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164 clearchanne

  1. 1. ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C., 20549 Form 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date Of Report (Date Of Earliest Event Reported): 8/5/2005 CLEAR CHANNEL COMMUNICATIONS INC (Exact Name of Registrant as Specified in its Charter) Commission File Number: 001-09645 TX 74-1787539 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 200 E. Basse San Antonio, TX 78209 (Address of Principal Executive Offices, Including Zip Code) 210-822-2828 (Registrant’s Telephone Number, Including Area Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR240.14a-12) [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17CFR240.14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17CFR240.13e-4(c)) ================================================================================
  2. 2. Items to be Included in this Report Item 1.01 Entry into a Material Definitive Agreement On August 5, 2005, Clear Channel Outdoor Holdings, Inc., a wholly-owned subsidiary of Clear Channel Communications, Inc., (the quot;Companyquot;) entered into an employment agreement with Paul J. Meyer, which replaced the existing employment agreement by and between Mr. Meyer and the Company. The initial term of the new agreement ends on the third anniversary of the date of the agreement; the term automatically extends one day at a time beginning on the second anniversary of the date of the agreement, unless one party gives the other one year’s notice of expiration at or prior to the second anniversary of the date of the agreement. The contract calls for Mr. Meyer to be the President and Chief Operating Officer of Clear Channel Outdoor Holdings, Inc. for a base salary of $600,000 in the first year of the agreement; $625,000 in the second year of the agreement; and $650,000 in the third year of the agreement, subject to additional annual raises thereafter in accordance with company policies. Mr. Meyer is also eligible to receive a performance bonus as decided at the sole discretion of the board of directors and the compensation committee of Clear Channel Outdoor Holdings, Inc. Mr. Meyer may terminate his employment at any time after the second anniversary of the date of the agreement upon one year’s written notice. Clear Channel Outdoor Holdings, Inc. may terminate Mr. Meyer without quot;Causequot; after the second anniversary of the date of the agreement upon one year’s written notice. quot;Causequot; is narrowly defined in the agreement. If Mr. Meyer is terminated without quot;Cause,quot; he is entitled to receive a lump sum payment of accrued and unpaid base salary and prorated bonus, if any, and any payments to which he may be entitled under any applicable employee benefit plan. Mr. Meyer is prohibited by his employment agreement from activities that compete with Clear Channel Outdoor Holdings, Inc. for one year after he leaves Clear Channel Outdoor Holdings, Inc. and he is prohibited from soliciting Clear Channel Outdoor Holdings, Inc. employees for employment for 12 months after termination regardless of the reason for termination of employment. Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 9, 2005 Clear Channel Communications, Inc. issued a press release announcing its earnings for the quarter ended June 30, 2005. The information contained in Exhibit 99.1 is incorporated herein by reference. The information in this Current Report is being furnished and shall not be deemed quot;filedquot; for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended. Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 10.1 Employment Agreement by and between Clear Channel Outdoor Holdings, Inc. and Mr. Paul Meyer dated August 5, 2005. 99.1 Press Release of Clear Channel Communications, Inc. issued August 9, 2005.
  3. 3. Signature(s) Pursuant to the Requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the Undersigned hereunto duly authorized. CLEAR CHANNEL COMMUNICATIONS, INC. Date: August 9, 2005 By: /s/ HERBERT W. HILL JR. -------------------------------- Herbert W. Hill, Jr. Sr. Vice President/ Chief Accounting Officer
  4. 4. INDEX TO EXHIBITS 10.1 Employment Agreement by and between Clear Channel Outdoor Holdings, Inc. and Mr. Paul Meyer dated August 5, 2005. 99.1 Press Release of Clear Channel Communications, Inc. issued August 9, 2005.
  5. 5. EXHIBIT 10.1 EMPLOYMENT AGREEMENT [PAUL MEYER] This Employment Agreement is entered into and effective as of the Company’s signature below (the quot;Effective Datequot;) between Clear Channel Outdoor Holdings, Inc., a Delaware corporation (the quot;Companyquot;) and Paul Meyer (the quot;Employeequot;). WHEREAS, the Company and the Employee desire to enter into an employment relationship under the terms and conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. TERM OF EMPLOYMENT. The Employee’s current Term of employment starts on the Effective Date and ends no earlier than the third anniversary of the Effective Date, unless neither party has given the one year notice described in Section 7(c) or 7(d), below. If such one year notice has not been given, the Term shall automatically extend, beginning on the second anniversary of the Effective Date, one day at a time, until such notice has been given. 2. TITLE AND DUTIES. The Employee’s title is President and Chief Operating Officer, Clear Channel Outdoor. The Company may later choose to elevate this title and responsibilities to Chief Executive Officer, at its sole discretion. Employee understands and agrees that he will not receive any additional compensation in the event of such change in title and responsibilities. The Employee will perform job duties that are usual and customary for this position, and will perform additional services and duties that the Company may from time to time designate that are consistent with the usual and customary duties of this position or of a Chief Executive Officer. The Employee will report to the President and Chief Executive Officer, Clear Channel Communications, Inc., currently Mark Mays. The Employee will devote his full working time and efforts to the business and affairs of Clear Channel Outdoor in its newly combined domestic and international organizational form. 3. COMPENSATION AND BENEFITS (a) BASE SALARY. The Company will pay the Employee an annual base salary of $600,000 for the first year after the Effective Date; $625,000 for the second year after the Effective Date; and $650,000 for the third year after the Effective Date. The Employee will be eligible for additional annual raises commensurate with Company policy. All payments of base salary will be made in installments according to the Company’s regular payroll practice, prorated monthly or weekly where appropriate, and subject to any increases that are determined to be appropriate by the Board of Directors of the Company (quot;Boardquot;) and its Compensation Committee.
  6. 6. (b) PERFORMANCE BONUS. No later than March 31 of each calendar year during the term, Employee will be eligible to receive a performance bonus as set forth in the Performance Bonus Calculation attached as quot;Exhibit Aquot; to this Employment Agreement. (c) EMPLOYMENT BENEFIT PLANS. The Employee will be entitled to participate in: all pension, profit sharing, and other retirement plans; all incentive compensation plans; and all group health, hospitalization and disability or other insurance plans; paid vacation, sick leave and other employee welfare benefit plans in which other similarly situated employees of the Company may participate as stated in the employee guide. (d) EXPENSES. The Company will pay or reimburse the Employee for all normal and reasonable travel and entertainment expenses incurred by the Employee in connection with the Employee’s responsibilities to the Company upon submission of proper vouchers in accordance with the Company’s expense reimbursement policy. (e) STOCK OPTIONS. Any future stock option grants will be granted based upon the performance of the Employee, which will be assessed in the sole discretion of the Company and the Compensation Committee of the Board. All option grants shall be made under the terms and conditions set forth in the applicable Clear Channel Communications Stock Option Plan under which they are issued. The Company reserves the right to modify any future Company incentive compensation or stock option plan with respect to the change of control, the granting of restricted stock or any other provision of such plans. The Company’s obligations under this agreement to the Employee in the area of stock options are conditioned upon and subject to the Company’s future decision, in its sole discretion, to: 1) alter, suspend or discontinue its stock option grant program; or 2) replace the program with an alternative form or method of compensation. 4. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. During the course of the Employee’s employment with the Company, the Company will provide the Employee with access to certain confidential information, trade secrets, and other matters which are of a confidential or proprietary nature, including but not limited to the Company’s customer lists, pricing information, production and cost data, compensation and fee information, strategic business plans, budgets, financial statements, and other information the Company treats as confidential or proprietary (collectively the quot;Confidential Informationquot;). The Company provides on an ongoing basis such Confidential Information as the Company deems necessary or desirable to aid the Employee in the performance of his duties. The Employee understands and acknowledges that such Confidential Information is confidential and proprietary, and agrees not to disclose such Confidential Information to anyone outside the Company except to the extent that (i) the Employee deems such disclosure or use reasonably necessary or appropriate in connection with performing his duties on behalf of the Company; (ii) the Employee is required by order of a court of competent jurisdiction (by subpoena or similar process) to disclose or discuss any Confidential Information, provided that in such case, the Employee shall promptly inform the Company of such event, shall cooperate with the Company in attempting to obtain a protective order or to otherwise restrict such disclosure, and shall only disclose Confidential Information to the minimum extent necessary to comply with any such court order; or (iii) such Confidential Information becomes generally known to and available for use in the industries in which the Company does business, other than as a result of any action or inaction by the Employee. The Employee further agrees that he will not during employment and/or at any time thereafter use such Confidential Information in competing, directly or 2
  7. 7. indirectly, with the Company. At such time as the Employee shall cease to be employed by the Company, he will immediately turn over to the Company all Confidential Information, including papers, documents, writings, electronically stored information, other property, and all copies of them, provided to or created by him during the course of his employment with the Company. This nondisclosure covenant is binding on the Employee, as well as his heirs, successors, and legal representatives, and will survive the termination of this Agreement for any reason. 5. NONHIRE OF COMPANY EMPLOYEES. To further preserve the rights of the Company pursuant to the nondisclosure covenant discussed above, and for the consideration promised by the Company under this Agreement, during the term of the Employee’s employment with the Company and for a period of twelve months thereafter, regardless of the reason for termination of employment, the Employee will not, directly or indirectly, (i) hire any current or prospective employee of the Company, or any subsidiary or affiliate of the Company (including, without limitation, any current or prospective employee of the Company within the 6-month period preceding the Employee’s last day of employment with the Company or within the 12-month period of this covenant) who worked, works, or has been offered employment by the Company; (ii) solicit or encourage any such employee to terminate their employment with the Company, or any subsidiary or affiliate of the Company; or (iii) solicit or encourage any such employee to accept employment with any business, operation, corporation, partnership, association, agency, or other person or entity with which the Employee may be associated. If, during the term of this non-hire covenant, the Employee learns that any such employee has accepted employment with any business, operation, corporation, partnership, association, agency, or other person or entity with which the Employee may be associated (other than the Company), the Employee will immediately send notice to the Company identifying the employee and certifying that the Employee did not breach any provision of this non-hire covenant. 6. NON-COMPETITION. To further preserve the rights of the Company pursuant to the nondisclosure covenant discussed above, and for the consideration promised by the Company under this Agreement, during the Employee’s employment with the Company and for a period of one year thereafter, regardless of the reason for termination of employment, the Employee will not, directly or indirectly, as an owner, director, principal, agent, officer, employee, partner, consultant, servant, or otherwise, carry on, operate, manage, control, or become involved in any manner with any business, operation, corporation, partnership, association, agency, or other person or entity which is in the same business as the Company in any location in which the Company, or any subsidiary or affiliate of the Company, operates or has plans or has projected to operate during the Employee’s employment with the Company, including any area within a 50-mile radius of any such location. The foregoing shall not prohibit the Employee from owning up to 5.0% of the outstanding stock of any publicly held company. Notwithstanding the foregoing, after the Employee’s employment with the Company has terminated, upon receiving written permission by the Board, the Employee shall be permitted to engage in such competing activities that would otherwise be prohibited by this covenant if such activities are determined in the sole discretion of the Board in good faith to be immaterial to the operations of the Company, or any subsidiary or affiliate of the Company, in the location in question. 3
  8. 8. To further preserve the rights of the Company pursuant to the nondisclosure covenant discussed above, and for the consideration promised by the Company under this Agreement, during the term of the Employee’s employment with the Company and for a period of one year thereafter, regardless of the reason for termination of employment, the Employee will not, directly or indirectly, either for himself or for any other business, operation, corporation, partnership, association, agency, or other person or entity, call upon, compete for, solicit, divert, or take away, or attempt to divert or take away current or prospective customers (including, without limitation, any customer with whom the Company, or any subsidiary or affiliate of the Company, (i) has an existing agreement or business relationship; (ii) has had an agreement or business relationship within the six-month period preceding the Employee’s last day of employment with the Company; or (iii) has included as a prospect in its applicable pipeline) of the Company, or any subsidiary or affiliate of the Company. The Company and the Employee agree that the restrictions contained in this noncompetition covenant are reasonable in scope and duration and are necessary to protect the Company’s business interests and Confidential Information. If any provision of this noncompetition covenant as applied to any party or to any circumstance is adjudged by a court or arbitrator to be invalid or unenforceable, the same will in no way affect any other circumstance or the validity or enforceability of this Agreement. If any such provision, or any part thereof, is held to be unenforceable because of the scope, duration, or geographic area covered thereby, the parties agree that the court or arbitrator making such determination shall have the power to reduce the scope and/or duration and/or geographic area of such provision, and/or to delete specific words or phrases, and in its reduced form, such provision shall then be enforceable and shall be enforced. The parties agree and acknowledge that the breach of this noncompetition covenant will cause irreparable damage to the Company, and upon breach of any provision of this noncompetition covenant, the Company shall be entitled to injunctive relief, specific performance, or other equitable relief; provided, however, that this shall in no way limit any other remedies which the Company may have (including, without limitation, the right to seek monetary damages). Should the Employee violate the provisions of this noncompetition covenant, then in addition to all other rights and remedies available to the Company at law or in equity, the duration of this covenant shall automatically be extended for the period of time from which the Employee began such violation until he permanently ceases such violation 7. TERMINATION. The Employee’s employment with the Company may be terminated under the following circumstances: (a) DEATH. The Employee’s employment with the Company shall terminate upon his death. (b) DISABILITY. The Company may terminate the Employee’s employment with the Company if, as a result of the Employee’s incapacity due to physical or mental illness, the Employee is unable to perform his duties under this Agreement on a full-time basis for more than 90 days in any 12 month period, as determined by the Company. 4
  9. 9. (c) TERMINATION BY THE COMPANY. The Company may terminate the Employee’s employment with the Company for any reason at any time after the second anniversary of the Effective Date upon one year’s written notice, and, in no case to be effective earlier than the third anniversary of the Effective Date. The Company may also terminate the Employee’s employment for Cause. A termination for Cause must be for one or more of the following reasons: (i) conduct by the Employee constituting a material act of willful misconduct in connection with the performance of his duties, including, without limitation, violation of the Company’s policy on sexual harassment, misappropriation of funds or property of the Company or any of its affiliates other than the occasional, customary and de minimis use of Company property for personal purposes, or other willful misconduct as determined in the sole discretion of the Company; (ii) continued, willful and deliberate non-performance by the Employee of his duties hereunder (other than by reason of the Employee’s physical or mental illness, incapacity or disability) where such non-performance has continued for more than 10 days following written notice of such non-performance; (iii) the Employee’s refusal or failure to follow lawful directives where such refusal or failure has continued for more than 30 days following written notice of such refusal or failure; (iv) a criminal or civil conviction of the Employee, a plea of nolo contendere by the Employee, or other conduct by the Employee that, as determined in the sole discretion of the Board, has resulted in, or would result in if he were retained in his position with the Company, material injury to the reputation of the Company, including, without limitation, conviction of fraud, theft, embezzlement, or a crime involving moral turpitude; (v) a breach by the Employee of any of the provisions of this Agreement; or (vi) a violation by the Employee of the Company’s employment policies. (d) TERMINATION BY THE EMPLOYEE. The Employee may terminate his employment with the Company at any time after the second anniversary of the Effective Date with a one year written notice to Company, and, in no case to be effective earlier than the third anniversary of the Effective Date. 8. COMPENSATION UPON TERMINATION. (a) DEATH. If the Employee’s employment with the Company terminates by reason of his death, the Company will, within 90 days, pay in a lump sum amount to such person as the Employee shall designate in a notice filed with the Company or, if no such person is designated, to the Employee’s estate, the Employee’s accrued and unpaid base salary and prorated bonus, if any (See Exhibit A), and any payments to which the Employee’s spouse, beneficiaries, or estate may be entitled under any applicable employee benefit plan (according to the terms of such plans and policies). (b) DISABILITY. If the Employee’s employment with the Company terminates by reason of his disability, the Company shall, within 90 days, pay in a lump sum amount to the Employee his accrued and unpaid base salary and prorated bonus, if any (See Exhibit A), and any payments to which he may be entitled under any applicable employee benefit plan (according to the terms of such plans and policies). (c) TERMINATION BY THE COMPANY FOR CAUSE. If the Employee’s employment with the Company is terminated by the Company for Cause the Company will, within 90 days, pay in a lump sum amount to the Employee his accrued and unpaid base salary and any payments to which he may be entitled under any applicable employee benefit plan (according to the terms of such plans and policies). 5
  10. 10. (d) TERMINATION BY THE COMPANY WITHOUT CAUSE. If the Employee’s employment with the Company is terminated by the Company without Cause, the Company will, within 90 days after the effective date of the termination, pay in a lump sum amount to the Employee his accrued and unpaid base salary and prorated bonus, if any (See Exhibit A), and any payments to which he may be entitled under any applicable employee benefit plan (according to the terms of such plans and policies). Additionally, Employee will receive a total of $600,000, paid pro rata over a one year period in accordance with the Company’s standard payroll schedule and practices, as consideration for Employee’s post-termination non-compete and non-solicitation obligations under Paragraphs Five and Six, above. (e) EFFECT OF COMPLIANCE WITH COMPENSATION UPON TERMINATION PROVISIONS. Upon complying with Subparagraphs 8(a) through 8(d) above, as applicable, the Company will have no further obligations to the Employee except as otherwise expressly provided under this Agreement, provided that such compliance will not adversely affect or alter the Employee’s rights under any employee benefit plan of the Company in which the Employee has a vested interest, unless, otherwise provided in such employee benefit plan or any agreement or other instrument attendant thereto. 9. PARTIES BENEFITED; ASSIGNMENTS. This Agreement shall be binding upon the Employee, his heirs and his personal representative or representatives, and upon the Company and its respective successors and assigns. Neither this Agreement nor any rights or obligations hereunder may be assigned by the Employee, other than by will or by the laws of descent and distribution. 10. NOTICES. Any notice provided for in this Agreement will be in writing and will be deemed to have been given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid. If to the Board or the Company, the notice will be sent to Mark P. Mays, President and Chief Executive Officer, Clear Channel Communications, Inc., 200 E. Basse Road, San Antonio, TX 78209 and a copy of the notice will be sent to Andrew W. Levin, EVP and CLO, Clear Channel Communications, Inc., 200 E. Basse Road, San Antonio, TX 78209 . If to the Employee, the notice will be sent to 5109 N. 34th Place, Phoenix, AZ 85018. Such notices may alternatively be sent to such other address as any party may have furnished to the other in writing in accordance with this Agreement, except that notices of change of address shall be effective only upon receipt. 11. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas without giving effect to any choice of law or conflict provisions or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas and the Employee hereby expressly consents to the personal jurisdiction of the state and federal courts located in the State of Texas for any lawsuit arising from or relating to this Agreement. 6
  11. 11. 12. DEFINITION OF COMPANY. As used in this Agreement, the term quot;Companyquot; shall include any of its past, present and future divisions, operating companies, subsidiaries and affiliates. 13. LITIGATION AND REGULATORY COOPERATION. During and after the Employee’s employment, the Employee shall reasonably cooperate with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Employee was employed by the Company; provided, however, that such cooperation shall not materially and adversely affect the Employee or expose the Employee to an increased probability of civil or criminal litigation. The Employee’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Employee’s employment, the Employee also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Employee was employed by the Company. The Company will pay the Employee on an hourly basis (to be derived from his base salary) for requested litigation and regulatory cooperation that occurs after his termination of employment, and reimburse the Employee for all costs and expenses incurred in connection with his performance under this paragraph, including, but not limited to, reasonable attorneys’ fees and costs. 14. INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES. The Company shall indemnify the Employee to the fullest extent permitted by law, in effect at the time of the subject act or omission, and shall advance to the Employee reasonable attorneys’ fees and expenses as such fees and expenses are incurred (subject to an undertaking from the Employee to repay such advances if it shall be finally determined by a judicial decision which is not subject to further appeal that the Employee was not entitled to the reimbursement of such fees and expenses), and the Employee will be entitled to the protection of any insurance policies that the Company may elect to maintain generally for the benefit of its directors and officers against all costs, charges and expenses incurred or sustained by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer or employee of the Company or any of its subsidiaries, or his serving or having served any other enterprise as a director, officer or employee at the request of the Company (other than any dispute, claim or controversy arising under or relating to this Agreement). The Company covenants to maintain during the Employee’s employment for the benefit of the Employee (in his capacity as an officer and director of the Company) Directors and Officers Insurance providing benefits to the Employee no less favorable, taken as a whole, than the benefits provided to the other similarly situated employees of the Company by the Directors and Officers Insurance maintained by the Company on the date hereof; provided, however, that the Board may elect to terminate Directors and Officers Insurance for all officers and directors, including the Employee, if the Board determines in good faith that such insurance is not available or is available only at unreasonable expense. 7
  12. 12. 15. ARBITRATION. The parties agree that any dispute, controversy or claim, whether based on contract, tort, statute, discrimination, retaliation, or otherwise, relating to, arising from or connected in any manner to this Agreement, or to the alleged breach of this Agreement, or arising out of or relating to Employee’s employment or termination of employment, shall, upon timely written request of either party be submitted to and resolved by binding arbitration. The arbitration shall be conducted in San Antonio, Texas. The arbitration shall proceed in accordance with the National Rules for Resolution of Employment Disputes of the American Arbitration Association (quot;AAAquot;) in effect at the time the claim or dispute arose, unless other rules are agreed upon by the parties. Unless otherwise agreed to by the parties in writing, the arbitration shall be conducted by one arbitrator who is a member of the AAA and who is selected pursuant to the methods set out in the National Rules for Resolution of Employment Disputes of the AAA. Any claims received after the applicable/relevant statute of limitations period has passed shall be deemed null and void. The award of the arbitrator shall be a reasoned award with findings of fact and conclusions of law. Either party may bring an action in any court of competent jurisdiction to compel arbitration under this Agreement, to enforce an arbitration award, and to vacate an arbitration award. However, in actions seeking to vacate an award, the standard of review to be applied by said court to the arbitrator’s findings of fact and conclusions of law will be the same as that applied by an appellate court reviewing a decision of a trial court sitting without a jury. The Company will pay the actual costs of arbitration excluding attorney’s fees. Each party will pay its own attorneys fees and other costs incurred by their respective attorneys. 16. REPRESENTATIONS AND WARRANTIES OF THE EMPLOYEE. The Employee represents and warrants to the Company that he is under no contractual or other restriction which is inconsistent with the execution of this Agreement, the performance of his duties hereunder or the other rights of Company hereunder. The Employee also represents and warrants to the Company that he is under no physical or mental disability that would hinder the performance of his duties under this Agreement. 17. MISCELLANEOUS. This Agreement contains the entire agreement of the parties relating to the subject matter hereof. This Agreement supersedes any prior written or oral agreements or understandings between the parties relating to the subject matter hereof. No modification or amendment of this Agreement shall be valid unless in writing and signed by or on behalf of the parties hereto. The failure of a party to require performance of any provision of this Agreement shall in no manner affect the right of such party at a later time to enforce any provision of this Agreement. A waiver of the breach of any term or condition of this Agreement shall not be deemed to constitute a waiver of any subsequent breach of the same or any other term or condition. This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations. If any provision of this Agreement, or the application thereof to any person or circumstance, shall, for any reason and to any extent, be held invalid or unenforceable, such invalidity and unenforceability shall not affect the remaining provisions hereof or the application of such provisions to other persons or circumstances, all of which shall be enforced to the greatest extent permitted by law. The headings in this Agreement are inserted 8
  13. 13. for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof. IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date last executed below. DATE: August 5, 2005 PAUL MEYER /s/ Paul Meyer ------------------------------- CLEAR CHANNEL OUTDOOR HOLDINGS, INC. DATE: August 5, 2005 By: /s/ Mark P. Mays ------------------------------ Name: Mark P. Mays Title: Chief Executive Officer 9
  14. 14. EXHIBIT A PERFORMANCE BONUS CALCUATION To be determined at the sole discretion of the Board and the Compensation Committee. 10
  15. 15. EXHIBIT 99.1 CLEAR CHANNEL REPORTS SECOND QUARTER 2005 RESULTS SAN ANTONIO, TEXAS AUGUST 9, 2005...Clear Channel Communications, Inc. (NYSE: CCU) today reported results for its second quarter ended June 30, 2005. The Company also announced today an update to its plan to strategically realign its businesses and its share repurchase program. The Company reported revenues of $2.46 billion in the second quarter of 2005, a 1% decrease from the $2.49 billion reported for the second quarter of 2004. Clear Channel’s net income and diluted earnings per share were $220.7 million and $.40 per diluted share during the second quarter of 2005. This compares to net income and diluted earnings per share of $253.8 million and $.41 per diluted share during the second quarter of 2004. Mark Mays, President and Chief Executive Officer, commented, quot;Our second quarter results reflect the short-term impact of our decision to reduce the commercial loads on our radio stations, combined with a less than ideal advertising environment. With just two complete quarters of quot;Less is Morequot; behind us we are seeing positive trends. Early ratings results from the important spring ratings book show that ratings and time spent listening are on the rise. In addition, we are seeing real progress in the development of a 30-second marketplace. These early results underscore that quot;Less is Morequot; is the right move for our business over the long-term. Overall, our operational focus remains on leading change, driving innovation and delivering value to our customers across all of our businesses. We believe this long-term and forward thinking approach will create shareholder value over the long-term.quot; Mark Mays added, quot;Our strategic realignment plan is on track and is targeted to be completed by the end of this year. It remains our intention to fund activities that enhance shareholder returns. However, given current and changing market conditions, we believe it is appropriate to expand the options available to us in returning capital to shareholders and we may choose to use these funds for share repurchases, a special dividend or a combination of both. As a result, we have authorized an increase to our existing share repurchase program to an aggregate of $1.0 billion. A significant share repurchase is an attractive option for maximizing shareholder value and will enable us to maintain financial flexibility. We have a strong track record of announcing and executing material share repurchases and this decision will enable the company to return capital directly to shareholders in a significant way, over a longer period of time.quot; 1
  16. 16. REVENUE AND DIVISIONAL OPERATING EXPENSES <Table> <Caption> (In thousands) Three Months Ended June 30, --------------------------------- % 2005 2004 Change --------------- -------------- ------------ <S> <C> <C> <C> Revenue Radio Broadcasting $ 931,929 $ 996,824 (7%) Outdoor Advertising 684,508 639,549 7% Live Entertainment 729,473 734,481 (1%) Other 145,751 149,917 (3%) Eliminations (32,910) (35,737) --------------- -------------- CONSOLIDATED REVENUE $ 2,458,751 $ 2,485,034 (1%) ============== ============= Divisional operating expenses Radio Broadcasting $ 554,217 $ 552,769 0% Outdoor Advertising 460,865 432,989 6% Live Entertainment 691,214 693,939 0% Other 117,106 116,353 1% Eliminations (32,910) (35,737) --------------- -------------- CONSOLIDATED DIVISIONAL OPERATING EXPENSES $ 1,790,492 $ 1,760,313 2% =============== ============== </Table> Included in the Company’s second quarter 2005 revenue and operating expenses are approximately $20.1 million and $16.3 million, respectively, of foreign exchange increases compared to the same period of 2004. RADIO BROADCASTING The Company’s radio revenues declined 6.5% to $931.9 million during the second quarter of 2005 compared to the same period of 2004. The decline includes a reduction of approximately $8.8 million from non-cash trade revenues. Both local and national revenues were down for the quarter as well, primarily from its reduction in commercial minutes made available for sale on its radio stations. As a result, some of its larger advertising categories declined during the quarter, including retail and automotive. While commercial minutes were down, this was partially offset by an increase in average unit rates. As the year progressed, the Company made improvements on its quot;Less is Morequot; initiative as evidenced by increased average unit rates on its 15, 30 and 60 second commercials over the first quarter of the year. The Company also saw improvement in the second quarter in selling 30 second and 15 second commercials as a percentage of total minutes sold. Finally, yield, or revenue divided by total minutes of available inventory, has seen consistent improvement throughout the year. Divisional operating expenses were up $1.4 million during the second quarter of 2005 compared to the same period of 2004. Driving the increase were advertising and promotional expenditures as well as sports broadcasting rights related to contracts awarded in the second half of last year. Partially offsetting the increase were decreases in commission and bad debt expenses. OUTDOOR ADVERTISING The Company’s outdoor advertising revenue increased 7.0% to $684.5 million during the second quarter of 2005 compared to the same period of 2004. This reflects an increase of 11.2% domestically and 3.7% internationally. The growth domestically was driven by bulletin sales, while international growth came primarily from transit and street furniture sales. Included in the second quarter 2005 results is approximately $13.4 million from increases in foreign exchange compared to the second quarter of 2004. Domestic bulletin revenues grew principally from increased rates, with occupancy up slightly for the second quarter of 2005 compared to 2004. Strong domestic markets included Phoenix, Cleveland, Seattle, Jacksonville and San Antonio. Strong advertising categories were automotive, entertainment, financial services, retail and telecommunications. 2
  17. 17. Internationally, street furniture revenues benefited from an increase in displays as well as average revenue per display compared to the second quarter of 2004. The Company’s international transit revenue growth was fueled by an increase in average revenue per display. Its strongest international markets for the quarter were Australia/New Zealand, Sweden and the United Kingdom. However, consistent with the end of 2004, the Company continued to see weak demand for its media inventory in France, particularly from national sales which tempered the overall results of its international revenues. Outdoor advertising expenses increased 6.4% to $460.9 million during the second quarter of 2005 compared to the same period of 2004. Included in the increase is approximately $10.0 million from increases in foreign exchange. Divisional operating expenses increased from commissions, production and site lease expenses associated with the increase in revenue as well as increased rental from new contracts in its international business entered into in the second half of 2004. On July 27, 2005 the Company announced to the trade union representatives and to employees a draft plan to restructure its operations in France. In connection with the restructuring, the Company expects to record approximately $25.0 million in restructuring costs, including employee termination and other costs, as a component of divisional operating expenses during the third quarter of 2005. LIVE ENTERTAINMENT Live entertainment revenues were essentially flat for the second quarter of 2005 compared to the same period of 2004. Second quarter revenues included approximately $6.7 million from increases in foreign exchange. The Company experienced a decline in domestic music events during the second quarter as compared to the same period of the prior year resulting in decreased attendance and ticket revenues. Also, concession and merchandising revenues declined associated with fewer events at the Company’s amphitheaters. These declines were partially offset by revenue increases in its theater operations from increased presenting weeks, increased ticket revenues in its motor sports group and revenue growth in its European operations, primarily from promoting the U2 tour as well as additional music festival revenues. Live entertainment expenses were down $2.7 million for the second quarter of 2005 compared to the same period of 2004. Second quarter expenses included approximately $6.3 million from increases in foreign exchange. This decline in expenses was primarily due to lower talent costs associated with fewer events and reduced artist guarantees in the current quarter compared to the same period of 2004. UPDATE TO STRATEGIC REALIGNMENT OF BUSINESSES On April 29, 2005, the Company announced a plan to strategically realign its businesses. This plan includes an initial public offering (quot;IPOquot;) of approximately 10% of the common stock of the Company’s outdoor business (quot;Clear Channel Outdoorquot;) and a 100% spin-off of its entertainment business (quot;Clear Channel Entertainmentquot;). These transactions are progressing and are expected to close by the end of the year. The closing of the IPO and spin-off of Clear Channel Entertainment is subject to approval of the Company’s Board of Directors, receipt of a tax opinion of counsel and letter ruling from the IRS relating to the Clear Channel Entertainment spin-off, favorable market conditions, the filing and effectiveness of registration statements with the Securities and Exchange Commission and other customary conditions. As part of the strategic realignment, the Company announced its intention to pay a special dividend of $3.00 per share following the close of the IPO and the spin-off of Clear Channel Entertainment, a total of approximately $1.6 billion. The Company believes that it is appropriate to expand the options available to returning this capital to shareholders. At this time, rather than paying the approximately $1.6 billion as a $3.00 per share special dividend, the Company now currently anticipates utilizing the approximately $1.6 billion in the form of either share repurchases, a special dividend, or a combination of both. To facilitate this change, the Board of Directors of the Company has increased the current share repurchase program to $1.0 billion as described below. It is the Company’s current intention to pay a special dividend in 2006 after taking into account the results of the Company’s share repurchases, and subject to the Company’s financial 3
  18. 18. condition, and market and economic conditions among other factors. The Company intends to fund any share repurchases and/or a special dividend from funds generated from the repayment of intercompany debt, the proceeds of any new debt offerings, available cash balances and cash flow from operations. The timing and amount of a special dividend, if any, is in the discretion of the Board of Directors and may be based on the economic and market factors described above, among others. SHARE REPURCHASE AUTHORIZATION On August 9, 2005, the Company’s Board of Directors authorized an increase in and extension of its existing $1.0 billion share repurchase program, which was originally authorized in February 2005 (the quot;February 2005 Programquot;). As of June 30, 2005, the Company has purchased under the February 2005 Program approximately 20.9 million shares of its common stock for an aggregate purchase price of $692 million. The Board of Directors has authorized an increase of $692 million to the existing balance of the February 2005 Program, bringing the current authorized amount of the share repurchase program to an aggregate of $1.0 billion. This increase in the share repurchase program is effective immediately, and expires on August 8, 2006, although the program may be discontinued or suspended at anytime prior to its expiration. The Company will purchase shares from time to time through open market or privately negotiated transactions. The Company will base its decision on amounts of repurchases and their timing on such factors as the Company’s financial condition and stock price, general economic and market conditions and other factors. CONFERENCE CALL The Company will host a teleconference to discuss its results on August 9th at 9:00 a.m. Eastern Time. The conference call number is 888-283-6901 and the pass code is 5915724. Please call ten minutes in advance to ensure that you are connected prior to the presentation. The teleconference will also be available via a live audio cast on the Company’s website, located at www.clearchannel.com. A replay of the call will be available for 72 hours after the live conference call. The replay number is 888-203-1112 and the pass code is 5915724. The audio cast will also be archived on the Company’s website and will be available beginning 24 hours after the call for a period of one week. 4
  19. 19. TABLE 1 FINANCIAL HIGHLIGHTS CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA) <Table> <Caption> Three Months Ended June 30, ---------------------------------- % 2005 2004 Change ---------------- -------------- ------------ <S> <C> <C> <C> REVENUE $ 2,458,751 $ 2,485,034 (1%) Divisional operating expenses 1,790,492 1,760,313 Corporate expenses 48,156 46,581 Non-cash compensation expense 1,675 915 Depreciation and amortization 167,991 167,754 ---------------- ---------------- OPERATING INCOME 450,437 509,471 (12%) Interest expense 105,487 85,403 Gain (loss) on marketable securities 1,610 (5,503) Equity in earnings of nonconsolidated affiliates 9,834 10,635 Other income (expense) - net 8,453 (2,694) ---------------- ---------------- Income before income taxes 364,847 426,506 Income tax benefit (expense): Current (108,051) (106,888) Deferred (36,064) (65,848) ---------------- ---------------- NET INCOME $ 220,732 $ 253,770 (13%) ================ ================ Net Income per share: BASIC $ 0.41 $ 0.42 (2%) ================ ================ DILUTED $ 0.40 $ 0.41 (2%) ================ ================ Weighted average shares outstanding - diluted 545,090 612,960 </Table> 5
  20. 20. TABLE 2 SELECTED BALANCE SHEET INFORMATION <Table> <Caption> (In millions) June 30, 2005 March 31, 2005 ------------- -------------- <S> <C> <C> Cash $ 321.3 $ 271.3 Total Current Assets $ 2,700.6 $ 2,316.6 Net Property, Plant and Equipment $ 3,961.6 $ 4,040.5 Total Assets $ 20,090.7 $ 19,769.7 Current Liabilities (excluding current portion of long-term debt) $ 2,247.7 $ 1,897.0 Long-Term Debt (including current portion of long-term debt) $ 7,896.7 $ 7,732.8 Shareholders’ Equity $ 8,662.1 $ 8,850.0 </Table> TABLE 3 CAPITAL EXPENDITURES Capital expenditures for the second quarter of 2005 versus 2004 were: <Table> <Caption> (In millions) June 30, 2005 June 30, 2004 ------------- ------------- <S> <C> <C> Non-revenue producing $ 71.0 $ 47.4 Revenue producing 30.7 38.5 ----------- ----------- Total capital expenditures $ 101.7 $ 85.9 =========== =========== </Table> The Company defines non-revenue producing capital expenditures as those expenditures that are required on a recurring basis. Revenue producing capital expenditures are discretionary capital investments for new revenue streams, similar to an acquisition. TABLE 4 LIQUIDITY AND FINANCIAL POSITION For the six months ended June 30, 2005, cash flow from operating activities was $774.1 million, cash flow used in investing activities was $236.3 million, and cash flow used in financing activities was $427.0 million for a net increase in cash of $110.8 million. At June 30, 2005, Clear Channel had long-term debt of: <Table> <Caption> (In millions) June 30, 2005 ------------- <S> <C> Bank Credit Facilities $ 916.8 Public Notes 6,814.1 Other Debt 165.8 ------------- Total $ 7,896.7 ============= </Table> Leverage, defined as debt*, net of cash, divided by the trailing 12-month pro forma EBITDA**, was 3.4x at June 30, 2005. At June 30, 2005, 70% of the Company’s debt bears interest at fixed rates and 30% of the Company’s debt bears interest at floating rates based upon LIBOR. The Company’s weighted average cost of debt at June 30, 2005 was 5.6%. ---------- * As defined by Clear Channel’s credit facility, debt is long-term debt of $7,897 million plus letters of credit of $241 million; guarantees of third party debt of $13 million; net original issue discount/premium of $10 million; deferred purchase consideration of $10 million included in other long-term liabilities; less the fair value of interest rate swaps of $4 million; and less purchase accounting premiums of $12 million. ** As defined by Clear Channel’s credit facilities, pro forma EBITDA is the trailing twelve-month EBITDA adjusted to include EBITDA of any assets acquired in the trailing twelve-month period. 6
  21. 21. As of August 9, 2005, Clear Channel has approximately $332.5 million available on its bank credit facility. The Company does not have any public debt maturing during the remainder of 2005. The Company may utilize existing capacity under its bank facilities and other available funds for future maturities or redemptions of debt. Redemptions or repurchases will occur through open market purchases, privately negotiated transactions, or other means. SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP FINANCIAL INFORMATION TABLE 5 OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION (D&A) AND NON-CASH COMPENSATION EXPENSE The following tables set forth Clear Channel’s Operating Income, D&A and Non-cash compensation expense for the three months ended June 30, 2005 and 2004. The Company defines quot;Operating Income before D&A and Non-cash compensation expensequot; as net income adjusted to exclude the following line items presented in its Statement of Operations: Income tax benefit (expense); Other income (expense) - net; Equity in earnings of nonconsolidated affiliates; Gain (loss) on marketable securities; Interest expense; D&A; and, Non-cash compensation expense. The Company uses Operating Income before D&A and Non-cash compensation expense, among other things, to evaluate the Company’s operating performance. This measure is among the primary measures used by management for planning and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of management. This measure is an important indicator of the Company’s operational strength and performance of its business because it provides a link between profitability and cash flows from operating activities. It is also a primary measure used by management in evaluating companies as potential acquisition targets. The Company believes the presentation of this measure is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by the Company’s management. It helps improve investors’ ability to understand the Company’s operating performance and makes it easier to compare the Company’s results with other companies that have different capital structures or tax rates. In addition, this measure is also among the primary measures used externally by the Company’s investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry. Additionally, the Company’s bank credit facilities use this measure for compliance with leverage covenants. Since Operating Income before D&A and Non-cash compensation expense is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance and may not be comparable to similarly titled measures employed by other companies. Operating Income, D&A and Non-cash compensation expense are all financial statement line items included on the Company’s statement of earnings. Operating Income before D&A and Non-cash compensation expense is not necessarily a measure of the Company’s ability to fund its cash needs. As it excludes certain financial information compared with operating income and net income (loss), the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions, which are excluded. As required by the SEC, the Company provides reconciliations below of Operating Income before D&A and Non-cash compensation expense for each segment to such segment’s operating income; Operating Income before D&A and Non-cash compensation expense to net income, the most directly comparable amounts reported under GAAP; and, Net Income and Diluted Earnings Per Share excluding certain items, if applicable. 7
  22. 22. <Table> <Caption> Non-cash Operating Income before (In thousands) Operating income compensation Depreciation D&A and Non-cash (loss) expense and amortization compensation expense ------ ------- ---------------- -------------------- <S> <C> <C> <C> <C> THREE MONTHS ENDED JUNE 30, 2005 Radio Broadcasting $ 343,282 $ -- $ 34,430 $ 377,712 Outdoor Advertising 127,081 -- 96,562 223,643 Live Entertainment 23,434 -- 14,825 38,259 Other 11,257 -- 17,388 28,645 Corporate (54,617) 1,675 4,786 (48,156) -------------- ------------- --------------- ---------------- Consolidated $ 450,437 $ 1,675 $ 167,991 $ 620,103 ============= ============= =============== =============== THREE MONTHS ENDED JUNE 30, 2004 Radio Broadcasting $ 405,848 $ 232 $ 37,975 $ 444,055 Outdoor Advertising 113,754 -- 92,806 206,560 Live Entertainment 25,647 -- 14,895 40,542 Other 16,706 -- 16,858 33,564 Corporate (52,484) 683 5,220 (46,581) -------------- ------------- --------------- ---------------- Consolidated $ 509,471 $ 915 $ 167,754 $ 678,140 ============= ============= =============== =============== </Table> TABLE 6 RECONCILIATION OF OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION (D&A) AND NON-CASH COMPENSATION EXPENSE TO NET INCOME <Table> <Caption> (In thousands) THREE MONTHS ENDED JUNE 30, 2005 2004 ----------------- ----------------- <S> <C> <C> Operating Income before D&A and Non-cash compensation expense $ 620,103 $ 678,140 Non-cash compensation expense 1,675 915 Depreciation & amortization 167,991 167,754 ----------------- ----------------- Operating Income 450,437 509,471 Interest expense 105,487 85,403 Gain (loss) on marketable securities 1,610 (5,503) Equity in earnings of nonconsolidated affiliates 9,834 10,635 Other income (expense) - net 8,453 (2,694) ----------------- ------------------ Income before income taxes 364,847 426,506 Income tax (expense) benefit: Current (108,051) (106,888) Deferred (36,064) (65,848) ------------------ ------------------ Net income $ 220,732 $ 253,770 ================= ================= </Table> ABOUT CLEAR CHANNEL COMMUNICATIONS Clear Channel Communications, Inc. (NYSE:CCU) is a global media and entertainment company specializing in quot;gone from homequot; entertainment and information services for local communities and premiere opportunities for advertisers. Based in San Antonio, Texas, the company’s businesses include radio, outdoor displays, live entertainment events and venues, and television stations. See us on the web at www.clearchannel.com. For further information contact: Investors - Randy Palmer, Senior Vice President of Investor Relations, (210) 832-3315 or Media - Lisa Dollinger, Chief Communications Officer, (210) 832-3474 8
  23. 23. or visit our web-site at http://www.clearchannel.com. CERTAIN STATEMENTS IN THIS DOCUMENT CONSTITUTE quot;FORWARD-LOOKING STATEMENTSquot; WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF CLEAR CHANNEL COMMUNICATIONS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE WORDS OR PHRASES quot;GUIDANCE,quot; quot;BELIEVE,quot; quot;EXPECT,quot; quot;ANTICIPATE,quot; quot;ESTIMATESquot; AND quot;FORECASTquot; AND SIMILAR WORDS OR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. IN ADDITION, ANY STATEMENTS THAT REFER TO EXPECTATIONS OR OTHER CHARACTERIZATIONS OF FUTURE EVENTS OR CIRCUMSTANCES ARE FORWARD-LOOKING STATEMENTS. THE COMPANY CANNOT PROVIDE ANY ASSURANCE THAT THE IPO OF CLEAR CHANNEL OUTDOOR, THE SPIN-OFF OF CLEAR CHANNEL ENTERTAINMENT OR THE PAYMENT OF THE ONE-TIME/SPECIAL DIVIDEND WILL BE COMPLETED, OR THE TERMS OF WHICH ALL OF THE TRANSACTIONS WILL BE CONSUMMATED. VARIOUS RISKS THAT COULD CAUSE FUTURE RESULTS TO DIFFER FROM THOSE EXPRESSED BY THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT INCLUDE, BUT ARE NOT LIMITED TO: RISKS INHERENT IN THE CONTEMPLATED IPO, SPIN-OFF, CASH DIVIDENDS OR BORROWINGS; COSTS RELATED TO THE PROPOSED TRANSACTIONS; DISTRACTION OF THE COMPANY AND ITS MANAGEMENT TEAM AS A RESULT OF THE PROPOSED TRANSACTIONS; CHANGES IN BUSINESS, POLITICAL AND ECONOMIC CONDITIONS IN THE U.S. AND IN OTHER COUNTRIES IN WHICH CLEAR CHANNEL COMMUNICATIONS CURRENTLY DOES BUSINESS (BOTH GENERAL AND RELATIVE TO THE ADVERTISING AND ENTERTAINMENT INDUSTRIES); FLUCTUATIONS IN INTEREST RATES; CHANGES IN OPERATING PERFORMANCE; SHIFTS IN POPULATION AND OTHER DEMOGRAPHICS; CHANGES IN THE LEVEL OF COMPETITION FOR ADVERTISING DOLLARS; FLUCTUATIONS IN OPERATING COSTS; TECHNOLOGICAL CHANGES AND INNOVATIONS; CHANGES IN LABOR CONDITIONS; CHANGES IN GOVERNMENTAL REGULATIONS AND POLICIES AND ACTIONS OF REGULATORY BODIES; FLUCTUATIONS IN EXCHANGE RATES AND CURRENCY VALUES; CHANGES IN TAX RATES; AND CHANGES IN CAPITAL EXPENDITURE REQUIREMENTS; ACCESS TO CAPITAL MARKETS AND CHANGES IN CREDIT RATINGS. OTHER UNKNOWN OR UNPREDICTABLE FACTORS ALSO COULD HAVE MATERIAL ADVERSE EFFECTS ON CLEAR CHANNEL COMMUNICATIONS’, CLEAR CHANNEL OUTDOOR’S AND CLEAR CHANNEL ENTERTAINMENT’S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS. IN LIGHT OF THESE RISKS, UNCERTAINTIES, ASSUMPTIONS AND FACTORS, THE FORWARD-LOOKING EVENTS DISCUSSED IN THIS DOCUMENT MAY NOT OCCUR. YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE STATED, OR IF NO DATE IS STATED, AS OF THE DATE OF THIS DOCUMENT. OTHER KEY RISKS ARE DESCRIBED IN CLEAR CHANNEL COMMUNICATIONS’ REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION, INCLUDING IN THE SECTION ENTITLED quot;ITEM 1. BUSINESS - RISK FACTORSquot; OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2004. EXCEPT AS OTHERWISE STATED IN THIS DOCUMENT, CLEAR CHANNEL COMMUNICATIONS DOES NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS BECAUSE OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. A REGISTRATION STATEMENT RELATING TO THE IPO OF CLEAR CHANNEL OUTDOOR COMMON STOCK AND AN INFORMATION STATEMENT RELATING TO THE SPIN-OFF OF CLEAR CHANNEL ENTERTAINMENT WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THIS DOCUMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, NOR SHALL THERE BE ANY SALE OF CLEAR CHANNEL OUTDOOR COMMON STOCK IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. ANY SUCH OFFERING OF SECURITIES WILL BE MADE ONLY BY MEANS OF A PROSPECTUS INCLUDED IN THE REGISTRATIONS STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. 9

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