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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 (S) 240.14a-11(c) or (S) 240.14a-12
Cox Radio, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[Cox Radio Logo]
To the Stockholders of Cox Radio, Inc.
You are invited to attend the Annual Meeting of Stockholders of Cox
Radio, Inc. to be held at Corporate Headquarters, 1400 Lake Hearn
Drive, Atlanta, Georgia 30319, on Wednesday, May 23, 2001, at 9:30
a.m., local time.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement explain the matters to be voted on at the meeting.
Please read the enclosed Notice of Annual Meeting and Proxy
Statement so you will be informed about the business to come before
the meeting. Your vote is important, regardless of the number of
shares you own. On behalf of the Board of Directors, I urge you to
mark, sign and return the enclosed proxy card or take advantage of
our telephone or Internet voting systems as soon as possible, even if
you plan to attend the Annual Meeting. You may, of course, revoke
your proxy by notice in writing to the Corporate Secretary or by
using the telephone or Internet voting procedures at any time before
the proxy is voted.
Sincerely,
/s/ Robert F. Neil
Robert F. Neil
President and Chief Executive Officer
Atlanta, Georgia
March 30, 2001
COX RADIO, INC.
1400 LAKE HEARN DRIVE
ATLANTA, GEORGIA 30319
(404) 843-5000
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2001
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To the Stockholders of Cox Radio, Inc.
The Annual Meeting of the holders of Class A Common Stock and Class B Common
Stock of Cox Radio, Inc. ("Cox Radio") will be held at Corporate Headquarters,
1400 Lake Hearn Drive, Atlanta, Georgia 30319 on Wednesday, May 23, 2001, at
9:30 a.m., local time, for the following purposes:
1. to elect a Board of Directors of eight members to serve until the 2002
Annual Meeting of Stockholders or until their successors are duly
elected and qualified;
2. to adopt the Amended and Restated Long-Term Incentive Plan; and
3. to ratify the appointment by the Board of Directors of Deloitte &
Touche LLP, independent certified public accountants, as Cox Radio's
independent auditors for the year ending December 31, 2001.
The Board of Directors has fixed March 26, 2001 as the record date for the
Annual Meeting with respect to this solicitation. Only holders of record of
Class A Common Stock and Class B Common Stock at the close of business on that
date are entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof as set forth in the Proxy Statement.
Cox Radio's Annual Report to stockholders for the year ended December 31,
2000 is enclosed.
By Order of the Board of Directors,
/s/ Andrew A. Merdek
Andrew A. Merdek
Corporate Secretary
Atlanta, Georgia
March 30, 2001
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE OR USE
OUR TELEPHONE OR INTERNET VOTING SYSTEMS AS PROMPTLY AS POSSIBLE. AS SPECIFIED
IN THE ENCLOSED PROXY STATEMENT, A STOCKHOLDER MAY REVOKE A PROXY AT ANY TIME
PRIOR TO ITS USE.
COX RADIO, INC.
1400 LAKE HEARN DRIVE
ATLANTA, GEORGIA 30319
(404) 843-5000
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PROXY STATEMENT
2001 Annual Meeting of Stockholders
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Solicitation of Proxies
The Board of Directors of Cox Radio, Inc. is furnishing this Proxy Statement
to solicit proxies for use at Cox Radio's 2001 Annual Meeting of Stockholders,
to be held on May 23, 2001, at 9:30 a.m., local time, at Corporate
Headquarters, 1400 Lake Hearn Drive, Atlanta, Georgia 30319, and at any
adjournment of the meeting. Each valid proxy received in time will be voted at
the meeting according to the choice specified, if any. A proxy may be revoked
at any time before the proxy is voted as outlined below.
This Proxy Statement and the enclosed proxy card are being first sent for
delivery to stockholders of Cox Radio on or about April 2, 2001. Cox Radio
will pay the cost of solicitation of proxies, including the reimbursement to
banks and brokers for the reasonable expenses of sending proxy materials to
their principals.
The shares of Class A Common Stock and Class B Common Stock represented by
valid proxies that we receive in time for the Annual Meeting will be voted as
specified in such proxies. Valid proxies include all properly executed,
written proxy cards and all properly completed proxies voted by telephone or
the Internet pursuant to this solicitation and not later revoked. Voting your
proxy by mail, telephone or the Internet will not limit your right to vote at
the Annual Meeting if you later decide to attend in person. Executed but
unvoted proxies will be voted:
(1) FOR the election of the Board of Directors' nominees for directors;
(2) FOR the adoption of the Amended and Restated Long-Term Incentive
Plan; and
(3) FOR the ratification of the appointment of Deloitte & Touche LLP,
independent certified public accountants, as Cox Radio's
independent auditors for the year ending December 31, 2001.
If any other matters properly come before the Annual Meeting, the persons
named on the proxies will, unless the stockholder otherwise specifies in the
proxy, vote upon such matters in accordance with their best judgment.
In determining whether a proposal is approved, an abstention would have the
effect of a vote against the applicable proposal. On the other hand, broker
non-votes are not considered shares entitled to vote on the applicable
proposal and are not included in determining whether such proposal is
approved. A broker non-vote occurs when the nominee of a beneficial owner with
the power to vote on at least one matter does not vote on another matter
because the nominee does not have the discretionary voting power and has not
received instructions from the beneficial owner with respect to such matter.
Accordingly, broker non-votes have no effect on the outcome of a vote on the
applicable proposal.
Voting Securities
Cox Radio has two classes of outstanding voting securities, Class A Common
Stock, par value $0.33 per share, and Class B Common Stock, par value $0.33
per share. As of February 28, 2001, there were 40,767,282 shares of Class A
Common Stock and 58,733,016 shares of Class B Common Stock outstanding. Only
stockholders of record of Class A Common Stock or Class B Common Stock at the
close of business on March 26, 2001, which the Board of Directors has fixed as
the record date, are entitled to vote at the meeting.
The Class A Common Stock and Class B Common Stock will vote together as a
single class, with each share of Class A Common Stock being entitled to one
vote, and each share of Class B Common Stock being entitled to ten votes. The
presence in person or by proxy of holders of record of one-third of the issued
and outstanding shares of Class A Common Stock and Class B Common Stock
entitled to vote at the Annual Meeting, which represent a majority of the
votes entitled to be cast by such shares, will constitute a quorum. The
affirmative vote of a majority of the votes entitled to be cast by such shares
of the issued and outstanding Class A Common Stock and Class B Common Stock,
voting together as a single class, present at the Annual Meeting in person or
by proxy, and entitled to vote, is required for the election of directors,
adoption of the Amended and Restated Long-Term Incentive Plan, and the
ratification of appointment of independent auditors.
Voting by Proxy
If a stockholder is a corporation or a partnership, a duly authorized person
must sign the accompanying proxy card in the full corporate or partnership
name. If the proxy card is signed pursuant to a power of attorney or by an
executor, administrator, trustee or guardian, the signer's full title must be
given and a certificate or other evidence of appointment must be furnished. If
shares are owned jointly, each joint owner must sign the proxy card.
Instructions for a stockholder of record to vote by telephone or the
Internet are set forth on the enclosed proxy card. The telephone and Internet
voting procedures are designed to authenticate votes cast by use of a personal
identification number. If you vote by telephone or the Internet, you do not
have to mail in your proxy card. The procedures, which comply with Delaware
law, allow stockholders to appoint a proxy to vote their shares and to confirm
that their instructions have been properly recorded.
Any proxy duly given pursuant to this solicitation may be revoked by the
stockholder at any time prior to the voting of the proxy by written notice to
the Corporate Secretary of Cox Radio, by a later-dated proxy either signed and
returned by mail or by using the telephone or Internet voting procedures
before the Annual Meeting, or by attending the Annual Meeting and voting in
person. Attendance at the Annual Meeting will not in and of itself constitute
a revocation of a proxy.
As of February 28, 2001, Cox Enterprises, Inc., a Delaware corporation,
through its wholly-owned subsidiary, Cox Broadcasting, Inc., a Delaware
corporation, held approximately 94% of the combined voting power of the Class
A Common Stock and Class B Common Stock and 100% of the issued and outstanding
shares of Class B Common Stock. Accordingly, Cox Enterprises will have
sufficient voting power to elect all members of the Board of Directors, to
approve the adoption of the Amended and Restated Long-Term Incentive Plan, to
ratify the appointment of independent auditors, and to control substantially
all other actions that may come before the Annual Meeting.
ELECTION OF DIRECTORS
(Proposal No. 1)
At the Annual Meeting, eight directors are to be elected to hold office
until the 2002 Annual Meeting of Stockholders or until their respective
successors have been elected and qualified. All nominees currently are
directors of Cox Radio.
2
The eight directors nominated for election at the 2001 Annual Meeting of
Stockholders are: David E. Easterly (Chairman); Ernest D. Fears, Jr.; Richard
A. Ferguson; Paul M. Hughes; James C. Kennedy; Marc W. Morgan; Robert F. Neil;
and Nicholas D. Trigony. The persons named as proxies intend (unless authority
is withheld) to vote for election of all of the nominees as directors.
The Board of Directors knows of no reason why any nominee for director would
be unable to serve as director. If at the time of the Annual Meeting any of
the nominees is unable or unwilling to serve as a director of Cox Radio, the
persons named in the proxy intend to vote for such substitutes as may be
nominated by the Board of Directors.
The affirmative vote of the holders of a majority of the voting power of Cox
Radio's Class A Common Stock and Class B Common Stock, voting together as a
single class, present or represented by proxy and entitled to vote at the
Annual Meeting, is required to elect each of the nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES.
The following information regarding the nominees, their principal
occupations, employment history, and directorships in certain companies is as
reported by the respective nominees.
David E. Easterly, 58, has served as a director of Cox Radio since July
1996, and became Chairman of the Board of Directors in January 2001. Mr.
Easterly has served as Vice Chairman of Cox Enterprises since January 2001.
Previously, he served as President and Chief Operating Officer of Cox
Enterprises beginning October 1994, and was President of Cox Newspapers, Inc.,
a subsidiary of Cox Enterprises, from May 1986 through October 1994. Mr.
Easterly joined Cox Enterprises in 1970 at the Dayton Daily News, transferring
to Atlanta in 1981 as Vice President of Operations for Cox Newspapers. He was
named Publisher of The Atlanta Journal/Constitution in April 1984. Mr.
Easterly is a member of the Board of Directors of the Associated Press, and
Mutual Insurance Company, Ltd. Mr. Easterly also serves as a director of Cox
Enterprises and Cox Communications, Inc., a majority-owned subsidiary of Cox
Enterprises.
Ernest D. Fears, Jr., 68, has served as a director of Cox Radio since
December 1996. He has been a lecturer at Howard University since 1990 and was
a consultant to the National Institutes of Health from February to August of
1996. From June 1992 to August 1992, he was General Manager for radio station
XFRM-FM in San Diego, California/Tijuana, Mexico. Mr. Fears retired in 1987 as
General Manager of American Broadcasting Company's WRQX-FM in Washington, D.C.
Richard A. Ferguson, 55, has served as a director of Cox Radio since May
1997, and as Vice President and Co-Chief Operating Officer since July 1999.
Prior to that, he served as Vice President and Chief Operating Officer since
April 1997. Previously, Mr. Ferguson served as President, Chief Executive
Officer and a director of NewCity Communications, Inc. since its organization
in 1986. He served as the President of Katz Broadcasting Company, Inc., a
subsidiary of Katz Communications, Inc., from 1981 to 1986, when he led a
management group in organizing NewCity to purchase all of the stock of Katz
Broadcasting Company. Prior to 1981, he served as the President of Park City
Communications, Inc., until it was acquired by Katz Communications. Mr.
Ferguson is a past chairman of the Joint Board of Directors of the National
Association of Broadcasters and a member of the Radio Operators Caucus.
Paul M. Hughes, 62, has served as a director of Cox Radio since December
1996. He has been President and Chief Operating Officer of OG Holding LTD
since April 1995. From June 1991 through April 1995 he was Chairman of Hughes
Broadcasting Partners, and from April 1995 through December 1998 he was
President of Great Trails Broadcasting, Inc.
James C. Kennedy, 53, has served as a director of Cox Radio since July 1996.
He has served as Chairman of the Board of Directors and Chief Executive
Officer of Cox Enterprises since January 1988, and prior to that
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time was Cox Enterprises' President and Chief Operating Officer. Mr. Kennedy
joined Cox Enterprises in 1972, and initially worked with Cox Enterprises'
Atlanta Newspapers. Mr. Kennedy is Chairman of the Board of Directors of Cox
Communications, Inc., a majority-owned subsidiary of Cox Enterprises, a
director of Flagler Systems, Inc., and an advisory director of Chase Bank of
Texas, N.A.
Marc W. Morgan, 51, has served as a director of Cox Radio since August 1999
and as Vice President and Co-Chief Operating Officer since July 1999. Prior to
that, he served as Senior Group Vice President of Cox Radio from May 1997 to
June 1999. He has been Vice President and General Manager of WSB Radio since
July 1992. Previously, Mr. Morgan was Senior Vice President of Cox Radio from
July 1996 to May 1997, and Vice President and General Manager of WCKG-FM
(Chicago, Illinois) from January 1984 to July 1992.
Robert F. Neil, 42, has served as a director and as President and Chief
Executive Officer of Cox Radio since July 1996, and was Executive Vice
President -- Radio of Cox Broadcasting from June 1992 to 1996. Previously, he
was Vice President and General Manager of WSB-AM/FM (Atlanta, Georgia). Mr.
Neil joined Cox Broadcasting in November 1986. Previously, Mr. Neil was
Operations Manager from December 1984 to November 1986 at WYAY-FM
(Gainesville, Florida). He served at WYYY-FM and WSYR-AM (Syracuse, New York)
as Operations Manager from October 1983 to December 1984 and as Program
Director from March 1983 to October 1983.
Nicholas D. Trigony, 60, has served as a director of Cox Radio since July
1996, and was Chairman of the Board of Directors from December 1996 through
December 2000. Mr. Trigony served as President of Cox Broadcasting from March
1990 until his retirement in December 2000. Mr. Trigony joined Cox
Broadcasting in September 1986 as Executive Vice President -- Radio and was
Executive Vice President -- Broadcast from April 1989 to March 1990. He is
also past Chairman of the Board of the National Association of Television
Program Executives and serves on its Executive Committee. Mr. Trigony is a
past chairman and current board member of the Television Operators Caucus and
past Chairman of the National Association of Broadcaster's Media Convergence
Task Force.
Security Ownership of Certain Beneficial Owners
The following table provides information as of February 28, 2001 with
respect to the shares of Class A Common Stock and Class B Common Stock
beneficially owned by each person known by Cox Radio to own more than 5% of
any class of the outstanding voting securities of Cox Radio.
Percent of
Class A Class B Vote of All
Common Percent Common Percent Classes of
Name of Beneficial Owner Stock of Class Stock of Class Common Stock
- ------------------------ --------- -------- ---------- -------- ------------
Cox Enterprises,
Inc.(1)(2)(3)............ 3,591,954 8.8% 58,733,016 100% 94.0%
Westport Asset Management,
Inc.(4).................. 3,534,000 8.7% -- -- 0.27%
Janus Capital Corp.(5).... 5,220,175 12.8% -- -- 0.46%
- ----------
(1) The business address for Cox Enterprises is 1400 Lake Hearn Drive,
Atlanta, Georgia 30319.
(2) All the shares of common stock of Cox Radio that are beneficially owned by
Cox Enterprises are held of record by Cox Broadcasting. Cox Broadcasting
holds 3,591,954 shares of Class A Common Stock, and 58,733,016 shares of
Class B Common Stock that are convertible into the same number of shares
of Class A Common Stock. All the shares of outstanding capital stock of
Cox Broadcasting are beneficially owned by Cox Holdings, Inc., and all of
the shares of outstanding capital stock of Cox Holdings are beneficially
owned by Cox Enterprises. The beneficial ownership of the outstanding
capital stock of Cox Enterprises is described in footnote (3) below.
(3) There are 604,697,089 shares of common stock of Cox Enterprises
outstanding, with respect to which (i) Barbara Cox Anthony, as trustee of
the Anne Cox Chambers Atlanta Trust, exercises beneficial ownership over
174,949,266 shares (28.9%); (ii) Anne Cox Chambers, as trustee of the
Barbara Cox Anthony Atlanta Trust, exercises beneficial ownership over
174,949,266 shares (28.9%); (iii) Barbara Cox
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Anthony, Anne Cox Chambers and Richard L. Braunstein, as trustees of the
Dayton Cox Trust A, exercise beneficial ownership over 248,237,055 shares
(41.1%); and (iv) 248 individuals and other trusts exercise beneficial
ownership over the remaining 6,561,502 shares (1.1%), including 43,734
shares held beneficially and of record by Garner Anthony, the husband of
Barbara Cox Anthony (as to which Barbara Cox Anthony disclaims beneficial
ownership). Thus, Barbara Cox Anthony and Anne Cox Chambers, who are
sisters, together exercise sole or shared beneficial ownership over
598,135,587 shares (98.9%) of the common stock of Cox Enterprises. Barbara
Cox Anthony and Anne Cox Chambers are the mother and aunt, respectively,
of James C. Kennedy, the Chairman of the Board of Directors and Chief
Executive Officer of Cox Enterprises and a director of Cox Radio.
(4) The information contained in this table with respect to Westport Asset
Management, Inc. is based on a filing on Schedule 13G reporting ownership
as of December 31, 2000. The address of the reporting person is 253
Riverside Avenue, Westport, Connecticut 06880.
(5) The information contained in this table with respect to Janus Capital
Corp. is based on a filing on Schedule 13G reporting ownership as of
December 31, 2000. The address of the reporting person is 100 Fillmore
Street, Denver, Colorado 80206.
Security Ownership of Management
Beneficial ownership of the Class A Common Stock of Cox Radio and the common
stock of Cox Enterprises by Cox Radio's directors and Named Executive Officers
(as defined below), and by all directors and executive officers as a group at
February 28, 2001 is shown in the following table. Except as indicated below,
none of such persons, individually or in the aggregate, owns 1% or more of the
common stock of Cox Radio or Cox Enterprises.
Number of Shares of Number of Shares of Percent of Shares of
Cox Radio Class A Cox Enterprises Cox Radio Class A
Name of Beneficial Owner Common Stock Owned Common Stock Owned Common Stock Owned
- ------------------------ ------------------- ------------------- --------------------
David E. Easterly....... 15,000 531,834 (h)
Richard A. Ferguson..... 99,289(a) -- (h)
Robert B. Green......... 171,111(b) -- (h)
James C. Kennedy........ 159,876 554,949(c) (h)
Marc W. Morgan.......... 217,977(d) -- (h)
Robert F. Neil.......... 340,299(e) 9,204 (h)
Nicholas D. Trigony..... 3,000 205,833 (h)
Ernest D. Fears, Jr. ... 4,551 -- (h)
Paul M. Hughes.......... 6,751 -- (h)
Richard A. Reis......... 109,875(f) -- (h)
All directors and
executive officers as a
group (eleven persons,
including those named
above)................. 1,130,222(g) 1,301,820 2.8%
- ----------
(a) Includes 54,972 shares subject to stock options that are exercisable
within 60 days.
(b) Includes 140,097 shares subject to stock options that are exercisable
within 60 days.
(c) Mr. Kennedy owns of record 554,949 shares of common stock of Cox
Enterprises. Sarah K. Kennedy, Mr. Kennedy's wife and trustee of the
Kennedy Trusts, exercises beneficial ownership over an aggregate of
22,140 shares of common stock of Cox Enterprises. In addition, as
described above, Barbara Cox Anthony and Anne Cox Chambers, the mother
and aunt, respectively, of Mr. Kennedy, together exercise sole or shared
beneficial ownership over 598,135,587 shares of common stock of Cox
Enterprises. Also, Mr. Kennedy's children are the beneficiaries of a
trust, of which R. Dale Hughes is the sole trustee, that beneficially
owns 16,155 shares of common stock of Cox Enterprises. Mr. Kennedy
disclaims beneficial ownership of all such shares, other than the 554,949
shares described above.
(d) Includes 216,252 shares subject to stock options that are exercisable
within 60 days.
(e) Includes 323,694 shares subject to stock options that are exercisable
within 60 days.
5
(f) Includes 54,558 shares subject to stock options that are exercisable
within 60 days.
(g) Includes 791,766 shares subject to stock options that are exercisable
within 60 days.
(h) Beneficial owner, individually or in the aggregate, of less than 1% of
the Class A Common Stock of Cox Radio.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Cox Radio's
executive officers and directors and persons who own more than 10% of Cox
Radio's Class A Common Stock to file reports of ownership and changes in
ownership of Cox Radio's Class A Common Stock with the Securities and Exchange
Commission and the New York Stock Exchange. Based solely on a review of copies
of such reports and written representations from the reporting persons, Cox
Radio believes that during the year ended December 31, 2000, its executive
officers, directors and greater than 10% stockholders filed on a timely basis
all reports due under Section 16(a) of the Exchange Act.
Board of Directors and Committees
During 2000, the Board of Directors met three times. The Board of Directors
has an Executive Committee, an Audit Committee, and a Compensation Committee.
In addition, a Community Relations Committee was created in December 2000.
During 2000, each director attended at least 75% of the total number of
meetings of the Board of Directors and meetings of the Committees on which
each director served.
Executive Committee
The members of the Executive Committee are David E. Easterly (Chairman),
James C. Kennedy, and Paul M. Hughes. The Executive Committee of the Board of
Directors took action by unanimous written consent seven times in 2000.
Compensation Committee
The members of the Compensation Committee are Ernest D. Fears, Jr.
(Chairman) and Paul M. Hughes. The Compensation Committee met once in 2000.
The Compensation Committee:
. adopts and oversees the administration of compensation plans for
executive officers and senior management of Cox Radio;
. determines awards granted under such plans to "insiders" who are subject
to Section 16 of the Securities Exchange Act of 1934;
. approves the chief executive officer's compensation; and
. reviews the reasonableness of such compensation.
Community Relations Committee
The Board of Directors created a new Community Relations Committee on
December 12, 2000, to further Cox Radio's longstanding goal of having a
strong, diverse workforce and to oversee Cox Radio's policy that it will not
discriminate in employment based on any protected classification. Cox Radio's
businesses have reported on these issues to the Community Relations Committee
of majority stockholder Cox Enterprises since 1980. The Cox Radio Community
Relations Committee oversees Cox Radio's workforce diversity initiatives,
minority-owned business purchasing, corporate contributions to public service
organizations, and Equal Employment Opportunity claims. The members of the
Community Relations Committee are Ernest D. Fears, Jr. (Chairman), David E.
Easterly, and Robert F. Neil.
6
Audit Committee
The members of the Audit Committee are Paul M. Hughes (Chairman), Ernest D.
Fears, Jr., and Nicholas D. Trigony. During 2000 the Audit Committee held
three formal meetings and held three conference calls to review quarterly
results with the independent auditors. The Board of Directors adopted a
written Audit Committee charter. A copy of the Audit Committee charter is
filed as an appendix to this proxy statement. The Audit Committee is
responsible for oversight of the quality and integrity of the accounting,
auditing and reporting practices of Cox Radio, and as part of this
responsibility the Audit Committee:
. recommends the selection of the independent auditors for Cox Radio;
. reviews the services performed by the independent auditors, including
non-audit services (if any);
. reviews the scope and results of the annual audit;
. reviews the independence of the auditors;
. reviews the performance and fees of the independent auditors;
. reviews the adequacy of the system of internal accounting controls;
. reviews the scope and results of internal auditing procedures;
. reviews the Audit Committee charter annually;
. reviews the activities of Cox Radio's Risk Committee, a Board-created
committee composed of senior financial managers with oversight of
financial risk management; and
. reviews related party transactions, if any.
Audit Fees
The aggregate fees billed by Deloitte & Touche LLP, the member firms of
Deloitte Touche Tohmatsu, and their respective affiliates (collectively
referred to as "Deloitte") for professional services rendered for the audit of
Cox Radio's annual financial statements for the fiscal year ended December 31,
2000 and for the review of the financial statements included in Cox Radio's
Quarterly Reports on Form 10-Q for that fiscal year were $336,975.
Financial Information Systems Design and Implementation Fees
The aggregate fees billed by Deloitte for professional services rendered for
information technology services relating to financial information systems
design and implementation for the fiscal year ended December 31, 2000 were $0.
All Other Fees
The aggregate fees billed by Deloitte for services rendered to Cox Radio,
other than the services described above under "Audit Fees" and "Financial
Information Systems Design and Implementation Fees," for the fiscal year ended
December 31, 2000 were $591,905.
Audit Committee Report
In 2000, the Audit Committee consisted of two members, Mr. Hughes and Mr.
Fears, who have been found by the Board of Directors to have no relationship
with Cox Radio that would interfere with the exercise of their independence
from Cox Radio and its management, and who meet all other criteria of
independence under the listing standards of the New York Stock Exchange. The
third member of the Audit Committee, Mr. Trigony, was elected by the Board of
Directors to serve on the Audit Committee effective January 1, 2001.
Previously, Mr. Trigony was the President of Cox Broadcasting, the majority
stockholder of Cox Radio, from March 1990 until his retirement on December 31,
2000. Mr. Trigony has been found by the Board of Directors to have no
7
relationship with Cox Radio that would interfere with the exercise of his
independence from Cox Radio and its management. However, because Mr. Trigony
was employed by Cox Radio within three years prior to his election to the
Audit Committee, he would not be deemed to be an "independent" director under
the listing standards of the New York Stock Exchange absent a determination by
the Board of Directors that his membership on the Audit Committee is required
by the best interests of Cox Radio and its stockholders. The Board of
Directors made this determination on December 12, 2000, finding that Mr.
Trigony had exercised substantial financial oversight responsibility during
his service in several senior executive positions with Cox Radio or its
affiliates since 1986, including service as Chairman of the Board of Directors
of Cox Radio and President of Cox Broadcasting. The Board of Directors further
noted that Mr. Trigony would not be receiving any payments from Cox Radio that
would compromise his independence. Based upon all these factors, the Board of
Directors determined that because of Mr. Trigony's unique and valuable
expertise in the financial, strategic and operational aspects of the business
of Cox Radio, his membership would greatly enhance the oversight function of
the Audit Committee, and that his membership on the Audit Committee is
therefore required by the best interests of Cox Radio and its stockholders.
In connection with the December 31, 2000 financial statements, the Audit
Committee (1) reviewed and discussed the audited financial statements with
management; (2) discussed with the independent auditors the matters required
by Statement on Auditing Standards No. 61, as amended; and (3) received and
discussed with the independent auditors the matters required by Independence
Standards Board Standard No. 1, and discussed the independent auditor's
independence, including a consideration of the compatibility of non-audit
services with such independence. Based upon these reviews and discussions, the
Audit Committee has recommended that the Board of Directors include the
audited financial statements in Cox Radio's Annual Report filed with the
Securities and Exchange Commission on Form 10-K.
Paul M. Hughes (Chairman)
Ernest D. Fears, Jr.
Nicholas D. Trigony
Compensation of Directors
The directors who are not affiliates of Cox Radio, Paul M. Hughes, Ernest D.
Fears, Jr. and Nicholas D. Trigony, are reimbursed for expenses and paid an
annual fee of $20,000. The annual fee is paid as follows: (a) one half in
shares of Class A Common Stock pursuant to the Cox Radio, Inc. Restricted
Stock Plan for Non-Employee Directors, subject to certain restrictions and
forfeitures prior to the expiration of the period ending five years after the
date of the grant of the award or, if earlier, the date of death or disability
in certain circumstances, plus (b) one half in cash. In addition, the non-
affiliate directors receive a meeting fee of $1,000 for every board meeting
and committee meeting attended. The directors of Cox Radio who are affiliates
of Cox Radio do not receive any compensation for serving on the Board of
Directors. The maximum number of shares of Class A Common Stock that may be
granted pursuant to restricted stock awards under the Restricted Stock Plan
for Non-Employee Directors is 75,000.
Executive Officers
The executive officers of Cox Radio who are not directors are set forth
below. Executive officers of Cox Radio are elected to serve until they resign
or are removed, or are otherwise disqualified to serve, or until their
successors are elected and qualified.
Robert B. Green, 47, has served as Group Vice President of Cox Radio since
May 1997 and as Vice President and General Manager of Cox Radio's Miami,
Florida radio stations (WFLC-FM, WHQT-FM, and WTMI-FM) since September 1992.
Previously, Mr. Green was Regional Vice President of Cox Radio from July 1996
to May 1997, and Station Manager of WSB-AM/FM (Atlanta, Georgia) from January
1990 to September 1992.
8
Neil O. Johnston, 35, Vice President and Chief Financial Officer, has served
as Cox Radio's chief financial officer since September 2000. Prior to that,
Mr. Johnston served as Vice President of Development for Cox Broadcasting from
January 2000 to September 2000, and as Controller of Cox Radio from 1998
through December 1999. Previously, he was manager of financial reporting for
Cox Enterprises from 1996 through 1998. Prior to joining Cox, Mr. Johnston was
employed in financial and accounting positions with Coca-Cola Enterprises Inc.
and Deloitte & Touche.
Richard A. Reis, 47, has served as Group Vice President of Cox Radio since
April 1997. Previously, he was a Director and Group Vice President of NewCity
since its organization in 1986. From 1983 to 1984, he served as Vice President
of the Broadcasting Company, then a subsidiary of Katz Broadcasting Company,
Inc., becoming Group Vice President in 1984. He was General Manager of WFTQ-AM
and WAAF-FM in Worcester, Massachusetts from 1981 and 1983, respectively, to
1989. Since 1989, he has served as General Manager of WDBO-AM and WWKA-FM in
Orlando, Florida and of WCFB-FM since 1992. Since July 1996, Mr. Reis has
served as Group Vice President of Cox Radio's six Orlando, Florida radio
stations (WDBO-AM, WWKA-FM, WCFB-FM, WHTQ-FM, WMMO-FM, and WPYO-FM). He is a
member of the Orlando Ad Federation. He also serves on the Board of Trustees
of the Creative Education Foundation.
Executive Compensation
The following table sets forth certain information for the years ended
December 31, 1998, 1999 and 2000, concerning the cash and non-cash
compensation earned by, or awarded to, the Chief Executive Officer and the
other four most highly compensated executive officers of Cox Radio whose
combined salary and bonus exceeded $100,000 in such periods (the "Named
Executive Officers"). The number of shares of Class A Common Stock have been
adjusted to reflect the May 2000 3-for-1 stock split, where applicable.
SUMMARY COMPENSATION TABLE
Long-term Compensation
-------------------------
Annual
Compensation Awards
----------------- -------------------------
Restricted Securities
Name and Principal Stock Underlying All Other
Position Year Salary Bonus Awards Options Compensation(a)
- ------------------ ---- -------- -------- ----------- ------------ ---------------
Robert F. Neil.......... 2000 $450,846 $450,846 $ -- 100,275 $6,000
President & Chief 1999 409,860 327,888 -- 68,700 6,000
Executive Officer 1998 379,500 303,600 -- 79,632 6,000
Marc W. Morgan.......... 2000 $310,125 $279,113 $ -- 42,000 $6,000
Vice President & Co-
Chief 1999 289,836 199,070 -- 26,400 6,000
Operating Officer 1998 265,650 171,344 -- 26,592 6,000
Richard A. Ferguson..... 2000 $304,328 $273,895 $ -- 37,335 $6,000
Vice President & Co-
Chief 1999 289,836 173,902 -- 27,600 6,000
Operating Officer 1998 273,430 136,715 -- 27,372 6,000
Robert B. Green......... 2000 $249,885 $149,931 $ -- 29,700 $6,000
Group Vice President 1999 227,168 147,659 -- 21,000 6,000
1998 212,307 131,630 -- 21,051 6,000
Richard A. Reis......... 2000 $239,306 $119,653 $ -- 27,375 $6,000
Group Vice President 1999 223,650 156,555 -- 16,200 6,000
1998 210,000 101,446 -- 15,570 6,000
- ----------
(a) Reflects amounts contributed to the Cox Enterprises, Inc. Savings and
Investment Plan and credited under the Cox Enterprises, Inc. Executive
Savings Plus Restoration Plan.
9
Long-Term Incentive Plan
The Cox Radio, Inc. Long-Term Incentive Plan (the "LTIP") provides for
various forms of equity-based incentive compensation with respect to Class A
Common Stock, including stock options, stock appreciation rights, stock
bonuses, restricted stock awards, performance shares, and awards consisting of
combinations of such incentives. The Compensation Committee of Cox Radio
administers the LTIP, and has the discretion to determine the type of awards
to be granted, when, if and to whom awards are granted, the number of shares
covered by each award and the terms and conditions of each award. The
Compensation Committee has delegated to a management committee the
administration of grants to eligible individuals who are not "insiders" for
purposes of reporting obligations under Section 16 of the Securities Exchange
Act of 1934.
The following table discloses for the Named Executive Officers information
regarding options granted under the LTIP during the fiscal year ended December
31, 2000:
OPTION GRANTS IN 2000
Potential Realizable
Percent of Value at Assumed
Number of Total Annual Rates of Stock
Securities Options Exercise Price Appreciation
Underlying Granted to Price for Option Term(b)
Options Employees Per Expiration ---------------------
Name Granted(a) in 2000 Share Date 5% 10%
- ---- ---------- ---------- -------- ---------- ---------- ----------
Robert F. Neil.......... 100,275 10.33% $31.6563 01/03/2010 $1,996,325 $5,059,074
Marc W. Morgan.......... 42,000 4.33 31.6563 01/03/2010 836,157 2,118,984
Richard A. Ferguson..... 37,335 3.85 31.6563 01/03/2010 743,284 1,883,625
Robert B. Green......... 29,700 3.06 31.6563 01/03/2010 591,282 1,498,424
Richard A. Reis......... 27,375 2.82 31.6563 01/03/2010 544,995 1,381,124
- ----------
(a) Stock options become exercisable over a five year period, with 60%
becoming exercisable three years from the date of grant and an additional
20% becoming exercisable in each of the next two years thereafter. In
addition, all options become immediately and fully exercisable if, no
sooner than six months after the date of grant of the option, the stock
price achieves, and maintains for a period of 10 consecutive trading days,
a level equal to or greater than 140% of the option exercise price.
(b) The 5% and 10% rates of appreciation would result in per share prices of
$51.5648 and $82.1083, respectively. Cox Radio expresses no opinion
regarding whether this level of appreciation will be realized and
expressly disclaims any representation to that effect.
The following table sets forth information related to the number and value
of options held at December 31, 2000 by the Named Executive Officers, two of
whom exercised options in 2000:
2000 OPTION EXERCISES AND YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying In the Money
Unexercised Options Options at
at December 31, 2000 December 31, 2000(a)
Shares Acquired Value ------------------------- -------------------------
Name on Exercise Received Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ---------- ----------- ------------- ----------- -------------
Robert F. Neil.......... 57,996 $1,097,690 323,694 100,275 $4,182,163 $ 0
Marc W. Morgan.......... 0 0 216,252 42,000 3,140,460 0
Richard A. Ferguson..... 0 0 54,972 37,335 489,682 0
Robert B. Green......... 51,369 902,593 140,097 29,700 2,296,652 0
Richard A. Reis......... 0 0 54,558 27,375 604,220 0
- ----------
(a) The exercisable value represents the value of the exercisable shares times
the difference between the closing price on December 29, 2000 of $22.56
per share and the exercise price of $6.1667 per share for all 1996
options; $5.7707 per share for all 1/1/97 options; $6.9167 per share for
all 3/31/97 options; $8.4583 per share for all 6/18/97 options; $13.3854
per share for all 1998 options, and $13.9167 per share for all 1999
options.
10
Retirement Plans
Cox Enterprises, Inc. Pension Plan. The Cox Enterprises, Inc. Pension Plan
(the "Pension Plan") is a tax-qualified defined benefit pension plan. The
Pension Plan covers all eligible employees of Cox Enterprises and any of its
affiliates who have adopted the Plan (including certain of the Named Executive
Officers). No employees whose employment commenced after January 1, 1997, and
no employees hired in connection with the acquisition by Cox Radio of NewCity
Communications, Inc., are eligible for participation under the Pension Plan.
The Pension Plan is funded through a tax-exempt trust, into which
contributions are made as necessary based on an actuarial funding analysis.
The Pension Plan provides for the payment of benefits upon retirement, early
retirement, death, disability and termination of employment. Participants
become vested in their benefits under the Plan after completing five years of
vesting service. The Pension Plan benefit is determined under a formula based
on a participant's compensation and years of benefit accrual service.
Participants may elect from several optional forms of benefit distribution.
Cox Executive Supplemental Plan. The Cox Executive Supplemental Plan is a
non-qualified defined benefit pension plan providing supplemental retirement
benefits to certain management employees of Cox Enterprises and certain of its
affiliates (including certain of the Named Executive Officers). The Executive
Supplemental Plan is administered by the Management Committee of Cox
Enterprises whose members are appointed by the Cox Enterprises Board of
Directors. This committee designates management employees to participate in
the Executive Supplemental Plan. No management employees hired after January
1, 1997, and no former NewCity employees, are eligible to participate in the
Executive Supplemental Plan.
The Executive Supplemental Plan monthly benefit formula, payable at normal
retirement, is 2.5% of a participant's average compensation, as calculated in
the Executive Supplemental Plan, multiplied by the participant's years of
benefit service credited under the Executive Supplemental Plan. The normal
retirement benefit will not exceed 50 percent of a participant's average
compensation at retirement. Benefits payable with respect to early retirement
are reduced to reflect an earlier commencement date. Special disability,
termination of employment and death benefits also are provided. All benefits
payable under the Executive Supplemental Plan are reduced by benefits payable
to the participant under the Pension Plan. Participants may elect from several
optional forms of benefit distributions.
The Executive Supplemental Plan is not funded currently by Cox Enterprises.
Cox Radio will make annual payments to Cox Enterprises arising from its
employees' participation in this plan as benefits are paid to Cox Radio
employees under the Executive Supplemental Plan. However, all payments of
current and future benefits due to Cox Radio employees will be made from the
general funds of Cox Enterprises.
11
The following table provides estimates of annual retirement income benefits
payable to certain executives under the Pension Plan and the Executive
Supplemental Plan:
PENSION PLAN AND EXECUTIVE SUPPLEMENTAL PLAN TABLE
Final Average Compensation (5 Years) Years of Services
- ------------------------------------ ------------------------------------
5 10 15 20 or more
------- -------- -------- ----------
$150,000.................................. $18,750 $ 37,500 $ 56,250 $ 75,000
250,000.................................. 31,250 62,500 93,750 125,000
350,000.................................. 43,750 87,500 131,250 175,000
450,000.................................. 56,250 112,500 168,750 225,000
550,000.................................. 68,750 137,500 206,250 275,000
650,000.................................. 81,250 162,500 243,750 325,000
750,000.................................. 93,750 187,500 281,250 375,000
The Named Executive Officers have been credited with the following years of
benefit service: Mr. Neil, 14 years; Mr. Morgan, 16 years; and Mr. Green, 10
years. The Pension Plan and the Executive Supplemental Plan define
"compensation" generally to include all remuneration to an employee for
services rendered, including base pay, bonuses, special forms of pay and
certain employee deferrals. Certain forms of additional compensation,
including severance, moving expenses, extraordinary bonuses, long-term
incentive compensation and contributions to employee benefit plans, are
excluded from the definition of compensation. The Pension Plan credits
compensation only up to the limit of covered compensation under Section
401(a)(17) of the Internal Revenue Code; the Executive Supplemental Plan does
not impose this limit on covered compensation. The definition of "covered
compensation" under the Pension Plan and the Executive Supplemental Plan, in
the aggregate, is not substantially different from the amounts reflected in
the Annual Compensation columns of the Summary Compensation Table set forth
above. The estimates of annual retirement benefits reflected in the Pension
Plan and Executive Supplemental Plan Table are based on payment in the form of
a straight-life annuity and are determined after offsetting benefits payable
from Social Security as provided under the terms of the Pension Plan and the
Executive Supplemental Plan.
12
Performance Graph
The following graph compares for the period beginning on September 26, 1996,
the date Cox Radio's Class A Common Stock first became publicly traded on the
New York Stock Exchange, and ending on December 31, 2000, the cumulative total
return on Cox Radio's Class A Common Stock to the cumulative total returns on
the Standard & Poor's 500 Stock Index and on an index consisting of certain
peer radio broadcasting companies with which Cox Radio competes (the "Peer
Group Index"). The Peer Group Index is comprised of common stock of Clear
Channel Communications Inc. and Emmis Broadcasting Corporation and is weighted
for the respective market capitalization of each company. The Peer Group Index
has been modified from the Peer Group Index used for Cox Radio's 2000 Proxy
Statement due to industry consolidation. The comparison assumes $100 was
invested on September 26, 1996 in Cox Radio's Class A Common Stock and in each
of the foregoing indices and that all dividends were reinvested.
[Performance Graph Appears Here]
9/26/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98 6/30/99 12/31/99 6/30/00 12/31/00
CXR $100 $94.59 $138.51 $217.55 $233.77 $228.37 $293.22 $539.15 $454.01 $365.84
S&P 500 $100 $108.57 $130.95 $144.80 $170.45 $186.18 $209.23 $225.36 $224.42 $204.85
Peer Group $100 $85.06 $143.45 $183.77 $249.86 $248.59 $313.08 $421.95 $351.36 $227.63
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors determines the
compensation of the executive officers of Cox Radio. The Compensation
Committee currently consists of Paul M. Hughes and Ernest D. Fears, Jr., both
of whom are independent directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Policies
The Compensation Committee administers compensation for executive officers.
Cox Radio has developed a policy on executive compensation, which is described
in this report. This policy formed the basis of
13
compensation decisions made by the Committee for 2000. This policy reflects
Cox Radio's belief that stockholders are served well by executive pay programs
that are competitive with industry standards, variable with annual
performance, and focused on stockholder value.
In developing compensation plans and setting compensation levels, Cox Radio
reviews competitive compensation data provided in the Towers Perrin Media
Industry Survey. This survey allows Cox Radio to examine compensation levels
at companies with which Cox Radio competes for talent in the marketplace.
Where necessary, survey information is supplemented by proxy statement
analysis and other survey sources.
Executive Officers' Compensation
The total compensation of executive officers consists of three components:
. base salary;
. annual incentive compensation; and
. long-term incentive awards.
The philosophy of the Committee is that a substantial portion of total
compensation should be at risk, based on Cox Radio's financial and operational
performance. The at-risk components of total compensation are progressively
greater for higher level positions.
Base Salary
Base salary is designed to provide meaningful levels of compensation to
executives, while helping Cox Radio manage its fixed costs. Salaries for top
executives are determined annually, and are based on:
. job scope and responsibilities;
. length of service;
. corporate, unit, and individual performance;
. competitive rates for similar positions as indicated by the Towers Perrin
Media Industry Survey; and
. subjective factors.
In general, executive base salaries are targeted to the 75th percentile of the
competitive data.
Annual Incentive Compensation
Short-term incentives for 2000 were provided for executive officers under
the "Annual Incentive Program." Participation in the Annual Incentive Program
is limited to a group of senior managers, including the Named Executive
Officers, who have a material impact on Cox Radio's performance. Awards earned
under the Program are contingent upon employment with Cox Radio through the
end of the year, except for payments made in the event of death, retirement,
disability, or in the event of a change in control.
Payouts under the Annual Incentive Program are determined based on:
. annual base salary;
. a specific percentage of base salary, which increases for higher level
positions commensurate with the greater percentage of compensation at
risk for those with greater responsibilities; and
. actual performance in the areas of operating cash flow, station ratings,
station revenue share and other individual objectives.
In addition, the participant's contribution to results during the year is
considered, and a discretionary award in the form of restricted stock may be
made.
14
Awards under the Annual Incentive Program are based on the achievement of
goals relating to performance in the fiscal year. Objective performance goals
are set to represent a range of performance, with the level of the associated
incentive award varying with different levels of performance achievement. The
"minimum" goal is set to reflect the minimum acceptable levels of performance
which will warrant payment of incentive awards. The "maximum" goal reflects an
ambitious level of performance which would only be attainable in an
outstanding year.
Long-Term Incentive Compensation
Long-term incentive awards typically are granted annually to provide
executive officers with a competitive long-term incentive opportunity and an
identity of interest with Cox Radio. Long-term incentives generally are
provided through annual grants of nonqualified stock options under the LTIP. A
stock option permits the holder to buy Cox Radio stock at a specific price
during a specific period of time. As the price of Cox Radio stock rises, the
option increases in value. The intent of such awards is to provide the
recipient with an incentive to perform at levels that will result in better
Cox Radio performance and enhanced stock value. In general, stock option
awards will be issued annually with an exercise price equal to the market
price of Cox Radio's Class A Common Stock at the time of award.
All options issued in 1998, 1999 and 2000 have a ten-year term. To encourage
continued employment with Cox Radio, these options were designed to vest over
a five-year period, with 60% becoming exercisable three years after the date
of grant and an additional 20% becoming exercisable each year thereafter.
However, no sooner than six months after the grant date of the options, if the
stock price achieves and for a period of ten consecutive trading days
maintains a level equal to or greater than 140% of the price on the grant
date, vesting accelerates and these options become fully exercisable. Due to
the performance of Cox Radio's stock price, all options issued in 1998 and
1999 have vested.
To ensure that executive officers and key management employees retain
significant holdings in Cox Radio, the Committee encourages them to own Cox
Radio stock with a value equal to one to three times their base salary,
depending upon their position. For purposes of these guidelines, an employee's
holdings include Cox Radio's Class A Common Stock (excluding restricted stock
and shares subject to unexercised options) and Cox Enterprises' common stock
received as awards under the Cox Enterprises, Inc. Unit Appreciation Plan.
Chief Executive Officer Compensation
The executive compensation policy described above was applied in
establishing Mr. Neil's compensation for 2000. Mr. Neil participated in the
same executive compensation plans available to Cox Radio's other executive
officers.
In 2000, Mr. Neil had a base salary of $450,846. On the basis of Cox Radio's
performance versus established goals, and Mr. Neil's individual performance,
the Committee determined that an annual bonus of $450,846 had been earned for
2000. Effective January 1, 2000, Mr. Neil was granted a long-term incentive
award under the LTIP in the form of options for 100,275 shares of Class A
Common Stock.
Tax Deductibility Considerations
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation in excess of $1 million paid to the executive officers named in
this Proxy Statement, unless certain requirements are met. It is the present
intention of the Compensation Committee of Cox Radio to preserve the
deductibility of compensation under Section 162(m) to the extent the Committee
believes that doing so would be consistent with the best interests of the
stockholders. As such, long-term incentive compensation awards, particularly
stock option awards, generally are designed to meet the requirements for
deductibility under Section 162(m).
Ernest D. Fears, Jr. (Chairman)
Paul M. Hughes
15
CERTAIN TRANSACTIONS
Cox Radio borrows funds for working capital and other needs from Cox
Enterprises. Cox Radio has entered into a revolving credit facility with Cox
Enterprises. Cox Radio pays, or is paid, interest on the daily inter-company
balance based on Cox Enterprises' commercial paper rate plus .40%.
Cox Enterprises performs day-to-day cash management services for Cox Radio,
whereby Cox Enterprises receives daily notification of Cox Radio's checks
presented for payment and transfers funds from other sources to cover such
checks. Settlements of debit or credit balances between Cox Radio and Cox
Enterprises occur monthly at market interest rates. Certain other management
services have been and will continue to be provided to Cox Radio by Cox
Enterprises. Such services include rent, management advisory services, legal,
corporate secretarial, tax, treasury, internal audit, risk management,
purchasing and materials management, benefits (including pension plan)
administration and other support services. Cox Radio was allocated expenses
for the year ended December 31, 2000 of $3.5 million for such services.
Allocated expenses are based on Cox Enterprises' estimate of expenses related
to the services provided to Cox Radio in relation to those provided to other
divisions of Cox Enterprises. Rent and occupancy expense is allocated based on
occupied space. Cox Radio believes that these allocations are made on a
reasonable basis. However, the allocations are not necessarily indicative of
the level of expenses that might have been incurred had Cox Radio operated on
a stand-alone basis. There has been no study or any attempt to obtain quotes
from third parties to determine what the cost of obtaining such services from
third parties could have been. The fees and expenses to be paid by Cox Radio
to Cox Enterprises are subject to change.
In November 2000, Cox Radio and Cox Interactive Media, Inc., a wholly-owned
subsidiary of Cox Enterprises, entered into two agreements concerning the
operation of Cox Radio's web sites, which had previously been designed,
developed and operated by Cox Interactive Media. First, a memorandum of
understanding sets forth a transition plan for the transfer of the operations
of the Cox Radio web sites to the newly created Cox Radio division CXRi.
Second, a cross-promotion agreement provides that each party shall promote the
other in six common markets, and contemplates that the same terms and
conditions shall be applicable to any new common markets that arise over the
term.
Subsidiaries of Cox Radio have entered into lease arrangements with Cox
Broadcasting with respect to studio and tower site properties in Atlanta,
Georgia and Dayton, Ohio that are used for Cox Radio's radio operations and
Cox Broadcasting's television operations in those markets. The annual rental
cost to Cox Radio in the aggregate is less than $0.6 million.
APPROVAL OF THE COX RADIO, INC. AMENDED AND RESTATED
LONG-TERM INCENTIVE PLAN
(Proposal No. 2)
The Compensation Committee of the Board of Directors has amended and
restated the Cox Radio, Inc. Long-Term Incentive Plan, including an amendment
to increase the number of shares of Cox Radio's Class A common stock reserved
for issuance under the Plan. This amendment is subject to the approval of the
stockholders of Cox Radio at the 2001 Annual Meeting. The Compensation
Committee also has made several miscellaneous clarifying and ministerial
amendments to the Cox Radio, Inc. Long-Term Incentive Plan.
Plan Administration. The purpose of the Cox Radio, Inc. Amended and Restated
Long-Term Incentive Plan (the "Long-Term Incentive Plan") is to advance the
interests of Cox Radio by providing incentives to certain employees of Cox
Radio and its subsidiaries through awards of various forms of equity-based
compensation. The Long-Term Incentive Plan is administered by the Compensation
Committee of the Board of Directors. The Compensation Committee has sole
discretion, subject to the terms of the Long-Term Incentive Plan, to determine
the amounts and types of awards to be made, set the terms, conditions and
limitations
16
applicable to each award, and prescribe the form of the instruments embodying
any award. Certain functions under the Long-Term Incentive Plan may be
delegated by the Compensation Committee to any person or persons, and pursuant
to this authority, the Compensation Committee has delegated certain
administrative and other functions to a Management Committee. The Board of
Directors has the right to amend, modify, suspend or terminate the Long-Term
Incentive Plan at any time without notice, provided that no participant's
rights in an existing award may be adversely affected without his or her
consent. Any amendment or similar action will be submitted for stockholder
approval if required by law, regulation, or rule of any stock exchange on
which Cox Radio's Class A Common Stock is traded.
Types and Number of Awards Under the Plan. The Compensation Committee has
approved, subject to the approval of the stockholders, an additional six
million (6,000,000) shares of Cox Radio's Class A Common Stock to be reserved
for issuance under the Long-Term Incentive Plan. This would provide for a
total share authorization of thirteen million two hundred thousand
(13,200,000) shares of Cox Radio's Class A Common Stock. Of this total,
1,949,078 shares have been issued previously pursuant to awards under the
Long-Term Incentive Plan, 3,615,217 shares are subject to outstanding options
or other awards, and 7,635,705 shares will be available for future issuance.
If any shares to be awarded under the Long-Term Incentive Plan are forfeited,
those shares may be added to the remaining share total and re-granted.
No participant may be granted more than 250,000 shares subject to any
combination of performance-based awards, restricted stock, or other stock-
based awards that are subject to performance criteria in any given year. The
maximum payout for any participant for a performance-based award paid in cash
is 100 percent of the participant's January 1 base salary for the year of the
payment. No participant may receive more than 500,000 options in any given
year.
All of the share totals described above will be adjusted by the Compensation
Committee in its discretion to reflect any change in the number of shares of
Class A Common Stock due to any stock dividend, stock split, combination,
recapitalization, merger, spin-off, or similar corporate transaction.
Eligibility. The Compensation Committee or the Management Committee, as
appropriate, is authorized to grant awards under the Long-Term Incentive Plan
to any officer or other employee of Cox Radio and its subsidiaries who is
selected to receive an award. This group of eligible participants consists of
approximately 1,000 individuals.
Duration of Options. No stock option may be exercised more than 10 years
after the date of grant, and all stock appreciation rights will expire not
later than 10 years after the date of grant.
Vesting and Exercise of Options. Options become exercisable when they have
vested. Vesting schedules are set forth in an agreement or notice of award.
Awards typically provide that a participant who terminates employment for
reasons other than for cause, retirement, death, permanent disability or
transfer to an affiliated company will have 90 days to exercise any vested
stock options, and any unvested stock options will be forfeited. A participant
who is terminated for cause will forfeit all benefits under the Long-Term
Incentive Plan, and all options (both vested and unvested) will be cancelled.
Payment for Options. The exercise price of any stock option awarded under
the Long-Term Incentive Plan will be determined by the Compensation Committee.
Except for certain awards substituted for or granted in tandem with previously
issued awards, the exercise price will not be less than the fair market value
of Cox Radio's Class A Common Stock on the date of grant. Participants may
exercise an option by making payment in any manner specified by the
Compensation Committee, including without limitation by tendering previously
owned shares of Class A Common Stock or by "cashless exercise."
Stock Appreciation Rights. A stock appreciation right gives the participant
the right to receive upon exercise the excess of the fair market value of a
share of stock on a specified date over the grant price. Except for certain
awards substituted for or granted in tandem with previously issued awards, the
grant price will be not
17
less than the fair market value of Cox Radio's Class A Common Stock on the
date of grant. The Compensation Committee has the discretion to determine the
manner in which stock appreciation rights may be paid, including in cash,
shares or a combination thereof.
Restricted Stock. The Compensation Committee or the Management Committee, as
appropriate, may authorize awards of restricted stock, including performance-
based restricted stock. Restricted stock awards may be made for no
consideration. Restricted stock is common stock that is non-transferable and
subject to other restrictions for a specified period. Unless the Compensation
Committee or the Management Committee, as appropriate, determines otherwise,
or specifies otherwise in an award agreement, if the participant terminates
employment during the restricted period, then the restricted stock will be
forfeited. Performance-based restricted stock may be subject to additional
risk of forfeiture during the restricted period until and unless certain
conditions are met. These conditions are established by the Compensation
Committee or the Management Committee, as appropriate, and may include the
performance criteria described below.
Deferred Stock. The Compensation Committee or the Management Committee, as
appropriate, may authorize grants of rights to receive shares of common stock
at the end of a specified deferral period. Awards of deferred stock may be
made for no consideration or for an amount that is less than the fair market
value on the date of grant. Unless the Compensation Committee or the
Management Committee, as appropriate, determines otherwise, or specifies
otherwise in an award agreement, if the participant terminates employment
during the deferral period, then the award will be forfeited.
Performance-Based Awards. The Compensation Committee or the Management
Committee, as appropriate, may grant awards that specify performance criteria
to be achieved as a condition to vesting or payment, including awards of
performance-based restricted stock. For purposes of the Long-Term Incentive
Plan, "performance criteria" mean pre-established objective performance goals
consisting of one or more of the following: net income, operating income,
earnings per share, cash flow, return on assets, return on equity, return on
capital and total shareholder return. The Compensation Committee or the
Management Committee, as appropriate, may utilize other criteria for the
purpose of reducing, but not increasing, any performance-based award.
Assignment and Transfer. Unless otherwise determined by the Compensation
Committee or the Management Committee, as appropriate, awards generally are
not assignable or transferable, except by will or by the laws of descent and
distribution, provided that a participant may designate a beneficiary to
exercise the participant's rights, and receive any distribution, in the event
of death. No right or interest of a participant in any award may be pledged or
encumbered, or made subject to any lien, obligation or liability of the
participant.
Estimate of Benefits. The number of stock options, stock appreciation rights
and other awards that would be granted to officers and other employees under
the Long-Term Incentive Plan is not currently determinable. During 2000,
options were awarded under the Cox Radio, Inc. Long-Term Incentive Plan to the
Chief Executive Officer and the other Named Executive Officers in the amounts
shown in the table on page 10 of this Proxy Statement. In 2000, 236,685
options were awarded to current executive officers as a group, 733,689 options
were awarded to approximately 247 non-executive officer employees, and 21,720
shares of restricted stock were awarded to two non-executive officer
employees.
Federal Income Tax Consequences to the Company and the Participants. Some of
the options granted under the Long-Term Incentive Plan may be incentive stock
options ("ISOs") within the meaning of Section 422 of the Internal Revenue
Code. Under present federal tax laws, there are no federal income tax
consequences to either Cox Radio or the participant upon the grant or exercise
of an ISO. If the participant does not dispose of the stock acquired through
the ISO for two years from the date of grant or one year from the date of
exercise, then any gain realized from a subsequent disposition would
constitute long-term capital gain to the participant. If the participant does
dispose of the stock prior to the expiration of either holding period, any
gain equal to the excess of the fair market value of the stock on the date of
exercise (or, if less, the amount realized on the disposition of the stock if
a sale or exchange) over the option price would constitute ordinary income to
the
18
participant. Any additional gain realized upon the disposition would be
taxable either as a short-term capital gain or a long-term capital gain,
depending on how long the participant held the stock.
Cox Radio generally is not entitled to an income tax deduction for the grant
of an ISO or as a result of either the participant's exercise of an ISO or the
participant's sale of the stock acquired upon the exercise of an ISO. However,
if the participant sells the stock either within two years from the date of
grant or within one year from the date of exercise, then the ISO is treated
for federal income tax purposes as if it were a nonqualified stock option and
Cox Radio will be entitled to a federal income tax deduction equal to the
amount of income recognized by the participant.
Stock options that do not constitute ISOs ("nonqualified options") may also
be granted under the Long-Term Incentive Plan. Under present federal tax laws,
there are no federal income tax consequences to either Cox Radio or the
participant upon the grant of a nonqualified option. However, the participant
will recognize ordinary income upon the exercise of a nonqualified option in
an amount equal to the excess of the fair market value of the stock at the
time of exercise over the option price, and Cox Radio will receive a
corresponding deduction. Any gain realized upon a subsequent disposition of
the stock will constitute either a short-term or long-term capital gain to the
participant, depending on how long it is held.
Unless the participant makes a special tax election, restricted stock awards
are not taxable to the participant as long as the shares remain
nontransferable and subject to a substantial risk of forfeiture. When these
transferability restrictions and forfeiture risks lapse or are removed, the
participant at the time of such lapse or removal generally will recognize as
ordinary income the fair market value of the stock, less any amounts that were
paid to acquire the stock. Cox Radio will receive a federal income tax
deduction equal to the amount of ordinary income recognized by the
participant.
No taxable income is recognized upon the grant of a stock appreciation
right. Upon the exercise of a stock appreciation right, the participant will
recognize as ordinary income the amount of any cash received, plus the fair
market value of any stock acquired (less any amount required to be paid by the
participant). Cox Radio will receive a federal income tax deduction equal to
the amount of ordinary income recognized by the participant.
Payment of cash and outright grants of stock will be taxed as ordinary
income at the time the cash or stock is received, and Cox Radio will be
entitled to a corresponding deduction equal to the amount of income recognized
by the participant.
The average of the high and low market price of Cox Radio's Class A Common
Stock as reported on the New York Stock Exchange composite transactions
listing for February 28, 2001 was $22.01 per share.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 3)
The Board of Directors has selected the firm of Deloitte & Touche LLP,
independent certified public accountants, as our independent auditors for the
year ending December 31, 2001. Deloitte & Touche LLP has audited our
consolidated financial statements since Cox Radio became a publicly traded
company in 1996. Deloitte & Touche LLP (or one of its predecessors) has
audited the consolidated financial statements of Cox Enterprises for many
years.
Ratification of this appointment shall be effective upon receiving the
affirmative vote of the holders of a majority of the voting power of Cox
Radio's Class A Common Stock and Class B Common Stock, voting together as a
single class, present or represented by proxy and entitled to vote at the
Annual Meeting.
19
A representative of Deloitte & Touche LLP will be present at the Annual
Meeting, will be offered the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions.
In the event the appointment is not ratified, the Board of Directors will
consider the appointment of other independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
Other Matters
Management does not know of any other matters to be considered at the Annual
Meeting. If any other matters do properly come before the meeting, the persons
named in the accompanying form of proxy intend to vote thereon in accordance
with their best judgment, and the discretionary authority to do so is included
in the proxy.
Annual Report on Form 10-K
Cox Radio's Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission, is enclosed with this proxy statement.
Transfer Agent and Registrar
Cox Radio's transfer agent and registrar is First Chicago Trust Company of
New York, a division of EquiServe LLP, 525 Washington Boulevard, Suite 4694,
Jersey City, New Jersey 07310.
Submission of Stockholder Proposals
It is anticipated that the 2002 Annual Meeting of Stockholders of Cox Radio
will be held in May 2002. Any stockholders who intend to present proposals at
the 2002 Annual Meeting of Stockholders, and who wish to have such proposals
included in Cox Radio's Proxy Statement for the 2002 Annual Meeting, must
ensure that such proposals are received by the Corporate Secretary of Cox
Radio not later than December 1, 2001. Such proposals must meet the
requirements set forth in the rules and regulations of the Securities and
Exchange Commission in order to be eligible for inclusion in Cox Radio's 2002
proxy materials. Any stockholder proposal that a stockholder intends to
present at the 2002 Annual Meeting, other than through inclusion in the proxy
materials, must be received at least 30 (but not more than 60) days prior to
the scheduled date of the 2002 Annual Meeting.
By Order of the Board of Directors,
/s/ Andrew A Merdek
Andrew A. Merdek
Corporate Secretary
Atlanta, Georgia
March 30, 2001
20
APPENDIX A
COX RADIO, INC.
Audit Committee Charter
The Board of Directors shall annually appoint at least three Directors (or,
prior to June 14, 2001, at least two Directors) to serve as Members of its
Audit Committee until their term as Director expires and their respective
successors have been appointed, including one such Member as Chairperson. The
Chairperson shall be responsible for leadership of the Committee, including
presiding over meetings and reporting to the Board. In the event that the
Chairperson is unable to perform at any time for any reason, he or she or the
Chairman of the Board may designate another Committee Member to act as
Chairperson in his or her absence. The Chairperson or his or her designee will
also maintain liaison with the CEO, CFO, the lead independent audit partner
and the director of internal audit.
Role and Independence
The Audit Committee of the Board of Directors assists the Board in
fulfilling its responsibility for oversight of the quality and integrity of
the accounting, auditing and reporting practices of Cox Radio, Inc. and such
other duties as directed by the Board. The membership of the Committee shall
consist of Directors who, in the business judgment of the Board, are generally
knowledgeable in financial and auditing matters, including at least one Member
with, in the business judgment of the Board, accounting or related financial
management expertise and shall otherwise meet the independence, financial
literacy and financial management expertise requirements for serving on audit
committees as set forth in the Corporate Governance Standards of the New York
Stock Exchange. Each Member shall be free of any relationship that, in the
business judgment of the Board, would interfere with his or her individual
exercise of independent judgment.
The Committee shall maintain free and open communication with the
independent auditors (including private executive sessions at least annually),
the internal auditors and management of the corporation. In discharging this
oversight role, the Committee is empowered to investigate any matter brought
to its attention, with full power to retain outside counsel or other experts
for this purpose.
Responsibilities
The Audit Committee's primary responsibilities include:
. Recommending at least annually to the Board the independent auditor to be
selected and retained to audit the financial statements of the
corporation. As a prerequisite to such recommendation, the Committee will
request from the independent auditor a written affirmation that the
independent auditor is in fact independent, discuss with the independent
auditor any relationships that may impact the independent auditor's
independence, consider the compatibility of any non-audit services with
such independence, and recommend to the Board any actions necessary to
oversee the independent auditor's independence.
. Overseeing the independent auditor relationship by discussing with the
independent auditor at least annually the nature and rigor of the audit
process, receiving and reviewing audit reports, approving audit fees and
non-audit fees, if any, and providing the independent auditor full access
to the Committee (and the Board) to report on any and all appropriate
matters.
. Providing guidance and oversight to the internal audit activities of the
corporation, including reviewing the organization, plans and results of
such activity.
. Reviewing the audited financial statements and discussing them with
management and the independent auditor. These discussions shall include
consideration of the quality of the Company's accounting principles as
applied in its financial reporting, including review of estimates,
reserves, accruals and other judgmental areas, review of audit
adjustments whether or not recorded and such other inquiries as may be
appropriate. Based on this review, the Committee shall make its
recommendation to the Board as to the inclusion of the Company's audited
financial statements in the Company's annual report on Form 10-K.
A-1
. Reviewing the interim quarterly financial statements with financial
management and the independent auditor prior to filing or prior to the
release of earnings. This quarterly financial review may be performed by
the Committee as a whole or, at his or her discretion, by its Chairperson
or his or her designee acting on its behalf.
. Discussing with management, the internal auditors and the independent
auditor, the quality and adequacy of the Company's internal controls.
. Reporting Audit Committee activities to the full Board.
. Issuing a shareholder report annually to be included in the proxy
statement (including appropriate oversight conclusions) beginning with
proxy statements relating to shareholder votes after December 15, 2000.
The shareholder report shall indicate whether, based on the review and
discussions, the Committee recommended to the Board that the audited
financial statements be included in the annual report on Form 10-K. The
shareholder report shall state whether the Committee considered the
compatibility of any non-audit services provided by the independent
auditors with the independence of the independent auditors. The
shareholder report shall also include a discussion of whether the Audit
Committee reviewed and discussed audited financial statements with
management and independent auditors, discussed Statement on Auditing
Standard #61 matters (Communication with Audit Committees) and
independence issues with independent auditors, and received the
communications from independent auditors required by Independence
Standards Board Standard #1.
. Fair and impartial review and oversight of related party transactions
consistent with (S)307 of the Listed Company Manual of the New York Stock
Exchange.
. Reviewing the activities of the Company's Risk Committee.
. Reviewing this Charter annually to assess its adequacy, and updating it
as necessary.
A-2
APPENDIX B
COX RADIO, INC.
AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN
SECTION 1. Purpose. The purpose of this Long-Term Incentive Plan (the
"Plan") of Cox Radio, Inc. (the "Corporation") is (a) to promote the identity of
interests between shareholders and employees of the Corporation by encouraging
and creating significant ownership of Common Stock of the Corporation by
officers and other employees of the Corporation and its subsidiaries; (b) to
enable the Corporation to attract and retain qualified officers and employees
who contribute to the Corporation's success by their ability, ingenuity and
industry; and (c) to provide meaningful long-term incentive opportunities for
officers and other employees who are responsible for the success of the
Corporation and who are in a position to make significant contributions toward
its objectives.
SECTION 2. Definitions. In addition to the terms defined elsewhere in the
Plan, the following shall be defined terms under the Plan:
2.01. "Award" means any Performance Award, Option, Stock Appreciation Right,
Restricted Stock, Deferred Stock, Dividend Equivalent, or Other Stock-Based
Award, or any other right or interest relating to Shares or cash, granted to a
Participant under the Plan.
2.02. "Award Agreement" means any written agreement, contract or other
instrument or document evidencing the terms and conditions of an individual
Award. Each Award Agreement shall be subject to the terms and conditions of the
Plan.
2.03. "Board" means the Board of Directors of the Corporation.
2.04. "Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.
2.05. "Committee" means the committee designated by the Board to administer
the Plan, or another committee to which certain administrative or other
functions have been delegated consistent with the terms of the Plan.
2.06. "Corporation" is defined as Cox Radio, Inc. or any successor to it in
ownership of substantially all of its assets, whether by merger, consolidation
or otherwise.
2.07. "Covered Employee" means the chief executive officer and the officers
of the Corporation for whom total compensation is required to be reported to
shareholders under the Exchange Act, as determined for purposes of Section
162(m) of the Code, and successor provisions.
2.08. "Deferred Stock" means a right, granted to a Participant under Section
6.05, to receive Shares at the end of a specified deferral period.
B-1
2.09. "Dividend Equivalent" means a right, granted to a Participant under
Section 6.03, to receive cash, Shares, other Awards, or other property equal in
value to dividends paid with respect to a specified number of Shares.
2.10. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.
2.11. "Fair Market Value" means, with respect to Shares, Awards or other
property, the fair market value of such Shares, Awards or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. Unless otherwise determined by the Committee, the Fair
Market Value of Shares as of any date shall be the average of the high and the
low sales price on that date of a Share as reported in the New York Stock
Exchange Composite Transaction Report; provided, that if there were no sales on
the valuation date but there were sales on dates within a reasonable period both
before and after the valuation date, the Fair Market Value is the weighted
average of the high and low sale prices on the nearest date before and the
nearest date after the valuation date. The average is to be weighted inversely
by the respective numbers of trading days between the selling dates and the
valuation date.
2.12. "Incentive Stock Option" means an Option that is intended to meet the
requirements of Section 422 of the Code.
2.13. "Non-Qualified Stock Option" means an Option that is not intended to
be an Incentive Stock Option.
2.14. "Option" means a right, granted to a Participant under Section 6.06,
to purchase Shares, other Awards, or other property at a specified price during
specified time periods. An Option may be either an Incentive Stock Option or a
Non-Qualified Stock Option.
2.15. "Other Stock-Based Award" means a right, granted to a Participant
under Section 6.08, that relates to or is valued by reference to Shares.
2.16. "Participant" means a person who, as an officer or employee of the
Corporation or any Subsidiary, has been granted an Award under the Plan.
2.17. "Performance Award" means a right, granted to a Participant under
Section 6.02, to receive cash, Shares, other Awards, or other property the
payment of which is contingent upon achievement of performance goals specified
by the Committee.
2.18. "Performance-Based Restricted Stock" means Restricted Stock that is
subject to a risk of forfeiture if specified performance criteria are not met
within the restriction period.
2.19. "Plan" is the Cox Radio, Inc. Amended and Restated Long-Term Incentive
Plan.
2.20. "Restricted Stock" means Shares granted to a Participant under Section
6.04, that are subject to certain restrictions and to a risk of forfeiture.
B-2
2.21. "Rule 16b-3" means Rule 16b-3, as from time to time amended,
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act.
2.22. "Shares" means the Class A Common Stock of the Corporation and such
other securities of the Corporation as may be substituted for Shares or such
other securities pursuant to Section 10.
2.23. "Stock Appreciation Right" means a right, granted to a Participant
under Section 6.07, to be paid an amount measured by the appreciation in the
Fair Market Value of Shares from the date of grant to the date of exercise of
the right, with payment to be made in cash, Shares, other Awards, or other
property as specified in the Award or determined by the Committee.
2.24. "Subsidiary" means any corporation (other than the Corporation) with
respect to which the Corporation owns, directly or indirectly, 50% or more of
the total combined voting power of all classes of stock.
2.25. "Year" means a calendar year.
SECTION 3. Administration.
3.01. Authority of the Committee. The Plan shall be administered by the
Committee. Each Award shall be evidenced by an Award Agreement, executed by the
Corporation and the Participant, in a form satisfactory to the Committee. The
Committee shall have full and final authority to take the following actions, in
each case subject to and consistent with the provisions of the Plan:
(i) to select and designate Participants;
(ii) to determine the type or types of Awards to be granted to each
Participant;
(iii) to determine the number of Awards to be granted, the number of
Shares to which an Award will relate, the terms and conditions of any Award
granted under the Plan (including, but not limited to, any exercise price,
grant price, or purchase price, any restriction or condition, any schedule
for lapse of restrictions or conditions relating to transferability or
forfeiture, exercisability, or settlement of an Award, and waivers or
accelerations thereof, and waiver of performance conditions relating to an
Award, based in each case on such considerations as the Committee shall
determine), and all other matters to be determined in connection with an
Award;
(iv) to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award may
be paid, in cash, Shares, other Awards, or other property, or an Award may be
cancelled, forfeited or surrendered;
(v) to determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, or other property payable with
respect to an Award will be deferred either automatically, at the election of
the Committee or at the election of the Participant;
B-3
(vi) to prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(vii) to adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(viii) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement or other instrument hereunder;
and
(ix) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem necessary
or advisable for the administration of the Plan.
3.02. Manner of Exercise of Committee Authority. Except to the extent
specifically reserved to another entity under the terms of the Plan or
applicable law, the Committee shall have sole discretion in exercising its
authority under the Plan. Any action of the Committee with respect to the Plan
shall be final, conclusive and binding on all persons, including the
Corporation, Subsidiaries, Participants and any person claiming any rights under
the Plan from or through any Participant. The express grant of any specific
power to the Committee, and the taking of any action by the Committee, shall not
be construed as limiting any power or authority of the Committee. A memorandum
signed by all members of the Committee shall constitute the act of the Committee
without the necessity, in such event, to hold a meeting. The Committee may
delegate to officers or managers of the Corporation or any Subsidiary the
authority to perform administrative functions under the Plan, subject to such
terms as the Committee shall determine. Notwithstanding any provisions of the
Plan to the contrary, the Committee may delegate any or all of its authority
under the terms of the Plan to any person or persons the Committee shall from
time to time designate.
3.03. Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Corporation or any
Subsidiary, the Corporation's independent certified public accountants, legal
counsel or any executive compensation consultant or other professional retained
by the Corporation to assist in the administration of the Plan. No member of the
Committee, nor any officer or employee of the Corporation acting on behalf of
the Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Corporation acting
on their behalf, shall, to the extent permitted by law, be fully indemnified and
protected by the Corporation with respect to any such action, determination, or
interpretation.
SECTION 4. Shares Subject to the Plan. Subject to adjustment as provided in
Section 10, the total number of Shares reserved and available for Awards under
the Plan shall be 13,200,000. For purposes of this Section 4, the number of and
time at which Shares shall be deemed to be subject to Awards and therefore
counted against the number of Shares reserved and
B-4
available under the Plan shall be the earliest date at which the Committee can
reasonably estimate the number of Shares to be distributed in settlement of an
Award or with respect to which payments will be made; provided that, subject to
the requirements of Rule 16b-3, the Committee may adopt procedures for the
counting of Shares relating to any Award for which the number of Shares to be
distributed or with respect to which payment will be made cannot be fixed at the
date of grant to ensure appropriate counting, avoid double counting (in the case
of tandem or substitute awards), and provide for adjustments in any case in
which the number of Shares actually distributed or with respect to which
payments are actually made differs from the number of Shares previously counted
in connection with such Award.
The Shares subject to the Plan may be unissued Shares or reacquired Shares,
bought on the open market or otherwise. If any Shares to which an Award relates
are forfeited or the Award is settled or terminates without a distribution of
Shares (whether or not cash, other Awards, or other property is distributed with
respect to such Award), any Shares counted against the number of Shares reserved
and available under the Plan with respect to such Award shall, to the extent of
any such forfeiture, settlement or termination, again be available for Awards
under the Plan; provided that in the event Rule 16b-3 applies to the issuance of
an Award, such Shares shall be available for issuance only to the extent the
issuance of such Shares would be exempted under Rule 16b-3.
SECTION 5. Eligibility. Awards may be granted only to individuals who are
officers or other employees (including employees who are also directors) of the
Corporation or a Subsidiary.
SECTION 6. Specific Terms of Awards.
6.01. General. Awards may be granted on the terms and conditions set forth
in this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 11.02),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including without limitation the
acceleration of vesting of any Awards or terms requiring forfeiture of Awards in
the event of termination of employment by the Participant. Except as provided in
Sections 7.03 or 7.04, only services may be required as consideration for the
grant of any Award.
6.02. Performance Awards. Subject to the provisions of Sections 7.01 and
7.02, the Committee is authorized to grant Performance Awards to Participants on
the following terms and conditions:
(i) Awards and Conditions. A Performance Award shall confer upon the
Participant rights, valued as determined by the Committee, and payable to, or
exercisable by, the Participant to whom the Performance Award is granted, in
whole or in part, as determined by the Committee, conditioned upon the
achievement of performance criteria determined by the Committee.
(ii) Other Terms. A Performance Award shall be denominated in Shares
and may be payable in cash, Shares, other Awards, or other property, and have
such other terms as shall be determined by the Committee.
B-5
6.03. Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Participants. The Committee may provide that Dividend Equivalents
shall be paid or distributed when accrued or shall be deemed to have been
reinvested in additional Shares or Awards, or otherwise reinvested.
6.04. Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions as the Committee
may impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends thereon), which
restrictions may lapse separately or in combination at such times, under such
circumstances, in such installments or otherwise as the Committee shall
determine.
(ii) Forfeiture. Performance-Based Restricted Stock shall be
forfeited unless preestablished performance criteria specified by the
Committee are met during the applicable restriction period. Except as
otherwise determined by the Committee, upon termination of employment (as
determined under criteria established by the Committee) during the applicable
restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited and reacquired by the Corporation; provided,
that the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of terminations resulting from specified causes.
(iii) Certificates of Shares. Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Participant, such certificates shall bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock,
the Corporation shall retain physical possession of the certificates, and the
Participant shall deliver a stock power to the Corporation, endorsed in
blank, relating to the Restricted Stock.
(iv) Dividends. Unless otherwise determined by the Committee, cash
dividends paid on Performance-Based Restricted Stock shall be automatically
reinvested in additional shares of Performance-Based Restricted Stock and
cash dividends paid on other Restricted Stock shall be paid to the
Participant. Dividends reinvested in Performance-Based Restricted Stock and
Shares distributed in connection with a stock split or stock dividend, and
other property distributed as a dividend, shall be subject to restrictions
and a risk of forfeiture to the same extent as the Restricted Stock with
respect to which such stock or other property has been distributed.
6.05. Deferred Stock. The Committee is authorized to grant Deferred Stock to
Participants, on the following terms and conditions:
(i) Award and Restrictions. Delivery of Shares will occur upon
expiration of the deferral period specified for Deferred Stock by the
Committee (or, if permitted by the
B-6
Committee, as elected by the Participant). In addition, Deferred Stock shall
be subject to such restrictions as the Committee may impose, which
restrictions may lapse at the expiration of the deferral period or at earlier
specified times, separately or in combination, in installments, or otherwise,
as the Committee shall determine.
(ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment (as determined under criteria established by
the Committee) during the applicable deferral period or portion thereof (as
provided in the Award Agreement evidencing the Deferred Stock), all Deferred
Stock that is at that time subject to deferral (other than a deferral at the
election of the Participant) shall be forfeited; provided, that the Committee
may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture conditions
relating to Deferred Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of Deferred Stock.
6.06. Options. The Committee is authorized to grant Options to Participants
on the following terms and conditions:
(i) Exercise Price. The exercise price per Share purchasable under an
Option shall be determined by the Committee; provided, that, except as
provided in Section 7.03, such exercise price shall be not less than the Fair
Market Value of a Share on the date of grant of such Option.
(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part, the
methods by which such exercise price may be paid or deemed to be paid, the
form of such payment, including, without limitation, cash, Shares, other
Awards or awards issued under other Corporation plans, or other property
(including notes or other contractual obligations of Participants to make
payment on a deferred basis, such as through "cashless exercise"
arrangements), and the methods by which Shares will be delivered or deemed to
be delivered to Participants. Options shall expire not later than ten years
after the date of grant.
(iii) Incentive Stock Options. The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code, including but not limited to the
requirement that no Incentive Stock Option shall be granted more than ten
years after the effective date of the Plan. Anything in the Plan to the
contrary notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended, or altered, nor shall any discretion
or authority granted under the Plan be exercised, so as to disqualify either
the Plan or any Incentive Stock Option under Section 422 of the Code. In the
event a Participant voluntarily disqualifies an Option as an Incentive Stock
Option, the Committee may, but shall not be obligated to, make such
additional Awards or pay bonuses as the Committee shall deem appropriate to
reflect the tax savings to the Corporation which result from such
disqualification.
6.07. Stock Appreciation Rights. The Committee is authorized to grant Stock
Appreciation Rights to Participants on the following terms and conditions:
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(i) Right to Payment. A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise thereof,
the excess of (A) the Fair Market Value of one Share on the date of exercise
(or, if the Committee shall so determine in the case of any such right, other
than one related to an Incentive Stock Option, the Fair Market Value of one
Share at any time during a specified period before or after the date of
exercise or Change in Control, as defined in Section 9.02) over (B) the grant
price of the Stock Appreciation Right as determined by the Committee as of
the date of grant of the Stock Appreciation Right, which, except as provided
in Section 7.03, shall be not less than the Fair Market Value of one Share on
the date of grant.
(ii) Other Terms. The Committee shall determine the time or times at
which a Stock Appreciation Right may be exercised in whole or in part, the
method of exercise, method of settlement, form of consideration payable in
settlement, method by which Shares will be delivered or deemed to be
delivered to Participants, and any other terms and conditions of any Stock
Appreciation Right. Limited Stock Appreciation Rights that may be exercised
only upon the occurrence of a Change in Control (as such term is defined in
Section 9.02) or as otherwise defined by the Committee) may be granted under
this Section 6.07. Stock Appreciation Rights shall expire not later than ten
years after the date of grant.
6.08. Other Stock-Based Awards. The Committee is authorized to grant to
Participants other Awards that are denominated or payable in, valued in whole or
in part by reference to, or otherwise based on or related to, Shares, as deemed
by the Committee to be consistent with the purposes of the Plan, including
without limitation, Shares awarded purely as a "bonus" and not subject to any
restrictions or conditions, convertible or exchangeable debt securities, other
rights convertible or exchangeable into Shares, purchase rights, and Awards
valued by reference to book value of Shares or the value of securities of or the
performance of specified Subsidiaries. The Committee shall determine the terms
and conditions of such Awards, which may include performance criteria. Shares
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6.08 shall be purchased for such consideration, paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Shares, other Awards, or other property, as the Committee shall determine.
SECTION 7. Certain Provisions Applicable to Awards.
7.01. Performance-Based Awards. Performance Awards, Performance-Based
Restricted Stock, and certain Other Stock-Based Awards subject to performance
criteria are intended to be "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code and shall be paid solely on account of
the attainment of one or more preestablished, objective performance goals within
the meaning of Section 162(m) and the regulations thereunder. As selected by the
Committee, the performance goal shall be the attainment of one or more of the
preestablished amounts of annual net income, operating income, cash flow,
earnings per share, return on assets, return on equity, return on capital or
total shareholder return of the Corporation.
The payout of any such Award to a Covered Employee may be reduced, but not
increased, based on the degree of attainment of other performance criteria or
otherwise at the direction of the Committee.
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7.02. Maximum Individual Awards. No individual may be granted more than
250,000 shares subject to any combination of Performance Awards, Restricted
Stock, or other Stock-Based Awards subject to performance criteria in any given
year. The maximum payout for any individual for a Performance Award paid in cash
is 100 percent of the participant's January 1 base salary for the year of the
Performance Award payment. No individual may receive more than 500,000 Options
in any given year. The Share amounts in this Section 7.02 are subject to
adjustment under Section 10 and are subject to the Plan maximum under Section 4.
7.03. Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution for any other Award
granted under the Plan or any award granted under any other plan of the
Corporation, any Subsidiary, or any business entity to be acquired by the
Corporation or a Subsidiary, or any other right of a Participant to receive
payment from the Corporation or any Subsidiary. If an Award is granted in
substitution for another Award or award, the Committee shall require the
surrender of such other Award or award in consideration for the grant of the new
Award. Awards granted in addition to or in tandem with other Awards or awards
may be granted either as of the same time as or a different time from the grant
of such other Awards or awards. The per Share exercise price of any Option,
grant price of any Stock Appreciation Right, or purchase price of any other
Award conferring a right to purchase Shares:
(i) Granted in substitution for an outstanding Award or award shall
be not less than the lesser of the Fair Market Value of a Share at the date
such substitute award is granted or such Fair Market Value at that date
reduced to reflect the Fair Market Value at that date of the Award or award
required to be surrendered by the Participant as a condition to receipt of
the substitute Award; or
(ii) Retroactively granted in tandem with an outstanding Award or
award shall be not less than the lesser of the Fair Market Value of a Share
at the date of grant of the later Award or at the date of grant of the
earlier Award or award.
7.04. Exchange Provisions. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Shares, other
Awards (subject to Section 7.03), or other property based on such terms and
conditions as the Committee shall determine and communicate to the Participant
at the time that such offer is made.
7.05. Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee; provided, that in no event shall the term of
any Option or a Stock Appreciation Right granted in tandem therewith exceed a
period of ten years from the date of its grant (or such shorter period as may be
applicable under Section 422 of the Code).
7.06. Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Corporation or a
Subsidiary upon the grant or exercise of an Award may be made in such form as
the Committee shall determine, including without limitation, cash, Shares, other
Awards, or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or
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deferred payments or the grant or crediting of Dividend Equivalents in respect
of installment or deferred payments denominated in Shares.
SECTION 8. General Restrictions Applicable to Awards.
8.01. Specific Restrictions.
8.01.1. Six-Month Holding Period. Unless a Participant could otherwise
transfer an equity security, derivative security, or Shares issued upon
exercise of a derivative security granted under the Plan without incurring
liability under Section 16(b) of the Exchange Act, (i) an equity security
issued under the Plan, other than an equity security issued upon exercise or
conversion of a derivative security granted under the Plan, shall be held for
at least six months from the date of acquisition; (ii) with respect to a
derivative security issued under the Plan, at least six months shall elapse
from the date of acquisition of the derivative security to the date of
disposition of the derivative security (other than upon exercise or
conversion) or its underlying equity security; and (iii) any Award in the
nature of a Stock Appreciation Right must be held for six months from the
date of grant to the date of cash settlement.
8.01.2. Nontransferability. Unless otherwise determined by the
Committee, Awards which constitute derivative securities (including any
option, stock appreciation right, or similar right) shall not be transferable
by a Participant except by will or the laws of descent and distribution
(except pursuant to a beneficiary designation authorized under Section 8.02)
or, if then permitted under Rule 16b-3, pursuant to a qualified domestic
relations order as defined under the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder,
and, in the case of an Incentive Stock Option or, if then required by Rule
16b-3, any other derivative security granted under the Plan, shall be
exercisable during the lifetime of a Participant only by such Participant or
his guardian or legal representative.
8.01.3. Compliance with Rule 16b-3. It is the intent of the Corporation
that this Plan comply in all respects with Rule 16b-3 in connection with any
Award granted to a person who is subject to Section 16 of the Exchange Act.
8.02. Limits on Transfer of Awards; Beneficiaries. No right or interest of a
Participant in any Award shall be pledged, encumbered, or hypothecated to or in
favor of any party (other than the Corporation or a Subsidiary), or shall be
subject to any lien, obligation, or liability of such Participant to any party
(other than the Corporation or a Subsidiary). Unless otherwise determined by the
Committee (subject to the requirements of Section 8.01.2), no Award shall be
assignable or transferable by a Participant otherwise than by will or the laws
of descent and distribution (except to the Corporation under the terms of the
Plan); provided, that a Participant may, in the manner established by the
Committee, designate a beneficiary or beneficiaries to exercise the rights of
the Participant, and to receive any distribution, with respect to any Award,
upon the death of the Participant. A beneficiary, guardian, legal
representative, or other person claiming any rights under the Plan from or
through any Participant shall be subject to all terms and conditions of the Plan
and any Award Agreement applicable to such Participant or agreement applicable
to such, except to the extent the Plan and such Award Agreement or
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agreement otherwise provide with respect to such persons, and to any additional
restrictions deemed necessary or appropriate by the Committee.
8.03. Registration and Listing Compliance. The Corporation shall not be
obligated to deliver any Award or distribute any Shares with respect to any
Award in a transaction subject to regulatory approval, registration, or any
other applicable requirement of federal or state law, or subject to a listing
requirement under any listing or similar agreement between the Corporation and
any national securities exchange or market, until such laws, regulations, and
contractual obligations of the Corporation have been complied with in full,
although the Corporation shall be obligated to use reasonable efforts to obtain
any such approval and comply with such requirements as promptly as practicable.
If, after reasonable efforts, the Corporation is unable to obtain from any
regulatory commission or agency or national securities exchange or market having
jurisdiction over the Plan the authority which counsel for the Corporation deems
necessary for the lawful issuance and sale of the Shares under the Plan, the
Corporation shall be relieved from any liability for failure to issue and sell
Shares upon exercise of such Awards unless and until such authority is obtained.
8.04. Share Certificates. All certificates for Shares delivered under the
Plan pursuant to any Award or the exercise thereof shall be subject to such
stop-transfer order and other restrictions as the Committee may deem advisable
under applicable federal or state laws, rules and regulations thereunder, and
the rules of any national securities exchange on which Shares are listed. The
Committee may cause a legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions or any other restrictions that
may be applicable to Shares, including under the terms of the Plan or any Award
Agreement. In addition, during any period in which Awards or Shares are subject
to restrictions under the terms of the Plan or any Award Agreement, or during
any period during which delivery or receipt of an Award or Shares has been
deferred by the Committee or a Participant, the Committee may require the
Participant to enter into an agreement providing that certificates representing
Shares issuable or issued pursuant to an Award shall remain in the physical
custody of the Corporation or such other person as the Committee may designate.
SECTION 9. Change in Control Provisions. Notwithstanding any other provision
of the Plan, the following acceleration provisions shall apply in the event of a
"Change in Control" as defined in this Section 9.
9.01. Acceleration and Cash-Out Rights. In the event of a "Change in
Control" and a "Qualified Termination" as defined in Sections 9.02 and 9.03,
respectively, automatically in the case of Participants subject to Section 16 of
the Exchange Act, and unless otherwise determined by the Board in writing at or
after grant but prior to the occurrence of the Change in Control in the case of
Participants not subject to Section 16 of the Exchange Act:
(i) the performance criteria of all Performance Awards, Performance-
Based Restricted Stock, and Other Stock-Based Awards shall be deemed fully
achieved and all such Awards shall be fully earned and vested, subject only
to the restrictions on dispositions of equity securities set forth in Section
8.01.1 and legal restrictions on the issuance of Shares set forth in Section
8.04;
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(ii) any Option, Stock Appreciation Right, and other Award in the
nature of a right that may be exercised which was not previously exercisable
and vested shall become fully exercisable and vested, subject only to the
restrictions on disposition of equity securities set forth in Section 8.01.1
and legal restrictions on the issuance of Shares set forth in Section 8.04;
and
(iii) the restrictions, deferral limitations, and forfeiture
conditions applicable to any other Award granted under the Plan shall lapse
and such Awards shall be deemed fully vested, subject only to the
restrictions on dispositions of equity securities set forth in Section 8.01.1
and legal restrictions on the issuance of Shares set forth in Section 8.04.
9.02. Change in Control. For purposes of Section 9.01, a "Change in Control"
shall mean any transaction that results in the voting control of the Corporation
held by Cox Enterprises, Inc., its successor or any subsidiary of either falling
below 50.1 percent.
9.03. Qualified Termination. For the purposes of Section 9.01, a "Qualified
Termination" shall mean any termination of employment for reasons other than (i)
Cause; (ii) death, Disability or Retirement, or (iii) by the Participant without
Good Reason within one (1) year following a Change in Control.
(a) "Cause" shall mean (i) the willful and continued failure by the
Participant to substantially perform the Participant's duties with the
Corporation or (ii) the willful engaging by the Participant in conduct which
is demonstrably and materially injurious to the Corporation or its
subsidiaries, monetarily or otherwise.
(b) "Disability" shall be deemed the reason for the termination by
the Corporation of the Participant's employment, if, as a result of the
Participant's incapacity due to physical or mental illness, the Participant
shall have been absent from the full-time performance of the Participant's
duties with the Corporation for a period of six (6) consecutive months.
(c) "Good Reason" for termination by the Participant of the
Participant's employment shall mean the occurrence (without the Participant's
express written consent) after any Change in Control of any one of the
following acts by the Corporation.
(i) a reduction by the Corporation in the Participant's annual
base salary other than for Cause or a Corporation-wide reduction in
annual base salaries that generally affects similarly situated employees
of the Corporation;
(ii) the relocation of the Corporation's principal executive
offices to a location more than fifty (50) miles from the location of
such offices immediately prior to the Change in Control, but only in the
event the Participant was employed at the Corporation's principal
executive offices immediately prior to such relocation.
(d) "Retirement" shall be deemed the reason for the termination by
the Corporation or the Participant of the Participant's employment if such
employment is terminated in accordance with the Corporation's retirement
policy generally applicable to its employees, as in effect immediately prior
to the Change in Control, or in accordance with any
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retirement arrangement established with the Participant's consent with
respect to the Participant.
SECTION 10. Adjustment Provisions. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares, or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Shares such that an adjustment is determined by the Committee to be appropriate
in order to prevent dilution or enlargement of the rights of Participants under
the Plan, then the Committee may, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of Shares which may thereafter be
issued in connection with Awards (ii) the number and kind of Shares issued or
issuable in respect of outstanding Awards, and (iii) the exercise price, grant
price, or purchase price relating to any Award or, if deemed appropriate, make
provision for a cash payment with respect to any outstanding Award; provided,
however, in each case, that, with respect to Incentive Stock Options, no such
adjustment shall be authorized to the extent that such authority would cause the
Plan to violate Section 422(b)(1) of the Code. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, events described in the preceding sentence) affecting the
Corporation or any Subsidiary or the financial statements of the Corporation or
any Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles.
SECTION 11. Changes to the Plan and Awards.
11.01. Changes to the Plan. The Board may amend, alter, suspend, discontinue
or terminate the Plan without the consent of shareholders or Participants,
except that any such amendment, alteration, suspension, discontinuation, or
termination shall be subject to the approval of the Corporation's shareholders
within one year after such Board action if such shareholder approval is required
by any federal or state law or regulation or the rules of any stock exchange on
which the Shares may be listed, or if the Board in its discretion determines
that obtaining such shareholder approval is for any reason advisable; provided,
however, that, without the consent of an affected Participant, no amendment,
alteration, suspension, discontinuation, or termination of the Plan may impair
the rights of such Participant under any Award previously granted to him.
11.02. Changes to Awards. The Committee may waive any conditions or rights
under, or amend, alter, suspend, discontinue, or terminate, any Award previously
granted and any Award Agreement relating thereto; provided, however, that,
without the consent of an affected Participant, no such amendment, alteration,
suspension, discontinuation, or termination of any Award may impair the rights
of such Participant under such Award.
SECTION 12. General Provisions.
12.01. No Rights to Awards. No Participant or employee shall have any claim
to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants and employees.
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12.02. No Shareholder Rights. No Award shall confer on any Participant any
of the rights of a shareholder of the Corporation unless and until Shares are
duly issued or transferred to the Participant in accordance with the terms of
the Award.
12.03. Tax Withholding. The Corporation or any Subsidiary is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to a Participant, amounts or withholding and other taxes due with respect
thereto, its exercise, or any payment thereunder, and to take such other action
as the Committee may deem necessary or advisable to enable the Corporation and
Participants to satisfy obligations for the payment of withholding taxes and
other tax liabilities relating to any Award, provided, that no Shares are
withheld with a value exceeding the minimum amount of tax required to be
withheld by law. This authority shall include authority to withhold or receive
Shares or other property and to make cash payments in respect thereof in
satisfaction of Participant's tax obligations.
12.04. No Right to Employment. Nothing contained in the Plan or any Award
Agreement shall confer, and no grant of an Award shall be construed as
conferring, upon any employee any right to continue in the employ of the
Corporation or any Subsidiary or to interfere in any way with the right of the
Corporation or any Subsidiary to terminate his employment at any time or
increase or decrease his compensation from the rate in existence at the time of
granting of an Award.
12.05. Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Corporation; provided, that the
Committee may authorize the creation of trusts or make other arrangements to
meet the Corporation's obligations under the Plan to deliver cash, Shares, other
Awards, or other property pursuant to any award, which trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan unless
the Committee otherwise determines.
12.06. Other Compensatory Arrangements. The Corporation or any Subsidiary
shall be permitted to adopt other or additional compensation arrangements (which
may include arrangements which relate to Awards), and such arrangements may be
either generally applicable or applicable only in specific cases.
12.07. Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine whether cash,
other Awards, or other property shall be issued or paid in lieu of fractional
Shares or whether such fractional Shares or any rights thereto shall be
forfeited or otherwise eliminated.
12.08. Governing Law. The validity, construction, and effect of the Plan,
any rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws, and applicable Federal law.
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SECTION 13. Effective Date. The Plan, as amended and restated, shall become
effective on the date this amended and restated version is adopted under the
provisions of Section 11.01, subject to the approval of the Corporation's
shareholders.
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APPENDIX C
[ COX RADIO, INC. LOGO ]
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COX RADIO, INC. FOR
ANNUAL MEETING ON MAY 23, 2001.
The undersigned hereby appoints Robert F. Neil, Andrew A. Merdek, and Neil O.
Johnston, or any of them, and any substitute or substitutes, to be the attorneys
and proxies of the undersigned at the Annual Meeting of Stockholders of Cox
Radio, Inc. ("Cox") to be held at 9:30 a.m. local time on Wednesday, May 23,
2001, at Corporate Headquarters at 1400 Lake Hearn Drive, NE, Atlanta, Georgia,
or at any adjournment thereof, and to vote at such meeting the shares of stock
of Cox the undersigned held of record on the books of Cox on March 26, 2001, the
record date for the meeting. The undersigned hereby revokes any previous proxies
with respect to the matters covered by this proxy.
(change of address/comments)
_______________________________
_______________________________
_______________________________
ELECTION OF DIRECTORS, NOMINEES:
1. David E. Easterly
2. Ernest D. Fears, Jr.
3. Richard A. Ferguson
4. Paul M. Hughes
5. James C. Kennedy
6. Marc W. Morgan
7. Robert F. Neil
8. Nicholas D. Trigony
INDEPENDENT AUDITORS:
Deloitte & Touche LLP (If you have written in the above space, please
mark the corresponding box on the reverse side
of this card)
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. The proxies cannot vote your
shares unless you sign and return this card or vote by telephone or Internet.
SEE REVERSE SIDE
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FOLD AND DETACH HERE
[X] Please mark your votes as in this example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR proposals 1, 2 and 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
FOR WITHHELD
1. Election of [ ] [ ]
Directors (see reverse)
For, except vote withheld from the following nominee(s):
- ------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Adoption of [ ] [ ] [ ]
the Amended and Restated Long-Term Incentive Plan
3. Ratification of [ ] [ ] [ ]
appointment of independent auditors
In the discretion of the proxies named herein, the proxies are authorized to
vote upon other matters as are properly brought before the meeting.
Change of Address/Comments [ ]
on reverse side.
I plan to attend the meeting. [ ]
All as more particularly described in the Proxy Statement relating to such
meeting, receipt of which is hereby acknowledged.
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
SIGNATURE(S) _________________________________ DATE _________________
C-2
FOLD AND DETACH HERE
(COX RADIO, INC. LOGO)
VOTE BY TELEPHONE OR INTERNET
QUICK * EASY * IMMEDIATE
Cox Radio, Inc. encourages you to take advantage of two cost-effective and
convenient ways to vote your shares. You may vote your proxy 24 hours a day, 7
days a week, using either a touch-tone telephone or through the Internet. Your
telephone or Internet vote must be received by 8:00 a.m. Eastern Time on May 23,
2001. Your telephone or Internet vote authorizes the proxies named on the above
proxy card to vote your shares in the same manner as if you marked, signed, and
returned your proxy card.
VOTE BY PHONE: ON A TOUCH-TONE TELEPHONE DIAL 1-877-PRX-VOTE (1-877-779-8683)
FROM THE U.S. AND CANADA OR DIAL 1-201-536-8073 FROM OTHER COUNTRIES. You will
be asked to enter the Voter Control Number located in the box just below the
perforation on the proxy card. Then follow the instructions.
OR
VOTE BY INTERNET: POINT YOUR BROWSER TO THE WEB ADDRESS:
http://www.eproxyvote.com/cox. Click on the "Vote Your Proxy" Icon. You will be
asked to enter the Voter Control Number located in the box just below the
perforation on the proxy card. Then follow the instructions.
OR
VOTE BY MAIL: Mark, sign and date your proxy card and return it in the postage-
paid envelope. If you are voting by telephone or the Internet, please do not
mail your proxy card.
CONSENT TO ELECTRONIC DELIVERY
If you choose to vote by Internet, you also will be given the opportunity to
receive future annual meeting and proxy materials by electronic delivery,
instead of by mail. If you wish to do so, the website will prompt you to click
on a "proxy consent" link for further instructions and registration. If you
register for electronic delivery, prior to the next annual meeting you will
receive notice by e-mail directing you to a website containing the annual report
and proxy statement. By choosing electronic delivery, you will help your
company control printing and postage costs.
C-3
[COX RADIO LOGO]