted Subsidiary that
is a Guarantor.

"Asset Sale Proceeds" means, with respect to any Asset Sale, (i) cash
received by the Company or any Restricted Subsidiary from such Asset Sale
(including cash received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset Sale), after (a)
provision for all income or other taxes measured by or resulting from such Asset
Sale, (b) payment of all brokerage commissions, underwriting and other fees and
expenses related to such Asset Sale, and (c) deduction of appropriate amounts to
be provided by the Company or such Restricted Subsidiary as a reserve, in
accordance with GAAP, against any liabilities associated with the assets sold or
disposed of in such Asset Sale and retained by the Company or such Restricted
Subsidiary after such Asset Sale, including, without limitation, pension and
other post employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
the assets sold or disposed of in such Asset Sale, and (ii) promissory notes and
other noncash consideration received by the Company or any Restricted Subsidiary
from such Asset Sale or other disposition upon the liquidation or conversion of
such notes or noncash consideration into cash.

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"Available Asset Sale Proceeds" means, with respect to any Asset Sale, the
aggregate Asset Sale Proceeds from such Asset Sale that have not been applied in
accordance with clauses (iii)(a) or (iii)(b), and which have not yet been the
basis for an Excess Proceeds Offer in accordance with clause (iii)(c) of the
first paragraph of "Certain Covenants -- Limitation on Certain Asset Sales."

"Average Life to Stated Maturity" means, with respect to any Indebtedness,
as at any date of determination, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years (or any fraction thereof) from such
date to the date or dates of each successive scheduled principal payment
(including, without limitation, any sinking fund requirements) of such
Indebtedness multiplied by (b) the amount of each such principal payment by (ii)
the sum of all such principal payments.

"Capital Stock" means, with respect to any Person, any and all shares or
other equivalents (however designated) of capital stock, partnership interests
or any other participation, right or other interest in the nature of an equity
interest in such Person or any option, warrant or other security convertible
into any of the foregoing.

"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.

"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), excluding Permitted Holders, is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening of an event or
otherwise), directly or indirectly, of more than 35% of the total voting power
with respect to the total Voting Stock of the Company; provided, however, that
the Permitted Holders (i) "beneficially own" (as so defined) a lower percentage
of such total voting power with respect to the Voting Stock than such other
person or "group" and (ii) do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the Board
of Directors of the Company; (b) the Company consolidates with, or merges with
or into, another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any person, or
any person consolidates with, or merges with or into, the Company, in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where (i) the outstanding Voting Stock of the
Company is converted into or exchanged for (1) Voting Stock (other than
Disqualified Capital Stock) of the surviving or transferee corporation or (2)
cash, securities and other property in an amount which could then be paid by the
Company as a Restricted Payment under the Indenture, or a combination thereof,
and (ii) immediately after such transaction no "person" or "group" (as such
terms are used in Section 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time, upon the happening of an event or otherwise), directly or indirectly,
of more than 50% of the total voting power with respect to the total Voting
Stock of the surviving or transferee corporation; (c) at any time during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of 66 2/3% of
the directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or (d) the Company is liquidated or
dissolved or adopts a plan of liquidation.

"Common Stock" of any Person means all Capital Stock of such Person that is
generally entitled to (i) vote in the election of directors of such Person or
(ii) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management and policies of such Person.

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"Consolidated Interest Expense" means, for any period, the aggregate amount
of interest which, in conformity with GAAP, would be set forth opposite the
caption "interest expense" or any like caption on an income statement for the
Company and its Restricted Subsidiaries on a consolidated basis (including, but
not limited to, imputed interest included in Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, the net costs associated with
hedging obligations, the interest portion of any deferred payment obligation,
amortization of discount or premium, if any, and all other non-cash interest
expense (other than interest amortized to cost of sales)) plus, without
duplication, all net capitalized interest for such period and all interest
incurred or paid under any guarantee of Indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person, plus an amount
equal to the product of (a) the aggregate dividends paid on Disqualified Capital
Stock during such period and (b) a fraction, the numerator of which is one and
the denominator of which is one minus the Company's then effective combined tax
rate, to the extent paid; provided, however, that "Consolidated Interest
Expense" shall exclude the amortization of deferred financing fees.

"Consolidated Net Income" means, for any period, the aggregate of the Net
Income of the Company and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided, however, that
(a) the Net Income of any Person (the "other Person") in which the Company or
any of its Restricted Subsidiaries has less than a 100% interest (which interest
does not cause the net income of such other Person to be consolidated into the
net income of the Company in accordance with GAAP) shall be included only to the
extent of the amount of dividends or distributions paid to the Company or such
Restricted Subsidiary, (b) the Net Income of any Restricted Subsidiary that is
subject to any restriction or limitation on the payment of dividends or the
making of other distributions (other than pursuant to the Notes or the
Indenture) shall be excluded to the extent of such restriction or limitation,
except that to the extent that any such restriction or limitation results solely
from covenant limitations under any SBA Indebtedness, there shall not be
deducted that portion of such Restricted Subsidiary's Net Income which exceeds
the outstanding aggregate principal amount of such SBA Indebtedness, (c)(i) the
Net Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition and (ii) any net gain (but not
loss) resulting from an Asset Sale by the Company or any of its Restricted
Subsidiaries other than in the ordinary course of business shall be excluded,
and (d) extraordinary gains and losses shall be excluded.

"Consolidated Net Tangible Assets" means the book value of the assets of
the Company and its Restricted Subsidiaries (other than patents, patent rights,
trademarks, trade names, franchises, copyrights, licenses, permits, goodwill and
other intangible assets classified as such in accordance with GAAP) after all
applicable deductions in accordance with GAAP (including, without limitation,
reserves for doubtful receivables, obsolescence, depreciation and amortization)
less all liabilities of the Company and its Restricted Subsidiaries determined
in accordance with GAAP.

"Cumulative Consolidated Interest Expense" means, as of any date of
determination, Consolidated Interest Expense of the Company from the Issue Date
to the end of the Company's most recently ended full fiscal quarter prior to
such date, taken as a single accounting period.

"Cumulative EBITDA" means, as of any date of determination, EBITDA of the
Company from the Issue Date to the end of the Company's most recently ended full
fiscal quarter prior to such date, taken as a single accounting period.

"Default" means any event that is, or with the passing of time or giving of
notice or both would be, an Event of Default.

"Designated Senior Indebtedness," as to the Company or any Guarantor, as
the case may be, means any Senior Indebtedness (a) under or in respect of the
Senior Credit Facility, or (b) which at the time of determination exceeds $10
million in aggregate principal amount (or accreted value in the case of
Indebtedness issued at a discount) outstanding or available under a committed
facility, and (i) which is specifically designated in the instrument evidencing
such Senior Indebtedness as "Designated Senior Indebtedness" and (ii) as to
which the Trustee has been given written notice of such designation.

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"Disqualified Capital Stock" means any Capital Stock of the Company or any
Restricted Subsidiary which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
maturity date of the Notes, for cash or securities constituting Indebtedness.

"EBITDA" means, for any Person, for any period, an amount equal to (a) the
sum of, without duplication, (i) Consolidated Net Income for such period, plus
(ii) the provision for taxes for such period based on income or profits to the
extent such income or profits were included in computing Consolidated Net Income
and any provision for taxes utilized in computing net loss under clause (i)
hereof, plus (iii) to the extent it reduces Consolidated Net Income during such
period, Consolidated Interest Expense for such period, plus (iv) depreciation
for such period on a consolidated basis, plus (v) amortization of intangibles
for such period on a consolidated basis, plus (vi) any other non-cash items
reducing Consolidated Net Income for such period, minus (b) all non-cash items
increasing Consolidated Net Income for such period, all for the Company and its
Restricted Subsidiaries determined in accordance with GAAP.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Final Maturity Date" shall be the date fixed in the Indenture for the
final payment of principal on the Notes.

"GAAP" means generally accepted accounting principles consistently applied
as in effect in the United States from time to time.

"Guarantee" means each guarantee of the Notes by each Guarantor.

"Guarantor" means each Subsidiary of the Company in existence on the Issue
Date (other than Missouri Logos, a partnership) and each Restricted Subsidiary
which thereafter guarantees payment of the Notes pursuant to the covenant
described under "Guarantees of Certain Indebtedness".

"incur" means, with respect to any Indebtedness or other obligation of any
Person, to directly or indirectly create, issue, incur (by conversion, exchange
or otherwise), assume, guarantee or otherwise become directly or indirectly
liable with respect to (including as a result of an Asset Acquisition), or
otherwise become responsible for, contingently or otherwise, any Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "incurrence," "incurred," "incurable," and "incurring" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness.

"Indebtedness" means (without duplication), with respect to any Person, any
indebtedness at any time outstanding, secured or unsecured, contingent or
otherwise, which is for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
representing the balance deferred and unpaid of the purchase price of any
property (excluding any balances that constitute accounts payable or trade
payables, and other accrued liabilities arising in the ordinary course of
business) if and to the extent any of the foregoing indebtedness would appear as
a liability upon a balance sheet of such Person prepared in accordance with
GAAP, and shall also include, to the extent not otherwise included (i) any
Capitalized Lease Obligations of such Person, (ii) obligations secured by a lien
to which the property or assets owned or held by such Person is subject, whether
or not the obligation or obligations secured thereby shall have been assumed
(the amount of such obligation being deemed to be the lesser of the value of
such property or asset or the amount of the obligation so secured), (iii)
guarantees of items of other Persons which would be included within this
definition for such other Persons (whether or not such items would appear upon
the balance sheet of the guarantor), (iv) all obligations for the reimbursement
of any obligor on any banker's acceptance or for reimbursement of any obligor on
any letter of credit with respect to drawings made thereunder and not yet
reimbursed, (v) in the case of the Company, Disqualified Capital Stock of the
Company or any Restricted Subsidiary, and (vi) obligations of any such Person
under any Interest Rate Agreement applicable to any of the foregoing (if and to
the extent such Interest Rate Agreement obligations would appear as a liability
upon a

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balance sheet of such Person prepared in accordance with GAAP) and (vii) the
outstanding amount of any Permitted Unrestricted Subsidiary Obligations;
provided, however, that, except for purposes of this clause (vii), obligations
in respect of performance and surety bonds and in respect of reimbursement
obligations for undrawn letters of credit (whether or not secured by a lien)
supporting insurance arrangements and performance and surety bonds, each
incurred in the ordinary course of business and not as a part of a financing
transaction, for the benefit of the Company or any Restricted Subsidiary, shall
not be considered Indebtedness for purposes of the Indenture. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above, provided (i) that the
amount outstanding at any time of any Indebtedness issued with original issue
discount is the principal amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP and (ii) that Indebtedness shall not
include any liability for federal, state, local or other taxes.

"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.

"Investments" means, (x) directly or indirectly, any advance, account
receivable (other than an account receivable arising in the ordinary course of
business), loan or capital contribution to (by means of transfers of property to
others, payments for property or services for the account or use of others or
otherwise), the purchase of any stock, bonds, notes, debentures, partnership or
joint venture interests or other securities of, the acquisition, by purchase or
otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person and (y) any Permitted
Unrestricted Subsidiary Obligation to the extent it is guaranteed by the Company
or a Restricted Subsidiary or otherwise is recourse to or obligates the Company
or any Restricted Subsidiary, directly or indirectly, contingently or otherwise,
to the satisfaction thereof. Investments shall exclude extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices.

"Issue Date" means the date the Notes are first issued by the Company and
authenticated by the Trustee under the Indenture.

"Junior Security" means any securities of the Company or any other Person
that are (i) equity securities without special covenants or (ii) subordinated in
right of payment to all Senior Indebtedness of the Company or any Guarantor, as
the case may be, to substantially the same extent as, or to a greater extent
than, the Notes are subordinated as provided in the Indenture, in any event
issued pursuant to a court order so providing and as to which (a) the rate of
interest on such securities shall not exceed the effective rate of interest on
the Notes on the date of the Indenture, (b) such securities shall not be
entitled to the benefits of covenants or defaults materially more beneficial to
the holders of such securities than those in effect with respect to the Notes on
the date of the Indenture and (c) such securities shall not provide for
amortization (including sinking fund and mandatory prepayment provisions)
commencing prior to the date six months following the final scheduled maturity
date of the Senior Indebtedness of the Company or Guarantor, as the case may be
(as modified by the plan of reorganization or readjustment pursuant to which
such securities are issued).

"Leverage Ratio" means the ratio of (i) the sum of the aggregate
outstanding amount of (x) Indebtedness of the Company and the Restricted
Subsidiaries and (y) except to the extent included in the previous clause (x),
Preferred Stock of the Company's Restricted Subsidiaries as of the date of
calculation on a consolidated basis in accordance with GAAP to (ii) the
Company's EBITDA for the four full fiscal quarters (the "Four Quarter Period")
ending on or prior to the date of determination for which financial statements
are available. For purposes of this definition, the Company's "EBITDA" shall be
calculated on a pro forma basis after giving effect to any Asset Sales or Asset
Acquisitions (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of the Company or one of the
Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of such Asset Acquisition) incurring, assuming or
otherwise becoming liable for Indebtedness) at any time on or subsequent to the
first day of the Four Quarter Period and on or prior to the date of
determination, as if such Asset Sale or Asset Acquisition (including any EBITDA
associated with such Asset Acquisition and including any pro

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forma expense and cost reductions determined in accordance with Article 11 of
Regulation S-X relating to such Asset Acquisition) occurred on the first day of
the Four Quarter Period.

"Lien" means with respect to any property or assets of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including
without limitation, any Capitalized Lease Obligation, conditional sales, or
other title retention agreement having substantially the same economic effect as
any of the foregoing).

"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person determined in accordance with GAAP.

"Net Proceeds" means (a) in the case of any sale of Capital Stock or
Indebtedness by the Company, the aggregate net cash proceeds received by the
Company, after payment of expenses, commissions and the like incurred in
connection therewith and (b) in the case of any exchange, exercise, conversion
or surrender of outstanding securities of any kind for or into shares of Capital
Stock of the Company which is not Disqualified Capital Stock, the net book value
of such outstanding securities on the date of such exchange, exercise,
conversion or surrender (plus any additional amount required to be paid by the
holder to the Company upon such exchange, exercise, conversion or surrender,
less any and all payments made to the holders, e.g., on account of fractional
shares and less all expenses incurred by the Company in connection therewith).

"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chief Executive Officer, the President or any Vice President and
the Chief Financial Officer or any Treasurer of such Person that shall comply
with applicable provisions of the Indenture.

"Permitted Asset Swap" means the exchange, in the ordinary course of the
outdoor advertising business, of any interest of the Company or any of the
Restricted Subsidiaries in any Advertising Display or Displays for a similar
interest in an Advertising Display or Displays of a Person other than the
Company or such Restricted Subsidiary; provided that the aggregate fair market
value (as determined in good faith by the board of directors of the Company) of
the Advertising Display or Displays being transferred by the Company or such
Restricted Subsidiary is not greater than the aggregate fair market value (as
determined in good faith by the board of directors of the Company) of the
Advertising Display or Displays received by the Company or such Restricted
Subsidiary in such exchange.

"Permitted Dividend Encumbrances" means encumbrances or restrictions (a)
existing on the Issue Date, (b) arising by reason of Acquired Indebtedness of
any Restricted Subsidiary existing at the time such Person became a Restricted
Subsidiary; provided that such encumbrances or restrictions were not created in
anticipation of such Person becoming a Restricted Subsidiary and are not
applicable to the Company or any of the other Restricted Subsidiaries, (c)
arising under Indebtedness incurred pursuant to clause (i) of the definition of
Permitted Indebtedness, (d) arising under Refinancing Indebtedness; provided
that the terms and conditions of any such restrictions are no less favorable to
the Holders of Notes than those under the Indebtedness being refinanced, (e)
customary provisions restricting the assignment of any contract or interest of
the Company or any Restricted Subsidiary, (f) existing under an agreement
relating to SBA Indebtedness, (g) existing under an agreement relating to any
Permitted Lien referred to in clause (v) of the definition of Permitted Liens
provided that such encumbrance or restriction only relates to the assets or
property subject to such Permitted Lien and having an aggregate fair market
value equal to the Indebtedness secured thereby, (h) imposed by applicable law
and (i) imposed pursuant to a binding agreement which has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or of
any assets of such Restricted Subsidiary, provided such encumbrances and
restrictions apply solely to such Capital Stock or assets of such Restricted
Subsidiary which are the subject of such binding agreement.

"Permitted Holders" means (x) any of Charles Switzer, Charles W. Lamar,
III, Kevin P. Reilly, Sr., members of their immediate families or any lineal
descendant of any of the foregoing and the immediate families of any such lineal
descendant, (y) any trust, to the extent it is for the benefit of any of the
foregoing or (z) any Person, entity or group of Persons controlled by any of the
foregoing.

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"Permitted Indebtedness" means:

(i) Indebtedness of the Company and Restricted Subsidiaries which are
Guarantors pursuant to the Senior Credit Facility in an aggregate principal
amount not to exceed $400 million less the aggregate amount of all
permanent repayments thereunder made in accordance with "Limitation on
Certain Asset Sales" and guarantees of such Indebtedness by Restricted
Subsidiaries that are Guarantors;

(ii) Indebtedness under the Notes and the Guarantees;

(iii) Indebtedness not covered by any other clause of this definition
which is outstanding on the date of the Indenture;

(iv) Indebtedness of the Company to any Wholly-Owned Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary to the Company or
another Restricted Subsidiary;

(v) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred by the Company or any Restricted Subsidiary to acquire or lease
property in the ordinary course of business, provided that (a) the
aggregate amount of such Purchase Money Indebtedness and Capital Lease
Obligations outstanding at any time shall not exceed the greater of (x) 5%
of the Company's Consolidated Net Tangible Assets at the time of the
incurrence of any such Purchase Money Indebtedness or Capitalized Lease
Obligation or (x) $10 million, and (b) in each case, such Purchase Money
Indebtedness or Capitalized Lease Obligation, as the case may be, would not
constitute more than 100% of the cost (determined in accordance with GAAP)
of the property so purchased or leased plus reasonable fees and expenses
incurred in connection therewith;

(vi) Interest Rate Protection Agreements and any guarantees thereof;

(vii) additional Indebtedness of the Company or any Restricted
Subsidiary that is a Guarantor not to exceed $25 million in principal
amount outstanding at any time; and

(viii) Refinancing Indebtedness.

"Permitted Investments" means, for any Person, Investments made on or after
the date of the Indenture consisting of:

(a) Investments by the Company or by a Restricted Subsidiary in the
Company or a Restricted Subsidiary which is a Guarantor;

(b) Temporary Cash Investments;

(c) Investments by the Company or by a Restricted Subsidiary in a
Person, if as a result of such Investment (i) such Person becomes a
Restricted Subsidiary which is a Guarantor or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary which is a Guarantor; and

(d) an Investment that is made by the Company or a Restricted
Subsidiary in the form of any stock, bonds, notes, debentures, partnership
or joint venture interests or other securities that are issued by a third
party to the Company or such Restricted Subsidiary solely as partial
consideration for the consummation of an Asset Sale that is otherwise
permitted under the covenant described under "Limitation on Certain Asset
Sales."

"Permitted Liens" means (i) Liens existing on the Issue Date, (ii) Liens on
property or assets of, or any shares of stock of or secured debt of, any
corporation existing at the time such corporation becomes a Restricted
Subsidiary or at the time such corporation is merged into the Company or any of
the Restricted Subsidiaries; provided that such Liens are not incurred in
connection with, or in contemplation of, such corporation becoming a Restricted
Subsidiary or merging into the Company or any of the Restricted Subsidiaries,
(iii) Liens securing Refinancing Indebtedness; provided that any such Lien does
not extend to or cover any Property, shares or debt other than the Property,
shares or debt securing the Indebtedness so refunded, refinanced or extended,
(iv) Liens in favor of the Company or any of the Restricted Subsidiaries,

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(v) Liens to secure Purchase Money Indebtedness that is otherwise permitted
under the Indenture; provided that any such Lien is created solely for the
purpose of securing such Purchase Money Indebtedness and does not extend to or
cover any property other than such item of property and any improvements on such
item, (vi) statutory liens or landlords', carriers', warehouseman's, mechanics',
suppliers', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which do not secure any Indebtedness and with
respect to amounts not yet delinquent or being contested in good faith by
appropriate proceedings, if a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor, (vii)
Liens for taxes, assessments or governmental charges that are being contested in
good faith by appropriate proceedings, (viii) Liens securing Capitalized Lease
Obligations permitted to be incurred under clause (v) of the definition of
"Permitted Indebtedness," provided that any such Lien does not extend to any
property other than that subject to the underlying lease, (ix) Liens securing
Senior Indebtedness and Guarantor Senior Indebtedness, (x) Permitted Dividend
Encumbrances and (xi) Liens securing Indebtedness in an aggregate principal
amount not to exceed $1,000,000 outstanding at any time.

"Permitted Unrestricted Subsidiary Obligations" shall have the meaning
specified in the definition of "Unrestricted Subsidiary."

"Person" or "person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).

"Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.

"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries
(Restricted Subsidiaries in the case of the Company) under GAAP.

"Public Equity Offerings" means a public offering by the Company of shares
of its common stock (however designated and whether voting or non-voting but
excluding Disqualified Capital Stock) and any and all rights, warrants or
options to acquire such common stock pursuant to a registration statement
registered pursuant to the Securities Act.

"Purchase Money Indebtedness" means any Indebtedness incurred by a Person
to finance the cost (including the cost of construction or improvement and in
the case of any Capitalized Lease Obligation, the lease) of any real or personal
property, the principal amount of which Indebtedness does not exceed the sum of
(i) 100% of such cost and (ii) reasonable fees and expenses of such Person
incurred in connection therewith.

"Refinancing Indebtedness" means Indebtedness that refunds, refinances or
extends any Indebtedness of the Company or the Restricted Subsidiaries
outstanding on the Issue Date or other Indebtedness permitted to be incurred by
the Company or the Restricted Subsidiaries pursuant to the terms of the
Indenture (other than pursuant to clauses (i), (iv), (v), (vi) and (vii) of the
definition of Permitted Indebtedness), but only to the extent that (i) the
Refinancing Indebtedness is subordinated to the Notes to at least the same
extent as the Indebtedness being refunded, refinanced or extended, (ii) the
Refinancing Indebtedness is scheduled to mature either (a) no earlier than the
Indebtedness being refunded, refinanced or extended, or (b) after the maturity
date of the Notes, (iii) the portion, if any, of the Refinancing Indebtedness
that is scheduled to mature on or prior to the maturity date of the Notes has a
weighted average life to maturity at the time such Refinancing Indebtedness is
incurred that is equal to or greater than the weighted average life to maturity
of the portion of the Indebtedness being refunded, refinanced or extended that
is scheduled to mature on or prior to the maturity date of the Notes, (iv) such
Refinancing Indebtedness is in an aggregate principal amount that is equal to or
less than the sum of (a) the aggregate principal amount then outstanding under
the Indebtedness being refunded, refinanced or extended, (b) the amount of any
premium required to be paid in connection with such refunding, refinancing or
extension pursuant to the terms of such Indebtedness or the amount of any
premium reasonably determined by the Board of Directors of the Company as
necessary to

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accomplish such refunding, refinancing or extension by means of a tender offer
or privately negotiated purchase and (c) the amount of customary fees, expenses
and costs related to the incurrence of such Refinancing Indebtedness, and (v)
such Refinancing Indebtedness is incurred by the same Person that initially
incurred the Indebtedness being refunded, refinanced or extended, except that
the Company may incur Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any Wholly-Owned Restricted Subsidiary.

"Related Business" means the business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the Issue Date and any and
all businesses that in the good faith judgment of the Board of Directors of the
Company are materially related businesses.

"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution or payment on Capital Stock of
the Company or any Restricted Subsidiary of the Company or any payment made to
the direct or indirect holders (in their capacities as such) of Capital Stock of
the Company or any Restricted Subsidiary (other than (x) dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock) or
in options, warrants or other rights to purchase Capital Stock (other than
Disqualified Stock), and (y) in the case of Restricted Subsidiaries of the
Company, dividends or distributions payable to the Company or to a Wholly-Owned
Restricted Subsidiary), (ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any of the
Restricted Subsidiaries (other than Capital Stock owned by the Company or a
Wholly-Owned Restricted Subsidiary), (iii) the making of any principal payment
on, or the purchase, defeasance, repurchase, redemption or other acquisition or
retirement for value, prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, of any Indebtedness which is subordinated or
pari passu in right of payment to the Notes, (iv) the making of any Investment
or guarantee of any Investment in any Person other than a Permitted Investment,
(v) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary to
the extent set forth in the definition of Unrestricted Subsidiary and (vi)
forgiveness of any Indebtedness of an Affiliate of the Company (other than a
Wholly-Owned Restricted Subsidiary) to the Company or a Restricted Subsidiary.
For purposes of determining the amount expended for Restricted Payments, cash
distributed or invested shall be valued at the face amount thereof and property
other than cash shall be valued at its fair market value.

"Restricted Subsidiary" means a Subsidiary of the Company other than an
Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Issue Date. The board of directors of the Company may
designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary of the Company as a Restricted Subsidiary if immediately after giving
effect to such action (and treating any Acquired Indebtedness as having been
incurred at the time of such action), the Company could have incurred at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to
the "Limitation on Additional Indebtedness" covenant and no Default or Event of
Default shall have occurred and be continuing.

"SBA Indebtedness" means Indebtedness incurred pursuant to the United
States Small Business Administration Disaster Relief Loan program or any similar
loan program, provided that such Indebtedness shall at all times be prepayable
without penalty at the option of the obligor.

"Senior Credit Facility" means the Credit Agreement dated as of
, 1996 among the Company, the Guarantors, the several lenders from time to
time parties thereto and The Chase Manhattan Bank, as agent, together with the
documents related thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including adding
Subsidiaries of the Company as additional guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of lenders
and whether or not increasing the amount of Indebtedness that may be incurred
thereunder.

"Senior Indebtedness" means the principal of and premium, if any, and
interest (including, without limitation, interest accruing or that would have
accrued but for the filing of a bankruptcy, reorganization or

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other insolvency proceeding whether or not such interest constitutes an
allowable claim in such proceeding) on, and any and all other fees, charges,
expense reimbursement obligations and other amounts due pursuant to the terms of
all agreements, documents and instruments providing for, creating, securing or
evidencing or otherwise entered into in connection with (a) all obligations owed
to lenders under the Senior Credit Facility, (b) all obligations with respect to
any Interest Rate Agreement, (c) all obligations to reimburse any bank or other
person in respect of amounts paid under letters of credit, acceptances or other
similar instruments, (d) all other current or future Indebtedness which does not
provide that it is to rank pari passu with or subordinate to the Notes and the
Guarantees and (e) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any of the Senior Indebtedness
described above. Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness will not include (i) Indebtedness of the Company to any of
its Subsidiaries or Indebtedness of any Subsidiary of the Company to the Company
or any other Subsidiary of the Company, (ii) Indebtedness represented by the
Notes and the Guarantees, (iii) any Indebtedness which by the express terms of
the agreement or instrument creating, evidencing or governing the same is junior
or subordinate in right of payment to any item of Senior Indebtedness, (iv) to
the extent it constitutes Indebtedness, any trade payable arising from the
purchase of goods or materials or for services obtained in the ordinary course
of business, (v) Indebtedness represented by Disqualified Capital Stock or (vi)
that portion of any Indebtedness which is incurred in violation of the
Indenture, provided, however, that in the case of any Indebtedness (regardless
of whether or not such Indebtedness is incurred pursuant to the first or second
paragraph of "Limitation on Additional Indebtedness and Preferred Stock of
Restricted Subsidiaries"), such Indebtedness shall not be deemed to have been
incurred in violation of the Indenture if the holder(s) of such Indebtedness or
their agent or representative shall have received a representation from the
Company to the effect that the incurrence of such Indebtedness does not violate
the provisions of the Indenture (but nothing in this clause (vi) shall preclude
the existence of any Default or Events of Default in the event that such
Indebtedness is in fact incurred in violation of the Indenture).

"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and when used with respect to any other Indebtedness, means the
date specified in the instrument governing such Indebtedness as the fixed date
on which the principal of such Indebtedness, or any installment of interest
thereon, is due and payable.

"Subsidiary" of any specified Person means any corporation, partnership,
joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which more
than 50% of the total voting power of the Capital Stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
officers or trustees thereof is held, directly or indirectly by such Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such Person or any
of its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with such Person for financial
statement purposes.

"Temporary Cash Investments" or "cash equivalents" mean (i) Investments in
marketable, direct obligations issued or guaranteed by the United States of
America, or of any governmental agency or political subdivision thereof,
maturing within 365 days of the date of purchase; (ii) Investments in
certificates of deposit issued by a bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, in each case
having capital, surplus and undivided profits totaling more than $500,000,000
and rated at least A by Standard & Poor's Corporation and A-2 by Moody's
Investors Service, Inc., maturing within 365 days of purchase; or (iii)
Investments not exceeding 365 days in duration in money market funds that invest
substantially all of such funds' assets in the Investments described in the
preceding clauses (i) and (ii).

"Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted
Subsidiary and (b) any Subsidiary of the Company which is classified after the
Issue Date as an Unrestricted Subsidiary by a resolution adopted by the board of
directors of the Company, but only so long as (i) no portion of the Indebtedness
or any other obligation (contingent or otherwise) of such Unrestricted
Subsidiary (other than obligations in respect of performance and surety bonds
and in respect of reimbursement obligations for

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undrawn letters of credit supporting insurance arrangement and performance and
surety bonds, each incurred in the ordinary course of business and not as part
of a financing transaction (collectively, "Permitted Unrestricted Subsidiary
Obligations")) (A) is guaranteed by the Company or any Restricted Subsidiary,
(B) is recourse to or obligates the Company or any Restricted Subsidiary of the
Company, directly or indirectly, contingently or otherwise, to satisfaction
thereof, (ii) such Unrestricted Subsidiary has no Indebtedness or any other
obligation that, if in default in any respect (including a payment default),
would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or its Restricted Subsidiaries to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity and (iii) no Default or Event of Default
shall have occurred and be continuing. Any designation of a Subsidiary as an
Unrestricted Subsidiary shall be deemed a Restricted Payment in an amount equal
to the fair market value of such Subsidiary (as determined in good faith by the
board of directors of the Company) and any such designation shall be permitted
only if it complies with the provisions of "Limitation on Restricted Payments".
The Trustee shall be given prompt notice by the Company of each resolution
adopted by the board of directors of the Company under this provision, together
with a copy of each such resolution adopted.

"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof to vote
under ordinary circumstances in the election of members of the board of
directors or other governing body of such Person.

"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary, all
of the outstanding Voting Stock (other than directors' qualifying shares) of
which are owned, directly or indirectly, by the Company.

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 50,000,000 shares of
Class A Common Stock, $0.001 par value per share, 25,000,000 shares of Class B
Common Stock, $0.001 par value per share, 10,000 shares of Class A Preferred
Stock, $638 par value per share, and 1,000,000 additional shares of Preferred
Stock, the terms and provisions of which may be designated by the Board of
Directors in the future. The following summary of the Company's capital stock is
qualified in its entirety by reference to the Company's Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation") and By-Laws
(the "By-Laws"), each of which is incorporated by reference into the
registration statement of which this Prospectus is a part.

COMMON STOCK

Following the Common Stock Offering, 17,526,615 shares of Class A Common
Stock will be issued and outstanding and 13,467,965 shares of Class B Common
Stock will be issued and outstanding. See "Capitalization."

Except for voting rights, the rights of the holders of the Class A Common
Stock and the Class B Common Stock are substantially identical. The holders of
the Class A Common Stock and the holders of the Class B Common Stock vote
together as a single class (except as may otherwise be required by Delaware
law), with the holders of the Class A Common Stock entitled to one vote per
share and the holders of Class B Common Stock entitled to ten votes per share,
on all matters on which the holders of Common Stock are entitled to vote. Each
share of Class B Common Stock is convertible at the option of its holder into
one share of Class A Common Stock at any time. In addition, each share of Class
B Common Stock converts automatically into one share of Class A Common Stock
upon the sale or other transfer of such share of Class B Common Stock to a
person who, or entity which, is not a Permitted Transferee. Permitted
Transferees include (i) Kevin P. Reilly, Sr.; (ii) a descendant of Kevin P.
Reilly, Sr.; (iii) a spouse or surviving spouse (even if remarried) of any
individual named or described in (i) or (ii) above; (iv) any estate, trust,
guardianship, custodianship, curatorship or other fiduciary arrangement for the
primary benefit of any one or more of the individuals named or described in (i),
(ii) and (iii) above; and (v) any corporation, partnership, limited liability
company or other business organization controlled by and substantially all of
the interests in which are owned, directly or indirectly, by any one or more of
the individuals and entities named or described in (i), (ii), (iii) and (iv)
above.

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All of the outstanding shares of Common Stock are, and all of the shares of
Class A Common Stock sold in the Common Stock Offering will be, when issued and
paid for, fully paid and nonassessable. In the event of the liquidation or
dissolution of the Company, following any required distribution to the holders
of outstanding shares of Preferred Stock, the holders of Common Stock are
entitled to share pro rata in any balance of the corporate assets available for
distribution to them. The Company may pay dividends if, when and as declared by
the Board of Directors from funds legally available therefor, subject to the
restrictions set forth in the Company's existing and future debt instruments.
Subject to the preferential rights of the holders of any class of preferred
stock, holders of shares of Common Stock are entitled to receive such dividends
as may be declared by the Company's Board of Directors out of funds legally
available for such purpose. No dividend may be declared or paid in cash or
property on any share of either class of Common Stock unless simultaneously the
same dividend is declared or paid on each share of the other class of Common
Stock, provided that, in the event of stock dividends, holders of a specific
class of Common Stock shall be entitled to receive only additional shares of
such class.

Under Delaware law, the affirmative vote of the holders of a majority of
the outstanding shares of any class of common stock is required to approve any
amendment to the Certificate of Incorporation that would increase or decrease
the par value of such class, or modify or change the powers, preferences or
special rights of the shares of any class so as to affect such class adversely.
The Certificate of Incorporation provides that no such separate class vote shall
be available for increases or decreases in the number of authorized shares of
Class A Common Stock.

The Common Stock is redeemable in the manner and on the conditions
permitted under Delaware law and as may be authorized by the Board of Directors.
Holders of Common Stock have no preemptive rights.

CLASS A PREFERRED STOCK

All outstanding shares of the Company's Class A Preferred Stock are fully
paid and nonassessable. For information regarding ownership of the issued and
outstanding shares of Class A Preferred Stock, see "Principal Stockholders."

Rank. The Class A Preferred Stock, with respect to dividends and upon
liquidation, ranks senior to Class A and Class B Common Stock.

Dividends. Holders of shares of Class A Preferred Stock are entitled to
receive, when and if declared by the Board of Directors out of funds legally
available therefor, cash dividends at a rate of $15.95 per share per quarter.
Dividends accrue and are cumulative from the date of the issuance of shares. As
of the date of this Prospectus, all accrued dividends have been paid. The
Company intends to continue paying dividends on the Class A Preferred Stock.

Dissolution or Liquidation. In the case of voluntary or involuntary
dissolution or liquidation of the Company, subject to the rights of holders of
any additional Preferred Stock issued in the future, the holders of the Class A
Preferred Stock are entitled to receive out of the assets of the Company the sum
of the par value of the Class A Preferred Stock ($638 per share) and any accrued
and unpaid dividends thereon before any payment may be made or any assets
distributed to the holders of Common Stock. Upon any distribution or
liquidation, whether voluntary or involuntary, if the assets distributed among
the holders of the Class A Preferred Stock are insufficient to permit the
payment to a stockholder of the full preferential amounts, subject to the rights
of holders of any additional Preferred Stock issued in the future, the entire
assets of the Company to be distributed will be distributed ratably among the
holders of the Class A Preferred Stock and, after payment of such preferential
amounts and any preferential amounts due holders of additional Preferred Stock,
if any, the holders of Common Stock will be entitled to receive ratably all the
remaining assets. A merger or consolidation of the Company with or into any
other corporation or corporations, will not, however, be deemed to be a
dissolution or liquidation.

Voting Rights. Holders of Class A Preferred Stock have no voting rights
with respect to general corporate matters except as provided by law. Under
Delaware law, holders of the Class A Preferred Stock are entitled to vote as a
class upon any proposed amendment, whether or not entitled to vote thereon by
the Certificate of Incorporation, if such amendment would increase or decrease
the par value of the shares of such class, or alter or change the powers,
preferences, or special rights of the shares of such class so as to affect them
adversely.

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<PAGE> 86

ADDITIONAL PREFERRED STOCK

Additional Preferred Stock may be issued from time to time by the Board of
Directors as shares of one or more classes or series. Subject to the provisions
of the Company's Certificate of Incorporation, including those regarding the
rights of the holders of Class A Preferred Stock, and limitations prescribed by
law, the Board of Directors is expressly authorized to adopt resolutions to
issue the shares, to fix the number of shares and to change the number of shares
constituting any series, and to provide for or change the voting powers,
designations, preferences, and relative participating, optional or other special
rights, qualifications, limitations or restrictions thereof, including dividend
rights, sinking fund provisions, redemption prices conversion rights and
liquidation preferences of the shares constituting any class or series of this
additional Preferred Stock, in each case without any further action or vote by
the stockholders. The Company has no current plans to issue any shares of
additional Preferred Stock of any class or series.

One of the effects of undesignated additional Preferred Stock may be to
enable the Board of Directors to render more difficult or to discourage an
attempt to obtain control of the Company by means of a tender offer, proxy
contest, merger or otherwise, and thereby to protect the continuity of the
Company's management. The issuance of shares of additional Preferred Stock
pursuant to the Board of Directors' authority described above may adversely
affect the rights of the holders of Common Stock. For example, additional
Preferred Stock issued by the Company may rank prior to the Common Stock as to
dividend rights, liquidation preference or both, may have full or limited voting
rights and may be convertible into shares of Common Stock.

DESCRIPTION OF OTHER INDEBTEDNESS

The following is a description of the principal agreements governing the
indebtedness of the Company and the terms of the principal agreements that would
be entered into in connection with the Transactions. The following summaries are
qualified in their entirety by reference to the credit and security agreements
and indenture to which each summary relates, copies of which are exhibits to the
Registration Statement of which this Prospectus is a part. Defined terms used
below and not defined herein have meanings set forth in the respective
agreements.

EXISTING CREDIT AGREEMENT

The Company expects to replace the Existing Credit Agreement with the New
Credit Agreement. If the New Credit Agreement is not executed, the Existing
Credit Agreement will remain in effect.

Primary Facility and New Logo Facility. The Company presently has two
syndicated bank credit facilities under the Existing Credit Agreement, both of
which are agented by The Chase Manhattan Bank: (i) a revolving credit and term
loan facility (the "Primary Facility") providing for term loans in the principal
amount outstanding as of the date hereof of $0 and a reducing revolving credit
facility with a maximum borrowing availability of $20 million and (ii) a
revolving credit facility (the "New Logo Facility") with a maximum borrowing
availability of $15 million. The Company anticipates entering into an amendment
(the "Proposed Amendment") to the Primary Facility for the purpose of increasing
the revolving credit availability from $20 million to $50 million to finance the
FKM acquisition. The proceeds of the Primary Facility may be used for general
corporate purposes, including working capital requirements of the Company and
its subsidiaries in the outdoor advertising and logo sign business created prior
to October 31, 1995. The proceeds of the New Logo Facility may be used for
start-up and construction costs in connection with the logo sign business of
subsidiaries created after October 31, 1995 (the "New Logo Subsidiaries"). The
Primary Facility and New Logo Facility are collectively referred to hereinafter
as the "Existing Credit Facilities."

Interest. Borrowings under the Existing Credit Facilities bear interest
computed as a margin over either Chase's "Base Rate" or the London Interbank
Offered Rate (the "LIBOR Rate"). The margins range from 0 to 75 basis points and
from 125 (100, upon execution of the Proposed Amendment) to 200 basis points
over the Base Rate and LIBOR Rate, respectively, depending on the Company's
current leverage ratio, as such ratio is defined under the subheading
"Covenants."

85
<PAGE> 87

Reductions in Commitments; Amortization. The Primary Facility and the New
Logo Facility, both of which mature October 31, 2001 (the Proposed Amendment
would shorten the maturity of the Primary Facility to April 30, 1997), provide
for reductions in revolving credit commitments and amortization of term loans as
follows:

<TABLE>
<CAPTION>
NEW LOGO FACILITY
REVOLVING CREDIT TERM LOAN REVOLVING CREDIT
FISCAL YEAR REDUCTION AMORTIZATION(1) REDUCTION(1)
----------- ---------------- --------------- -----------------
<S> <C> <C> <C>
1996 (after 4/30/96).................... -- $ 1,000,000 --
1997.................................... -- $ 4,000,000 $ 2,000,000
1998.................................... $ 8,000,000 $ 3,000,000
1999.................................... $ 3,000,000 $11,000,000 $ 4,000,000
2000.................................... $ 5,000,000 $12,000,000 $ 6,000,000
2001.................................... $ 12,000,000 $ 2,250,000 --
</TABLE>

- ---------------

(1) The Proposed Amendment would eliminate revolving credit commitment
reductions for the Primary Facility. The term loan amortizes quarterly, and
the New Logo Facility revolving credit commitment is reduced quarterly.

Guarantees; Security. The obligations of the Company under the Primary
Facility are guaranteed by all of the Company's Restricted Subsidiaries with the
exception of Missouri Logos, a partnership, and, subject to the approval of the
Primary Facility Banks, any joint ventures that may be formed hereafter between
Restricted Logo Subsidiaries and entities not affiliated or related to the
Company or any Restricted Subsidiary. The obligations under the Primary Facility
and the guarantees in respect thereto are secured, on an equal and ratable basis
with the subsidiary guarantees and Company obligations in respect of the
Existing Notes, by a pledge of the capital stock of all of the Company's
Restricted Subsidiaries with the exception of the New Logo Subsidiaries.

The obligations of the Company under the New Logo Facility are guaranteed
by the New Logo Subsidiaries. Such obligations and guarantees are secured by a
pledge of the capital stock, and security interest in the assets, of the New
Logo Subsidiaries.

Covenants. The Existing Credit Agreement places certain restrictions upon
the ability of the Company and its Restricted Subsidiaries that are parties
thereto, among other things, to (i) incur indebtedness, (ii) incur liens or
guarantee obligations, (iii) declare dividends and make other distributions,
(iv) make investments and enter into joint ventures, (v) make capital
expenditures, (vi) dispose of assets and (vii) engage in transactions with
affiliates except on an arms-length basis. In addition, the Existing Credit
Agreement requires the Company and its Restricted Subsidiaries which are parties
thereto to maintain (a) a minimum leverage ratio, defined as Total Debt to
Operating Cash Flow, of between 4.5 to 1 and 3.0 to 1 under the Primary Facility
and from 6.0 to 1 and 4.0 to 1 under the New Logo Facility; (b) an interest
coverage ratio, defined as pro forma Operating Cash Flow for the period of 12
months most recently ended to total accrued cash interest expense for such
period, of at least 2.0 to 1; and (c) a fixed charge coverage ratio, defined as
pro forma Operating Cash Flow for the period of 12 months most recently ended to
total projected payments of principal and interest on debt to be made in the
succeeding four fiscal quarters plus (i) capital expenditures (excluding logo
contract expenditures) and (ii) income and franchise tax payments and stock
dividends and redemptions during such period, of at least 1.1 to 1.

Change of Control. A change of control of the Company constitutes an event
of default, permitting the banks under the Existing Credit Agreement to
accelerate the indebtedness and terminate the Existing Credit Facilities. Such a
change in control would occur if Kevin P. Reilly, Sr. and his immediate family
(including grandchildren) and certain entities under their control cease to own
at least 20% of the total amount of voting stock of the Company.

NEW CREDIT AGREEMENT

The Company expects to enter into the New Credit Agreement with a syndicate
of financial institutions and the agent under the Existing Credit Agreement
providing the Company with a committed reducing revolving credit facility in the
amount of $225 million and a $75 million incremental facility funded at the

86
<PAGE> 88

discretion of the lenders. The New Credit Agreement would replace the Existing
Credit Agreement and substantially increase the Company's borrowing
availability. There can be no assurance, however, that the New Credit Agreement
will be entered into.

The New Credit Agreement is expected to bear interest computed as a margin
over "Base Rate" or the LIBOR Rate, with the loan commitment reducing over a
period from 1999 to 2003. The obligations of the Company under the New Credit
Facility are expected to be guaranteed by its subsidiaries and secured by a
pledge of the capital stock of the Company's subsidiaries in a manner similar to
the Existing Credit Agreement. The New Credit Agreement will also have
restrictive covenants covering similar matters as the Existing Credit Agreement
and a change of control event of default comparable to that under the Existing
Credit Agreement.

EXISTING NOTES

On October 17, 1996, the Company commenced a cash tender offer for all of
the Existing Notes and a solicitation of consents to (i) eliminate substantially
all of the restrictive covenants described below (other than a less restrictive
covenant with respect to the incurrence of indebtedness) and the change of
control repurchase option described below, (ii) release the security for the
Existing Notes and (iii) release the Subsidiary Guarantors from their
obligations as guarantors of the Existing Notes. See "The Transactions -- The
Tender Offer." Consummation of the Tender Offer is subject to the valid tender
of a majority in principal amount of the outstanding Existing Notes. Any
Existing Notes not validly tendered and accepted for payment pursuant to the
Tender Offer will remain outstanding. The terms and conditions of the Existing
Notes are set forth below.

General. On May 15, 1993, the Company issued the $100 million aggregate
principal amount of 11% Senior Secured Notes due May 15, 2003 pursuant to an
indenture between the Company, as issuer, its Restricted Subsidiaries, as
"Subsidiary Guarantors," and State Street Bank and Trust Company, as Trustee.
The Existing Notes are senior secured obligations of the Company and Restricted
Subsidiaries ranking pari passu with all present and future indebtedness of the
Company and the Subsidiary Guarantors that by its terms is not subordinated to
the obligations represented by the Existing Notes. Upon consummation of the
Tender Offer the Subsidiary Guarantors will be released from their obligations
as guarantors.

Interest. The Existing Notes bear interest at 11% per annum. Interest is
payable semi-annually on each May 15 and November 15.

Security. The Existing Notes and the Guarantees in respect thereof are
secured, on an equal and ratable basis with the Company obligations and
subsidiary guarantees in respect of the Primary Facility, by a pledge of the
capital stock of all the Company's Restricted Subsidiaries with the exception of
the New Logo Subsidiaries. Upon consummation of the Tender Offer all of the
foregoing security will be released and any remaining Existing Notes not validly
tendered and accepted for payment in the Tender Offer will be unsecured
obligations of the Company.

Redemption. The securities may be redeemed at the election of the Company,
as a whole or from time-to-time in part, at any time after May 15, 1998 at
redemption prices declining from 105.5% of the principal amount for the twelve
months after May 15, 1998 to 102.75% of such amount for the twelve months after
May 15, 1999, and thereafter at a redemption price equal to 100.0% of such
principal amount, plus in each case accrued in unpaid interest to the applicable
redemption date.

Covenants. The Existing Note Indenture places certain restrictions on the
ability of the Company and its Restricted Subsidiaries to (i) incur liens or
guaranty obligations, (ii) make restricted payments (dividends, redemptions and
certain other payments), (iii) engage in transactions with affiliates except on
an arms-length basis, (iv) dispose of assets and (v) enter into mergers,
consolidations or acquisitions. Upon consummation of the Tender Offer the
foregoing covenants will be eliminated and the existing indebtedness covenant
will be replaced with a covenant that would restrict the Company from incurring
any indebtedness unless the ratio of the Company's consolidated indebtedness to
consolidated operating cash flow would be less than 7.5 to 1.

Change of Control. Upon a Change of Control (as defined in the Existing
Note Indenture), each holder of an Existing Note may require the Company to
repurchase all or portions of such holder's Existing Notes at

87
<PAGE> 89

a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase. A "Change of
Control" occurs if (a) any person or group, other than stockholders of the
Company as of May 15, 1993 and related and affiliated persons ("Permitted
Holder") beneficially owns at least 30% of the aggregate voting power of all
classes of voting stock of the Company or (b) any person or group other than
Permitted Holders succeed in electing a majority of the Board of Directors of
the Company. Upon consummation of the Tender Offer the foregoing Change of
Control provision will be eliminated.

SUBORDINATED NOTES

After the completion of the Offering, the Company will have outstanding
three classes of subordinated notes: (i) $2.5 million aggregate principal amount
of 8% Series A Unsecured Subordinated Discount Debentures due 2001; (ii) $0.4
million aggregate principal amount of 10% to 12% Series A Unsecured Subordinated
Debentures due 1996 and 1997; and (iii) $20.0 million aggregate principal amount
of ten-year subordinated notes. The Series A debentures referred to in clauses
(i) and (ii) of the preceding sentence were issued in consideration of stock
redemptions occurring in 1993 and 1994. The ten-year subordinated notes referred
to in clause (iii) were issued as a portion of the consideration paid on account
of stock redemptions occurring in October 1995 and March 1996, bear interest at
an annual rate of 8% and amortize monthly until their maturity in 2006. See
"Certain Transactions."

88
<PAGE> 90

UNDERWRITING

Upon the terms and subject to the conditions stated in an underwriting
agreement dated , 1996 (the "Underwriting Agreement"), each of the
underwriters named below (the "Underwriters") has agreed to purchase, and the
Company has agreed to sell to each such Underwriter, the principal amount of
Notes set forth opposite the name of such Underwriter below.

<TABLE>
<CAPTION>
NAME PRINCIPAL AMOUNT
---- ----------------
<S> <C>
Smith Barney Inc. ...................................................
Chase Securities Inc. ...............................................
CIBC Wood Gundy Securities Corp. ....................................
------------
Total...................................................... $225,000,000
============
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Notes are subject to approval
of certain legal matters by counsel and to certain other conditions. The
Underwriters are obligated to take and pay for all of the Notes offered hereby
if any are taken.

The Underwriters have advised the Company that they propose to offer part
of the Notes directly to the public at the public offering price set forth on
the cover page of this Prospectus and part to certain dealers at a price that
represents a concession not in excess of % of the public offering price of
the Notes. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of % of the public offering price of the Notes to
certain other dealers. After this Offering, the public offering price and such
concessions may be changed from time to time by the Underwriters.

The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend to
make a market in the Notes, as permitted by applicable laws and regulations;
however, the Underwriters are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for the Notes. See "Risk Factors -- Absence of Public
Market for the Notes."

To the extent the Company borrows amounts under the New Credit Agreement to
finance the repurchase of Existing Notes or a portion of the aggregate purchase
price of the Pending Acquisitions, the Company intends to repay such amounts
outstanding under the New Credit Agreement with the proceeds of this Offering.
See "Use of Proceeds." The Chase Manhattan Bank, an affiliate of Chase
Securities Inc., one of the Underwriters in connection with this Offering, is a
lender under the New Credit Agreement. To the extent that more than 10% of the
net proceeds of this Offering is used to repay amounts owing to The Chase
Manhattan Bank under the New Credit Agreement, this Offering will be conducted
in accordance with the applicable provisions of Rule 2720 to the Conduct Rules
of the National Association of Securities Dealers, Inc. ("Rule 2720"). In this
regard, Rule 2720 would require that the interest rate of the Notes not be lower
than that recommended by a "qualified independent underwriter" meeting certain
standards. Accordingly, Smith Barney Inc. would assume the responsibilities of
acting as the qualified independent underwriter in pricing this Offering and
conducting due diligence.

The Company and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act of
1933.

Smith Barney Inc. is acting as underwriter in connection with the Common
Stock Offering and is the dealer manager for the Tender Offer.

CERTAIN LEGAL MATTERS

Certain legal matters with respect to the legality of the Notes offered
hereby will be passed upon for the Company by Palmer & Dodge LLP, Boston,
Massachusetts. Certain legal matters relating to the Offering will be passed
upon for the Underwriters by Chadbourne & Parke LLP, New York, New York.

89
<PAGE> 91

EXPERTS

The consolidated financial statements of Lamar Advertising Company and
Subsidiaries as of October 31, 1994 and 1995, and for each of the years in the
three-year period ended October 31, 1995, included in this Prospectus and
Registration Statement have been included herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein, and upon the authority
of such firm as experts in accounting and auditing.

The consolidated financial statements of Outdoor East, L.P. as of December
31, 1994 and 1995 and for each of the years in the three-year period ended
December 31, 1995 have been included herein and in the Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

The financial statements of FKM Advertising Co., Inc., as of December 31,
1994 and 1995 and for the years then ended, have been included herein and in the
registration statement in reliance upon the report of McGrail, Merkel, Quinn and
Associates, independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company files reports and other information with the Commission
pursuant to the informational requirements of the Exchange Act.

The Company has filed with the Commission a Registration Statement (which
term shall include all amendments thereto) on Form S-3 under the Securities Act
with respect to the Notes offered hereby. This Prospectus, which constitutes a
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement and reference is made to the Registration
Statement and the exhibits thereto for further information with respect to the
Company and the Notes. Such reports, the Registration Statement and the exhibits
thereto may be inspected, without charge, at the offices of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 and at its regional offices at
Seven World Trade Center, New York, New York 10048, and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such materials may be obtained
from the public reference section of the Commission at its Washington address
upon payment of the prescribed fee. Such reports and other information can also
be reviewed through the Commission's Web site (http://www.sec.gov).

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company hereby incorporates in this Prospectus by reference the
following documents heretofore filed with the Commission pursuant to the
Exchange Act: (i) the Company's Annual Report on Form 10-K for the year ended
October 31, 1995, as amended by Amendments No. 1 and 2 thereto on Form 10-K/A,
filed with the Commission on January 26, 1996, March 28, 1996 and August 1,
1996, respectively; (ii) the Company's Quarterly Report on Form 10-Q for the
quarter ended January 31, 1996, as amended by Amendment No. 1 thereto on Form
10-Q/A, filed with the Commission on March 15, 1996 and May 20, 1996,
respectively; (iii) the Company's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1996, filed with the Commission on June 13, 1996; (iv) the
Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 1996,
filed with the Commission on September 12, 1996; and (v) the description of the
Class A Common Stock contained in the Company's Registration Statement on Form
8-A, filed with the Commission on June 7, 1996, as amended by Form 8-A/A, filed
with Commission on July 31, 1996.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
termination of this Offering made hereby shall be deemed to be incorporated in
this Prospectus by reference and to be a part hereof from the respective dates
of the filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus

90
<PAGE> 92

to the extent that a statement contained herein or in any subsequently filed
document which also is, or is deemed to be, incorporated by reference herein,
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.

The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any and all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents which are not specifically incorporated by
reference into such documents. Requests for such copies should be directed to
the executive offices of the Company, 5551 Corporate Boulevard, Baton Rouge,
Louisiana 70808, Attention: Investor Relations, telephone (504) 926-1000.

91
<PAGE> 93

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

Independent Auditors' Report.......................................................... F-2

Consolidated Balance Sheets as of October 31, 1994 and 1995, and July 31, 1996 pro
forma and actual (unaudited)........................................................ F-3

Consolidated Statements of Earnings (Loss) for the years ended October 31, 1993, 1994
and 1995, and the nine months ended July 31, 1995 and 1996 (unaudited).............. F-4

Consolidated Statements of Stockholders' Deficit for the years ended October 31, 1993,
1994 and 1995 and the nine months ended July 31, 1996 (unaudited)................... F-5

Consolidated Statements of Cash Flows for the years ended October 31, 1993, 1994 and
1995 and the nine months ended July 31, 1995 and 1996 (unaudited)................... F-6

Notes to Consolidated Financial Statements............................................ F-7

FKM ADVERTISING INC.

Independent Auditor's Report.......................................................... F-19

Balance Sheets as of December 31, 1994 and 1995, and September 30, 1996 (unaudited)... F-20

Statements of Operations for the years ended December 31, 1994 and 1995, and the nine
months ended September 30, 1995 and 1996 (unaudited)................................ F-21

Statements of Changes of Stockholders' Equity for the years ended December 31, 1994
and 1995, and the nine months ended September 30, 1995 and 1996 (unaudited)......... F-22

Statements of Cash Flows for the years ended December 31, 1994 and 1995, and the nine
months ended September 30, 1995 and 1996 (unaudited)................................ F-23

Notes to Financial Statements......................................................... F-24
OUTDOOR EAST, L.P.

Independent Auditors' Report.......................................................... F-33

Balance Sheets as of December 31, 1994 and 1995 and September 30, 1996 (unaudited).... F-34

Statements of Operations for the years ended December 31, 1993, 1994 and 1995 and the
nine months ended September 30, 1995 and 1996 (unaudited)........................... F-35

Statements of Partners' Deficit for the years ended December 31, 1993, 1994 and 1995,
and the nine months ended September 30, 1996 (unaudited)............................ F-36

Statements of Cash Flows for the years ended December 31, 1993, 1994 and 1995 and the
nine months ended September 30, 1996 (unaudited).................................... F-37

Notes to Financial Statements......................................................... F-38
</TABLE>

F-1
<PAGE> 94

INDEPENDENT AUDITORS' REPORT

Board of Directors
Lamar Advertising Company:

We have audited the accompanying consolidated balance sheets of Lamar
Advertising Company and subsidiaries as of October 31, 1994 and 1995, and the
related consolidated statements of earnings (loss), stockholders' deficit and
cash flows for each of the years in the three-year period ended October 31,
1995. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Lamar
Advertising Company and subsidiaries as of October 31, 1994 and 1995, and the
results of their operations and their cash flows for each of the years in the
three-year period ended October 31, 1995, in conformity with generally accepted
accounting principles.

KPMG Peat Marwick LLP

New Orleans, Louisiana
January 12, 1996, except as to notes 12 and 14,
which are as of October 17, 1996

F-2
<PAGE> 95

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
ASSETS

OCTOBER 31 JULY 31, 1996
-------------------- ---------------------
PRO FORMA
1994 1995 ACTUAL (NOTE 14)
-------- -------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents......................... $ 8,016 $ 5,886 $ 1,965 $ 1,965
Receivables (note 3):
Trade accounts, less allowance for doubtful
accounts of $1,046 (unaudited) in 1996 and
$551 in 1995 and 1994......................... 9,963 10,741 14,527 14,527
Affiliates, related parties and employees....... 560 583 531 531
Other........................................... 68 109 433 433
-------- -------- -------- --------
10,591 11,433 15,491 15,491
Prepaid expenses.................................. 1,200 1,247 1,112 1,112
Other current assets.............................. 1,287 1,266 1,793 1,793
-------- -------- -------- --------
Total current assets....................... 21,094 19,832 20,361 20,361
-------- -------- -------- --------
Property, plant and equipment (note 4).............. 159,707 168,402 189,115 189,115
Less accumulated depreciation and amortization.... (70,884) (77,524) (83,930) (83,930)
-------- -------- -------- --------
88,823 90,878 105,185 105,185
-------- -------- -------- --------
Intangible assets (note 5).......................... 14,062 13,406 16,891 16,891
Receivables -- noncurrent (note 3).................. 751 918 751 751
Deferred taxes (note 10)............................ 2,650 5,951 3,680 3,680
Other assets........................................ 2,628 2,900 3,399 3,399
-------- -------- -------- --------
Total assets............................... $130,008 $133,885 $150,267 $150,267
======== ======== ======== ========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Trade accounts payable............................ 1,123 2,435 3,115 3,115
Current maturities of long-term debt (note 9)..... 7,054 3,479 5,326 7,326
Accrued expenses (note 8)......................... 9,647 9,733 5,575 10,575
Deferred income................................... 1,579 2,448 4,866 4,866
-------- -------- -------- --------
Total current liabilities.................. 19,403 18,095 18,882 25,882
Long-term debt (note 9)............................. 146,875 142,572 154,681 172,681
Deferred income..................................... 668 749 779 779
Other liabilities................................... 414 623 1,214 1,214
-------- -------- -------- --------
167,360 162,039 175,556 200,556
-------- -------- -------- --------
Stockholders' equity (deficit) (note 12):
Class A preferred stock, par value $638, $63.80
cumulative, 10,000 shares authorized, 5,719.49
(unaudited) shares issued and outstanding in
1996............................................ $ -- $ -- 3,649 3,649
Class A common stock, par value $.001, 50,000,000
shares authorized, 10,180,483 (unaudited),
15,657,623 and 16,504,263 shares issued and
outstanding in 1996, 1995 and 1994,
respectively.................................... 17 16 10 10
Class B common stock, par value $.001, 25,000,000
shares authorized, 14,301,537 (unaudited),
16,897,379 and 17,271,240 shares issued and
outstanding in 1996, 1995 and 1994,
respectively.................................... 17 17 14 14
Accumulated deficit............................... (37,386) (28,187) (28,962) (53,962)
-------- -------- -------- --------
Stockholders' equity (deficit)............. (37,352) (28,154) (25,289) (50,289)
Commitments and contingencies (notes 7 and 13)
-------- -------- -------- --------
Total liabilities and stockholders'
deficit.................................. $130,008 $133,885 $150,267 $150,267
======== ======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 96

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED OCTOBER 31, JULY 31,
------------------------------------ -----------------
1993 1994 1995 1995 1996
----------- ----------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Outdoor advertising, net.................. $65,365 $83,627 $101,871 $76,295 $87,647
Management fees from related and
affiliated parties..................... 595 334 31 23 45
Rental income............................. 564 512 506 408 473
------- ------- -------- ------- -------
66,524 84,473 102,408 76,726 88,165
------- ------- -------- ------- -------
Operating expenses:
Direct advertising expenses............... 23,830 28,959 34,386 26,564 30,969
General and administrative expenses....... 19,504 24,239 27,057 20,636 22,842
Depreciation and amortization............. 8,924 11,352 14,090 9,954 10,568
------- ------- -------- ------- -------
52,258 64,550 75,533 57,154 64,379
------- ------- -------- ------- -------
Operating income.................. 14,266 19,923 26,875 19,572 23,786
------- ------- -------- ------- -------
Other expense (income):
Interest income........................... (218) (194) (199) (133) (140)
Interest expense.......................... 11,502 13,599 15,783 11,948 11,957
Loss on disposition of assets............. 729 675 2,328 1,004 818
Other expenses............................ 576 616 655 684 254
------- ------- -------- ------- -------
12,589 14,696 18,567 13,503 12,889
------- ------- -------- ------- -------
Earnings before income taxes and
extraordinary item.............. 1,677 5,227 8,308 6,069 10,897
Income tax expense (benefit) -- (note 10)... 476 (2,072) (2,390) (2,480) 4,420
------- ------- -------- ------- -------
Earnings before extraordinary
item............................ 1,201 7,299 10,698 8,549 6,477
------- ------- -------- ------- -------
Extraordinary loss on debt extinguishment,
net of income tax benefit of $98 (note
9)........................................ (1,854) -- -- -- --
------- ------- -------- ------- -------
Net earnings (loss)............... (653) 7,299 10,698 8,549 6,477
Preferred stock dividends................... -- -- -- -- 274
------- ------- -------- ------- -------
Net earnings (loss) applicable to common
stock..................................... $ (653) $ 7,299 $ 10,698 $ 8,549 $ 6,203
======= ======= ======== ======= =======
Earnings per common share before
extraordinary item........................ $ .03 $ .21 $ .32 $ .26 $ .23
======= ======= ======== ======= =======
Net earnings (loss) per common share........ $ (.02) $ .21 $ .32 $ .26 $ .23
======= ======= ======== ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 97

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
CLASS A CLASS A CLASS B ADDITIONAL
PREFERRED COMMON COMMON PAID-IN ACCUMULATED
STOCK STOCK STOCK CAPITAL DEFICIT TOTAL
--------- ------- ------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance, October 31, 1992........................ $ -- $19 $15 $ 403 $ (42,307) $(41,870)
Shares issued.................................. -- 1 2 627 -- 630
Redemption of 1,690,163 shares of common
stock....................................... -- (2) -- (899) -- (901)
Net loss....................................... -- -- -- -- (653) (653)
Dividends ($.01 per share)..................... -- -- -- -- (455) (455)
------ --- --- ------ --------- --------
Balance, October 31, 1993........................ -- 18 17 131 (43,415) (43,249)
Redemption of 1,327,985 shares of common
stock....................................... -- (1) -- (131) (771) (903)
Net earnings................................... -- -- -- -- 7,299 7,299
Dividends ($.01 per share)..................... -- -- -- -- (499) (499)
------ --- --- ------ --------- --------
Balance, October 31, 1994........................ -- 17 17 -- (37,386) (37,352)
Redemption of 1,220,500 shares of common
stock....................................... -- (1) -- -- (999) (1,000)
Net earnings................................... -- -- -- -- 10,698 10,698
Dividends ($.01 per share)..................... -- -- -- -- (500) (500)
------ --- --- ------ --------- --------
Balance, October 31, 1995........................ -- 16 17 -- (28,187) (28,154)
Conversion of 4,454,779 shares of common stock
to 5,719 shares preferred stock
(unaudited)................................. 3,649 (2) (2) -- (3,645) --
Redemption of 3,618,203 shares of common stock,
(unaudited)................................. -- (4) (1) -- (2,958) (2,963)
Net earnings (unaudited)....................... -- -- -- -- 6,477 6,477
Dividends ($.004 per common share at January
1996, $.005 per common share at April 1996,
$15.95 per preferred
share) -- (unaudited)....................... -- -- -- -- (649) (649)
------ --- --- ------ --------- --------
Balance, July 31, 1996, (unaudited).............. $3,649 $10 $14 $ -- $ (28,962) $(25,289)
====== === === ====== ========= ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 98

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
W<CAPTION>
NINE MONTHS ENDED
YEARS ENDED OCTOBER 31, JULY 31,
-------------------------------- --------------------
1993 1994 1995 1995 1996
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss)............................ $ (653) $ 7,299 $ 10,698 $ 8,549 $ 6,477
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation and amortization................ 8,924 11,352 14,090 9,954 10,568
Loss on disposition of assets................ 729 675 2,328 1,004 818
Deferred taxes............................... -- (2,650) (3,301) (3,312) 2,271
Provision for doubtful accounts.............. 471 508 502 330 550
Changes in operating assets and liabilities:
Increase in receivables.................... (1,998) (1,391) (1,344) (2,062) (3,988)
(Increase) decrease in prepaid expenses.... 4 (321) (47) (198) 97
(Increase) decrease in other assets........ 34 (1,640) (418) (965) (282)
Increase (decrease) in trade accounts
payable................................. (502) (69) 1,312 384 680
Increase (decrease) in accrued expenses.... 4,817 1,356 86 (3,475) (4,157)
Increase (decrease) in deferred income..... 596 (113) 950 517 2,448
Increase (decrease) in other liabilities... (11) 208 209 26 113
-------- -------- -------- -------- --------
Net cash provided by operating
activities.............................. 12,411 15,214 25,065 10,752 15,595
-------- -------- -------- -------- --------
Cash flows from investing activities:
Capital expenditures........................... (7,550) (13,357) (14,046) (8,780) (17,653)
Purchase of new markets........................ -- (40,482) (2,885) (2,353) (9,445)
Proceeds from sale of property and equipment... 396 733 717 629 500
Purchase of intangible assets.................. (2,352) (463) (1,603) (545) (1,525)
Investments in and advances to affiliated
companies.................................... (558) -- -- -- --
Increase in notes receivable................... -- -- -- -- (675)
-------- -------- -------- -------- --------
Net cash used in investing activities...... (10,064) (53,569) (17,817) (11,049) (28,798)
-------- -------- -------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of long-term debt....... 105,611 44,515 -- -- 15,500
Principal payments on long-term debt........... (97,453) (5,966) (7,878) (5,376) (2,605)
Redemption of common stock..................... (901) (903) (1,000) -- (2,964)
Dividends...................................... (455) (499) (500) (375) (649)
-------- -------- -------- -------- --------
Net cash provided by (used in) financing
activities.............................. 6,802 37,147 (9,378) (5,751) 9,282
-------- -------- -------- -------- --------
Net increase (decrease) in cash and cash
equivalents............................. 9,149 (1,208) (2,130) (6,048) (3,921)
Cash and cash equivalents at beginning of
year.................................... 75 9,224 8,016 8,016 5,886
-------- -------- -------- -------- --------
Cash and cash equivalents at end of year... $ 9,224 $ 8,016 $ 5,886 $ 1,968 $ 1,965
======== ======== ======== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid for interest......................... $ 6,994 $ 13,461 $ 15,825 $ 14,728 $ 14,744
======== ======== ======== ======== ========
Cash paid for income taxes..................... $ 295 $ 267 $ 1,028 $ 803 $ 1,991
======== ======== ======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 99

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

OCTOBER 31, 1993, 1994 AND 1995
(INFORMATION AS OF JULY 31, 1996 AND FOR
THE NINE MONTHS ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation

The accompanying consolidated financial statements include Lamar
Advertising Company, its wholly-owned subsidiaries, Lamar Holding Company (LHC)
and The Lamar Corporation (TLC), their majority-owned subsidiaries and
Interstate Logos, Inc., a subsidiary of both LAC and TLC (collectively, the
Company or LAC). All intercompany transactions and balances have been
eliminated. Prior to May 1994, the Company owned 49.36% of the outstanding stock
of LHC, which investment was accounted for by the equity method. On May 10,
1994, LAC acquired substantially all of the assets of LHC. The proceeds from the
sale of its assets were used by LHC to repay existing debt and redeem all of its
shareholders other than LAC, resulting in LHC becoming a wholly-owned subsidiary
of LAC. The acquisition has been accounted for using the purchase method of
accounting.

(b) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is
calculated using accelerated and straight-line methods over the estimated useful
lives of the assets.

Debt issuance costs are deferred and amortized over the terms of the
related credit facilities using the interest method. Other intangible assets are
initially recorded at cost and amortized using the straight-line method over the
assets' estimated useful lives, generally from 5 to 10 years.

(d) Deferred Income

Deferred income consists principally of advertising revenue received in
advance and gains resulting from the sale of certain assets to related parties.
Deferred advertising revenue is recognized in income as services are provided
over the term of the contract. Deferred gains are recognized in income in the
consolidated financial statements at the time the assets are sold to an
unrelated party or otherwise disposed of.

(e) Revenue Recognition

The Company recognizes revenue from outdoor and logo sign advertising
contracts, net of agency commissions, on an accrual basis ratably over the term
of the contracts, as advertising services are provided.

(f) Income Taxes

The Company uses the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

F-7
<PAGE> 100

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(INFORMATION AS OF JULY 31, 1996 AND FOR
THE NINE MONTHS ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(g) Earnings Per Share

Earnings per common share are computed by dividing net earnings applicable
to common stock by the weighted average number of common shares outstanding
during each period presented. (35,470,837 shares, 35,089,188 shares and
33,772,107 shares, respectively for the years ended October 31, 1993, 1994 and
1995 and 33,775,222 shares and 27,068,544 shares for the nine-month periods
ended July 31, 1995 and 1996 respectively.) Such amounts have been adjusted to
reflect the approximate 778.9-for-1 stock split and the concurrent exchanges of
shares in a recapitalization that will occur in connection with the Offering
referred to in Note 14.

(h) Cash and Cash Equivalents

The Company considers all highly-liquid investments with original
maturities of three months or less to be cash equivalents.

(i) Reclassification of Prior Year Amounts

Certain amounts in the prior year's consolidated financial statements have
been reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported net earnings.

(j) Unaudited Interim Financial Statements

The unaudited interim financial statements include all adjustments,
consisting of normal recurring adjustments, which are, in the opinion of
management, necessary for a fair presentation of the financial position and the
results of operations of the Company.

(2) NONCASH FINANCING AND INVESTING ACTIVITIES

A summary of significant noncash financing and investing activities
follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
JULY 31,
----------------
1993 1994 1995 1995 1996
------ ---- ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Noncash dispositions of assets.............. $ 336 $445 $3,788 $3,788 $ --
Noncash acquisitions of assets.............. 1,817 -- 4,341 4,341 1,113
Common stock issued in exchange for
investment in affiliate................... 630 -- -- -- --
Noncash issuance of preferred stock in
exchange for common stock................. -- -- -- -- 3,649
</TABLE>

F-8
<PAGE> 101

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

(3) RECEIVABLES

The following is a summary of accounts and notes receivable as of October
31:

<TABLE>
<CAPTION>
1994 1995
--------------------- ---------------------
CURRENT NONCURRENT CURRENT NONCURRENT
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
Trade accounts receivable, net.............. $ 9,963 $ -- $10,741 $ --
Related parties............................. 291 -- 452 --
Employees, other than related parties....... 269 -- 131 --
Other....................................... 68 751 109 918
------- ---- ------- ----
$10,591 $751 $11,433 $918
======= ==== ======= ====
</TABLE>

(4) PROPERTY, PLANT AND EQUIPMENT

Major categories of property, plant and equipment at October 31, 1994 and
1995 are as follows:

<TABLE>
<CAPTION>
ESTIMATED
LIFE (YEARS) 1994 1995
------------ -------- --------
<S> <C> <C> <C>
Land................................................. - $ 7,739 $ 7,826
Building and improvements............................ 10-32 15,132 15,553
Advertising structures............................... 15 123,592 131,071
Automotive and other equipment....................... 3-7 13,244 13,952
-------- --------
$159,707 $168,402
======== ========
</TABLE>

(5) INTANGIBLE ASSETS

The following is a summary of intangible assets at October 31:

<TABLE>
<CAPTION>
ESTIMATED
LIFE (YEARS) 1994 1995
------------ ------- -------
<S> <C> <C> <C>
Debt issuance costs.................................. 10 $ 3,604 $ 3,180
Customer lists and unexpired contracts............... 7 7,581 7,103
Non-compete agreements............................... 7-15 1,296 1,036
Organization costs................................... 5 219 673
Loan fees............................................ 7-10 1,027 1,051
Other................................................ 7-10 335 363
------- -------
$14,062 $13,406
======= =======
Cost................................................. 18,870 20,473
Accumulated amortization............................. 4,808 7,067
------- -------
Net intangible assets...................... $14,062 $13,406
======= =======
</TABLE>

(6) LAMAR HOLDINGS CORPORATION

Prior to May 1994, the Company owned 49.36% of the common stock of LHC. LHC
was founded in 1989 by TLC, members of its management and certain institutional
investors to provide outdoor advertising services in markets other than those
served by TLC.

F-9
<PAGE> 102

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

Effective May 1, 1994, LAC acquired substantially all of the assets and
assumed certain liabilities of LHC for a purchase price of $43,500. The proceeds
from the sale of its assets were used by LHC to repay existing debt and redeem
all of its shareholders other than LAC, resulting in LHC becoming a wholly-owned
subsidiary of LAC. The acquisition has been accounted for as a purchase and
accordingly, the purchase price attributable to shareholders other than LAC
(50.64%) has been allocated to the assets acquired based on their fair values.
The results of operations of LHC have been included in LAC's consolidated
financial statements from May 1, 1994.

The following unaudited pro forma financial information presents the
combined results of operations of LAC and LHC as if the acquisition had occurred
as of the beginning of 1993 and 1994, after giving effect to certain
adjustments, including additional depreciation expense, increased interest
expense on debt related to the acquisition, and related income tax effects. The
pro forma financial information does not necessarily reflect the results of
operations that would have occurred had the companies constituted a single
entity during such period.

<TABLE>
<CAPTION>
YEAR ENDED
OCTOBER 31,
-------------------
1993 1994
------- -------
(UNAUDITED)
<S> <C> <C>
Revenues......................................................... $81,303 $92,480
======= =======
Net income (loss) before extraordinary item...................... $(1,856) $ 6,265
======= =======
Net income (loss)................................................ $(3,710) $ 6,265
======= =======
Earnings (loss) per share before extraordinary item.............. $ (.05) $ .18
======= =======
Earnings (loss) per share........................................ $ (.10) $ .18
======= =======
</TABLE>

(7) LEASES

The Company is party to various operating leases for production facilities
and sites upon which advertising structures are built. The leases expire at
various dates, generally during the next five years, and have varying options to
renew and to cancel. The following is a summary of minimum annual rental
payments required under those operating leases that have original or remaining
lease terms in excess of one year as of October 31:

Rental expense related to the Company's operating leases was $10,983,
$14,999 and $17,053 for the years ended October 31, 1993, 1994 and 1995,
respectively.

F-10
<PAGE> 103

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

The Company leases a portion of its corporate office building to tenants
under operating leases. The following is a summary of property held for lease at
October 31:

<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Land........................................................... $ 47 $ 53
Buildings...................................................... 2,454 1,892
Less accumulated depreciation.................................. (1,754) (1,124)
------- -------
$ 747 $ 821
======= =======
</TABLE>

Minimum future rental income for noncancelable leases in effect as of
October 31, 1995 is as follows:

<TABLE>
<S> <C>
Year ending October 31:
1996.................................................... $224
1997.................................................... 152
1998.................................................... 115
1999.................................................... 99
2000.................................................... 97
====
</TABLE>

(8) ACCRUED EXPENSES

The following is a summary of accrued expenses at October 31:

<TABLE>
<CAPTION>
1994 1995
------ ------
<S> <C> <C>
Payroll............................................................ $2,084 $2,134
Interest........................................................... 5,442 5,400
Insurance benefits................................................. 1,374 1,457
Other.............................................................. 747 742
------ ------
$9,647 $9,733
====== ======
</TABLE>

F-11
<PAGE> 104

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

(9) LONG-TERM DEBT

Long-term debt consists of the following at October 31 and July 31, 1996:

<TABLE>
<CAPTION>
JULY 31,
1996
1994 1995 -----------
-------- -------- (UNAUDITED)
<S> <C> <C> <C>
Senior Secured Notes................................ $100,000 $100,000 $ 100,000
Note payable to a bank group........................ 43,000 39,250 37,750
1993 Series A Line of Credit, payable to bank....... 2,000 -- 6,000
1995 Series B Line of Credit, payable to bank....... -- -- 9,500
8% Series A unsecured subordinated discount
debentures, maturing through 2001 (11.5% effective
yield)............................................ 3,095 2,706 2,409
5% to 10% notes payable to banks and others with
varying maturities secured by plant and
equipment......................................... 4,960 3,713 3,974
10% to 12% Series A unsecured subordinated
debentures maturing in 1996 and 1997.............. 372 372 372
Other notes with various rates and terms............ 502 10 2
-------- -------- ----------
153,929 146,051 160,007
Less current maturities............................. (7,054) (3,479) (5,326)
-------- -------- ----------
Long term debt, excluding current maturities........ $146,875 $142,572 $ 154,681
======== ======== ==========
</TABLE>

Long term debt matures as follows:

<TABLE>
<S> <C>
1996...................................................... $ 3,479
1997...................................................... 5,465
1998...................................................... 9,235
1999...................................................... 12,154
2000...................................................... 12,516
Later years............................................... 103,202
--------
$146,051
========
</TABLE>

The Senior Secured Notes were issued on May 19, 1993. The notes bear
interest at 11% payable semiannually. The notes mature in 2003 and are subject
to redemption at the option of the Company at any time on or after May 15, 1998.
There is no sinking fund obligation associated with the notes. The notes rank
senior in right of payment to all subordinated debt of the Company and pari
passu in right of payment with all unsubordinated borrowings of the Company and
are unconditionally guaranteed by certain subsidiaries of the Company. The notes
are secured by a pledge of the capital stock of all of the Subsidiary
Guarantors, subject to certain provisions. Additionally, the Company is
obligated to pledge the capital stock and obtain the guarantee of all future
restricted subsidiaries as security.

A portion of the proceeds from the Senior Secured Notes was used to
extinguish existing variable and fixed rate debt prior to maturity. In
connection with the extinguishment, the Company incurred a loss of approximately
$1,900 which has been reflected as an extraordinary item in the accompanying
consolidated financial statements. The per share amount of the aggregate loss
net of related income tax effect is $0.05 for the year ended October 31, 1993.

F-12
<PAGE> 105

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

The indenture contains certain restrictive financial covenants, including
the following:

- Limitation on outstanding debt of the Company and any of its restricted
subsidiaries;

- Limitation of the payment of cash dividends and other restricted
payments;

- Limitation on sale and leaseback transactions, and

- Limitation on sales or disposals of assets.

The Company was in compliance with such covenants as of October 31, 1995.

On May 19, 1993, the Company also entered into a Bank Credit Agreement
which provided an $8,000 term loan and a $20,000 working capital line of credit.
The term loan will amortize over four years beginning in 1995 and the
availability under the revolving credit facility will be reduced over a
three-year period beginning in 1995 until the facility terminates in 1998. The
term loan and the revolving credit facility are secured by a pledge of the
capital stock of all of the Company's present subsidiaries. During 1994, the
Company executed certain amendments to the Bank Credit Agreement, including
increasing of the term loan to $43,000. During 1995, the Company executed
additional amendments to the Bank Credit Agreement, including a change in the
Commitment to reduce the revolving line of credit over a three-year period
beginning in 1999 until the facility terminates in 2001. As of October 31, 1995,
the balance of the term loan was $39,250 with an interest rate of 8.09%. The
Bank Credit Agreement contains certain restrictive financial covenants,
including the following:

- Maintaining specific ratios of cash flow to debt service and total debt;

- Limitation of the payment of dividends;

- Limitation on investments and joint ventures,

- Limitation on capital expenditures, and

- Limitation on sales or disposals of assets.

The Company was in compliance with such covenants as of October 31, 1995.

The 8% Series A, unsecured subordinated debentures with an original face
amount of $4,844 were issued in 1986 at a discount of $986, which is being
amortized over the life of the debentures. The total unamortized discount was
$314 and $238 at October 31, 1994 and 1995, respectively.

(10) INCOME TAXES

LAC files a consolidated federal income tax return which includes all of
its qualifying subsidiaries.

Total income tax expense (benefit) for the years ended October 31, 1993,
1994 and 1995 is allocated as follows:

<TABLE>
<CAPTION>
1993 1994 1995
---- ------- -------
<S> <C> <C> <C>
Income from continuing operations........................ $476 $(2,072) $(2,390)
Extraordinary item....................................... (98) -- --
---- ------- -------
$378 $(2,072) $(2,390)
==== ======= =======
</TABLE>

F-13
<PAGE> 106

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

Income tax expense (benefit) attributable to continuing operations for the
years ended October 31, 1993, 1994 and 1995 consists of:

<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- -------
<S> <C> <C> <C>
1993:
U.S. federal......................................... 155 -- 155
State and local...................................... 321 -- 321
----- -------- -------
$ 476 $ -- $ 476
===== ======== =======
1994:
U.S. federal......................................... 165 (2,650) (2,485)
State and local...................................... 413 -- 413
----- -------- -------
$ 578 $ (2,650) $(2,072)
===== ======== =======
1995:
U.S. federal......................................... $ 290 $ (3,301) $(3,011)
State and local...................................... 621 -- 621
----- -------- -------
$ 911 $ (3,301) $(2,390)
===== ======== =======
</TABLE>

Income taxes attributable to continuing operations in 1994 and 1995 include
adjustments to the beginning-of-the-year valuation allowance on the Company's
deferred tax assets in the amount of $3,882 and $5,939, respectively. The
improved business conditions and resulting profitability has resulted in a
change in management's judgment regarding the realizability of the deferred tax
assets.

Income tax expense (benefit) for 1993, 1994 and 1995, differs from the
amounts computed by applying the U.S. federal income tax rate of 34 percent to
pretax income from continuing operations as follows:

<TABLE>
<CAPTION>
1993 1994 1995
----- ------- -------
<S> <C> <C> <C>
Computed "expected" tax expense........................... $ 570 $ 1,777 $ 2,825
Increase (reduction) in income taxes resulting from:
Change in beginning of the year balance of the
valuation allowance for deferred tax assets........ (217) (3,882) (5,939)
State and local income taxes, net of federal income
tax benefit........................................ 214 273 410
Other differences, net............................... (91) (240) 314
----- ------- -------
Actual income tax expense (benefit)............. $ 476 $(2,072) $(2,390)
===== ======= =======
</TABLE>

F-14
<PAGE> 107

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at October 31,
1994 and 1995 are presented below:

<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Deferred tax liabilities:
Plant and equipment, principally due to differences in
depreciation................................................ $(5,411) $(4,656)
Intangibles, due to differences in amortizable lives........... (569) (594)
------- -------
Deferred tax liabilities............................... $(5,980) $(5,250)
======= =======
Deferred tax assets:
Receivables, principally due to allowance for doubtful accounts
and accounts written off.................................... $ 187 $ 193
Plant and equipment, due to additional costs capitalized for
tax purposes pursuant to the Tax Reform Act of 1986......... 641 764
Plant and equipment, due to basis differences on acquisitions
of assets................................................... 4,276 4,064
Investment in affiliates and plant and equipment due to gains
previously recognized for tax purposes and deferred for
financial reporting purposes................................ 1,357 1,719
Net operating loss carryforwards............................... 6,512 2,262
Investment tax credit carryforwards............................ 982 929
Other, net..................................................... 614 1,270
------- -------
Gross deferred tax assets.............................. 14,569 11,201
Less valuation allowance....................................... (5,939) --
------- -------
Deferred tax assets.................................... $ 8,630 $11,201
======= =======
Net deferred taxes..................................... $ 2,650 $ 5,951
======= =======
</TABLE>

The valuation allowance for deferred tax assets as of November 1, 1993 was
$9,821.

For federal income tax purposes, the following carryforwards are available
as of October 31, 1995:

<TABLE>
<CAPTION>
EXPIRATION
-----------
<S> <C> <C>
Net operating loss.............................................. $6,465 2003-2005
Investment credit............................................... 929 1995-2001
Alternative minimum tax credit.................................. 660 Indefinite
</TABLE>

(11) OTHER RELATED PARTY TRANSACTIONS

Affiliates, as used within these statements, are companies which are
affiliated with Lamar Advertising Company or its subsidiaries through common
ownership and directorate control.

F-15
<PAGE> 108

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

The Company receives income and incurs costs in transactions with related
parties and affiliates. The following is a summary of such transactions for the
years ending October 31:

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Revenues:
Management fee income....................................... $595 $334 $ 31
Rental income............................................... 209 -- --
Interest income............................................. 75 59 8
Production of logo plates................................... 341 143 143
Expenses:
Interest expense............................................ 390 308 296
Rent expense................................................ 143 71 --
</TABLE>

The Company is a party to a consulting agreement with a shareholder and
former Chairman of the Board of the Company. The agreement, which expires in
1996, provides for annual payments of $120 and an annual bonus of up to $100.
The Company incurred consulting expense of $120 under this agreement in 1993,
1994 and 1995. Additionally, the Company paid consulting fees of $110 to this
individual in 1995.

As of October 31, 1994 and 1995, debentures totaling $3,600 and $2,950,
respectively, are owned by shareholders, directors and employees.

During 1993, the Company purchased all outstanding stock of Lamar
Advertising of Wichita Falls, Inc., a company which, at the time of the
acquisition, was owned by certain stockholders of LAC. The total consideration
was approximately $1,200, which approximated the book value of the underlying
assets.

During 1993, a subsidiary of the Company purchased a building from a joint
venture whose principals included the former Chairman of the Board and two
officers of the Company for a price of approximately $740. Additionally in 1993,
this subsidiary purchased two buildings from a director of the Company for
approximately $530.

(12) COMMON STOCK

The rights of Class A and Class B common stock (as in effect on October 31,
1995) are equal in all respects, except holders of Class A common stock shall
have preemptive rights with respect to Class A common stock and Class B is
non-voting. In connection with the Offering referred to in Note 14, the Company
effected a recapitalization consisting of an approximate 778.9-for-1 stock split
and an exchange of common stock for new Class A and Class B common stock which
are equal in all respects, except holders of Class B common stock have ten votes
per share and holders of Class A common stock have one vote per share. Class B
common stock will convert automatically into Class A common stock upon the sale
or transfer to persons other than permitted transferees. All share information
has been adjusted to reflect the recapitalization.

(13) COMMITMENTS AND OTHER CONTINGENCIES

The Company sponsors a partially self-insured group health insurance
program. Coverage is available to all employees who work in excess of 30 hours
per week. The Company is obligated to pay all claims under the program which are
in excess of premiums, up to program limits of $150 per employee, per claim, per
year. The Company has purchased third-party insurance coverage for claims in
excess of this amount. The Company is

F-16
<PAGE> 109

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

also self-insured with respect to its income disability benefits and against
casualty losses on advertising structures. Amounts for expected losses including
a provision for losses incurred but not reported, are included in accrued
expenses in the accompanying consolidated financial statements. The Company
maintains a $1,000 letter of credit with a bank to meet requirements of the
Company's workers' compensation insurance carrier. The Company also maintains a
$375 letter of credit with an insurance company to partially collateralize a
surety bond for a logo company.

The Company established The Lamar Corporation Savings and Profit Sharing
Plan effective January 1, 1988. Participants include all employees who have
completed one year of service and are at least 21 years of age. The Company
matches 50% of employees' contributions up to 5% of related compensation.
Employees can contribute up to 15% of compensation. Full vesting on the
Company's matched contributions occurs after five years. The Company contributed
$313, $230 and $512 for the years ended October 31, 1993, 1994 and 1995,
respectively.

On November 1, 1993, LAC established The Lamar Corporation, Its Affiliates
and Subsidiaries Deferred Compensation Plan (the Plan) for the benefit of
certain of its senior management who meet specified age and years of service
criteria. Employees who have attained the age of 30 and have a minimum of 10
years of service are eligible for annual contributions to the Plan generally
ranging from $3 to $8, depending on the employee's length of service. LAC's
contributions to the Plan will be maintained in a "rabbi" trust and,
accordingly, the assets and liabilities of the Plan will be reflected in the
balance sheet of LAC. Upon termination, death or disability, participating
employees are eligible to receive an amount equal to the fair market value of
the assets in the employee's deferred compensation account. The Company has
contributed $101, $442 and $240 to the Plan during 1993, 1994 and 1995,
respectively. Contributions to the Plan are discretionary and are determined by
the Board of Directors.

The Company is the subject of litigation arising during the normal course
of business. In the opinion of management and general counsel of the Company,
those claims will not have a material impact on the financial position, results
of operations or liquidity of the Company.

(14) SUBSEQUENT EVENTS (UNAUDITED)

On December 30, 1995, the Certificate of Incorporation of the Company was
amended to authorize 10,000 shares of Class A preferred stock with a par value
of $638 per share and no voting rights. The Class A preferred stock are
cumulative and are priority to Class A and Class B common stock dividends at the
rate of $15.95 per share per quarter.

As of December 30, 1995, 4,454,397 shares of Class A common stock with a
$.001 per share par value were converted into 5,719.49 shares of Class A
preferred stock with a $638 per share par value. This conversion resulted in a
$3,600 charge to accumulated deficit.

On March 1, 1996, 3,463,666 shares of Class A common stock and 154,218
shares of Class B common stock, $.001 par value, were redeemed at a price of
$0.82 per share. This redemption resulted in a $3,000 charge to accumulated
deficit. In connection with the redemption, the Company agreed, contingent upon
completion of the Offering referred to below, to pay additional consideration of
$1.38 per share in cash and $5.52 per share in ten-year subordinated notes,
which resulted in an additional charge to stockholders' equity of $25,000. The
accompanying pro forma financial information gives effect to the additional
consideration paid upon completion of the Offering, but does not give effect to
the Offering proceeds.

F-17
<PAGE> 110

LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES

Subsequent to April 30, 1996, the Company advanced $450 to a stockholder.
The loan is payable on or before October 15, 1996.

Effective July 1, 1996, the Company entered into a consulting agreement
with an affiliate of a shareholder and former Chairman of the Board of the
Company to replace the expiring consulting agreement discussed in Note 11. The
agreement provides for a $120 annual consulting fee for a term of ten years.

In August, 1996, the Company consummated an initial public offering of
4,294,041 shares of Class A Common Stock, $.001 par value per share (the
"Offering"). In connection with the Offering, the Company effected the
recapitalization referred to in Note 12.

Also in connection with the Offering, the Company adopted the 1996 Equity
Incentive Plan (the "1996 Plan"). The purpose of the 1996 Plan is to attract and
retain key employees and consultants of the Company. The 1996 Plan authorizes
the grant of stock options, stock appreciation rights and restricted stock to
employees and consultants of the Company capable of contributing to the
Company's performance. The Company has reserved an aggregate of 2,000,000 shares
of Class A Common Stock for awards under the 1996 Plan.

In September, 1996 the Company agreed to acquire all of the outstanding
capital stock of FKM for a cash purchase price of $40.0 million and
substantially all of the assets of Outdoor East for a cash purchase price of
approximately $60.0 million. These acquisitions will be accounted for under the
purchase method of accounting.

On October 8, 1996, the Board of Directors of the Company authorized a Note
Offering of $225 million aggregate principal amount of Notes that would be
subordinate to amounts borrowed under the New Credit Agreement. The Board of
Directors also authorized the offering of $100 million of Class A $.001 par
value Common Stock. The Filings will be registered with the Securities Exchange
Commission pursuant to the Securities Act of 1933.

On October 17, 1996, the Company commenced a tender offer for all of its
$100,000 outstanding 11% Senior Secured Notes Due May 15, 2003, together with a
consent solicitation to effect certain amendments to the indenture under which
the Notes were issued and the related pledge agreement. The tender offer is
expected to be financed through the New Credit Agreement.

F-18
<PAGE> 111

Board of Directors and Shareholders
FKM Advertising Co., Inc.
Allentown, Pennsylvania

INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying balance sheets of FKM Advertising Co.,
Inc. as of December 31, 1994 and 1995, and the related statements of operations,
changes in stockholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FKM Advertising Co., Inc. as
of December 31, 1994 and 1995, and the results of its operations and cash flows
for the years then ended in conformity with generally accepted accounting
principles.

MCGRAIL MERKEL QUINN & ASSOCIATES

Scranton, Pennsylvania
March 14, 1996

F-19
<PAGE> 112

FKM ADVERTISING CO., INC.

BALANCE SHEETS
DECEMBER 31, 1994 AND 1995, AND SEPTEMBER 30, 1996 (UNAUDITED)

<TABLE>
<CAPTION>
SEPTEMBER 30,
1996
1994 1995 -------------
----------- ----------- (UNAUDITED)
<S> <C> <C> <C>
ASSETS

Current assets
Cash..................................................................... $ 27,483 $ 164,643 $ 80,631
Accounts receivable, net of an allowance for doubtful accounts
of $55,000 in 1994 and $33,500 in 1995 and $69,900 in 1996
(unaudited)............................................................ 317,039 686,350 593,700
Note receivable -- shareholder........................................... 63,072 69,296 73,704
Prepaid expenses......................................................... 399,215 469,262 554,336
Other current assets..................................................... 23,100 41,150 66,015
----------- ----------- -----------
Total current assets............................................... 829,909 1,430,701 1,368,386
----------- ----------- -----------
Property and equipment
Land..................................................................... 26,413 126,413 144,763
Buildings................................................................ -- 175,000 175,000
Advertising structures................................................... 5,160,587 7,785,370 8,090,801
Furniture and fixtures................................................... 54,648 56,640 84,502
Equipment................................................................ 118,752 403,785 467,917
Vehicles................................................................. 101,764 118,142 118,142
----------- ----------- -----------
5,462,164 8,665,350 9,081,125
Less: Accumulated depreciation........................................... 1,021,410 1,379,025 1,872,442
----------- ----------- -----------
Net property and equipment......................................... 4,440,754 7,286,325 7,208,683
----------- ----------- -----------
Other assets
Deposits................................................................. 6,400 8,400 7,400
Deferred taxes........................................................... 1,369,940 1,562,383 1,682,383
Intangibles, net of amortization......................................... 4,860,953 10,114,870 8,675,513
----------- ----------- -----------
Total other assets................................................. 6,237,293 11,685,653 10,365,296
----------- ----------- -----------
Total assets....................................................... $11,507,956 $20,402,679 $18,942,365
=========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Current portion of long-term debt........................................ $ 1,451,989 $ 1,214,613 $ 1,489,788
Accounts payable......................................................... 87,612 159,912 37,917
Accrued severance expense................................................ 28,846 -- --
Accrued interest expense................................................. -- 88,743 174,209
Accrued expenses -- other................................................ 160,072 276,477 156,132
Deferred revenue......................................................... 10,311 9,435 17,672
----------- ----------- -----------
Total current liabilities.......................................... 1,738,830 1,749,180 1,875,718
----------- ----------- -----------
Other liabilities
Long-term accrued expenses............................................... 142,713 -- -
Long-term debt, net of current portion................................... 7,257,867 16,812,828 15,747,553
----------- ----------- -----------
Total other liabilities............................................ 7,400,580 16,812,828 15,747,553
----------- ----------- -----------
Total liabilities.................................................. 9,139,410 18,562,008 17,623,271
----------- ----------- -----------
Stockholders' equity
Preferred stock, $0.01 par value, 619,972 shares authorized, issued and
outstanding............................................................ 6,200 6,200 6,200
Common stock -- Class A, $0.01 par value, 1,000,132 shares authorized,
shares issued -- 220,160 in 1994, 270,160 in 1995 and 270,160 in 1996
(unaudited)............................................................ 2,202 2,702 2,702
Common stock -- Class B, $0.01 par value, 170,000 shares authorized,
shares issued -- 160,000 in 1994, 110,000 in 1995 and 110,000 in 1996
(unaudited)............................................................ 1,600 1,100 1,100
Additional paid-in capital............................................... 4,992,036 4,992,036 4,992,036
Additional paid-in capital from the sale of treasury stock............... 16,140 16,140 16,140
Deficit.................................................................. (2,644,532) (3,172,407) (3,693,984)
Treasury stock -- 30,000 shares of common -- Class B, at cost............ (5,100) (5,100) (5,100)
----------- ----------- -----------
Total stockholders' equity......................................... 2,368,546 1,840,671 1,319,094
----------- ----------- -----------
Total liabilities and stockholders' equity......................... $11,507,956 $20,402,679 $18,942,365
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these Financial Statements.

F-20
<PAGE> 113

FKM ADVERTISING CO., INC.

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1994 AND 1995, AND THE NINE MONTHS ENDED
SEPTEMBER 30, 1995 AND 1996 (UNAUDITED)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
----------------------- -------------------------
1994 1995 1995 1996
---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue
Billboard rentals, net............................................ $4,702,698 $4,955,918 $3,503,686 $5,924,160
Interest income................................................... -- 11,735 7,204 19,961
Other income...................................................... 2,115 44,753 39,498 79,680
---------- ---------- ---------- ----------
Total revenue............................................... 4,704,813 5,012,406 3,550,388 6,023,801
---------- ---------- ---------- ----------
Costs and expenses
Production........................................................ 742,801 909,560 619,827 1,087,111
Lease expense..................................................... 538,481 603,452 423,180 656,790
Sales and marketing............................................... 405,918 359,062 253,495 482,291
General and administrative........................................ 891,906 759,707 584,723 869,633
---------- ---------- ---------- ----------
Total costs and expenses.................................... 2,579,106 2,631,781 1,881,225 3,095,825
---------- ---------- ---------- ----------
Income from operations before depreciation and
amortization.............................................. 2,125,707 2,380,625 1,669,163 2,927,976
---------- ---------- ---------- ----------
Depreciation and amortization
Depreciation...................................................... 385,441 430,922 289,944 493,417
Amortization...................................................... 2,032,353 1,391,606 1,054,106 1,481,574
---------- ---------- ---------- ----------
Total depreciation and amortization......................... 2,417,794 1,822,528 1,344,050 1,974,991
---------- ---------- ---------- ----------
(Loss) income from operations............................... (292,087) 558,097 325,113 952,985
---------- ---------- ---------- ----------
Other expenses
Employee severance expense........................................ 8,654 577 577 --
Interest expense.................................................. 868,561 1,038,807 663,170 1,588,947
Commitment fees................................................... 4,285 6,270 1,575 5,615
Loss on sale and disposal of fixed assets......................... 4,434 232,761 228,602 --
---------- ---------- ---------- ----------
Total other expenses........................................ 885,934 1,278,415 893,924 1,594,562
---------- ---------- ---------- ----------
Net loss before income tax benefit.......................... (1,178,021) (720,318) (568,811) (641,577)
Income tax benefit.................................................. 439,969 192,443 155,000 120,000
---------- ---------- ---------- ----------
Net loss.................................................... $ (738,052) $ (527,875) (413,811) (521,577)
========== ========== ========== ==========
Net loss per common share................................... $ (1.94) $ (1.39) $ (1.09) $ (1.37)
========== ========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these Financial Statements.

F-21
<PAGE> 114

FKM ADVERTISING CO., INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994 AND 1995, AND THE NINE MONTHS
ENDED SEPTEMBER 30, 1996 (UNAUDITED)

<TABLE>
<CAPTION>
ADDITIONAL
COMMON COMMON PAID-IN
STOCK STOCK ADDITIONAL CAPITAL FROM
PREFERRED CLASS CLASS PAID-IN THE SALE OF TREASURY
STOCK A B CAPITAL TREASURY STOCK DEFICIT STOCK TOTAL
--------- ------ ------ ---------- -------------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993... $ 6,200 $2,102 $1,700 $4,992,036 $ -- $(1,865,405) $ -- $3,136,633
Purchase of stock:
Preferred stock (15,517
shares).................... -- -- -- -- -- -- (144,576) (144,576)
Common stock -- Class A
(5,260 shares)............. -- -- -- -- -- -- (20,024) (20,024)
Common stock -- Class B
(120,000 shares)........... -- -- -- -- -- -- (20,400) (20,400)
Stock issued:
Preferred stock (15,517
shares).................... -- -- -- -- -- (37,083) 144,576 107,493
Common stock -- Class A
(5,260 shares)............. -- -- -- -- -- (3,992) 20,024 16,032
Common stock -- Class B
(90,000 shares)............ -- -- -- -- 16,140 -- 15,300 31,440
Conversion of 10,000 shares of
common stock -- Class B to
Class A...................... -- 100 (100 ) -- -- -- -- --
Net loss, 1994................. -- -- -- -- -- (738,052) -- (738,052)
------- ------ ------ ---------- -------- ----------- --------- ----------
Balance at December 31, 1994... 6,200 2,202 1,600 4,992,036 16,140 (2,644,532) (5,100) 2,368,546
Conversion of 50,000 shares of
common stock -- Class B to
Class A...................... -- 500 (500 ) -- -- -- -- --
Net loss, 1995................. -- -- -- -- -- (527,875) -- (527,875)
------- ------ ------ ---------- -------- ----------- --------- ----------
Balance at December 31, 1995... $ 6,200 $2,702 $1,100 $4,992,036 $ 16,140 $(3,172,407) $ (5,100) $1,840,671
Net loss (unaudited)........... -- -- -- -- -- (521,577) -- (521,577)
------- ------ ------ ---------- -------- ----------- --------- ----------
Balance at September 30, 1996
(unaudited).................. $ 6,200 $2,702 $1,100 $4,992,036 $ 16,140 $(3,693,984) $ (5,100) $1,319,094
======= ====== ====== ========== ======== =========== ========= ==========
</TABLE>

The accompanying notes are an integral part of these Financial Statements.

F-22
<PAGE> 115

FKM ADVERTISING CO., INC.

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994 AND 1995, AND THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 (UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------- -----------------------
1994 1995 1995 1996
---------- ------------ ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Operating activities
Net loss.................................... $ (738,052) $ (527,875) $ (413,811) $ (521,577)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization............ 2,417,794 1,822,528 1,344,050 1,974,991
Deferred taxes........................... (439,969) (192,443) (155,000) (120,000)
Bad debt expense......................... 138,714 98,010 98,010 89,353
Loss on sale and disposal of fixed
assets................................. 4,434 232,761 228,602 --
(Increase) decrease in:
Accounts receivable.................... 170,324 (467,321) 24,394 3,297
Notes receivable -- shareholder........ (1,272) (6,224) (4,287) (4,408)
Prepaid expenses....................... (93,863) (70,047) (56,984) (85,074)
Other current assets................... 8,503 (18,050) 5,208 (24,865)
Deposits............................... 2,980 (2,000) -- 1,000
Increase (decrease) in:
Accounts payable....................... 15,017 72,300 (34,207) (121,995)
Accrued severance expense.............. (126,443) (28,846) (28,846) --
Accrued expenses....................... 153,316 62,435 (17,891) (34,879)
Deferred revenue....................... 980 (876) (10,311) 8,237
---------- ------------ ---------- ----------
Net cash provided by operating
activities........................ 1,512,463 974,352 978,927 1,164,080
========== ============ ========== ==========
Investing activities
Acquisition costs........................... -- (6,025,667) (83,073) (42,218)
Loan costs.................................. (393,306) (619,856) -- --
Purchase of fixed assets.................... (285,532) (3,509,254) (313,944) (415,774)
Proceeds from sale of fixed assets.......... 12,500 -- -- --
---------- ------------ ---------- ----------
Net cash used by investing
activities........................ (666,338) (10,154,777) (397,017) (457,992)
---------- ------------ ---------- ----------
Financing activities
Loan proceeds............................... 30,000 10,469,559 -- 22,355
Payments of principal....................... (846,900) (1,151,974) (298,512) (812,455)
Acquisition of treasury stock............... (185,000) -- -- --
Issuance of stock........................... 154,965 -- -- --
---------- ------------ ---------- ----------
Net cash (used) provided by
financing activities.............. (846,935) 9,317,585 (298,512) (790,100)
---------- ------------ ---------- ----------
Net (decrease) increase in cash..... (810) 137,160 283,398 (84,012)
Cash, beginning of year....................... 28,293 27,483 27,483 164,643
---------- ------------ ---------- ----------
Cash, end of year............................. $ 27,483 $ 164,643 $ 310,881 $ 80,631
========== ============ ========== ==========
</TABLE>

The accompanying notes are an integral part of these Financial Statements.

F-23
<PAGE> 116

NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

FKM Advertising Co., Inc. ("FKM") is a Delaware Corporation engaged in the
outdoor advertising business. The Company is located in Allentown, Pennsylvania
and Youngstown, Ohio. Advertising structures are primarily located in
Pennsylvania and Ohio.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Revenue Recognition

Outdoor advertising revenues are recorded in the month the billboard is
displayed, based on the terms of the contract. The date the billboard is
actually displayed may vary slightly from the contract date due to scheduling
and other concerns. These variances do not materially affect revenue.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is the amount that, in management's
judgment, is sufficient to absorb any anticipated losses related to the accounts
receivable.

Property and Equipment

Depreciation is computed using the straight-line method over the estimated
useful lives of the related assets.

Earnings Per Share

Intangible Assets and Deferred Costs

The amounts representing the excess of the purchase price over the fair
value of the identifiable assets acquired ("Goodwill") has been recorded as an
intangible asset and is being amortized over a period of fifteen to forty years
using the straight-line method.

Lease rights represent the fair value at acquisition of below market rate
leases assumed in connection with the acquisition referred to above. These lease
rights are being amortized over the average remaining terms of the respective
leases.

Prepaid advertising contracts represent the estimated fair value of
contracts existing at the date of acquisition. The contract values are being
amortized over their remaining lives.

Costs incurred by FKM in securing financing agreements have been recorded
as an asset and amortized over the terms of the agreements using the
straight-line method.

F-24
<PAGE> 117

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Income Taxes

The Company adopted the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109) effective January 1,
1993. SFAS 109 requires an asset and liability approach for accounting and
reporting for income taxes.

Deferred taxes are the result of accounting for certain items differently
for financial reporting purposes than for income tax purposes. These temporary
differences primarily relate to the Company's net operating loss carryover for
Federal income tax purposes, the allowance for doubtful accounts, depreciation
and employee severance expense.

Cash Flow Disclosures

The Company has defined cash as only those amounts included under the
Balance Sheet caption "Cash".

The Company paid interest amounting to $784,499 and $942,458 for the years
ended 1994 and 1995, respectively.

The Company paid no income taxes for the years ended December 31, 1994 and
1995.

Prepaid Expenses

The Company prepays certain costs for land leases and painting of displays
at the inception of the advertising contracts. These costs are deferred and
amortized on a straight-line basis over the period that coincides with the
recognition of income. This period is generally twelve months for land leases
and painting.

Reclassifications

Certain prior year amounts have been reclassified to conform to the 1995
presentation.

Unaudited Interim Financial Statements

The unaudited interim financial statements include all adjustments which
are, in the opinion of management, necessary for a fair presentation of the
financial position and the results of operations of the Company.

NOTE 2 -- ACQUISITIONS

On November 15, 1995, the Company acquired certain assets of Naegele
Outdoor Advertising and Genesis Outdoor Advertising, both located in Youngstown,
Ohio, (the Naegele and Genesis acquisitions) for $8,565,000.

The acquisitions were accounted for as purchases, and the operations are
included in the accompanying financial statements subsequent to the acquisition
date.

The aggregate purchase price of the two acquisitions was allocated to the
assets acquired based upon the fair values at the date of acquisition. The
excess of purchase price over the fair value of assets acquired is recorded as
goodwill and is being amortized over fifteen years using the straight-line
method.

Also, in connection with the Naegele acquisition, the Company acquired real
estate on which potential environmental concerns were identified. The areas of
environmental concern were identified prior to the acquisition date and the
Company has been indemnified against the cost of any environmental remediation
that may be required.

NOTE 3 -- CASH

The current asset caption "Cash" at December 31, 1995 consisted of the
following:

F-25
<PAGE> 118

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<S> <C>
Mahoning National Bank.................................................... $125,785
Ambassador Bank........................................................... 38,383
ABN*AMRO Bank N.V. ....................................................... 75
Petty cash................................................................ 400
--------
$164,643
========
</TABLE>

NOTE 4 -- PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Expenditures for maintenance and
repairs are charged to expense as incurred, while expenditures for renewals or
betterments are capitalized. Depreciation is computed using the straight-line
method over the useful lives of the assets.

At December 31, 1994 and 1995, property and equipment consisted of the
following:

<TABLE>
<CAPTION>
COST
ESTIMATED USEFUL ------------------------
DESCRIPTION LIVES 1994 1995
---------------------------------------------- ---------------- ---------- ----------
<S> <C> <C> <C>
Land.......................................... -- $ 26,413 $ 126,413
Buildings..................................... 40 years -- 175,000
Advertising structures........................ 15 years 5,160,587 7,785,370
Furniture and fixtures........................ 5-10 years 54,648 56,640
Equipment..................................... 3- 5 years 118,752 403,785
Vehicles...................................... 3- 5 years 101,764 118,142
---------- ----------
5,462,164 8,665,350
Less: Accumulated depreciation................ 1,021,410 1,379,025
---------- ----------
$4,440,754 $7,286,325
========== ==========
</TABLE>

Depreciation expense amounted to $385,441 and $430,922 for the years ended
December 31, 1994 and 1995, respectively.

During the current year, management disposed of advertising structures that
were no longer in service. The cost of the structures was $273,755 and the
resulting loss amounted to $232,761.

NOTE 5 -- INTANGIBLE ASSETS

Intangible assets at December 31, 1994 and 1995 consisted of the following:

<TABLE>
<CAPTION>
ESTIMATED USEFUL
DESCRIPTION LIVES 1994 1995
-------------------------------------------- ---------------- ----------- -----------
<S> <C> <C> <C>
Lease rights................................ 7 years $ 2,500,000 $ 2,745,000
Organization costs.......................... 5 years 918,409 918,409
Noncompetition agreements................... 5 years 3,600,000 4,158,775
Loan costs.................................. 10 years 330,050 330,050
Loan costs -- amendments.................... 74-93 months 403,039 1,022,896
Interest cap................................ 30 months 44,550 44,550
Prepaid advertising contracts............... 30 months 2,700,000 2,700,000
Prepaid contracts and permits............... 15 years -- 1,990,021
Goodwill.................................... 15-40 years 1,055,577 4,287,448
----------- -----------
11,551,625 18,197,149
Less: Accumulated amortization.............. 6,690,672 8,082,279
----------- -----------
$ 4,860,953 $10,114,870
=========== ===========
</TABLE>

F-26
<PAGE> 119

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Amortization expense amounted to $2,032,353 and $1,391,606 for the years
ended December 31, 1994 and 1995, respectively.

NOTE 6 -- LONG-TERM DEBT

Long-term debt at December 31, 1994 and 1995 consisted of the following:

SENIOR DEBT

<TABLE>
<CAPTION>
SEPTEMBER 31,
1996
1994 1995 -------------
---------- ----------- (UNAUDITED)
<S> <C> <C> <C>
ABN*AMRO BANK N.V.
Term loan payable. Interest is payable monthly
at the Bank's base rate plus 1 7/8%. Refer
below for principal payments and additional
information. ............................... $8,519,000 $13,500,000 $ 12,700,000
Revolving note payable. Interest is payable
monthly at the Bank's base rate plus 1 7/8%
and all principal is due on December 31,
2001. The maximum borrowing is
$1,500,000. ................................ 150,000 1,000,000 1,000,000
Acquisition loan payable. Interest is payable
monthly at the Bank's base rate plus 1 7/8%
and all principal is due on December 31,
2001. The maximum borrowing is
$1,000,000. ................................ -- -- --
---------- ----------- ------------
8,669,000 14,500,000 13,700,000
========== =========== ============
SUBORDINATED DEBT
CASCADE COMMUNICATIONS VENTURES, L.P.
Promissory loan dated November 15, 1995.
Interest is payable at a rate of 18%. All
principal is due on June 30, 2002........... -- 1,750,000 1,750,000
COAST MEZZANINE INVESTMENTS, LTD.
Promissory loan dated November 15, 1995.
Interest is payable at a rate of 18%. All
principal is due on June 30, 2002. ......... $ -- $ 1,750,000 $ 1,750,000
---------- ----------- ------------
-- 3,500,000 3,500,000
---------- ----------- ------------
INSTALLMENT DEBT
Note payable at 8.75%, payable in 36
installments of $952 per month, including
principal and interest, secured by a
vehicle, maturing June, 1997. .............. 25,536 15,976 8,197
Note payable at 7.75%, payable in 60
installments of $409 per month, including
principal and interest, secured by a
vehicle, maturing July 1998. ............... 15,320 11,465 8,369
Note payable in 24 monthly installments of
$1,111 per month, including principal and
interest, secured by equipment, maturing
July, 1998. ................................ -- -- 20,775
---------- ----------- ------------
40,856 27,441 37,341
---------- ----------- ------------
Total long-term debt.......................... 8,709,856 18,027,441 17,237,341
Less: Current portion......................... 1,451,989 1,214,613 1,489,788
---------- ----------- ------------
Total long-term debt, net of current
portion........................... $7,257,867 $16,812,828 $ 15,747,553
========== =========== ============
</TABLE>

F-27
<PAGE> 120

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,
- -------------------------
<S> <C> <C>
1996............................................. $ 1,214,613
1997............................................. 1,610,034
1998............................................. 2,002,794
1999............................................. 2,600,000
2000............................................. 3,000,000
Thereafter....................................... 7,600,000
-----------
$18,027,441
===========
</TABLE>

In addition to the above scheduled repayments, the Company is required to
make principal payments in the amount of varying percents of excess cash flow.
Excess cash flow is defined by the agreement, and the payment is due on April
15th of the following year. For the year ended December 31, 1994, additional
principal was due of $238,558 and is reflected in the current portion of
long-term debt. There is no excess cash flow payment due for the year ended
December 31, 1995.

According to the amended and restated Loan Agreement dated November 15,
1995, prepayment of loan principal equal to the percentage of the Company's
excess cash flow for the immediately preceding calendar year commences in 1997
for the calendar year ended December 31, 1996.

SENIOR DEBT

ABN*AMRO BANK N.V.

To finance the acquisition of its original operating assets, the Company
entered into a loan agreement with ABN*AMRO Bank N.V. dated January 17, 1992
(the "ABN Agreement"). The ABN Agreement provided a total loan facility of
$12,000,000 of which $11,000,000 represented a term loan and $1,000,000
represented a revolving line of credit. The ABN Agreement was amended pursuant
to the first and second amendments dated March 31, 1994 and 1993, respectively.
The Amendments primarily changed certain financial covenants, extended the
maturity date and amortization of the term loan and provided for the payment of
a fee to the Bank for its agreement to the second amendment.

During the current year, the Bank agreed to extend additional credit to the
Company for the purpose of making the acquisition referred to in Note 2, to fund
future acquisitions and for other purposes specifically permitted by the
Agreement. The additional credit was made available through an amendment to and
a restatement of the original loan agreement. The amended and restated loan
agreement is dated November 15, 1995.

Under the terms of this credit agreement, the Bank has committed to advance
to the Company the aggregate sum of up to $16,000,000. This commitment includes
a term loan commitment of $13,500,000, a revolver loan commitment of $1,500,000
and an acquisition loan commitment of $1,000,000.

Interest on the term loan and revolving line of credit is based on the
Bank's prime rate plus 1 7/8 percent and is payable monthly. Interest on the
term loan is also subject to the interest rate swap agreement entered into by
the Company and ABN*AMRO Bank N.V. on March 31, 1994. All unpaid principal and
interest is due on the maturity date of the above loans, December 31, 2001.

Covenants contained in the ABN Agreement, which among other things,
restrict the Company from incurring additional debt or capitalized lease
obligations in excess of $200,000 and indebtedness not to exceed $250,000 for
the purpose of acquiring motor vehicles at any one time while the loans are
outstanding; investing in certain types of securities and granting any security
interest in its assets other than permitted liens. The Agreement restricts
declaring or paying any dividends and issuing, distributing, redeeming,
repurchasing, acquiring or selling any stock or debt securities (except under
certain circumstances). The Agreement also

F-28
<PAGE> 121

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

restricts sales and purchases of assets, mergers, and consolidations. Also, the
Company must meet certain financial ratios relating to cash flows and the
relationship of debt to cash flows. In addition, the Company will be in default
of the Agreement if revenue from the advertisement of alcohol and tobacco
products is greater than five percent of gross revenue.

The borrowings under the Agreement are collateralized by the assets, the
capital stock, existing or subsequently acquired assets, including patents,
trademarks, copyrights and licenses, and leases of the Company. In addition, the
Company must maintain life insurance of $2,000,000 on the President of the
Company. The insurance policy is assigned to ABN*AMRO and serves as additional
collateral.

SUBORDINATED DEBT

The proceeds of the subordinated debt listed above was used solely to
partially finance the Naegele and Genesis acquisitions of November 15, 1995.

The principal balance of the subordinated loans is due and payable on the
maturity date, June 30, 2002. Interest accrues on the outstanding principal
balance, including all accrued interest added to the principal of the loans, at
a simple interest rate per annum of 18%. Beginning January 1, 1996 and on the
first day of each calendar quarter until the maturity date, interest is due and
payable at a simple interest rate of 12.5% from the Agreement date through and
including December 31, 1996, and at a simple interest rate of 15.5% for the
period from and after January 1, 1997. Accrued interest, which is not payable
quarterly, shall be added to the outstanding principal amount of the subordinate
loans and is compounded quarterly until paid.

Under the terms of the subordinated agreements, the Company must comply
with all of the covenants (affirmative and negative) as set forth in the Senior
Loan Agreement. Also, if the subordinated loans are accelerated at any time
prior to the third anniversary of the agreement dates, the present value of the
sum of all the interest that would accrue from the acceleration date through and
including the third anniversary date becomes due along with the outstanding
principal and any accrued interest.

NOTE 7 -- REDEEMABLE PREFERRED STOCK

Preferred Stock -- Series A -- The holders of the outstanding Series A
Preferred Stock shall be entitled to receive cumulative dividends at an annual
rate of fifteen percent of the original issue price of $7.00 or $1.05 per share.
Dividends shall accrue from day-to-day on each share from the date of issuance
of each share whether or not earned or declared. Holders of Series A Preferred
Stock can convert their shares at any time into Class A Common Stock on a
share-for-share basis. Upon any conversion of Series A Preferred Stock to Class
A Common Stock all accrued and unpaid cumulative dividends shall be forfeited.
At December 31, 1994 and 1995, dividends on Preferred Stock were in arrears by
$1,924,375 and $2,575,345, respectively.

The Series A Preferred Stock holders have participation rights in any
dividend other than a stock dividend declared and paid on Common Stock of the
Company.

Beginning in 1997, Series A Preferred Stock holders have the right to
redeem their shares based on an optional redemption schedule. The redemption
price shall be the greater of the fair market value per share or $7.00 per share
plus all unaccrued and unpaid cumulative dividends.

Also, upon any event of default, Series A Preferred Stockholders can redeem
all shares outstanding at the redemption price, even prior to the redemption
date of January 1, 1997, at the redemption price.

NOTE 8 -- COMMON STOCK AND WARRANTS

Class A Shares -- Of the authorized shares of Class A Common Stock, 619,972
shares are reserved for the conversion of the Preferred Stock to Class A Common
Stock and 170,000 shares for the conversion of the Class B Common Stock into
Class A Common Stock of the Company.

F-29
<PAGE> 122

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Class B Shares -- Certain stockholders of the Company to whom shares of
Class B Common Stock have been issued will vest their rights in these shares
over the next four years, based upon the Company's ability to achieve various
performance goals and/or the passage of time.

Treasury Stock -- The purchase of the Company's Common Stock is recorded at
cost. At the date of subsequent reissue, the treasury stock account is reduced
by the cost of such stock on the first-in -- first-out basis.

Warrants -- Cascade Communications Ventures, L.P. and Coast Mezzanine
Investments, Ltd., the subordinated lenders referred to in Note 2, were issued
stock purchase warrants during the current year. Effective November 15, 1995,
each Company is entitled to purchase 25,530 shares of Class A Common Stock at an
exercise price of $.02 per share. The exercise period terminates on June 30,
2002. Among other things, the warrant agreements restrict stockholders' equity
transactions that would dilute the value of their warrants.

NOTE 9 -- DEFINED CONTRIBUTION PLAN

The Company sponsors a defined contribution profit sharing plan. The plan
was established by adopting a New England Mutual Life Company 401(k) prototype
plan. It covers all eligible employees.

The Company contributes to the plan an amount equal to fifty percent of the
participant's salary reduction contributions for the plan year. Employer
matching contributions are further limited to five percent of the participants
compensation. Matching contributions for the current year amounted to $12,753.
For the year ended December 31, 1994, matching contributions amounted to $9,639.

Profit sharing contributions are made by the Company at the discretion of
the Board of Directors. For the years ended December 31, 1994 and 1995,
discretionary contributions of $15,000 were made.

NOTE 10 -- INCOME TAXES

The Company has approximately $4,808,000 of net operating losses available
for Federal income tax purposes which begin to expire in 2007. The Commonwealth
of Pennsylvania provides for the carryover of operating losses up to a maximum
of $1,000,000 per year. Current operating loss carryovers are available through
1997.

The income tax benefits are comprised of the following for the years ended
December 31,

<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Current payable
Federal...................................................... $ -- $ --
State........................................................ -- --
Deferred benefit (provision)
Federal...................................................... 359,165 131,941
State........................................................ 80,804 60,502
-------- --------
Income tax benefit................................... $439,969 $192,443
======== ========
</TABLE>

F-30
<PAGE> 123

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The components of the deferred income tax benefit, which result from
temporary differences, are as follows:

<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Net operating loss (NOL)....................................... $550,909 $243,715
Allowance for doubtful accounts................................ (90,040) (7,327)
Depreciation................................................... (49,524) (32,796)
Employee severance expense..................................... (42,991) (9,809)
Contribution carryover......................................... 3,619 355
Adjustment for enacted changes in state tax laws............... 67,996 (1,695)
-------- --------
Total................................................ $439,969 $192,443
======== ========
</TABLE>

A reconciliation of income taxes at statutory rates to applicable income
taxes reported in the statement of operations and deficit is as follows:

<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Benefit at the expected statutory rates........................ $485,975 $292,403
NOL carryover unallowable for state tax purposes............... (93,372) (19,797)
Adjustment for enacted changes in state tax laws............... 67,996 (1,695)
Non-deductible expenses for tax purposes....................... (13,889) (13,954)
Other reductions, net........................................ (6,741) (64,514)
-------- --------
Total................................................ $439,969 $192,443
======== ========
</TABLE>

Significant components of the Company's deferred tax assets and liabilities
are as follows for the years ended December 31,

<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Deferred tax assets:
Net operating loss (NOL).................................. $1,481,522 $1,948,867
Allowance for doubtful accounts........................... 22,603 12,847
Employee severance expense................................ 12,908 --
Contribution carryover.................................... 4,019 4,325
---------- ----------
Total deferred tax assets......................... 1,521,052 1,966,039
Less valuation allowance.......................... (58,051) (278,935)
---------- ----------
1,463,001 1,687,104
Deferred tax liability -- depreciation...................... (93,061) (124,721)
---------- ----------
Net deferred tax asset...................................... $1,369,940 $1,562,383
========== ==========
</TABLE>

NOTE 11 -- RELATED PARTY TRANSACTIONS

The Company has entered into the following related party transactions:

NOTE RECEIVABLE -- SHAREHOLDER

The Corporation made a loan to a shareholder in the amount of $61,243.
Interest accrues at a rate equal to the variable interest rate which is charged
to the Company under the ABN*AMRO Bank N.V. Loan Agreement. Principal and
interest is payable on demand. If no demand is made, the shareholder shall pay
the amount of unpaid principal and accrued interest as of July 31, 1997, plus
interest thereon, in eight equal quarterly installments commencing August 1,
1997.

F-31
<PAGE> 124

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

CONSULTING AGREEMENT

Brush, Johnsen & Fretty, Inc., is providing the Company with certain
consulting and investment banking services pursuant to an Agreement dated
January 17, 1992. The principals of Brush, Johnsen & Fretty, Inc., are also
shareholders in FKM. The Agreement terminates on January 16, 1999.

EMPLOYMENT AGREEMENT

The Company entered into an Employment Agreement dated May 18, 1994 with a
shareholder of the Company. Under the Agreement, the shareholder was employed as
President of the Company. The Agreement primarily provides for an annual salary,
benefits and a performance bonus arrangement. Additional non-cash compensation
in the form of the Company's Class B Common Stock was also provided to the
President under the terms of the Agreement.

ABN*AMRO BANK

In connection with the second amendment to the loan agreement referred to
in Note 5, the Company agreed to pay the Bank a fee equal to $206,880. On the
amendment date, $25,860 was paid in cash and $181,020 was deferred and terms of
repayment agreed upon. In accordance with section 2.4(d) of the amendment, the
Bank opted to purchase shares of the Company's stock for $154,965 through the
partial liquidation of the deferred fee.

NOTE 12 -- COMMITMENTS AND CONTINGENCIES

Leases

The Company's advertising structures are located on properties leased from
others. The Company also leases its corporate office and plant. Some of the land
leases for advertising structures contain renewal options with varying terms and
escalation clauses which provide, primarily on a yearly basis, for increased
rental. The corporate office and plant lease has a five year term with one five
year renewal term available. For the years ended December 31, 1994 and 1995,
rent expense was $564,262 and $642,344, respectively. Future office and plant
minimum rentals at December 31, 1995 are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, AMOUNT
- ------------ -------
<S> <C> <C>
1996................................................ $38,400
=======
</TABLE>

NOTE 13 -- DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has a number of financial instruments, none of which are held
for trading purposes. The Company estimates that the fair value of all financial
instruments at December 31, 1995, does not differ materially from the aggregate
carrying values of its financial instruments recorded in the accompanying
Balance Sheet. The estimated fair value amounts have been determined by the
Company using available market information and appropriate valuation
methodologies. Considerable judgment is necessarily required in interpreting
market data to develop the estimates of fair value, and, accordingly, the
estimates are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.

F-32
<PAGE> 125

INDEPENDENT AUDITORS' REPORT

The Partners
Outdoor East, L.P.:

We have audited the accompanying balance sheets of Outdoor East, L.P. as of
December 31, 1994 and 1995, and the related statements of operations, partners'
deficit, and cash flows for each of the years in the three year period ended
December 31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Outdoor East, L.P. as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

March 1, 1996, except for note 8 which
is as of June 13, 1996

F-33
<PAGE> 126

OUTDOOR EAST, L.P.

BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS

DECEMBER 31,
--------------------------- SEPTEMBER 30,
1994 1995 1996
------------ ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.......................... $ 251,659 485,383 1,026,360
Accounts receivable:
Trade, net of allowance for doubtful accounts of
$52,221 and $25,914 at December 31, 1995 and
1994, respectively, and $48,444 at September
30, 1996...................................... 1,655,990 1,840,843 1,836,483
Other........................................... 130,978 79,814 114,017
Prepaid expenses................................... 874,889 649,083 853,126
------------ ----------- -----------
Total current assets....................... 2,913,516 3,055,123 3,829,986
Property and equipment, at cost, net of accumulated
depreciation (note 2).............................. 17,368,265 16,197,181 15,565,545
Intangible assets, net of accumulated amortization:
Site lease rights.................................. 1,710,467 1,213,698 857,740
Goodwill........................................... 1,878,216 1,743,641 1,644,397
Deferred financing costs and other (note 9)........ 214,589 152,923 1,717,172
------------ ----------- -----------
3,803,272 3,110,262 4,219,309
Other assets (note 9)................................ -- -- 775,472
------------ ----------- -----------
$ 24,085,053 22,362,566 24,390,312
============ =========== ===========

LIABILITIES AND PARTNERS' DEFICIT

Current liabilities:
Current portion of long-term debt (notes 3 and
9).............................................. $ 655,588 21,990,932 866,667
Current portion of notes payable to general
partner......................................... 37,072 45,627 --
Note payable (notes 4 and 9)....................... 445,000 445,000 --
Accounts payable:
Trade........................................... 873,935 430,022 458,092
General partner (note 5)........................ 18,142 -- --
Accrued interest payable........................... 157,418 159,017 522,062
Other accrued liabilities.......................... 172,499 128,419 177,220
Deferred revenue................................... 485,854 483,957 --
------------ ----------- -----------
Total current liabilities.................. 2,845,508 23,682,974 2,024,041
Long-term debt, less current portion (notes 3 and
9)................................................. 22,990,501 998,212 22,942,937
Notes payable to general partner (notes 5 and 9)..... 1,227,377 1,183,273 --
------------ ----------- -----------
Total liabilities.......................... 27,063,386 25,864,459 24,966,978
Partners' deficit:
Partners' capital contributions.................... 23,183,150 23,662,316 28,202,316
Accumulated deficit................................ (26,161,483) (27,164,209) (28,778,982)
------------ ----------- -----------
Total partners' deficit.................... (2,978,333) (3,501,893) (576,666)
------------ ----------- -----------
Commitments and contingencies (notes 3, 6, 7 and 9)
$ 24,085,053 22,362,566 24,390,312
============ =========== ===========
</TABLE>

See accompanying notes to financial statements.

F-34
<PAGE> 127

OUTDOOR EAST, L.P.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- -----------------------
1993 1994 1995 1995 1996
----------- ---------- ---------- --------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue:
Advertising.................... $ 9,792,960 10,554,742 10,981,093 8,152,417 8,684,455
Other.......................... 359,515 809,276 526,440 343,113 545,212
----------- ---------- ---------- --------- ----------
10,152,475 11,364,018 11,507,533 8,495,530 9,229,667
----------- ---------- ---------- --------- ----------
Operating expenses:
Technical services............. 3,659,296 4,085,795 3,883,507 2,945,813 3,004,028
Selling, general and
administrative.............. 3,324,964 3,835,728 3,548,336 2,737,045 2,698,636
Executive recruiting and
severance................... 131,913 163,595 -- -- --
Management fees to general
partner (note 5)............ 457,000 249,996 -- -- --
Depreciation and
amortization................ 3,543,531 3,222,131 2,674,826 1,925,540 2,191,614
----------- ---------- ---------- --------- ----------
11,116,704 11,557,245 10,106,669 7,608,398 7,894,278
Operating income (loss)........ (964,229) (193,227) 1,400,864 887,132 1,335,389
----------- ---------- ---------- --------- ----------
Other expenses:
Interest expense............... 2,102,307 2,073,420 2,059,741 1,547,883 2,159,701
Loss on sale of assets......... 190,189 12,027 -- -- --
Other (note 9)................. 59,942 342,045 343,849 148,901 790,461
----------- ---------- ---------- --------- ----------
Net income (loss)...... $(3,316,667) (2,620,719) (1,002,726) (809,652) (1,614,773)
=========== ========== ========== ========= ==========
</TABLE>

See accompanying notes to financial statements.

F-35
<PAGE> 128

OUTDOOR EAST, L.P.

STATEMENTS OF PARTNERS' DEFICIT

<TABLE>
<CAPTION>
PARTNERS'
CAPITAL ACCUMULATED
CONTRIBUTIONS DEFICIT TOTAL
------------- ----------- ----------
<S> <C> <C> <C>
Balances, January 1, 1993............................ $ 16,233,150 (20,224,097) (3,990,947)
Capital contributions.............................. 6,000,000 -- 6,000,000
Net loss........................................... -- (3,316,667) (3,316,667)
------------ ----------- ----------
Balances, December 31, 1993.......................... $ 22,233,150 (23,540,764) (1,307,614)
Capital contributions.............................. 950,000 -- 950,000
Net loss........................................... -- (2,620,719) (2,620,719)
------------ ----------- ----------
Balances, December 31, 1994.......................... $ 23,183,150 (26,161,483) (2,978,333)
Capital contributions.............................. 479,166 -- 479,166
Net loss........................................... -- (1,002,726) (1,002,726)
------------ ----------- ----------
Balances, December 31, 1995.......................... $ 23,662,316 (27,164,209) (3,501,893)
Capital contributions (Note 9)..................... 4,540,000 -- 4,540,000
Net loss........................................... -- (1,614,773) (1,614,773)
------------ ----------- ----------
Balances, September 30, 1996 (unaudited)............. $ 28,202,316 (28,778,982) (576,666)
============ =========== ==========
</TABLE>

See accompanying notes to financial statements.

F-36
<PAGE> 129

OUTDOOR EAST, L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- ------------------------
1993 1994 1995 1995 1996
----------- ---------- ---------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss..................................... $(3,316,667) (2,620,719) (1,002,726) (809,652) (1,614,773)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization............. 3,543,531 3,225,367.. 2,674,826 1,925,540 2,191,614
Gain (loss) on sale of assets............. (19,921) 12,027 -- -- --
Loss on disposition of assets............. 261,644 -- -- -- --
Changes in operating assets and
liabilities:
Decrease (increase) accounts receivable,
prepaid expenses and other assets.... (353,900) (315,127) 92,117 30,149 (259,359)
(Decrease) increase in accounts payable,
accrued interest payable, other
accrued liabilities, and deferred
revenue.............................. 317,646 (427,469) (515,633) (415,765) (44,041)
----------- ---------- ---------- --------- -----------
Net cash provided by (used in)
operating activities............... 432,333 (125,921) 1,248,584 730,272 273,441
----------- ---------- ---------- --------- -----------
Cash flows from investing activities:
Purchases of property and equipment.......... (2,281,251) (475,240) (810,732) (607,046) (783,580)
Proceeds from sale of assets................. 27,204 -- -- -- --
----------- ---------- ---------- --------- -----------
Net cash used in investing
activities......................... (2,254,047) (475,240) (810,732) (607,046) (783,580)
----------- ---------- ---------- --------- -----------
Cash flows from financing activities:
Capital contributions........................ 6,000,000 950,000 479,166 479,166 4,540,000
Proceeds from notes payable.................. 213,144 73,600 -- -- 22,750,000
Repayments of notes payable and long-term
debt...................................... (3,970,883) (494,378) (683,294) (509,675) (23,603,440)
Cash deposited in escrow..................... -- -- -- -- (750,000)
Payment of debt issuance costs............... (280,645) -- -- -- (1,885,444)
----------- ---------- ---------- --------- -----------
Net cash provided by (used in)
financing activities............... 1,961,616 529,222 (204,128) (30,509) 1,051,116
----------- ---------- ---------- --------- -----------
Net increase (decrease) in cash and
cash equivalents................... 139,902 (71,939) 233,724 92,717 540,977
Cash and cash equivalents at beginning of
year......................................... 183,696 323,598 251,659 251,659 485,383
----------- ---------- ---------- --------- -----------
Cash and cash equivalents at end of year....... $ 323,598 251,659 485,383 344,376 1,026,360
=========== ========== ========== ========= ===========
Supplemental cash flow information:
Cash paid for interest....................... $ 2,274,370 2,083,743 2,067,342 1,559,241 1,796,710
=========== ========== ========== ========= ===========
Issuance of Note Payable for purchase of fixed
assets (note 6).............................. $ -- 445,000 -- -- --
=========== ========== ========== ========= ===========
</TABLE>

See accompanying notes to financial statements.

F-37
<PAGE> 130

OUTDOOR EAST, L.P.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1995

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Outdoor East, L.P. (the Partnership) is a Delaware limited partnership
which acquires, operates and develops outdoor advertising businesses throughout
the Southeast United States. The managing general partner of the Partnership is
First Carolina Communications, Inc. (FCCI).

The balance sheet as of September 30, 1996, and the statements of
operations, partners' equity, and cash flows for the nine months ended September
30, 1995 and 1996 have been prepared by the Partnership without audit. In the
opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial position,
results of operations and cash flows as of September 30, 1996 and for the nine
months ended September 30, 1995 and 1996, have been included.

(b) Allocation of Profits and Losses

The Partnership agreement generally provides for the allocation of profits
and losses among the partners in proportion to their respective capital
contributions. Profits and losses are allocated to the partners in the following
percentages: 19.8% to the general partner and 80.2% to the limited partners.

For purposes of the statements or cash flows, the Partnership considers
investments with original maturities of three months or less to be cash
equivalents.

(d) Revenue Recognition

The Partnership recognizes advertising revenue as the services are
provided. The revenue is recorded net of advertising agency commission expense.
Allowances for doubtful accounts are provided based on estimated losses.

(e) Property and Equipment

Property and equipment are recorded at cost and depreciation is computed
using various accelerated methods over the estimated useful lives of the assets
as follows: buildings and improvements -- 31.5 years; sign structures -- 15
years; vehicles, shop equipment, leasehold improvements, and office furniture
and equipment -- 5 to 7 years. Maintenance and repairs are expensed as incurred;
and property additions, renewals and improvements are capitalized. When assets
are retired or otherwise disposed of, the related cost and accumulated
depreciation are removed from the respective accounts and any gain or loss is
recognized.

(f) Intangible Assets

The Partnership's display structures are generally located on leased sites
under long-term operating leases providing for monthly rental payments over the
term of the lease, which generally range from 5 to 15 years. The estimated fair
value of leases in place (arising from favorable terms) obtained in business
combinations is allocated to site lease rights and amortized using the
straight-line method over the weighted average remaining life of the leases.
Additionally, direct costs associated with obtaining new site leases are
capitalized and amortized over a period of five years. Accumulated amortization
of site lease rights was approximately $5,299,000 and $5,808,000 at December 31,
1994 and 1995, respectively, and $6,164,000 at September 30, 1996 (unaudited).

F-38
<PAGE> 131

OUTDOOR EAST, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Goodwill arising from business combinations is amortized using the
straight-line method over a period of 20 years. Accumulated amortization of
goodwill was approximately $765,000 and $896,000 at December 31, 1994 and 1995,
respectively, and $1,002,000 at September 30, 1996 (unaudited).

Direct costs associated with obtaining long-term debt are deferred and
amortized using the straight-line method over the term of the loan agreement.
Accumulated amortization of deferred finance costs was approximately $189,000
and $239,000 at December 31, 1994 and 1995, respectively, and $407,000 at
September 30, 1996 (unaudited).

(g) Income Taxes

The Partnership's profits and losses are reported directly by the partners
for income tax purposes. Accordingly, the Partnership is not liable for federal
or state income taxes.

(h) Use of Estimates

(2) PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
1994 1995 1996
----------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Land........................................ $ 131,173 131,173 131,173
Buildings and leasehold improvements........ 1,191,124 1,205,286 1,218,028
Sign structures............................. 25,453,180 26,162,278 26,760,672
Vehicles.................................... 1,138,059 1,239,132 1,265,351
Shop equipment.............................. 183,766 206,401 221,355
Office furniture and equipment.............. 696,006 876,849 1,008,052
Construction in progress.................... 217,079 -- --
----------- ----------- -----------
29,010,387 29,821,119 30,604,631
Accumulated depreciation.................... (11,642,122) (13,623,938) (15,039,086)
----------- ----------- -----------
$17,368,265 16,197,181 15,565,545
=========== =========== ===========
</TABLE>

F-39
<PAGE> 132

OUTDOOR EAST, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Depreciation expense for the years ended December 31, 1995 and 1994 was
approximately $2,059,000 and $1,985,000, respectively, and $1,415,000 at
September 30, 1996 (unaudited).

(3) LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
1994 1995 1996
----------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Term loan facility, secured by pledged
assets and partnership interests, with
interest payable quarterly at LIBOR plus
3.25%..................................... $ -- -- 22,500,000
Revolving line of credit, secured by pledged
assets and partnership interests, with
interest payable at LIBOR plus 3.25%...... -- -- 250,000
Bank credit facility, secured by pledge of
assets, partnership interests and partial
guarantee of majority limited partner,
with interest payable quarterly at
7 7/8%.................................... 22,370,000 21,870,000 --
Note payable, secured by standby letter of
credit, payable in 120 monthly
installments of $6,250 plus interest at
10%, final installment of $750,000 due
June 1, 1999.............................. 1,081,250 1,006,250 950,000
Other....................................... 194,839 112,894 109,604
--- --- ----------
23,646,089 22,989,144 23,809,604
Less current portion........................ (655,588) (21,990,932) (866,667)
----------- ----------- -----------
$22,990,501 998,212 22,942,937
=========== =========== ===========
</TABLE>

The bank credit facility is payable in graduated quarterly installments
through December 31, 1999. The Bank Credit Facility Agreement (the "Agreement")
contains restrictive covenants which include the maintenance of certain
financial ratios.

Effective March 28, 1994, the Agreement was amended to waive certain debt
covenant violations and defaults and to revise certain provisions which, among
other things, restrict capital expenditures and management fees. Effective June
15, 1995, the Agreement was further amended to revise certain covenants and to
prohibit payment of management fees to FCCI.

The Partnership failed to meet certain covenant requirements which has
placed the Partnership in technical default. Consequently, the Partnership has
classified the entire outstanding balance of the bank credit facility as a
current liability as of December 31, 1995.

Scheduled maturities of long-term debt are as follows:

F-40
<PAGE> 133

OUTDOOR EAST, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Partnership has an open letter of credit with an available balance of
$1,175,000. The Partnership pays an annual fee of 1.5% of the available balance.

See note 9.

(4) NOTE PAYABLE

In 1994, the Partnership acquired $445,000 of signboards from Lamar
Advertising, Inc., a Georgia based company in exchange for the issuance of a
note payable. The note is dated September 30, 1994 and calls for interest at 9%,
payable monthly. The note is due in full on May 1, 1996. See note 9.

(5) RELATED PARTY TRANSACTIONS

FCCI provides management services to the Partnership. During 1994, the
Partnership paid $249,996 in management fees. As is required by a covenant in
the Partnership's Bank Credit Facility Agreement, the Partnership did not pay
management fees to FCCI during 1995.

Accounts payable -- general partner primarily represents unpaid management
fees due to FCCI, and are noninterest bearing.

Notes payable to general partner represent unsecured advances from FCCI,
which bear interest at 7 7/8%, payable in graduated quarterly installments. Any
unpaid principal and interest is due in full on March 31, 2000. See note 9.

(6) COMMITMENTS

In the normal course of business, the Partnership maintains long-term
operating leases for land site locations. The aggregate future minimum lease
payments required under noncancelable operating leases as of December 31, 1995
were as follows:

<TABLE>
<S> <C>
1996............................................. $ 429,421
1997............................................. 389,410
1998............................................. 330,445
1999............................................. 271,513
2000............................................. 199,795
Thereafter....................................... 988,271
----------
$2,608,855
==========
</TABLE>

Total site lease expense was approximately $1,467,000, $1,559,000 and
$1,615,000, respectively, for the years ended December 31, 1993, 1994 and 1995
and approximately $1,218,000 for the nine months ended September 30, 1996
(unaudited).

(7) LITIGATION

On December 19, 1995, COA, Inc., formerly known as Columbia Outdoor
Advertising, Inc. filed suit against Outdoor South, L.P. in the Court of Common
Pleas of Richland County, South Carolina. Outdoor South, L.P. was formerly an
affiliate of the Company and ceased to exist on October 25, 1990 in a
transaction in which the Company succeeded to Outdoor South, L.P.'s assets and
liabilities. The suit alleges that Outdoor South, L.P. is indebted to the
plaintiff in the amount of $101,707 arising out of Outdoor South, L.P.'s
acquisition of the assets of COA, Inc. in 1990. An answer denying liability has
been filed in this action and no further proceedings have yet occurred. No
charge has been made to the Company's income related to this litigation.

F-41
<PAGE> 134

OUTDOOR EAST, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(8) LIQUIDITY

The Partnership had a negative working capital balance of $20,627,851 as of
December 31, 1995 as a result of its classifying the outstanding balance of the
Bank Credit Facility as a current liability. The Partnership was in technical
default of the Bank Credit Facility Agreement, since it failed to meet certain
covenant requirements contained therein.

On June 13, 1996, the Partnership signed a new Bank Credit Facility (the
"Facility"). The Facility is comprised of a Term Loan Facility ( the "Term
Loan") for $22.5 million and a Revolving Line of Credit (the "LOC") for up to
$7.5 million. Quarterly installment payments on the Term Loan will commence on
June 30, 1997. Outstanding balances under the LOC will be due on June 30, 2003,
the Facility's termination date. Borrowings under the Facility are secured by
the assets of the Partnership and partnership interests. Covenants under the
Facility require the Partnership to maintain certain debt to cash flow ratios.
The Partnership has placed $750,000 of the proceeds in escrow as provided for in
the Facility. The escrow balance has been recorded in other non-current assets
in the accompanying September 30, 1996 balance sheet. The remaining proceeds
from the Facility were used to pay-off the Partnership's existing Bank Credit
Facility, the note payable to Lamar Advertising, Inc., and for general purposes.
In addition, the lenders and others invested $4,540,000 in the Partnership.

(9) SUBSEQUENT EVENTS (UNAUDITED)

In October 1996, the Partnership signed an agreement for the sale of the
assets and liabilities of the Partnership to Lamar Advertising, Inc.

Through September 30, 1996, the Partnership has recorded approximately
$716,000 of cost associated with an initial potential sale and reorganization of
the Partnership as other expenses.

F-42
<PAGE> 135

[PHOTOGRAPH OF POSTER, BULLETIN, HIGHWAY LOGO SIGN AND BUS SHELTER]
<PAGE> 136

================================================================================

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THOSE TO WHICH IT RELATES
IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

---------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 12
The Transactions...................... 18
Use of Proceeds....................... 20
Capitalization........................ 21
Selected Consolidated Historical and
Pro Forma Financial and Operating
Data................................ 22
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 34
Business.............................. 41
Management............................ 54
Certain Transactions.................. 58
Principal Stockholders................ 59
Description of Notes.................. 61
Description of Capital Stock.......... 83
Description of Other Indebtedness..... 85
Underwriting.......................... 89
Certain Legal Matters................. 89
Experts............................... 90
Additional Information................ 90
Incorporation of Certain Documents by
Reference........................... 90
Index to Consolidated Historical and
Pro Forma Financial Statements...... F-1
</TABLE>

================================================================================

$225,000,000

[LAMAR LOGO]

% SENIOR SUBORDINATED NOTES DUE 2006

------------

PROSPECTUS

, 1996

------------

SMITH BARNEY INC.

CHASE SECURITIES INC.

CIBC WOOD GUNDY SECURITIES CORP.

================================================================================
<PAGE> 137

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following are the estimated expenses of issuance and distribution of
the Notes registered hereunder on Form S-3 other than underwriting discounts and
commissions:

<TABLE>
<S> <C>
SEC registration fee..................................................... $68,181.82
NASD filing fee.......................................................... 23,000.00
Blue Sky fees and expenses...............................................
Printing and engraving expenses..........................................
Accounting fees and expenses.............................................
Legal fees and expenses..................................................
Trustee fees.............................................................
Miscellaneous expenses...................................................
----------
Total.......................................................... $
==========
</TABLE>

All of the above figures, except the SEC registration fee and NASD filing
fee, are estimates.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law grants Lamar the power
to indemnify each person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason of the fact
that he is or was a director, officer, employee or agent of Lamar, or is or was
serving at the request of Lamar as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with any
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of Lamar, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful, provided, however, no indemnification shall be
made in connection with any proceeding brought by or in the right of Lamar where
the person involved is adjudged to be liable to Lamar except to the extent
approved by a court.

Lamar's By-laws provide that any person who is made a party to any action
or proceeding because such person is or was a director or officer of Lamar will
be indemnified and held harmless against all claims, liabilities and expenses,
including those expenses incurred in defending a claim and amounts paid or
agreed to be paid in connection with reasonable settlements made before final
adjudication with the approval of the Board of Directors, if such person has not
acted, or in the judgement or the shareholders or directors of Lamar has not
acted, with willful or intentional misconduct. The indemnification provided for
in Lamar's By-laws is expressly not exclusive of any other rights to which those
seeking indemnification may be entitled as a matter of law.

Lamar's Certificate of Incorporation (the "Certificate") provides that
directors of Lamar will not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
whether or not an individual continues to be a director at the time such
liability is asserted, except for liability (i) for any breach of the director's
duty of loyalty to Lamar or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL, relating to prohibited dividends or
distributions or the repurchase or redemption of stock, or (iv) for any
transaction from which the director derives an improper personal benefit.

II-1
<PAGE> 138

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------------- ------------------------------------------------------------------------
<C> <S>
1.1 -- Form of Underwriting Agreement. To be filed by amendment.

3.1 -- Amended and Restated Certificate of Incorporation of the Registrant.
Previously filed as Exhibit 3.1 to the Registrant's Registration
Statement on Form S-1 (File No. 333-05479), and incorporated herein
by reference.

3.2 -- By-Laws of the Registrant, as amended. Previously filed as Exhibit
3.2 to the Registrant's Registration Statement on Form S-1 (File No.
333-05479), and incorporated herein by reference.

4.1 -- Specimen certificate for the shares of Class A Common Stock of the
Registrant. Previously filed as Exhibit 4.1 to the Registrant's
Registration Statement on Form S-1 (File No. 333-05479), and
incorporated herein by reference.

4.2 -- Senior Secured Note dated May 19, 1993. Previously filed as Exhibit
4.1 to the Registrant's Registration Statement on Form S-1 (File No.
33-59624), and incorporated herein by reference.

4.3 -- Subsidiary Guarantees dated May 19, 1993. Previously filed as Exhibit
4.2 to the Registrant's Registration Statement on Form S-1 (File No.
33-59624), and incorporated herein by reference.

4.4 -- Indenture dated May 15, 1993. Previously filed as Exhibit 4.3 to the
Registrant's Registration Statement on Form S-1 (File No. 33-59624),
and incorporated herein by reference.

4.5 -- First Supplemental Indenture dated July 30, 1996. Previously filed as
Exhibit 4.5 to the Registrant's Registration Statement on Form S-1
(File No. 333-05479), and incorporated herein by reference.

4.6 -- Pledge Agreement dated May 19, 1993. Previously filed as Exhibit 4.4
to the Registrant's Registration Statement on Form S-1 (File No.
33-59624), and incorporated herein by reference.

4.7 -- Amendment to Pledge Agreement dated July 30, 1996. Previously filed
as Exhibit 4.7 to the Registrant's Registration Statement on Form S-1
(File No. 333-05479), and incorporated herein by reference.

4.8 -- Form of Subordinated Note. Previously filed as Exhibit 4.8 to the
Registrant's Registration Statement on Form S-1 (File No. 333-05479),
and incorporated herein by reference.

5.1 -- Opinion of Palmer & Dodge LLP. To be filed by amendment.

10.1 -- Bank Credit Agreement between the Registrant and The Chase Manhattan
Bank (National Association) dated May 19, 1993. Previously filed as
Exhibit 10.1 to the Registrant's Registration Statement on Form S-1
(File No. 33-59624), and incorporated herein by reference.

10.2 -- Consultation Agreement dated July 1, 1996 between the Lamar Texas
Limited Partnership and the Reilly Consulting Company, LLC., of which
Kevin P. Reilly, Sr. is the manager. Previously filed as Exhibit 10.2
to the Registrant's Registration Statement on Form S-1 (File No.
333-05479), and incorporated herein by reference.

10.3 -- Indenture dated as of September 24, 1986 relating to the Registrant's
8% Unsecured Subordinated Debentures. Previously filed as Exhibit
10.4 to the Registrant's Registration Statement on Form S-1 (File No.
33-59624), and incorporated herein by reference.

10.4 -- The Lamar Savings and Profit Sharing Plan Trust. Previously filed as
Exhibit 10.5 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1995 (File No. 33-59624), and
incorporated herein by reference.
</TABLE>

II-2
<PAGE> 139

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------------- ------------------------------------------------------------------------
<C> <S>
10.5 -- Amendment and Waiver to the Bank Credit Agreement between the
Registrant and the Chase Manhattan Bank, dated September 30, 1993.
Previously filed as Exhibit 10.6 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended October 31, 1995 (File No.
33-59624), and incorporated herein by reference.

10.6 -- Second Amendment to the Bank Credit Agreement between the Registrant
and the Chase Manhattan Bank, dated January 1, 1994. Previously filed
as Exhibit 10.7 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1995 (File No. 33-59624), and
incorporated herein by reference.

10.7 -- Third Amendment to the Bank Credit Agreement between the Registrant
and the Chase Manhattan Bank, dated May 10, 1994. Previously filed as
Exhibit 10.8 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1995 (File No. 33-59624), and
incorporated herein by reference.

10.8 -- Fourth Amendment to the Bank Credit Agreement between the Registrant
and the Chase Manhattan Bank, dated October 31, 1994. Previously
filed as Exhibit 10.9 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 31, 1995 (File No. 33-59624), and
incorporated herein by reference.

10.9 -- Fifth Amendment to the Bank Credit Agreement between the Registrant
and the Chase Manhattan Bank, dated October 15, 1995. Previously
filed as Exhibit 10.10 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 31, 1995 (File No. 33-59624), and
incorporated herein by reference.

10.10 -- Sixth Amendment to the Bank Credit Agreement between the Registrant
and the Chase Manhattan Bank, dated July 12, 1996. Previously filed
as Exhibit 10.10 to the Registrant's Registration Statement on Form
S-1 (File No. 333-05479), and incorporated herein by reference.

10.11 -- Trust under The Lamar Corporation, its Affiliates and Subsidiaries
Deferred Compensation Plan dated October 3, 1993. Previously filed as
Exhibit 10.11 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1995 (File No. 33-59624), and
incorporated herein by reference.
10.12 -- Bank Credit Agreement between the Registrant and the Chase Manhattan

Bank (National Association) dated December 22, 1995. Previously filed
as Exhibit 10.12 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1995 (File No. 33-59624), and
incorporated herein by reference.

10.13 -- Amendment No. 1 to Bank Credit Agreement between the Registrant and
the Chase Manhattan Bank (National Association) dated July 12, 1996.
Previously filed as Exhibit 10.13 to the Registrant's Registration
Statement on Form S-1 (File No. 333-05479), and incorporated herein
by reference.

10.14 -- 1996 Equity Incentive Plan. Previously filed as Exhibit 10.14 to the
Registrant's Registration Statement on Form S-1 (File No. 333-05479),
and incorporated herein by reference.

10.15 -- Form of Indenture dated as of November 1, 1996 relating to the
Registrant's New Notes. To be filed by amendment.

10.16 -- Form of New Credit Agreement, dated as of November , 1996. Form of
Pledge Agreement dated November , 1996. To be filed by amendment.

10.17 -- Contract to Sell and Purchase, dated as of October 9, 1996, between
the Registrant and Outdoor East L.P. To be filed by amendment.

10.18 -- Stock Purchase Agreement, dated as of September 25, 1996, between the
Registrant and the shareholders of FKM Advertising, Inc. To be filed
by amendment.

10.19 -- Form of Pledge Agreement, dated as of November , 1996. To be filed
by amendment.

23.1 -- Consent of KPMG Peat Marwick LLP, independent accountants of Lamar
Advertising Company. Filed herewith.
</TABLE>

II-3
<PAGE> 140

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------------- ------------------------------------------------------------------------
<S> <C>
23.2 -- Consent of KPMG Peat Marwick LLP, independent accountants of Outdoor
East, L.P. Filed herewith.

23.3 -- Consent of McGrail, Merkel, Quinn and Associates, independent
accountants of FKM Advertising Co., Inc. Filed herewith.

23.4 -- Consent of Palmer & Dodge LLP (included in Exhibit 5.1).

24.1 -- Power of Attorney (included in the signature page to this
Registration Statement).
</TABLE>

ITEM 17. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be a part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 141

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Baton Rouge, State of Louisiana, on October 24, 1996.

LAMAR ADVERTISING COMPANY

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Advertising Company,
hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre,
Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true and
lawful attorneys, with full power to them in any and all capacitates, to sign
any amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- ------------------
<S> <C> <C>
/s/ KEVIN P. REILLY, JR. Director and Principal October 24, 1996
- --------------------------------------------- Executive Officer
Kevin P. Reilly, Jr.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ DUDLEY W. COATES Director October 24, 1996
- ---------------------------------------------
Dudley W. Coates

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

Director
- ---------------------------------------------
Jack S. Rome, Jr.

Director
- ---------------------------------------------
William R. Schmidt

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>

II-5
<PAGE> 142

SIGNATURES

GEORGIA LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Georgia Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- ------------------
<S> <C> <C>
/s/ T. EVERETT STEWART, JR. Director and Principal October 24, 1996
- --------------------------------------------- Executive Officer
T. Everett Stewart, Jr.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 143

SIGNATURES

INTERSTATE LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Interstate Logos, Inc.,
hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre,
Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true and
lawful attorneys, with full power to them in any and all capacitates, to sign
any amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 144

SIGNATURES

KANSAS LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Kansas Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 145

SIGNATURES

LAMAR ADVERTISING OF COLORADO
SPRINGS, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Advertising of Colorado
Springs, Inc., hereby severally constitute and appoint Kevin P. Reilly, Jr.,
Keith A. Istre, Ben R. Miller, Jr. and Stanley Keller, and each of them singly,
our true and lawful attorneys, with full power to them in any and all
capacitates, to sign any amendments to this Registration Statement on Form S-3
(including Pre- and Post-Effective Amendments), and any related Rule 462(b)
registration statement or amendment thereto, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 146

SIGNATURES

LAMAR ADVERTISING OF JACKSON, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Advertising of Jackson,
Inc., hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A.
Istre, Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true
and lawful attorneys, with full power to them in any and all capacitates, to
sign any amendments to this Registration Statement on Form S-3 (including Pre-
and Post-Effective Amendments), and any related Rule 462(b) registration
statement or amendment thereto, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 147

SIGNATURES

LAMAR ADVERTISING OF MOBILE, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Advertising of Mobile,
Inc., hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A.
Istre, Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true
and lawful attorneys, with full power to them in any and all capacitates, to
sign any amendments to this Registration Statement on Form S-3 (including Pre-
and Post-Effective Amendments), and any related Rule 462(b) registration
statement or amendment thereto, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar
/s/ GERALD H. MARCHAND Director October 24, 1996

- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 148

SIGNATURES

LAMAR ADVERTISING OF SOUTH GEORGIA,
INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Advertising of South
Georgia, Inc., hereby severally constitute and appoint Kevin P. Reilly, Jr.,
Keith A. Istre, Ben R. Miller, Jr. and Stanley Keller, and each of them singly,
our true and lawful attorneys, with full power to them in any and all
capacitates, to sign any amendments to this Registration Statement on Form S-3
(including Pre- and Post-Effective Amendments), and any related Rule 462(b)
registration statement or amendment thereto, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer
/s/ CHARLES W. LAMAR Director October 24, 1996

- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 149

SIGNATURES

LAMAR ADVERTISING OF SOUTH
MISSISSIPPI, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Advertising of South
Mississippi, Inc., hereby severally constitute and appoint Kevin P. Reilly, Jr.,
Keith A. Istre, Ben R. Miller, Jr. and Stanley Keller, and each of them singly,
our true and lawful attorneys, with full power to them in any and all
capacitates, to sign any amendments to this Registration Statement on Form S-3
(including Pre- and Post-Effective Amendments), and any related Rule 462(b)
registration statement or amendment thereto, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 150

SIGNATURES

LAMAR AIR, LLC

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Air, LLC, hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 151

SIGNATURES

LAMAR PENSACOLA TRANSIT, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Pensacola Transit,
Inc., hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A.
Istre, Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true
and lawful attorneys, with full power to them in any and all capacitates, to
sign any amendments to this Registration Statement on Form S-3 (including Pre-
and Post-Effective Amendments), and any related Rule 462(b) registration
statement or amendment thereto, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 152

SIGNATURES

LAMAR TENNESSEE LIMITED
PARTNER, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Tennessee Limited
Partner, Inc., hereby severally constitute and appoint Kevin P. Reilly, Jr.,
Keith A. Istre, Ben R. Miller, Jr. and Stanley Keller, and each of them singly,
our true and lawful attorneys, with full power to them in any and all
capacitates, to sign any amendments to this Registration Statement on Form S-3
(including Pre- and Post-Effective Amendments), and any related Rule 462(b)
registration statement or amendment thereto, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 153

SIGNATURES

LAMAR TENNESSEE LIMITED
PARTNERSHIP

By: THE LAMAR CORPORATION
------------------------------------
its General Partner

By: /s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer
<PAGE> 154

SIGNATURES

LAMAR TENNESSEE LIMITED
PARTNERSHIP II

By: THE LAMAR CORPORATION
------------------------------------
its General Partner

By: /s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer
<PAGE> 155

SIGNATURES

LAMAR TEXAS GENERAL PARTNER, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Texas General Partner,
Inc., hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A.
Istre, Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true
and lawful attorneys, with full power to them in any and all capacitates, to
sign any amendments to this Registration Statement on Form S-3 (including Pre-
and Post-Effective Amendments), and any related Rule 462(b) registration
statement or amendment thereto, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 156

SIGNATURES

LAMAR TEXAS LIMITED PARTNERSHIP

By: LAMAR TEXAS GENERAL PARTNER,
INC., its General Partner

By: /s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer
<PAGE> 157

SIGNATURES

MICHIGAN LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Michigan Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- ------------------
<C> <S> <C>
/s/ T. EVERETT STEWART, JR. Director and Principal October 24, 1996
- --------------------------------------------- Executive Officer
T. Everett Stewart, Jr.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 158

SIGNATURES

MINNESOTA LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Minnesota Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- ------------------
<C> <S> <C>

/s/ T. EVERETT STEWART, JR. Director and Principal October 24, 1996
- --------------------------------------------- Executive Officer
T. Everett Stewart, Jr.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 159

SIGNATURES

MINNESOTA LOGOS, A PARTNERSHIP

By: MINNESOTA LOGOS, INC.,
its General Partner

By: /s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer
<PAGE> 160

SIGNATURES

MISSISSIPPI LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Mississippi Logos, Inc.,
hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre,
Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true and
lawful attorneys, with full power to them in any and all capacitates, to sign
any amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 161

SIGNATURES

MISSOURI LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Missouri Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 162

SIGNATURES

NEBRASKA LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Nebraska Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 163

SIGNATURES

NEW JERSEY LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of New Jersey Logos, Inc.,
hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre,
Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true and
lawful attorneys, with full power to them in any and all capacitates, to sign
any amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 164

SIGNATURES

OHIO LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Ohio Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 165

SIGNATURES

OKLAHOMA LOGO SIGNS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Oklahoma Logo Signs, Inc.,
hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre,
Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true and
lawful attorneys, with full power to them in any and all capacitates, to sign
any amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 166

SIGNATURES

SOUTH CAROLINA LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of South Carolina Logos, Inc.,
hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre,
Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true and
lawful attorneys, with full power to them in any and all capacitates, to sign
any amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 167

SIGNATURES

TENNESSEE LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Tennessee Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 168

SIGNATURES

TEXAS LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Texas Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 169

SIGNATURES

THE LAMAR CORPORATION

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of The Lamar Corporation, hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- ------------------
<C> <S> <C>
/s/ KEVIN P. REILLY, JR. Director and Principal October 24, 1996
- --------------------------------------------- Executive Officer
Kevin P. Reilly, Jr.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ DUDLEY W. COATES Director October 24, 1996
- ---------------------------------------------
Dudley W. Coates

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
Director
- ---------------------------------------------
Jack S. Rome, Jr.
Director
- ---------------------------------------------
William R. Schmidt

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 170

SIGNATURES

TLC PROPERTIES, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of TLC Properties, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 171

SIGNATURES

TLC PROPERTIES II, INC.

/s/ KEVIN P. REILLY, JR.
------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Lamar Properties II, Inc.,
hereby severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre,
Ben R. Miller, Jr. and Stanley Keller, and each of them singly, our true and
lawful attorneys, with full power to them in any and all capacitates, to sign
any amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand

/s/ T. EVERETT STEWART, JR. Director October 24, 1996
- ---------------------------------------------
T. Everett Stewart, Jr.
</TABLE>
<PAGE> 172

SIGNATURES

UTAH LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Utah Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 173

SIGNATURES

VIRGINIA LOGOS, INC.

/s/ T. EVERETT STEWART, JR.
------------------------------------
T. Everett Stewart, Jr.
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Virginia Logos, Inc., hereby
severally constitute and appoint Kevin P. Reilly, Jr., Keith A. Istre, Ben R.
Miller, Jr. and Stanley Keller, and each of them singly, our true and lawful
attorneys, with full power to them in any and all capacitates, to sign any
amendments to this Registration Statement on Form S-3 (including Pre- and
Post-Effective Amendments), and any related Rule 462(b) registration statement
or amendment thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact may do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ KEITH A. ISTRE Director and Principal October 24, 1996
- --------------------------------------------- Financial and Accounting
Keith A. Istre Officer

/s/ KEVIN P. REILLY, JR. Director October 24, 1996
- ---------------------------------------------
Kevin P. Reilly, Jr.

/s/ CHARLES W. LAMAR Director October 24, 1996
- ---------------------------------------------
Charles W. Lamar

/s/ GERALD H. MARCHAND Director October 24, 1996
- ---------------------------------------------
Gerald H. Marchand
</TABLE>
<PAGE> 174

INDEX TO EXHIBITS

EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<S> <C>
1.1 -- Form of Underwriting Agreement. To be filed by amendment.

3.2 -- By-Laws of the Registrant, as amended. Previously filed as Exhibit
3.2 to the Registrant's Registration Statement on Form S-1 (File No.
333-05479), and incorporated herein by reference.

4.2 -- Senior Secured Note dated May 19, 1993. Previously filed as Exhibit
4.1 to the Registrant's Registration Statement on Form S-1 (File No.
33-59624), and incorporated herein by reference.

4.3 -- Subsidiary Guarantees dated May 19, 1993. Previously filed as Exhibit
4.2 to the Registrant's Registration Statement on Form S-1 (File No.
33-59624), and incorporated herein by reference.

4.4 -- Indenture dated May 15, 1993. Previously filed as Exhibit 4.3 to the
Registrant's Registration Statement on Form S-1 (File No. 33-59624),
and incorporated herein by reference.

4.6 -- Pledge Agreement dated May 19, 1993. Previously filed as Exhibit 4.4
to the Registrant's Registration Statement on Form S-1 (File No.
33-59624), and incorporated herein by reference.

4.8 -- Form of Subordinated Note. Previously filed as Exhibit 4.8 to the
Registrant's Registration Statement on Form S-1 (File No. 333-05479),
and incorporated herein by reference.

5.1 -- Opinion of Palmer & Dodge LLP. Filed herewith.

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<S> <C>
10.5 -- Amendment and Waiver to the Bank Credit Agreement between the
Registrant and the Chase Manhattan Bank, dated September 30, 1993.
Previously filed as Exhibit 10.6 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended October 31, 1995 (File No.
33-59624), and incorporated herein by reference.

10.12 -- Bank Credit Agreement between the Registrant and the Chase Manhattan
Bank (National Association) dated December 22, 1995. Previously filed
as Exhibit 10.12 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1995 (File No. 33-59624), and
incorporated herein by reference.

10.14 -- 1996 Equity Incentive Plan. Previously filed as Exhibit 10.14 to the
Registrant's Registration Statement on Form S-1 (File No. 333-05479),
and incorporated herein by reference.

10.15 -- Form of Indenture dated as of November 1, 1996 relating to the
Registrant's new Notes. To be filed by amendment.

10.16 -- Form of New Credit Agreement, dated as of November , 1996.

10.17 -- Contract to Sell and Purchase, dated as of October 9, 1996, between
the Registrant and Outdoor East L.P. To be filed by amendment.

10.18 -- Stock Purchase Agreement, dated as of September 25, 1996, between the
Registrant and the shareholders of FKM Advertising, Inc. To be filed
by amendment.

10.19 -- Form of Pledge Agreement, dated as of November , 1996. To be filed
by amendment.

23.1 -- Consent of KPMG Peat Marwick LLP, independent accountants of Lamar
Advertising Company. Filed herewith.
</TABLE>
<PAGE> 176

23.3 -- Consent of McGrail, Merkel, Quinn and Associates, independent
accountants of FKM Advertising Co., Inc. Filed herewith.

23.4 -- Consent of Palmer & Dodge LLP (included in Exhibit 5.1).

24.1 -- Power of Attorney (included in the signature page to this
Registration Statement).
</TABLE>

<PAGE> 1

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

The Board of Directors
Lamar Advertising Company:

We consent to the use of our report included herein and to the references
to our firm under the headings "Selected Consolidated Historical and Pro Forma
Financial and Operating Data" and "Experts" in the prospectus.

KPMG Peat Marwick LLP

New Orleans, Louisiana
October 22, 1996

<PAGE> 1

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

The Partners
Outdoor East, L.P.:

We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.

KPMG Peat Marwick LLP

Charlotte, North Carolina
October 22, 1996

<PAGE> 1

EXHIBIT 23.3

INDEPENDENT AUDITORS' CONSENT

The Board of Directors October 22, 1996
FKM Advertising Co., Inc.

We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.

McGrail Merkel Quinn & Associates