<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
</TABLE>
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CITADEL COMMUNICATIONS CORPORATION
--------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction
applies:
------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
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</TABLE>
<PAGE> 2
CITADEL COMMUNICATIONS CORPORATION
CITY CENTER WEST
SUITE 400
7201 WEST LAKE MEAD BOULEVARD
LAS VEGAS, NV 89128
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2000
Dear Stockholders:
You are cordially invited to attend the annual meeting of stockholders of
Citadel Communications Corporation ("Citadel Communications") that will be held
on Wednesday, May 24, 2000 at 10:00 a.m. (local time), at its principal
executive offices at City Center West, Suite 400, 7201 West Lake Mead Boulevard,
Las Vegas, Nevada 89128, for the following purposes, as set forth in the
accompanying proxy statement:
1. To elect five directors.
2. To consider and vote upon a proposal to amend Citadel
Communications' Certificate of Incorporation to allow the size of
the Board of Directors to be determined in accordance with the
Bylaws.
3. To consider and vote upon a proposal to amend Citadel
Communications' Certificate of Incorporation to increase the vote
of the stockholders required to remove a director in order to
conform to Nevada law.
4. To ratify the Board of Directors' appointment of KPMG LLP as
independent public accountants for Citadel Communications for the
year ending December 31, 2000.
5. To transact such other business as may properly come before the
meeting and any adjournments or postponements thereof.
The Board of Directors has established the close of business on April 10,
2000, as the record date for the determination of stockholders entitled to
receive notice of and to vote at the annual meeting and any adjournment or
postponement thereof.
YOU ARE URGED TO REVIEW CAREFULLY THE ACCOMPANYING PROXY STATEMENT AND TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
Your proxy may be revoked by you at any time before it has been voted. You
are cordially invited to attend the annual meeting in person if it is convenient
for you to do so.
By order of the Board of Directors,
/s/ Donna L. Heffner
-----------------------------------
Donna L. Heffner
Secretary
April , 2000
<PAGE> 3
CITADEL COMMUNICATIONS CORPORATION
PROXY STATEMENT
GENERAL INFORMATION
This proxy statement is provided to the stockholders of Citadel
Communications Corporation ("Citadel Communications") in connection with the
solicitation by the Board of Directors of Citadel Communications of proxies for
use at the Annual Meeting of Stockholders of Citadel Communications to be held
on Wednesday, May 24, 2000 at 10:00 a.m. (local time), at Citadel
Communications' principal executive offices at City Center West, Suite 400, 7201
West Lake Mead Boulevard, Las Vegas, Nevada 89128, and any adjournments or
postponements thereof. A form of proxy is enclosed for use at the annual
meeting. Proxies properly executed and returned in a timely manner will be voted
at the annual meeting in accordance with the directions specified therein. If no
direction is indicated, they will be voted for the election of the nominees
named herein as directors, for the proposal to amend Citadel Communications'
Amended and Restated Certificate of Incorporation to allow the size of the Board
of Directors to be determined in accordance with the Bylaws, for the proposal to
amend Citadel Communications' Amended and Restated Certificate of Incorporation
to increase the vote of the stockholders required to remove a director in order
to conform to conform with Nevada law, for the proposal to ratify the
appointment of KPMG LLP as Citadel Communications' independent public
accountants and, on other matters presented for a vote, in accordance with the
judgment of the persons acting under the proxies. The persons named as proxies
were selected by the Board of Directors and are present members of executive
management of Citadel Communications.
Citadel Communications' principal executive offices are located at City
Center West, Suite 400, 7201 West Lake Mead Boulevard, Las Vegas, Nevada, 89128,
and its telephone number is (702) 804-5200. Proxy materials are first being
mailed to stockholders beginning on or about April , 2000.
SHARES OUTSTANDING, VOTING RIGHTS AND VOTE REQUIRED
Only stockholders of record at the close of business on April 10, 2000 are
entitled to vote at the annual meeting. The only voting stock of Citadel
Communications outstanding and entitled to vote at the annual meeting is its
common stock, $.001 par value per share (the "Common Stock"), of which
shares were outstanding as of the close of business on April 10,
2000. Each share of Common Stock issued and outstanding is entitled to one vote
on matters properly submitted at the annual meeting. Cumulative voting is not
permitted under Citadel Communications' Amended and Restated Certificate of
Incorporation.
The presence, in person or by proxy, of the holders of a majority of the
total issued and outstanding shares of Common Stock entitled to vote at the
annual meeting is necessary to constitute a quorum for the transaction of
business at the annual meeting. Abstentions and broker non-votes will be counted
for purposes of determining the presence or absence of a quorum. A broker
non-vote occurs when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received instructions from
the beneficial owner. Abstentions will be counted in tabulating votes cast on
the proposals presented to stockholders, whereas broker non-votes will not.
Votes cast in person or by proxy at the annual meeting will be tabulated by the
election inspectors appointed for the meeting.
Directors will be elected by a plurality of the votes of the shares present
or represented by proxy at the meeting and entitled to vote on the election of
directors. That is, the nominees receiving the greatest number of votes will be
elected. If a quorum is present, abstentions and broker non-votes will have no
effect on the voting for the election of directors. Approval of each of the
amendments to Citadel Communications' Amended and Restated Certificate of
Incorporation and ratification of the appointment of independent public
accountants require the affirmative vote of a majority of the aggregate voting
power of the Common Stock entitled to vote, present or represented at the annual
meeting. If a quorum is present, non-votes will have no effect on the voting for
approval of the amendments to Citadel Communications' Amended and Restated
Certificate of Incorporation and ratification of the appointment of independent
public accountants. However, abstentions will have the effect of a negative
vote. Stockholders voting by proxy may revoke that proxy at any time before it
is voted at the
2
<PAGE> 4
annual meeting by delivering written notice to the Secretary of Citadel
Communications, by delivering a proxy bearing a later date or by attending the
annual meeting in person and casting a ballot. The Board of Directors recommends
voting (1) FOR the election of the nominees named herein for director, (2) FOR
approval of the amendment to the Amended and Restated Certificate of
Incorporation to allow the size of the Board of Directors to be determined in
accordance with the Bylaws, (3) FOR approval of the amendment to the Amended and
Restated Certificate of Incorporation to increase the vote required to remove a
director in order to conform with Nevada Law and (4) FOR ratification of the
appointment of KPMG LLP as Citadel Communications' independent public
accountants for 2000.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Board of Directors of Citadel Communications currently consists of five
members, four of whom are non-employee directors. The Chairman, President and
Chief Executive Officer of Citadel Communications is a member of the Board. All
directors are elected for a one-year term and hold office until the next annual
meeting of stockholders following election and until their successors are duly
elected and qualified. All officers serve at the discretion of the Board and are
elected by the Board each year. There are no family relationships among Citadel
Communications' directors and executive officers.
The persons named below have been designated by the Board of Directors as
nominees for election as directors, for terms expiring at the 2001 Annual
Meeting of Stockholders. All nominees currently serve as directors of Citadel
Communications.
Lawrence R. Wilson, age 55, co-founded and was a general partner of Citadel
Communications' predecessor, Citadel Associates Limited Partnership and Citadel
Associates Montana Limited Partnership, from 1984 to July 1992 and has been the
Chief Executive Officer, President and Chairman of Citadel Communications since
it was incorporated in 1993 and Chief Executive Officer and Chairman of Citadel
Broadcasting Company ("Citadel Broadcasting"), the operating subsidiary of
Citadel Communications, since it was incorporated in 1991. Mr. Wilson also
served as President of Citadel Broadcasting from 1991 to October 1998. From 1974
to 1979, Mr. Wilson was Executive Vice President and General Counsel of Combined
Communications Corporation, a national media company, where he handled all
acquisitions and mergers and oversaw the broadcast, newspaper and outdoor
billboard divisions as a part of a five person management committee. From 1979
to 1986, he was engaged in the private practice of law.
Robert F. Fuller, age 59, became a director of Citadel Communications and
Citadel Broadcasting in November 1999. From 1975 to 1999, he was the President
and majority owner of Fuller-Jeffrey Broadcasting Companies, Inc., a ten station
radio group purchased by Citadel Broadcasting in August 1999. Mr. Fuller brings
over 43 years of radio broadcast experience to Citadel Communications, ranging
from on-air and management positions to ownership of over 30 radio stations.
Ike Kalangis, age 62, became a director of Citadel Communications and
Citadel Broadcasting in May 1999. Mr. Kalangis has over 30 years' experience in
the banking industry, most recently, from 1989 until his retirement in 1997, as
Chairman, President and Chief Executive Officer of Boatman's Sunwest, Inc., a
bank holding company with community banks in New Mexico and Texas, which is now
a part of Bank of America.
Ted L. Snider, Sr., age 71, became a director of Citadel Communications and
Citadel Broadcasting in November 1997 following Citadel Broadcasting's October
1997 acquisition of Snider Corporation. Mr. Snider had been Chairman of Snider
Corporation since its incorporation in 1971. Snider Corporation owned two FM and
two AM radio stations, the right to construct an additional FM radio station and
the Arkansas Radio Network.
John E. von Schlegell, age 45, has served as a member of the Board of
Directors of Citadel Communications and Citadel Broadcasting since January 1997.
He co-founded and, since 1991, has managed, The Endeavour Capital Fund Limited
Partnership, a firm that invests equity capital in privately held businesses
throughout the northwest. Prior to 1991, Mr. von Schlegell was a general partner
at Golder, Thomas & Cressey, a private equity firm based in Chicago.
3
<PAGE> 5
Three of the five persons presently constituting the Board of Directors of
Citadel Communications were elected under the terms of a Fourth Amended and
Restated Voting Agreement dated as of October 15, 1997, by and among Citadel
Communications, the voting trustee under the Amended and Restated Voting Trust
Agreement dated October 15, 1997 and certain other stockholders of Citadel
Communications. In connection with Citadel Communications' initial public
offering in July 1998, the Fourth Amended and Restated Voting Agreement and a
related stockholders agreement among Citadel Communications and certain of its
stockholders were terminated.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF THE ABOVE NAMED NOMINEES
If you do not wish your shares to be voted for particular nominees, you may
so indicate on the proxy. If, for any reason, any of the nominees shall become
unavailable for election, the individuals named in the enclosed proxy may
exercise their discretion to vote for any substitutes proposed by the Board of
Directors, unless the Board of Directors should decide to reduce the number of
directors to be elected at the annual meeting. At this time, the Board of
Directors knows of no reason why any nominee might be unavailable to serve.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The business affairs of Citadel Communications are managed under the
direction of the Board of Directors. During 1999, Citadel Communications' Board
of Directors held five meetings and took action by unanimous written consent in
lieu of meetings 16 times.
The Board of Directors has established two committees, the Audit Committee
and the Compensation Committee. The Board has no standing nominating committee.
The Audit Committee provides oversight of the financial reporting process
and management's responsibility for the integrity, accuracy and objectivity of
financial reports and accounting and financial reporting and practices. The
Audit Committee has the power to recommend the retention of the independent
public accountants for Citadel Communications and to consult with such
independent accountants concerning the plan of audit, their report of audit and
the adequacy of internal controls. The Audit Committee is currently composed of
four independent, non-employee directors, Ted L. Snider, Sr. (Chairman), John E.
von Schlegell, Robert F. Fuller and Ike Kalangis. The Audit Committee met two
times during 1999.
The Compensation Committee reviews and makes recommendations to the Board
of Directors concerning the compensation and benefit policies and practices of
Citadel Communications. The Compensation Committee is currently composed of four
non-employee directors, John E. von Schlegell (Chairman), Ike Kalangis, Robert
F. Fuller and Ted L. Snider, Sr. The Compensation Committee met one time during
1999 and took action by written consent in lieu of meetings three times.
EXECUTIVE OFFICERS
Information concerning Mr. Wilson, Citadel Communications' Chairman,
President and Chief Executive Officer, is included above in the biographic
summaries of the nominees for director. Information with regard to the remaining
executive officers of Citadel Communications who are not also directors follows.
Donna L. Heffner, age 40, joined Citadel Associates Limited Partnership and
Citadel Associates Montana Limited Partnership in 1988 as Controller. Ms.
Heffner has served as Secretary of Citadel Communications since it was
incorporated in 1993 and of Citadel Broadcasting since it was incorporated in
1991. She has served as Chief Financial Officer of Citadel Communications and
Citadel Broadcasting since 1993 and 1992, respectively. In January 1997, Ms.
Heffner became Vice President of Citadel Communications and Citadel
Broadcasting. Ms. Heffner also served as Treasurer of Citadel Communications
from 1993 to 1999 and as a director of Citadel Communications for several months
in 1993. She served as Treasurer of Citadel Broadcasting from 1991 to 1999 and
as a director of Citadel Broadcasting from 1992 to 1993. From 1982 to 1985 and
in 1987, she was employed by Price Waterhouse, and in 1986, she was employed by
Lowrimore, Warwick & Company as an accountant.
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<PAGE> 6
D. Robert Proffitt, age 47, joined Citadel Associates Limited Partnership
and Citadel Associates Montana Limited Partnership in 1988 as Vice President --
General Manager of KKFM-FM in Colorado Springs, Colorado. In 1991, he was
appointed Vice President of Citadel Broadcasting, and in 1993, he was appointed
Vice President of Citadel Communications. Mr. Proffitt took over as General
Manager of Citadel Communications' Albuquerque operations in 1994. Mr. Proffitt
served as President of the Central Region for Citadel Broadcasting from June
1997 to October 1998, and he became President and Chief Operating Officer of
Citadel Broadcasting in October 1998.
Stuart R. Stanek, age 44, joined Citadel Associates Limited Partnership and
Citadel Associates Montana Limited Partnership in 1986 as a General Manager of
KKFM-FM in Colorado Springs, Colorado. In 1988, he became General Manager of
KBEE-AM/KUBL-FM in Salt Lake City, Utah. In 1991, he was appointed Vice
President of Citadel Broadcasting, in 1992 he was elected to the Board of
Directors of Citadel Broadcasting and in 1993, he was appointed Vice President
and elected to the Board of Directors of Citadel Communications. He served as a
Director of Citadel Communications and Citadel Broadcasting until August 1996.
Mr. Stanek became President of the East Region for Citadel Broadcasting in June
1997.
Peter J. Benedetti, age 36, joined Citadel Communications in April 1995 as
Sales Manager for KMGA-FM in Albuquerque, New Mexico and also became Sales
Manager for KHFM-FM in Albuquerque upon Citadel Communications' acquisition of
that station in June 1996. From January 1997 to July 1997, Mr. Benedetti was
Director of Sales of Citadel Communications' Salt Lake City radio station group,
and from July 1997 to October 1998, he served as Vice President and General
Manager of that radio station group. In October 1998, Mr. Benedetti became Vice
President of Citadel Communications and Citadel Broadcasting and from October
1998 to July 1999, he served as President of the Central Region for Citadel
Broadcasting. In July 1999, Mr. Benedetti became President of the West Region
for Citadel Broadcasting when operations were consolidated into East and West
regions. Prior to joining Citadel Communications, he served as an account
executive for Jacor Communications in Denver, Colorado.
5
<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
paid to Citadel Communications' Chief Executive Officer and each of the other
four most highly compensated executive officers of Citadel Communications during
1999. Information with respect to 1997 compensation is not given for Mr.
Benedetti as he did not begin service as an executive officer of Citadel
Communications until 1998. Unless the context otherwise requires, references to
Citadel Communications in this Executive Compensation section include Citadel
Communications' subsidiary, Citadel Broadcasting.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- ------------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION(2)
------------------ ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence R. Wilson.......... 1999 $438,319 -0- -0- 875,000 $3,413
Chairman, 1998 358,319 $214,370(3) -0- 60,000 3,046
Chief Executive Officer 1997 341,256 120,000(4) -0- -0- 3,278
and President
Donna L. Heffner............ 1999 $230,000 -0- -0- 250,000 $3,489
Vice President and 1998 175,000 80,000(3) -0- 12,000 4,537
Chief Financial Officer 1997 140,535 50,000(4) -0- -0- 3,086
D. Robert Proffitt.......... 1999 $250,000 -0- -0- 250,000 $3,849
Vice President 1998 200,000 $ 40,000(3) -0- 12,000 3,161
1997 192,211 15,000(4) -0- -0- 2,541
Stuart R. Stanek............ 1999 $230,000 -0- $26,216 250,000 $2,598
Vice President 1998 210,000 $ 50,000(3) -0- 12,000 2,635
1997 190,007 30,000(4) -0- -0- 2,529
Peter J. Benedetti.......... 1999 $200,000 -0- $69,402 125,000 $2,202
Vice President 1998 160,000(5) $ 65,000(3) -0- 21,005 2,093
</TABLE>
- ---------------
(1) In accordance with applicable regulations, the amounts set forth in this
column do not include perquisites and other personal benefits received by
the executive officers unless the aggregate value of such perquisites and
other benefits exceeded the lesser of $50,000 or 10% of the total salary and
bonus reported for the executive officer. The amount shown for Mr. Stanek
represents $25,309 for mortgage payments made on behalf of Mr. Stanek and
$907 for personal motor vehicle use. The amount shown for Mr. Benedetti
represents $58,568 for closing cost payments made on behalf of Mr. Benedetti
and reimbursement of the loss on the sale of a home, $7,825 for temporary
living expenses and $3,009 for personal motor vehicle use.
(2) Included for 1999 are Citadel Communications' contributions to Citadel
Communications' 401(k) Plan (Mr. Wilson -- $3,200, Ms. Heffner -- $3,408,
Mr. Proffitt -- $3,717, Mr. Stanek -- $2,517 and Mr. Benedetti -- $2,142),
which contributions vest over five years, and Citadel Communications'
payment of premiums for term life insurance (Mr. Wilson -- $213, Ms.
Heffner -- $81, Mr. Proffitt -- $132, Mr. Stanek -- $81 and Mr.
Benedetti -- $60).
(3) Bonuses were earned in 1998 and paid in 1998 and 1999. Does not reflect
bonuses earned in 1997 but paid in 1998.
(4) Bonuses were earned in 1997, and paid in 1997 and 1998. Does not reflect
bonuses earned in 1996 but paid in 1997.
(5) Includes payments of $10,000 made in 1999 following a salary increase made
retroactive to November 1998.
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<PAGE> 8
The following table summarizes individual grants of options to purchase
shares of Common Stock of Citadel Communications to the executive officers
listed in the Summary Compensation Table during the year ended December 31,
1999.
OPTIONS GRANTED IN FISCAL 1999
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL MARKET POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS EXERCISE PRICE ON ASSUMED RATES OF STOCK PRICE
UNDERLYING GRANTED TO OR BASE DATE OF APPRECIATION FOR OPTION TERM(4)
OPTIONS EMPLOYEES PRICE GRANT EXPIRATION ------------------------------------
NAME GRANTED IN 1999 ($/SH)(1) ($/SH)(2) DATE(3) 0%($) 5%($) 10%($)
---- ---------- ---------- --------- --------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence R. Wilson(5)... 875,000 42.6% $29.25 $30.25 6-25-09 $875,000 $17,517,500 $43,058,750
Donna L. Heffner(5)..... 250,000 12.2 29.25 30.25 6-25-09 250,000 5,005,000 12,302,500
D. Robert Proffitt(5)... 250,000 12.2 29.25 30.25 6-25-09 250,000 5,005,000 12,302,500
Stuart R. Stanek(5)..... 250,000 12.2 29.25 30.25 6-25-09 250,000 5,005,000 12,302,500
Peter J. Benedetti(5)... 125,000 6.1 29.25 30.25 6-25-09 125,000 2,502,500 6,151,250
</TABLE>
- ---------------
(1) The exercise price equals the price to the public in Citadel Communications'
June 1999 Common Stock offering.
(2) The indicated market price on the date of grant was the closing market price
of the Common Stock.
(3) The options must be earned prior to June 25, 2004. Any portion not earned
will be forfeited. Earned options expire on the dates shown in the table.
See footnote (5).
(4) The potential realizable value is based on the term of the option at the
time of grant, which is ten years for each of the options set forth in the
table. An assumed stock price appreciation of 0%, 5% and 10% is used
pursuant to rules promulgated by the Securities and Exchange Commission. The
potential realizable value is calculated by assuming that the market price
on the date of grant appreciates at the indicated rate, compounded annually,
for the entire term of the option and that the option is exercised and sold
on the last day of its term at this appreciated stock price. The potential
realizable value is not intended to forecast the future appreciation of the
common stock.
(5) The options are earned in one-fifth increments for each increase in average
stock price (calculated over 20 consecutive trading days) equal to one-fifth
of the difference between the doubled exercise price and the exercise price.
When an increment of the option is earned, the earned portion vests 20% each
year thereafter. Vesting accelerates in the event of a change in control of
Citadel Communications, as provided for in Citadel Communications' 1999
Long-Term Incentive Plan.
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<PAGE> 9
The following table shows the number of shares of Common Stock acquired and
the value realized upon exercise in 1999 of options to purchase shares of Common
Stock of Citadel Communications by the executive officers listed in the Summary
Compensation Table, as well as the number and value of unexercised options to
purchase shares of Common Stock of Citadel Communications (rounded to the
nearest whole share) held by such persons as of December 31, 1999.
AGGREGATED OPTION EXERCISES IN 1999 AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END(1)
EXERCISE REALIZED # $
# $ EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
----------- ---------- -------------------------- -----------------------------
<S> <C> <C> <C> <C>
Lawrence R. Wilson(2).... 178,071 11,105,728 407,410/1,091,467 $24,721,516/$43,483,540
Donna L. Heffner......... 124,392 7,733,806 58,662/286,000 3,666,588/10,937,142
D. Robert Proffitt....... 124,805 7,736,520 18,421/290,800 1,119,817/11,229,342
Stuart R. Stanek......... 39,600 2,342,538 146,034/288,400 9,211,823/11,083,242
Peter J. Benedetti....... -0- -0- 7,801/147,204 402,874/5,570,746
</TABLE>
- ---------------
(1) These values have been calculated on the basis of the December 31, 1999
closing price per share of $64.875, less the applicable exercise price.
(2) Includes options held by Rio Bravo Enterprise Associates, L.P. Mr. Wilson
owns all of the capital stock of Rio Bravo, Inc., the sole general partner
of Rio Bravo Enterprise Associates, L.P.
EMPLOYMENT AGREEMENT
In June 1996, Citadel Communications entered into an employment agreement
with Lawrence R. Wilson which has an initial term ending in June 2001. The
agreement provides for annual base salary compensation, annual increases to base
salary and an annual bonus calculated as a percentage of base salary in effect
at the end of the year and based on annual performance criteria. The annual
performance criteria were not achieved for 1999 and, therefore, no bonus was
earned for 1999. For 1999, the Compensation Committee approved a base salary for
Mr. Wilson in an amount greater than that provided for in the agreement
following the Committee's review of compensation levels at comparable public
companies.
Mr. Wilson's employment with Citadel Communications will terminate upon Mr.
Wilson's becoming permanently disabled or upon (1) a liquidation or dissolution
of Citadel Communications, (2) a sale, transfer or other disposition of all of
the assets of Citadel Broadcasting on a consolidated basis or (3) any
transaction or series of transactions whereby any person or entity other than
ABRY Broadcast Partners II, L.P. or its affiliates or affiliates of Citadel
Communications, becomes the direct or indirect beneficial owner of securities of
Citadel Communications or Citadel Broadcasting representing 50% or more of the
combined voting power of Citadel Communications' or Citadel Broadcasting's then
outstanding securities. In such event, Mr. Wilson or his beneficiary will be
entitled to receive Mr. Wilson's then base salary through the end of the month
in which the termination occurs. In addition, upon the affirmative vote or
written consent of not less than 66 2/3% of the members of the Citadel
Communications Board of Directors, Mr. Wilson's employment may be terminated
with or without cause. If any such termination is without cause, Mr. Wilson will
be entitled to receive his then current base salary through the end of the then
current term of the employment agreement.
1999 LONG-TERM INCENTIVE PLAN
Citadel Communications adopted the 1999 Long-Term Incentive Plan, which is
intended to be the primary long-term incentive plan for senior management. The
Long-Term Incentive Plan provides opportunities for participants to earn the
right to purchase shares of Citadel Communications' Common Stock if performance
goals, measured solely by the increase in the price of the Common Stock, and
continued employment requirements are met. Participants under the Long-Term
Incentive Plan receive an option grant based on the
8
<PAGE> 10
Citadel Communications Compensation Committee's evaluation of the participant's
ability to contribute to Citadel Communications' overall performance. If the
option is not fully earned during the specific five-year performance period, any
portion not earned is forfeited, and the shares become available for issuance
upon exercise of other options granted under the plan. If any shares become
available for additional grants under this plan, the exercise price will be the
average of the bid and asked prices of the Common Stock on the date of the
grant. For the full option to be earned, the average stock price (calculated
over 20 consecutive trading days) over the exercise price must double during the
performance period. The option is earned in one-fifth increments for each
increase in average stock price (calculated over 20 consecutive trading days)
equal to one-fifth of the difference between the doubled exercise price and the
exercise price. When an increment of the option is earned, the earned portion
generally vests over a five-year period. A total of 1,750,000 shares of Common
Stock are reserved and available for issuance under the Long-Term Incentive
Plan.
At the time that the Citadel Communications Board of Directors adopted the
Long-Term Incentive Plan, the following option grants were made to be effective
as of the closing of Citadel Communications' Common Stock offering in June 1999,
subject to stockholder approval of the Long-Term Incentive Plan, which was
obtained in July 1999: Lawrence R. Wilson -- 875,000 shares; Donna L.
Heffner -- 250,000 shares; D. Robert Proffitt -- 250,000 shares; Stuart R.
Stanek -- 250,000 shares; and Peter J. Benedetti -- 125,000 shares. The exercise
price for the options granted is $29.25 per share, the price to the public in
Citadel Communications' June 1999 Common Stock offering. As of March 31, 2000,
four-fifths of each of these options had been earned. No portion has yet vested.
1996 EQUITY INCENTIVE PLAN
Citadel Communications adopted the 1996 Equity Plan under which employees,
officers, directors (excluding non-employee directors), consultants, independent
contractors and advisors of Citadel Communications and its subsidiaries are
eligible to receive awards in the form of incentive stock options and options
that are not incentive stock options to purchase Common Stock of Citadel
Communications. Awards may also be in the form of stock appreciation rights,
restricted securities and other stock-based awards as determined by the Board of
Directors, none of which have been granted to date. The 1996 Equity Plan is
administered by the Compensation Committee of the Board of Directors and in
certain cases the Board. The Compensation Committee or the Board has authority
under the 1996 Equity Plan to designate participants, determine the terms and
conditions of awards to be granted to each participant and decide all matters
relating to any award. At March 31, 2000, the total number of shares of Common
Stock of Citadel Communications that remained reserved and available for
issuance under the 1996 Equity Plan, or which may be used to provide a basis of
measurement for an award, was 2,081,038 shares, including shares underlying
outstanding grants.
Shares subject to any expired, terminated or lapsed awards are available
for subsequent grants under the 1996 Equity Plan. The exercise price of
incentive stock options granted under the plan may not be less than the fair
market value of the Common Stock as of the date of grant (110% of the fair
market value of the Common Stock in the case of an incentive stock option to an
individual who at the time of the grant owns more than ten percent of the
combined voting power of Citadel Communications' capital stock). The Board may
provide that an optionee may pay for shares upon exercise of an option in cash
or by check or through cashless exercise procedures or other medium or
combination of media as authorized by the Board. The grant of an option may be
accompanied by a reload option, which gives an optionee who pays the exercise
price of an option with shares of Common Stock an additional option to acquire
the same number of shares that was used to pay for the original option at an
exercise price of not less than the fair market value of Common Stock as of the
reload option grant date. In the event a participant's employment with Citadel
Communications is terminated due to disability, retirement or any other reason,
a participant may exercise an option only to the extent it was exercisable on
the termination date of the participant's employment. An incentive stock option
must be exercised prior to the earlier of the expiration of three months (six
months in the case of disability) after the termination date or the expiration
date of the options set forth in the award agreement. A non-incentive stock
option must be exercised within the applicable time period for exercise set
forth in the award agreement. In the event of the death of the participant
before an option lapses, an option may be exercised only to the extent it was
exercisable on the date of death.
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<PAGE> 11
However, such exercise must be made prior to the earlier of the first
anniversary of the participant's death or the expiration date of the option.
401(k) PLAN
Effective in 1993, Citadel Communications adopted the Citadel
Communications Corporation 401(k) Retirement Savings Plan for the purpose of
providing, at the option of the employee, retirement benefits to full-time
employees of Citadel Communications and its subsidiaries who have been employed
for a period of one year or longer. Contributions to the 401(k) plan are made by
the employee and, on a voluntary basis, by Citadel Communications. Citadel
Communications currently matches 100% of that part of the employee's elective
deferrals up to 2% of the employee's salary.
A contribution to the 401(k) plan of approximately $532,000 was made by
Citadel Communications during the year ended December 31, 1999.
DIRECTOR COMPENSATION
Currently, all of the non-employee directors are entitled to receive an
annual fee of $20,000 for their services as directors. Directors who are also
employees of Citadel Communications do not receive additional consideration for
serving as directors, except that all directors are entitled to reimbursement
for travel and out-of-pocket expenses in connection with their attendance at
Board and committee meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, John E. von Schlegell, Ike Kalangis, Ted L. Snider, Sr.,
Robert F. Fuller and former directors, Scott E. Smith and Patricia Diaz Dennis,
were members of the Compensation Committee of the Citadel Communications Board
of Directors, which determines, or makes recommendations with respect to,
compensation matters for Citadel Communications.
Registration Rights Agreement. Citadel Communications is a party to a
Registration Rights Agreement, dated June 28, 1996, as amended, with Lawrence R.
Wilson, Rio Bravo Enterprise Associates, L.P., ABRY Broadcast Partners II, L.P.,
Baker, Fentress & Company, Edward T. Hardy, The Endeavour Capital Fund Limited
Partnership, Ted L. Snider, Sr. and others, which requires Citadel
Communications to register their shares of its Common Stock under the Securities
Act of 1933, as amended, for offer and sale to the public (including by way of
an underwritten public offering), upon a demand by such stockholders, and which
entitles such parties to join in any registration of equity securities of
Citadel Communications. Various stockholders have exercised their rights under
this agreement and have participated in Citadel Communications' Common Stock
offerings in 1999 and/or 2000, including ABRY Broadcast Partners II, L.P. and
its general partner; Baker, Fentress & Company; The Endeavour Capital Fund
Limited Partnership and its general partner; Edward T. Hardy and Ted L. Snider,
Sr. ABRY Broadcast Partners II, L.P., is a significant stockholder of Citadel
Communications. For a portion of 1999, Baker, Fentress & Company owned more than
five percent of the outstanding Common Stock and Mr. Smith was an Executive Vice
President of Baker, Fentress & Company. Mr. von Schlegell is President and a
shareholder of the general partner of The Endeavour Capital Fund Limited
Partnership, and Edward T. Hardy was an executive officer of Citadel
Communications and Citadel Broadcasting. Mr. Wilson owns all of the capital
stock of Rio Bravo, Inc., the sole general partner of Rio Bravo Enterprise
Associates, L.P. In addition to those parties having registration rights under
the Registration Rights Agreement, each of Rio Bravo Enterprise Associates,
L.P., Donna L. Heffner, D. Robert Proffitt, Stuart R. Stanek and Peter J.
Benedetti participated as selling stockholders in Citadel Communications' Common
Stock offerings in 1999 and/or 2000.
Transactions with Connect Communications. On October 1, 1999, Citadel
Broadcasting acquired certain assets and subscriber agreements of Connect
Communications Corporation, an internet service provider in Arkansas, in
exchange for extinguishment of approximately $100,000 in accounts receivable and
certain equipment owned by Citadel Broadcasting. Ted Snider, Jr., the son of Ted
L. Snider, Sr., a director of Citadel Communications and Citadel Broadcasting,
is a director and shareholder of Connect Communications Corporation.
10
<PAGE> 12
Connect Communications Corporation also provided telephone service to
Citadel Broadcasting during 1999. The value of the service provided in 1999 was
approximately $124,000 as of December 31, 1999. As of December 31, 1999, Connect
Communications Corporation owed Citadel Broadcasting approximately $69,000 for
third party telephone charges, which were to be reimbursed by Connect
Communications Corporation. Citadel Communications believes that the terms of
its transactions with Connect Communications Corporation are at least as
favorable to Citadel Communications as those that could be obtained generally
from unaffiliated parties.
Consulting Agreement. On August 31, 1999, Citadel Broadcasting entered into
a seven-year Consulting Agreement with Robert F. Fuller which provides for
compensation to Mr. Fuller of $250,000 each year. In 1999, Citadel Broadcasting
paid Mr. Fuller $83,333 under this Consulting Agreement. Citadel Broadcasting
originally entered into this Consulting Agreement in connection with its
acquisition of all of the issued and outstanding shares of capital stock of
Fuller-Jeffrey Broadcasting Companies, Inc. from Mr. Fuller and Joseph N.
Jeffrey, Jr., the two former stockholders of Fuller-Jeffrey Broadcasting. Mr.
Fuller became a director of each of Citadel Communications and Citadel
Broadcasting in November 1999. Citadel Communications believes that the terms of
the Consulting Agreement with Mr. Fuller are at least as favorable to Citadel
Communications as those that could be obtained generally from unaffiliated
parties.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors approves the
compensation programs for Citadel Communications' executive officers and certain
other members of senior management. During 1999, the Committee consisted of from
three to four non-employee directors.
The Committee intends for Citadel Communications' compensation programs to
provide strong incentives to senior management to pursue actions that will
directly benefit Citadel Communications and its stockholders. The principles
underlying Citadel Communications' executive compensation program are:
(1) Citadel Communications must offer competitive salaries to be able
to attract and retain highly qualified and experienced executives
and other management personnel;
(2) Executive cash compensation in excess of base salaries should be
tied to the performance of Citadel Communications and the
individual executive; and
(3) The financial interests of the executives should be aligned with
the financial interests of the stockholders.
In developing compensation programs, the Committee has utilized the
services of an outside consultant who specializes in executive compensation
matters. The consultant advised the Committee about comparable publicly traded
radio broadcasting companies' compensation programs.
The Committee intends that a major portion of total compensation for senior
management be based on attainment of performance objectives. Depending on the
situation, such objectives will measure performance across Citadel
Communications' business or as to an identifiable portion of the operations over
which the individual has managerial responsibility. Another, smaller portion of
compensation is based on the individual's attainment of specific personal
performance objectives. In addition to these formal procedures, at any time the
Committee may and has rewarded a particularly outstanding performance
achievement by an individual member of management.
In 1999, the two primary forms of compensation paid or awarded to Citadel
Communications' executive officers were salary and stock options.
Base salaries for the Chief Executive Officer and other executive officers
are established at levels appropriate for the duties and scope of
responsibilities of each officer's position and are intended to be competitive
with comparable radio broadcasting companies. In 1998, the Chief Executive
Officer was awarded an $80,000 bonus and two other executive officers were
awarded bonuses in recognition of the contributions made by these individuals in
connection with the successful completion of Citadel Communications' initial
public offering in July 1998. Further, the executive officers' base salaries for
1999 were increased by the respective bonus amounts, reflecting an adjustment
that the Committee believes appropriate following its review of the compensation
levels
11
<PAGE> 13
of comparable public companies. In the case of the Chief Executive Officer, this
adjustment resulted in an increase in base salary for 1999 beyond the five
percent per year increase otherwise provided for in the Chief Executive
Officer's employment agreement with Citadel Communications. Salaries for all
executives are reviewed periodically and adjusted as warranted to reflect
sustained individual officer performance.
No additional cash compensation was paid to executive officers for 1999.
The opportunity for the executive officers to earn bonuses in respect of 1999
was dependent on Citadel Communications' achieving certain performance criteria,
with a portion of any bonus based on individual achievement criteria developed
by the Committee through consultation with the Chief Executive Officer. However,
the award of any individual achievement bonus was contingent on the achievement
of the overall performance criteria. As the overall performance criteria
established for 1999 were not realized, no bonus was awarded to any executive
officer for 1999. However, certain other key employees were awarded stock option
bonuses.
Stock ownership is a fundamental principle underlying Citadel
Communications' executive compensation policies. The Committee believes that
management's having an equity interest in Citadel Communications more closely
aligns the interests of stockholders and management.
In 1999, Citadel Communications adopted the 1999 Long-Term Incentive Plan
as a primary long-term incentive vehicle for senior management. The 1999
Long-Term Incentive Plan provides opportunities for participants to acquire
shares of Citadel Communications' Common Stock upon the exercise of options
granted under the plan if performance goals (measured solely by the increase in
the price of the Common Stock) and continued employment requirements are met.
Each participant receives an option to acquire a certain number of shares of
Common Stock that can be earned during a five-year performance period. For the
full option to be earned, the average stock price (calculated over 20
consecutive trading days) over the exercise price must double during the
performance period. The option is earned in one-fifth increments for each
increase in average stock price (calculated over 20 consecutive trading days)
equal to one-fifth of the difference between the doubled exercise price and the
exercise price. The Committee believes that the performance-based features of
the 1999 Long-Term Incentive Plan advance the interests of Citadel
Communications by encouraging senior management to seek ways to improve
efficiencies, spend capital wisely, reduce debt and generate cash, all of which
should combine to cause stock appreciation.
An option to purchase 875,000 shares of Common Stock under the 1999
Long-Term Incentive Plan was granted to the Chief Executive Officer effective as
of June 25, 1999, the date on which Citadel Communications closed a public
offering of its Common Stock. Each other current executive officer also received
a grant under this plan effective as of June 25, 1999. The exercise price for
these options is $29.25 per share, the price to the public in such Common Stock
offering.
When an increment of the number of shares subject to an option granted
under the 1999 Long-Term Incentive Plan is earned, that increment is subject to
a five-year vesting period. Similarly, the stock options granted to other key
employees in 1999 under other plans generally vest over five years. This
approach is designed to increase stockholder value over a long term since the
full benefit of the compensation package cannot be realized unless stock price
appreciation occurs over a number of years.
The Internal Revenue Code (the "Code") contains a provision that limits the
tax deductibility of certain compensation paid to certain executive officers and
disallows the deductibility of certain compensation in excess of $1,000,000 per
year unless it is considered performance-based compensation under the Code.
Citadel Communications' policies and practices generally ensure the maximum
deduction possible under Section 162(m) of the Code. However, Citadel
Communications reserves the right to forego any or all of the tax deduction if
believed to be in the best interest of Citadel Communications and its
stockholders.
Members of the Compensation Committee
John E. von Schlegell
Robert F. Fuller
Ike Kalangis
Ted L. Snider, Sr.
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<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the cumulative total return on Citadel
Communications' Common Stock, The Nasdaq Stock Market (U.S.) Index and a peer
group of radio broadcasting companies (AM/FM, Inc. (formerly Chancellor Media
Corp.), Clear Channel Communications Inc., Cox Radio Inc. and Emmis
Communications Corp) for the period from July 1, 1998, the first day of trading
of Citadel Communications' Common Stock, through December 31, 1999.
<TABLE>
<CAPTION>
CITADEL
COMMUNICATIONS NASDAQ STOCK
CORPORATION MARKET (U.S.) INDEX PEER GROUP
----------- ------------------- ----------
<S> <C> <C> <C>
7/1/98 100.00 100.00 100.00
9/30/98 127.73 89.29 84.81
12/31/98 161.72 116.03 97.64
3/31/99 207.81 130.04 119.51
6/30/99 226.17 142.29 123.02
9/30/99 213.28 145.74 142.81
12/31/99 405.47 214.72 165.42
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
-----------------------
7/1/98 9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99
------ ------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Citadel Communications
Corporation......... $100 $127.73 $161.72 $207.81 $226.17 $213.28 $405.47
Nasdaq Stock Market
(U.S.) Index........ 100 89.29 116.03 130.04 142.29 145.74 214.72
Peer Group (1)........ 100 84.81 97.64 119.51 123.02 142.81 165.42
</TABLE>
- ---------------
(1) The peer group presented in Citadel Communications' comparative performance
data in its proxy statement for its 1999 Annual Meeting of Stockholders
included Jacor Communications Inc., an entity which was acquired by Clear
Channel Communications Inc. in May 1999. As Jacor Communications cannot
independently be included in the peer group comparative data for the period
following its acquisition, its separate results have been deleted from the
graph and chart for the period prior to its acquisition.
The graph and chart assume that $100 was invested on July 1, 1998 with
dividends, if any, reinvested. Peer returns are weighted by market
capitalization. The total stockholder returns are not necessarily indicative of
future returns.
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<PAGE> 15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The only outstanding capital stock of Citadel Communications is its Common
Stock. The following table sets forth information with respect to the beneficial
ownership of the Common Stock as of March 31, 2000 by (1) each person, entity or
group known to Citadel Communications to beneficially own more than five percent
of the Common Stock, (2) each director of Citadel Communications, (3) each
executive officer listed in the Summary Compensation Table and (4) all directors
and executive officers of Citadel Communications as a group.
Except as indicated below, the persons named have sole voting and
investment power with respect to the shares shown as beneficially owned by them.
The percentages are rounded to the nearest tenth of a percent. Holders of the
Common Stock are entitled to one vote per share on all matters submitted to a
vote of stockholders generally.
The number of shares and percentages are calculated in accordance with Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on a stockholder by stockholder basis, assuming that each stockholder
converted all securities owned by such stockholder that are convertible into
Common Stock at the option of the holder within 60 days of March 31, 2000, and
that no other stockholder so converts. The numbers and percentages of shares
owned assume that outstanding options have been exercised as follows: Lawrence
R. Wilson -- 407,410 shares (including options to purchase 395,410 shares held
by Rio Bravo Enterprise Associates, L.P.); Donna L. Heffner -- 58,662 shares; D.
Robert Proffitt -- 20,821 shares; Stuart R. Stanek -- 127,234 shares; Peter J.
Benedetti -- 7,801 shares; and all directors and executive officers as a
group -- 621,928 shares.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP OF
COMMON STOCK
--------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT
- ------------------------ --------- -------
<S> <C> <C>
Lawrence R. Wilson(1)....................................... 2,167,956 5.8%
City Center West
Suite 400
7201 West Lake Mead Boulevard
Las Vegas, NV 89128
Donna L. Heffner(2)......................................... 177,213 *
D. Robert Proffitt(3)....................................... 173,555 *
Stuart R. Stanek(4)......................................... 209,907 *
Peter J. Benedetti(5)....................................... 11,628 *
Robert F. Fuller............................................ 15,000 *
Ike Kalangis................................................ 1,000 *
John E. von Schlegell(6).................................... 84,377 *
Ted L. Snider, Sr.(7)....................................... 214,817 *
All directors and executive officers as a group (9
persons)(8)............................................... 3,055,453 8.2%
ABRY Broadcast Partners II, L.P.(9)......................... 3,339,144 9.1%
18 Newbury Street
Boston, MA 02116
Putnam Investments, Inc.(10)................................ 4,071,267 11.1%
One Post Office Square
Boston, MA 02109
Janus Capital Corporation (11).............................. 3,263,430 8.9%
100 Fillmore Street
Suite 300
Denver, CO 80246
</TABLE>
14
<PAGE> 16
- ---------------
* Less than 1%
(1) The numbers of shares include 1,702,883 shares held by Rio Bravo Enterprise
Associates, L.P. The numbers of shares also include 395,410 shares of
Common Stock which may be acquired upon exercise of options held by Rio
Bravo Enterprise Associates, L.P. Rio Bravo Enterprise Associates, L.P.
therefore beneficially owns 2,098,293 shares or 5.6% of the Common Stock.
Mr. Wilson owns all of the capital stock of Rio Bravo, Inc., the sole
general partner of Rio Bravo Enterprise Associates, L.P. The remaining
shares are jointly owned by Mr. Wilson and his spouse or may be acquired
upon exercise of options held by Mr. Wilson.
(2) Ms. Heffner's shares are jointly owned by Ms. Heffner and her spouse.
(3) Mr. Proffitt's shares are jointly owned by Mr. Proffitt and his spouse.
(4) Mr. Stanek's shares are jointly owned by Mr. Stanek and his spouse. Does
not include 1,781 shares owned by Mr. Stanek's spouse.
(5) Mr. Benedetti's shares are jointly owned by Mr. Benedetti and his spouse.
(6) Represents 2,554 shares held by The Endeavour Capital Fund Limited
Partnership and 81,823 shares held by DVS Management, Inc. Mr. von
Schlegell is the Managing Partner of The Endeavour Capital Fund Limited
Partnership and the President and a shareholder of DVS Management, Inc.,
the general partner of The Endeavour Capital Fund Limited Partnership.
(7) Does not include 121,713 shares owned by Mr. Snider's spouse.
(8) Includes shares discussed in footnotes (1) and (6).
(9) All of the shares beneficially owned by ABRY Broadcast Partners II, L.P.
are held under an Amended and Restated Voting Trust Agreement dated October
15, 1997. By its terms, the Amended and Restated Voting Trust Agreement
shall continue in effect until terminated upon the written agreement of
Citadel Communications and the holders of voting trust certificates which
represent a majority of the shares held in the voting trust as determined
in accordance with the Amended and Restated Voting Trust Agreement. The
voting trust also terminates with respect to any shares upon transfer of
such shares to a person who is not an affiliate of ABRY Broadcast Partners
II, L.P. or upon a distribution of shares by ABRY Broadcast Partners II,
L.P. to its partners. During the term of the Amended and Restated Voting
Trust Agreement, the voting trustee has the right to vote the shares of
stock subject to that agreement and to take part in any stockholders'
meetings, including the right to vote the shares for the election of
directors of Citadel Communications. The voting trustee may assign his
rights and delegate his obligations to a successor voting trustee, who
shall be a back-up trustee or other person appointed in the manner provided
under the terms of the Amended and Restated Voting Trust Agreement. The
voting trustee is Harlan A. Levy, whose address is 1585 Broadway, 19th
Floor, New York, N.Y. 10036. Dispositive power with respect to these shares
is held by Royce Yudkoff, the sole trustee of ABRY Holdings, Co., the sole
member of ABRY Holdings, LLC, the general partner of ABRY Capital, L.P.,
the general partner of ABRY Broadcast Partners II, L.P.
(10) As reported on Schedule 13G filed with the Securities and Exchange
Commission on February 17, 2000 (dated February 7, 2000) by Putnam
Investments, Inc. on behalf of itself and Marsh & McLennan Companies, Inc.,
Putnam Investment Management, Inc. and The Putnam Advisory Company, Inc.,
301,000 of the shares indicated are under shared voting power among Putnam
Investments, Inc. and The Putnam Advisory Company, Inc. Of the shares
indicated, 3,598,967 shares are under shared dispositive power between
Putnam Investments, Inc. and Putnam Investment Management, Inc., and
472,300 shares are under shared dispositive power between Putnam
Investments, Inc. and The Putnam Advisory Company, Inc. Putnam Investment
Management, Inc. and The Putnam Advisory Company, Inc. are subsidiaries of
Putnam Investments, Inc. and Putnam Investments, Inc. is a subsidiary of
Marsh & McLennan Companies, Inc. The number of shares shown assumes that
there has been no change in the number of shares beneficially owned from
the number of shares reported as being beneficially owned in the Schedule
13G. Pursuant to Rule 13d-4 under the Exchange Act, March & McLennan
Companies, Inc. and Putnam Investments, Inc. declared that their filing of
the Schedule 13G shall not be deemed to be an admission of beneficial
ownership of the shares reported.
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<PAGE> 17
(11) As reported on a Schedule 13G filed with the Securities and Exchange
Commission on January 11, 2000 (dated January 10, 2000) by Janus Capital
Corporation on behalf of itself and Thomas H. Bailey, all of the shares
indicated are under shared voting and dispositive power among Janus Capital
Corporation and Mr. Bailey. Mr. Bailey owns approximately 12.2% of Janus
Capital. The number of shares shown assumes that there has been no change
in the number of shares beneficially owned from the number of shares
reported as being beneficially owned in the Schedule 13G. In the Schedule
13G, Mr. Bailey disclaimed beneficial ownership in these shares. Janus
Capital and Mr. Bailey declared that they do not have the right to receive
any dividends from, or the proceeds from the sale of, these shares and
disclaimed any ownership associated with such rights.
CERTAIN TRANSACTIONS
In December 1995, Citadel Broadcasting sold to Wilson Aviation, L.L.C., a
company then owned by Lawrence R. Wilson and his spouse and currently owned by
Rio Bravo Enterprise Associates, L.P., an airplane formerly owned by Citadel
Broadcasting, for a cash purchase price of approximately $1.3 million.
Contemporaneously with the sale of the airplane, Citadel Broadcasting entered
into an agreement to lease the airplane from Wilson Aviation, L.L.C. Under the
terms of the lease, Citadel Broadcasting paid rent in the amount of $252,000 in
1999 and bore the costs of the maintenance, repair and operation of the
airplane. The lease was terminated effective as of January 1, 2000. The sale and
leaseback were not independently established in an arm's length transaction;
however, the original transaction was reviewed and approved by Citadel
Broadcasting's senior lender and management believes, based upon such review,
that the terms of the transaction were reasonable and at least as favorable to
Citadel Communications as could have been obtained generally from unaffiliated
parties. Mr. Wilson is a director and an executive officer of each of Citadel
Communications and Citadel Broadcasting. Mr. Wilson owns all of the capital
stock of Rio Bravo, Inc., the sole general partner of Rio Bravo Enterprise
Associates, L.P.
PROPOSAL TO ELIMINATE RESTRICTIONS ON SIZE OF BOARD OF DIRECTORS
(PROPOSAL 2)
Article IX, Section 1(b), of Citadel Communications' Amended and Restated
Certificate of Incorporation currently provides that "the Board of Directors
shall consist of up to seven directors...." Citadel Communications' Board of
Directors believes that it is in Citadel Communications' best interests not to
restrict the size of its Board of Directors. The Board of Directors proposes
that Article IX, Section 1(b), be amended to allow the size of the Board to be
set in Citadel Communications' Amended and Restated Bylaws. As the Bylaws may be
amended by the directors without action by the stockholders, the proposed
amendment to the Amended and Restated Certificate of Incorporation would allow
the Board, without action of the stockholders, to alter the size of the Board.
The Board of Directors believes that the amendment will give it flexibility
to respond to Citadel Communications' growth as well as to opportunities to add
qualified individuals to the Board from outside of Citadel Communications whose
skills and expertise will benefit the company and the conduct and operations of
the Board. Citadel Communications is experiencing significant growth and has
become sizeable enough to warrant a larger Board of Directors.
For the reasons set forth above, the Board has unanimously adopted the
following resolution concerning the proposed amendment to Article IX, Section
1(b):
"RESOLVED, that Article IX, Section 1(b) of the Corporation's
Certificate of Incorporation be amended to read in its entirety as follows:
b. The Board of Directors shall consist of directors of the same
class, which number of directors may be fixed from time to time
pursuant to the provisions contained in the Bylaws of the
Corporation."
16
<PAGE> 18
While the Board believes that the proposed amendment should be adopted for
the reasons set forth above, the Board is aware that the proposed amendment may
have potential anti-takeover effects. Allowing the size of the Board to be
determined in the Bylaws gives the current Board the ability to add members
sympathetic to it, diluting the influence of directors hostile to current
management. Citadel Communications is not aware, however, of any effort to
accumulate its securities or to gain control of the company at this time, and
the proposal is not being adopted in order to block any such effort.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ALLOW THE SIZE OF
THE BOARD OF DIRECTORS TO BE DETERMINED IN ACCORDANCE WITH THE BYLAWS
PROPOSAL TO INCREASE THE VOTE REQUIRED TO REMOVE DIRECTORS
(PROPOSAL 3)
The Board of Directors also proposes that in order to conform to Nevada
law, Article IX, Section 3, of Citadel Communications' Amended and Restated
Certificate of Incorporation, relating to the removal of directors, be amended
to change vote of the stockholders required to remove a director from a majority
to two-thirds of the outstanding voting shares.
The Board believes that this amendment is in Citadel Communications' best
interests so that there are no ambiguities in the application of governing law
with respect to this section of Citadel Communications' Amended and Restated
Certificate of Incorporation. For this reason, the Board has unanimously adopted
the following resolution:
"RESOLVED, that Article IX, Section 3 of the Corporation's Certificate
of Incorporation be amended to read in its entirety as follows:
3. Removal. Directors may be removed from office only for cause by
the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation then
entitled to vote at an election of directors. Removal action may
be taken at any stockholders' meeting with respect to which
notice of such purpose has been given and a removed director's
successor may be elected at the same meeting to serve the
unexpired term."
While the Board believes that the proposed amendment should be adopted for
the reasons set forth above, the Board is aware that the proposed amendment may
have potential anti-takeover effects, but no more so than that required by
Nevada Law. The higher vote requirement makes removing a director from the Board
more difficult. This effect may hinder or discourage a merger offer, tender
offer or proxy contest, even if it may be favorable to the interests of
stockholders. Citadel Communications is not aware, however, of any effort to
accumulate its securities or to gain control of the company at this time, and
the proposal is not being adopted in order to block any such effort.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
VOTE REQUIRED TO REMOVE A DIRECTOR IN ORDER TO CONFORM TO NEVADA LAW
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PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 4)
The Board of Directors of Citadel Communications has selected KPMG LLP to
serve as the independent public accountants to examine the financial statements
of Citadel Communications and its subsidiaries for the year ending December 31,
2000. KPMG LLP has been employed to perform this function for Citadel
Communications since its formation in 1993. A representative of KPMG LLP is
expected to be present at the annual meeting for the purpose of making a
statement, should he or she so desire, and to respond to appropriate questions.
If the stockholders should not ratify the appointment, the Audit Committee
of the Board will investigate the reasons for rejection by the stockholders and
the Board of Directors will reconsider the appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS CITADEL COMMUNICATIONS'
INDEPENDENT ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 2000
OTHER INFORMATION
DIRECTOR NOMINEES
Any stockholder entitled to vote for the election of directors may nominate
persons for election to the Board of Directors. Generally such nominations with
respect to an election to be held at an annual meeting must be submitted in
writing to the Secretary of Citadel Communications at Citadel Communications'
principal offices at least 90 days before the anniversary date of the preceding
annual meeting, and the notice must provide information as required by Citadel
Communications' Bylaws. A copy of these Bylaw requirements will be provided upon
request in writing to the Secretary at the principal offices of Citadel
Communications. This requirement does not affect the deadline for submitting
stockholder proposals for inclusion in the proxy statement, nor does it apply to
questions a stockholder may wish to ask at the meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that Citadel Communications'
directors and executive officers, and any persons who own more than ten percent
of Citadel Communications' Common Stock, file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
the Common Stock and other equity securities of Citadel Communications. Such
persons are required by Securities and Exchange Commission regulations to
furnish Citadel Communications with copies of all Section 16(a) forms they file.
To Citadel Communications' knowledge, based solely on the review of the
copies of such reports and written representations that no other reports were
required during or with respect to the year ended December 31, 1999, all such
section 16(a) filing requirements were met, except Robert F. Fuller filed a late
report with respect to one transaction and Edward T. Hardy, a former executive
officer, filed a late report with respect to two transactions.
ANNUAL REPORT
Citadel Communications has enclosed its Annual Report for the year ended
December 31, 1999 with this proxy statement, which includes Citadel
Communications' 1999 Annual Report to the Securities and Exchange Commission on
Form 10-K, without exhibits. Stockholders are referred to the report for
financial and other information about Citadel Communications, but such report is
not incorporated in this proxy statement and is not a part of the proxy
soliciting material.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Any proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders must be received by Citadel Communications, City Center
West, Suite 400, 7201 West Lake Mead Boulevard, Las Vegas, Nevada, 89128, no
later than December , 2000 in order to be included in the proxy materials for
such meeting.
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It is suggested that a proponent submit any proposal by Certified Mail -- Return
Receipt Requested to the Secretary of Citadel Communications. Such proposals
must meet the requirements set forth in the rules and regulations of the
Securities and Exchange Commission in order to be eligible for inclusion in
Citadel Communications' 2001 proxy materials.
All other stockholder proposals to be presented at the 2001 Annual Meeting
of Stockholders must be submitted in writing to the Secretary of Citadel
Communications at Citadel Communications' principal offices no later than
February 23, 2001, and the notice must provide information as required by
Citadel Communications' Bylaws. A copy of these Bylaw requirements will be
provided upon request in writing to the Secretary at the principal offices of
Citadel Communications.
If there should be any change in the foregoing submission deadlines,
Citadel Communications intends to publicly disseminate information concerning
the change.
OTHER MATTERS
The Board does not intend to present, and does not have any reason to
believe that others will present, any item of business at the annual meeting
other than those specifically set forth in the notice of the meeting. However,
if other matters are properly brought before the meeting, the persons named on
the enclosed proxy will have discretionary authority to vote all proxies in
accordance with their best judgment.
SOLICITATION OF PROXIES
All costs and expenses of this solicitation, including the cost of
preparing and mailing this proxy statement will be borne by Citadel
Communications. In addition to the use of the mails, certain directors, officers
and regular employees of Citadel Communications may solicit proxies personally,
or by mail, telephone or otherwise, but such persons will not be compensated for
such services. Arrangements will be made with brokerage firms, banks,
fiduciaries, voting trustees or other nominees to forward the soliciting
materials to each beneficial owner of stock held of record by them, and Citadel
Communications will reimburse them for their expenses in doing so.
By order of the Board of Directors
/s/ Donna L. Heffner
----------------------------------
Donna L. Heffner
Secretary
April , 2000
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1792-PS00
<PAGE> 22
DETACH HERE
PROXY
CITADEL COMMUNICATIONS CORPORATION
THIS PROXY IS SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2000
The undersigned hereby appoints Lawrence R. Wilson and Donna L.
Heffner, or either of them, as proxies with full power of substitution, to
represent the undersigned at the Annual Meeting of Stockholders of Citadel
Communications Corporation to be held at City Center West, Suite 400, 7201 West
Lake Mead Boulevard, Las Vegas, Nevada 89128, on Wednesday, May 24, 2000, at
10:00 a.m., local time, and at any adjournments or postponements thereof, and
to vote all shares of Common Stock of Citadel Communications Corporation which
the undersigned would be entitled to vote if personally present, on all the
matters set forth on the reverse side.
The undersigned acknowledges receipt of the Notice of Annual Meeting
and the Proxy Statement together with this Proxy.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE> 23
DETACH HERE
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES AND FOR PROPOSALS 2, 3 AND 4.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
1. Election of five directors for a one-year term until 2. Approval of Amendment to the Amended
the next annual meeting. and Restated Certificate of
NOMINEES: (01) Lawrence R. Wilson, (02) Robert F. Incorporation to allow the size of the / / / / / /
Fuller, (03) Ike Kalangis, (04) Ted L. Snider, Sr. Board of Directors to be determined
and (05) John E. von Schlegell. in accordance with the Bylaws.
FOR WITHHELD
ALL / / / / FROM ALL 3. Approval of Amendment to the Amended
NOMINEES NOMINEES and Restated Certificate of
Incorporation to increase the vote / / / / / /
/ / _________________________________________ required to remove a Director in
For all nominees except as noted above order to conform to Nevada law.
4. Ratification of the appointment of
KPMG LLP as independent public / / / / / /
accountants for the year ending
December 31, 2000.
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any
postponements or adjournments thereof.
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND / / TO ATTEND / /
NOTE AT LEFT THE MEETING
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) hereon. All holders must
sign. When signing in a fiduciary capacity, please indicate full title
as such. If a corporation or partnership, please sign in full corporate
or partnership name by authorized person.
Signature: __________________________________ Date: _______________ Signature: __________________________________ Date: ____________
</TABLE>
