PROXY STATEMENT

 

This proxy statement contains information related to the annual meeting of stockholders of Clear Channel Outdoor Holdings, Inc. (referred to herein as “Clear Channel Outdoor,” “Company,” “we,” “our” or “us”) to be held on Friday, May 18, 2012, beginning at 8:00 a.m. local time, in the Lone Star Ballroom-East at the Hilton San Antonio Airport, located at 611 NW Loop 410, San Antonio, Texas 78216, and at any postponements or adjournments thereof.  This proxy statement is first being mailed to stockholders on or about April 18, 2012.

 

 

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING

 

Q:           Why am I receiving these materials?

 

A:

Clear Channel Outdoor’s Board of Directors (the “Board”) is providing these proxy materials to you in connection with Clear Channel Outdoor’s annual meeting of stockholders (the “annual meeting”), which will take place on May 18, 2012.  The Board is soliciting proxies to be used at the annual meeting.  You also are invited to attend the annual meeting and are requested to vote on the proposals described in this proxy statement.

Q:	What information is contained in these materials?

 

A:

The information included in this proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, the compensation of our directors and our most highly paid executive officers, and certain other required information.  Following this proxy statement are Clear Channel Outdoor’s 2012 Stock Incentive Plan (Appendix A), Clear Channel Outdoor’s Amended and Restated 2006 Annual Incentive Plan (Appendix B) and excerpts from Clear Channel Outdoor’s 2011 Annual Report on Form 10-K, including the Consolidated Financial Statements, Notes to the Consolidated Financial Statements, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as certain other data (Appendix C).  A proxy card and a return envelope also are enclosed.

Q:	What proposals will be voted on at the annual meeting?

 

A:	There are four proposals scheduled to be voted on at the annual meeting:

 

·	the election of the three nominees for directors named in this proxy statement;

·	the approval of the adoption of the 2012 Stock Incentive Plan;

·	the approval of the adoption of the Amended and Restated 2006 Annual Incentive Plan; and

·	the ratification of the selection of Ernst & Young LLP as Clear Channel Outdoor’s independent registered public accounting firm for the year ending December 31, 2012.

 

Q:	Which of my shares may I vote?

 

A:

All shares of Class A and Class B common stock owned by you as of the close of business on April 2, 2012 (the “Record Date”) may be voted by you.  These shares include shares that are: (1) held directly in your name as the stockholder of record and (2) held for you as the beneficial owner through a stockbroker, bank or other nominee.  Each share of Class A common stock is entitled to one vote at the annual meeting and each share of Class B common stock is entitled to twenty votes at the annual meeting.  As of the Record Date, there were 41,802,578 shares of Class A common stock outstanding and 315,000,000 shares of Class B common stock outstanding.   All shares of our Class B common stock are held by Clear Channel Holdings, Inc., a wholly owned indirect subsidiary of CC Media Holdings, Inc. (“CC Media” or “CCMH”).

Q:	What is the difference between holding shares as a stockholder of record and as a beneficial owner?

 

A:	Most stockholders of Clear Channel Outdoor hold their shares through a stockbroker, bank or other nominee rather than directly in their own name.  As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Stockholder of Record : If your shares are registered directly in your name with Clear Channel Outdoor’s transfer agent, Computershare Shareowner Services LLC (“Computershare”), you are considered, with respect to those shares, the stockholder of record, and these proxy materials are being sent directly to you by Computershare on behalf of Clear Channel Outdoor.  As the stockholder of record, you have the right to grant your voting proxy directly to Clear Channel Outdoor or to vote in person at the annual meeting.  Clear Channel Outdoor has enclosed a proxy card for you to use.  Please sign and return your proxy card.

 

 

Beneficial Owner : If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by your broker or nominee who is considered, with respect to those shares, the stockholder of record.  As the beneficial owner, you have the right to direct your broker on how to vote and also are invited to attend the annual meeting.  However, since you are not the stockholder of record, you may not vote these shares in person at the annual meeting, unless you obtain and present at the meeting a signed proxy from the record holder giving you the right to vote the shares.  Your broker or nominee has enclosed a voting instruction card for you to use in directing the broker or nominee regarding how to vote your shares.  Please sign and return your voting instruction card.

 

Q:	What constitutes a quorum?

 

A:

The holders of a majority of the total voting power of Clear Channel Outdoor’s Class A and Class B common stock entitled to vote and represented in person or by proxy will constitute a quorum at the annual meeting.  Votes “withheld,” abstentions and “broker non-votes” (described below) are counted as present for purposes of establishing a quorum.

Q:	If my shares are held in “street name” by my broker, will my broker vote my shares for me?

 

A:

Under New York Stock Exchange (“NYSE”) rules, brokers will have discretion to vote the shares of customers who fail to provide voting instructions on “routine matters,” but brokers may not vote such shares on “non-routine matters” without voting instructions.  When a broker is not permitted to vote the shares of a customer who does not provide voting instructions, it is called a “broker non-vote.”  If you do not provide your broker with voting instructions, your broker will not be able to vote your shares with respect to (1) the election of directors, (2) the approval of the adoption of the 2012 Stock Incentive Plan and (3) the approval of the adoption of the Amended and Restated 2006 Annual Incentive Plan.  Your broker will send you directions on how you can instruct your broker to vote.

As described above, if you do not provide your broker with voting instructions and the broker is not permitted to vote your shares on a proposal, a “broker non-vote” occurs.  Broker non-votes will be counted for purposes of establishing a quorum at the annual meeting and will have no effect on the vote on the election of directors or the approval of the adoption of the Amended and Restated 2006 Annual Incentive Plan at the annual meeting. With respect to the proposal to approve the adoption of the 2012 Stock Incentive Plan, a broker non-vote is not counted as a vote cast and, therefore, could prevent the total votes cast on that proposal from representing more than 50% of the outstanding shares of our Class A and Class B common stock as required, but will not otherwise have an effect on the vote.

Q:	How can I vote my shares in person at the annual meeting?

 

A:

Shares held directly in your name as the stockholder of record may be voted by you in person at the annual meeting.  If you choose to vote your shares held of record in person at the annual meeting, please bring the enclosed proxy card and proof of identification.  Even if you plan to attend the annual meeting, Clear Channel Outdoor recommends that you also submit your proxy as described below so that your vote will be counted if you later decide not to attend the annual meeting.  You may request that your previously submitted proxy card not be used if you desire to vote in person when you attend the annual meeting.  Shares held in “street name” may be voted in person by you at the annual meeting only if you obtain and present at the meeting a signed proxy from the record holder giving you the right to vote the shares.   Your vote is important.  Accordingly, you are urged to sign and return the accompanying proxy card whether or not you plan to attend the annual meeting.

If you plan to attend the annual meeting, please note that space limitations make it necessary to limit attendance to stockholders and one guest per each stockholder.  Admission to the annual meeting will be on a first-come, first-served basis.  Registration and seating will begin at 7:45 a.m. local time.  Each stockholder may be asked to present valid picture identification, such as a driver’s license or passport.  Stockholders holding stock in brokerage accounts (“street name” holders) will need to bring a copy of a brokerage statement reflecting stock ownership as of the Record Date.  Cameras (including cellular telephones with photographic capabilities), recording devices and other electronic devices will not be permitted at the annual meeting.

 

 

COMMITTEES OF THE BOARD

 

The Board has two standing committees: the Audit Committee and the Compensation Committee.  Each committee has a written charter, which guides its operations.  The written charters are available on Clear Channel Outdoor’s website at www.clearchanneloutdoor.com .  The table below sets forth the members of each of these committees.

 

Board Committee Membership

 

Name			Audit Committee		Compensation Committee
Douglas L. Jacobs			*X		X
Christopher M. Temple			X
Dale W. Tremblay			X		*X

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

Except as otherwise stated, the table below sets forth information concerning the beneficial ownership of Clear Channel Outdoor’s common stock as of April 2, 2012 for: (1) each director currently serving on our Board and each of the nominees for director; (2) each of our named executive officers; (3) our directors and executive officers as a group; and (4) each person known to Clear Channel Outdoor to beneficially own more than 5% of any class of Clear Channel Outdoor’s outstanding shares of common stock.  At the close of business on April 2, 2012, there were 41,802,578 shares of Clear Channel Outdoor’s Class A common stock outstanding and 315,000,000 shares of Clear Channel Outdoor’s Class B common stock outstanding.   In addition, information concerning the beneficial ownership of common stock of CC Media, our indirect parent entity, by: (1) each director currently serving on our Board and each of the nominees for director; (2) each of our named executive officers; and (3) our directors and executive officers as a group is set forth in the footnotes to the table below.  At the close of business on April 2, 2012, there were 23,579,852 shares of CC Media’s Class A common stock, 555,556 shares of CC Media’s Class B common stock and 58,967,502 shares of CC Media’s Class C common stock outstanding.  Except as otherwise noted, each stockholder has sole voting and investment power with respect to the shares beneficially owned.

 

Each share of Clear Channel Outdoor Class A common stock is entitled to one vote on matters submitted to a vote of the stockholders and each share of Clear Channel Outdoor Class B common stock is entitled to twenty votes on matters submitted to a vote of the stockholders.  Each share of our Class B common stock is convertible at the option of the holder thereof into one share of Class A common stock.  Each share of our common stock is entitled to share equally on a per share basis in any dividends and distributions by us.

 

 

 

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Table of Contents

 

 

		Amount and Nature of Beneficial Ownership
Name and Address of Beneficial Owner(a)		Number of Shares of Class A Common Stock				Number of Shares of Class B Common Stock				Percent of Class A Common Stock (b)				Percent of Class B Common Stock (b)				Percent of Outstanding Common Stock on an As-Converted Basis (b)
Holders of More than 5%:
Clear Channel Communications, Inc. (c)			1,553,971				315,000,000				3.7	%			100.0	%			88.7	%
Mason Capital Management LLC (d)			5,072,946				—				12.1	%			—				1.4	%
GAMCO Asset Management, Inc. and affiliates (e)			4,843,942				—				11.6	%			—				1.4	%
Canyon Capital Advisors LLC (f)			4,099,505				—				9.8	%			—				1.1	%
Abrams Capital Management, L.P. and affiliates (g)			3,354,390				—				8.0	%			—				*
Named Executive Officers, Nominees, Executive Officers and Directors:
Jonathan D. Bevan (h)			231,721				—				*				—				*
James C. Carlisle (i)			—				—				—				—				—
Thomas W. Casey (j)			—				—				—				—				—
Ronald H. Cooper (k)			49,292				—				*				—				*
C. William Eccleshare (l)			199,862				—				*				—				*
Blair E. Hendrix (m)			—				—				—				—				—
Douglas L. Jacobs (n)			6,875				—				*				—				*
Daniel G. Jones (i)			—				—				—				—				—
Mark P. Mays (o)			165,565				—				*				—				*
Robert W. Pittman (p)			—				—				—				—				—
Thomas R. Shepherd (q)			2,500				—				*				—				*
Christopher M. Temple (q)			2,500				—				*				—				*
Dale W. Tremblay (r)			41,641				—				*				—				*
Robert H. Walls, Jr. (s)			—				—				—				—				—
Scott R. Wells (m)			—				—				—				—				—
All directors and executive officers as a group (16 individuals) (t)			1,080,824				—				2.5	%			—				*

_________________

 

(a)	Unless otherwise indicated, the address for all beneficial owners is c/o Clear Channel Outdoor Holdings, Inc., 200 East Basse Road, San Antonio, Texas 78209.

 

(b)	Percentage of ownership calculated in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended.

 

(c)

Represents 1,553,971 shares of Clear Channel Outdoor’s Class A common stock held by CC Finco, LLC, a wholly owned subsidiary of Clear Channel and 315,000,000 shares of Clear Channel Outdoor’s Class B common stock held by Clear Channel Holdings, Inc., a wholly owned subsidiary of Clear Channel.  Shares of Class B common stock are convertible on a one for one basis into shares of Class A common stock and entitle the holder to 20 votes per share upon all matters on which stockholders are entitled to vote.  The business address of CC Finco, LLC, Clear Channel Holdings, Inc. and Clear Channel is 200 E. Basse Road, San Antonio, Texas 78209.

 

(d)

As reported on a Schedule 13G/A filed with respect to Clear Channel Outdoor’s Class A common stock on February 14, 2012. The shares of Clear Channel Outdoor’s Class A common stock reported in the Schedule 13G/A are directly owned by Mason Capital L.P., a Delaware limited partnership (“Mason Capital LP”), Mason Capital Master Fund, L.P., a Cayman Islands exempted limited partnership (“Mason Capital Master Fund”), and an account (the “Managed Account”) separately managed by Mason Capital Management LLC, a Delaware limited liability company (“Mason Management”).  Mason Management is the investment manager of each of Mason Capital LP, Mason Capital Master Fund and the Managed Account, and Mason Management may be deemed to have beneficial ownership over the shares of Class A common stock reported in the Schedule 13G/A by virtue of the authority granted to Mason Management by Mason Capital LP, Mason Capital Master Fund and the Managed Account to vote and exercise investment discretion over such shares. Kenneth M. Garschina and Michael E. Martino are managing principals of Mason Management and the sole members of Mason Management. Mason Capital Management, Mr. Garschina and Mr. Martino disclaim beneficial ownership of all shares reported in the Schedule 13G/A pursuant to 13d-4 under the Securities Exchange Act of 1934, as amended.  The business address of each reporting person is 110 East 59th Street, New York, New York 10022.

 

(e)

As reported on a Schedule 13D/A filed with respect to Clear Channel Outdoor’s Class A common stock on March 12, 2012. The shares of Clear Channel Outdoor’s Class A common stock reported in the Schedule 13D/A may be deemed to be beneficially owned by one or more of the following persons: GGCP, Inc. (“GGCP”), GGCP Holdings LLC (“GGCP Holdings”), GAMCO Investors, Inc. (“GBL”), Gabelli Funds, LLC (“Gabelli Funds”), GAMCO Asset Management Inc. (“GAMCO”), Teton Advisors, Inc. (“Teton Advisors”), Gabelli Securities, Inc. (“GSI”), Gabelli & Company, Inc. (“Gabelli & Company”), MJG Associates, Inc. (“MJG Associates”), Gabelli Foundation, Inc. (“Foundation”), MJG-IV Limited Partnership (“MJG”) and Mario Gabelli. Mario Gabelli is deemed to have beneficial ownership of the securities owned beneficially by each of GAMCO, Gabelli Funds, GSI and MJG.  GSI is deemed to have beneficial ownership of the securities owned beneficially by Gabelli & Company.  GBL and GGCP are deemed to have beneficial ownership of the securities owned beneficially by each of the foregoing persons other than Mario Gabelli and the Foundation. The business address of GBL, Gabelli Funds, Gabelli & Company, GAMCO, GSI, Teton Advisors and Mario Gabelli is One Corporate Center, Rye, New York 10580.  The business address of GGCP, GGCP Holdings and MJG Associates is 140 Greenwich Avenue, Greenwich, Connecticut 06850.  The business address of the Foundation is 165 West Liberty Street, Reno, Nevada 89501.

 

(f)

As reported on a Schedule 13G/A filed with respect to Clear Channel Outdoor’s Class A common stock on February 14, 2012. The shares of Clear Channel Outdoor’s Class A common stock reported in the Schedule 13G may be deemed to be beneficially owned by one or more of the following persons: Canyon Capital Advisors LLC (“CCA”), Mitchell R. Julis, Joshua S. Friedman and K. Robert Turner.  CCA is an investment advisor to various managed accounts, including Canyon Value Realization Fund, L.P., The Canyon Value Realization Master Fund (Cayman), L.P., Citi Canyon Ltd., Canyon Value Realization Fund MAC 18, Ltd., Canyon-GRF Master Fund, L.P., Canyon Balanced Master Fund, Ltd., Pernal Canyon Fund Ltd., Canyon Distressed Opportunity Investing Fund, L.P. and Canyon-GRF Master Fund II, L.P., with the right to receive, or the power to direct the receipt, of dividends from, or the proceeds from the sale of the securities held by, such managed accounts. Messrs. Julis, Friedman, and Turner control entities which own 100% of CCA.  The business address of each reporting person is 2000 Avenue of the Stars, 11th Floor, Los Angeles, CA 90067.

 

(g)

As reported on a Schedule 13G/A filed with respect to Clear Channel Outdoor’s Class A common stock on February 10, 2012. Shares of Clear Channel Outdoor’s Class A common stock reported in the Schedule 13G/A for Abrams Capital Partners II, L.P. (“ACP II”) represent shares beneficially owned by ACP II.  Shares reported in the Schedule 13G/A for Abrams Capital, LLC (“Abrams Capital”) represent shares beneficially owned by ACP II and other private investment funds for which Abrams Capital serves as general partner.  Shares reported in the Schedule 13G/A for Abrams Capital Management, L.P. (“Abrams CM LP”) and Abrams Capital Management, LLC (“Abrams CM LLC”) represent the above-referenced shares beneficially owned by Abrams Capital and shares beneficially owned by another private investment fund for which Abrams CM LP serves as investment manager.  Abrams CM LLC is the general partner of Abrams CM LP.  Shares reported in the Schedule 13G/A for Mr. Abrams represent the above referenced shares reported for Abrams Capital and Abrams CM LLC.  Mr. Abrams is the managing member of Abrams Capital and Abrams CM LLC.  Each disclaims beneficial ownership of the shares reported except to the extent of its or his pecuniary interest therein.  The business address of each reporting person is c/o Abrams Capital Management, L.P., 222 Berkley Street, 22nd Floor, Boston, Massachusetts 02116.

 

As reported on a Schedule 13D filed on November 29, 2011, Abrams CM LP and affiliates also own 6,811,407 shares of the Class A common stock of CC Media, which represent 28.9% of CC Media’s Class A common stock and 8.2% of CC Media’s Class A common stock assuming all shares of CC Media’s Class B and Class C common stock are converted to shares of CC Media’s Class A common stock.  The CC Media shares reported in the Schedule 13D for ACP II represent shares beneficially owned by ACP II. Shares reported in the Schedule 13D for Abrams Capital represent shares beneficially owned by ACP II and other private investment vehicles for which Abrams Capital serves as general partner.  Shares reported in the Schedule 13D for Abrams CM LP and Abrams CM LLC represent shares beneficially owned by ACP II and other private investment vehicles (including those for which shares are reported for Abrams Capital) for which Abrams CM LP serves as investment manager.  Abrams CM LLC is the general partner of Abrams CM LP.  The CC Media shares reported in the Schedule 13D for Mr. Abrams represent the above referenced shares reported for Abrams Capital and Abrams CM LLC.  Mr. Abrams is the managing member of Abrams Capital and Abrams CM LLC.

 

 

 

(h)	Includes vested stock options and stock options that will vest within 60 days after April 2, 2012 collectively representing 222,363 shares of Clear Channel Outdoor’s Class A common stock held by Mr. Bevan.

 

(i)

Mr. Carlisle and Mr. Jones are a managing director and a director, respectively, at Thomas H. Lee Partners, L.P.  Entities controlled by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. hold all of the shares of CC Media’s Class B common stock and CC Media’s Class C common stock, and these shares represent a majority (whether measured by voting power or economic interest) of the equity of CC Media.

(j)

As of April 2, 2012, Mr. Casey held vested stock options to purchase 125,000 shares of CC Media’s Class A common stock, which represented less than 1% of CC Media’s Class A common stock and less than 1% of CC Media’s Class A common stock assuming all shares of CC Media’s Class B and Class C common stock are converted to shares of CC Media’s Class A common stock.

 

(k)	Includes vested stock options representing 16,666 shares of Clear Channel Outdoor’s Class A common stock held by Mr. Cooper.

 

As of April 2, 2012, Mr. Cooper also held vested stock options representing 82,500 shares of CC Media’s Class A common stock, which represented less than 1% of CC Media’s Class A common stock and less than 1% of CC Media’s Class A common stock assuming all shares of CC Media’s Class B and Class C common stock are converted to shares of CC Media’s Class A common stock.

 

(l)	Includes vested stock options representing 197,360 shares of Clear Channel Outdoor’s Class A common stock held by Mr. Eccleshare.

 

(m)

Mr. Hendrix and Mr. Wells are a managing director and an operating partner, respectively, at Bain Capital Partners, LLC.  Entities controlled by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. hold all of the shares of CC Media’s Class B common stock and CC Media’s Class C common stock, and these shares represent a majority (whether measured by voting power or economic interest) of the equity of CC Media.

 

(n)	Represents vested stock options and stock options that will vest within 60 days after April 2, 2012 collectively representing 6,875 shares of Clear Channel Outdoor’s Class A common stock held by Mr. Jacobs.

 

(o)	Includes vested stock options representing 150,000 shares of Clear Channel Outdoor’s Class A common stock held by Mr. Mays.

 

As of April 2, 2012, Mr. Mays also held 245,124 shares of CC Media’s Class A common stock, 222,223 shares of unvested restricted Class A common stock of CC Media and stock options that are vested or will vest within 60 days after April 2, 2012 collectively representing 327,044 shares of CC Media’s Class A common stock.  In addition, Mr. Mays held indirectly 29,970 shares of CC Media’s Class A common stock through a trust of which Mr. Mays is the trustee.  These holdings represented 3.4% of CC Media’s Class A common stock and 1.0% of CC Media’s Class A common stock assuming all shares of CC Media’s Class B and Class C common stock are converted to shares of CC Media’s Class A common stock.

 

(p)

As of April 2, 2012, Pittman CC LLC, a limited liability company controlled by Mr. Pittman, beneficially owned 706,215 shares of CC Media’s Class A common stock. These holdings represented 3.0% of CC Media’s Class A common stock and less than 1% of CC Media’s Class A common stock assuming all shares of CC Media’s Class B and Class C common stock are converted to shares of CC Media’s Class A common stock.

 

(q)	Represents stock options that will vest within 60 days after April 2, 2012 representing 2,500 shares of Clear Channel Outdoor’s Class A common stock held by each of Messrs. Shepherd and Temple.

 

(r)	Includes vested stock options and stock options that will vest within 60 days after April 2, 2012 collectively representing 35,391 shares of Clear Channel Outdoor’s Class A common stock held by Mr. Tremblay.

 

(s)

As of April 2, 2012, Mr. Walls held vested stock options to purchase 25,000 shares of CC Media’s Class A common stock, which represented less than 1% of CC Media’s Class A common stock and less than 1% of CC Media’s Class A common stock assuming all shares of CC Media’s Class B and Class C common stock are converted to shares of CC Media’s Class A common stock.

 

(t)

Includes vested stock options and stock options that will vest within 60 days after April 2, 2012 collectively representing 957,028 shares of Clear Channel Outdoor’s Class A common stock and 5,253 shares of Clear Channel Outdoor’s Class A common stock held indirectly through the 401(k) plan by such persons.

 

As of April 2, 2012, all of our directors and executive officers as a group were the beneficial owners of CC Media’s Class A common stock as follows: (1) 245,124 shares of CC Media’s Class A common stock held by such persons; (2) 222,223 shares of unvested restricted Class A common stock of CC Media’s held by such persons; (3) stock options to purchase 479,544 shares of CC Media’s Class A common stock that are vested and that will vest within 60 days after April 2, 2012; and (4) 736,185 shares of CC Media’s Class A common stock held indirectly.  These holdings represented 7.0% of CC Media’s Class A common stock and 2.0% of CC Media’s Class A common stock assuming all shares of CC Media’s Class B common stock and CC Media’s Class C common stock are converted to shares of CC Media’s Class A common stock.