SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of
the Commission only (as
permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
LAMAR ADVERTISING COMPANY
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
LAMAR ADVERTISING COMPANY
5551 CORPORATE BOULEVARD, BATON ROUGE, LOUISIANA 70808
(225) 926-1000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of the stockholders of Lamar Advertising Company, a
Delaware corporation (the "Company"), will be held at the offices of Lamar
Advertising Company, 5551 Corporate Boulevard, Baton Rouge, Louisiana, at 10:00
a.m. on Thursday, May 24, 2001, for the following purposes:
1. To elect ten directors of the Company, each for a one-year term.
2. To approve an amendment to the Company's 1996 Equity Incentive Plan to
include directors as eligible participants.
3. To approve an amendment to the Company's 1996 Equity Incentive Plan
that sets forth the maximum number of shares of restricted or
unrestricted stock that may be granted to a participant in any calendar
year.
4. To approve an amendment to the Company's 1996 Equity Incentive Plan
that allows the establishment of performance goals for the granting of
restricted or unrestricted stock.
5. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 9, 2001 will
be entitled to vote at the meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. THEREFORE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE YOUR PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR PROXY
WILL NOT BE USED.
By order of the Board of Directors,
James R. McIlwain
Secretary
April 24, 2001
LAMAR ADVERTISING COMPANY
_______________
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 24, 2001
_______________
General Information
The enclosed proxy is solicited on behalf of the Board of Directors of
Lamar Advertising Company (the "Company") for use at the annual meeting of
stockholders to be held at the offices of Lamar Advertising Company, 5551
Corporate Boulevard, Baton Rouge, Louisiana, at 10:00 a.m. on Thursday, May 24,
2001, and at any adjournments thereof. The approximate date on which this proxy
statement and accompanying proxy are first being sent or given to stockholders
is April 24, 2001.
The authority granted by an executed proxy may be revoked, at any time
before its exercise, by filing with the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date or by voting in person
at the meeting. Shares represented by valid proxies will be voted in accordance
with the specifications in the proxies. If no specifications are made, the
proxies will be voted to elect the directors nominated by the Board of Directors
and to approve the three amendments to the 1996 Equity Incentive Plan.
Only stockholders of record at the close of business on April 9, 2001 (the
"Record Date") will be entitled to vote at the meeting. On the Record Date, the
Company had outstanding 81,250,985 shares of Class A common stock, 16,638,136
shares of Class B common stock and 5,719.49 shares of Series AA preferred stock,
which are its only outstanding classes of voting stock. The holders of Class A
common stock and Series AA preferred stock are entitled to one vote for each
share registered in their names on the Record Date with respect to all matters
to be acted upon at the meeting, and the holders of Class B common stock are
entitled to ten votes for each share registered in their names on the Record
Date with respect to such matters. The presence at the meeting, in person or by
proxy, of one-third of the voting capital stock issued and outstanding and
entitled to vote at the meeting shall constitute a quorum for the transaction of
business. Proxies submitted by brokers that do not indicate a vote for one or
more proposals because the brokers do not have discretionary voting authority
and have not received instructions from the beneficial owners on how to vote on
these proposals are called "broker non-votes." Abstentions and broker non-votes
will be considered present for purposes of determining the presence of a quorum.
SHARE OWNERSHIP
The following table and footnotes set forth certain information regarding
the beneficial ownership of the common stock as of March 30, 2001 by (i) persons
known by the Company to be beneficial owners of more than 5% of either class of
common stock, (ii) the Chief Executive Officer and each of the other executive
officers other than the Chief Executive Officer, (iii) each director and nominee
for election as a director of the Company and (iv) all current executive
officers and directors of the Company as a group:
DIRECTORS, OFFICERS TITLE OF NUMBER OF PERCENT
AND 5% STOCKHOLDERS CLASS SHARES (1) OF CLASS
------------------- -------- --------- --------
Kevin P. Reilly, Jr. Class A 144,873 *
c/o The Lamar Corporation Class B(2) 15,545,081(3) 93.4%(4)
5551 Corporate Blvd.
Baton Rouge, LA 70808
Sean E. Reilly Class A 20,000(5) *
c/o The Lamar Corporation Class B(2) 15,394,292(3) 92.5%(6)
5551 Corporate Blvd.
Baton Rouge, LA 70808
Anna Reilly Cullinan Class A 6,446(7) *
c/o The Lamar Corporation Class B(2) 15,395,326(3) 92.5%(8)
5551 Corporate Blvd.
Baton Rouge, LA 70808
Wendell Reilly Class A 144,003 *
c/o The Lamar Corporation Class B(2) 15,303,437(9) 92.0%(10)
5551 Corporate Blvd.
Baton Rouge, LA 70808
The Reilly Family Limited Partnership Class B(2) 15,000,000 90.2%(11)
c/o The Lamar Corporation
5551 Corporate Blvd.
Baton Rouge, LA 70808
AMFM Operating Inc. Class A 19,115,073(12) 23.5%
200 East Basse Road
San Antonio, TX 78209
Putnam Investments, LLC Class A 9,768,005(13) 12.0%
One Post Office Square
Boston, MA 02109
Janus Capital Corporation Class A 8,595,513(14) 10.6%
100 Fillmore Street
Denver, CO 80206
AIM Management Group Inc. Class A 7,058,258(15) 8.7%
11 Greenway Plaza
Suite 100
Houston, TX 77046
Charles W. Lamar, III Class A 5,071,259(16) 6.2%
c/o The Lamar Corporation
5551 Corporate Blvd.
Baton Rouge, LA 70808
Gerald H. Marchand Class A 177,362(17) *
Keith A. Istre Class A 59,512(18) *
T. Everett Stewart, Jr. Class A 56,900(19) *
Stephen P. Mumblow Class A 5,000(20) *
John Maxwell Hamilton Class A 4,000(21) *
Thomas Reifenheiser Class A 4,000(22) *
All Directors and Executive Officers as a Group Class A 21,482,279(23) 22.0%(24)
(9 Persons)
* Less than 1%
2
(1) The persons and entities named in the table have sole voting and investment
power with respect to all shares beneficially owned by them, except as
noted below.
(2) Upon the sale of any shares of Class B common stock to a person other than
to a Permitted Transferee, such shares will automatically convert into
shares of Class A common stock. Permitted Transferees include (i) Kevin P.
Reilly, Sr.; (ii) a descendant of Kevin P. Reilly, Sr.; (iii) a spouse or
surviving spouse (even if remarried) of any individual named or described
in (i) or (ii) above; (iv) any estate, trust, guardianship, custodianship,
curatorship or other fiduciary arrangement for the primary benefit of any
one or more of the individuals named or described in (i), (ii) and (iii)
above; and (v) any corporation, partnership, limited liability company or
other business organization controlled by and substantially all of the
interests in which are owned, directly or indirectly, by any one or more of
the individuals and entities named or described in (i), (ii), (iii) and
(iv) above. Except for voting rights, the Class A and Class B common stock
are substantially identical. The holders of Class A common stock and Class
B common stock vote together as a single class (except as may otherwise be
required by Delaware law), with the holders of Class A common stock
entitled to one vote per share and the holders of Class B common stock
entitled to ten votes per share, on all matters on which the holders of
common stock are entitled to vote.
(3) Includes 15,000,000 shares held by the Reilly Family Limited Partnership
(the "RFLP"), of which Kevin Reilly, the President and Chief Executive
Officer of the Company, is the managing general partner. Kevin Reilly's
three siblings, Anna Reilly Cullinan, Sean E. Reilly (both nominees for
director) and Wendell S. Reilly are the other general partners of the RFLP.
The managing general partner has sole voting power over the shares but
dispositions of the shares require the approval of 50% of the general
partnership interests of the RFLP.
(4) Represents 15.9% of the Class A common stock if all shares of Class B
common stock are converted into Class A common stock.
(5) Consists of shares owned jointly with Mr. Reilly's spouse.
(6) Represents 15.7% of the Class A common stock if all shares of Class B
common stock are converted into Class A common stock.
(7) Consists of shares owned jointly with Mrs. Cullinan's spouse.
(8) Represents 15.7% of the Class A common stock if all shares of Class B
common stock are converted into Class A common stock.
(9) Includes 15,000,000 shares held by the Reilly Family Limited Partnership
(the "RFLP"), of which Kevin Reilly, the President and Chief Executive
Officer of the Company, is the managing general partner. Kevin Reilly's
three siblings, Anna Reilly Cullinan, Sean E. Reilly (both nominees for
director) and Wendell S. Reilly are the other general partners of the RFLP.
The managing general partner has sole voting power over the shares but
dispositions of the shares require the approval of 50% of the general
partnership interests of the RFLP. Also includes 156,301 shares held by the
Wendell Reilly Trust, of which Wendell Reilly is the trustee and has sole
voting and dispositive power over the trust shares.
(10) Represents 15.6% of the Class A common stock if all shares of Class B
common stock are converted into Class A common stock.
(11) Represents 15.3% of the Class A common stock if all shares of Class B
common stock are converted into Class A common stock.
(12) AMFM Operating Inc. shares voting and investment power over these shares
with AMFM, Inc., Clear Channel Communications, Inc. and AMFM Holdings Inc.
Based on the Schedule 13D/A filed by AMFM Inc. with the SEC on January 23,
2001.
(13) Putnam Investments, LLC ("PI") shares voting power as to 101,300 of these
shares with The Putnam Advisory Co., LLC and shares investment power with
Putnam Investment Management, LLC and The Putnam Advisory Co., LLC as to
9,052,005 and 716,000 of these shares, respectively. Based on the Schedule
13G/A for the year ended December 31, 2000 filed by PI with the SEC.
(14) Based on the Schedule 13G/A filed with the SEC by Janus Capital Corporation
for the year ended December 31, 2000.
(15) Based on the Schedule 13G/A for the year ended December 31, 2000 filed by
AIM Management Group, Inc. with the SEC on behalf of itself and its wholly-
owned subsidiaries, AIM Advisors, Inc. and AIM Capital Management, Inc.
(16) Includes (a) 200,000 shares of which Mr. Lamar may, on November 19, 2001,
put to a broker at $50.36 per share and the broker has the right to call
Mr. Lamar at $76.95 per share; (b) 505,000 shares that Mr. Lamar has
exchanged for units in exchange funds over which he retains voting power;
(c) 1,339,967 shares held in trust for Mr. Lamar's two minor children who
reside with him, 250,000 shares of which the trusts may, on October 5,
2001, put to a broker at $39.07 per share and the broker has the right to
call the trusts at $61.64 per share; Mr. Lamar disclaims beneficial
ownership to these shares (d) 80,000 shares that the trusts for Mr. Lamar's
two minor children who reside with him have exchanged for units in an
exchange fund over which they retain voting power; Mr. Lamar disclaims
beneficial ownership to these shares; (e) 2,250,000 shares held by CWL3,
LLC; CWL3, No. 2, LLC; and CWL3, No. 3, LLC; as to which Mr. Lamar is
deemed the beneficial owner and (f) 30,750 shares owned by Mr. Lamar's
spouse, as to which Mr. Lamar disclaims beneficial ownership.
(17) Includes 60,000 shares of Class A common stock subject to stock options
exercisable within 60 days of March 30, 2001, and 51,282 shares owned by
the Marchand Family Partnership of which Mr. Marchand is a partner. Mr.
Marchand shares voting power over the partnership shares with his wife.
(18) Includes 58,200 shares of Class A common stock subject to stock options
exercisable within 60 days of March 30, 2001.
(19) Includes 8,000 shares of Class A common stock subject to stock options
exercisable within 60 days of March 30, 2001.
(20) Includes 4,000 shares of Class A common stock subject to stock options
exercisable within 60 days of March 30, 2001.
(21) Consists of 4,000 shares of Class A common stock subject to options
exercisable within 60 days of March 30, 2001.
(22) Consists of 4,000 shares of Class A common stock subject to options
exercisable within 60 days of March 30, 2001.
(23) See Notes 3, 5, 16, 17, 18, 19, 20, 21 and 22.
(24) Assumes the conversion of all shares of Class B common stock into shares of
Class A common stock.
3
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers and directors and persons who own
beneficially more than ten percent of the Company's equity securities are
required under Section 16(a) of the Securities Exchange Act of 1934 to file
reports of ownership and changes in ownership of Company securities with the
Securities and Exchange Commission. Copies of these reports must also be
furnished to the Company. Based solely on a review of the copies of reports
furnished to the Company and written representations that no other reports were
required, the Company believes that during 2000 the Company's executive
officers, directors and 10% beneficial owners complied with all applicable
Section 16(a) filing requirements.
ITEM 1 ELECTION OF DIRECTORS
The Board of Directors has fixed the number of directors at ten for the
coming year. The persons named below have been nominated for election as
directors at the annual meeting of stockholders to be held on May 24, 2001, to
serve until the next annual meeting of stockholders and until their successors
are elected and qualified. Each has consented to being named a nominee in this
proxy statement and to serve, if elected, as a director. If any nominee is
unable to serve, proxies will be voted for such other candidates as may be
nominated by the Board of Directors.
Directors will be elected by a plurality of the votes cast by the
stockholders entitled to vote on this proposal at the meeting. Abstentions,
broker non-votes and votes withheld will not be treated as votes cast for this
purpose and will not affect the outcome of the election.
The following table contains certain information about the nominees for
director.
BUSINESS EXPERIENCE DURING PAST FIVE DIRECTOR
NAME AND AGE YEARS AND OTHER DIRECTORSHIPS SINCE
------------ ------------------------------------ --------
Kevin P. Reilly, Jr. Kevin P. Reilly, Jr. has served as the Company's President and 1984
Age: 46 Chief Executive Officer since February 1989 and as a director of
the Company since February 1984. Mr. Reilly served as President
of the Company's Outdoor Division from 1984 to 1989. Mr. Reilly,
an employee of the Company since 1978, has also served as
Assistant and General Manager of the Company's Baton Rouge Region
and Vice President and General Manager of the Louisiana Region.
Mr. Reilly received a B.A. from Harvard University in 1977.
Keith A. Istre Keith A. Istre has been Chief Financial Officer of the Company 1991
Age: 48 since February 1989 and a director of the Company since February
1991. Mr. Istre joined the Company as Controller in 1978 and
became Treasurer in 1985. Prior to joining the Company, Mr.
Istre was employed by a public accounting firm in Baton Rouge
from 1975 to 1978. Mr. Istre graduated from the University of
Southwestern Louisiana in 1974 with a degree in Accounting.
4
BUSINESS EXPERIENCE DURING PAST FIVE DIRECTOR
NAME AND AGE YEARS AND OTHER DIRECTORSHIPS SINCE
------------ ------------------------------------ --------
Charles W. Lamar, III Charles W. Lamar, III has been a director of the Company since 1973
Age: 52 June 1973. He joined the Company in 1982 and served as General
Counsel and Secretary through December 1998. Prior to joining
the Company, Mr. Lamar maintained his own law practice and was
employed by a law firm in Baton Rouge. In January 1999, Mr.
Lamar became Chairman and Chief Executive Officer of Woodlawn
Land Company, a commercial real estate company. Mr. Lamar
received a B.A. in Philosophy from Harvard University in 1971, a
M.A. in Economics from Tufts University in 1972 and a J.D. from
Boston University in 1975.
Gerald H. Marchand Gerald H. Marchand has been Regional Manager of the Gulf Coast 1978
Age: 69 Region, which encompasses operations in Louisiana and
Mississippi, since 1988 and a director of the Company since 1978.
He began his career with the Company in leasing and went on to
become President of the Outdoor Division. He has served as
General Manager of the Lake Charles and Mobile operations. Mr.
Marchand received a Masters in Education from Louisiana State
University in 1955.
T. Everett Stewart, Jr. T. Everett Stewart, Jr. has been President of Interstate Logos, 1997
Age: 47 Inc. since 1988, and has been a director since 1997. He served
as Regional Manager of the Company's Baton Rouge Region from 1984
to 1988. Previously, he served the Company as Sales Manager in
Montgomery and General Manager of the Monroe and Alexandria
operations. Before joining the Company in 1979, Mr. Stewart was
employed by the Lieutenant Governor of the State of Alabama and
by a United States Senator from the State of Alabama. Mr.
Stewart received a B.S. in Finance from Auburn University in 1976.
Sean E. Reilly Sean E. Reilly is Director of Mergers and Acquisitions and 1999
Age: 39 President of the Company's real estate division, TLC Properties,
Inc. He has been a director of the Company since 1999 and serves
on the Executive Committee of the Board. He began working with
the Company as Vice President of Mergers and Acquisitions in 1987
and served in that capacity until 1994. He also served as a
director of the Company from 1989 to 1996. Mr. Reilly was the
Chief Executive Officer of Wireless One, Inc., a wireless cable
television company, from 1994 to 1997. Mr. Reilly received a
B.A. from Harvard University in 1984 and a J.D. from Harvard Law
School in 1989.
5
BUSINESS EXPERIENCE DURING PAST FIVE DIRECTOR
NAME AND AGE YEARS AND OTHER DIRECTORSHIPS SINCE
------------ ------------------------------------ --------
Anna Reilly Cullinan From 1992 until 2000, Mrs. Cullinan owned and operated Lula's --
Age: 37 Cafe, a restaurant, and served on the Board of Directors of
several community-based organizations in South Bend, Indiana.
Mrs. Cullinan currently is a director of St. Joseph Capital Bank
in South Bend. Prior to living and raising her family in
Indiana, Mrs. Cullinan worked for the Corporation for National
Service and the Ashoka Foundation in Washington, D.C. Mrs.
Cullinan received her B.A. from Emory University in 1985, and a
Masters of Public Policy from Duke University in 1990.
Stephen P. Mumblow Stephen P. Mumblow is the President and a Director of 1999
Age: 45 Communications Corporation of America, a television and radio
broadcasting company, having joined that company in 1998. Mr.
Mumblow was a Managing Director of Chase Securities, Inc., an
investment banking firm, from March 1988 to August 1998, prior to
which he was a Vice President of Michigan Energy Resources
Company, an intrastate natural gas utility company and cable
television and broadcasting concern, and Citibank, N.A., a
commercial bank. Mr. Mumblow is a 1977 graduate of The Wharton
School, University of Pennsylvania with a BS Degree in Economics.
John Maxwell Hamilton John Maxwell Hamilton has served as Dean of the Manship School of 2000
Age: 54 Mass Communications of Louisiana State University since 1992.
Mr. Hamilton received a B.A. in Journalism from Marquette
University in 1969, an M.S. in Journalism from Boston University
in 1974 and a Ph.D. from George Washington University in 1983.
Thomas Reifenheiser Thomas Reifenheiser was a Managing Director and Group Executive 2000
Age: 65 for the Global Media and Telecom Group of Chase Securities Inc.,
an investment banking firm, from prior to 1995 to 2000. He
joined Chase in 1963 and was the Global Media and Telecom Group
Executive since 1977. He is a member of the Board of Directors
of Mediacom Communications Corp. Mr. Reifenheiser received a
B.B.A. from Hofstra University and an M.B.A. from The Wharton
School, University of Pennsylvania.
Kevin P. Reilly, Jr. and Sean E. Reilly are brothers, Anna Reilly Cullinan
is their sister and Charles W. Lamar, III is their cousin.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held four meetings during 2000. Each of the
directors then in office attended at least 75% of the aggregate of all meetings
of the Board and all meetings of the committees of the Board on which such
director then served.
The Company has standing Audit and Compensation Committees of the Board of
Directors but does not have a Nominating Committee. The Audit Committee
currently consists of Stephen Mumblow, John Maxwell Hamilton and Thomas
Reifenheiser, each of whom is independent as defined by applicable Nasdaq
National Market standards governing the qualifications of Audit Committee
members. The Audit
6
Committee held four meetings during 2000. The primary function of the Audit
Committee is to assist the Board of Directors in the discharge of its duties and
responsibilities by providing the Board with an independent review of the
financial health of the Company and of the reliability of the Company's
financial controls and financial reporting systems. The Committee reviews the
general scope of the Company's annual audit, the fee charged by the Company's
independent accountants and other matters relating to internal control systems.
The Audit Committee operates under a written charter adopted by the Board of
Directors on May 25, 2000, a copy of which is included as Appendix A to this
Proxy Statement. For more information about the Audit Committee, see the "Report
of the Audit Committee" below. For information about the Compensation Committee,
see the "Compensation Committee Report on Executive Compensation" below.
The Company also has an Executive Committee of the Board of Directors. The
Executive Committee has authority to operate the affairs of the Company between
meetings of the Board of Directors and administers the Company's 2000 Employee
Stock Purchase Plan. The Executive Committee currently consists of Kevin
Reilly, Keith Istre and Sean Reilly.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company purchased approximately $2,407,050 of highway signs used in its
logo signs business from Interstate Highway Signs Corp. during 2000. Interstate
Highway Signs Corp. is a wholly-owned subsidiary of Sign Acquisition Corp.
Kevin P. Reilly, Jr., the President and Chief Executive Officer of the Company,
has voting control over a majority of the outstanding shares of Sign Acquisition
Corp. through a voting trust.
Mr. Mumblow, a director of the Company, is the President and a Director of
Communications Corporation of America. Communications Corporation of American
purchased outdoor advertising space, which consisted of approximately
623 outdoor advertising displays, from the Company in 2000 for a total purchase
price of $179,409.
The Company's wholly-owned direct subsidiary, Lamar Media Corp., loaned
$196,666.66 to Gerald Marchand, a director of the Company, pursuant to a
promissory note dated March 24, 2001. The note is due and payable on September
24, 2001 and accrues interest at a rate of eight percent per annum.
In March 2000, the Company loaned Wendell S. Reilly, who served as a
director from November 1999 to March 2001, $75,000. The loan accrues interest
based on the semi-annual Applicable Federal Rate as of December 31, 2000 the
loan had accrued $3,691 of interest.
The Company loaned Sean Reilly, a director and executive officer of the
Company, $242,918 in March 2000. This loan plus $7,082 of accrued interest was
repaid in full in July 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Charles W. Lamar, III,
Stephen Mumblow and Thomas Reifenheiser. Wendell Reilly served on the Committee
from November 1999 until his resignation from the Board of Directors in March
2001. Thomas O. Hicks served on the Committee from February 1999 until his
resignation from the Board of Directors in August 2000. None of our executive
officers serves as a member of the Board of Directors or compensation committee
of any other company that has one or more executive officers serving as a member
of our Board of Directors or Compensation Committee.
From October 1982 to December 1998, Charles Lamar was the Company's
Secretary and General Counsel.
7
EXECUTIVE COMPENSATION
The Compensation Committee Report set forth on the following page
describes the Company's compensation policies applicable to executive officers
and the basis for Mr. Reilly's compensation as Chief Executive Officer. The
following graph shows a comparison of the cumulative total stockholder returns
on the Class A common stock over the period from August 2, 1996 (the first
trading day of the Class A common stock) to December 31, 2000 as compared with
that of the Nasdaq US Index and two indexes of certain companies selected by the
Company as comparative to the Company in that each is an outdoor advertising
company. The Old Custom Composite Index was replaced with the New Custom
Component Index because Infinity Broadcasting Corp., a member of the Old Custom
Composite Index, ceased trading in February 2001 when it was merged into Viacom
Inc. The representative peer group now consists of the two remaining members.
The graph assumes $100 invested on August 2, 1996 in Class A common stock at its
initial public offering price of $10.67 per share (as adjusted for the Company's
3-for-2 stock split effected in February 1998), the Nasdaq US Index and the old
and new peer group indexes, with all dividends, if any, being reinvested.
[CHART APPEARS HERE]
2-AUG-96 31-DEC-96 31-DEC-97 31-DEC-98 31-DEC-99 31-DEC.-00
---------------------------------------------------------------------------------------------------------------------------
Lamar Advertising Company $100 $152 $248 $349 $568 $362
---------------------------------------------------------------------------------------------------------------------------
Nasdaq US $100 $114 $140 $198 $368 $221
---------------------------------------------------------------------------------------------------------------------------
Old Custom Composite Index (3 Stocks)(1) $100 $ 86 $184 $249 $359 $234
---------------------------------------------------------------------------------------------------------------------------
New Custom Composite Index (2 Stocks)(2) $100 $ 86 $184 $249 $403 $218
---------------------------------------------------------------------------------------------------------------------------
(1) The Old Custom Composite Index consists of Clear Channel Communications,
Inc., the Ackerley Group, Inc., and Infinity Broadcasting Corp.
(2) The New Custom Composite Index consists of Clear Channel Communications,
Inc. and the Ackerley Group, Inc.
8
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
currently consists of Charles W. Lamar, III (Chairman), Steven Mumblow and
Thomas Reifenheiser. The Committee's responsibilities include reviewing the
performance of the Chief Executive Officer and the other executive officers of
the Company and making determinations as to such officers' cash and equity-based
compensation and benefits. The Committee met one time during 2000.
The Company's executive compensation policy is designed to attract, retain
and reward executive officers who contribute to the long-term success of the
Company by maintaining a competitive salary structure and aligning individual
compensation with the achievement of corporate and individual performance
objectives.
The Committee reviews the entire executive compensation package for each
officer, which consists of base salary, annual cash bonuses and stock option
grants under the Company's 1996 Equity Incentive Plan.
Executive Officer Compensation
Overall, the Committee has determined that executive officer base salaries
and cash bonuses should be based on industry averages for comparable positions
as well as on individual and corporate performance.
For 2000, the Chief Executive Officer made recommendations to the Committee
as to base salary amounts for each executive officer (including himself) based
on his assessment of each officer's individual performance and current level of
compensation. The Committee evaluated the Chief Executive Officer's
recommendations, taking into account the officer's tenure in his position, the
Committee's subjective assessment of individual performance and the Company's
overall performance during the prior year. The Committee did not apply a strict
formula but instead considered these factors together without giving any
specific weight to any individual factor. The Committee gauged overall
performance of the Company based on several key indicators. These indicators
included the number of acquisitions completed and the aggregate purchase price,
the market performance of the Company's Class A common stock and the growth in
net revenues and cash flows. The Committee also considered the current
financial and economic environment in making its assessment. Based on its
evaluation, the Committee approved the Chief Executive Officer's recommendations
that his base compensation and the base compensation of the Director of Mergers
and Acquisitions remain the same in 2000 as it was in 1999 and that the base
compensation of the Chief Financial Officer be increased for 2000.
Each year, the Chief Executive Officer proposes to the Committee the size
of annual bonuses, taking into account the growth of the Company for that year
and each officer's individual performance. In 2000, cash bonuses paid to the
Chief Executive Officer and other executive officers totaled $750,000. The
Chief Executive Officer's bonus was based on the overall financial performance
of the Company during 2000 and the successful completion of over $536 million in
acquisitions during the year.
Stock Options
The Committee did not grant any stock options to management during 2000.
Deduction Limit for Executive Compensation
Section 162(m) of the Internal Revenue Code limits a publicly held
company's tax deduction for compensation paid to the chief executive officer and
the other four most highly paid officers. Generally, amounts paid in excess of
$1,000,000 to a covered executive in any year cannot be deducted. Certain
9
performance-based compensation that has been approved by stockholders is not
subject to the limit. The Company does not currently expect to pay cash
compensation exceeding the $1,000,000 limitation. Stock options granted under
the 1996 Equity Incentive Plan are not subject to the limitation under
applicable regulations. In addition, the Committee will consider as appropriate
other ways to maximize the deductibility of executive compensation, while
retaining the discretion to compensate certain executive officers in a manner
commensurate with performance and the competitive environment for executive
talent without regard to deductibility.
By the Compensation Committee,
Charles W. Lamar, III (Chair)
Stephen P. Mumblow
Thomas Reifenheiser
SUMMARY COMPENSATION TABLE
The following table sets forth certain compensation information for the
Chief Executive Officer and each of the other executive officers of the Company
whose salary and bonus for the year ended December 31, 2000 exceeded $100,000
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- --------------------
SHARES OF CLASS A
COMMON STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) UNDERLYING OPTIONS(#) COMPENSATION($)(1)
--------------------------- ---- --------- ------- --------------------- ------------------
Kevin P. Reilly, Jr. 2000 220,000 300,000 -- 57,500
President and Chief Executive 1999 220,000 400,000 -- 57,500
Officer 1998 180,000 400,000 -- 57,500
Keith A. Istre 2000 166,000 225,000 -- 15,000
Treasurer and Chief Financial 1999 160,000 250,000 40,000 15,000
Officer 1998 102,000 220,000 50,000 15,000
Sean E. Reilly 2000 150,000 225,000 -- 15,000
Director of Mergers and Acquisition 1999 150,000 250,000 -- --
1998(2) -- -- -- --
(1) The reported amounts consist of employer contributions under the Company's
deferred compensation plan.
(2) No 1998 compensation is reported for Sean Reilly because he was not an
executive officer in that year.
10
OPTION GRANTS AND POTENTIAL REALIZABLE VALUES TABLE
No option grants were made to the Named Executive Officers during 2000.
OPTION EXERCISES AND YEAR-END VALUES TABLE
The following table sets forth certain information concerning exercisable
and unexercisable stock options held by the Named Executive Officers as of
December 31, 2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END(#) FISCAL YEAR-END(#)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
---- --------------- ----------- ------------------------ -----------------------
Kevin P. Reilly, Jr. 0 -- 0/0 0/0
Keith A. Istre 70,000 1,918,509 50,200/44,000 1,038,384/289,680
Sean E. Reilly 0 -- 0/0 0/0
-----------------
(1) Based on the difference between the option exercise price and the closing
price of the underlying Class A common stock on December 29, 2000, which
closing price was $38.59.
DIRECTOR COMPENSATION
During 2000, directors who were not employed by the Company received a fee
of $1,500 a month and were reimbursed for travel expenses incurred to attend
board meetings.
REPORT OF THE AUDIT COMMITTEE
In the course of its oversight of the Company's financial reporting
process, the Audit Committee of the Board of Directors has (i) reviewed and
discussed with management the Company's audited financial statements for the
fiscal year ended December 31, 2000, (ii) discussed with KPMG LLP, the Company's
independent auditors, the matters required to be discussed by Statement on
Auditing Standards No. 61, Communication with Audit Committees, and (iii)
received the written disclosures and the letter from the auditors required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees, discussed with the auditors their independence, and considered
whether the provision of nonaudit services by the auditors is compatible with
maintaining their independence.
Based on the foregoing review and discussions, the Committee recommended to
the board of directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000 for
filing with the Securities and Exchange Commission.
By the Audit Committee,
Stephen Mumblow (Chair)
John Maxwell Hamilton
Thomas Reifenheiser
11
ITEM 2 PROPOSAL TO APPROVE THE AMENDMENT OF LAMAR ADVERTISING COMPANY'S
1996 EQUITY INCENTIVE PLAN TO INCLUDE DIRECTORS AS ELIGIBLE
PARTICIPANTS
GENERAL
The 1996 Equity Incentive Plan, a copy of which is included as Appendix B
to this Proxy Statement, was adopted by Lamar Advertising Company in July 1996.
The 1996 Equity Incentive Plan is designed to provide the Company flexibility in
awarding equity incentives by providing for different types of incentives that
may be awarded. The purpose of the 1996 Equity Incentive Plan is to attract and
retain key employees of and, consultants to the Company and its eligible
affiliated companies and to enable them to participate in the long-term growth
of the Company. In August 2000 the Board of Directors voted, subject to
stockholder approval, to amend the 1996 Equity Incentive Plan to include
directors as eligible participants. Stockholder approval of this amendment is
required under the rules of the Nasdaq National Market. The Board of Directors
believes that it is advisable to give the stockholders an opportunity to approve
this amendment so that outside directors may participate in the 1996 Equity
Incentive Plan. The holders of approximately 67% of the total voting power of
the common stock have indicated that they will vote in favor of this amendment.
The Company believes that the amendment is necessary and appropriate to enable
the Company to attract and retain the quality of directors whose services are
considered important to the Company's future progress. The Company believes that
participation in the 1996 Equity Incentive Plan provides such directors with an
incentive to remain as directors of the Company.
The following is a summary of the Equity Incentive Plan's features.
ADMINISTRATION AND ELIGIBILITY
The 1996 Equity Incentive Plan provides for the grant of stock options
(incentive and nonstatutory), stock appreciation rights, restricted stock and
unrestricted stock for the purchase of shares of Class A common stock. Awards
under the 1996 Equity Incentive Plan can be granted to employees, consultants
and, subject to stockholder approval, directors of the Company as well as
employees, directors and consultants of its eligible subsidiaries who are
capable of contributing significantly to the successful performance of the
Company. The Compensation Committee administers the 1996 Equity Incentive Plan
and selects the participants and establishes the terms and conditions of each
option or other equity right granted under the 1996 Equity Incentive Plan
including the exercise price, the number of shares subject to options or other
equity rights and the time(s) at which such options become exercisable. Subject
to certain limitations the Compensation Committee may delegate to one or more
executive officers of the Company the power to make awards to participants who
are not subject to Section 16 of the Securities Exchange Act of 1934 or "covered
employees" for purposes of Section 162(m) of the Internal Revenue Code. The
Compensation Committee has authorized the Chief Financial Officer to grant
options to purchase shares of Class A common stock to each such participant.
The exercise price of all "incentive stock options" ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code granted under the 1996
Equity Incentive Plan must be at least equal to 100% of the fair market value of
the option shares on the date of grant. The term of any ISO granted under the
1996 Equity Incentive Plan may not exceed ten years.
As of March 30, 2001, approximately 2,700 employees of the Company and its
affiliates were eligible to participate in the 1996 Equity Incentive Plan. The
closing price of the Company's Class A common stock as reported on the Nasdaq
National Market on March 30, 2001 was $36.75.
12
1996 EQUITY INCENTIVE PLAN ACTIVITY
As of March 30, 2001, options to purchase an aggregate of 4,798,000 shares
of Class A common stock had been granted under the 1996 Equity Incentive Plan,
of which options to purchase 279,008 shares had been cancelled and options to
purchase 1,670,995 shares had been exercised. As of such date, 481,008 shares
remained available for the of awards under the 1996 Equity Incentive Plan. No
stock appreciation rights or awards other than option grants have been granted
under the 1996 Equity Incentive Plan to date.
FEDERAL INCOME TAX CONSEQUENCES RELATING TO STOCK OPTIONS
Incentive Stock Options. An optionee does not realize taxable income upon
the grant or exercise of an ISO under the 1996 Equity Incentive Plan. If no
disposition of shares issued to an optionee pursuant to the exercise of an ISO
is made by the optionee within two years from the date of grant or within one
year from the date of exercise, then (a) upon sale of such shares, any amount
realized in excess of the option price (the amount paid for the shares) is taxed
to the optionee as a capital gain and any loss sustained will be a capital loss
and (b) no deduction is allowed to the Company for Federal income tax purposes.
The exercise of ISOs gives rise to an adjustment in computing alternative
minimum taxable income that may result in alternative minimum tax liability for
the optionee.
If shares of common stock acquired upon the exercise of an ISO are disposed
of prior to the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition") then (a) the optionee realizes
ordinary income in the year of disposition in an amount equal to the excess (if
any) of the fair market value of the shares at exercise (or, if less, the amount
realized on a sale of such shares) over the option price thereof and (b) the
Company is entitled to deduct such amount. Any further gain realized is taxed
as a capital gain and does not result in any deduction to the Company. A
disqualifying disposition in the year of exercise will generally avoid the
alternative minimum tax consequences of the exercise of an ISO.
Nonstatutory Stock Options. No income is realized by the optionee at the
time a nonstatutory option is granted. Upon exercise, (a) ordinary income is
realized by the optionee in an amount equal to the difference between the option
price and the fair market value of the shares on the date of exercise and (b)
the Company receives a tax deduction for the same amount. Upon disposition of
the shares, appreciation or depreciation after the date of exercise is treated
as a capital gain or loss and will not result in any deduction by the Company.
VOTES REQUIRED
The affirmative vote of a majority of the total votes properly cast on this
proposal will constitute the approval of the proposed amendment to the 1996
Equity Incentive Plan. Abstentions and broker non-votes will not be treated as
votes cast for the purpose of determining the outcome of the vote on this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
---
ITEM 3 PROPOSAL TO APPROVE AN AMENDMENT TO 1996 EQUITY INCENTIVE PLAN
REGARDING MAXIMUM ANNUAL GRANTS
In August 2000, the Board of Directors voted, subject to stockholder
approval, to amend the 1996 Equity Incentive Plan to limit the maximum number of
shares of common stock that may be granted as restricted or unrestricted stock
awards to any participant in any calendar year to 300,000. If this limit is
approved by the stockholders, then awards under this provision made to the
Company's chief executive
13
officer and its other four most highly paid officers will not be subject to the
limits on the Company's ability to deduct compensation paid to these persons
under Section 162(m) of the Internal Revenue Code of 1986, as amended. The Board
of Directors believes that it is advisable to give the stockholders an
opportunity to approve this amendment so that the Company maximizes its ability
to deduct executive compensation. If the stockholders are opposed to the
proposal, the Board of Directors will reconsider the amendment. The Company
believes that the amendment is advisable and sets an appropriate cap on annual
grants to individual participants, while providing the Company with increased
flexibility in executive compensation. Please refer to the "Compensation
Committee Report on Executive Compensation - Deductible Limit for Executive
Compensation" above for a further description of the Section 162(m) deduction
limit for executive compensation. A detailed description of the 1996 Equity
Incentive Plan is set forth in Item 2 above.
VOTES REQUIRED
The affirmative vote of a majority of the total votes properly cast on this
proposal will constitute the approval of the proposed amendment to the 1996
Equity Incentive Plan. Abstentions and broker non-votes will not be treated as
votes cast for the purpose of determining the outcome of the vote on this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
---
ITEM 4 PROPOSAL TO APPROVE AN AMENDMENT TO THE 1996 EQUITY INCENTIVE PLAN
REGARDING PERFORMANCE GOALS
In August 2000, the Board of Directors voted, subject to stockholder
approval, to amend the 1996 Equity Incentive Plan to allow the Compensation
Committee of the Board of Directors to establish performance goals for the
granting of restricted stock or unrestricted stock awards. Such performance
goals may be based on earnings per share, revenues, sales or expense targets of
the Company or any subsidiary, or stock price. If these performance goals are
approved by the stockholders, then performance-based awards made to the
Company's chief executive officer and its other four most highly paid officers
will not be subject to the limits on the Company's ability to deduct
compensation paid to these persons under Section 162(m) of the Internal Revenue
Code of 1986, as amended. The Board of Directors believes that it is advisable
to give the stockholders an opportunity to approve this amendment so that the
Company maximizes its ability to deduct executive compensation. If the
stockholders are opposed to the proposal, the Board of Directors will reconsider
the amendment. The Company believes that the amendment is advisable and
provides the Company with increased flexibility in executive compensation.
Please refer to the "Compensation Committee Report on Executive Compensation -
Deductible Limit for Executive Compensation" above for a further description of
the Section 162(m) deduction limit for executive compensation. A detailed
description of the 1996 Equity Incentive Plan is set forth in Item 2 above.
VOTES REQUIRED
The affirmative vote of a majority of the total votes properly cast on this
proposal will constitute the approval of the proposed amendment to the 1996
Equity Incentive Plan. Abstentions and broker non-votes will not be treated as
votes cast for the purpose of determining the outcome of the vote on this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
---
14
Other Matters
The Board of Directors does not know of any business to come before the
meeting other than the matters described in the notice. If other business is
properly presented for consideration at the meeting, the enclosed proxy
authorizes the persons named therein to vote the shares in their discretion.
DEADLINE FOR STOCKHOLDER PROPOSALS
In order for a stockholder proposal to be considered for inclusion in the
Company's proxy materials for the 2002 Annual Meeting of Stockholders, it must
be received by the Company at 5551 Corporate Boulevard, Baton Rouge, Louisiana
70808, Attention: Secretary, no later than December 26, 2001.
In addition, the Company's Bylaws require a stockholder who wishes to bring
business before or propose director nominations at an annual meeting to give
advance written notice to the Secretary of the Company as described in the
Bylaws. To be timely for the 2002 Annual Meeting, proposals must be received by
not later than the close of business on March 9, 2002.
INFORMATION CONCERNING AUDITORS
The firm of KPMG LLP, independent accountants, audited the Company's
financial statements for the year ended December 31, 2000. The Board of
Directors has appointed KPMG LLP to serve as the Company's independent auditors
for its fiscal year ending December 31, 2001. Representatives of KPMG LLP are
expected to attend the annual meeting to respond to appropriate questions, and
will have the opportunity to make a statement if they desire.
The fees for services provided by KPMG LLP to the Company in 2000 were as
follows:
Audit Fees $309,500
All Other Fees $703,900
EXPENSES OF SOLICITATION
The Company will bear the cost of the solicitation of proxies, including
the charges and expenses of brokerage firms and others of forwarding
solicitation material to beneficial owners of common stock. In addition to the
use of mails, proxies may be solicited by officers and any regular employees of
the Company in person or by telephone. The Company expects that the costs
incurred in the solicitation of proxies will be nominal.
April 24, 2001
15
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
This Charter was adopted at a meeting of the Board of Directors held on May 25,
2000. All of the provisions of this Charter became effective upon adoption,
provided that the provisions of Article II relating to the independence and
qualifications of the members of the Audit Committee shall be satisfied by no
later than June 14, 2001.
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary responsibilities, with respect to the Company's financial reporting
process, are to:
. Monitor the integrity of the Company's financial reporting process
and systems of internal controls regarding finance and accounting
compliance.
. Monitor the independence and performance of the Company's independent
auditors.
. Provide an avenue of communication among the independent auditors,
management and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to
the independent auditors as well as anyone in the organization. The Audit
Committee has the ability to retain, at the Company's expense, special
legal, accounting, or other consultants or experts it deems necessary in
the performance of its duties.
The Audit Committee's role is one of oversight, and it is recognized that
the Company's management is responsible for preparing the Company's
financial statements and that the independent auditor is responsible for
auditing those financial statements.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
Audit Committee members shall meet the requirements of The Nasdaq Stock
Market, Inc. The Audit Committee shall be comprised of three or more
directors as determined by the Board of Directors, each of whom shall,
except as permitted by the Nasdaq rules, be independent non-executive
directors, free form any relationship that would interfere with the
exercise of his or her independent judgment. All members of the Audit
Committee shall have a basic understanding of finance and accounting and be
able to read and understand fundamental financial statements, and at least
one member of the Audit Committee shall have accounting or related
financial management expertise.
Audit Committee members shall be appointed by the Board of Directors. If
an Audit Committee Chair is not designated or present, the members of the
Audit Committee may designate a Chair by majority vote of the Audit
Committee membership.
The Audit Committee shall meet at least three times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall
prepare and/or approve an agenda in advance of each meeting. the Audit
Committee shall meet privately in executive session as least annually with
management, the independent auditors, and as a committee to discuss any
matters
A-1
that the Audit Committee or each of these groups believe should be
discussed. In addition, the Audit Committee, or at least its Chair, should
communicate with management and the independent auditors quarterly, to the
extent necessary, to review the Company's financial statements and
significant findings based upon the auditors limited review procedures.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published in the Company's annual proxy statement, at least
every three years in accordance with regulations of the Securities and
Exchange Commission.
2. Review the Company's annual audited financial statements prior to
filing or distribution. Review should include discussion with
management and independent auditors of significant issues regarding
accounting principles, practices, and judgments. Discuss any
significant changes to the Company's accounting principles and any
items required to be communicated by the independent auditors in
accordance with SAS 61 (see item 8).
3. In consultation with the management, the independent auditors, and the
internal auditors, consider the integrity of the Company's financial
reporting processes and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control and
report such exposures. Review significant findings prepared by the
independent auditors and the internal auditing department together
with management's responses.
Independent Auditors
4. The independent auditors are ultimately accountable to the Audit
Committee and the board of Directors. The Audit Committee shall
review the independence and performance of the auditors and annually
recommend to the Board of Directors the appropriate action regarding
the independence of the auditors, the appointment of the independent
auditors or approve any discharge of auditors when circumstances
warrant.
5. Approve the fees and other significant compensation to be paid to the
independent auditors.
6. On an annual basis, the Audit Committee should review and discuss with
the Independent auditors all significant relationships that the
auditors have with the Company that could impair the auditor's
independence.
7. Review the independent auditor's audit plan - discuss scope, staffing,
locations, reliance upon management, and general audit approach.
8. Prior to the filing of the Annual Report on Form 10-K, discuss the
results of the audit with the independent auditors. Discuss certain
matters required to be communicated to the Audit Committee in
accordance with AICPA SAS 61.
9. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
A-2
Legal Compliance
10. On at least an annual basis, review with the Company's internal
counsel or outside counsel, any material legal compliance issues,
including any legal matters that could have a significant impact on
the organization's financial statements, the Company's compliance with
applicable laws and regulation, and inquiries received from regulators
or governmental agencies.
Other Audit Committee Responsibilities
11. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission regulations. The report should be
included in the Company's annual proxy statement.
12. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Audit Committee or the
Board of Directors deems necessary or appropriate.
13. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
Other Optional Charter Disclosures
14. Annually review a summary of director and officers' related party
transactions and potential conflicts of interest.
A-3
APPENDIX B
LAMAR ADVERTISING COMPANY
1996 EQUITY INCENTIVE PLAN
(as amended through August 2000)
1. PURPOSE
The purpose of the Lamar Advertising Company 1996 Equity Incentive Plan (the
"Plan") is to attract and retain directors, key employees and consultants of the
Company and its Affiliates, to provide an incentive for them to achieve long-
range performance goals, and to enable them to participate in the long-term
growth of the Company by granting Awards with respect to the Company's Class A
Common Stock (the "Common Stock"). Certain capitalized terms used herein are
defined in Section 9 below.
2. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall select
the Participants to receive Awards and shall determine the terms and conditions
of the Awards. The Committee shall have authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the operation of
the Plan as it shall from time to time consider advisable, and to interpret the
provisions of the Plan. The Committee's decisions shall be final and binding.
To the extent permitted by applicable law, the Committee may delegate to one or
more executive officers of the Company the power to make Awards to Participants
who are not Reporting Persons or Covered Employees and all determinations under
the Plan with respect thereto, provided that the Committee shall fix the maximum
amount of such Awards for all such Participants and a maximum for any one
Participant.
3. ELIGIBILITY
All directors, employees and consultants of the Company or any Affiliate
capable of contributing significantly to the successful performance of the
Company, other than a person who has irrevocably elected not to be eligible, are
eligible to be Participants in the Plan. Incentive Stock Options may be granted
only to persons eligible to receive such Options under the Code.
4. STOCK AVAILABLE FOR AWARDS
(a) AMOUNT. Subject to adjustment under subsection (b), Awards may be made
under the Plan for up to 5,000,000 shares of Common Stock. If any Award expires
or is terminated unexercised or is forfeited or settled in a manner that results
in fewer shares outstanding than were awarded, the shares subject to such Award,
to the extent of such expiration, termination, forfeiture or decrease, shall
again be available for award under the Plan. Common Stock issued through the
assumption or substitution of outstanding grants from an acquired company shall
not reduce the shares available for Awards under the Plan. Shares issued under
the Plan may consist in whole or in part of authorized but unissued shares or
treasury shares.
(b) ADJUSTMENT. In the event that the Committee determines that any stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares or other
transaction affects the Common Stock such that an adjustment is required in
order to preserve the benefits intended to be provided by the Plan, then the
Committee (subject in the case of Incentive Stock Options to any limitation
required under the Code) shall equitably adjust any or all of (i) the number and
kind of shares in respect of which Awards may be made under the
B-1
Plan, (ii) the number and kind of shares subject to outstanding Awards and (iii)
the exercise price with respect to any of the foregoing, and if considered
appropriate, the Committee may make provision for a cash payment with respect to
an outstanding Award, provided that the number of shares subject to any Award
shall always be a whole number.
(c) LIMIT ON INDIVIDUAL GRANTS. The maximum number of shares of Common Stock
subject to Options and Stock Appreciation Rights that may be granted to any
Participant in the aggregate in any calendar year shall not exceed 300,000
shares and the maximum number of shares of Common Stock that may be granted as
Restricted Stock or Unrestricted Stock Awards, with respect to which performance
goals apply under Section 7 below, to any Participant in the aggregate in any
calendar year shall not exceed 300,000, subject to adjustment under subsection
(b).
5. STOCK OPTIONS
(a) GRANT OF OPTIONS. Subject to the provisions of the Plan, the Committee
may grant options ("Options") to purchase shares of Common Stock (i) complying
with the requirements of Section 422 of the Code or any successor provision and
any regulations thereunder ("Incentive Stock Options") and (ii) not intended to
comply with such requirements ("Nonstatutory Stock Options"). The Committee
shall determine the number of shares subject to each Option and the exercise
price therefor, which shall not be less than 100% of the Fair Market Value of
the Common Stock on the date of grant with respect to Incentive Stock Options.
Nonstatutory Stock Options may be granted at such prices as the Committee may
determine. No Incentive Stock Options may be granted hereunder more than ten
years after the effective date of the Plan.
(b) TERMS AND CONDITIONS. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may specify in the
applicable grant or thereafter. The Committee may impose such conditions with
respect to the exercise of Options, including conditions relating to applicable
federal or state securities laws, as it considers necessary or advisable.
(c) PAYMENT. No shares shall be delivered pursuant to any exercise of an
Option until payment in full of the exercise price therefor is received by the
Company. Such payment may be made in whole or in part in cash or, to the extent
permitted by the Committee at or after the grant of the Option, by delivery of a
note or other commitment satisfactory to the Committee or shares of Common Stock
owned by the optionee, including Restricted Stock, or by retaining shares
otherwise issuable pursuant to the Option, in each case valued at their Fair
Market Value on the date of delivery or retention, or such other lawful
consideration as the Committee may determine.
6. STOCK APPRECIATION RIGHTS
(a) GRANT OF SARS. Subject to the provisions of the Plan, the Committee may
grant rights to receive any excess in value of shares of Common Stock over the
exercise price ("Stock Appreciation Rights" or "SARs") in tandem with an Option
(at or after the award of the Option), or alone and unrelated to an Option.
SARs in tandem with an Option shall terminate to the extent that the related
Option is exercised, and the related Option shall terminate to the extent that
the tandem SARs are exercised. The Committee shall determine at the time of
grant or thereafter whether SARs are settled in cash, Common Stock or other
securities of the Company, Awards or other property, and may define the manner
of determining the excess in value of the shares of Common Stock.
(b) EXERCISE PRICE. The Committee shall fix the exercise price of each SAR or
specify the manner in which the price shall be determined. An SAR granted in
tandem with an Option shall have an exercise price not less than the exercise
price of the related Option. SARs granted alone and unrelated to an Option may
be granted at such exercise prices as the Committee may determine.
B-2
7. STOCK AWARDS
(a) GRANT OF RESTRICTED OR UNRESTRICTED STOCK. Subject to the provisions of
the Plan, the Committee may grant shares of Common Stock subject to forfeiture
("Restricted Stock") and determine the duration of the period (the "Restricted
Period") during which, and the conditions under which, the shares may be
forfeited to the Company and the other terms and conditions of such Awards.
Shares of Restricted Stock may be issued for no cash consideration, such minimum
consideration as may be required by applicable law or such other consideration
as the Committee may determine. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as permitted by
the Committee, during the Restricted Period. Shares of Restricted Stock shall
be evidenced in such manner as the Committee may determine. Any certificates
issued in respect of shares of Restricted Stock shall be registered in the name
of the Participant and unless otherwise determined by the Committee, deposited
by the Participant, together with a stock power endorsed in blank, with the
Company. At the expiration of the Restricted Period, the Company shall deliver
such certificates to the Participant or if the Participant has died, to the
Participant's Designated Beneficiary. The Committee also may make Awards of
shares of Common Stock that are not subject to restrictions or forfeiture, on
such terms and conditions as the Committee may determine from time to time
("Unrestricted Stock").
(b) PERFORMANCE GOALS. The Committee may establish performance goals for the
granting of Restricted Stock or Unrestricted Stock Awards or the lapse of risk
of forfeiture of Restricted Stock. Such performance goals may be based on
earnings per share, revenues, sales or expense targets of the Company or any
subsidiary or division thereof, stock price, or such other business criteria as
the Committee may determine. The achievement of the performance goals shall be
determined by the Committee. Shares of Restricted Stock or Unrestricted Stock
may be issued for no cash consideration, such minimum consideration as may be
required by applicable law or such other consideration as the Committee may
determine.
8. GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) DOCUMENTATION. Each Award under the Plan shall be evidenced by a writing
delivered to the Participant or agreement executed by the Participant specifying
the terms and conditions thereof and containing such other terms and conditions
not inconsistent with the provisions of the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or to comply with
applicable tax and regulatory laws and accounting principles.
(b) COMMITTEE DISCRETION. Each type of Award may be made alone, in addition
to or in relation to any other Award. The terms of each type of Award need not
be identical, and the Committee need not treat Participants uniformly. Except
as otherwise provided by the Plan or a particular Award, any determination with
respect to an Award may be made by the Committee at the time of grant or at any
time thereafter.
(c) DIVIDENDS AND CASH AWARDS. In the discretion of the Committee, any Award
under the Plan may provide the Participant with (i) dividends or dividend
equivalents payable (in cash or in the form of Awards under the Plan) currently
or deferred with or without interest and (ii) cash payments in lieu of or in
addition to an Award.
(d) TERMINATION OF EMPLOYMENT. The Committee shall determine the effect on an
Award of the disability, death, retirement or other termination of employment of
a Participant and the extent to which, and the period during which, the
Participant's legal representative, guardian or Designated Beneficiary may
receive payment of an Award or exercise rights thereunder.
(e) CHANGE IN CONTROL. In order to preserve a Participant's rights under an
Award in the event of a change in control of the Company (as defined by the
Committee), the Committee in its
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discretion may, at the time an Award is made or at any time thereafter, take one
or more of the following actions: (i) provide for the acceleration of any time
period relating to the exercise or payment of the Award, (ii) provide for
payment to the Participant of cash or other property with a Fair Market Value
equal to the amount that would have been received upon the exercise or payment
of the Award had the Award been exercised or paid upon the change in control,
(iii) adjust the terms of the Award in a manner determined by the Committee to
reflect the change in control, (iv) cause the Award to be assumed, or new rights
substituted therefor, by another entity, or (v) make such other provision as the
Committee may consider equitable to Participants and in the best interests of
the Company.
(f) TRANSFERABILITY. In the discretion of the Committee, any Award may be
made transferable upon such terms and conditions and to such extent as the
Committee determines, provided that Incentive Stock Options may be transferable
only to the extent permitted by the Code. The Committee may in its discretion
waive any restriction on transferability.
(g) LOANS. The Committee may authorize the making of loans or cash payments
to Participants in connection with the grant or exercise any Award under the
Plan, which loans may be secured by any security, including Common Stock,
underlying or related to such Award (provided that the loan shall not exceed the
Fair Market Value of the security subject to such Award), and which may be
forgiven upon such terms and conditions as the Committee may establish at the
time of such loan or at any time thereafter.
(h) WITHHOLDING TAXES. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Participant hereunder or otherwise. In the
Committee's discretion, the minimum tax obligations required by law to be
withheld in respect of Awards may be paid in whole or in part in shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their Fair Market Value on the date of delivery.
(i) FOREIGN NATIONALS. Awards may be made to Participants who are foreign
nationals or employed outside the United States on such terms and conditions
different from those specified in the Plan as the Committee considers necessary
or advisable to achieve the purposes of the Plan or to comply with applicable
laws.
(j) AMENDMENT OF AWARD. The Committee may amend, modify or terminate any
outstanding Award, including substituting therefor another Award of the same or
a different type, changing the date of exercise or realization and converting an
Incentive Stock Option to a Nonstatutory Stock Option. Any such action shall
require the Participant's consent unless:
(i) In the case of a termination of, or a reduction in the number
of shares issuable under, an Option, any time period relating to the
exercise of such Option or the eliminated portion, as the case may be, is
waived or accelerated before such termination or reduction (and in such
case the Committee may provide for the Participant to receive cash or other
property equal to the net value that would have been received upon exercise
of the terminated Option or the eliminated portion, as the case may be); or
(ii) In any other case, the Committee determines that the action,
taking into account any related action, would not materially and adversely
affect the Participant.
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9. CERTAIN DEFINITIONS
"Affiliate" means any business entity in which the Company owns directly or
indirectly 50% or more of the total voting power or has a significant financial
interest as determined by the Committee.
"Award" means any Option, Stock Appreciation Right, Restricted Stock or
Unrestricted Stock granted under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor law.
"Committee" means one or more committees each comprised of not less than
two members of the Board appointed by the Board to administer the Plan or a
specified portion thereof. Unless otherwise determined by the Board, if a
Committee is authorized to grant Awards to a Reporting Person or a Covered
Employee, each member shall be a "non-employee director" or the equivalent
within the meaning of applicable Rule 16b-3 under the Exchange Act or an
"outside director" within the meaning of Section 162(m) of the Code,
respectively.
"Common Stock" or "Stock" means the Class A Common Stock, $0.001 par value,
of the Company.
"Company" means Lamar Advertising Company, a Delaware corporation.
"Covered Employee" means a "covered employee" within the meaning of Section
162(m) of the Code.
"Designated Beneficiary" means the beneficiary designated by a Participant,
in a manner determined by the Committee, to receive amounts due or exercise
rights of the Participant in the event of the Participant's death. In the
absence of an effective designation by a Participant, "Designated Beneficiary"
means the Participant's estate.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor law.
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the Committee
in good faith or in the manner established by the Committee from time to time.
"Participant" means a person selected by the Committee to receive an Award
under the Plan.
"Reporting Person" means a person subject to Section 16 of the Exchange
Act.
10. MISCELLANEOUS
(a) NO RIGHT TO EMPLOYMENT. No person shall have any claim or right to be
granted an Award. Neither the adoption, maintenance, nor operation of the Plan
nor any Award hereunder shall confer upon any employee or consultant of the
Company or of any Affiliate any right with respect to the continuance of his/her
employment by or other service with the Company or any such Affiliate nor shall
they interfere with the rights of the Company (or Affiliate) to terminate any
employee at any time or otherwise change the terms of employment, including,
without limitation, the right to promote, demote or otherwise re-assign any
employee from one position to another within the Company or any Affiliate.
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(b) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed under
the Plan until he or she becomes the holder thereof. A Participant to whom
Restricted Stock or Unrestricted Stock is awarded shall be considered a
stockholder of the Company at the time of the Award except as otherwise provided
in the applicable Award.
(c) EFFECTIVE DATE. Subject to the approval of the stockholders of the
Company, the Plan shall be effective on July 24, 1996.
(d) AMENDMENT OF PLAN. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, subject to such stockholder approval as the
Board determines to be necessary or advisable.
(e) GOVERNING LAW. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of Delaware.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 24, 2001
LAMAR ADVERTISING COMPANY
The undersigned stockholder of Lamar Advertising Company (the "Company")
hereby appoints Kevin P. Reilly, Jr. and Keith A. Istre and each of them acting
singly, the attorneys and proxies of the undersigned, with full power of
substitution, to vote on behalf of the undersigned all of the shares of capital
stock of the Company that the undersigned is entitled to vote at the Annual
Meeting of Stockholders of the Company to be held May 24, 2001, and at all
adjournments thereof, hereby revoking any proxy heretofore given with respect
to such shares.
This proxy when properly executed will be voted in the manner directed by the
undersigned stockholder(s). If no specifications are made, this proxy will be
voted for the proposals.
PLEASE SIGN AND MAIL PROXY TODAY
Mark Here For Address Change and Note on Reverse [_]
(Continued and to be signed on reverse side.)
[X] Please mark your votes as this example.
FOR WITHHELD
All For all
nominees nominees
1.Proposal to elect directors [_] [_]
FOR, except withheld from the following nominee(s):
-----------------------------------------------------------
Nominees: Kevin P. Reilly, Jr., Keith A. Istre, Charles W. Lamar, III, Gerald
H. Marchand, T. Everett Stewart, Jr., Sean E. Reilly,
Anna Reilly Cullinan, Stephen P. Mumblow, John Maxwell Hamilton, Thomas
Reifenheiser
2. Proposal to amend the 1996 Equity Incentive Plan to include Directors as
eligible participants
FOR [_] AGAINST [_] [_]ABSTAIN
3. Proposal to amend the 1996 Equity Incentive Plan regarding maximum annual
grants
FOR [_] AGAINST [_] [_]ABSTAIN
4. Proposal to amend the 1996 Equity Incentive Plan regarding performance goals
FOR [_] AGAINST [_] [_]ABSTAIN
Signature: ___________________________________________________ Date:__________
Signature: ___________________________________________________ Date:__________
NOTE: Please sign exactly as name appears on stock certificate. When shares are
held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title as
such. If a corporation, please sign in full corporate name by President
or other authorized officer. If a partnership, please sign in partnership
name by authorized person.