<PAGE>
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
Heftel Broadcasting Corporation
- --------------------------------------------------------------------------------
(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)(1)
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>
HEFTEL BROADCASTING CORPORATION
100 CRESCENT COURT, SUITE 1777
DALLAS, TX 75201
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 4, 1998
To the Stockholders:
The Annual Meeting of the Stockholders of HEFTEL BROADCASTING CORPORATION
(the "Annual Meeting") will be held at the Hotel Crescent Court, 400 Crescent
Court, Dallas, Texas 75201, on June 4, 1998 at 10:00 a.m. local time, to
consider and act upon the following matters, all as more fully described in the
accompanying Proxy Statement which is incorporated herein by this reference:
(1) To elect five members to the Board of Directors to serve until the next
Annual Meeting of Stockholders or until their respective successors shall
be elected and qualify.
(2) To amend the Company's Second Amended and Restated Certificate of
Incorporation to increase the number of authorized shares of Class A Common
Stock of the Company from 50 million shares to 100 million shares.
(3) To ratify the appointment of KPMG Peat Marwick LLP as independent auditors
for the fiscal year ending December 31, 1998.
(4) To transact such other business and to consider and take action upon any
and all matters that may properly come before the Annual Meeting or any
adjournment thereof.
The Board of Directors has fixed the close of business on April 17, 1998,
as the record date for the determination of the stockholders entitled to notice
of and to vote at the Annual Meeting and any adjournment thereof. For ten days
prior to the Annual Meeting, a complete list of stockholders entitled to vote at
the Annual Meeting will be available for examination by any stockholder for any
purpose germane to the Annual Meeting during ordinary business hours at the
Company's executive office, located at the address set forth above.
All stockholders are invited to attend the Annual Meeting in person.
By Order of the Board of Directors
/s/ David D. Lykes
David D. Lykes
CORPORATE SECRETARY
Dallas, Texas
April 30, 1998
IMPORTANT WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE MARK,
SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
ENVELOPE SO THAT YOUR STOCK MAY BE REPRESENTED AT THE ANNUAL MEETING.
<PAGE>
HEFTEL BROADCASTING CORPORATION
100 CRESCENT COURT, SUITE 1777
DALLAS, TEXAS 75201
(214) 855-8882
---------------
PROXY STATEMENT
---------------
INFORMATION CONCERNING SOLICITATION AND VOTING
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Heftel Broadcasting Corporation (the "Company") in connection
with the Annual Meeting of Stockholders and any adjournments thereof (the
"Annual Meeting") to be held on June 4, 1998, at the Hotel Crescent Court,
400 Crescent Court, Dallas, Texas, 75201, at 10:00 a.m. local time. This
Proxy Statement and the associated Proxy are first being sent or given to
stockholders on or about April 30, 1998.
Stockholders are requested to complete, date, and sign the accompanying
proxy, and return it promptly to the Company. Any proxy given may be revoked
by a stockholder at any time before it is voted at the Annual Meeting or any
adjournments thereof by filing with the Secretary of the Company a notice in
writing revoking the proxy, or by duly executing and submitting a proxy
bearing a later date. Proxies may also be revoked by any stockholder present
at the Annual Meeting who expresses a desire to vote such shares in person.
Subject to such revocation, all proxies duly executed and received prior to,
or at the time of, the Annual Meeting will be voted in accordance with the
specification on the proxy card. If no specification is made, proxies will
be voted in favor of the proposals therein. As to other matters, if any, to
be voted upon, the persons designated as proxies will take such actions as
they, in their discretion, may deem advisable. The persons named as proxies
were selected by the Board of Directors of the Company, and each of them is a
director of the Company.
Under the Company's bylaws and Delaware law, shares represented by proxies
that reflect abstentions or "broker non-votes" (i.e., shares held by a broker or
nominee which are represented at the Annual Meeting, but with respect to which
such broker or nominee is not empowered to vote on a particular proposal) will
be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Any shares not voted (whether by
abstention, broker non-vote or otherwise) will have no impact on the election of
directors, except to the extent that the failure to vote for an individual
results in another individual receiving a larger proportion of votes. Any
shares represented at the Annual Meeting but not voted (whether by abstention,
broker non-vote or otherwise) with respect to the proposals to (i) amend the
Company's Second Amended and Restated Certificate of Incorporation, or (ii)
ratify the selection of KPMG Peat Marwick LLP will have no effect on the vote
for such proposals except to the extent the number of abstentions causes the
number of shares voted in favor of the proposal not to equal or exceed the
minimum number of shares necessary to approve such proposals (in which case the
proposal would not be adopted).
The Company will bear the cost of the solicitation of proxies, including
the charges and expenses of brokerage firms and others forwarding the
solicitation material to beneficial owners of stock. Directors, officers and
regular employees of the Company may solicit proxies personally, by telephone or
by telegraph but will not be separately compensated for such solicitation
services.
<PAGE>
STOCKHOLDERS' VOTING RIGHTS
Each share of the Company's Class A Common Stock, $.001 par value ("Class A
Common Stock"), outstanding at the close of business on April 17, 1998, (the
"Record Date") will be entitled to notice of, and to vote at, the Annual
Meeting. Each share of the Company's Class A Common Stock is entitled to one
vote. There were 35,160,497 shares of Class A Common Stock outstanding on the
Record Date. The Company also has 14,156,470 shares of Class B Common
Stock, $.001 par value ("Class B Common Stock" and together with the Class A
Common Stock, the "Common Stock") outstanding. All of the outstanding shares of
Class B Common Stock are currently held by Clear Channel Communications, Inc.
("Clear Channel") and its affiliates. Holders of Class B Common Stock do not
have voting rights except as provided in the Company's Second Amended and
Restated Certificate of Incorporation. As long as Clear Channel and its
affiliates own at least 20% of the then outstanding Common Stock, neither the
Company nor any of its subsidiaries may, without the affirmative vote or consent
of the holders of a majority of the Class B Common Stock voting as a single
class, (i) effect the sale, lease or other transfer of all or substantially all
of the Company's assets, or any merger or consolidation involving the Company
where the stockholders of the Company immediately prior to such transaction
would not own at least 50% of the capital stock of the surviving entity, or any
reclassification, recapitalization, dissolution, liquidation or winding up of
the Company; (ii) authorize, issue or obligate itself to issue any shares of
Preferred Stock; (iii) make or permit any amendment to the Company's certificate
of incorporation that adversely affects the rights of the holders of the Class B
Common Stock; (iv) declare or pay any non-cash dividends on or make any other
non-cash distribution on the Company's Common Stock; or (v) make or permit any
amendment or modification to the Company's certificate of incorporation
concerning the Company's capital stock. Shares of Class B Common Stock will be
entitled to one vote per share on all such matters submitted for a vote or
consent to the holders thereof. In addition, shares of Class B Common Stock are
convertible into shares of Class A Common Stock at the holder's option, subject
to the receipt of applicable regulatory approvals, including compliance with the
FCC's "cross-interest" policy. The voting rights and conversion privileges of
the Class B Common Stock as described herein may have the effect of impeding the
acquisition of control of the Company by means of a tender offer, proxy fight,
open market purchases or otherwise. See "Security Ownership of Certain
Beneficial Owners and Management" and "Certain Transactions."
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Class A Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. If a quorum is not present, the
stockholders entitled to vote who are present in person or by proxy at the
Annual Meeting have the power to adjourn the Annual Meeting from time to time,
without notice other than an announcement at the Annual Meeting, until a quorum
is present. At any adjourned Annual Meeting at which a quorum is present, any
business may be transacted that might have been transacted at the Annual Meeting
as originally noticed.
With respect to election of directors, the five candidates receiving the
highest number of votes from holders of Class A Common Stock will be elected.
The approval of the amendment to the Company's Second Amended and Restated
Certificate of Incorporation requires the affirmative vote of stockholders
holding a majority of the outstanding shares of Class B Common Stock, voting as
a single class, and the affirmative vote of stockholders holding a majority of
the outstanding shares of Class A Common Stock, voting as a single class. The
appointment of KPMG Peat Marwick LLP requires the affirmative vote of
stockholders holding a majority of the shares of Class A Common Stock
represented and voting at the Annual Meeting.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
the Class A Common Stock and Class B Common Stock as of the Record Date by (i)
each person known by the Company to be the beneficial owner of more than 5% of
the outstanding shares of Class A Common Stock, (ii) each director of the
Company, (iii) the current and former Chief Executive Officers and each other
executive officer of the Company named in the Summary Compensation Table, and
(iv) all executive officers and directors of the Company as a group.
<TABLE>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP OF
NAME CLASS A COMMON STOCK PERCENT OF CLASS
---- ------------------------ ----------------
<S> <C> <C>
McHenry T. Tichenor, Jr.(1) 7,422,644(2) 21.1%
McHenry T. Tichenor 7,422,644(3) 21.1
Robert W. Hughes 5,000(4) *
James M. Raines 5,500(4) *
Ernesto Cruz 7,000(4) *
Ricardo A. del Castillo(5) 125,236 *
Jeffrey T. Hinson(6) 166,910 *
David D. Lykes(7) 305,000 *
L. Lowry Mays(8) - -
Ronald Baron(9) 4,023,200 11.4
Warren W. Tichenor 7,422,644(10) 21.1
All Directors and Executive Officers as a Group (8 persons) 8,037,290 22.8
</TABLE>
- ----------------------
* Indicates less than 1.0%.
(1) On February 14, 1997, McHenry T. Tichenor, Jr. was appointed Chief
Executive Officer of the Company in connection with the closing of the
merger of Tichenor Media System, Inc. ("Tichenor") with a wholly-owned
subsidiary of the Company pursuant to which Tichenor became a wholly-owned
subsidiary of the Company (the "Tichenor Merger").
(2) Includes 1,752,334 shares held by McHenry T. Tichenor, Jr. and 5,670,310
shares held by McHenry T. Tichenor Jr.'s family, with respect to which
McHenry T. Tichenor, Jr. shares voting control pursuant to a voting
agreement among certain members of the Tichenor family (the "Tichenor
Voting Agreement").
(3) Includes 208,768 shares held by McHenry T. Tichenor and 7,213,876 shares
held by McHenry T. Tichenor's family, with respect to which McHenry T.
Tichenor shares voting control pursuant to the Tichenor Voting Agreement.
(4) Includes 5,000 vested but unexercised stock options for shares of Class A
Common Stock.
(5) On February 14, 1997, Ricardo A. del Castillo was appointed Senior Vice
President of the Company in connection with the closing of the Tichenor
Merger.
(6) On February 14, 1997, Jeffrey T. Hinson was appointed Senior Vice
President and Chief Financial Officer of the Company in connection
with the closing of the Tichenor Merger.
(7) On February 14, 1997, David D. Lykes was appointed Executive Vice
President and Chief Operating Officer of the Company in connection
with the closing of the Tichenor Merger.
(8) L. Lowry Mays was the Chief Executive Officer of the Company from August 5,
1996 through February 14, 1997, the date of the Tichenor Merger.
(9) Ronald Baron reported beneficial ownership of an aggregate of 4,023,200
shares of Class A Common Stock through Baron Capital Group, Inc. which is
controlled by Ronald Baron. Ronald Baron disclaims beneficial ownership
since all shares are held on behalf of advisory clients. Ronald Baron's
mailing address is 767 Park Avenue, 24th floor, New York, New York 10153.
(10) Includes 2,231,778 shares held by Warren W. Tichenor and 5,190,866 shares
held by Warren W. Tichenor's family, with respect to which Warren W.
Tichenor shares voting control pursuant to the Tichenor Voting Agreement.
Warren W. Tichenor's mailing address is 37 Eton Green Circle,
San Antonio, Texas 78257.
As of the Record Date, Clear Channel and its affiliates owned no shares of
Class A Common Stock. However, Clear Channel and its affiliates owned all of
the outstanding shares of the Company's Class B Common Stock (14,156,470
shares), which accounted for approximately a 28.7% interest in the Common Stock
of the Company.
3
<PAGE>
CHANGE IN CONTROL OF COMPANY
On August 5, 1996, Clear Channel Radio, Inc., a wholly owned subsidiary
of Clear Channel, completed a stock purchase and tender offer of the
Company's Common Stock (the "Tender Offer"). The consummation of the Tender
Offer increased Clear Channel's investment in the Company from a 21% interest
to a 63% interest.
As a result of the Tichenor Merger, Clear Channel and its affiliates
converted all of their Class A Common Stock and Tichenor common stock into
14,156,470 shares of Class B Common Stock, then representing approximately
32% of the total outstanding shares of Common Stock. This conversion was
made in accordance with the "cross-interest" policy of the Federal
Communications Commission ("FCC"), which permits a party that has an
attributable interest in one or more radio stations in a market to have a
non-voting equity position of up to 33.3% of the total outstanding common
stock of another party that holds an attributable interest in another radio
station in the same market. Pursuant to the Tichenor Merger, the former
Tichenor shareholders and warrant holders received an aggregate of 11,379,756
shares of Common Stock. See "Certain Transactions."
PROPOSAL ONE
ELECTION OF DIRECTORS
Five directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting to hold office until the next Annual Meeting of
Stockholders or until their respective successors have been elected and
shall qualify. The Board of Directors has designated McHenry T. Tichenor,
Jr., McHenry T. Tichenor, Robert W. Hughes, James M. Raines and Ernesto Cruz
as nominees, each of whom currently serves as a member of the Board of
Directors. It is the intention of the persons named in the enclosed proxy to
vote the shares covered by each proxy for the election of all the nominees
named above. Although the Board of Directors does not anticipate that any
nominees will be unavailable for election, in the event of such occurrence
the proxies will be voted for such substitute, if any, as the Board of
Directors may designate. There is no cumulative voting for the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT EACH HOLDER OF CLASS A COMMON
STOCK VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE.
DIRECTORS, NOMINEES FOR DIRECTOR AND EXECUTIVE OFFICERS
The following table sets forth information concerning the current
directors (representing all nominees for director) and executive officers of
the Company:
<TABLE>
NAME POSITION WITH COMPANY AGE
---- --------------------- ---
<S> <C> <C>
McHenry T. Tichenor, Jr. Chairman of the Board, President and Chief 42
Executive Officer
David D. Lykes Executive Vice President, Chief Operating 63
Officer and Secretary
Jeffrey T. Hinson Senior Vice President, Chief Financial 43
Officer and Treasurer
Ricardo A. del Castillo Senior Vice President 51
McHenry T. Tichenor Director 65
Robert W. Hughes Director 62
James M. Raines Director 57
Ernesto Cruz Director 43
</TABLE>
4
<PAGE>
McHenry T. Tichenor, Jr. has been the Chairman of the Board, President,
Chief Executive Officer, and a director of the Company since February 14,
1997. From 1981 until February 14, 1997, Mr. Tichenor was the President,
Chief Executive Officer, and a director of Tichenor.
David D. Lykes has served as the Executive Vice President and Chief
Operating Officer of the Company since February 14, 1997. Mr. Lykes
previously served as the Senior Vice President of Operations and a director
of Tichenor. Mr. Lykes began his career at Tichenor in 1958.
Jeffrey T. Hinson has served as the Senior Vice President and Chief
Financial Officer of the Company since February 14, 1997. From October 1995
until February 14, 1997, Mr. Hinson served as the Chief Financial Officer,
Treasurer, and a director of Tichenor. From October 1991 to October 1995,
Mr. Hinson was president of Alliance Investors Holding, Ltd., a privately
held merchant bank located in Houston, Texas.
Ricardo A. del Castillo has served as Senior Vice President of the Company
since February 14, 1997. From 1988 until February 14, 1997, Mr. A. del Castillo
served as the Vice President of Operations of Tichenor. Mr. A. del Castillo
also served as a director of Tichenor from February 1989 to February 14, 1997.
McHenry T. Tichenor has been a director and an employee of the Company
since February 14, 1997. From 1981 until February 14, 1997, Mr. Tichenor
served as the Vice Chairman and a director of Tichenor. McHenry T. Tichenor
is the father of McHenry T. Tichenor, Jr.
Mr. Hughes became a director of the Company on February 14, 1997. Mr.
Hughes is Chairman of Prime Management Group in Austin, Texas. In that
capacity, he also serves as Chairman of Prime Cable, Prime Video, Prime
Venture I, and Prime New Ventures Management, and has served in such position
for more than five years. Mr. Hughes serves on the Board of Directors of
Atlantic Cellular, Providence, Rhode Island, and Hawaiian Wireless, Honolulu,
Hawaii. For the past 28 years, he has primarily been involved in the cable
television industry.
Mr. Raines became a director of the Company on August 5, 1996. Mr.
Raines is the President of James M. Raines & Company, and has served in such
position for more than five years.
Mr. Cruz became a director of the Company on August 5, 1996. Mr. Cruz
is a Managing Director of Credit Suisse First Boston Corporation, and has
served in this position for more than five years.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND CERTAIN COMMITTEES THEREOF
The Board of Directors has an Audit Committee and a Compensation
Committee, but it does not have a Nominating Committee. The functions of the
Audit Committee include (i) selecting independent auditors for the Company,
(ii) reviewing and arranging the scope of audits of the Company's financial
statements and reviewing with the independent auditors and management of the
Company the results thereof, including evaluation of the internal accounting
controls, and (iii) reviewing and approving the Company's accounting principles
and methods of their application. The members of the Audit Committee are
Messrs. Hughes (Chairman), Cruz and Raines. The Audit Committee held five
meetings during the last fiscal year.
5
<PAGE>
The members of the Compensation Committee are Messrs. Cruz (Chairman),
Hughes and Raines. The functions of the Compensation Committee are to (i)
approve policies, plans and performance criteria concerning the salaries,
bonuses and other compensation of the executive officers of the Company, (ii)
review and approve the salaries, bonuses and other compensation of the
executive officers of the Company, (iii) establish and review policies
regarding executive officer perquisites, (iv) engage experts on compensation
matters, if and when the members of the Compensation Committee deem it proper
or advisable to do so, and (v) perform such other duties as shall from time
to time be delegated by the Board. The Compensation Committee held five
meetings during the last fiscal year.
The Board of Directors held a total of six meetings during the last
fiscal year. Each incumbent director who was a director of the Company
during the fiscal year ended December 31, 1997, attended more than 75% of the
aggregate number of meetings of the Board and the committees of which they
were members that were held during the period such director was a member of
the Board of Directors.
EXECUTIVE COMPENSATION AND OTHER MATTERS
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation
of each individual who served as Chief Executive Officer during the fiscal
year ended December 31, 1997, and each of the other three most highly
compensated executive officers whose total cash compensation exceeded
$100,000 for services rendered in all capacities for the year ended December
31, 1997 (the "Named Executive Officers").
<TABLE>
Annual Compensation Long-Term Compensation
-------------------------------------------------------------------------
Awards Payouts
Other -------------------------------------
Annual Restricted All Other
Compen- Stock LTIP Compen-
Name And Principal Position Year Salary ($) Bonus ($) sation ($) Awards ($) Options (#) Payout ($) sation ($)
- --------------------------- ---- ---------- --------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
McHenry T. Tichenor, Jr.(1) 1997(2) $227,500 $240,243 $ - $ - 40,000 $ - $ 1,850(3)
Chairman, President and CEO
L. Lowry Mays(4) 1997(2) - - - - - - -
Former Chairman, President 1996(5) - - - - - - -
and CEO 1996(6) - - - - - - -
David D. Lykes(1) 1997(2) 201,250 161,199 - - 35,000 - 15,025(7)
Executive Vice President
and COO
Jeffrey T. Hinson(1) 1997(2) 157,500 151,042 - - 35,000 - 1,850(3)
Senior Vice President
and CFO
Ricardo A. del Castillo(1) 1997(2) 105,000 86,696 - - 20,000 - 1,850(3)
Senior Vice President
John T. Kendrick(8) 1997(2) 226,843 29,897 - - - - 1,213(3)
Former Senior Vice President, 1996(5) 43,846 11,250 - - - - 1,008(3)
Chief Financial Officer and 1996(6) 183,194 42,500 - - 30,000 - 2,280(3)
Assistant Secretary 1995(9) 160,615 14,754 - - - - 1,552(3)
</TABLE>
(1) Represents partial year compensation. Became an executive officer of the
Company on February 14, 1997 upon consummation of the Tichenor Merger.
(2) Represents the year ended December 31, 1997, except as noted in (1) above.
(3) Represents Company contributions to the 401(k) plan account of the
respective employee.
(4) Mr. Mays served as Chief Executive Officer of the Company from August 5,
1996 to February 14, 1997. Upon consummation of the Tichenor Merger, Mr.
Mays ceased to serve as an executive officer of the Company.
(5) Represents the transition period which is the quarter ended December 31,
1996.
(6) Represents the year ended September 30, 1996.
(7) Represents $13,175 of insurance premiums paid by the Company on a
split-dollar life insurance policy where Mr. Lykes names the
beneficiary. The amount includes the term life portion of the premiums
paid by the Company. The remaining $1,850 represents Company contributions
to his 401(k) plan account.
(8) On August 1, 1995, Mr. Kendrick entered into an employment agreement with
the Company (see "--Employment Agreements"). Prior to February 14, 1997,
Mr. Kendrick served as Senior Vice President, Chief Financial Officer and
Assistant Secretary of the Company. Although Mr. Kendrick's employment
agreement is still in effect upon consummation of the Tichenor Merger, Mr.
Kendrick ceased to serve as an executive officer of the Company.
(9) Represents the year ended September 30, 1995.
6
<PAGE>
OPTIONS
The following table sets forth certain information concerning options
granted to the Named Executive Officers during the year ended December 31,
1997.
<TABLE>
Potential Realizable Value At Assumed
Annual Rates of Stock Price
Individual Grants Appreciation for Option Term
----------------------------------------------------------------------------------------------
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees Exercise or
Options Granted in Fiscal Base Price
Name (#) Year ($/share) Expiration Date 5% ($) 10% ($)
- ------------------------- --------------- ----------- ------------ ------------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
McHenry T. Tichenor, Jr. 40,000 5% $23.50 6/6/2007 $591,161 $1,498,118
L. Lowry Mays - - - - - -
David D. Lykes 35,000 5 23.50 6/6/2007 517,266 1,310,853
Jeffrey T. Hinson 35,000 5 23.50 6/6/2007 517,266 1,310,853
Ricardo A. del Castillo 20,000 3 23.50 6/6/2007 295,580 749,059
John T. Kendrick - - - - - -
</TABLE>
The following table sets forth certain information regarding stock
options exercised by the Named Executive Officers during the year ended
December 31, 1997, including the aggregate value of gains on the date of
exercise. In addition, the table sets forth the number of shares covered by
both exercisable and nonexercisable stock options as of December 31, 1997.
Also reported are the values of "in the money" options which represent the
positive spread between the exercise price of any existing stock options and
the Common Stock price as of December 31, 1997.
<TABLE>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End (#) at Fiscal Year End ($)
Shares Acquired Value ------------------------------ --------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
McHenry T. Tichenor, Jr. - - - 40,000 - $930,000
L. Lowry Mays - - - - - -
David D. Lykes - - - 35,000 - 813,750
Jeffrey T. Hinson - - - 35,000 - 813,750
Ricardo A. del Castillo - - - 20,000 - 465,000
John T. Kendrick - - - - - -
</TABLE>
EMPLOYMENT AGREEMENTS
On February 14, 1997, upon the closing of the Tichenor Merger, the
Company entered into an Employment Agreement with McHenry Tichenor, Jr. to
serve as President and Chief Executive Officer of the Company. Mr.
Tichenor's Employment Agreement provides for a five year term at an annual
salary of $260,000 plus incentive compensation as determined by the
Compensation Committee of the Board of Directors. Upon termination by the
Company without cause or by Mr. Tichenor for good reason, the Company is
obligated to pay Mr. Tichenor a lump sum amount equal to the estimated
payments of salary and bonus remaining through the end of the term of the
agreement. Furthermore, Mr. Tichenor's Employment Agreement provides that
Mr. Tichenor agrees not to compete with the Company for a period of one year
following the date his Employment Agreement is terminated.
7
<PAGE>
On August 1, 1995, the Company and Mr. John Kendrick entered into a
three-year Employment Agreement. This employment agreement provides that
upon the occurrence of a change in control of the Company, the term of the
agreement is automatically extended for three years from the date of the
change of control. The Tender Offer was deemed a change in control, and
therefore, the term of this employment agreement was automatically extended
to August 4, 1999. In connection with the completion of the Tichenor Merger,
Mr. Kendrick ceased to serve as the Chief Financial Officer of the Company.
The employment agreement provides that Mr. Kendrick is entitled to receive
his annual salary and minimum bonus (which total $235,000 on an annual basis)
until August 4, 1999 (the Company may at any time pay in a lump sum an amount
equal to the present value of the total amount owed to Mr. Kendrick) and
payment of monthly premiums to permit Mr. Kendrick and his family to
participate in the Company's health insurance for the shorter of the period
ending August 4, 1999 or the maximum COBRA continuation coverage period
mandated by law.
DIRECTOR COMPENSATION
Each member of the Board of Directors other than McHenry T. Tichenor,
Jr. receives an annual fee of $20,000, payable in quarterly installments
which the directors may elect to receive in cash or shares of the Company's
Class A Common Stock. Each non-employee director receives a one-time grant of
2,500 options for the Company's Class A Common Stock when they attend their
first meeting of the Board of Directors. These options are fully
exercisable commencing six months from the date of grant and expire ten
years after the date of grant. The Company also reimburses directors for
expenses related to attending board or committee meetings. The Company's
directors do not receive any additional compensation for attendance at board
or committee meetings.
CERTAIN TRANSACTIONS
The following transactions were entered into between the Company and
certain current directors, nominees for election as directors, officers and
beneficial owners of five percent or more of the Company's Common Stock.
On February 3, 1997, Tichenor, now a wholly-owned subsidiary of the
Company, granted Heart Unlimited Company ("Heart") an option to purchase
radio station KXTN-AM in San Antonio, Texas for a purchase price of $1.0
million. McHenry T. Tichenor, a director of the Company and the father of
McHenry T. Tichenor, Jr., is the controlling shareholder of Heart. The term
of the option is from February 3, 1997, until November 3, 1998. In addition,
Tichenor entered into a 24-month Local Marketing Agreement with Heart. Under
the terms of the Local Marketing Agreement, Heart pays the Company $4,000 a
month during the first 12 months of the agreement and $5,000 a month during
the last 12 months of the agreement. Heart also reimburses the Company for
the cost of operating and maintaining the station's transmitter.
In connection with the closing of the Tichenor Merger on February 14,
1997, McHenry T. Tichenor, Jr., McHenry T. Tichenor, certain other members of
the Tichenor family, David D. Lykes, Jeffrey T. Hinson, Ricardo A. del Castillo,
and certain other former Tichenor stockholders (the "Major Tichenor
Stockholders") entered into a Registration Rights Agreement (the "Tichenor
Registration Rights Agreement") pursuant to which the Company granted to the
Major Tichenor Stockholders the following demand registration rights: (i) at
any time during the three year period following the date on which Clear
Channel beneficially owns a greater number of shares of Class A Common Stock
than the number of shares owned by the Major Tichenor Stockholders (the
"Conversion Date"), up to two demand registrations, and (ii) prior to the
Conversion Date, during any period (a) in which less than 2.0 million shares
of Class A Common Stock are held by public stockholders, one demand
registration or (b) after February 14, 1998, until the earlier of (1) such
time as the Company consummates a qualified public offering (as defined in
the Tichenor Registration Rights Agreement) or (2) the exercise of the demand
registration right under clause (a), one demand registration. Any demand
registration must be made by the holders of at least 25% of the
8
<PAGE>
registrable securities held by the Major Tichenor Stockholders and the size
of proposed registered offering must be at least $20.0 million. The Tichenor
Registration Rights Agreement also provides the Major Tichenor Stockholders
with certain piggyback registration rights.
In connection with the closing of the Tichenor Merger on February 14,
1997, the Company entered into a Registration Rights Agreement with Clear
Channel (the "Clear Channel Registration Rights Agreement"). Under the Clear
Channel Registration Rights Agreement, the Company has granted Clear Channel
certain rights to demand registration of shares of the Company's Class A
Common Stock in the event of a distribution of such shares to Clear Channel's
stockholders. The agreement also provides Clear Channel with certain
"piggy-back" registration rights.
In connection with the closing of the Tichenor Merger on February 14,
1997, Clear Channel and the Major Tichenor Stockholders entered into a
Stockholders Agreement with the Company whereby such stockholders agreed to
certain restrictions on the transfer of their shares of Class A Common Stock
and granted certain rights of first refusal and "tag along" rights with
respect to certain sales of such shares.
Ernesto Cruz, a director of the Company, is a Managing Director of
Credit Suisse First Boston Corporation, which performed investment banking
services for the Company during the last fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and persons who own
more than 10% of a registered class of the Company's equity securities to
file various reports with the Securities and Exchange Commission concerning
their holdings of, and transactions in, securities of the Company. Copies of
these filings must be furnished to the Company.
Based on a review of the copies of such forms furnished to the Company
and written representations from the Company's executive officers and
directors, the Company believes that, during the year ended December 31,
1997, all of its directors and executive officers were in compliance with the
applicable filing requirements.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In February 1997, the Company completed the Tichenor Merger. Pursuant
to the agreements governing that transaction, five designees of Tichenor were
appointed to the Board of Directors of the Company. Three of those
directors, Ernesto Cruz, Robert Hughes, and James Raines, were elected to the
Compensation Committee.
The Compensation Committee reviews the performance of the executive
officers of the Company, reviews and approves the compensation of the
executive officers of the Company, and reviews the compensation programs for
other key employees, including salary and cash bonus levels. Robert Hughes
and James M. Raines are also members of the committee (the "Option
Committee") that awards options under the Company's Long-Term Incentive Plan
(the "Incentive Plan").
9
<PAGE>
COMPENSATION POLICIES AND PHILOSOPHY
The financial success of the Company is linked to the ability of its
executive officers and managers to direct the Company's current operations,
and to assess the advantages of potential acquisitions, and realign the
operations of the acquired entities with the operating policies of the
Company. A major objective of the Company's compensation strategy is to
attract and retain top-quality executive officers and managers. Another
objective of the Company's compensation strategy is to reward executive
officers and managers based on the financial performance of operations under
their control. Financial incentives are used to motivate those responsible
to achieve the Company's financial goals and to align the interests of the
Company's managers with the interests of the Company's stockholders.
In order to achieve the foregoing objectives, the Company uses a
combination of base salary, cash bonuses, and stock options.
In establishing the compensation levels for the Company's executive
officers, the Compensation Committee considers a number of factors, including
the level and types of compensation paid to executive officers in similar
positions by comparable companies. In addition, the Compensation Committee
evaluates the Company's performance by looking at factors such as performance
relative to competitors, performance relative to business conditions and the
success of the Company in meeting its financial objectives.
COMPONENTS OF COMPENSATION
Executive officer base salaries are established in relation to salaries
for individuals in comparable positions paid by other companies in the radio
broadcast industry.
Executive officer cash bonuses are used to provide executive officers
with financial incentives to meet annual performance targets. The
performance targets are based on the Company's budgeted goals pursuant to a
detailed annual operating plan. Bonus recommendations for executive officers
other than the Chief Executive Officer ("CEO") are proposed by the CEO,
reviewed and, when appropriate, revised and approved by the Compensation
Committee. The Compensation Committee also establishes the bonus level for
the CEO.
The Compensation Committee believes that equity ownership by the
executive officers, managers, and other employees of the Company provides
incentive to build stockholder value and aligns the interests of these
employees with the interests of stockholders. Upon hiring executive
officers, managers, and certain other key employees, the Option Committee, a
subset of the Compensation Committee, typically approves stock option grants
under the Incentive Plan, subject to applicable vesting periods. Thereafter,
the Option Committee considers awarding additional grants, usually on an
annual basis, under the Incentive Plan. The Option Committee believes these
additional annual grants will provide incentives for executive officers,
managers, and key employees to remain with the Company. Options are granted
at the current market price of the Company's Class A Common Stock and,
consequently, have value only if the price of the Company's Class A Common
Stock increases over the exercise price. The size of the initial and
periodic grants to employees other than the CEO and the executive officers
are proposed by the CEO, reviewed and, when appropriate, revised and approved
by the Option Committee. The Option Committee establishes the size of the
initial and periodic grants to the CEO and the executive officers.
At the 1997 Annual Meeting, the stockholders approved the Incentive
Plan, which meets the requirements of Section 162(m) of the Internal Revenue
Code. The Company's present intention is that awards under the Incentive Plan
comply with Section 162(m).
10
<PAGE>
COMPENSATION OF THE CEO
On February 14, 1997, the Company entered into an Employment Agreement
with McHenry T. Tichenor, Jr., Chairman of the Board, President, and Chief
Executive Officer of the Company, which provides an annual base salary of
$260,000, with monthly and annual bonuses based on the performance of the
Company. See "Employment Agreements." The Compensation Committee reviews
the performance of the CEO of the Company, as well as other executive
officers of the Company annually.
Respectfully submitted,
Compensation Committee
Ernesto Cruz
Robert W. Hughes
James M. Raines
11
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The graph below compares the cumulative total stockholder return on the
Company's Class A Common Stock with the cumulative total return on the
Standard & Poor's 500 Index, the Standard & Poors Broadcasting Index for TV,
Radio and Cable and a Radio Station Component Peer Group Index consisting of
Emmis Broadcasting Corporation, Chancellor Media Corporation, Jacor
Communications, Inc., Clear Channel Communications, Inc., and SFX
Broadcasting, Inc. for the period commencing on July 27, 1994 (the date
trading of the Company's Class A Common Stock commenced on the Nasdaq
National Market) and ending on December 31, 1997. In previous years, the
Radio Station Component Peer Group Index consisted of (1) Emmis Broadcasting
Corporation, (2) Evergreen Media Corporation, (3) Infinity Broadcasting
Company, (4) Jacor Communications, Inc., (5) EZ Communications, Inc., (6)
Clear Channel Communications, Inc. and (7) SFX Broadcasting, Inc. However,
during 1997, Evergreen Media Corporation, Infinity Broadcasting Company and
EZ Communications, Inc. were subject to a merger or acquisition. As a result
of these acquisitions, the industry representative peer companies used in the
past no longer provide a meaningful comparison against the cumulative total
stockholder return on the Company's Class A Common Stock. Therefore, in the
future, the Company will compare the total cumulative stockholder return on
the Company's Class A Common Stock to the Standard & Poors Broadcasting Index
for TV, Radio and Cable. However, as required, the following graph also
shows the cumulative total return of the five remaining industry
representative peer group companies used in previous years (Emmis
Broadcasting Corporation, Chancellor Media Corporation, Jacor Communications,
Inc., Clear Channel Communications, Inc., and SFX Broadcasting, Inc). The
data set forth below assumes the value of an investment in the Company's
Class A Common Stock and each Index was $100 on July 27, 1994.
COMPARISON OF 41 MONTH CUMULATIVE TOTAL RETURN*
AMONG HEFTEL BROADCASTING CORPORATION, THE S & P 500 INDEX THE S & P
BROADCASTING (TV, RADIO & CABLE) INDEX AND A PEER GROUP
[GRAPH]
<TABLE>
<CAPTION>
7/27/94 9/94 9/95 9/96 12/96 12/97
<S> <C> <C> <C> <C> <C> <C>
HEFTEL BROADCASTING CORP 100.00 135.90 197.44 447.44 323.08 958.97
PEER GROUP 100.00 107.93 158.95 330.37 262.51 518.69
S & P 500 100.00 102.83 133.42 160.55 173.93 231.97
S & P BROADCASTING (TV, RADIO & CABLE) 100.00 106.24 132.70 109.25 113.40 186.57
S & P BROADCASTING
HEFTEL BROADCASTING CORPORATION PEER GROUP S & P 500 (TV, RADIO & CABLE)
--*-- --*-- --*-- --*--
</TABLE>
* $100 INVESTED ON 7/27/94 IN STOCK, PEER GROUP AND S & P 500 OR ON 6/30/94 IN
S & P BROADCASTING-INCLUDING REINVESTMENT OF DIVIDENDS
In calculating cumulative total stockholder return, reinvestment of
dividends, if any, was assumed, and the returns of each member of the Radio
Station Component Peer Group Index are weighted for market capitalization.
12
<PAGE>
PROPOSAL TWO
AMENDMENT TO THE COMPANY'S SECOND AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION
The current authorized capital stock of the Company consists of
5,000,000 shares of preferred stock, $0.001 par value (the "Preferred
Stock"), 50,000,000 shares of Class A Common Stock, and 50,000,000 shares of
Class B Common Stock, of which no shares of Preferred Stock, 35,160,497
shares of Class A Common Stock, and 14,156,470 of Class B Common Stock were
issued and outstanding at April 17, 1998. On March 12, 1998, the Board
adopted a proposed amendment to Section 4.1 of the Company's Second Amended
and Restated Certificate of Incorporation increasing the authorized number of
shares of Class A Common Stock from 50,000,000 shares to 100,000,000 shares
for submission to the stockholders at the Annual Meeting.
Holders of Class A Common Stock are entitled to one vote per share on
all matters submitted to a vote of stockholders of the Company. Holders of
Common Stock are entitled to receive dividends, if any, as may be declared
from time to time by the Board from funds legally available therefore,
subject to the payment of any outstanding preferential dividends declared
with respect to any Preferred Stock that from time to time may be
outstanding. Upon liquidation, dissolution or winding up of the Company,
holders of Common Stock are entitled to share ratably in any assets available
for distribution to stockholders after payment of all obligations of the
Company, subject to the rights to receive preferential distributions of the
holders of any Preferred Stock then outstanding.
Holders of Class B Common Stock will, in certain circumstances, have
certain voting rights, with each share of Class B Common Stock being entitled
to one vote. Specifically, so long as Clear Channel and its affiliates own
at least 20% of the then outstanding Common Stock, neither the Company nor any
of its subsidiaries may, without the affirmative vote or consent of the
holders of a majority of the Class B Common Stock voting as a single class,
(i) effect the sale, lease or other transfer of all or substantially all of
the Company's assets, or any merger or consolidation involving the Company
where the stockholders of the Company immediately prior to such transaction
would not own at least 50% of the capital stock of the surviving entity, or
any reclassification, recapitalization, dissolution, liquidation or winding
up of the Company; (ii) authorize, issue or obligate itself to issue any
shares of Preferred Stock; (iii) make or permit any amendment to the
Company's certificate of incorporation that adversely affects the rights of
the holders of the Class B Common Stock; (iv) declare or pay any non-cash
dividends on or make any other non-cash distribution on the Company's Common
Stock; or (v) make or permit any amendment or modification to the Company's
certificate of incorporation concerning the Company's capital stock. In
addition, shares of Class B Common Stock are convertible into shares of Class
A Common Stock at the holder's option, subject to the receipt of applicable
regulatory approvals, including compliance with the FCC's "cross-interest"
policy. The voting rights and conversion privileges of the Class B Common
Stock as described herein may have the effect of impeding the acquisition of
control of the Company by means of a tender offer, proxy fight, open market
purchases or otherwise.
If the proposed amendment is approved, all or any part of the authorized
but unissued shares of Class A Common Stock may thereafter be issued without
further approval from the stockholders, except as may be required by law or
the policies of any stock exchange on which the shares of stock of the
Company may be listed, for such purposes and on such terms as the Board may
determine. Holders of the capital stock of the Company do not have any
preemptive rights to subscribe for the purchase of any shares of Class A
Common Stock, which means that current stockholders do not have a prior right
to purchase any new issue of Class A Common Stock in order to maintain their
proportionate ownership.
Upon obtaining the consent of the holders of Class B Common Stock, the
Board of Directors has the authority to issue up to 5,000,000 shares of
preferred stock, par value $0.001 per share (the "Preferred Stock"), in one
or more series, and to fix the rights, preferences, privileges, and
qualifications thereof without any further vote or action by the
stockholders. There are currently no shares of Preferred Stock
13
<PAGE>
issued or outstanding. The issuance of Preferred Stock could have the effect
of delaying, deferring or preventing a change in control of the Company. In
addition, the voting rights and conversion privileges of the Class B Common
Stock as described herein could have the effect of delaying, deferring or
preventing a change in control of the Company. See "Security Ownership of
Certain Beneficial Owners and Management" for a description of the Voting
Agreement between certain members of the Tichenor Family.
The proposed amendment will not affect the rights of existing holders of
Common Stock except to the extent that future issuances of Class A Common
Stock will reduce each existing Class A Common Stockholder's proportionate
ownership.
If the proposed amendment is adopted, Section 4.1 of the Company's
Second Amended and Restated Certificate of Incorporation would be amended to
read as follows:
"AUTHORIZED SHARES. The total number of shares of capital stock which
the Corporation shall have authority to issue is 155,000,000 shares,
consisting of three classes of capital stock:
(a) 100,000,000 shares of Class A Common Stock, par value $.001 per
share (the "Class A Shares");
(b) 50,000,000 shares of Class B Common Stock, par value $.001 per
share (the Class B Shares" and, together with the Class A Shares, the
"Common Shares"); and
(c) 5,000,000 shares of Preferred Stock, par value $.001 per share
(the "Preferred Stock")."
The proposed amendment to Section 4.1 will not change any other aspect
of the Company's Second Amended and Restated Certificate of Incorporation.
The Board has determined that it would be appropriate for the Company to
increase the number of its authorized shares of Class A Common Stock in order
to have additional shares available for possible future acquisition or
financing transactions, stock splits, stock dividends and other issuances, or
to satisfy requirements for additional reservations of shares by reason of
future transactions which might require increased reservations. The issuance
of additional shares of Class A Common Stock could decrease the amount
earnings and assets available for distribution to the Company's existing
stockholders, and may have the effect of delaying, deferring or preventing a
change in control of the Company. The Company currently has no plans to
issue additional shares of Class A Common Stock.
The affirmative vote of holders of at least a majority of the
outstanding shares of Class A Common Stock entitled to vote at the Annual
Meeting is required in order to adopt the proposed amendment. In addition,
pursuant to the Company's Second Amended and Restated Certificate of
Incorporation, the approval of the holders of a majority of the outstanding
shares of Class B Common Stock is also required in order to adopt the
proposed amendment. Unless indicated to the contrary, the enclosed proxy
will be voted for the proposed amendment. Votes "withheld" or abstaining from
voting will have the same effect as a negative vote or a vote "against" the
proposed amendment.
THE BOARD RECOMMENDS THAT THE HOLDERS OF BOTH THE SHARES OF CLASS A
COMMON STOCK AND CLASS B COMMON STOCK VOTE "FOR" THE PROPOSED AMENDMENT.
14
<PAGE>
PROPOSAL THREE
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
On February 19, 1997, Ernst & Young LLP, the Company's prior independent
accountants, were notified that KPMG Peat Marwick LLP had been approved by
the Board of Directors of the Company and its Audit Committee as the
Company's new independent accountants. Ernst & Young LLP had served as the
independent accountants for the Company and its subsidiaries for the fiscal
years ended September 30, 1995, and 1996. The independent auditors' reports
of Ernst & Young LLP on the consolidated financial statements of the Company
and its subsidiaries as of September 30, 1995, and 1996, and for each of the
two years in the period ended September 30, 1996, each expressed an
unqualified opinion, and were not modified as to uncertainty, audit scope or
accounting principles. During the fiscal years ended September 30, 1995, and
1996, and through February 18, 1997, there were no "reportable events" (as
such term is defined in Regulation S-K, Item 304(a)(1)(v)) or disagreements
with Ernst & Young LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure that were not
resolved to the satisfaction of Ernst & Young LLP.
The Company's financial statements for the year ended December 31, 1997,
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants. Representatives of KPMG Peat Marwick LLP are expected to be
present at the Annual Meeting to respond to appropriate questions, and will
have an opportunity to make a statement if they so desire.
The Board has appointed KPMG Peat Marwick LLP as independent auditors to
audit the financial statements of the Company for the year ending December
31, 1998. Unless otherwise directed, the persons named in the accompanying
proxy will vote in favor of the ratification of the appointment of KPMG Peat
Marwick LLP.
THE BOARD RECOMMENDS THAT THE HOLDERS OF CLASS A COMMON STOCK VOTE "FOR"
THE RATIFICATION OF KPMG PEAT MARWICK LLP AS AUDITORS FOR THE YEAR ENDING
DECEMBER 31, 1998.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
The Bylaws of the Company provide a procedure for stockholder proposals
and stockholder nominations for election of directors. That procedure
provides that any stockholder intending to present a proposal or nomination
for election of one or more directors at the Annual Meeting must deliver a
written notice to the Company's Corporate Secretary at the Company's
principal executive offices not less than 60 days nor more than 120 days
before the date of such Annual Meeting; provided, however, that in the event
that the first public disclosure (whether by mailing of a notice to
stockholders or to an exchange on which the Common Stock of the Company is
listed or to the Nasdaq National Market, by press release or otherwise) of
the date of the Annual Meeting is made less than 65 days prior to the date of
the meeting, notice by the stockholder will be timely received not later than
the close of business on the tenth day following the day on which such public
disclosure was first made.
Any such notice from a stockholder to the Company's Corporate Secretary
must contain (i) the name and address of that stockholder as they appear on
the Company's books (and, if the nomination or proposal in question is made
on behalf of a beneficial owner of Common Stock, the name and address of that
beneficial owner), (ii) the number of shares of each class of the Company's
stock beneficially owned by that stockholder and (iii) such other information
relating to the stockholder or the nomination required to be disclosed under
the rules of the Securities and Exchange Commission. If the stockholder's
notice to the Company's Corporate Secretary proposes to nominate one or more
individuals for election or re-election as a director, that notice must also
include for each such individual all information relating to that person that
is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934 (including that
15
<PAGE>
individual's written consent to being named in the proxy statement as a
nominee and to serve as a director if elected). If the stockholder's notice
to the Corporate Secretary proposes to bring other business before the Annual
Meeting, that notice must include a reasonably detailed description of (i)
that business, (ii) the reasons for conducting that business at the Annual
Meeting, and (iii) any material interest of the stockholder in that business
(and by the beneficial owner, if any, on whose behalf the proposal is made).
If a stockholder proposal or nomination is not made in accordance with the
procedure set forth above, the Chairman of the Annual Meeting shall, if the
facts warrant, determine and declare at the Annual Meeting that the proposed
business or nomination was not properly brought before the Annual Meeting in
accordance with the procedures set forth in the Bylaws and direct that the
business not be transacted or that the defective nomination be disregarded.
In order for a stockholder proposal to be included in the Board of
Directors' Proxy Statement for the next Annual Meeting of Stockholders, such
proposal must be submitted in writing and must be received at 100 Crescent
Court, Suite 1777, Dallas, Texas 75201, Attention: Corporate Secretary, no
later than the close of business on December 22, 1998.
ANNUAL REPORT
The Company's Annual Report on Form 10-K containing its financial
statements for the fiscal year ended December 31, 1997, has been mailed
concurrently herewith. The Annual Report to Stockholders is not incorporated
in this Proxy Statement and is not deemed to be a part of the proxy
solicitation material. Any stockholder who does not receive a copy of such
Annual Report on Form 10-K may obtain one by writing to the Company.
REPORT FILED WITH SECURITIES AND EXCHANGE COMMISSION
Any beneficial owner of securities of the Company whose proxy is hereby
solicited may request and receive without charge a copy of the Company's
Annual Report on Form 10-K, including the financial statements thereto, but
excluding exhibits and schedules, filed with the Securities and Exchange
Commission. Such request should be addressed to: Heftel Broadcasting
Corporation, 100 Crescent Court, Suite 1777, Dallas, Texas 75201, Attention:
Corporate Secretary.
16
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any other matter which will be brought before the Annual Meeting.
However, if any other matter properly comes before the Annual Meeting, or any
adjournment thereof, the person or persons voting the proxies will vote on
such matters in accordance with their best judgment and discretion.
By Order of the Board of Directors
/s/ McHenry T. Tichenor, Jr.
McHenry T. Tichenor, Jr.
Chairman of the Board
Dallas, Texas
April 30, 1998
17
<PAGE>
HEFTEL BROADCASTING CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD JUNE 4, 1998
The undersigned hereby appoints McHenry T. Tichenor, Jr. and Jeffrey T.
Hinson, and each of them, proxies of the undersigned with full power of
substitution for and in the name, place and stead of the undersigned to appear
and act for and to vote all shares of Class A Common Stock of HEFTEL
BROADCASTING CORPORATION standing in the name of the undersigned or with respect
to which the undersigned is entitled to vote and act at the Annual Meeting of
Stockholders of said Company to be held in Dallas, Texas on June 4, 1998 at
10:00 A.M., local time, or at any adjournments or postponements thereof, with
all powers the undersigned would possess if then personally present, as
indicated on the reverse side.
THIS UNDERSIGNED ACKNOWLEDGES RECEIPT OF NOTICE OF SAID MEETING AND
ACCOMPANYING PROXY STATEMENT AND OF THE 1997 ANNUAL REPORT ON FORM 10-K AND
RATIFIES AND CONFIRMS ALL ACTS THAT ANY OF THE SAID PROXY HOLDERS OR THEIR
SUBSTITUTES MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
(Continued and to be dated and signed on the reverse side.)
HEFTEL BROADCASTING CORPORATION
<PAGE>
1. ELECTION OF DIRECTORS FOR all five nominees listed below [ ]
WITHHOLD AUTHORITY to vote for all
five nominees below [ ]
EXCEPTIONS* [ ]
Nominees: McHenry T. Tichenor, Jr. McHenry T. Tichenor Robert W. Hughes
James M. Raines Ernesto Cruz
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE MARK THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED BELOW.)
*Exceptions:
----------------------------------------------------------
2. AMENDMENT OF THE COMPANY'S SECOND AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF CLASS A COMMON
STOCK.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT(S)
THEREOF.
Change of Address and/or Comments: [ ]
Please sign your name exactly as it appears hereon. Joint owners should
sign personally. Attorney, Executor, Administrator, Trustee or Guardian should
indicate full title.
Dated:____________________________________, 1998
- -----------------------------------------------
Stockholder's signature
- -----------------------------------------------
Stockholder's signature if stock held jointly
SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK.
