Document:

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                                                                   EXHIBIT 10.14

                                             REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT dated as of October 2, 1999 (this
"Agreement"), among CLEAR CHANNEL COMMUNICATIONS, INC., a Texas corporation (the
"Issuer"), and the other persons set forth on the signature pages hereto
(including such persons' permitted transferees, the "Holders").

                                  WITNESSETH:

     WHEREAS, this Agreement is being entered into in connection with the
closing under the Merger Agreement referred to below.

     NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

     Section 1.1  Definitions. Terms defined in the Agreement and Plan of
Merger, dated as of October 2, 1999 (the "Merger Agreement"), among the Issuer,
CCU Merger Sub, Inc., a Delaware corporation wholly owned by the Issuer, and
AMFM Inc., a Delaware corporation (the "Company"), are used herein as defined
therein. In addition, the following terms, as used herein, shall have the
following respective meanings:

     "Commission" shall mean the Securities and Exchange Commission or any
successor governmental body or agency.

     "Common Stock" shall mean the common stock, par value $.10 per share, of
the Issuer.

     "Demand Registration" shall have the meaning ascribed thereto in Section
2.1(a).

     "Demand Request" shall have the meaning ascribed thereto in Section 2.1(a).

     "Disadvantageous Condition" shall have the meaning ascribed thereto in
Section 2.4.

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

     "Excluded Registration" shall mean the sale of any securities pursuant to a
registration statement that is not a firmly underwritten offering of Common
Stock.

     "HMTF" shall mean Hicks, Muse, Tate & Furst Incorporated, a Delaware
corporation.

     "Holders' Agent" shall have the meaning ascribed thereto in Section 4.11.

     "Holder" shall mean each of the Persons who are listed as signatories
hereto other than the Issuer and their Included Transferees.

     "Included Transferee" shall mean any transferee in a Significant
Disposition, as well as any subsequent transferees to the extent such subsequent
transferees received shares in the manner set forth in the definition of
"Significant Disposition," but in each case only with respect to shares of
Registrable Securities received in a Significant Disposition.

     "Person" shall mean any natural person, firm, individual, business trust,
association, corporation, partnership, joint venture, company, unincorporated
entity or other entity.

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     "Registrable Securities" shall mean Common Stock acquired by the initial
Holders pursuant to the Merger (and any shares of stock or other securities into
which or for which such Common Stock may hereafter be changed, converted or
exchanged and any other shares or securities issued to Holders of such Common
Stock (or such shares of stock or other securities into which or for which such
shares are so changed, converted or exchanged) upon any reclassification, share
combination, share subdivision, share dividend, share exchange, merger,
consolidation or similar transaction or event). The Person that issues the
Registrable Securities shall be the "Issuer" hereunder. As to any particular
Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities as soon as (i) such Registrable Securities have been sold
or otherwise disposed of pursuant to a registration statement that was filed
with the Commission in accordance with this Agreement and declared effective
under the Securities Act, (ii) such Registrable Securities shall have been
otherwise sold, transferred or disposed of by a Holder to any Person that is not
a Holder, or (iii) such Registrable Securities shall have ceased to be
outstanding. Any shares of Common Stock received by an Included Transferee
pursuant to a Significant Disposition shall be deemed "Registrable Securities"
for purposes of this Agreement.

     "Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article 2, including, without limitation, (i) the fees, disbursements and
expenses of the Issuer's counsel and accountants (including in connection with
the delivery of opinions and/or comfort letters) in connection with this
Agreement and the performance of the Issuer's obligations hereunder; (ii) all
expenses, including filing fees, in connection with the preparation, printing
and filing of one or more registration statements hereunder; (iii) the cost of
printing or producing any agreements among underwriters, underwriting
agreements, and blue sky or legal investment memoranda; (iv) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the securities to be
disposed of; (v) transfer agents' and registrars' fees and expenses in
connection with such offering; (vi) all security engraving and security printing
expenses; and (vii) all fees and expenses payable in connection with the listing
of the Registrable Securities on any securities exchange or automated
interdealer quotation system on which the Common Stock is then listed; provided
that Registration Expenses shall exclude (x) all underwriting discounts and
commissions, selling or placement agent or broker fees and commissions, and
transfer taxes, if any, in connection with the sale of any securities, (y) the
fees and expenses of counsel for any Holder and (z) all costs and expenses of
the Issuer incurred as contemplated in Section 2.6(g).

     "Rule 144" shall mean Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.

     "Rule 415 Offering" shall mean an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect)  -- promulgated
under the Securities Act.

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

     "Selling Holder" shall mean any Holder who sells Registrable Securities
pursuant to a public offering registered hereunder.

     "Shareholders Agreement" shall mean that certain Shareholders Agreement
dated the date hereof among the Issuer, L. Lowry Mays and the Holders and the
other Persons named therein.

     "Significant Disposition" means any sale, exchange, disposition or other
transfer to one Person to the extent that (a) such sale, exchange, disposition
or transfer involves at least a majority of all the Registrable Securities then
held by the initial Holders and (b) the value of the Registrable Securities
received by such transferees was at least $2,000,000,000 based on the closing
price of the Common Stock on the trading day immediately preceding the day of
such sale, exchange, distribution, disposition or other transfer. If a
transferee of Common Stock in a Significant Disposition makes a subsequent
disposition or transfer of the entire amount of securities received as set forth
above in a single transaction to one Person, such transferee (but not more than
one Person) shall be deemed an Included Transferee and shall have

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the rights of a Holder under this Agreement, and any subsequent transferee (but
not more than one Person) of such entire block of shares of Common Stock shall
be deemed an Included Transferee and shall have rights of a Holder under this
Agreement.

     "Termination Date" shall have the meaning set forth in Article 3.

     Section 1.2  Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement, and references to the
parties shall mean the parties to this Agreement.

                                   ARTICLE 2

                              REGISTRATION RIGHTS

     Section 2.1  Demand Registration.

     (a) Upon written notice to the Issuer prior to the Termination Date from a
Holder or Holders holding a majority in interest of the Registrable Securities
(the "Demand Request") requesting that the Issuer effect the registration under
the Securities Act of any or all of the Registrable Securities held by such
requesting Holders (the "Requesting Holders" which term shall include parties
deemed "Requesting Holders" pursuant to Section 2.1(d)) in a firmly underwritten
public offering, the Issuer shall prepare as soon as practicable and, within 30
days after such request, file with the Commission a registration statement with
respect to such Registrable Securities and thereafter use its reasonable best
efforts to cause such registration statement to be declared effective under the
Securities Act within 45 days after the filing of such registration statement. A
registration effected pursuant to a Demand Request pursuant to this Section
2.1(a) shall be referred to herein as a "Demand Registration." Notwithstanding
any other provision of this Agreement to the contrary:

          (i) the Holders may collectively exercise their rights to request
     Demand Registrations on not more the one occasion in any 12-month period;

          (ii) the method of disposition requested by Holders in connection with
     any Demand Registration may not, without the Issuer's written consent, be a
     Rule 415 Offering; and

          (iii) the Issuer shall not be required to effect a Demand Registration
     hereunder unless the aggregate offering size for such offering is at least
     $500 million.

     (b) Notwithstanding any other provision of this Agreement to the contrary,
a Demand Registration requested by Holders pursuant to this Section 2.1 shall
not be deemed to have been effected, and, therefore, not requested and the
rights of each Holder shall be deemed not to have been exercised for purposes of
paragraph (a) above, if (i) such Demand Registration has not become effective
under the Securities Act or (ii) such Demand Registration, after it became
effective under the Securities Act, was not maintained effective under the
Securities Act (other than as a result of any stop order, injunction or other
order or requirement of the Commission or other government agency or court
solely on the account of a material misrepresentation or omission of a Holder)
for at least 90 days (or such shorter period ending when all the Registrable
Securities covered thereby have been disposed of pursuant thereto) and, as a
result thereof, the Registrable Securities requested to be registered cannot be
distributed in accordance with the plan of distribution set forth in the related
registration statement. So long as a Demand Request is made by the Holders prior
to the Termination Date, the Holders shall not lose their right to their Demand
Registration under Section 2.1(a) if the Demand Registration related to such
Demand Request is delayed or not effected in the circumstances set forth in this
Section 2.1(b) or Section 2.4.

     (c) The Issuer shall have the right to cause the registration of additional
equity securities for sale for the account of the Issuer or any other Person to
whom the Issuer has granted registration rights from time to time, in the
registration of Registrable Securities requested by the Holders pursuant to
Section 2.1(a)

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above, provided that if such Holders are advised in writing (with a copy to the
Issuer) by the lead or managing underwriter referred to in Section 2.3(b) that,
in such underwriter's good faith view, all or a part of such Registrable
Securities and additional equity securities cannot be sold and the inclusion of
such Registrable Securities and additional equity securities in such
registration would be likely to have an adverse effect on the price, timing or
distribution of the offering and sale of the Registrable Securities and
additional equity securities then contemplated (referred to herein as a
"Material Adverse Effect"), then the number of securities that can, in the good
faith view of such underwriter, be sold in such offering without so adversely
affecting such offering shall be allocated as follows: (i) first, all securities
the Holders propose to register and (ii) thereafter, the securities to be
registered for the account of the Issuer and/or securities requested to be
registered for the account of other Persons entitled to participate, in such
proportions determined by the Issuer in its discretion or in accordance with
agreements between the Issuer and other Persons.

     (d) Within 7 days after delivery of a Demand Request by a Holder, the
Issuer shall provide a written notice to the Holders' Agent (which shall be
deemed notice to all the Holders), advising such Holder of its right to include
any or all of the Registrable Securities held by such Holder for sale pursuant
to the Demand Registration and advising such Holder of procedures to enable such
Holder to elect to so include Registrable Securities for sale in the Demand
Registration. Any Holder may, within 15 days of delivery to such Holder of a
notice pursuant to this Section 2.1(d), elect to so include all or any portion
of such Holder's Registrable Securities in the Demand Registration by written
notice to such effect to the Issuer specifying the number of Registrable
Securities desired to be so included by such Holder. All Holders requesting to
have their Registrable Securities included in a Demand Registration pursuant to
this Section 2.1(d) shall be deemed "Requesting Holders" for purposes of this
Article 2.

     Section 2.2  Piggyback Registrations.

     (a) Right to Piggyback. Each time the Issuer proposes to register any of
its equity securities (other than pursuant to an Excluded Registration) under
the Securities Act for sale to the public (whether for the account of the Issuer
or the account of any securityholder) or proposes to make such an offering of
equity securities (other than pursuant to an Excluded Registration) to the
public pursuant to a previously filed registration statement pursuant to Rule
415 under the Securities Act, the Issuer shall give prompt written notice to
each Holder of Registrable Securities (which notice shall be given not less than
10 days prior to the proposed initial filing date of the Issuer's registration
statement in the case of a non-Rule 415 Offering or the commencement of the
offering, in the case of a Rule 415 Offering), which notice shall offer each
such Holder the opportunity to offer any or all of its or his Registrable
Securities in such public offering. Each Holder who desires to sell its or his
Registrable Securities in such underwritten public offering shall so advise the
Issuer in writing (stating the number of Registrable Securities desired to be
registered or sold) within 5 days after the date of such notice from the Issuer.
Any Holder shall have the right to withdraw such Holder's request for inclusion
of such Holder's Registrable Securities in any offering pursuant to this Section
2.2(a) by giving written notice to the Issuer of such withdrawal. The Issuer may
at any time withdraw or cease proceeding with any such registration if it shall
at the same time withdraw or cease proceeding with the registration of all other
equity securities originally proposed to be registered. Except as provided
above, the Holders shall have no registration rights with respect to an Excluded
Registration.

     (b) Priority on Piggyback Registrations. The priority of shares to be
included on an offering pursuant to which the Holders have piggyback
registrations and as to which the underwriters have advised the Holders that a
Material Adverse Effect would be likely shall be as follows:

          (i) with respect to an offering initiated by the Issuer on its own
     behalf, first, to the Issuer, and second to the Holders and any other
     securityholders of the Issuer who have the right to include securities in
     such offering pro rata based on the number of shares proposed by such
     Persons to be included in the offering; and

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          (ii) with respect to an offering pursuant to demand registration
     rights of securityholders of the Issuer other than the Holders, first to
     the securityholders pursuant to their demand registration rights, second to
     the Issuer, and third, to the Holders and any other securityholders of the
     Issuer who have the right to include securities in such offering pro rata
     based on the number of shares proposed by the Holders and such other
     securityholders to be included in such offering.

If as a result of the provisions of this Section 2.2(b) any Holder shall not be
entitled to include all Registrable Securities in an offering that such Holder
has requested to be so included, such Holder may withdraw such Holder's request
to include Registrable Securities in such offering prior to completion of the
offering.

     (c) Limited Purpose Shelf Registration Statement. The Issuer shall prepare,
and file with the Commission one or more Registration Statements on Form S-3
under Rule 415 of the Securities Act covering the resale of the Registrable
Securities in an amount of shares to be mutually agreed by Issuer and Holders'
Agent from time to time, but such Registration Statement on Form S-3 shall be
restricted for use by the Holders only for participation pursuant to Section
2.2(a) in a firmly underwritten public offering of Common Stock proposed by the
Issuer for the account of the Issuer or the account of any other securityholder.

     Section 2.3  Other Matters In Connection With Registrations.

     (a) Each Holder shall keep the Holders' Agent informed promptly of (x) the
name, address and other contact information of such Holder, (y) the number of
Registrable Securities held from time-to-time by such Holder, and (z) each sale,
transfer or other disposition of Registrable Securities (including the number of
shares sold) by each such Holder. The Holders' Agent shall use its reasonable
best efforts to keep the Issuer informed promptly of (x) the name, address and
other contact information of each Holder, (y) the number of Registrable
Securities held from time-to-time by each such Holder and (z) each sale,
transfer or other disposition of Registrable Securities (including the number of
shares sold) by each such Holder.

     (b) The Issuer shall have the right to designate an underwriter or
underwriters as the lead or managing underwriters of any Demand Registration or
other registration who shall be reasonably acceptable to Holders owning a
majority of the Registrable Securities proposed to be sold therein.

     (c) No Holder may participate in any registration statement hereunder
unless such Person (x) agrees to sell such Person's Registrable Securities on
the basis provided in any underwriting arrangements approved by the Issuer and
(y) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, and other documents reasonably required under the terms
of such underwriting arrangements.

     Section 2.4  Certain Delay Rights. The Issuer may defer the filing or
effectiveness (but not the preparation) of a registration statement required by
Section 2.1 for a period not to exceed 120 days (or, if longer, 120 days after
the effective date of the registration statement contemplated by clause (ii) or
(iii) below) if (i) at the time the Issuer receives the Demand Request, the
Issuer or any of its Subsidiaries are engaged in confidential negotiations or
other confidential business activities, disclosure of which would be required in
such registration statement (but would not be required if such registration
statement were not filed), and the Board of Directors of the Issuer determines
in good faith that such disclosure would be materially detrimental to the Issuer
and its stockholders or would have a material adverse effect on any such
confidential negotiations or other confidential business activities, (ii) within
three (3) business days following its receipt of a Demand Request, the Issuer
decides to effect a public offering of the Issuer's securities for the Issuer's
account, or (iii) prior to the receipt of any Demand Request, another Person has
exercised demand registration rights and the Issuer has begun preparations or
planning for the offering (each of clauses (i), (ii) and (iii) referred to
herein as a "Disadvantageous Condition"). A deferral of the filing or
effectiveness of a registration statement pursuant to this Section 2.4

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shall be lifted, and the requested registration statement shall be filed
forthwith, if, in the case of a deferral pursuant to clause (i) of the preceding
sentence, the negotiations or other activities are disclosed or terminated, or,
in the case of a deferral pursuant to clause (ii) or (iii) of the preceding
sentence, the proposed offering for the Issuer's or another securityholder's
account is abandoned. In order to defer the filing or effectiveness of a
registration statement pursuant to this Section 2.4, the Issuer shall promptly
(but in any event within three (3) business days), upon determining to seek such
deferral, deliver to each Holder (whether by notice directly to such Holder or
through the Holders' Agent) a certificate signed by an executive officer of the
Issuer stating that the Issuer is deferring such filing pursuant to this Section
2.4 and a general statement of the reason for such deferral, and an
approximation of the anticipated delay. Within 20 days after receiving such
certificate, the holders of a majority of the Registrable Securities held by the
Requesting Holders and for which registration was previously requested may
withdraw such Demand Request by giving notice to the Issuer. If withdrawn, the
Demand Request shall be deemed not to have been made for all purposes of this
Agreement. The Issuer may defer the filing of a particular registration
statement pursuant to this Section 2.4 only once during any 12-month period.

     Section 2.5  Expenses. Except as provided herein, the Issuer shall be
responsible for all Registration Expenses with respect to each registration
hereunder, whether or not any registration statement becomes effective.
Notwithstanding the foregoing, (i) each Holder and the Issuer shall be
responsible for its own internal administrative and similar costs, which shall
not constitute Registration Expenses, (ii) each Holder shall be responsible for
all underwriting discounts and commissions, selling or placement agent or broker
fees and commissions, and transfer taxes, if any, in connection with the sale of
securities by such Holder, (iii) each Holder shall be responsible for the legal
fees and expenses of its own counsel; and (iv) the Issuer shall be responsible
for all out-of-pocket costs and expenses of the Issuer and its officers and
employees incurred in connection with providing the assistance and/or attending
analyst or investor presentations or any "road show" undertaken in connection
with the registration and/or marketing of any Registrable Securities as
contemplated in Section 2.6(g).

     Section 2.6  Registration and Qualification. If and whenever the Issuer is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Section 2.1, the Issuer shall as promptly as
practicable (but subject to the provisions of Section 2.1):

          (a) prepare, file and cause to become effective a registration
     statement under the Securities Act relating to the Registrable Securities
     to be offered in accordance with the intended method of disposition
     thereof;

          (b) prepare and file with the Commission such amendments and
     supplements to such registration statement and the prospectus used in
     connection therewith as may be necessary to keep such registration
     statement effective and to comply with the provisions of the Securities Act
     with respect to the disposition of all Registrable Securities until the
     earlier of (A) such time as all Registrable Securities proposed to be sold
     therein have been disposed of in accordance with the intended methods of
     disposition set forth in such registration statement and (B) the expiration
     of 90 days after such registration statement becomes effective, provided,
     that such 90-day period shall be extended for such number of days that
     equals the number of days elapsing from (x) the date the written notice
     contemplated by Section 2.6(e) below is given by the Issuer to (y) the date
     on which the Issuer delivers to the Holders of Registrable Securities the
     supplement or amendment contemplated by Section 2.6(e) below;

          (c) furnish to the Holders of Registrable Securities and to any
     underwriter of such Registrable Securities such number of conformed copies
     of such registration statement and of each such amendment and supplement
     thereto (in each case including all exhibits), such number of copies of the
     prospectus included in such registration statement (including each
     preliminary prospectus) in conformity with the requirements of the
     Securities Act and such documents incorporated by reference in such
     registration statement or prospectus as the Holders of Registrable
     Securities or such

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     underwriter may reasonably request (it being understood that, subject to
     Section 2.10 and the requirements of the Securities Act and applicable
     State securities law, the Issuer consents to the use of the prospectus and
     any amendment or supplement thereto by each Selling Holder and the
     underwriters in connection with the offering and sale of the Registrable
     Securities covered by the registration statement of which such prospectus,
     amendment to supplement is a part);

          (d) furnish to any underwriter of such Registrable Securities an
     opinion of counsel for the Issuer and a "cold comfort" letter signed by the
     independent public accountants who have audited the financial statements of
     the Issuer included in or incorporated by reference into the applicable
     registration statement, in each such case covering substantially such
     matters with respect to such registration statement (and the prospectus
     included therein) and the related offering as are customarily covered in
     opinions of issuer's counsel with respect thereto and in accountants'
     letters delivered to underwriters in underwritten public offerings of
     securities and such other matters as such underwriters may reasonably
     request;

          (e) promptly notify the Selling Holders and each underwriter in
     writing (i) when a prospectus or any prospectus supplement or
     post-effective amendment has been filed and, with respect to a registration
     statement or any post-effective amendment, when the same has become
     effective, (ii) of the issuance by any state securities or other regulatory
     authority of any order suspending the qualification or exemption from
     qualification of any of the Registrable Securities under state securities
     or "blue sky" laws or the initiation of any proceedings for that purpose,
     (iii) at any time when a prospectus relating to a registration pursuant to
     Section 2.1 is required to be delivered under the Securities Act, of the
     happening of any event as a result of which the prospectus included in such
     registration statement, as then in effect, includes an untrue statement of
     a material fact or omits to state any material fact required to be stated
     therein or necessary to make the statements therein, in light of the
     circumstances under which they were made, not misleading, and (iv) of any
     request by the Commission, or any other regulatory body or other body
     having jurisdiction, for any amendment or supplement to any registration
     statement or other document relating to such offering, and in either such
     case, at the request of the Selling Holders, promptly prepare and furnish
     to the Selling Holders a reasonable number of copies of a supplement to or
     an amendment of such prospectus as may be necessary so that, as thereafter
     delivered to the purchasers of such Registrable Securities, such prospectus
     shall not include an untrue statement of a material fact or omit to state a
     material fact required to be stated therein or necessary to make the
     statements therein, in light of the circumstances under which they are
     made, not misleading;

          (f) use its reasonable best efforts to list all such Registrable
     Securities covered by such registration on each securities exchange or
     automated interdealer quotation system on which the Common Stock is then
     listed;

          (g) use reasonable efforts to assist the Holders in the marketing of
     Common Stock in connection with up to five underwritten offerings hereunder
     (including, to the extent reasonably consistent with work commitments,
     using reasonable efforts to have officers of the Issuer attend "road shows"
     and analyst or investor presentations scheduled in connection with such
     registration), with all out-of-pocket costs and expenses incurred by the
     Issuer or such officers in connection with such attendance or assistance to
     be paid by the Issuer as provided in Section 2.5;

          (h) use its commercially reasonable efforts to register or qualify
     such Registrable Securities under such other securities or blue sky laws of
     such jurisdictions as the managing underwriter reasonably requests; use its
     commercially reasonable efforts to keep each such registration or
     qualification (or exemption therefrom) effective during the period in which
     such registration statement is required to be kept effective; and do any
     and all other acts and things which may be reasonably necessary or
     advisable to enable such Selling Holder to consummate the disposition of
     the Registrable Securities owned by such Selling Holder in such
     jurisdictions (provided, however, that the

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     Issuer will not be required to (A) qualify generally to do business in any
     jurisdiction where it would not otherwise be required to qualify but for
     this subparagraph or (B) consent to general service of process in any such
     jurisdiction);

          (i) make generally available to the Holders an earning statement
     satisfying the provisions of Section 11(a) of the Securities Act no later
     than 30 days after the end of the 12-month period beginning with the first
     day of the Issuer's first fiscal quarter commencing after the effective
     date of a registration statement, which earnings statement shall cover said
     12-month period, and which requirement will be deemed to be satisfied if
     the Issuer timely files complete and accurate information on Forms 10-Q,
     10-K and 8-K under the Exchange Act, and otherwise complies with Rule 158
     under the Securities Act;

          (j) if requested by the managing underwriter or any Selling Holder,
     promptly incorporate in a prospectus supplement or post-effective amendment
     such information as the managing underwriter or any Selling Holder
     reasonably requests to be included therein, including, without limitation,
     with respect to the Registrable Securities being sold by such Selling
     Holder, the purchase price being paid therefor by the underwriters and with
     respect to any other terms of the underwritten offering of the Registrable
     Securities to be sold in such offering, and promptly make all required
     filings of such prospectus supplement or post-effective amendment;

          (k) as promptly as practicable after filing with the Commission of any
     document which is incorporated by reference into a registration statement
     (in the form in which it was incorporated), deliver a copy of each such
     document to each Selling Holder;

          (l) provide a CUSIP number for the Registrable Securities included in
     any registration statement not later than the effective date of such
     registration statement;

          (m) cooperate with each Selling Holder and each underwriter
     participating in the disposition of such Registrable Securities and their
     respective counsel in connection with any filings required to be made with
     the National Association of Securities Dealers, Inc.;

          (n) prepare and file with the Commission promptly any amendments or
     supplements to such registration statement or prospectus which, in the
     opinion of counsel for the Issuer or the managing underwriter, is required
     in connection with the distribution of the Registrable Securities; and

          (o) advise each Selling Holder of such Registrable Securities,
     promptly after it shall receive notice or obtain knowledge thereof, of the
     issuance of any stop order by the Commission suspending the effectiveness
     of such registration statement or the initiation or threatening of any
     proceeding for such purpose and promptly use its best efforts to prevent
     the issuance of any stop order or to obtain its withdrawal at the earliest
     possible moment if such stop order should be issued.

     Section 2.7  Underwriting; Due Diligence.

     (a) If requested by the underwriters for any underwritten offering of
Registrable Securities pursuant to a registration requested under this Article
2, the Issuer shall enter into an underwriting agreement with such underwriters
for such offering, which agreement will contain such representations and
warranties by the Issuer and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 2.8, and
agreements as to the provision of opinions of counsel and accountants' letters
to the effect and to the extent provided in Section 2.6(d). Such underwriting
agreement shall also contain such representations and warranties by such Selling
Holders and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnification and contribution provisions substantially to
the effect and to the extent provided in Section 2.8.

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     (b) In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act pursuant
to this Article 2, the Issuer shall give the Holders' Agent and the
underwriters, if any, and their respective counsel and accountants (the identity
and number of whom shall be reasonably acceptable to the Issuer), such
reasonable and customary access to its books, records and properties and such
opportunities to discuss the business and affairs of the Issuer with its
officers and the independent public accounts who have certified the financial
statements of the Issuer as shall be necessary, in the opinion of such Holders
and such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act; provided that the
foregoing shall not require the Issuer to provide access to (or copies of) any
competitively sensitive information relating to the Issuer or its subsidiaries
or their respective businesses; provided further that (i) each Holder and the
underwriters and their respective counsel and accountants shall have entered
into a confidentiality agreement reasonably acceptable to the Issuer and (ii)
the Holders' Agent and the underwriters and their respective counsel and
accountants shall use their reasonable best efforts to minimize the disruption
to the Issuer's business and coordinate any such investigation of the books,
records and properties of the Issuer and any such discussions with the Issuer's
officers and accountants so that all such investigations occur at the same time
and all such discussions occur at the same time.

     Section 2.8  Indemnification and Contribution.

     (a) The Issuer agrees to indemnify and hold harmless, to the fullest extent
permitted by law, each Selling Holder and each of its employees, advisors,
agents, representatives, partners, officers and directors, and each Person, if
any, who controls such Selling Holder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages, liabilities or expenses (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) insofar as such losses,
claims, damages, liabilities or expenses are caused by any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or any amendment thereof, any preliminary prospectus or prospectus (as
amended or supplemented if the Issuer shall have furnished any amendments or
supplements thereto) relating to the Registrable Securities, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses are
caused by any such untrue statement or omission or alleged untrue statement or
omission made in reliance upon information furnished to the Issuer in writing by
such Selling Holder expressly for use therein. The Issuer also agrees to
indemnify any underwriter of the Registrable Securities so offered and each
Person, if any, who controls such underwriter on substantially the same basis as
that of the indemnification by the Issuer of the Selling Holders provided in
this Section 2.8(a). The reimbursement required by this Section 2.8(a) will be
made by periodic payments during the course of the investigation or defense, as
and when bills are received or expenses incurred.

     (b) Each Selling Holder agrees to indemnify and hold harmless the Issuer,
its employees, advisors, agents, representatives, directors, the officers who
sign the registration statement and each Person, if any who controls the Issuer
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) insofar as such losses, claims, damages, liabilities or
expenses are caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or any amendment thereof,
any preliminary prospectus or prospectus (as amended or supplemented if the
Issuer shall have furnished any amendments or supplements thereto) relating to
the Registrable Securities, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only with reference to information
furnished in writing by such Selling Holder (or any representative thereof)
expressly for use in a registration statement, any preliminary prospectus,
prospectus or any amendments or

                                       9
<PAGE>   10

supplements thereto; provided that the obligation to indemnify will be several,
not joint and several, among such Selling Holders, and the liability of each
Selling Holder will be in proportion to, and provided further that such
liability will be limited to, the net amount received by such seller from the
sale of Registrable Securities pursuant to such registration statement;
provided, however, that such Selling Holder shall not be liable in any such case
to the extent that prior to the filing of any such registration statement or
prospectus or amendment thereof or supplement thereto, such Selling Holder has
furnished in writing to the Issuer information expressly for use in such
registration statement or prospectus or any amendment thereof or supplement
thereto, such Selling Holder has furnished in writing to the Issuer information
expressly for use in such registration statement or prospectus or any amendment
or supplement thereto which corrected or made not misleading information
previously furnished to the Issuer. Each Selling Holder also agrees to indemnify
any underwriter of the Registrable Securities so offered and each Person, if
any, who controls such underwriter on substantially the same basis as that of
the indemnification by such Selling Holder of the Issuer provided in this
Section 2.8(b).

     (c) Each party indemnified under paragraph (a) or (b) above shall, promptly
after receipt of notice of a claim or action against such indemnified party in
respect of which indemnity may be sought hereunder, notify the indemnifying
party in writing of the claim or action; provided that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to
an indemnified party on account of the indemnity agreement contained in
paragraph (a) or (b) above except to the extent that the indemnifying party was
actually prejudiced by such failure, and in no event shall such failure relieve
the indemnifying party from any other liability that it may have to such
indemnified party. If any such claim or action shall be brought against an
indemnified party, and it shall have notified the indemnifying party thereof,
unless based on the written advice of counsel to such indemnified party a
conflict of interest between such indemnified party and indemnifying parties may
exist in respect of such claim, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 2.8 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof. Any indemnifying party against whom indemnity may be sought
under this Section 2.8 shall not be liable to indemnify an indemnified party if
such indemnified party settles such claim or action without the consent of the
indemnifying party. The indemnifying party may not agree to any settlement of
any such claim or action, other than solely for monetary damages for which the
indemnifying party shall be responsible hereunder, the result of which any
remedy or relief shall be applied to or against the indemnified party, without
the prior written consent of the indemnified party, which consent shall not be
unreasonably withheld and unless such settlement contains a full and
unconditional release of the indemnified party. In any action hereunder as to
which the indemnifying party has assumed the defense thereof, the indemnified
party shall continue to be entitled to participate in the defense thereof, with
counsel of its own choice, but the indemnifying party shall not be obligated
hereunder to reimburse the indemnified party for the costs thereof.

     (d) If the indemnification provided for in this Section 2.8 shall for any
reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, cost, claim, damage, liability or
expense referred to herein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, cost, claim, damage,
liability or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of the Issuer on the one hand and the Selling Holders on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Issuer or a
Selling Holder

                                       10
<PAGE>   11

and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by an indemnified party as a result of the loss, cost, claim, damage,
liability, expense, or action in respect thereof, referred to above in this
paragraph (d) shall be deemed to include, for purposes of this paragraph (d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. The Issuer
and the Selling Holders agree that it would not be just and equitable if
contribution pursuant to this Section 2.8 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in this paragraph. Notwithstanding any
other provision of this Section 2.8, no Selling Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of such Selling Holder were offered to the public
exceeds the amount of any damages which such Selling Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations in this Section 2.8(d) to contribute
shall be several in proportion to the amount of Registrable Securities
registered by them and not joint.

     (e) The obligations of the parties under this Section 2.8 shall be in
addition to any liability which any party may otherwise have to any other party.

     Section 2.9  Holdback Agreement. Each Selling Holder agrees not to effect
any sale or distribution, including any sale under Rule 144, of any equity
security of the Issuer (otherwise than through the registered public offering
then being made), within 10 days prior to or 30 days (or such lesser period as
the lead or managing underwriters may permit) after the date of the consummation
of such offering for any Demand Registration hereunder, for any underwritten
public offering by the Issuer by or any other Person of Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock.

     Section 2.10  Suspension of Dispositions. Each Holder agrees by acquisition
of any Registrable Securities that, upon receipt of any notice (a "Suspension
Notice") from the Issuer of the happening of any event of the kind described in
Section 2.6(e)(iii), such Holder will forthwith discontinue disposition of
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus, or until it is advised in writing (the
"Advice") by the Issuer that the use of the prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in the prospectus, and, if so directed by the Issuer, such Holder
will deliver to the Issuer all copies, other than permanent file copies then in
such Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Issuer shall
give any such notice, the time period regarding the effectiveness of
registration statements set forth in Section 2.6(b) hereof shall be extended by
the number of days during the period from and including the date of the giving
of the Suspension Notice to and including the date when each Selling Holder of
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus or the Advice. The
Issuer shall use its commercially reasonable efforts and take such actions as
are reasonably necessary to render the Advice as promptly as practicable.

                                   ARTICLE 3

                              TERM AND TERMINATION

     This Agreement shall become effective at the Effective Time of the Merger
and shall continue in effect for five (5) years from the Effective Time, and
shall continue in effect thereafter until the Issuer terminates this Agreement
by delivery of written notice to each Holder (whether by notice directly to such
Holder or through the Holders' Agent) on the earlier of the following to occur
(or at any time thereafter): (i) the market value of the aggregate amount of
Registrable Securities beneficially owned by the Holders

                                       11
<PAGE>   12

is less than $1,000,000,000 based on the average closing price of the Issuer's
Common Stock for the twelve (12) consecutive calendar months preceding the date
of notice of termination; or (ii) the aggregate number of shares of Registrable
Securities beneficially owned by the Holders is less than the average weekly
trading volume of the Common Stock during the preceding consecutive six-month
period and the market value of the aggregate amount of Registrable Securities
beneficially owned by the Holders is less than $2,000,000,000 based on the
average closing price of the Issuer's Common Stock for the twelve (12)
consecutive calendar months preceding the date of notice of termination. Such
date upon which the Issuer terminates this Agreement shall be referred to herein
as the "Termination Date." Notwithstanding the above, no termination shall be
effective for any Demand Registration for which the Issuer has received a Demand
Request.

                                   ARTICLE 4

                                 MISCELLANEOUS

     Section 4.1 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.

     Section 4.2 Not Exclusive; No Other Rights. The Holders agree that nothing
herein contained shall prohibit the Issuer from granting registration rights to
any other party, provided that such registration rights shall not conflict with
the terms of this Agreement. The Issuer represents and warrants that no other
Person has registration rights that conflict with the rights granted to the
Holders hereunder.

     Section 4.3 Assignment. No party may assign any of its rights or
obligations hereunder by operation of law or otherwise without the prior written
consent of the other parties.

     Section 4.4 Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the Issuer and
Holders representing a majority of the Registrable Securities then held by all
Holders.

     Section 4.5 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if given) by hand delivery or telecopy, or by
any courier service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
address or telecopy number set forth on the signature pages hereto (unless such
contact information in the case of the Holders is updated by written notice from
the affected Holder to the Issuer).

     Section 4.6 Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.

     Section 4.7 No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.

                                       12
<PAGE>   13

     Section 4.8  No Third Party Beneficiaries. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by, any Person who or
which is not a party hereto; provided, that, this Agreement is also intended to
be for the benefit of and is enforceable by each Holder.

     Section 4.9  Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Texas, without giving effect to the
principles of conflicts of law thereof.

     Section 4.10  Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.

     Section 4.11  Holders' Agent. Each Holder hereby appoints HMTF as its agent
and attorney-in-fact (the "Holders' Agent") for purposes of the delivery and
receipt of all notices and requests pursuant to this Agreement. The Issuer may
give notice to any Holder hereunder by giving such notice directly to such
Holder. Alternatively, the Issuer may give notice to the Holders' Agent, in
which event the Holders' Agent will promptly so give such notice to each Holder.
Delivery of any notice or other communication pursuant to this Agreement by the
Issuer to the Holders' Agent in accordance with Section 4.5 will be deemed to
constitute notice by the Issuer directly to the Holders. Delivery of any notice
or other communication pursuant to this Agreement by the Holders' Agent to the
Issuer in accordance with Section 4.5 will be deemed to constitute notice by the
Holders directly to the Issuer. Notwithstanding anything else contained herein,
under no circumstances shall the Issuer be required to deliver any notice or
other communication pursuant to this Agreement directly to any Holder. Further
notwithstanding anything else contained herein, the Holders' Agent will not be
liable or responsible to any Person should any Holder fail to act in accordance
with any notice so give to such Holder hereunder.

     Section 4.12  Counterparts. This Agreement may be executed in counterpart,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.

     Section 4.13  Termination of Existing Registration Rights. Each Holder that
is a party to any registration rights agreement of the Issuer in effect on the
date hereof hereby consents to the termination of such agreement effective on
the Effective Time.

                                       13
<PAGE>   14

                  REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE

     IN WITNESS WHEREOF, the Issuer and the Holders have caused this Agreement
to be duly executed as of the day and year first above written.

                                        CLEAR CHANNEL COMMUNICATIONS, INC.,
                                        a Texas corporation

                                        By:       /s/ RANDALL T. MAYS
                                           -------------------------------------
                                        Name: Randall T. Mays

                                        Address:  200 Concord Plaza
                                                  Suite 600
                                                  San Antonio, Texas 78216-6940

                                        Facsimile No.: (210) 822-2299

                                       14
<PAGE>   15

                                        HOLDERS:

                                        HICKS, MUSE, TATE & FURST EQUITY
                                        FUND II, L.P.

                                        By: HM2/GP PARTNERS, L.P.,
                                            its general partner

                                        By: HICKS, MUSE GP PARTNERS, L.P.,
                                            its general partner

                                        By: HICKS, MUSE FUND II INCORPORATED,
                                            its general partner

                                        By:       /s/ THOMAS O. HICKS
                                           -------------------------------------
                                        Name: Thomas O. Hicks
                                        Title:  President

                                        HM2/HMW, L.P.

                                        By: HICKS, MUSE, TATE & FURST EQUITY
                                            FUND II, L.P.,
                                            its general partner

                                        By: HM2/GP PARTNERS, L.P.,
                                            its general partner

                                        By: HICKS, MUSE GP PARTNERS, L.P.,
                                            its general partner

                                        By: HICKS, MUSE FUND II INCORPORATED,
                                            its general partner

                                        By:       /s/ THOMAS O. HICKS
                                           -------------------------------------
                                        Name: Thomas O. Hicks
                                        Title:  President

                                       15
<PAGE>   16

                                        HM2/CHANCELLOR, L.P.

                                        By: HM2/CHANCELLOR GP, L.P.,
                                            its general partner

                                        By: HM2/CHANCELLOR HOLDINGS, INC.,
                                            its general partner

                                        By:       /s/ THOMAS O. HICKS
                                           -------------------------------------
                                        Name: Thomas O. Hicks
                                        Title:  President

                                        HM4/CHANCELLOR, L.P.

                                        By: HICKS, MUSE FUND IV LLC,
                                            its general partner

                                        By:       /s/ THOMAS O. HICKS
                                           -------------------------------------
                                        Name: Thomas O. Hicks
                                        Title:  President

                                        CAPSTAR BROADCASTING PARTNERS, L.P.

                                        By: HM3/CAPSTAR PARTNERS, L.P.,
                                            its general partner

                                        By: HM3/CAPSTAR, INC.,
                                            its general partner

                                        By:       /s/ THOMAS O. HICKS
                                           -------------------------------------
                                        Name: Thomas O. Hicks
                                        Title:  President

                                       16
<PAGE>   17

                                        CAPSTAR BT PARTNERS, L.P.

                                        By: HM3/GP PARTNERS, L.P.,
                                            its general partner

                                        By: HICKS, MUSE GP PARTNERS III, L.P.,
                                            its general partner

                                        By: HICKS, MUSE FUND III INCORPORATED,
                                            its general partner

                                        By:       /s/ THOMAS O. HICKS
                                           -------------------------------------
                                        Name: Thomas O. Hicks
                                        Title:  President

                                        CAPSTAR BOSTON PARTNERS, L.L.C.

                                        By: HM3/GP PARTNERS, L.P.,
                                            its managing member

                                        By: HICKS, MUSE GP PARTNERS III, L.P.,
                                            its general partner

                                        By: HICKS, MUSE FUND III INCORPORATED,
                                            its general partner

                                        By:       /s/ THOMAS O. HICKS
                                           -------------------------------------
                                        Name: Thomas O. Hicks
                                        Title:  President

                                                 /s/ THOMAS O. HICKS
                                        ----------------------------------------
                                                    Thomas O. Hicks

                                                  /s/ JOHN D. MUSE
                                        ----------------------------------------
                                                      John D. Muse

                                                 /s/ CHARLES W. TATE
                                        ----------------------------------------
                                                    Charles W. Tate

                                                  /s/ JACK D. FURST
                                        ----------------------------------------
                                                     Jack D. Furst

                                                /s/ MICHAEL J. LEVITT
                                        ----------------------------------------
                                                   Michael J. Levitt

                                       17
<PAGE>   18

                                            /s/ LAWRENCE D. STEWART, JR.
                                        ----------------------------------------
                                                Lawrence D. Stewart, Jr.

                                                /s/ DAVID B. DENIGER
                                        ----------------------------------------
                                                    David B. Deniger

                                                  /s/ DAN H. BLANKS
                                        ----------------------------------------
                                                     Dan H. Blanks

                                       18<PAGE>   1
                                                                     EXHIBIT 4.3

                                NETSILICON, INC.
                              AMENDED AND RESTATED
               1998 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN

1.   PURPOSES OF PLAN. The purposes of the NETsilicon, Inc. 1998 Amended and
Restated Incentive and Non-Qualified Stock Option Plan (hereinafter referred to
as the "Plan") are to provide to employees and consultants of NETsilicon, Inc.
(hereinafter referred to as the "Corporation"), as well as employees subsidiary
or parent corporations which may currently exist or be formed or acquired in the
future, an opportunity for investment in the Corporation's common stock
(hereinafter referred to as the "Shares"), as an inducement for such individuals
to remain with the Corporation, and to encourage them to increase their efforts
to make the Corporation's business more successful.

2.   EFFECTIVE DATE AND TERMINATION OF PLAN. The effective date of the Plan is
August 24, 1998, the date on which the Plan was adopted by the Board of
Directors of the Corporation. The Plan shall terminate on, and no option shall
be granted hereunder, after August 24, 2008; provided, however, that the Board
of Directors may at any time prior to that date terminate the Plan; and provided
further that any option granted hereunder prior to the termination of the Plan
shall remain exercisable in accordance with its terms as then in effect.

3.   ADMINISTRATION OF PLAN. The Plan shall be administered by the Board of
Directors of the Corporation. The Board of Directors may, however, to the extent
permissible under the Corporation's Articles of Organization, By-laws and
applicable law, delegate any of its functions under this Plan to a committee of
the Board of Directors or any other committee. Wherever in this Plan the term
"Board of Directors" is used it shall be construed to mean such committee to the
extent that the Board of Directors may have delegated any of its functions to
said committee and only to the extent of any such delegation. The acts of a
majority of the members present at any meeting of the Board of Directors at
which a quorum is present, or acts approved in writing by a majority of the
entire Board, shall be the acts of the Board of Directors for purposes of the
Plan.

4.   ELIGIBILITY AND GRANT OF OPTIONS. Subject to the provisions of the Plan,
the Board of Directors shall (i) authorize the granting of incentive stock
options, non-qualified stock options or a combination of incentive stock options
and non-qualified stock options (hereinafter collectively referred to as
"options" unless otherwise stated); (ii) determine and designate from time to
time those employees (from the group consisting of all employees of the Company)
and consultants to whom options are to be granted and the number of Shares to be
optioned to each employee and consultant; (iii) determine the number of Shares
subject to each option; and (iv) determine the time or times when and the manner
in which each option shall be exercisable and the duration of the exercise
period. In determining the eligibility of an individual to receive an option, as
well as in determining the number of Shares to be optioned to any individual,
the Board of Directors shall consider the position and responsibilities of the
employee or consultant, the nature and value to the Corporation, parent or
subsidiary of his services and accomplishments, his present and potential
contribution to the success of the Corporation, parent or subsidiary, and such
other factors as the Board may deem relevant. To be eligible to receive an
incentive stock option or non-qualified stock option an individual must be an
employee of the Corporation, parent

<PAGE>   2

or subsidiary. A Director shall abstain from voting on the grant of any options
to himself, his spouse, his children, grandchildren and parents. The grant of
each option shall be confirmed by a Stock Option Agreement (in the form
prescribed by the Board of Directors) which shall be executed by the Corporation
and the optionee as promptly as practicable after such grant. More than one
option may be granted to an individual.

     (a) Incentive stock options shall be those options which satisfy the
     requirements of Section 422 of the Internal Revenue Code of 1986, as
     amended and which the Board of Directors has specifically identified as
     incentive stock options in the Stock Option Agreement executed by the
     Corporation and the optionee. In the case of incentive stock options, the
     aggregate fair market value, determined at the time incentive stock options
     are granted, of the stock with respect to which the incentive stock options
     are exercisable for the first time by such individual during any calendar
     year (under all such plans the Corporation may adopt) shall not exceed one
     hundred thousand dollars ($100,000.00). In the event that an incentive
     stock option granted pursuant to the terms of this Plan is granted to an
     employee who, prior to the grant, holds more than ten percent (10%) of the
     total combined voting power of all classes of stock of the Corporation, its
     parent or a subsidiary ("10% shareholder") the option price under such
     grant shall be at least one hundred ten percent (110%) of the fair market
     value, and such option, by its terms, shall not be exercisable more than
     five (5) years from the date of grant.

     (b) Nothing in the Plan or in any option granted pursuant to the Plan shall
     confer on any individual any right to continue in the employ of the
     Corporation or any parent or subsidiary or interfere in any way with the
     right of the Corporation to terminate his employment at any time.

5.   NUMBER OF SHARES SUBJECT TO OPTIONS. The Board of Directors, prior to the
time options under the Plan become exercisable, shall reserve for the purposes
of the Plan a total of six million (6,000,000) Shares, which Shares may be
either authorized and unissued Shares, or previously issued Shares held in the
treasury of the Corporation, or both. Shares as to which an option granted under
the Plan shall remain unexercised at the expiration or termination thereof, and
Shares subject to options which are cancelled, may be the subject of the grant
of further options. Shares reserved pursuant to this paragraph may be adjusted
to reflect changes in the Corporation's capital structure as discussed in
paragraph 19 hereof.

6.   OPTION PRICE. The option price per Share shall be determined in each case
by the Board of Directors and shall not be less than one hundred percent (100%)
(one hundred ten percent (110%) in the case of an incentive stock option granted
to a ten percent (10%) Shareholder) of the fair market value thereof as
determined by the Board by any reasonable method using market quotations on the
date the option is granted.

<PAGE>   3

7.   PERIOD OF OPTION AND WHEN EXERCISABLE. No option may be granted under this
Plan whose exercise date is later than ten (10) years after the date of grant or
five (5) years after the date of grant in the case of an incentive stock option
granted to a ten percent (10%) Shareholder. Generally, an option may be
exercised only by the optionee and subject to the rules set forth below only if,
at all times during the period beginning on the date of the granting of such
option and ending with the date of exercise of such option, the optionee is an
employee or consultant of the Corporation, its parent or a subsidiary.

     (a) Except as otherwise provided herein, in the case of an employee who
     terminates employment, incentive stock options which are vested but
     unexercised as of the date of termination of employment must be exercised
     within three (3) months of termination. In the case of an employee who is
     discharged for cause, as determined in the sole discretion of the Board of
     Directors, all previously vested but unexercised options shall be forfeited
     immediately.

     (b) In the case of an employee who dies during the three (3) month period
     discussed in (a) above, options which are vested but unexercised as of the
     date of termination of employment must be exercised within twelve (12)
     months of death.

     (c) Options which are vested but unexercised as of the date of termination
     of employment due to death, must be exercised within twelve (12) months
     after the death of an optionee.

     (d) In the event that the employee becomes disabled as defined in Section
     22(e) (3) of the Internal Revenue code of 1986, as amended, options which
     are vested but unexercised as of the date of termination of employment due
     to disability must be exercised within twelve (12) months following the
     date of termination of the optionee's said employment.

     (e) In the event an optionee's employment is terminated for any reason
     (including but not limited to, voluntary or involuntary termination or
     termination resulting from the death or disability of the optionee), all
     unvested options shall be immediately forfeited.

     Notwithstanding the foregoing, options may not be exercised after the
original five (5) or ten (10) year term, Options may be exercised on behalf of
the estate of a former employee by the person or persons entitled to do so under
the optionee's will or, if the optionee shall have failed to make testamentary
disposition of such option or shall have died in testate, by the optionee's
legal representative or representatives. Such person, persons, representative,
or representatives are hereinafter referred to as the "Successors of an
Optionee."

<PAGE>   4

8.   VESTING. Options granted to a participant shall be exercisable in
accordance with the following schedule unless the Board of Directors otherwise
specifies at the time of grant:

                                             Cumulative Percentage of Aggregate
                                              Number of Shares of Stock Covered
Exercise Period                              by an Option Which may be Exercised
---------------                              -----------------------------------

Beginning on the one year anniversary
date from date of grant                                     25%

Beginning on the second anniversary
date from date of grant                                     50%*

Beginning on the third anniversary
date from date of grant                                     75%*

Beginning on the fourth anniversary
date from date of grant                                    100%*

     * less the number of Shares, if any, previously purchased under the option.
     Non-vested options shall be immediately forfeited upon the termination of
     employment for any reason. Vested options shall be forfeited upon the
     termination of employment as provided in paragraph 7 hereof.

Notwithstanding the foregoing, the Board of Directors or its designees shall
have the right to grant any options with any vesting schedules including those
which are immediately exercisable under the Plan.

9.   EXERCISE OF OPTIONS. Subject to Plan restrictions and vesting, an option
may be exercised, and payment in full of the option price made, by an optionee
only by written notice (in the form prescribed by the Board of Directors) to the
Corporation specifying the number of Shares to be so purchased. Such notice
shall state that the option price will be paid in full in cash (which in the
discretion of the Board of Directors may be obtained through a loan from the
Corporation or from a third party and guaranteed by the Corporation) or other
property, in the discretion of the Corporation. If the Corporation accepts a
request to pay in stock of the Corporation in satisfaction of the exercise
price, the fair market value of said stock shall at least equal the option
price, and, in the case of incentive stock options, prior to such acceptance the
Corporation must be furnished with evidence that the acquisition of said stock
and its transfer in payment of the option price satisfies the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended and other
applicable law. As soon as practicable after receipt by the Corporation of such
notice and of payment in full of the option price of all the Shares with respect
to which an option has been exercised, a certificate or certificates
representing such Shares shall be registered (subject to the provisions of
paragraph 16 hereof) in the name of the optionee or the Successors of an
Optionee as defined under this Plan and delivered to the optionee or to the
Successors of an Optionee.

<PAGE>   5

10.  MERGER OR ASSET SALE. In the event of a merger of the Company with or into
another corporation or the sale of substantially all of the assets of the
Company, outstanding Options may be assumed or equivalent options may be
substituted by the successor corporation or a Parent or Subsidiary thereof (the
"Successor Corporation"). If an Option is assumed or substituted for, the Option
or equivalent option shall continue to be exercisable as provided in Section 7
hereof for so long as the Optionee serves as an employee of the Successor
Corporation. Following such assumption or substitution, if the Optionee's status
as an employee is terminated other than upon a voluntary resignation by the
Optionee, the Option shall become fully vested and exercisable in accordance
with Section 7 above.

     (a) If the Successor Corporation does not assume an outstanding Option or
     substitute for it an equivalent option, the Option shall become fully
     vested and exercisable, including as to Shares for which it would not
     otherwise be exercisable. In such event the Board shall notify the Optionee
     that the Option shall be fully exercisable for a period of thirty (30) days
     from the date of such notice, and upon the expiration of such period the
     Option shall terminate.

     (b) For the purposes of this Section 10, an Option shall be considered
     assumed if, following the merger or sale of assets, the Option confers the
     right to purchase or receive, for each Share of Optioned Stock subject to
     the Option immediately prior to the merger or sale of assets, the
     consideration (whether stock, cash, or other securities or property)
     received in the merger or sale of assets by holders of Common Stock for
     each Share held on the effective date of the transaction (and if holders
     were offered a choice of consideration, the type of consideration chosen by
     the holders of a majority of the outstanding Shares). If such consideration
     received in the merger or sale of assets is not solely common stock of the
     successor corporation or its Parent, the Board may, with the consent of the
     successor corporation, provide for the consideration to be received upon
     the exercise of the Option, for each Share of Optioned Stock subject to the
     Option, to be solely common stock of the successor corporation or its
     Parent equal in fair market value to the per share consideration received
     by holders of Common Stock in the merger or sale of assets.

11.  EMPLOYER WITHHOLDING. In the case of non-qualified stock options, the
Corporation shall be required to withhold additional income taxes attributable
to that amount which is considered compensation includible in the optionee's
gross income by reason of the exercise of such options. The Corporation in its
discretion shall determine the method and amount of withholding.

<PAGE>   6

12.  EXERCISE BY SUCCESSORS AND PAYMENT IN FULL. An option may be exercised, and
payment in full of the option price made, by the Successors of an Optionee only
by written notice (in the form prescribed by the Board of Directors) to the
Corporation specifying the number of Shares to be purchased. Such notice shall
state that the option price will be paid in full in cash (which in the
discretion of the Board of Directors may be obtained through a loan from the
Corporation or from a third party and guaranteed by the Corporation), property
or stock of the Corporation in conformance with paragraph 9 hereof. As soon as
practicable after receipt by the Corporation of such notice and of payment in
full of the option price of all the Shares with respect to which an option has
been exercised, a certificate or certificates representing such Shares shall be
registered (subject to the provisions of paragraph 16 hereof) in the name or
names of such Successors of an Optionee and shall be delivered to him.

13.  NON-TRANSFERABILITY OF OPTION. Each option granted under the Plan shall by
its terms be nontransferable by the optionee except by will or the laws of
descent and distribution of the state wherein the optionee is domiciled at the
time of his death. If the Administrator makes an Option transferable, such
Option shall contain such additional terms and conditions, as the Administrator
deems appropriate.

14.  OTHER TERMS OF OPTION. Options granted pursuant to the Plan shall contain
such terms, provisions, and conditions not inconsistent herewith as shall be
determined by the Board of Directors.

15.  REGISTRATION OF CERTIFICATES. Certificates representing Shares may be
registered either in the name of the Optionee or in the name or names of the
Successors of an Optionee. Designation of the appropriate form of registration
of certificates shall be made in the written notice given to the Corporation
upon exercise of an option.

16.  LISTING AND REGISTRATION OF SHARES. If at any time the Board of Directors
of the Corporation shall determine, in its discretion, that the listing,
registration, or qualification of any of the Shares subject to options under the
Plan upon 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 granting of options or the
purchase or issue of Shares thereunder, no further options may be granted and
outstanding options may not be exercised in whole or in part unless and until
such listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors. The Board of Directors shall have the authority to cause the
Corporation at its expense to take any action related to the Plan which may be
required in connection with such listing, registration, qualification, consent,
or approval. The Board of Directors may require that any person exercising an
option hereunder shall make such representations and agreements and furnish such
information as it deems appropriate to assure compliance with the foregoing or
any other applicable legal requirement.

<PAGE>   7

17.  INTERPRETATION AND AMENDMENTS. The Board of Directors may make such rules
and regulations and establish such procedure for the administration of the Plan
as it deems appropriate. In the event of any dispute or disagreements as to the
interpretation of this Plan or of any rule, regulation, or procedure, or as to
any question, right or obligation arising from or related to the Plan, the
decision of the Board of Directors shall be final and binding upon all persons.
The Board of Directors may amend this Plan as it shall deem advisable. However,
in no event shall any such amendment adversely affect the rights of an optionee
under any existing stock option agreement without the consent of such optionee.
In addition, no amendment may, without further approval of the shareholders of
the Company within twelve months before or after the date on which such
amendment was adopted, (a) increase the total number of shares which may be made
subject of options granted under the Plan, (b) change the manner of determining
the option price, (c) change the criteria of determining which employees are
eligible to receive options, (d) extend the period during which options may be
granted or exercised, or (e) withdraw the administration of the Plan from the
Board of Directors.

18.  INDEMNIFICATION AND EXCULPATION.

     (a) Each person who is or shall have been a member of the Board of
     Directors shall be indemnified and held harmless by the Corporation against
     and from any and all loss, cost, liability, or expense that may be imposed
     upon or reasonably incurred by him in connection with or resulting from any
     claim, action, suit, or proceeding to which he may be or become a party or
     in which he may be or become involved by reason of any action taken or
     failure to act under the Plan and against and from any and all amounts paid
     by him in settlement thereof (with the Corporation's written approval) or
     paid by him in satisfaction of a judgment in any such action, suit, or
     proceeding, except a judgment in favor of the Corporation based upon a
     finding of his lack of good faith; subject, however, to the condition that
     upon the institution of any claim, action, suit, or proceeding against him,
     he shall in writing give the Corporation an opportunity, at its own
     expense, to handle and defend the same before he undertakes to handle and
     defend it on his own behalf. The foregoing right of indemnification shall
     not be exclusive of any other right to which such person may be entitled as
     a matter of law or otherwise, or any power that the Corporation may have to
     indemnify him or hold him harmless.

     (b) Each member of the Board of Directors, and each officer and employee of
     the Corporation shall be fully justified in relying or acting in good faith
     upon any information furnished in connection with the administration of the
     Plan by any appropriate person or persons other than himself. In no event
     shall any person who is or shall have been a member of the Board of
     Directors, or an officer or employee of the Corporation be held liable for
     any determination made or other action taken or any omission to act in
     reliance upon any such information, or for any action (including the
     furnishing of information) taken or any failure to act, if in good faith.

<PAGE>   8

19.  CHANGES IN CAPITAL STRUCTURE. In the event that a dividend shall be
declared upon the Shares payable in Shares, the number of shares then subject to
any option outstanding under the Plan and the number of Shares reserved for the
grant of options pursuant to the Plan but not yet subject to option shall be
adjusted by adding to each such Share the number of Shares which would be
distributable in respect thereof if such Shares had been outstanding on the date
fixed for determining the shareholders of the Corporation entitled to receive
such Share dividend. In the event that the outstanding Shares shall be changed
into or exchanged for a different number of Shares or other securities of the
Corporation or of another corporation, whether through reorganization,
recapitalization, split-up, combination of shares, merger, or consolidation,
then there shall be substituted for each Share subject to any such option and
for each Share reserved for the grant of options pursuant to the Plan but not
yet subject to option the number and kind of Shares or other securities into
which each outstanding Share shall have been so changed or for which each such
share shall have been exchanged. In the event there shall be any change, other
than as specified above in this paragraph, in the number or kind of outstanding
Shares or of any shares or other securities into which such Shares shall have
been changed or for which they shall have been exchanged, then if the Board of
Directors shall in its sole discretion determine that such change equitably
requires an adjustment in the number or kind of Shares theretofore reserved for
the grant of options pursuant to the Plan but not yet subject to option and of
the Shares then subject to an option or options. Such adjustments shall be made
by the Board of Directors and shall be effective and binding for all purposes of
the Plan and of each option outstanding thereunder. In the case of any such
substitution or adjustment as provided for in this paragraph, the aggregate
option exercise price set forth for all outstanding options for all Shares
covered thereby prior to such substitution or adjustment will be the option
exercise price for all shares or other securities which shall have been adjusted
pursuant to this paragraph. No adjustment or substitution provided for in this
paragraph shall require the Corporation to sell a fractional Share, and the
total substitution or adjustment with respect to each outstanding option shall
be limited accordingly. Upon any adjustment made pursuant to this paragraph, the
Corporation will, upon request, deliver to the optionee or to his successors a
certificate setting forth the option price thereafter in effect and the number
and kind of shares or other securities thereafter purchasable on the exercise of
the option.

20.  NOTICES. All notices under the Plan shall be in writing, and if to the
Corporation, shall be delivered to the Treasurer of the Corporation or mailed to
its principal office, addressed to the attention of the Treasurer; and if to the
optionee, shall be delivered personally or mailed to the optionee at the address
appearing in the payroll records of the Corporation. Such addresses may be
changed at any time by written notice to the other party.

21.  CORPORATION'S OPTION. As of the date of the adoption of the Plan, the
Corporation intends to commence an initial public offering of shares of its
Common Stock. Until such time as such offering is completed, the Corporation
shall have the right to purchase from any optionee (or his or her successor,
assignee or transferee) shares of common stock issued upon the exercise of
options granted hereunder for a price per share equal to the exercise price per
share paid for such shares.

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