<PAGE>
-------------------------------------
OMB APPROVAL
UNITED STATES -------------------------------------
SECURITIES AND EXCHANGE COMMISSION OMB Number: 3235-0145
Washington, D.C. 20549 Expires: October 31, 1997
Estimated average burden
hours per response..........14.90
-------------------------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
PEGASUS COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
705904 10 0
- --------------------------------------------------------------------------------
(CUSIP Number)
Michael B. Jordan
Drinker Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107
(215) 988-2700
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 27, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 2 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Marshall W. Pagon
S.S. No.
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
6,842,506
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
4,612,081
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,842,506
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.6%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 3 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pegasus Communications Holdings, Inc.
IRS Identification No. 23-2778524
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
5,510,208
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,364,552
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,510,208
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.1%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 4 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pegasus Communications Limited Partnership
IRS Identification No. 06-1149248
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Connecticut
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
5,510,208
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,364,552
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,510,208
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.6%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 5 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Northwest Management Associates, L.P.
IRS Identification No. 23-2654154
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
5,510,208
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,364,552 (rights to acquire; see item 5)
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,510,208
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.6%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 6 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pegasus Cable Associates, Ltd.
IRS Identification No. 23-2641841
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
5,510,208
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,364,552
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,510,208
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.6%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 7 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pegasus Northwest Office Corp.
IRS Identification No. 23-2943020
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
2,267,994
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
122,338
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,267,994
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.9%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 8 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pegasus Scranton Office Corp.
IRS Identification No. 23-2943021
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
2,264,014
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
118,358
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,264,014
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.9%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 9 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pegasus Capital, L.P.
IRS Identification No. 23-2661759
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
3,363,004
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,217,348
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,363,004
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.9%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------------------------- ----------------------------------------------
CUSIP No. 705904 10 0 Page 10 of 31 Pages
- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pegasus Capital, Ltd.
IRS Identification No. 23-2660588
- -----------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -----------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not applicable
- -----------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH -0-
REPORTING PERSON
WITH
------------------------------------------------------------------------------------------
8 SHARED VOTING POWER
3,363,004
------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,217,348
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,363,004
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.9%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Page 11 of 31 Pages
Introductory Statement
This amendment is filed to report changes in the statement on Schedule
13D dated October 18, 1996, filed with the Commission by certain of the
Reporting Persons identified herein. On April 27, 1998, the Issuer (as defined)
issued shares of its Class A Common Stock (as defined) in connection with an
acquisition. As more fully described in item 6, the Reporting Persons entered
into the Voting Agreement (as defined) with certain of the persons to whom those
shares were issued. Because of the Voting Agreement, the Reporting Persons share
voting power over the shares issued to the other parties to the Voting Agreement
and, under the Commission's rules, are deemed to beneficially own them. The
purpose of this amendment is to reflect the Reporting Persons' deemed beneficial
owners of these shares.
Item 1. Security and Issuer.
This statement relates to the Class A Common Stock, par value $.01 per
share (the "Class A Common Stock"), of Pegasus Communications Corporation (the
"Issuer"). The Issuer is a Delaware corporation, and its principal executive
office is c/o Pegasus Communications Management Company, 5 Radnor Corporate
Center, Suite 454, 100 Matsonford Road, Radnor, Pennsylvania 19087 (the "Radnor
Office").
Item 2. Identity and Background.
This statement is being filed by the following persons (hereinafter
referred to collectively as the "Reporting Persons"):
(i) Marshall W. Pagon, a citizen of the United States of America
(ii) Pegasus Communications Holdings, Inc., a Delaware corporation
("PCH")
(iii) Pegasus Northwest Offer Corp, a Delaware corporation ("PNOC")
(iv) Pegasus Scranton Offer Corp, a Delaware corporation ("PSOC")
(v) Pegasus Communications Limited Partnership, a Connecticut
limited partnership ("PCLP")
(vi) Northwest Management Associates, L.P., a Pennsylvania limited
partnership ("Northwest Management")
(vii) Pegasus Cable Associates, Ltd., a Pennsylvania corporation
("Pegasus Cable")
(viii) Pegasus Capital, L.P., a Pennsylvania limited partnership
(ix) Pegasus Capital, Ltd., a Pennsylvania corporation
Mr. Pagon has been authorized, pursuant to an agreement among the
Reporting Persons identified in (ii) through (vii) above (which agreement was
filed as Exhibit 1 to the statement on Schedule 13D amended by this amendment),
to file this joint statement on behalf of each of them, as permitted by Rule
13d-1(f) under the Securities Exchange Act of 1934.
Shares of the Issuer's Class B Common Stock, par value $.01 per share
(the "Class B Common Stock") are convertible into shares of Class A Common
<PAGE>
Page 12 of 31 Pages
Stock on a one-for-one basis at any time at the option of the holder. In
addition, shares of Class B Common Stock are automatically converted into
Class A Common Stock upon transfer to persons who are not Permitted Transferees
(as this term is defined in the Issuer's Amended and Restated Certificate of
Incorporation). Holders of Class A Common Stock are entitled to one vote per
share, and holders of Class B Common Stock are entitled to ten votes per share.
See Item 5 for a statement of the direct holdings of each of the
Reporting Persons. Mr. Pagon and Pegasus Capital, Ltd. are deemed to be
beneficial owners of shares held of record by Pegasus Capital, L.P. by virtue of
the fact that Mr. Pagon owns 100% of the stock of Pegasus Capital, Ltd. which,
in turn, is the sole general partner of Pegasus Capital, L.P.
Because PNOC and PSOC are wholly-owned subsidiaries of PCH, the shares
held by them are deemed to be beneficially owned by PCH. Mr. Pagon, PCLP,
Northwest Management and Pegasus Cable are deemed to be the beneficial owners of
the shares held by PCH, PNOC and PSOC by virtue of the fact that Mr. Pagon owns
100% of the stock of Pegasus Cable, which is the sole general partner in
Northwest Management, and by virtue of the fact that Northwest Management is the
sole general partner in PCLP, which owns all of the outstanding stock of PCH.
By reason of the Voting Agreement described in item 6, the Reporting
Persons share voting power over the shares of Class A Common Stock held by the
persons identified in item 6 and are deemed to be beneficial owners thereof. The
Reporting Persons are advised that certain of the persons described in item 6
are separately filing one or more statements on Schedule 13D, pursuant to Rule
13d-1(f)(2), with respect to their beneficial ownership of the Issuer's
securities.
Each of the Reporting Persons is engaged, through the Issuer and its
subsidiaries, in the media and communications business. The business address for
each of the Reporting Persons is the Radnor Office. None of the Reporting
Persons has, during the last five years, been convected of a criminal proceeding
(excluding traffic violations or similar misdemeanors) (a "Criminal Conviction")
or been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or state securities laws or finding any violation with respect to such laws (a
"Civil Violation"). Mr. Pagon's principal employment is as President, Chief
Executive Officer, and Chairman of the Board of Directors of the Issuer. Mr.
Pagon also serves as Chief Executive Officer and a director of each of the
Issuer's subsidiaries, and as President, Chief Executive Officer, and sole
director of each of PCH, PNOC, PSOC, Pegasus Cable and Pegasus Capital, Ltd.
(the "Corporate Reporting Persons").
In addition to Mr. Pagon, Robert N. Verdecchio (the Issuer's Senior
Vice President, Chief Financial Officer, Treasurer and Assistant Secretary and a
director of the Issuer), Ted S. Lodge (the Issuer's Senior Vice President, Chief
Administrative Officer, General Counsel and Secretary), and Howard E. Verlin
(the Issuer's Vice President and Assistant Secretary) serve as executive
officers of each of the Corporate Reporting Persons. Messrs. Verdecchio, Lodge
and Verlin are collectively referred to herein as "Executive Officers." (Guyon
W. Turner, who was an executive officer of the Issuer and of the Corporate
Reporting Persons at the time of the filing of the statement on Schedule 13D
amended by this amendment, has since left the Issuer's employ.) The principal
business address for each of the Executive Officers is the Radnor office, and
each of the Executive Officers is a citizen of the United States. None of the
Executive Officers has been subject to a Criminal Conviction or Civil Violation.
-2-
<PAGE>
Page 13 of 31 Pages
Item 3. Source and Amount of Funds or Other Consideration.
Not applicable.
Item 4. Purpose of Transaction.
The composition of the Issuer's board of directors has been changed to
meet the requirements of the Voting Agreement described in item 6. Otherwise,
neither the Reporting Persons nor the Executive Officers have any present plans,
or contemplate any present proposals, that relate to or would result in any of
the transactions described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, the Reporting Persons and the Executive Officers
are deemed the beneficial owners in the aggregate of the number and
percentage of the Issuer's Class A Common Stock set forth below:
Name Shares of Class A
- ---- Common Stock % (1)
------------------ -----
Reporting Persons
- -----------------
Marshall W. Pagon (2)(3)(4)(5)(6) 6,842,506 43.1%
PCH (2)(3) 5,510,208 37.6%
PCLP (2)(3) 5,510,208 37.6%
Northwest Management (2)(3) 5,510,208 37.6%
Pegasus Cable (2)(3) 5,510,208 37.6%
PNOC (2) 2,267,994 19.9%
PSOC (2) 2,264,014 19.9%
Pegasus Capital, L.P. (2)(5) 3,363,004 26.9%
Pegasus Capital, Ltd. (2)(5) 3,363,004 26.9%
Executive Officers
- ------------------
Robert N. Verdecchio (6)(7) 250,203 2.2%
Howard E. Verlin (7) 52,153 *
Ted S. Lodge (8) 15,669 *
- -------------
* Less than 1%.
1. The percentage for each Reporting Person is calculated on the assumptions
that all shares of Class B Common Stock held directly or indirectly by the
particular Reporting Person, and only those shares, are converted into Class A
Common Stock, and that all other rights held by the particular Reporting Person
or Executive Officer to acquire Class A Common Stock, and only those rights, are
exercised.
2. Includes 2,145,656 shares of Class A Common Stock held by persons identified
in item 6 and deemed to be beneficially owned by this person solely by reason of
the Voting Agreement described in item 6.
3. Includes 3,123,856 shares of Class B Common Stock directly owned by PCH, and
122,338 and 118,358 shares of Class B Common Stock, respectively, directly owned
of record by its wholly-owned subsidiaries, PNOC and PSOC. See item 2 for a
description of the relationship among these Reporting Persons.
-3-
<PAGE>
Page 14 of 31 Pages
4. Includes 17,000 shares of Class A Common Stock issuable upon exercise of the
vested portion of employee stock options.
5. Includes 1,217,348 shares of Class B Common Stock directly owned by Pegasus
Capital, L.P. See item 2 for a description of the relationship among these
Reporting Persons.
6. Includes 84,769 shares of Class A Common Stock held in the Issuer's 401(k)
plan, over which Messrs. Pagon and Verdecchio share voting power in their
capacities as co-trustees.
7. Includes 9,090 shares of Class A Common Stock issuable upon exercise of the
vested portion of employee stock options.
8. Includes 9,090 shares of Class A Common Stock issuable upon exercise of the
vested portion of employee stock options. Also includes 1,500 shares owned by
Mr. Lodge's wife, of which he disclaims beneficial ownership, and 5,079 shares
issued to Mr. Lodge and his wife subject to certain vesting restrictions.
- -----------
(b) Because Mr. Pagon controls each of the other Reporting Persons, he and
the other Reporting Persons share the power to direct the vote and to
dispose of the shares of Class A Common Stock beneficially owned by the
Reporting Persons.
The Reporting Persons also share voting power over all shares
beneficially owned by them with the other parties to the Voting
Agreement described in item 6.
Each of the Executive Officers has the sole power to vote and dispose
of his shares, except that Mr. Lodge shares voting and dispositive
power over 5,079 shares of Class A Common Stock that he holds jointly
with his wife and disclaims beneficial ownership of 1,500 shares owned
by his wife.
(c) The Reporting Persons and the Executive Officers have not effected any
transactions in the Issuer's securities in the last 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer
On April 27, 1998, a wholly-owned subsidiary of the Issuer merged (the
"Merger") into Digital Television Services, Inc., a Delaware corporation
("DTS"), as a result of which DTS became a wholly-owned subsidiary of the
Issuer, and the Issuer issued 5,471,296 shares of Class A Common Stock to the
former stockholders of DTS. In connection with the Merger, the Issuer and the
Reporting Persons entered into a voting agreement dated April 27, 1998 (the
"Voting Agreement"), with Columbia Capital Corporation ("Columbia"), Columbia
DBS, Inc., Whitney Equity Partners, L.P. ("Whitney"), Chisholm Partners III,
L.P. ("Chisholm"), Fleet Venture Resources, Inc., Fleet Equity Partners VI,
L.P., and Kennedy Plaza Partners, all of which are former stockholders of DTS,
and which collectively own 2,145,656 shares of the Class A Common Stock issued
in the Merger. The Voting Agreement obligates the parties to vote their shares
of the Issuer's common stock to elect to the Issuer's board of directors three
persons designated by Mr. Pagon, one person designated by
-4-
<PAGE>
Page 15 of 31 Pages
Columbia, one person designated by Whitney, one person designated by Chisholm,
and three Independent Directors (as defined in the Voting Agreement). It also
requires there to be audit, compensation and nominating committees of the
Issuer's board of directors, each consisting of one member designated by Mr.
Pagon, one member designated by a majority of the directors designated by
Columbia, Whitney and Chisholm, and one member designated by a majority of the
Independent Directors. The Voting Agreement is filed as an exhibit to this
statement.
Pegasus Capital, L.P. has pledged 1,000,000 shares of Class B Common
Stock to CIBC Oppenheimer Securities Corp. as security for a loan. PNOC and PSOC
have pledged 122,388 and 118,358 shares of Class B Common Stock, respectively,
to an escrow agent to secure certain deferred payment obligations.
Item 7. Material to be Filed as Exhibits.
1. Voting Agreement dated April 27, 1998.
-5-
<PAGE>
Page 16 of 31 Pages
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Dated: May 7, 1998
PEGASUS COMMUNICATIONS HOLDINGS, INC.
By: /s/ Marshall W. Pagon
-------------------------------
Marshall W. Pagon,
President
PEGASUS NORTHWEST OFFER CORP.
By: /s/ Marshall W. Pagon
-------------------------------
Marshall W. Pagon,
President
PEGASUS SCRANTON OFFER CORP.
By: /s/ Marshall W. Pagon
-------------------------------
Marshall W. Pagon,
President
PEGASUS COMMUNICATIONS LIMITED PARTNERSHIP
By: NORTHWEST MANAGEMENT ASSOCIATES, L.P.
General Partner
By: PEGASUS CABLE ASSOCIATES, LTD.,
General Partner
By: /s/ Marshall W. Pagon
-------------------------------
Marshall W. Pagon,
President
NORTHWEST MANAGEMENT ASSOCIATES, L.P.
By: PEGASUS CABLE ASSOCIATES, LTD.,
General Partner
By: /s/ Marshall W. Pagon
-------------------------------
Marshall W. Pagon,
President
-6-
<PAGE>
Page 17 of 31 Pages
PEGASUS CABLE ASSOCIATES, LTD.
By: /s/ Marshall W. Pagon
-------------------------------
Marshall W. Pagon,
President
PEGASUS CAPITAL, L.P.
By: PEGASUS CAPITAL, LTD.,
General Partner
By: /s/ Marshall W. Pagon
-------------------------------
Marshall W. Pagon,
President
PEGASUS CAPITAL, LTD.
By: /s/ Marshall W. Pagon
-------------------------------
Marshall W. Pagon,
President
/s/ Marshall W. Pagon
- ----------------------------------
Marshall W. Pagon
-7-
<PAGE>
Exhibit 1
Page 18 of 31 Pages
VOTING AGREEMENT, dated April 27, 1998, among PEGASUS COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company"); COLUMBIA CAPITAL
CORPORATION, a Virginia corporation, and COLUMBIA DBS, INC., a Virginia
corporation; WHITNEY EQUITY PARTNERS, L.P., a Delaware limited partnership;
FLEET VENTURE RESOURCES, INC., a Rhode Island corporation, FLEET EQUITY PARTNERS
VI, L.P., a Delaware limited partnership, CHISHOLM PARTNERS III, L.P., a
Delaware limited partnership, and KENNEDY PLAZA PARTNERS, a Rhode Island general
partnership; and PEGASUS COMMUNICATIONS HOLDINGS, INC., a Delaware corporation,
PEGASUS CAPITAL, L.P., a Pennsylvania limited partnership, PEGASUS SCRANTON
OFFER CORP, a Delaware corporation, PEGASUS NORTHWEST OFFER CORP, a Delaware
corporation, and MARSHALL W. PAGON, an individual.
The Company, Pegasus DTS Merger Sub, Inc., a Delaware corporation
("Merger Sub"), Digital Television Services, Inc., a Delaware corporation
("DTS"), and certain shareholders of the Company and of DTS are parties to an
Agreement and Plan of Merger dated January 8, 1998 (the "Merger Agreement").
Certain of the DTS Parties (this and certain other terms are defined in Section
1) or certain of their equity holders are shareholders of DTS.
PCH, PCLP, PSOC and PNOC hold all the issued and outstanding shares of
Class B Common Stock. Pagon controls PCH, PCLP, PSOC and PNOC.
At the Closing held today under the Merger Agreement, Merger Sub is
being merged with and into DTS, DTS is thereby becoming a wholly-owned
subsidiary of the Company, and certain of the DTS Parties or certain of their
equity holders are receiving shares of Class A Common Stock as the Merger
Consideration. It is a condition precedent to the Closing that the parties
execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the completion of the transactions
contemplated by the Merger Agreement and of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows,
intending to be legally bound.
SECTION 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms have
the following terms have the following meanings:
"Audit Committee": the audit committee of the Board of Directors
referred to in Section 3.4.
<PAGE>
Page 19 of 31 Pages
"Board of Directors": the Board of Directors of the Company.
"Chisholm": Chisholm Partners III, L.P., a Delaware limited
partnership.
"Chisholm Designee": a person designated by Chisholm to serve as
a director in accordance with this Agreement.
"Class A Common Stock": the Company's Class A Common Stock, par
value $0.01 per share.
"Class B Common Stock": the Company's Class B Common Stock, par
value $0.01 per share.
"Columbia Capital": Columbia Capital Corporation, a Virginia
corporation.
"Columbia Designee": a person designated by Columbia Capital to
serve as a director in accordance with this Agreement.
"Columbia Parties": Columbia Capital and Columbia DBS, Inc., a
Virginia corporation.
"Columbia Principals": each of James B. Murray, Jr., David P.
Mixer, Mark R. Warner, Robert B. Blow, Mark J. Kington, Harry F. Hopper, III, R.
Philip Herget, III, Neil P. Byrne, Barton Schneider and James Fleming.
"Committee": the Audit Committee, the Compensation Committee or
the Nominating Committee.
"Compensation Committee": the compensation committee of the Board
of Directors referred to in Section 3.4.
"Covered Shares": (a) the shares of Class A Common Stock received
as the Merger Consideration by the shareholders of DTS that are parties to this
Agreement; and (b) all shares of voting securities of the Company now or
hereafter beneficially owned (within the meaning of the Securities Exchange Act
of 1934) by PCH, PCLP, PSOC, PNOC or Pagon.
"Designation Right Loss Event": With respect to any person, any
of the following, as determined by a majority of the Independent Directors
(whose determination shall be conclusive):
(a) such person's designee as a director commits a breach of
fiduciary duty to the Company or a material violation of any federal
or state securities law in connection with the purchase or sale of
any of the Company's securities;
2
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Page 20 of 31 Pages
(b) such person (or, in the case of Columbia Capital, any
Columbia Principal who owns at the time 100,000 or more shares of
Class A Common Stock) commits a material violation of any federal or
state securities law in connection with the purchase or sale of any
of the Company's securities;
(c) such person materially breaches its or his noncompetition or
confidentiality agreement with the Company;
(d) such person shall own, control, manage or be financially
interested, directly or indirectly, in any business (other than a less
than 5% interest in a publicly held company) that competes with the
Company or any of its Subsidiaries in any geographic area in which the
Company does business; but this paragraph (d) shall not apply (1) to
any investment held on November 5, 1997, (2) to any investment in a
business that comes into competition with the Company or any of its
Subsidiaries as a result of the Company's acquisition or establishment
of a new business or its expansion into a geographic area in which it
did not previously operate if such person shall have held such
investment before the Company's management proposes to the Board of
Directors such acquisition, establishment or expansion, (3) to any
investment in an investment fund or pool that itself makes or holds an
investment in a competitive business if such person (A) is regularly
engaged in making investment of that kind and (B) does not have the
power to, and does not in fact, exercise an influence on the decision
of the fund or pool in making the investment in the competitive
business, and (4) unless prior to the exercise by a majority of the
Independent Directors of the right to terminate the relevant person's
right to designate a director, such person is given notice of the
potential applicability of this paragraph (d) and a reasonable
opportunity to cure or modify the relationship to the satisfaction of a
majority of the Independent Directors;
(e) such person shall violate Section 2; or
(f) any director designated by such person shall take or omit to
take any action in his capacity as a director or Committee member in a
manner materially inconsistent with this Agreement, and the Person who
has the right to designate such director has not obtained such
director's resignation as a director within 30 days after being
requested to do so by the Board of Directors.
"Director" or "director": a member of the Board of Directors.
"DTS": as defined in the recitals.
"DTS Designee": a Columbia Designee, a Chisholm Designee or a
Whitney Designee.
"DTS Parties": the Columbia Parties, Whitney and the Fleet
Parties.
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Page 21 of 31 Pages
"Fleet Parties": Chisholm, Fleet Venture Resources, Inc., a Rhode
Island corporation, Fleet Equity Partners VI, L.P., a Delaware limited
partnership, and Kennedy Plaza Partners, a Rhode Island general partnership.
"Independent Director": a natural person who (a) is not Marshall
W. Pagon or a Columbia Principal or an officer, employee or principal of the
Company, PCH, PCLP, PSOC, PNOC, any of the Columbia Parties, Whitney, any of the
Fleet Parties, DTS, or any of their subsidiaries or affiliates, or any spouse or
sibling, or any ancestor or lineal descendant of any such person, spouse or
sibling ("immediate family") (b) is not a former officer or employee of any such
person, (c) does not in addition to such person's role as a director, act on a
regular basis, either individually or as a member or representative of an
organization, serving as a professional adviser, legal counsel or consultant to
any such person, if, in the reasonable discretion of the Nominating Committee,
such relationship is material to any such person, and (d) does not represent,
and is not a member of the immediate family of, a person who would not satisfy
the requirements of the preceding clauses (a), (b) and (c) of this sentence. A
person who has been or is a partner, officer or director of an organization that
has customary commercial, industrial, banking or underwriting relationships with
any of the persons named in clause (a) of the preceding sentence that are
carried on in the ordinary course of business and on an arms-length basis and
who otherwise satisfies the requirements set forth in clauses (a), (b), (c) and
(d) of the first sentence of this definition, may qualify as a Independent
Director unless, in the reasonable discretion of the Nominating Committee, such
person is not independent or may not be independent with respect to the
management of the business and affairs of the Company. A person shall not be
disqualified as an Independent Director under clause (b), (c) or (d) above
solely because of such person's (or a member of such person's immediate
family's) having served in any capacity with a business (other than DTS)
acquired by the Company, or solely because such person is a representative or
designee of any such business (whether or not the Company shall enter into a
consulting agreement with such person in connection with such acquisition).
"Merger Agreement": as defined in the recitals.
"Merger Consideration": as defined in the Merger Agreement.
"Pagon": Marshall W. Pagon, an individual.
"Pagon Designee": a person designated by Pagon (or, in the event
of his death or incapacity, by PCLP or another person appointed by Pagon for
this purpose) to serve as a director in accordance with this Agreement.
"PCH": Pegasus Communications Holdings, Inc., a Delaware
corporation.
"PCLP": Pegasus Capital, L.P., a Pennsylvania limited
partnership.
"PNOC": Pegasus Northwest Offer Corp, a Delaware corporation.
4
<PAGE>
Page 22 of 31 Pages
"PSOC": Pegasus Scranton Offer Corp, a Delaware corporation.
"Permitted Transferee": as defined in the Company's certificate
of incorporation on the date hereof.
"Person or "person": an individual, a partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
"Subsidiary": as defined in the Merger Agreement.
"Whitney": Whitney Equity Partners, L.P., a Delaware limited
partnership.
"Whitney Designee": a person designated by Whitney to serve as a
director in accordance with this Agreement.
SECTION 2
VOTING
Section 2.1 Each party warrants to the others that it has voting
control over the number of Covered Shares set forth opposite its name on Exhibit
A. Each party shall vote all Covered Shares held by it, or over which it has the
power to direct the voting, as specified in this Agreement and shall take any
and all other action necessary or appropriate to implement the provisions of
this Agreement, including without limitation proposing and voting on amendments
to the Company's certificate of incorporation and by-laws as may be necessary to
fully implement the provisions hereof. No party shall permit any Covered Shares
held by it, or over which it has the power to direct the voting, to be voted in
any manner inconsistent with this Agreement. "Voting" includes the execution of
written consents.
SECTION 3
COMPOSITION OF BOARD OF DIRECTORS
AND COMMITTEES
Section 3.1 Board of Directors. Except as otherwise provided in
Section 3.3, the Board of Directors shall consist of nine members, of whom:
(a) three will be Pagon Designees;
5
<PAGE>
Page 23 of 31 Pages
(b) one will be a Columbia Designee until Columbia Capital
ceases to have the right to designate a director under Section 4.1;
(c) one will be a Whitney Designee until Whitney ceases to have
the right to designate a director under Section 4.1;
(d) one will be a Chisholm Designee until Chisholm ceases to
have the right to designate a director under Section 4.1; and
(e) three will be Independent Directors, who shall be the
persons identified in Section 3.5(e) (so long as they continue to
satisfy the definition of "Independent Director") or their
successors (who satisfy the definition of "Independent Director")
nominated by the Nominating Committee.
Section 2.1 shall apply to the election of directors specified in this
Section 3.1.
Section 3.2 Vacancies Caused by Resignation, etc. Any vacancy in the
Board of Directors or a Committee caused by the resignation, removal, incapacity
or death of a Pagon Designee or a DTS Designee shall be filled by a person
designated by the party that had the right to designate the resigned, removed,
incapacitated or dead director or Committee member, except as provided in
Section 3.3. Section 2.1 shall apply to the election of directors and Committee
members specified in this Section 3.2.
Section 3.3 Other Vacancies.
(a) If Columbia Capital, Whitney or Chisholm ceases to have the
right to designate a director pursuant to Section 4.1, such party shall promptly
cause the director designated by it to resign if so requested by Pagon (or, in
the event of his death or incapacity, by PCLP or another person appointed for
Pagon for this purpose), except that in case of the loss pursuant to Section
4.1(a)(1), (b)(1) or (c)(1) of the right of Columbia Capital, Whitney or
Chisholm to designate a director, as the case may be, which also results in the
termination of this Agreement pursuant to Section 4.3, such party shall cause
the director designated by it to resign not later than the date on which this
Agreement terminates. Failing such resignation, such director may be removed in
the manner provided by law. If a vacancy occurs in the Board of Directors by
reason of any such required resignation or permitted removal, the Board of
Directors (as constituted after giving effect to such vacancy) shall either (1)
reduce the number of directors to eliminate the vacancy or (2) instruct the
Nominating Committee to nominate an Independent Director to fill the vacancy.
(b) The size of the Board of Directors may be increased as
provided by law. Each director elected to fill any position created by an
increase in the size of the Board of Directors shall be an Independent Director.
6
<PAGE>
Page 24 of 31 Pages
(c) No party to this Agreement will take any action to fill a
vacancy created under this Section 3.3 by a person who is not an Independent
Director. Otherwise, Section 2.1 shall not apply to the election of directors to
fill vacancies created under this Section 3.3
Section 3.4 Committees. The Board of Directors shall establish an Audit
Committee, a Nominating Committee and a Compensation Committee, each of which
shall consist of three directors who shall be (1) a director designated by
Pagon, (2) a director designated by a majority of the DTS Designees then serving
as directors; and (3) one of the Independent Directors specified in Section
3.1(e) designated by the Board of Directors in the manner provided by law. The
Audit Committee and the Compensation Committee shall have the powers and
functions of the present audit committee and compensation committee of the Board
of Directors. The Nominating Committee shall nominate all persons (other than
the Pagon Designees and the DTS Designees) to serve as directors, which nominee
shall be subject to election by the shareholders of the Company or subject to
appointment by the Board of Directors to fill vacancies. The Company shall not
establish a committee with the authority to act on all or substantially all
matters on which the Board of Directors may act (commonly known as an "executive
committee") without the consent of a majority of the DTS Designees.
Section 3.5 Initial Designations. The parties make the following
designations pursuant to this Section 3:
(a) Two of the Pagon Designees are Pagon and Robert N.
Verdecchio.
(b) The Columbia Designee is Harry F. Hopper, III.
(c) The Whitney Designee is Michael C. Brooks.
(d) The Chisholm Designee is Riordon B. Smith.
(e) The Independent Directors specified in Section 3.1(e) are
James J. McEntee, III, Mary C. Metzger and Donald W. Weber, each of
whom is currently a director of the Company.
Immediately following the execution of this Agreement, the Board of Directors
shall take such action as shall be required to create vacancies on the Board of
Directors and to elect persons to the Board of Directors as specified in this
Section 3.5. The parties will make their designations to the Committees at a
later date.
Section 3.6 Subsequent Designations. Except as provided in Section 3.5,
each party to this Agreement that is entitled to designate one or more directors
or Committee members shall do so by written notice to each of the other parties
to this Agreement and to the Secretary of the Company, signed by the Person
making such designation.
7
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Page 25 of 31 Pages
Section 3.7 Removal. Any director may be removed by the shareholders of
the Company in the manner provided by law, except that no DTS Designee may be
removed without the written consent of the party that designated him unless such
party shall have ceased to have the right to designate a director pursuant to
Section 4.1. Section 2.1 shall apply to this Section 3.7.
Section 3.8 Chairman, President and Chief Executive Officer. For so
long as this Agreement is in effect, Pagon will be elected by the Board of
Directors as Chairman, President and Chief Executive Officer of the Company,
except in case of incapacity.
Section 3.9 Preferred Stock. If the holders of the Company's 12-3/4%
Series A Cumulative Exchangeable Preferred Stock shall become entitled to elect
directors in accordance with the terms thereof, this Agreement shall not apply
to any additional directorships to which their rights apply.
Section 3.10 Failure or Delay in Making Designations. No failure or
delay by any party in making any designation of a director or Committee member
(including the fact that Pagon has made only two of his three designations in
Section 3.5(a)) shall constitute a waiver of such party's right to make
designations in the future.
SECTION 4
TERMINATION
Section 4.1 Termination of Designation Rights.
(a) Columbia Capital shall cease to have the right to designate
a director if at any time (1) the Columbia Parties and the Columbia Principals
collectively own less than half the Covered Shares received by the Columbia
Parties and the Columbia Principals pursuant to the Merger Agreement, or (2) a
Designation Right Loss Event occurs with respect to any Columbia Party or any
Columbia Principal.
(b) Whitney shall cease to have the right to designate a
director if at any time (1) Whitney owns less than half the Covered Shares
received by it pursuant to the Merger Agreement, or (2) a Designation Right Loss
Event occurs with respect to Whitney.
(c) Chisholm shall cease to have the right to designate a
director if at any time (1) the Fleet Parties collectively own less than half
the Covered Shares received by them pursuant to the Merger Agreement, or (2) a
Designation Right Loss Event occurs with respect to any Fleet Party.
(d) For purposes of this Section 4.1, a party no longer owns
Covered Shares distributed to its equity holders unless the distributee is also
a party to this Agreement or, in the
8
<PAGE>
Page 26 of 31 Pages
case of the Columbia Parties, is a Columbia Principal. Continuing ownership of
Covered Shares shall be determined by the specific identification method.
(e) For purposes of this Section 4.1, if the Columbia Parties,
the Columbia Principals, the Fleet Parties and Whitney, or any of them, shall
transfer any Covered Shares to a partnership or limited liability company wholly
owned by such transferors immediately following the Closing, then for purposes
of this Section 4.1 the transferor shall be deemed to own a portion of the
Covered Shares transferred to such partnership or limited liability company,
which portion shall be designated in writing by such partnership or limited
liability company to the Company at the time of the transfer of such Covered
Shares, as long as (i) such partnership or limited liability company continues
to own such Covered Shares, and (ii) such transferors continue to own all of the
equity interests in such partnership or limited liability company.
Section 4.2 Termination of Voting Obligations.
(a) The obligations of any party under Section 2.1 shall
terminate with respect to any Covered Share upon the sale or other transfer of
such Covered Share to any person who is not a party to this Agreement and is not
required by subsection (b) to become a party to this Agreement.
(b) PCH, PCLP, PSOC or PNOC shall not sell or otherwise
transfer any Covered Shares to a Permitted Transferee unless the Permitted
Transferee agrees in writing to be bound by, and to become a party to, this
Agreement (including the requirements of this subsection) to the same extent as
its transferor, as it relates to the Covered Shares so transferred.
Section 4.3 Termination of Agreement. This Agreement shall terminate in
its entirety on the date of the meeting of the Company's shareholders at which
directors are scheduled to be elected next following the date on which all of
Columbia Capital, Whitney and Chisholm shall cease to have the right to
designate a director pursuant to Section 4.1. Neither Section 2 nor the
requirements of this Agreement relating to actions by the Nominating Committee
shall apply to the election of directors to occur at such meeting.
SECTION 5
MISCELLANEOUS
Section 5.1 Notices. Except as otherwise provided below, whenever it is
provided in this Agreement that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties hereto, or whenever any of the parties hereto, wishes to provide
to or serve upon the other party any other communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be delivered in person or sent
by telecopy, as specified in the Merger Agreement.
9
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Page 27 of 31 Pages
Section 5.2 Entire Agreement. This Agreement represents the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes any and all prior oral and written agreements,
arrangements and understandings among the parties hereto with respect to such
subject matter; and this Agreement can be amended, supplemented or changed, and
any provision hereof can be waived or a departure from any provision hereof can
be consented to, only by a written instrument making specific reference to this
Agreement signed by all parties to this Agreement other than (a) the Columbia
Parties if Columbia Capital shall no longer have the right to designate a
director pursuant to Section 4.1, (b) Whitney if Whitney shall no longer have
the right to designate a director pursuant to Section 4.1, or (c) the Fleet
Parties if Chisholm shall no longer have the right to designate a director under
Section 4.1.
Section 5.3 Paragraph Headings. The paragraph headings contained in
this Agreement are for general reference purposes only and shall not affect in
any manner the meaning, interpretation or construction of the terms or other
provisions of this Agreement.
Section 5.4 Applicable Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of Delaware applicable to
contracts to be made, executed, delivered and performed wholly within such state
and, in any case, without regard to the conflicts of law principles of such
state.
Section 5.5 Severability. If any provision of this Agreement shall be
held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.
Section 5.6 No Waiver. The failure of any party at any time or times to
require performance of any provision hereof shall not affect the right at a
later time to enforce the same. No waiver by any party of any condition, and no
breach of any provision, term, covenant, representation or warranty contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
Section 5.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same original instrument. Not all
parties need sign the same counterpart. Delivery by facsimile of a signature
page to this Agreement shall have the same effect as delivery of an original
executed counterpart.
10
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Page 28 of 31 Pages
Section 5.8 Successors and Assigns. Subject to Section 4.1(d), this
Agreement shall inure to the benefit of and be binding upon the successors,
assigns and transferees of each of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed the date first written above.
PEGASUS COMMUNICATIONS CORPORATION
By: /s/ Howard E. Verlin
---------------------------------------------
Howard E. Verlin,
Vice President
PEGASUS CAPITAL, L.P.
By: Pegasus Capital, Ltd., General Partner
By: /s/ Howard E. Verlin
---------------------------------------------
Howard E. Verlin,
Vice President
PEGASUS COMMUNICATIONS HOLDINGS, INC.
By: /s/ Howard E. Verlin
---------------------------------------------
Howard E. Verlin,
Vice President
PEGASUS SCRANTON OFFER CORP
By: /s/ Howard E. Verlin
---------------------------------------------
Howard E. Verlin,
Vice President
PEGASUS NORTHWEST OFFER CORP
By: /s/ Howard E. Verlin
---------------------------------------------
Howard E. Verlin,
Vice President
11
<PAGE>
Page 29 of 31 Pages
/s/ Marshall W. Pagon
---------------------------------------------
Marshall W. Pagon
FLEET VENTURE RESOURCES, INC.
By: /s/ Riordon B. Smith
---------------------------------------------
Name: Riordon B. Smith
Title: Senior Vice President
FLEET EQUITY PARTNERS VI, L.P.
By: Fleet Growth Resources II, Inc.
Its General Partner
By: /s/ Riordon B. Smith
----------------------------------------
Name: Riordon B. Smith
Title: Senior Vice President
CHISHOLM PARTNERS III, L.P.
By: Silverado III L.P., its general partner
By: Silverado III Corp., its general partner
By: /s/ Riordon B. Smith
----------------------------------------
Name: Riordon B. Smith
Title: Senior Vice President
KENNEDY PLAZA PARTNERS
By: /s/ Riordon B. Smith
----------------------------------------
Name: Riordon B. Smith
Title: General Partner
12
<PAGE>
Page 30 of 31 Pages
WHITNEY EQUITY PARTNERS, L.P.
By: J.H. Whitney Equity Partners LLC
Its General Partner
By: /s/ Daniel J. O'Brien
----------------------------------------
Name: Daniel J. O'Brien
Title: Managing Member
COLUMBIA CAPITAL CORPORATION
By: /s/ Neil P. Byrne
----------------------------------------
Name: Neil P. Byrne
Title: Vice President
COLUMBIA DBS, INC.
By: /s/ Neil P. Byrne
----------------------------------------
Name: Neil P. Byrne
Title: Vice President
13
<PAGE>
Page 31 of 31 Pages
EXHIBIT A
<TABLE>
<CAPTION>
Covered Shares
Shareholder Class A Common Stock Class B Common Stock
- ------------------------------------- -------------------- --------------------
<S> <C> <C>
Whitney Equity Partners, L.P. 959,473
Fleet Venture Resources, Inc. 406,186
Fleet Equity Partners VI, L.P. 174,079
Chisholm Partners III, L.P. 147,611
Kennedy Plaza Partners 10,179
Columbia Capital Corporation 429,812
Columbia DBS, Inc. 18,316
Pegasus Capital, L.P. 1,217,348
Pegasus Communications Holdings, Inc. 3,123,856
Pegasus Northwest Offer Corp. 122,338
Pegasus Scranton Offer Corp. 118,358
Marshall W. Pagon 12,699
</TABLE>
14
