iHeartCommunications, Inc. – ‘PRE 14A’ for 3/9/01

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Preliminary Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Preliminary Proxy Report to Shareholders              60±   245K 

Document Table of Contents

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SCHEDULE 14A INFORMATION

 Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )

Filed by the Registrant  [X]                                                    
Filed by a Party other than the Registrant  [  ]                                

Check the appropriate box:                                                      

[X ]     Preliminary Proxy Statement                                            
[  ]     Confidential, for Use of the Commission Only (as permitted by Rule     
14a-6(e)(2))                                              
[  ]     Definitive Proxy Statement                                             
[  ]     Definitive Additional Materials                                        
[  ]     Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12          

Clear Channel Communications, Inc.
(Name of Registrant as Specified In Its Charter)

 (Name of Person(s) Filing Proxy Statement
 if other than the Registrant)

Payment of Filing Fee (check the appropriate box):                              

[X]      No fee required.                                                       
[  ]     Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

 (1)      Title of each class of securities to which transaction
applies:                                    

       (2)      Aggregate number of securities to which transaction applies:

         (3)      Per  unit  price  or other  underlying  value  of  transaction
                  computed  pursuant  to  Exchange  Act Rule 0-11 (set forth the
                  amount on which the filing fee is calculated  and state how it
was determined):                            

(4)      Proposed maximum aggregate value of transaction:     

(5)      Total fee paid:                                      

[  ]     Fee paid previously with preliminary materials.                        
[        ] Check box if any part of the fee is offset as  provided  by  Exchange
         Act Rule  0-11(a)(2)  and identify the filing for which the  offsetting
         fee was paid  previously.  Identify the previous filing by registration
       statement number, or the Form or Schedule and the date of its filing.

(1)      Amount previously paid:                              

(2)      Form, Schedule or Registration Statement No.:        

(3)      Filing party:                                        

(4)      Date filed:                                          

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Clear Channel Communications, Inc.

 P.O. Box 659512
 San Antonio, Texas 78265-9512

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 To Be Held April 26, 2001

         As a shareholder of Clear Channel Communications,  Inc., you are hereby
given notice of and invited to attend, in person or by proxy, the Annual Meeting
of Shareholders of Clear Channel  Communications,  Inc. be held at Clear Channel
Communications,  200 East Basse Road, San Antonio, Texas (see map on back cover)
on April 26, 2001, at 11:00 a.m. local time, for the following purposes:        

1.  To elect thirteen directors to serve for the coming year;         

  2.  to ratify the selection of Ernst & Young LLP as independent auditors
for the year ending December 31, 2001;                        

    3.  to approve the Clear Channel Communications, Inc. 2001 Stock Incentive
Plan; and                                                     

4.  to transact any other business which may properly come before the 
meeting or any adjournment thereof.                           

         Only  shareholders  of record at the close of business on March 9, 2001
are entitled to notice of and to vote at the meeting.                           

         Two cut-out  admission  tickets are  included on the back cover of this
document.  Please contact Clear Channel's Corporate Secretary at Clear Channel's
corporate  headquarters if you need additional tickets.  The annual meeting will
begin promptly at 11:00 a.m.                                                    

         Your  attention  is invited to the  accompanying  proxy  statement.  In
addition, although mere attendance at the meeting will not revoke your proxy, if
you attend the meeting  you may revoke your proxy and vote in person.  To assure
that your shares are represented at the meeting, please complete, date, sign and
mail the enclosed proxy card in the return envelope provided for that purpose.  

                                        By Order of the Board of Directors

                      Kenneth E. Wyker
               Secretary

San Antonio, Texas                                                              
March ___, 2001                                                                 

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 2001 ANNUAL MEETING OF SHAREHOLDERS

NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

 TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING.......1  
   Why am I receiving these materials?.....................................1
   What information is contained in these materials?.......................1
   What proposals will be voted on at the annual meeting?..................1
   What shares owned by me can be voted?...................................1
What is the difference between holding shares as a shareholder of     
     record and as a beneficial owner?.....................................1
If my shares are held in "street name" by my broker, will my broker   
     vote my shares for me?................................................2
   How can I vote my shares in person at the annual meeting?...............2
   How can I vote my shares without attending the annual meeting?..........2
   How can I revoke my proxy? .............................................2
   What if I return my proxy card without specifying my voting choices?....2
What does it mean if I receive more than one proxy or voting          
     instruction card?.....................................................2
   What constitutes a quorum?..............................................2
   What are Clear Channel's voting recommendations?........................3
   Where can I find the voting results of the annual meeting?..............3
THE BOARD OF DIRECTORS.......................................................3  
   Compensation of Directors...............................................3
   Board Meetings..........................................................3
   Committees of the Board.................................................3
PROPOSAL 1: ELECTION OF DIRECTORS............................................4  
   Nominees for Director...................................................5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                             
   MANAGEMENT..............................................................7
EXECUTIVE COMPENSATION.......................................................9  
   Summary Compensation Table..............................................9
   Stock Option Grant Table...............................................10
   Stock Option Exercises and Holding Table...............................10
   Employment Agreements..................................................10
REPORT OF THE COMPENSATION COMMITTEE AND THE EXECUTIVE PERFORMANCE              
   SUBCOMMITTEE...........................................................11
   Overall Policy.........................................................11
   Compensation...........................................................12
   Chief Executive Officer Compensation...................................13
   Policy on Deductibility of Compensation................................14
AUDIT COMMITTEE REPORT......................................................14  
STOCK PERFORMANCE GRAPH.....................................................16  
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.....................16  
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.................17  
CERTAIN TRANSACTIONS........................................................17  
PROPOSAL 2: SELECTION OF INDEPENDENT AUDITORS...............................17  
PROPOSAL 3: APPROVAL OF THE CLEAR CHANNEL COMMUNICATIONS, INC. 2001 STOCK       
   INCENTIVE PLAN.........................................................18
SHAREHOLDER PROPOSALS.......................................................23  
GENERAL.....................................................................23  
APPENDIX A - CLEAR CHANNEL COMMUNICATIONS, INC. 2001 STOCK INCENTIVE PLAN..A-1  
APPENDIX B - AUDIT COMMITTEE CHARTER.......................................B-1  

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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING

Q:       Why am I receiving these materials?                                    

A:       Clear  Channel's  Board of Directors  (the "Board") is providing  these
         proxy  materials  for you in  connection  with Clear  Channel's  annual
         meeting of shareholders (the "annual  meeting"),  which will take place
         on April 26, 2001.  The Board is  soliciting  proxies to be used at the
         meeting.  You are also  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  directors  and our most  highly  paid  officers,  and
         certain other required information.  Clear Channel's 2000 Annual Report
         on Form 10-K, 2000 Shareholder  Report,  Proxy Card and return envelope
are also enclosed.                                            

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

A:       There  are  three  proposals  scheduled  to be voted on at the  annual 
        meeting: the election of directors;  the ratification of Ernst & Young
        LLP as Clear  Channel's  independent  accountants  for the year ending
        December   31,   2001;   and  the   approval  of  The  Clear   Channel
Communications, Inc. 2001 Stock Incentive Plan.               

Q:       What shares owned by me can be voted?                                  

A:       All shares  owned by you as of the close of  business  on March 9, 2001
         (the "Record  Date") may be voted by you.  These shares  include shares
         that are: (1) held directly in your name as the  shareholder of record,
         and (2) held for you as the  beneficial  owner  through a  stockbroker,
         bank or other  nominee.  Each of your shares is entitled to one vote at
the annual meeting.                                           

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

A:       Most  shareholders  of Clear Channel hold their shares  through a stock
         broker,  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.                          
           SHAREHOLDER OF RECORD: If your shares are registered directly in your
         name with Clear Channel's transfer agent, The Bank of New York, you are
         considered,  with respect to those shares,  the  shareholder of record,
         and these  proxy  materials  are being  sent  directly  to you by Clear
         Channel. As the shareholder of record, you have the right to grant your
         voting  proxy  directly  to Clear  Channel  or to vote in person at the
         annual meeting. Clear Channel has enclosed a proxy card for you to use.
           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 shareholder of record. As
         the beneficial  owner,  you have the right to direct your broker on how
         to vote and are also  invited to attend the  annual  meeting.  However,
         since you are not the  shareholder  of  record,  you may not vote these
         shares in person at the annual  meeting.  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.          

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

A:       Your broker will vote your shares only if you instruct  your broker how
         to vote.  Your broker will send you  directions on how you can instruct
         your  broker to vote.  Your  broker  cannot  vote your  shares  without
instructions from you.                                        

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

A:       Shares held directly in your name as the  shareholder  of record may be
         voted in person at the annual  meeting.  If you choose to do so, please
         bring the enclosed proxy card or proof of  identification.  Even if you
         plan to attend the annual  meeting,  Clear Channel  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  meeting.  Shares held in
         "street name" may be voted in person by you only if you obtain 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
meeting.                                                      

Q:       How can I vote my shares without attending the annual meeting?         

A:       Whether  you hold  shares  directly  as the  shareholder  of  record or
         beneficially  in  "street  name",  when you  return  your  proxy  card,
         properly  signed,  the shares  represented  will be voted in accordance
         with your  directions.  You can  specify  your  choices by marking  the
appropriate boxes on the enclosed proxy card.                 

Q:       How can I revoke my proxy?                                             

A:       You may revoke your proxy at any time before it is voted by giving     
         written notice to the secretary of Clear Channel prior to the convening
of the meeting.                                               

Q What if I return my proxy card without specifying my voting choices?          

A:       If your proxy card is signed and returned without specifying choices,  
the shares will be voted as recommended by the Board.         

Q:       What does it mean if I receive more than one proxy or voting           
instruction card?                                             

A:       It means your shares are registered differently or are in more than one
      account. Please provide voting instructions for all proxy and voting
instruction cards you receive.                                

Q:       What constitutes a quorum?                                             

A:       The  presence,  in person or by proxy,  of the holders of a majority of
         the outstanding  shares of Clear Channel's Common Stock is necessary to
         constitute  a quorum at the  meeting.  Only  votes  cast "for" a matter
         constitute  affirmative  votes.  Votes  "withheld" or  abstaining  from
         voting are  counted  for quorum  purposes,  but since they are not cast
         "for" a particular  matter,  they will have the same effect as negative
votes or vote "against" a particular matter.                  

Q:       What are Clear Channel's voting recommendations?                       

A:       The Board recommends that you vote your shares "FOR" each of the       
nominees to the Board and "FOR" each of the other proposals.  

Q:       Where can I find the voting results of the annual meeting?             

A:       Clear Channel will announce  preliminary  voting  results at the annual
         meeting and publish final results in Clear Channel's  quarterly  report
         on Form 10-Q for the second  quarter of 2001,  which will be filed with
the SEC by August 14, 2001.                                   

THE BOARD OF DIRECTORS

         The Board is  responsible  for the  management  and  direction of Clear
Channel and for establishing broad corporate  policies.  However,  in accordance
with  corporate  legal  principles,  it is not involved in day-to-day  operating
details.  Members of the Board are kept  informed  of Clear  Channel's  business
through discussions with the Chairman and other officers,  by reviewing analyses
and reports sent to them, and by participating in board and committee meetings. 

COMPENSATION OF DIRECTORS                                                       

         Outside  directors are paid $20,000 annual  retainer with an additional
$2,500 for each meeting of the Board they attend and members of the Compensation
Committee  and Audit  Committee  are paid $500 for each  committee  meeting they
attend. In addition, in February 1993, February 1994, April 1997, May 1998, July
1999 and April 2000,  each  outside  director  was  granted  options to purchase
62,500,  50,000,  10,000, 10,000, 5,000 and 5,000 shares of Clear Channel common
stock, respectively. These options vest 20% per year beginning one year from the
date of grant and expire ten years from the date of grant.                      

BOARD MEETINGS                                                                  

         During 2000,  the Board held six meetings.  Each of the nominees  named
below  attended at least 75% of the aggregate of the total number of meetings of
the Board  held  during  such  director's  term and 75% of the  total  number of
meetings held by committees of the Board on which that director served.         

COMMITTEES OF THE BOARD                                                         

     The Board has two  committees:  the  Compensation  Committee  and the Audit
Committee.  The Compensation  Committee has established an Executive Performance
Subcommittee. The table below sets forth members of each committee.             

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                           BOARD COMMITTEE MEMBERSHIP                                                                 

------------------------------- ---------------------------- ---------------------------- ----------------------------
                                                                      Executive                                       
                                       Compensation                  Performance                     Audit            
             Name                        Committee                  Subcommittee                   Committee          
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                                                                                                      
Robert L. Crandall (1)                        X                          X                                            
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Alan D. Feld (2)                              X                                                                       
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Thomas O. Hicks (3)                           X                                                                       
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Vernon E. Jordan, Jr. (3)                     X                                                                       
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Michael J. Levitt (4)                                                                                 X               
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Perry J. Lewis (4)                                                                                    X*              
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
L. Lowry Mays                                 X                                                                       
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
B. J. McCombs                                 X                                                                       
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Theodore H. Strauss (5)                                                                               X               
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
John H. Williams (6)                          X*                         X                            X               
------------------------------- ---------------------------- ---------------------------- ----------------------------
X = Committee member;  * = Chairperson                                                                                

(1) Mr. Crandall has served on the Compensation  Committee since October 26,    
2000 and Executive Performance Subcommittee since February 12, 2001.    
(2) Mr. Feld served on the Audit Committee until October 26, 2000 and has served
on the Compensation Committee since that time.                          
(3) Mr. Hicks and Mr. Jordan have served on the Compensation Committee since    
October 26, 2000.                                                       
(4) Mr. Levitt and Mr. Lewis have served on the Audit Committee since October   
26, 2000.                                                               
(5) Mr. Strauss served on the Compensation Committee until October 26, 2000.    
(6) Mr. Williams served as the Chairperson of the Audit Committee until October 
26, 2000.                                                               

         The  Compensation  Committee  administers  Clear Channel's stock option
plans and performance-based  compensation plans and makes recommendations to the
Board  concerning  compensation  arrangements  for all officers and directors of
Clear Channel and its subsidiaries  (except with respect to matters entrusted to
the Executive  Performance  Subcommittee as described below).  See the Report of
the Compensation  Committee and the Executive Performance  Subcommittee later in
this document,  which details the basis on which the Compensation  Committee and
its subcommittee determines executive  compensation.  The Compensation Committee
met one time during 2000.                                                       

         The Executive  Performance  Subcommittee of the Compensation  Committee
has as its principal  responsibility to review and advise the Board with respect
to performance-based  compensation of executive and other corporate officers who
are,  or who are likely to become,  subject  to Section  162(m) of the  Internal
Revenue Code.  Section 162(m) limits the deductibility of compensation in excess
of $1 million paid to a corporation's chief executive officer and the four other
most highly compensated executive officers, unless certain conditions are met.  

         The Audit  Committee  is  responsible  for  reviewing  Clear  Channel's
accounting  practices and audit  procedures.  The members of the Audit Committee
are  independent as defined by the listing  standards of the NYSE. See the Audit
Committee  Report  later  in  this  document,   which  details  the  duties  and
performance of the committee. The Audit Committee met four times during 2000.   

 PROPOSAL 1: ELECTION OF DIRECTORS

         The Board intends to nominate,  at the annual meeting of  shareholders,
the thirteen persons listed as nominees below.  Each of the directors elected at
the annual meeting will serve until the next annual meeting of  shareholders  or
until his successor  shall have been elected and  qualified,  subject to earlier
resignation  and removal.  The directors are to be elected by a plurality of the
votes  cast  by  the  holders  of the  shares  of  Clear  Channel  common  stock
represented and entitled to be voted at the annual meeting.  Unless authority to
vote for directors is "withheld" in the proxy,  the persons named therein intend
to vote "for" the election of the  thirteen  nominees  listed.  Each nominee has
indicated a  willingness  to serve as  director  if elected.  Should any nominee
become  unavailable for election,  discretionary  authority is conferred to vote
for a substitute.  Management  has no reason to believe that any of the nominees
will be unable or unwilling to serve if elected.                                

NOMINEES FOR DIRECTOR                                                           

     The  nominees for  director  are L. Lowry Mays,  Karl Eller,  Mark P. Mays,
Randall T. Mays, Robert L. Crandall,  Alan D. Feld,  Thomas O. Hicks,  Vernon E.
Jordan Jr.,  Michael J.  Levitt,  Perry J.  Lewis,  B. J.  McCombs,  Theodore H.
Strauss and John H. Williams.                                                   

     L. Lowry Mays, age 65, is the founder of Clear Channel and currently serves
as  Chairman  of the Board  and  Chief  Executive  Officer.  He has  served as a
director since Clear Channel's  inception.  Mr. L. Mays is the father of Mark P.
Mays and Randall T. Mays, who serve as the President and Chief Operating Officer
and the Executive Vice President and Chief  Financial  Officer of Clear Channel,
respectively. Mr. L. Mays also serves on the board of directors of NBC Internet,
Inc.                                                                            

         Karl  Eller,  age  72,  was the  founder  of  Eller  Media  Company,  a
subsidiary of Clear Channel,  and has served as its Chairman and Chief Executive
Officer  since 1995.  Mr. Eller has over 40 years of  experience  in the outdoor
advertising  industry.  He was appointed as a director of Clear Channel in April
1997 in connection with Clear Channel's acquisition of Eller Media Company.     

     Mark P. Mays, age 37, serves as the President and Chief  Operating  Officer
of Clear Channel. He has served as a director since May 1998. Mr. M. Mays is the
son of L. Lowry Mays, Clear Channel's  Chairman and Chief Executive  Officer and
the brother of Randall T. Mays,  Clear  Channel's  Executive  Vice President and
Chief Financial Officer.                                                        

     Randall T. Mays,  age 35, serves as the Executive  Vice President and Chief
Financial  Officer of Clear  Channel.  He has served as a director  since  April
1999.  Mr. R. Mays is the son of L. Lowry Mays,  Clear  Channel's  Chairman  and
Chief  Executive  Officer  and the  brother  of Mark P.  Mays,  Clear  Channel's
President and Chief Operating  Officer.  Mr. R. Mays also serves on the board of
directors of XM Satellite Radio and CNET, Inc.                                  

     Robert L. Crandall,  age 65, served as Chairman of the Board, President and
Chief  Executive  Officer of AMR  Corporation,  the parent  company of  American
Airlines, from 1985 to May 1998, when he retired. He has served as a director of
Clear  Channel  since August 30, 2000.  He had served as a director of AMFM Inc.
prior to that time. Mr.  Crandall also serves as a director of American  Express
Company, Anixter International, Inc., Celestica, Inc. and Halliburton Company.  

     Alan D. Feld, age 63, is the sole shareholder of a professional corporation
which is partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P. He
has served as a director of Clear  Channel  since 1984.  Mr. Feld also serves on
the board of directors of Centerpoint Properties,  Inc. and AMR Advantage Mutual
Funds.                                                                          

     Thomas O.  Hicks,  age 55,  is  Chairman  of the Board and Chief  Executive
Officer  of Hicks,  Muse,  Tate & Furst  Incorporated,  a  Dallas-based  private
investment  firm.  From 1984 to May 1989, Mr. Hicks was Co-Chairman of the Board
and  Co-Chief   Executive  Officer  of  Hicks  &  Haas   Incorporated,   another
Dallas-based  private  investment  firm.  He has served as a  director  of Clear
Channel  since August 30, 2000. He had served as Chairman of the Board and Chief
Executive  Officer of AMFM Inc.  prior to that time.  Mr. Hicks also serves as a
director of Sybron  International  Corporation,  Inc.,  Home  Interiors & Gifts,
Inc.,  Triton Energy Limited,  Cooperative  Computing,  Inc.,  Viasystems Group,
Inc.,  Stratford  Capital,  Olympus  Real  Estate  Corporation,  LIN  Television
Corporation,  Ibero-American Media Partners, Corp Group, Grupo MVS, LIN Holdings
Corp., Regal Cinemas, Inc. and Lamar Advertising Company.                       

     Vernon  E.  Jordan,  Jr.,  age 65  currently  serves  as a senior  managing
director in the New York office of the investment  banking firm of Lazard Freres
& Co.,  LLC and Of Counsel  in the  Washington,  D.C.  office of the law firm of
Akin, Gump,  Strauss,  Hauer & Feld, L.L.P. He has served as a director of Clear
Channel since August 30, 2000. He had served as a director of AMFM Inc. prior to
that time.  Mr.  Jordan also serves as a director of American  Express  Company,
American Online Latin America, Callaway Golf Company, Dow Jones & Company, Inc.,
Firstmark Communications, J.C. Penney Company, Inc., Revlon, Ryder System, Inc.,
Sara Lee  Corporation  and Xerox  Corporation.  Mr.  Jordan serves as trustee of
Howard University.                                                              

     Michael J. Levitt,  age 42, has been a partner of Hicks Muse,  Tate & Furst
Incorporated, a Dallas-based private investment firm, since 1996. Before joining
Hicks Muse,  Mr.  Levitt was a Managing  Director and Deputy Head of  Investment
Banking of Smith Barney Inc. from 1993 through 1995. He has served as a director
of Clear Channel since August 30, 2000. He had served as a director of AMFM Inc.
prior to that time.  Mr.  Levitt also  serves as a director of Eubisco  Limited,
Globix Corporation, Handango.com, Inc., PeopleLink, Inc., Premiere International
Foods, The Realm, Inc., Rhythms NetConnections Inc., and RCN Corporation.       

     Perry J. Lewis,  age 63, was the Chairman of  Broadcasting  Partners,  Inc.
from its inception in 1988 until its merger with  Evergreen  Media  Corporation,
and was Chief  Executive  Officer of  Broadcasting  Partners,  Inc. from 1993 to
1995.  Mr.  Lewis is a founder of Morgan,  Lewis,  Githens & Ahn, an  investment
banking and leveraged  buyout firm which was  established in 1982. He has served
as a  director  of Clear  Channel  since  August  30,  2000.  He had served as a
director of AMFM Inc. prior to that time and Evergreen Media  Corporation  prior
to AMFM's acquisition of Evergreen Media Corporation. Mr. Lewis also serves as a
director  of Aon  Corporation  and  Metaldyne  Corporation  (formerly  known  as
Mascotech Corporation).                                                         

     B. J. McCombs,  age 72, is a private  investor with interests in automobile
dealerships and other investments.  He has served as a director of Clear Channel
since its inception.                                                            

     Theodore H. Strauss, age 75, is a Senior Managing Director of Bear, Stearns
& Co., Inc. He has served as a director of Clear Channel since 1984. Mr. Strauss
also serves as a director of Sizeler  Properties,  Inc. and  Hollywood  Casinos,
Inc.                                                                            

     John H.  Williams,  age 66,  was a Senior  Vice  President  of First  Union
Securities,  Inc.,  (formerly  known  as  Everen  Securities,  Inc.)  until  his
retirement  in July 1999.  He has served as a director  of Clear  Channel  since
1984. Mr. Williams also serves as a director of GAINSCO, Inc.                   

MANAGEMENT RECOMMENDS THAT THE YOU VOTE "FOR" THE DIRECTOR NOMINEES NAMED ABOVE.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
 OWNERS AND MANAGEMENT

         The table  below  sets  forth  information  concerning  the  beneficial
ownership  of Clear  Channel  common  stock as of February  28,  2001,  for each
director  serving on the Board in 2000 and each of the  nominees  for  director;
each of the named executive officers not listed as a director; the directors and
executive  officers as a group;  and each person  known to Clear  Channel to own
beneficially more than 5% of outstanding  common stock. At the close of business
on February 28, 2001,  there were  587,249,889  shares of Clear  Channel  common
stock  outstanding.  Except as otherwise noted, each shareholder has sole voting
and investment power with respect to the shares beneficially owned.             

                                                        [Enlarge/Download Table]

                                                                         Amount and Nature of     Percent 
          Name                                                           Beneficial Ownership     of Class

                                                                                                          
L. Lowry Mays...................................................              31,032,838 (1)        5.3%  
Karl Eller......................................................               2,241,165 (2)          *   
Mark P. Mays....................................................               1,034,100 (3)          *   
Randall T. Mays.................................................                 656,816 (4)          *   
Robert L. Crandall..............................................                  29,200 (5)          *   
Alan D. Feld....................................................                  78,300 (6)          *   
Thomas O. Hicks.................................................              55,173,273 (7)(16)    9.4%  
Vernon E. Jordan, Jr. ..........................................                  90,300 (8)          *   
Michael J. Levitt...............................................                 160,670 (9)          *   
Perry J. Lewis..................................................                 168,832 (10)         *   
B. J. McCombs...................................................              14,451,986 (11)       2.5%  
Theodore H. Strauss.............................................                 227,106 (12)         *   
John H. Williams................................................                  20,620 (13)         *   
Randy Michaels (14) ............................................                 973,077 (15)         *   
Hicks Muse Parties (16) ........................................              50,837,622 (17)       8.7%  
FMR Corp. (18) .................................................              40,649,511 (19)       6.9%  
Capital Research and Management Company (20) ...................              38,094,690 (21)       6.5%  
Janus Capital Corporation (22) .................................              31,861,019            5.4%  
Putnam Investments, LLC (23)....................................              31,786,096            5.4%  
All Directors and Executive Officers as a Group (22 persons)....             107,926,314 (24)       18.2% 

---------------                                                                                           
*  Percentage  of shares  beneficially  owned by such person does not exceed one                          
percent of the class so owned.                                                                            

(1)  Includes 1,745,000 shares subject to options held by Mr. L. Mays and 98,456
     shares held by trusts of which Mr. L. Mays is trustee, but not beneficiary,
     468,283 shares held by the Mays Family Foundation, 1,159,787 shares held by
     the Mays Family 2000  Charitable  Lead Annuity Trust and 20,000,000  shares
     held by 4-M  Partners,  Ltd.,  over  which Mr. L. Mays has  either  sole or
shared investment or voting authority.                                

(2)  Includes  998,112 shares subject to options held by Mr. Eller and 1,243,053
     shares held by Red River  Resources,  a company  jointly  controlled by Mr.
Eller.                                                                

(3)  Includes  62,380  shares  subject to options  held by Mr. M. Mays,  134,316
     shares held by trusts of which Mr. M. Mays is trustee,  but not beneficiary
 and 629,193  shares held by the MPM  Partners,  Ltd., over which Mr. M.
Mays has control of the sole general partner.                         

(4)  Includes  66,980  shares  subject to options held by Mr. R. Mays and 13,041
     shares held by trusts of which Mr. R. Mays is trustee, but not beneficiary.

(5)  Includes 24,500 shares subject to options held by Mr. Crandall.            

(6)  Includes 62,000 shares subject to options held by Mr. Feld. Excludes 10,860
     shares owned by Mr. Feld's wife, as to which Mr. Feld disclaims  beneficial
ownership                                                             

(7)  Consists of 4,314,756  shares for which Thomas O. Hicks has sole voting and
     dispositive  power and 50,859,517 shares (including vested stock options to
     purchase  94,000  shares) for which  Thomas O. Hicks has shared  voting and
     dispositive  power.  Of the 4,314,756  shares for which Thomas O. Hicks has
     sole voting and dispositive  power,  3,553,691 shares are held of record by
     Thomas O. Hicks,  253,358  shares are subject to options that are currently
     vested,  311,169  shares  are held by Thomas  O.  Hicks as the  trustee  of
     certain trusts for the benefit of Thomas O. Hicks' children, 102,366 shares
     are held of record by a private  foundation  controlled by Thomas O. Hicks,
     and 94,172 shares are held of record by two limited  partnerships  of which
     the general partner is a limited liability company of which Thomas O. Hicks
     is the sole  member.  Of the  50,859,517  shares of common  stock for which
     Thomas O. Hicks has shared voting and dispositive power,  21,895 shares are
     held by Thomas O.  Hicks as the  co-trustee  of a trust for the  benefit of
     unrelated parties, and 50,837,622 shares (including vested stock options to
     purchase  94,000 shares) are held of record by the Hicks Muse Parties.  Mr.
     Thomas O.  Hicks  disclaims  beneficial  ownership  of the shares of common
stock not owned of record by him.                                     

(8)  Includes 90,300 shares subject to options held by Mr. Jordan.              

(9)  Includes 95,687 shares for which Mr. Levitt has sole voting and dispositive
     power and  64,983  shares  for which  Mr.  Levitt  has  shared  voting  and
     dispositive  power.  Of the  94,687  shares  for which Mr.  Levitt has sole
     voting and  dispositive  power,  1,080 shares are held by Mr. Levitt as the
     trustee of certain  trust for the benefit of his children and 94,607 shares
     subject  to  options  held by Mr.  Levitt.  All of the shares for which Mr.
     Levitt has shared  voting and  dispositive  power are held of record by Mr.
     Levitt  and his wife in joint  tenancy.  Mr.  Levitt  disclaims  beneficial
ownership of the shares held in trust for the benefit of his children.

(10) Includes 118,500 shares subject to options held by Mr. Lewis.              

(11) Includes  6,000  shares  subject to options held by Mr.  McCombs.  Excludes
     9,798,453  shares  held by  trusts  of  which  Mr.  McCombs'  children  are
trustees, as to which Mr. McCombs disclaims beneficial ownership.     

(12) Includes 124,500 shares subject to options held by Mr. Strauss.            

(13) Includes 6,000 shares subject to options held by Mr. Williams.             

(14) Mr.  Michaels is also known as Benjamin  Homel and he files  reports  under
Section 16(a) of the Securities Exchange Act of 1934 under that name. 

(15) Includes 532,135 shares subject to options held by Mr. Michaels.           

(16) Address c/o Hicks,  Muse,  Tate & Furst  Incorporated,  200 Crescent Court,
Suite 1600, Dallas, Texas 75201.                                      

(17) Consists of (i) 127,027 shares held of record by Capstar  Boston  Partners,
     L.L.C.,  a limited  liability  company  of which the  manager  is a limited
     partnership  whose  ultimate  general  partner  is  Hicks,  Muse  Fund  III
     Incorporated  ("Fund III Inc."),  (ii) 28,206,684  shares held of record by
     Capstar Broadcasting Partners, L.P. ("Capstar L.P."), a limited partnership
     of which the ultimate general partner is HM3/Capstar, Inc. ("HM3/Capstar"),
     (iii) 8,029,935  shares held of record by  HM4/Chancellor,  L.P., a limited
     partnership of which the ultimate  general  partner is Hicks,  Muse Fund IV
     LLC ("Fund IV"), (iv) 2,026,183  shares held of record by HM2/HMW,  L.P., a
     limited  partnership  of which the ultimate  general  partner is Hicks Muse
     Fund II Incorporated  ("Fund II Inc."), (v) 14,036 shares held of record by
     Hicks,  Muse,  Tate & Furst Equity Fund II, L.P., a limited  partnership of
     which the ultimate general partner is Fund II Inc., (vi) 12,339,757  shares
     held of record by HM2/Chancellor,  L.P., a limited partnership of which the
     ultimate    general    partner    is    HM2/Chancellor    Holdings,    Inc.
     ("HM2/Chancellor"),  and (vii) 94,000 shares  issuable upon the exercise of
     stock  options  that  are  already  vested  and held by  Hicks,  Muse & Co.
     Partners, L.P., a limited partnership of which the ultimate general partner
     is HM Partners Inc.  ("HM  Partners")  (Capstar  Boston  Partners,  L.L.C.,
     Capstar L.P.,  HM4/Chancellor,  L.P.,  HM2/HMW,  L.P., Hicks,  Muse, Tate &
     Furst Equity Fund II, L.P.,  HM2/Chancellor,  L.P.,  and Hicks,  Muse & Co.
     Partners, L.P., collectively, the "Hicks Muse Parties"). Thomas O. Hicks is
     a  controlling  stockholder  and  serves  as Chief  Executive  Officer  and
     Chairman of the Boards of Directors of Fund III Inc., HM3/Capstar,  Fund II
     Inc.,  HM2/Chancellor  and HM  Partners,  and  Thomas O.  Hicks is the sole
     member of Fund IV.  Accordingly,  Thomas  O.  Hicks may be deemed to be the
     beneficial owner of the common stock  beneficially  owned by the Hicks Muse
     Parties.  Mr. Thomas O. Hicks disclaims  beneficial ownership of the shares
of common stock not owned of record by him.                           

(18) Address: 82 Devonshire Street, Boston, Massachusetts 02109.                

(19) Includes  186,412 shares issuable upon conversion of $17,500,000  principal
     amount  of Clear  Channel's  1.5%  Senior  Convertible  Notes  due 2002 and
     221,868 shares issuable upon conversion of $30,700,000  principal amount of
Jacor Communications Company Liquid Yield Option Notes due 2018.      

(20) Address: 333 South Hope Street, Los Angeles, California 90071.             

(21) Includes  863,602 shares issuable upon conversion of $53,500,000  principal
amount of Clear Channel's 2-5/8% Senior Convertible Notes due 2003.   

(22) Address: 100 Filmore Street, Denver, Colorado 80206-4923.                  

(23) Address: One Post Office Square, Boston, Massachusetts 02109.              

(24) Includes  5,303,520  shares  subject  to  options  held  by  such  persons,
     1,059,092 shares held by trusts of which such persons are trustees, but not
     beneficiaries, 468,283 shares held by the Mays Family Foundation, 1,159,787
     shares  held  by the  Mays  Family  2000  Charitable  Lead  Annuity  Trust,
     20,000,000  shares held by 4-M Partners,  Ltd.,  629,193 shares held by the
     MPM  Partners,  Ltd.,  1,243,053  shares  held by Red River  Resources  and
     50,837,622 shares held by Hick Muse Parties as more fully described in note
(17) above.                                                           

EXECUTIVE COMPENSATION

         Clear  Channel  believes that  compensation  of its executive and other
officers should be directly and materially linked to operating performance.  For
fiscal year 2000, the executive compensation program consisted of a base salary,
a bonus plan and stock  options  based on Clear  Channel's  cash flow growth and
individual performance.                                                         

Summary Compensation Table                                                      

     The Summary Compensation Table shows certain  compensation  information for
the years  ended  December  31,  2000,  1999 and 1998,  for the Chief  Executive
Officer and each of the four most highly  compensated  executive  officers whose
total  cash  compensation   exceeded  $100,000  for  services  rendered  in  all
capacities for the three years ended December 31, 2000 (hereinafter  referred to
as the "named executive officers").                                             

                                                        [Enlarge/Download Table]

                   ANNUAL COMPENSATION LONG-TERM COMPENSATION                                                     
                                                                            Awards          Payouts               

                                Other Restricted                                                                  
                                                         Annual     Stock                   LTIP       All Other  
   Name And Principal                                    Compen-satiAwards                  Payout   Compen-sation
        Position            Year    Salary    Bonus ($)     ($)       ($)     Options (#)     ($)         ($)     
                                      ($)                                                                         

                                                                                                                  
L. Lowry Mays             2000      1,000,000 3,000,000      -         -           375,000     -       179,441 (1)
Chairman and CEO          1999       972,274  2,750,000      -         -           375,000     -       191,740 (1)
                          1998       753,425  2,500,000      -         -           400,000     -       200,020 (1)

Mark P. Mays              2000       657,500  1,500,000      -         -            76,500     -         2,800 (3)
President and COO         1999       382,499    895,000      -         -            76,500     -         2,800 (3)
                          1998       291,250    625,000      -         -            42,380     -         2,800 (3)

Randall T. Mays           2000       655,000  1,500,000      -         -            76,500     -         2,800 (3)
Executive Vice President  1999       362,500    895,000      -         -            76,500     -         2,800 (3)
and CFO                   1998       266,667    625,000      -         -            42,380     -         2,800 (3)

Randy Michaels            2000       504,412  1,300,000      -         -            50,000     -     1,002,800 (2)
President - Radio         1999 (4)   519,120    810,853      -         -            50,000     -           -      
                          1998           N/A        N/A     N/A       N/A              N/A    N/A         N/A     

Karl Eller                2000       407,200    500,000      -         -            25,000     -         2,800 (3)
CEO of Eller Media        1999       397,820    400,000      -         -            25,000     -           564 (3)
Company                   1998       405,815    400,000      -         -            20,000     -           -      
-------------------                                                                                               

(1)  Represents  $176,641,  $188,940 and $197,220 paid by Clear Channel in 2000,
     1999 and 1998 respectively,  on a split-dollar life insurance policy for L.
     Lowry Mays.  Such amounts include the entire dollar amount of the term life
     portion and the present value to L. Lowry Mays of the  interest-free use of
     the non-term portion of each premium payment.  The remainder represents the
     amount of matching  contributions  paid by Clear  Channel  under its 401(k)
Plan.                                                                 

(2)  Represents $1 million paid by Clear Channel in 2000 as a one-time  contract
     buy-out   payment.   The  remainder   represents  the  amount  of  matching
contributions paid by Clear Channel under its 401(k) Plan.            

(3) Represents the amount of matching  contributions paid by Clear Channel under
its 401(k) Plan.                                                                

(4)  Represents partial year compensation.                                      

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Stock Option Grant Table                                                        

         The following  table sets forth certain  information  concerning  stock
options granted to the named  executive  officers during the year ended December
31, 2000.                                                                       

                                                                [Download Table]

                               Percent of                                         
                                 Total                                            
                  Number of     Options                                           
                  Securities   Granted to                                         
                  Underlying   Employees   Exercise or               Grant Date   
                   Options     in Fiscal   Base Price   Expiration     Present    
           Name  Granted (#)      Year      ($/share)      Date     Value ($) (1) 

                                                                                  
L. Lowry Mays         375,000    10.7%       66.6250     2/28/10        14,253,750
Mark P. Mays           75,000     2.1%       66.6250     2/28/10         2,850,750
                        1,500      -         73.2875     2/28/05            36,780
Randall T. Mays        75,000     2.1%       66.6250     2/28/10         2,850,750
                        1,500      -         73.2875     2/28/05            36,780
Randy Michaels         50,000     1.4%       66.6250     2/28/07         1,612,500
Karl Eller             25,000     .7%        66.6250     2/28/07           806,250

(1)  Present  value for these options was estimated at the date of grant using a
     Black-Scholes   option  pricing  model  with  the  following   assumptions:
     Risk-free  interest  rate of 6%, a  dividend  yield of 0%,  the  volatility
     factor of the expected  market price of Clear  Channel's  common stock used
     was 34% and the expected life was five, seven and ten years as appropriate.

Stock Option Exercises and Holding Table                                        

         The following  table sets forth  certain  information  regarding  stock
options exercised by the named executive officers during the year ended December
31, 2000,  including  the aggregate  value of gains on the date of exercise.  In
addition,  the table sets forth the number of shares covered by both exercisable
and  unexercisable  stock options as of December 31, 2000. Also reported are the
values of "in the money" options which represent the positive spread between the
exercise  price of any existing stock options and the Clear Channel common stock
price as of December 31, 2000.                                                  

                                                        [Enlarge/Download Table]

                  Shares                        Number of Securities      Value of Unexercised   
                  Acquired                     Underlying Unexercised    In-the-Money Options at 
                  on                           Options at Fiscal Year        Fiscal Year End     
                   Exercise      Value                End (#)                      ($)           
            Name     (#)      Realized ($)   Exercisable/Unexercisable  Exercisable/Unexercisable

                                                                                                 
L. Lowry Mays         -            -               1,370,000 / 0              6,868,690 / 0      
Mark P. Mays          -            -              52,008 / 245,380        2,057,480 / 1,860,950  
Randall T. Mays       22,224      1,539,056       44,600 / 245,380        1,792,878 / 1,860,950  
Randy Michaels        -            -             532,135 / 100,000           11,400,413 / 0      
Karl Eller           150,000     10,158,570      1,298,112 / 70,000       54,446,063 / 128,750   


EMPLOYMENT AGREEMENTS                                                           

         On October 1, 1999,  Clear Channel entered into  employment  agreements
with its three senior  executives,  L. Lowry Mays (Chairman and Chief  Executive
Officer),  Mark P. Mays (President and Chief  Operating  Officer) and Randall T.
Mays (Executive Vice President and Chief Financial Officer).  Each agreement has
a term of seven years with automatic  daily  extensions  unless Clear Channel or
the  executive  elects not to extend  the  agreement.  Each of these  employment
agreements  provides for a minimum  initial  base salary,  subject to review and
annual  increase by the  Compensation  Committee.  In addition,  each  agreement
provides for an annual bonus pursuant to Clear Channel's  Annual  Incentive Plan
or  as  the  Executive  Performance  Subcommittee  determines.   The  employment
agreements  with the Chief  Executive  Officer,  President  and Chief  Financial
Officer  initially  provided  for base  salaries  of  $1,000,000,  $350,000  and
$325,000, respectively, and for minimum option grants to acquire 100,000, 50,000
and  50,000  shares  of Clear  Channel  common  stock,  respectively;  provided,
however,  that the annual option grant will not be smaller than the option grant
in the  preceding  year  unless  waived by the  executive.  Each  option will be
exercisable at fair market value at the date of grant for a ten-year period even
if the executive is not employed by Clear Channel. The Compensation Committee or
the Executive  Performance  Subcommittee  will determine the schedule upon which
the options will vest and become exercisable.                                   

         Each of these executive  employment  agreements  provides for severance
and  change-in-control  payments in the event that Clear  Channel  terminates an
executive's  employment "without cause" or if the executive terminates for "good
reason." "Cause" is narrowly defined,  and any determination of cause is subject
to a supermajority vote of Clear Channel's board. "Good reason" includes defined
change-in-control transactions involving Clear Channel, Clear Channel's election
not to automatically extend the term of the employment  agreement,  a diminution
in the  executive's  pay,  duties or title or, in the case of the  President and
Chief Financial  Officer,  if neither L. Lowry Mays, Mark P. Mays nor Randall T.
Mays is the  Chairman  and  Chief  Executive  Officer  of Clear  Channel.  If an
executive  is  terminated  by Clear  Channel  "without  cause" or the  executive
resigns for "good  reason"  then that  executive  will  receive a lump-sum  cash
payment equal to the base salary and bonus that  otherwise  would have been paid
for the remainder of the term of the agreement  (using the highest bonus paid to
executive  in the  three  years  preceding  the  termination  but not less  than
$1,000,000  bonus for the President or Chief  Financial  Officer and  $3,000,000
bonus for the Chief Executive Officer);  continuation of benefits;  an option to
acquire  1,000,000  shares of Clear Channel common stock at fair market value as
of the date of termination  that is fully vested and exercisable for a period of
ten years; and immediate vesting on the date of termination of all stock options
held by the executive on the date of termination.  Certain tax gross up payments
would also be due on such  amounts.  However,  if either the  President or Chief
Financial Officer terminates his employment  agreement "for good reason" because
neither L. Lowry  Mays,  Mark P. Mays nor  Randall T. Mays is the  Chairman  and
Chief Executive  Officer of Clear Channel,  then the lump-sum payment and option
grants  described  above  essentially  double.  In  the  event  the  executive's
employment is terminated  "without  cause" or for "good  reason," the employment
agreements also restrict the executive's  business  activities that compete with
the  business  of  Clear  Channel  for a  period  of two  years  following  such
termination.                                                                    

 REPORT OF THE COMPENSATION COMMITTEE AND THE EXECUTIVE PERFORMANCE SUBCOMMITTEE

         The following  Report of the  Compensation  Committee and the Executive
Performance  Subcommittee and the performance  graphs included elsewhere in this
proxy statement do not constitute  soliciting  material and should not be deemed
filed or  incorporated  by  reference  into any other  Company  filing under the
Securities  Act of 1933 or the  Securities  Exchange Act of 1934,  except to the
extent Clear Channel  specifically  incorporates  this Report or the performance
graphs by reference therein.                                                    

         The   Compensation   Committee  of  the  Board  of  Directors  and  the
Committee's  Executive  Performance  Subcommittee  have  furnished the following
report on executive compensation for fiscal year 2000.                          

Overall Policy                                                                  

         The financial  success of Clear Channel is linked to the ability of its
executive and other officers to direct Clear Channel's current operations and to
assess the  advantages of potential  acquisitions  and realign the operations of
the acquired  entities with the  operating  policies of Clear  Channel.  A major
objective of Clear Channel's  compensation strategy is to attract and retain top
quality  executive  and other  officers.  Another  objective of Clear  Channel's
compensation  strategy is to reward officers based on the financial  performance
of operations  under their  control.  Financial  incentives are used to motivate
those  responsible to achieve Clear  Channel's  financial goals and to align the
interests of Clear  Channel's  officers  with the  interests of Clear  Channel's
shareholders.                                                                   

         Clear  Channel  believes that  compensation  of its executive and other
officers should be directly and materially linked to operating performance.  For
fiscal year 2000, the executive compensation program consisted of a base salary,
a bonus plan and stock  options  based on Clear  Channel's  cash flow growth and
individual performance.                                                         

         The Compensation  Committee and the Executive Performance  Subcommittee
believes  that this  three-part  approach  best  serves the  interests  of Clear
Channel and its shareholders.  It enables Clear Channel to meet the requirements
of the highly  competitive  environment  in which Clear Channel  operates  while
ensuring that all officers are compensated in a way that advances both the short
and long-term interests of shareholders.  Under this approach,  compensation for
these officers involves a high proportion of pay that is "at risk",  namely, the
annual bonus and stock options.  The annual bonus is also based,  in significant
part, on the Company's  performance.  Stock options relate a significant portion
of long-term  remuneration  directly to stock price appreciation realized by all
of Clear Channel's shareholders.                                                

Compensation                                                                    

Base Salary                                                   

         Base salaries of executive  and other  officers are set with respect to
comparable  salaries  paid by  companies  in similar  industries  in which Clear
Channel  operates.  The  salaries  of all  executive  officers  except the Chief
Executive  Officer  are  determined  through  mutual  negotiations  between  the
executive and the Chief Executive Officer and are based on both past performance
and expected future performance.  However,  under certain  circumstances,  Clear
Channel may enter into  employment  agreements  with  executive  officers and it
currently has  employment  agreements  with its  President  and Chief  Operating
Officer and its Executive Vice President and Chief Financial Officer.           

Bonus Plans                                                   

         Annual bonuses for fiscal year 2000 paid to executive officers of Clear
Channel were granted under Clear Channel's  Annual  Incentive Plan. This plan is
administered  by  the  Executive  Performance   Subcommittee  and  provides  for
performance-based bonuses for executives who are "covered employees" pursuant to
Section 162(m) of the Internal  Revenue Code.  Under the plan, the  Subcommittee
establishes  specific  company  "budgeted  goals"  applicable  to  each  covered
executive  officer for  performance  periods of one or more years.  The budgeted
goals  used for the  fiscal  year  2000  annual  bonuses  paid to the  executive
officers were based upon the executives  achieving  certain goals,  including an
increase in cash flow over the prior year, other selected  performance  criteria
or other  subjective  measures of  performance.  Budgeted goals are set for each
such  executive   officer   pursuant  to  an  extensive  annual  operating  plan
established by Clear Channel and the Chief Executive Officer.  Past and expected
future  performance  was considered on a subjective  basis in determining  these
budgeted  goals,  based on the varied  circumstances  impacting  each  operating
division.  The Chief Executive Officer reports to the Compensation  Committee as
to the  compensation  levels  and  performance  goals,  which he sets for  Clear
Channel's executive officers.                                                   

         At the same time, the Subcommittee  establishes an objective formula or
standard  for  calculating  the  maximum  bonus  payable  to each  participating
executive  officer.  These maximum bonus amounts were set above Clear  Channel's
historical  bonus levels for executives  other than the Chief Executive  Officer
because the Section  162(m)  regulations  allow only  "negative  discretion"  in
respect  of this  type of plan,  and the  Subcommittee  desired  flexibility  to
recognize exceptional individual performance when warranted.                    

         Within the plan terms, the Subcommittee determines the actual amount of
each bonus. The Subcommittee may also exercise "negative discretion," and reduce
bonuses  otherwise  payable  under  the  objective   formula,   by  establishing
additional  conditions  or  terms  for  the  payment  of  bonuses,  such  as the
establishment of other financial,  strategic or individual  goals,  which may be
objective or subjective.                                                        

         For fiscal year 2000,  the  Subcommittee  established  overall  Company
performance  targets based upon the achievement of specified levels of cash flow
growth.  After the end of the fiscal year, the  Subcommittee  confirmed that the
2000 targets had been achieved and accordingly that annual bonuses would be paid
under the plan, subject to the Subcommittee's exercise of "negative discretion,"
to the Chief Executive Officer and the other plan  participants.  The amounts of
the  bonuses  paid  to the  named  executives  are  set  forth  in  the  Summary
Compensation Table presented elsewhere in these proxy materials.                

         For  bonus-eligible  officers  other  than  "covered  employees"  under
Section 162(m), Clear Channel's Chief Executive Officer developed a company-wide
bonus pool. The size of the bonus pool is based upon a subjective  assessment of
overall  company and  individual  business unit  performance as compared to both
budgeted and prior fiscal year performance and the extent to which Clear Channel
achieved  its  overall  financial  goals of growth in cash flows.  In  addition,
consideration is given to the need to keep Clear Channel  competitive in overall
compensation.  The amount of the bonus pool is  subject to the  approval  of the
Compensation Committee. Once the overall bonus pool is approved, Clear Channel's
senior  management makes individual  bonus  recommendations  to the Compensation
Committee,  within the limits of the pool, for eligible  employees based upon an
evaluation of their  individual  performance and contribution to Clear Channel's
overall performance.  Several of the executive officers'  employment  agreements
contemplate that bonus compensation will be awarded.                            

Stock Options                                                 

         Stock option  grants to executive  and other  officers of Clear Channel
were determined using the sole factor of achieving  budgeted goals as determined
on a subjective basis after consideration of the varied circumstances  impacting
each  operating  division.  All decisions to grant stock options are in the sole
discretion  of  the   Compensation   Committee  or  the  Executive   Performance
Subcommittee, as applicable.                                                    

         The  employment  agreements  with the  President  and  Chief  Operating
Officer and the Executive Vice President and Chief Financial Officer contemplate
the award of annual  option  grants to acquire  not less than  50,000  shares of
Clear Channel common stock.                                                     

Chief Executive Officer Compensation                                            

         The Clear Channel Compensation  Committee and the Executive Performance
Subcommittee  established the Chief Executive  Officer's  performance  goals and
determined the amount of incentive bonus.                                       

         Clear Channel  entered into a seven-year  employment  agreement with L.
Lowry Mays, to serve as Chairman and Chief Executive  Officer  effective October
1, 1999. The employment  agreement  provides for a minimum annual base salary of
$1  million.  The  salary  amount is  subject  to  review  by the Clear  Channel
Compensation  Committee  of the Board and may be increased on an annual basis at
the  beginning  of each fiscal  year.  The term of the  employment  agreement is
automatically extended at the end of each day by one additional day for each day
expired  during  the  employment   period,   in  the  absence  of  a  notice  of
non-extension from L. Lowry Mays. The employment agreement  contemplates that L.
Lowry Mays will be awarded bonus compensation as determined by the Clear Channel
Executive  Performance  Subcommittee  of the Board and an annual option grant to
acquire  not less  than  100,000  shares  of Clear  Channel  common  stock.  The
employment  agreement provides for substantial  severance and  change-in-control
payments and option grants in the event that Clear  Channel  terminates L. Lowry
Mays'  employment  "without  cause" or if the L. Lowry Mays terminates for "good
reason."                                                                        

         At the end of 2000, the Chief Executive  Officer's annual salary was $1
million  pursuant to his employment  contract with Clear Channel.  He was paid a
cash bonus of $3 million in February of 2001 that, while paid in 2001,  rewarded
the Chief Executive Officer for performance in 2000. Options were granted to the
Chief  Executive  Officer in 2000 for the  purchase  of 375,000  shares of Clear
Channel common stock.                                                           

         The  Compensation  Committee  and  Executive  Performance  Subcommittee
utilized information  gathered from its review of compensation  packages of five
comparable  companies in similar  industries in determining  the Chief Executive
Officer's  base salary and overall  compensation  package.  The amount of salary
paid and bonus  awarded was judged to be  deserving  and  balanced for the value
received by the shareholders from the Chief Executive  Officer's efforts,  based
on the overall increase in Clear Channel's after tax cash flow.                 

         In evaluating the incentive  bonus  compensation to be awarded to Clear
Channel's Chief  Executive  Officer,  the  Compensation  Committee  reviewed the
financial  performance of Clear Channel over the 2000 fiscal year.  Based on the
performance  goals  established by the Compensation  Committee and the Executive
Performance  Subcommittee,  under  the  Annual  Incentive  Plan  adopted  by the
shareholders at the 2000 annual shareholder meeting, the Chief Executive Officer
was entitled to an incentive  bonus of up to 5% of the  aggregate  increase over
20% of the  increase in the after tax cash flow from the 1999 fiscal year to the
2000 fiscal year. In 2000,  after tax cash flow  increased  from $.75 billion to
$1.28 billion, or 70%.                                                          

         As  mentioned   above,   the   Compensation   Committee  and  Executive
Performance   Subcommittee  gathered  competitive   compensation  data  on  five
companies in similar  industries.  The Committee and  Subcommittee  selected the
companies as the most  comparable  to Clear  Channel in terms of the  properties
operated  and the markets  served.  The  Compensation  Committee  and  Executive
Performance  Subcommittee  determined  that these five  companies  provided more
accurate  compensation  information  relative to Clear Channel's operations than
the entire range of companies covered in the S&P  Broadcast/Media  Index used in
the Stock  Performance  Chart included in this  document.  In the opinion of the
Compensation  Committee and the Executive  Performance  Subcommittee,  the Chief
Executive  Officer's 2000 compensation  corresponded to the median to low-end of
the range paid by the five companies surveyed.                                  

Policy on Deductibility of Compensation                                         

         Section  162(m) of the Internal  Revenue Code limits the tax  deduction
for compensation  paid to the named executive  officers to $1 million.  However,
performance-based  compensation  that  has  been  approved  by  shareholders  is
excluded  from  the  $1  million  limit  if,  among  other   requirements,   the
compensation  is payable  only upon  attainment  of  pre-established,  objective
performance  goals and the board committee that  establishes such goals consists
only of outside directors (as defined for purposes of Section 162(m)).          

         At the 2000 annual Clear Channel shareholder  meeting, the shareholders
approved the Annual  Incentive  Plan,  which meets the  requirements  of Section
162(m)  with  respect to the  performance-based  compensation  paid to the Chief
Executive  Officer,  as  discussed  above.  The present  intention  of the Clear
Channel Compensation Committee is to continue to comply with the requirements of
Section 162(m).                                                                 

Respectfully submitted,         

THE COMPENSATION COMMITTEE      
                        John Williams, Robert Crandall, Alan Feld, Thomas Hicks,
                  Vernon Jordan, Jr., L. Lowry Mays and B.J. McCombs

      THE EXECUTIVE PERFORMANCE SUBCOMMITTEE
John Williams and               
Robert Crandall                 

AUDIT COMMITTEE REPORT

         The  following  Report  of the  Audit  Committee  does  not  constitute
soliciting  material and should not be deemed filed or incorporated by reference
into any other Company filing under the Securities Act of 1933 or the Securities
Exchange  Act  of  1934,  except  to  the  extent  Clear  Channel   specifically
incorporates this Report by reference therein.                                  

         During the year ended  December  31, 2000,  the Audit  Committee of the
Board of Directors  developed an updated  charter for the  Committee,  which was
approved  by the full  Board on April 27,  2000.  The  complete  text of the new
charter,  which  reflects  standards set forth in new SEC  regulations  and NYSE
rules, is reproduced in the appendix to this proxy statement.                   

         As set forth in more  detail  in the  charter,  the  Audit  Committee's
primary responsibilities fall into three broad categories:                      

o             first, the Committee is charged with monitoring the preparation of
              quarterly  and  annual   financial   reports  by  Clear  Channel's
              management,   including  discussions  with  management  and  Clear
              Channel's outside auditors about draft annual financial statements
and key accounting and reporting matters;           

o             second,  the Committee is responsible  for matters  concerning the
              relationship  between  Clear  Channel  and its  outside  auditors,
              including recommending their appointment or removal; reviewing the
              scope of their audit  services  and related  fees,  as well as any
              other services being  provided to Clear Channel;  and  determining
              whether the outside auditors are independent (based in part on the
              annual letter  provided to Clear Channel  pursuant to Independence
Standards Board Standard No. 1); and                

o             third,  the  Committee  oversees  management's  implementation  of
              effective  systems  of  internal  controls,  including  review  of
              policies relating to legal and regulatory  compliance,  ethics and
              conflicts  of  interests;   and  review  of  the   activities  and
         recommendations of Clear Channel's internal auditing program.

         The  Committee  has  implemented  procedures  to ensure that during the
course of each fiscal year it devotes the attention  that it deems  necessary or
appropriate to each of the matters assigned to it under the Committee's charter.
To carry out its responsibilities,  the Committee met four times during the year
ended December 31, 2000.                                                        

         In overseeing the preparation of Clear Channel's financial  statements,
the Committee met with both management and Clear Channel's  outside  auditors to
review and discuss  all  financial  statements  prior to their  issuance  and to
discuss significant accounting issues. Management advised the Committee that all
financial  statements  were  prepared  in  accordance  with  generally  accepted
accounting  principles,  and the Committee  discussed the  statements  with both
management and the outside auditors.  The Committee's review included discussion
with the  outside  auditors  of matters  required  to be  discussed  pursuant to
Statement on Auditing Standards No. 61 (Communication With Audit Committees).   

         With respect to Clear Channel's outside auditors, the Committee,  among
other  things,  discussed  with  Ernst  &  Young  LLP  matters  relating  to its
independence, including the disclosures made to the Committee as required by the
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees).                                                                    

         Finally,  the Committee  continued to monitor the scope and adequacy of
Clear Channel's  internal  auditing  program,  including  proposals for adequate
staffing and to strengthen internal procedures and controls where appropriate.  

         On  the  basis  of  these  reviews  and   discussions,   the  Committee
recommended  to the Board of Directors  that the Board  approve the inclusion of
Clear Channel's audited financial statements in Clear Channel's Annual Report on
Form 10-K for the year ended  December 31, 2000,  for filing with the Securities
and Exchange Commission.                                                        

                                 Respectfully submitted,

                             THE AUDIT COMMITTEE
                                      Perry Lewis, Michael Levitt,
                                            Theodore Strauss and John Williams

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 STOCK PERFORMANCE GRAPH

          The  following  chart  demonstrates  a  five-year  comparison  of  the
cumulative  total returns,  adjusted for stock splits and  dividends,  for Clear
Channel, the S&P Broadcast/Media Index, and the S&P 500 Composite Index.        

CLEAR CHANNEL COMMUNICATIONS
 STOCK PERFORMANCE CHART

Indexed yearly Stock Price Close
(Prices adjusted for Stock Splits and Dividends)

 [GRAPH]

INDEXED YEARLY STOCK PRICE CLOSE
(Prices adjusted for Stock Splits and Dividends)

                                                        [Enlarge/Download Table]

                               ------------ ------------ ------------ ------------ ------------ -------------
                                  12/31/95     12/31/96     12/31/97     12/31/98     12/31/99      12/31/00 
------------------------------ ------------ ------------ ------------ ------------ ------------ -------------
------------------------------ ------------ ------------ ------------ ------------ ------------ -------------
                                                                                                             
Clear Channel                        1,000        1,637        3,601        4,941        8,091         4,391 
------------------------------ ------------ ------------ ------------ ------------ ------------ -------------
------------------------------ ------------ ------------ ------------ ------------ ------------ -------------
S&P Broadcast/                                                                                               
Media Index                          1,000          819        1,348        2,093        3,652         2,638 
------------------------------ ------------ ------------ ------------ ------------ ------------ -------------
------------------------------ ------------ ------------ ------------ ------------ ------------ -------------
S&P 500 Index                        1,000        1,227        1,633        2,096        2,533         2,305 
------------------------------ ------------ ------------ ------------ ------------ ------------ -------------

SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

         Section 16(a) of the  Securities  Exchange Act of 1934  requires  Clear
Channel's  directors,  executive officers and beneficial owners of more than 10%
of any class of  securities  of Clear  Channel to file reports of ownership  and
changes in ownership with the SEC and the NYSE.  Directors,  executive  officers
and greater than 10%  shareholders  are required to furnish  Clear  Channel with
copies of all Section 16(a) forms they file.                                    

         Based solely on its review of the copies of such forms  received by it,
or written  representations  from certain  reporting  persons that no such forms
were required to be filed by those persons,  Clear Channel believes that, during
the year ended  December 31, 2000,  all of its directors and executive  officers
were in  compliance  with the  applicable  filing  requirements  except that one
report  covering one transaction was filed late by L. Lowry Mays, Karl Eller and
B.J. McCombs and the Initial Statement of Beneficial Ownership of Securities was
filed late by Brian Becker and Kenneth O'Keefe.                                 

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 COMPENSATION COMMITTEE INTERLOCKS
 AND INSIDER PARTICIPATION

     Beginning on October 26, 2000,  Mssrs.  Alan Feld,  Vernon Jordan,  Jr., L.
Lowry Mays and B. J. McCombs served on Clear Channel's  Compensation  Committee.
Mr. Mays serves as Clear Channel's Chairman and Chief Executive  Officer.  Clear
Channel paid fees in 2000 to the law firm of Akin, Gump, Strauss,  Hauer & Feld,
L.L.P. Alan Feld is the sole shareholder of a professional  corporation which is
a partner of such firm and Vernon Jordan,  Jr. is Of Counsel to such firm. Clear
Channel purchased various forms of insurance from Primera in 2000. B. J. McCombs
owns 75% of Primera.  Clear Channel  leases certain office space in San Antonio,
Texas, from the trusts of the children of L. Lowry Mays and B. J. McCombs.  This
lease  expires on December  31, 2005 with  current  monthly  rentals of $12,500.
Clear Channel believes the transactions described above are no less favorable to
Clear Channel than could be obtained with nonaffiliated parties.                

CERTAIN TRANSACTIONS

         Clear Channel  contracted  charter air service under  commercial  terms
from N55EM,  LLC. Karl Eller,  a director of Clear  Channel,  is an affiliate of
N55EM, LLC. Gross charter fees of approximately  $312,500 were paid during 2000.
Clear Channel believes the transactions described above are no less favorable to
Clear Channel than could be obtained with nonaffiliated  parties.  Clear Channel
pays annual  wages of $66,000 for  personnel  that  provide  accounting  and tax
services to L. Lowry Mays,  Chairman  and Chief  Executive  Officer,  Mark Mays,
President and Chief Operating  Officer,  Randall Mays,  Executive Vice President
and Chief Financial Officer and their families.                                 

         In May 1977,  Clear  Channel and its  shareholders,  including L. Lowry
Mays and  B.J.  McCombs,  entered  into a  Buy-Sell  Agreement  restricting  the
disposition of the outstanding  shares of Clear Channel common stock owned by L.
Lowry Mays and B.J. McCombs and their heirs, legal  representatives,  successors
and assigns. The Buy-Sell Agreement provides that in the event that a restricted
party  desires to dispose of his shares,  other than by  disposition  by will or
intestacy or through gifts to such restricted  party's spouse or children,  such
shares must by offered for a period of 30 days to Clear Channel.  Any shares not
purchased  by Clear  Channel must then be offered for a period of 30 days to the
other  restricted  parties.  If all of the offered  shares are not  purchased by
Clear Channel or the other restricted parties, the restricted party offering his
or her  shares  may  sell  them to a third  party  during  a  period  of 90 days
thereafter  at a price and on terms not more  favorable  than  those  offered to
Clear Channel and the other restricted parties. In addition,  a restricted party
may not  individually,  or in  concert  with  others,  sell any  shares so as to
deliver voting control to a third party without  providing in any such sale that
all  restricted  parties  will be  offered  the same  price  and terms for their
shares.                                                                         

 PROPOSAL 2: SELECTION OF INDEPENDENT AUDITORS

         Subject to ratification by the shareholders,  the Board has reappointed
Ernst & Young LLP as independent  auditors to audit the financial  statements of
Clear Channel for the year ended December 31, 2001.                             

Audit Fees                                                                      
         Fees for the last  annual  audit were $2.1  million  and all other fees
were $5.6 million, including audit related services of $1.5 million and nonaudit
services of $4.1 million.  Audit  related  services  generally  include fees for
foreign  statutory  audits,  business  acquisitions,  accounting  consultations,
internal audit and SEC registration statements.                                 

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Financial Information System Design and Implementation Fees                     
         Financial  information  systems design and implementation fees were $.7
million,  and consist  entirely of fees billed by the E&Y consulting group prior
to its sale on May 27, 2000, to Cap Gemini, a separate French public company.   

         Representatives  of the firm of Ernst & Young  LLP are  expected  to be
present at the annual  meeting of  shareholders  and will have an opportunity to
make a  statement  if  they so  desire  and  will be  available  to  respond  to
appropriate questions.                                                          

         THE BOARD  RECOMMENDS  THAT YOU VOTE "FOR" THE  RATIFICATION OF ERNST &
YOUNG LLP AS INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 2001.        

PROPOSAL 3: APPROVAL OF THE CLEAR CHANNEL COMMUNICATIONS, INC.
 2001 STOCK INCENTIVE PLAN

         On  February   12,   2001,   the  Board   adopted  the  Clear   Channel
Communications,  Inc.  2001 Stock  Incentive  Plan for the purpose of  providing
Clear  Channel an effective  means to attract,  retain and  encourage  qualified
individuals  to serve Clear  Channel with a high degree of  commitment.  A brief
description of the major provisions of the plan is set forth below to facilitate
an informed decision by the shareholders entitled to vote on the approval of the
plan. This summary  highlights only selected  information from the plan and does
not contain all of the  information  that may be important to you. To understand
the terms of the plan fully,  you should read the full text of the plan,  a copy
of which is attached hereto as Appendix A. The affirmative vote of a majority of
the  outstanding  shares  present and entitled to vote at the annual  meeting is
required to approve the plan                                                    

Overview of Awards                                                              

         The  following  types of awards  may be  granted  under  the plan:  (i)
incentive  stock  options,  (ii)  nonqualified  stock  options,  (iii) rights to
receive all or some  portion of the  increase in value of the common stock (also
known as stock  appreciation  rights or SARs),  (iv) the right to receive all or
some portion of cash  dividends  with respect to the common stock (also known as
dividend  equivalent  rights),  (v) rights to receive  cash and/or  common stock
contingent  upon the  attainment  of defined  performance  goals  (also known as
performance  awards),  and (vi)  shares of common  stock  subject  to  temporary
restrictions on transfer (also known as restricted stock).  Eligible individuals
under the plan include all employees, officers and directors of Clear Channel or
its  subsidiaries or consultants or advisors  receiving cash  compensation  from
Clear Channel or its subsidiaries. In addition, the plan provides that directors
of Clear Channel may receive some or all of their annual  director  compensation
in the form of shares of common stock.                                          

Administration                                                                  

         Except  for  awards  of  nonqualified   stock  options  to  nonemployee
directors  ("Director  Options"),  the plan will be  administered by a committee
which  shall  consist of at least two  directors  and may  consist of the entire
Board. The Board will grant Director Options. The plan committee will have broad
discretion,  subject to the terms of the plan,  to designate  the  recipients of
awards,  prescribe the terms and  conditions  of awards and establish  rules and
regulations for administration of the plan.                                     

         Under the plan,  members of the plan committee are not liable for their
actions taken in a good faith attempt to administer the plan and are entitled to
indemnification  from Clear Channel to the extent permitted by law in connection
with claims asserted in regard to administration of the plan.                   

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Stock Subject to the Plan                                                       

         The shares subject to awards granted under the plan are Clear Channel's
authorized  but unissued  common stock.  The maximum  number of shares of common
stock  which  may be the  subject  of  awards  under  the  plan  is  30,000,000.
Furthermore,  within  the  period of one year no  individual  may  receive  with
respect to awards more than  3,000,000  shares or  $15,000,000 in cash or shares
with an equivalent fair market value.  However,  the ceilings may be adjusted by
the  plan  committee  upon  the  occurrence  of  certain  events  affecting  the
capitalization of Clear Channel. See "Adjustments" below.                       

         Upon the  expiration,  cancellation  or  termination of an award (other
than by reason of  exercise),  the shares  previously  subject to such award may
again be the  subject of awards  granted  under the plan.  Any shares held by an
award holder that are delivered to Clear Channel or that are otherwise  withheld
from  shares  issuable  under an award in  payment  of all or a  portion  of the
exercise price or tax  withholding  obligations for such award will be available
for subsequent  grants and awards.  Any shares issued or awards settled by Clear
Channel as a result of the assumption or substitution  of outstanding  grants or
grant  commitments  by an acquired  company or other  entity will not be counted
against the maximum share limitations under the plan.                           

         The market value of Clear Channel's common stock as reported on the New
York Stock Exchange as of March __, 2001 was $______ per share.                 

         Nothing in the plan prohibits  Clear Channel from adopting other equity
compensation  programs  for  employees  of Clear  Channel and its  subsidiaries,
including employees eligible for grants under the plan.                         

Summary of Incentive Stock Options and Nonqualified Stock Options               

         The exercise price for incentive stock options and  nonqualified  stock
options  will be  determined  by the plan  committee,  other  than for  Director
Options, which will be determined by the Board; provided,  however, the exercise
price for each stock  option may not be less than 100% of the fair market  value
of the common  stock on the date the  option is granted  (110% in the case of an
incentive  stock  option  granted to an  individual  owning more than 10% of the
voting stock of Clear Channel or a parent or subsidiary of Clear  Channel).  The
aggregate fair market value (determined at the time an incentive stock option is
granted) of the common stock with respect to which  incentive  stock options are
exercisable  for the first time by an employee  during any calendar  year (under
all stock option plans of Clear Channel) will not exceed $100,000, or such other
amount as may be prescribed under the Code or applicable regulations and rulings
from time to time.  Incentive  stock  options may not be granted  under the plan
subsequent to February 12, 2011.                                                

         Each Option granted under the plan other than Director  Options will be
exercisable  according to the terms  established by the plan  committee.  In the
case of Directors  Options,  the Board will grant the options and such  Director
Options will be exercised according to the terms established by the Board. In no
event,  however,  will an option,  including a Directors  Option, be exercisable
after the  expiration  of ten years  from the date of grant  (five  years for an
individual owning more than 10% of the voting stock of Clear Channel or a parent
or subsidiary of Clear Channel).                                                

         Options are not transferable  except by will or the laws of descent and
distribution  or pursuant to a domestic  relations  order (within the meaning of
Rule 16a-12 under the Exchange Act), and are exercisable only by the optionee or
his or her legal guardian or legal representative.                              

         The purchase price payable upon the exercise of an option is payable in
cash,  by  delivery  of an  equivalent  fair market  value of common  stock,  by
cashless exercise procedures or by a combination of the foregoing, as determined
by the plan committee. No fractional shares will be issuable upon exercise of an
option,  and the number of shares  issuable will be rounded to the nearest whole
number.                                                                         

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No Repricing of Stock Options                                                   

         Subject to the  provisions of the plan regarding  adjustments  due to a
change in  corporate  or  capital  structure,  the plan  committee  will have no
authority  to  reprice   outstanding   options,   whether   through   amendment,
cancellation or replacement grants.                                             

Summary of Stock Appreciation Rights                                            

         A stock  appreciation  right or SAR is the right to  receive  an amount
equal to the  excess  of the  fair  market  value of a share of Clear  Channel's
common  stock on the date of exercise  over the fair market  value of a share of
common stock on the date of grant (in the case of SARs granted  independent of a
stock option) or the exercise  price of the related stock option (in the case of
a SAR granted in tandem with a stock option).  SARs may be granted in connection
with stock  options or as a  separate  award  unrelated  to stock  options.  The
exercisability of SARs granted in connection with stock options will be governed
by the  exercisability of the related options.  The amount payable to the holder
upon the  exercise of a SAR is based on the  difference  between the fair market
value of Clear  Channel's  common stock on the date  preceding  exercise and the
exercise  price of the option in  connection  with which the SAR was granted (or
the fair market  value of common stock on the date the SAR was granted if it was
not granted in  connection  with an option).  However,  the plan  committee  may
establish  a maximum  amount  payable  upon the  exercise  of a SAR.  The amount
payable to a holder upon the exercise of a SAR may be paid in the form of common
stock or cash or a combination thereof, as determined by the plan committee.    

Summary of Dividend Equivalent Rights                                           

         Dividend  equivalent  rights may be granted in  conjunction  with other
awards or as a separate  award.  The plan committee will determine the terms and
conditions of the dividend equivalent rights and,  specifically,  will determine
whether  amounts payable will be paid on a current or deferred basis and whether
they will be settled in cash or stock in single or multiple installments.       

Summary of Restricted Stock                                                     

         Restricted stock is the grant of shares of common stock or the right to
purchase  common stock at a price  determined  by the plan  committee,  which is
nontransferable  and subject to  substantial  risk of forfeiture  until specific
conditions are met.  Restricted  stock granted under the plan will be subject to
restrictions  on  transfer  and  such  other  restrictions  imposed  by the plan
committee.  No stock certificate  representing restricted stock may be issued in
the name of the grantee until the grantee  executes a written  agreement,  blank
stock  powers and an escrow  agreement or other  documents  required by the plan
committee.  Restricted  stock  may not be  delivered  to the  grantee  or  sold,
transferred or pledged until the restrictions imposed by the plan committee have
lapsed  according  to the  terms  established  by the plan  committee.  The plan
committee  will  determine  whether  dividend  payments in respect of restricted
stock will be made currently or deferred until the lapsing of restrictions. Upon
lapse of the  restrictions,  the certificates  representing the restricted stock
will be  delivered to the grantee,  in addition to any deferred  dividends  with
interest  accrued thereon.  All  restrictions  lapse upon a change in control of
Clear  Channel  unless the plan  committee  specifies  otherwise  in the written
agreement.                                                                      

Summary of Performance Awards                                                   

         Awards  contingent  upon the  attainment of certain  financial or other
objectives  within  a  designated  period  of time  may be  granted  by the plan
committee in the form of shares of common stock (known as performance shares) or
other awards (known as  performance  units).  The  performance  objectives to be
established  in  writing  by the plan  committee  may be  expressed  in terms of
earnings per share, share price, pre-tax profits, net earnings, return on equity
or assets,  revenues,  EBITDA,  market share,  or a combination of the foregoing
with regard to Clear Channel or a subsidiary. The plan committee may establish a
ceiling on the amount payable under a performance award.                        

         A grantee  becomes vested in performance  awards to the extent that the
established  objectives are achieved during the designated  measurement  period,
and  immediately  following  the end of such period  Clear  Channel must pay any
amounts due in cash or common stock or a combination thereof.                   

         Issuance of certificates  representing performance shares may not occur
until the grantee executes a written agreement, blank stock powers and an escrow
agreement or such other documents  required by the plan committee.  Certificates
representing  performance  shares may not be  delivered  to the grantee or sold,
transferred or pledged prior to the attainment of the designated  objectives and
fulfillment  of other  conditions  established by the plan  committee.  The plan
committee may determine  whether  dividends in respect of issued but undelivered
performance  shares will be paid  currently or deferred  and paid with  interest
upon lapsing of the restrictions.                                               

Adjustments                                                                     

         Upon the  termination  or change in status of  employment of a grantee,
adjustments  to the terms and  conditions of awards held by such grantee will be
made  according to the terms  established  by the plan  committee in the written
agreement respecting such award.                                                

         Each award granted by the plan committee must be evidenced by a written
agreement.  Although the plan committee has the discretion to amend the terms of
an  award  subsequent  to the  date of  grant,  it may  not do so in a way  that
adversely affects rights previously granted under the plan.                     

         The plan committee will also determine the  appropriate  adjustments to
be made to the terms of the plan and awards previously  granted  thereunder upon
the occurrence of certain events affecting the  capitalization  of Clear Channel
including,  but not  limited to, an increase or decrease in the number of issued
and  outstanding  shares  of common  stock or other  changes  in  capitalization
resulting  from a  reclassification,  recapitalization,  merger,  consolidation,
stock dividend, stock split or otherwise. Appropriate adjustments may be made to
the maximum  number of shares and the class of shares or other  securities  with
respect to which awards may be made,  the maximum  number of shares with respect
to which an  individual  may be granted  awards,  the number and class of shares
subject to outstanding  awards,  the exercise price of such outstanding  awards,
and the performance objectives upon which performance awards are based.         

         Upon a Change of Control (as defined in the plan),  (i) with respect to
all stock  option  awards  and SARs  awards,  all of such  awards  shall  become
immediately  exercisable,  (ii) with respect to  restricted  stock  awards,  all
restrictions upon such shares shall lapse, and (iii) with respect to performance
awards,  such  awards  will be  treated  in the  manner  determined  by the plan
committee at the time such performance awards were granted. In addition,  to the
extent set forth in the applicable agreement relating to a stock option award or
SAR award, upon a Change of Control, (i) the holder of a stock option award will
have the right to a cash  payment  within  sixty (60) days after such  Change of
Control  equal to the excess of fair market value of the shares  subject to such
stock  option on the date  preceding  the date of surrender  over the  aggregate
purchase price of the shares  subject to such stock option,  and (ii) the holder
of a SAR award will be  entitled to receive a cash or stock  payment  from Clear
Channel  with a value equal to the fair market value on the date  preceding  the
date of exercise  over the fair market  value of the shares  subject to such SAR
award.                                                                          

         Following any  liquidation,  dissolution,  merger or  consolidation  of
Clear  Channel,  each  holder  of an  award  is  entitled  to  receive  the same
consideration  received  in such  transaction  by each  holder of common  stock,
subject to the  restrictions  and other terms and  conditions  applicable to the
award.                                                                          

Termination and Amendment of the Plan                                           

         The plan has no automatic  termination date.  However,  incentive stock
options may not be granted  under the plan  subsequent  to February 12, 2011. In
addition,  the plan  committee may  terminate,  amend or suspend the plan at any
time  provided  that such action does not  adversely  affect  rights  previously
granted under the plan.                                                         

Federal Income Tax Consequences                                                 

         An  individual  receiving  nonqualified  stock options or SARs will not
recognize taxable income at the time the nonqualified  stock options or SARs are
granted.  At the time the nonqualified stock options or SARs are exercised,  the
individual  will  recognize  ordinary  taxable  income in an amount equal to the
difference  between  the  exercise  price  (or  in  the  case  of  SARs  granted
independent of stock  options,  the fair market value of the common stock at the
time of  grant)  and the  fair  market  value  of  common  stock  on the date of
exercise.  Clear Channel will be entitled to a concurrent deduction equal to the
ordinary  income  recognized  by the  individual,  provided  that Clear  Channel
withholds taxes.                                                                

         An  individual  granted an incentive  stock  option will not  recognize
taxable  income at the time of grant or, subject to certain  conditions,  at the
time of  exercise.  The  excess of the fair  market  value of the  common  stock
received over the exercise price is an item of tax preference income potentially
subject to the  alternative  minimum tax. If stock  acquired upon exercise of an
incentive stock option is held for a minimum of two years from the date of grant
and one year from the date of exercise,  the gain or loss (in an amount equal to
the difference  between the sales price and the exercise price) upon disposition
of the stock  will be  treated  as  long-term  capital  gain or loss,  and Clear
Channel will not be entitled to any deduction.                                  

         If the holding  period  requirement  is not met,  the  incentive  stock
option will be treated as one which does not meet the  requirements  of the Code
for incentive stock options and the individual will recognize ordinary income in
an amount  equal to the  lesser of (i) the  excess of the fair  market  value of
common stock on the date of exercise over the exercise  price or (ii) the amount
realized on the sale of such stock over the exercise price.                     

         An individual  receiving  restricted  stock will not recognize  taxable
income at the time of grant. At the time the restrictions  lapse, the individual
will recognize  ordinary taxable income equal to the difference between the fair
market  value of the  common  stock at the time the  restrictions  lapse and the
price,  if any, paid for such common stock.  Any dividends  received  before the
termination of restrictions will be taxed as ordinary income. Clear Channel will
be  entitled  to a  deduction  equal  to the  ordinary  income  reported  by the
individual,  provided Clear Channel withholds taxes. Upon the disposition of the
common stock,  the individual  will recognize  taxable gain or loss equal to the
difference  between  the fair market  value of the common  stock at the time the
restrictions  lapse and the amount  realized upon the  disposition of the common
stock. The gain or loss will be taxable as a capital asset.                     

         An individual  may elect to report and recognize  income at the time of
grant or purchase of restricted  stock by filing an election under Section 83(b)
of the Code (a "Section  83(b)  election").  If the  individual  makes a Section
83(b)  election,  Clear  Channel  will be entitled  to a deduction  equal to the
ordinary income reported by the individual in the year of the election, provided
Clear  Channel  withholds  taxes.   However,   dividends   received  before  the
restrictions lapse will not be deductible by Clear Channel. Upon the disposition
of the common stock,  the  individual  will  recognize gain or loss equal to the
difference  between the amount realized and the sum of the income  recognized by
the individual as a result of the Section 83(b) election and any amounts paid by
the individual for the restricted stock.                                        

         Special rules may apply with respect to individuals  subject to Section
16(b)  of the  Securities  Exchange  Act of 1934.  Other  than in the case of an
incentive  stock option held in  accordance  with the specified  holding  period
requirements,  the  amount  and  timing  of  the  recognition  of  income  by an
individual  subject to  Section  16(b) (and the  concurrent  deduction  by Clear
Channel) on the exercise of a stock option or SAR generally will be based on the
fair market value of the shares received when the  restrictions of Section 16(b)
lapse,  unless  the  individual  elects  otherwise  by  making a  Section  83(b)
election.                                                                       

Registration with SEC                                                           

         If  this  proposal  2 is  adopted,  Clear  Channel  intends  to  file a
registration  statement  covering the offering of the shares under the plan with
the Securities and Exchange Commission pursuant to the Securities Act of 1933.  

New Plan Benefits                                                               

         Since future awards under the plan are discretionary,  it is impossible
to determine  who will receive  awards and in what amounts in the event the plan
is approved.                                                                    

THE BOARD  RECOMMENDS  THAT YOU VOTE "FOR" THE APPROVAL OF THE PLAN. EACH OF THE
DIRECTORS  MAY HAVE AN INTEREST  AND MAY BENEFIT  FROM THE ADOPTION OF THE PLAN,
SINCE THEY ARE ELIGIBLE TO RECEIVE AWARDS UNDER THE TERMS OF THE PLAN.          

 SHAREHOLDER PROPOSALS

         A  proper  proposal  submitted  by  a  Clear  Channel  shareholder  for
consideration at Clear Channel's 2002 annual shareholder meeting and received at
Clear  Channel's  executive  offices no later  than  November  23,  2001 will be
included in Clear  Channel's  proxy statement and form of proxy relating to such
annual shareholder  meeting.  If the proposal is adopted, it will be included in
the information statements distributed to Clear Channel shareholders.           

 GENERAL

         Neither Clear Channel  management  nor the Board knows of any matter to
be acted upon at the Clear  Channel  shareholder  meeting other than the matters
described  above.  If any other matter  properly  comes before the Clear Channel
shareholder meeting,  however, the proxy holders will vote thereon in accordance
with their best judgment.                                                       

         The  cost  of  soliciting  proxies  will be  borne  by  Clear  Channel.
Following  the  original  mailing  of the  proxy  soliciting  material,  regular
employees of Clear Channel may solicit proxies by mail, telephone, telegraph and
personal  interview.  Clear  Channel  has also  retained  Georgeson  Shareholder
Communications  Inc. to aid in the solicitation of proxies, at an estimated cost
of $8,500 plus  reimbursement of reasonable out-of pocket expenses.  Proxy cards
and materials will also be distributed  to beneficial  owners of stock,  through
brokers, custodians,  nominees and other like parties, and Clear Channel expects
to reimburse such parties for their charges and expenses connected therewith.   

         A copy of Clear  Channel's  Annual  Report on Form 10-K  filed with the
Securities  and Exchange  Commission has been mailed to all  shareholders  along
with this  document.  Additional  copies  will be  available  without  charge to
shareholders  upon written request to Clear Channel  Communications,  Inc., P.O.
Box 659512, San Antonio, Texas 78265-9512.                                      

         This  document  is dated March ___,  2001 and is first being  mailed to
shareholders on or about March ___, 2001.                                       

        Kenneth E. Wyker
 Secretary

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A-18
APPENDIX A

THE CLEAR CHANNEL COMMUNICATIONS, INC.
 2001 STOCK INCENTIVE PLAN

1.       Purpose.                                             

                  The  purpose  of this  Plan  is to  strengthen  Clear  Channel
Communications,  Inc.,  a Texas  corporation  (the  "Company"),  by providing an
incentive to its  employees,  officers,  consultants  and  directors and thereby
encouraging  them to devote their  abilities  and industry to the success of the
Company's business  enterprise.  It is intended that this purpose be achieved by
extending to employees,  officers,  consultants and directors of the Company and
its Subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options,  Stock Appreciation  Rights,  Dividend  Equivalent Rights,  Performance
Awards and Restricted Stock (as each term is herein defined).                   

2.   Definitions.                                             

For purposes of the Plan:                           

          2.1 "Adjusted  Fair Market  Value" means,  in the event of a Change in
     Control,  the greater of (i) the highest price per Share paid to holders of
     the Shares in any transaction (or series of  transactions)  constituting or
     resulting in a Change in Control or (ii) the highest Fair Market Value of a
     Share  during the ninety (90) day period  ending on the date of a Change in
Control.                                                              

          2.2 "Affiliate" means any entity,  directly or indirectly,  controlled
     by, controlling or under common control with the Company or any corporation
     or other entity acquiring, directly or indirectly, all or substantially all
     the assets and  business of the  Company,  whether by  operation  of law or
otherwise.                                                            

          2.3 "Agreement" means the written agreement between the Company and an
     Optionee or Grantee  evidencing the grant of an Option or Award and setting
forth the terms and conditions thereof.                               

          2.4 "Award" means a grant of Restricted  Stock,  a Stock  Appreciation
     Right, a Performance  Award, a Dividend  Equivalent  Right or any or all of
them.                                                                 

2.5 "Board" means the Board of Directors of the Company.    

          2.6  "Cause"  means (i)  intentional  failure  to  perform  reasonably
     assigned duties,  (ii) dishonesty or willful  misconduct in the performance
     of duties,  (iii)  involvement  in a  transaction  in  connection  with the
     performance  of  duties to the  Company  or any of its  Subsidiaries  which
     transaction  is  adverse  to the  interests  of the  Company  or any of its
     Subsidiaries  and which is engaged in for  personal  profit or (iv) willful
     violation of any law, rule or regulation in connection with the performance
of duties (other than traffic violations or similar offenses).        

          2.7 "Change in Capitalization"  means any increase or reduction in the
     number of Shares, or any change (including, but not limited to, a change in
     value) in the Shares or exchange  of Shares for a different  number or kind
     of shares or other  securities  of the Company or another  corporation,  by
     reason  of a  reclassification,  recapitalization,  merger,  consolidation,
     reorganization,  spin-off,  split-up,  issuance  of  warrants  or rights or
     debentures,  stock  dividend,  stock  split or reverse  stock  split,  cash
     dividend, property dividend,  combination or exchange of shares, repurchase
of shares, change in corporate structure or otherwise.                

          2.8 A "Change in Control" shall mean the occurrence during the term of
the Plan of:                                                          

               (a) An acquisition  (other than directly from the Company) of any
          voting  securities  of the Company  (the "Voting  Securities")  by any
          "Person" (as the term person is used for purposes of Section  13(d) or
          14(d)  of  the  Securities  Exchange  Act of  1934,  as  amended  (the
          "Exchange Act"), excluding L. Lowry Mays, B.J. McCombs or any of their
          affiliates),  immediately  after  which such  Person  has  "Beneficial
          Ownership"  (within  the meaning of Rule 13d-3  promulgated  under the
          Exchange Act) of thirty percent (30%) or more of the then  outstanding
          Shares or the combined voting power of the Company's then  outstanding
          Voting Securities;  provided, however, in determining whether a Change
          in  Control  has  occurred,  Shares  or  Voting  Securities  which are
          acquired in a "Non-Control Acquisition" (as hereinafter defined) shall
          not constitute an acquisition which would cause a Change in Control. A
          "Non-Control Acquisition" shall mean an acquisition by (i) an employee
          benefit plan (or a trust forming a part thereof) maintained by (A) the
          Company or (B) any  corporation or other Person of which a majority of
          its voting power or its voting equity securities or equity interest is
          owned,  directly or  indirectly,  by the Company (for purposes of this
          definition, a "Subsidiary"),  (ii) the Company or its Subsidiaries, or
          (iii) any Person in connection  with a "Non-Control  Transaction"  (as
hereinafter defined);                                       

               (b) The  individuals  who, as of February 12, 2001 are members of
          the Board (the "Incumbent Board"),  cease for any reason to constitute
          at least a majority  of the members of the Board;  provided,  however,
          that if the  election,  or  nomination  for election by the  Company's
          common stockholders,  of any new director was approved by a vote of at
          least a majority of the Incumbent Board,  such new director shall, for
          purposes  of this Plan,  be  considered  as a member of the  Incumbent
          Board;  provided  further,   however,  that  no  individual  shall  be
          considered  a  member  of  the  Incumbent  Board  if  such  individual
          initially assumed office as a result of either an actual or threatened
          "Election  Contest" (as described in Rule 14a-11 promulgated under the
          Exchange Act) or other actual or threatened solicitation of proxies or
          consents  by or on behalf of a Person  other  than the Board (a "Proxy
          Contest")  including by reason of any  agreement  intended to avoid or
settle any Election Contest or Proxy Contest; or            

(c) The consummation of:                          

                    (i) A merger,  consolidation or reorganization  with or into
               the  Company or in which  securities  of the  Company are issued,
               unless  such  merger,   consolidation  or   reorganization  is  a
               "Non-Control Transaction." A "Non-Control Transaction" shall mean
               a  merger,  consolidation  or  reorganization  with or  into  the
             Company or in which securities of the Company are issued where:

                         (A) the stockholders of the Company, immediately before
                    such merger,  consolidation or reorganization,  own directly
                    or   indirectly    immediately    following   such   merger,
                    consolidation  or  reorganization,  at least  fifty  percent
                    (50%) of the combined voting power of the outstanding voting
                    securities of the corporation  resulting from such merger or
                    consolidation    or    reorganization     (the    "Surviving
                    Corporation") in substantially  the same proportion as their
                    ownership of the Voting Securities  immediately  before such
merger, consolidation or reorganization,

                         (B) the  individuals  who were members of the Incumbent
                    Board  immediately  prior to the  execution of the agreement
                    providing for such merger,  consolidation or  reorganization
                    constitute  at least a majority  of the members of the board
                    of directors of the Surviving Corporation,  or a corporation
                    beneficially directly or indirectly owning a majority of the
           Voting Securities of the Surviving Corporation, and

                         (C) no  Person  other  than (i) the  Company,  (ii) any
                    Subsidiary,  (iii) any  employee  benefit plan (or any trust
                    forming  a part  thereof)  that,  immediately  prior to such
                    merger,  consolidation or reorganization,  was maintained by
                    the  Company  or any  Subsidiary,  or (iv) any  Person  who,
                    immediately   prior  to  such   merger,   consolidation   or
                    reorganization  had  Beneficial  Ownership of thirty percent
                    (30%) or more of the then outstanding  Voting  Securities or
                    Shares, has Beneficial  Ownership of thirty percent (30%) or
                    more  of  the  combined   voting  power  of  the   Surviving
                    Corporation's  then  outstanding  voting  securities  or its
common stock.                           

                    (ii) A complete  liquidation  or dissolution of the Company;
or                                                

                    (iii) The sale or other  disposition of all or substantially
               all of the  assets of the  Company to any  Person  (other  than a
transfer to a Subsidiary).                        

                  Notwithstanding  the foregoing,  a Change in Control shall not
be deemed to occur solely  because any Person (the  "Subject  Person")  acquired
Beneficial  Ownership of more than the permitted  amount of the then outstanding
Shares or Voting  Securities as a result of the  acquisition of Shares or Voting
Securities  by the Company  which,  by  reducing  the number of Shares or Voting
Securities  then  outstanding,  increases  the  proportional  number  of  shares
Beneficially Owned by the Subject Persons,  provided that if a Change in Control
would  occur  (but  for the  operation  of this  sentence)  as a  result  of the
acquisition of Shares or Voting Securities by the Company,  and after such share
acquisition by the Company,  the Subject Person becomes the Beneficial  Owner of
any additional Shares or Voting Securities which increases the percentage of the
then outstanding  Shares or Voting Securities  Beneficially Owned by the Subject
Person, then a Change in Control shall occur.                                   

                  If an Eligible  Individual's  employment  is terminated by the
Company  without Cause prior to the date of a Change in Control but the Eligible
Individual  reasonably  demonstrates that the termination (A) was at the request
of a third  party who has  indicated  or  intention  or taken  steps  reasonably
calculated  to effect a change in control or (B)  otherwise  arose in connection
with, or in  anticipation  of, a Change in Control which has been  threatened or
proposed,  such  termination  shall be deemed to have occurred after a Change in
Control for purposes of this Plan  provided a Change in Control  shall  actually
have occurred.                                                                  

    2.9  "Code" means the Internal Revenue Code of 1986, as amended.

          2.10  "Committee"  means a committee  or  committees,  as described in
     Section  3.1,  appointed by the Board from time to time to  administer  the
Plan and to perform the functions set forth herein.                   

2.11 "Company" means Clear Channel Communications, Inc.     

2.12 "Director" means a director of the Company.            

  2.13  "Director  Option" means an Option  granted  pursuant to
Section 6.1.                                                          

   2.14 "Director Stock" has the meaning set forth in Section 6.2.

2.15 "Disability" means:                                    

               (a) in the case of an Optionee or Grantee whose  employment  with
          the Company or a Subsidiary  is subject to the terms of an  employment
          agreement  between  such  Optionee  or  Grantee  and  the  Company  or
          Subsidiary,  which  employment  agreement  includes  a  definition  of
          "Disability",  the  term  "Disability"  as used  in  this  Plan or any
          Agreement  shall  have  the  meaning  set  forth  in  such  employment
          agreement during the period that such employment  agreement remains in
effect; and                                                 

               (b) in all other  cases,  the term  "Disability"  as used in this
          Plan or any Agreement shall mean a physical or mental  infirmity which
          impairs the Optionee's or Grantee's  ability to perform  substantially
          his or her duties for a period of one hundred eighty (180) consecutive
days.                                                       

          2.16  "Division"  means any of the operating units or divisions of the
Company designated as a Division by the Committee.                    

          2.17 "Dividend  Equivalent Right" means a right to receive all or some
     portion of the cash  dividends that are or would be payable with respect to
Shares.                                                               

          2.18 "Eligible Director" means a director of the Company who is not an
employee of the Company or any Affiliate of the Company.              

          2.19 "Eligible  Individual" means any director (other than an Eligible
     Director),  officer or  employee  of the  Company or a  Subsidiary,  or any
     consultant or advisor who is receiving cash  compensation  from the Company
     or a Subsidiary, designated by the Committee as eligible to receive Options
or Awards subject to the conditions set forth herein.                 

         2.20 "Employee Option" means an Option granted pursuant to Section 5.

          2.21  "Exchange  Act" means the  Securities  Exchange Act of 1934,  as
amended.                                                              

          2.22 "Fair Market Value" on any date means the closing sales prices of
     the Shares on such date on the principal  national  securities  exchange on
     which such Shares are listed or admitted to trading, or, if such Shares are
     not so listed or admitted to trading,  the average of the per Share closing
     bid price and per Share  closing  asked price on such date as quoted on the
     National  Association of Securities  Dealers Automated  Quotation System or
     such other market in which such prices are regularly  quoted,  or, if there
     have been no published  bid or asked  quotations  with respect to Shares on
     such date,  the Fair  Market  Value shall be the value  established  by the
     Board in good faith  and,  in the case of an  Incentive  Stock  Option,  in
accordance with Section 422 of the Code.                              

          2.23 "Grantee"  means a person to whom an Award has been granted under
the Plan.                                                             

          2.24  "Incentive   Stock  Option"  means  an  Option   satisfying  the
     requirements  of Section  422 of the Code as it may exist from time to time
     and  designated  by  the  Committee  as an  Incentive  Stock  Option.  Each
     Incentive  Stock Option granted  hereunder shall comply with Section 422 of
the Code as it may exist from time to time.                           

          2.25  "Nonemployee  Director" means a director of the Company who is a
     "nonemployee  director" within the meaning of Rule 16b-3  promulgated under
the Exchange Act.                                                     

          2.26  "Nonqualified  Stock  Option"  means an  Option  which is not an
Incentive Stock Option.                                               

          2.27 "Option" means a Nonqualified  Stock Option,  an Incentive  Stock
Option, a Director Option, or any or all of them.                     

          2.28  "Optionee"  means a person  to whom an Option  has been  granted
under the Plan.                                                       

          2.29  "Outside  Director"  means a director  of the  Company who is an
     "outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.                                   

          2.30  "Parent"  means any  corporation  which is a parent  corporation
     (within  the  meaning  of Section  424(e) of the Code) with  respect to the
Company.                                                              

          2.31 "Performance Awards" means Performance Units,  Performance Shares
or either or both of them.                                            

          2.32  "Performance  Cycle"  means  the time  period  specified  by the
     Committee  at the time  Performance  Awards are  granted  during  which the
  performance of the Company, a Subsidiary or a Division will be measured.

          2.33 "Performance Objectives" has the meaning set forth in Section 11.

          2.34  "Performance  Shares" means Shares issued or  transferred  to an
Eligible Individual under Section 11.                                 

          2.35  "Performance  Units"  means  Performance  Units  granted  to  an
Eligible Individual under Section 11.                                 

          2.36 "Plan" means the Clear  Channel  Communications,  Inc. 1998 Stock
Incentive Plan, as amended and restated from time to time.            

          2.37 "Pooling  Transaction"  means an  acquisition of the Company in a
     transaction  which is intended  to be treated as a "pooling  of  interests"
under generally accepted accounting principles.                       

          2.38  "Restricted  Stock" means  Shares  issued or  transferred  to an
Eligible Individual pursuant to Section 10.                           

2.39 "Retained" has the meaning set forth in Section 6.2.   

          2.40 "Shares"  means the common stock,  par value $0.10 per share,  of
the Company.                                                          

          2.41 "Stock  Appreciation  Right" means a right to receive all or some
     portion of the increase in the value of the Shares as provided in Section 8
hereof.                                                               

          2.42  "Subsidiary"   means  any  corporation  which  is  a  subsidiary
     corporation (within the meaning of Section 424(f) of the Code) with respect
to the Company.                                                       

          2.43  "Successor  Corporation"  means a  corporation,  or a parent  or
     subsidiary  thereof within the meaning of Section 424(a) of the Code, which
     issues or assumes a stock option in a transaction  to which Section  424(a)
of the Code applies.                                                  

          2.44 "Ten-Percent  Stockholder" means an Eligible Individual,  who, at
     the time an  Incentive  Stock  Option is to be granted to him or her,  owns
     (within the meaning of Section 422(b)(6) of the Code) stock possessing more
     than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, or of a Parent or a Subsidiary.                 

3.   Administration.                                          

          3.1  Except  for a grant  of  Director  Options,  the  Plan  shall  be
     administered  by the Committee,  which shall hold meetings at such times as
     may be necessary for the proper administration of the Plan. With respect to
     a grant of Director  Options,  Awards shall be determined by the Board. The
     Committee shall keep minutes of its meetings. A quorum shall consist of not
     fewer than two  members  of the  Committee  and a majority  of a quorum may
     authorize any action. Any decision or determination  reduced to writing and
     signed by a majority  of all of the  members of the  Committee  shall be as
     fully  effective as if made by a majority vote at a meeting duly called and
     held.  The  Committee  shall  consist of at least two (2)  directors of the
     Company and may consist of the entire Board; provided, however, that (A) if
     the Committee  consists of less than the entire Board, each member shall be
     a  Nonemployee  Director and (B) to the extent  necessary for any Option or
     Award intended to qualify as  performance-based  compensation under Section
     162(m) of the Code to so qualify, each member of the Committee,  whether or
     not it  consists  of the entire  Board,  shall be an Outside  Director.  No
     member of the  Committee  shall be liable for any  action,  failure to act,
     determination  or  interpretation  made in good faith with  respect to this
     Plan or any transaction hereunder, except for liability arising from his or
     her own willful misfeasance,  gross negligence or reckless disregard of his
     or her duties.  The Company  hereby agrees to indemnify  each member of the
     Committee  for all costs and  expenses  and,  to the  extent  permitted  by
     applicable  law,  any  liability  incurred  in  connection  with  defending
     against,  responding  to,  negotiating  for the  settlement of or otherwise
     dealing  with any claim,  cause of action or dispute of any kind arising in
     connection with any actions in administering this Plan or in authorizing or
denying authorization to any transaction hereunder.                   

          3.2 Subject to the express terms and conditions set forth herein,  the
Committee shall have the power from time to time to:                  

               (a) determine those Eligible Individuals to whom Employee Options
          shall  be  granted  under  the Plan and the  number  of such  Employee
          Options to be granted and to prescribe the terms and conditions (which
          need not be  identical) of each such  Employee  Option,  including the
          purchase price per Share subject to each Employee Option, and make any
          amendment or modification to any Option Agreement  consistent with the
terms of the Plan;                                          

               (b) select  those  Eligible  Individuals  to whom Awards shall be
          granted   under  the  Plan  and  to  determine  the  number  of  Stock
          Appreciation  Rights,  Performance Awards,  Shares of Restricted Stock
          and/or  Dividend  Equivalent  Rights to be  granted  pursuant  to each
          Award,  the  terms  and  conditions  of  each  Award,   including  the
          restrictions or Performance Objectives relating to Shares, the maximum
          value of each Performance Share and make any amendment or modification
 to any Award Agreement consistent with the terms of the Plan;

               (c) to construe and interpret the Plan and the Options and Awards
          granted  hereunder  and to  establish,  amend  and  revoke  rules  and
          regulations for the  administration  of the Plan,  including,  but not
          limited  to,  correcting  any defect or  supplying  any  omission,  or
          reconciling any inconsistency in the Plan or in any Agreement,  in the
          manner and to the extent it shall deem  necessary or advisable so that
          the Plan complies with  applicable  law including Rule 16b-3 under the
          Exchange Act and the Code to the extent  applicable,  and otherwise to
          make the Plan fully effective. All decisions and determinations by the
          Committee  in the  exercise of this power shall be final,  binding and
          conclusive  upon the Company,  its  Subsidiaries,  the  Optionees  and
Grantees, and all other persons having any interest therein;

               (d) to determine  the duration and purposes for leaves of absence
          which may be granted to an Optionee or Grantee on an individual  basis
          without  constituting  a  termination  of  employment  or service  for
purposes of the Plan;                                       

               (e) to exercise  its  discretion  with  respect to the powers and
rights granted to it as set forth in the Plan; and          

               (f)  generally,  to exercise such powers and to perform such acts
          as are deemed  necessary or advisable to promote the best interests of
the Company with respect to the Plan.                       

4.   Stock Subject to the Plan.                               

          4.1 The  maximum  number of  Shares  that may be made the  subject  of
     Options and Awards granted under the Plan is 30,000,000; provided, however,
     that in the  aggregate,  not more than  one-third of the number of allotted
     Shares may be made the subject of Restricted  Stock Awards under Section 10
     of the Plan (other than shares of  Restricted  Stock made in  settlement of
     Performance  Units  pursuant to Section  11.2(b)).  The  maximum  number of
     Shares that an Eligible  Individual may receive in any calendar year period
     in respect of Options  and  Awards  may not exceed  3,000,000  Shares.  The
     maximum  dollar  amount of cash or the Fair Market Value of Shares that any
     Eligible Individual may receive in any calendar year during the term of the
     Plan in respect of Performance  Units denominated in dollars may not exceed
     $15,000,000. Upon a Change in Capitalization,  the maximum number of Shares
     referred  to in the  first  two  sentences  of this  Section  4.1  shall be
     adjusted  in number and kind  pursuant  to Section  13. The  Company  shall
     reserve for the purposes of the Plan,  out of its  authorized  but unissued
     Shares or out of Shares held in the  Company's  treasury,  or partly out of
each, such number of Shares as shall be determined by the Board.      

          4.2 Upon the  granting of an Option or an Award,  the number of Shares
     available  under Section 4.1 for the granting of further Options and Awards
shall be reduced as follows:                                          

               (a) In  connection  with the  granting  of an  Option or an Award
          (other  than  the  granting  of  a  Performance  Unit  denominated  in
          dollars),  the  number of Shares  shall be  reduced  by the  number of
          Shares  in  respect  of  which  the  Option  or Award  is  granted  or
denominated.                                                

               (b)  In  connection  with  the  granting  of a  Performance  Unit
          denominated  in dollars,  the number of Shares  shall be reduced by an
          amount  equal to the  quotient  of (i) the dollar  amount in which the
          Performance Unit is denominated, divided by (ii) the Fair Market Value
of a Share on the date the Performance Unit is granted.     

          4.3  Whenever  any  outstanding  Option  or Award or  portion  thereof
     expires,  is canceled or is  otherwise  terminated  for any reason  without
     having been  exercised or payment having been made in respect of the entire
     Option or Award, the Shares allocable to the expired, canceled or otherwise
     terminated  portion  of the  Option or Award may  again be the  subject  of
     Options or Awards granted  hereunder.  If Shares  allocable to an Option or
     Award are delivered to the Company,  or are withheld from Shares  otherwise
     issuable  pursuant to such Option or Award,  in payment of all or a portion
     of the purchase price or tax  withholding  obligations  under the Option or
     Award,  only the net number of Shares issued by the Company (i.e. the gross
     number less the Shares  delivered or withheld)  shall be counted toward the
     limit in Section  4.1. Any Shares  issued or grants  settled by the Company
     pursuant to the assumption or substitution  of outstanding  grants or grant
     commitments  from an acquired  company or other  entity  (whether  acquired
     through the acquisition of stock, assets or otherwise) shall not be counted
against the limitations set forth in Section 4.1.                     

5.   Option Grants for Eligible Individuals.                  

          5.1 Authority of Committee. Subject to the provisions of the Plan, the
     Committee  shall have full and final  authority  to select  those  Eligible
     Individuals who will receive Employee Options, and the terms and conditions
     of the  grant  to  such  Eligible  Individuals  shall  be set  forth  in an
Agreement.                                                            

          5.2  Purchase  Price.  The  purchase  price or the manner in which the
     purchase  price is to be determined  for Shares under each Employee  Option
     shall be  determined  by the  Committee  and set  forth  in the  Agreement;
     provided,  however,  that in no event  shall the  purchase  price per Share
     under each Employee  Option be less than 100% of the Fair Market Value of a
     Share on the date the  Employee  Option is granted  (110% in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder).         

          5.3 Maximum Duration.  Employee Options granted hereunder shall be for
     such term as the  Committee  shall  determine,  provided  that an Incentive
     Stock  Option shall not be  exercisable  after the  expiration  of ten (10)
     years  from  the  date it is  granted  (five  (5)  years  in the case of an
     Incentive  Stock  Option  granted  to  a  Ten-Percent  Stockholder)  and  a
     Nonqualified  Stock Option shall not be exercisable after the expiration of
     ten (10) years from the date it is granted.  The Committee may,  subsequent
     to the granting of any Employee Option,  extend the term thereof, but in no
     event shall the term as so extended exceed the maximum term provided for in
the preceding sentence.                                               

          5.4 Vesting. Subject to Section 7.4, each Employee Option shall become
     exercisable  in such  installments  (which  need not be equal)  and at such
     times as may be designated by the Committee and set forth in the Agreement.
     To  the  extent  not  exercised,   installments  shall  accumulate  and  be
     exercisable,  in whole or in part, at any time after becoming  exercisable,
     but not later than the date the Employee Option expires.  The Committee may
     accelerate the  exercisability of any Employee Option or portion thereof at
any time.                                                             

          5.5  Modification.  No  modification  of an Employee  Option shall (i)
     adversely  alter or impair any  rights or  obligations  under the  Employee
     Option without the Optionee's consent, or (ii) subject to the provisions of
     Section 13 hereof,  reprice outstanding  Employee Options,  whether through
amendment, cancellation or replacement grants.                        

          5.6  Limitation  on  Aggregate  Value of Shares that May Become  First
     Exercisable  During any  Calendar  Year Under an  Incentive  Stock  Option.
     Except as is otherwise provided in this Plan, with respect to any Incentive
     Stock Option  granted under this Plan,  the aggregate  Fair Market Value of
     Shares  subject to an Incentive  Stock Option and the aggregate Fair market
     Value of Shares or shares of stock of any  Subsidiary  (or a predecessor of
     the Company or a Subsidiary)  subject to any other  incentive  stock option
     (within  the  meaning  of  Section  422 of the Code) of the  Company or its
     Subsidiaries (or a predecessor  corporation of any such  corporation)  that
     first become  purchasable  by a holder in any  calendar  year may not (with
     respect to that  holder)  exceed  $100,000,  or such other amount as may be
     prescribed  under  Section  422 of the Code or  applicable  regulations  or
     rulings from time to time.  As used in the previous  sentence,  Fair Market
     Value shall be  determined  as of the date the  Incentive  Stock  Option is
     granted.  For purposes of this Section 5.6 "predecessor  corporation" means
     (a) a corporation  that was a party to a  transaction  described in Section
     424(a) of the Code (or which would be so  described  if a  substitution  or
     assumption  under that Section had been effected)  with the Company,  (b) a
     corporation  which,  at the time the new incentive stock option (within the
     meaning of Section  422 of the Code) is  granted,  is a  Subsidiary  of the
     Company or a predecessor  corporation  of any such  corporations,  or (c) a
     predecessor  corporation of any such  corporations.  Failure to comply with
     this provision shall not impair the enforceability or exercisability of any
     Option,  but shall cause the excess amount of Shares to be  reclassified in
accordance with the Code.                                             

6.   Option Grants for Nonemployee Directors.                 

          6.1  Discretionary  Awards.  From  time to time the Board may elect to
     grant  Director  Options to Eligible  Directors.  In making such grants the
     Board  shall  take  into   consideration  the  contribution  such  Eligible
     Directors  have made or may make to the  success  of the  Company  and such
     other  considerations as the Board may from time to time specify. The Board
     shall determine the number of shares subject to such Director Options, and,
     subject to provisions of the Plan, the exercise price, vesting schedule and
     terms of such Director Options;  provided,  however, that in no event shall
     the purchase  price per Share under each Director  Option be less than 100%
     of the Fair  Market  Value of a Share on the date the  Director  Option  is
granted.                                                              

6.2 Director Stock.                                         

               (a) The Company intends to pay each Eligible Director (and at the
          discretion of the Board certain employee directors) an annual retainer
          in the  amount  set from time to time by the Board  (the  "Retainer").
          Each  Director  shall  be  entitled  to  receive  his or her  Retainer
          exclusively in cash, exclusively in shares of Stock ("Director Stock")
          or any  portion  in cash  and any  portion  in  Director  Stock.  Each
          Director shall be given the opportunity, during the month the Director
          first  becomes a Director  and  during the last month of each  quarter
          thereafter,  to elect among these  choices  for the  remainder  of the
          quarter  (in the case of the  election  made when the  Director  first
          becomes a Director) and for the following  quarter (in the case of any
          subsequent election). If the Director chooses to receive at least some
          of his or her  Retainer in Director  Stock,  the  election  shall also
          indicate the percentage of the Retainer to be paid in Director  Stock.
          If a Director makes no election during his or her first opportunity to
          make an  election,  the  Director  shall be assumed to have elected to
          receive  his or her entire  Retainer in cash.  If a Director  makes no
          election during any succeeding  election month,  the Director shall be
          assumed to have remade the election then  currently in effect for that
          Director. An election by a Director to receive a portion of his or her
          retainer  in Director  Stock  shall  either (i) be approved by (A) the
          Committee  or (B)  the  Board  or (ii)  provide  that  Director  Stock
          received by the Director  pursuant to such  election  shall be held by
the Director for a period of at least six months.           

               (b) The  Company  shall  make the  first  issuance  of  shares of
          Director  Stock on the first  trading  day of the first full  calendar
          quarter  after  February  10, 1998.  Subsequent  issuances of Director
          Stock  shall  be  made on the  first  trading  day of each  subsequent
          calendar quarter and shall be made to all Persons who are Directors on
          that  trading  day except any  Director  whose  Retainer is to be paid
          entirely  in cash.  The number of shares of Stock is issuable to those
       Directors on the relevant trading date indicated above shall equal:

[ % multiplied by (R/4) ] divided by P

WHERE:                                      

                % =      the percentage of the Director's  Retainer that the
                      Director elected or is deemed to have elected to
                         receive in the form of Director Stock, expressed as
a decimal;                

              R =      the Director's Retainer for the year during which
the issuance occurs; and  

          P =      the closing price, as quoted on the principal
                         exchange on which Shares are traded, on the date of
issuance.                 

         Director Stock shall not include any fractional shares. Fractions shall
be rounded to the nearest whole share.                                          

7.   Terms and Conditions Applicable to All Options.          

          7.1 Non-Transferability.  Unless set forth in the Agreement evidencing
     the Option  (other than an Incentive  Stock Option) at the time of grant or
     at  any  time  thereafter,   an  Option  granted  hereunder  shall  not  be
     transferable  by the Optionee to whom granted except by will or the laws of
     descent and distribution or pursuant to a domestic  relations order (within
     the meaning of Rule 16a-12  promulgated  under the  Exchange  Act),  and an
     Option may be exercised  during the lifetime of such  Optionee  only by the
     Optionee or his or her guardian or legal representative.  The terms of such
     Option  shall be final,  binding  and  conclusive  upon the  beneficiaries,
executors, administrators, heirs and successors of the Optionee.      

          7.2 Method of  Exercise.  The exercise of an Option shall be made only
     by a written notice  delivered in person or by mail to the Secretary of the
     Company at the Company's principal executive office,  specifying the number
     of Shares to be purchased and accompanied by payment therefor and otherwise
     in accordance with the Agreement  pursuant to which the Option was granted.
     The purchase price for any Shares purchased  pursuant to the exercise of an
     Option shall be paid, as determined by the Committee in its discretion,  in
     either of the following  forms (or any  combination  thereof):  (i) cash or
     (ii) the transfer of Shares to the Company  upon such terms and  conditions
     as  determined by the  Committee.  In addition,  both Employee  Options and
     Director  Options  may be  exercised  through  a  registered  broker-dealer
     pursuant  to  such   cashless   exercise   procedures   (other  than  Share
     withholding)  which  are,  from  time to  time,  deemed  acceptable  by the
     Committee,  and the Committee may authorize that the purchase price payable
     upon exercise of an Employee  Option may be paid by having Shares  withheld
     that otherwise would be acquired upon such exercise. Any Shares transferred
     to the Company (or withheld upon exercise) as payment of the purchase price
     under an  Option  shall be  valued at their  Fair  Market  Value on the day
     preceding the date of exercise of such Option.  The Optionee  shall deliver
     the  Agreement  evidencing  the Option to the  Secretary of the Company who
     shall endorse thereon a notation of such exercise and return such Agreement
     to the Optionee.  No fractional  Shares (or cash in lieu thereof)  shall be
     issued  upon  exercise  of an Option and the  number of Shares  that may be
     purchased  upon  exercise  shall be rounded to the nearest  number of whole
Shares.                                                               

          7.3 Rights of Optionees.  Optionee  shall be deemed for any purpose to
     be the owner of any Shares  subject to any Option  unless and until (i) the
     Option shall have been exercised  pursuant to the terms  thereof,  (ii) the
     Company shall have issued and delivered  Shares to the Optionee,  and (iii)
     the  Optionee's  name shall have been entered as a stockholder of record on
     the books of the Company.  Thereupon,  the Optionee shall have full voting,
     dividend and other ownership rights with respect to such Shares, subject to
    such terms and conditions as may be set forth in the applicable Agreement.

          7.4 Effect of Change in Control.  In the event of a Change in Control,
     all Options  outstanding on the date of such Change in Control shall become
     immediately and fully exercisable.  In addition, to the extent set forth in
     an Agreement  evidencing the grant of an Employee Option,  an Optionee will
     be permitted to surrender to the Company for cancellation within sixty (60)
     days after  such  Change in Control  any  Employee  Option or portion of an
     Employee  Option to the extent not yet  exercised  and the Optionee will be
     entitled to receive a cash  payment in an amount  equal to the  excess,  if
     any, of (x) (A) in the case of a Nonqualified  Stock Option, the greater of
     (1) the Fair Market Value, on the date preceding the date of surrender,  of
     the Shares subject to the Employee Option or portion thereof surrendered or
     (2) the Adjusted  Fair Market  Value of the Shares  subject to the Employee
     Option or portion  thereof  surrendered  or (B) in the case of an Incentive
     Stock  Option,  the Fair Market  Value,  on the date  preceding the date of
     surrender,  of the Shares subject to the Employee Option or portion thereof
     surrendered,  over (y) the aggregate  purchase  price for such Shares under
     the  Employee  Option  or  portion  thereof  surrendered.  In the  event an
     Optionee's  employment  with,  or  service as a  Director  of, the  Company
     terminates following a Change in Control,  each Option held by the Optionee
     that  was  exercisable  as of the  date of  termination  of the  Optionee's
     employment  or service  shall remain  exercisable  for a period  ending not
     before the earlier of (A) the first  anniversary of the  termination of the
     Optionee's  employment or service or (B) the  expiration of the stated term
of the Option.                                                        

          7.5  Prohibition on Repricing.  No Option granted  hereunder  shall be
     amended  to reduce the  purchase  price per Shares  under such  Option,  or
     surrendered  in exchange for a replacement  Option having a lower  purchase
     price per Share;  provided  that this  Section  7.5 shall not  restrict  or
     prohibit any adjustment or other action taken pursuant to Section 13 below.

8.   Stock Appreciation Rights.                               

                  The  Committee  may  in its  discretion,  either  alone  or in
connection with the grant of an Employee Option, grant Stock Appreciation Rights
in  accordance  with the Plan,  the terms and  conditions  of which shall be set
forth  in an  Agreement.  If  granted  in  connection  with an  Option,  a Stock
Appreciation  Right shall  cover the same Shares  covered by the Option (or such
lesser  number of Shares as the Committee may  determine)  and shall,  except as
provided in this Section 8, be subject to the same terms and  conditions  as the
related Option.                                                                 

          8.1 Time of Grant.  A Stock  Appreciation  Right may be granted (i) at
     any time if unrelated to an Option, or (ii) if related to an Option, either
     at the time of  grant,  or at any time  thereafter  during  the term of the
Option.                                                               

8.2 Stock Appreciation Right Related to an Option.          

               (a) Exercise.  A Stock  Appreciation  Right granted in connection
          with an Option shall be  exercisable at such time or times and only to
          the extent that the related Options are  exercisable,  and will not be
          transferable   except  to  the  extent  the  related   Option  may  be
          transferable. A Stock Appreciation Right granted in connection with an
          Incentive  Stock Option shall be  exercisable  only if the Fair Market
          Value of a Share on the date of exercise  exceeds the  purchase  price
specified in the related Incentive Stock Option Agreement.  

               (b) Amount  Payable.  Upon the  exercise of a Stock  Appreciation
          Right  related to an Option,  the Grantee shall be entitled to receive
          an amount  determined by multiplying (A) the excess of the Fair Market
          Value of a Share on the date  preceding  the date of  exercise of such
          Stock  Appreciation  Right over the per Share purchase price under the
          related  Option,  by (B) the  number of Shares as to which  such Stock
          Appreciation Right is being exercised.  Notwithstanding the foregoing,
          the Committee may limit in any manner the amount  payable with respect
          to any  Stock  Appreciation  Right  by  including  such a limit in the
          Agreement  evidencing the Stock  Appreciation  Right at the time it is
granted.                                                    

               (c) Treatment of Related  Options and Stock  Appreciation  Rights
          Upon Exercise. Upon the exercise of a Stock Appreciation Right granted
          in  connection  with an Option,  the Option  shall be  canceled to the
          extent of the  number  of  Shares  as to which the Stock  Appreciation
          Right is  exercised,  and upon the  exercise  of an Option  granted in
          connection with a Stock  Appreciation  Right,  the Stock  Appreciation
          Right  shall be  canceled  to the extent of the number of Shares as to
which the Option is exercised or surrendered.               

          8.3 Stock Appreciation Right Unrelated to an Option. The Committee may
     grant to  Eligible  Individuals  Stock  Appreciation  Rights  unrelated  to
     Options.  Stock Appreciation Rights unrelated to Options shall contain such
     terms and conditions as to exercisability (subject to Section 8.7), vesting
     and duration as the Committee shall  determine,  but in no event shall they
     have a term of  greater  than  ten (10)  years.  Upon  exercise  of a Stock
     Appreciation Right unrelated to an Option, the Grantee shall be entitled to
     receive  an amount  determined  by  multiplying  (A) the excess of the Fair
     Market Value of a Share on the date  preceding the date of exercise of such
     Stock  Appreciation Right over the Fair Market Value of a Share on the date
     the Stock  Appreciation  Right was  granted,  by (B) number of Shares as to
     which the Stock Appreciation Right is being exercised.  Notwithstanding the
     foregoing,  the Committee  may limit in any manner the amount  payable with
     respect to any Stock  Appreciation  Right by including  such a limit in the
     Agreement  evidencing  the  Stock  Appreciation  Right  at the  time  it is
granted.                                                              

          8.4 Method of Exercise.  Stock Appreciation  Rights shall be exercised
     by a Grantee only by a written notice delivered in person or by mail to the
     Secretary  of the  Company at the  Company's  principal  executive  office,
     specifying   the  number  of  Shares  with   respect  to  which  the  Stock
     Appreciation Right is being exercised.  If requested by the Committee,  the
     Grantee shall deliver the Agreement evidencing the Stock Appreciation Right
     being  exercised and the  Agreement  evidencing  any related  Option to the
     Secretary  of the  Company  who shall  endorse  thereon a notation  of such
exercise and return such Agreement to the Grantee.                    

          8.5 Form of Payment.  Payment of the amount  determined under Sections
     8.2(b)  or 8.3 may be made in the  discretion  of the  Committee  solely in
     whole Shares in a number  determined at their Fair Market Value on the date
     preceding the date of exercise of the Stock  Appreciation  Right, or solely
     in cash, or in a combination of cash and Shares.  If the Committee  decides
     to make  full  payment  in  Shares  and the  amount  payable  results  in a
  fractional Share, payment for the fractional Share will be made in cash.

          8.6  Modification or  Substitution.  Subject to the terms of the Plan,
     the Committee may modify outstanding Awards of Stock Appreciation Rights or
     accept the surrender of outstanding Awards of Stock Appreciation Rights (to
     the extent not  exercised) and grant new Awards in  substitution  for them.
     Notwithstanding the foregoing,  no modification of an Award shall adversely
     alter or impair any rights or obligations  under the Agreement  without the
Grantee's consent.                                                    

          8.7 Effect of Change in Control.  In the event of a Change in Control,
     all  Stock   Appreciation   Rights  shall  become   immediately  and  fully
     exercisable.  In  addition,  to  the  extent  set  forth  in  an  Agreement
     evidencing the grant of a Stock  Appreciation Right unrelated to an Option,
     a Grantee will be entitled to receive a payment from the Company in cash or
     stock, in either case, with a value equal to the excess, if any, of (A) the
     greater of (x) the Fair Market  Value,  on the date  preceding  the date of
     exercise,  of the underlying Shares subject to the Stock Appreciation Right
     or portion thereof exercised and (y) the Adjusted Fair Market Value, on the
     date  preceding the date of exercise,  of the Shares over (B) the aggregate
     Fair Market Value, on the date the Stock Appreciation Right was granted, of
     the Shares  subject  to the Stock  Appreciation  Right or  portion  thereof
     exercised.  In the event a Grantee's employment with the Company terminates
     following a Change in Control,  each Stock  Appreciation  Right held by the
     Grantee that was exercisable as of the date of termination of the Grantee's
     employment  shall  remain  exercisable  for a period  ending not before the
     earlier of the first  anniversary  of (A) the  termination of the Grantee's
     employment  or  (B)  the  expiration  of  the  stated  term  of  the  Stock
Appreciation Right.                                                   

9.   Dividend Equivalent Rights.                              

                  Dividend   Equivalent   Rights  may  be  granted  to  Eligible
Individuals  and  Eligible  Directors  in tandem with an Option or Award or as a
separate award. The terms and conditions  applicable to each Dividend Equivalent
Right shall be specified in the  Agreement  under which the Dividend  Equivalent
Right is granted.  Amounts payable in respect of Dividend  Equivalent Rights may
be payable  currently  or  deferred  until the lapsing of  restrictions  on such
Dividend Equivalent Rights or until the vesting, exercise,  payment,  settlement
or other  lapse of  restrictions  on the  Option or Award to which the  Dividend
Equivalent  Rights  relate.  In the event that the amount  payable in respect of
Dividend  Equivalent  Rights are to be deferred,  the Committee  shall determine
whether  such amounts are to be held in cash or  reinvested  in Shares or deemed
(notionally)  to be  reinvested  in  Shares.  If  amounts  payable in respect of
Dividend  Equivalent Rights are to be held in cash, there may be credited at the
end of each year (or portion  thereof)  interest on the amount of the account at
the  beginning  of the  year  at a rate  per  annum  as  the  Committee,  in its
discretion, may determine.  Dividend Equivalent Rights may be settled in cash or
Shares  or  a  combination   thereof,   in  a  single  installment  or  multiple
installments.                                                                   

10.  Restricted Stock.                                        

          10.1 Grant. The Committee may grant Awards to Eligible  Individuals of
     Restricted  Stock,  which shall be evidenced  by an  Agreement  between the
     Company and the Grantee.  Each Agreement  shall contain such  restrictions,
     terms and conditions as the Committee may, in its discretion, determine and
     (without  limiting the  generality of the  foregoing)  such  Agreements may
     require that an appropriate legend be placed on Share certificates.  Awards
     of Restricted  Stock shall be subject to the terms and provisions set forth
below in this Section 10.                                             

          10.2 Rights of Grantee. Shares of Restricted Stock granted pursuant to
     an Award  hereunder  shall be issued in the name of the  Grantee as soon as
     reasonably practicable after the Award is granted provided that the Grantee
     has executed an Agreement evidencing the Award, the appropriate blank stock
     powers and, in the discretion of the Committee, an escrow agreement and any
     other  documents  which the  Committee  may require as a  condition  to the
     issuance of such Shares.  If a Grantee  shall fail to execute the Agreement
     evidencing a Restricted  Stock Award,  the  appropriate  blank stock powers
     and, in the discretion of the Committee,  an escrow agreement and any other
     documents which the Committee may require within the time period prescribed
     by the Committee at the time the Award is granted,  the Award shall be null
     and void. At the discretion of the  Committee,  Shares issued in connection
     with a Restricted  Stock Award shall be deposited  together  with the stock
     powers with an escrow agent (which may be the  Company)  designated  by the
     Committee.  Unless the Committee  determines  otherwise and as set forth in
     the Agreement, upon delivery of the Shares to the escrow agent, the Grantee
     shall have all of the rights of a stockholder  with respect to such Shares,
     including  the right to vote the  Shares and to receive  all  dividends  or
other distributions paid or made with respect to the Shares.          

          10.3  Non-transferability.  Until all restrictions  upon the Shares of
     Restricted  Stock  awarded to a Grantee shall have lapsed in the manner set
     forth in  Section  10.4,  such  Shares  shall not be sold,  transferred  or
     otherwise  disposed of and shall not be pledged or otherwise  hypothecated,
nor shall they be delivered to the Grantee.                           

10.4 Lapse of Restrictions.                                 

               (a)  Generally.  Restrictions  upon  Shares of  Restricted  Stock
          awarded  hereunder shall lapse at such time or times and on such terms
          and  conditions  as  the  Committee  may   determine.   The  Agreement
evidencing the Award shall set forth any such restrictions. 

               (b)  Effect of Change in  Control.  Unless  the  Committee  shall
          determine otherwise at the time of the grant of an Award of Restricted
          Stock,  the  restrictions  upon Shares of Restricted Stock shall lapse
          upon a Change in Control. The Agreement evidencing the Award shall set
forth any such provisions.                                  

          10.5  Modification or Substitution.  Subject to the terms of the Plan,
     the Committee may modify  outstanding  Awards of Restricted Stock or accept
     the surrender of outstanding  Shares of Restricted Stock (to the extent the
     restrictions  on such  Shares  have not yet lapsed) and grant new Awards in
     substitution for them. Notwithstanding the foregoing, no modification of an
     Award shall adversely  alter or impair any rights or obligations  under the
Agreement without the Grantee's consent.                              

          10.6  Treatment  of  Dividends.  At the  time an Award  of  Shares  of
     Restricted  Stock  is  granted,  the  Committee  may,  in  its  discretion,
     determine  that the  payment to the  Grantee of  dividends,  or a specified
     portion  thereof,  declared or paid on such Shares by the Company  shall be
     (i) deferred until the lapsing of the restrictions imposed upon such Shares
     and (ii) held by the  Company  for the  account of the  Grantee  until such
     time. In the event that dividends are to be deferred,  the Committee  shall
     determine  whether such  dividends  are to be reinvested in shares of Stock
     (which shall be held as additional  Shares of Restricted  Stock) or held in
     cash. If deferred  dividends are to be held in cash,  there may be credited
     at the end of each year (or portion thereof)  interest on the amount of the
     account at the beginning of the year at a rate per annum as the  Committee,
     in its discretion, may determine.  Payment of deferred dividends in respect
     of Shares of Restricted Stock (whether held in cash or as additional Shares
     of Restricted Stock), together with interest accrued thereon, if any, shall
     be made upon the lapsing of  restrictions  imposed on the Shares in respect
     of which the  deferred  dividends  were paid,  and any  dividends  deferred
     (together  with any interest  accrued  thereon) in respect of any Shares of
 Restricted Stock shall be forfeited upon the forfeiture of such Shares.

          10.7 Delivery of Shares.  Upon the lapse of the restrictions on Shares
     of Restricted  Stock,  the Committee shall cause a stock  certificate to be
     delivered  to  the  Grantee  with  respect  to  such  Shares,  free  of all
restrictions hereunder.                                               

11.  Performance Awards.                                      

     11.1  (a)  Performance  Objectives.  Performance  Objectives  for
          Performance  Awards  may be  expressed  in terms of (i)  earnings  per
          Share, (ii) Share price, (iii) pre-tax profits, (iv) net earnings, (v)
          return on equity or assets, (vi) revenues, (vii) EBITDA, (viii) market
          share or market  penetration or (ix) any combination of the foregoing.
          Performance  Objectives  may be in respect of the  performance  of the
          Company and its Subsidiaries (which may be on a consolidated basis), a
          Subsidiary or a Division.  Performance  Objectives  may be absolute or
          relative  and may be  expressed  in  terms of a  progression  within a
          specified  range.  The  Performance   Objectives  with  respect  to  a
          Performance  Cycle shall be established in writing by the Committee by
          the  earlier  of (i) the date on which a  quarter  of the  Performance
          Cycle has elapsed or (ii) the date which is ninety (90) days after the
          commencement  of the  Performance  Cycle,  and in any event  while the
          performance   relating   to   the   Performance    Objectives   remain
          substantially  uncertain. At the time of the granting of a Performance
          Award and to the extent permitted under Section 162(m) of the Code and
          the regulations  thereunder,  the Committee may provide for the manner
          in which the  Performance  Objectives  will be measured to reflect the
          impact of  specified  corporate  transactions,  extraordinary  events,
accounting changes and other similar events.                

               (b) Determination of Performance.  Prior to the vesting, payment,
          settlement  or  lapsing  of  any  restrictions  with  respect  to  any
          Performance  Award made to a Grantee who is subject to Section  162(m)
          of  the  Code,  the  Committee  shall  certify  in  writing  that  the
applicable Performance Objectives have been satisfied.      

          11.2 Performance  Units. The Committee,  in its discretion,  may grant
     Awards  of  Performance  Units  to  Eligible  Individuals,  the  terms  and
     conditions of which shall be set forth in an Agreement  between the Company
     and the  Grantee.  Performance  Units  may be  denominated  in  Shares or a
     specified  dollar amount and,  contingent  upon the attainment of specified
     Performance Objectives within the Performance Cycle, represent the right to
     receive  payment  as  provided  in  Section  11.2(b)  of (i) in the case of
     Share-denominated  Performance  Units,  the Fair Market Value of a Share on
     the date the Performance  Unit was granted,  the date the Performance  Unit
     became  vested or any other date  specified by the  Committee,  (ii) in the
     case of  dollar-denominated  Performance Units, the specified dollar amount
     or (iii) a percentage (which may be more than 100%) of the amount described
     in  clause  (i) or (ii)  depending  on the level of  Performance  Objective
     attainment;  provided,  however,  that,  the  Committee  may at the  time a
     Performance  Unit is granted specify a maximum amount payable in respect of
     a vested  Performance  Unit.  Each  Agreement  shall  specify the number of
     Performance  Units to which it relates,  the Performance  Objectives  which
     must be  satisfied  in  order  for the  Performance  Units  to vest and the
     Performance  Cycle  within  which  such  Performance   Objectives  must  be
satisfied.                                                            

               (a) Vesting and Forfeiture. Subject to Sections 11.1(b) and 11.4,
          a Grantee shall become vested with respect to the Performance Units to
          the extent that the Performance  Objectives set forth in the Agreement
are satisfied for the Performance Cycle.                    

               (b)  Payment of Awards.  Subject to Section  11.1(b),  payment to
          Grantees in respect of vested  Performance Units shall be made as soon
          as practicable  after the last day of the  Performance  Cycle to which
          such Award relates unless the Agreement  evidencing the Award provides
          for the deferral of payment,  in which event the terms and  conditions
          of the  deferral  shall be set  forth  in the  Agreement.  Subject  to
          Section  11.4,  such payments may be made entirely in Shares valued at
          their Fair Market Value as of the day preceding the date of payment or
          such other date  specified by the  Committee,  entirely in cash, or in
          such combination of Shares and cash as the Committee in its discretion
          shall determine at any time prior to such payment; provided,  however,
          that if the  Committee  in its  discretion  determines  to  make  such
          payment  entirely or  partially  in Shares of  Restricted  Stock,  the
          Committee  must  determine the extent to which such payment will be in
          Shares of Restricted  Stock and the terms of such Restricted  Stock at
the time the Award is granted.                              

          11.3 Performance Shares. The Committee,  in its discretion,  may grant
     Awards  of  Performance  Shares  to  Eligible  Individuals,  the  terms and
     conditions of which shall be set forth in an Agreement  between the Company
     and the Grantee.  Each Agreement may require that an appropriate  legend be
     placed on Share certificates. Awards of Performance Shares shall be subject
to the following terms and provisions:                                

               (a) Rights of Grantee. The Committee shall provide at the time an
          Award of  Performance  Shares  is made the time or times at which  the
          actual Shares represented by such Award shall be issued in the name of
          the Grantee;  provided,  however,  that no Performance Shares shall be
          issued  until the Grantee has  executed an  Agreement  evidencing  the
          Award,  the  appropriate  blank stock powers and, in the discretion of
          the Committee,  an escrow  agreement and any other documents which the
          Committee  may  require  as  a  condition  to  the  issuance  of  such
          Performance  Shares.  If a Grantee shall fail to execute the Agreement
          evidencing an Award of Performance Shares, the appropriate blank stock
          powers and, in the  discretion of the Committee,  an escrow  agreement
          and any other  documents  which the Committee  may require  within the
          time  period  prescribed  by the  Committee  at the time the  Award is
          granted,  the Award shall be null and void.  At the  discretion of the
          Committee,  Shares issued in connection  with an Award of  Performance
          Shares  shall be  deposited  together  with the stock  powers  with an
          escrow agent (which may be the Company)  designated by the  Committee.
          Except as restricted by the terms of the  Agreement,  upon delivery of
          the  Shares to the  escrow  agent,  the  Grantee  shall  have,  in the
          discretion of the Committee,  all of the rights of a stockholder  with
          respect to such Shares,  including the right to vote the Shares and to
          receive all dividends or other distributions paid or made with respect
to the Shares.                                              

               (b)   Non-transferability.   Until  any  restrictions   upon  the
          Performance  Shares  awarded  to a Grantee  shall  have  lapsed in the
          manner set forth in Sections 11.3(c) or 11.4, such Performance  Shares
          shall not be sold,  transferred or otherwise disposed of and shall not
          be pledged or otherwise  hypothecated,  nor shall they be delivered to
          the Grantee. The Committee may also impose such other restrictions and
          conditions on the Performance Shares, if any, as it deems appropriate.

               (c) Lapse of Restrictions.  Subject to Sections 11.1(b) and 11.4,
          restrictions upon Performance Shares awarded hereunder shall lapse and
          such Performance  Shares shall become vested at such time or times and
          on such terms,  conditions and satisfaction of Performance  Objectives
          as the  Committee  may, in its  discretion,  determine  at the time an
Award is granted.                                           

               (d) Treatment of Dividends.  At the time the Award of Performance
          Shares is granted,  the Committee  may, in its  discretion,  determine
          that the payment to the Grantee of dividends,  or a specified  portion
          thereof,  declared or paid on actual Shares  represented by such Award
          which  have been  issued by the  Company to the  Grantee  shall be (i)
          deferred  until the  lapsing  of the  restrictions  imposed  upon such
          Performance Shares and (ii) held by the Company for the account of the
          Grantee  until  such  time.  In the  event  that  dividends  are to be
          deferred,  the Committee shall determine whether such dividends are to
          be  reinvested  in shares of Stock (which shall be held as  additional
          Performance  Shares) or held in cash. If deferred  dividends are to be
          held in  cash,  there  may be  credited  at the end of each  year  (or
          portion  thereof)  interest  on  the  amount  of  the  account  at the
          beginning  of the year at a rate per  annum as the  Committee,  in its
          discretion, may determine. Payment of deferred dividends in respect of
          Performance Shares (whether held in cash or in additional  Performance
          Shares), together with interest accrued thereon, if any, shall be made
          upon the lapsing of restrictions  imposed on the Performance Shares in
          respect of which the deferred  dividends  were paid, and any dividends
          deferred  (together with any interest  accrued  thereon) in respect of
          any Performance  Shares shall be forfeited upon the forfeiture of such
Performance Shares.                                         

               (e)  Delivery of Shares.  Upon the lapse of the  restrictions  on
          Performance  Shares  awarded  hereunder,  the Committee  shall cause a
          stock  certificate to be delivered to the Grantee with respect to such
Shares, free of all restrictions hereunder.                 

          11.4 Effect of Change in Control. In the event of a Change in Control:

               (a) With  respect to  Performance  Units,  the Grantee  shall (i)
          become  vested in a percentage of  Performance  Units as determined by
          the Committee at the time of the Award of such  Performance  Units and
          as set forth in the  Agreement  and (ii) be  entitled  to  receive  in
          respect of all Performance  Units which become vested as a result of a
          Change in  Control a cash  payment  within  ten (10) days  after  such
          Change in Control in an amount as  determined  by the Committee at the
          time of the  Award of such  Performance  Unit and as set  forth in the
Agreement.                                                  

               (b) With respect to Performance Shares,  restrictions shall lapse
          immediately  on  all  or  a  portion  of  the  Performance  Shares  as
          determined  by  the  Committee  at  the  time  of the  Award  of  such
Performance Shares and as set forth in the Agreement.       

               (c) The Agreements evidencing  Performance Shares and Performance
          Units shall  provide  for the  treatment  of such Awards (or  portions
          thereof)  which do not  become  vested  as the  result  of a Change in
          Control,  including, but not limited to, provisions for the adjustment
of applicable Performance Objectives.                       

          11.5  Modification or Substitution.  Subject to the terms of the Plan,
     the  Committee  may  modify  outstanding  Performance  Awards or accept the
     surrender  of  outstanding  Performance  Awards  and grant new  Performance
     Awards  in  substitution  for  them.   Notwithstanding  the  foregoing,  no
     modification  of a Performance  Award shall  adversely  alter or impair any
  rights or obligations under the Agreement without the Grantee's consent.

12.  Effect of a Termination of Employment.                   

                  The  Agreement  evidencing  the grant of each  Option and each
Award  shall set forth the terms and  conditions  applicable  to such  Option or
Award  upon a  termination  or change in the  status  of the  employment  of the
Optionee or Grantee by the  Company,  a  Subsidiary  or a Division  (including a
termination  or change by reason  of the sale of a  Subsidiary  or a  Division),
which,  except for  Director  Options,  shall be as the  Committee  may,  in its
discretion, determine at the time the Option or Award is granted or thereafter. 

13.  Adjustment Upon Changes in Capitalization.               

               (a) In the event of a Change  in  Capitalization,  the  Committee
          shall conclusively determine the appropriate  adjustments,  if any, to
          (i) the  maximum  number  and  class  of  Shares  or  other  stock  or
          securities  with  respect  to which  Options  or Awards may be granted
          under the Plan,  (ii) the maximum  number and class of Shares or other
          stock or  securities  with  respect to which  Options or Awards may be
          granted to any Eligible  Individual during the term of the Plan, (iii)
          the number and class of Shares or other stock or securities  which are
          subject to  outstanding  Options or Awards  granted under the Plan and
          the purchase price therefor, if applicable,  (iv) the number and class
          of Shares or other securities in respect of which Director Options are
     to be granted under Section 6 and (v) the Performance Objectives.

               (b)  Any  such  adjustment  in  the  Shares  or  other  stock  or
          securities  subject to outstanding  Incentive Stock Options (including
          any adjustments in the purchase price) shall be made in such manner as
          not to constitute a  modification  as defined by Section  424(h)(3) of
          the Code and only to the extent  otherwise  permitted  by Sections 422
and 424 of the Code.                                        

               (c) If, by reason of a Change in Capitalization,  a Grantee of an
          Award  shall be  entitled  to, or an  Optionee  shall be  entitled  to
          exercise an Option  with  respect to,  new,  additional  or  different
          shares of stock or  securities,  such  new,  additional  or  different
          shares  shall   thereupon  be  subject  to  all  of  the   conditions,
          restrictions  and  performance  criteria which were  applicable to the
          Shares  subject to the Award or Option,  as the case may be,  prior to
such Change in Capitalization.                              

14.  Effect of Certain Transactions.                          

                  Subject to Sections 7.4, 8.7, 10.4(b) and 11.4 or as otherwise
provided in an Agreement,  in the event of (i) the liquidation or dissolution of
the Company or (ii) a merger or consolidation of the Company (a  "Transaction"),
the Plan and the Options and Awards issued hereunder shall continue in effect in
accordance with their respective terms, except that following a Transaction each
Optionee  and  Grantee  shall be  entitled  to  receive in respect of each Share
subject to any outstanding  Options or Awards, as the case may be, upon exercise
of any Option or payment or  transfer  in respect of any Award,  the same number
and kind of stock,  securities,  cash, property or other consideration that each
holder of a Share was  entitled  to receive in the  Transaction  in respect of a
Share; provided, however, that such stock, securities,  cash, property, or other
consideration  shall remain subject to all of the conditions,  restrictions  and
performance  criteria  which were  applicable to the Options and Awards prior to
such Transaction.                                                               

15.  Interpretation.                                          

                  Following the required  registration of any equity security of
the Company pursuant to Section 12 of the Exchange Act:                         

               (a) The Plan is intended  to comply  with Rule 16b-3  promulgated
          under  the  Exchange  Act  and  the  Committee   shall  interpret  and
          administer  the  provisions  of the Plan or any  Agreement in a manner
          consistent therewith. Any provisions inconsistent with such Rule shall
 be inoperative and shall not affect the validity of the Plan.

               (b) Unless otherwise  expressly stated in the relevant Agreement,
          each Option,  Stock  Appreciation  Right and Performance Award granted
          under the Plan is intended to be performance-based compensation within
          the meaning of Section  162(m)(4)(C)  of the Code. The Committee shall
          not be  entitled  to  exercise  any  discretion  otherwise  authorized
          hereunder  with  respect to such  Options or Awards if the  ability to
          exercise  such  discretion or the exercise of such  discretion  itself
          would cause the compensation attributable to such Options or Awards to
fail to qualify as performance-based compensation.          

16.  Pooling Transactions.                                    

                  Notwithstanding   anything   contained  in  the  Plan  or  any
Agreement  to the  contrary,  in the event of a Change in Control  which is also
intended  to  constitute  a Pooling  Transaction,  the  Committee  may take such
actions,  if any, as are specifically  recommended by an independent  accounting
firm  retained by the  Company to the extent  reasonably  necessary  in order to
assure that the Pooling  Transaction  will  qualify as such,  including  but not
limited to (i) deferring the vesting, exercise,  payment,  settlement or lapsing
of  restrictions  with respect to any Option or Award,  (ii)  providing that the
payment or  settlement  in respect of any Option or Award be made in the form of
cash,  Shares or  securities  of a successor  or acquirer of the  Company,  or a
combination of the foregoing,  and (iii) providing for the extension of the term
of any Option or Award to the extent necessary to accommodate the foregoing, but
not beyond the maximum term permitted for any Option or Award.                  

17.  Termination and Amendment of the Plan.                   

                  The Plan does not have a fixed termination date, provided that
no Incentive Stock Option shall be granted hereunder  subsequent to February 12,
2011.  The Board may  terminate  the Plan and the Board may at any time and from
time to time amend, modify or suspend the Plan; provided, however, that:        

               (a) no such  amendment,  modification,  suspension or termination
          shall  impair or  adversely  alter any  Options or Awards  theretofore
          granted  under the Plan,  except with the  consent of the  Optionee or
          Grantee,  nor  shall  any  amendment,   modification,   suspension  or
          termination  deprive any Optionee or Grantee of any Shares which he or
 she may have acquired through or as a result of the Plan; and

               (b) to the extent  necessary  under  applicable law, no amendment
          shall be effective  unless approved by the stockholders of the Company
in accordance with applicable law.                          

18.  Non-Exclusivity of the Plan.                             

                  The  adoption of the Plan by the Board shall not be  construed
as  amending,   modifying  or  rescinding  any  previously   approved  incentive
arrangement  or as creating any  limitations  on the power of the Board to adopt
such other incentive arrangements as it may deem desirable,  including,  without
limitation,  the granting of stock options  otherwise  than under the Plan,  and
such arrangements may be either applicable generally or only in specific cases. 

19.  Limitation of Liability.                                 

                  As  illustrative  of  the  limitations  of  liability  of  the
Company, but not intended to be exhaustive thereof, nothing in the Plan shall be
construed to:                                                                   

                    (i) give any  person  any right to be  granted  an Option or
       Award other than at the sole discretion of the Committee;

                    (ii) give any person any rights  whatsoever  with respect to
 Shares except as specifically provided in the Plan;

                    (iii)  limit  in any way the  right  of the  Company  or any
               Subsidiary to terminate the employment of any person at any time;
or                                                

                    (iv)  be  evidence  of  any   agreement  or   understanding,
               expressed or implied,  that the Company will employ any person at
               any particular rate of compensation or for any particular  period
of time.                                          

20.  Regulations and Other Approvals; Governing Law.          

          20.1 Except as to matters of federal  law,  the Plan and the rights of
     all  persons  claiming  hereunder  shall be  construed  and  determined  in
     accordance  with the laws of the State of Texas  without  giving  effect to
conflicts of laws principles thereof.                                 

          20.2 The  obligation  of the  Company to sell or deliver  Shares  with
     respect to Options  and Awards  granted  under the Plan shall be subject to
     all  applicable  laws,  rules and  regulations,  including  all  applicable
     federal and state  securities laws, and the obtaining of all such approvals
     by governmental  agencies as may be deemed  necessary or appropriate by the
Committee.                                                            

          20.3  The  Board  may  make  such  changes  as  may  be  necessary  or
     appropriate  to comply  with the rules and  regulations  of any  government
     authority,  or to obtain for Eligible  Individuals  granted Incentive Stock
     Options the tax benefits  under the  applicable  provisions of the Code and
regulations promulgated thereunder.                                   

          20.4 Each Option and Award is subject to the  requirement  that, if at
     any time the Committee  determines,  in its  discretion,  that the listing,
     registration or  qualification  of Shares issuable  pursuant to the Plan is
     required by any  securities  exchange or under any state or federal law, or
     the consent or approval of any governmental regulatory body is necessary or
     desirable as a condition of, or in connection  with, the grant of an Option
     or Award or the  issuance of Shares,  no Options or Awards shall be granted
     or payment  made or Shares  issued,  in whole or in part,  unless  listing,
     registration,  qualification,  consent or  approval  has been  effected  or
obtained free of any conditions as acceptable to the Committee.       

          20.5  Notwithstanding  anything contained in the Plan or any Agreement
     to the  contrary,  in the event  that the  disposition  of Shares  acquired
     pursuant  to  the  Plan  is not  covered  by a  then  current  registration
     statement  under the  Securities  Act of 1933, as amended (the  "Securities
     Act"),  and is not  otherwise  exempt from such  registration,  such Shares
     shall  be  restricted  against  transfer  to  the  extent  required  by the
     Securities Act and Rule 144 or other regulations thereunder.  The Committee
     may require any individual  receiving Shares pursuant to an Option or Award
     granted under the Plan, as a condition precedent to receipt of such Shares,
     to represent and warrant to the Company in writing that the Shares acquired
     by such individual are acquired without a view to any distribution  thereof
     and will not be sold or  transferred  other than  pursuant to an  effective
     registration  thereof under said Act or pursuant to an exemption applicable
     under  the  Securities  Act  or  the  rules  and  regulations   promulgated
     thereunder.  The  certificates  evidencing  any of  such  Shares  shall  be
     appropriately  amended to reflect their status as restricted  securities as
aforesaid.                                                            

21.  Miscellaneous.                                           

          21.1 Multiple Agreements. The terms of each Option or Award may differ
     from other Options or Awards granted under the Plan at the same time, or at
     some other time. The Committee may also grant more than one Option or Award
     to a given  Eligible  Individual  during  the term of the  Plan,  either in
     addition  to,  or in  substitution  for,  one or  more  Options  or  Awards
previously granted to that Eligible Individual.                       

21.2 Withholding of Taxes.                                  

               (a) At such times as an  Optionee or Grantee  recognizes  taxable
          income in connection  with the receipt of Shares or cash  hereunder (a
          "Taxable Event"),  the Optionee or Grantee shall pay to the Company an
          amount  equal to the  federal,  state and local income taxes and other
          amounts as may be  required  by law to be  withheld  by the Company in
          connection with the Taxable Event (the  "Withholding  Taxes") prior to
          the issuance, or release from escrow, of such Shares or the payment of
          such cash. The Company shall have the right to deduct from any payment
          of cash to an Optionee or Grantee an amount  equal to the  Withholding
          Taxes in satisfaction  of the obligation to pay Withholding  Taxes. In
          satisfaction  of  the  obligation  to  pay  Withholding  Taxes  to the
          Company, the Optionee or Grantee may make a written election (the "Tax
          Election"), which may be accepted or rejected in the discretion of the
          Committee,  to have  withheld a portion of the Shares then issuable to
          him  or her  having  an  aggregate  Fair  Market  Value  equal  to the
Withholding Taxes.                                          

               (b) If an  Optionee  makes a  disposition,  within the meaning of
          Section 424(c) of the Code and regulations promulgated thereunder,  of
          any Share or Shares issued to such  Optionee  pursuant to the exercise
          of an Incentive Stock Option within the two-year period  commencing on
          the day  after the date of the grant or  within  the  one-year  period
          commencing  on the day after  the date of  transfer  of such  Share or
          Shares to the Optionee pursuant to such exercise,  the Optionee shall,
          within ten (10) days of such disposition,  notify the Company thereof,
          by  delivery  of  written  notice  to the  Company  at  its  principal
executive office.                                           

          21.3.  Effective  Date.  The  effective  date of this Plan shall be as
     determined  by the Board,  subject only to the approval by the  affirmative
     vote of the holders of a majority of the securities of the Company present,
     or represented, and entitled to vote at a meeting of stockholders duly held
     in accordance  with the applicable laws of the State of Texas within twelve
(12) months of the adoption of the Plan by the Board.                 

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APPENDIX B

 AUDIT COMMITTEE CHARTER

Organization                                                                    

         The Audit  Committee of the Board of Directors shall be comprised of at
least three directors who are independent of management and the Company. Members
of the  Audit  Committee  shall  be  considered  independent  if  they  have  no
relationship  to the  Company  that may  interfere  with the  exercise  of their
independence  from management and the Company.  All Audit Committee members will
be financially literate, and at least one member will have accounting or related
financial management expertise.                                                 

Statement of Policy                                                             

         The Audit  Committee  shall  provide  assistance  to the  directors  in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment  community relating to corporate  accounting,  reporting practices of
the Company,  and the quality and integrity of financial reports of the Company.
In so doing,  it is the  responsibility  of the Audit Committee to maintain free
and open  communication  between the directors,  the independent  auditors,  the
internal auditors,  and the financial  management of the company. In discharging
its oversight role, the Committee is empowered to investigate any matter brought
to its  attention  with  full  access to all  books,  records,  facilities,  and
personnel  of the  Company  and the power to retain  outside  counsel,  or other
experts for this purpose.                                                       

Responsibilities and Processes                                                  

         The primary  responsibility  of the Audit  Committee  is to oversee the
Company's  financial  reporting  process  on behalf of the Board and  report the
results  of  their  activities  to the  Board.  Management  is  responsible  for
preparing the Company's financial  statements,  and the independent auditors are
responsible  for  auditing  those  financial  statements.  In  carrying  out its
responsibilities,  the Audit  Committee  believes its  policies  and  procedures
should remain  flexible,  in order to best react to changing  conditions  and to
ensure to the  directors and  shareholders  that the  corporate  accounting  and
reporting  practices of the company are in accordance with all  requirements and
are of the highest quality.                                                     

In carrying out these responsibilities, the Audit Committee will:     

o        Obtain the full Board of Directors' approval of this Charter and review
      and reassess this Charter as conditions dictate (at least annually).

o        Review and recommend to the directors  the  independent  auditors to be
selected to audit the financial statements of the Company.    

o        Have a clear understanding with the independent  auditors that they are
         ultimately  accountable  to  the  Board  of  Directors  and  the  Audit
         Committee, as the shareholders' representatives,  who have the ultimate
         authority  in  deciding  to  engage,   evaluate,  and  if  appropriate,
terminate their services.                                     

o        Meet with the  independent  auditors and  financial  management  of the
         Company to review the scope of the proposed audit and timely  quarterly
         reviews for the current year and at the conclusion  thereof review such
         audit or  review,  including  any  comments  or  recommendation  of the
independent auditors.                                         

o        Review with the independent  auditors,  the Company's internal auditor,
         and financial and accounting personnel,  the adequacy and effectiveness
         of the accounting and financial controls of the Company, and elicit any
         recommendations  for the  improvement  of  such  internal  controls  or
         particular areas where new or more detailed  controls or procedures are
         desirable.  Particular  emphasis  should  be given to the  adequacy  of
         internal controls to expose any payments,  transactions,  or procedures
that might be deemed illegal or otherwise improper.           

o        Review  reports from  regulators  (such as the SEC) and other legal and
         regulatory  matters  that may have a material  effect on the  financial
statements or related Company compliance policies.            

o        Review  the  internal  audit  function  of the  Company  including  the
         independence and authority of its reporting  obligations,  the proposed
         audit plans for the coming  year,  and the  coordination  of such plans
with the independent auditors.                                

o        Inquire  of  management,  the  internal  auditor,  and the  independent
         auditors  about  significant  risks or  exposures  and assess the steps
management has taken to minimize such risks to the Company.   

o        Receive  prior to each meeting,  a summary of findings  from  completed
         internal  audits and a progress  report on the proposed  internal audit
    plan, with explanations for any deviations from the original plan.

o        Review the quarterly financial statements with financial management and
         the independent auditors prior to the filing of the Form 10-Q (or prior
         to the press  release of results,  if possible)  to determine  that the
         independent  auditors  do not  take  exception  to the  disclosure  and
         content of the  financial  statement,  and  discuss  any other  matters
         required to be communicated to the Committee by the auditors. The chair
         of the Committee  may  represent  the entire  Committee for purposes of
this review.                                                  

o        Review the  financial  statements  contained  in the annual  report to 
        shareholders with management and the independent auditors to determine
        that the  independent  auditors are satisfied  with the disclosure and
        content  of  the   financial   statements   to  be  presented  to  the
        shareholders.  Review with financial  management  and the  independent
        auditors the results of their timely analysis of significant financial
        reporting issues and practices, including changes in, or adoptions of,
        accounting principles and disclosure practices,  and discuss any other
        matters  required to be communicated to the Committee by the auditors.
        Also review with  financial  management and the  independent  auditors
        their  judgments  about  the  quality,  not  just  acceptability,   of
        accounting  principles  and the  clarity of the  financial  disclosure
        practices used or proposed to be used, and particularly, the degree of
        aggressiveness  or  conservatism  of  the  organization's   accounting
        principles and underlying  estimates,  and other significant decisions
        made in  preparing  the  financial  statements.  o Provide  sufficient
        opportunity for the internal and independent auditors to meet with the
        members of the Audit Committee without members of management  present.
        Among the items to be discussed in these meetings are the  independent
        auditors'  evaluation  of the  Company's  financial,  accounting,  and
        auditing personnel,  and the cooperation that the independent auditors
received during the course of audit.                          

o        Report the results of the annual  audit to the Board of  Directors.  If
         requested by the Board,  invite the independent  auditors to attend the
         full Board of Directors  meeting to assist in reporting  the results of
         the   annual   audit   or  to   answer   other   directors'   questions
         (alternatively, the other directors, particularly the other independent
         directors,  may be invited to attend the Audit Committee meeting during
which the results of the annual audit are reviewed).          

o        On an annual  basis,  obtain  from the  independent  auditors a written
         communication  delineating  all their  relationships  and  professional
         services as required by  Independence  Standards  Board Standard No. 1,
         Independence Discussion with Audit Committees. In addition, review with
         the  independent  auditors  the  nature  and  scope  of  any  disclosed
         relationships or professional  services and take, or recommend that the
         Board of Directors  take,  appropriate  action to ensure the continuing
independence of the auditors.                                 

o        Review  the  report  of the Audit  Committee  in the  annual  report to
         shareholders  and the Annual Report on Form 10-K disclosing  whether or
         not the Committee had reviewed and discussed  with  management  and the
         independent  auditors,  as  well  as  discussed  within  the  Committee
         (without management or the independent auditors present), the financial
         statements  and the quality of accounting  principles  and  significant
         judgments affecting the financial statements. In addition, disclose the
         Committee's conclusion on the fairness of presentation of the financial
statements in conformity with GAAP based on those discussion. 

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DIRECTION TO THE ANNUAL MEETING OF SHAREHOLDERS OF CLEAR CHANNEL      
COMMUNICATIONS, INC.      

From South:                                                                     

Take 281 North.                                                                 

Exit East Basse Road, turn right.                                               

Clear Channel is 2/10th mile on the right side.                  [MAP]          

From North:                                                                     

Take 281 South.                                                                 

Exit Jones Maltsberger, turn left.  At third traffic signal turn right on Basse 
Road.                                                                           

Clear  Channel is 3/10th mile on the left side.  Turn left on  Forestshire  then
left into our parking lot.                                                      

Clear Channel Communications, Inc.                          
      Annual Meeting of Shareholders                  April 26, 2001
                                                      11:00 a.m.
Clear Channel Communications                          
200 East Basse Road                         
      San Antonio, Texas  78209                      ADMIT ONE

Clear Channel Communications, Inc.                          
      Annual Meeting of Shareholders                  April 26, 2001
                                                      11:00 a.m.
Clear Channel Communications                          
200 East Basse Road                         
      San Antonio, Texas  78209                      ADMIT ONE

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CLEAR CHANNEL COMMUNICATIONS, INC.

              Proxy Solicited on Behalf of the Board of Directors for the Annual
Meeting of Shareholders to be held April 26, 2001                               

         The  undersigned  hereby  appoints L. Lowry Mays and Alan D. Feld,  and
each of them, proxies of the undersigned with full power of substitution for and
in the name,  place and stead of the  undersigned  to appear  and act for and to
vote all shares of CLEAR CHANNEL  COMMUNICATIONS,  INC.  standing in the name of
the undersigned or with respect to which the undersigned is entitled to vote and
act at the Annual  Meeting  of  Shareholders  of said  Company to be held in San
Antonio,  Texas  on  April  26,  2001  at  11:00  A.M.,  local  time,  or at any
adjournments or  postponements  thereof,  with all powers the undersigned  would
possess of then personally present, as indicated on the reverse side.           

         The  undersigned  acknowledges  receipt of notice of said  meeting  and
accompanying  Proxy  Statement  and of the 2000 Annual  Report and  ratifies and
confirms all acts that any of the said proxy  holders or their  substitutes  may
lawfully do or cause to be done by virtue hereof.                               

(Continued and to be dated and signed on
the reverse side.)

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1.   Election of Directors                                                      
FOR all thirteen nominees listed below [  ]     
            WITHHOLD AUTHORITY to vote for all eight nominees below [  ]
EXCEPTIONS* [  ]                                

 Nominees: L. Lowry Mays Karl Eller Mark P. Mays Randall T. Mays
 Robert L. Crandall Alan D. Feld Thomas O. Hicks Vernon E. Jordan, Jr.
Michael J. Levitt Perry J. Lewis B. J. McCombs
Theodore H. Strauss John H. Williams

     (INSTRUCTIONS:  To withhold  authority to vote for any  individual  nominee
     mark the  "EXCEPTIONS"  box and  write  that  nominee's  name in the  space
provided below.)                                                      
    *Exceptions: _____________________________________________________________

2.   Ratification of the selection of Ernst & Young LLP as independent  auditors
for the year ending December 31, 2001.                                

FOR  [  ]   AGAINST [  ]  ABSTAIN [  ]                        

3.   Approval of the Clear Channel  Communications,  Inc.  2001 Stock  Incentive
Plan.                                                                 

FOR [  ]   AGAINST [  ]   ABSTAIN [  ]                        

Change of Address and/or Comments:  [  ]                                        

         Please sign your name exactly as it appears hereon. Joint owners should
sign personally. Attorney, Executor,  Administrator,  Trustee or Guardian should
indicate full title.                                                            

Dated:____________________________________, 2001                                

-----------------------------------------------                                 
Shareholder's signature                                                         

-----------------------------------------------                                 
Shareholder's signature if stock held jointly                                   

Sign, Date, and Return the Proxy Card Promptly Using the Enclosed Envelope.     

Votes MUST be indicated (X) in Black or Blue Ink.                               

Dates Referenced Herein   and   Documents Incorporated by Reference

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