<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission only (as
permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
LAMAR ADVERTISING COMPANY
------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
LAMAR ADVERTISING COMPANY
5551 Corporate Boulevard, Baton Rouge, Louisiana 70808
(225) 926-1000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of the stockholders of Lamar Advertising Company, a
Delaware corporation (the "Company"), will be held at the offices of Lamar
Advertising Company, 5551 Corporate Boulevard, Baton Rouge, Louisiana, at 10:00
a.m. on Thursday, May 27, 1999, for the following purposes:
1. To elect eight directors of the Company, each for a one-year
term.
2. To approve an amendment to the Company's 1996 Equity Incentive
Plan to increase the number of shares of the Company's Class A
common stock available for issuance pursuant to awards under
the 1996 Equity Incentive Plan by 1,000,000 shares from
3,000,000 to 4,000,000 shares.
3. To approve an amendment to the Company's Restated Certificate
of Incorporation that would increase the number of authorized
shares of Class A common stock from 75,000,000 to 125,000,000
shares.
4. To transact such other business as may properly come before
the meeting.
Only stockholders of record at the close of business on April 9, 1999
will be entitled to vote at the meeting.
It is important that your shares be represented at the meeting.
Therefore, whether or not you plan to attend the meeting, please complete your
proxy and return it in the enclosed envelope, which requires no postage if
mailed in the United States. If you attend the meeting and wish to vote in
person, your proxy will not be used.
By order of the Board of Directors,
James R. McIlwain
Secretary
April 23, 1999
<PAGE> 3
LAMAR ADVERTISING COMPANY
---------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 27, 1999
---------------
General Information
The enclosed proxy is solicited on behalf of the Board of Directors of
Lamar Advertising Company (the "Company") for use at the annual meeting of
stockholders to be held at the offices of Lamar Advertising Company, 5551
Corporate Boulevard, Baton Rouge, Louisiana, at 10:00 a.m. on Thursday, May 27,
1999, and at any adjournments thereof. The approximate date on which this proxy
statement and accompanying proxy are first being sent or given to stockholders
is April 23, 1999.
The authority granted by an executed proxy may be revoked, at any time
before its exercise, by filing with the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date or by voting in person
at the meeting. Shares represented by valid proxies will be voted in accordance
with the specifications in the proxies. If no specifications are made, the
proxies will be voted to elect the directors nominated by the Board of Directors
and to approve the amendments to the Company's 1996 Equity Incentive Plan and
Restated Certificate of Incorporation.
Only stockholders of record at the close of business on April 9, 1999
(the "Record Date") will be entitled to vote at the meeting. On the Record Date,
the Company had outstanding 43,509,817 shares of Class A common stock and
17,700,000 shares of Class B common stock, which are its only outstanding
classes of voting stock. The holders of Class A common stock are entitled to one
vote for each share registered in their names on the Record Date with respect to
all matters to be acted upon at the meeting, and the holders of Class B common
stock are entitled to ten votes for each share registered in their names on the
Record Date with respect to such matters. The presence at the meeting, in person
or by proxy, of a majority in interest of the common stock issued and
outstanding and entitled to vote at the meeting shall constitute a quorum for
the transaction of business. Proxies submitted by brokers that do not indicate a
vote for one or more proposals because the brokers do not have discretionary
voting authority and have not received instructions from the beneficial owners
on how to vote on these proposals are called "broker non-votes." Abstentions and
broker non-votes will be considered present for purposes of determining the
presence of a quorum.
1
<PAGE> 4
Share Ownership
The following table and footnotes set forth certain information
regarding the beneficial ownership of the common stock as of March 1, 1999 by
(i) persons known by the Company to be beneficial owners of more than 5% of
either class of common stock, (ii) the Chief Executive Officer and each of the
other executive officers other than the Chief Executive Officer, (iii) each
director and nominee for election as a director of the Company and (iv) all
current executive officers and directors of the Company as a group:
<TABLE>
<CAPTION>
DIRECTORS, OFFICERS TITLE OF NUMBER OF PERCENT
AND 5% STOCKHOLDERS CLASS SHARES (1) OF CLASS
------------------- ------- ------------ --------
<S> <C> <C> <C>
Kevin P. Reilly, Jr. Class A 307,500(2) *
c/o The Lamar Corporation Class B(3) 17,700,000(4) 100.0%(5)
5551 Corporate Blvd.
Baton Rouge, LA 70808
Sean E. Reilly Class A 300,000(6) *
c/o The Lamar Corporation Class B 17,700,000 (4) 100%(5)
5551 Corporate Blvd.
Baton Rouge, LA 70808
Putnam Investments, Inc. Class A 7,609,810(7) 17.5%
One Post Office Square
Boston, MA 02109
Charles W. Lamar, III Class A 4,835,509(8) 11.1%
c/o The Lamar Corporation
5551 Corporate Blvd.
Baton Rouge, LA 70808
FMR Corp. Class A 4,402,500(9) 10.15%
82 Devonshire Street
Boston, MA 02109
Pilgrim Baxter & Associates, Ltd. Class A 2,997,450(10) 6.9%
825 Duportail Road
Wayne, PA 19087
AMVESCAP PLC Class A 2,419,950(11) 5.6%
11 Devonshire Square
London ECZ2M 4YR
England
Keith A. Istre Class A 51,512(12) *
Gerald H. Marchand Class A 165,125(13) *
Jack S. Rome, Jr. Class A 3,750(14) *
William R. Schmidt Class A 750 *
T. Everett Stewart, Jr. Class A 10,000(15) *
Stephen P. Mumblow CLASS A 0 *
All Directors and Executive Officers Class A 23,074,146(16) 37.7%(17)
as a Group (7 Persons)
</TABLE>
- ----------------------
2
<PAGE> 5
* 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) Includes 300,000 shares of Class A common stock held by the Reilly Family
Limited Partnership (the "RFLP").
(3) Upon the sale of any shares of Class B common stock to a person other than
to a Permitted Transferee, such shares will automatically convert into
shares of Class A common stock. 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. Except for voting rights, the Class A and Class B common stock
are substantially identical. The holders of Class A common stock and Class
B common stock vote together as a single class (except as may otherwise be
required by Delaware law), with the holders of 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.
(4) Consists of shares held by the RFLP, of which Kevin Reilly, the President
and Chief Executive Officer of the Company, is the managing general
partner. Kevin Reilly's three siblings, Wendell S. Reilly, Sean E. Reilly
(a nominee for director) and Anna Reilly Cullinan, are the other general
partners of the RFLP. The managing general partner has sole voting power
over the shares but dispositions of the shares require the approval of 50%
of the general partnership interests of the RFLP.
(5) Represents 29.0% of the Class A common stock if all shares of Class B
common stock are converted into Class A common stock.
(6) Held by the RFLP.
(7) Putnam Investments, Inc. ("PI") shares voting power as to 341,251 of these
shares with The Putnam Advisory Co., Inc. and shares dispositive power with
Putnam Investment Management, Inc. and The Putnam Advisory Co., Inc. as to
7,068,972 and 540,838 of these shares, respectively. Based on the Schedule
13-G/A for the year ended December 31, 1998 filed by PI with the SEC.
(8) Includes 1,409,967 shares of Class A common stock held in trust for Mr.
Lamar's two minor children who reside with him, as to which Mr. Lamar
disclaims beneficial ownership, and 1,500,000 shares of Class A common
stock held by CWL3, LLC, as to which Mr. Lamar is deemed the beneficial
owner.
(9) FMR Corp. has sole dispositive power over these shares. FMR Corp. has sole
voting power with respect to 65,200 of the shares. Based on the Schedule
13-G/A for the year ended December 31, 1998 filed by FMR Corp.
with the SEC.
(10) Based on the Schedule 13G for the year ended December 31, 1998 filed by
Pilgrim Baxter & Associates, Ltd. with the SEC.
(11) AMVESCAP PLC shares voting and dispositive power over these shares with
AVZ, Inc., AIM Management Group, Inc., AMVESCAP Group Services, Inc.,
INVESCO Inc., INVESCO Capital Management, Inc., INVESCO Management &
Research, Inc., INVESCO Realty Advisers, Inc., INVESCO North America
Holdings, Inc., INVESCO Funds Group, Inc. and INVESCO (NY) Asset
Management, Inc. Based on the Schedule 13-G for the year ended December 31,
1998 filed by AMVESCAP PLC with the SEC.
(12) Includes 50,200 shares of Class A common stock subject to stock options
exercisable within 60 days of March 1, 1999.
(13) Includes 10,000 shares of Class A common stock subject to stock options
exercisable within 60 days of March 1, 1999.
(14) Consists of 3,000 shares of Class A common stock held in trust for Mr.
Rome's two children and 750 shares of Class A common stock owned jointly
with J. King Woolf, III, as to which Mr. Rome is considered the beneficial
owner.
(15) Consists of 10,000 shares of Class A common stock subject to stock options
exercisable within 60 days of March 1, 1999.
(16) See Notes 2, 4, 8, 12, 13, 14 and 15.
(17) Assumes the conversion of all shares of Class B common stock into shares of
Class A common stock.
3
<PAGE> 6
Section 16(a) Beneficial Ownership Reporting Compliance
The Company's executive officers and directors and persons who own
beneficially more than ten percent of the Company's equity securities are
required under Section 16(a) of the Securities Exchange Act of 1934 to file
reports of ownership and changes in ownership of Company securities with the
Securities and Exchange Commission. Copies of these reports must also be
furnished to the Company. Based solely on a review of the copies of reports
furnished to the Company and written representations that no other reports were
required, the Company believes that during 1998 the Company's executive
officers, directors and 10% beneficial owners complied with all applicable
Section 16(a) filing requirements, subject to the following: The Reilly Family
Limited Partnership (the "RFLP"), a 10% owner of the Company, and Kevin P.
Reilly, Jr. (a director and Chief Executive Officer of the Company), Wendell S.
Reilly, Anna R. Cullinan and Sean E. Reilly (a nominee for director), general
partners of the RFLP, reported the conversion and transfer of shares of Class B
common stock held by the RFLP into Class A common stock on Forms 5 filed on
February 12, 1999; these transactions should have been reported on Forms 4 no
later than November 10, 1998. T. Everett Stewart, a director of the Company,
filed an amended Form 4 on January 8, 1999 to correct an option exercise
transaction that was incorrectly stated on the Form 4 filed on December 8, 1998
relating to the sale of shares of Class A common stock. Mr. Stuart also filed an
amended Form 4 on March 9, 1998 to correct the share amount previously reported
on a Form 4 filed on September 6, 1996. Charlie Lamar, a director of the
Company, filed an amended Form 5 on March 10, 1999 to correct the share amount
and price information that was incorrectly stated on the Form 5 filed on
February 12, 1999 relating to gifts made in July 1998.
ITEM 1 ELECTION OF DIRECTORS
The Board of Directors has fixed the number of directors at eight for the
coming year. The persons named below have been nominated for election as
directors at the annual meeting of stockholders to be held on May 27, 1999, to
serve until the next annual meeting of stockholders and until their successors
are elected and qualified. Each has consented to being named a nominee in this
proxy statement and to serve, if elected, as a director. If any nominee is
unable to serve, proxies will be voted for such other candidates as may be
nominated by the Board of Directors.
Directors will be elected by a plurality of the votes cast by the
stockholders entitled to vote on this proposal at the meeting. Abstentions,
broker non-votes and votes withheld will not be treated as votes cast for this
purpose and will not affect the outcome of the election.
4
<PAGE> 7
The following table contains certain information about the nominees for
director.
<TABLE>
<CAPTION>
Business Experience During Past Five Director
Name and Age Years and Other Directorships Since
------------ ------------------------------------ --------
<S> <C> <C>
Kevin P. Reilly, Jr. Kevin P. Reilly, Jr. has served as the Company's President and Chief 1984
Age: 44 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 Keith A. Istre has been Chief Financial Officer of the Company since 1991
Age: 46 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 Charles W. Lamar, III has been a director of the Company since June 1973
Age: 50 1973. He joined the Company in 1982 and served as General Counsel
and Secretary through December 1998. Prior to joining the Company,
Mr. Lamar maintained his own law practice and was employed by a law
firm in Baton Rouge. In January 1999, Mr. Lamar became Chairman and
Chief Executive Officer of Woodlawn Land Company, a commercial real
estate company. 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 Gerald H. Marchand has been Regional Manager of the Baton Rouge 1978
Age: 67 Region, which encompasses operations in Louisiana, Mississippi and
Texas, since 1988 and a director of the Company since 1978. He 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.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
Business Experience During Past Five Director
Name and Age Years and Other Directorships Since
------------ ------------------------------------ --------
<S> <C> <C>
Jack S. Rome, Jr. Jack S. Rome, Jr. has been a director of the Company since 1974. 1974
Age: 50 Since 1988, Mr. Rome has been President of No Fault Industries, Inc.,
a construction company specializing in outdoor recreational facilities.
Mr. Rome also currently serves 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.
T. Everett Stewart, Jr. T. Everett Stewart, Jr. has been President of Interstate Logos, Inc. 1996
Age: 45 since 1988, and has been a director since 1997. 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.
Sean E. Reilly Sean E. Reilly is Director of Mergers and Acquisitions and President
Age: 37 of the Company's real estate division, TLC Properties, Inc. He began
working with the Company as Vice President of Mergers and
Acquisitions in 1987 and served in that capacity until 1994. He
served as a director of the Company from 1989 to 1996. Mr. Reilly
was the Chief Executive Officer of Wireless One, Inc., a wireless
cable television company, from 1994 to 1997. Mr. Reilly received a
B.A. from Harvard University in 1984 and a J.D. from Harvard Law
School in 1989.
Stephen P. Mumblow Stephen P. Mumblow is the President and a Director of Communications
Age: 43 Corporation of America, a television and radio broadcasting company,
having joined that company in 1998. Mr. Mumblow was a Managing Director
of Chase Securities, Inc., an investment banking firm, from March 1988
to August 1998, prior to which he was a Vice President of Michigan Energy
Resources Company, an intrastate natural gas utility company and media
cable television broadcasting concern, and Citibank, N.A., a commercial
bank. Mr. Mumblow is a 1977 graduate of The Wharton School, University
of Pennsylvania with a BS Degree in Economics.
</TABLE>
6
<PAGE> 9
Kevin P. Reilly, Jr. and Sean E. Reilly are brothers and Charles W.
Lamar, III is their cousin.
Board and Committee Meetings
The Board of Directors held four meetings during 1998 Each of the
directors then in office attended at least 75% of the aggregate of all meetings
of the Board and all meetings of the committees of the Board on which such
director then served.
The Company has standing Audit and Compensation Committees of the Board
of Directors but does not have a Nominating Committee. The Audit Committee,
which currently consists of Mr. Rome and William R. Schmidt, held two meetings
during 1998. Because Mr. Schmidt has decided not to stand for reelection to the
Board of Directors, he will not serve on the Audit Committee after the annual
meeting. If elected, Stephen Mumblow is expected to take his place. The primary
function of the Audit Committee is to assist the Board of Directors in the
discharge of its duties and responsibilities by providing the Board with an
independent review of the financial health of the Company and of the reliability
of the Company's financial controls and financial reporting systems. The
Committee reviews the general scope of the Company's annual audit, the fee
charged by the Company's independent accountants and other matters relating to
internal control systems. For information about the Compensation Committee, see
the "Compensation Committee Report on Executive Compensation" below.
The Company also has an Executive Committee of the Board of Directors.
The Executive Committee has authority to operate the affairs of the Company
between meetings of the Board of Directors and currently consists of Kevin
Reilly, Keith Istre and Gerald Marchand.
Certain Relationships and Related Transactions
The Company has from time to time made various personal loans to Jack
S. Rome, a director of the Company. The largest outstanding balance on these
loans since the beginning of the last fiscal year was $76,667 and the balance
outstanding as of December 31, 1998 was $58,334. The loans bear interest at a
rate equal to 100 basis points above the rate applicable to United State
Treasury six-month bills.
The Company made equity investments totaling $1.25 million in Wireless
One, Inc. ("Wireless"), a publicly-held company in the wireless cable business.
Sean E. Reilly, a nominee for director of the Company, and the brother of the
Company's Chief Executive Officer, was the Chief Executive Officer of Wireless
until August 1997. The Company sold these shares in May 1998, resulting in a
realized loss of $875,000.
Stephen Mumblow, a nominee for director of the Company, was the
Managing Director of Chase Securities, Inc. until his resignation on August 10,
1998. Chase Securities, Inc. was an underwriter of the Company's private
placement and exchange offer of $200 million principal amount of 8 5/8%
Senior Subordinated Notes in September 1997, and is affiliated with The Chase
Manhattan Bank, administrative agent of the Company's credit facility. The
Company's payments to Chase Securities, Inc. did not exceed five percent of its
consolidated gross revenues for its last full fiscal year.
7
<PAGE> 10
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 1998, the Company's
Compensation Committee consisted of Messrs. Rome and Schmidt. Mr. Rome was
employed by the Company from 1975 to 1986.
Executive Compensation
The Compensation Committee Report set forth below describes the
Company's compensation policies applicable to executive officers and the bases
for Mr. Reilly's compensation as Chief Executive Officer. The following graph
shows a comparison of the cumulative total shareholder returns on the Class A
common stock over the period from August 2, 1996 (the first trading day of the
Class A common stock) to December 31, 1998 as compared with that of the Nasdaq
US Index and two indexes of certain companies selected by the Company as
comparative to the Company in that each is an outdoor advertising company. The
Old Custom Composite Index was replaced with the New Custom Composite Index
because one member of the Old Custom Composite Index, Universal Outdoor
Holdings, Inc., ceased trading in 1998 leaving only two members. The Company
reformed the representative peer group by adding two additional members. The
graph assumes $100 invested on August 2, 1996 in Class A common stock at its
initial public offering price of $10.67 per share (as adjusted for the Company's
3-for-2 stock split effected in February 1998), the Nasdaq US Index and the old
and new peer group indexes, with all dividends, if any, being reinvested.
8
<PAGE> 11
[ PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
2-AUG-96 31-DEC-96 31-DEC-97 31-DEC-98
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lamar Advertising Company $100 $152 $248 $349
- --------------------------------------------------------------------------------------------------------------------------------
Nasdaq US $100 $114 $140 $197
- --------------------------------------------------------------------------------------------------------------------------------
Old Custom Composite Index (3 Stocks) (1) $100 $115 $223 $359
- --------------------------------------------------------------------------------------------------------------------------------
New Custom Composite Index (4 Stocks) (2) $100 $92 $210 $295
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The 3-Stock Old Custom Composite Index consists of Outdoor Systems, Inc.,
Universal Outdoor Holdings, Inc., and The Ackerley Group, Inc.
(2) The 4-Stock New Custom Composite Index consists of Chancellor Media
Corporation, Clear Channel Communications, Outdoor Systems, Inc. and The
Ackerley Group, Inc.
9
<PAGE> 12
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the "Committee")
currently consists of Messrs. Rome (Chairman) and Schmidt. Because Mr. Schmidt
has decided not to stand for reelection to the Board of Directors, he will not
serve on the Compensation Committee after the annual meeting. If elected,
Stephen Mumblow is expected to take his place. The Committee's responsibilities
include reviewing the performance of the Chief Executive Officer and the other
executive officers of the Company and making determinations as to such officers'
cash and equity-based compensation and benefits. The Committee met one time
during 1998.
The Company's executive compensation policy is designed to attract,
retain and reward executive officers who contribute to the long-term success of
the Company by maintaining a competitive salary structure and aligning
individual compensation with the achievement of corporate and individual
performance objectives.
The Committee reviews the entire executive compensation package for
each officer, which consists of base salary, annual cash bonuses and stock
option grants under the Company's 1996 Equity Incentive Plan.
Executive Officer Compensation
Overall, the Committee has determined that executive officer base
salaries and cash bonuses should be based on industry averages for comparable
positions as well as on individual and corporate performance.
For 1998, the Chief Executive Officer made recommendations to the
Committee as to base salary amounts for each executive officer (including
himself) based on his assessment of each officer's individual performance and
current level of compensation. The Committee evaluated the Chief Executive
Officer's recommendations, taking into account the officer's tenure in his
position, the Committee's subjective assessment of individual performance and
the Company's overall performance during the prior year. The Committee did not
apply a strict formula but instead considered these factors together without
giving any specific weight to any individual factor. The Committee gauged
overall performance of the Company based on several key indicators. These
indicators included the number of acquisitions completed and the aggregate
purchase price, the market performance of the Company's Class A common stock and
the growth in net revenues and cash flows. The Committee also considered the
current financial and economic environment in making its assessment. Based on
its evaluation, the Committee approved the Chief Executive Officer's
recommendations that the base compensation of each executive officer remain the
same in 1998.
Each year, the Chief Executive Officer proposes to the Committee the
size of annual bonuses, taking into account the growth of the Company for that
year and each officer's individual performance. In 1998, cash bonuses paid to
the Chief Executive Officer and other executive officers amounted to $660,000.
The Chief Executive Officer's bonus was based on the overall financial
performance of the Company during 1998 and the successful completion of over
$600 million in acquisitions during the year.
10
<PAGE> 13
Stock Options
The Committee believes that stock option grants align the interests of
management with those of the Company's stockholders. The Committee granted stock
options to Mr. Istre in 1996 upon the completion of the Company's initial public
equity offering. Because the majority of these options have vested, the
Committee determined that additional options should be granted to Mr. Istre in
1998.
Deduction Limit for Executive Compensation
Section 162(m) of the Internal Revenue Code limits a publicly held
company's tax deduction for compensation paid to the chief executive officer and
the other four most highly paid officers. Generally, amounts paid in excess of
$1,000,000 to a covered executive in any year cannot be deducted. Certain
performance-based compensation that has been approved by stockholders is not
subject to the limit. The Company does not expect to have compensation exceeding
the $1,000,000 limitation for the foreseeable future. Stock options granted
under the 1996 Equity Incentive Plan are not subject to the limitation under
applicable regulations. In addition, the Committee will consider as appropriate
other ways to maximize the deductibility of executive compensation, while
retaining the discretion to compensate certain executive officers in a manner
commensurate with performance and the competitive environment for executive
talent without regard to deductibility.
By the Compensation Committee,
Jack S. Rome, Jr.
William R. Schmidt
11
<PAGE> 14
Summary Compensation Table
The following table sets forth certain compensation information for the
Chief Executive Officer and each of the other executive officers of the Company
whose salary and bonus for the year ended December 31, 1998 exceeded $100,000
(the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------------------- ---------------------
Shares Of
Name and Class A Common Stock All Other
Principal Position Year Salary($) Bonus($) Underlying Options(#) Compensation($)(1)
- ------------------ ---- --------- -------- --------------------- ------------------
<S> <C> <C> <C> <C> <C>
Kevin P. Reilly, Jr. 1998 180,000 400,000 -- 57,500
President and Chief Executive 1997 180,000 350,000 -- 57,500
Officer 1996 180,000 250,000 -- 6,500
Keith A. Istre 1998 102,000 220,000 50,000 15,000
Treasurer and Chief Financial 1997 102,000 200,000 -- 15,000
Officer 1996 90,000 125,000 100,200 6,500
Charles W. Lamar, III 1998 89,000 40,000 -- 7,500
Secretary and General Counsel 1997 89,000 40,000 -- 7,500
1996 89,000 40,000 -- 7,500
</TABLE>
- ----------------------
(1) The reported amounts consist of employer contributions under the Company's
deferred compensation plan.
12
<PAGE> 15
Option Grants and Potential Realizable Values Table
The following table sets forth certain information concerning option
grants made to the Named Executive Officers as of December 1998.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value At Assumed Annual Alternative
Rates of Stock Price To (f) And
Appreciation For Option (g): Grant
Individual Grants Term Date Value
---------------------------------------------------------- ------------------------- -----------
Number Of Percent Of
Securities Total
Underlying Options Exercise of Grant Date
Options Granted To Base Price Expiration Present
Name Granted Employees In ($/Sh) Date 5% ($) 10% ($) Value $
(a) (#) (b) Fiscal Year (c) (d) (c) (f) (g) (h)
---- ---------- ---------------- ----------- ----------- ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Kevin P. Reilly, Jr. 0 --- --- --- --- --- ---
Keith A. Istre 50,000 5.3 30.34 6/04/08 954,033 2,417,707 ---
Charles W. Lamar, III 0 --- --- --- --- --- ---
</TABLE>
Option Exercises and Year-End Values Table
The following table sets forth certain information concerning
exercisable and unexercisable stock options held by the Named Executive Officers
as of December 31, 1998.
Aggregated Option Exercises In Last Fiscal Year And
Fiscal Year-End Option Value
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money
Options at Options at
Shares Fiscal Year-End(#) Fiscal Year-End($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable(1) Unexercisable(1)(2)
---- ----------- ----------- ---------------- -------------------
<S> <C> <C> <C> <C>
Kevin P. Reilly, Jr. 0 --- 0/0 0/0
Keith A. Istre 49,800 1,015,236 50,200/100,000 1,334,316/2,658,000
Charles W. Lamar, III 0 --- 0/0 0/0
</TABLE>
- ----------------------
(1) As adjusted for the Company's 3-for-2 stock split effected in February
1998.
(2) Based on the difference between the option exercise price and the closing
price of the underlying Class A common stock on December 31, 1998, which
closing price was $37.25.
Director Compensation
As of January 1, 1999, directors who are not employed by the Company
receive a fee of $1,500 a month and are reimbursed for travel expenses incurred
to attend such meetings. During 1998, directors not employed by the Company
received $2,500 for each meeting of the Board of Directors and were reimbursed
for travel expenses incurred to attend such meetings.
13
<PAGE> 16
ITEM 2 PROPOSAL TO APPROVE AN AMENDMENT TO 1996 EQUITY
INCENTIVE PLAN
General
The 1996 Equity Incentive Plan was adopted by the Company in July 1996.
There were originally 2,000,000 shares of Class A common stock reserved for
issuance under the 1996 Equity Incentive Plan, which became 3,000,000 shares as
a result of the Company's 3-for-2 stock split effected in February 1998. The
number of shares reserved for issuance under the 1996 Equity Incentive Plan
includes shares subject to options already granted and shares issued pursuant to
options already exercised. The 1996 Equity Incentive Plan is designed to provide
the Company flexibility in awarding equity incentives by providing for different
types of incentives that may be awarded. The purpose of the 1996 Equity
Incentive Plan is to attract and retain key employees of and consultants to the
Company and its eligible affiliated companies and to enable them to participate
in the long-term growth of the Company.
Amendment
In September 1998, the Board of Directors voted, subject to stockholder
approval, to amend the 1996 Equity Incentive Plan to increase the aggregate
number of shares of Class A common stock available under such plan by an
additional 1,000,000 shares to an aggregate of 4,000,000 shares, subject to
adjustment for stock-splits and similar capital changes. Although approval of
the amendment is not required by applicable law on resolutions, the Board of
Directors believes that it is advisable to give the stockholders an opportunity
to approve this amendment. If the stockholders are opposed to the proposal, the
Board of Directors will reconsider the amendment. The Company believes that this
increase is necessary and appropriate to enable the Company to attract and
retain the quality of employees and consultants whose services are considered
important to the Company's future progress, including employees and consultants
of companies acquired by the Company. The Company believes that participation in
the Plan provides such employees with an incentive to remain as employees or
consultants of the Company.
Administration and Eligibility
The 1996 Equity Incentive Plan provides for the grant of stock options
(incentive and nonstatutory), stock appreciation rights and restricted stock for
the purchase of shares of Class A common stock. Awards under the 1996 Equity
Incentive Plan can be granted to employees and consultants of the Company as
well as employees and consultants of its eligible subsidiaries who are capable
of contributing significantly to the successful performance of the Company. The
Compensation Committee administers the 1996 Equity Incentive Plan and selects
the participants and establishes the terms and conditions of each option or
other equity right granted under the 1996 Equity Incentive Plan, including the
exercise price, the number of shares subject to options or other equity rights
and the time(s) at which such options become exercisable. Subject to certain
limitations the Compensation Committee may delegate to one or more executive
officers of the Company the power to make awards to participants who are not
subject to Section 16 of the Securities Exchange Act of 1934 or "covered
employees" for purposes of Section 162(m) of the Internal Revenue Code. The
Compensation Committee has authorized the Chief Financial Officer to grant
options to purchase shares of Class A common stock to each such participant.
14
<PAGE> 17
The exercise price of all "incentive stock options" ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code granted under the 1996
Equity Incentive Plan must be at least equal to 100% of the fair market value of
the option shares on the date of grant. The term of any ISO granted under the
1996 Equity Incentive Plan may not exceed ten years.
As of March 31, 1999, approximately 247 employees of the Company and
its affiliates were eligible to participate in the 1996 Equity Incentive Plan.
The closing price of the Company's Class A common stock as reported on the
Nasdaq National Market on March 31, 1999 was $33.94.
1996 Equity Incentive Plan Activity
As of March 31, 1999, options to purchase an aggregate of 3,194,500
shares of Class A common stock had been granted under the 1996 Equity Incentive
Plan, of which options to purchase 155,182 shares had been cancelled and options
to purchase 903,423 shares had been exercised. As of such date, 960,682 shares
remained available for the granting of awards under the 1996 Equity Incentive
Plan, if the 1,000,000 shares added by the amendment for which stockholder
approval is being requested are included. No stock appreciation rights or awards
other than option grants have been granted under the 1996 Equity Incentive Plan
to date.
Federal Income Tax Consequences Relating to Stock Options
Incentive Stock Options. An optionee does not realize taxable income
upon the grant or exercise of an ISO under the 1996 Equity Incentive Plan. If no
disposition of shares issued to an optionee pursuant to the exercise of an ISO
is made by the optionee within two years from the date of grant or within one
year from the date of exercise, then (a) upon sale of such shares, any amount
realized in excess of the option price (the amount paid for the shares) is taxed
to the optionee as a capital gain and any loss sustained will be a capital loss
and (b) no deduction is allowed to the Company for Federal income tax purposes.
The exercise of ISOs gives rise to an adjustment in computing alternative
minimum taxable income that may result in alternative minimum tax liability for
the optionee.
If shares of common stock acquired upon the exercise of an ISO are
disposed of prior to the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition") then (a) the optionee realizes
ordinary income in the year of disposition in an amount equal to the excess (if
any) of the fair market value of the shares at exercise (or, if less, the amount
realized on a sale of such shares) over the option price thereof and (b) the
Company is entitled to deduct such amount. Any further gain realized is taxed as
a capital gain and does not result in any deduction to the Company. A
disqualifying disposition in the year of exercise will generally avoid the
alternative minimum tax consequences of the exercise of an ISO.
Nonstatutory Stock Options. No income is realized by the optionee at
the time a nonstatutory option is granted. Upon exercise, (a) ordinary income is
realized by the optionee in an amount equal to the difference between the option
price and the fair market value of the shares on the date of exercise and (b)
the Company receives a tax deduction for the same amount. Upon disposition of
the shares, appreciation or depreciation after the date of exercise is treated
as a capital gain or loss and will not result in any deduction by the Company.
15
<PAGE> 18
Votes Required
The affirmative vote of a majority of the total votes cast on this
proposal will constitute the approval of the proposed amendment to the 1996
Equity Incentive Plan. Abstentions and broker non-votes will not be treated as
votes cast for the purpose of determining the outcome of the vote on this
proposal.
The Board of Directors recommends a vote FOR this Proposal.
ITEM 3 PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF CLASS A COMMON STOCK
On March 5, 1999, the Board of Directors of the Company approved and
recommended to the stockholders that Article FOURTH of the Company's Restated
Certificate of Incorporation be amended to increase the number of authorized
shares of its capital stock from 113,510,000 to 163,510,000 shares and the
number of authorized shares of its Class A common stock from 75,000,000 to
125,000,000 shares, subject to stockholder approval of the proposed amendment.
The principal reason for the proposed amendment is to ensure that a
sufficient number of shares of Class A common stock are available for future use
by the Company. As of March 1, 1999, there were 43,438,682 shares of Class A
common stock issued and outstanding, 3,145,977 shares of Class A common stock
reserved for issuance upon the exercise of outstanding stock options and
17,700,000 shares of Class A common stock reserved for issuance upon conversion
of outstanding shares of Class B common stock. Accordingly, only approximately
10,715,341 shares of Class A common stock would be available for future use
without any increase in the number of authorized shares. If the proposed
amendment is adopted by the stockholders, the additional authorized common stock
would be available for issuance from time to time for such corporate purposes as
financings, acquisitions, stock splits and stock dividends, as the Board of
Directors may deem appropriate, without delay or the necessity of a special
stockholders' meeting to approve a further amendment to the Restated Certificate
of Incorporation. No further action on the part of the Company's stockholders
would be necessary to issue additional shares of Class A common stock unless
required by applicable law or regulations or under the rules governing the
Nasdaq National Market or any stock exchange on which the Class A common stock
may then be listed.
The holders of any additional shares of Class A common stock issued in
the future would have the same rights as the holders of Class A common stock
currently outstanding. Those rights do not include preemptive rights with
respect to the future issuance of any additional shares. The issuance of
additional shares of Class A common stock, while providing desirable flexibility
in carrying out corporate purposes, could have the effect of diluting the
interests of existing holders of common stock.
Votes Required
The affirmative vote of the holders of a majority in interest of the
outstanding Class A common stock and Class B common stock, voting together as a
single class, is required to
16
<PAGE> 19
approve the proposed amendment to the Restated Certificate of Incorporation.
Therefore, abstentions and broker non-votes will have the effect of votes
against this proposal.
The Board of Directors recommends a vote FOR this Proposal.
Other Matters
The Board of Directors does not know of any business to come before the
meeting other than the matters described in the notice.
Deadline For Stockholder Proposals
In order for a stockholder proposal to be considered for inclusion in
the Company's proxy materials for the 2000 Annual Meeting of Stockholders, it
must be received by the Company at 5551 Corporate Boulevard, Baton Rouge,
Louisiana 70808, Attention: Secretary, no later than December 25, 1999.
In addition, the Company's Bylaws require a stockholder who wishes to
bring business before or propose director nominations at an annual meeting to
give advance written notice to the Secretary of the Company as described in the
Bylaws. To be timely for the 2000 Annual Meeting, proposals must be received by
not later than the close of business on April 10, 2000.
Information Concerning Auditors
The firm of KPMG LLP (formerly KPMG Peat Marwick LLP), independent
accountants, examined the Company's financial statements for the year ended
December 31, 1998. The Board of Directors has appointed KPMG LLP to serve as the
Company's independent auditors for its fiscal year ending December 31, 1999.
Representatives of KPMG LLP are expected to attend the annual meeting to respond
to appropriate questions, and will have the opportunity to make a statement if
they desire.
Expenses Of Solicitation
The Company will bear the cost of the solicitation of proxies,
including the charges and expenses of brokerage firms and others of forwarding
solicitation material to beneficial owners of common stock. In addition to the
use of mails, proxies may be solicited by officers and any regular employees of
the Company in person or by telephone. The Company expects that the costs
incurred in the solicitation of proxies will be nominal.
April 23, 1999
17
<PAGE> 20
APPENDIX: PROPOSED 1996 EQUITY INCENTIVE PLAN
1. PURPOSE
The purpose of the Lamar Advertising Company 1996 Equity Incentive Plan
(the "Plan") is to attract and retain key employees and consultants of the
Company and its Affiliates, 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 by granting Awards with respect to the Company's Class A
Common Stock (the "Common Stock").
2. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall
select the Participants to receive Awards and shall determine the terms and
conditions of the Awards. The Committee shall have authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the
operation of the Plan as it shall from time to time consider advisable, and to
interpret the provisions of the Plan. The Committee's decisions shall be final
and binding. To the extent permitted by applicable law, the Committee may
delegate to one or more executive officers of the Company the power to make
Awards to Participants who are not Reporting Persons or Covered Employees and
all determinations under the Plan with respect thereto, provided that the
Committee shall fix the maximum amount of such Awards for all such Participants
and a maximum for any one Participant.
3. ELIGIBILITY
All employees and consultants of the Company or any Affiliate capable
of contributing significantly to the successful performance of the Company,
other than a person who has irrevocably elected not to be eligible, are eligible
to be Participants in the Plan. Incentive Stock Options may be granted only to
persons eligible to receive such Options under the Code.
4. STOCK AVAILABLE FOR AWARDS
(a) AMOUNT. Subject to adjustment under subsection (b), Awards may be
made under the Plan for up to 4,000,000 shares of Common Stock. If any Award
expires or is terminated unexercised or is forfeited or settled in a manner that
results in fewer shares outstanding than were awarded, the shares subject to
such Award, to the extent of such expiration, termination, forfeiture or
decrease, shall again be available for award under the Plan. Common Stock issued
through the assumption or substitution of outstanding grants from an acquired
company shall not reduce the shares available for Awards under the Plan. Shares
issued under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.
(b) ADJUSTMENT. In the event that the Committee determines that any
stock dividend, extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange of shares or
other transaction affects the Common Stock such that an adjustment is required
in order to preserve the benefits intended to be provided by the
A-1
<PAGE> 21
Plan, then the Committee (subject in the case of Incentive Stock Options to any
limitation required under the Code) shall equitably adjust any or all of (i) the
number and kind of shares in respect of which Awards may be made under the Plan,
(ii) the number and kind of shares subject to outstanding Awards and (iii) the
exercise price with respect to any of the foregoing, and if considered
appropriate, the Committee may make provision for a cash payment with respect to
an outstanding Award, provided that the number of shares subject to any Award
shall always be a whole number.
(c) LIMIT ON INDIVIDUAL GRANTS. The maximum number of shares of Common
Stock subject to Options and Stock Appreciation Rights that may be granted to
any Participant in the aggregate in any calendar year shall not exceed 200,000
shares, subject to adjustment under subsection (b).
5. STOCK OPTIONS
(a) GRANT OF OPTIONS. Subject to the provisions of the Plan, the
Committee may grant options ("Options") to purchase shares of Common Stock (i)
complying with the requirements of Section 422 of the Code or any successor
provision and any regulations thereunder ("Incentive Stock Options") and (ii)
not intended to comply with such requirements ("Nonstatutory Stock Options").
The Committee shall determine the number of shares subject to each Option and
the exercise price therefor, which shall not be less than 100% of the Fair
Market Value of the Common Stock on the date of grant, provided that a
Nonstatutory Stock Option granted to a new employee or consultant within 90 days
of the date of employment may have a lower exercise price so long as it is not
less than 100% of Fair Market Value on the date of employment. No Incentive
Stock Option may be granted hereunder more than ten years after the effective
date of the Plan.
(b) TERMS AND CONDITIONS. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Committee may specify in
the applicable grant or thereafter. The Committee may impose such conditions
with respect to the exercise of Options, including conditions relating to
applicable federal or state securities laws, as it considers necessary or
advisable.
(c) PAYMENT. Payment for shares to be delivered pursuant to any
exercise of an Option may be made in whole or in part in cash or, to the extent
permitted by the Committee at or after the grant of the Option, by delivery of a
note or other commitment satisfactory to the Committee or shares of Common Stock
owned by the optionee, including Restricted Stock, or by retaining shares
otherwise issuable pursuant to the Option, in each case valued at their Fair
Market Value on the date of delivery or retention, or such other lawful
consideration as the Committee may determine.
A-2
<PAGE> 22
6. STOCK APPRECIATION RIGHTS
(a) GRANT OF SARS. Subject to the provisions of the Plan, the Committee
may grant rights to receive any excess in value of shares of Common Stock over
the exercise price ("Stock Appreciation Rights" or "SARs") in tandem with an
Option (at or after the award of the Option), or alone and unrelated to an
Option. SARs in tandem with an Option shall terminate to the extent that the
related Option is exercised, and the related Option shall terminate to the
extent that the tandem SARs are exercised. The Committee shall determine at the
time of grant or thereafter whether SARs are settled in cash, Common Stock or
other securities of the Company, Awards or other property, and may define the
manner of determining the excess in value of the shares of Common Stock.
(b) EXERCISE PRICE. The Committee shall fix the exercise price of each
SAR or specify the manner in which the price shall be determined. An SAR granted
in tandem with an Option shall have an exercise price not less than the exercise
price of the related Option. An SAR granted alone and unrelated to an Option may
not have an exercise price less than 100% of the Fair Market Value of the Common
Stock on the date of the grant, provided that such an SAR granted to a new
employee or consultant within 90 days of the date of employment may have a lower
exercise price so long as it is not less than 100% of Fair Market Value on the
date of employment.
7. RESTRICTED STOCK
(a) GRANT OF RESTRICTED STOCK. Subject to the provisions of the Plan,
the Committee may grant shares of Common Stock subject to forfeiture
("Restricted Stock") and determine the duration of the period (the "Restricted
Period") during which, and the conditions under which, the shares may be
forfeited to the Company and the other terms and conditions of such Awards.
Shares of Restricted Stock may be issued for no cash consideration, such minimum
consideration as may be required by applicable law or such other consideration
as the Committee may determine.
(b) RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as permitted by the
Committee, during the Restricted Period. Shares of Restricted Stock shall be
evidenced in such manner as the Committee may determine. Any certificates issued
in respect of shares of Restricted Stock shall be registered in the name of the
Participant and unless otherwise determined by the Committee, deposited by the
Participant, together with a stock power endorsed in blank, with the Company. At
the expiration of the Restricted Period, the Company shall deliver such
certificates to the Participant or if the Participant has died, to the
Participant's Designated Beneficiary.
A-3
<PAGE> 23
8. GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) REPORTING PERSON LIMITATIONS. Notwithstanding any other provision
of the Plan, to the extent required to qualify for the exemption provided by
Rule 16b-3 under the Exchange Act, Awards made to a Reporting Person shall not
be transferable by such person other than by will or the laws of descent and
distribution and are exercisable during such person's lifetime only by such
person or by such person's guardian or legal representative. If then permitted
by Rule 16b-3, such Awards, unless Incentive Stock Options, may also be made
transferable pursuant to a Qualified Domestic Relations Order as defined in the
Code or Title I of the Employee Retirement Income Security Act or the rules
thereunder.
(b) DOCUMENTATION. Each Award under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and conditions thereof
and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or to comply with applicable tax and regulatory
laws and accounting principles.
(c) COMMITTEE DISCRETION. Each type of Award may be made alone, in
addition to or in relation to any other Award. The terms of each type of Award
need not be identical, and the Committee need not treat Participants uniformly.
Except as otherwise provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Committee at the time
of grant or at any time thereafter.
(d) DIVIDENDS AND CASH AWARDS. In the discretion of the Committee, any
Award under the Plan may provide the Participant with (i) dividends or dividend
equivalents payable currently or deferred with or without interest and (ii) cash
payments in lieu of or in addition to an Award.
(e) TERMINATION OF EMPLOYMENT. The Committee shall determine the effect
on an Award of the disability, death, retirement or other termination of
employment of a Participant and the extent to which, and the period during
which, the Participant's legal representative, guardian or Designated
Beneficiary may receive payment of an Award or exercise rights thereunder.
(f) CHANGE IN CONTROL. In order to preserve a Participant's rights
under an Award in the event of a change in control of the Company (as defined by
the Committee), the Committee in its discretion may, at the time an Award is
made or at any time thereafter, take one or more of the following actions: (i)
provide for the acceleration of any time period relating to the exercise or
payment of the Award, (ii) provide for payment to the Participant of cash or
other property with a Fair Market Value equal to the amount that would have been
received upon the exercise or payment of the Award had the Award been exercised
or paid upon the change in control, (iii) adjust the terms of the Award in a
manner determined by the Committee to reflect the change in control, (iv) cause
the Award to be assumed, or new rights substituted therefor, by another entity,
or (v) make such other provision as the Committee may consider equitable to
Participants and in the best interests of the Company.
A-4
<PAGE> 24
(g) LOANS. The Committee may authorize the making of loans or cash
payments to Participants in connection with the grant or exercise any Award
under the Plan, which loans may be secured by any security, including Common
Stock, underlying or related to such Award (provided that the loan shall not
exceed the Fair Market Value of the security subject to such Award), and which
may be forgiven upon such terms and conditions as the Committee may establish at
the time of such loan or at any time thereafter.
(h) WITHHOLDING TAXES. The Participant shall pay to the Company, or
make provision satisfactory to the Committee for payment of, any taxes required
by law to be withheld in respect of Awards under the Plan no later than the date
of the event creating the tax liability. In the Committee's discretion, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value on the date of delivery. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Participant.
(i) FOREIGN NATIONALS. Awards may be made to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or to comply with
applicable laws.
(j) AMENDMENT OF AWARD. The Committee may amend, modify or terminate
any outstanding Award, including substituting therefor another Award of the same
or a different type, changing the date of exercise or realization and converting
an Incentive Stock Option to a Nonstatutory Stock Option, provided that the
Participant's consent to such action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
9. CERTAIN DEFINITIONS
"Affiliate" means any business entity in which the Company owns
directly or indirectly 50% or more of the total voting power or has a
significant financial interest as determined by the Committee.
"Award" means any Option, Stock Appreciation Right or Restricted Stock
granted under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor law.
"Committee" means one or more committees each comprised of not less
than two members of the Board appointed by the Board to administer the Plan or a
specified portion thereof. Unless otherwise determined by the Board, if a
Committee is authorized to grant Awards to a Reporting Person or a Covered
Employee, each member shall be a "non-employee director" or the equivalent
within the meaning of applicable Rule 16b-3 under the Exchange Act or an
"outside director" within the meaning of Section 162(m) of the Code,
respectively.
A-5
<PAGE> 25
"Common Stock" or "Stock" means the Class A Common Stock, $0.001 par
value, of the Company.
"Company" means Lamar Advertising Company, a Delaware corporation.
"Covered Employee" means a "covered employee" within the meaning of
Section 162(m) of the Code.
"Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Committee, to receive amounts due or
exercise rights of the Participant in the event of the Participant's death. In
the absence of an effective designation by a Participant, "Designated
Beneficiary" means the Participant's estate.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor law.
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the Committee
in good faith or in the manner established by the Committee from time to time.
"Participant" means a person selected by the Committee to receive an
Award under the Plan.
"Reporting Person" means a person subject to Section 16 of the Exchange
Act.
10. MISCELLANEOUS
(a) NO RIGHT TO EMPLOYMENT. No person shall have any claim or right to
be granted an Award. Neither the Plan nor any Award hereunder shall be deemed to
give any employee the right to continued employment or to limit the right of the
Company to discharge any employee at any time.
(b) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
under the Plan until he or she becomes the holder thereof. A Participant to whom
Common Stock is awarded shall be considered the holder of the Stock at the time
of the Award except as otherwise provided in the applicable Award.
(c) EFFECTIVE DATE. Subject to the approval of the stockholders of the
Company, the Plan shall be effective on July 24, 1996.
(d) AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, subject to such stockholder approval as
the Board determines to be necessary or advisable to comply with any tax or
regulatory requirement.
(e) GOVERNING LAW. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of Delaware.
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<PAGE> 26
(FRONT OF PROXY CARD)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 27, 1999
LAMAR ADVERTISING COMPANY
The undersigned stockholder of Lamar Advertising Company (the
"Company") hereby appoints Kevin P. Reilly, Jr. and Keith A. Istre and each of
them acting singly, the attorneys and proxies of the undersigned, with full
power of substitution, to vote on behalf of the undersigned all of the shares of
capital stock of the Company that the undersigned is entitled to vote at the
Annual Meeting of Stockholders of the Company to be held May 27, 1999, and at
all adjournments thereof, hereby revoking any proxy heretofore given with
respect to such shares.
This proxy when properly executed will be voted in the manner directed
by the undersigned stockholder(s). If no specifications are made, this proxy
will be voted for the proposals.
PLEASE SIGN AND MAIL PROXY TODAY
MARK HERE FOR ADDRESS CHANGE AND NOTE ON REVERSE [ ]
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
[SEE REVERSE SIDE]
18
<PAGE> 27
(REVERSE OF PROXY CARD)
<TABLE>
<S> <C> <C>
[X] PLEASE MARK YOUR VOTES AS THIS EXAMPLE.
FOR WITHHELD
All nominees For all nominees
1. Proposal to elect directors [ ] [ ]
FOR, except withheld from the following nominee(s):
-----------------------------
Nominees: Kevin P. Reilly, Jr.
Keith A. Istre
Charles W. Lamar, III
Gerald H. Marchand
Jack S. Rome, Jr.
T. Everett Stewart, Jr.
Sean E. Reilly
Stephen P. Mumblow
FOR AGAINST ABSTAIN
2. Proposal to amend the 1996 Equity
Incentive Plan [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. Proposal to amend the Restated
Certificate of Incorporation [ ] [ ] [ ]
Signature: Date:
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Signature: Date:
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NOTE: Please sign exactly as name appears on stock certificate. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title
as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
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