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                                                                     EXHIBIT 4.3

                           SPANISH BROADCASTING SYSTEM
                             1999 STOCK OPTION PLAN


1.    PURPOSES.

      The purposes of the Plan are to further the growth, development and
financial success of Spanish Broadcasting System, Inc. (the "Company") and its
Subsidiaries by providing incentives to those officers and key employees who
have the capacity to contribute in substantial measure toward the growth and
profitability of the Company and to assist the Company in attracting and
retaining employees with the ability to make such contributions. To accomplish
such purposes, the Plan provides that the Company may grant such employees
either Nonqualified Stock and Incentive Stock Options, or both.

2.    DEFINITIONS.

      Wherever the masculine gender is used in the Plan, it shall include the
feminine and neuter and wherever a singular pronoun is used, it shall include
the plural, unless the context clearly indicates otherwise. Whenever the
following terms are used in the Plan, they shall have the meaning specified
below, unless the context clearly indicates to the contrary.

      "Board" shall mean the Board of Directors of the Company.

      "Cause" shall mean an Employee's willful failure to perform his duties
with the Company or a Subsidiary or the willful engaging in conduct which is
injurious to the Company or a Subsidiary, monetarily or otherwise, as determined
by the Committee in its sole discretion, provided that, if an Employee has
entered into an employment agreement with the Company or a Subsidiary, the
definition, if any, set forth in such agreement shall be substituted for the
above.

      "Change in Control" shall mean:

            (a) any "person," as such term is defined in Sections 13(d) and
14(d) of the Exchange Act, other than the Company, any Subsidiary, Raul Alarcon
Jr. (or his spouse, heirs, assigns, legatees or trust for Mr. Alarcon's or any
of the foregoing's benefit) or any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any Subsidiary, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities;

            (b) during any two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director, whose
election by the Board or nomination for election by the Company's shareholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board;

            (c) the stockholders of the Company approve a merger or
consolidation of the Company with any other company other than (i) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than eighty percent (80%) of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities; or
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            (d) the stockholders of the Company adopt a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

      "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.

      "Committee" shall mean the Compensation Committee of the Board, appointed
as provided in Section 5.1, or, if no such Committee has been appointed, the
Board.

      "Company" shall mean Spanish Broadcasting System, Inc., a Delaware
corporation, and any successor corporation.

      "Designated Beneficiary" shall mean any individual designated by an
Optionee, in a manner determined by the Committee, to receive amounts due the
Optionee in the event of the Optionee's death. In the absence of an effective
designation by the Optionee, Designated Beneficiary shall mean the Optionee's
estate.

      "Director" shall mean a member of the Board.

      "Employee" shall mean any employee (including any officer whether or not a
Director) of the Company, or of any corporation which is then a Subsidiary, who
has been designated by the Board to participate in the Plan.

      "Early Retirement" shall mean an Employee's retirement from active
employment with the Company or a Subsidiary in accordance with the early
retirement provisions of a pension plan maintained by the Company or a
Subsidiary, provided that, if no such plan is in existence, it shall mean the
attainment of age fifty-five (55) and the completion of fifteen (15) years of
service.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

      "Fair Market Value" per Share as of a particular date shall mean, unless
otherwise determined by the Committee:

            (a) the closing sales price per Share on a national securities
exchange for the preceding ten days on which there was a sale of Shares on such
exchange; or

            (b) if clause (a) does not apply and the Shares are then quoted on
the National Association of Securities Dealers Automated Quotation system
("NASDAQ"), the closing price per Share as reported on NASDAQ for the preceding
ten (10) days on which a sale was reported; or

            (c) if neither clause (a) or (b) applies and the Shares are then
traded on an over-the-counter market, the average of the closing bid and asked
prices for the Shares in such over-the-counter market for the preceding ten (10)
days on which such bid and asked prices were quoted; or

            (d) if the Shares are not then listed on a national securities
exchange or traded in an over-the-counter market, such value as the Committee,
in its sole discretion, may determine.

      "Incentive Stock Option" shall mean an Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.

      "Nonqualified Stock Option" shall mean an Option that is not an Incentive
Stock Option.

      "Normal Retirement" shall mean an Employee's retirement from active
employment with the Company or a Subsidiary in accordance with the normal
retirement provisions of a pension plan maintained by the Company or a
Subsidiary, provided that, if no such plan exists, it shall mean retirement on
or after attainment of age sixty-five (65).
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      "Option" shall mean an option to purchase Shares granted pursuant to
Section 4.1.

      "Option Agreement" shall mean an Option Agreement, substantially in the
form attached hereto as Exhibit A, to be entered into between the Company and an
Optionee, which shall set forth the terms and conditions of the Options granted
to such Optionee.

      "Optionee" shall mean an Employee to whom an Option has been granted
pursuant to the Plan.

      "Permanent Disability" shall mean a physical or mental incapacity that
renders an Optionee incapable of engaging in any substantial gainful employment,
or that has lasted for a continuous period of no less than six consecutive
months, or six months in any twelve-month period, as determined by the Committee
in good faith in its sole discretion, provided that, if an Employee has entered
into an employment agreement with the Company or a Subsidiary, the definition
set forth in such agreement shall be substituted for the above definition. All
determinations as to the date and extent of disability of any Optionee shall be
made by the Committee upon the basis of such evidence as it deems necessary or
desirable.

      "Plan" shall mean the Spanish Broadcasting System 1999 Stock Option Plan,
as amended from time to time.

      "Retirement" shall mean an Optionee's (a) Early Retirement which the
Committee, in its sole discretion, has determined should be treated as a
Retirement for purposes of the Plan, or (b) Normal Retirement.

      "Securities Act" shall mean the Securities Act of 1933, as amended.

      "Share" shall mean a share of the Company's Class A common stock, .0001
par value per share.

      "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company, if each such corporation (other than
the last corporation in the unbroken chain), or if each group of commonly
controlled corporations, then owns fifty percent (50%) or more of the total
combined voting power in one of the other corporations in such chain.

      "Ten-Percent Stockholder" shall mean an Employee, who, at the time an
Incentive Stock Option is to be granted to him, 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 a
Subsidiary (or, if applicable, a parent corporation within the meaning of
Section 424(e) of the Code).

      "Termination of Employment" shall mean the Employee's termination of
employment for any reason whatsoever, excluding any termination where there is a
simultaneous reemployment by either the Company or a Subsidiary, provided that,
if a corporation that is a Subsidiary ceases to be a Subsidiary as a result of a
sale of stock, such sale shall be deemed to be a Termination of Employment of
the Optionees who were employed by such corporation immediately prior to such
sale.

3.    ELIGIBILITY.

      Any Employee (whether or not a Director) who is an officer or who is
designated by the Committee as a key Employee shall be eligible to be granted
Options under the Plan.

4.    TERMS OF OPTIONS.

      4.1   TERMS OF OPTIONS.

            (a) Price. The exercise price for the Shares subject to an Option,
or the manner in which such exercise price is to be determined, shall be
determined by the Committee, provided that, the exercise price per Share
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of any Incentive Stock Option shall not be less than 100% of the Fair Market
Value of a Share as of the date the Option is granted (110% in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder).

            (b) Term. Options shall be for such term as the Committee shall
determine, provided that no Option shall be exercisable after the expiration of
ten years from the date it is granted (five years in the case of an Incentive
Stock Option granted to a Ten-Percent Stockholder).

            (c) Vesting. Options shall be exercisable in such installments
(which need not be equal) and at such times as the Committee may designate, as
set forth in an Option Agreement. To the extent not exercised, installments
shall accumulate and may be exercised, in whole or in part, at any time after
becoming exercisable, but not later than the date the Option expires. The
Committee may accelerate the exercisability of an Option at any time.
Notwithstanding the foregoing, any Options that are not exercisable prior to a
Change in Control shall become exercisable on the date of such Change in Control
and shall remain exercisable for the remainder of their Term.

            (d) Exercise of Option After Termination of Employment.

                  Subject to the terms of any written employment agreement and
reflected in an option agreement, an Option granted under the Plan is
exercisable by an Optionee only while he is an Employee, provided that any
Options that are exercisable preceding an Optionee's Termination of Employment
for any reason other than Cause, shall remain exercisable for the following
period.

                  (i) If the Optionee dies while an Employee, or if his
Termination of Employment is due to Permanent Disability or Retirement, the
Optionee (or his Beneficiary or personal representative, as applicable) may
exercise the Option no later than twelve (12) months after such death or
determination;

                  (ii) If the Optionee's Termination of Employment is for any
reason other than those set forth in (i) above and is not for Cause, the
Optionee may exercise the Option within three months after such termination; or

                  (iii) If the Optionee dies during a period described in (i) or
(ii) above, his Beneficiary may exercise such Option no later than the
expiration of such extended period;

                  (iv) Notwithstanding (i) through (iii) above or anything in an
Option Agreement or the Plan to the contrary, at any time after the grant of an
Option, the Committee, in its sole and absolute discretion and subject to
whatever terms and conditions it selects, may provide that an Option may be
exercised after the relevant extended period set forth above, but in no event
later than the date that it would have expired under the Option Agreement.

      4.2   NONTRANSFERABILITY.

            No Option granted hereunder shall be transferable by the Optionee to
whom granted otherwise than by will or the laws of descent and distribution, and
an Option may be exercised during the lifetime of such Optionee only by the
Optionee or his guardian or legal representative; provided, however that an
Optionee may designate a Beneficiary to exercise his Option or other rights
under the Plan after his death and, in the discretion of the Committee, Options
may be transferable pursuant to a Qualified Domestic Relations Order ("QDRO"),
as determined by the Committee or its designee.

      4.3   METHOD OF EXERCISE.

            An Option shall be exercised by delivery of a written notice (in
person or by first class mail to the Secretary of the Company at the Company's
principal executive office) which specifies the number of Shares to be purchased
and is accompanied by full payment therefor and otherwise in accordance with the
Option Agreement pursuant to which the Option was granted. The purchase price
for any Shares purchased pursuant to the exercise of an
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Option shall be paid in full upon such exercise in cash, by check or, at the
discretion of the Committee and upon such terms and conditions as the Committee
shall approve, by transferring previously owned Shares to the Company, having
Shares withheld or exercising pursuant to a "cashless exercise" procedure, or
any combination thereof. Any Shares transferred to the Company as payment of the
purchase price under an Option shall be valued at their Fair Market Value on the
date of exercise of such Option. If requested by the Committee, the Optionee
shall deliver the Option Agreement evidencing the Option to the Secretary of the
Company who shall endorse thereon a notation of such exercise and return such
Option Agreement to the Optionee. Not less than one hundred (100) Shares may be
purchased at any time upon the exercise of an Option unless the number of Shares
so purchased constitutes the total number of Shares then purchasable under the
Option or the Committee determines otherwise, in its sole discretion.

5.    ADMINISTRATION.

      5.1   COMPOSITION OF COMPENSATION COMMITTEE.

            The Plan shall be administered by the Committee, which shall consist
of at least two individuals appointed by and serving at the pleasure of the
Board, provided that each Committee member must qualify as an "outside director"
as such term is used in Section 162(m) of the Code, unless the Board determines
otherwise, in its sole discretion. All Committee members shall be members of the
Board. Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering thirty (30)
days advance written notice to the Board and may be removed by the Board at any
time for any reason. Vacancies in the Committee shall be filled by the Board. If
no Committee has been appointed, the Plan shall be administered by the Board
acting by a majority of the Board. In such case, the Board shall have all the
powers and duties as would have been delegated to the Committee hereunder.

      5.2   DUTIES AND POWERS OF COMMITTEE.

            (a) Subject to the provisions hereof, the Committee shall have (a)
the sole and complete authority to determine which Employees shall be granted
options, the number of Shares to be covered by each Option, the exercise price
therefor and the terms and conditions applicable to the exercise of the Option,
(b) the authority to grant Incentive Stock Options, Nonqualified Stock Options
or both. In the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and shall comply with Section 422 of the Code
and any rules or regulations promulgated thereunder, including the requirement
that the aggregate Fair Market Value (determined as of the date of grant) of the
Shares granted under the Plan and all other option plans of the Company and any
Subsidiary (and, if applicable, any parent corporation, within the meaning of
Section 424(e) of the Code) that become exercisable by an Optionee during any
calendar year shall not exceed $100,000. To the extent that the limitation set
forth in the preceding sentence is exceeded for any reason (including the
acceleration of the time for exercise of an Option), the Options with respect to
such excess amount shall be treated as Nonqualified Stock Options.

            (b) It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its terms and provisions. The
Committee shall have the power to interpret the Plan and to adopt such rules for
the administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. All actions taken
and all interpretations and determinations made by the Committee shall be
binding upon all persons, including, but not limited to, the Company,
stockholders, all Subsidiaries, Employees, Directors, Optionees and Designated
Beneficiaries.

      5.3   COMMITTEE ACTIONS.

            The Committee shall act by a majority of its members in office in
attendance at a meeting at which a quorum is present or by a memorandum or other
written instrument signed by all of the members of the Committee.
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      5.4   COMPENSATION; PROFESSIONAL ASSISTANCE.

            Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, or other persons. The Committee, the Company and its officers and
Directors shall be entitled to rely upon the advice, opinions or valuations of
any such persons.

      5.5   DELEGATION OF AUTHORITY.

            The Committee may, in its sole and absolute discretion, delegate to
any proper officer of the Company, or more than one of them, any or all of the
administrative duties of the Committee under this Plan.

      5.6   NO LIABILITY.

            No member of the Board or the Committee, or Director, officer of the
Company or other Employee shall be liable, responsible or accountable in damages
or otherwise for any determination made or other action taken or any failure to
act by such person with respect to the Plan so long as such person is not
determined to be guilty by a final adjudication of willful misconduct with
respect to such determination, action or failure to act.

      5.7   INDEMNIFICATION.

            To the fullest extent permitted by law, each member of the Board and
the Committee and each Director, officer of the Company or Employee shall be
held harmless and be indemnified by the Company for any liability, loss
(including amounts paid in settlement), damages or expenses (including
reasonable attorneys' fees) suffered by virtue of any determinations, acts or
failures to act, or alleged acts or failures to act, in connection with the
administration of the Plan so long as such person is not determined by a final
adjudication to be guilty of willful misconduct with respect to such
determination, action or failure to act.

6.    SHARES SUBJECT TO THE PLAN.

      6.1   SHARES SUBJECT TO THE PLAN.

            The maximum number of Shares that may be issued upon the exercise of
Options granted under the Plan is 3,000,000. The Company shall reserve such
number of Shares 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. In the event that an Option expires or is terminated unexercised as to
any Shares covered thereby, or is canceled or forfeited for any reason under the
Plan without the delivery of Shares, or any Restricted Shares are forfeited for
any reason, such Shares shall thereafter be again available for award pursuant
to the Plan. The maximum number of Shares that may be granted to an Optionee in
any year is 250,000.

      6.2   EFFECT OF CHANGES IN COMPANY'S SHARES.

            In the event that the Committee determines that any stock dividend,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Shares at a price substantially below fair market
value, or other similar corporate event affects the Shares such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under the Plan, the Committee shall, in its sole
discretion, and in such manner as the Committee may deem equitable, adjust any
or all of (a) the number and kind of shares subject to outstanding Options, and
(b) the exercise price with respect to any outstanding Option and/or, if deemed
appropriate, make provision for a cash payment to an Optionee, provided,
however, that the number of Shares subject to any Option shall always be a whole
number.
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7.    MISCELLANEOUS.

      7.1   EFFECTIVE DATE; TERM OF PLAN.

            The Plan has been approved by the Board and by the Company's
stockholders, and shall be effective as of the date of Board approval (the
"Effective Date"). The Plan shall continue in effect until ten years after the
date it was approved by the Company's stockholders.

      7.2   AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.

            The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board. Neither
the amendment, suspension nor termination of the Plan shall, without the consent
of an Optionee, alter or impair any rights or obligations under any option
theretofore granted. No Options may be granted during any period of suspension
nor after termination of the Plan, and in no event may any Options be granted
under the Plan after September 30, 2009.

      7.3   AMENDMENT OF OPTION.

            The Committee may amend, modify or terminate any outstanding Option
with the Optionee's consent at any time prior to payment or exercise in any
manner not inconsistent with the terms of the Plan, including without
limitation, (a) to change the date or dates as of which an Option becomes
exercisable or Restricted Shares become vested, or (b) to cancel and reissue an
Option under such different terms and conditions as it determines appropriate.

      7.4   NO RIGHTS AS STOCKHOLDER.

            No holder of an Option shall be deemed to be or to have the rights
and privileges of an owner of Shares unless and until certificates representing
such Shares have been issued to such holder.

      7.5   EFFECT OF PLAN UPON OTHER COMPENSATION AND INCENTIVE PLANS.

            The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan
shall be construed to limit the right of the Company or any Subsidiary to
establish any other forms of incentives or compensation for Employees.

      7.6   REGULATIONS AND OTHER APPROVALS.

            (a) The obligation of the Company to sell or deliver Shares with
respect to Options 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.

            (b) 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 the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder for Employees granted Incentive Stock
Options.

            (c) Each Option is subject to the requirement that, if at any time
the Committee determines, in its sole 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 the issuance of
Shares, no Options shall be granted 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.

            (d) 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, and is not otherwise exempt from such registration, such
<PAGE>   8
Shares shall be restricted against transfer to the extent required by the
Securities Act or regulations thereunder, and the Committee may require any
individual receiving Shares pursuant to the Plan, as a condition precedent to
receipt of such Shares, to represent to the Company in writing that the Shares
acquired by such individual are acquired for investment only and not with a view
to distribution. The certificate for any Shares acquired pursuant to the Plan
shall include any legend that the Committee deems appropriate to reflect any
restrictions on transfer.

      7.7   GOVERNING 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 New York
without giving effect to the choice of law principles thereof.

      7.8   WITHHOLDING OF TAXES.

            As a condition to the exercise of an Option and the continued
holding of shares received upon exercise of an Option, to the extent required by
law, no later than the date as to which an amount first becomes includible in
the gross income of an Optionee for federal income tax purposes with respect to
any award granted under the Plan, the Optionee shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any federal,
state, or local taxes of any kind required by law or the Company to be withheld
with respect to such amount. The obligations of the Company under the Plan shall
be conditional on such payment or arrangements and the Company and its
Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Optionee. In its
discretion, the Committee may permit an Optionee to satisfy withholding
obligations by delivering previously owned Shares or by electing to have Shares
withheld.

      7.9   NO RIGHT TO CONTINUED EMPLOYMENT.

            Nothing in the Plan or in any award agreement shall confer upon any
Employee any right to continue in the employ of the Company or any Subsidiary or
shall interfere with or restrict in any way the right of the Company and its
Subsidiaries, which are hereby expressly reserved, to remove, terminate or
discharge any Employee at any time for any reason whatsoever, with or without
Cause.

      7.10  TITLES; CONSTRUCTION.

            Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of the Plan. The masculine pronoun
shall include the feminine and neuter and the singular shall include the plural,
when the context so indicates.
<PAGE>   9
                                    EXHIBIT A

                         FORM OF STOCK OPTION AGREEMENT


            THIS AGREEMENT, dated as of __________, is made by and between
Spanish Broadcasting System, Inc. a Delaware corporation (the "Company") and
__________ (the "Optionee").

            WHEREAS, the Optionee has been selected by the Committee to receive
a grant of stock options under the Spanish Broadcasting System 1999 Stock Option
Plan (the "Plan").

            NOW, THEREFORE, in consideration of the Optionee's employment with
the Company, the Company and the Optionee agree as follows:

      1.    Definitions.

            Any capitalized term not defined herein shall have the meaning set
forth in the Plan.

      2.    Grant of Option.

            (a) Grant; Grant Date. Subject to the terms and conditions hereof,
the Company hereby grants to the Optionee as of _________ (the "Grant Date") an
option to purchase up to _________ Shares at an exercise price of $_________ per
Share.

            (b) Adjustments in Option. In the event that the outstanding Shares
subject to the Option are changed into or exchanged for a different number or
kind of shares or securities of the Company, or of another corporation, by
reason of reorganization, merger or other subdivision, consolidation,
recapitalization, reclassification, stock split, issuance of warrants, stock
dividend or combination of shares or similar event, the Committee shall make an
appropriate and equitable adjustment in the Option so that the Optionee's
proportionate interest shall be maintained as before the occurrence of such
event, provided that any such adjustment shall be consistent with the provisions
of the Optionee's employment agreement, if applicable.

            (c) Form of Option. [Committee must determine whether options are to
be Incentive Stock Options, Nonqualified Stock Options, or a combination
thereof, and this provision must so state.]

            (d) Term. The Option shall expire on the tenth anniversary of the
Grant Date, unless terminated earlier by the Committee.

            (e) Vesting. The Option shall become exercisable [Committee
determines timing for each Optionee.]

            (f) Exercise. The Optionee may exercise an Option in whole or in
part at any time by delivering written notice of such exercise to the Secretary
of the Company of the number of Shares as to which the Option is being
exercised, and enclosing payment for the Shares with respect to which the Option
is being exercised. Such payment shall be in cash or by check, or if approved by
the Committee, by the delivery of Shares previously owned by the Employee, duly
endorsed for transfer to the Company, with a Fair Market Value on the date of
delivery equal to the aggregate purchase price of the Shares with respect to
which the Option is being exercised, or pursuant to a "cashless exercise," or
any combination of the foregoing approved by the Committee, in its sole
discretion. Partial exercise shall be for whole Shares only and shall not be for
less than one hundred (100) Shares unless the number of Shares purchased
constitutes the total number of Shares then remaining subject to the Option or
the Committee permits such smaller exercise in its sole discretion.
<PAGE>   10
            (g) Exercise Following Termination of Employment. In the event the
Optionee's Termination of Employment is for Cause, the Option, whether
exercisable or nonexercisable, at such time, shall be deemed to have terminated
as of the day preceding such Termination of Employment. If such Termination of
Employment is for any reason other than cause, any outstanding portion of the
Option that has not become exercisable shall terminate on the date of such
Termination of Employment, unless provided otherwise by the Board, in its sole
discretion. Any outstanding exercisable portion shall be exercisable for the
following periods:

                        (A)   If the Optionee's Termination of Employment is
due to death, Permanent Disability, or Retirement, the Option shall be
exercisable by the Optionee (or his personal representative or Beneficiary) for
the shorter of twelve (12) months following the date of such Termination of
Employment or the remainder of its original term.

                        (B) In all other cases, the Option shall be exercisable
for the shorter of three months following such Termination of Employment, or the
remainder of its original term.

            (h) Nontransferability. The Option shall not be transferable other
than by will or the laws of descent and distribution, and no transfer so
effected shall be effective to bind the Company unless the Company has been
furnished with written notice thereof and a copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and
conditions of the Option, provided, however, that, in the discretion of the
Committee, Options may be transferred pursuant to a Qualified Domestic Relations
Order (within the meaning of the Code).

            (i) Conditions to Issuance of Stock Certificates.

                  (i) The Shares deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued Shares or
issued Shares which have been reacquired by the Company. Such Shares shall be
fully paid and non-assessable. The stock certificates evidencing the Shares
shall bear such legends restricting transferability as the Committee deems
necessary or advisable.

                  (ii) The Company shall not be required to issue or deliver any
certificate or certificates for Shares deliverable upon any exercise of the
Option prior to fulfillment of all of the following conditions:

                        (A) The completion of any registration or other
qualification of such Shares under any state or federal law or under rulings or
regulations of the Securities and Exchange Commission or of any other
governmental regulatory body, or the obtaining of approval or other clearance
from any state or federal governmental agency which the Committee shall, in its
sole discretion, deem necessary or advisable.

                        (B) If, in its sole discretion, the Committee deems it
necessary or advisable, the execution by the Employee of a written
representation and agreement, in a form satisfactory to the Committee, in which
the Optionee represents that the Shares acquired by him upon exercise are being
acquired for investment and not with a view to distribution thereof.

            (j) Rights as Stockholder. The Optionee shall not be, nor have any
of the rights or privileges of, a stockholder of the Company in respect of any
Shares purchasable upon the exercise of the Option unless and until certificates
representing such Shares have been issued by the Company.

      3.    Miscellaneous.

            (a) Administration. The Committee shall have the power to interpret
the Plan and this Agreement, and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Committee shall be final and binding upon the
Optionee, the Company, and all other interested persons.
<PAGE>   11
            (b) Withholding of Taxes. No later than the date as of which an
amount first becomes includible in the gross income of the Optionee for federal
income tax purposes with respect to the grant of the Option under this
Agreement, the Optionee shall pay to the Company, or the Optionee (or his
Designated Beneficiary) shall make arrangements satisfactory to the Company
regarding the payment of, any federal, state, or local taxes of any kind
required by law or the Company to be withheld with respect to such amount. The
obligations of the Company under this Agreement shall be conditioned on such
payment or arrangements, and the Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Optionee.

            (c) No Right to Continued Employment. Nothing in this Agreement or
in the Plan shall confer upon the Optionee any right to continue in the employ
of the Company or shall interfere with or restrict in any way the rights of the
Company, which are hereby expressly reserved, to discharge the Optionee at any
time for any reason whatsoever, with or without cause.

            (d) Entire Agreement; Amendment. This Agreement, and the Plan,
constitute the entire agreement between the parties with respect to the subject
matter hereof, and supersedes all prior agreements and understandings between
the parties with respect to such subject matter. Any term or provision of this
Agreement may be waived at any time by the party which is entitled to the
benefits thereof, and any term or provision of this Agreement may be amended or
supplemented at any time by the mutual consent of the parties hereto, except
that any waiver of any term or condition, or any amendment, of this Agreement
must be in writing.

            (e) Governing Law. The laws of the State of New York shall govern
the interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflict of
laws.

            (f) Successors. This Agreement shall be binding upon and inure to
the benefit of the successors, assigns and heirs of the respective parties.

            (g) Notices. All notices or other communications made or given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by registered or certified mail, return
receipt requested, to those listed below at their following respective addresses
or at such other address as each may specify by notice to the others:

                  To the Optionee:
                  --------------------
                  --------------------
                  --------------------

                  To the Company:
                  Spanish Broadcasting System, Inc.
                  3191 Coral Way
                  Miami, Florida  33145
                  Attention:  Joseph A. Garcia

                  Copy to:
                  Kaye, Scholer, Fierman, Hays & Handler, LLP
                  425 Park Avenue
                  New York, New York  10022
                  Attention:  William E. Wallace, Jr., Esq.

            (h) Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
<PAGE>   12
            (i) Conflict with the Plan. In the event of any conflict or
inconsistency between the provisions of this Agreement and the Plan, the
provisions of the Plan shall control.

            (j) Injunctive Relief. The Optionee acknowledges and agrees that a
violation of Section 2(h) hereof will cause the Company irreparable injury for
which adequate remedy at law is not available. Accordingly, the Optionee agrees
that the Company shall be entitled to an injunction, restraining order or other
equitable relief to prevent the breach of such provisions and to enforce the
terms and provisions hereof in any court of competent jurisdiction in the United
States or any state thereof, in addition to any other remedy to which it may be
entitled at law or equity.

            (k) Titles; Construction. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Agreement. The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, when the context so indicates.

            IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.


                                           Spanish Broadcasting System, Inc.


                                           By_________________________________
                                              Name:
                                              Title:

                                           OPTIONEE



                                           ___________________________________