<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Infinity Broadcasting Corporation
--------------------------------------------------------
(Name of Issuer)
Class A Common Stock, par value $.002 per share
--------------------------------------------------------
(Title of Class of Securities)
45662610
--------------------------------------------------------
(CUSIP Number)
Angeline C. Straka, Esq.
Vice President, Secretary & Associate General Counsel
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, Pennsylvania 15222-1384
(412) 642-5631
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 20, 1996
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(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 [ ].
Check the following box if a fee is being paid with this statement [x]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
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.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
CUSIP NO. 45662610
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(1) Name of Reporting Person. S.S. or I.R.S. Identification No. of Above
Person
Westinghouse Electric Corporation, I.R.S.
Identification No. 25-0877540
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(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
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(3) SEC Use Only
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(4) Source of Funds
OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
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(6) Citizenship or Place of Organization
Pennsylvania
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Number of (7) Sole Voting Power
Shares Bene-
ficially ----------------------------------------------
Owned by (8) Shared Voting Power
Each Report- 14,722,901 (See response to Item 5)
ing Person ----------------------------------------------
with (9) Sole Dispositive Power
----------------------------------------------
(10) Shared Dispositive Power
14,722,901 (See response to Item 5)
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
14,722,901 (See response to Item 5)
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
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(13) Percent of Class Represented by Amount in Row (11)
16.2% (See response to Item 5)
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(14) Type of Reporting Person CO
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<PAGE> 3
ITEM 1. SECURITY AND ISSUER
This statement relates to the Class A Common Stock, par value $.002 per
share ("Class A Common Stock"), of Infinity Broadcasting Corporation
("Issuer"), a Delaware corporation with its principal executive offices at 600
Madison Avenue, New York, New York 10022.
ITEM 2. IDENTITY AND BACKGROUND
The person filing this statement is Westinghouse Electric Corporation
("Westinghouse"), a Pennsylvania corporation. The address of the principal
office and principal business address of Westinghouse is Westinghouse Building,
11 Stanwix Street, Pittsburgh, Pennsylvania 15222-1384. Westinghouse conducts
its businesses through its Westinghouse/CBS Group and its Industries &
Technology Group. The operations of the Westinghouse/CBS Group principally
relate to broadcasting, while the Industries & Technology Group provides
services, fuel and equipment for the nuclear energy market, services and
equipment for the power generation market, transport refrigeration services,
management services at government-owned facilities, and communication and
information systems.
During the last five years, neither Westinghouse nor, to the knowledge of
Westinghouse, any executive officer or director of Westinghouse has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to 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.
The attached Schedule I is a list of the directors and executive officers of
Westinghouse which contains the following information with respect to each such
person:
(a) name;
(b) business address; and
(c) present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which such
employment is conducted.
Except for Robert E. Cawthorn and David K. P. Li, who are both British
citizens, each person identified on Schedule I hereto is a United States
citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to the Stockholder Agreement dated as of June 20, 1996 among
Westinghouse and certain stockholders of Issuer set forth on Schedule A thereto
(the "Principal Stockholders"), Westinghouse may be deemed to be the
beneficial owner of 14,722,901 shares of Class A Common
<PAGE> 4
Stock. See response to Item 5. The Principal Stockholders entered into the
Stockholder Agreement to induce Westinghouse to enter into, and in
consideration of its entering into, the Agreement and Plan of Merger dated as
of June 20, 1996 (the "Merger Agreement") among Westinghouse, R Acquisition
Corp., a Delaware corporation and wholly owned subsidiary of Westinghouse
("Sub"), and Issuer.
The descriptions of the Merger Agreement and the Stockholder Agreement
contained herein are qualified in their entirety by reference to the applicable
agreements, which are attached hereto as Exhibits 1 and 2, respectively.
ITEM 4. PURPOSE OF TRANSACTION
The purpose of the Stockholder Agreement is to facilitate the merger of Sub
with and into Issuer (the "Merger"), with Issuer surviving the Merger, pursuant
to the terms of the Merger Agreement (the terms of which are hereby
incorporated by reference). The Merger Agreement provides, among other things,
for changes to the board of directors and certificate of incorporation of
Issuer at the effective time of the Merger. The Merger Agreement also
restricts Issuer from, among other things, engaging in certain transactions,
including extraordinary corporate transactions (other than the Merger),
selling certain assets, changing its capitalization and paying dividends and
otherwise requires Issuer to operate in the ordinary course of business. In
connection with the Merger, the Class A Common Stock will be delisted from the
New York Stock Exchange and will become eligible for termination of
registration under the Securities Exchange Act of 1934.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
The shares subject to the Stockholder Agreement, as of June 20, 1996,
consist of (i) 353,967 outstanding shares of Class A Common Stock, (ii)
8,310,465 outstanding shares of Class B Common Stock, par value $.002 per
share, of Issuer ("Class B Common Stock") and (iii) 199,309 and 5,859,160
shares of Class A Common Stock and Class B Common Stock, respectively, issuable
upon the exercise of outstanding stock options and warrants, all of which are
presently exercisable by the holder thereof, as well as any other shares of
common stock acquired by any Principal Stockholder after June 20, 1996 and
prior to the effective time of the Merger. As of June 20, 1996, the shares
subject to the Stockholder Agreement represent 52.0% of the aggregate voting
power ("Voting Power") of Issuer (1/) (assuming no exercise of warrants and
options subject to the Stockholder Agreement) and 64.9% of the aggregate Voting
Power (assuming exercise of all warrants and options subject to the Stockholder
Agreement).
As of June 20, 1996, the shares of Class A Common Stock subject to the
Stockholder Agreement represent 0.7% of the Class A Common Stock outstanding,
and less than 0.1% of the Voting Power (in each case, assuming exercise in full
of warrants to purchase 199,303 shares of Class A Common Stock). The shares of
Class B Common Stock subject to the Stockholder Agreement are convertible into
shares of Class A Common at
- ---------------
(1/) As of June 20, 1996, Issuer has three classes of common stock
outstanding entitled to vote on matters submitted to stockholders: Class A
Common Stock, Class B Common Stock and Class C Common Stock, par value $.002
per share ("Class C Common Stock"). For most matters submitted to a vote of
stockholders (including the Merger), holders of Class A Common Stock, Class B
Common Stock and Class C Common Stock will be entitled to one vote, ten votes
and one vote, respectively.
<PAGE> 5
any time and automatically convert upon the occurrence of certain events.
However, under the terms of the Stockholder Agreement, the Principal
Stockholders have agreed, subject to certain exceptions, not to transfer such
shares or convert such shares of Class B Common Stock into shares of Class A
Common Stock. If, however, such shares of Class B Common Stock were converted
into shares of Class A Common Stock, as of June 20, 1996, the shares subject to
the Stockholder Agreement would consist of 14,722,901 shares of Class A Common
Stock representing, 16.2% of the Class A Common Stock outstanding, or 16.0% of
the Voting Power (in each case, assuming exercise of all options and warrants in
full subject to the Stockholder Agreement). Accordingly, pursuant to the
Stockholder Agreement, Westinghouse may be deemed to have acquired beneficial
ownership of 14,722,901 shares of Class A Common Stock.
Under the terms of the Stockholder Agreement, the Principal Stockholders
also agreed, subject to certain exceptions, (i) to vote their shares of Class A
Common Stock and Class B Common Stock in favor of the Merger, the Merger
Agreement and the transactions contemplated thereby and (ii) to vote such shares
against any alternative takeover proposal or amendment to Issuer's certificate
of incorporation or by-laws which would impede the Merger, the Merger Agreement
and the transactions contemplated thereby. Accordingly, pursuant to the
Stockholder Agreement, Westinghouse may be deemed to have acquired shared voting
and dispositive power with respect to all such shares.
Except as described above, neither Westinghouse nor, to Westinghouse's
knowledge, any person named in Schedule I beneficially owns any shares of Class
A Common Stock or has effected any transactions in Class A Common Stock during
the past 60 days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The information set forth under Items 3, 4 and 5 above and the Exhibits
attached hereto are incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1: Agreement and Plan of Merger dated as of June 20, 1996,
among Westinghouse, Sub and Issuer.
Exhibit 2: Stockholder Agreement dated as of June 20, 1996, among
Westinghouse and the Principal Stockholders.
<PAGE> 6
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
June 28, 1996.
WESTINGHOUSE ELECTRIC CORPORATION
By: /s/ FREDRIC G. REYNOLDS
-------------------------------
Name: Fredric G. Reynolds
Title: Executive Vice President
and Chief Financial Officer
<PAGE> 7
SCHEDULE I
Name, business address, and present
principal occupation or employment of
the directors and executive officers of
Westinghouse Electric Corporation:
Directors
<TABLE>
<CAPTION>
Present Principal Occupation and
Name, Business Address Address of Employment
- ---------------------- -----------------------------------
<S> <C>
Frank C. Carlucci Chairman
The Carlyle Group The Carlyle Group
1001 Pennsylvania Avenue, N.W. 1001 Pennsylvania Avenue, N.W.
Washington, DC 20004-2505 Washington, DC 20004-2505
Robert E. Cawthorn Chairman
Rhone-Poulenc Rorer, Inc. Rhone-Poulenc Rorer, Inc.
500 Arcola Road 500 Arcola Road
Collegeville, PA 19426 Collegeville, PA 19426
Gary M. Clark President
Westinghouse Electric Corporation Westinghouse Electric Corporation
Westinghouse Building Westinghouse Building
11 Stanwix Street 11 Stanwix Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
George H. Conrades President and Chief Executive Officer
BBN Corporation. BBN Corporation
150 Cambridge Park Drive 150 Cambridge Park Drive
Cambridge, MA 02140 Cambridge, MA 02140
William H. Gray III President and Chief Executive Officer
The College Fund/UNCF The College Fund/UNCF
8260 Willow Oaks Corporate Drive 8260 Willow Oaks Corporate Drive
P.O. Box 10444 P. O. Box 10444
Fairfax, VA 22031 Fairfax, VA 22031
Michael H. Jordan Chairman and Chief Executive Officer
Westinghouse Electric Corporation Westinghouse Electric Corporation
Westinghouse Building Westinghouse Building
11 Stanwix Street 11 Stanwix Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
</TABLE>
<PAGE> 8
Directors (con't.)
<TABLE>
<CAPTION>
Present Principal Occupation and
Name, Business Address Address of Employment
- ---------------------- -----------------------------------
<S> <C>
David K. P. Li Deputy Chairman and Chief Executive
Bank of East Asia, Limited Bank of East Asia, Limited
Bank of East Asia Building Bank of East Asia Building
22nd Floor 22nd Floor
10 Des Voeux Road Central 10 Des Voeux Road Central
Hong Kong Hong Kong
David T. McLaughlin Chairman and Chief Executive Officer
The Aspen Institute The Aspen Institute
Carmichael Road Carmichael Road
Queenstown, MD 21658 Queenstown, MD 21658
Richard R. Pivirotto President
Richard R. Pivirotto Co., Inc. Richard R. Pivirotto Co., Inc.
111 Clapboard Ridge Road 111 Clapboard Ridge Road
Greenwich, CT 06830 Greenwich, CT 06830
Paula Stern President
The Stern Group, Inc. The Stern Group, Inc.
3314 Ross Place, N.W. 3314 Ross Place, N.W.
Washington, DC 20008 Washington, DC 20008
Robert D. Walter Chairman and Chief Executive Officer
Cardinal Health, Inc. Cardinal Health, Inc.
555 Glendon Court 555 Glendon Court
Dublin, OH 43016 Dublin, OH 43016
</TABLE>
<PAGE> 9
Executive Officers
<TABLE>
<CAPTION>
Present Principal Occupation and
Name, Business Address Address of Employment
- ---------------------- -----------------------------------
<S> <C>
Michael H. Jordan Chairman and Chief Executive Officer
Westinghouse Electric Corporation Westinghouse Electric Corporation
Westinghouse Building Westinghouse Building
11 Stanwix Street 11 Stanwix Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
Gary M. Clark President
Westinghouse Electric Corporation Westinghouse Electric Corporation
Westinghouse Building Westinghouse Building
11 Stanwix Street 11 Stanwix Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
Frank R. Bakos President - Power Generation
Westinghouse Electric Corporation Westinghouse Electric Corporation
The Quadrangle The Quadrangle
4400 Alafaya Trail 4400 Alafaya Trail
Orlando, FL 32826-2399 Orlando, FL 32826-2399
Louis J. Briskman Senior Vice President and General Counsel
Westinghouse Electric Corporation Westinghouse Electric Corporation
Westinghouse Building Westinghouse Building
11 Stanwix Street 11 Stanwix Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
Francis J. Harvey Executive Vice President and Chief Operating Officer
Westinghouse Electric Corporation Industries & Technology Group
Westinghouse Building Westinghouse Building
11 Stanwix Street 11 Stanwix Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
</TABLE>
<PAGE> 10
Executive Officers (con't.)
<TABLE>
<CAPTION>
Present Principal Occupation and
Name, Business Address Address of Employment
- ---------------------- -----------------------------------
<S> <C>
Peter A. Lund President & Chief Executive Officer
CBS Inc. CBS Inc.
President and Chief Executive Officer 51 W. 52nd Street
51 W. 52nd Street New York, NY 10019
New York, NY 10019
Fredric G. Reynolds Executive Vice President
Westinghouse Electric Corporation and Chief Financial Officer
Westinghouse Building Westinghouse Electric Corporation
11 Stanwix Street Westinghouse Building
Pittsburgh, PA 15222 11 Stanwix Street
Pittsburgh, PA 15222
James F. Watson, Jr. President - Thermo King
Thermo King Corporation Thermo King Corporation
314 W. 90th Street 314 W. 90th Street
Minneapolis, MN 55420 Minneapolis, MN 55420
</TABLE>
<PAGE> 11
Exhibit 1
===============================================================================
AGREEMENT AND PLAN OF MERGER
among
WESTINGHOUSE ELECTRIC CORPORATION,
R ACQUISITION CORP.
and
INFINITY BROADCASTING CORPORATION
Dated as of June 20, 1996
===============================================================================
<PAGE> 12
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
The Merger
<S> <C> <C>
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.03. Effective Time . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.04. Effects of the Merger . . . . . . . . . . . . . . . . . . . 3
SECTION 1.05. Certificate of Incorporation and By-laws . . . . . . . . . 3
SECTION 1.06. Directors . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.07. Officers . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
Effect of the Merger on the
Capital Stock of the Constituent
Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. Exchange of Certificates . . . . . . . . . . . . . . . . . 5
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company . . . . . . . 9
SECTION 3.02. Representations and Warranties of Parent and Sub . . . . . 25
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.02. No Solicitation . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
<PAGE> 13
2
<TABLE>
<CAPTION>
Page
ARTICLE V
Additional Agreements
<S> <C> <C>
Section 5.01. Preparation of the Form S-4 and the Joint Proxy Statement;
Stockholders Meetings . . . . . . . . . . . . . . . . . 42
SECTION 5.02. Letters of the Company's Accountants . . . . . . . . . . . 43
SECTION 5.03. Letters of Parent's Accountants . . . . . . . . . . . . . . 43
SECTION 5.04. Access to Information; Confidentiality . . . . . . . . . . 44
SECTION 5.05. Reasonable Efforts . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.06. Stock Options; Warrants . . . . . . . . . . . . . . . . . . 46
SECTION 5.07. Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.08. Indemnification, Exculpation and Insurance . . . . . . . . 49
SECTION 5.09. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.10. Public Announcements . . . . . . . . . . . . . . . . . . . 50
SECTION 5.11. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.12. NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.13. Stockholder Litigation . . . . . . . . . . . . . . . . . . 51
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation to Effect the Merger. 51
SECTION 6.02. Conditions to Obligations of Parent and Sub . . . . . . . . 53
SECTION 6.03. Conditions to Obligation of the Company . . . . . . . . . . 56
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.02. Effect of Termination . . . . . . . . . . . . . . . . . . . 58
SECTION 7.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.04. Extension; Waiver . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.05. Procedure for Termination, Amendment, Extension or Waiver . 59
</TABLE>
<PAGE> 14
3
<TABLE>
<CAPTION>
Page
ARTICLE VIII
General Provisions
<S> <C> <C>
SECTION 8.01. Nonsurvival of Representations and Warranties . . . . . . 60
SECTION 8.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.03. Definitions . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.04. Interpretation . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.05. Counterparts . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.06. Entire Agreement; No Third Party Beneficiaries . . . . . 63
SECTION 8.07. Governing Law . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.08. Assignment . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.09. Enforcement . . . . . . . . . . . . . . . . . . . . . . . 64
</TABLE>
<PAGE> 15
AGREEMENT AND PLAN OF MERGER dated as of June 20, 1996,
among WESTINGHOUSE ELECTRIC CORPORATION, a Pennsylvania
corporation ("Parent"), R ACQUISITION CORP., a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub"), and
INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company, and Parent acting as the sole stockholder of Sub, have approved the
merger of Sub with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued and
outstanding share of Class A Common Stock, par value $.002 per share, of the
Company ("Company Class A Common Stock"), each issued and outstanding share of
Class B Common Stock, par value $.002 per share, of the Company ("Company Class
B Common Stock") and each issued and outstanding share of Class C Common Stock,
par value $.002 per share, of the Company ("Company Class C Common Stock" and,
together with the Company Class A Common Stock and the Company Class B Common
Stock, the "Company Common Stock"), in each case other than shares owned
directly or indirectly by Parent or the Company, will be converted into the
right to receive the Merger Consideration (as defined in Section 2.01(c));
WHEREAS as a condition of the willingness of Parent to enter into this
Agreement, those individuals and trusts set forth on Schedule A attached to the
Stockholder Agreement (as defined below), as the holders of all the outstanding
Company Class B Common Stock (the "Principal Stockholders"), have entered into
the Stockholder Agreement dated as of the date hereof (the "Stockholder
Agreement") with Parent, which provides, among other things, that, subject to
the terms and conditions thereof, each Principal Stockholder will vote his or
its shares of Company Common Stock in favor of the Merger and the approval and
adoption of this Agreement;
WHEREAS the Board of Directors of the Company has approved the terms
of the Stockholder Agreement;
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and
<PAGE> 16
2
agreements in connection with the Merger and also to prescribe various
conditions to the Merger; and
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. (a) Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time (as defined in Section 1.03). Following the
Effective Time, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Sub in accordance with the DGCL.
(b) At the election of Parent, any direct or indirect wholly owned
subsidiary (as defined in Section 8.03) of Parent may be substituted for Sub as
a constituent corporation in the Merger. In such event, the parties agree to
execute an appropriate amendment to this Agreement in order to reflect such
substitution.
(c) If at any time prior to the Effective Time Parent creates a new
public holding company that becomes the sole shareholder of Parent (the
"Holding Company"), the Holding Company shall be substituted for Parent for all
purposes hereunder (and shares of common stock of the Holding Company will be
issued as the Merger Consideration in the same manner and amount as shares of
Parent Common Stock (as defined in Section 2.01(c)) would have otherwise been
issued hereunder), and the parties agree to execute an appropriate amendment to
this Agreement in order to reflect such substitution.
<PAGE> 17
3
SECTION 1.02. CLOSING. The closing of the Merger (the "Closing") will
take place at 10:00 a.m. on a date to be specified by the parties (the "Closing
Date"), which (subject to satisfaction or waiver of the conditions set forth in
Sections 6.01, 6.02 and 6.03) shall be no later than the second business day
after satisfaction or waiver of the conditions set forth in Section 6.01, at
the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New
York, New York 10019, unless another time, date or place is agreed to in
writing by the parties hereto.
SECTION 1.03. EFFECTIVE TIME. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State, or at
such other time as Sub and the Company shall agree should be specified in the
Certificate of Merger (the time the Merger becomes effective being hereinafter
referred to as the "Effective Time").
SECTION 1.04. EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in Section 259 of the DGCL.
SECTION 1.05. CERTIFICATE OF INCORPORATION AND BY-LAWS. (a) The
certificate of incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be amended as of the Effective Time so that Articles
FOUR, FIVE and SIX thereof read in their entirety as follows:
"ARTICLE FOUR
CAPITAL STRUCTURE
The total number of shares of capital stock which the Corporation
shall have authority to issue is 1,000 shares of common stock, par value $1.00
per share (the "Common Stock").
ARTICLE FIVE
[Intentionally omitted]
<PAGE> 18
4
ARTICLE SIX
[Intentionally omitted]".
As so amended, such certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
(b) The by-laws of the Company as in effect at the Effective Time
shall be the by-laws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
SECTION 1.06. DIRECTORS. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 1.07. OFFICERS. The officers of the Company immediately prior
to the Effective Time shall be the officers of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01. EFFECT ON CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one validly issued, fully
paid and nonassessable share of common stock, par value $1.00 per share,
of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Each share
of Company Common Stock that is owned by the Company or by any subsidiary
of the
<PAGE> 19
5
Company and each share of Company Common Stock that is owned by Parent,
Sub or any other subsidiary of Parent shall automatically be cancelled and
retired and shall cease to exist, and no consideration shall be delivered
in exchange therefor.
(c) CONVERSION OF COMPANY COMMON STOCK. Subject to Section 2.02(e),
each issued and outstanding share of Company Common Stock (other than
shares to be cancelled in accordance with Section 2.01(b)) shall be
converted into the right to receive 1.71 (the "Conversion Number") fully
paid and nonassessable shares of common stock, par value $1.00 per share,
of Parent ("Parent Common Stock") (the "Merger Consideration"). As of the
Effective Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such
shares of Company Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration and any cash
in lieu of fractional shares of Parent Common Stock to be issued or paid
in consideration therefor upon surrender of such certificate in accordance
with Section 2.02, without interest.
SECTION 2.02. EXCHANGE OF CERTIFICATES. (a) EXCHANGE AGENT. As of the
Effective Time, Parent shall enter into an agreement with such bank or trust
company as may be designated by Parent (the "Exchange Agent"), which shall
provide that Parent shall deposit with the Exchange Agent as of the Effective
Time, for the benefit of the holders of shares of Company Common Stock, for
exchange in accordance with this Article II, through the Exchange Agent,
certificates representing the shares of Parent Common Stock (such shares of
Parent Common Stock, together with any dividends or distributions with respect
thereto with a record date after the Effective Time, and any cash payable in
lieu of any fractional shares of Parent Common Stock being hereinafter referred
to as the "Exchange Fund") issuable pursuant to Section 2.01 in exchange for
outstanding shares of Company Common Stock.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
<PAGE> 20
6
represented outstanding shares of Company Common Stock (the "Certificates")
whose shares were converted into the right to receive the Merger Consideration
pursuant to Section 2.01, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of
Parent Common Stock and cash, if any, which such holder has the right to
receive pursuant to the provisions of this Article II, and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of Company Common Stock which is not registered in the transfer
records of the Company, a certificate representing the proper number of shares
of Parent Common Stock may be issued to a person other than the person in whose
name the Certificate so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by
reason of the issuance of shares of Parent Common Stock to a person other than
the registered holder of such Certificate or establish to the satisfaction of
Parent that such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.02, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration and cash, if any, which the holder thereof
has the right to receive in respect of such Certificate pursuant to the
provisions of this Article II. No interest will be paid or will accrue on any
cash payable to holders of Certificates pursuant to the provisions of this
Article II.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions with respect to Parent Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Parent Common
<PAGE> 21
7
Stock represented thereby, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 2.02(e), and all such
dividends, other distributions and cash in lieu of fractional shares of Parent
Common Stock shall be paid by Parent to the Exchange Agent and shall be
included in the Exchange Fund, in each case until the surrender of such
Certificate in accordance with this Article II. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificate representing whole shares of Parent
Common Stock issued in exchange therefor, without interest, (i) at the time of
such surrender, the amount of any cash payable in lieu of a fractional share of
Parent Common Stock to which such holder is entitled pursuant to Section
2.02(e) and the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
Parent Common Stock, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time
but prior to such surrender and with a payment date subsequent to such
surrender payable with respect to such whole shares of Parent Common Stock.
(d) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All shares of
Parent Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms of this Article II (including any cash paid pursuant
to this Article II) shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the shares of Company Common Stock
theretofore represented by such Certificates, SUBJECT, HOWEVER, to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have
been declared or made by the Company on such shares of Company Common Stock in
accordance with the terms of this Agreement or prior to the date of this
Agreement and which remain unpaid at the Effective Time, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be cancelled and exchanged as provided in this
Article II, except as otherwise provided by law.
<PAGE> 22
8
(e) NO FRACTIONAL SHARES. (i) No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates, no dividend or distribution of Parent shall relate to
such fractional share interests and such fractional share interests will not
entitle the owner thereof to vote or to any rights of a shareholder of Parent.
(ii) Notwithstanding any other provision of this Agreement, each holder
of shares of Company Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of Parent Common
Stock (after taking into account all Certificates delivered by such holder)
shall receive, in lieu thereof, cash (without interest) in an amount equal to
such fractional part of a share of Parent Common Stock multiplied by the
closing price of a share of Parent Common Stock on the New York Stock Exchange
("NYSE") Composite Transactions List (as reported by the WALL STREET JOURNAL
or, if not reported thereby, any other authoritative source) on the Closing
Date.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of the Certificates who have not theretofore complied with this Article
II shall thereafter look only to Parent for payment of their claim for the
Merger Consideration, any cash in lieu of fractional shares of Parent Common
Stock and any dividends or distributions with respect to Parent Common Stock.
(g) NO LIABILITY. None of Parent, Sub, the Company or the Exchange
Agent shall be liable to any person in respect of any shares of Parent Common
Stock or any cash from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificate shall not have been surrendered prior to seven years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration, any cash payable to the holder of such Certificate pursuant to
this Article II or any dividends or distributions payable to the holder of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.01(d))), any such Merger
Consideration or cash shall, to the extent permitted by applicable law, become
the property of the
<PAGE> 23
9
Surviving Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
(h) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, on a daily basis.
Any interest and other income resulting from such investments shall be paid to
Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
set forth with respect to a specifically identified representation and warranty
on the Disclosure Schedule delivered by the Company to Parent prior to the
execution of this Agreement (the "Company Disclosure Schedule"), the Company
represents and warrants to Parent and Sub as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of the Company and
each of its significant subsidiaries (as defined in Section 8.03) is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated and has the
requisite corporate power and authority to carry on its business as now
being conducted. Each of the Company and each of its significant
subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to
be so qualified or licensed or to be in good standing individually or in
the aggregate would not have a material adverse effect (as defined in
Section 8.03(c)) on the Company. The Company has delivered to Parent prior
to the execution of this Agreement complete and correct copies of its
certificate of incorporation and by-laws and the certificates of
incorporation and by-laws (or comparable organizational documents) of its
significant subsidiaries, in each case as amended to date.
(b) SUBSIDIARIES. As of the date hereof, the Company Disclosure
Schedule sets forth a true and
<PAGE> 24
10
complete list of each subsidiary of the Company. All the outstanding
shares of capital stock of each subsidiary of the Company have been
validly issued and are fully paid and nonassessable and are owned directly
or indirectly by the Company, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"). Except for the capital stock of its
subsidiaries, as of the date hereof, the Company does not own, directly or
indirectly, any capital stock or other ownership interest in any
corporation, limited liability company, partnership, joint venture or
other entity.
(c) CAPITAL STRUCTURE. The authorized capital stock of the Company
consists of 200,000,000 shares of Company Class A Common Stock, 17,500,000
shares of Company Class B Common Stock and 30,000,000 shares of Company
Class C Common Stock and 1,000,000 shares of preferred stock, par value
$.01 per share, of the Company ("Company Preferred Stock"). Immediately
following the Company's 1996 annual meeting, which is scheduled for July
10, 1996, the number of authorized shares of Company Class A Common Stock
will increase to 300,000,000, if such increase is approved by the
Company's stockholders. At the close of business on June 12, 1996, (i)
76,337,396 shares of Company Class A Common Stock were issued and
outstanding, (ii) 8,310,465 shares of Company Class B Common Stock were
issued and outstanding, (iii) 1,116,257 shares of Company Class C Common
Stock were issued and outstanding, (iv) no shares of Company Preferred
Stock were issued and outstanding, (v) 4,320,517 shares of Company Class A
Common Stock and no shares of Company Class B Common Stock or Company
Class C Common Stock were held by the Company in its treasury, (vi)
10,626,503 shares of Company Class A Common Stock and 9,135,317 shares of
Company Class B Common Stock were reserved for issuance pursuant to the
Stock Plans (as defined in Section 5.06), (vii) 8,310,465 and 1,116,257
shares of Company Class A Common Stock were reserved for issuance upon
conversion of the Company Class B Common Stock and Company Class C Common
Stock, respectively, each of which are convertible on a one-for-one basis
into shares of Company Class A Common Stock, (viii) 72,989 shares of
Company Class A Common Stock and 20,104,934 shares of Company Class C
Common Stock were reserved for issuance upon exercise of all
<PAGE> 25
11
outstanding warrants of the Company (the "Company Warrants") and (ix)
270,865 shares of Company Class A Common Stock and 37,988 shares of Class
B Common Stock were reserved for issuance pursuant to outstanding deferred
share awards under the Company's Deferred Share Plan. Except as set forth
above, at the close of business on June 12, 1996, no shares of capital
stock or other voting securities of the Company were issued, reserved for
issuance or outstanding. There are no outstanding stock appreciation
rights or rights (other than the Employee Stock Options (as defined in
Section 5.06)) to receive shares of Company Common Stock on a deferred
basis granted under the Stock Plans or otherwise. The Company Disclosure
Schedule sets forth a complete and correct list, as of June 12, 1996, of
the holders of all Employee Stock Options, the number of shares subject to
each such option and the exercise prices thereof. All outstanding shares
of capital stock of the Company are, and all shares which may be issued
will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to
vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of the Company may
vote. Except as set forth above, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of its subsidiaries
is a party or by which any of them is bound obligating the Company or any
of its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of the Company or of any of its subsidiaries or obligating the
Company or any of its subsidiaries to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. There are no outstanding contractual
obligations of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or
any of its subsidiaries. There are no outstanding contractual obligations
of the Company to vote or to dispose of any shares of the capital stock of
any of its subsidiaries. As of the date of this Agreement, the Principal
Stockholders are the record owners of a number of shares of Company Common
<PAGE> 26
12
Stock that in the aggregate constitutes a majority of the votes entitled
to be cast at the Company Stockholders Meeting (as defined in Section
5.01(b)).
(d) AUTHORITY; NONCONTRAVENTION. The Company has all requisite
corporate power and authority to enter into this Agreement and, subject to
the Company Stockholder Approval (as defined in Section 3.01(1)) with
respect to the Merger, to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on
the part of the Company, subject, in the case of the Merger, to the
Company Stockholder Approval. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
The execution and delivery of this Agreement do not, and the consummation
of the transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or assets of
the Company or any of its subsidiaries under, (i) the certificate of
incorporation or by-laws of the Company or the comparable organizational
documents of any of its subsidiaries, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to the Company or any
of its subsidiaries or their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company or any of its subsidiaries or
their respective properties or assets, other than, in the case of clauses
(ii) and (iii), any such conflicts, violations, defaults, rights, Liens,
judgments, orders, decrees, statutes, laws, ordinances, rules or
regulations that individually or in the aggregate would not (x) have a
material adverse effect on the Company, (y) impair the ability of the
Company
<PAGE> 27
13
to perform its obligations under this Agreement in any material respect or
(z) delay in any material respect or prevent the consummation of any of
the transactions contemplated by this Agreement or the Stockholder
Agreement. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal, state or local
government or any court, administrative or regulatory agency or commission
or other governmental authority or agency (a "Governmental Entity"), is
required by or with respect to the Company or any of its subsidiaries in
connection with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the transactions
contemplated by this Agreement, except for (1) the filing of a premerger
notification and report form by the Company under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"); (2) the
filing with the Securities and Exchange Commission (the "SEC") of (A) a
proxy statement relating to the Company Stockholders Meeting (such proxy
statement, together with the proxy statement relating to the Parent
Shareholders Meeting (as defined in Section 5.01(c)), in each case as
amended or supplemented from time to time, the "Joint Proxy Statement"),
and (B) such reports under Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as may be required
in connection with this Agreement and the transactions contemplated by
this Agreement; (3) the filing of the Certificate of Merger with the
Delaware Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do
business and such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws; (4) such
filings with and approvals of the Federal Communications Commission or any
successor entity (the "FCC") as may be required under the Communications
Act of 1934, as amended, and the rules, regulations and policies of the
FCC thereunder (collectively, the "Communications Act"), including in
connection with the transfer of the FCC Licenses (as defined in Section
3.01(s)) for the operation of the Licensed Facilities (as defined in
Section 3.01(s)); (5) such other filings and consents as may be required
under any environmental, health or safety law or regulation pertaining to
any notification, disclosure or required approval necessitated by the
Merger or the transactions
<PAGE> 28
14
contemplated by this Agreement; and (6) such consents, approvals, orders
or authorizations the failure of which to be made or obtained would not
reasonably be expected to have a material adverse effect on the Company.
(e) SEC DOCUMENTS; UNDISCLOSED LIABILITIES. The Company has filed all
required reports, schedules, forms, statements and other documents with
the SEC since January 1, 1995 (the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects with
the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents when filed contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Except to the extent that information contained in any SEC Document has
been revised or superseded by a later filed SEC Document, none of the SEC
Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the
Company included in the SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may
be indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed SEC Documents (as defined
in Section 3.01(g)), and except for liabilities and obligations incurred
in the
<PAGE> 29
15
ordinary course of business consistent with past practice since the date
of the most recent consolidated balance sheet included in the Filed SEC
Documents, neither the Company nor any of its subsidiaries has any
material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by generally accepted
accounting principles to be recognized or disclosed on a consolidated
balance sheet of the Company and its consolidated subsidiaries or in the
notes thereto.
(f) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by the Company specifically for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with
the SEC by Parent in connection with the issuance of Parent Common Stock
in the Merger (the "Form S-4") will, at the time the Form S-4 is filed
with the SEC, at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading
or (ii) the Joint Proxy Statement will, at the date it is first mailed to
the Company's stockholders or at the time of the Company Stockholders
Meeting, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. The Joint Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder, except that no representation or
warranty is made by the Company with respect to statements made or
incorporated by reference therein based on information supplied by Parent
or Sub specifically for inclusion or incorporation by reference in the
Joint Proxy Statement.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
SEC Documents filed and publicly available prior to the date of this
Agreement (as amended to the date of this Agreement, the "Filed SEC
Documents"), since the date of the most recent audited financial
statements included in the Filed SEC Documents, the Company has conducted
its business only
<PAGE> 30
16
in the ordinary course, and there has not been (i) any material adverse
change (as defined in Section 8.03(c)) in the Company, (ii) any
declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of
the Company's capital stock, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock, (iv) (x) any
granting by the Company to any executive officer or other key employee of
the Company of any increase in compensation, except for normal increases
in the ordinary course of business consistent with past practice or as
required under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed SEC Documents or
(y) any granting by the Company to any such executive officer of any
increase in severance or termination pay, except as was required under any
employment, severance or termination agreements in effect as of the date
of the most recent audited financial statements included in the Filed SEC
Documents, (v) any damage, destruction or loss, whether or not covered by
insurance, that has or could reasonably be expected to have a material
adverse effect on the Company or (vi) except insofar as may have been
disclosed in the Filed SEC Documents or required by a change in generally
accepted accounting principles, any change in accounting methods,
principles or practices by the Company materially affecting its assets,
liabilities or business.
(h) LITIGATION. Except as disclosed in the Filed SEC Documents, there
is no suit, action or proceeding (including any proceeding by or before
the FCC other than proceedings to amend FCC rules of general applicability
to the radio industry) pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries
that individually or in the aggregate could reasonably be expected to (i)
have a material adverse effect on the Company, (ii) impair the ability of
the Company to perform its obligations under this Agreement in any
material respect or (iii) delay in any material respect or prevent the
consummation of any of the transactions contemplated by this Agreement or
the Stockholder Agreement, nor is there any judgment, decree,
<PAGE> 31
17
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against the Company or any of its subsidiaries having, or
which could reasonably be expected to have, any effect referred to in
clause (i), (ii) or (iii) above.
(i) ABSENCE OF CHANGES IN BENEFIT PLANS. Except (x) as disclosed in
the Filed SEC Documents or (y) for normal increases in the ordinary course
of business consistent with past practice or as required by law, since the
date of the most recent audited financial statements included in the Filed
SEC Documents, there has not been any adoption or amendment in any
material respect by the Company or any of its significant subsidiaries of
any collective bargaining agreement or any bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other material plan
providing material benefits to any current or former employee, officer or
director of the Company or any of its significant subsidiaries. Without
limiting the foregoing, except as disclosed in the Filed SEC Documents,
since the date of the most recent audited financial statements included in
the Filed SEC Documents, there has not been any change in any actuarial or
other assumption used to calculate funding obligations with respect to any
Pension Plan (as defined below), or in the manner in which contributions
to any Pension Plan are made or the basis on which such contributions are
determined. Except as disclosed in the Filed SEC Documents, there exist no
employment, consulting or severance agreements currently in effect between
the Company and any current or former employee, officer or director of the
Company providing for annual compensation or annual payments in excess of
$250,000.
(j) ERISA COMPLIANCE. (i) The Company has delivered or made available
to Purchaser each "employee pension benefit plan" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (a "Pension Plan"), each "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA) (a "Welfare Plan"), each stock option,
stock purchase, deferred compensation plan or arrangement and each other
employee fringe benefit plan or arrangement maintained, contributed to or
required to be maintained
<PAGE> 32
18
or contributed to by the Company, any of its significant subsidiaries or
any other person or entity that, together with the Company, is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code (each,
a "Commonly Controlled Entity") which is currently in effect for the
benefit of any current or former employees, officers, directors or
independent contractors of the Company or any of its subsidiaries
(collectively, "Benefit Plans"). The Company has delivered or made
available to Parent true, complete and correct copies of (x) the most
recent annual report on Form 5500 filed with the Internal Revenue Service
with respect to each Benefit Plan (if any such report was required), (y)
the most recent summary plan description for each Benefit Plan for which
such summary plan description is required and (z) each currently effective
trust agreement, insurance or group annuity contract and each other
funding or financing arrangement relating to any Benefit Plan.
(ii) Each Benefit Plan has been administered in material compliance
with its terms, the applicable provisions of ERISA, the Code and all other
applicable laws and the terms of all applicable collective bargaining
agreements. To the knowledge of the Company, there are no investigations
by any governmental agency, termination proceedings or other claims
(except routine claims for benefits payable under the Benefit Plans),
suits or proceedings pending or threatened against any Benefit Plan or
asserting any rights or claims to benefits under any Benefit Plan that,
individually or in the aggregate, is reasonably likely to result in a
material adverse effect on the Company.
(iii) (1) There has been no application for waiver or waiver of the
minimum funding standards imposed by Section 412 of the Code with respect
to any Pension Plan and (2) no Pension Plan has or had at any time during
the current plan year an "accumulated funding deficiency" within the
meaning of Section 412(a) of the Code.
(iv) Each Pension Plan that is intended to be a tax-qualified plan has
been the subject of a determination letter from the Internal Revenue
Service to the effect that such Pension Plan and related trust is
qualified and exempt from Federal income taxes under Sections 401(a) and
501(a), respectively, of the Code;
<PAGE> 33
19
no such determination letter has been revoked, and, to the knowledge of
the Company, revocation has not been threatened; and such Pension Plan has
not been amended since the effective date of its most recent determination
letter in any respect that would adversely affect its qualification. The
Company has delivered or made available to Parent a copy of the most
recent determination letter received with respect to each Pension Plan for
which such a letter has been issued, as well as a copy of any pending
application for a determination letter. To the knowledge of the Company,
no event has occurred that could subject any Pension Plan to tax under
Section 511 of the Code.
(v) (1) Neither the Company nor any of its significant subsidiaries
has engaged in a "prohibited transaction" (as defined in Section 4975 of
the Code or Section 406 of ERISA) that involves the assets of any Benefit
Plan that is reasonably likely to subject the Company, any of its
significant subsidiaries, any employee of the Company or its significant
subsidiaries or, to the knowledge of the Company, a non-employee trustee,
non-employee administrator or other non-employee fiduciary of any trust
created under any Benefit Plan to the tax or penalty on prohibited
transactions imposed by Section 4975 of the Code; (2) within the past five
years, no Pension Plan that is subject to Title IV of ERISA has been
terminated other than in a standard termination in accordance with Section
4041(b) of ERISA (a "Standard Termination") or, to the knowledge of the
Company, has been the subject of a "reportable event" (as defined in
Section 4043 of ERISA and the regulations thereunder) and no such Pension
Plan is reasonably expected to be terminated other than in a Standard
Termination; and (3) none of the Company, any of its significant
subsidiaries or, to the knowledge of the Company, any non-employee
trustee, non-employee administrator or other non-employee fiduciary of any
Benefit Plan has breached the fiduciary duty provisions of ERISA or any
other applicable law in a manner that, individually or in the aggregate,
is reasonably likely to, result in a material adverse effect on the
Company.
(vi) As of the most recent valuation date for each Pension Plan that
is a "defined benefit pension plan" (as defined in Section 3(35) of ERISA)
(a "Defined Benefit Plan"), there was not any amount of "unfunded benefit
liabilities" (based upon the plan's ongoing actuarial assumptions used for
funding purposes as set
<PAGE> 34
20
forth in the most recent actuarial report or valuation) under such Defined
Benefit Plan in excess of $5 million and the aggregate amount of all such
unfunded benefit liabilities under all such Defined Benefit Plans as of
such date did not exceed $20 million, and the Company is not aware of any
facts or circumstances that would materially change the funded status of
any such Defined Benefit Plan as of the date hereof available as of the
date hereof. The Company has furnished to Parent the most recent actuarial
report or valuation with respect to each Defined Benefit Plan. To the
knowledge of the Company, the information supplied to the plan actuary by
the Company and any of its subsidiaries for use in preparing those reports
or valuations was complete and accurate in all material respects.
(vii) No Commonly Controlled Entity has incurred any liability under
Title IV of ERISA (other than for contributions not yet due to a Defined
Benefit Plan and other than for the payment of premiums to the Pension
Benefit Guaranty Corporation not yet due), which liability, to the extent
currently due, has not been fully paid as of the date hereof and would
not, individually or in the aggregate, be reasonably likely to result in a
material adverse effect on the Company.
(viii) No Commonly Controlled Entity has engaged in a transaction
described in Section 4069 of ERISA that could subject the Company to
liability at any time after the date hereof.
(ix) No Commonly Controlled Entity has withdrawn from any
multiemployer plan where such withdrawal has resulted in any "withdrawal
liability" (as defined in Section 4201 of ERISA) that has not been fully
paid.
(x) Except as specifically provided in this Agreement, no employee of
the Company or any of its subsidiaries will be entitled to any additional
benefits or any acceleration of the time of payment or vesting of any
benefits under any Benefit Plan or under any employment, severance,
termination or compensation agreement or as a result of the transactions
contemplated by this Agreement.
(k) TAXES. (i) Each of the Company and its subsidiaries has filed all
tax returns and reports required to be filed by it or requests for
extensions
<PAGE> 35
21
to file such returns or reports have been timely filed, granted and have
not expired, except to the extent that such failures to file or to have
extensions granted that remain in effect individually or in the aggregate
would not have a material adverse effect on the Company. All returns filed
by the Company and each of its subsidiaries are complete and accurate in
all material respects to the knowledge of the Company. The Company and
each of its subsidiaries has paid (or the Company has paid on its behalf)
all taxes shown as due on such returns, and the most recent financial
statements contained in the Filed SEC Documents reflect an adequate
reserve for all taxes payable by the Company and its subsidiaries for all
taxable periods and portions thereof accrued through the date of such
financial statements.
(ii) No deficiencies for any taxes have been proposed, asserted or
assessed against the Company or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in
the aggregate would not have a material adverse effect on the Company, and
no requests for waivers of the time to assess any such taxes have been
granted or are pending that individually or in the aggregate would have a
material adverse effect on the Company. The statute of limitations on
assessment or collection of any Federal income taxes due from the Company
or any of its subsidiaries has expired for all taxable years of the
Company or any of its subsidiaries through 1991. None of the assets or
properties of the Company or any of its subsidiaries is subject to any tax
lien, other than any such liens for taxes which are not due and payable,
which may thereafter be paid without penalty or the validity of which are
being contested in good faith by appropriate proceedings and for which
adequate reserves are being maintained in accordance with generally
accepted accounting principles ("Permitted Tax Liens").
(iii) As used in this Agreement, "taxes" shall include all Federal,
state and local income, franchise, use, property, sales, excise and other
taxes, tariffs or governmental charges of any nature whatsoever, domestic
or foreign, including any interest, penalties or additions with respect
thereto.
<PAGE> 36
22
(l) VOTING REQUIREMENTS. The affirmative vote of the holders of a
majority of the voting power of all outstanding shares of the Company
Common Stock, voting as a single class, at the Company Stockholders
Meeting (the "Company Stockholder Approval") is the only vote of the
holders of any class or series of the Company's capital stock necessary to
approve and adopt this Agreement and the transactions contemplated by this
Agreement.
(m) STATE TAKEOVER STATUTES. The Board of Directors of the Company has
approved the terms of this Agreement and the Stockholder Agreement and the
consummation of the Merger and the other transactions contemplated by this
Agreement and the Stockholder Agreement, and such approval is sufficient
to render inapplicable to the Merger and the other transactions
contemplated by this Agreement and the Stockholder Agreement the
provisions of Section 203 of the DGCL. To the best of the Company's
knowledge, no other state takeover statute or similar statute or
regulation applies or purports to apply to the Merger, this Agreement, the
Stockholder Agreement or any of the transactions contemplated by this
Agreement or the Stockholder Agreement and no provision of the certificate
of incorporation, by-laws or other governing instruments of the Company or
any of its subsidiaries would, directly or indirectly, restrict or impair
the ability of Parent to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of the Company and its subsidiaries
that may be acquired or controlled by Parent.
(n) LABOR MATTERS. Neither the Company nor any of its subsidiaries is
the subject of any suit, action or proceeding which is pending or, to the
knowledge of the Company, threatened, asserting that the Company or any of
its subsidiaries has committed an unfair labor practice (within the
meaning of the National Labor Relations Act or applicable state statutes)
or seeking to compel the Company or any of its subsidiaries to bargain
with any labor organization as to wages and conditions of employment, in
any such case, that is reasonably expected to result in a material
liability of the Company and its subsidiaries. No strike or other labor
dispute involving the Company or any of its subsidiaries is pending or, to
the knowledge of the Company, threatened, and, to the knowledge of the
<PAGE> 37
23
Company, there is no activity involving any employees of the Company or
any of its subsidiaries seeking to certify a collective bargaining unit or
engaging in any other organizational activity, except for any such dispute
or activity which would not have a material adverse effect on the Company.
(o) BROKERS. No broker, investment banker, financial advisor or other
person, other than Merrill Lynch & Co., the fees and expenses of which
will be paid by the Company, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with
the transactions contemplated by this Agreement and the Stockholder
Agreement based upon arrangements made by or on behalf of the Company. The
Company has furnished to Parent true and complete copies of all agreements
under which any such fees or expenses may be payable and all
indemnification and other agreements related to the engagement of the
persons to whom such fees may be payable.
(p) OPINION OF FINANCIAL ADVISOR. The Company has received the opinion
of Merrill Lynch & Co., dated the date of this Agreement, to the effect
that, as of such date, the Merger Consideration is fair to the Company's
stockholders from a financial point of view, a copy of which opinion has
been delivered to Parent.
(q) COMPLIANCE WITH APPLICABLE LAWS. Each of the Company and each of
its subsidiaries has in effect all Federal, state and local governmental
approvals, authorizations, certificates, filings, franchises, licenses,
notices, permits and rights ('Permits ) necessary for it to own, lease or
operate its properties and assets and to carry on its business as now
conducted, and there has occurred no default under any such Permit, except
for the lack of Permits and for defaults under Permits which lack or
default individually or in the aggregate would not have a material adverse
effect on the Company. Except as disclosed in the Filed SEC Documents, the
Company and its subsidiaries are in compliance with all applicable
statutes, laws, ordinances, rules, orders and regulations of any
Governmental Entity, except for possible noncompliance which individually
or in the aggregate would not have a material adverse effect on the
Company.
<PAGE> 38
24
(r) CONTRACTS; DEBT INSTRUMENTS. (i) Neither the Company nor any of
its subsidiaries is in violation of or in default under (nor does there
exist any condition which upon the passage of time or the giving of notice
would cause such a violation of or default under) any loan or credit
agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other contract, agreement, arrangement or
understanding to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that
individually or in the aggregate would not have a material adverse effect
on the Company.
(ii) The Company has made available to Parent (x) true and correct
copies of all loan or credit agreements, notes, bonds, mortgages,
indentures and other agreements and instruments pursuant to which any
indebtedness of the Company or any of its subsidiaries in an aggregate
principal amount in excess of $500,000 is outstanding or may be incurred
and (y) accurate information regarding the respective principal amounts
currently outstanding thereunder. For purposes of this Agreement,
"indebtedness" shall mean, with respect to any person, without
duplication, (A) all obligations of such person for borrowed money, or
with respect to deposits or advances of any kind to such person, (B) all
obligations of such person evidenced by bonds, debentures, notes or
similar instruments, (C) all obligations of such person under conditional
sale or other title retention agreements relating to property purchased by
such person, (D) all obligations of such person issued or assumed as the
deferred purchase price of property or services (excluding obligations of
such person to creditors for raw materials, inventory, services and
supplies incurred in the ordinary course of such person's business), (E)
all capitalized lease obligations of such person, (F) all obligations of
others secured by any Lien on property or assets owned or acquired by such
person, whether or not the obligations secured thereby have been assumed,
(G) all obligations of such person under interest rate or currency hedging
transactions (valued at the termination value thereof), (H) all letters of
credit issued for the account of such person and (I) all guarantees and
arrangements having the economic effect of a guarantee of such person of
any indebtedness of any other person.
<PAGE> 39
25
(s) FCC LICENSES: OPERATIONS OF LICENSED FACILITIES. The Company and
its subsidiaries have operated the radio stations for which the Company or
any of its subsidiaries holds licenses from the FCC, in each case which
are owned or operated by the Company and its subsidiaries (the "Licensed
Facilities") in material compliance with the terms of the Permits issued
by the FCC to the Company and its subsidiaries (the "FCC Licenses")
(complete and correct copies of each of which have been made available to
Parent), and in material compliance with the Communications Act. The
Company and its subsidiaries have, since acquired by the Company, timely
filed or made all applications, reports and other disclosures required by
the FCC to be filed or made with respect to the Licensed Facilities and
have timely paid all FCC regulatory fees with respect thereto. The Company
and each of its subsidiaries have, and are the authorized legal holders
of, all FCC Licenses necessary or used in the operation of the businesses
of the Licensed Facilities as presently operated. All such FCC Licenses
are validly held and are in full force and effect, unimpaired by any act
or omission of the Company, each of its subsidiaries (or their respective
predecessors) or their respective officers, employees or agents. As of the
date hereof, no application, action or proceeding is pending for the
renewal or material modification of any of the FCC Licenses and, to the
best of the Company's knowledge, there is not now before the FCC any
material investigation, proceeding, notice of violation, order of
forfeiture or complaint against the Company or any of its subsidiaries
relating to any of the Licensed Facilities that, if adversely decided,
would have a material adverse effect on the Company (and the Company is
not aware of any basis that would cause the FCC not to renew any of the
FCC Licenses). There is not now pending and, to the Company's knowledge,
there is not threatened, any action by or before the FCC to revoke,
suspend, cancel, rescind or modify in any material respect any of the FCC
Licenses that, if adversely decided, would have a material adverse effect
on the Company (other than proceedings to amend FCC rules of general
applicability to the radio industry).
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Except
as set forth with respect to a specifically identified representation and
warranty on the
<PAGE> 40
26
Disclosure Schedule delivered by Parent to the Company prior to the execution
of this Agreement (the Parent Disclosure Schedule"), Parent and Sub represent
and warrant to the Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent, Sub
and Parent's significant subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction
in which it is incorporated and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of Parent,
Sub and Parent's significant subsidiaries is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed or to be in
good standing individually or in the aggregate would not have a material
adverse effect on Parent. Parent has delivered to the Company complete and
correct copies of its articles of incorporation and by-laws and the
certificate of incorporation and by-laws of Sub, in each case as amended
to the date hereof.
(b) CAPITAL STRUCTURE. The authorized capital stock of Parent consists
of 630,000,000 shares of Parent Common Stock, which Parent proposes to
increase pursuant to the Charter Amendment (as defined in Section
3.02(j)), subject to the Parent Shareholder Approval (as defined in
Section 3.02(j)), and 25,000,000 shares of preferred stock, par value
$1.00 per share ("Parent Preferred Stock"). At the close of business on
June 18, 1996, (i) 419,550,580 shares of Parent Common Stock were issued
and outstanding, (ii) 3,600,000 shares of Parent Preferred Stock, all
denominated as Series C Conversion Preferred Stock, were issued and
outstanding, (iii) 6,419,541 shares of Parent Common Stock were held by
Parent in its treasury, (iv) 36,000,000 shares of Parent Common Stock were
reserved for issuance pursuant to the conversion of the Series C
Conversion Preferred Stock, (v) 51,379,144 shares of Parent Common Stock
were reserved for issuance pursuant to Parent's 1993 Long Term Incentive
Plan, Parent's 1991 Long Term Incentive Plan, Parent's 1984 Long Term
Incentive Plan and Parent's Deferred Compensation and Stock Plan for
<PAGE> 41
27
Directors and other stock-based plans (the "Parent Stock Plans") and (vi)
5,000,000 shares of Parent Preferred Stock, all denominated as Series A
Participating Preferred Stock (subject to increase and adjustment as set
forth in the Rights Agreement and the Certificate of Designations attached
as an exhibit thereto) were reserved for issuance in connection with the
rights (the "Rights") to purchase shares of Parent Preferred Stock
pursuant to the Rights Agreement dated as of December 28, 1995, between
Parent and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agreement"). Except as set forth above, at the close of business
on June 18, 1996, no shares of capital stock or other voting securities of
Parent were issued, reserved for issuance or outstanding. All outstanding
shares of capital stock of Parent are, and, subject to the Parent
Shareholder Approval, all shares which may be issued pursuant to this
Agreement will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. There are no
bonds, debentures, notes or other indebtedness of Parent having the right
to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which shareholders of Parent may vote.
Except as set forth above or as otherwise contemplated by this Agreement,
there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Parent is a party or by which it is bound obligating Parent to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of Parent or obligating
Parent to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking.
There are no outstanding contractual obligations of Parent to repurchase,
redeem or otherwise acquire any shares of capital stock of Parent. As of
the date of this Agreement, the authorized capital stock of Sub consists
of 1,000 shares of common stock, par value $1.00 per share, all of which
have been validly issued, are fully paid and nonassessable and are owned
by Parent free and clear of any Lien.
(c) AUTHORITY; NONCONTRAVENTION. Parent and Sub have all requisite
corporate power and authority to enter into this Agreement and, subject to
the Parent
<PAGE> 42
28
Shareholder Approval, to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by Parent and Sub
and the consummation by Parent and Sub of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate action
on the part of Parent and Sub, subject in the case of Parent to the Parent
Shareholder Approval. This Agreement has been duly executed and delivered
by Parent and Sub and constitutes a valid and binding obligation of Parent
and Sub, enforceable against Parent and Sub in accordance with its terms.
The execution and delivery of this Agreement do not, and the consummation
of the transactions contemplated by this Agreement and compliance with the
provisions of this Agreement by Parent or Sub, as the case may be, will
not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation or loss of
a material benefit under, or result in the creation of any Lien upon any
of the properties or assets of Parent, Sub or any of Parent's other
subsidiaries under, (i) the articles or certificate of incorporation or
by-laws of Parent, Sub or such other subsidiary, subject in the case of
Parent to the Parent Shareholder Approval, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent,
Sub or such other subsidiary or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent, Sub or such other
subsidiary or their respective properties or assets, other than, in the
case of clauses (ii) and (iii), any such conflicts, violations, defaults,
rights, Liens, judgments, orders, decrees, statutes, laws, ordinances,
rules or regulations that individually or in the aggregate would not (x)
have a material adverse effect on Parent, (y) impair the ability of Parent
and Sub to perform their respective obligations under this Agreement in
any material respect or (z) delay in any material respect or prevent the
consummation of any of the transactions contemplated by this Agreement or
the Stockholder Agreement. No consent, approval, order or authorization
of, or registration, declaration or
<PAGE> 43
29
filing with, any Governmental Entity is required by or with respect to
Parent or Sub in connection with the execution and delivery of this
Agreement or the consummation by Parent or Sub, as the case may be, of any
of the transactions contemplated by this Agreement, except for (1) the
filing of a premerger notification and report form by Parent under the HSR
Act; (2) the filing with the SEC of the Form S-4, the Joint Proxy
Statement relating to the Parent Shareholders Meeting and such reports
under Section 13 of the Exchange Act as may be required in connection with
this Agreement, the Stockholder Agreement and the transactions
contemplated by this Agreement; (3) the filing of the Certificate of
Merger with the Delaware Secretary of State and appropriate documents with
the relevant authorities of other states in which the Company is qualified
to do business and such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws; (4) such
filings with and approvals of the FCC as may be required under the
Communications Act, including in connection with the transfer of the FCC
Licenses; (5) such filings with and approvals of the NYSE to permit the
shares of Parent Common Stock that are to be issued in the Merger, upon
exercise of the Company Warrants and under the Stock Plans to be listed on
the NYSE; (6) such other filings and consents as may be required under any
environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval necessitated by the Merger
or the transactions contemplated by this Agreement; and (7) such consents,
approvals, orders or authorizations the failure of which to be made or
obtained would not reasonably be expected to have a material adverse
effect on Parent.
(d) SEC DOCUMENTS; UNDISCLOSED LIABILITIES. Parent has filed all
required reports, schedules, forms, statements and other documents with
the SEC since January 1, 1995 (the "Parent SEC Documents"). As of their
respective dates, the Parent SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Parent SEC Documents, and none of the Parent
SEC Documents when filed contained any untrue statement of a material fact
or omitted to state a material fact required to be
<PAGE> 44
30
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Except to the extent that information contained in any Parent SEC Document
has been revised or superseded by a later filed Parent SEC Document, none
of the Parent SEC Documents contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Parent included in the Parent SEC Documents comply as to
form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Parent and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed Parent SEC Documents (as
defined in Section 3.02(f)), and except for liabilities and obligations
incurred in the ordinary course of business consistent with past practice
since the date of the most recent consolidated balance sheet included in
the Filed Parent SEC Documents, neither Parent nor any of its subsidiaries
has any material liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by generally accepted
accounting to be recognized or disclosed on a consolidated balance sheet
of Parent and its consolidated subsidiaries or in the notes thereto.
(e) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 is filed with
the SEC, at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any
<PAGE> 45
31
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) the Joint Proxy Statement will,
at the date the Joint Proxy Statement is first mailed to Parent's
shareholders or at the time of the Parent Shareholders Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Form S-4 will comply as to form in all material respects
with the requirements of the securities Act and the rules and regulations
promulgated thereunder and the Joint Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange Act
and the rules and regulations promulgated thereunder, except that no
representation or warranty is made by Parent or Sub with respect to
statements made or incorporated by reference in either the Form S-4 or the
Joint Proxy Statement based on information supplied by the Company
specifically for inclusion or incorporation by reference therein.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Parent SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed Parent SEC Documents"), since the date of the
most recent audited financial statements included in the Filed Parent SEC
Documents, Parent has conducted its business only in the ordinary course,
and there has not been (i) any material adverse change in Parent, (ii)
except for regular quarterly dividends (in an amount determined in a
manner consistent with Parent's past practice) with customary record and
payment dates, any declaration, setting aside or payment of any dividend
or distribution (whether in cash, stock or property) with respect to any
of Parent's capital stock, (iii) any split, combination or
reclassification of any Parent Common Stock or any issuance or the
authorization of any issuance of any other securities in respect of, in
lieu of or in substitution for shares of the Parent Common Stock or (iv)
any damage, destruction or loss, whether or not covered by insurance, that
has or could reasonably be expected to have a material adverse effect on
Parent; it being understood that, except for the creation of the holding
company described in Section 1.01(c), the foregoing
<PAGE> 46
32
exception for matters disclosed in the Filed Parent SEC Documents shall
not relate to any transaction contemplated by Parent's press release dated
as of June 10, 1996, relating to the possible separation of Parent's
broadcasting businesses from its other businesses.
(g) LITIGATION. Except as disclosed in the Filed Parent SEC Documents,
there is no suit, action or proceeding (including any proceeding by or
before the FCC other than proceedings to amend FCC rules of general
applicability to the radio industry) pending or, to the knowledge of
Parent, threatened against or affecting Parent or any of its subsidiaries
that individually or in the aggregate could reasonably be expected to (i)
have a material adverse effect on Parent, (ii) impair the ability of
Parent or Sub to perform its obligations under this Agreement in any
material respect or (iii) delay in any material respect or prevent the
consummation of any of the transactions contemplated by this Agreement,
nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Parent or any of its
subsidiaries having, or which could reasonably be expected to have, any
effect referred to in clause (i), (ii) or (iii) above.
(h) BROKERS. No broker, investment banker, financial advisor or other
person, other than Chase Securities Inc. and Salomon Brothers Inc, the
fees and expenses of which will be paid by Parent, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated by this Agreement and the
Stockholder Agreement based upon arrangements made by or on behalf of
Parent or Sub.
(i) INTERIM OPERATIONS OF SUB. Sub was formed solely for the purpose
of engaging in the transactions contemplated hereby and has engaged in no
other business other than incident to its creation and this Agreement and
the transactions contemplated hereby.
(j) VOTING REQUIREMENTS. The affirmative vote at the Parent
Shareholders Meeting of the holders of a majority of the voting power of
the outstanding shares of Parent Common Stock entitled to vote generally
in an annual election of directors (the "Parent Shareholder
<PAGE> 47
33
Approval") is the only vote of the holders of any class or series of
Parent's capital stock necessary (i) to approve and adopt the amendment
(the "Charter Amendment") to Parent's articles of incorporation to create
a sufficient number of authorized shares of Parent Common Stock to permit
the issuance of Parent Common Stock pursuant to the Merger and (ii) to
authorize, in accordance with the applicable rules of the NYSE, the
issuance of Parent Common Stock pursuant to the Merger.
(k) TAXES. (i) Each of Parent and its subsidiaries has filed all tax
returns and reports required to be filed by it or requests for extensions
to file such returns or reports have been timely filed, granted and have
not expired, except to the extent that such failures to file or to have
extensions granted that remain in effect individually or in the aggregate
would not have a material adverse effect on Parent. All returns filed by
Parent and each of its subsidiaries are complete and accurate in all
material respects to the knowledge of Parent. Parent and each of its
subsidiaries has paid (or Parent has paid on its behalf) all taxes shown
as due on such returns, and the most recent financial statements contained
in the Filed Parent SEC Documents reflect an adequate reserve for all
taxes payable by Parent and its subsidiaries for all taxable periods and
portions thereof accrued through the date of such financial statements. Of
the net operating loss carryovers available to Parent's federal
consolidated group as of January 1, 1996, no more than $100,000,000 are
subject to "separate return limitation year" restrictions under Section
1502 of the Code.
(ii) No deficiencies for any taxes have been proposed, asserted or
assessed against Parent or any of its subsidiaries that are not adequately
reserved for, except for deficiencies that individually or in the
aggregate would not have a material adverse effect on Parent, and no
requests for waivers of the time to assess any such taxes have been
granted or are pending that individually or in the aggregate would have a
material adverse effect on Parent. The Federal income tax returns of
Parent and each of its subsidiaries consolidated in such returns have been
examined by and settled with the United States Internal Revenue Service
for all years through 1989. The statute of limitations
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34
on assessment or collection of any Federal income taxes due from Parent or
any of its subsidiaries has expired for all taxable years of Parent or
such subsidiaries through 1984. None of the assets or properties of Parent
or any of its subsidiaries is subject to any tax lien other than Permitted
Tax Liens.
(l) COMPLIANCE WITH APPLICABLE LAWS. Each of Parent and each of its
subsidiaries has in effect all Permits necessary for it to own, lease or
operate its properties and assets and to carry on its business as now
conducted, and there has occurred no default under any such Permit, except
for the lack of Permits and for defaults under Permits which lack or
default individually or in the aggregate would not have a material adverse
effect on Parent. Except as disclosed in the Filed Parent SEC Documents,
Parent and its subsidiaries are in compliance with all applicable
statutes, laws, ordinances, rules, orders and regulations of any
Governmental Entity, except for possible noncompliance which individually
or in the aggregate would not have a material adverse effect on Parent.
(m) OPINION OF FINANCIAL ADVISORS. Parent has received the opinions of
Chase Securities Inc. and Salomon Brothers Inc, in each case dated June
19, 1996, to the effect that, as of such date, the Conversion Number is
fair to Parent from a financial point of view, a signed copy of each such
opinion has been delivered to the Company.
(n) FCC LICENSES; OPERATIONS OF PARENT LICENSED FACILITIES. Parent and
its subsidiaries have operated the radio stations for which Parent or any
of its subsidiaries holds licenses from the FCC, in each case which are
owned or operated by Parent and its subsidiaries (the "Parent Licensed
Facilities") in material compliance with the terms of the Permits issued
by the FCC to the Parent and its subsidiaries ("Parent FCC Licenses")
(complete and correct copies of each of which have been made available to
the Company), and in material compliance with the Communications Act.
Parent and its subsidiaries have timely filed or made all applications,
reports and other disclosures required by the FCC to be filed or made with
respect to the Parent Licensed Facilities and have timely paid all FCC
regulatory fees with respect thereto. Parent and
<PAGE> 49
35
each of its subsidiaries have, and are the authorized legal holders of,
all Parent FCC Licenses necessary or used in the operation of the
businesses of the Parent Licensed Facilities as presently operated. All
such Parent FCC Licenses are validly held and are in full force and
effect, unimpaired by any act or omission of Parent, each of its
subsidiaries (or their respective predecessors) or their respective
officers, employees or agents. As of the date hereof, no application,
action or proceeding is pending for the renewal or material modification
of any of the Parent FCC Licenses and, to the best of Parent's knowledge,
there is not now before the FCC any material investigation, proceeding,
notice of violation, order of forfeiture or complaint against Parent or
any of its subsidiaries relating to any of the Parent Licensed Facilities
that, if adversely decided, would have a material adverse effect on Parent
(and Parent is not aware of any basis that would cause the FCC not to
renew any of the Parent FCC Licenses). There is not now pending and, to
Parent's knowledge, there is not threatened, any action by or before the
FCC to revoke, suspend, cancel, rescind or modify in any material respect
any of the Parent FCC Licenses that, if adversely decided, would have a
material adverse effect on Parent (other than proceedings to amend FCC
rules of general applicability to the radio industry).
(o) FCC QUALIFICATIONS. Parent and Sub are fully qualified under the
Communications Act to be the transferees of control of the FCC Licenses,
provided, however, that the parties recognize that the consummation of the
Merger would cause Parent to exceed in certain cases (i) the limits on
ownership of television and radio stations serving the same market imposed
by the FCC's "one-to-a-market" rule, 47 C.F.R. Section 73.3555(c), and (ii)
the numerical limits on local multiple radio station ownership imposed by
Section 202(b) of the 1996 Telecommunications Act.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.01. CONDUCT OF BUSINESS. (a) CONDUCT OF BUSINESS BY THE
COMPANY. During the period from the date of this Agreement to the Effective
Time, the Company shall,
<PAGE> 50
36
and shall cause its subsidiaries to, carry on their respective businesses in
the usual, regular and ordinary course in substantially the same manner as
heretofore conducted and in compliance in all material respects with all
applicable laws and regulations (including the Communications Act). Without
limiting the generality of the foregoing, during the period from the date of
this Agreement to the Effective Time, the Company shall not, and shall not
permit any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than
dividends and distributions by a direct or indirect wholly owned
subsidiary of the Company to its parent, (y) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or (z) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities (other than (w) the
issuance of Company Class A Common Stock or Company Class B Common Stock,
as applicable, upon the exercise of Employee Stock Options outstanding on
the date of this Agreement and in accordance with their present terms, (x)
the issuance of Company Class A Common Stock upon conversion of Company
Class B Common Stock and Company Class C Common Stock in accordance with
their present terms, (y) the issuance of Company Class A Common Stock,
Company Class B Common Stock or Company Class C Common Stock, as
applicable, upon the exercise of warrants of the Company outstanding on
the date of this Agreement and in accordance with their present terms and
(z) grants of options on Company Class A Common Stock to persons other
than executive officers of the Company in the ordinary course of business
consistent with past practice, and the issuance of Company Class A Common
Stock upon exercise of such options, such options not to exceed an
aggregate of 500,000 shares);
<PAGE> 51
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(iii) other than as contemplated by the Company's proxy statement for
its 1996 annual meeting, amend its certificate of incorporation, by-laws
or other comparable organizational documents;
(iv) except as set forth in Section 4.01 of the Company Disclosure
Schedule and subject to Section 4.01(c), acquire or agree to acquire (x)
by merging or consolidating with, or by purchasing a substantial portion
of the assets of, or by any other manner, any business or any corporation,
limited liability company, partnership, joint venture, association or
other business organization or division thereof, (y) any assets that
individually or in the aggregate are material to the Company and its
subsidiaries taken as a whole or (z) any broadcast radio stations
(provided that any such acquisition pursuant to a swap of assets without
the payment by the Company of a material amount of cash consideration
along therewith shall require only consultation with, and not approval of,
Parent);
(v) except as set forth in Section 4.01 of the Company Disclosure
Schedule and subject to Section 4.01(c), sell, lease, license, mortgage or
otherwise encumber or subject to any Lien or otherwise dispose of (x) any
of its properties or assets, other than in the ordinary course of business
consistent with past practice, that are material to the Company and its
subsidiaries taken as a whole or (y) any broadcast radio stations
(provided that any such disposition pursuant to a swap without the payment
by the Company of a material amount of cash consideration along therewith
shall require only consultation with, and not approval of, Parent);
(vi) except as set forth in Section 4.01 of the Company Disclosure
Schedule (x) incur any indebtedness, except for borrowings for working
capital purposes not in excess of $10 million at any one time outstanding
incurred in the ordinary course of business consistent with past practice
and except for intercompany indebtedness between the Company and any of
its subsidiaries or between such subsidiaries, or (y) make any loans,
advances or capital contributions to, or investments in, any other person,
other than to the Company or any direct or indirect wholly owned
subsidiary of the Company or to officers and employees
<PAGE> 52
38
of the Company or any of its subsidiaries for travel, business or
relocation expenses in the ordinary course of business;
(vii) make or agree to make any new capital expenditure or capital
expenditures which in the aggregate are in excess of $5,000,000;
(viii) make any tax election that could reasonably be expected to have
a material adverse effect on the Company or settle or compromise any
material income tax liability;
(ix) except in the ordinary course of business or except as would not
reasonably be expected to have a material adverse effect on the Company,
modify, amend or terminate any material contract or agreement to which the
Company or any subsidiary is a party or waive, release or assign any
material rights or claims thereunder;
(x) make any material change to its accounting methods, principles or
practices, except as may be required by generally accepted accounting
principles;
(xi) authorize, or commit or agree to take, any of the foregoing
actions.
(b) CONDUCT OF BUSINESS BY PARENT. During the period from the date of
this Agreement to the Effective Time, Parent shall not:
(i) (x) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than regular
quarterly cash dividends (in an amount determined in a manner consistent
with Parent's past practice) with customary record and payment dates or
(y) split, combine or reclassify any of its capital stock or, except for
the creation of the holding company described in Section 1.01(c), issue or
authorize the issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock;
(ii) amend Parent's articles of incorporation or by-laws in a manner
that would be materially adverse to the holders of Parent Common Stock;
<PAGE> 53
39
(iii) except as set forth in Section 4.01 of the Parent Disclosure
Schedule and subject to Section 4.01(c), acquire or agree to acquire any
broadcast radio stations (whether through merger or by purchase of assets
or otherwise) (provided that any acquisition pursuant to a swap of assets
without the payment by Parent of a material amount of cash consideration
along therewith shall require only consultation with, and not approval of,
the Company);
(iv) except as set forth in Section 4.01 of the Parent Disclosure
Schedule and subject to Section 4.01(c), sell or otherwise dispose of any
broadcast radio station (provided that any such disposition pursuant to a
swap without the payment by Parent of a material amount of cash
consideration along therewith shall require only consultation with, and
not approval of, the Company); or
(v) authorize, or commit or agree to take, any of the foregoing
actions.
(c) OTHER ACTIONS. The Company and Parent shall not, and shall not
permit any of their respective subsidiaries to, take any action that would, or
that could reasonably be expected to, result in (i) any of the representations
and warranties of such party set forth in this Agreement that are qualified as
to materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect or (iii) any
of the conditions to the Merger set forth in Article VI not being satisfied. In
addition, Parent and Sub, on the one hand, and the Company, on the other hand,
further covenant that from and after the date hereof until the Effective Time,
without the prior written consent of the Company or Parent, as the case may be,
neither Parent nor Sub, on the one hand, nor the Company, on the other hand,
shall, except as otherwise set forth in Section 4.01(c) of the Parent
Disclosure Schedule or of the Company Disclosure Schedule, take any action that
could reasonably be expected to impair or delay in any material respect
obtaining the FCC Order (as defined in Section 6.01(b)) or complying with or
satisfying the terms thereof.
(d) ADVICE OF CHANGES. The Company and Parent shall promptly advise
the other party orally and in writing of (i) any representation or warranty
made by it contained in this Agreement that is qualified as to materiality
<PAGE> 54
40
becoming untrue or inaccurate in any respect or any such representation or
warranty that is not so qualified becoming untrue or inaccurate in any material
respect, (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement or (iii) any change or event having, or which,
insofar as can reasonably be foreseen, would have, a material adverse effect on
such party or on the truth of their respective representations and warranties
or the ability of the conditions set forth in Article VI to be satisfied;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
SECTION 4.02. NO SOLICITATION. (a) The Company shall not, nor shall it
permit any of its subsidiaries to, nor shall it authorize or permit any
officer, director or employee of or any investment banker, attorney or other
advisor or representative of, the Company or any of its subsidiaries to,
directly or indirectly, (i) solicit, initiate or encourage the submission of
any takeover proposal (as defined in Section 8.03), (ii) enter into any
agreement with respect to any takeover proposal or give any approval of the
type referred to in Section 3.01(m) with respect to any takeover proposal or
(iii) participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any takeover proposal; provided, however,
that if at any time prior to the receipt of the Company Stockholder Approval,
the Board of Directors of the Company determines in good faith, based on the
advice of outside counsel, that it is necessary to do so in order to comply
with its fiduciary duties to the Company's stockholders under applicable law,
the Company may, in response to an unsolicited takeover proposal of the sort
referred to in clause (x) of Section 8.03(g) that involves consideration to the
Company's stockholders with a value that the Company's Board of Directors
reasonably believes, after receiving advice from the Company's financial
advisor, is superior to the consideration provided for in the Merger, and
subject to compliance with Section 4.02(c), (x) furnish information with
respect to the Company pursuant to a customary confidentiality agreement to any
person making such proposal and (y) participate in negotiations regarding such
proposal. Without limiting the foregoing, it is understood that any
<PAGE> 55
41
violation of the restrictions set forth in the preceding sentence by any
officer, director or employee of the Company or any of its subsidiaries or any
investment banker, attorney or other advisor or representative of the Company
or any of its subsidiaries, whether or not such person is purporting to act on
behalf of the Company or any of its subsidiaries or otherwise, shall be deemed
to be a breach of this Section 4.02(a) by the Company.
(b) Neither the Board of Directors of the Company nor any committee
thereof shall (x) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Parent, the approval or recommendation by such Board of
Directors or such committee of this Agreement or the Merger or (y) approve or
recommend, or propose to approve or recommend, any takeover proposal except in
connection with a superior proposal (as defined in Section 8.03(g)) and then
only at or after the termination of this Agreement pursuant to Section 7.01(c).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company promptly shall advise
Parent orally and in writing of any request for information or of any takeover
proposal or any inquiry with respect to or which could reasonably be expected
to lead to any takeover proposal, the identity of the person making any such
request, takeover proposal or inquiry and all the terms and conditions thereof.
The Company will keep Parent fully informed of the status and details
(including amendments or proposed amendments) of any such request, takeover
proposal or inquiry.
(d) Nothing contained in this Section 4.02 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act; provided, however, neither the
Company nor its Board of Directors nor any committee thereof shall, except as
permitted by Section 4.02(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to the Merger or approve or recommend, or
propose to approve or recommend, a takeover proposal.
<PAGE> 56
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ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. PREPARATION OF THE FORM S-4 AND THE JOINT PROXY
STATEMENT; STOCKHOLDERS MEETINGS. (a) As soon as practicable following the
date of this Agreement, the Company and Parent shall prepare and file with the
SEC the Joint Proxy Statement and Parent shall prepare and file with the SEC
the Form S-4, in which the Joint Proxy Statement will be included as a
prospectus. Each of the Company and Parent shall use all reasonable efforts to
have the Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. The Company will use all reasonable efforts to
cause the Joint Proxy Statement to be mailed to the Company's stockholders, and
Parent will use all reasonable efforts to cause the Joint Proxy Statement to be
mailed to Parent's shareholders, in each case as promptly as practicable after
the Form S-4 is declared effective under the Securities Act. Parent shall also
take any action (other than qualifying to do business in any jurisdiction in
which it is not now so qualified or to file a general consent to service of
process) required to be taken under any applicable state securities laws in
connection with the issuance of Parent Common Stock in the Merger and the
Company shall furnish all information concerning the Company and the holders of
the Company Common Stock as may be reasonably requested in connection with any
such action.
(b) The Company will, as soon as practicable following the date of
this Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Company Stockholders Meeting") for the purpose of obtaining
the Company Stockholder Approval. Without limiting the generality of the
foregoing, the Company agrees that its obligations pursuant to the first
sentence of this Section 5.01(b) shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
takeover proposal. The Company will, through its Board of Directors, recommend
to its stockholders the approval and adoption of this Agreement and the
transactions contemplated hereby, except to the extent that the Board of
Directors of the Company shall have withdrawn or modified its approval or
recommendation of this Agreement or the Merger and terminated this Agreement in
accordance with Section 4.02(b).
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(c) Parent will, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of its
shareholders (the "Parent Shareholders Meeting") for the purpose of obtaining
the Parent Shareholder Approval. Parent will, through its Board of Directors,
recommend to its shareholders (i) the approval and adoption of the amendment to
its articles of incorporation to increase the authorized number of shares of
Parent Common Stock to permit the issuance of the Parent Common Stock pursuant
to the Merger and (ii) to authorize, in accordance with the applicable rules of
the NYSE, the issuance of Parent Common Stock pursuant to the Merger.
(d) Parent and the Company will use reasonable efforts to hold the
Company Stockholders Meeting and the Parent Shareholders Meeting on the same
date and as soon as practicable after the date hereof.
SECTION 5.02. LETTERS OF THE COMPANY'S ACCOUNTANTS. The Company
shall use all reasonable efforts to cause to be delivered to Parent a letter of
KPMG Peat Marwick LLP, the Company's independent public accountants, dated a
date within two business days before the date on which the Form S-4 shall
become effective and a letter of KPMG Peat Marwick LLP dated a date within two
business days before the Closing Date, each addressed to Parent, in form and
substance reasonably satisfactory to Parent and customary in scope and
substance for letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4.
SECTION 5.03. LETTERS OF PARENT'S ACCOUNTANTS. Parent shall use all
reasonable efforts to cause to be delivered to the Company letters of KPMG Peat
Marwick LLP, Price Waterhouse LLP and Coopers & Lybrand LLP, Parent's
independent public accountants for the relevant periods prior to the date
hereof, dated a date within two business days before the date on which the Form
S-4 shall become effective and letters of KPMG Peat Marwick LLP, Price
Waterhouse LLP and Coopers & Lybrand LLP dated a date within two business days
before the Closing Date, each addressed to the Company, in form and substance
reasonably satisfactory to the Company and customary in scope and substance for
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
<PAGE> 58
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SECTION 5.04. ACCESS TO INFORMATION; CONFIDENTIALITY. Subject to the
Confidentiality Agreement (as defined below), each of the Company and Parent
shall, and shall cause each of its respective subsidiaries to, afford to the
other party and to the officers, employees, accountants, counsel, financial
advisors and other representatives of such other party, reasonable access
during normal business hours during the period prior to the Effective Time to
all their respective properties, books, contracts, commitments, personnel and
records and, during such period, each of the Company and Parent shall, and
shall cause each of its respective subsidiaries to, furnish promptly to the
other party (a) a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the requirements of
Federal or state securities laws and (b) all other information concerning its
business, properties and personnel as such other party may reasonably request.
Each of the Company and Parent will hold, and will cause its respective
officers, employees, accountants, counsel, financial advisors and other
representatives and affiliates to hold, any nonpublic information in accordance
with the terms of the Confidentiality Agreement dated as of June 12, 1996,
between Parent and the Company (the "Confidentiality Agreement").
SECTION 5.05. REASONABLE EFFORTS. (a) Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
all reasonable efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement,
including (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Entities (including the FCC (the "FCC
Application"), which the parties shall file as soon as practicable (and in any
event within 30 days) after the date hereof) and the making of all necessary
registrations and filings (including filings with Governmental Entities, such
as those referred to in Sections 3.01(d)(1)-(5) and 3.02(c)(1)-(5)) and the
taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any
<PAGE> 59
45
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the Stockholder Agreement or the consummation of
the transactions contemplated by this Agreement or the Stockholder Agreement
(such as in connection with the transfer of the FCC Licenses), including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement and the
Stockholder Agreement; provided, however, that a party shall not be obligated
to take any action pursuant to the foregoing if the taking of such action or
the obtaining of any waiver, consent, approval or exemption is reasonably
likely (x) to be materially burdensome to such party and its subsidiaries taken
as a whole or to impact in a materially adverse manner the economic or business
benefits of the transactions contemplated by this Agreement or the Stockholder
Agreement so as to render inadvisable the consummation of the Merger or (y) to
result in the imposition of a condition or restriction of the type referred to
in clause (ii), (iii), (iv) or (v) of Section 6.02(d); provided further that
Parent agrees to offer in the FCC Application and to accept the conditions
contained in the proviso of Section 6.01(b).
(b) In connection with and without limiting the foregoing, the
Company and its Board of Directors shall (i) take all action necessary to
ensure that no state takeover statute or similar statute or regulation is or
becomes applicable to the Merger, this Agreement, the Stockholder Agreement or
any of the other transactions contemplated by this Agreement or the Stockholder
Agreement and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to the Merger, this Agreement, the Stockholder
Agreement or any other transaction contemplated by this Agreement or the
Stockholder Agreement, take all action necessary to ensure that the Merger and
the other transactions contemplated by this Agreement and the Stockholder
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and the Stockholder Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement.
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SECTION 5.06. STOCK OPTIONS; WARRANTS. (a) As soon as practicable
following the date of this Agreement, the Board of Directors of the Company
(or, if appropriate, any committee administering the Stock Plans) shall adopt
such resolutions or take such other actions as may be required to effect the
following:
(i) adjust the terms of all outstanding (x) employee and director stock
options to purchase shares of Company Common Stock ("Employee Stock
Options") granted under the Company's Stock Option Plan, and the Company's
1996 Long-Term Incentive Plan (if adopted by the Company's stockholders at
the Company's 1996 annual meeting), in each case as amended and restated
through the date hereof, or any other stock option plan, program, agreement
or arrangement of the Company or its subsidiaries (collectively, the "Stock
Plans") and (y) employee deferred share awards with respect to Company
Common Stock ("Employee Deferred Shares" and, together with the Employee
Stock Options, the "Employee Stock Awards") granted under the Company's
Deferred Share Plan or any other deferred share plan, program, agreement or
arrangement of the Company or its subsidiaries, in each case as amended or
restated through the date hereof (collectively, the "Deferred Share Plans"
and, together with the Stock Plans, the "Equity Plans"), whether vested or
unvested, as necessary to provide that, at the Effective Time, (I) each
Employee Stock Option outstanding immediately prior to the Effective Time
shall be deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under such Employee Stock Option, including
vesting and the rights of the holder under the terms of such Employee Stock
Option, the same number of shares of Parent Common Stock as the holder of
such Employee Stock Option would have been entitled to receive pursuant to
the Merger had such holder exercised such Employee Stock Option in full
immediately prior to the Effective Time (the "Deemed Parent Share Amount"),
at a price per share of Parent Common Stock equal to (A) the aggregate
exercise price for the shares of Company Common Stock otherwise purchasable
pursuant to such Employee Stock Option divided by (B) the aggregate Deemed
Parent Share Amount with respect to such Employee Stock Option (each, as so
adjusted, an "Adjusted Option"); provided, however, that in the case of any
option to which Section 421 of the Code applies by reason of its
qualification under
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any of Sections 422 through 424 of the Code ("qualified stock options"),
the option price, the number of shares purchasable pursuant to such option
and the terms and conditions of exercise of such option shall be determined
in order to comply with Section 424 of the Code and (II) each Employee
Deferred Share outstanding immediately prior to the Effective Time shall be
deemed to constitute a deferred share, subject to the same terms and
conditions as were applicable under the Employee Deferred Share, including
the rights of the holder under the terms of such Employee Deferred Share,
with respect to the number of shares of Parent Common Stock that the holder
of such Employee Deferred Share would have been entitled to receive
pursuant to the Merger had such holder held the shares of Company Common
Stock covered by such Employee Deferred Share directly immediately prior to
the Effective Time; and
(ii) subject to the consent of Parent, such consent not to be
unreasonably withheld, make such other changes to the Equity Plans as the
Company and Parent may determine appropriate to give effect to the Merger,
including the amendment of the Stock Plans to permit the deferral of the
payment of any shares of Parent Common Stock purchased upon the exercise of
any Adjusted Stock Option identified on Section 5.06 of the Company
Disclosure Schedule pursuant to the election of the holder thereof who is
identified on Section 5.06 of the Company Disclosure Schedule but only to
the extent any such amendment would not cause any amount that would
otherwise be deductible by the Company or Parent to fail to be so
deductible.
(b) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Employee Stock Awards appropriate notices setting
forth such holders' rights pursuant to the respective Equity Plans and the
agreements evidencing the grants of such Employee Stock Awards shall continue in
effect on the same terms and conditions (subject to the adjustments required by
this Section 5.06 after giving effect to the Merger and the provisions of
paragraphs (a)(ii) and (e) of this Section 5.06). Parent shall comply with the
terms of the Equity Plans and ensure, to the extent required by, and subject to
the provisions of, the Stock Plans, that the Employee Stock Options which
qualified as qualified stock options prior to the Effective Time continue to
qualify as qualified stock options after the Effective Time.
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(c) Parent shall take such actions as are reasonably necessary for
the assumption of the Equity Plans of the Company pursuant to Section 5.06(a),
including the reservation, issuance and listing of Parent Common Stock as is
necessary to effectuate the transactions contemplated by Section 5.06(a). Upon
or prior to the Effective Time, Parent shall prepare and file with the SEC a
registration statement on Form S-8 with respect to shares of Parent Common
Stock subject to Employee Stock Awards and shall use its best efforts to
maintain the effectiveness of a registration statement or registration
statements covering such Employee Stock Awards (and maintain the current status
of the prospectus or prospectuses contained therein) for so long as such
Employee Stock Awards remain outstanding. With respect to those individuals,
if any, who subsequent to the Effective Time will be subject to the reporting
requirements under Section 16(a) of the Exchange Act, where applicable, Parent
shall use its best efforts to administer the Equity Plans assumed pursuant to
Section 5.06(a) in a manner that complies with Rule 16b-3 promulgated under the
Exchange Act.
(d) A holder of an Adjusted Option may exercise such Adjusted Option
in whole or in part in accordance with its terms and the terms of the related
Stock Plan by delivering a properly executed notice of exercise to Parent,
together with the consideration therefor and the Federal withholding tax
information, if any, required in accordance with the related Stock Plan.
(e) All restrictions or limitations on transfer and vesting with
respect to Employee Stock Options awarded under the Stock Plans, to the extent
that such restrictions or limitations shall not have already lapsed, shall
remain in full force and effect with respect to such options after giving
effect to the Merger and the assumption by Parent as set forth above, except
that effective from and after the Effective Time the restrictions and
limitations on the vesting of Employee Options held as of the date hereof by
that individual listed on Section 5.06 of the Company Disclosure Schedule shall
lapse and shall be of no further effect.
(f) Parent shall cause the Surviving Corporation to deliver to each
holder of Company Warrants at or prior to the Effective Time the undertakings
required by Section 6.3 of each warrant certificate (as in effect on the date
hereof) that represents outstanding Company Warrants.
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SECTION 5.07. BENEFIT PLANS. Except as provided in Section 5.06,
Parent hereby agrees that for a period of one year immediately following the
Closing, it shall, or shall cause the Surviving Corporation to, continue to
maintain employee benefit plans, programs and policies for the employees of the
Company and its subsidiaries which, in the aggregate, provide benefits that are
no less favorable to those provided to them under such plans, programs and
policies on the date hereof.
SECTION 5.08. INDEMNIFICATION, EXCULPATION AND INSURANCE. Parent and
Sub agree that all rights to indemnification and exculpation from liabilities
for acts or omissions occurring at or prior to the Effective Time now existing
in favor of the current or former directors or officers of the Company and its
subsidiaries as provided in their respective certificates of incorporation,
by-laws (or comparable organizational documents) and indemnification agreements
shall survive the Merger and shall continue in full force and effect in
accordance with their terms for a period of not less than six years from the
Effective Time. Parent will cause to be maintained for a period of not less
than six years from the Effective Time the Company's current directors' and
officers' insurance and indemnification policy to the extent that it provides
coverage for events occurring prior to the Effective Time ("D&O Insurance") for
all persons who are directors and officers of the Company on the date of this
Agreement, so long as the annual premium therefor would not be in excess of
200% of the last annual premium paid prior to the date of this Agreement (the
"Maximum Premium"); provided, however, that Parent may, in lieu of maintaining
such existing D&O Insurance as provided above, cause coverage to be provided
under any policy maintained for the benefit of Parent or any of its
subsidiaries, so long as the terms thereof are no less advantageous to the
intended beneficiaries thereof than the existing D&O Insurance. If the
existing D&O Insurance expires, is terminated or cancelled during such six-year
period, Parent will use all reasonable efforts to cause to be obtained as much
D&O Insurance as can be obtained for the remainder of such period for an
annualized premium not in excess of the Maximum Premium, on terms and
conditions no less advantageous to the covered persons than the existing D&O
Insurance. The Company represents to Parent that the Maximum Premium is
$581,660.
SECTION 5.09. FEES AND EXPENSES. (a) Except as provided below in
this Section 5.09, all fees and expenses
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incurred in connection with the Merger, this Agreement, the Stockholder
Agreement and the transactions contemplated by this Agreement and the
Stockholder Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated, except that each of Parent
and the Company shall bear and pay one-half of the costs and expenses incurred
in connection with the filing, printing and mailing of the Form S-4 and the
Joint Proxy Statement.
(b) The Company shall pay, or cause to be paid, in same day funds to
Parent the sum of (x) Parent's Expenses (as defined below) in an amount up to
but not to exceed $20,000,000 and (y) $100,000,000 (the "Termination Fee") upon
demand if (i) the Company terminates this Agreement pursuant to Section
7.01(c); or (ii) Parent terminates this Agreement pursuant to Section
7.01(b)(i) or (b)(iv) at any time after a takeover proposal has been made and
within one year after such a termination, the person that made the takeover
proposal (or an affiliate thereof) completes a merger, consolidation or other
business combination with the Company or a significant subsidiary of the
Company, or the purchase from the Company or from a significant subsidiary of
the Company of 20% or more (in voting power) of the voting securities of the
Company or of 20% or more (in market value or book value) of the assets of the
Company and its subsidiaries, on a consolidated basis. "Expenses" shall mean
reasonable and reasonably documented out-of-pocket fees and expenses incurred
or paid by or on behalf of Parent in connection with the Merger or the
consummation of any of the transactions contemplated by this Agreement,
including all fees and expenses of counsel, commercial banks, investment
banking firms, accountants, experts and consultants to Parent.
SECTION 5.10. PUBLIC ANNOUNCEMENTS. Parent and Sub, on the one hand,
and the Company, on the other hand, will consult with each other before
issuing, and provide each other the opportunity to review, comment upon and
concur with, any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Merger, and shall
not issue any such press release or make any such public statement prior to
such consultation, except as may be required by applicable law, court process
or by obligations pursuant to any listing agreement with any national
securities exchange. The parties agree that the initial press release to be
issued with respect to the transactions contemplated by this
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Agreement and the Stockholder Agreement shall be in the form heretofore agreed
to by the parties.
SECTION 5.11. AFFILIATES. Prior to the Closing Date, the Company
shall deliver to Parent a letter identifying all persons who are, at the time
the Merger is submitted for approval to the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act.
The Company shall use reasonable efforts to cause each such person to deliver
to Parent on or prior to the Closing Date a written agreement in a form
reasonably acceptable to Parent and the Company. The Company shall not
register, and shall instruct its transfer agent not to register, the transfer
of any certificate representing Company Common Stock held by a Principal
Stockholder, unless such transfer is made in compliance with the terms of the
Stockholder Agreement.
SECTION 5.12. NYSE LISTING. Parent shall use all reasonable efforts
to cause the shares of Parent Common Stock to be issued in the Merger, upon
exercise of the Company Warrants and under the Stock Plans to be approved for
listing on the NYSE, subject to official notice of issuance, prior to the
Closing Date.
SECTION 5.13. STOCKHOLDER LITIGATION. The Company shall give Parent
the opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to the transactions
contemplated by this Agreement; provided, however, that Parent shall have the
right to prevent the Company from entering into any such settlement without
Parent's consent by agreeing to indemnify each director of the Company for the
amount of his individual liability (whether as director or in another
capacity), if any, arising from the underlying claim, net of insurance, that is
in excess of the amount, if any, that such director would have been liable for
under such settlement (whether as director or in another capacity).
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger is
subject to the
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satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) STOCKHOLDER APPROVALS. Each of the Company Stockholder Approval
and the Parent Shareholder Approval shall have been obtained.
(b) FCC ORDER. The FCC shall have issued the FCC Order (as defined
below) approving the applications for transfer of control of the FCC
Licenses for the operation of the Licensed Facilities in connection with
the Merger, and the FCC Order shall have been obtained without the
imposition of any conditions or restrictions of the type referred to in
Section 6.02(d)(ii), (iii), (iv) or (v) that are not acceptable to Parent
in its sole discretion; provided that without triggering Parent's right to
approve such conditions or restrictions, the FCC Order (i) may condition
consummation of the Merger on Parent complying with the numerical limits on
local multiple radio ownership imposed by Section 202(b) of the 1996
Telecommunications Act through receipt of a temporary waiver for a period
of up to six months following the Effective Time or otherwise, and (ii) may
grant Parent temporary, rather than permanent, waivers of the "one-
to-a-market" rule, 47 C.F.R. 73.3555(c), so long as such temporary waivers
shall remain in effect until at least six months following the effective
date of FCC action concluding the ongoing rulemaking proceeding in MM
Docket Nos. 91-221, 87-8 (FCC 94-322) and any successor rulemaking
proceeding, including in particular a rulemaking initiated by the FCC in
response to the 1996 Telecommunications Act, that considers the
"one-to-a-market" rule. The "FCC Order" shall be an action by the FCC
approving the transfer of the FCC Licenses for the operation of the
Licensed Facilities pursuant to the Merger which, except in each case as
may be waived in writing by Parent in its sole discretion, has not been
reversed, stayed, enjoined, set aside, annulled or suspended; with respect
to which no timely request for stay, petition for reconsideration or appeal
or sua sponte action of the FCC with comparable effect is pending; and as
to which the time for filing any such request, petition or appeal or for
the taking of any such sua sponte action by the FCC has expired.
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(c) HSR ACT. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(d) NO INJUNCTIONS OR RESTRAINTS. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order enacted, entered, promulgated, enforced
or issued by any court of competent jurisdiction or other Governmental
Entity or other legal restraint or prohibition preventing the consummation
of the Merger shall be in effect.
(e) FORM S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order, and Parent shall have received all state
securities or "blue sky" authorizations necessary to issue the Parent
Common Stock issuable pursuant to this Agreement.
(f) NYSE LISTING. The shares of Parent Common Stock issuable to the
Company's stockholders pursuant to this Agreement, upon exercise of the
Company Warrants and under the Stock Plans shall have been approved for
listing on the NYSE, subject to official notice of issuance.
SECTION 6.02. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The
obligations of Parent and Sub to effect the Merger are further subject to
satisfaction or waiver of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct (for all purposes of this Section 6.02(a) without giving effect to
any "materiality" or "material adverse effect" limitations contained
therein) as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in
which case as of such date), and except to the extent the failure of such
representations and warranties to be true and correct would not, in the
aggregate, have a material adverse effect on the Company. Parent shall
have received a
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54
certificate signed on behalf of the Company by the chief executive officer
and the chief financial officer of the Company to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and Parent
shall have received a certificate signed on behalf of the Company by the
chief executive officer and the chief financial officer of the Company to
such effect.
(c) LETTERS FROM COMPANY AFFILIATES. Parent shall have received from
each person identified in the letter referred to in Section 5.11 an
executed copy of an agreement in a form reasonably acceptable to Parent and
the Company.
(d) NO LITIGATION. There shall not be pending or threatened by any
Governmental Entity other than the FCC any suit, action or proceeding (and
there shall not be pending by any other person any suit, action or
proceeding which has a reasonable likelihood of success), in each case (i)
challenging the acquisition by Parent or Sub of any shares of capital stock
of the Company or the Surviving Corporation, seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement or the Stockholder Agreement or seeking to
obtain from the Company, Parent or Sub any damages that are material in
relation to the Company and its subsidiaries taken as a whole or Parent and
its subsidiaries taken as a whole, as applicable, (ii) seeking to prohibit
or limit the ownership or operation by the Company, Parent or any of their
respective subsidiaries of any material portion of the business or assets
of the Company and its subsidiaries, taken as a whole, or Parent and its
subsidiaries, taken as a whole, as applicable, or to compel the Company,
Parent or any of their respective subsidiaries to dispose of or hold
separate any material portion of the business or assets of the Company and
its subsidiaries, taken as a whole, or Parent and its subsidiaries, taken
as a whole, as applicable, as a result of the Merger or any of the other
transactions contemplated by this Agreement or the Stockholder Agreement,
(iii) seeking to impose limitations on the ability of Parent to
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55
acquire or hold, or exercise full rights of ownership of, any shares of
capital stock of the Company or the Surviving Corporation, including the
right to vote the Company Common Stock, or common stock of the Surviving
Corporation, on all matters properly presented to the stockholders of the
Company or the Surviving Corporation, respectively, (iv) seeking to
prohibit Parent and its subsidiaries from effectively controlling in any
material respect the business or operations of the Company and its
subsidiaries, taken as a whole, or (v) which otherwise could reasonably be
expected to have a material adverse effect on the Company or Parent. In
addition, there shall not be any statute, rule, regulation, judgment or
order enacted, entered, enforced or promulgated that is reasonably likely
to result, directly or indirectly, in any of the consequences referred to
in clauses (ii) through (iv) above.
(e) TAX OPINIONS. Parent shall have received from Cravath, Swaine &
Moore, counsel to Parent, on the date of the Joint Proxy Statement and on
the Closing Date opinions, in each case dated as of such respective dates
and stating that the Merger will be treated for Federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code and
that Parent, Sub and the Company will each be a party to that
reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinions, counsel for Parent shall be entitled to rely upon
representations of officers of Parent, Sub and the Company reasonably
satisfactory in form and substance to such counsel.
(f) KARMAZIN EMPLOYMENT ARRANGEMENTS. The agreement dated as of the
date hereof between Mel Karmazin and Parent relating to the terms of
employment of Mel Karmazin by Parent, as amended from time to time, shall
be in full force and effect and Parent shall not be aware of any basis that
would reasonably be expected to cause such agreement to no longer be in
full force and effect, in each case other than as a result of breach by
Parent thereunder.
(g) COMPLIANCE. After giving effect to the consummation of the
Merger, the Company shall be in compliance with the provisions of any
agreement
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referred to in Section 6.02(g) of the Company Disclosure Schedule.
SECTION 6.03. CONDITIONS TO OBLIGATION OF THE COMPANY. The
obligation of the Company to effect the Merger is further subject to
satisfaction or waiver of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent and Sub set forth in this Agreement shall be true and
correct (for all purposes of this Section 6.03(a) without giving effect to
any "materiality" or "material adverse effect" limitations contained
therein) as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except to the extent such
representations expressly relate to an earlier date (in which case as of
such date), and except to the extent the failure of such representations
and warranties to be true and correct would not, in the aggregate, have a
material adverse effect on the Company. The Company shall have received a
certificate signed on behalf of Parent by an executive officer of Parent to
such effect.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND SUB. Parent and Sub
shall have performed in all material respects all obligations required to
be performed by them under this Agreement at or prior to the Closing Date,
and the Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect.
(c) TAX OPINIONS. The Company shall have received from Debevoise &
Plimpton, counsel to the Company, on the date of the Joint Proxy Statement
and on the Closing Date opinions, in each case dated as of such respective
dates and stating that the Merger will be treated for Federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the
Code and that Parent, Sub and the Company will each be a party to that
reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinions, counsel for the Company shall be entitled to rely
upon representations of officers of Parent, Sub and the Company reasonably
satisfactory in form and substance to such counsel.
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01. TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after the Company
Stockholder Approval or the Parent Shareholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if, upon a vote at a duly held Company Stockholders Meeting or
Parent Shareholders Meeting or any adjournment thereof at which the
Company Stockholder Approval or the Parent Shareholder Approval, as the
case may be, shall have been voted upon, the Company Stockholder
Approval or the Parent Shareholder Approval, as the case may be, shall
not have been obtained;
(ii) if the Merger shall not have been consummated on or before June
30, 1997, unless the failure to consummate the Merger is the result of
a willful and material breach of this Agreement by the party seeking to
terminate this Agreement; provided, however, that the passage of such
period shall be tolled for any part thereof (but not exceeding 60
calendar days in the aggregate) during which any party shall be subject
to a nonfinal order, injunction, decree, ruling or action restraining,
enjoining or otherwise prohibiting the consummation of the Merger or
the calling or holding of the Company Stockholders Meeting or the
Parent Shareholders Meeting;
(iii) if any Governmental Entity shall have issued an order,
injunction, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the Merger and such
order, injunction, decree, ruling or other action shall have become
final and nonappealable; or
(iv) in the event of a breach by the other party of any
representation, warranty, covenant or
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other agreement contained in this Agreement which (A) would give rise
to the failure of a condition set forth in Section 6.02(a) or (b) or
Section 6.03(a) or (b), as applicable, and (B) cannot be or has not
been cured within 30 days after the giving of written notice to the
breaching party of such breach (a "Material Breach") (provided that the
terminating party is not then in Material Breach of any representation,
warranty, covenant or other agreement contained in this Agreement); or
(c) by the Company if (i) the Board of Directors of the Company shall
have determined in good faith, based on the advice of outside counsel, that
it is necessary, in order to comply with its fiduciary duties to the
Company's stockholders under applicable law, to terminate this Agreement to
enter into an agreement with respect to or to consummate a transaction
constituting a superior proposal, (ii) the Company shall have given notice
to Parent advising Parent that the Company has received a superior proposal
from a third party, specifying the material terms and conditions (including
the identity of the third party), and that the Company intends to terminate
this Agreement in accordance with this Section 7.01(c), (iii) either (A)
Parent shall not have revised its takeover proposal within two business
days from the time on which such notice is deemed to have been given to
Parent, or (B) if Parent within such period shall have revised its takeover
proposal, the Board of Directors of the Company, after receiving advice
from the Company's financial advisor, shall have determined in its good
faith reasonable judgment that the third party's takeover proposal is
superior to Parent's revised takeover proposal, and (iv) the Company, at
the time of such termination, pays the Expenses and the Termination Fee in
accordance with Section 5.09.
SECTION 7.02. EFFECT OF TERMINATION. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.01,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Sub or the Company, other than
the provisions of Section 3.01(o), Section 3.02(h), the last sentence of
Section 5.04, Section 5.09, this Section 7.02 and Article VIII and except to
the extent that such termination results from the willful
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and material breach by a party of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
SECTION 7.03. AMENDMENT. This Agreement may be amended by the
parties at any time before or after the Company Stockholder Approval or the
Parent Shareholder Approval; provided, however, that after any such approval,
there shall not be made any amendment that by law requires further approval by
the stockholders of the Company or the shareholders of Parent without the
further approval of such stockholders or shareholders, as the case may be.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
SECTION 7.04. EXTENSION; WAIVER. At any time prior to the Effective
Time, a party may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c)
subject to the proviso of Section 7.03, waive compliance by the other parties
with any of the agreements or conditions contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of such rights.
SECTION 7.05. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER. A termination of this Agreement pursuant to Section 7.01, an amendment
of this Agreement pursuant to Section 7.03 or an extension or waiver pursuant
to Section 7.04 shall, in order to be effective, require in the case of Parent,
Sub or the Company, action by its Board of Directors or, except in the case of
Sub or the Company, with respect to any amendment to this Agreement, the duly
authorized designee of its Board of Directors.
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ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 8.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 8.02. NOTICES. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or sent
by overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Parent or Sub, to
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222
Telecopy No.: (412) 642-5224
Attention: Lou Briskman, Esq.
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Telecopy No.: (212) 474-3700
Attention: Peter S. Wilson, Esq.; and
(b) if to the Company, to
Infinity Broadcasting Corporation
600 Madison Avenue
New York, NY 10022
Telecopy No.: (212) 355-4541
Attention: Mr. Mel Karmazin
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with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Telecopy No.: (212) 909-6836
Attention: Richard D. Bohm, Esq.
SECTION 8.03. DEFINITIONS. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first person;
(b) "indebtedness" has the meaning assigned thereto in Section
3.01(r)(ii);
(c) "material adverse change" or "material adverse effect" means, when
used in connection with the Company or Parent, any change, effect, event or
occurrence that is materially adverse to the business, properties, assets,
condition (financial or otherwise) or results of operations of such party
and its subsidiaries taken as a whole other than any change, effect, event
or occurrence relating to the United States economy in general or to the
United States radio broadcasting industry in general, and not specifically
relating to the Company or Parent or their respective subsidiaries;
(d) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(e) a "significant subsidiary" means any subsidiary of the Company that
constitutes a significant subsidiary within the meaning of Rule 1-02 of
Regulation S-X of the SEC;
(f) a "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting
interests, 50% or more of the
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equity interests of which) is owned directly or indirectly by such first
person;
(g) "superior proposal" means (x) a bona fide takeover proposal to
acquire, directly or indirectly, for consideration consisting of cash
and/or securities, more than 50% of the shares and/or voting power of
Company Common Stock then outstanding or all or substantially all the
assets of the Company, and (y) otherwise on terms which the Board of
Directors of the Company determines in its good faith reasonable judgment
to be more favorable to the Company's stockholders than the Merger (based
on the written opinion, with only customary qualifications, of the
Company's independent financial advisor that the value of the consideration
provided for in such proposal is superior to the value of the consideration
provided for in the Merger), for which financing, to the extent required,
is then committed or which, in the good faith reasonable judgment of the
Board of Directors, based on advice from the Company's independent
financial advisor, is reasonably capable of being financed by such third
party and for which the Board of Directors determines, in its good faith
reasonable judgment, that such proposed transaction is reasonably likely to
be consummated without undue delay;
(h) "takeover proposal" means any proposal for a merger, consolidation
or other business combination involving the Company or any proposal or
offer to acquire in any manner, directly or indirectly, an equity interest
in, any more than 25% of the voting power of, or a substantial portion of
the assets of, the Company and its subsidiaries, taken as a whole, other
than the transactions contemplated by this Agreement; and
(i) "taxes" has the meaning assigned thereto in Section 3.01(k)(iii).
SECTION 8.04. INTERPRETATION. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are
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used in this Agreement, they shall be deemed to be followed by the words
"without limitation". The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement. All terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless
otherwise defined therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns and, in
the case of an individual, to his heirs and estate, as applicable.
SECTION 8.05. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 8.06. ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARIES. This
Agreement (including the documents and instruments referred to herein) and the
Confidentiality Agreement (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter of this Agreement and (b) except for
the provisions of Article II, Section 5.06 and Section 5.08, are not intended
to confer upon any person other than the parties any rights or remedies.
SECTION 8.07. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
<PAGE> 78
64
SECTION 8.08. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations under this Agreement. Any assignment in violation of the
preceding sentence shall be void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
SECTION 8.09. ENFORCEMENT. The parties agree that irreparable damage
would occur and that the parties would not have any adequate remedy at law in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Delaware or in Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself to the personal
jurisdiction of any Federal court located in the State of Delaware or any
Delaware state court in the event any dispute arises out of this Agreement or
any of the transactions contemplated by this Agreement, (b) agrees that it will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than a
<PAGE> 79
65
Federal court sitting in the State of Delaware or a Delaware state court.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
WESTINGHOUSE ELECTRIC
CORPORATION,
by /s/ FREDRIC G. REYNOLDS
----------------------------
Name: Fredric G. Reynolds
Title: Executive Vice President
and Chief Financial Officer
R ACQUISITION CORP.,
by /s/ LOUIS J. BRISKMAN
----------------------------
Name: Louis J. Briskman
Title: Vise president
INFINITY BROADCASTING
CORPORATION,
by
----------------------------
Name:
Title:
<PAGE> 80
65
Federal court sitting in the State of Delaware or a Delaware state court.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION,
by
----------------------------
Name:
Title:
R ACQUISITION CORP.,
by
----------------------------
Name:
Title:
INFINITY BROADCASTING CORPORATION
by /s/ MEL KARMAZIN
----------------------------
Name:
Title:
<PAGE> 81
Exhibit 2
STOCKHOLDER AGREEMENT dated as of June 20, 1996, among WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Parent"), and the
individuals and other parties listed on Schedule A attached hereto (each,
a "Stockholder" and, collectively, the "Stockholders").
WHEREAS Parent, R Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Parent ("Sub"), and INFINITY BROADCASTING CORPORATION, a
Delaware corporation (the "Company"), propose to enter into an Agreement and
Plan of Merger dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement"; capitalized terms used but not defined
herein shall have the meanings set forth in the Merger Agreement) providing for
the merger of Sub with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in the Merger Agreement; and
WHEREAS each Stockholder owns the number of shares of Class A Common Stock,
par value $.002 per share, of the Company (the "Class A Common Stock") and of
Class B Common Stock, par value $.002 per share, of the Company (the "Class B
Common Stock" and, together with the Class A Common Stock, the "Common Stock")
set forth opposite his or its name on Schedule A attached hereto (such shares
of Common Stock, together with any other shares of capital stock of the Company
acquired by such Stockholder after the date hereof and during the term of this
Agreement, being collectively referred to herein as the "Subject Shares"); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that each Stockholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent to enter into, and in consideration of its
entering into, the Merger Agreement, and in consideration of the premises and
the representations, warranties and agreements contained herein, the parties
agree as follows:
<PAGE> 82
2
1. REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER. Each Stockholder
hereby, severally and not jointly, represents and warrants to Parent as of the
date hereof in respect of himself or itself as follows:
(a) AUTHORITY. The Stockholder has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder enforceable in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will not, conflict
with, or result in any violation of, or default (with or without notice or
lapse of time or both) under any provision of, any trust agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, notice,
decree, statute, law, ordinance, rule or regulation applicable to the
Stockholder or to the Stockholder's property or assets. If the Stockholder
is married and the Stockholder's Subject Shares constitute community property
or otherwise need spousal or other approval to be legal, valid and binding,
this Agreement has been duly authorized, executed and delivered by, and
constitutes a valid and binding agreement of, the Stockholder's spouse,
enforceable against such spouse in accordance with its terms. No trust of
which such Stockholder is a trustee requires the consent of any beneficiary
to the execution and delivery of this Agreement or to the consummation of the
transactions contemplated hereby. Each Stockholder will execute a power of
attorney in favor of at least two other Stockholders with respect to the
matters covered by Sections 3(a) and (b) in the event of incapacity of any
Stockholder.
(b) THE SUBJECT SHARES. The Stockholder is the record and beneficial owner
of, or is trustee of a trust that is the record holder of, and whose
beneficiaries are the beneficial owners of, and has good and marketable title
to, the Subject Shares set forth opposite his or its name on Schedule A
attached hereto, free and clear of any claims, liens, encumbrances and
security interests whatsoever. The Stockholder does not own, of record or
beneficially,
<PAGE> 83
3
any shares of capital stock of the Company other than the Subject Shares set
forth opposite his or its name on Schedule A attached hereto. The
Stockholder has the sole right to vote such Subject Shares, and none of such
Subject Shares is subject to any voting trust or other agreement, arrangement
or restriction with respect to the voting of such Subject Shares, except as
contemplated by this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF PARENT. (a) Parent hereby represents
and warrants to each Stockholder that Parent has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Parent,
and the consummation of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Parent. This
Agreement has been duly executed and delivered by Parent and constitutes a
valid and binding obligation of Parent enforceable in accordance with its
terms. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with the
terms hereof will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any provision of, the
articles of incorporation or by-laws of Parent, any trust agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, notice,
decree, statute, law, ordinance, rule or regulation applicable to Parent or to
Parent's property or assets.
3. COVENANTS OF EACH STOCKHOLDER. Until the termination of this Agreement
in accordance with Section 7, each Stockholder, severally and not jointly,
agrees as follows:
(a) At any meeting of stockholders of the Company called to vote upon the
Merger and the Merger Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval (including by
written consent) with respect to the Merger and the Merger Agreement is
sought, the Stockholder shall, including by initiating a written consent
solicitation if requested by Parent, vote (or cause to be voted) the Subject
Shares (and each class thereof) in favor of the Merger, the adoption by the
Company of the Merger Agreement and the approval of the
<PAGE> 84
4
terms thereof and each of the other transactions contemplated by the Merger
Agreement.
(b) At any meeting of stockholders of the Company or at any adjournment
thereof or in any other circumstances upon which the Stockholder's vote,
consent or other approval is sought, the Stockholder shall vote (or cause to
be voted) the Subject Shares (and each class thereof) against (i) any merger
agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company
or any other takeover proposal as such term is defined in Section 8.03(h) of
the Merger Agreement (a "Takeover Proposal") or (ii) any amendment of the
Company's certificate of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which amendment
or other proposal or transaction would in any manner impede, frustrate,
prevent or nullify the Merger, the Merger Agreement or any of the other
transactions contemplated by the Merger Agreement or change in any manner the
voting rights of each class of Company Common Stock. Subject to Section 9,
the Stockholder further agrees not to commit or agree to take any action
inconsistent with the foregoing.
(c) Except as provided in the immediately succeeding sentence of this
Section 3(c), the Stockholder agrees not to (i) sell, transfer, pledge,
assign or otherwise dispose of (including by gift) (collectively,
"Transfer"), or enter into any contract, option or other arrangement
(including any profit sharing arrangement) with respect to the Transfer of,
the Subject Shares to any person other than pursuant to the terms of the
Merger, (ii) enter into any voting arrangement, whether by proxy, voting
agreement or otherwise, in connection with, directly or indirectly, any
Takeover Proposal or (iii) convert (or cause to be converted) any of the
Subject Shares consisting of Class B Common Stock into Class A Common Stock,
and agrees not to commit or agree to take any of the
<PAGE> 85
5
foregoing actions. Notwithstanding the foregoing, the following Transfers
(and any related conversions of Class B Common Stock into Class A Common
Stock) shall be permitted at any time:
(x) the Stockholder shall have the right, for estate planning purposes, to
Transfer Subject Shares to a transferee if and only if such transfer will
not result in the automatic conversion of Class B Common Stock to Class A
Common Stock and only following the due execution and delivery to Parent by
each transferee of a counterpart to this Agreement;
(y) Mel Karmazin, a Stockholder identified on Schedule A attached hereto
(the "Designated Stockholder"), shall have the right to Transfer (in the
case of clauses (B) and (C) below, after first converting such shares to
shares of Class A Common Stock) (A) 353,967 shares of Class A Common Stock
to satisfy certain existing obligations, (B) up to 750,000 shares of Class B
Common Stock in order to satisfy certain existing obligations and (C) up to
that number of shares of Class B Common Stock as may be reasonably necessary
to pay the reasonably estimated taxes incurred by the Designated Stockholder
in connection with any exercise of options pursuant to Section 4(a), in each
case so long as all such shares are acquired by the Designated Stockholder
pursuant to exercises of options in respect of Class B Common Stock after
the date hereof; and
(z) Gerald Carrus and Michael A. Wiener, each Stockholders identified on
Schedule A attached hereto (together with the Designated Stockholder, the
"Principal Stockholders"), shall each have the right to Transfer up to
100,000 shares of Class B Common Stock (after first converting such shares
to shares of Class A Common Stock).
(d) Subject to the terms of Section 9, during the term of this Agreement,
the Stockholder shall not, nor shall it permit any investment banker,
attorney or other adviser or representative of the Stockholder to, (i)
directly or indirectly solicit, initiate or encourage the submission of, any
Takeover Proposal or (ii) directly or indirectly participate in any
<PAGE> 86
6
discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Takeover Proposal.
(e) Until after the Merger is consummated or the Merger Agreement is
terminated, the Stockholder shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper
or advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by the Merger
Agreement.
(f) (i) In the event that the Merger Agreement shall have been terminated
under circumstances where Parent is or may become entitled to receive the
Termination Fee, each Stockholder shall pay to Parent on demand an amount
equal to all profit (determined in accordance with Section 3(f)(ii)) of such
Stockholder from the consummation of any Takeover Proposal that is
consummated within two years of such termination.
(ii) For purposes of this Section 3(f), the profit of any Shareholder from
any Takeover Proposal shall equal (A) the aggregate consideration received by
such Stockholder pursuant to such Takeover Proposal, valuing any non-cash
consideration (including any residual interest in the Company) at its fair
market value on the date of such consummation plus (B) the fair market value,
on the date of disposition, of all Subject Shares of such Stockholder
disposed of after the termination of the Merger Agreement and prior to the
date of such consummation less (C) the fair market value of the aggregate
consideration that would have been issuable or payable to such Stockholder if
he had received the Merger Consideration pursuant to the Merger Agreement as
originally executed, valued as of immediately prior to the first public
announcement by the Company of its intention to terminate the Merger
Agreement to pursue a superior proposal as if the Merger had been consummated
on the date of such public announcement.
(iii) In the event that (x) prior to the Effective Time, a Takeover Proposal
shall have been
<PAGE> 87
7
made and (y) the Effective Time of the Merger shall have occurred and Parent
for any reason shall have increased the amount of Merger Consideration
payable over that set forth in the Merger Agreement in effect on the date
hereof (the "Original Merger Consideration"), each Stockholder shall pay to
Parent on demand an amount in cash equal to the product of (i) the number of
Subject Shares of such Stockholder and (ii) 100% of the excess, if any, of
(A) the per share cash consideration or the per share fair market value of
any non-cash consideration, as the case may be, received by the Stockholder
as a result of the Merger, as amended, determined as of the Effective Time of
the Merger, over (B) the fair market value of the Original Merger
Consideration determined as of the time of the first increase in the amount
of the Original Merger Consideration.
(iv) For purposes of this Section 3(f), the fair market value of any
non-cash consideration consisting of:
(A) securities listed on a national securities exchange or traded on the
NASDAQ/NMS shall be equal to the average closing price per share of
such security as reported on such exchange or NASDAQ/NMS for the five
trading days after the date of determination; and
(B) consideration which is other than cash or securities of the form
specified in clause (i) of this Section 3(f)(iv) shall be determined
by a nationally recognized independent investment banking firm
mutually agreed upon by the parties within 10 business days of the
event requiring selection of such banking firm; PROVIDED, HOWEVER,
that if the parties are unable to agree within two business days
after the date of such event as to the investment banking firm, then
the parties shall each select one firm, and those firms shall select
a third investment banking firm, which third firm shall make such
determination; provided further, that the fees and expenses of such
investment
<PAGE> 88
8
banking firm shall be borne equally by Parent, on the one hand, and
the Stockholders, on the other hand. The determination of the
investment banking firm shall be binding upon the parties.
(v) Any payment of profit under this Section 3(f) shall (x) if paid in
cash, be paid by wire transfer of same day funds to an account designated by
Parent and (y) if paid through a mutually agreed transfer of securities, be
paid through delivery of such securities, suitably endorsed for transfer.
4. ADDITIONAL AGREEMENTS OF DESIGNATED STOCKHOLDER. (a) The Designated
Stockholder owns validly issued and outstanding options and warrants to acquire
a number of shares of Class A Common Stock and of Class B Common Stock, in each
case as set forth opposite his name on Schedule A attached hereto. All such
options and warrants are fully vested and freely exercisable by the Designated
Stockholder to acquire any or all such shares at any time at his option;
PROVIDED that the Designated Stockholder shall not take any action that would
affect such full vesting or continued free exercisability and shall not
Transfer such options and warrants except pursuant to Section 3(c)(y). The
Designated Stockholder hereby agrees with Parent that, if so requested by
Parent at a time and from time to time prior to when Parent believes the record
date for a stockholder vote contemplated by Sections 3(a) or (b) is reasonably
likely to arise and Parent reasonably believes such exercise will be necessary
to ensure the required vote to approve the Merger, the Designated Stockholder
will exercise such number of options and/or warrants as are sufficient, after
giving effect to the exercises and any Transfers contemplated by Section
3(c)(y)(C), to ensure that the Subject Shares continue to represent a majority
of the outstanding voting power of the outstanding capital stock of the Company
entitled to vote on the matters referred to in Sections 3(a) and (b) (the
"Sufficient Number"); provided, however, that, notwithstanding the foregoing,
the Designated Stockholder shall not be obligated to exercise options under
this Section 4(a) to the extent that the shortfall in reaching the Sufficient
Number of votes results from the death of one or more of the Principal
Stockholders. Any shares of Common Stock received by the Designated
Stockholder upon such exercise shall automatically at such time become "Subject
Shares" for all purposes hereunder
<PAGE> 89
9
(b) For a period of two years following the Effective Time, except as
otherwise required by law and except for the Transfer during the second year of
such two-year period of up to 20% of the aggregate number of shares of Parent
Common Stock received by the Designated Stockholder in the Merger in exchange
for the Subject Shares of the Designated Stockholder or following the Effective
Time upon the exercise of Adjusted Options (the "Subject Parent Shares"), the
Designated Stockholder agrees not to Transfer, or enter into any contract,
option or other arrangement (including any profit sharing arrangement) with
respect to the Transfer of, any such Subject Parent Shares, provided he can
transfer Subject Parent Shares to his former spouse as part of the currently
contemplated settlement so long as she agrees to be bound by the terms of this
Section 4(b).
5. FURTHER ASSURANCES. Each Stockholder will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
consents, documents and other instruments as Parent may reasonably request for
the purpose of effectively carrying out the transactions contemplated by this
Agreement.
6. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties without the prior
written consent of the other parties, except that Parent may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to any holding company of Parent that may be created as contemplated by Section
1.01(c) of the Merger Agreement or to any direct or indirect wholly owned
subsidiary of Parent. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
7. TERMINATION. This Agreement shall terminate upon the earlier of (a) 15
months from the date hereof or (b) the Effective Time of the Merger; provided,
however, that the Company is not in breach of its obligations under the Merger
Agreement and none of the Stockholders are in breach of their obligations under
this Agreement, this Agreement shall terminate at the time the Merger Agreement
is terminated (i) pursuant to Section 7.01(a) thereof, (ii) by the Company (A)
pursuant to Section 7.01(b)(i) thereof as a result of the Parent Shareholder
Approval not having been obtained or (B) pursuant to Section 7.01(b)(ii)
<PAGE> 90
10
thereof (unless a Takeover Proposal has been made), or (iii) (unless a Takeover
Proposal has been made) otherwise pursuant to its terms solely because the FCC
shall have issued a final, nonappealable order that fails to satisfy the
conditions set forth in Section 6.01(b) (after giving effect to any waiver
thereof by Parent). Notwithstanding the foregoing, Sections 3(f) and 4(b)
shall survive the consummation of the Merger or the termination of the Merger
Agreement for the respective periods of time specified therein.
8. GENERAL PROVISIONS.
(a) AMENDMENTS. This Agreement may not be amended except by an instrument
in writing signed by each of the parties hereto.
(b) NOTICE. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) to Parent in accordance with
Section 8.02 of the Merger Agreement and to the Stockholders at their
respective addresses set forth on Schedule A attached hereto (or at such
other address for a party as shall be specified by like notice).
(c) INTERPRETATION. When a reference is made in this Agreement to
Sections, such reference shall be to a Section to this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
(d) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more of the counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that each party need not sign the same counterpart.
(e) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
(including the documents and instruments referred to herein) (i) constitutes
the entire agreement and supersedes all prior agreements
<PAGE> 91
11
and understandings, both written and oral, among the parties with respect to
the subject matter hereof and (ii) is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
(f) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof.
9. STOCKHOLDER CAPACITY. No person executing this Agreement who is or
becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his capacity as such director or officer.
Each Stockholder signs solely in his capacity as the record holder and
beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, such Stockholder's Subject Shares and nothing herein
shall limit or affect any actions taken by a Stockholder in his capacity as an
officer or director of the Company to the extent specifically permitted by the
Merger Agreement.
10. ENFORCEMENT. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity.
In addition, each of the parties hereto (i) consents to submit such party to
the personal jurisdiction of any Federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that such
party will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (iii) agrees that such party
will not bring any action relating to this Agreement or the transactions
contemplated hereby in any court other than a Federal court sitting in the
state of Delaware or a Delaware state court and (iv) waives any right to trial
by jury with respect to
<PAGE> 92
12
any claim or proceeding related to or arising out of this Agreement or any of
the transactions contemplated hereby.
IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by its
officer thereunto duly authorized and each Stockholder has signed this
Agreement, all as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION,
By: /s/ FREDRIC G. REYNOLDS
-------------------------------
Name:
Title:
<PAGE> 93
IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by
its officers thereunto duly authorized and each Stockholder has signed this
Agreement, all as of the date first written above.
WESTINGHOUSE ELECTRIC
CORPORATION
By:
----------------------------------
Name:
Title:
Stockholders:
GERALD CARRUS
By: /s/ GERALD CARRUS
----------------------------------
Name:
Title:
JRSW PARTNERS, L.P.
By: /s/ GERALD CARRUS
----------------------------------
Name:
Title:
STEVEN D. CARRUS
By:
----------------------------------
Name:
Title:
MICHAEL A. WIENER
By: /s/ MICHAEL A. WIENER
----------------------------------
Name:
Title:
<PAGE> 94
THE ZENA AND MICHAEL A.
WIENER FOUNDATION
By: /s/ MICHAEL A. WIENER
----------------------------------
Name:
Title: Director & President
ZENA WIENER
By: /s/ ZENA WIENER
----------------------------------
Name:
Title:
THE ZENA WIENER 1994 TRUST
By: /s/ ZENA WIENER
----------------------------------
Name:
Title: Trustee
THE MICHAEL A. WIENER 1993 TRUST
By: /s/ MICHAEL A. WIENER
----------------------------------
Name:
Title: Trustee
MEL KARMAZIN
By: /s/ MEL KARMAZIN
----------------------------------
Name:
Title:
<PAGE> 95
IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by
its officers thereunto duly authorized and each Stockholder has signed this
Agreement, all as of the date first written above.
WESTINGHOUSE ELECTRIC
CORPORATION
By:
----------------------------------
Name:
Title:
Stockholders:
GERALD CARRUS
By:
----------------------------------
Name:
Title:
JRSW PARTNERS, L.P.
By:
----------------------------------
Name:
Title:
STEVEN D. CARRUS
By: /s/ STEVEN D. CARRUS
----------------------------------
Name:
Title:
MICHAEL A. WIENER
By:
----------------------------------
Name:
Title:
<PAGE> 96
SCHEDULE A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares of Class Shares of Class Options and
Name A Common Stock B Common Stock Deferred Shares Warrants
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerald Carrus -- 3,897,027 -- --
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
JRSW Partners, L.P. -- 225,000 -- --
(Carrus family limited
partnership)
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
Steven D. Carrus -- 750 -- --
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares of Class Shares of Class Options and
Name A Common Stock B Common Stock Deferred Shares Warrants
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michael W. Wiener -- 3,164,976 -- --
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
The Zena and -- 63,000 -- --
Michael A. Wiener Foundation
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
Zena Wiener -- 14,344 -- --
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
The Zena Wiener 1994 Trust -- 165,657 -- --
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 98
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares of Class Shares of Class Options and
Name A Common Stock B Common Stock Deferred Shares Warrants
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Michael Wiener 1993 Trust -- 163,504 -- --
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
Mel Karmazin 353,967 616,207 5,985,480 72,989
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
