<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 1, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
WESTINGHOUSE ELECTRIC CORPORATION
(Exact name of registrant as specified in its charter)
------------------------
<TABLE>
<S> <C> <C>
PENNSYLVANIA 4833 25-0877540
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
11 STANWIX STREET
PITTSBURGH, PENNSYLVANIA 15222
(412) 244-2300
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
LOUIS J. BRISKMAN, ESQ.
SENIOR VICE PRESIDENT AND
GENERAL COUNSEL
WESTINGHOUSE ELECTRIC CORPORATION
11 STANWIX STREET
PITTSBURGH, PENNSYLVANIA 15222
(412) 244-2300
(Name, address, including ZIP code, and telephone number, including area code,
of agent for service)
------------------------
Copies to:
<TABLE>
<S> <C>
PETER S. WILSON RICHARD D. BOHM
CRAVATH, SWAINE & MOORE DEBEVOISE & PLIMPTON
WORLDWIDE PLAZA 875 THIRD AVENUE
825 EIGHTH AVENUE NEW YORK, NEW YORK 10022
NEW YORK, NEW YORK 10019
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement and
satisfaction or waiver of all other conditions to the Merger (as defined herein)
of R Acquisition Corp., a wholly-owned subsidiary of Westinghouse Electric
Corporation, with and into Infinity Broadcasting Corporation pursuant to the
Merger Agreement described herein.
------------------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
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Common Stock, $1.00 par value......... 204,515,258 shares N.A. $3,737,486,437(2) $1,288,797(3)
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Preferred Stock Purchase Rights....... 204,515,258 rights (4) (4) (4)
</TABLE>
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(1) Based on the maximum number of shares of Westinghouse Common Stock that may
be issued as of the Effective Time (as defined) of the Merger.
(2) Estimated solely for the purpose of calculating the registration fee
required by Section 6(b) of the Securities Act of 1933, as amended (the
"Securities Act"), and computed pursuant to Rule 457(f) under the Securities
Act by multiplying $31.25, the average of the high and low sales prices of
Infinity Class A Common Stock on September 25, 1996, as reported in the
consolidated reporting system, by 119,599,566, the number of shares of
Infinity Common Stock outstanding at the close of business on September 30,
1996, assuming the exercise of all then outstanding options and warrants to
purchase shares of Infinity Common Stock.
(3) Pursuant to Rule 457(b) under the Securities Act, $642,100 of the
registration fee was paid on September 4, 1996 in connection with the filing
of preliminary joint proxy material
(4) The Preferred Stock Purchase Rights of Westinghouse initially are attached
to and trade with the shares of Westinghouse Common Stock being registered
hereby. Value attributable to such Preferred Stock Purchase Rights, if any,
is reflected in the market price of Westinghouse Common Stock.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
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<PAGE> 2
[LETTERHEAD OF WESTINGHOUSE ELECTRIC CORPORATION]
[DATE]
Dear Stockholder:
You are cordially invited to attend a Special Meeting (the "Special
Meeting") of Stockholders of Westinghouse Electric Corporation ("Westinghouse").
The meeting will be held at [site] on [date] beginning at [time] a.m., local
time. The purposes of the meeting are set forth below and described in detail in
the accompanying Joint Proxy Statement/ Prospectus.
On June 20, 1996, Westinghouse entered into an Agreement and Plan of Merger
(as amended, the "Merger Agreement") with Infinity Broadcasting Corporation
("Infinity") and R Acquisition Corp., a wholly owned subsidiary of Westinghouse
("Sub"), pursuant to which Sub will be merged (the "Merger") with and into
Infinity, with Infinity surviving as a wholly owned subsidiary of Westinghouse.
Subject to the terms and conditions of the Merger Agreement, each share of
Infinity common stock outstanding immediately prior to the effective time of the
Merger will be converted into 1.71 (the "Conversion Number") shares of Common
Stock, $1.00 par value, of Westinghouse ("Westinghouse Common Stock"). Cash will
be paid in lieu of any fractional shares of Westinghouse Common Stock. In order
to accomplish the Merger, stockholders of Westinghouse are being asked: (i) to
approve an amendment to the Restated Articles of Incorporation of Westinghouse
to increase the number of authorized shares of Westinghouse Common Stock from
630,000,000 to 1,100,000,000 (the "Charter Amendment"); and (ii) to approve the
issuance of shares of Westinghouse Common Stock in accordance with the terms of
the Merger Agreement (the "Share Issuance").
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE MERGER, THE
CHARTER AMENDMENT AND THE SHARE ISSUANCE ARE ADVISABLE AND IN THE BEST INTEREST
OF WESTINGHOUSE AND ITS STOCKHOLDERS AND HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT, THE CHARTER AMENDMENT AND THE SHARE ISSUANCE. THE BOARD UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE CHARTER AMENDMENT AND THE SHARE
ISSUANCE.
Chase Securities Inc. ("Chase") acted as financial advisor to Westinghouse
in connection with providing a written opinion dated June 19, 1996 to the Board
that the Conversion Number is fair to Westinghouse from a financial point of
view. Salomon Brothers Inc ("Salomon") also delivered a written opinion dated
June 19, 1996 to the Board to the effect set forth above.
Consummation of the Merger is subject to certain conditions, including
approval and adoption of the Merger Agreement and the transactions contemplated
thereby by Infinity stockholders, approval of the Charter Amendment and the
Share Issuance by Westinghouse stockholders and the review by, or receipt of
certain approvals from, regulatory authorities.
You are urged to read the accompanying Joint Proxy Statement/Prospectus
which provides you with a description of the terms of the proposed transaction.
A copy of the Merger Agreement is included as Annex I to the Joint Proxy
Statement/Prospectus.
It is important that your shares be represented at the Special Meeting.
Whether or not you plan to attend the Special Meeting, you are requested to
complete, date, sign and return the proxy card in the enclosed postage-paid
envelope. Thank you for your time and attention to the accompanying Joint Proxy
Statement/Prospectus.
Sincerely,
Michael H. Jordan
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON , 1996
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Special
Meeting") of Westinghouse Electric Corporation ("Westinghouse") will be held at
[site] on [date] beginning at [time] a.m., local time, for the following
purposes:
(i) To consider and vote upon: (a) a proposal to approve an amendment
to the Restated Articles of Incorporation of Westinghouse to increase the
number of authorized shares of Common Stock, $1.00 par value, of
Westinghouse ("Westinghouse Common Stock") from 630,000,000 to
1,100,000,000 (the "Charter Amendment"); and (b) a proposal to approve the
issuance of shares of Westinghouse Common Stock (the "Share Issuance") in
accordance with the terms of the Agreement and Plan of Merger dated as of
June 20, 1996 (as amended, the "Merger Agreement"), among Westinghouse, R
Acquisition Corp. and Infinity Broadcasting Corporation; and
(ii) To transact such other business as may properly come before the
Special Meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on [ ],
1996 as the record date for determining the stockholders entitled to notice of
and to vote at the Special Meeting or any adjournments or postponements thereof.
The accompanying Joint Proxy Statement/Prospectus describes the Merger
Agreement and certain actions to be taken in connection with the Merger. The
vote of each stockholder is important. Your vote is important and we urge you to
complete, sign, date and return your proxy card as promptly as possible. In this
way, if you are unable to attend in person, your shares can nevertheless be
voted at the Special Meeting. A return envelope is enclosed for your
convenience. Your proxy may be revoked by delivering written notice of
revocation to the Secretary prior to the time voting is declared closed or by
attending the Special Meeting and voting your shares in person. Please see the
accompanying Joint Proxy Statement/Prospectus for further details regarding the
treatment of proxies at the Special Meeting.
In the event that there are not sufficient votes to approve the Charter
Amendment and the Share Issuance, it is expected that the Special Meeting will
be postponed or adjourned in order to permit further solicitation of proxies by
or on behalf of Westinghouse.
By Order of the Board of Directors
Angeline C. Straka
Vice President, Secretary
and Associate General Counsel
Pittsburgh, Pennsylvania
[date]
<PAGE> 4
[LETTERHEAD OF INFINITY BROADCASTING CORPORATION]
[DATE]
Dear Stockholder:
You are cordially invited to attend a Special Meeting (the "Special
Meeting") of Stockholders of Infinity Broadcasting Corporation (the "Company").
The Special Meeting will be held at [site], on [date], beginning at [time] a.m.,
Eastern Time. The purpose of the Special Meeting is set forth below and in the
accompanying Notice of Special Meeting of Stockholders, and is described in
detail in the accompanying Joint Proxy Statement/Prospectus.
On June 20, 1996, the Company entered into an Agreement and Plan of Merger
(as amended, the "Merger Agreement") with Westinghouse Electric Corporation
("Westinghouse") and R Acquisition Corp., a wholly owned subsidiary of
Westinghouse ("Sub"), pursuant to which Sub will be merged (the "Merger") with
and into the Company, with the Company surviving as a wholly owned subsidiary of
Westinghouse. Subject to the terms and conditions of the Merger Agreement, each
share of Class A Common Stock, par value $.002 per share, Class B Common Stock,
par value $.002 per share, and Class C Common Stock, par value $.002 per share,
of the Company (collectively, "Company Common Stock") outstanding immediately
prior to the effective time of the Merger will be converted into the right to
receive 1.71 shares of Common Stock, $1.00 par value, of Westinghouse
("Westinghouse Common Stock"). Cash will be paid in lieu of any fractional
shares of Westinghouse Common Stock. In order to accomplish the Merger,
stockholders of the Company are being asked to approve and adopt the Merger
Agreement and the transactions contemplated thereby.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE MERGER IS
ADVISABLE AND FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT. THE BOARD
UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL AND ADOPTION OF THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as financial
advisor to the Company in connection with the Merger and delivered a written
opinion to the Board that the consideration to be received by holders of Company
Common Stock (other than Westinghouse and its affiliates) pursuant to the Merger
Agreement is fair to such holders from a financial point of view.
Consummation of the Merger is subject to certain conditions, including the
approval and adoption of the transaction by the Company's stockholders, certain
approvals from the stockholders of Westinghouse, and the review by, or receipt
of certain approvals from, regulatory authorities.
You are urged to read the accompanying Joint Proxy Statement/Prospectus,
which provides you with a description of the terms of the proposed transaction.
A copy of the Merger Agreement is included as Annex I to the Joint Proxy
Statement/Prospectus.
It is important that your shares be represented at the Special Meeting.
Whether or not you plan to attend the Special Meeting in person, you are urged
to complete, date and sign the enclosed proxy card and return it in the enclosed
postage-paid envelope as promptly as possible.
Thank you for your time and attention to the accompanying Notice of Special
Meeting and Joint Proxy Statement/Prospectus.
Very truly yours,
Mel Karmazin
President and Chief
Executive Officer
<PAGE> 5
INFINITY BROADCASTING CORPORATION
600 MADISON AVENUE
NEW YORK, NEW YORK 10022
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON , 1996
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Special
Meeting") of Infinity Broadcasting Corporation, a Delaware corporation (the
"Company"), will be held at [site], [address], on [date], beginning at [time]
a.m., Eastern Time, for the following purposes:
1. To consider and vote upon a proposal to approve and adopt the
Agreement and Plan of Merger dated as of June 20, 1996 (as amended, the
"Merger Agreement"), among the Company, Westinghouse Electric Corporation, a
Pennsylvania corporation ("Westinghouse"), and R Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of Westinghouse ("Sub"),
and the transactions contemplated thereby, including, among other things,
the merger (the "Merger") of Sub with and into the Company, and the
conversion of each share of Class A Common Stock, par value $.002 per share,
Class B Common Stock, par value $.002 per share, and Class C Common Stock,
par value $.002 per share, of the Company (collectively, "Company Common
Stock") into the right to receive 1.71 shares of Common Stock, $1.00 par
value, of Westinghouse ("Westinghouse Common Stock"). Cash will be paid in
lieu of any fractional shares of Westinghouse Common Stock. As a result of
the Merger, the Company will become a wholly owned subsidiary of
Westinghouse. The Merger and related matters are described in greater detail
in, and a copy of the Merger Agreement is attached as Annex I to, the
accompanying Joint Proxy Statement/Prospectus.
2. To transact such other business as may properly come before the
Special Meeting or any adjournments or postponements thereof.
Stockholders of record at the close of business on , 1996, the
record date for the Special Meeting, are entitled to notice of and to vote at,
the Special Meeting and any adjournments or postponements thereof.
Approval of the proposal described in item 1 above requires the affirmative
vote of the holders of a majority of the combined voting power of the
outstanding shares of Company Common Stock entitled to be voted with respect to
such proposal, voting as a single class.
As of the record date for the Special Meeting, the holders of the Company's
Class B Common Stock held, in the aggregate, a majority of the total voting
power of the outstanding Company Common Stock. Consequently, such holders in the
aggregate have sufficient voting power to approve and adopt the Merger Agreement
and the transactions contemplated thereby, regardless of the vote of any other
Company stockholders.
The holders of the Company's Class B Common Stock have entered into a
Stockholder Agreement dated as of June 20, 1996, with Westinghouse (as amended,
the "Stockholder Agreement"), pursuant to which such holders have agreed to vote
their shares of Company Common Stock in favor of the approval and adoption of
the Merger Agreement and the transactions contemplated thereby (subject to
certain conditions set forth in the Stockholder Agreement). The Stockholder
Agreement is described in greater detail in, and a copy of the Stockholder
Agreement is attached as Annex II to, the accompanying Joint Proxy
Statement/Prospectus.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, YOU ARE URGED
TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS PROMPTLY AS POSSIBLE. THE ENVELOPE REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES. Any stockholder who signs and mails a proxy may
revoke such proxy by delivering written notice of such revocation to the
Secretary of the Company prior to the time voting is declared closed or by
attending the Special Meeting and voting in person. Please see the accompanying
Joint Proxy Statement/Prospectus for further details regarding the treatment of
proxies at the Special Meeting.
Please do not mail any stock certificates at this time.
By Order of the Board of Directors,
---------------------------------------
Michael A. Wiener
Co-Chairman of the Board and Secretary
, 1996
<PAGE> 6
SUBJECT TO COMPLETION, DATED OCTOBER 1, 1996
WESTINGHOUSE ELECTRIC CORPORATION
AND
INFINITY BROADCASTING CORPORATION
JOINT PROXY STATEMENT
------------------------
WESTINGHOUSE ELECTRIC CORPORATION
PROSPECTUS
------------------------
This Joint Proxy Statement/Prospectus ("Proxy Statement/Prospectus") is
being furnished to (i) the holders of Common Stock, $1.00 par value
("Westinghouse Common Stock"), of Westinghouse Electric Corporation, a
Pennsylvania corporation ("Westinghouse"), in connection with the solicitation
of proxies by the Board of Directors of Westinghouse (the "Westinghouse Board")
for use at a Special Meeting of stockholders of Westinghouse to be held on
[ ], 1996, and at any and all adjournments or postponements thereof (the
"Westinghouse Special Meeting") and (ii) the holders of (a) Class A Common
Stock, $.002 par value ("Infinity Class A Common Stock"), of Infinity
Broadcasting Corporation, a Delaware corporation ("Infinity"), (b) Class B
Common Stock, $.002 par value ("Infinity Class B Common Stock"), of Infinity and
(c) Class C Common Stock, $.002 par value ("Infinity Class C Common Stock" and,
together with Infinity Class A Common Stock and Infinity Class B Common Stock,
"Infinity Common Stock"), of Infinity in connection with the solicitation of
proxies by the Board of Directors of Infinity (the "Infinity Board") for use at
a Special Meeting of stockholders of Infinity to be held on [ ], 1996,
and at any and all adjournments or postponements thereof (the "Infinity Special
Meeting" and, together with the Westinghouse Special Meeting, the "Special
Meetings").
This Proxy Statement/Prospectus relates to the Agreement and Plan of Merger
dated as of June 20, 1996 (as amended, the "Merger Agreement") among
Westinghouse, R Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Westinghouse ("Sub"), and Infinity, which provides for the merger
(the "Merger") of Sub with and into Infinity, with Infinity surviving as a
wholly owned subsidiary of Westinghouse. Subject to the terms and conditions of
the Merger Agreement, each share of Infinity Common Stock outstanding
immediately prior to the Effective Time (as defined in the Merger Agreement) of
the Merger (other than shares owned directly or indirectly by Westinghouse or
Infinity, which will be canceled) will be converted into the right to receive
1.71 (the "Conversion Number") shares of Westinghouse Common Stock. Cash will be
paid in lieu of any fractional shares of Westinghouse Common Stock.
At the Westinghouse Special Meeting, holders of Westinghouse Common Stock
are being asked to approve (i) an amendment to the Restated Articles of
Incorporation of Westinghouse (the "Westinghouse Charter") to increase the
number of authorized shares of Westinghouse Common Stock from 630,000,000 to
1,100,000,000 (the "Charter Amendment") and (ii) the issuance of shares of
Westinghouse Common Stock in accordance with the terms of the Merger Agreement
(the "Share Issuance"). Approval of the Charter Amendment will require the
affirmative vote of the holders of a majority of the shares of Westinghouse
Common Stock outstanding as of the Westinghouse Record Date (as defined).
Approval of the Share Issuance will require the affirmative vote of the holders
of a majority of the votes cast on the Share Issuance, provided that the total
number of votes cast on the Share Issuance represents more than 50% of the
outstanding shares of Westinghouse Common Stock entitled to vote thereon at the
Westinghouse Special Meeting. Approval of the Charter Amendment is not
conditioned on approval of the Share Issuance; however, approval of the Charter
Amendment is a prerequisite to the Share Issuance. As used herein, approval of
each of the Charter Amendment and the Share Issuance are referred to
collectively as the "Westinghouse Stockholder Approvals."
At the Infinity Special Meeting, holders of Infinity Common Stock are being
asked to approve and adopt the Merger Agreement and the transactions
contemplated thereby. Approval and adoption of the Merger Agreement and the
transactions contemplated thereby (the "Infinity Stockholder Approval" and,
together with the Westinghouse Stockholder Approvals, the "Stockholder
Approvals") will require the affirmative vote of the holders of a majority of
the combined voting power of the outstanding shares of Infinity Common Stock.
The consummation of the Merger is subject, among other things, to the
Stockholder Approvals and the receipt of certain regulatory approvals. SEE "RISK
FACTORS" COMMENCING ON PAGE 16 FOR A DESCRIPTION OF CERTAIN MATTERS THAT SHOULD
BE CONSIDERED BEFORE VOTING. A composite conformed copy of the Merger Agreement
is attached hereto as Annex I.
This Proxy Statement/Prospectus also constitutes the Prospectus of
Westinghouse filed as part of a Registration Statement on Form S-4 (the "Form
S-4") with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
registration of shares of Westinghouse Common Stock to be issued in connection
with the Merger. Each share of Westinghouse Common Stock issued in connection
with the Merger will also be accompanied by a right to purchase one one-
hundredth of a share of Series A Participating Preferred Stock of Westinghouse
(the "Series A Preferred Stock") pursuant to a Rights Agreement (the
"Westinghouse Rights Agreement") between Westinghouse and First Chicago Trust
Company of New York, as Rights Agent. See "DESCRIPTION OF WESTINGHOUSE CAPITAL
STOCK--Preferred Stock--Series A Preferred Stock--Rights Plan."
Westinghouse Common Stock is listed for trading under the symbol "WX" on the
New York Stock Exchange (the "NYSE"), the Chicago Stock Exchange (the "CSE"),
the Pacific Stock Exchange (the "PSE"), the Boston Stock Exchange (the "BSE")
and the Philadelphia Stock Exchange (the "PHSE"). Infinity Class A Common Stock
is listed for trading under the symbol "INF" on the NYSE. On June 19, 1996, the
last trading day prior to the execution of the Merger Agreement, the last
reported sale prices of Westinghouse Common Stock and Infinity Class A Common
Stock, as reported on the NYSE Composite Transactions Tape, were $18 7/8 per
share and $28 5/8 per share, respectively. On September 30, 1996, the last
trading day prior to the date of this Proxy Statement/Prospectus, the last
reported sale prices of Westinghouse Common Stock and Infinity Class A Common
Stock, as reported on the NYSE Composite Transactions Tape, were $18 5/8 per
share and $31 1/2 per share, respectively.
This Proxy Statement/Prospectus and the accompanying forms of proxy are
first being mailed to stockholders of Westinghouse and Infinity on or about
[ ], 1996.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Proxy Statement/Prospectus is , 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
AVAILABLE INFORMATION................................................................ 4
INCORPORATION OF DOCUMENTS BY REFERENCE.............................................. 4
SUMMARY.............................................................................. 6
The Companies...................................................................... 6
The Special Meetings............................................................... 6
The Merger and the Merger Agreement................................................ 8
Selected Unaudited Pro Forma Combined Condensed Financial Data..................... 12
Westinghouse Selected Consolidated Historical Financial Data....................... 14
Infinity Selected Consolidated Historical Financial Data........................... 15
RISK FACTORS......................................................................... 16
RECENT DEVELOPMENTS.................................................................. 18
WESTINGHOUSE SPECIAL MEETING......................................................... 19
Purpose............................................................................ 19
Record Date; Voting Rights......................................................... 19
Share Ownership of Management...................................................... 19
Quorum............................................................................. 19
Proxies............................................................................ 20
Solicitation of Proxies............................................................ 20
Required Vote...................................................................... 20
PROPOSED WESTINGHOUSE CHARTER AMENDMENT.............................................. 21
INFINITY SPECIAL MEETING............................................................. 22
Purpose............................................................................ 22
Record Date; Voting Rights......................................................... 22
Share Ownership of Management...................................................... 22
Quorum............................................................................. 22
Proxies............................................................................ 23
Solicitation of Proxies............................................................ 23
Required Vote...................................................................... 23
The Stockholder Agreement.......................................................... 23
THE MERGER........................................................................... 25
General............................................................................ 25
Background of the Merger........................................................... 25
Westinghouse's Reasons for the Merger; Recommendation of its Board of Directors.... 27
Opinions of Westinghouse's Investment Bankers...................................... 28
Infinity's Reasons for the Merger; Recommendation of its Board of Directors........ 36
Opinion of Infinity's Financial Advisor............................................ 37
Certain Litigation................................................................. 42
Interests of Certain Persons in the Merger......................................... 42
Resale of Shares of Westinghouse Common Stock Issued in the Merger; Affiliates..... 44
Certain Federal Income Tax Consequences............................................ 45
Anticipated Accounting Treatment................................................... 46
Regulatory Reviews and Approvals................................................... 46
Absence of Appraisal and Dissenters' Rights........................................ 50
Stock Exchange Listing............................................................. 50
Delisting and Deregistration of Infinity Class A Common Stock...................... 50
</TABLE>
2
<PAGE> 8
<TABLE>
<CAPTION>
PAGE
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<S> <C>
THE MERGER AGREEMENT................................................................. 51
Certificate of Incorporation and By-Laws........................................... 51
Directors and Officers............................................................. 51
Conversion of Infinity Common Stock................................................ 51
Fractional Shares.................................................................. 51
Effective Time of the Merger....................................................... 52
Substitution of Parties............................................................ 52
Exchange of Infinity Common Stock.................................................. 52
Representations and Warranties..................................................... 52
Business of Infinity Pending the Merger............................................ 53
Business of Westinghouse Pending the Merger........................................ 54
No Solicitation.................................................................... 54
Conditions to the Consummation of the Merger; Conditions to Each Party's Obligation
to Effect the Merger............................................................ 55
Conditions to the Obligations of Westinghouse and Sub.............................. 55
Conditions to the Obligations of Infinity.......................................... 56
Effect on Infinity Benefit Plans, Stock Options, Deferred Shares and Warrants...... 56
Indemnification, Exculpation and Insurance......................................... 57
Termination........................................................................ 57
Fees and Expenses.................................................................. 58
Amendment.......................................................................... 58
Waiver............................................................................. 58
COMPARATIVE PER SHARE MARKET INFORMATION............................................. 59
UNAUDITED PRO FORMA FINANCIAL INFORMATION............................................ 60
DESCRIPTION OF INFINITY CAPITAL STOCK................................................ 68
DESCRIPTION OF WESTINGHOUSE CAPITAL STOCK............................................ 69
COMPARISON OF THE RIGHTS OF WESTINGHOUSE AND INFINITY
STOCKHOLDERS....................................................................... 72
BUSINESS OF WESTINGHOUSE............................................................. 81
BUSINESS OF INFINITY................................................................. 83
EXPERTS.............................................................................. 84
LEGAL OPINIONS....................................................................... 84
ANNEXES
ANNEX I AGREEMENT AND PLAN OF MERGER DATED AS OF JUNE 20, 1996,
AS AMENDED (COMPOSITE CONFORMED COPY)
ANNEX II STOCKHOLDER AGREEMENT DATED AS OF JUNE 20, 1996, AS AMENDED
(COMPOSITE CONFORMED COPY)
ANNEX III OPINION OF CHASE SECURITIES INC.
ANNEX IV OPINION OF SALOMON BROTHERS INC
ANNEX V OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
</TABLE>
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<PAGE> 9
AVAILABLE INFORMATION
Westinghouse and Infinity are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the SEC. Such reports, proxy statements and other information may be inspected
and copied at the public reference facilities maintained by the SEC at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Offices of the SEC: Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60611; and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such reports, proxy statements
and other information may be obtained from the Public Reference Section of the
SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The SEC
maintains a Web site at http://www.sec.gov that contains such reports, proxy
statements and other information. Copies of such materials filed by Westinghouse
can be inspected at the NYSE, 20 Broad Street, New York, New York 10005; the
CSE, One Financial Place, 440 South LaSalle Street, Chicago, Illinois 60605; the
PSE, 301 Pine Street, San Francisco, California 94104; the BSE, 1 Boston Place,
Boston, Massachusetts 02108 and the PHSE, 1900 Market Street, Philadelphia,
Pennsylvania 19103. Copies of such materials filed by Infinity can be inspected
at the NYSE at the address above. After consummation of the Merger, Infinity may
no longer be required to file reports, proxy statements or other information
with the SEC. Instead, such information may be included, to the extent required,
in filings made by Westinghouse.
This Proxy Statement/Prospectus does not contain all of the information set
forth in the Form S-4, certain parts of which are omitted in accordance with the
rules and regulations of the SEC. Reference is made to the Form S-4 and the
Exhibits thereto for further information. Statements contained or incorporated
by reference herein concerning the provisions of any agreement or other document
filed as an Exhibit to the Form S-4 or otherwise filed with the SEC are not
necessarily complete and reference is hereby made to the copy thereof so filed
for more detailed information, each such statement being qualified in its
entirety by such reference.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS THAT
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF SUCH DOCUMENTS
(EXCLUDING EXHIBITS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO THE INFORMATION INCORPORATED HEREIN) ARE AVAILABLE, WITHOUT
CHARGE, TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER OF SHARES OF WESTINGHOUSE
COMMON STOCK OR INFINITY COMMON STOCK TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS
DELIVERED, UPON WRITTEN OR ORAL REQUEST TO, IN THE CASE OF DOCUMENTS RELATING TO
WESTINGHOUSE, WESTINGHOUSE ELECTRIC CORPORATION, 11 STANWIX STREET, ROOM 1064,
PITTSBURGH, PENNSYLVANIA 15222, ATTENTION: CORPORATE INFORMATION CENTER
(TELEPHONE: (412) 244-2300), AND, IN THE CASE OF DOCUMENTS RELATING TO INFINITY,
INFINITY BROADCASTING CORPORATION, 600 MADISON AVENUE, NEW YORK, NEW YORK 10022,
ATTENTION: SECRETARY'S OFFICE (TELEPHONE: (212) 750-6400). IN ORDER TO ENSURE
DELIVERY OF DOCUMENTS PRIOR TO THE APPLICABLE SPECIAL MEETING, ANY REQUEST
THEREFOR SHOULD BE MADE NOT LATER THAN [ ], 1996.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents heretofore filed with the SEC pursuant to the
Exchange Act are incorporated herein by reference:
1. Westinghouse's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (the "1995 Westinghouse 10-K");
2. The portions of Westinghouse's Notice of 1996 Annual Meeting and Proxy
Statement that have been incorporated by reference in the 1995 Westinghouse
10-K;
3. Westinghouse's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1996 and June 30, 1996;
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<PAGE> 10
4. Westinghouse's Current Reports on Form 8-K reporting events on January
9, 1996, February 8, 1996, April 19, 1996, May 2, 1996, June 5, 1996, June 10,
1996, June 20, 1996, August 6, 1996 and September 19, 1996;
5. Westinghouse's Current Report on Form 8-K/A dated February 6, 1996.
6. Infinity's Annual Report on Form 10-K for the fiscal year ended December
31, 1995 (the "1995 Infinity 10-K");
7. The portions of Infinity's Proxy Statement dated May 14, 1996 that have
been incorporated by reference in the 1995 Infinity 10-K;
8. Infinity's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1996 and June 30, 1996;
9. Infinity's Current Reports on Form 8-K reporting events on March 26,
1996, June 20, 1996 and June 26, 1996; and
10. Infinity's Current Reports on Form 8-K/A, dated April 1, 1996, May 15,
1996 and September 5, 1996.
All reports and other documents filed by either Westinghouse or Infinity
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Proxy Statement/Prospectus and prior to the date of its
respective Special Meeting shall be deemed to be incorporated by reference
herein and to be a part hereof from the dates of filing such reports and
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement/Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this Proxy
Statement/Prospectus.
------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS WITH RESPECT TO THE MATTERS DESCRIBED IN THIS PROXY
STATEMENT/PROSPECTUS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE
HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY EITHER WESTINGHOUSE OR INFINITY. THIS
PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, NOR DOES IT CONSTITUTE THE
SOLICITATION OF A PROXY, IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF
SECURITIES HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF WESTINGHOUSE OR INFINITY SINCE THE
DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
------------------------
As used herein, unless the context otherwise clearly requires:
"Westinghouse" refers to Westinghouse Electric Corporation and its consolidated
subsidiaries and "Infinity" refers to Infinity Broadcasting Corporation and its
consolidated subsidiaries. Capitalized terms not defined in this Proxy
Statement/Prospectus have the respective meanings specified in the Merger
Agreement.
------------------------
All information contained in this Proxy Statement/Prospectus with respect
to Westinghouse and Sub has been provided by Westinghouse. All information
contained in this Proxy Statement/Prospectus with respect to Infinity has been
provided by Infinity.
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<PAGE> 11
SUMMARY
The following is a summary of certain information contained elsewhere or
incorporated by reference in this Proxy Statement/Prospectus. Reference is made
to, and this summary is qualified in its entirety by, the more detailed
information contained or incorporated by reference in this Proxy
Statement/Prospectus and the Annexes hereto.
------------------------
STOCKHOLDERS OF WESTINGHOUSE AND INFINITY ARE URGED TO READ THIS PROXY
STATEMENT/PROSPECTUS AND THE ANNEXES HERETO IN THEIR ENTIRETY AND SHOULD
CONSIDER CAREFULLY THE INFORMATION SET FORTH BELOW UNDER THE HEADING "RISK
FACTORS."
------------------------
THE COMPANIES
Westinghouse. Westinghouse is a diversified, global company which engages
in a wide variety of businesses through its Westinghouse/CBS Group and its
Industries & Technology Group. The Westinghouse/CBS Group combines the
operations of CBS Inc. ("CBS"), which Westinghouse acquired in 1995, and the
former Group W Broadcasting. The Industries & Technology Group provides
services, fuel and equipment for the nuclear energy market, services and
equipment for the power generation market, transport temperature control
equipment, management services at government-owned facilities, and communication
and information systems. Westinghouse's principal executive offices are located
at 11 Stanwix Street, Pittsburgh, Pennsylvania 15222, and its telephone number
is (412) 244-2300. See "BUSINESS OF WESTINGHOUSE."
Infinity. Infinity is one of the largest owners and/or operators of radio
stations in the United States. Infinity currently owns and/or operates 44 radio
stations serving 13 of the nation's largest radio markets. In addition to its
radio industry activities, Infinity participates in the out-of-home media
business through its wholly owned subsidiary TDI Worldwide, Inc. ("TDI").
Infinity also manages and has a minority equity investment in Westwood One, Inc.
("Westwood One"), the nation's largest producer and distributor of radio
programming. Infinity's principal executive offices are located at 600 Madison
Avenue, New York, New York 10022, and its telephone number is (212) 750-6400.
See "BUSINESS OF INFINITY."
Sub. Sub, which is a wholly-owned subsidiary of Westinghouse, was
incorporated in Delaware on June 18, 1996 solely for the purpose of engaging in
the transactions contemplated by the Merger Agreement and has engaged in no
other business other than incident to its creation and the Merger Agreement and
the transactions contemplated by the Merger Agreement. Its principal executive
offices are located at 11 Stanwix Street, Pittsburgh, Pennsylvania 15222, and
its telephone number is (412) 244-2300.
THE SPECIAL MEETINGS
Westinghouse
Purpose. The Westinghouse Special Meeting will be held at [ ], on
[ ], at [ ] a.m., local time, to consider and vote upon proposals to
approve (i) the Charter Amendment and (ii) the Share Issuance. See "WESTINGHOUSE
SPECIAL MEETING--Purpose."
Record Date. Only holders of record of Westinghouse Common Stock at the
close of business on [ ], 1996 (the "Westinghouse Record Date") are
entitled to receive notice of and to vote at the Westinghouse Special Meeting.
At the close of business on the Westinghouse Record Date, there were [ ]
shares of Westinghouse Common Stock outstanding, each of which entitles the
registered holder thereof to one vote. See "WESTINGHOUSE SPECIAL MEETING--Record
Date; Voting Rights."
Share Ownership of Management. At the close of business on the Westinghouse
Record Date, directors and executive officers of Westinghouse, as a group, were
the beneficial owners of an aggregate of [ ] shares (approximately
[ ]%) of the Westinghouse Common Stock then outstanding.
Required Vote. Approval of the Charter Amendment will require the
affirmative vote of the holders of a majority of the shares of Westinghouse
Common Stock outstanding as of the Westinghouse Record Date.
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<PAGE> 12
Approval of the Share Issuance will require the affirmative vote of the holders
of a majority of the votes cast on the Share Issuance, provided that the total
number of votes cast on the Share Issuance represents more than 50% of the
outstanding shares of Westinghouse Common Stock entitled to vote thereon at the
Westinghouse Special Meeting. Approval of the Charter Amendment is not
conditioned on approval of the Share Issuance; however, approval of the Charter
Amendment is a prerequisite to the Share Issuance.
An abstention with respect to either the Charter Amendment or the Share
Issuance will have the effect of a vote cast against such proposal. The shares
of Westinghouse Common Stock represented by valid proxies received will be voted
in the manner specified on the proxies. Where a specific choice is not
indicated, the shares represented by valid proxies received will be voted "FOR"
approval of the Charter Amendment and the Share Issuance. Brokers who hold
shares of Westinghouse Common Stock as nominees will not have discretionary
authority to vote such shares on the Charter Amendment or the Share Issuance in
the absence of instructions from the beneficial owners thereof. Any shares which
are not voted because the nominee-broker lacks such discretionary authority will
have the effect of votes cast against the Charter Amendment and will not be
counted as votes cast on the Share Issuance. See "WESTINGHOUSE SPECIAL MEETING--
Required Vote."
Infinity
Purpose. The Infinity Special Meeting will be held at [ ], on
[ ], at [ ] a.m., Eastern Time, to consider and vote upon a proposal
to approve and adopt the Merger Agreement and the transactions contemplated
thereby, which provides for the Merger of Sub with and into Infinity, with
Infinity surviving as a wholly owned subsidiary of Westinghouse. See "INFINITY
SPECIAL MEETING--Purpose."
Record Date. Only holders of record of Infinity Common Stock at the close
of business on [ ], 1996 (the "Infinity Record Date") are entitled to
receive notice of and to vote at the Infinity Special Meeting. At the close of
business on the Infinity Record Date, there were [ ] shares of Infinity
Common Stock outstanding, consisting of [ ] shares of Infinity Class A
Common Stock, [ ] shares of Infinity Class B Common Stock and [ ]
shares of Infinity Class C Common Stock. Each registered holder of Infinity
Class A Common Stock, Infinity Class B Common Stock and Infinity Class C Common
Stock is entitled to one vote, ten votes and one vote per share, respectively,
voting as a single class at the Infinity Special Meeting. See "INFINITY SPECIAL
MEETING--Record Date; Voting Rights."
Share Ownership of Management. At the close of business on the Infinity
Record Date, directors and executive officers of Infinity, as a group, were the
beneficial owners of an aggregate of [ ] shares (approximately
[ ]%) of the Infinity Common Stock then outstanding. Such ownership
represents approximately [ ]% of the combined voting power of the
outstanding shares of Infinity Common Stock entitled to vote at the Infinity
Special Meeting.
Required Vote. Approval and adoption of the Merger Agreement and the
transactions contemplated thereby will require the affirmative vote of the
holders of a majority of the combined voting power of the outstanding shares of
Infinity Common Stock. The shares of Infinity Common Stock represented by valid
proxies received will be voted in the manner specified on the proxies. Where a
specific choice is not indicated, the shares represented by valid proxies
received will be voted "FOR" the approval and adoption of the Merger Agreement
and the transactions contemplated thereby. An abstention will have the effect of
a vote cast against approval and adoption of the Merger Agreement and the
transactions contemplated thereby. Brokers who hold shares of Infinity Class A
Common Stock as nominees will not have discretionary authority to vote such
shares in the absence of instructions from the beneficial owners thereof. Any
shares which are not voted because the nominee-broker lacks such discretionary
authority will have the effect of votes cast against approval and adoption of
the Merger Agreement and the transactions contemplated thereby. See "INFINITY
SPECIAL MEETING--Required Vote."
The Stockholder Agreement. Pursuant to the terms of a Stockholder
Agreement, dated as of June 20, 1996 (as amended, the "Stockholder Agreement"),
among Westinghouse and the holders at such date of all the outstanding shares of
Infinity Class B Common Stock, such stockholders have agreed, subject to certain
conditions set forth in the Stockholder Agreement, to vote their shares of
Infinity Common Stock in favor of
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<PAGE> 13
the approval and adoption of the Merger Agreement and the transactions
contemplated thereby at the Infinity Special Meeting. Together, such
stockholders hold more than a majority of the outstanding voting power of the
Infinity Common Stock, and, subject to certain limitations set forth in the
Restated Certificate of Incorporation of Infinity, as amended (the "Infinity
Charter"), are therefore together able to control the vote on all matters
submitted to a vote of Infinity's stockholders, including the approval and
adoption of the Merger Agreement and the transactions contemplated thereby. The
general effect of the Stockholder Agreement, subject to certain conditions set
forth therein, is to ensure the affirmative vote at the Infinity Special Meeting
of a number of shares of Infinity Common Stock sufficient to cause such approval
and adoption. See "INFINITY SPECIAL MEETING--The Stockholder Agreement;" and
"THE MERGER--Interests of Certain Persons in the Merger."
THE MERGER AND THE MERGER AGREEMENT
General. At the Effective Time of the Merger, Sub will be merged with and
into Infinity, with Infinity continuing as the surviving corporation (the
"Surviving Corporation") and a wholly owned subsidiary of Westinghouse. As a
result of the Merger, the separate corporate existence of Sub will cease and
Infinity will succeed to all the rights and be responsible for all the
obligations of Sub in accordance with the Delaware General Corporation Law (the
"DGCL"). Subject to the terms and conditions of the Merger Agreement, each share
of Infinity Common Stock outstanding immediately prior to the Effective Time
(other than shares owned directly or indirectly by Westinghouse or Infinity,
which will be canceled) will be converted into the right to receive 1.71 shares
of Westinghouse Common Stock. Cash will be paid in lieu of any fractional shares
of Westinghouse Common Stock.
HOLDERS OF INFINITY COMMON STOCK SHOULD NOT SEND ANY CERTIFICATES
REPRESENTING SHARES OF INFINITY COMMON STOCK WITH THE ENCLOSED PROXY CARD. IF
THE MERGER IS CONSUMMATED, A LETTER OF TRANSMITTAL WILL BE MAILED AS SOON AS
PRACTICABLE AFTER THE MERGER TO EACH PERSON WHO WAS A HOLDER OF OUTSTANDING
SHARES OF INFINITY COMMON STOCK IMMEDIATELY PRIOR TO THE CONSUMMATION OF THE
MERGER. INFINITY STOCKHOLDERS SHOULD SEND CERTIFICATES REPRESENTING INFINITY
COMMON STOCK TO THE EXCHANGE AGENT (AS DEFINED) ONLY AFTER THEY RECEIVE, AND IN
ACCORDANCE WITH THE INSTRUCTIONS CONTAINED IN, THE LETTER OF TRANSMITTAL. See
"THE MERGER AGREEMENT--Exchange of Infinity Common Stock."
The Merger will become effective upon the filing of a Certificate of Merger
with the Secretary of State of the State of Delaware unless the Certificate of
Merger provides for a later time of effectiveness. The filing of the Certificate
of Merger will occur as soon as practicable on or after the Closing Date. See
"THE MERGER AGREEMENT--Conditions to the Consummation of the Merger; Conditions
to Each Party's Obligation to Effect the Merger."
Shares of Westinghouse Common Stock Issued in Connection with the
Merger. Based on the number of shares of Infinity Common Stock and warrants to
purchase shares of Infinity Class C Common Stock (the "Lehman Warrants")
outstanding on the Infinity Record Date and based on the Conversion Number,
approximately [ ] shares of Westinghouse Common Stock will be issued in
connection with the Merger. Further, assuming all Infinity stock options,
deferred shares and warrants, other than the Lehman Warrants, with respect to
shares of Infinity Common Stock outstanding as of the Infinity Record Date are
exercised for Westinghouse Common Stock, [ ] additional shares of
Westinghouse Common Stock will have been issued in connection with the Merger,
for a total issuance of [ ] shares of Westinghouse Common Stock.
Recommendation of the Westinghouse Board. The Westinghouse Board has
unanimously (with one director not present, hereinafter "unanimously")
determined that the Merger, the Charter Amendment and the Share Issuance are
advisable and in the best interests of Westinghouse and the stockholders of
Westinghouse and has approved the Merger Agreement, the Charter Amendment and
the Share Issuance. THE WESTINGHOUSE BOARD UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS
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<PAGE> 14
OF WESTINGHOUSE VOTE "FOR" APPROVAL OF THE CHARTER AMENDMENT AND THE SHARE
ISSUANCE AT THE WESTINGHOUSE SPECIAL MEETING. See "THE MERGER-- Westinghouse's
Reasons for the Merger; Recommendation of its Board of Directors" and "PROPOSED
WESTINGHOUSE CHARTER AMENDMENT."
Opinions of Westinghouse's Investment Bankers. Chase Securities Inc.
("Chase") has acted as financial advisor to Westinghouse in connection with
providing a fairness opinion with respect to the Merger and has delivered its
written opinion (the "Chase Opinion") dated June 19, 1996 to the Westinghouse
Board to the effect that, based upon and subject to the various considerations
set forth therein, as of the date of such opinion, the Conversion Number in the
Merger is fair, from a financial point of view, to Westinghouse. Salomon
Brothers Inc ("Salomon") has also delivered a written opinion (the "Salomon
Opinion") dated June 19, 1996 to the Westinghouse Board to the effect set forth
above. The full texts of the Chase Opinion and the Salomon Opinion, which set
forth a description of the assumptions made, general procedures followed,
factors considered and limitations on the reviews undertaken, are attached
hereto as Annex III and Annex IV, respectively, and should be read carefully in
their entirety. See "THE MERGER--Opinions of Westinghouse's Investment Bankers."
Recommendation of the Infinity Board. The Infinity Board has unanimously
determined that the Merger is advisable and fair to and in the best interests of
Infinity and its stockholders and has unanimously approved the Merger Agreement.
THE INFINITY BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF INFINITY VOTE
"FOR" THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY AT THE INFINITY SPECIAL MEETING. For a discussion of the
interests that certain directors and executive officers of Infinity have with
respect to the Merger that are different from, or in addition to, the interests
of stockholders of Infinity generally, see "THE MERGER--Interests of Certain
Persons in the Merger." Such interests, together with other relevant factors,
were considered by the Infinity Board in making its recommendation and approving
the Merger Agreement. See "THE MERGER--Infinity's Reasons for the Merger;
Recommendation of its Board of Directors."
Opinion of Infinity's Financial Advisor. Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") has acted as financial advisor to Infinity
in connection with the Merger and has delivered its written opinion dated June
20, 1996 to the Infinity Board to the effect that, based upon and subject to the
various considerations set forth therein, as of the date of such opinion, the
consideration to be received by the holders of shares of Infinity Common Stock
(other than Westinghouse and its affiliates) pursuant to the Merger Agreement is
fair to such holders from a financial point of view. The full text of the
Merrill Lynch Opinion (as defined), which sets forth the assumptions made,
general procedures followed, factors considered and limitations on the review
undertaken by Merrill Lynch in rendering its opinion, is attached hereto as
Annex V and should be read carefully in its entirety. See "THE MERGER--Opinion
of Infinity's Financial Advisor."
Certain Litigation. Several purported class action complaints have been
filed by purported stockholders of Infinity against Infinity, its directors and
Westinghouse as defendants alleging, among other things, that the Infinity Board
acted in disregard of its fiduciary duties to Infinity's public stockholders in
agreeing to the Merger and that Westinghouse aided and abetted such alleged
breach. See "THE MERGER--Certain Litigation."
Interests of Certain Persons in the Merger. Certain directors and executive
officers of Infinity have certain interests in the Merger that are different
from, or in addition to, the interests of stockholders of Infinity generally.
Such interests include, among other things, outstanding options, deferred shares
and warrants with respect to Infinity Common Stock which will be assumed by
Westinghouse with the substitution of Westinghouse Common Stock as the
underlying stock for such options, deferred shares and warrants, and the
understanding that Mr. Mel Karmazin, the President and Chief Executive Officer
of Infinity, will be recommended to the Westinghouse Board and its Nominating
and Governance Committee for election as a director of Westinghouse following
the Merger. Mr. Karmazin has also entered into an employment agreement with
Westinghouse that will become effective as of the Effective Time. In addition,
certain options to purchase Infinity Common Stock granted to Mr. Karmazin and
one other executive officer of Infinity will
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<PAGE> 15
become fully vested as of the Effective Time. See "THE MERGER--Interests of
Certain Persons in the Merger." In addition, subject to certain conditions, for
six years from the Effective Time, Westinghouse has agreed to maintain (i)
Infinity's current directors' and officers' insurance and indemnification
policy, to the extent that such policy provides coverage for events occurring at
or prior to the Effective Time, for all persons who were directors and officers
of Infinity on the date of the Merger Agreement and (ii) all rights to
indemnification for all acts or omissions occurring at or prior to the Effective
Time for all current and former directors and officers of Infinity. See "THE
MERGER--Interests of Certain Persons in the Merger" and "-- Indemnification,
Exculpation and Insurance."
Absence of Appraisal and Dissenters' Rights. Under the Pennsylvania
Business Corporation Law (the "PBCL"), the stockholders of Westinghouse are not
entitled to dissenters' rights with respect to either the Charter Amendment or
the Share Issuance. Under the DGCL, the stockholders of Infinity are not
entitled to appraisal rights with respect to the approval and adoption of the
Merger Agreement and the transactions contemplated thereby. See "THE
MERGER--Absence of Appraisal and Dissenters' Rights" and "COMPARISON OF THE
RIGHTS OF WESTINGHOUSE AND INFINITY STOCKHOLDERS--Rights of Appraisal."
Certain Federal Income Tax Consequences. Each of Cravath, Swaine & Moore,
counsel to Westinghouse, and Debevoise & Plimpton, counsel to Infinity, has
delivered to Westinghouse and Infinity, respectively, opinions dated the date
hereof (which will be confirmed as of the Closing Date), to the effect that the
Merger will constitute a "reorganization" within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), and Westinghouse,
Sub and Infinity will each be a party to the reorganization within the meaning
of Section 368(b) of the Code. Based upon such opinions, no gain or loss will be
recognized by the stockholders of Infinity upon the exchange of their Infinity
Common Stock solely for shares of Westinghouse Common Stock pursuant to the
Merger, except with respect to cash, if any, received in lieu of fractional
shares of Westinghouse Common Stock. See "THE MERGER--Certain Federal Income Tax
Consequences" and "THE MERGER AGREEMENT--Conditions to the Consummation of the
Merger; Conditions to Each Party's Obligation to Effect the Merger."
Governmental Reviews and Regulatory Approvals. The respective obligations
of Westinghouse, Sub and Infinity to consummate the Merger are subject to
certain conditions, including: (i) subject to certain limitations, the issuance
by the Federal Communications Commission (the "FCC") of the FCC Order (including
the grant of certain temporary waivers under the FCC's "one-to-a-market" rule,
and assuming the parties' disposition prior to the Merger of radio stations in
the Chicago and Dallas/Ft. Worth markets, as described in "RISK FACTORS--Radio
Broadcasting Industry Subject to Federal Regulation; Disposition of
Stations--Status of Certain Stations") without the imposition of certain
conditions or restrictions; (ii) the absence of any statute, rule, regulation,
temporary restraining order, preliminary or permanent injunction or other order
of any court or other Governmental Entity preventing consummation of the Merger;
(iii) the declaration by the SEC that the Form S-4 is effective under the
Securities Act and the receipt by Westinghouse of all state securities or "blue
sky" authorizations necessary to issue the shares of Westinghouse Common Stock
issuable pursuant to the Share Issuance; (iv) the approval for listing on the
NYSE of the shares of Westinghouse Common Stock issuable pursuant to the Share
Issuance; and (v) the expiration or termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Act of 1976, as amended (the "HSR Act").
See "THE MERGER--Regulatory Reviews and Approvals" and "THE MERGER
AGREEMENT--Conditions to the Consummation of the Merger; Conditions to Each
Party's Obligation to Effect the Merger."
Accounting Treatment. The management of Westinghouse has assumed that the
Merger would be accounted for under the "purchase" method of accounting, in
accordance with generally accepted accounting principles. However, should
certain specific criteria be met as of the Effective Time, the Merger may
qualify as a pooling of interests for accounting and financial reporting
purposes. See "THE MERGER--Anticipated Accounting Treatment."
Comparative Per Share Market Information. Set forth below are the last
reported sale prices of Westinghouse Common Stock and Infinity Class A Common
Stock on June 19, 1996, the last trading day
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<PAGE> 16
prior to the execution of the Merger Agreement, as reported on the NYSE
Composite Transactions Tape, and the equivalent pro forma sale price of Infinity
Class A Common Stock on such date, as determined by multiplying such last
reported sale price of Westinghouse Common Stock by the Conversion Number of
1.71:
<TABLE>
<S> <C>
Westinghouse Common Stock........................................................... $18 7/8
Infinity Class A Common Stock....................................................... $28 7/8
Infinity Equivalent................................................................. $32.28
</TABLE>
On September 30, 1996, the last trading day prior to the date of this Proxy
Statement/Prospectus, the last reported sale prices of Westinghouse Common Stock
and Infinity Class A Common Stock, as reported on the NYSE Composite
Transactions Tape, were $18 5/8 per share and $31 1/2 per share, respectively.
Termination of the Merger Agreement; Fees and Expenses. The Merger
Agreement may be terminated prior to the Effective Time by mutual agreement of
Westinghouse, Sub and Infinity. The Merger Agreement may also be terminated
prior to the Effective Time by either Westinghouse or Infinity (i) if (a) any of
the Stockholder Approvals are not obtained by reason of the failure to obtain
the required vote at the relevant Special Meeting or any adjournment or
postponement thereof; (b) the Merger is not consummated on or before June 30,
1997, subject to certain exceptions; or (c) any Governmental Entity has issued
an order enjoining or otherwise prohibiting the Merger and such order becomes
final and nonappealable; or (ii) provided that the terminating party is not then
in material breach of the Merger Agreement, if the other party breaches any of
the representations, warranties, covenants or other agreements made by such
party and such breach has not been or cannot be cured within 30 days following
written notice to the breaching party and such breach would entitle the
non-breaching party not to consummate the transactions contemplated by the
Merger Agreement. The Merger Agreement may also be terminated by Infinity if (i)
the Infinity Board determines in good faith, based on the advice of outside
counsel, that it is necessary, in order to comply with its fiduciary duties to
Infinity's stockholders under applicable law, to terminate the Merger Agreement
to enter into an agreement with respect to or to consummate a transaction
constituting a "superior proposal" (as defined in the Merger Agreement); (ii)
Infinity gives notice to Westinghouse that it has received a "superior proposal"
and that it intends to terminate the Merger Agreement; (iii) either (a)
Westinghouse fails to revise the terms of its "takeover proposal" (as defined in
the Merger Agreement), or (b) if Westinghouse has revised the terms of such
proposal, the Infinity Board, after receiving advice from its financial advisor,
determines in its good faith reasonable judgment that the third party's takeover
proposal is superior to Westinghouse's revised proposal; and (iv) Infinity, at
the time of such termination, pays certain expenses and a termination fee to
Westinghouse, as provided in the Merger Agreement. See "THE MERGER
AGREEMENT--Termination." The Merger Agreement also provides for the payment of a
termination fee under certain other circumstances. See "THE MERGER
AGREEMENT--Fees and Expenses."
11
<PAGE> 17
SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
The following selected unaudited pro forma combined condensed financial
data are derived from the Unaudited Pro Forma Combined Condensed Financial
Statements included elsewhere in this Proxy Statement/Prospectus and should be
read in conjunction therewith and with the related notes thereto. These selected
unaudited pro forma combined condensed financial data: (a) are based upon the
respective financial statements of Westinghouse and Infinity; (b) are adjusted
to give effect to the acquisition by Westinghouse of CBS and the acquisition by
Infinity of certain radio stations and media properties; and (c) are adjusted
for the Merger. With respect to the Statement of Operations Data such
acquisitions and the Merger are assumed to have been consummated on January 1,
1995. With respect to the Balance Sheet Data, the Merger is assumed to have been
consummated as of June 30, 1996.
These selected unaudited pro forma combined condensed financial data are
presented for illustrative purposes only and are not necessarily indicative of
the operating results or financial position that would have been achieved had
the Merger been consummated as of the dates indicated or the results that may be
obtained in the future. See "UNAUDITED PRO FORMA FINANCIAL INFORMATION."
<TABLE>
<CAPTION>
SIX
MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
--------------- --------------------
(IN MILLIONS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Sales of products and services................................. $ 4,518 $ 9,610
Interest expense............................................... (297) (815)
Loss from Continuing Operations before income taxes and
minority interest in income of consolidated subsidiaries..... (1,286) (756)
Loss from Continuing Operations................................ $ (880) $ (552)
======= ========
Loss per common share from Continuing Operations............... $ (1.38) $ (0.96)
======= ========
Average common and common stock equivalent shares outstanding
(in thousands)............................................... 639,945(1) 609,196(1)
======= =======
</TABLE>
<TABLE>
<CAPTION>
AS OF
JUNE 30, 1996
---------------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA:
Total assets.................................................... $20,511
Total debt...................................................... 6,580
Shareholders' equity............................................ 5,635
</TABLE>
<TABLE>
<CAPTION>
INFINITY
HISTORICAL HISTORICAL PRO FORMA EQUIVALENT
COMPARATIVE PER SHARE DATA: WESTINGHOUSE INFINITY COMBINED PRO FORMA(2)
------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C>
Income (loss) per common share from Continuing
Operations for the six months ended June 30,
1996............................................ $(1.94) $ 0.27 $(1.38) $ (2.36)
Income (loss) per common share from Continuing
Operations for the year ended December 31,
1995............................................ $(0.11) $ 0.53 $(0.96) $ (1.64)
Book value per common share as of June 30,
1996(3)......................................... $ 3.14 $ 4.29 $ 8.12 $ 13.89
Cash dividend per common share for the six months
ended June 30, 1996............................. $ 0.10 -- $ 0.10 $ 0.17
Cash dividend per common share for the year ended
December 31, 1995............................... $ 0.20 -- $ 0.20 $ 0.34
</TABLE>
See accompanying notes to Selected Unaudited Pro Forma Combined Condensed
Financial Data.
12
<PAGE> 18
NOTES TO SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
(1) The average common and common stock equivalent shares outstanding used in
calculating pro forma loss per share are calculated assuming the estimated
shares issued in connection with the Merger were outstanding from January
1, 1995, reduced by the assumed repurchase of shares from the exercise
proceeds of options, warrants and other stock equivalents.
(2) Infinity Equivalent Pro Forma per share amounts are calculated by
multiplying the respective pro forma combined per share amounts by the
Conversion Number of 1.71.
(3) The historical book value per share amounts were calculated by dividing
shareholder's equity, less the liquidation value of the Westinghouse
preferred shares, by the number of common shares outstanding, excluding
treasury shares, at the end of the period. The historical book values per
share as of December 31, 1995 for Westinghouse and Infinity were $2.50 and
$3.29, respectively.
The common shares outstanding used in the calculation of pro forma book
value per share are assumed to be the number of Westinghouse common shares
outstanding prior to the Merger plus 204,515,258, the estimated number of
shares to be issued in connection with the Merger.
13
<PAGE> 19
WESTINGHOUSE ELECTRIC CORPORATION
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The selected consolidated historical financial data presented below have
been derived from and should be read in conjunction with the Westinghouse
audited restated consolidated financial statements and notes thereto for the
year ended December 31, 1995 included in Westinghouse's Current Report on Form
8-K filed September 19, 1996 and unaudited interim consolidated financial
statements and notes thereto for the quarter ended June 30, 1996 included in
Westinghouse's Quarterly Report on Form 10-Q, which are incorporated by
reference in this Proxy Statement/Prospectus. Unaudited interim data reflect, in
the opinion of Westinghouse management, all adjustments considered necessary for
a fair presentation of results of such interim period. Results for unaudited
interim periods are not necessarily indicative of results which may be expected
for any other interim or annual period. The historical financial data presented
below include the results of CBS subsequent to its acquisition by Westinghouse
on November 24, 1995.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------- -----------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------- ------- ------- ------- ------- ------- -------
(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Sales of products and services.................. $ 4,180 $ 2,647 $ 5,923 $ 5,490 $ 5,401 $ 5,410 $ 5,305
Interest expense................................ (255) (95) (237) (134) (165) (169) (182)
Income (loss) from Continuing Operations before
income taxes and minority interest in income
of consolidated subsidiaries.................. (1,280) 26 13 3 (236) 271 249
Income (loss) from Continuing Operations........ (853) 16 (12) (1) (174) 184 176
Income (loss) from Discontinued Operations...... 1,008 58 27 78 (96) (1,240) (1,262)
Extraordinary item: Loss on early extinguishment
of debt....................................... (63) -- -- -- -- -- --
Cumulative effect of changes in accounting
principles.................................... -- -- -- -- (56) (338) --
Net income (loss)............................... $ 92 $ 74 $ 15 $ 77 $ (326) $(1,394) $(1,086)
======= ======= ======= ======= ======= ======= =======
Primary earnings (loss) per common share:
Continuing Operations........................... $ (1.94) $ (0.02) $ (0.11) $ (0.13) $ (0.64) $ 0.45 $ 0.56
Discontinued Operations......................... 2.29 0.14 0.06 0.20 (0.27) (3.58) (4.02)
Extraordinary item.............................. (0.14) -- -- -- -- -- --
Cumulative effect of changes in accounting
principles.................................... -- -- -- -- (0.16) (0.98) --
------- ------- ------- ------- ------- ------- -------
Earnings (loss) per common share................ $ 0.21 $ 0.12 $ (0.05) $ 0.07 $ (1.07) $ (4.11) $ (3.46)
======= ======= ======= ======= ======= ======= =======
Fully diluted earnings (loss) per common share:
Continuing Operations........................... $ (1.94) $ (0.02) $ (0.03) $ (0.13) $ (0.64) $ 0.45 $ 0.56
Discontinued Operations......................... 2.29 0.14 0.06 0.20 (0.27) (3.58) (4.02)
Extraordinary item.............................. (0.14) -- -- -- -- -- --
Cumulative effect of changes in accounting
principles.................................... -- -- -- -- (0.16) (0.98) --
------- ------- ------- ------- ------- ------- -------
Earnings (loss) per common share................ $ 0.21 $ 0.12 $ 0.03 $ 0.07 $ (1.07) $ (4.11) $ (3.46)
======= ======= ======= ======= ======= ======= =======
Dividends per common share...................... $ 0.10 $ 0.10 $ 0.20 $ 0.20 $ 0.40 $ 0.72 $ 1.40
======= ======= ======= ======= ======= ======= =======
Average common and common stock equivalent
shares outstanding (in thousands)............. 440,866 398,469 410,138 383,736 352,902 346,103 313,984
======= ======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
AS OF --------------------------------------------------------------
JUNE 30, 1996 1995 1994 1993 1992 1991
-------------- ------- ------- ------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets--Continuing
Operations......................... $15,302 $14,986 $ 6,965 $ 7,185 $ 6,403 $ 5,841
Total assets--Discontinued
Operations......................... 1,372 3,628 4,873 7,336 11,522 14,077
Total assets......................... 16,674 18,614 11,838 14,521 17,925 19,918
Total debt--Continuing Operations.... 5,443 7,865 2,505 2,506 2,800 3,495
Total debt--Discontinued
Operations......................... 453 503 1,232 3,844 7,133 7,661
Total debt........................... 5,896 8,368 3,737 6,350 9,933 11,156
Shareholders' equity................. 1,775 1,508 1,815 1,062 2,235 3,748
</TABLE>
14
<PAGE> 20
INFINITY BROADCASTING CORPORATION
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The selected consolidated historical financial data presented below have
been derived from and should be read in conjunction with the Infinity audited
consolidated financial statements and notes thereto and unaudited interim
consolidated financial statements and notes thereto included in the 1995
Infinity 10-K and included in Infinity's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996, which are incorporated by reference in this Proxy
Statement/Prospectus. Unaudited interim data reflect, in the opinion of Infinity
management, all adjustments considered necessary for a fair presentation of
results of such interim period. Results for unaudited interim periods are not
necessarily indicative of results which may be expected for any other interim or
annual period. The historical consolidated financial data presented below are
not comparable from year to year because of various acquisitions by Infinity
during the periods presented. See "Business--Background" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," in
the 1995 Infinity 10-K.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------- --------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------- ------- ------- ------- ------ ------ ------
(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues....................... $ 261 $ 147 $ 326 $ 274 $ 205 $ 150 $ 118
Interest expense, net.............. (25) (24) (44) (45) (36) (38) (51)
Income (loss) before extraordinary
item............................. 30 18 54 33 14 (9) (24)
Extraordinary item: Loss (gain) on
early extinguishment of debt..... -- -- -- -- -- (13) 18
Net income (loss).................. $ 30 $ 18 $ 54 $ 33 $ 14 $ (22) $ (6)
======= ======= ======= ======= ====== ====== ======
Primary earnings (loss) per common
share:
Income (loss) before extraordinary
item............................. $ 0.27 $ 0.18 $ 0.53 $ 0.33 $ 0.15 $(0.13) $(0.73)
Extraordinary item................. -- -- -- -- -- (0.18) 0.54
------- ------- ------- ------- ------ ------ ------
Net income (loss).................. $ 0.27 $ 0.18 $ 0.53 $ 0.33 $ 0.15 $(0.31) $(0.19)
======= ======= ======= ======= ====== ====== ======
Dividends per common share......... -- -- -- -- -- -- --
Average common and common stock
equivalent shares outstanding (in
thousands)....................... 114,987 100,913 102,903 100,709 93,083 70,502 33,110
======= ======= ======= ======= ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
JUNE 30, ---------------------------------------------
1996 1995 1994 1993 1992 1991
-------------- ---- ---- ---- ----- -----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets....................... $1,706 $594 $562 $378 $ 272 $ 212
Total debt......................... 1,137 267 532 365 381 406
Shareholders' equity (deficit)..... 367 274 (26) (24) (139) (222)
</TABLE>
15
<PAGE> 21
RISK FACTORS
In considering whether to approve the Charter Amendment and the Share
Issuance, or to approve and adopt the Merger Agreement and the transactions
contemplated thereby, as the case may be, the stockholders of Westinghouse and
Infinity should consider the following matters.
FIXED EXCHANGE RATIO DESPITE POSSIBLE CHANGE IN STOCK PRICES.
The Conversion Number is expressed in the Merger Agreement as a fixed
ratio. Accordingly, the Conversion Number will not be adjusted in the event of
any increase or decrease in the price of either Westinghouse Common Stock or
Infinity Common Stock. The price of Westinghouse Common Stock at the Effective
Time may vary from its price at the date of this Proxy Statement/Prospectus and
the dates of the Special Meetings, possibly by a material amount. Such
variations may be the result of changes in the business, operations or prospects
of Westinghouse or Infinity, market assessments of the likelihood that the
Merger will be consummated and the timing thereof, regulatory considerations,
general market and economic conditions and other factors. Because the Effective
Time will occur at a date later than the Special Meetings, there can be no
assurance that the price of Westinghouse Common Stock on the dates of the
Special Meetings will be indicative of its price at the Effective Time. The
Effective Time will occur as soon as practicable following the Special Meetings
and the satisfaction or waiver of the conditions set forth in the Merger
Agreement. Stockholders of Westinghouse and Infinity are urged to obtain current
market quotations for Westinghouse Common Stock and Infinity Common Stock. See
"THE MERGER AGREEMENT--Exchange of Infinity Common Stock" and "-- Conditions to
the Consummation of the Merger; Conditions to Each Party's Obligation to Effect
the Merger."
NECESSITY OF GOVERNMENTAL REVIEWS AND APPROVALS PRIOR TO THE MERGER; REQUIRED
DIVESTITURES.
The consummation of the Merger is conditioned upon the expiration or
termination of the applicable waiting period under the HSR Act. In addition,
approval of the FCC is required for the issuance, renewal or transfer of radio
broadcast station operating licenses. The combined enterprise will be required
to divest certain radio stations (including stations in the Chicago and
Dallas/Ft. Worth markets) in order to obtain the necessary FCC authorizations
and approvals of the Merger and may be required to divest certain radio stations
and other assets in order to obtain the necessary antitrust approvals for the
Merger. There can be no assurance that the consummation of any such divestitures
could be effected at a fair market price or that the reinvestment of the
proceeds therefrom would produce for the combined enterprise operating profit or
cash flow at the same level as the divested radio stations or a commensurate
rate of return on the amount of its investment. Westinghouse has also requested
temporary waivers to the FCC's "one-to-a-market" rule. There can be no assurance
that such waivers will be granted. Other filings with, notifications to and
authorizations and approvals of, various governmental agencies, with respect to
the transactions contemplated by the Merger Agreement must also be made and
received prior to the consummation of the Merger. There can be no assurance that
any governmental agency will approve or take any other required action with
respect to the Merger, and, if approvals are received or actions are taken, that
such approvals or actions will not require further, possibly numerous
divestitures, or be conditioned upon matters that would cause Westinghouse to
abandon the Merger, or that no action will be brought challenging such approvals
or actions, or, if such challenge is made, as to the result thereof. See
"--Broadcasting Industry Subject to Federal Regulation; Disposition of Stations"
and "THE MERGER--Regulatory Reviews and Approvals."
UNCERTAINTIES IN INTEGRATING BUSINESS OPERATIONS AND ACHIEVING COST SAVINGS.
In determining that the Merger is advisable and in the best interests of
its stockholders, each of the Westinghouse Board and the Infinity Board
considered the cost savings, operating efficiencies and other synergies expected
to result from the consummation thereof. See "THE MERGER--Westinghouse's Reasons
for the Merger; Recommendation of its Board of Directors" and "--Infinity's
Reasons for the Merger; Recommendation of its Board of Directors." There can be
no assurance that any or all of such synergies will be accomplished as rapidly
as currently expected or at all.
16
<PAGE> 22
INTERESTS OF CERTAIN PERSONS IN THE MERGER.
In considering the recommendation of the Merger by the Infinity Board, the
stockholders of Infinity should be aware that certain directors and executive
officers of Infinity have certain interests in the Merger that are different
from, or in addition to, the interests of stockholders of Infinity generally;
such interests, together with other relevant factors, were considered by the
Infinity Board in making its recommendation and approving the Merger Agreement.
See "THE MERGER--Interests of Certain Persons in the Merger."
BROADCASTING INDUSTRY SUBJECT TO FEDERAL REGULATION; DISPOSITION OF STATIONS
General. The television and radio broadcasting industry is subject to
regulation by the FCC under the Communications Act of 1934, as amended (the
"Communications Act"). Approval of the FCC is required for the issuance, renewal
or transfer of television and radio broadcast station operating licenses. In
particular, Westinghouse's television and radio broadcast business will be
dependent upon its continuing to hold broadcasting licenses from the FCC. Radio
broadcasting licenses currently are issued for terms of seven years and
television broadcast licenses are currently issued for terms of five years. The
FCC is considering adoption of rules to implement a provision of the
Telecommunications Act of 1996 (the "Telecommunications Act"), which permits
licenses for television and radio stations to be issued for terms of up to eight
years. While in the vast majority of cases such licenses are renewed by the FCC,
there can be no assurance that any of the stations' licenses will be renewed at
their expiration dates. The FCC currently has under consideration and may in the
future adopt new laws, regulations and policies regarding a wide variety of
matters (including technological changes) which could, directly or indirectly,
affect the operations and ownership of Westinghouse's broadcast properties. In
addition, the Communications Act and FCC rules restrict alien ownership and
voting of the capital stock of and participation in the affairs of Westinghouse.
Status of Certain Stations. Consummation of the Merger is subject to the
prior approval of the FCC. Westinghouse and Infinity filed an application for
FCC approval of the proposed transaction on July 22, 1996. In connection with
that application, the parties have stated that prior to consummation of the
Merger, either Westinghouse or Infinity will divest its interest in at least one
AM and one FM station in the Chicago, Illinois market and at least two FM
stations in the Dallas/Ft. Worth, Texas market in order to achieve compliance
with the FCC's regulations limiting the number of radio stations a single party
may own in those markets. In connection with its acquisition of twelve radio
stations from Granum Holdings, L.P. and certain of its operating subsidiaries,
Infinity already is obligated to divest its interest in one FM radio station in
the Dallas/Ft. Worth market, which divestiture is expected to occur prior to the
consummation of the Merger. Westinghouse has also requested temporary waivers of
the FCC's "one-to-a-market" rule, which limits the common ownership of
television and radio stations in the same market, with respect to eight markets
in which Westinghouse owns or controls a television station and would acquire
control of co-located radio stations from Infinity. There can be no assurance
that the FCC will grant the application or the requested temporary waivers, that
such temporary waivers, if granted, will be made permanent, or that divestiture
of additional radio stations will not be required to secure FCC approval or to
achieve compliance with current or future FCC ownership restrictions.
COMPETITION
The television and radio broadcasting business is highly competitive.
Westinghouse's television and radio broadcasting business currently competes for
audiences with other television and radio networks and stations, as well as with
other media, including cable and satellite television, newspapers, movie
theaters and other advertising media. In addition, the Telecommunications Act
provides opportunities for potential new competition for the Westinghouse/CBS
Group's television and radio business. For example, the Telecommunications Act
allows the entry of telephone companies into the video programming and
distribution businesses, which may mean new competition in program sales.
Current and future technological developments may also affect competition within
Westinghouse's television and radio broadcasting business. Developments such as
advanced digital technology, digital compression technology and "digital audio
broadcasting" may allow competitors to provide broadcasting quality superior to
that currently provided by Westinghouse's television and radio stations.
Westinghouse cannot predict the extent to which any of the foregoing competitive
factors
17
<PAGE> 23
may affect its television and radio broadcasting business and there can be no
assurance that such factors will not adversely affect Westinghouse's
broadcasting operations and competitive position.
In addition to its television and radio broadcasting business,
Westinghouse's Industries & Technology Group competes in a variety of domestic
and international businesses, including, among other things, energy systems and
power generation, the manufacture of transport temperature control equipment,
management services at government-owned facilities and communication and
information systems. Each of these businesses is subject to worldwide
competition and there can be no assurance that such competition will not have an
adverse effect on any of such businesses.
INDUSTRIAL COMPANY RISKS
Unlike Infinity, Westinghouse is a diversified, global company which
engages in a wide variety of businesses. Through its Industries & Technology
Group, Westinghouse provides services, fuel and equipment for the nuclear energy
market, provides services and equipment for the power generation market,
manufactures transport temperature control equipment, provides management
services at government-owned facilities and engages in the communication and
information systems business. The domestic utility sector is restructuring in
response to a new competitive environment brought on by regulatory changes.
There is continued softness in this sector and intense price pressures. The
nuclear industry is a mature business with no new nuclear plants scheduled to be
built in the United States in the foreseeable future. The businesses in the
Industries & Technology Group are dependent on the development of new products
and technologies and also face a variety of potential liabilities and lawsuits
not common to broadcasting-based companies, such as environmental clean-up
liabilities and product liability litigation. Litigation is inherently uncertain
and always difficult to predict. Substantial damages are sought in certain of
the lawsuits pending against Westinghouse and, although Westinghouse management
believes a significant adverse judgment is unlikely, any such judgment could
have a material adverse effect on Westinghouse's results of operations for a
quarter or a year.
RECENT DEVELOPMENTS
On June 10, 1996, Westinghouse announced that it was considering actions to
separate its broadcasting and industrial businesses. Westinghouse expects to
conclude its assessment of the legal, financial and human resources issues and
announce its strategy in the fourth quarter of 1996.
Under the terms of the Merger Agreement, if at any time prior to the
Effective Time Westinghouse creates a new public holding company that becomes
the sole shareholder of Westinghouse (the "Holding Company"), the Holding
Company will be substituted for Westinghouse for all purposes under the Merger
Agreement 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 Westinghouse
Common Stock (subject to the parties executing an appropriate amendment to the
Merger Agreement). Westinghouse would be a wholly owned subsidiary of the
Holding Company. Substitution of the Holding Company as a party to the Merger
Agreement would result in Infinity's stockholders receiving in the Merger shares
of common stock of the Holding Company, rather than shares of Westinghouse
Common Stock. The shares of outstanding common stock of the Holding Company
received by Infinity's stockholders would represent a percentage of such
outstanding common stock equal to the percentage of outstanding Westinghouse
Common Stock that Infinity's stockholders would have received pursuant to the
Merger Agreement had the Holding Company not been substituted for Westinghouse.
At the present time, Westinghouse has no intention of creating the Holding
Company prior to the Effective Time.
Any structural changes prior to the Effective Time could require an
amendment to the Merger Agreement. There can be no assurance that Infinity would
consent to any such amendment. In the event Westinghouse were to make a
structural change following the Effective Time, each current holder of Infinity
Common Stock (so long as such holder continued to hold Westinghouse Common Stock
at such time) would be treated the same as all other holders of Westinghouse
Common Stock.
18
<PAGE> 24
On August 29, 1996, Westinghouse entered into a $5,500,000,000 credit
agreement (the "Westinghouse Credit Agreement") among the Lenders named therein,
NationsBank, N.A. and Toronto Dominion (Texas) Inc., as Syndication Agents, The
Chase Manhattan Bank, as Documentation Agent, and Morgan Guaranty Trust Company
of New York, as Administrative Agent. Upon the closing of the Westinghouse
Credit Agreement, $4,000,000,000 was available for use by Westinghouse. The
remaining $1,500,000,000 will be available for use upon the consummation of the
Merger. The Westinghouse Credit Agreement replaced Westinghouse's previous
credit agreement. In addition to replacing borrowings under the previous
Westinghouse credit agreement, the Westinghouse Credit Agreement will be used to
refinance debt of Infinity existing at the Effective Time.
WESTINGHOUSE SPECIAL MEETING
PURPOSE
At the Westinghouse Special Meeting, the stockholders of Westinghouse will
consider and vote upon proposals to approve (i) the Charter Amendment and (ii)
the Share Issuance. Approval of the Charter Amendment is not conditioned on
approval of the Share Issuance; however, approval of the Charter Amendment is a
prerequisite to the Share Issuance.
The Westinghouse Board has unanimously determined that the Merger, the
Charter Amendment and the Share Issuance are advisable and in the best interests
of Westinghouse and the stockholders of Westinghouse and has approved the Merger
Agreement, the Charter Amendment and the Share Issuance. THE WESTINGHOUSE BOARD
UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF WESTINGHOUSE VOTE "FOR" APPROVAL
OF THE CHARTER AMENDMENT AND THE SHARE ISSUANCE AT THE WESTINGHOUSE SPECIAL
MEETING. See "THE MERGER--Westinghouse's Reasons for the Merger; Recommendation
of its Board of Directors" and "PROPOSED WESTINGHOUSE CHARTER AMENDMENT."
RECORD DATE; VOTING RIGHTS
Only holders of record of Westinghouse Common Stock at the close of
business on the Westinghouse Record Date, [ ], 1996, are entitled to
receive notice of and to vote at the Westinghouse Special Meeting. At the close
of business on the Westinghouse Record Date, there were [ ] shares of
Westinghouse Common Stock outstanding, each of which entitles the registered
holder thereof to one vote.
SHARE OWNERSHIP OF MANAGEMENT
At the close of business on the Westinghouse Record Date, directors and
executive officers of Westinghouse, as a group, were the beneficial owners of an
aggregate of [ ] shares (approximately [ ]%) of the Westinghouse
Common Stock then outstanding.
QUORUM
Under the PBCL and the Westinghouse by-laws (the "Westinghouse By-Laws"),
the presence of a quorum is required to transact business at the Westinghouse
Special Meeting. The presence in person or by proxy of the holders of a majority
of the votes that all stockholders are entitled to cast at the Westinghouse
Special Meeting shall constitute a quorum on all matters.
Shares of Westinghouse Common Stock represented by proxies which are marked
"abstain" will be counted as shares present for purposes of determining the
presence of a quorum on all matters, as will shares that are represented by
proxies that are executed by any broker, fiduciary or other nominee on behalf of
the beneficial owner(s) thereof regardless of whether authority to vote is
withheld from such broker, fiduciary or nominee on one or more matters.
In the event that a quorum is not present at the Westinghouse Special
Meeting, it is expected that such meeting will be adjourned or postponed to
solicit additional proxies.
19
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PROXIES
All shares of Westinghouse Common Stock represented by properly executed
proxies in the enclosed form which are received prior to or at the Westinghouse
Special Meeting and have not been revoked will be voted in accordance with the
instructions indicated in such proxies. If no instructions are indicated, such
shares will be voted FOR approval of the Charter Amendment and the Share
Issuance. In addition, the persons designated in such proxy will have discretion
to vote upon any other matter which properly comes before the Westinghouse
Special Meeting such as a procedural matter relating to the Westinghouse Special
Meeting, including the right to vote for any adjournment thereof proposed to
solicit additional proxies. Any proxy may be revoked by the stockholder
executing it by delivering written notice thereof to the Secretary of
Westinghouse prior to the time voting is declared closed or by attending the
Westinghouse Special Meeting and voting in person. Attendance at the
Westinghouse Special Meeting will not in and of itself constitute the revocation
of a proxy.
The Westinghouse By-Laws provide that proxies, ballots and voting
tabulations that identify individual stockholders will be kept confidential
other than as necessary to meet applicable legal requirements. Information that
identifies individual stockholders is available for examination only by persons
associated with an independent third party tabulator.
SOLICITATION OF PROXIES
The solicitation of proxies for the Westinghouse Special Meeting is being
made on behalf of the Westinghouse Board. Pursuant to the Merger Agreement, the
entire cost of proxy solicitation for the Westinghouse Special Meeting,
including the reasonable expenses of brokers, fiduciaries and other nominees in
forwarding solicitation materials to beneficial owners, will be borne by
Westinghouse, except that Westinghouse and Infinity will share equally all
printing and mailing expenses and filing fees. Solicitation will be by mail,
except for any personal solicitation made orally or in writing by or under the
direction of directors, officers and employees of Westinghouse. Westinghouse may
request persons, such as brokers, nominees and fiduciaries, holding Westinghouse
Common Stock in their names to forward proxy materials to the beneficial owners
and it will reimburse such persons for their reasonable expenses incurred in
doing so. In addition, Westinghouse has retained Georgeson & Company Inc., Wall
Street Plaza, New York, New York 10005, for a fee of $12,000 plus incidental and
related expenses, to assist in providing proxy materials to brokers, nominees,
fiduciaries and individuals (other than officers of Westinghouse) holding
sizable amounts of Westinghouse Common Stock and in soliciting proxies from
them. Westinghouse will indemnify Georgeson & Company Inc. against certain
liabilities and expenses in connection with the proxy solicitation, including
liabilities under the federal securities laws.
REQUIRED VOTE
Approval of the Charter Amendment will require the affirmative vote of the
holders of a majority of the shares of Westinghouse Common Stock outstanding as
of the Westinghouse Record Date. Approval of the Share Issuance will require the
affirmative vote of the holders of a majority of the votes cast on the Share
Issuance, provided that the total number of votes cast on the Share Issuance
represents more than 50% of the outstanding shares of Westinghouse Common Stock
entitled to vote thereon at the Westinghouse Special Meeting. Approval of the
Charter Amendment is not conditioned on approval of the Share Issuance; however,
approval of the Charter Amendment is a prerequisite to the Share Issuance.
An abstention with respect to either the Charter Amendment or the Share
Issuance will have the effect of a vote cast against such proposal. Brokers who
hold shares of Westinghouse Common Stock as nominees will not have discretionary
authority to vote such shares on the Charter Amendment or the Share Issuance in
the absence of instructions from the beneficial owners thereof. Any shares which
are not voted because the nominee-broker lacks such discretionary authority will
have the effect of votes cast against the Charter Amendment and will not be
counted as votes cast on the Share Issuance.
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PROPOSED WESTINGHOUSE CHARTER AMENDMENT
At the Westinghouse Special Meeting, the stockholders of Westinghouse will
be asked to consider and vote upon a proposal to approve and adopt the Charter
Amendment, which would increase the number of authorized shares of Westinghouse
Common Stock from 630,000,000 to 1,100,000,000. No change is being proposed with
respect to the number of authorized shares of Westinghouse preferred stock.
At the close of business on the Westinghouse Record Date, there were
[ ] shares of Westinghouse Common Stock outstanding. If the Charter
Amendment is approved and the Merger is consummated, it is expected that there
will be approximately [ ] shares of Westinghouse Common Stock outstanding
(assuming no options, warrants or deferred shares with respect to Infinity
Common Stock are exercised after the Infinity Record Date). Following the
Merger, Westinghouse would have available for future issuance approximately
[ ] authorized shares of Westinghouse Common Stock. Of such authorized but
unissued shares, [ ] would be reserved for issuance upon the exercise of
options, warrants, deferred shares including [ ] shares relating to such
exercise by current holders of Infinity securities, and for the conversion of
outstanding Westinghouse preferred stock. Such shares would be available for
issuance without further action by stockholders except as required by law or
applicable stock exchange requirements. The current rules of the NYSE require
stockholder approval if the number of shares of Westinghouse Common Stock to be
issued in any transaction (such as the Merger) or series of related
transactions, other than a public offering for cash, would equal or exceed 20%
of the number of shares of Westinghouse Common Stock outstanding immediately
prior to such issuance.
The Westinghouse Board believes it is desirable to authorize shares of
Westinghouse Common Stock in addition to those required in connection with the
Merger so that there will be sufficient shares available for issuance after the
Merger for purposes that the Westinghouse Board may hereafter determine to be in
the best interests of Westinghouse and its stockholders. Such purposes could
include the offer of shares for cash, acquisitions, employee benefit programs
and other general corporate purposes. In many situations, prompt action may be
required which would not permit seeking stockholder approval to authorize
additional shares for a specific transaction on a timely basis. The Westinghouse
Board believes it is important that the Board have the flexibility to act
promptly in the best interests of stockholders. The terms of any future issuance
of shares of Westinghouse Common Stock will depend largely on market and
financial conditions and other factors existing at the time of issuance.
The Westinghouse Board has adopted the following resolution and is
presenting the same resolution for adoption by the Westinghouse stockholders:
"RESOLVED, that Section A of Article FIFTH of the Restated Articles of
Incorporation of the Company is hereby amended and restated in its entirety
to read as follows: The total number of shares of all classes of stock
which the Company shall have authority to issue is 1,125,000,000 consisting
of: (1) 25,000,000 shares of Preferred Stock, par value $1.00 per share
("Preferred Stock"); and (2) 1,100,000,000 shares of Common Stock, par
value $1.00 per share ("Common Stock")."
Approval of the Charter Amendment will require the affirmative vote of the
holders of a majority of the shares of Westinghouse Common Stock outstanding as
of the Westinghouse Record Date. If so approved, the Charter Amendment will be
effective upon the filing of Articles of Amendment with the Pennsylvania
Department of State, which filing would take place shortly after the
Westinghouse Special Meeting.
The Westinghouse Board has unanimously determined that the Charter
Amendment is advisable and in the best interests of Westinghouse and the
stockholders of Westinghouse. THE WESTINGHOUSE BOARD UNANIMOUSLY RECOMMENDS THAT
THE STOCKHOLDERS OF WESTINGHOUSE VOTE "FOR" THE APPROVAL OF THE CHARTER
AMENDMENT. Approval of the Charter Amendment is not conditioned on approval of
the Share Issuance; however, approval of the Charter Amendment is a prerequisite
to the Share Issuance.
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INFINITY SPECIAL MEETING
PURPOSE
At the Infinity Special Meeting, the stockholders of Infinity will consider
and vote upon a proposal to approve and adopt the Merger Agreement and the
transactions contemplated thereby.
The Infinity Board has unanimously determined that the Merger is advisable
and fair to and in the best interests of Infinity and its stockholders and has
approved the Merger Agreement. THE INFINITY BOARD UNANIMOUSLY RECOMMENDS THAT
THE STOCKHOLDERS OF INFINITY VOTE "FOR" THE APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AT THE INFINITY SPECIAL
MEETING. See "THE MERGER-- Infinity's Reasons for the Merger; Recommendation of
its Board of Directors."
For a discussion of (i) the interests that certain directors and executive
officers of Infinity have with respect to the Merger that are different from, or
in addition to, the interests of stockholders of Infinity generally and (ii)
information regarding the treatment of options and warrants to purchase Infinity
Common Stock and other rights of certain directors and executive officers of
Infinity, see "--The Stockholder Agreement," "THE MERGER--Interests of Certain
Persons in the Merger" and "THE MERGER AGREEMENT--Effect on Infinity Benefit
Plans and Stock Options." Such interests, together with other relevant factors,
were considered by the Infinity Board in making its recommendation and approving
the Merger Agreement.
RECORD DATE; VOTING RIGHTS
Only holders of record of Infinity Common Stock at the close of business on
the Infinity Record Date, [ ], 1996, are entitled to receive notice of and
to vote at the Infinity Special Meeting. At the close of business on the
Infinity Record Date, there were [ ] shares of Infinity Common Stock
outstanding, consisting of [ ] shares of Infinity Class A Common Stock,
[ ] shares of Infinity Class B Common Stock and [ ] shares of
Infinity Class C Common Stock. Each registered holder of Infinity Class A Common
Stock, Infinity Class B Common Stock and Infinity Class C Common Stock is
entitled to one vote, ten votes and one vote per share, respectively, voting as
a single class at the Infinity Special Meeting.
SHARE OWNERSHIP OF MANAGEMENT
At the close of business on the Infinity Record Date, directors and
executive officers of Infinity, as a group, were the beneficial owners of an
aggregate of [ ] shares (approximately [ ]%) of the Infinity Common
Stock then outstanding. Such ownership represents approximately [ ]% of
the combined voting power of the outstanding shares of Infinity Common Stock.
Pursuant to the terms of the Stockholder Agreement, certain holders of
Infinity Common Stock, including certain directors and executive officers of
Infinity and their respective affiliates, have agreed, subject to certain
conditions set forth in the Stockholder Agreement, to vote their shares of
Infinity Common Stock in favor of the approval and adoption of the Merger
Agreement and the transactions contemplated thereby at the Infinity Special
Meeting. The general effect of the Stockholder Agreement, subject to certain
conditions set forth therein, is to ensure the affirmative vote at the Infinity
Special Meeting of shares of Infinity Common Stock representing a combined
voting power sufficient to cause such approval and adoption. For a further
discussion of the terms and effect of the Stockholder Agreement, see "--The
Stockholder Agreement."
QUORUM
Under the DGCL and Infinity's Amended and Restated By-Laws (the "Infinity
By-Laws"), the presence of a quorum is required to transact business at the
Infinity Special Meeting. The presence in person or by proxy of a majority of
the combined voting power of the outstanding shares of Infinity Common Stock
entitled to vote shall constitute a quorum. Pursuant to the terms of the
Stockholder Agreement, each Class B Stockholder (as defined) has agreed to vote
his, her or its shares in person or by proxy at the Infinity Special Meeting.
See "--The Stockholder Agreement."
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Shares of Infinity Common Stock represented by proxies which are marked
"abstain" will be counted as shares present for purposes of determining the
presence of a quorum on all matters, as will shares that are represented by
proxies that are executed by any broker, fiduciary or other nominee on behalf of
the beneficial owner(s) thereof regardless of whether authority to vote is
withheld by such broker, fiduciary or nominee on one or more matters.
In the event that a quorum is not present at the Infinity Special Meeting,
it is expected that such meeting will be adjourned or postponed to solicit
additional proxies.
PROXIES
All shares of Infinity Common Stock represented by properly executed
proxies in the enclosed form which are received prior to or at the Infinity
Special Meeting and have not been revoked will be voted in accordance with the
instructions indicated in such proxies. If no instructions are indicated, such
shares will be voted FOR the approval and adoption of the Merger Agreement and
the transactions contemplated thereby. In addition, the persons designated in
such proxy will have discretion to vote upon any other matter which properly
comes before the Infinity Special Meeting such as a procedural matter relating
to the Infinity Special Meeting, including the right to vote for any adjournment
thereof proposed to solicit additional proxies. Any proxy may be revoked by the
stockholder executing it by delivering written notice thereof to the Secretary
of Infinity prior to the time voting is declared closed or by attending the
Infinity Special Meeting and voting in person. Attendance at the Infinity
Special Meeting will not in and of itself constitute the revocation of a proxy.
SOLICITATION OF PROXIES
The solicitation of proxies for the Infinity Special Meeting is being made
on behalf of the Infinity Board. Pursuant to the Merger Agreement, the entire
cost of proxy solicitation for the Infinity Special Meeting, including the
reasonable expenses of brokers, fiduciaries and other nominees in forwarding
solicitation materials to beneficial owners, will be borne by Infinity, except
that Westinghouse and Infinity will share equally all printing and mailing
expenses and filing fees. Solicitation will be by mail, except for any personal
solicitation made orally or in writing by or under the direction of directors,
officers and employees of Infinity. Infinity may request persons, such as
brokers, nominees and fiduciaries, holding Infinity Common Stock in their names
to forward proxy materials to the beneficial owners and it will reimburse such
persons for their reasonable expenses incurred in doing so.
REQUIRED VOTE
Approval and adoption of the Merger Agreement and the transactions
contemplated thereby will require the affirmative vote of a majority of the
combined voting power of the outstanding shares of Infinity Common Stock. An
abstention will have the effect of a vote cast against such proposal. Brokers
who hold Infinity Class A Common Stock as nominees will not have discretionary
authority to vote such shares in the absence of instructions from the beneficial
owners thereof. Any shares which are not voted because the nominee-broker lacks
such discretionary authority will have the effect of votes cast against such
proposal. The terms of the Stockholder Agreement are intended to ensure that the
shares of certain holders of Infinity Common Stock, including certain directors
and executive officers of Infinity and their respective affiliates, will be
voted at the Infinity Special Meeting in favor of the approval and adoption of
the Merger Agreement and the transactions contemplated thereby, and that such
affirmative vote will be sufficient to cause the approval and adoption of the
Merger Agreement and the transactions contemplated thereby at the Infinity
Special Meeting. See "-- The Stockholder Agreement."
THE STOCKHOLDER AGREEMENT
The description of the Stockholder Agreement contained in this Proxy
Statement/Prospectus does not purport to be complete and is qualified in its
entirety by reference to the Stockholder Agreement, a composite conformed copy
of which is attached hereto as Annex II and incorporated herein by reference.
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On June 20, 1996, Westinghouse entered into the Stockholder Agreement with
each of the holders of Infinity Class B Common Stock (collectively, the "Class B
Stockholders" and each, a "Class B Stockholder"). The Class B Stockholders are
Mel Karmazin, Gerald Carrus, Michael A. Wiener, JRSW Partners, L.P., Steven D.
Carrus, The Zena and Michael A. Wiener Foundation, Zena Wiener, The Zena Wiener
1994 Trust and The Michael A. Wiener 1993 Trust.
Together, the Class B Stockholders held, as of September 20, 1996,
approximately [ ]% of the combined voting power of the outstanding capital
stock of Infinity, and, subject to certain limitations set forth in the Infinity
Charter, are therefore together able to control the vote on all matters
submitted to a vote of Infinity's stockholders, including the approval and
adoption of the Merger Agreement and the transactions contemplated thereby.
Pursuant to the terms of the Stockholder Agreement, each Class B
Stockholder has agreed to vote (or cause to be voted), at the Infinity Special
Meeting or in any other circumstances upon which a vote, consent or other
approval with respect to the Merger Agreement and the transactions contemplated
thereby is sought (including by initiating a written consent solicitation if
requested by Westinghouse) his, her or its shares of Infinity Common Stock
(together, the "Subject Shares") in favor of the approval and adoption of the
Merger Agreement and the transactions contemplated thereby.
Further, each Class B Stockholder has agreed: (a) to vote (or cause to be
voted), at any meeting of the stockholders of Infinity or in any other
circumstances upon which his, her or its vote, consent or other approval is
sought, the Subject Shares against (i) any merger agreement or merger (other
than the Merger Agreement and the Merger) or other takeover proposal (as defined
in the Merger Agreement) or (ii) any amendment of the Infinity Charter, the
Infinity By-Laws or any other proposal or transaction involving Infinity 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 any class of Infinity Common Stock;
and (b) subject to certain limited exceptions in the cases of Messrs. Karmazin,
Carrus and Wiener (collectively, the "Principal Stockholders" and each, a
"Principal Stockholder"), not to (i) sell, transfer, pledge, assign or otherwise
dispose of the Subject Shares other than pursuant to 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 Subject Shares consisting of Infinity Class B
Common Stock into shares of Infinity Class A Common Stock.
Mr. Karmazin has agreed pursuant to the Stockholder Agreement to exercise,
if so requested by Westinghouse at a time and from time to time prior to when
Westinghouse believes the record date for the Infinity Special Meeting (or any
other stockholder vote described in the preceding two paragraphs) is reasonably
likely to arise and Westinghouse reasonably believes such exercise will be
necessary to ensure the required vote to approve and adopt the Merger Agreement
and the transactions contemplated thereby, such number of options and/or
warrants as are sufficient to ensure that the Subject Shares continue to
represent a majority of the combined voting power of the outstanding capital
stock of Infinity entitled to vote on such matters (the "Sufficient Number").
Notwithstanding the foregoing, Mr. Karmazin will not be required to exercise
options or warrants to the extent that the shortfall in reaching the Sufficient
Number results from the death of one or more of the Principal Stockholders.
Pursuant to the terms of the Stockholder Agreement, each Class B
Stockholder is prohibited from directly or indirectly soliciting, initiating or
encouraging the submission of any takeover proposal, or taking any actions to
facilitate any inquiries or the making of any proposal that constitutes or may
reasonably be expected to lead to a takeover proposal. In addition, each Class B
Stockholder has agreed to use all reasonable efforts to take, until the
consummation of the Merger or the termination of the Merger Agreement, all
actions, and to do and cooperate in doing, all things necessary, proper and
advisable, to make effective, in the most expeditious manner practicable, the
Merger and the transactions contemplated thereby. In the event the Merger
Agreement is terminated under circumstances where Westinghouse is or may become
entitled to receive the termination fee as described under "THE MERGER
AGREEMENT--Fees and Expenses," each Class B Stockholder will be obligated to pay
to Westinghouse on demand an amount equal to all profit (as
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determined pursuant to the terms of the Stockholder Agreement) of such Class B
Stockholder from the consummation of any takeover proposal that is consummated
within two years of such termination.
The Stockholder Agreement will terminate upon the earlier of September 20,
1997 and the Effective Time of the Merger. In addition, subject to certain
conditions, the Stockholder Agreement will terminate at the time the Merger
Agreement is terminated for any of certain specified reasons. See "THE MERGER
AGREEMENT--Termination."
THE MERGER
GENERAL
At the Effective Time of the Merger, Sub will be merged with and into
Infinity, with Infinity continuing as the Surviving Corporation and a wholly
owned subsidiary of Westinghouse. As a result of the Merger, the separate
corporate existence of Sub will cease and Infinity will succeed to all the
rights and be responsible for all the obligations of Sub in accordance with the
DGCL. Subject to the terms and conditions of the Merger Agreement, each share of
Infinity Common Stock outstanding immediately prior to the Effective Time (other
than shares owned directly or indirectly by Westinghouse or Infinity, which will
be canceled) will be converted into the right to receive 1.71 shares of
Westinghouse Common Stock. Cash will be paid in lieu of any fractional shares of
Westinghouse Common Stock. See "THE MERGER AGREEMENT--Conversion of Infinity
Common Stock" and "--Fractional Shares." The Merger Agreement also provides for
the assumption by Westinghouse of certain Infinity options, warrants and
deferred shares.
The Merger Agreement provides that at the election of Westinghouse, any
direct or indirect wholly owned subsidiary of Westinghouse may be substituted
for Sub as a constituent corporation in the Merger (subject to the parties
executing an appropriate amendment to the Merger Agreement). The Merger
Agreement also provides that if at any time prior to the Effective Time,
Westinghouse creates the Holding Company, the Holding Company will be
substituted for Westinghouse for all purposes under the Merger Agreement
(subject to the parties executing an appropriate amendment to the Merger
Agreement). See "RECENT DEVELOPMENTS."
Based on the number of shares of Infinity Common Stock and the Lehman
Warrants outstanding on the Infinity Record Date and based on the Conversion
Number, approximately [ ] shares of Westinghouse Common Stock will be
issued in connection with the Merger. Further, assuming all Infinity stock
options, deferred shares and warrants, other than the Lehman Warrants, with
respect to shares of Infinity Common Stock outstanding as of the Infinity Record
Date are exercised for Westinghouse Common Stock, [ ] additional shares of
Westinghouse Common Stock will have been issued in connection with the Merger,
for a total issuance of [ ] shares of Westinghouse Common Stock.
The Merger will become effective upon the filing of a Certificate of Merger
with the Secretary of State of the State of Delaware unless the Certificate of
Merger provides for a later time of effectiveness. The filing of the Certificate
of Merger will occur as soon as practicable on or after the Closing Date. See
"THE MERGER AGREEMENT--Conditions to the Consummation of the Merger; Conditions
to Each Party's Obligation to Effect the Merger."
BACKGROUND OF THE MERGER
In March 1996, shortly after passage by the United States Congress of the
Telecommunications Act, Mr. Mel Karmazin, President and Chief Executive Officer
of Infinity, met with Mr. Willard C. Korn, President of the CBS Station Group,
and Mr. Daniel R. Mason, President of the CBS Radio Station Group, to discuss in
general terms the possible benefits of combining Infinity's and Westinghouse's
radio operations. The participants agreed that such a combination could be
attractive to the stockholders of both companies. Mr. Korn stated that he would
discuss the idea of such a combination with Mr. Michael H. Jordan, Chairman and
Chief Executive Officer of Westinghouse.
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Mr. Korn subsequently spoke with Mr. Jordan, and a meeting was arranged for
April 4, 1996 between Messrs. Jordan and Karmazin. At that meeting, Messrs.
Jordan and Karmazin discussed a number of subjects, including recent
developments in the radio industry, Infinity's history and industry position,
Westinghouse's interest in radio and the possible benefits of combining the
radio properties of Infinity and Westinghouse. Mr. Jordan stated that he was
currently exploring a number of options regarding Westinghouse's future
activities in the radio industry, and that he would contact Mr. Karmazin at a
later date if further discussions with Infinity were warranted.
On April 26, 1996, Mr. Karmazin and Mr. Farid Suleman, Vice
President-Finance and Chief Financial Officer of Infinity, met with Mr. Tom
Reifenheiser, Managing Director and head of Chase's media and telecommunications
client management. Mr. Reifenheiser was accompanied by Mr. James B. Lee, Jr.,
Senior Executive Vice President and group head of Chase's global investment
banking. The discussion at this meeting focused on the implications of recent
regulatory changes in the broadcasting industry, and Westinghouse's possible
interest in a business combination involving its radio properties. The opinion
of the participants at this meeting was that a combination involving Infinity
appeared to have the most potential benefit to Westinghouse.
On May 15, 1996, Mr. Karmazin met with Mr. Fredric G. Reynolds, Executive
Vice President and Chief Financial Officer of Westinghouse. Messrs. Karmazin and
Reynolds discussed various approaches to combining Infinity's and Westinghouse's
radio businesses, and the prospective advantages of such a combination. On May
16, 1996, Mr. Jordan called Mr. Karmazin to say that while Westinghouse
continued to explore its options regarding a business combination in the radio
industry, a possible transaction with Infinity appeared attractive. Mr. Jordan
stated that he expected to confer with Mr. Reynolds over the coming days, and
that he or Mr. Reynolds would contact Mr. Karmazin shortly.
On May 22, 1996, Mr. Reynolds called Mr. Karmazin to arrange a meeting
between them, which occurred on May 23. At this meeting, Messrs. Reynolds and
Karmazin discussed the possible terms of a business combination between
Westinghouse and Infinity, including, among other topics, the consideration to
be paid, post-combination management structure and the possibility of legally
required broadcast industry divestitures.
On May 29, 1996, Mr. Reynolds called Mr. Karmazin to arrange a meeting on
June 4, 1996 among Messrs. Jordan, Reynolds and Karmazin.
On June 4, 1996, Mr. Karmazin met with Messrs. Jordan and Reynolds to
continue discussion of a possible business combination between Infinity and
Westinghouse. At this meeting, the participants discussed a possible
stock-for-stock merger in which holders of all three classes of Infinity Common
Stock would receive Westinghouse Common Stock. At the end of this meeting, Mr.
Jordan stated that, after further reflection, he would contact Mr. Karmazin
within the next several days to schedule a follow-up meeting.
On June 6, 1996, at a special meeting of the Westinghouse Board, Mr. Jordan
reviewed with the Westinghouse Board the preliminary discussions held to date
with Infinity.
On June 11, 1996, Messrs. Karmazin, Jordan and Reynolds met and agreed to
proceed with negotiations for a business combination between Westinghouse and
Infinity. At this meeting, the participants held preliminary discussions
relating to, among other things, the exchange ratio to be used in such a
combination, Mr. Karmazin's role in the combined business enterprise and a
commitment from the Class B Stockholders to vote in favor of the Merger
Agreement and the transactions contemplated thereby. Later on June 11, 1996, Mr.
Karmazin informed the Infinity Board at a special meeting of the preliminary
discussions in which he and Messrs. Jordan and Reynolds had engaged.
On June 12, 1996, Westinghouse and Infinity entered into a Confidentiality
Agreement, dated as of such date, providing, among other things, for the
exchange of information between the companies and their representatives for the
purpose of evaluating various aspects of the potential business combination. On
June 12, 1996, Infinity and Westinghouse began to exchange financial, legal and
business due diligence information. The due diligence process, which included
review of documents and interviews with executives and professional advisors of
each company, continued through the signing of the Merger Agreement.
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On June 14, 1996, Cravath, Swaine & Moore, legal counsel to Westinghouse,
delivered to Infinity and Debevoise & Plimpton, legal counsel to Infinity,
initial drafts of the Merger Agreement, the Stockholder Agreement and related
agreements. On June 15, 1996, Debevoise & Plimpton delivered to Cravath, Swaine
& Moore marked copies of such agreements, and negotiations with respect thereto
ensued.
On June 18, 1996, at a special meeting of the Infinity Board, the members
thereof considered drafts of the Merger Agreement, the Stockholder Agreement and
related agreements, heard a presentation by Merrill Lynch and discussed the
status of negotiations.
On the evening of June 19, 1996, at a special meeting of the Westinghouse
Board, the Westinghouse Board unanimously approved, subject to the completion of
negotiations as described and discussed, the Merger Agreement, the Charter
Amendment and the Share Issuance. This approval was given after a full update
and review by Mr. Jordan of all previous Westinghouse Board discussions on the
matter, presentations by Westinghouse's management, investment advisors, legal
counsel and independent accountants, and consideration of the proposed terms and
conditions of the Merger Agreement and the transactions contemplated thereby.
Also, on the evening of June 19, 1996, the Infinity Board considered the
proposed transaction further at a special meeting, which was adjourned until the
morning of June 20, 1996. During the evening of June 19 and the morning of June
20, the parties and their legal advisors completed negotiation of the Merger
Agreement, the Stockholder Agreement and related agreements.
The Infinity Board reconvened its special meeting on the morning of June
20, 1996 and unanimously approved the Merger Agreement and the transactions
contemplated thereby. On June 20, 1996, Westinghouse and Infinity executed the
Merger Agreement, Westinghouse and the Infinity Class B Stockholders entered
into the Stockholder Agreement and the parties issued a joint press release
announcing the transaction.
On September 20, 1996, Westinghouse, Sub and Infinity entered into an
Amendment to Agreement and Plan of Merger, dated as of such date (the
"Amendment"), providing, among other things, for the Lehman Warrants to be
exchanged, at the Effective Time, for a number of shares of Westinghouse Common
Stock equal to the number of such shares that would have been issuable to the
holders of Lehman Warrants had such warrants been exercised immediately prior to
the Effective Time for shares of Infinity Class C Common Stock, less the number
of shares of Westinghouse Common Stock having an aggregate market value on the
Closing Date equal to the exercise price of the Lehman Warrants. The Amendment
also provided for certain minor technical corrections to the language of the
Merger Agreement. The changes to the terms and provisions of the Merger
Agreement effected by the Amendment are reflected in the composite conformed
copy of the Merger Agreement attached as Annex I.
WESTINGHOUSE'S REASONS FOR THE MERGER; RECOMMENDATION OF ITS BOARD OF DIRECTORS
The Westinghouse Board has carefully considered the terms of the Merger and
believes that the Merger is advisable and in the best interests of Westinghouse
and the stockholders of Westinghouse. The Westinghouse Board has approved the
Merger Agreement, the Charter Amendment, the Share Issuance and the related
transactions and unanimously recommends that the Westinghouse stockholders vote
FOR the approval of the Charter Amendment and the Share Issuance at the
Westinghouse Special Meeting.
In reaching its conclusion, the Westinghouse Board considered, among other
things: (i) the judgment, advice and analyses of Westinghouse management; (ii)
the analyses prepared by, and the opinions of, Chase and Salomon (see
"--Opinions of Westinghouse's Investment Bankers" below); (iii) the financial
condition, results of operations and cash flows of Westinghouse and Infinity,
both on an historical and a prospective basis; (iv) the synergies and operating
efficiencies that should become available to the combined enterprise as a result
of the Merger; (v) the strategic benefits of the Merger; (vi) the current and
prospective environment in which Westinghouse operates, including national and
local economic conditions, the competitive environment for broadcast companies
generally and the trend towards consolidation in the media and entertainment
industries; (vii) the express terms and conditions of the Merger Agreement,
which were viewed as providing an equitable basis for the Merger from the
standpoint of Westinghouse; (viii) historical market prices and
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trading information with respect to Westinghouse Common Stock and Infinity Class
A Common Stock; (ix) the tax effects of the Merger on Westinghouse; and (x) the
ability of Westinghouse and Infinity to obtain the necessary regulatory
approvals.
The Westinghouse Board believes that the terms of the Merger are attractive
to Westinghouse and that the Merger would be strategically advantageous for
Westinghouse and would enhance future value for Westinghouse stockholders.
The Westinghouse Board believes that the Merger will result in the
combination of two premier radio groups, increasing Westinghouse's position in a
very attractive, high growth industry. While the environment in the industry is
competitive, radio advertising expenditures have grown and are expected to
continue to grow through the rest of the decade, with trends in local
advertising favoring an increasing share of total advertising expenditures going
to radio. The Telecommunications Act has accelerated the ability to expand radio
distribution, but has also accelerated the growth of larger radio groups. The
Merger will combine two premier radio groups, focused in major metropolitan
areas, in this attractive industry and will also add to Westinghouse's
experienced management the skills of Infinity's management.
The Westinghouse Board believes that this focused group of radio stations
will enhance Westinghouse's ability to attract advertisers and continue revenue
growth in the future. It also believes that Westinghouse's increased focus on
broadcasting as well as the premier radio group resulting from the Merger will
be beneficial to Westinghouse and its stockholders.
The foregoing discussion of the information and factors considered and
given weight by the Westinghouse Board is not intended to be exhaustive. In view
of the variety of factors considered in connection with its evaluation of the
Merger, the Westinghouse Board did not find it practicable to and did not
quantify or otherwise assign relative weights to the specific factors considered
in reaching its determination. In addition, individual members of the
Westinghouse Board may have given different weights to different factors.
THE WESTINGHOUSE BOARD UNANIMOUSLY RECOMMENDS THAT THE HOLDERS OF WESTINGHOUSE
COMMON STOCK VOTE "FOR" APPROVAL OF THE CHARTER AMENDMENT AND THE SHARE
ISSUANCE.
OPINIONS OF WESTINGHOUSE'S INVESTMENT BANKERS
Chase Securities Inc.
Westinghouse engaged Chase as financial advisor in connection with
providing a fairness opinion with respect to a possible transaction involving
Infinity. On June 19, 1996, in connection with the evaluation of the Merger by
the Westinghouse Board, Chase delivered its written opinion to the Westinghouse
Board that, as of such date and subject to the assumptions made, general
procedures followed, factors considered and limitations on the review undertaken
set forth therein, the Conversion Number is fair, from a financial point of
view, to Westinghouse.
THE FULL TEXT OF THE CHASE OPINION, WHICH SETS FORTH THE ASSUMPTIONS MADE,
GENERAL PROCEDURES FOLLOWED, FACTORS CONSIDERED AND LIMITATIONS ON THE REVIEW
UNDERTAKEN BY CHASE IN RENDERING ITS OPINION, IS ATTACHED AS ANNEX III AND IS
INCORPORATED HEREIN BY REFERENCE. THE SUMMARY OF THE OPINION SET FORTH BELOW IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE CHASE OPINION.
HOLDERS OF WESTINGHOUSE COMMON STOCK ARE URGED TO READ THE CHASE OPINION
CAREFULLY AND IN ITS ENTIRETY. TERMS DEFINED HEREIN SHALL HAVE SUCH MEANING
SOLELY FOR PURPOSES OF THIS SUMMARY OF THE CHASE OPINION.
No limitations were imposed by Westinghouse on the scope of Chase's
investigation or the procedures to be followed by Chase in rendering its
opinion. Chase was not requested to and did not make any recommendation to the
Westinghouse Board as to the form or amount of the consideration to be paid in
the Merger, which was determined through arm's-length negotiations between
Westinghouse and Infinity. In arriving at its opinion, Chase did not render an
opinion as to a specific range of values for Westinghouse, but made its
determination as to the fairness, from a financial point of view, of the
Conversion Number on the basis of the financial and comparative analyses
described below. The Chase Opinion is for the use and benefit
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of the Westinghouse Board and was rendered to the Westinghouse Board in
connection with its consideration of the Merger and does not constitute a
recommendation to any stockholder of Westinghouse as to how such stockholder
should vote with respect to the Charter Amendment and the Share Issuance. Chase
was not requested to opine as to, and its opinion does not in any manner
address, Westinghouse's underlying business decision to proceed with or effect
the Merger.
In connection with its opinion, Chase reviewed and analyzed, among other
things: (i) drafts of the Merger Agreement, (ii) publicly available business and
financial information concerning Westinghouse and Infinity and the respective
industries in which they operate which Chase believed to be relevant to its
inquiry, including, without limitation, the Form 10-K for the fiscal year ended
December 31, 1995 and the Form 10-Q for the quarter ended March 31, 1996 for
each of Westinghouse and Infinity and (iii) certain internal and non-public
financial and operating information provided to Chase by the managements of
Westinghouse and Infinity relating to such businesses, including certain
forecast and projection information as to future financial results of such
businesses. Chase also had discussions with members of the senior managements of
Westinghouse and Infinity concerning the operations, historical financial
statements and future prospects of their respective companies, before and after
giving effect to the Merger, as well as their views of the business, operational
and strategic benefits and other implications of the Merger. Chase also compared
the financial and operating performance of Westinghouse and Infinity with
publicly available information concerning certain other companies Chase deemed
comparable, reviewed the relevant historical stock prices of the Westinghouse
Common Stock, the Infinity Class A Common Stock and certain publicly traded
securities of such other companies, reviewed the financial terms of certain
recent business combinations and acquisition transactions it deemed reasonably
comparable to the Merger and relevant to its inquiries and made such other
analyses and examinations as it deemed necessary or appropriate.
Chase assumed and relied upon, without assuming any responsibility for
verification, the accuracy and completeness of all of the financial and other
information provided to, discussed with, or reviewed by or for it, or publicly
available in arriving at its opinion. In arriving at its opinion, Chase did not
conduct a physical inspection of the properties and facilities of Westinghouse
or Infinity and did not make or obtain any independent evaluations or appraisals
of the assets or liabilities of Westinghouse or Infinity. Chase assumed that the
financial forecast and projection information provided to Chase by Westinghouse
and Infinity were reasonably determined on bases reflecting the best then
currently available estimates and judgments of the managements of Westinghouse
and Infinity as to the future financial performance of Westinghouse or Infinity,
as the case may be, and Chase expresses no view as to such forecast or
projection information or the assumptions on which they were based.
In arriving at its opinion, Chase assumed, in all respects material to its
analysis, that the representations and warranties of each party contained in the
Merger Agreement were true and correct, that each party would perform all of the
covenants and agreements required to be performed by it under the Merger
Agreement and that all conditions to the consummation of the Merger would be
satisfied without waiver thereof. Chase also assumed that all material
governmental, regulatory or other consents and approvals will be obtained and
that in the course of obtaining any necessary governmental, regulatory or other
consents and approvals, or any amendments, modifications or waivers to any
documents to which either Westinghouse or Infinity is a party, as contemplated
by the Merger Agreement, no restrictions will be imposed or amendments,
modifications or waivers made that would have any material adverse effect on the
contemplated benefits to Westinghouse of the Merger. Chase based its opinion on
market, economic, regulatory and other conditions as they existed on, and could
be evaluated as of, the date of its opinion.
The following is a summary of the financial analyses utilized by Chase and
reviewed with the Westinghouse Board at the meeting of the Westinghouse Board on
June 19, 1996, and does not purport to be a complete description of the analyses
performed by Chase. The preparation of a fairness opinion is a complex process
and is not necessarily susceptible to partial analysis or summary description.
Selecting portions of the analyses or of the summary set forth below, without
considering the analysis as a whole, could create an incomplete view of the
processes underlying Chase's opinion. In arriving at its fairness determination,
Chase considered the results of all such analyses. The analyses were prepared
solely for the purposes of enabling Chase to render its opinion to the
Westinghouse Board as to the fairness of the Conversion Number. Analyses
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based upon forecasts of future results are not necessarily indicative of actual
future values, which may be significantly more or less favorable than suggested
by such analyses.
Comparable Public Company Analysis. Chase compared certain publicly
available financial and operating data of selected publicly traded radio
companies with similar financial and operating data of Infinity. The selected
radio companies (collectively, the "Radio Comparable Group") were American Radio
Systems Corp. ("American Radio Systems"), Chancellor Broadcasting Co.
("Chancellor"), Emmis Broadcasting Corporation ("Emmis"), Evergreen Media Corp.
("Evergreen Media"), Jacor Communications, Inc. ("Jacor") and SFX Broadcasting
Inc. ("SFX"). For each company in the Radio Comparable Group, Chase analyzed,
among other things, the fully diluted number of outstanding shares of common
stock times the market price per share ("market value"), market value plus the
liquidation value of the preferred stock plus total debt and minority interests
less cash, cash equivalents and other investments ("firm value") and historical
sales, earnings before interest, taxes, depreciation and amortization
("EBITDA"), EBITDA plus corporate expenses ("broadcast cash flow") and net
income. Chase then compared the results of such analyses for the Radio
Comparable Group to the corresponding results for Infinity, adjusted for recent
acquisitions. Applying a range of EBITDA multiples of 15.6x to 28.2x with a mean
of 21.2x, which were the low, high and mean EBITDA multiples, Chase calculated
the implied firm value of Infinity to be $4.0 billion to $7.3 billion with a
mean of $5.5 billion.
Because of the lack of truly comparable companies due to the inherent
differences between the businesses, operations and prospects of Infinity and the
businesses, operations and prospects of the companies included in the Radio
Comparable Group, Chase believed that it was inappropriate to, and therefore did
not, rely solely on the quantitative results of the analysis, and accordingly
also made qualitative judgments concerning differences between the financial and
operating characteristics of Infinity and the companies in the Radio Comparable
Group that would affect the public trading values of Infinity and such other
companies.
Discounted Cash Flow Analysis. Chase performed a discounted cash flow
analysis of Infinity based upon certain forecast and projection information
provided to Chase by the management of Infinity for the years 1997 through 2001.
Utilizing such information, Chase calculated a range of values based upon the
discounted net present value of the sum of (i) the projected stream of unlevered
free cash flows (defined as broadcast cash flow less taxes less the change in
working capital less capital expenditures) to Infinity through the year 2000 and
(ii) the projected terminal value of Infinity at the year 2001 based upon a
range of multiples of projected broadcast cash flow. Chase applied discount
rates ranging from 10.0% to 14.0% and multiples of broadcast cash flow ranging
from 13.0x to 15.0x. Utilizing this methodology, Chase calculated the implied
firm value of Infinity to be approximately $4.1 billion to $5.4 billion, and an
implied range of per share values of $27.45 to $38.49 on a fully diluted basis.
Comparable Acquisition Transaction Analysis. Chase reviewed certain
publicly available information regarding 13 selected radio industry transactions
announced since the beginning of August 1995. Because these transactions
involved either the sale of individual properties or the sale of private
companies, limited financial data was disclosed to the public. To determine
broadcast cash flow for each of the sold properties, Chase reviewed a publicly
available radio industry newsletter and made certain estimates based upon
Chase's knowledge of the radio market. For each such transaction, Chase reviewed
the consideration for the equity plus liquidation value of preferred stock plus
total debt and minority interests less cash, cash equivalents and other
investments (the "transaction value") as a multiple of actual or estimated
broadcast cash flow for the year in which the transaction was announced. The 13
transactions reviewed in this analysis (collectively, the "Transaction
Comparables") were: the acquisition of BayCom Partners L.P. by American Radio
Systems, Chancellor's acquisition of OmniAmerica Communications, Inc., Clear
Channel Communications, Inc.'s ("Clear Channel") acquisition of Radio Equity
Partners Limited Partnership, American Radio Systems' acquisition of Henry
Broadcasting Co., Inc., American Radio Systems' acquisition of Marlin
Broadcasting, Inc., Entercom Corporation's acquisition of certain radio stations
from Viacom Inc., Clear Channel's acquisition of U.S. Radio, L.P., Infinity's
acquisition of Granum Holdings L.P., American Radio Systems' acquisition of The
Lincoln Group, Jacor's acquisition of Citicasters Inc., Jacor's acquisition of
Noble Broadcast Group, Inc., Infinity's acquisition of Alliance Broadcasting,
L.P. and Chancellor's acquisition of Shamrock Broadcasting, Inc. Applying a
range of broadcast cash flow multiples of 10.4x to 16.1x with a mean
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of 13.3x, which multiples were derived from the Transaction Comparables
information analyzed by Chase, to Infinity's estimated 1996 broadcast cash flow
(based upon financial and projection information provided to Chase by management
of Infinity), Chase calculated the implied firm value of Infinity at
approximately $2.8 billion to $4.3 billion with a mean of $3.5 billion.
Because the market conditions, rationale and circumstances surrounding each
of the transactions analyzed were specific to each transaction and because of
the inherent differences between the businesses, operations and prospects of
Infinity and the acquired businesses analyzed, Chase believed that a purely
quantitative comparable transaction analysis would not be particularly
meaningful in the context of the Merger. Chase believed that an appropriate use
of a comparable transaction analysis in this instance would involve qualitative
judgments concerning differences between the characteristics of these
transactions and the Merger that would affect the acquisition values of Infinity
and such acquired companies.
Stock Price Premium Analysis. Chase analyzed the market premiums (defined
to be the difference, expressed as a percentage, between the transaction price
per share and the actual closing price per share of the target company one day,
one week and four weeks, respectively, preceding the announcement date of the
transaction) paid in 89 selected merger and acquisition transactions completed
between January 1993 and June 1996 with equity values in excess of $1 billion.
Of the 89 total transactions in Chase's analysis, 49 were stock-for-stock
mergers and 40 were all-cash transactions. The average premiums paid in the 49
stock mergers were 32.6%, 31.7% and 37.0% over the actual closing price per
share of the target companies' shares one day, one week and four weeks,
respectively, preceding the announcement date of the transaction. The average
premiums paid in the 40 all-cash transactions were 37.6%, 36.5% and 44.2% over
the actual closing price per share of the target companies' shares one day, one
week and four weeks, respectively, preceding the announcement date of the
transaction. The implied premium paid by Westinghouse to stockholders of
Infinity is 12.0%, 11.0% and 15.0% over the actual closing price per share of
Infinity's shares one day, one week and four weeks, respectively, preceding June
19, 1996.
The following paragraphs describe Chase's analysis of Westinghouse:
Comparable Public Company Analysis by Business. Chase compared certain
publicly available financial and operating data of selected companies
(collectively, the "Comparable Companies") with similar financial and operating
data of the various businesses of Westinghouse provided to Chase by management
of Westinghouse. The Westinghouse/CBS Group includes the Television, Network
(including Production), Radio and Satellite businesses. For the Television
business the Comparable Companies were LIN Television Corp., Renaissance
Communications Corp., Sinclair Broadcasting Group Inc. and Young Broadcasting
Inc. For the Radio business the Comparable Companies were American Radio
Systems, Chancellor, Emmis, Evergreen Media, Infinity, Jacor and SFX. For the
Satellite and Network businesses Chase used publicly available equity analyst
estimates and the pre-merger announcement trading multiples of CBS Inc. and
Capital Cities/ABC, Inc. in 1995. The Industries & Technology Group includes the
Power Systems, Thermo King, Government Operations and Communication &
Information Systems businesses. For the Power Systems business the Comparable
Companies were Stewart & Stevenson Services Inc., Stone & Webster, Incorporated,
Foster Wheeler Corporation, Fluor Corporation ("Fluor") and Magnatek Corp. For
the Thermo King business the Comparable Companies were Dysor Industrial, Mestek,
Inc., York International Corporation, Scotsman Industries, Inc., Wabash National
Corporation, Modine Manufacturing Company and Simpson Industries, Inc. For the
Government Operations business the Comparable Companies were Fluor, Dames &
Moore, Inc., Rollins Environmental Services, Inc., WMX Technologies, Inc. and
International Technology Corporation. For the Communication & Information
Systems business the Comparable Companies were The Allen Group Inc., Tellabs,
Inc., Colonial Data Technologies Corp., Interdigital Communications Corporation,
Stanford Telecommunications, Inc., Protection One Inc. and ADT Limited. Chase
then compared the results of such valuation analyses to the results of valuation
analyses for the corresponding businesses of Westinghouse. Such analysis
indicated an implied firm value range for Westinghouse of $11.5 billion to $14.2
billion, and, after certain adjustments eliminating extraordinary items, an
implied range of per share values of $14.07 to $20.56 on a fully diluted basis.
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Because of the lack of truly comparable companies due to the inherent
differences between the businesses, operations and prospects of each of
Westinghouse's businesses and the businesses, operations and prospects of the
Comparable Companies, Chase believed that it was inappropriate to, and therefore
did not, rely solely on the quantitative results of the analysis, and
accordingly also made qualitative judgments concerning differences between the
financial and operating characteristics of each of Westinghouse's businesses and
the Comparable Companies that would affect the public trading values of
Westinghouse and such other companies.
Pro Forma Merger Analysis. Chase reviewed certain financial information
provided to Chase by the managements of Westinghouse and Infinity, including
forecast and projection information as to future financial results of the
respective companies, on a stand-alone basis for the fiscal years ending
December 31, 1996, 1997 and 1998. Based on this review, Chase calculated the
implied EBITDA for the combined company without considering any potential cost
savings or revenue enhancements generated by the Merger for the fiscal years
ending December 31, 1996, 1997 and 1998. Such analysis indicated that, based on
such financial information and without considering such potential cost savings
or revenue enhancements, the Merger would be dilutive to Westinghouse's
projected EBITDA by 15.2%, 16.6% and 17.8% for the fiscal years ending December
31, 1996, 1997 and 1998, respectively.
Contribution Analysis. Chase reviewed the estimated EBITDA for Westinghouse
and Infinity based on forecast and projection information as to future financial
results provided to Chase by the managements of Westinghouse and Infinity for
each of their respective companies. Based on such review, Chase analyzed the
relative financial contributions of each of Westinghouse and Infinity to the pro
forma consolidated EBITDA for the twelve month periods ending December 31, 1996,
1997 and 1998. Based on such analysis, Chase determined that Westinghouse's
contributions to the pro forma consolidated EBITDA for the twelve month periods
ending December 31, 1996, 1997 and 1998 were 80.5%, 81.9% and 83.0%,
respectively.
Other Analyses. Chase reviewed the performance of the historical trading
prices and volume of Infinity Class A Common Stock and Westinghouse Common Stock
for certain periods, and compared such per share market price movements to the
Standard & Poor's 500 Index and, with respect to Infinity, to an index of
selected publicly-traded radio companies.
The terms of the engagement of Chase by Westinghouse are set forth in the
letter agreement dated June 19, 1996 between Chase and Westinghouse (the
"Engagement Letter"). Pursuant to the terms of the Engagement Letter, a fee of
$1,000,000 was payable to Chase upon execution of the Engagement Letter and
delivery of the Chase Opinion. In addition, Westinghouse has agreed to reimburse
Chase for its reasonable out-of-pocket expenses, including fees and
disbursements of its counsel, and to indemnify Chase against certain liabilities
relating to or arising out of its engagement.
The Chase Manhattan Corporation and its affiliates, including Chase
Securities, Inc., in the ordinary course of business, have, from time to time,
provided, and in the future may continue to provide, commercial and investment
banking services to Westinghouse and Infinity, including serving as agent bank
under Westinghouse's senior credit facility dated September 12, 1995 (which was
replaced on August 29, 1996) and as documentation agent for the Westinghouse
Credit Agreement dated August 29, 1996, and serving as agent bank under
Infinity's senior credit facility. In the ordinary course of business, Chase or
its affiliates may trade in the debt and equity securities of Westinghouse and
Infinity for their own accounts and for the accounts of their customers and,
accordingly, may at any time hold a long or short position in such securities.
Salomon Brothers Inc
Westinghouse engaged Salomon on June 17, 1996 to render an opinion to the
Westinghouse Board as to the fairness, from a financial point of view, to
Westinghouse of the Conversion Number. Salomon rendered an oral and written
opinion to the Westinghouse Board on June 19, 1996 that, as of such date and
subject to the assumptions made, general procedures followed, factors considered
and limitations on the reviews undertaken set forth therein, the Conversion
Number was fair to Westinghouse from a financial point of view. Salomon did not,
and was not requested by the Westinghouse Board to, make any recommendation as
to the form or amount of consideration to be paid by Westinghouse pursuant to
the Merger Agreement.
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THE FULL TEXT OF THE SALOMON OPINION, WHICH SETS FORTH A DESCRIPTION OF THE
ASSUMPTIONS MADE, GENERAL PROCEDURES FOLLOWED, FACTORS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN BY SALOMON IN RENDERING ITS OPINION, IS
ATTACHED AS ANNEX IV AND IS INCORPORATED HEREIN BY REFERENCE. THE SALOMON
OPINION IS DIRECTED ONLY TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, TO
WESTINGHOUSE OF THE CONVERSION NUMBER AND DOES NOT ADDRESS WESTINGHOUSE'S
UNDERLYING BUSINESS DECISION TO EFFECT THE MERGER OR CONSTITUTE A RECOMMENDATION
TO ANY HOLDER OF WESTINGHOUSE COMMON STOCK AS TO HOW SUCH HOLDER SHOULD VOTE
WITH RESPECT TO THE CHARTER AMENDMENT AND/OR THE SHARE ISSUANCE. THE SUMMARY OF
THE OPINION SET FORTH BELOW IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
FULL TEXT OF THE SALOMON OPINION. HOLDERS OF WESTINGHOUSE COMMON STOCK ARE URGED
TO READ THE SALOMON OPINION CAREFULLY AND IN ITS ENTIRETY. TERMS DEFINED HEREIN
SHALL HAVE SUCH MEANING SOLELY FOR PURPOSES OF THIS SUMMARY OF THE SALOMON
OPINION.
In connection with rendering its opinion, Salomon reviewed and analyzed,
among other things, the following: (a) a draft dated June 19, 1996 of the Merger
Agreement; (b) a draft dated June 19, 1996 of the Stockholder Agreement; (c)
certain publicly available information concerning Westinghouse and Infinity,
including the Annual Reports on Form 10-K of Westinghouse and Infinity for each
of the years in the three-year period ended December 31, 1995 and the Quarterly
Reports on Form 10-Q of Westinghouse and Infinity for the quarter ended March
31, 1996; (d) certain financial information provided to Salomon by Westinghouse
regarding acquisitions made by Infinity in 1996; (e) certain financial forecasts
concerning the businesses and operations of Westinghouse and Infinity that were
prepared by the management of Westinghouse; (f) certain information concerning
cost savings and synergies expected to result from the Merger that was prepared
by the management of Westinghouse; (g) certain publicly available information
with respect to other companies that Salomon believed to be comparable in
certain respects to Infinity and certain businesses of Westinghouse and the
trading markets for such other companies' securities; and (h) certain publicly
available information concerning the terms of other acquisition transactions
that Salomon believed to be comparable to the Merger. Salomon also met with
certain officers and employees of Westinghouse and Infinity to discuss the
foregoing, including the past and current business operations, financial
condition and prospects of Westinghouse and Infinity, respectively, and the cost
savings and synergies expected to result from the Merger, as well as other
matters Salomon believed relevant to its inquiry. Salomon also considered such
other information, financial studies, analyses, investigations and financial,
economic and market criteria as it deemed relevant.
In its review and analysis and in arriving at its opinion, Salomon assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided to it or publicly available and neither attempted
independently to verify nor assumed responsibility for verifying any of such
information. With respect to the financial forecasts of Westinghouse and
Infinity and the cost savings and synergies expected to result from the Merger,
Salomon assumed that they had been reasonably prepared on bases reflecting the
best currently available estimates and judgments of management of Westinghouse
and Infinity as to the future financial performance of Westinghouse or Infinity,
as the case may be, and such expected cost savings and synergies, and Salomon
expressed no opinion with respect to such projections or expected savings and
synergies or the assumptions on which they were based. Salomon did not make or
obtain or assume any responsibility for making or obtaining any independent
evaluations or appraisals of any of the assets (including properties and
facilities) or liabilities of Westinghouse or Infinity. Salomon's opinion was
necessarily based upon conditions as they existed and could be evaluated as of
June 19, 1996, and Salomon assumed no responsibility to update or revise its
opinion based upon circumstances or events occurring after June 19, 1996.
The following is a summary of the analyses performed by Salomon in
connection with the preparation of its opinion rendered to the Westinghouse
Board on June 19, 1996 and presented to the Westinghouse Board on that date.
Infinity Historical Trading Analysis. Salomon analyzed the Conversion
Number by reference to the recent market prices of the Infinity Class A Common
Stock and the Westinghouse Common Stock and noted that, on the basis of the
closing prices of $28.63 and $18.75 for the Infinity Class A Common Stock and
the Westinghouse Common Stock, respectively, on June 18, 1996 (the last trading
day prior to the date of the Salomon Opinion), the Conversion Number resulted in
consideration of $32.06 per share of Infinity Common Stock (a premium of 12.0%
to the closing price of Infinity Class A Common Stock on June 18, 1996, 3.4% to
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the highest closing price of the Infinity Class A Common Stock within the last
twelve months and 64.4% to the lowest closing price of the Infinity Class A
Common Stock within the last twelve months). Salomon also noted that the
Conversion Number resulted in an equity market capitalization (calculated using
fully diluted shares outstanding under the treasury method) of approximately
$3.7 billion and an adjusted firm value (defined as fully diluted equity market
capitalization plus total debt, preferred stock and minority interests less
cash, equity investments and unconsolidated assets) of approximately $4.5
billion, as compared to an equity market capitalization of approximately $3.3
billion and an adjusted firm value of approximately $4.1 billion based on the
closing price of Infinity Class A Common Stock on June 18, 1996. Salomon also
noted that, as a multiple of Infinity's estimated Broadcast Cash Flow ("BCF")
and estimated earnings before interest, taxes, depreciation and amortization
("EBITDA") (as provided by relevant media industry research reports and
estimated by Westinghouse management), the Conversion Number represented 17.2
times 1996 estimated BCF, 15.7 times 1997 estimated BCF, 17.6 times 1996
estimated EBITDA and 16.1 times 1997 estimated EBITDA. Before giving effect to
the Conversion Number, Infinity's adjusted firm value represented a multiple of
15.6 times 1996 estimated BCF, 14.2 times 1997 estimated BCF, 16.0 times 1996
estimated EBITDA and 14.6 times 1997 estimated EBITDA. Salomon also noted that
the Conversion Number represented a multiple of 35.6 times the 1997 median
estimate for Infinity's earnings per share (as provided by Institutional Brokers
Estimate System), whereas Infinity's adjusted firm value before giving effect to
the Conversion Number represented a multiple of 31.8 times such earnings per
share estimate.
Public Market Valuation of Selected Radio Station Companies. Salomon
compared certain available financial and market data of Infinity to that of
seven selected publicly traded radio broadcasting companies that Salomon deemed
to be comparable to Infinity for purposes of its analysis: American Radio
Systems Corporation, Chancellor Broadcasting Company, Clear Channel
Communications, Inc., Emmis Broadcasting, Inc., Evergreen Media, Inc., Jacor
Communications, Inc. and SFX Broadcasting, Inc. (collectively, the "Comparable
Companies"). In performing the public market valuation analysis, Salomon
reviewed and compared the closing stock prices of each Comparable Company on
June 18, 1996, its equity market capitalization as of such date and its adjusted
firm value as of such date. Salomon derived the multiples of estimated BCF and
EBITDA for 1996 and 1997 (as provided by relevant media industry research
reports) that the adjusted firm values of the Comparable Companies represented.
This analysis yielded the following valuations for the Comparable Companies: (i)
a median multiple of 13.4 times 1996 estimated BCF (with a high of 18.9 and a
low of 12.2); (ii) a median multiple of 14.1 times 1996 estimated EBITDA (with a
high of 19.6 and a low of 13.5); (iii) a median multiple of 12.4 times 1997
estimated BCF (with a high of 16.6 and a low of 11.3); and (iv) a median
multiple of 13.0 times 1997 estimated EBITDA (with a high of 17.1 and a low of
12.1). Salomon's analysis referenced a range of 13.0 to 18.0 times 1996
estimated BCF, an implied price per share of Infinity Common Stock ranging from
$22.81 to $33.85 and an implied Conversion Number of 1.2 to 1.8 shares of
Westinghouse Common Stock for each share of Infinity Common Stock.
Radio Broadcasting Transactions Analysis. Salomon analyzed certain publicly
available financial and operating information for nine recent merger and
acquisition transactions in the radio broadcasting industry valued at greater
than $200 million. Such transactions included the acquisition of Broadcast
Partners, Inc. by Evergreen Media, Inc. (announced on January 31, 1995); the
acquisition of Pyramid Communications by Evergreen Media, Inc. (announced on
July 14, 1995); the acquisition of Shamrock Broadcasting by Chancellor
Broadcasting (announced August 3, 1995); the acquisition of Alliance
Broadcasting L.P. by Infinity (announced September 22, 1995); the acquisition of
Liberty Broadcasting Inc. by SFX Broadcasting, Inc. (announced November 15,
1995); the acquisition of Citicasters Inc. by Jacor Communications, Inc.
(announced February 12, 1996); the acquisition of Granum Holdings L.P. by
Infinity (announced March 4, 1996); the acquisition of Radio Equity Partners by
Clear Channel Communications, Inc. (announced May 9, 1996); and the acquisition
of NewCity Communications by Cox Enterprises, Inc. (announced May 13, 1996).
Salomon reviewed the adjusted firm value implied by the terms of these
transactions and then derived the estimated multiples of forward BCF that these
adjusted firm values represented. Salomon's analysis of the recent merger and
acquisition transactions referenced a range of 13.0 to 19.0 times estimated
forward BCF, an implied price per share of Infinity Class A Common Stock ranging
from $22.81 to $36.06 and an implied Conversion Number range of 1.2 to 1.9
shares of Westinghouse Common Stock for each share of Infinity Common Stock.
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Discounted Cash Flow Analysis. Salomon derived ranges of per share equity
value for Infinity based upon the value, discounted to the present, of its
fiscal year end five-year stream of projected unlevered cash flow and its
projected fiscal year 2001 terminal values based upon a range of multiples of
its projected fiscal year 2001 EBITDA. In conducting its analysis, Salomon
utilized two different sets of financial projections for Infinity provided by
Westinghouse management. The first set of financial projections was based on
certain assumptions and projections without the synergies expected to result
from the Merger (the "Stand-Alone Case"). The second set of financial
projections was based on certain assumptions and projections and reflected such
synergies (the "Synergies Case"). Salomon applied discount rates reflecting a
weighted average cost of capital ("WACC") ranging from 10.5% to 11.5% and
multiples of terminal EBITDA ranging from 11.5x to 12.5x. Based on this
analysis, Salomon calculated implied per share equity values of Infinity ranging
from $26.92 to $30.66 on a fully diluted basis under the Stand-Alone Case and
from $39.66 to $43.40 on a fully diluted basis under the Synergies Case.
Westinghouse Business Valuation Analysis. Salomon derived ranges of per
share equity value for Westinghouse based upon estimated public market values of
each Westinghouse business (television, network, radio, satellite, production,
power systems, Thermo King, government operations and communication &
information systems businesses). Based upon analysis of publicly traded
companies that Salomon deemed comparable to each business and research analysts'
estimates, Salomon derived the following ranges of multiples of estimated 1996
EBITDA: (i) a low of 11.0x and a high of 13.0x in the television business; (ii)
a low of 12.0x and a high of 15.0x in the network business; (iii) a low of 14.0x
and a high of 16.0x in the radio business; (iv) a low of 13.0x and a high of
15.0x in the satellite business; (v) a low of 5.0x and a high of 7.0x in the
power systems business; (vi) a low of 8.0x and a high of 10.0x in the Thermo
King business; (vii) a low of 5.0x and a high of 6.0x in the government
operations business; and (viii) a low of 8.0x and a high of 10.0x in the
communication & information systems business.
Salomon derived an estimate of the total value of Westinghouse's businesses
that ranged from a low of approximately $11.6 billion to a high of approximately
$14.2 billion. After adjusting such estimates to account for certain net
operating loss tax carry forwards, certain discontinued assets, Westinghouse's
debt, provisions for restructuring, environmental reserves, other accruals and
minority interest, Salomon derived an estimate of Westinghouse's equity value
that ranged from a low of approximately $6.3 billion to a high of approximately
$9.0 billion. On a fully diluted basis, Salomon noted that this represented a
per share value ranging from $14.01 to $19.66.
Conversion Number Analysis. Salomon reviewed the per share daily closing
market prices of Westinghouse Common Stock and Infinity Class A Common Stock
over the period from January 2, 1995 through June 18, 1996. Salomon's comparison
yielded an implied exchange ratio ranging from 1.00 to 1.84 shares (and
averaging 1.40 shares) of Westinghouse Common Stock for each share of Infinity
Common Stock.
Pro Forma Contribution. Salomon compared the relative ownership of the
stockholders of Westinghouse and the stockholders of Infinity of approximately
69.6% and 30.4% (based upon the Conversion Number), respectively, in
Westinghouse following consummation of the Merger (the "Combined Company") to
the relative estimated 1996 balance sheet and income statement contributions of
each of Westinghouse and Infinity to the Combined Company. Salomon's analysis
indicated, among other things, that Westinghouse and Infinity contributed to the
Combined Company approximately 92.4% and 7.6%, respectively, of revenues, 79.1%
and 20.9%, respectively, of EBITDA, 75.8% and 24.2%, respectively, of earnings
before interest and taxes, 36.8% and 63.2%, respectively, of net income, 75.7%
and 24.3%, respectively, of total funds from operations (defined as net income
plus depreciation and amortization), 90.1% and 9.9%, respectively, of total
assets, 81.6% and 18.4%, respectively, of total debt, and 85.3% and 14.7%,
respectively, of stockholders' equity of the Combined Company.
General. No company used in the public market company valuation analysis
nor any transaction used in the precedent merger and acquisition transactions
analysis summarized above is identical to Westinghouse, Infinity or the Merger,
respectively. Accordingly, any such analysis of the value of the Infinity Common
Stock, the Westinghouse Common Stock or of the pro forma Combined Company
involves complex considerations and judgments concerning differences in the
potential financial and operating characteristics of the compara-
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ble companies and other factors in relation to the trading and acquisition
values of the comparable companies and publicly announced transactions.
The foregoing summary does not purport to be a complete description of the
analyses performed by Salomon or of its presentation to the Westinghouse Board.
The preparation of financial analyses and fairness opinions is a complex process
and is not necessarily susceptible to partial analysis or summary description.
Salomon believes that its analyses (and the summary set forth above) must be
considered as a whole, and that selecting portions of such analyses and of the
factors considered by Salomon, without considering all such analyses and
factors, could create an incomplete view of the processes underlying the
analyses set forth in Salomon's presentation to the Westinghouse Board and the
Salomon Opinion. Salomon made no attempt to assign specific weights to
particular analyses. In performing its analyses, Salomon made numerous
assumptions with respect to industry performance, general business, financial,
market and economic conditions and other matters, many of which are beyond the
control of Westinghouse or Infinity. Any estimates contained in Salomon's
analyses are not necessarily indicative of actual values or future results,
which may be significantly more or less favorable than as set forth therein.
Estimates of values of companies do not purport to be appraisals or necessarily
reflect the prices at which companies may actually be sold or the prices at
which securities may trade at the present time or any time in the future.
Because such estimates are inherently subject to uncertainty, Salomon does not
assume responsibility for their accuracy.
Salomon is an internationally recognized investment banking firm engaged
in, among other things, the valuation of businesses and their securities in
connection with mergers and acquisitions, restructurings, leveraged buyouts,
negotiated underwritings, competitive biddings, secondary distributions of
listed and unlisted securities, private placements and valuations for estate,
corporate and other purposes. The Westinghouse Board retained Salomon based on
Salomon's expertise in the valuation of companies as well as its familiarity
with Westinghouse, Infinity and the media industry.
Salomon has previously rendered certain investment banking and financial
advisory services to Infinity for which Salomon received customary compensation.
In addition, in the ordinary course of its business, Salomon may actively trade
the securities of Westinghouse and Infinity for Salomon's own account and the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities.
Pursuant to an engagement letter dated June 17, 1996, Westinghouse agreed
to pay Salomon a fee of $1,000,000, payable upon initial submission by Salomon
of the Salomon Opinion to the Westinghouse Board. Westinghouse also has agreed
to reimburse Salomon for certain expenses incurred in connection with its
engagement and to indemnify Salomon and certain related persons against certain
liabilities and expenses relating to or arising out of its engagement, including
certain liabilities under the federal securities laws.
INFINITY'S REASONS FOR THE MERGER; RECOMMENDATION OF ITS BOARD OF DIRECTORS
The Infinity Board has carefully considered the terms of the proposed
Merger and believes that the Merger and the related transactions are fair to and
in the best interests of Infinity and its stockholders. The Infinity Board has
approved the Merger and the related transactions and recommends that the
Infinity stockholders vote FOR the approval and adoption of the Merger Agreement
and the transactions contemplated thereby.
The Infinity Board believes that the Merger would be strategically
advantageous for the combined companies and would enhance future value for
Infinity's stockholders.
Strategic Fit. The Merger is expected to create for the combined companies
a group of premier radio stations in the nation's largest radio markets. The
Infinity Board believes that this presence in large markets will enhance the
combined companies' ability to attract advertisers and to attract highly skilled
management, employees and on-air talent, resulting in significant opportunities
for continued revenue growth in the future. In particular, the listener base of
the combined companies would enable them to enhance their ability to compete for
advertising dollars with print and with other broadcast media. The strategic
desirability of the Merger results from the fact that the number and location of
each company's current radio properties should permit achievement of this
strengthened market presence with a minimum of divestitures required under the
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Telecommunications Act. See "--Regulatory Approvals;" "THE MERGER
AGREEMENT--Conditions to the Consummation of the Merger; Conditions to Each
Party's Obligation to Effect the Merger;" "BUSINESS OF WESTINGHOUSE;" and
"BUSINESS OF INFINITY."
Synergies and Increased Efficiency. The Merger is expected to enhance
efficiency by producing economies of scale in the area of station management, as
well as technical and engineering efficiencies and more efficient news gathering
and public service. The Infinity Board expects the savings resulting from such
increased efficiency to permit greater spending by the combined companies on
programming, which in turn is expected to enhance revenues. See "BUSINESS OF
WESTINGHOUSE" and "BUSINESS OF INFINITY."
Stockholder Flexibility. Due to the structure of the Merger, Infinity
stockholders who wish to retain the shares of Westinghouse Common Stock they
receive in the Merger would be able to participate as equity holders of
Westinghouse on a tax-free basis. At the same time, Westinghouse's large public
float would afford liquidity to Infinity stockholders wishing to sell their
shares of Westinghouse Common Stock following the Merger. See "--Certain Federal
Income Tax Consequences" and "--Stock Exchange Listing."
Westinghouse and its Commitment to Broadcasting. The Infinity Board
considers that Westinghouse's increased focus on the broadcasting industry (as
evidenced by its 1995 CBS acquisition) makes Westinghouse an attractive merger
partner. The Infinity Board believes that the Merger will strengthen the
investment community's perception of Westinghouse's increased focus on
broadcasting, and that this strengthened perception may increase stockholder
value. See "BUSINESS OF WESTINGHOUSE."
Management. The combined companies' management team would be strong and
experienced, and is expected to include Mel Karmazin and other current members
of Infinity's senior management team.
Availability of NOL. Westinghouse has a large net operating loss carry
forward, which would be available to increase future after-tax cash flow of the
combined companies by reducing the taxation of the combined companies' income.
Fairness Opinion. The Infinity Board has received from Merrill Lynch a
presentation as to Westinghouse and the Merger, and the written opinion of
Merrill Lynch to the effect that, based upon and subject to the various
considerations set forth therein, as of the date of such opinion, the
consideration to be received by holders of shares of Infinity Common Stock
(other than Westinghouse and its affiliates) pursuant to the Merger Agreement is
fair to such holders from a financial point of view. See "--Opinion of
Infinity's Financial Advisor."
Views of Management and Principal Stockholders. Infinity's senior
management and principal stockholders, who are familiar with the radio industry
and have a substantial financial stake in Infinity, have expressed to the
Infinity Board their belief that the Merger is strategically desirable and
should enhance stockholder value. The Class B Stockholders have evidenced their
approval of the Merger by entering into the Stockholder Agreement.
The foregoing discussion of the information and factors considered and
given weight by the Infinity Board is not intended to be exhaustive. In view of
the variety of factors considered in connection with its evaluation of the
Merger, the Infinity Board did not find it practicable to and did not quantify
or otherwise assign relative weights to the specific factors considered in
reaching its determination. In addition, individual members of the Infinity
Board may have given different weights to different factors.
THE INFINITY BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF INFINITY
VOTE "FOR" THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY.
OPINION OF INFINITY'S FINANCIAL ADVISOR
Merrill Lynch delivered a written opinion to the Infinity Board on June 20,
1996 to the effect that, as of such date, and based upon the assumptions made,
general procedures followed, factors considered and limitations on the review
undertaken as set forth in such opinion, the consideration to be received by the
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holders of shares of Infinity Common Stock (other than Westinghouse and its
affiliates) pursuant to the Merger Agreement is fair to such holders from a
financial point of view. References herein to the "Merrill Lynch Opinion" refer
to the written opinion of Merrill Lynch dated June 20, 1996.
THE FULL TEXT OF THE MERRILL LYNCH OPINION, WHICH SETS FORTH THE
ASSUMPTIONS MADE, GENERAL PROCEDURES FOLLOWED, FACTORS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN BY MERRILL LYNCH IN RENDERING ITS OPINION
IS ATTACHED AS ANNEX V AND IS INCORPORATED HEREIN BY REFERENCE. THE MERRILL
LYNCH OPINION IS DIRECTED ONLY TO THE FAIRNESS FROM A FINANCIAL POINT OF VIEW OF
THE CONSIDERATION TO BE RECEIVED BY HOLDERS OF SHARES OF INFINITY COMMON STOCK
(OTHER THAN WESTINGHOUSE AND ITS AFFILIATES) PURSUANT TO THE MERGER AGREEMENT
AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER OF INFINITY AS TO
HOW SUCH STOCKHOLDER SHOULD VOTE WITH RESPECT TO THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY. THE SUMMARY OF THE MERRILL LYNCH OPINION SET
FORTH IN THIS PROXY STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE FULL TEXT OF THE MERRILL LYNCH OPINION. HOLDERS OF SHARES OF
INFINITY COMMON STOCK ARE URGED TO, AND SHOULD, READ THE MERRILL LYNCH OPINION
IN ITS ENTIRETY. TERMS DEFINED HEREIN SHALL HAVE SUCH MEANING SOLELY FOR
PURPOSES OF THIS SUMMARY OF THE MERRILL LYNCH OPINION.
Merrill Lynch was not requested to and did not make any recommendation as
to the form or amount of the consideration to be paid in the Merger. In arriving
at the Merrill Lynch Opinion, Merrill Lynch, among other things: (i) reviewed
Infinity's Annual Reports, Forms 10-K and related financial information for the
five fiscal years ended December 31, 1995 and Infinity's Form 10-Q and the
related unaudited financial information for the quarterly period ended March 31,
1996; (ii) reviewed Westinghouse's Annual Reports, Forms 10-K and related
financial information for the five fiscal years ended December 31, 1995 and
Westinghouse's Form 10-Q and the related unaudited financial information for the
quarterly period ended March 31, 1996; (iii) conducted discussions with members
of the management of Infinity concerning its business and prospects and the
potential synergies which might be realized following the Merger; (iv) conducted
discussions with members of the management of Westinghouse concerning its
business and prospects and the then recently announced potential restructuring
of Westinghouse; (v) reviewed the historical market prices and trading activity
for the Infinity Class A Common Stock and the Westinghouse Common Stock and
compared them with those of certain publicly traded companies which Merrill
Lynch deemed to be reasonably similar to Infinity and Westinghouse,
respectively; (vi) compared the results of operations of Infinity and
Westinghouse with those of certain companies which Merrill Lynch deemed to be
reasonably similar to Infinity and Westinghouse, respectively; (vii) reviewed
the Merger Agreement and the Stockholder Agreement; (viii) compared the proposed
financial terms of the transactions contemplated by the Merger Agreement with
the financial terms of certain other mergers and acquisitions which Merrill
Lynch deemed to be relevant; (ix) considered certain pro forma financial effects
of the Merger; and (x) reviewed such other financial studies and analyses and
performed such other investigations and took into account such other matters as
Merrill Lynch deemed necessary, including its assessments of general economic,
market and monetary conditions.
In preparing the Merrill Lynch Opinion, Merrill Lynch relied, without
independent verification, upon the accuracy and completeness of all the
financial and other information supplied or otherwise made available to it by
Infinity and Westinghouse. Merrill Lynch did not make any independent evaluation
or appraisal of the assets or liabilities of Infinity and Westinghouse, nor was
Merrill Lynch furnished with any such appraisal. Merrill Lynch assumed that
certain publicly available forecasted financial information relating to Infinity
which was prepared by a third party identified to Merrill Lynch by Infinity and
which was discussed with members of the management of Infinity was reasonably
prepared. In addition, with respect to certain publicly available information
relating to Westinghouse upon which Merrill Lynch prepared summary financial
forecasts which were discussed with the management of Westinghouse, Merrill
Lynch assumed that such information had been reasonably prepared. Merrill Lynch
also assumed that the Merger will qualify as a tax-free transaction under
Section 368(a) of the Code.
Merrill Lynch did not express any opinion as to prices at which the
Westinghouse Common Stock will trade following the consummation of the Merger.
Merrill Lynch was not authorized by Infinity to solicit, nor did it solicit,
third-party indications of interest for the acquisition of all or any part of
Infinity. In addition, Merrill Lynch did not review with Infinity or the
Infinity Board any other potential transactions in lieu of the
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Merger. The Merrill Lynch Opinion is necessarily based upon general economic,
market and other conditions as they existed and could be evaluated, and the
information made available to Merrill Lynch, as of the date of the Merrill Lynch
Opinion.
Set forth below is a brief summary setting forth the material analyses
presented by Merrill Lynch to the Infinity Board in connection with the Merrill
Lynch Opinion.
Infinity Broadcasting Corporation
Analysis of Stock Trading Price. Merrill Lynch reviewed the stock trading
prices for Infinity Class A Common Stock for the period from January 1992 to
June 1996. The stock trading price for the 52 week trading period prior to June
17, 1996 indicated a high of $31.00 and a low of $19.58. Merrill Lynch
calculated the per share consideration to be received in exchange for each share
of Infinity Common Stock in the Merger to be $32.28 based on the Conversion
Number and the Westinghouse closing stock price of $18.88 on June 19, 1996 and
that such amount represented a 12.8% premium to the Infinity closing stock price
of $28.63 on June 19, 1996 (and a premium of 4.1% to the highest Infinity
closing stock price and 64.9% to the lowest Infinity closing stock price during
the prior 52 week period). Merrill Lynch reported that the Conversion Number
resulted in an equity market value (defined as the fully diluted number of
shares of Infinity Common Stock multiplied by the market price) of approximately
$3.9 billion and an enterprise value (defined as equity market value plus net
debt) of approximately $5.0 billion as compared to an equity market value of
approximately $3.4 billion and an enterprise value of approximately $4.6 billion
based on the June 19, 1996 Infinity closing stock price. Merrill Lynch also
reported that the enterprise value resulting from the Conversion Number resulted
in multiples of 1996 estimated broadcasting cash flow ("BCF") of 20.4x, 1997
estimated BCF of 16.5x, 1996 estimated earnings before interest, taxes,
depreciation and amortization ("EBITDA") of 21.0x and 1997 estimated EBITDA of
16.9x. BCF is defined as EBITDA plus corporate overhead. In addition, Merrill
Lynch reported that the equity market value resulting from the Conversion Number
resulted in multiples of 1996 estimated free cash flow (defined as net income
plus depreciation and amortization) of 25.0x and 1997 estimated free cash flow
of 22.5x.
Analysis of Selected Comparable Publicly Traded Companies. Merrill Lynch
compared certain financial information for Infinity with the corresponding
publicly available financial information of certain other companies which
Merrill Lynch deemed to be reasonably similar. In this portion of its analysis,
Merrill Lynch compared certain financial information for five radio broadcasting
companies: American Radio Systems Corp.; Chancellor Broadcasting Co.; Clear
Channel Communications, Inc.; Evergreen Media Corp.; and Jacor Communications,
Inc. (the "Comparable Companies").
Merrill Lynch calculated multiples for the Comparable Companies of market
capitalization to 1996 and 1997 estimated BCF. Based on, among other things,
Infinity's margins, asset quality, ability to successfully integrate
acquisitions and expected growth rate, Merrill Lynch utilized a multiple range
of 18x to 20x for 1996 estimated BCF (pro forma to account for the acquisition
of 12 radio stations owned by various subsidiaries of Granum Holdings L.P.) and
15x to 17x for 1997 estimated BCF. For purposes of its analysis, Merrill Lynch
assumed the operations of TDI (acquired in March 1996) to be valued at cost
($300 million) and Infinity's equity investment in Westwood One to be valued at
$142.8 million (based on its then current public market value). Based upon such
multiples, this portion of the analysis resulted in an implied per share equity
value of Infinity ranging from $25.28 to $30.71.
Analysis of Selected Comparable Acquisition Transactions. Merrill Lynch
reviewed certain publicly available information regarding eight selected
business combinations in excess of $50 million announced since February 1996
(the "Acquisition Comparables"). The Acquisition Comparables and the dates the
transactions were announced were as follows: Clear Channel Communications'
acquisition of Radio Equity Partners (May 1996); Cox Enterprises' acquisition of
New City Communications (May 1996); Chancellor Broadcasting's acquisition of
Omni America Group (May 1996); Clear Channel Communications' acquisition of US
Radio LP (March 1996); American Radio Systems' acquisition of Henry Broadcasting
(March 1996); Jacor Communications' acquisition of Noble Broadcasting Group
(February 1996); Jacor Communications'
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acquisition of Citicasters Inc. (February 1996); and SFX Broadcasting Inc.'s
acquisition of Prism Radio Partners LP (February 1996).
Merrill Lynch compared the prices of these announced acquisitions as a
multiple of the trailing 1995 BCF and the 1996 estimated BCF of the acquired
companies; in these transactions, the multiples of 1995 BCF ranged from 10.4x to
14.5x and of 1996 estimated BCF ranged from 8.5x to 13.0x. Basing its analysis
on the acquisitions deemed most comparable to the Merger (i.e., transactions
involving the acquisition of a significant number of stations and transactions
involving stations in large markets), Merrill Lynch applied multiples ranging
from 10.5x to 14.5x to 1996 estimated BCF and, assuming the operations of TDI to
be valued at cost and Infinity's equity investment in Westwood One to be valued
at its then current public market value, obtained an implied per share equity
value of Infinity ranging from $13.41 to $20.69.
Discounted Cash Flow Analysis. Merrill Lynch calculated ranges of per share
equity value for Infinity based upon the value, discounted to June 30, 1996, of
its year end five-year stream of projected unlevered free cash flow and its
projected fiscal year 2000 terminal value based on terminal multiples of BCF
ranging from 13.0x to 17.0x and discount rates ranging from 11.0% to 13.0%. For
purposes of its analysis, net debt was structured from enterprise value and
Infinity's equity investment in Westwood One was assumed to be valued at its
then current public market value in calculating the Infinity equity value. This
valuation did not reflect any potential acquisitions by Infinity or any
potential synergies resulting from the Merger. Based on such analysis, the
implied per share equity value of Infinity ranged from $24.01 to $35.21.
Westinghouse Electric Corporation
Analysis of Stock Trading Price. Merrill Lynch reviewed the stock trading
prices for Westinghouse for the period from June 1993 to June 1996, which
indicated (i) from June 12, 1993 to June 17, 1996 a high of $20.75 and a low of
$11.00, (ii) since the CBS acquisition in November 1995 a high of $20.75 and a
low of $15.50 and (iii) for the twelve month period from June 17, 1995 to June
17, 1996 a high of $20.75 and a low of $13.00.
Segment Valuation Analysis. Merrill Lynch calculated ranges of equity value
per share for Westinghouse based upon the estimated public market and private
market values of each Westinghouse business unit (network, television stations,
radio, other broadcasting, energy systems, power generation, other power
systems, Thermo King, government operations, communications and information,
other businesses and corporate).
Public Market Valuation. Merrill Lynch used the following ranges of
multiples of 1996 estimated EBITDA for each business unit, except where
otherwise noted, in calculating a public market value range for Westinghouse:
(i) 8.5x - 10.5x 1997 estimated EBITDA for the network business unit; (ii) 11.0x
- -13.0x for the television stations business unit; (iii) 14.0x - 16.0x for the
radio business unit; (iv) 10.0x - 12.0x for the other broadcasting business
unit; (v) 4.0x - 5.0x for the energy systems business unit; (vi) 8.0x - 12.5x
1993 - 1995 average earnings before interest and taxes ("EBIT") for the power
generation business unit; (vii) the discounted expected future cost for the
other power systems business unit; (viii) 8.0x - 10.0x for Thermo King; (ix)
5.0x - 7.0x for the government operations business unit; (x) 9.0x - 11.0x for
the communications and information business unit; (xi) 4.0x - 6.0x for the other
businesses; and (xii) 4.0x for the corporate business unit.
Using such multiples, Merrill Lynch calculated an implied total public
market value of Westinghouse's businesses that ranged from $11.5 billion to
$14.3 billion. These values were adjusted by subtracting debt, minority interest
and certain reserves and by adding cash and cash equivalents, the net value of
assets held for sale and the present value of net operating loss carry-forwards
which resulted in an implied equity value for Westinghouse ranging from $6.8
billion to $9.8 billion, or $15.80 to $22.66 per share.
Private Market Valuation. Merrill Lynch also calculated a pre-tax private
market value range for Westinghouse utilizing the following ranges of multiples
of 1996 estimated EBITDA for each business unit, except where otherwise noted:
(i) 10.5x - 12.5x 1997 estimated EBITDA for the network business unit; (ii)
13.0x - 15.0x for the television stations business unit; (iii) 16.0x - 18.0x for
the radio business unit;
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(iv) 12.0x - 14.0x for the other broadcasting business unit; (v) 5.0x - 6.0x for
the energy systems business unit; (vi) 8.0x - 12.5x 1993 - 1995 average EBIT for
the power generation business unit; (vii) the discounted expected future cost
for the other power systems business unit; (viii) 12.0x - 14.0x for Thermo King;
(ix) 6.0x - 8.0x for the government operations business unit; (x) 9.0x - 11.0x
for the communication and information systems business unit; and (xi) 5.0x -
7.0x for the other businesses.
Using such multiples, Merrill Lynch calculated an implied total pre-tax
private market value of Westinghouse's businesses that ranged from $14.9 billion
to $17.7 billion. These values were adjusted by subtracting debt, minority
interest and certain reserves and by adding cash and cash equivalents and the
net value of assets held for sale which resulted in an implied equity value for
Westinghouse ranging from $9.8 billion to $12.7 billion, or $22.63 to $29.38 per
share.
Discounted Cash Flow Analysis. Merrill Lynch calculated ranges of equity
value per share for Westinghouse based upon the value, discounted to June 30,
1996, of its year end five-year stream of projected unlevered free cash flow and
its projected year 2000 terminal value based on multiples ranging from 9.5x to
11.5x of year 2000 estimated EBITDA and discount rates ranging from 10.0% to
12.0%. For purposes of this analysis, net debt as well as $400 million of
reserves for litigation and restructuring costs were subtracted from enterprise
value in calculating the Westinghouse equity value. Based upon such multiples
and certain adjustments, the implied per share equity value of Westinghouse
ranged from $17.53 to $25.66.
The Merger
Pro Forma Combined Operations Analysis. Merrill Lynch reviewed the
geographic markets in which the companies would operate following the Merger,
including the various radio and TV properties which would be owned in such
markets. Merrill Lynch also reviewed with the Infinity Board certain synergies
expected to result from the Merger, estimated to range from $65-108 million to
be phased in over a two year period following consummation of the Merger.
Pro Forma Financial Analysis. Merrill Lynch analyzed certain pro forma
effects resulting from the Merger, including the potential impact of the Merger
on projected earnings per share and on projected free cash flow, in each case
for each of Infinity and Westinghouse, assuming 100% of the estimated synergies
were achieved. In addition, Merrill Lynch assumed that the purchase method of
accounting would be used to account for the transaction and that goodwill
arising from the transaction would be amortized over a period of 40 years. Based
upon the Conversion Number of shares of Westinghouse Common Stock to be received
in the Merger as compared to a share of Infinity Common Stock prior to the
Merger, this analysis indicated that the Merger would be dilutive in the case of
earnings per Infinity share until after 1998 and accretive in the case of cash
flow per Infinity share. The analysis also indicated that the Merger would be
dilutive in the case of earnings per share and cash flow per share in the case
of Westinghouse Common Stock.
Exchange Ratio Analysis. Merrill Lynch reviewed the exchange ratio based on
historical stock prices of Infinity and Westinghouse over the period from June
1992 to June 1996 and compared the four year mean implied exchange ratio of
0.956, the three year mean implied exchange ratio of 1.161, the two year mean
implied exchange ratio of 1.306 and the one year mean implied exchange ratio of
1.480 to the Conversion Number. Merrill Lynch also calculated a range of implied
exchange ratios by dividing the discounted cash flow per share of Infinity by
the discounted cash flow per share of Westinghouse using the discounted cash
flow analyses set forth above. In this analysis, Merrill Lynch also assumed that
0, 50% or 100% of the estimated synergies from the Merger was allocated to
Infinity. This analysis resulted in theoretical exchange ratios ranging from
1.33x to 1.84x. In addition, Merrill Lynch calculated the relative contributions
to projected EBITDA of Westinghouse following the Merger from each of
Westinghouse and Infinity for the fiscal years ending December 31, 1996, 1997
and 1998. This analysis resulted in Infinity's contributions to the pro forma
projected Westinghouse EBITDA of 19.5%, 19.7% and 19.2% for the periods ending
December 31, 1996, 1997 and 1998, respectively.
The summary set forth above does not purport to be a complete description
of the analyses performed by Merrill Lynch in arriving at the Merrill Lynch
Opinion. Arriving at a fairness opinion is a complex process not necessarily
susceptible to partial or summary description. In addition, Merrill Lynch
believes that its analysis
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must be considered as a whole and that selecting portions of its analyses and of
the factors considered by it, without considering all such factors and analyses,
could create an incomplete view of the process underlying its analyses set forth
in the Merrill Lynch Opinion. The matters considered by Merrill Lynch in its
analyses are based on numerous macroeconomic, operating and financial
assumptions with respect to industry performance, general business and economic
conditions and other matters, many of which are beyond Infinity's or
Westinghouse's control and involve the application of complex methodologies and
educated judgment. Any estimates incorporated in the analyses performed by
Merrill Lynch are not necessarily indicative of actual past or future results or
values, which may be significantly more or less favorable than such estimates.
Estimated values do not purport to be appraisals and do not necessarily reflect
the prices at which businesses or companies may be sold in the future, and such
estimates are inherently subject to uncertainty. No public company utilized as a
comparison is identical to Infinity or Westinghouse or the business segment for
which a comparison is being made, and none of the Acquisition Comparables or
other business combinations utilized as a comparison is identical to the
proposed Merger. Accordingly, an analysis of publicly traded comparable
companies and comparable business combinations is not mathematical; rather it
involves complex considerations and judgments concerning differences in
financial and operating characteristics of the comparable companies and other
factors that could affect the public trading value of the comparable companies
to which they are being compared.
The Infinity Board selected Merrill Lynch to act as its financial advisor
on the basis of Merrill Lynch's reputation as an internationally recognized
investment banking firm with substantial expertise in transactions similar to
the Merger and because it is familiar with Infinity and its business. Merrill
Lynch has, in the past, provided financial advisory and financing services to
Infinity and Westinghouse and has received fees for the rendering of such
services. As part of its investment banking business, Merrill Lynch is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions.
Merrill Lynch Fees. Pursuant to a letter agreement dated June 13, 1996,
Infinity has agreed to pay Merrill Lynch $2 million for its financial advisory
services in connection with the Merger; (i) one half of such fee payable upon
execution of the Merger Agreement and (ii) the balance of the fee payable upon
consummation of the Merger. In addition, Infinity also has agreed to reimburse
Merrill Lynch for its reasonable out-of-pocket expenses (including reasonable
fees and expenses of its legal counsel) and to indemnify Merrill Lynch and
certain related persons against certain liabilities, including liabilities under
the federal securities laws, arising out of its engagement.
Merrill Lynch has advised Infinity that, in the ordinary course of
business, it may, subject to certain restrictions, actively trade securities of
Infinity or Westinghouse for its own account or for the account of its customers
and, accordingly, may at any time hold a long or short position in such
securities.
CERTAIN LITIGATION
Beginning on June 21, 1996, four complaints have been filed by purported
stockholders of Infinity on behalf of a class of all public stockholders of
Infinity in the Court of Chancery of the State of Delaware, New Castle County.
Each complaint names Infinity, its directors and Westinghouse as defendants and
alleges, among other things, that the Infinity Board acted in disregard of its
fiduciary duties to Infinity's public stockholders in agreeing to the Merger and
that Westinghouse aided and abetted such alleged breach. Each complaint seeks,
among other things, to have the Merger enjoined and to recover unspecified
damages. The time for defendants to respond to the complaints has been extended,
pending entry of an order consolidating the four actions.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendation of the Infinity Board with respect to the
approval and adoption of the Merger Agreement and the transactions contemplated
thereby, stockholders of Infinity should be aware that certain members of the
management of Infinity and the Infinity Board have certain interests in the
Merger that are different from, or in addition to, the interests of stockholders
of Infinity generally.
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Directors and Officers of the Combined Company. Mel Karmazin, a current
director of Infinity, is expected to be recommended to the Westinghouse Board
and its Nominating and Governance Committee for election as a director of
Westinghouse following the Merger. In addition, Mr. Karmazin has entered into an
employment agreement with Westinghouse that will become effective as of the
Effective Time pursuant to which Mr. Karmazin will become Chairman and Chief
Executive Officer of the Westinghouse/CBS Radio Group. It is also expected that
Farid Suleman will become an executive officer of the Westinghouse/CBS Radio
Group following the Merger. See "--Employment Agreements."
Stockholder Agreement. Messrs. Karmazin, Carrus and Wiener, along with all
other current holders of Infinity Class B Common Stock, have entered into the
Stockholder Agreement, in their capacities as stockholders of Infinity. The
general effect of the Stockholder Agreement, subject to certain conditions set
forth therein, is to ensure the affirmative vote at the Infinity Special Meeting
of a number of shares of Infinity Common Stock sufficient to cause the approval
and adoption of the Merger Agreement and the transactions contemplated thereby
by the stockholders of Infinity. See "INFINITY SPECIAL MEETING--The Stockholder
Agreement."
Stock Options; Warrants. Pursuant to the terms of certain Infinity options
previously granted to Mel Karmazin, such options become fully vested and
exercisable upon certain changes of control of Infinity which, for this purpose,
would include the Merger. In addition, the Merger Agreement provides that all
Infinity options held by Farid Suleman as of the date of the Merger Agreement
will become fully vested as of the Effective Time. As of September 20, 1996, the
number of shares of Infinity Common Stock subject to unexercisable options held
by Messrs. Karmazin and Suleman was 495,000 and 447,282, respectively, at
exercise prices which ranged from $3.4577 to $27.583 per share, all of which
will become fully vested as of the Effective Time. The Merger Agreement also
provides for the assumption by Westinghouse of outstanding options, deferred
shares and warrants with respect to Infinity Class A Common Stock (including
options, deferred shares and warrants held by Mel Karmazin) and the substitution
of Westinghouse Common Stock as the underlying stock for such options, deferred
shares and warrants. See "THE MERGER AGREEMENT--Effect on Infinity Benefit
Plans, Stock Options, Deferred Shares and Warrants."
Employee Benefits. Under the Merger Agreement, Westinghouse has agreed that
for a period of one year following the Effective Time, it will, or will cause
Infinity to, continue to maintain employee benefit plans, programs and policies
for the employees of Infinity and its subsidiaries which, in the aggregate,
provide benefits that are no less favorable than such benefits as are provided
to such employees under those plans, programs and policies in effect on the date
of the Merger Agreement. See "THE MERGER AGREEMENT--Effect on Infinity Benefit
Plans and Stock Options." As a result of these arrangements, current members of
Infinity's management, including members of the Infinity Board employed by
Infinity, would continue to receive employee benefits at least as favorable as
those currently provided to them by Infinity following the Merger.
Indemnification; Directors' and Officers' Liability Insurance. Under the
Merger Agreement, Westinghouse has agreed that all rights to indemnification and
exculpation from liabilities for acts or omissions occurring at or prior to the
Effective Time existing as of the date of the Merger Agreement in favor of the
current or former directors and officers of Infinity and its subsidiaries as
provided in their respective organizational documents and indemnification
agreements shall survive the Merger and continue in full force and effect in
accordance with their terms for not less than six years from the Effective Time.
In addition, subject to certain conditions, for six years after the Effective
Time, Westinghouse has agreed to maintain Infinity's current directors' and
officers' insurance and indemnification policy, to the extent that such policy
provides coverage for events occurring prior to the Effective Time, for all
persons who were directors and officers of Infinity on the date of the Merger
Agreement.
Employment Agreements. Pursuant to an employment agreement, dated as of
June 20, 1996 between Westinghouse and Mel Karmazin (the "Employment
Agreement"), Mr. Karmazin will be employed following the Merger as Chairman and
Chief Executive Officer of the Westinghouse/CBS Radio Group. In exercising the
functions of such office, Mr. Karmazin will be responsible for and have full
authority to manage
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all owned and operated radio stations and other radio-related activities of the
Westinghouse/CBS Radio Group.
The Employment Agreement provides for an employment term of four years
commencing at the Effective Time, and for a starting annual salary of $925,000,
which annual salary will be subject to merit review and annual increases (but
not decreases) at the sole discretion of the Compensation Committee of the
Westinghouse Board (the "Westinghouse Compensation Committee"). The Employment
Agreement further provides that Mr. Karmazin will have the opportunity to
receive annual incentive bonuses based on the performance of the
Westinghouse/CBS Radio Group and to defer payment of any such bonuses under the
Westinghouse deferral program. The target amount of such annual incentive bonus
for each full calendar year during the employment term will be $1,500,000, with
a range of $900,000 to $2,625,000; however, no amounts shall be payable to Mr.
Karmazin under this provision of the Employment Agreement unless the minimum
performance standards as determined by the Westinghouse Compensation Committee
for any such year have been met. The Employment Agreement also provides that
promptly following the Effective Time, Mr. Karmazin will be granted options to
acquire 500,000 shares of Westinghouse Common Stock, with an exercise price
equal to the per share fair market value of Westinghouse Common Stock on the
date of grant, representing a one-time-only grant of options for the four-year
term of the Employment Agreement. Of such options, 250,000 will generally vest
one year from the date of grant, with the remainder generally vesting two years
from the date of grant.
The Employment Agreement provides that Mr. Karmazin's employment is
terminable for cause upon the occurrence of any (i) action involving willful
malfeasance or gross misconduct in connection with such employment having a
material adverse effect on Westinghouse, (ii) substantial and continuing refusal
to perform ordinary duties of a chief executive officer or (iii) felony
conviction.
In the event Mr. Karmazin is terminated without cause, Westinghouse would
be obligated to pay to Mr. Karmazin a lump sum in cash equal to the
compensation, including annual incentive compensation, that otherwise would have
been paid to Mr. Karmazin for the remainder of the term of the Employment
Agreement.
In addition to the Employment Agreement, it is understood by Westinghouse
and Infinity that prior to the Effective Time, Infinity will renew its
employment agreements, which expired on December 31, 1995, with each of Michael
A. Wiener and Gerald Carrus, on substantially the same terms and conditions as
such expired agreements, including terms of three years commencing the date of
the Effective Time and annual salaries of $250,000. Mr. Wiener is Co-Chairman of
the Infinity Board and is also Infinity's Secretary. Mr. Carrus is Chairman of
the Infinity Board and is also Infinity's Treasurer.
RESALE OF SHARES OF WESTINGHOUSE COMMON STOCK ISSUED IN THE MERGER; AFFILIATES
The shares of Westinghouse Common Stock to be issued in the Merger will be
freely transferable, except that shares issued to any Infinity stockholder who
may be deemed to be an "affiliate" (as defined under the Securities Act, and
generally including, without limitation, directors, certain executive officers
and beneficial owners of 10% or more of a class of capital stock) of Infinity
for purposes of Rule 145 under the Securities Act may be resold by them only in
transactions permitted by the resale provisions of Rule 145 or as otherwise
permitted under the Securities Act. The Merger Agreement provides that
Westinghouse's obligation to consummate the Merger is subject to Westinghouse
receiving, prior to the Closing Date, a letter agreement from each affiliate of
Infinity to the effect that such person will not offer or sell or otherwise
dispose of any shares of Westinghouse Common Stock issued to such person in or
pursuant to the Merger in violation of the Securities Act or the rules and
regulations promulgated thereunder. This Proxy Statement/Prospectus does not
cover resales of shares of Westinghouse Common Stock received by any person who
may be deemed to be an affiliate of Infinity.
Upon consummation of the Merger, certain merchant banking limited
partnerships that are affiliates of Lehman Brothers Inc. (collectively, the
"Lehman Investors"), will own an aggregate of 36,288,235 shares of Westinghouse
Common Stock, representing approximately 5% of the Westinghouse Common Stock
expected to be outstanding immediately after the Effective Time, based on the
Lehman Investors' aggregate ownership,
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as of September 20, 1996, of 1,116,256 shares of Infinity Class A Common Stock
and warrants to purchase an additional 20,104,934 shares of Infinity Class C
Common Stock, which warrants will be exchanged in the Merger for shares of
Westinghouse Common Stock.
Pursuant to a letter agreement, dated September 20, 1996, among the Lehman
Investors, Westinghouse and Infinity (the "Lehman Agreement"), the Lehman
Investors have agreed, subject to certain conditions, to cause the resignation
from the Infinity Board, prior to the date of mailing of this Proxy
Statement/Prospectus to Infinity's stockholders, of the two directors elected by
the holders of Infinity Class C Common Stock, and to take certain other actions
intended to ensure that the Lehman Investors are not deemed "affiliates" of
Infinity for purposes of Rule 145 under the Securities Act.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the principal Federal income tax
consequences of the Merger to holders of Infinity Common Stock and does not
purport to be a complete analysis or listing of all potential tax effects
relevant to a decision whether to vote in favor of approval and adoption of the
Merger Agreement and the transactions contemplated thereby. The discussion does
not reflect the individual tax position of any holder of Infinity Common Stock
and does not address the tax consequences that may be relevant to holders of
Infinity Common Stock with special tax status, including but not limited to
financial institutions, dealers in securities, holders that are not citizens or
residents of the United States, tax-exempt entities and holders that acquired
Infinity Common Stock upon the exercise of employee stock options or otherwise
as compensation. Moreover, the discussion does not address any consequences
arising under the laws of any state, locality or foreign jurisdiction. Finally,
the tax consequences to holders of stock options, deferred shares or warrants
are not discussed. The discussion is based on the Code, Treasury Regulations
thereunder and administrative rulings and court decisions as of the date hereof.
All of the foregoing are subject to change and any such change could affect the
continuing validity of this discussion. Holders of Infinity Common Stock are
urged to consult with their own tax advisors regarding the tax consequences of
the Merger to them, including the effects of Federal, state, local, foreign and
other tax laws.
Each of Cravath, Swaine & Moore, counsel to Westinghouse, and Debevoise &
Plimpton, counsel to Infinity, has delivered to Westinghouse and Infinity,
respectively, opinions, dated the date of this Proxy Statement/Prospectus, to
the effect that the Merger will constitute a reorganization within the meaning
of Section 368(a) of the Code and Westinghouse, Sub and Infinity will each be a
party to the reorganization within the meaning of Section 368(b) of the Code.
Such opinions assume that the Merger will take place as described in the Merger
Agreement and that certain factual matters represented by Westinghouse, Sub and
Infinity, which will be reconfirmed prior to the Closing Date, are true and
correct. It is a condition to the obligations of Westinghouse and Infinity to
consummate the Merger that each shall receive an opinion, dated the Closing
Date, confirming the previously received opinion described herein. Based upon
such opinions, the following will be the material Federal income tax
consequences of the Merger:
(i) no gain or loss will be recognized by the stockholders of Infinity
upon receipt of Westinghouse Common Stock in exchange for their Infinity
Common Stock, except that a holder of Infinity Common Stock who receives
cash in lieu of a fractional share of Westinghouse Common Stock will
recognize gain or loss equal to the difference between the amount of such
cash and the tax basis allocated to such stockholder's fractional share of
Westinghouse Common Stock. Such gain or loss will constitute long-term
capital gain or loss if, at the Effective Time, such stockholder's Infinity
Common Stock is held as a capital asset and has been held for more than one
year;
(ii) the tax basis of the Westinghouse Common Stock received by the
stockholders of Infinity will be the same as the tax basis of such
stockholders' Infinity Common Stock exchanged therefor; and
(iii) the holding period of the Westinghouse Common Stock in the hands
of the Infinity stockholders will include the holding period of such
stockholders' Infinity Common Stock exchanged therefor, provided that such
Infinity Common Stock is held as a capital asset at the Effective Time.
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ANTICIPATED ACCOUNTING TREATMENT
The management of Westinghouse has assumed that the Merger would be
accounted for under the "purchase" method of accounting, in accordance with
generally accepted accounting principles. After the Merger, the results of
operations of Infinity will be included in the consolidated financial statements
of Westinghouse. On the date that the Merger becomes effective, the cost of the
Infinity acquisition to Westinghouse, based upon (i) the value of the shares of
Westinghouse Common Stock exchanged for Infinity Common Stock, based on the
closing price of 18 7/8 on the last trading day prior to execution of the Merger
Agreement, and (ii) the costs incurred by Westinghouse related to the Merger,
will be allocated to the net assets of Infinity based upon their respective
estimated fair market values.
However, should certain specific criteria be met at the Effective Time, the
Merger may qualify as a pooling of interests for accounting and financial
reporting purposes. Accordingly, the assets and liabilities of Westinghouse and
Infinity would be carried forward at their historical recorded bases. Results of
operations of the combined entity would include the results of both Infinity and
Westinghouse for the entire fiscal year in which the Merger occurs. The reported
balance sheet amounts and results of the separate corporations for prior periods
would be combined, reclassified and conformed, as appropriate, to reflect the
combined balance sheets and statements of operations for the new combined
entity.
The terms of the Merger, including the number of Infinity shares to be
exchanged for Westinghouse Common Stock, will be the same regardless of which
accounting method will be required.
REGULATORY REVIEWS AND APPROVALS
FCC Approval
FCC Regulation of Broadcast Stations; FCC Approval Process. Radio and
television broadcasting stations are subject to the jurisdiction of the FCC
under the Communications Act. The Communications Act prohibits the operation of
broadcasting stations except under licenses issued by the FCC. The
Communications Act further prohibits the assignment of a broadcast station
license or the transfer of control of a broadcast station licensee without the
prior approval of the FCC. Infinity (through subsidiaries) is the owner or
operator of 44 radio broadcasting stations and is in the process of acquiring
two additional radio broadcast station licenses in the Chicago market and
divesting three of its existing licenses in the Orlando market. Because the
Merger will result in the transfer of control of Infinity for the purposes of
the Communications Act, the prior approval of the FCC is necessary before the
Merger may be consummated.
Upon the filing of an application for consent to the transfer of control of
a broadcast station licensee, the FCC will issue an official public notice of
the filing of the application. Interested parties have a period of 30 days
following issuance of the public notice in which to petition to deny such
application. Applications for approval of the transfer of control of Infinity to
Westinghouse were filed with the FCC on July 22, 1996. Public notice of the
filing was released by the FCC on July 25, 1996. Accordingly, any petitions to
deny the applications were required to be filed on or before August 26, 1996.
Petitions to deny the applications for approval of the transfer of control of
the Infinity radio stations were filed by three parties (two of which filed
jointly) which had previously opposed FCC approval of the Westinghouse/CBS
merger and/or CBS's 1995 acquisition of television station WGPR-TV (now WWJ-TV)
in Detroit, Michigan. Westinghouse and Infinity filed oppositions to the
petitions to deny on September 10, 1996. Applications relating to the transfer
of control of certain non-broadcast licenses held by Infinity either have been
or are in the process of being filed with the FCC.
In reviewing an application for its approval to transfer of control, the
FCC considers whether such transfer will serve the public interest, convenience
and necessity, as well as whether the proposed transferee has the requisite
legal, financial, technical and other qualifications to operate the licensed
entities. Following the grant of FCC approval with respect to such a transfer,
the transaction may be consummated by the parties. Any "person who is aggrieved
or whose interests are adversely affected" (as such terms are defined in Section
402(b) of the Communications Act) may appeal the FCC's approval of the transfer
to the United States Court of Appeals for the District of Columbia Circuit. In
addition, under certain circumstances, the
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FCC may reconsider such approval at the request of a third party or on its own
motion. In the event the parties determine to consummate the transaction prior
to the deadline for the filing of an appeal for reconsideration by the FCC on
its own motion or to the completion of any FCC or judicial review proceedings,
they assume the risk that the FCC's approval could be reversed or modified by
the FCC or a reviewing court.
Broadcast Station Ownership Restrictions. Pursuant to its authority under
the Communications Act, the FCC has promulgated rules that limit the ability of
individuals or entities to own or have "attributable" ownership interests in
broadcast stations, as well as in certain other mass media entities. The
recently enacted Telecommunications Act eliminated prior FCC restrictions on the
total number of radio stations in which one party or entity may have an
attributable interest on a national basis. On a local basis, depending on the
size of the local market, an individual or entity may have an attributable
interest in up to eight radio stations, no more than five of which are in the
same service (i.e., AM or FM) (the radio "contour overlap" or "duopoly" rule).
Further, the ownership of a television station and one or more radio stations in
the same market may be restricted by the FCC's "one-to-a-market" rule. Under the
FCC's current rules, the FCC will "look favorably" upon requests for waiver of
the one-to-a-market rule to permit common ownership of one AM, one FM, and one
television station in the same area if the stations to be commonly owned are
located in one of the 25 largest television markets and more than 30
independently owned broadcast "voices" would remain in the market after the
proposed transaction. In addition, waivers may be available on a more rigorous
case-by-case basis to permit the common ownership of a television station and
more than one AM and one FM station in the same market. In a pending rulemaking
proceeding, the FCC has requested comment on proposals to eliminate or relax the
requirements of the one-to-a-market rule. The results and timing of FCC action
in the pending rulemaking proceeding cannot be predicted at this time.
Planned Station Dispositions and Requests for Waivers of Multiple Ownership
Rules. If an acquisition will result in an acquirer having media holdings that
conflict with applicable ownership limits, the FCC may, in certain cases, grant
permanent waivers of the relevant rule. Alternatively, the FCC may grant
temporary waivers in order to afford the acquirer a reasonable period of time
following the consummation of the transaction to come into compliance with
applicable law and regulations through the disposition of certain properties or
otherwise.
Because Westinghouse already owns or controls a number of radio stations,
some of which are located in the same markets as radio stations owned by
Infinity, Westinghouse has advised the FCC in the application for FCC approval
of the transfer of control of Infinity of the parties' intention to dispose of
certain radio properties to achieve compliance with the local radio contour
overlap rule. In addition, because Westinghouse owns eight television stations
in markets in which Infinity owns radio stations, Westinghouse has requested
that the FCC issue certain waivers of its one-to-a-market rule to permit the
consummation of the Merger.
More specifically, assuming completion of each of Infinity's and
Westinghouse's pending acquisitions, the Merger would result in Westinghouse
owning 33 AM radio stations, 52 FM stations, and 18 television stations
(including three television stations operated as satellites of other stations
and a construction permit for an unbuilt television station). The Merger would
result in the common ownership in the Chicago, Illinois market of six FM and
four AM stations, and in the Dallas/Ft. Worth, Texas market of eight (including
Infinity's beneficial interest in one FM station held in trust) FM and three AM
stations, in each case in excess of the limits permitted under the FCC's radio
duopoly rule. In the application for FCC approval of the transfer of control of
Infinity, Westinghouse advised the FCC that either Westinghouse or Infinity
would divest its interests in a sufficient number of stations (at least one FM
station and one AM station in Chicago and at least two FM stations in Dallas/Ft.
Worth) through sales to or exchanges with third parties prior to or
contemporaneously with the consummation of the Merger, so that upon consummation
of the Merger, Westinghouse's combined radio holdings in those markets would
comply with the radio duopoly rule (as noted previously, Infinity is already
obligated to divest its interest in one FM station in the Dallas/Fort Worth
market, which divestiture is expected to occur prior to consummation of the
Merger). The sales or exchanges of the radio stations to be divested will
require the prior approval of the FCC. On August 26, 1996, Infinity announced
that it had entered into an agreement to sell WYSY(FM) in Chicago to Spanish
Broadcasting Systems, Inc. On September 11, 1996, Westinghouse announced that it
had entered into an agreement to sell WSCR(AM) in Chicago to John Douglas,
founder of Douglas Broadcasting and Chief Executive Officer of
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Personal Achievement Radio, Inc. Both of these transactions are contingent upon
consummation of the Merger. On September 26, 1996, Westinghouse announced that
it had reached an agreement with SFX Broadcasting, Inc. to exchange certain
radio stations. Westinghouse will exchange stations KTXQ(FM) and KRRW(FM) in
Dallas for SFX's WHFS(FM) station in Washington, D.C. On October 1, 1996,
Infinity announced that it had reached an agreement to sell KEWS(FM) in Dallas
to Salem Communications Corporation.
In addition, Westinghouse has requested that the FCC grant it temporary
waivers of the one-to-a-market rule in the eight instances in which Westinghouse
owns or controls a television station and would acquire radio stations from
Infinity (in the New York, Los Angeles, Chicago, Philadelphia, San Francisco,
Boston, Detroit, and Washington/Baltimore markets). In each such case,
Westinghouse has requested a temporary waiver extending until six months after
the FCC takes action in the pending rulemaking proceeding in which it is
considering elimination or relaxation of the one-to-a-market rule (or any
related or successor proceeding the FCC may initiate in light of the
Telecommunications Act). There can be no assurance that the FCC will grant the
requested temporary waivers, that such temporary waivers, if granted, will be
made permanent, or that divestiture of additional radio stations will not be
required to obtain FCC approval of the Merger or to achieve compliance with the
FCC's current or future broadcast station ownership restrictions.
In November 1995, the FCC approved the merger of CBS into Westinghouse. In
connection with its approval, the FCC granted Westinghouse permanent waivers of
the one-to-a-market rule (under the "Top 25 market/30 voices" standard) with
respect to the common ownership of the two companies' television and radio
broadcast stations in the Boston, Baltimore/Washington and Minneapolis,
Minnesota markets. In addition, the FCC granted Westinghouse temporary waivers
of the one-to-a-market rule (under the "case-by-case" standard), for a period
ending 12 months after the consummation of the Westinghouse/CBS merger, in those
markets in which Westinghouse and CBS (together) own a television station and
more than two radio stations (one AM and one FM)--i.e., New York, Los Angeles,
Chicago, Philadelphia, San Francisco and Detroit.
Four parties which had opposed approval of the Westinghouse/CBS merger
(and, in certain cases, CBS's prior acquisition of television stations WGPR-TV
in Detroit and/or WPRI-TV in Providence, Rhode Island) sought judicial review of
the FCC's decision approving that merger. One of those parties, Spectrum
Detroit, Inc., also filed a petition for reconsideration by the FCC. The
consolidated appeals and the petition for reconsideration of the FCC's approval
of the Westinghouse/CBS merger remain pending.
On March 8, 1996, Westinghouse filed with the FCC a petition for permanent
waivers of the one-to-a-market rule under the case-by-case standard to permit it
to retain all of the television and radio stations it currently owns and
operates in the New York, Los Angeles, Chicago, Philadelphia, San Francisco and
Detroit markets. The petition for permanent waivers, which was opposed by
Spectrum Detroit, Inc., remains pending before the FCC. Based on current FCC
policy and precedent, Westinghouse believes that the FCC will grant the
requested permanent waivers. If these permanent waivers are not granted, or if
the existing temporary waivers are not extended prior to their expiration in
November 1996, Westinghouse would be required to divest certain of its
television and/or radio properties.
License Grant and Renewal. Currently, television broadcasting licenses are
granted or renewed for a maximum period of five years and radio broadcasting
licenses for a maximum period of seven years. The FCC is considering the
adoption of rules to implement a provision of the Telecommunications Act which
allows licenses for television and radio stations to be issued for terms of up
to eight years. At the time an application is made for renewal of a television
or radio station license, parties in interest may file petitions to deny the
application, and such parties, including members of the public, may comment upon
the service the station has provided during the preceding license term. Under
the Telecommunications Act, broadcast licenses are required to be renewed by the
FCC if it finds that: (i) the station has served the public interest,
convenience and necessity; (ii) there have been no serious violations of either
the Communications Act or the FCC's rules and regulations by the licensee; and
(iii) there have been no other violations which, taken together, constitute a
pattern of abuse. If a station's application for license renewal is denied,
other parties may thereafter file applications for FCC authorization to operate
a new station on the same frequency.
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In the vast majority of cases, broadcast licenses are renewed by the FCC
even when petitions to deny are filed against license renewal applications.
Currently, Infinity (through subsidiaries) has pending applications for renewal
of the licenses of three radio stations (WXYT(AM), WOMC(FM) and WYCD(FM), in
Detroit, Michigan), which were filed on or about June 1, 1996. Petitions to deny
these applications were required to be filed with the FCC on or before September
1, 1996. To Infinity's knowledge, no such applications were filed. In addition,
applications to renew the licenses for Infinity's WJJD(AM), WJMK(FM) and
WUSN(FM), all in Chicago, Illinois, and for WYSY(FM), Aurora, Illinois, and
WCKG(FM), Elmwood Park, Illinois, which Infinity proposes to acquire, were filed
on or about August 1, 1996. Petitions to deny these applications must be filed
with the FCC on or before November 1, 1996. Infinity is not required to file any
other license renewal applications during the term of the Merger Agreement
except those for its Houston and Dallas/Ft. Worth radio stations, which must be
filed by April 1, 1997.
Applications for renewal of the licenses to operate certain of the radio
and television stations owned (through subsidiaries) by Westinghouse currently
are pending before the FCC. Specifically, an application for renewal of the
license to operate KYW-TV, Philadelphia, Pennsylvania was filed with the FCC on
March 31, 1994. Applications for renewal of the licenses of WJZ-TV, Baltimore,
Maryland and of WWJ(AM), WYST(FM) and WVMV(FM), Detroit, Michigan, were filed
with the FCC on June 3, 1996, and applications for renewal of the licenses of
WMAQ(AM), WSCR(AM), WXRT(FM), WMMB(AM) and WBBM-FM, Chicago, Illinois, were
filed with the FCC on August 1, 1996. Applications for renewal of the licenses
of several other radio and television stations owned by Westinghouse (through
subsidiaries) will be required to be filed with the FCC from time to time during
the period prior to the Effective Time.
Under normal procedures, the FCC will not grant its consent to the transfer
of control of a licensee that is in the process of obtaining a renewal of its
license. However, under certain circumstances, the FCC may permit a
multi-station transaction, such as the proposed Merger, to proceed while a
renewal application remains pending, provided the parties agree to accept the
consequences of any action the FCC may take on the renewal application.
Westinghouse and Infinity have requested, in the application for FCC approval of
transfer of control of Infinity, that the proposed transaction be approved on
this basis, notwithstanding the pendency of one or more applications for renewal
of licenses held by Infinity subsidiaries.
Antitrust Review
Under the HSR Act and the rules promulgated thereunder by the Federal Trade
Commission ("the FTC"), the Merger may not be consummated until notifications
have been given and certain information and materials have been furnished to the
Antitrust Division of the Department of Justice (the "Antitrust Division") and
the FTC and specified waiting period requirements have been satisfied. On July
23, 1996, Westinghouse and Infinity, as well as Westwood One and Mel Karmazin,
filed all appropriate Notification and Report Forms with the Antitrust Division
and the FTC with respect to the Merger. On July 30, 1996, the Antitrust Division
requested preliminary information from Westinghouse and Infinity, and
Westinghouse and Infinity were responsive to such request. On August 6, 1996,
the Antitrust Division requested other preliminary information from
Westinghouse, and Westinghouse responded to such request. On August 21, 1996,
the Antitrust Division issued a request to Westinghouse and Infinity for
additional information. The parties are in the process of responding to such
request. In addition, on August 21, 1996, the Antitrust Division issued a
request to Westwood One for additional information. Westwood One is in the
process of responding to such request. Under the HSR Act, the waiting period
will be extended until, and will expire at, 11:59 p.m. on the twentieth calendar
day after the date of substantial compliance by all parties with the Antitrust
Division's request. Only one extension of the waiting period pursuant to a
request for additional information is authorized by the HSR Act. Thereafter,
such waiting period may be extended only by court order or with the consent of
the parties. In practice, complying with a request for additional information
can take a significant amount of time. If, as a result of its investigation, the
Antitrust Division raises substantive issues in connection with the Merger, the
parties may engage in negotiations with the Antitrust Division concerning
possible means of addressing those issues and may agree to delay consummation of
the Merger pending the resolution of such negotiations. At any time, before or
after the Special Meetings, the Antitrust Division could take such action under
the antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin
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the Merger or seeking the divestiture of certain stations or other assets of
Westinghouse or its subsidiaries or of Infinity or its subsidiaries. See "Risk
Factors--Necessity of Governmental Reviews and Approvals Prior to the Merger;
Required Divestitures."
On August 23, 1996, the Antitrust Division issued a request to Infinity for
additional information in connection with Infinity's previously filed
Notification and Report Form relating to the proposed asset exchange between
Infinity and Cox Broadcasting, Inc. ("Cox"), whereby Infinity would acquire two
radio stations in the Chicago market and Cox would acquire three radio stations
in the Orlando market. Infinity is in the process of responding to such request.
On August 13, 1996, Westinghouse received a request from the Office of the
Attorney General for the State of New York for copies of the same materials
provided by Westinghouse to the Antitrust Division. On August 16, 1996,
Westinghouse agreed to provide such materials insofar as they relate to the
State of New York. Other state antitrust authorities may also bring legal action
under state or Federal antitrust laws. Such action could include seeking to
enjoin the consummation of the Merger or seeking divestiture of certain stations
or other assets of Westinghouse or Infinity. Private parties may also seek to
take legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Merger on antitrust grounds will not
be made or, if such a challenge is made, to the result thereof.
ABSENCE OF APPRAISAL AND DISSENTERS' RIGHTS
Under the PBCL, the stockholders of Westinghouse are not entitled to
dissenters' rights with respect to either the Charter Amendment or the Share
Issuance. Under the DGCL, the stockholders of Infinity are not entitled to
appraisal rights with respect to the approval and adoption of the Merger
Agreement and the transactions contemplated thereby.
STOCK EXCHANGE LISTING
It is a condition to the consummation of the Merger that the shares of
Westinghouse Common Stock constituting the Share Issuance be authorized for
listing on the NYSE, upon official notice of issuance.
DELISTING AND DEREGISTRATION OF INFINITY CLASS A COMMON STOCK
If the Merger is consummated, the Infinity Class A Common Stock will be
delisted from the NYSE and will be deregistered under the Exchange Act.
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THE MERGER AGREEMENT
The description of the Merger Agreement contained in this Proxy
Statement/Prospectus does not purport to be complete and is qualified in its
entirety by reference to the Merger Agreement, a composite conformed copy of
which is attached hereto as Annex I and incorporated herein by reference.
Certificate of Incorporation and By-Laws. The Merger Agreement provides
that the Infinity Charter, as in effect immediately prior to the Effective Time,
will become the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended, except that such certificate of incorporation
will 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 will have
authority to issue is 1,000 shares of common stock, par value $1.00 per share
(the "Common Stock").
ARTICLE FIVE
[Intentionally omitted]
ARTICLE SIX
[Intentionally omitted]".
The Infinity By-Laws will also become the by-laws of the Surviving
Corporation until thereafter changed or amended.
Directors and Officers. The directors of Sub immediately prior to the
Effective Time will become the directors of the Surviving Corporation until
their successors have been duly elected and qualified or until their earlier
resignation or removal. The directors of Sub currently are Michael H. Jordan,
Chairman and Chief Executive Officer of Westinghouse, Louis J. Briskman, Senior
Vice President and General Counsel of Westinghouse, and Fredric G. Reynolds,
Executive Vice President and Chief Financial Officer of Westinghouse. The
officers of Infinity immediately prior to the Effective Time will become the
officers of the Surviving Corporation until their successors have been duly
elected and qualified or until their earlier resignation or removal. In
addition, following the Effective Time, Mr. Mel Karmazin will become the
Chairman and Chief Executive Officer of the Westinghouse/CBS Radio Group. See
"THE MERGER-- Interests of Certain Persons in the Merger."
Conversion of Infinity Common Stock. Subject to the Merger Agreement's
provision that no fractional shares of Westinghouse Common Stock will be issued
in the Merger, each issued and outstanding share of Infinity Common Stock (other
than shares owned directly or indirectly by Infinity or Westinghouse, which will
be canceled) will be converted into the right to receive 1.71 fully paid and
nonassessable shares of Westinghouse Common Stock. As of the Effective Time, all
such shares of Infinity Common Stock will no longer be outstanding and will
automatically be canceled and retired and will cease to exist, and each holder
of a certificate representing any such shares of Infinity Common Stock will
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration and any cash in lieu of shares of Westinghouse Common Stock
to be issued or paid in consideration therefor upon surrender of such
certificate in accordance with the terms of the Merger Agreement, without
interest.
Fractional Shares. No fractional shares of Westinghouse Common Stock will
be issued in the Merger. Each holder of shares of Infinity Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Westinghouse Common Stock (after taking into
account all Certificates delivered by such holder) will receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Westinghouse Common Stock multiplied by the closing price of a share of
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Westinghouse Common Stock on the NYSE Composite Transactions List (as reported
by the Wall Street Journal or, if not reported thereby, any other authoritative
source) on the Closing Date.
Effective Time of the Merger. As soon as practicable on or after the
Closing Date, the parties to the Merger Agreement will file a Certificate of
Merger with the Secretary of State of the State of Delaware. The Merger will
become effective at such time as the Certificate of Merger is duly filed with
the Secretary of State of the State of Delaware or at such other time as Sub and
Infinity shall agree to specify in the Certificate of Merger. The Merger
Agreement may be terminated as discussed in "--Termination" below.
Substitution of Parties. The Merger Agreement provides that at the
election of Westinghouse, any direct or indirect wholly owned subsidiary of
Westinghouse may be substituted for Sub as a constituent corporation in the
Merger (subject to the parties executing an appropriate amendment to the Merger
Agreement). The Merger Agreement also provides that if at any time prior to the
Effective Time, Westinghouse creates the Holding Company, the Holding Company
will be substituted for Westinghouse for all purposes under the Merger Agreement
(subject to the parties executing an appropriate amendment to the Merger
Agreement).
Exchange of Infinity Common Stock. The Merger Agreement provides that the
exchange of shares of Infinity Common Stock in the Merger will be effected as
follows:
(i) as of the Effective Time, Westinghouse will deposit with such bank
or trust company as may be designated by Westinghouse (the "Exchange
Agent"), for the benefit of holders of shares of Infinity Common Stock,
certificates representing shares of Westinghouse 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 Westinghouse Common Stock, issuable, in exchange for outstanding
shares of Infinity Common Stock;
(ii) as soon as reasonably practicable after the Effective Time, the
Exchange Agent will mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of Infinity Common Stock (the "Certificates") whose
shares were converted into the right to receive the Merger Consideration, a
transmittal letter and instructions for use in effecting the surrender of
the Certificates for the Merger Consideration;
(iii) upon surrender of a Certificate for cancelation to the Exchange
Agent, together with a transmittal letter duly executed and any other
required documents, the holder of such Certificate will receive in exchange
therefor shares of Westinghouse Common Stock and cash in lieu of a
fractional share of Westinghouse Common Stock, and the surrendered
Certificate will be canceled; and
(iv) after the Effective Time, each outstanding, unsurrendered
Certificate will be deemed to represent only the right to receive upon such
surrender the Merger Consideration and cash, if any, into which such shares
of Infinity Common Stock will have been converted; however, the holders of
outstanding, unsurrendered Certificates after the Effective Time will not
be entitled to receive any dividends or distributions with respect to
Westinghouse Common Stock with a record date after the Effective Time
theretofore paid with respect to the shares of Westinghouse Common Stock
until such Certificates are surrendered, although any such dividends or
distributions will accrue and be payable to the holder, without interest,
upon surrender of the Certificate.
INFINITY STOCKHOLDERS SHOULD NOT FORWARD CERTIFICATES TO THE EXCHANGE AGENT
UNTIL THEY HAVE RECEIVED TRANSMITTAL LETTERS AND INSTRUCTIONS.
All shares of Westinghouse Common Stock issued and cash in lieu of
fractional shares paid upon surrender for exchange of Certificates will be
deemed to have been issued in full satisfaction of all rights pertaining to such
shares of Infinity Common Stock theretofore represented by such Certificates.
Representations and Warranties. The Merger Agreement includes various
customary representations and warranties of the parties thereto. The Merger
Agreement includes representations and warranties by Infinity as to, among other
things: (i) the organization, standing and corporate power of Infinity and its
subsidiaries; (ii) Infinity's capitalization; (iii) the authorization,
execution, delivery, performance and enforceability of the Merger Agreement and
related matters; (iv) the Merger Agreement's noncontravention of (A) the
Infinity
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Charter or the Infinity By-Laws, and (B) any agreement, judgment or law in any
manner which would have a material adverse effect on Infinity, materially impair
Infinity's ability to perform its obligations under the Merger Agreement or
materially delay the Merger; (v) the absence of the need (except as specified)
for governmental or other filings, consents, approvals or actions with respect
to the Merger Agreement and the transactions contemplated thereby; (vi)
documents filed by Infinity with the SEC and the accuracy of information
contained therein; (vii) the accuracy of information supplied by Infinity in
connection with this Joint Proxy Statement/Prospectus and the Form S-4; (viii)
the absence of certain material changes or events since the most recent audited
financial statements filed with the SEC, including any material adverse change
(as defined in the Merger Agreement), any declaration, setting aside or payment
of any dividend, any split, reclassification or combination of any of its
capital stock or any issuance or authorization of any issuance of any other
securities in lieu of, or in substitution for, shares of its capital stock, any
increases in compensation, severance or termination pay to its executive
officers and other key employees, except as required under existing agreements
or compensation increases in the ordinary course, any material damage or
destruction and certain changes in accounting methods, principles or practices;
(ix) the absence of material pending or threatened litigation, except as
disclosed; (x) the terms, existence, operations, liabilities and compliance with
applicable laws of Infinity's benefit plans and certain other matters relating
to the Employee Retirement Income Security Act of 1974, as amended; (xi) filing
of tax returns and payment of taxes; (xii) votes necessary to approve and adopt
the Merger Agreement and the transactions contemplated thereby; (xiii) approval
by the Infinity Board of the Merger Agreement and the Stockholder Agreement and
the inapplicability of Section 203 of the DGCL, relating to business
combinations with interested stockholders, to the Merger Agreement and the
transactions contemplated thereby; (xiv) labor relations; (xv) brokers' fees and
expenses; (xvi) receipt of an opinion from Infinity's financial advisor; (xvii)
compliance with applicable laws; (xviii) certain debt instruments and other
material contracts; and (xix) FCC licenses and the operations of licensed
facilities.
The Merger Agreement also includes representations and warranties by
Westinghouse and Sub as to, among other things: (i) the organization, standing
and corporate power of Westinghouse and Sub; (ii) the capitalization of
Westinghouse and Sub; (iii) the authorization, execution, delivery, performance
and enforceability of the Merger Agreement and related matters; (iv) the Merger
Agreement's noncontravention of (A) their articles or certificate of
incorporation or by-laws, and (B) any agreement, judgment or law in any manner
which would have a material adverse effect on Westinghouse, materially impair
Westinghouse's ability to perform its obligations under the Merger Agreement or
materially delay the Merger; (v) the absence of the need (except as specified)
for governmental or other filings, consents, approvals or actions with respect
to the Merger Agreement and the transactions contemplated thereby; (vi)
documents filed by Westinghouse with the SEC and the accuracy of information
contained therein; (vii) the accuracy of information supplied by Westinghouse in
connection with this Proxy Statement/Prospectus and the Form S-4; (viii) the
absence of certain material changes or events since the most recent audited
financial statements filed with the SEC, including any material adverse change,
any irregular declaration, setting aside or payment of any dividend, any split,
reclassification or combination of Westinghouse Common Stock or any issuance or
authorization of any issuance of any other securities in lieu of, or in
substitution for, shares of its capital stock or any material damage or
destruction; (ix) no material pending or threatened litigation; (x) brokers'
fees and expenses; (xi) operations of Sub; (xii) votes necessary to approve the
Charter Amendment and the Share Issuance; (xiii) filing of tax returns and
payment of taxes; (xiv) compliance with applicable laws; (xv) receipt of
opinions from Chase and Salomon; (xvi) FCC licenses and the operations of
licensed facilities; and (xvii) FCC qualifications.
Business of Infinity Pending the Merger. Infinity has agreed that, from
the date of the Merger Agreement to the Effective Time or earlier termination of
the Merger Agreement, it will, and it will cause its subsidiaries to, carry on
their respective businesses in the usual, regular and ordinary course in
substantially the same manner as conducted prior to the execution of the Merger
Agreement and in compliance in all material respects with all applicable laws
and regulations. Infinity has also agreed that from the date of the Merger
Agreement to the Effective Time, unless Westinghouse agrees in writing or as
otherwise permitted by the Merger Agreement, it will not, and it will not permit
any of its subsidiaries to, among other things: (i) (A) declare, set aside or
pay any dividends or other distributions on shares of its capital stock, other
than
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dividends by a wholly owned subsidiary to Infinity, (B) 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, (C) purchase, redeem or otherwise acquire any shares of its
capital stock; (ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, other than (A) upon the exercise of outstanding
Employee Stock Options, (B) the issuance of Infinity Class A Common Stock upon
conversion of Infinity Class B Common Stock and Infinity Class C Common Stock,
(C) upon the exercise of outstanding warrants of Infinity or (D) upon the grants
of options on Infinity Class A Common Stock (not to exceed 500,000 shares) to
persons other than executive officers in the ordinary course of business and
consistent with past practice; (iii) other than as contemplated by Infinity's
proxy statement dated May 14, 1996, amend the Infinity Charter or the Infinity
By-Laws; (iv) except as specified, make any material acquisition, enter into any
merger or acquire any broadcast radio stations (other than certain asset swaps,
which require only consultation with, and not approval of, Westinghouse); (v)
except as specified, sell, lease, license, mortgage or otherwise encumber or
dispose of (A) any material property or assets other than in the ordinary course
of business and consistent with past practice or (B) any broadcast radio
stations (other than certain asset swaps, which require only consultation with,
and not approval of, Westinghouse); (vi) except as specified, (A) 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 and consistent with past practice and except for intercompany
indebtedness, or (B) make any loans, advances or capital contributions to, or
investments in, any person, other than to Infinity or any of its wholly owned
subsidiaries or officers and employees for travel, business or relocation
expenses in the ordinary course of business; (vii) make any new capital
expenditures which in the aggregate are in excess of $5 million; (viii) make any
tax election that could reasonably be expected to have a material adverse effect
on Infinity 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 (as defined in the Merger Agreement)
on Infinity, modify, amend or terminate any material contract or agreement; (x)
make any material change to its accounting methods, principles or practices,
except as may be required by generally accepted accounting principles; or (xi)
authorize or agree to take any of the foregoing actions.
Business of Westinghouse Pending the Merger. Westinghouse has agreed that,
from the date of the Merger Agreement to the Effective Time, unless Infinity
agrees in writing or as otherwise permitted by the Merger Agreement, it will
not: (i) (A) declare, set aside or pay any dividends or other distributions on
shares of its capital stock other than regular quarterly cash dividends with
customary record and payment dates or (B) split, combine or reclassify any of
its capital stock or, except for the creation of a holding company as described
in the Merger Agreement, issue or authorize the issuance of any other securities
in lieu of or in substitution for shares of its capital stock; (ii) amend the
Westinghouse Charter or the Westinghouse By-Laws in a manner that would be
materially adverse to the holders of Westinghouse Common Stock; (iii) except as
specified, acquire or agree to acquire any broadcast radio stations (other than
certain asset swaps, which require only consultation with, and not approval of,
Infinity); (iv) except as specified, sell or otherwise dispose of any broadcast
radio station (other than certain asset swaps, which require only consultation
with, and not approval of, Infinity); or (v) authorize or agree to take any of
the foregoing actions.
Each of Westinghouse, Sub and Infinity has also agreed that, except as
specified, without the prior written consent of Infinity or Westinghouse, as the
case may be, neither Westinghouse or Sub, on the one hand, nor Infinity, on the
other hand, will take any action that could reasonably be expected to impair or
delay in any material respect obtaining the FCC Order or complying with or
satisfying the terms thereof.
No Solicitation. The Merger Agreement provides that Infinity will not, nor
will it permit any of its subsidiaries to, nor will it authorize or permit any
officer, director or employee of or any investment banker, attorney or other
advisor or representative of, Infinity or any of its subsidiaries to, directly
or indirectly, (i) solicit, initiate or encourage the submission of any takeover
proposal (as defined in the Merger Agreement), (ii) enter into any agreement
with respect to any takeover proposal or give any approval 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,
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however, that if at any time prior to receipt of the Infinity Stockholder
Approval, the Infinity Board 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 Infinity's stockholders under applicable law, Infinity may,
in response to an unsolicited takeover proposal that involves consideration to
Infinity's stockholders with a value that the Infinity Board reasonably
believes, after receiving advice from Infinity's financial advisor, is superior
to the consideration provided for in the Merger, furnish information with
respect to Infinity pursuant to a customary confidentiality agreement to any
person making such proposal and participate in negotiations regarding such
proposal. Under the terms of the Merger Agreement, Infinity is required to
inform Westinghouse promptly, 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 Merger Agreement provides that neither the Infinity Board nor any
committee thereof will (i) withdraw or modify, or propose to withdraw or modify,
in a manner adverse to Westinghouse, the approval or recommendation by the
Infinity Board or such committee thereof, of the Merger Agreement or the Merger
or (ii) approve or recommend, or propose to approve or recommend, any takeover
proposal except in connection with a superior proposal (as defined in the Merger
Agreement) and then only at or after the termination of the Merger Agreement as
described below under "--Termination."
Conditions to the Consummation of the Merger; Conditions to Each Party's
Obligation to Effect the Merger. The respective obligations of each of
Westinghouse, Sub and Infinity are subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions: (i) each of the Infinity
Stockholder Approval and Westinghouse Stockholder Approval will have been
obtained; (ii) subject to certain limitations, the FCC will have issued the FCC
Order 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 will have been obtained without the imposition of any condition or
restriction which would, among other things: (A) seek to prohibit or limit the
ownership or operation by Westinghouse, Infinity or any of their respective
subsidiaries of a material portion of their respective businesses or assets
taken as a whole as a result of the Merger, or to compel any party to dispose of
or hold separate any material portion of their respective businesses or assets;
(B) seek to impose limitations on Westinghouse's ownership of Infinity Common
Stock or capital stock of the Surviving Corporation, including the right to vote
such stock on matters properly presented to the stockholders of Infinity or the
Surviving Corporation, as the case may be; (C) seek to prohibit Westinghouse
from effectively controlling in any material respect the business or operations
of Infinity; or (D) otherwise reasonably be expected to have a material adverse
effect on Westinghouse or Infinity, in each case as is not acceptable to
Westinghouse in its sole discretion; (iii) no statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order of any court or other Governmental Entity preventing
consummation of the Merger will be in effect; (iv) the Form S-4 will have been
declared effective under the Securities Act and will not be the subject of any
stop order or proceedings seeking a stop order and Westinghouse will have
received all state securities or "blue sky" authorizations necessary to issue
the Westinghouse Common Stock issuable pursuant to the Merger Agreement; (v) the
shares of Westinghouse Common Stock issuable pursuant to the Merger Agreement,
and shares issuable upon exercise of any Infinity stock options or warrants will
have been approved for listing on the NYSE, subject to official notice of
issuance; and (vi) the waiting period under the HSR Act applicable to the Merger
will have expired or been terminated.
Conditions to the Obligations of Westinghouse and Sub. In addition to the
foregoing conditions, the obligations of Westinghouse and Sub to effect the
Merger are further subject to satisfaction or waiver of the following
conditions: (i) the representations and warranties of Infinity will be true and
correct as of the date of the Merger Agreement 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 Infinity; (ii) Infinity will
have performed in all material respects all obligations required to be performed
by it under the Merger Agreement at or prior to the Closing Date; (iii)
Westinghouse will have received an executed agreement from each "affiliate" of
Infinity for purposes of Rule 145 under the Securities Act; (iv) there will not
be pending or threatened by any Governmental Entity other than the FCC any suit,
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action or proceeding and there will not be pending by any other person any suit,
action or proceeding which has a reasonable likelihood of success, in each case
(A) challenging the acquisition by Westinghouse and Sub of any shares of capital
stock of Infinity or the Surviving Corporation, seeking to restrain or prohibit
the consummation of the Merger or any of the other transactions contemplated by
the Merger Agreement or the Stockholder Agreement or seeking to obtain from
Infinity, Westinghouse or Sub any damages that are material in relation to
Infinity and its subsidiaries taken as a whole, or Westinghouse and its
subsidiaries taken as a whole, as applicable or (B) which would fail to satisfy
clause (ii)(A)-(D) above under "--Conditions to the Consummation of the Merger;
Conditions to Each Party's Obligation to Effect the Merger"; (v) the Employment
Agreement will be in full force and effect and Westinghouse will 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
Westinghouse thereunder; (vi) Westinghouse will have received a tax opinion on
the date of this Proxy Statement/Prospectus and on the Closing Date, in each
case dated as of such respective dates, 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 Westinghouse, Sub and Infinity will each be
a party to that reorganization within the meaning of Section 368(b) of the Code;
and (vii) after giving effect to the Merger, Infinity will be in compliance with
the provisions of certain specified agreements.
Conditions to the Obligations of Infinity. In addition to the foregoing
conditions, the obligation of Infinity to effect the Merger is further subject
to satisfaction or waiver of the following conditions: (i) the representations
and warranties of Westinghouse and Sub set forth in the Merger Agreement will be
true and correct as of the date of the Merger Agreement 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 Westinghouse; (ii)
Westinghouse and Sub will have performed in all material respects all
obligations required to be performed by them under the Merger Agreement at or
prior to the Closing Date; and (iii) Infinity will have received a tax opinion
on the date of this Proxy Statement/ Prospectus and on the Closing Date, in each
case dated as of such respective dates, 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 Westinghouse, Sub and Infinity will each be
a party to that reorganization within the meaning of Section 368(b) of the Code.
Effect on Infinity Benefit Plans, Stock Options, Deferred Shares and
Warrants. The Merger Agreement provides that, except as described below, for a
period of one year immediately following the Closing, Westinghouse will, or will
cause the Surviving Corporation to, continue to maintain employee benefit plans,
programs and policies for the employees of Infinity and its subsidiaries which,
in the aggregate, provide benefits that are no less favorable than those
provided to them under Infinity's plans, programs and policies as of the date of
the Merger Agreement.
The Merger Agreement also provides that, among other things, (i) each
Employee Stock Option outstanding immediately prior to the Effective Time will,
at the Effective Time, 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 Westinghouse 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 Westinghouse Share
Amount"), at a price per share of Westinghouse Common Stock equal to (A) the
aggregate exercise price for the shares of Infinity Common Stock otherwise
purchasable pursuant to such Employee Stock Option divided by (B) the aggregate
Deemed Westinghouse Share Amount with respect to such Employee Stock Option;
provided that for any option to which Section 421 of the Code applies, the
option price, the number of shares purchasable pursuant to such option and the
terms and conditions of exercising such option will be determined in order to
comply with Section 424 of the Code; (ii) at the Effective Time, each Employee
Deferred Share outstanding immediately prior to the Effective Time will 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 Westinghouse Common
56
<PAGE> 62
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 Infinity
Common Stock covered by such Employee Deferred Share immediately prior to the
Effective Time; and (iii) all restrictions or limitations on vesting with
respect to Employee Stock Options held by Farid Suleman as of the date of the
Merger Agreement will lapse and be of no further effect from and after the
Effective Time. All other restrictions or limitations on transfer and vesting
with respect to Employee Stock Options will remain unchanged after the Merger.
The Merger Agreement also provides for the assumption of outstanding
warrants to purchase Infinity Common Stock by Westinghouse and the substitution
of Westinghouse Common Stock as the underlying stock in such warrants.
Indemnification, Exculpation and Insurance. The Merger Agreement provides
that all rights to indemnification and exculpation from liabilities for acts or
omissions occurring at or prior to the Effective Time existing at the date of
the Merger Agreement in favor of the current or former directors and officers of
Infinity and its subsidiaries as provided in their respective certificates of
incorporation, by-laws and indemnification agreements will continue in full
force and effect in accordance with their terms for at least six years from the
Effective Time. The Merger Agreement further provides that Westinghouse will
cause to be maintained for at least such six-year period Infinity's current
directors' and officers' insurance and indemnification policy to the extent such
policy provides coverage for events occurring prior to the Effective Time for
all persons who were directors and officers of Infinity on the date of the
Merger Agreement, provided that the annual premium for such policy does not
exceed 200% of the last annual premium paid prior to the date of the Merger
Agreement.
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after the Infinity Stockholder Approval or
the Westinghouse Stockholder Approval:
(i) by the mutual written consent of Westinghouse, Sub and Infinity;
(ii) by either Westinghouse or Infinity (a) if (1) either of the
Stockholder Approvals has not been obtained by reason of the failure to
obtain the required vote at the relevant Special Meeting or any adjournment
or postponement thereof; (2) the Merger has not been consummated on or
before June 30, 1997, subject to possible extension for up to 60 days under
certain circumstances (provided that such right to terminate will not be
available to any party whose willful and material breach of any obligation
under the Merger Agreement has been the cause of or resulted in the failure
of the Merger to be consummated on or before such date) or (3) any court or
other Governmental Entity has 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 becomes final and nonappealable, or (b) provided that the
terminating party is not then in material breach of the Merger Agreement,
if the other party breaches any of the representations, warranties,
covenants or other agreements made by such party in the Merger Agreement
and such breach is not or cannot be cured within 30 days following written
notice to the breaching party and such breach would entitle the non-
breaching party not to consummate the transactions contemplated by the
Merger Agreement; or
(iii) by Infinity if (a) the Infinity Board determines in good faith,
based on the advice of outside counsel, that it is necessary, in order to
comply with its fiduciary duties to Infinity's stockholders under
applicable law, to terminate the Merger Agreement to enter into an
agreement with respect to or to consummate a transaction constituting a
superior proposal; (b) Infinity gives notice to Westinghouse that it has
received a superior proposal and that it intends to terminate the Merger
Agreement; (c) either (1) Westinghouse fails to revise the terms of its
takeover proposal, or (2) if Westinghouse has revised the terms of such
proposal, the Infinity Board, after receiving advice from Infinity's
financial advisor, determines in its good faith reasonable judgment that
the third party's takeover proposal is superior to Westinghouse's revised
proposal; and (d) Infinity, at the time of such termination, reimburses
certain of Westinghouse's expenses and pays to Westinghouse a termination
fee, as described under "--Fees and Expenses" below.
57
<PAGE> 63
Fees and Expenses. Except for printing and mailing expenses and filing
fees relating to the Form S-4 and this Proxy Statement/Prospectus, which will be
shared equally, Westinghouse and Infinity will each pay its own costs and
expenses in connection with the Merger Agreement, the Stockholder Agreement and
the transactions contemplated thereby, whether or not the Merger is consummated.
The Merger Agreement also provides that Infinity will immediately pay to
Westinghouse the sum of (i) Westinghouse's reasonable expenses in connection
with the Merger Agreement and the transactions contemplated thereby in an amount
not to exceed $20 million and (ii) $100 million, upon demand, if (a) Infinity
terminates the Merger Agreement in response to a "superior proposal" as
described in paragraph (iii) under "--Termination" above; or (b) Westinghouse
terminates the Merger Agreement pursuant to paragraphs (ii)(a)(1) by reason of
the Infinity Stockholder Approval not being obtained or (ii)(b) under
"--Termination" above at any time after a takeover proposal (as defined in the
Merger Agreement) has been made and within one year after such termination, the
person that made the takeover proposal completes a merger, consolidation or
other business combination with Infinity or a significant subsidiary thereof, or
the purchase from Infinity or a significant subsidiary thereof of 20% or more
(in voting power) of the voting securities of Infinity or of 20% or more (in
market value or book value) of the assets of Infinity and its subsidiaries on a
consolidated basis.
Amendment. The Merger Agreement may be amended by the parties thereto by
an instrument in writing signed on behalf of each party at any time before or
after the Infinity Stockholder Approval or the Westinghouse Stockholder
Approval; provided, that after any such approval, no amendment can be made if
applicable law would require further approval by such stockholders, unless such
further approval is obtained.
Waiver. At any time prior to the Effective Time, the Merger Agreement
permits each party thereto to (in each case pursuant to a written instrument):
(i) extend the time for the performance of any of the obligations or other acts
of the other parties thereto; (ii) waive any inaccuracies in the representations
and warranties of the other parties contained therein or in any document
delivered pursuant thereto; and (iii) subject to the proviso contained in
"--Amendment" above, waive compliance by the other parties with any of the
agreements or conditions contained in the Merger Agreement.
58
<PAGE> 64
COMPARATIVE PER SHARE MARKET INFORMATION
Westinghouse Common Stock is traded on the NYSE, the CSE, the PSE, the BSE
and the PHSE under the symbol "WX". Infinity Class A Common Stock has been
traded on the NYSE, under the symbol "INF", since June 22, 1995, and prior to
such time, was quoted on the NASDAQ National Market System (the "NNMS"). The
following table sets forth, for the periods indicated, the range of the high and
low sales prices of Westinghouse Common Stock and Infinity Class A Common Stock,
as reported on the NYSE Composite Transactions Tape and, with respect to
Infinity Class A Common Stock, the NNMS for the period prior to June 22, 1995,
together with the per share dividends declared on the Westinghouse Common Stock.
Infinity has never declared or paid a cash dividend on shares of Infinity Common
Stock. See "COMPARISON OF THE RIGHTS OF WESTINGHOUSE AND INFINITY
STOCKHOLDERS--Dividend Rights." Infinity has effected four separate
three-for-two stock splits with respect to each class of Infinity Common Stock.
Such stock splits were effected on August 16, 1993, November 19, 1993, May 19,
1995 and April 11, 1996, respectively. The table below gives effect to such
stock splits.
<TABLE>
<CAPTION>
INFINITY
WESTINGHOUSE CLASS A
COMMON STOCK COMMON STOCK
----------------- -----------------
HIGH LOW DIVIDENDS HIGH LOW
------ ------ --------- ------ ------
<S> <C> <C> <C> <C> <C>
1993
First Quarter.................... $15.375 $13.25 $0.10 $ 6.17 $ 4.54
Second Quarter................... 16.00 14.25 0.10 8.30 6.03
Third Quarter.................... 17.00 13.00 0.10 14.30 9.04
Fourth Quarter................... 14.50 12.875 0.10 15.85 11.50
1994
First Quarter.................... $15.125 $12.00 $0.05 $15.00 $11.11
Second Quarter................... 13.125 11.00 0.05 12.45 9.00
Third Quarter.................... 14.125 11.50 0.05 14.67 10.67
Fourth Quarter................... 14.375 12.00 0.05 14.11 12.22
1995
First Quarter.................... $15.50 $12.50 $0.05 $19.11 $13.45
Second Quarter................... 16.00 14.00 0.05 25.00 17.22
Third Quarter.................... 15.375 13.00 0.05 25.09 19.59
Fourth Quarter................... 17.50 13.625 0.05 25.67 19.92
1996
First Quarter.................... $20.75 $17.125 $0.05 $31.00 $23.25
Second Quarter................... 20.125 17.75 0.05 31.875 25.625
Third Quarter .................... 18.75 15.50 0.05 31.875 24.25
Fourth Quarter...................
</TABLE>
Set forth below are the last reported sale prices of Westinghouse Common
Stock and Infinity Class A Common Stock on June 19, 1996, the last trading day
prior to the execution of the Merger Agreement, as reported on the NYSE
Composite Transactions Tape, and the equivalent pro forma sale price of Infinity
Class A Common Stock on such date, as determined by multiplying such last
reported sale price of Westinghouse Common Stock by the Conversion Number of
1.71:
<TABLE>
<S> <C>
Westinghouse Common Stock........................................................... $18.87
Infinity Class A Common Stock....................................................... $28.87
Infinity Equivalent................................................................. $32.28
</TABLE>
On September 30, 1996, the last trading day prior to the date of this Proxy
Statement/Prospectus, the last reported sale prices of Westinghouse Common Stock
and Infinity Class A Common Stock, as reported on the NYSE Composite
Transactions Tape, were $18 5/8 per share and $31 1/2 per share, respectively.
59
<PAGE> 65
UNAUDITED PRO FORMA FINANCIAL INFORMATION
INDEX TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Unaudited Pro Forma Combined Condensed Balance Sheet as of June 30, 1996 for
Westinghouse and Infinity 62
Unaudited Pro Forma Combined Condensed Statement of Operations for the Six Months
Ended June 30, 1996 for Westinghouse and Infinity 63
Unaudited Pro Forma Combined Condensed Statement of Operations for the Year Ended
December 31, 1995 for Westinghouse and Infinity 63
Notes to the Unaudited Pro Forma Combined Condensed Financial Statements 64
</TABLE>
60
<PAGE> 66
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial statements
are presented using the purchase method of accounting for all acquisitions by
Westinghouse and Infinity for the periods presented, including the Merger, and
reflect the combination of consolidated historical financial data of
Westinghouse and Infinity. However, the Merger will be accounted for as a
pooling of interests if certain specified criteria are met based on a review of
the facts and circumstances at the time the Merger is consummated.
The unaudited pro forma combined condensed balance sheet as of June 30,
1996 is presented as if the Merger had occurred on June 30, 1996. The unaudited
pro forma combined condensed statements of operations are presented as if the
following series of transactions had occurred on January 1 of each period
presented: (1) the acquisition by Westinghouse of CBS; (2) the acquisitions by
Infinity as described in Note 8 to the accompanying Notes to Unaudited Pro Forma
Combined Condensed Financial Statements; and (3) the Merger. In the opinion of
Westinghouse management all adjustments considered necessary for a fair
presentation of the pro forma data have been made.
These unaudited pro forma combined condensed financial statements should be
read in conjunction with the restated consolidated financial statements and
notes thereto for the year ended December 31, 1995 of Westinghouse included in
Westinghouse's Current Report on Form 8-K filed on September 19, 1996 and the
consolidated financial statements and notes thereto of Infinity included in the
1995 Infinity 10-K and Westinghouse's and Infinity's Quarterly Reports on Form
10-Q for the quarter ended June 30, 1996, which are incorporated by reference in
this Proxy Statement/Prospectus. See "INCORPORATION OF DOCUMENTS BY REFERENCE."
These unaudited pro forma combined condensed financial statements are presented
for illustrative purposes only and are not necessarily indicative of the
operating results or financial position that would have been achieved had the
Merger or the other acquisitions described above been consummated as of the
dates indicated or of the results that may be obtained in the future.
61
<PAGE> 67
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF JUNE 30, 1996 FOR WESTINGHOUSE AND INFINITY
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
WESTINGHOUSE INFINITY ADJUSTMENTS COMBINED
------------ -------- ----------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents........................ $ 157 $ 22 $ 179
Customer receivables............................. 1,511 149 1,660
Inventories...................................... 811 811
Uncompleted contracts costs over related
billings....................................... 699 699
Program rights................................... 314 4 318
Deferred income taxes............................ 656 656
Prepaid and other current assets................. 251 8 259
------- ------ ------ -------
Total current assets........................ 4,399 183 4,582
Plant and equipment, net......................... 1,850 41 18(3) 1,909
Intangible and other noncurrent assets........... 9,053 1,482 3,485(3) 14,020
------- ------ ------ -------
Total assets................................ $15,302 $1,706 $3,503 $20,511
======= ====== ====== =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
Revolving credit borrowings and other short-term
debt........................................... $ 1,768 $ 1,768
Current maturities of long-term debt............. 26 26
Accounts payable................................. 582 33 10(3) 625
Uncompleted contracts billings over related
costs.......................................... 383 383
Other current liabilities........................ 2,036 88 2,124
------- ------ ------ -------
Total current liabilities................... 4,795 121 10 4,926
Long-term debt................................... 3,649 1,137 4,786
Net liabilities of Discontinued Operations....... 64 64
Deferred income taxes............................ 81 81
Other noncurrent liabilities..................... 5,007 5,007
------- ------ ------ -------
Total liabilities........................... 13,515 1,339 10 14,864
------- ------ ------ -------
Minority interest in equity of consolidated
subsidiaries................................... 12 12
Shareholders' equity:
Preferred stock.................................. 4 4
Common stock..................................... 426 205(3) 631
Capital in excess of par value................... 1,820 598 (598)(3) 5,475
3,655(3)
Common stock held in treasury.................... (625) (65) 65(3) (625)
Minimum pension liability adjustment............. (1,050) (1,050)
Cumulative foreign currency translation
adjustments.................................... (10) (10)
Retained earnings................................ 1,210 (166) 166(3) 1,210
------- ------ ------ -------
Total shareholders' equity.................. 1,775 367 3,493 5,635
------- ------ ------ -------
Total liabilities and shareholders'
equity.................................... $15,302 $1,706 $3,503 $20,511
======= ====== ====== =======
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
62
<PAGE> 68
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 FOR WESTINGHOUSE AND INFINITY
<TABLE>
<CAPTION>
INFINITY, AS
WESTINGHOUSE ADJUSTED PRO FORMA PRO FORMA
(SEE NOTE 7) (SEE NOTE 8) ADJUSTMENTS COMBINED
------------- ------------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Sales of products and services............... $ 4,180 $ 338 $ 4,518
Costs of products and services............... (2,957) (227) (3,184)
Restructuring, litigation and other
matters.................................... (870) -- (870)
Marketing, administrative and general
expenses................................... (1,239) (49) (26)(4) (1,314)
Other income (expenses), net................. (139) (139)
Interest expense............................. (255) (42) (297)
------- ----- ------- -------
(Loss) income from Continuing Operations
before income taxes and minority interest
in income of consolidated subsidiaries..... (1,280) 20 (26) (1,286)
Income tax benefit (expense)................. 429 (21)(5) 408
Minority interest in income of consolidated
subsidiaries............................... (2) (2)
------- ----- ------- -------
(Loss) income from Continuing Operations..... $ (853) $ 20 $ (47) $ (880)
======= ===== ======= =======
(Loss) per common share from Continuing
Operations: (SEE NOTE 6)................... $ (1.94) $ (1.38)
======= =======
Average common and common stock equivalent
shares outstanding (in thousands): (SEE
NOTE 6).................................... 440,866 199,079 639,945
======= ======= =======
</TABLE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995 FOR WESTINGHOUSE AND INFINITY
<TABLE>
<CAPTION>
WESTINGHOUSE, INFINITY, AS
AS ADJUSTED ADJUSTED PRO FORMA PRO FORMA
(SEE NOTE 9) (SEE NOTE 8) ADJUSTMENTS COMBINED
------------- ------------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Sales of products and services................ $ 8,953 $ 657 $ 9,610
Costs of products and services................ (6,843) (419) (7,262)
Restructuring actions......................... (118) -- (118)
Marketing, administrative and general
expenses.................................... (2,207) (95) (51)(4) (2,353)
Other income (expenses), net.................. 184 (2) 182
Interest expense.............................. (710) (105) (815)
------- ----- ------- -------
(Loss) income from Continuing Operations
before income taxes and minority interest in
income of consolidated subsidiaries......... (741) 36 (51) (756)
Income tax benefit (expense).................. 255 (40)(5) 215
Minority interest in income of consolidated
subsidiaries................................ (11) (11)
------- ----- ------- -------
(Loss) income from Continuing Operations...... $ (497) $ 36 $ (91) $ (552)
======= ===== ======= =======
(Loss) per common share from Continuing
Operations: (SEE NOTE 6).................... $ (1.29) $ (0.96)
======= =======
Average common and common stock equivalent
shares outstanding (in thousands): (SEE NOTE
6).......................................... 410,138 199,058 609,196
======= ======= =======
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
63
<PAGE> 69
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(tables in millions, except share data)
(1) Basis of Presentation. The purchase method of accounting has been used in
the preparation of the accompanying unaudited pro forma combined condensed
financial statements. Under this method of accounting, the aggregate
purchase price is allocated to assets acquired and liabilities assumed based
on their estimated fair values. For purposes of the unaudited pro forma
combined condensed financial statements, the preliminary fair values of
Infinity's assets and liabilities were estimated by Westinghouse management
based primarily on information furnished by management of Infinity. The
final allocation of the purchase price will not be determined until after
the consummation of the Merger and will be based on a final evaluation of
the assets acquired and liabilities assumed of Infinity.
(2) Purchase Price Information
Pursuant to the Merger Agreement, each issued and outstanding share of
Infinity Common Stock will be converted into the right to receive 1.71
shares of Westinghouse Common Stock. The fair market value of Westinghouse
Common Stock is assumed to be $18.875 per share based on the closing price
on June 19, 1996 (the last trading day prior to the execution of the Merger
Agreement):
<TABLE>
<S> <C>
Estimated shares of Infinity Common Stock outstanding (assuming
conversion of all outstanding options, warrants and other stock
equivalents)........................................................... 119,599,566
Conversion Number........................................................ 1.71
-----------
Estimated shares of Westinghouse Common Stock to be issued in connection
with the Merger........................................................ 204,515,258
===========
Aggregate purchase price:
Estimated fair value of Westinghouse Common Stock to be issued in
connection with the Merger at $18.875 per share........................ $ 3,860
Investment advisors, legal, accounting and other professional fees....... 10
-----------
Aggregate purchase price................................................. $ 3,870
===========
</TABLE>
Adjustments to Unaudited Pro Forma Combined Condensed Balance Sheet
The accompanying unaudited pro forma combined condensed balance sheet as of June
30, 1996 assumes that the Merger was consummated on June 30, 1996 and reflects
the following pro forma adjustments:
(3) To record the aggregate purchase price of the Merger as described in Notes
(1) and (2) above and eliminate certain historical Infinity balances as
follows:
<TABLE>
<S> <C> <C>
Issuance of new Westinghouse equity (see Note 2) (204,515,258 shares
at $18.875) allocated as follows:
Common stock, $1.00 par value (204,515,258 shares)................. $ 205
Capital in excess of par value..................................... 3,655
Investment advisors, legal, accounting and other professional fees... 10
------
Aggregate purchase price (see Note 2)................................ 3,870
------
Less: Shareholders' equity of Infinity
Capital in excess of par value..................................... (598)
Accumulated deficit................................................ 166
Common stock held in treasury...................................... 65 (367)
----
Adjustment of plant and equipment to fair value...................... (18)
------
Adjustment to intangible assets...................................... $3,485
======
</TABLE>
64
<PAGE> 70
Adjustments to Unaudited Pro Forma Combined Condensed Statements of Operations
The accompanying pro forma combined condensed statements of operations have been
prepared as if the Merger, the acquisitions by Infinity (See Note 8) and the
acquisition of CBS by Westinghouse (See Note 9) occurred as of January 1, 1995
and reflect the following pro forma adjustments:
(4) Amortization of goodwill and other intangibles, which consist primarily of
FCC licenses, on a straight-line basis over periods ranging from 15-40 years
and depreciation of the step-up on fixed assets on a straight line basis
over five years, net of Infinity's amortization and depreciation, as
adjusted for the transactions described in Note 8 below.
(5) Income tax expense on the pro forma results of operations of Infinity and
the pro forma adjustments, excluding non-deductible amortization, at a 40%
rate.
(6) The average common and common stock equivalent shares outstanding used in
calculating pro forma earnings per share are calculated assuming the
estimated shares issued in connection with the Merger were outstanding from
January 1, 1995, reduced by the assumed repurchase of shares from the
exercise proceeds of options, warrants and other stock equivalents.
(7) The results of operations from Continuing Operations for Westinghouse for
the six months ended June 30, 1996 include special charges of approximately
$870 million related to restructuring projects, litigation, recoverability
of certain long-lived assets, divested businesses and environmental
remediation obligations. For additional information refer to the
Westinghouse Quarterly Report on Form 10-Q for the quarter ended June 30,
1996.
(8) The following pro forma combined condensed statements of operations for the
six months ended June 30, 1996 and the year ended December 31, 1995 are
presented as if, at the beginning of each such period, Infinity had
completed the acquisitions described below. Each of the acquisitions has
been accounted for under the purchase method of accounting:
- On April 21, 1995 radio station KLUV-FM was acquired for approximately
$51 million;
- On January 16, 1996 seven radio stations were acquired from various
entities affiliated with Alliance Broadcasting, L.P., for approximately
$275 million;
- On March 26, 1996 all of the outstanding common stock of TDI, a seller
of advertising space on buses and transit systems, was acquired for
approximately $300 million; and
- On June 27, 1996 the acquisition of twelve radio stations from Granum
Holdings, L.P. for approximately $425 million including working capital
was completed.
The purchase price for the above acquisitions was funded by borrowings
under Infinity's credit agreement and the issuance of approximately 2.4
million shares of Infinity Class A Common Stock.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 FOR INFINITY
<TABLE>
<CAPTION>
PRO FORMA INFINITY,
INFINITY ADJUSTMENTS AS ADJUSTED
-------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Sales of products and services.......................... $ 261 $ 77(a) $ 338
Costs of products and services.......................... (165) (62)(a) (227)
Administrative and general expenses..................... (40) (9)(b) (49)
Interest expense........................................ (25) (17)(c) (42)
----- ---- -----
Income (loss) before income taxes....................... 31 (11) 20
Income tax (expense) benefit............................ (1) 1(d) 0
----- ---- -----
Net income (loss)....................................... $ 30 $(10) $ 20
===== ==== =====
</TABLE>
65
<PAGE> 71
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995 FOR INFINITY
<TABLE>
<CAPTION>
PRO FORMA INFINITY,
INFINITY ADJUSTMENTS AS ADJUSTED
-------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Sales of products and services.......................... $ 326 $ 331(a) $ 657
Costs of products and services.......................... (167) (252)(a) (419)
Administrative and general expenses..................... (57) (38)(b) (95)
Other expenses, net..................................... (2) (2)
Interest expense........................................ (44) (61)(c) (105)
----- ----- -----
Income (loss) before income taxes....................... 56 (20) 36
Income tax (expense) benefit............................ (2) 2(d) 0
----- ----- -----
Net income (loss)....................................... $ 54 $ (18) $ 36
===== ===== =====
</TABLE>
Pro forma adjustments giving effect to the acquisitions described above in the
unaudited pro forma combined condensed statements of operations reflect the
following:
(a) Historical operating results of the acquired entities described above
from January 1 of each period through the end of the period presented or
the date of their respective acquisition, if sooner.
(b) Depreciation and amortization expense based on a preliminary allocation
of the purchase price for the acquired entities described above based on
the following: (1) FCC licenses, franchise costs and related intangibles
of approximately $229 million ($477 million for the year ended December
31, 1995) generally over periods of 40 years; (2) goodwill of
approximately $534 million over a period of 40 years; and (3) property
and equipment of approximately $20 million ($24 million for the year
ended December 31, 1995) over a period of 5 years.
(c) Additional interest expense of bank borrowings at an interest rate of
approximately 6.6% for the six months ended June 30, 1996 and
approximately 7.0% for the year ended December 31, 1995 to finance the
acquisitions described above.
(d) Change in deferred tax liability relating to the difference in book and
tax bases on fixed and intangible assets.
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(9) The following pro forma combined condensed statement of operations for the
year ended December 31, 1995 reflects the acquisition of CBS by Westinghouse
for an aggregate purchase price of $5,351 million. This acquisition has been
accounted for under the purchase method of accounting.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995 FOR WESTINGHOUSE
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA WESTINGHOUSE,
WESTINGHOUSE CBS ADJUSTMENTS AS ADJUSTED
------------ ---------- ----------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Sales of products and services.......... $ 5,923 $ 3,030 $ 8,953
Costs of products and services.......... (4,125) (2,719) $ 1(a) (6,843)
Restructuring actions................... (86) (32) (118)
Marketing, administrative and general
expenses.............................. (1,611) (568) (135)(b)(c) (2,207)
107(d)
Other income, net....................... 149 35 184
Interest expense........................ (237) (44) (429)(e) (710)
------- ------- ----- -------
(Loss) income from Continuing Operations
before income taxes and minority
interest in income of consolidated
subsidiaries.......................... 13 (298) (456) (741)
Income tax (expense) benefit............ (14) 128 141(f) 255
Minority interest in income of
consolidated subsidiaries............. (11) 0 0 (11)
------- ------- ----- -------
(Loss) from Continuing Operations....... $ (12) $ (170) $(315) $ (497)
======= ======= ===== =======
</TABLE>
Pro forma adjustments giving effect to the acquisition in the unaudited pro
forma combined condensed statement of operations reflect the following:
(a) Additional depreciation resulting from the step-up in value of property
and equipment acquired. Depreciation is provided on a straight-line
basis over periods ranging from 6 to 27.5 years.
(b) Amortization of identified intangible assets, including FCC licenses
and film libraries, on a straight-line basis over periods ranging from
23 to 40 years.
(c) Amortization of goodwill of approximately $4,794 million on a
straight-line basis over 40 years, net of elimination of CBS's
historical amortization of goodwill.
(d) Elimination of acquisition-related costs charged to the results of
operations of CBS.
(e) Increase in interest expense resulting from interest costs associated
with borrowings under Westinghouse's $7.5 billion credit agreement to
finance the acquisition of CBS and repay certain existing borrowings and
amortization of related debt issuance costs. Rate assumptions used for
these borrowings include an average LIBOR of 6.05% plus a 1.75% spread
for the period January 1 though the date of acquisition.
(f) Income tax effect of pro forma adjustments, excluding amortization of
non-deductible goodwill, at a 40% rate.
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DESCRIPTION OF INFINITY CAPITAL STOCK
Pursuant to the Infinity Charter, the total number of shares of capital
stock that Infinity has authority to issue is 348,500,000 shares, consisting of:
300,000,000 shares of Infinity Class A Common Stock, 77,126,390 of which were
issued and outstanding at September 20, 1996; 17,500,000 shares of Infinity
Class B Common Stock, 8,310,465 of which were issued and outstanding at such
date; 30,000,000 shares of Infinity Class C Common Stock, 1,116,257 of which
were issued and outstanding at such date; and 1,000,000 shares of Preferred
Stock, $.01 par value, none of which were issued or outstanding at such date.
Holders of shares of Infinity Common Stock are entitled to receive such
dividends as may be declared by the Infinity Board out of funds legally
available for such purpose. Holders of shares of Infinity Common Stock vote as a
single class on all matters submitted to a vote of the stockholders, with each
share of Infinity Class A Common Stock and Infinity Class C Common Stock
entitled to one vote and each share of Infinity Class B Common Stock entitled to
ten votes, except (i) for the election of directors, (ii) with respect to any
proposed "going private transaction" between Infinity and any Principal
Stockholder (or any affiliate thereof) and (iii) as otherwise provided by law.
In the election of directors, the holders of Infinity Class A Common Stock,
voting as a separate class, are entitled to elect two of Infinity's nine
directors and holders of Infinity Class C Common Stock, voting as a separate
class, are also entitled to elect two of Infinity's nine directors. The holders
of Infinity Common Stock, voting as a single class with each share of Infinity
Class A Common Stock and Infinity Class C Common Stock entitled to one vote, and
each share of Infinity Class B Common Stock entitled to ten votes, are entitled
to elect the remaining five directors. Holders of Infinity Common Stock are not
entitled to cumulative votes in the election of directors. Pursuant to the
Lehman Agreement, the Lehman Investors have agreed to cause, prior to the date
of mailing of this Proxy Statement/Prospectus to Infinity stockholders, the
resignation from the Infinity Board of the two directors most recently elected
by the holders of Infinity Class C Common Stock. It is not presently
contemplated that a meeting of Infinity stockholders will be called prior to the
Closing Date to elect successors to such resigning directors.
Upon the liquidation, dissolution or winding-up of Infinity, the holders of
Infinity Common Stock are entitled to share ratably in all assets available for
distribution after payment in full of creditors. No preemptive or subscription
rights are applicable to the Infinity Common Stock. Harris Trust Company of New
York is the Transfer Agent and Registrar for Infinity Class A Common Stock. See
"COMPARISON OF THE RIGHTS OF WESTINGHOUSE AND INFINITY STOCKHOLDERS."
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<PAGE> 74
DESCRIPTION OF WESTINGHOUSE CAPITAL STOCK
Under the Westinghouse Charter, Westinghouse is currently authorized to
issue 25,000,000 shares of preferred stock, par value $1.00 per share (the
"Preferred Stock") and 630,000,000 shares of Westinghouse Common Stock. As of
September 20, 1996, 421,508,058 shares of Westinghouse Common Stock and
3,600,000 shares of Series C Preferred Stock (as defined below) were issued and
outstanding. Assuming approval and adoption of the Charter Amendment,
Westinghouse will be authorized to issue 1,100,000,000 shares of Westinghouse
Common Stock.
Common Stock
Each holder of Westinghouse Common Stock is entitled to one vote per share
on all matters submitted to a vote of stockholders. In the election of
directors, no stockholder has cumulative voting rights. Each share of
Westinghouse Common Stock is entitled to share equally in dividends from sources
legally available therefor when, as, and if declared by the Westinghouse Board.
Upon liquidation or dissolution of Westinghouse, whether voluntary or
involuntary, each share of Westinghouse Common Stock is entitled to share
equally in the assets of Westinghouse available for distribution to the holders
of the Westinghouse Common Stock. No conversion or preemptive rights or
redemption or sinking fund provisions are applicable to the Westinghouse Common
Stock. The First Chicago Trust Company of New York (the "Trust Company") is the
Transfer Agent for the Westinghouse Common Stock, and is also Westinghouse's
Registrar.
Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or more
series with such designations, voting powers, dividend rights, rights of
redemption, conversion rights, other special rights, preferences and limitations
as may be stated in the resolutions providing for the issue of such shares of
Preferred Stock adopted by the Westinghouse Board.
Series C Preferred Stock. In March 1994, Westinghouse sold in a private
placement pursuant to Rule 144A of the Securities Act, 36,000,000 Depositary
Shares ("$1.30 Depositary Shares"), each of which represents ownership of
one-tenth of a share of Westinghouse's Series C Conversion Preferred Stock (the
"Series C Preferred Stock") deposited with the Trust Company as successor
Depositary, and entitles the owner to all of the proportionate rights,
preferences and privileges of the Series C Preferred Stock. The shares of Series
C Preferred Stock are referred to herein as Participating Equity Preferred Stock
(the "PEPS").
The PEPS rank senior to the Westinghouse Common Stock as to the payment of
dividends and distribution of assets upon liquidation.
Annual dividends are $1.30 per $1.30 Depositary Share (equivalent to $13.00
for each PEPS) and are payable quarterly in arrears on the first day of March,
June, September and December. Dividends are cumulative and must be declared by
the Westinghouse Board to be payable.
The PEPS have a liquidation preference equal to the sum of $144.40
(equivalent to a liquidation preference for each $1.30 Depositary Share of
$14.44) and all accrued and unpaid dividends thereon and no more.
The holders of PEPS will not have voting rights except as required by law
and except (i) with respect to certain amendments to the Westinghouse Charter
(such voting rights not being applicable to the Charter Amendment) and (ii) in
the event of the failure of Westinghouse to pay dividends on the PEPS for the
equivalent of six quarterly dividend periods, in which event the holders of the
PEPS (together with the holders of all other series of Westinghouse's Preferred
Stock entitled to vote thereon) will be entitled to elect two additional
directors to the Westinghouse Board until the default is cured.
Unless called on May 30, 1997 by Westinghouse or redeemed at any time prior
to June 1, 1997 by the holder, on June 1, 1997, each outstanding $1.30
Depositary Share will automatically convert into (i) one share of Westinghouse
Common Stock, as adjusted under certain circumstances, and (ii) the right to
receive on such date an amount in cash equal to all proportionate accrued and
unpaid dividends thereon or, in certain
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circumstances in lieu of cash dividends, a number of shares of Westinghouse
Common Stock equal to 110% of such cash amount divided by the market value of
the Westinghouse Common Stock as of the second trading day prior to the
mandatory conversion. If called by Westinghouse, each $1.30 Depositary Share
will convert into Westinghouse Common Stock at a rate not less than .885 per
share, as adjusted under certain circumstances. Dividends on the $1.30
Depositary Shares redeemed will be paid in cash on the date fixed for
redemption. If redeemed by the holder, each $1.30 Depositary Share will convert
into .885 of a share of Westinghouse Common Stock, as adjusted under certain
circumstances. Conversion of the outstanding $1.30 Depositary Shares (and the
PEPS) will also occur, among other things, upon certain mergers or
consolidations of Westinghouse.
Series A Preferred Stock--Rights Plan. In December 1995, the Westinghouse
Board adopted a Shareholder Rights Plan (the "Rights Plan")and in connection
therewith Westinghouse entered into the Westinghouse Rights Agreement. To effect
the Rights Plan, the Westinghouse Board declared a dividend distribution of one
Preferred Stock Purchase Right ("Right") on each outstanding share of
Westinghouse Common Stock on January 9, 1996. The Rights also attach to each
share of Westinghouse Common Stock issued after January 9, 1996. Each right
entitles the registered holder to purchase from Westinghouse one one-hundredth
of a share (subject to adjustment) of Series A Preferred Stock at a price (the
"Exercise Price") of $64.00 per one one-hundredth of a share (subject to
adjustment). As of the date hereof, there are no shares of Series A Preferred
Stock outstanding.
The Rights, unless earlier redeemed by the Westinghouse Board, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of Westinghouse (an "Acquiring Person") and (ii) the tenth business
day (or such later date as may be determined by the Westinghouse Board prior to
such time as any person or group affiliated or associated persons becomes an
Acquiring Person) after the date of the commencement or announcement of a
person's or group's intention to commence a tender or exchange offer the
consummation of which would result in the ownership of 30% or more of
Westinghouse's outstanding voting stock (even if no shares are actually
purchased pursuant to such offer); prior thereto, the Rights will not be
exercisable, will not be represented by separate certificates, and will not be
transferable apart from the Westinghouse Common Stock, but will instead be
evidenced, with respect to any of the Westinghouse Common Stock certificates
outstanding, by such Westinghouse Common Stock certificates. An Acquiring Person
does not include (A) Westinghouse, (B) any subsidiary of Westinghouse, (C) any
employee benefit plan, employee stock or deferral plan or director compensation
plan of Westinghouse or of any subsidiary of Westinghouse, or any trust or other
entity organized, appointed, established or holding Westinghouse Common Stock
for or pursuant to the terms of any such plan or (D) any person or group whose
ownership of 15% or more of the shares of voting stock of Westinghouse then
outstanding results solely from (i) any action or transaction or transactions
approved by the Westinghouse Board (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of an additional 1% or more of
Westinghouse's outstanding voting stock unless such acquisition of additional
voting stock will not result in such person or group becoming an Acquiring
Person by reason of such clause (i) or (ii)).
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on January 9, 2006, unless earlier redeemed by
Westinghouse as described below.
The Series A Preferred Stock is nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of preferred
stock, subordinate to any other series of Westinghouse's preferred stock,
including the Series C Preferred Stock. The Series A Preferred Stock may not be
issued except upon exercise of the Rights. Each share of Series A Preferred
Stock is entitled to receive when, as and if declared, a dividend in an amount
equal to (i) 100 times the per share amount of any cash dividend declared on the
Westinghouse Common Stock and (ii) a quarterly preferred cash dividend of $1.00
less the per share amount of all cash dividends declared on the preferred stock
pursuant to clause (i) of this sentence. In addition, Series A Preferred Stock
in entitled to 100 times any non-cash dividends (other than dividends payable in
equity securities or certain rights or warrants) declared on the Westinghouse
Common Stock, in like kind. In the
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event of the liquidation of Westinghouse, the holder of Series A Preferred Stock
will be entitled to receive, for each share of Series A Preferred Stock, a
payment in an amount equal to the greater of $100.00 or 100 times the payment
made per share of Westinghouse Common Stock. Each share of Series A Preferred
Stock has 100 votes, voting together with the Westinghouse Common Stock. In the
event of any merger, consolidation or other transaction in which Westinghouse
Common Stock is exchanged, each share of Series A Preferred Stock will be
entitled to receive 100 times the amount received per share of Westinghouse
Common Stock. The rights of Series A Preferred Stock as to dividends,
liquidation and voting are protected by anti-dilution provisions.
Unless the Rights are earlier redeemed or the transaction is approved by
the Westinghouse Board and the Continuing Directors (as defined in the
Westinghouse Rights Agreement), if Westinghouse at any time after the
Distribution Date were to be acquired in a merger or other fundamental
transaction (in which any shares of Westinghouse Common Stock are changed into
or exchanged for other securities or assets) or more than 50% of the assets or
earning power of Westinghouse and its subsidiaries (taken as a whole) were to be
sold or transferred in one or a series of related transactions, the Westinghouse
Rights Agreement provides that proper provisions will be made so that each
holder of record of a Right will from and after such date have the right to
receive, upon payment of the Exercise Price, that number of shares of common
stock of the acquiring company having a market value at the time of such
transaction equal to two times the Exercise Price. In addition, unless the
Rights are earlier redeemed, in the event that a person or group becomes the
beneficial owner of 15% or more of Westinghouse's voting stock (other than
pursuant to a tender or exchange offer (a "Qualifying Tender Offer") for all
outstanding shares of Westinghouse Common Stock that is approved by the
Westinghouse Board after taking into account the long-term value of Westinghouse
and all other factors they consider relevant in the circumstances), the
Westinghouse Rights Agreement provides that proper provisions will be made so
that each holder of record of a Right, other than the Acquiring Person (whose
Rights will thereupon become null and void), will thereafter have the right to
receive, upon payment of the Exercise Price, that number of shares of Series A
Preferred Stock having a market value at the time of the transaction equal to
two times the Exercise Price (such market value to be determined with reference
to the market value of the Westinghouse Common Stock as provided in the
Westinghouse Rights Agreement).
At any time on or prior to the close of business on the earlier of (i) the
tenth day after the time that a person has become an Acquiring Person (or such
later date as a majority of the Westinghouse Board and, if applicable, a
majority of the Continuing Directors may determine) or (ii) January 9, 2006,
Westinghouse may redeem the Rights in whole, but not in part, at a value of $.01
per Right, subject to adjustment (the "Redemption Price"). The Rights may be
redeemed after the time that any Person has become an Acquiring Person only if
approved by a majority of the Continuing Directors. Immediately upon the
effective time of the action of the Westinghouse Board authorizing redemption of
the Rights, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, Westinghouse may, except
with respect to the Redemption Price or date of expiration of the Rights, amend
the Rights in any manner, including an amendment to extend the time period in
which the Rights may be redeemed. At any time when the Rights are not then
redeemable, Westinghouse may amend the Rights in any manner that does not
materially adversely affect the interests of a holder of the Rights as such.
Amendments to the Westinghouse Rights Agreement from and after the time that any
person becomes an Acquiring Person require the approval of a majority of the
Continuing Directors.
Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of Westinghouse, including, without limitation, the right to vote or
to receive dividends.
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COMPARISON OF THE RIGHTS OF WESTINGHOUSE
AND INFINITY STOCKHOLDERS
The statements set forth under this heading with respect to the PBCL, the
DGCL, the Westinghouse Charter, the Westinghouse By-Laws, the Infinity Charter
and the Infinity By-Laws are brief summaries thereof and do not purport to be
complete; such statements are subject to the detailed provisions of the PBCL,
the DGCL, the Westinghouse Charter, the Westinghouse By-Laws, the Infinity
Charter and the Infinity By-Laws. See "AVAILABLE INFORMATION."
The following summary compares certain rights of the holders of
Westinghouse Common Stock to the rights of the holders of Infinity Common Stock.
The rights of Infinity stockholders are governed principally by the DGCL, the
Infinity Charter and the Infinity By-Laws. Upon consummation of the Merger, such
stockholders will become holders of Westinghouse Common Stock, and their rights
will be governed principally by the PBCL, the Westinghouse Charter and the
Westinghouse By-Laws.
DIVIDEND RIGHTS
Under the PBCL, a corporation is prohibited from making a distribution to
stockholders if, after giving effect thereto: (i) such corporation would be
unable to pay its debts as they become due in the usual course of its business;
or (ii) the total assets of such corporation would be less than the sum of its
total liabilities plus (unless otherwise provided in the Westinghouse Charter)
the amount that would be needed, if such corporation were then dissolved, to
satisfy the rights of stockholders having superior preferential rights upon
dissolution to the stockholders receiving such distribution. Under the DGCL, a
corporation may pay dividends out of surplus (defined as the excess, if any, of
net assets over capital) or, if no such surplus exists, out of its net profits
for the fiscal year in which such dividends are declared and/or for its
preceding fiscal year, provided, that dividends may not be paid out of net
profits if the capital of such corporation is less than the aggregate amount of
capital represented by the outstanding stock of all classes having a preference
upon the distribution of assets.
Holders of both Westinghouse Common Stock and Infinity Common Stock are
entitled to receive such dividends as may be declared by the Westinghouse Board
and the Infinity Board, respectively, out of funds legally available for such
purpose. With respect to Westinghouse, no dividends may be paid on shares of
Westinghouse Common Stock if dividends on Preferred Stock are in arrears. With
respect to Infinity, no dividends may be declared or paid in cash, property or
Infinity securities on any share of any class of Infinity Common Stock, however,
unless simultaneously the same dividend is declared or paid on each share of the
other classes of Infinity Common Stock. In the case of any stock dividend,
holders of a class of Infinity Common Stock shall be entitled to receive such
dividend at the same rate as each other class of Infinity Common Stock, except
that (i) holders of Infinity Class A Common Stock shall be entitled to receive
only shares of Infinity Class A Common Stock, (ii) holders of Infinity Class B
Common Stock shall be entitled to receive only shares of Infinity Class B Common
Stock and (iii) holders of Infinity Class C Common Stock shall be entitled to
receive only shares of Infinity Class C Common Stock. Infinity has never
declared or paid a cash dividend on shares of Infinity Common Stock, and does
not anticipate declaring or paying any dividends on shares of Infinity Common
Stock in the foreseeable future.
VOTING RIGHTS
Holders of Westinghouse Common Stock vote as a single class on all matters
submitted to a vote of the common stockholders, with each share entitled to one
vote. Except as otherwise provided by law, the Westinghouse Charter or the
Westinghouse By-Laws, matters submitted to a vote of the Westinghouse common
stockholders must be approved by a majority of the votes cast by the
Westinghouse common stockholders. Holders of Westinghouse Common Stock are not
entitled to cumulative votes in the election of directors.
The Westinghouse Charter provides that certain Business Combinations (as
defined in Article SIXTH of the Westinghouse Charter) involving an Interested
Stockholder (as defined in the Westinghouse Charter) require the affirmative
vote of the holders of at least 80% of the combined voting power of the then
outstanding
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shares of Westinghouse stock entitled to vote generally in an election of
directors ("Voting Stock") and the holders of at least a majority of the
combined voting power of the then outstanding shares of Voting Stock held by
Disinterested Stockholders (as defined in the Westinghouse Charter) unless such
transaction is approved by a majority of the Disinterested Directors (as defined
in the Westinghouse Charter) or meets certain "fair value" criteria set forth in
the Westinghouse Charter. Article SIXTH of the Westinghouse Charter also
provides that such Article cannot be amended without the same stockholder vote
described above to approve a Business Combination. The Westinghouse Charter also
provides that, in addition to any requirements of law, other provisions of the
Westinghouse Charter or the terms or provisions of any series of Preferred
Stock, the affirmative vote of holders of 80% or more of the outstanding Voting
Stock is required to take stockholder action to: (i) remove a director without
cause; (ii) adopt, amend, alter or repeal any provision of the Westinghouse
By-Laws, except that By-Law XVI (relating to employee stock option and purchase
plans) may be amended or altered by a majority vote of the outstanding Voting
Stock if a majority of the entire Westinghouse Board has first recommended the
amendment or alteration for approval by the Westinghouse stockholders; (iii)
amend, alter or repeal, or adopt any provision inconsistent with, Articles
SEVENTH (relating to the determination of the number, qualification, term of
office, compensation, powers and duties and classification of directors,
pursuant to the Westinghouse By-Laws, except as otherwise determined by the
terms of the Preferred Stock), EIGHTH (relating to the adoption, repeal,
alteration or amendment of the Westinghouse By-Laws by the Westinghouse Board)
or NINTH (relating to the stockholder vote required for stockholder action to
remove directors without cause and to adopt, amend, alter or repeal certain
provisions of the Westinghouse Charter or the Westinghouse By-Laws) of the
Westinghouse Charter or (iv) amend, alter or repeal or adopt any provision
inconsistent with any provision, other than Articles SIXTH (relating to
supermajority stockholder voting in respect of certain business combinations),
SEVENTH, EIGHTH or NINTH of the Westinghouse Charter, unless first recommended
and approved by a majority of the entire Westinghouse Board or, if there is an
Interested Stockholder, by a majority of the Disinterested Directors, in which
cases a majority vote of the outstanding Voting Common Stock is required.
Holders of Infinity Common Stock vote as a single class on all matters
submitted to a vote of stockholders, with each share of Infinity Class A Common
Stock and each share of Infinity Class C Common Stock entitled to one vote and
each share of Infinity Class B Common Stock entitled to ten votes, except (i)
for the election of directors, (ii) with respect to any proposed "going private
transaction" between Infinity and any of the Principal Stockholders (or their
affiliates) and (iii) as otherwise provided by law.
In the election of directors, the holders of Infinity Class A Common Stock
and Infinity Class C Common Stock, each voting as a separate class, are each
entitled to elect two of Infinity's nine directors. The holders of Infinity
Common Stock, voting as a single class, with each share of Infinity Class A
Common Stock and Infinity Class C Common Stock entitled to one vote and each
share of Infinity Class B Common Stock entitled to ten votes, are entitled to
elect, at the next regular stockholders meeting (or any special meeting called
for the purpose of electing directors), the remaining five directors. Holders of
Infinity Common Stock are not entitled to cumulative votes in the election of
directors.
In the event that all of the issued and outstanding shares of Infinity
Class C Common Stock are converted into shares of Infinity Class A Common Stock
in accordance with the Infinity Charter, the holders of the remaining shares of
the outstanding classes of Infinity Common Stock, voting as a single class, with
each share of Infinity Class A Common Stock entitled to one vote and each share
of Infinity Class B Common Stock entitled to ten votes, are entitled to elect
the directors previously elected by the holders of the Infinity Class C Common
Stock.
The holders of Infinity Common Stock vote as a single class with respect to
any proposed "going private transaction" between Infinity and any of the
Principal Stockholders (or their affiliates), with each share of Infinity Common
Stock entitled to one vote per share.
Under the DGCL, the affirmative vote of a majority of the outstanding
shares of any class of common stock is required to approve, among other things,
a change in the aggregate number of authorized shares of such class, the par
value of the shares of such class, or the powers, preferences or special rights
of the shares of such class in a manner adversely affecting such shares.
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DIRECTORS
Number and Election of Directors. Under both the PBCL and the DGCL, the
charter document or by-laws of a corporation may specify the number of
directors. The Westinghouse By-Laws currently provide that the Westinghouse
Board shall consist of not less than three nor more than twenty-four directors,
each serving for a term of one year, with the Westinghouse Board determining the
exact number of directors (subject to the rights of holders of Preferred Stock,
in certain circumstances, to elect two directors). The Westinghouse By-Laws also
provide that nominees for director be such that a majority of directors on the
Westinghouse Board, assuming the election of such nominees, would be Independent
Directors (as defined in the Westinghouse By-Laws). The Westinghouse Board may
fill vacancies and newly created directorships, subject to any rights of holders
of Preferred Stock.
The Westinghouse Charter provides that cumulative voting will not apply to
the election of directors. The Westinghouse By-Laws provide that, subject to the
rights of holders of Preferred Stock, nominations for directors can be made by
the Westinghouse Board or by any stockholder entitled to vote for the election
of directors at a stockholder meeting. Any such stockholder may nominate persons
for election as directors only if written notice of such holder's intent to make
such nomination at such meeting is received by the Secretary of Westinghouse in
the manner and within the time period specified in the Westinghouse By-Laws.
The Infinity By-Laws provide that the Infinity Board shall consist of five
directors, unless such number is modified by resolution of the Infinity Board.
The Infinity Board currently consists of nine members. Subject to applicable law
and the Infinity Charter, vacancies and newly created directorships may be
filled by the Infinity Board or by vote of the Infinity stockholders. Pursuant
to the Lehman Agreement, the Lehman Investors have agreed to cause the two
directors most recently elected by the holders of Infinity Class C Common Stock
to resign prior to the date of mailing of this Proxy Statement/Prospectus to
Infinity stockholders. See "DESCRIPTION OF INFINITY CAPITAL STOCK."
Fiduciary Duties of Directors. Under the PBCL, directors have a fiduciary
relationship to their corporation and, as such, are required to perform their
duties in good faith, in a manner they reasonably believe to be in the best
interests of such corporation, and with such care, including reasonable inquiry,
skill and diligence, as a person of ordinary prudence would use under similar
circumstances. In discharging their duties, directors may, in considering the
best interests of their corporation, consider the effects of any action upon
employees, suppliers and customers of such corporation, and upon communities in
which offices or other establishments of such corporation are located and all
other pertinent factors. Absent a breach of fiduciary duty, a lack of good faith
or self-dealing, any act of the board of directors, a committee thereof or an
individual director is presumed to be in the best interests of such corporation.
Under the DGCL, the business and affairs of a corporation are managed by or
under the direction of its board of directors. In exercising their powers,
directors are charged with an unyielding fiduciary duty to protect the interests
of the corporation and to act in the best interests of its stockholders. In
recognition of the managerial prerogatives granted to the directors of a
Delaware corporation, Delaware law presumes that, in making a business decision,
such directors are disinterested and act on an informed basis, in good faith and
in the honest belief that the action taken was in the best interests of such
corporation, which presumption is known as the "business judgment rule." A party
challenging the propriety of a decision of a board of directors bears the burden
of rebutting the applicability of the presumption of the business judgment rule
by demonstrating that, in reaching their decision, the directors breached one or
more of their fiduciary duties-- good faith, loyalty and due care. If the
presumption is not rebutted, the business judgment rule attaches to protect the
directors and their decisions, and their business judgments will not be
judicially second guessed. Where, however, the presumption is rebutted, the
directors bear the burden of demonstrating the entire fairness of the relevant
transaction. Notwithstanding the foregoing, Delaware courts subject directors'
conduct to enhanced scrutiny in respect of defensive actions taken in response
to a threat to corporate control and approval of a transaction resulting in a
sale of such control.
Liability of Directors. Both the PBCL and the DGCL permit a corporation to
limit the personal liability of its directors, with specified exceptions. The
PBCL permits a corporation to include in its by-laws a provision, adopted by
vote of its stockholders, which eliminates the personal liability of its
directors, as such,
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for monetary damages for any action taken or failure to take any action unless
(i) such directors have breached or failed to perform their duties as directors
and (ii) the breach or failure to perform constitutes selfdealing, willful
misconduct or recklessness. However, a Pennsylvania corporation is not empowered
to eliminate personal liability where the responsibility or liability of a
director is pursuant to any criminal statute or is for the payment of taxes
pursuant to any federal, state or local law. The Westinghouse Charter and the
Westinghouse By-Laws eliminate director liability to the maximum extent
permitted by the PBCL.
The DGCL permits a corporation to include in its certificate of
incorporation a provision limiting or eliminating the liability of its directors
to such corporation or its stockholders for monetary damages arising from a
breach of fiduciary duty, except for: (i) a breach of the duty of loyalty to the
corporation, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) a declaration of a
dividend or the authorization of the repurchase or redemption of stock in
violation of the DGCL or (iv) any transaction from which the director derived an
improper personal benefit. The Infinity Charter eliminates director liability to
the maximum extent permitted by the DGCL.
CALL OF SPECIAL MEETINGS
The PBCL permits a special meeting of stockholders to be called by the
board of directors or by such officers or other persons as may be provided in
the by-laws. The PBCL also permits such meetings to be called by stockholders
entitled to cast at least 20% of the votes entitled to be cast at the meeting.
However, as a company with a class of stock entitled to vote generally in an
election of directors registered under the Exchange Act (a "registered
corporation"), the stockholder portion of such provision is inapplicable to
Westinghouse (except in the context of stockholder approval of certain business
combinations with interested shareholders under Section 2555 of the PBCL). Under
the DGCL, a special meeting of the stockholders may be called by the board of
directors or such other person as may be authorized by the certificate of
incorporation or by-laws.
Special meetings of the stockholders of Westinghouse, subject to the rights
of holders of Preferred Stock, may be called only by the Westinghouse Board or
the Chairman of the Westinghouse Board. Special meetings of the stockholders of
Infinity may be called by the Chairman of the Infinity Board, the President of
Infinity, the Infinity Board or any officer designated by the Infinity Board. A
special meeting is also required to be called by the President or Secretary of
Infinity upon the written request of stockholders holding in the aggregate not
less than 25% of the shares of any class of Infinity capital stock then issued
and outstanding and entitled to vote at such special meeting.
ACTION BY STOCKHOLDERS WITHOUT A MEETING
Under the PBCL, stockholders of a registered corporation such as
Westinghouse may authorize an action without a meeting by less than unanimous
consent only if such action without a meeting is permitted by the corporation's
articles of incorporation. The Westinghouse Charter does not currently permit
such less than unanimous action by stockholders without a meeting. Under the
DGCL and the Infinity By-Laws, the holders of outstanding Infinity Common Stock
having not less than the minimum number of votes that would be necessary to
authorize or take a corporate action at a meeting at which all shares entitled
to vote thereon were present and voted may take such action by consenting to
such action in writing.
AMENDMENT TO CHARTER DOCUMENT
Under the PBCL, stockholders of a registered corporation such as
Westinghouse are not entitled to propose amendments to the articles of
incorporation of such corporation; any such amendment must be initiated by the
corporation's board of directors. Under the Westinghouse Charter, except as
provided in the PBCL or as described under "--Voting Rights," and subject to any
rights of Preferred Stock, any provision thereof may be amended by approval of
the Westinghouse Board and the affirmative vote of a majority of the outstanding
Voting Stock.
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Under the Infinity Charter and the DGCL, any provision of the Infinity
Charter may be amended by approval of the Infinity Board and the affirmative
vote of a majority of the combined voting power of the outstanding shares of
Infinity stock entitled to vote thereon.
AMENDMENT TO BY-LAWS
The Westinghouse By-Laws may be amended by the Westinghouse Board upon the
affirmative vote of a majority of the entire Westinghouse Board, or by the
Westinghouse stockholders upon the affirmative vote of the holders of 80% of the
Westinghouse stock entitled to vote thereon.
The Infinity By-Laws may be amended by resolution adopted by a majority of
the directors in office at any special or regular meeting of the Infinity Board,
except that the Infinity Board may not amend any provision of the Infinity
By-Laws with respect to the removal of directors or the filling of vacancies on
the Infinity Board. The Infinity By-Laws also may be amended at any regular or
special meeting of the Infinity stockholders, by the vote of a majority of the
combined voting power of the outstanding shares of Infinity Common Stock
entitled to vote thereon. Notwithstanding the preceding two sentences, no
provision of Article VI ("INDEMNIFICATION") of the Infinity By-Laws may be
amended other than by resolution adopted by the two-thirds vote of the directors
in office at any special or regular meeting of the Infinity Board, or at any
regular or special meeting of the Infinity stockholders upon the affirmative
vote of the holders of 75% or more of the outstanding shares eligible to vote at
such meeting.
APPROVAL OF MERGERS AND ASSET SALES
Under the PBCL, unless required by the by-laws of a constituent corporation
(the Westinghouse By-Laws contain no such requirement), stockholder approval is
not required for a plan of merger or consolidation if: (i)(A) the surviving or
new corporation is a domestic corporation whose articles of incorporation
(defined in the PBCL and hereinafter referred to as "Articles") are identical to
the Articles of such constituent corporation (except changes which may be made
without stockholder approval under the PBCL); (B) each share of such constituent
corporation outstanding immediately prior to the merger or consolidation will
continue as or be converted into (except as otherwise agreed to by the holder
thereof) an identical share of the surviving or new corporation; and (C) such
plan provides that the stockholders of such constituent corporation will hold in
the aggregate shares of the surviving or new corporation having a majority of
the votes entitled to be cast generally in an election of directors; (ii)
immediately prior to the adoption of such plan, another corporation that is a
party to such merger or consolidation owns directly or indirectly 80% or more of
the outstanding shares of each class of such constituent corporation; or (iii)
no shares of the constituent corporation have been issued prior to the adoption
of the plan of merger or consolidation by the board of directors pursuant to
Section 1922 of the PBCL. Under the PBCL, stockholder approval is required for
the sale, lease, exchange or other disposition (other than by means of a
distribution to stockholders or by a division) of all, or substantially all, of
the property and assets of a corporation when not made in the usual and regular
course of the business of such corporation or for the purpose of relocating the
business of such corporation or in certain transactions with subsidiaries. Under
the PBCL, stockholder approval is required for the division of a domestic
corporation into two or more domestic or foreign business corporations unless:
(i) the dividing corporation has only one class of shares outstanding and the
shares and other securities, if any, of each resulting corporation are
distributed pro rata to the stockholders of the dividing corporation; (ii) the
dividing corporation survives the division and all the shares and other
securities and obligations, if any, of the new corporations resulting from the
division are owned solely by the surviving corporation; or (iii) the transfer
effected by the division, if effected by means of a sale, lease, exchange or
other disposition, would not require stockholder approval. In cases where
stockholder approval is required, a merger, consolidation, division, sale,
lease, exchange or other disposition must be approved by a majority of the votes
cast by the holders of the securities entitled to vote thereon, unless the
corporation's articles require a higher vote.
Under the DGCL, unless required by its certificate of incorporation (the
Infinity Charter contains no such requirement), no vote of the stockholders of a
constituent corporation surviving a merger is necessary to authorize such merger
if: (i) the agreement of merger does not amend the certificate of incorporation
of such constituent corporation; (ii) each share of stock of such constituent
corporation outstanding prior to such
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merger is to be an identical outstanding or treasury share of the surviving
corporation after such merger; (iii) either no shares of common stock of the
surviving corporation and no shares, securities or obligations convertible into
such common stock are to be issued under such agreement of merger, or the number
of shares of common stock issued or so issuable does not exceed 20% of the
number thereof outstanding immediately prior to such merger; and (iv) certain
other conditions are satisfied. In addition, the DGCL provides that a parent
corporation that is the record holder of at least 90% of the outstanding shares
of each class of stock of a subsidiary may merge such subsidiary into such
parent corporation without the approval of such subsidiary's stockholders or
board of directors. Whenever the approval of the stockholders of a corporation
is required for an agreement of merger or consolidation or for a sale, lease or
exchange of all or substantially all of its assets, such agreement, sale, lease
or exchange must be approved by the affirmative vote of the holders of a
majority of outstanding shares of such corporation entitled to vote thereon;
provided, that under the DGCL, where a corporation's certificate of
incorporation provides for more or less than one vote per share on any matter,
the required vote is a majority of the combined voting power of the
corporation's stock. Thus, an agreement by Infinity for a merger or
consolidation, or the sale, lease or exchange by Infinity of all or
substantially all of its assets, must be approved by the affirmative vote of a
majority of the combined voting power of the outstanding shares of Infinity
Common Stock entitled to vote thereon.
RIGHTS OF APPRAISAL
The PBCL provides that stockholders of a corporation have a right of
appraisal (i.e., the right to dissent from a proposed corporate action and to
obtain payment of the judicially-determined "fair value" of their shares) with
respect to specified corporate actions, including: (i) certain plans of merger,
consolidation, division (within the meaning of Section 1951 of the PBCL), share
exchange (within the meaning of Section 1931 of the PBCL) or conversion (within
the meaning of Section 1961 of the PBCL); (ii) certain other plans or amendments
to its Articles in which disparate treatment is accorded to the holders of
shares of the same class or series; and (iii) certain sales or transfers of all
or substantially all of such corporation's assets. However, appraisal rights are
not provided to the holders of shares of any class or series that is either
listed on a national securities exchange or held of record by more than 2,000
stockholders (such as Westinghouse Common Stock) unless (i) such shares are not
converted solely into shares of the acquiring, surviving, new or other
corporation and cash in lieu of fractional shares; (ii) if such shares
constitute a preferred or special class of stock, the Articles of such
corporation, the corporate action under consideration or the express terms of
the transaction encompassed in such corporate action do not entitle all holders
of the shares of such class to vote thereon and require for the adoption thereof
the affirmative vote of a majority of the votes cast by all stockholders of such
class; or (iii) if such shares constitute a group of a class or series which are
to receive the same special treatment in the corporate action under
consideration, the holders of such group are not entitled to vote as a special
class in respect of such corporate action.
The DGCL provides for appraisal rights on the part of the stockholders of a
corporation only in the case of certain mergers or consolidations and not
(unless the certificate of incorporation of a corporation so provides, which the
Infinity Charter does not) in the case of other mergers, a sale or transfer of
all or substantially all of such corporation's assets or an amendment to such
corporation's certificate of incorporation. Moreover, the DGCL does not provide
for appraisal rights in connection with a merger or consolidation (unless the
certificate of incorporation so provides, which the Infinity Charter does not)
to the holders of shares of a constituent corporation listed on a national
securities exchange (or designated as a national market system security by the
National Association of Securities Dealers, Inc.) or held of record by more than
2,000 stockholders (such as Infinity Class A Common Stock), unless the
applicable agreement of merger or consolidation requires the holders of such
shares to receive, in exchange for such shares, any property other than shares
of stock of the resulting or surviving corporation, shares of stock of any other
corporation listed on a national securities exchange (or designated as described
above) or held of record by more than 2,000 holders, cash in lieu of fractional
shares or any combination of the foregoing. In addition, the DGCL denies
appraisal rights to the stockholders of the surviving corporation in a merger if
such merger did not require for its approval the vote of the stockholders of
such surviving corporation. See "--Approval of Mergers and Asset Sales."
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
The PBCL provides in general that a corporation may indemnify any person,
including its directors, officers and employees, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding (a "Proceeding"), whether civil, criminal, administrative or
investigative (other than actions by or in the right of the corporation) by
reason of the fact that he or she is or was a representative of or serving at
the request of the corporation, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or her in connection with the action or proceeding if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The PBCL permits similar indemnification in the case of actions by or
in the right of the corporation, provided that indemnification is not permitted
in respect of any claim, issue or matter as to which the person has been
adjudged to be liable to the corporation unless there is a judicial
determination that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for the expenses that the court
deems proper. In any case, to the extent that a representative of the
corporation has been successful on the merits or otherwise in defense of any
claim, issue or matter, he or she shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection therewith. The PBCL also provides that the indemnification permitted
or required by the PBCL is not exclusive of any other rights to which a person
seeking indemnification may be entitled; provided that indemnification may not
be made in any case where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness.
The Westinghouse Charter and the Westinghouse By-laws provide in effect
that, with respect to Proceedings based on acts or omissions on or after January
27, 1987, and unless prohibited by applicable law, Westinghouse will indemnify
directors and officers against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with any such Proceedings (subject to certain limitations in the
case of actions by such persons against Westinghouse) in which they were
involved by reason of representing Westinghouse or other entities at
Westinghouse's request. The Westinghouse Charter also provides that Westinghouse
will advance amounts to any director or officer during the pendency of any such
Proceedings against expenses incurred, provided that, if required by law,
Westinghouse receives an undertaking to repay such amounts if it is ultimately
determined that such person is not entitled to such indemnification. The
indemnification provided for in the Westinghouse Charter and the Westinghouse
By-Laws is in addition to any rights to which any director or officer may
otherwise be entitled. The Westinghouse By-Laws also provide that the right of a
director or officer to indemnification and advancement of expenses shall be a
contract right and further provides procedures for the enforcement of such
right.
Westinghouse has purchased directors' and officers' liability insurance
policies indemnifying its officers and directors and the officers and directors
of its subsidiaries against claims and liabilities (with stated exceptions) to
which they may become subject by reason of their positions with Westinghouse or
its subsidiaries as directors and officers.
The provisions of the DGCL regarding indemnification are substantially
similar to those of the PBCL. The Infinity Charter and the Infinity By-Laws
provide for indemnification of directors and officers of Infinity to the maximum
extent permitted under the DGCL. The Infinity By-Laws further provide for the
advancement of certain expenses in accordance with the DGCL, subject to certain
limitations, including the delivery of an undertaking to reimburse all amounts
so advanced to which a person is determined by a court not to be entitled.
ANTI-TAKEOVER PROVISIONS
Chapter 25 of the PBCL contains several anti-takeover provisions which
apply to "registered" corporations, including Westinghouse.
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Transactions with Interested Shareholders. Section 2538 of the PBCL
provides that if (i) an "interested shareholder" (as such term is defined in the
PBCL) of a "registered" corporation (together with others acting jointly or in
concert therewith and affiliates thereof) is to be a party to a merger or
consolidation, a share exchange or certain sales of assets involving such
corporation or a subsidiary thereof; (ii) such interested shareholder is to
receive a disproportionate amount of any of the securities of any corporation
surviving or resulting from a division of such corporation; (iii) such
interested shareholder is to be treated differently from others holding shares
of the same class in a voluntary dissolution of such corporation; or (iv) such
interested shareholder's percentage of voting or economic share interest in such
corporation is materially increased relative to substantially all other
shareholders in a reclassification; then the transactions being proposed must be
approved by the affirmative vote of the holders of shares representing at least
a majority of the votes that all shareholders (other than the interested
shareholder) are entitled to cast with respect to such transaction, excluding
all such voting shares beneficially owned by such interested shareholder. Such
special voting requirement does not apply if the transaction being proposed has
been approved in a prescribed manner by such corporation's board of directors or
certain other conditions (including the amount of consideration to be paid to
certain shareholders) are satisfied or the transaction involves certain
subsidiaries.
Section 2555 of the PBCL may apply to a transaction between a registered
corporation and an interested shareholder thereof, notwithstanding that Section
2538 is also applicable. Section 2555 prohibits such a corporation from engaging
in a "business combination" (as such term is defined in the PBCL) with an
interested shareholder unless: (i) the board of directors of such corporation
gives prior approval to the proposed transaction or gives prior approval to the
interested shareholder's acquisition of 20% of the shares entitled to vote in an
election of directors of such corporation, (ii) the interested shareholder owns
at least 80% of the stock of such corporation entitled to vote in an election of
directors and, no earlier than three months after such interested shareholder
reaches such 80% level, the majority of the remaining shareholders approve the
proposed transaction and shareholders receive a minimum "fair price" for their
shares in the transaction, and the other conditions of Section 2556 of the PBCL
are met, (iii) holders of all outstanding common stock approve the transaction,
(iv) no earlier than 5 years after the interested shareholder acquired the 20%,
a majority of the remaining shares entitled to vote in an election of directors
approve the transaction, or (v) no earlier than 5 years after the interested
shareholder acquired the 20%, a majority of all the shares approve the
transaction, all shareholders receive a minimum "fair price" for their shares
(as set forth in Section 2556 of the PBCL), and certain other conditions are
met.
Stockholder "Put" in Control Transactions. Under Sections 2542 through
2548 of the PBCL, when a person or group of persons acting in concert holds 20%
of the shares of a registered corporation entitled to vote in the election of
directors (a "control group"), on the occurrence of the transaction that makes
the group a control group, any other stockholder of the registered corporation
who objects can, under procedures set forth in the statute, require the control
group to purchase his or her shares at "fair value" as defined in the PBCL.
Certain Share Acquisitions. The PBCL also contains certain provisions
applicable to a "registered" corporation such as Westinghouse which, under
certain circumstances, permit a corporation to redeem Control Shares (as defined
in the PBCL), remove the voting rights of Control Shares and require the
disgorgement of profits by a Controlling Person (as defined in the PBCL). The
Westinghouse By-Laws expressly provide that each such provision shall not be
applicable to Westinghouse.
Section 203 of the DGCL applies to a broad range of business combinations
(as defined in the DGCL) between a Delaware corporation and an interested
stockholder (as defined). The DGCL definition of "business combination" includes
mergers, sales of assets, issuance of voting stock and certain other
transactions. An "interested stockholder" is defined as any person who owns,
directly or indirectly, 15% or more of the outstanding voting stock of a
corporation. The DGCL prohibits a corporation from engaging in a business
combination with an interested stockholder for a period of three years following
the date on which the stockholder became an interested stockholder, unless (i)
the board of directors approved the business combination before the stockholder
became an interested stockholder, or the board of directors approved the
transaction that resulted in the stockholder becoming an interested stockholder,
(ii) upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, such stockholder owned at least 85% of the
voting stock outstanding when the transaction began other than shares held by
directors
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who are also officers and by certain employee stock plans, or (iii) the board of
directors approved the business combination after the stockholder became an
interested stockholder and the business combination was approved at a meeting by
at least two-thirds of the outstanding voting stock not owned by such
stockholder.
RIGHTS OF INSPECTION
Under both the PBCL and the DGCL, every stockholder, upon proper written
demand stating the purpose thereof, may inspect the corporate books and records
during usual business hours as long as such inspection is for a proper purpose
and during normal business hours. Under both statutes, a "proper purpose" is any
purpose reasonably related to the interest of the inspecting person as a
stockholder.
LIQUIDATION RIGHTS
The rights of the holders of Westinghouse Common Stock upon the liquidation
or dissolution of Westinghouse are substantially the same as the holders of
Infinity Common Stock upon the liquidation or dissolution of Infinity. See
"DESCRIPTION OF INFINITY CAPITAL STOCK" and "DESCRIPTION OF WESTINGHOUSE CAPITAL
STOCK--Common Stock".
CASE LAW AND COURT SYSTEMS
There is a substantial body of case law in Delaware interpreting the
corporation laws of that state. A comparable body of judicial interpretation
does not yet exist in Pennsylvania. Delaware also has established a system of
Chancery Courts to adjudicate matters arising under the DGCL. In Pennsylvania,
matters arising under the PBCL are adjudicated by the general state courts. As a
result of these factors, there may be less certainty as to the outcome of
matters governed by the PBCL, and therefore it may be more difficult to obtain
legal guidance as to such matters, than would be the case under Delaware law.
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BUSINESS OF WESTINGHOUSE
Westinghouse is a diversified, global company which engages in a wide
variety of businesses through its Westinghouse/CBS Group and its Industries &
Technology Group. The Westinghouse/CBS Group combines the broadcasting
operations of CBS, which the Company acquired in 1995, and Group W Broadcasting.
The Industries & Technology Group provides services, fuel and equipment for the
nuclear energy market, services and equipment for the power generation market,
transport temperature control equipment, management services at government-owned
facilities, and communication and information systems. In addition, Westinghouse
has classified a number of businesses as Discontinued Operations. Included in
Discontinued Operations are financial services, which is being liquidated, and a
number of other businesses which are being sold. In March of 1996, Westinghouse
classified its environmental services line of business as Discontinued
Operations. See Westinghouse's Annual Report on Form 10-K for the year ended
December 31, 1995.
Westinghouse/CBS Group
The Westinghouse/CBS Group includes the CBS Television Network; CBS
Entertainment, News and Sports; the CBS Station Group; CBS Production and
Distribution; Group W Satellite Communications ("GWSC"); and CBS Telenoticias.
Through the CBS Television Network, the Westinghouse/CBS Group distributes
a comprehensive schedule of news and public affairs broadcasts, entertainment
and sports programming and feature films to over 200 independently-owned
affiliated stations and its 18 owned and operated television stations, which in
the aggregate serve the 50 states and the District of Columbia, and to certain
overseas affiliated stations. The CBS Television Network is responsible for
sales of advertising time for the CBS Television Network broadcasts and related
merchandising and sales promotion activities.
The CBS Entertainment division produces and otherwise acquires
entertainment series and other programs for all time periods, and acquires
feature films for distribution by the CBS Television Network for broadcast. The
CBS News division operates a worldwide news gathering and production
organization which produces regularly scheduled news and public affairs
broadcasts and special reports for the CBS Television and Radio Station Groups.
The CBS Sports division produces and otherwise acquires sports programs for
distribution by the television network for broadcast.
The CBS Station Group includes the CBS Television Station and the CBS Radio
Station Groups. The CBS Television Station Group operates and serves as national
sales representative for the 14 owned television stations. The larger markets
served by the owned television stations include New York, Los Angeles, Chicago,
Philadelphia, San Francisco and Boston. The CBS Radio Station Group operates 18
owned AM radio stations and 21 owned FM radio stations. The division also serves
as broadcast sales representative for independently owned AM and FM radio
stations and operates the CBS Radio Network, which serves approximately 585
affiliated stations nationwide.
CBS Production and Distribution produces and distributes syndicated and
off-network programming for the domestic and international marketplace.
GWSC is the Westinghouse/CBS Group's cable television programming,
satellite distribution and new media division. GWSC provides marketing and
advertising for two country music entertainment channels.
CBS Telenoticias, which was acquired by Westinghouse in June 1996, is the
world's leading Spanish-language news channel. It provides 24-hour
Spanish-language news services in Latin America and Spain and is distributed to
over 200 million homes in 22 countries.
Industries & Technology Group
The Industries & Technology Group consists of the following businesses:
Power Systems, Thermo King, Government Operations, Communication & Information
Systems, and Other Businesses.
Power Systems. The Power Systems segment consists of the Energy Systems
and Power Generation Business Units which together serve the worldwide market
for electrical power generation.
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The Energy Systems Business Unit primarily serves the worldwide nuclear
energy market through three major areas: operating plant, process control and
new plant. About 40% of the world's operating commercial nuclear power plants
incorporate Westinghouse technology. The business unit supplies a wide range of
operating plant services, ranging from performance based maintenance programs to
new products and services that enhance plant performance. It also has complete
capabilities for supplying customers with nuclear fuel for pressurized water
reactors. The business unit designs and develops process control systems for
nuclear as well as fossil-fueled power plants and industrial facilities. The
business unit is actively marketing new nuclear power plans and components for
new plants to the worldwide market. The business unit is also working with
government agencies and industry leaders to revitalize the nuclear energy
option, and is developing a simplified nuclear power plan design that
incorporates passive safety systems.
The Power Generation Business Unit designs, manufactures and services steam
turbine-generators for nuclear and fossil-fueled power plants and combustion
turbine-generators for natural gas and oil-fired power plants, and constructs
turnkey power plants worldwide. In addition to serving the electric utility
industry, the business unit supplies power generation equipment and independent
power producers and supplies power generation equipment and services to other
non-utility customers.
Thermo King. Thermo King Company manufactures a complete line of transport
temperature control equipment, including units and service parts for trucks,
trailers, seagoing containers, buses and rail cars, and it supplies mapping
software for the truck industry through its Innovating Computing Corporation
subsidiary.
Government Operations. Government Operations performs management services
at certain government-owned facilities and at U.S. naval nuclear reactors
programs.
Through certain subsidiaries and divisions of Westinghouse's Government
Operations, Westinghouse manages certain government-owned facilities under
contracts with the United States Department of Energy. The principal mission at
these sites is cleanup, waste management and the safe management of the nation's
nuclear materials inventory.
The government-funded U.S. naval nuclear reactors programs consist of
Westinghouse's Navy nuclear and technical support businesses.
Communication & Information Systems. The Communication and Information
Systems Company was formed in November 1995 to focus attention on a number of
smaller, yet high-potential businesses in the areas of security, network
communications and wireless communications.
Additional information concerning Westinghouse is included in the documents
incorporated by reference in this Proxy Statement/Prospectus. See "AVAILABLE
INFORMATION" and "INCORPORATION OF DOCUMENTS BY REFERENCE."
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BUSINESS OF INFINITY
Infinity is one of the largest owners and/or operators of radio stations in
the United States. Infinity currently owns and/or operates 44 radio stations
serving 13 of the nation's largest radio markets.
Historically, Infinity's overall strategy has been to acquire, develop and
operate radio stations in the nation's largest radio revenue markets. Infinity
believes that its presence in large markets makes it attractive to advertisers
and that the overall diversity of its stations reduces its dependence on any
single station, local economy or advertiser. Infinity also believes that by
serving major markets, it is able to attract highly skilled management,
employees and on-air talent.
In developing its stations, Infinity takes a variety of actions to improve
a station's operating cash flow (i.e., operating income plus depreciation and
amortization), including instituting strict financial reporting requirements and
cost controls, directing promotional activities, developing programming to
improve the station's appeal to a targeted audience group and enhancing
advertising sales efforts. In particular, Infinity emphasizes increasing local
advertising revenues in order to reduce dependence on national advertising
revenues.
The overall mix of a station's programming is designed to fit each
station's specific format and serve its local community. Infinity's overall
programming strategy includes acquiring significant on-air talent and sports
franchises for its radio stations. Infinity believes that this strategy, in
addition to developing loyal audiences for its radio stations, enables Infinity
to obtain additional revenues, including revenues from syndicating such
programming franchises to other radio stations. In addition to their regular
programming, all of Infinity's stations provide non-entertainment programming,
such as news and public affairs broadcasts.
In addition to its radio industry activities described above, Infinity
participates in the out-of-home media business through its wholly owned
subsidiary TDI, which Infinity acquired in March 1996. TDI is one of the largest
out-of-home media companies in the U.S., operating some 100 franchises, the
majority of which are in large metropolitan areas. TDI sells space on various
media including buses, trains, train platforms and terminals throughout commuter
rail systems, on painted billboards, on thirty-sheet billboards and on phone
booths. TDI also has the franchise to manage advertising space within the London
Underground and on certain London buses and has the exclusive rights to all
transit advertising in Ireland.
Infinity also has a minority equity investment in Westwood One, which it
manages pursuant to a management agreement. Westwood One is America's largest
producer and distributor of radio programming, and is the parent company of the
NBC Radio Networks Mutual Broadcasting System, and Westwood One Radio Networks.
Westwood One's award-winning News, Sports, Talk and Entertainment programming,
along with its 24-hour satellite formats and CNN Radio, air on over 6,000 radio
stations around the world. Infinity's affiliation with Westwood One enables it
to expand its presence in the radio program distribution business while
simultaneously enhancing the programming lineups of Westwood One.
Additional information concerning Infinity is included in the documents
incorporated by reference in this Proxy Statement/Prospectus. See "AVAILABLE
INFORMATION" and "INCORPORATION OF DOCUMENTS BY REFERENCE."
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EXPERTS
The consolidated financial statements of Westinghouse and its subsidiaries
incorporated in this Proxy Statement/Prospectus by reference to the restated
consolidated financial statements as of December 31, 1995 and 1994 and for each
of the three years in the period ended December 31, 1995 included in
Westinghouse's Current Report on Form 8-K dated September 19, 1995 have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements and consolidated financial statement
schedule of Infinity and subsidiaries as of December 31, 1995 and 1994 and for
each of the three-years in the period ended December 31, 1995, have been
incorporated by reference in this Proxy Statement/Prospectus in reliance on the
report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The consolidated financial statements of Alliance Broadcasting, L.P. and
its subsidiaries as of December 31, 1995 and 1994 and for each of the three
years ended December 31, 1995 incorporated in this Proxy Statement/Prospectus by
reference to the Current Report on Form 8-K/A of Infinity dated April 1, 1996,
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements of TDI and subsidiaries incorporated
in this Proxy Statement/ Prospectus by reference to the audited historical
consolidated financial statements as of December 31, 1995 and 1994 and for each
of the three years in the period ended December 31, 1995 included in Infinity's
Form 8-K/A dated May 15, 1996, have been so incorporated in this Proxy
Statement/Prospectus in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
auditing and accounting.
The combined financial statements of the operating subsidiaries of Granum
Holdings, L.P., incorporated in this Proxy Statement/Prospectus by reference to
Infinity's Form 8-K/A dated September 5, 1996 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, incorporated herein
by reference, and have been so incorporated in reliance on the report of such
firm given upon their authority as experts in accounting and auditing.
LEGAL OPINIONS
The validity of the shares of Westinghouse Common Stock being offered
hereby is being passed upon for Westinghouse by Louis J. Briskman, Esq. Mr.
Briskman beneficially owned [ ] shares of Westinghouse Common Stock as of
the Westinghouse Record Date (including [ ] shares issuable upon the
exercise of stock options that are exercisable within 60 days).
Cravath, Swaine & Moore, counsel to Westinghouse, and Debevoise & Plimpton,
counsel to Infinity, have delivered opinions concerning certain Federal income
tax consequences of the Merger. See "THE MERGER AGREEMENT --Conditions to the
Obligations of Westinghouse and Sub," "--Conditions to the Obligations of
Infinity" and "THE MERGER--Certain Federal Income Tax Consequences."
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<PAGE> 90
ANNEXES TO THE PROXY STATEMENT/PROSPECTUS
<TABLE>
<S> <C>
ANNEX I AGREEMENT AND PLAN OF MERGER DATED AS OF JUNE 20, 1996, AS AMENDED (COMPOSITE
CONFORMED COPY)
ANNEX II STOCKHOLDER AGREEMENT DATED AS OF JUNE 20, 1996, AS AMENDED (COMPOSITE
CONFORMED COPY)
ANNEX III OPINION OF CHASE SECURITIES, INC.
ANNEX IV OPINION OF SALOMON BROTHERS INC
ANNEX V OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
</TABLE>
<PAGE> 91
ANNEX I -- COMPOSITE
CONFORMED COPY*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
WESTINGHOUSE ELECTRIC CORPORATION,
R ACQUISITION CORP.
AND
INFINITY BROADCASTING CORPORATION
DATED AS OF JUNE 20, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* This Composite Conformed Copy reflects an amendment which was entered into on
September 20, 1996, relating to the treatment of warrants to purchase shares
of Infinity Class C Common Stock and certain other minor technical matters.
<PAGE> 92
TABLE OF CONTENTS
<TABLE>
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ARTICLE I
The Merger
SECTION 1.01. The Merger............................................................ I-1
SECTION 1.02. Closing............................................................... I-2
SECTION 1.03. Effective Time........................................................ I-2
SECTION 1.04. Effects of the Merger................................................. I-2
SECTION 1.05. Certificate of Incorporation and By-laws.............................. I-2
SECTION 1.06. Directors............................................................. I-2
SECTION 1.07. Officers.............................................................. I-2
ARTICLE II
Effect of the Merger on the Capital Stock of the Constituent
Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock............................................... I-3
SECTION 2.02. Exchange of Certificates.............................................. I-3
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company......................... I-5
SECTION 3.02. Representations and Warranties of Parent and Sub...................... I-13
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business................................................... I-18
SECTION 4.02. No Solicitation....................................................... I-20
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form S-4 and the Joint Proxy Statement;
Stockholders Meetings............................................... I-21
SECTION 5.02. Letters of the Company's Accountants.................................. I-21
SECTION 5.03. Letters of Parent's Accountants....................................... I-22
SECTION 5.04. Access to Information; Confidentiality................................ I-22
SECTION 5.05. Reasonable Efforts.................................................... I-22
SECTION 5.06. Stock Options; Warrants............................................... I-23
SECTION 5.07. Benefit Plans......................................................... I-25
SECTION 5.08. Indemnification, Exculpation and Insurance............................ I-25
SECTION 5.09. Fees and Expenses..................................................... I-25
SECTION 5.10. Public Announcements.................................................. I-25
SECTION 5.11. Affiliates............................................................ I-26
SECTION 5.12. NYSE Listing.......................................................... I-26
SECTION 5.13. Stockholder Litigation................................................ I-26
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation to Effect the Merger............ I-26
SECTION 6.02. Conditions to Obligations of Parent and Sub........................... I-27
SECTION 6.03. Conditions to Obligation of the Company............................... I-28
</TABLE>
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<TABLE>
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ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination........................................................... I-28
SECTION 7.02. Effect of Termination................................................. I-29
SECTION 7.03. Amendment............................................................. I-29
SECTION 7.04. Extension; Waiver..................................................... I-29
SECTION 7.05. Procedure for Termination, Amendment, Extension or Waiver............. I-30
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties......................... I-30
SECTION 8.02. Notices............................................................... I-30
SECTION 8.03. Definitions........................................................... I-31
SECTION 8.04. Interpretation........................................................ I-31
SECTION 8.05. Counterparts.......................................................... I-32
SECTION 8.06. Entire Agreement; No Third Party Beneficiaries........................ I-32
SECTION 8.07. Governing Law......................................................... I-32
SECTION 8.08. Assignment............................................................ I-32
SECTION 8.09. Enforcement........................................................... I-32
</TABLE>
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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 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.
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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]
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.
I-2
<PAGE> 96
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 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
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
I-3
<PAGE> 97
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 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.
(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
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<PAGE> 98
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 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 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
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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 outstanding warrants of the Company (the "Company Warrants") and (ix)
270,865 shares of Company Class A Common Stock and 37,988 shares of Company
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, and except for options that
may be granted as permitted under clause (z) of Section 4.01(a)(ii), 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 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(l)) 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
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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 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 .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 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
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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 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 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
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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, 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 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.
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(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; 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
trans-actions 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 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.
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(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 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.
(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 Company,
there is no activity involving any employees of the Company or any of its
subsidiaries seeking to certify a collective
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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.
(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.
(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,
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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 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 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
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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.
At the close of business on June 18, 1996, there were 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, at the close of
business on June 18, 1996, there were 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. At the close of business on June 18,
1996, there were 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 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 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
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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 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 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.
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(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 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 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 (the "Share Issuance"). The affirmative vote at the Parent
Shareholders Meeting of the holders of a majority of the votes cast is the
only vote of the holders of any class or series of Parent's capital stock
necessary to authorize, in accordance with the applicable rules of the
NYSE, the Share Issuance, provided that the total number of votes cast at
the Parent Shareholders Meeting with respect to the authorization of the
Share Issuance represents more than fifty percent of the outstanding shares
of Parent Common Stock entitled to vote generally in an annual election of
directors. (The above-described approval of the Charter Amendment and
authorization of the Share Issuance are referred to collectively herein as
the "Parent Shareholder Approval.")
(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
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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 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, and 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 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
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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, 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);
(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);
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(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 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; or
(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;
(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.
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(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 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 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).
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(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.
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).
(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
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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.
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 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).
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(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.
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 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
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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.
(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 to purchase shares of Company Class A Common Stock ("Company
Class A 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 Class A Warrants.
(g) Parent agrees at the Effective Time to exchange for each then
outstanding Company Warrant to purchase shares of Company Class C Common Stock
("Company Class C Warrants") a number of shares of Parent Common Stock equal to
(i) the number of shares of Parent Common Stock that would have been issuable to
the holder of such Company Class C Warrant pursuant to Section 2.01(c) had such
Company Class C Warrant been exercised, pursuant to the terms thereof and
immediately prior to the Effective Time, for shares of Company Class C Common
Stock, less (ii) the number of shares of Parent Common Stock having an aggregate
market value, determined by reference to the closing price of a share of Parent
Common Stock on the NYSE Composite Transactions List (as reported by the Wall
Street Journal or, if not reported thereby, any other authoritative source) on
the Closing Date, equal to the exercise price of such Company Class C Warrant;
provided, that the holder of a Company Class C Warrant entitled to receive
shares of Parent Common Stock pursuant to this Section 5.06(g) shall receive
cash in lieu of fractional shares of Parent Common Stock, in accordance with and
subject to the terms of Section 2.02(e). The shares of Parent Common Stock
issued in such exchange shall be duly authorized, validly issued, fully paid and
nonassessable.
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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 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 Agreement and the Stockholder Agreement shall
be in the form heretofore agreed to by the parties.
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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 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. Section 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-amarket" 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.
(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.
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(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
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 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
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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
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 Parent. 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.
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:
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(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 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 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
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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.
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
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Telecopy No.: (212) 909-6836
Attention: Richard D. Bohm, Esq.
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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 or
Parent, as applicable, 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 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 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
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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.
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 Federal court sitting in the State of
Delaware or a Delaware state court.
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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: Vice President
INFINITY BROADCASTING CORPORATION,
by /s/ Mel Karmazin
---------------------------------
Name: Mel Karmazin
Title: President and
Chief Executive Officer
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ANNEX II -- COMPOSITE
CONFORMED COPY*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STOCKHOLDER AGREEMENT
AMONG
WESTINGHOUSE ELECTRIC CORPORATION
AND
THE INDIVIDUALS AND OTHER PARTIES
LISTED ON SCHEDULE A HERETO
DATED AS OF JUNE 20, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* This Composite Conformed Copy reflects an amendment which was entered into on
September 20, 1996, relating to certain minor technical matters.
<PAGE> 128
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:
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 for this Agreement 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, 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
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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
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 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
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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
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 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
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<PAGE> 131
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 (A) 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 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 and/or
warrants 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
(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).
II-4
<PAGE> 132
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) 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 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.
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<PAGE> 133
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 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: Fredric G. Reynolds
Title: Executive Vice President
and Chief Financial Officer
II-6
<PAGE> 134
Stockholders:
GERALD CARRUS
By: /s/GERALD CARRUS
------------------------------------
Name: Gerald Carrus
Title:
JRSW PARTNERS, L.P.
By: /s/ GERALD CARRUS
------------------------------------
Name: Gerald Carrus
Title:
STEVEN D. CARRUS
By: /s/ STEVEN D. CARRUS
------------------------------------
Name: Steven D. Carrus
Title:
MICHAEL A. WIENER
By: /s/ MICHAEL A. WIENER
------------------------------------
Name: Michael A. Wiener
Title:
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<PAGE> 135
THE ZENA AND MICHAEL A. WIENER
FOUNDATION
By: /s/ MICHAEL A. WIENER
------------------------------------
Name: Michael A. Wiener
Title: Director & President
ZENA WIENER
By: /s/ ZENA WIENER
------------------------------------
Name: Zena Wiener
Title:
ZENA WIENER 1994 TRUST
By: /s/ ZENA WIENER
------------------------------------
Name: Zena Wiener
Title: Trustee
THE MICHAEL WIENER 1993 TRUST
By: /s/ MICHAEL A. WIENER
------------------------------------
Name: Michael A. Wiener
Title: Trustee
MEL KARMAZIN
By: /s/ MEL KARMAZIN
------------------------------------
Name: Mel Karmazin
Title:
II-8
<PAGE> 136
SCHEDULE A
<TABLE>
<CAPTION>
SHARES OF SHARES OF
CLASS A CLASS B OPTIONS AND
NAME COMMON STOCK 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
Michael A. Wiener -- 3,164,976 -- --
c/o Infinity Broadcasting
Corporation
600 Madison Avenue
New York, New York 10022
The Zena and Michael A. Wiener -- 63,000 -- --
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
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>
II-9
<PAGE> 137
[CHASE LETTERHEAD]
ANNEX III
June 19, 1996
Board of Directors
Westinghouse Electric Corporation
Westinghouse Building
11 Stanwix Street
Pittsburgh, PA 15222
Members of the Board:
You have informed us that Westinghouse Electric Corporation
("Westinghouse"), R Acquisition Corp. ("Sub") and Infinity Broadcasting
Corporation (the "Subject Company") propose to enter into an Agreement and Plan
of Merger dated as of June 19, 1996 (the "Merger Agreement"), which provides,
among other things, for the merger of Sub with and into the Subject Company (the
"Merger"), as a result of which the Subject Company will become a wholly-owned
subsidiary of Westinghouse. As set forth more fully in the Merger Agreement, as
a result of the Merger, each share of Class A Common Stock, Class B Common Stock
and Class C Common Stock, each par value of $.002 per share, of the Subject
Company (collectively, the "Subject Company Common Stock") will be converted
into the right to receive 1.71 shares (the "Exchange Ratio") of Common Stock,
par value $1.00 per share, of Westinghouse (the "Westinghouse Common Stock").
You have also informed us that the Merger is expected to be tax-free to each of
Westinghouse and the Subject Company and their respective shareholders.
You have requested that we render our opinion as to the fairness, from a
financial point of view, to Westinghouse of the Exchange Ratio in the Merger.
In arriving at the opinion set forth below, we have, among other things:
(a) reviewed a draft of the Merger Agreement in the form provided to us and
have assumed that the final form of such agreement will not vary in any
regard that is material to our analysis;
(b) reviewed certain publicly available business and financial information
that we deemed relevant relating to Westinghouse and the Subject
Company and the respective industries in which they operate;
(c) reviewed certain internal non-public financial and operating data
provided to us by the managements of Westinghouse and the Subject
Company relating to such businesses, including certain forecast and
projection information as to future financial results of such
businesses;
(d) discussed with members of Westinghouse's and the Subject Company's
senior managements, Westinghouse's and the Subject Company's
operations, historical financial statements and future prospects,
before and after giving effect to the Merger, as well as their views of
the business, operational and strategic benefits and other implications
of the Merger;
(e) compared the financial and operating performance of Westinghouse and
the Subject Company with publicly available information concerning
certain other companies we deemed comparable and reviewed the relevant
historical stock prices and trading volumes of the Westinghouse Common
Stock, the Subject Company Common Stock and certain publicly traded
securities of such other companies;
(f) reviewed the financial terms of certain recent business combinations
and acquisition transactions we deemed reasonably comparable to the
Merger and otherwise relevant to our inquiry; and
(g) made such other analyses and examinations as we have deemed necessary
or appropriate.
III-1
<PAGE> 138
We have assumed and relied upon, without assuming any responsibility for
verification, the accuracy and completeness of all of the financial and other
information provided to, discussed with, or reviewed by or for us, or publicly
available for purposes of this opinion. We have neither made nor obtained any
independent evaluations or appraisals of the assets or liabilities of
Westinghouse or the Subject Company, nor have we conducted a physical inspection
of the properties and facilities of Westinghouse or the Subject Company. We have
assumed that the financial forecast and projection information provided to us by
Westinghouse and the Subject Company have been reasonably determined on bases
reflecting the best currently available estimates and judgments of the
managements of Westinghouse and the Subject Company as to the future financial
performance of Westinghouse or the Subject Company, as the case may be. We
express no view as to such forecast or projection information or the assumptions
on which they were based.
For purposes of rendering our opinion we have assumed, in all respects
material to our analysis, that the representations and warranties of each party
contained in the Merger Agreement are true and correct, that each party will
perform all of the covenants and agreements required to be performed by it under
the Merger Agreement and that all conditions to the consummation of the Merger
will be satisfied without waiver thereof. We have also assumed that all material
governmental, regulatory or other consents and approvals will be obtained and
that in the course of obtaining any necessary governmental, regulatory or other
consents and approvals, or any amendments, modifications or waivers to any
documents to which either of Westinghouse or the Subject Company are party, as
contemplated by the Merger Agreement, no restrictions will be imposed or
amendments, modifications or waivers made that would have any material adverse
effect on the contemplated benefits to Westinghouse of the Merger.
Our opinion herein is necessarily based on market, economic and other
conditions as they exist and can be evaluated on the date of this letter. Our
opinion is limited to the fairness, from a financial point of view, to
Westinghouse of the Exchange Ratio in the Merger and we express no opinion as to
the merits of the underlying decision by Westinghouse to engage in the Merger.
This opinion does not constitute a recommendation to any Westinghouse
shareholder as to how such shareholder should vote with respect to the Merger or
the transactions related thereto.
Chase Securities Inc., as part of its financial advisory business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions and valuations for estate, corporate
and other purposes. We have acted as financial advisor to Westinghouse in
connection with the Merger and will receive a fee for our services, including
for rendering this opinion. In addition, Westinghouse has agreed to indemnify us
for certain liabilities arising out of our engagement. As we have previously
advised you, The Chase Manhattan Corporation and its affiliates, including Chase
Securities Inc., in the ordinary course of business, have, from time to time,
provided, and in the future may continue to provide, commercial and investment
banking services to Westinghouse and the Subject Company, including serving as
agent bank under Westinghouse's senior credit facility and serving as agent bank
under a senior credit facility for the Subject Company. In the ordinary course
of business, we or our affiliates may trade in the debt and equity securities of
Westinghouse and the Subject Company for our own accounts and for the accounts
of our customers and, accordingly, may at any time hold a long or short position
in such securities.
Based upon and subject to the foregoing, we are of the opinion, as of the
date hereof, that the Exchange Ratio in the Merger is fair, from a financial
point of view, to Westinghouse.
This opinion is for the use and benefit of the Board of Directors of
Westinghouse in its evaluation of the Merger and shall not be used for any other
purpose without the prior written consent of Chase Securities Inc.
Very truly yours,
CHASE SECURITIES INC.
III-2
<PAGE> 139
[SALOMON LETTERHEAD]
ANNEX IV
June 19, 1996
Board of Directors
Westinghouse Electric Corporation
Westinghouse Building
11 Stanwix Street
Pittsburgh, PA 15222-1384
Members of the Board:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to Westinghouse Electric Corporation, a
Pennsylvania corporation (the "Company"), of the exchange ratio (the "Exchange
Ratio") contemplated by the Agreement and Plan of Merger (the "Merger
Agreement") to be entered into in connection with the proposed merger (the
"Merger") of R Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of the Company, with and into Infinity Broadcasting Corporation, a
Delaware corporation ("Infinity"). Pursuant to the Merger Agreement, each issued
and outstanding share of (a) Class A Common Stock, par value $.002 per share, of
Infinity, (b) Class B Common Stock, par value $.002 per share, of Infinity and
(c) Class C Common Stock, par value $.002 per share, of Infinity (collectively,
the "Infinity Common Stock") will be converted into the right to receive 1.71
shares of common stock, par value $1.00, of the Company (the "Company Common
Stock"). In connection with the Merger, the Company and certain stockholders of
Infinity (the "Infinity Stockholders") also propose to enter into an agreement
(the "Stockholders' Agreement") pursuant to which each Infinity Stockholder will
agree, among other things, to vote its shares of Infinity Common Stock in favor
of the Merger.
In connection with rendering our opinion, we have reviewed and analyzed,
among other things, the following: (a) a draft dated June 19, 1996 of the Merger
Agreement; (b) a draft dated June 19, 1996 of the Stockholders' Agreement; (c)
certain publicly available information concerning the Company and Infinity,
including the Annual Reports on Form 10-K of the Company and Infinity for each
of the years in the three-year period ended December 31, 1995 and the Quarterly
Reports on Form 10-Q of the Company and Infinity for the quarter ended March 31,
1996; (d) certain financial information provided to us by the Company regarding
acquisitions made by Infinity in 1996; (e) certain financial forecasts
concerning the businesses and operations of the Company and Infinity that were
prepared by the management of the Company; (f) certain information concerning
cost savings and synergies expected to result from the Merger that was prepared
by the management of the Company; (g) certain publicly available information
with respect to other companies that we believe to be comparable in certain
respects to Infinity and certain business segments of the Company and the
trading markets for such other companies' securities; and (h) certain publicly
available information concerning the terms of other acquisition transactions
that we believe to be comparable to the Merger. We have also met with certain
officers and employees of the Company and Infinity to discuss the foregoing,
including the past and current business operations, financial condition and
prospects of the Company and Infinity, respectively, and the cost savings and
synergies expected to result from the Merger, as well as other matters we
believe relevant to our inquiry. We have also considered such other information,
financial studies, analyses, investigations and financial, economic and market
criteria that we deem relevant.
In our review and analysis and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided to us or publicly available and have neither attempted
independently to verify nor assumed responsibility for verifying any of such
information. With respect to the financial forecasts of the Company and Infinity
and the cost savings and synergies expected to result from the Merger, we have
assumed that they have been reasonably prepared on bases reflecting the best
currently available estimates and judgments of management of the Company as to
the future financial performance of the Company or Infinity, as the case may be,
and such expected cost savings
IV-1
<PAGE> 140
and synergies, and we express no opinion with respect to such projections or
expected savings and synergies or the assumptions on which they are based. We
have not made or obtained or assumed any responsibility for making or obtaining
any independent evaluations or appraisals of any of the assets (including
properties and facilities) or liabilities of the Company or Infinity.
Our opinion necessarily is based upon conditions as they exist and can be
evaluated on the date hereof, and we assume no responsibility to update or
revise our opinion based upon circumstances or events occurring after the date
hereof. Our opinion does not address the Company's underlying business decision
to effect the Merger or constitute a recommendation to any holder of Company
Common Stock as to how such holder should vote with respect to the Merger.
As you are aware, we will receive a fee from the Company for our services
in connection with the Merger. Additionally, we have previously rendered certain
investment banking and financial advisory services to Infinity for which we have
received customary compensation. In addition, in the ordinary course of our
business, we may actively trade the securities of the Company and Infinity for
our own account and for the accounts of customers and, accordingly, may at any
time hold a long or short position in such securities.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Exchange Ratio is fair to the Company from a financial point of
view.
Very truly yours,
SALOMON BROTHERS INC
IV-2
<PAGE> 141
[MERRILL LYNCH LETTERHEAD]
ANNEX V
June 20, 1996
Infinity Broadcasting Corporation
Board of Directors
600 Madison Avenue
New York, NY 10022
Gentlemen:
Infinity Broadcasting Corporation (the "Company"), Westinghouse Electric
Corporation (the "Acquiror") and a wholly owned subsidiary of the Acquiror (the
"Acquisition Sub"), propose to enter into an Agreement and Plan of Merger (the
"Merger Agreement") pursuant to which the Company will be merged with the
Acquisition Sub in a transaction (the "Merger") in which each issued and
outstanding Class A, Class B and Class C share of the Company's common stock,
par value $.002 per share (collectively, the "Shares"), not owned directly or
indirectly by the Acquiror or the Company will be converted into the right to
receive such number of fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the Acquiror (the "Acquiror Shares") as provided in
the Merger Agreement (the "Merger Consideration"). In connection with the
Merger, certain individuals and trusts which hold Shares (the "Principal
Stockholders") and the Acquiror propose to enter into a Stockholder Agreement
(the "Stockholder Agreement") pursuant to which, among other things, the
Principal Stockholders will agree to vote their Shares in favor of the Merger.
You have asked us whether, in our opinion, the Merger Consideration is fair
from a financial point of view to the holders of the Shares, other than the
Acquiror and its affiliates.
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed the Company's Annual Reports, Forms 10-K and related financial
information for the five fiscal years ended December 31, 1995 and the
Company's Form 10-Q and the related unaudited financial information for
the quarterly period ending March 31, 1996;
(2) Reviewed the Acquiror's Annual Reports, Forms 10-K and related
financial information for the five fiscal years ended December 31, 1995
and the Acquiror's Form 10-Q and the related unaudited financial
information for the quarterly period ending March 31, 1996;
(3) Conducted discussions with members of the management of the Company
concerning its business and prospects and the potential synergies which
might be realized following the Merger;
(4) Conducted discussions with members of the management of the Acquiror
concerning its business and prospects and the recently announced
potential restructuring of the Acquiror;
(5) Reviewed the historical market prices and trading activity for the
Shares and the Acquiror Shares and compared them with those of certain
publicly traded companies which we deemed to be reasonably similar to
the Company and the Acquiror, respectively;
(6) Compared the results of operations of the Company and the Acquiror with
those of certain companies which we deemed to be reasonably similar to
the Company and the Acquiror, respectively;
(7) Reviewed the Merger Agreement and the Stockholder Agreement;
(8) Compared the proposed financial terms of the transactions contemplated
by the Merger Agreement with the financial terms of other mergers and
acquisitions which we deemed relevant;
(9) Considered certain pro forma financial effects of the Merger; and
V-1
<PAGE> 142
(10) Reviewed such other financial studies and analyses and performed such
other investigations and took into account such other matters as we
deemed necessary, including our assessment of general economic, market
and monetary conditions.
In preparing our opinion, we have relied on the accuracy and completeness
of all information supplied or otherwise made available to us by the Company and
the Acquiror and we have not independently verified such information. We have
not made any independent evaluation or appraisal of the assets or liabilities of
the Company or the Acquiror, nor have we been furnished with any such appraisal.
In the case of our review with respect to projected financial results, we
conducted discussions with members of the management of the Company with respect
to certain publicly available forecasted financial information prepared by a
third party which was identified to us by the Company and which we have assumed
has been reasonably prepared, and with members of the management of the Acquiror
with respect to summary financial forecasts prepared by us based upon publicly
available information. We have, with your approval, assumed that the Merger will
qualify as a tax-free transaction under Section 368(a) of the Internal Revenue
Code of 1986, as amended. Our opinion is necessarily based upon market, economic
and other conditions as they exist on the date hereof. In addition, we express
no opinion as to prices at which the Acquiror Shares will trade following the
consummation of the Merger.
In connection with our engagement by the Company, we have not been
authorized by the Company or its Board of Directors to solicit, nor have we
solicited, any third party indications of interest for the acquisition of all or
any portion of the Company. In addition, we have not reviewed with the Company
or its Board of Directors any other potential transactions in lieu of the
Merger.
We have acted as financial advisor to the Company in connection with the
Merger and will receive a fee for our services, payment of a significant portion
of which is contingent upon consummation of the Merger. We have, in the past,
provided financial advisory and financing services to the Company and the
Acquiror and have received fees for the rendering of such services. In addition,
in the ordinary course of our business, we may actively trade securities of the
Company and the Acquiror for our own account and for the accounts of our
customers and, accordingly, we may from time to time hold long or short
positions in such securities.
It is understood that this letter is for the information of the Board of
Directors of the Company and may not be relied upon or used for any other
purpose without our prior written consent; provided, however that this letter
may be reproduced in full in the proxy statement/prospectus to be mailed to the
Company's stockholders in connection with the Merger. This letter does not
constitute a recommendation to any shareholder as to how such shareholder should
vote with respect to the Merger.
On the basis of, and subject to the foregoing, we are of the opinion that
the Merger Consideration is fair from a financial point of view to the holders
of the Shares, other than the Acquiror and its affiliates.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By
------------------------------
Managing Director
Investment Banking Group
V-2
<PAGE> 143
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1741 of the PBCL empowers a corporation to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or proceeding (a "Proceeding"), whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was a representative of the corporation or is or was serving at the request of
the corporation as a representative of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such Proceeding, if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful. Section 1742 of the PBCL
empowers a corporation to indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action by
or in the right of the corporation to procure a judgment in its favor by reason
of the fact that such person is or was a representative of the corporation or is
or was serving at the request of the corporation as a representative of another
corporation or enterprise, against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection with the defense or
settlement of the action if he or she acted in good faith and in a manner he or
she reasonably believed to be in, or not opposed to, the best interests of the
corporation, provided that indemnification shall not be made in respect of any
claim, issue or matter as to which such person has been adjudged to be liable to
the corporation unless there is a judicial determination that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for the expenses that the court deems proper.
Section 1743 of the PBCL provides that to the extent a representative of a
corporation has been successful on the merits or otherwise in defense of any
Proceeding, or in defense of any claim, issue or matter therein, he or she shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
Section 1745 of the PBCL provides that expenses (including attorneys' fees)
incurred in defending a Proceeding may be paid by the corporation in advance of
the final disposition of such Proceeding upon receipt of an undertaking by or on
behalf of the representative to repay such amount if it is ultimately determined
that he or she is not entitled to be indemnified by the corporation.
Section 1746 of the PBCL provides that the indemnification and advancement
of expenses provided by, or granted pursuant to, the other sections of the PBCL
shall not be deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of shareholders or disinterested directors or otherwise.
However, Section 1746 also provides that such indemnification shall not be made
in any case where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness.
Westinghouse provides for indemnification of its directors and officers
pursuant to Article ELEVENTH of the Restated Articles of Incorporation of
Westinghouse and Article XVII of the By-laws of Westinghouse. Article ELEVENTH
of the Restated Articles and Article XVII of the By-laws provide in effect that,
with respect to Proceedings based on acts or omissions on or after January 27,
1987, and unless prohibited by applicable law, Westinghouse shall indemnify
directors and officers against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement incurred in connection with any
such Proceedings (subject to certain limitations in the case of actions by such
persons against Westinghouse). Under Article XVII, Westinghouse shall also
advance amounts to any director or officer during the pendency of any such
Proceedings against expenses incurred, provided that, if required by law,
Westinghouse receives an undertaking to repay such amount if it is ultimately
determined that such person is not to be indemnified under such Article. The
indemnification provided for in such Articles is in addition to any rights to
which any director or officer may otherwise be entitled. Article XVII of the
By-laws provides that the right of a director or officer to
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<PAGE> 144
such indemnification and advancement of expenses shall be a contract right and
further provides procedures for the enforcement of such right.
Westinghouse has purchased directors' and officers' liability insurance
policies indemnifying its officers and directors and the officers and directors
of its subsidiaries against claims and liabilities (with stated exceptions) to
which they may become subject by reason of their positions with Westinghouse or
its subsidiaries as directors and officers.
ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES.
(a) The following is a list of Exhibits included as part of this
Registration Statement.
<TABLE>
<C> <S>
2.1 Agreement and Plan of Merger dated as of June 20, 1996, as amended, among
Westinghouse, R Acquisition Corp. and Infinity Broadcasting Corporation (included as
Annex I to the Joint Proxy Statement/Prospectus).
2.2 Stockholder Agreement dated as of June 20, 1996, as amended, among Westinghouse and
the stockholders named therein (included as Annex II to the Joint Proxy
Statement/Prospectus).
4.1 The Restated Articles of Westinghouse as amended are incorporated herein by reference
to Exhibit 3(a) to Form 10-K for the year ended December 31, 1995.
4.2 The By-Laws of Westinghouse, as amended.
4.3 Except as set forth below, there are no instruments with respect to long-term debt of
Westinghouse that involve securities authorized thereunder exceeding 10% of the total
assets of Westinghouse and its subsidiaries on a consolidated basis. Westinghouse
agrees to provide to the Securities and Exchange Commission, upon request, a copy of
instruments defining the rights of holders of long-term debt of Westinghouse and its
subsidiaries.
(1) Form of Senior Indenture, dated as of November 1, 1990, between Westinghouse and
Citibank, N.A. is incorporated herein by reference to Exhibit 4.1 to
Westinghouse's Registration Statement No. 33-41417.
4.4 Rights Agreement between Westinghouse and First Chicago Trust Company of New York is
incorporated herein by reference to Exhibit 1 to Form 8-A filed with the Securities
and Exchange Commission on January 9, 1996.
5.1 Opinion of Louis J. Briskman, Jr., as to the legality of the securities being
registered.
8.1 Opinion of Cravath, Swaine & Moore, as to certain United States federal income tax
consequences of the Merger.
8.2 Opinion of Debevoise & Plimpton, as to certain United States federal income tax
consequences of the Merger.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of Coopers & Lybrand L.L.P..
23.5 Consent of Deloitte & Touche.
23.6 Consent of Louis J. Briskman, Jr. (included in Exhibit 5.1 to this Registration
Statement).
23.7 Consent of Cravath, Swaine & Moore (included in Exhibit 8.1 to this Registration
Statement).
23.8 Consent of Debevoise & Plimpton (included in Exhibit 8.2 to this Registration
Statement).
24.1 Powers of Attorney.
99.1 Form of proxy card to be mailed to holders of Westinghouse Common Stock.
99.2 Form of proxy card to be mailed to holders of Infinity Common Stock.
</TABLE>
(b) Not applicable.
(c) The opinion of Chase Securities Inc. is included as Annex III to the
Joint Proxy Statement/ Prospectus; the opinion of Salomon Brothers Inc is
included as Annex IV to the Joint Proxy Statement/
II-2
<PAGE> 145
Prospectus; and the opinion of Merrill Lynch, Pierce, Fenner and Smith
Incorporated is included as Annex V to the Joint Proxy Statement/Prospectus.
ITEM 22. UNDERTAKING.
The undersigned Registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(b) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(c) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering;
(d) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof;
(e) that prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this
Registration Statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the Registrant undertakes
that such reoffering prospectus will contain the information called for by
the applicable registration form with respect to reofferings by persons who
may be deemed underwriters, in addition to the information called for by
the other items of the applicable registration form;
(f) that every prospectus (i) that is filed pursuant to paragraph (e)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is issued in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the Registration Statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(g) insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
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<PAGE> 146
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue;
(h) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request; and
(i) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
II-4
<PAGE> 147
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth
of Pennsylvania on the 23rd day of September, 1996.
WESTINGHOUSE ELECTRIC CORPORATION
By /s/ GARY M. CLARK
-----------------------------------
Name: Gary M. Clark
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on the 23rd day
of September, 1996 in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Chairman and Chief Executive Officer
- --------------------------------------------- (principal executive officer)
(Michael H. Jordan) and director
President and director
- ---------------------------------------------
(Gary M. Clark)
* director
- ---------------------------------------------
(Frank C. Carlucci)
* director
- ---------------------------------------------
(Robert E. Cawthorn)
* director
- ---------------------------------------------
(George H. Conrades)
* director
- ---------------------------------------------
(William H. Gray III)
* director
- ---------------------------------------------
(David K.P. Li)
* director
- ---------------------------------------------
(David T. McLaughlin)
* director
- ---------------------------------------------
(Richard R. Pivirotto)
</TABLE>
II-5
<PAGE> 148
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* director
- ---------------------------------------------
(Paula Stern)
* Executive Vice President and
- --------------------------------------------- Chief Financial Officer
(Fredric G. Reynolds) (principal financial officer)
/s/ CAROL V. SAVAGE Vice President and
- --------------------------------------------- Chief Accounting Officer
(Carol V. Savage) (principal accounting officer)
</TABLE>
* By /s/ GARY M. CLARK
--------------------------
Gary M. Clark
Attorney-in-Fact
II-6
<PAGE> 149
EXHIBIT INDEX
<TABLE>
<C> <S>
2.1 Agreement and Plan of Merger dated as of June 20, 1996, as amended, among
Westinghouse, R Acquisition Corp. and Infinity Broadcasting Corporation (included as
Annex I to the Joint Proxy Statement/Prospectus).
2.2 Stockholder Agreement dated as of June 20, 1996, as amended, among Westinghouse and
the stockholders named therein (included as Annex II to the Joint Proxy
Statement/Prospectus).
4.1 The Restated Articles of Westinghouse as amended are incorporated herein by reference
to Exhibit 3(a) to Form 10-K for the year ended December 31, 1995.
4.2 The By-Laws of Westinghouse, as amended.
4.3 Except as set forth below, there are no instruments with respect to long-term debt of
Westinghouse that involve securities authorized thereunder exceeding 10% of the total
assets of Westinghouse and its subsidiaries on a consolidated basis. Westinghouse
agrees to provide to the Securities and Exchange Commission, upon request, a copy of
instruments defining the rights of holders of long-term debt of Westinghouse and its
subsidiaries.
(1) Form of Senior Indenture, dated as of November 1, 1990, between Westinghouse and
Citibank, N.A. is incorporated herein by reference to Exhibit 4.1 to
Westinghouse's Registration Statement No. 33-41417.
4.4 Rights Agreement between Westinghouse and First Chicago Trust Company of New York is
incorporated herein by reference to Exhibit 1 to Form 8-A filed with the Securities
and Exchange Commission on January 9, 1996.
5.1 Opinion of Louis J. Briskman, Jr., as to the legality of the securities being
registered.
8.1 Opinion of Cravath, Swaine & Moore, as to certain United States federal income tax
consequences of the Merger.
8.2 Opinion of Debevoise & Plimpton, as to certain United States federal income tax
consequences of the Merger.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of Coopers & Lybrand L.L.P..
23.5 Consent of Deloitte & Touche.
23.6 Consent of Louis J. Briskman, Jr. (included in Exhibit 5.1 to this Registration
Statement).
23.7 Consent of Cravath, Swaine & Moore (included in Exhibit 8.1 to this Registration
Statement).
23.8 Consent of Debevoise & Plimpton (included in Exhibit 8.2 to this Registration
Statement).
24.1 Powers of Attorney.
99.1 Form of proxy card to be mailed to holders of Westinghouse Common Stock.
99.2 Form of proxy card to be mailed to holders of Infinity Common Stock.
</TABLE>
(b) Not applicable.
<PAGE> 1
Exhibit 4.2
BY-LAWS
OF
WESTINGHOUSE
ELECTRIC CORPORATION
-------
AS AMENDED TO
SEPTEMBER 25, 1996
-------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Article I Meetings of Shareholders......................................1
Article II Board of Directors - Committees -
Their Powers and Duties.......................................6
Article III Contributions.................................................9
Article IV Election and Term of Chairman of
the Board and Officers........................................9
Article V Meetings of Directors........................................10
Article VI Chairman of the Board........................................13
Article VII President; Chief Executive Officer...........................13
Article VIII Secretary....................................................14
Article IX Treasurer....................................................14
Article X Assistant Secretary, Assistant Treasurer
and Other Officers...........................................15
Article XI Corporate Seal...............................................16
Article XII Certificates of Stock........................................16
Article XIII Transfers of Stock...........................................17
Article XIV Rights.......................................................18
Article XV Fiscal Year..................................................18
Article XVI Certain Issues of Stock......................................18
Article XVII Indemnification..............................................19
Article XVIII Director Liability...........................................27
Article XIX Pennsylvania Opt Out.........................................27
Article XX Amendments...................................................28
Article XXI Confidentiality in Voting....................................29
</TABLE>
<PAGE> 3
BY-LAWS
OF
WESTINGHOUSE ELECTRIC CORPORATION
-------
ARTICLE I
MEETINGS OF SHAREHOLDERS
The annual meeting of the shareholders of the Company shall be held on
such date and at such hour as the Board of Directors may designate and on any
subsequent day or days to which such meeting may be adjourned, for the purpose
of electing directors and for the transaction of such other business as may
lawfully come before the meeting. If for any reason the annual meeting shall
not have been held on the day designated by the Board or on the day specified
above, the Board of Directors shall cause the annual meeting to be called and
held as soon thereafter as may be convenient.
Special meetings of the shareholders of the Company may be called by
the Board of Directors or by the Chairman to be held on such date as the Board
or the Chairman shall determine. At an annual meeting of the shareholders, only
such business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be (i)
specified in the notice of the meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, (ii) otherwise brought before the
meeting by or at the direction of the Board of Directors or (iii) brought
before the meeting by a shareholder in accordance with the procedure set forth
below. For business to be properly brought before an annual meeting by a
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<PAGE> 4
shareholder, the shareholder must be entitled by Pennsylvania law to present
such business and must have given written notice of such business, either by
personal delivery or by United States mail, postage prepaid, to the Secretary
of the Company not later than 90 days in advance of such meeting; provided,
however, that if such annual meeting of shareholders is held on a date other
than the last Wednesday of April, such written notice must be given within ten
days after the first public disclosure, which may include any public filing by
the Company with the Securities and Exchange Commission, of the date of the
annual meeting. Any such notice shall set forth as to each matter the
shareholder proposes to bring before the annual meeting: (a) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, and in the event that such
business includes a proposal to amend the By-laws of the Company, the language
of the proposed amendment; (b) the name and address of the shareholder
proposing such business; (c) a representation that the shareholder is a holder
of record of stock of the Company entitled to vote at such meeting and intends
to appear in person or by proxy at the meeting to propose such business; and
(d) any material interest of any shareholder in such business. No business
shall be conducted at an annual meeting except in accordance with this
paragraph, and the chairman of any annual meeting of shareholders may refuse to
permit any business to be brought before such annual meeting without compliance
with the foregoing procedures.
Subject to the rights of the holders of any class or series of stock
having a preference over the Common Stock of the Company as to dividends or
upon liquidation, nominations for the election of directors may be made by the
Board of Directors or by any shareholder entitled to vote for the election of
directors. Any shareholder entitled to vote
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<PAGE> 5
for the election of directors may nominate at a meeting persons for election as
directors only if written notice of such shareholder's intent to make such
nomination is given, either by personal delivery or by United States mail,
postage prepaid, to the Secretary of the Company not later than: (i) with
respect to an election to be held at an annual meeting of shareholders, 90 days
in advance of such meeting (provided that if such annual meeting of
shareholders is held on a date other than the last Wednesday of April, such
written notice must be given within ten days after the first public disclosure,
which may include any public filing by the Company with the Securities and
Exchange Commission, of the date of the annual meeting); and (ii) with respect
to an election to be held at a special meeting of shareholders for the election
of directors, the close of business on the seventh day following the date on
which notice of such meeting is first given to shareholders. Each such notice
shall set forth: (a) the name and address of the shareholder who intends to
make the nomination and of each person to be nominated; (b) a representation
that the shareholder is a holder of record of stock of the Company entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice as directors; (c) a
description of all arrangements or understandings between the shareholder and
each proposed nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by the
shareholder; (d) such other information regarding each nominee proposed by such
shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission were such
nominee to be nominated by the Board of Directors; and (e) the consent of each
proposed nominee to serve as a director of the Company if so elected. The
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<PAGE> 6
chairman of any meeting of shareholders to elect directors may refuse to permit
the nomination of any person to be made without compliance with the foregoing
procedure.
Every meeting of the shareholders, annual or special, shall be held at
such place within or without the Commonwealth of Pennsylvania as the Board of
Directors may designate or, in the absence of such designation, at the
registered office of the Company in the Commonwealth of Pennsylvania.
Written notice of every meeting of the shareholders shall be given by,
or at the direction of, the person authorized to call the meeting, to each
shareholder of record entitled to vote at the meeting, at the shareholder's
address appearing on the books of the Company. The notice of every meeting of
the shareholders shall specify the place, day and hour of the meeting and, in
the case of a special meeting, the matter or matters to be acted upon at such
meeting. Only the matter or matters specified in the notice of a special
meeting shall be acted upon thereat. All notices of meetings of the
shareholders shall be provided in accordance with Pennsylvania law.
The notice of every meeting of the shareholders may be accompanied by a
form of proxy approved by the Board of Directors in favor of such person or
persons as the Board of Directors may select.
Except as otherwise provided by law or by the Restated Articles of the
Company, as from time to time amended (hereinafter called the Articles of the
Company), or by these By-laws, the presence in person or by proxy of
shareholders entitled to cast at least a majority of the votes that all
shareholders are entitled to cast on a particular matter shall constitute a
quorum at the meeting of shareholders, and all questions shall be decided by a
majority of the votes cast, in person or by proxy, at a duly organized meeting
by the
-4-
<PAGE> 7
holders of shares entitled to vote thereon. The shareholders present at any
duly organized meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Any meeting of the shareholders may be adjourned from time to time,
without notice other than by announcement at the meeting at which such
adjournment is taken, and at any such adjourned meeting at which a quorum shall
be present any action may be taken that could have been taken at the meeting
originally called; provided, that any meeting at which directors are to be
elected shall be adjourned only from day to day, or for such longer periods,
not exceeding fifteen days each, as the holders of a majority of the shares
present in person or by proxy shall direct, until such directors have been
elected.
If a meeting cannot be organized because of lack of a quorum, those
present may, except as otherwise provided by law, adjourn the meeting to such
time and place as they may determine, but in the case of any meeting called for
the election of directors those who attend the second of such adjourned
meetings, although less than a quorum, shall nevertheless constitute a quorum
for the purpose of electing directors.
At each meeting, each shareholder entitled to vote may vote in person
or by proxy executed in writing by the shareholder or by his or her duly
authorized attorney-in-fact and filed with the Secretary of the Company. Except
as otherwise provided by law or the Articles of the Company or these By-laws,
each holder of record of shares of any class of the Company shall be entitled
to one vote, on each matter submitted to a vote at a meeting of the
shareholders, and in respect of which shares of such class shall be entitled to
be voted, for every share of such class standing in his or her name on the
books of the Company.
-5-
<PAGE> 8
ARTICLE II
BOARD OF DIRECTORS - COMMITTEES -
THEIR POWERS AND DUTIES
The business, affairs and property of the Company shall be managed and
controlled by a Board of Directors, which, except as otherwise provided by law
or the Articles of the Company, shall exercise all the powers of the Company.
The number, qualifications, manner of election, time and place of meeting,
compensation and powers and duties of the directors of the Company shall be
fixed from time to time by or pursuant to these By-laws. Nominees for election
to the Board of Directors who qualify as Independent Directors on the date of
their nomination shall be such that the majority of all directors holding
office immediately after such nomination, assuming the election of such
nominees, shall be Independent Directors.
The number of directors which shall constitute the Board of Directors
shall be fixed from time to time by a vote of a majority of the Board of
Directors, provided, however, that the number of directors of the Company shall
be not less than three nor more than twenty-four. The shareholders shall, at
each annual meeting, elect directors, each of whom shall serve until the annual
meeting of shareholders next following his or her election and until his
successor is elected and shall qualify; provided, however, that directors with
terms expiring at the annual meetings of shareholders to be held in 1994 and
1995 shall serve until the expiration of their respective terms.
Each election of directors by the shareholders shall be conducted by
one or three judges of election appointed by the Board of Directors in advance
of the meeting to act at that meeting and at any adjournment thereof. If any or
all of such appointees shall fail to
-6-
<PAGE> 9
appear or fail or refuse to act, the vacancy or vacancies shall be filled by
the Board of Directors or the presiding officer of the meeting. No person who
is a candidate for office to be filled at the meeting shall act as a judge.
Except as the law may otherwise provide, the shareholders shall not
remove any director from office without assigning any cause (as such term is
defined in the Articles) prior to the expiration of the term of office unless
holders of at least 80% of the shares of capital stock of the Company entitled
to vote thereon, vote to remove the director from office.
In case of any vacancy in the Board of Directors through death,
resignation, disqualification, removal, increase in the number of directors or
other cause, the remaining directors, though less than a quorum, by affirmative
vote of a majority thereof or by a sole remaining director, may fill such
vacancy to serve for the balance of the unexpired term and until his or her
successor shall have been elected and qualified; provided, however, that any
director elected to fill a vacancy for a director having a term expiring at the
annual meeting of shareholders to be held in 1994 or 1995 shall serve only
until the annual election of shareholders next following his election.
There shall be a Compensation Committee, an Audit Review Committee, a
Committee on Environment and Health, and a Nominating and Governance Committee.
The Compensation Committee may determine to retain an independent compensation
consultant to assist it in carrying out its duties. Each of these committees
shall consist of not less than two members of the Board of Directors, at least
two of whom, on the date of their appointment to the committee, are Independent
Directors. All members of the Compensation Committee and the Nominating and
Governance Committee must, on the
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date of their appointment to said committee, be Independent Directors. With
respect to each such committee, the Board of Directors shall, by one or more
resolutions adopted by a majority of the whole Board, determine the duties and
responsibilities, determine the number of members, appoint the members and the
committee chair and fill each vacancy occurring in the membership.
The Board of Directors may from time to time appoint such further
standing or special committees as it may deem in the best interest of the
Company, but no such committee shall have any powers, except such as are
expressly conferred upon it by the Board. Each committee referred to in this
Article II shall act only as a committee and the individual members shall have
no power as such.
Each director shall be entitled to receive from the Company such annual
and other fees and compensation as the Board of Directors shall from time to
time determine and to be reimbursed for his reasonable expenses in connection
with attendance at meetings. Nothing herein contained shall preclude any
director from serving the Company or its subsidiaries in any other capacity and
receiving compensation therefor.
For purposes of this Article II, the term "Independent Director" shall
mean a director who: (a) is not and has not been employed by the Company or a
subsidiary in an executive capacity within the five years immediately prior to
the annual meeting at which he or she will be voted upon; (b) is not an
employee or five percent or more owner of an entity that is a regular advisor
or consultant to the Company or its subsidiaries; (c) is not an employee or
five percent or more owner of a significant customer or supplier of the Company
or its subsidiaries; (d) does not have a personal services contract with the
Company or its subsidiaries; (e) is not employed by a tax-exempt organization
that
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receives significant contributions from the Company or its subsidiaries; and
(f) is not a spouse, parent, sibling, child, parent-in-law, brother or
sister-in-law or son or daughter-in-law of an officer of the Company.
The Board of Directors shall have the exclusive right and power to
interpret and apply the provisions of this Article II, including, without
limitation, the adoption of written definitions of terms used in and guidelines
for its application (any such definitions and guidelines shall be filed with
the Secretary, and such definitions and guidelines as may prevail shall be made
available to any shareholder upon written request). Any such definitions or
guidelines and any other interpretation or application of the provisions of
this Article II made in good faith shall be binding and conclusive.
ARTICLE III
CONTRIBUTIONS
The Board of Directors shall have the power, at any time and from time
to time, to make contributions and donations for the public welfare or for
religious, charitable, scientific or educational purposes.
ARTICLE IV
ELECTION AND TERM OF
CHAIRMAN OF THE BOARD AND OFFICERS
The Board of Directors shall elect a Chairman of the Board, who may be
designated an officer of the Company, a President or a Chief Executive Officer
or both, such Vice Presidents as may from time to time be necessary or
desirable, a Secretary and a Treasurer. There shall also be one or more
assistant secretaries and treasurers and such
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other officers and assistant officers as the Board may deem appropriate. The
Board of Directors shall elect all officers, except assistant officers.
The term of office for all officers shall be until the organization
meeting of the Board of Directors following the next annual meeting of
shareholders and until their respective successors are elected or appointed and
shall qualify, or until their earlier death, resignation or removal. The
Chairman of the Board or any officer may be removed from office, either with or
without cause, at any time by the affirmative vote of the majority of the
members of the Board then in office. A vacancy in any office arising from any
cause may be filled for the unexpired term by the Board.
ARTICLE V
MEETINGS OF DIRECTORS
Regular meetings of the Board of Directors shall be held without notice
at such place or places either within or without the Commonwealth of
Pennsylvania, at such hour and on such day as may be fixed by resolution of the
Board of Directors.
The Board of Directors shall meet for organization at its first regular
meeting after the annual meeting of shareholders or at a special meeting of the
Board of Directors called after the annual meeting of shareholders and prior to
said first regular meeting. If no special meeting of the Board of Directors for
organization shall be called, all provisions of these By-laws in respect of
notice of special meetings of the Board of Directors shall apply to the first
regular meeting of the Board of Directors held after the annual meeting of
shareholders.
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Special meetings of the Board of Directors shall be held, whenever
called by the Chairman or by four directors or by resolution adopted by the
Board of Directors, at such place or places either within or without the
Commonwealth of Pennsylvania as may be stated in the notice of the meeting.
Notice of the time and place of all special meetings of the Board of
Directors, and notice of any change in the time or place of holding the regular
meetings of the Board of Directors, shall be given to each director in person,
by telephone, or by sending a copy thereof by first class or express mail,
postage prepaid, or by telegram (with messenger service specified), telex or
TWX (with answerback received) or courier service, charges prepaid, or by
facsimile transmission, or by any type of electronic communication to the
address (or to the telephone, telex, TWX, fax or other number or address)
supplied by the director to the Corporation for the purpose of notice at least
one day before the day of the meeting; provided, however, that notice of any
meeting need not be given to any director if waived by such director in
writing, whether before or after the time stated therein, or if such director
shall be present at the beginning of such meeting and does not object to the
transaction of business because the meeting was not lawfully called or
convened. If the notice is sent by mail, telegraph or courier service, it shall
be deemed to have been given to the director when deposited in the United
States mail or with a telegraph office or courier service for delivery to the
director or, in the case of telex, TWX, fax or other electronic communication,
it shall be deemed to have been given to the director when dispatched. In the
absence of any resolution of the Board of Directors or any committee governing
rules of procedure to the contrary, notice of meetings of any committee
referred
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to or provided for in these By-laws shall follow the same procedures as those
set forth in these By-laws for meetings of the Board of Directors.
Except as otherwise provided in these By-laws, a majority of the
directors in office shall constitute a quorum of the Board competent to
transact business; but a lesser number may adjourn from day to day until a
quorum is present. Except as otherwise provided in these By-laws, all questions
shall be decided by a vote of a majority of the directors present.
All or any number less than all of the directors may participate in a
meeting of the Board of Directors or of a committee of the Board of Directors
by conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other.
Each committee referred to or provided for in these By-laws shall have
authority, except as may otherwise be required by law or by resolution of the
Board of Directors, to fix its own rules of procedure and to meet where and as
provided by such rules. The presence at any meeting of any such committee of a
majority of the members, including alternate members thereof, shall be
necessary to constitute a quorum for the transaction of business and in every
case the affirmative vote of a majority of such members present at any meeting
shall be necessary for the adoption of any resolution of such committee. In the
absence or disqualification of any member of such committee or committees, the
member or members thereof, including alternate members, present at any meeting
and not disqualified from voting, whether or not he, she or they constitute a
quorum, may unanimously appoint another director to act at the meeting in the
place of any such absent or disqualified member.
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ARTICLE VI
CHAIRMAN OF THE BOARD
The Chairman of the Board shall preside at all meetings of the Board of
Directors at which he or she is present and shall call meetings of the Board
and Board committees when he or she deems them necessary. Unless otherwise
precluded from doing so by these By-laws, the Chairman of the Board may be a
member of the committees of the Board. He or she shall act as chairman at all
meetings of the shareholders at which he or she is present unless he or she
elects that the Chief Executive Officer shall so preside. The Chairman of the
Board may be designated by the Board as an officer of the Company and may be
elected by the Board as the Chief Executive Officer. The Chairman of the Board
shall perform all duties as may be assigned to him or her by the Board of
Directors.
ARTICLE VII
PRESIDENT; CHIEF EXECUTIVE OFFICER
The President shall have such powers and duties as may, from time to
time, be prescribed by the Board of Directors or the Chairman of the Board.
Unless the Board of Directors shall otherwise direct, the President shall be
the Chief Executive Officer of the Company. In the absence of the Chairman of
the Board, the President or, if none, the Chief Executive Officer shall perform
the duties and have the powers of the Chairman of the Board, as determined by
the Board of Directors.
The Chief Executive Officer shall have general charge of the affairs of
the Company, subject to the control of the Board of Directors. He or she may
appoint all officers and
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employees of the Company for whose election no other provision is made in these
By-laws, and may discharge or remove any officer or employee, subject to action
thereon by the Board of Directors as required by these By-laws. The Chief
Executive Officer shall be the officer through whom the Board delegates
authority to corporate management, and shall be responsible to see that all
orders and resolutions of the Board are carried into effect by the proper
officers or other persons. The Chief Executive Officer shall also perform all
duties as may be assigned to him or her by the Board of Directors.
ARTICLE VIII
SECRETARY
The Secretary shall attend meetings of the shareholders and the Board
of Directors, shall keep minutes thereof in suitable books, and shall send out
all notices of meetings as required by law or by these By-laws. He or she
shall, in general, perform all duties incident to the office of the Secretary
and perform such other duties as may be assigned to him or her by the Board,
the Chairman of the Board or the President.
ARTICLE IX
TREASURER
The Treasurer shall have custody of, and shall manage and invest, all
moneys and securities of the Company, and shall have such powers and duties as
generally pertain to the office of Treasurer.
To the extent not invested, the Treasurer shall deposit all moneys in
such banks or other places of deposit as the Board of Directors may from time
to time designate or as
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may be designated by any officer or officers of the Company so authorized by
resolution of the Board of Directors. Unless otherwise provided by the Board of
Directors, all checks, drafts, notes and other orders for the payment of money
from a disbursing account shall be signed by the Treasurer or such person or
persons as may be designated by name by the Treasurer in writing. The
Treasurer's signature and, if authorized by the Treasurer in writing, the
signature of such person or persons as may be designated by the Treasurer as
provided above, to a check, draft, note or other order for the payment of money
from a disbursing account may be by facsimile or other means. Procedures for
withdrawal of moneys from accounts other than disbursing accounts shall be
established from time to time by the Treasurer.
The Treasurer shall have such other powers and perform such other
duties as may be assigned by the Board of Directors. The Chief Financial
Officer of the Company shall have all of the powers granted to the Treasurer
under these By-laws, including the power to sign any check, draft, note or
other order for the payment of money from a disbursing account, including by
facsimile signature or other means.
ARTICLE X
ASSISTANT SECRETARY, ASSISTANT TREASURER AND OTHER OFFICERS
In the event of the absence or inability to serve of the Secretary, an
assistant secretary shall perform all the duties of the Secretary; and in the
event of the absence or inability to serve of the Treasurer, an assistant
treasurer shall perform all the duties of the Treasurer.
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The powers and duties of other officers of the Company shall be such as
may, from time to time, be prescribed by the Board of Directors, the Chairman
of the Board, the President or the Chief Executive Officer.
In case of the absence of any officer of the Company, or for any other
reason that the Board of Directors may deem sufficient, the Board, or in the
absence of action by the Board, the Chief Executive Officer, or in his or her
absence, the President, or in his or her absence, the Chairman of the Board,
may delegate for the time being the powers and duties of any officer to any
other officer or to any director.
ARTICLE XI
CORPORATE SEAL
The Company shall have a corporate seal, which shall contain within a
circle the name of the Company, together with the following: "Incorporated
1872".
ARTICLE XII
CERTIFICATES OF STOCK
The shares of stock of the Company shall be represented by certificates
of stock, signed by the President or one of the Vice Presidents or other
officer designated by the Board of Directors, countersigned by the Treasurer or
an assistant treasurer and sealed with the corporate seal of the Company; and
if such certificates of stock are signed or countersigned by a corporate
transfer agent or a corporate registrar of this Company, such signature of the
President, Vice President or other officer, such counter-signature of the
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Treasurer or assistant treasurer, and such seal, or any of them, may be
executed in facsimile, engraved or printed.
ARTICLE XIII
TRANSFERS OF STOCK
Transfers of shares of stock of the Company shall be made on the books
of the Company by the holder of record thereof or his or her legal
representative, acting by his or her attorney-in-fact duly authorized by
written power of attorney filed with the Secretary of the Company, or with one
of its transfer agents, and on surrender for cancellation of the certificate or
certificates for such shares. Except as otherwise provided in these By-laws,
the person in whose name shares of stock stand on the books of the Company
shall be deemed the owner thereof for all purposes as regards the Company. The
Company may have one or more transfer offices or agencies and/or registrars for
the transfer and/or registration of shares of stock of the Company.
The Board of Directors may fix in advance a time, which shall not be
more than ninety days prior to the date of any meeting of shareholders, or the
date for the payment of any dividend or distribution, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
shares will be made or go into effect, as a record date, for the determination
of the shareholders entitled to notice of, or to vote at, any such meeting, or
entitled to receive payment of any such dividend or distribution, or to receive
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of shares; and in such case only shareholders of
record at the time so fixed as a record date shall be entitled to notice of, or
to vote at, such meeting or
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to vote at any adjournment thereof, or to receive payment of such dividend or
distribution, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of stock on the books
of the Company after any such record date fixed as aforesaid.
ARTICLE XIV
RIGHTS
Those rights having the terms provided under the Rights Agreement
between Westinghouse Electric Corporation and First Chicago Trust Company of
New York (the "Rights Agent") dated as of December 28, 1995, as it may be
amended from time to time (the "Rights" and the Rights Agreement") and issued
to or Beneficially Owned by Acquiring Persons or their Affiliates or Associates
(as such terms are defined in the Rights Agreement) shall, under certain
circumstances as provided in the Rights Agreement, be null and void and may not
be transferred to any person.
ARTICLE XV
FISCAL YEAR
The fiscal year of the Company shall be the calendar year.
ARTICLE XVI
CERTAIN ISSUES OF STOCK
The Company may from time to time issue shares of its stock and may
create and issue (whether or not in connection with the issuance of any of its
shares or other
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securities) option rights or securities having conversion or option rights
entitling the holders thereof to purchase or acquire shares, option rights,
securities having conversion or option rights, or obligations, of any class or
series, or assets of the Company, or to purchase or acquire from the Company
shares, option rights, securities having conversion or option rights, or
obligations, of any class or series owned by the Company and issued by any
other person. Such shares, rights or securities may be issued to directors,
officers (including assistant officers) or employees of the Company or any of
its subsidiaries or to such other persons as the Company may determine
appropriate.
ARTICLE XVII
INDEMNIFICATION
A. Indemnification Provisions Applicable to Proceedings Not Covered
by Section B of this Article.
Every person who is or was a director, officer or employee of the
Company, or of any other corporation which he or she serves or served as such
at the request of the Company, shall, in accordance with this Article XVII but
not if prohibited by law, be indemnified by the Company as hereinafter provided
against reasonable expense and any liability paid or incurred by him or her in
connection with or resulting from any threatened or actual claim, action, suit
or proceeding (whether brought by or in the right of the Company or such other
corporation or otherwise), civil, criminal administrative or investigative, in
which he or she may be involved, as a party or otherwise, by reason of his or
her being or having been a director, officer or employee of the Company or such
other corporation, whether or not he or she continues to be such at the time
such expense or liability shall have been paid or incurred.
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As used in this Article XVII, the term "expense" shall mean counsel
fees and disbursements and all other expenses (except any liability) relating
to any such claim, action, suit or proceeding, and the term "liability" shall
mean amounts of judgments, fines or penalties against, and amounts paid in
settlement by, a director, officer or employee with respect to any such claim,
action, suit or proceeding.
Any person referred to in the first paragraph of this Article XVII who
has been wholly successful, on the merits or otherwise, with respect to any
claim, action, suit or proceeding of the character described in such first
paragraph shall be reimbursed by the Company for his or her reasonable expense.
Any other person claiming indemnification under the first paragraph of
this Article XVII shall be reimbursed by the Company for his or her reasonable
expense and for any liability (other than any amount paid to the Company) if a
Referee shall deliver to the Company his or her written finding that such
person acted, in good faith, in what he or she reasonably believed to be the
best interests of the Company, and in addition with respect to any criminal
action or proceeding, reasonably believed that his or her conduct was lawful.
The termination of any claim, action, suit or proceeding by judgment,
settlement (whether with or without court approval), adverse decision or
conviction after trial or upon a plea of guilty or of nolo contendere, or its
equivalent, shall not create a presumption that a director, officer or employee
did not meet the foregoing standards of conduct. The person claiming
indemnification shall at the request of the Referee appear before him or her
and answer questions which the Referee deems relevant and shall be given ample
opportunity to present to the Referee evidence upon which he or she relies for
indemnification; and the Company shall, at the request of the Referee, make
available to
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the Referee facts, opinions or other evidence in any way relevant for his or
her finding which are within the possession or control of the Company. As used
in this Article XVII, the term "Referee" shall mean independent legal counsel
(who may be regular counsel of the Company), or other disinterested person or
persons, selected to act as such hereunder by the Board of Directors of the
Company, whether or not a disinterested quorum exists.
Any expense incurred with respect to any claim, action, suit or
proceeding of the character described in the first paragraph of this Article
XVII may be advanced by the Company prior to the final disposition thereof upon
receipt of an undertaking made by or on behalf of the recipient to repay such
amount if it is ultimately determined that he or she is not indemnified under
this Article XVII.
The rights of indemnification provided in this Article XVII shall be in
addition to any rights to which any such director, officer or employee may
otherwise be entitled by contract or as a matter of law and, in the event of
such person's death, such rights shall extend to his or her heirs and legal
representatives.
B. Indemnification Provisions Applicable to Proceedings Based on
Acts or Omissions on or after January 27, 1987.
SECTION 1. Right to Indemnification and Effect of Amendments.
(a) Right to Indemnification. The Company, unless prohibited by
applicable law, shall indemnify any person who is or was a director or officer
of the Company and who is or was involved in any manner (including, without
limitation, as a party or a witness) or is threatened to be made so involved in
any threatened, pending or completed investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
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Proceeding) (whether or not the indemnified liability arises or arose from any
threatened, pending or completed Proceeding by or in the right of the Company)
by reason of the fact that such person is or was a director, officer, employee
or agent of the Company, or is or was serving at the request of the Company as
a director or officer of another corporation, partnership, joint venture, trust
or other enterprise (including, without limitation, any employee benefit plan)
(a Covered Entity) against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such Proceeding; provided, however, that except as
provided in Section 4(c) of this Article, the foregoing shall not apply to a
director or officer of the Company with respect to a Proceeding that was
commenced by such director or officer. Any director or officer of the Company
entitled to indemnification as provided in this Section 1, is hereinafter
called an "Indemnitee." Any right of an Indemnitee to indemnification shall be
a contract right and shall include the right to receive, prior to the
conclusion of any Proceeding, payment of any expenses incurred by the
Indemnitee in connection with such Proceeding, consistent with the provisions
of applicable law as then in effect and the other provisions of this Article.
(b) Effect of Amendments. Neither the alteration, amendment or repeal
of, nor the adoption of a provision inconsistent with, any provision of this
Article (including, without limitation, this Section 1(b)) shall adversely
affect the rights of any director or officer under this Article with respect to
any Proceeding commenced or threatened, or any alleged act or omission, prior
to such alteration, amendment, repeal or adoption of an inconsistent provision,
without the written consent of such director or officer.
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SECTION 2. Insurance; Contracts and Funding. The Company may purchase
and maintain insurance to protect itself and any indemnified person against any
expenses, judgments, fines and amounts paid in settlement as specified in
Section 1 or Section 5 of this Article or incurred by any indemnified person in
connection with any Proceeding referred to in such Sections, to the fullest
extent permitted by applicable law as then in effect. The Company may enter
into contracts with any director, officer, employee or agent of the Company or
of any Covered Entity in furtherance of the provisions of this Article and may
create a trust fund, grant a security interest or use other means (including,
without limitation, a letter of credit) to insure the payment of such amounts
as may be necessary to effect indemnification as provided in this Article.
SECTION 3. Indemnification and Not Exclusive Right. The right of
indemnification provided in this Article shall not be exclusive of any other
rights to which any indemnified person may otherwise be entitled, and the
provisions of this Article shall inure to the benefit of the heirs and legal
representatives of any indemnified person under this Article and shall be
applicable to Proceedings arising from acts or omissions occurring on or after
January 27, 1987.
SECTION 4. Advancement of Expenses; Request for Indemnification;
Remedies; Presumptions and Defenses. In furtherance, but not in limitation of
the foregoing provisions, the following procedures, presumptions and remedies
shall apply with respect to advancement of expenses and the right to
indemnification under this Article:
(a) Advancement of Expenses. All reasonable expenses incurred by or on
behalf of the Indemnitee in connection with any Proceeding (including any
Proceeding commenced by the Indemnitee under Section 4(c) but excluding any
other Proceeding commenced by the Indemnitee) shall be advanced to the
Indemnitee by the Company
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within 20 days after the receipt by the Company of a statement or statements
from the Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding. Such statement
or statements shall reasonably evidence the expenses incurred by the Indemnitee
and, if required by law at the time of such advance, shall include or be
accompanied by an undertaking by or on behalf of the Indemnitee to repay the
amounts advanced if it should ultimately be determined that the Indemnitee is
not entitled to be indemnified against such expenses pursuant to this Article.
(b) Request for Indemnification. To obtain indemnification under this
Article, an Indemnitee shall submit to the Secretary of the Company a written
request, including such documentation and information as is reasonably
available to the Indemnitee and reasonably necessary to determine whether and
to what extent the Indemnitee is entitled to indemnification (the Supporting
Documentation).
(c) Remedies; Presumptions and Defenses. If (i) expenses are not
advanced in full within 20 days after receipt by the Company of the statement
or statements and the undertaking (if an undertaking is required by law,
By-law, agreement or otherwise at the time of such advance) required by Section
4(a) of this Article, or (ii) indemnification is not paid in full within 60
days after receipt by the Company of the written request for indemnification
and Supporting Documentation required by Section 4(b) of this Article, then the
person claiming advancement of expenses or indemnification shall be entitled to
seek judicial enforcement of the Company's obligation to pay such advancement
of expenses or indemnification. It shall be a defense to any Proceeding seeking
judicial enforcement of the Company's obligation to pay indemnification that
the conduct of the person claiming indemnification was such that under
Pennsylvania law the Company is
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prohibited from indemnifying such person for the amount claimed. The Company
shall have the burden of proving such defense. Neither the failure of the
Company (including its Board of Directors, independent legal counsel and its
shareholders) to have made a determination prior to the commencement of such
Proceeding that indemnification is proper in the circumstances, nor an actual
determination by the Company (including its Board of Directors, independent
legal counsel or its shareholders) that such indemnification is prohibited by
law, shall be a defense to a Proceeding seeking enforcement of the provisions
of this Article or create a presumption that such indemnification is prohibited
by law. The only defense to any such Proceeding to receive payment of expenses
in advance shall be failure to make an undertaking to reimburse, if such an
undertaking is required by law, By-law, agreement or otherwise. Notwithstanding
the foregoing, the Company may bring an action, in an appropriate court in the
Commonwealth of Pennsylvania or any other court of competent jurisdiction,
contesting the right of a person claiming advancement of expenses or
indemnification to receive such advancement or indemnification hereunder
because such advancement or indemnification is prohibited by law; provided,
however, that in any such action the Company shall have the burden of proving
that such advancement or indemnification is prohibited by law.
The Company shall be precluded from asserting in any action or
Proceeding commenced pursuant to this Section 4(c) that the procedure and
presumptions of this Article are not valid, binding and enforceable and shall
stipulate in any such court that the Company is bound by all the provisions of
this Article.
If the person claiming advancement of expenses or indemnification,
pursuant to this Section 4(c), seeks to enforce his or her rights under, or to
recover damages for breach of
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this Article, that person shall be entitled to recover from the Company, and
shall be indemnified by the Company against, any expenses actually and
reasonably incurred by such person if such person prevails in such Proceeding.
If it shall be determined in such Proceeding that such person is entitled to
receive part but not all of the indemnification or advancement of expenses
sought, the expenses incurred by such person in connection with such Proceeding
shall be prorated accordingly.
SECTION 5. Indemnification of Employees and Agents. Notwithstanding any
other provision or provisions of this Article, the Company, unless prohibited
by applicable law, may indemnify any person other than a director or officer of
the Company who is or was an employee or agent of the Company and who is or was
involved in any manner (including, without limitation, as a party or a witness)
or is threatened to be made so involved in any threatened, pending or completed
Proceeding by reason of the fact that such person is or was a director,
officer, employee or agent of a Covered Entity against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such Proceeding. The
Company may also advance expenses incurred by such employee or agent in
connection with any such Proceeding, consistent with the provisions of
applicable law as then in effect.
SECTION 6. Severability. If any provision or provisions of this Article
shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Article (including, without limitation, all portions of any
Section of this Article containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not
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in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Article (including, without limitation, all
portions of any Section of this Article containing any such provision held to
be invalid, illegal or unenforceable, that are not themselves invalid, illegal
or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
ARTICLE XVIII
DIRECTOR LIABILITY
To the fullest extent that the law of the Commonwealth of Pennsylvania,
as it exists on January 27, 1987, or as it may thereafter be amended, permits
the elimination of the liability of directors, no director of the Company shall
be liable for monetary damages for any action taken, or any failure to take any
action. This Article shall not apply to any breach of performance of duty or
any failure of performance of duty by any director occurring prior to January
27, 1987. No amendment to or repeal of this Article shall apply to or have any
effect on the liability or alleged liability of any director of the Company for
or with respect to any act or failure to act on the part of such director
occurring prior to such amendment or repeal.
ARTICLE XIX
PENNSYLVANIA OPT OUT
A. "Subsections (e) through (g) of Section 1721, "Board of
Directors," of Title 15 of the Pennsylvania Consolidated Statutes, or any
successor subsections thereto, shall not be applicable to the Company.
-27-
<PAGE> 30
B. Subchapter G, "Control-Share Acquisitions," of Chapter 25,
Title 15 of the Pennsylvania Consolidated Statutes, or any successor subchapter
thereto, shall not be applicable to the Company.
C. Subchapter H, "Disgorgement By Certain Controlling
Shareholders Following Attempts to Acquire Control," of Chapter 25, Title 15 of
the Pennsylvania Consolidated Statutes, or any successor subchapter thereto,
shall not be applicable to the Company."
ARTICLE XX
AMENDMENTS
The By-laws of the Company, regardless of whether adopted by the
shareholders or by the Board of Directors, may be altered, amended or repealed
by the Board of Directors, to the extent permitted by applicable law, or,
subject to Article I hereof, by the shareholders. Such action at a meeting of
the Board of Directors shall be taken by the affirmative vote of a majority of
the members of the Board of Directors in office at the time; and such action by
the shareholders shall be taken by the affirmative vote of the holders of 80%
of the shares of capital stock of the Company entitled to vote thereon.
These By-laws are subject to any requirements of law, any provisions
of the Articles of the Company, as from time to time amended, and any terms of
any series of preferred stock or any other securities of the Company.
-28-
<PAGE> 31
ARTICLE XXI
CONFIDENTIALITY IN VOTING
Shareholders shall be provided permanent confidentiality in all
voting, except as necessary to meet applicable legal requirements. The Company
shall engage the services of an independent third party to receive, inspect,
count and tabulate proxies. A representative of the independent third party
shall also act as a judge of election at the annual meeting of shareholders.
-29-
<PAGE> 1
Exhibit 5.1
October 1, 1996
Infinity Broadcasting Corporation
600 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
I am familiar with the Registration Statement on Form S-4 (the
"Registration Statement") being filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, in respect to
204,515,258 shares of the Common Stock, par value $1.00 per share (the "Common
Stock") of Westinghouse Electric Corporation (the "Company") to be issued in
connection with the merger of R. Acquisition Corp., a wholly-owned
subsidiary of the Company, with and into Infinity Broadcasting Corporation
pursuant to the Agreement and plan of Merger dated as of June 20,
1996, as amended.
I have reviewed the Restated Articles and the By-laws, both as amended, of
the Company, a Pennsylvania corporation and such other documents as I have
deemed necessary as a basis for the opinions hereinafter expressed. I am of the
opinion that the Company is a duly organized and validly existing corporation
under the laws of the Commonwealth of Pennsylvania.
Based on the foregoing, I am further of the opinion that the corporate
proceedings to authorize the issuance of 204,515,258 shares of Common Stock in
connection with the merger have been duly taken in accordance with the
applicable law, and that said 204,515,258 shares of Common Stock have been duly
authorized for issuance.
In addition, I am of the opinion that the 204,515,258 shares reserved, when
issued, will be legally issued, fully paid and nonassessable.
I know that I am referred to in the Registration Statement relating to the
Common Stock and I hereby consent to such use of my name in such Registration
Statement and to the use of this opinion for filing as an exhibit to such
Registration Statement as Exhibit 5.1 thereto.
Very truly yours,
Louis J. Briskman
Senior Vice President
and General Counsel
<PAGE> 1
Exhibit 8.1
CRAVATH, SWAINE & MOORE
[Letter Head]
October 1, 1996
AGREEMENT AND PLAN OF MERGER
DATED AS OF JUNE 20, 1996,
AMONG WESTINGHOUSE ELECTRIC CORPORATION
R ACQUISITION CORP. AND
INFINITY BROADCASTING CORPORATION
Ladies and Gentlemen:
We have acted as counsel for Westinghouse Electric Corporation, a
Pennsylvania corporation ("Parent"), in connection with the Agreement and Plan
of Merger (the "Merger Agreement") dated as of June 20, 1996, among Parent, R
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Sub"), and Infinity Broadcasting Corporation, a Delaware corporation
(the "Company"). Pursuant to the Merger Agreement, Sub will be merged with and
into the Company in a merger (the "Merger"), with the Company being the
surviving corporation (the "Surviving Corporation"). In the Merger, each issued
and outstanding share of common stock of the Company (other than shares owned
directly or indirectly by the Company or by Parent) will be converted into the
right to receive common stock of Parent. Capitalized terms not otherwise defined
herein shall have the meaning specified in the joint proxy statement/prospectus
related to the Merger (the "Proxy Statement").
As required by Section 6.02(e) of the Merger Agreement, you have requested
that we render the opinion set forth below. In providing our opinion, we have
examined the Merger Agreement and such other documents and corporate records as
we have deemed necessary or appropriate for purposes of our opinion. In
addition, we have assumed (i) the Merger will be consummated as described in the
Merger Agreement and (ii) the representations made to us by Parent, Sub and the
Company in their respective letters to us dated the date hereof, and delivered
to us for purposes of this opinion, are accurate and complete as of the date
hereof and as of the Closing Date.
Based upon the foregoing, in our opinion, for Federal income tax purposes,
the Merger will constitute a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), and Parent, Sub
and the Company will each be a party to such reorganization within the meaning
of Section 368(b) of the Code.
The opinions expressed herein are based upon existing statutory, regulatory
and judicial authority, any of which may be changed at any time with retroactive
effect. In addition, our opinions are based solely on the documents that we have
examined, the additional information that we have obtained, and the statements
contained in the letters from Parent, Sub and the Company referred to above.
We hereby consent to the filing of this opinion as an exhibit to the Proxy
Statement and to the use of our name under the captions "Summary--Certain
Federal Income Tax Consequences", "The Merger--Certain Federal Income Tax
Consequences" and "Legal Opinions" in the Proxy Statement. In giving such
consent, we do not thereby concede that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933 or the
Rules and Regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ CRAVATH, SWAINE & MOORE
<PAGE> 1
Exhibit 8.2
October 1, 1996
Infinity Broadcasting Corporation
600 Madison Avenue
New York, New York 10022
Agreement and Plan of Merger,
dated as of June 20, 1996, among
Westinghouse Electric Corporation,
R Acquisition Corp. and
Infinity Broadcasting Corporation
---------------------------------
Ladies and Gentlemen:
We have acted as counsel to Infinity Broadcasting Corporation
("Infinity"), a Delaware corporation, in connection with the proposed merger
(the "Merger") of R Acquisition Corp. ("Sub"), a Delaware corporation and a
wholly owned subsidiary of Westinghouse Electric Corporation ("Westinghouse"),
a Pennsylvania corporation, with and into Infinity pursuant to an Agreement and
Plan of Merger, dated as of June 20, 1996 (the "Merger Agreement"), among
Westinghouse, Sub and Infinity.
In so acting, we have participated in the preparation of the Merger
Agreement and the preparation and filing with the Securities and Exchange
Commission of a Joint Proxy Statement of Westinghouse and Infinity and a
<PAGE> 2
Infinity Broadcasting 2 October 1, 1996
Corporation
Prospectus of Westinghouse filed in connection with the Merger (the "Joint
Proxy Statement").
As required by Sections 6.02(e) and 6.03(c) of the Merger Agreement, you
have requested that we render the opinion set forth below. In rendering such
opinion, we have relied upon the accuracy and completeness as of the date hereof
and as of the date of the closing of the Merger of the representations and
warranties as to certain factual matters set forth in the letters, dated as of
the date hereof, which Infinity, Westinghouse and Sub have provided to us and
will reconfirm prior to the closing of the Merger. We have also examined the
originals, or copies certified or otherwise identified to our satisfaction, of
such records and documents as in our judgment are necessary or appropriate to
enable us to render the opinion set forth below. We have not, however,
undertaken any independent investigation of any factual matter set forth in any
of the foregoing.
Subject to the foregoing, and assuming that the Merger is consummated
in accordance with the Merger Agreement, we are of the following opinion:
1. The Merger will be treated for federal income tax purposes as
a reorganization within the meaning of section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Westinghouse, Sub and Infinity will each be a party to the
reorganization within the meaning of section 368(b) of the Code.
This opinion is limited solely to the federal law of the United States
as in effect on the date hereof. No assurance can be given that the law will
not change with possibly retroactive effect, and we have not undertaken to
advise you or any other person with respect to any event subsequent to the
date hereof.
We are delivering this opinion to you and, without our prior written
consent, no other persons are entitled to rely on this opinion. We hereby
consent to the filing of this opinion as an exhibit to the Joint Proxy
Statement and to the use of our name under the captions "Summary - The
<PAGE> 3
Infinity Broadcasting 3 October 1, 1996
Corporation
Merger and the Merger Agreement - Certain Federal Income Tax Consequences",
"The Merger - Certain Federal Income Tax Consequences", and "Legal Opinions" in
the Joint Proxy Statement. In giving such consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933 or the Rules and Regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of Westinghouse
Electric Corporation of our report dated February 12, 1996 except for the
restatement discussed in Note 23, for which the date is March 31, 1996, which is
included in its Form 8-K dated September 19, 1996. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
600 Grant Street
Pittsburgh, Pennsylvania 15219-9954
September 30, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Joint Proxy
Statement/Prospectus constituting part of this Registration Statement on Form
S-4 of Westinghouse Electric Corporation of our report dated February 26, 1996
relating to the consolidated financial statements of Alliance Broadcasting,
L.P., which appears on page F-1 of the Current Report on Form 8-K/A of Infinity
Broadcasting Corporation dated April 1, 1996. We also consent to the reference
to us under the heading "Experts" in such Joint Proxy Statement/Prospectus.
PRICE WATERHOUSE LLP
San Francisco, California
September 30, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Westinghouse Electric Corporation:
We consent to the use of our report on the consolidated financial statements and
consolidated financial statement schedule of Infinity Broadcasting Corporation
and subsidiaries as of December 31, 1995 and 1994 and for each of the years in
the three-year period ended December 31, 1995, incorporated herein by reference
in the Registration Statement No. 333- on Form S-4 of Westinghouse Electric
Corporation, and to the reference to our firm under the heading "Experts" in the
Prospectus.
KPMG PEAT MARWICK LLP
New York, New York
September 30, 1996
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Westinghouse Electric Corporation on Form S-4 of our report dated April 2, 1996,
on our audits of the consolidated financial statements of TDI Worldwide, Inc.
and Subsidiaries as of December 31, 1995 and 1994, and for each of the three
years in the period ended December 31, 1995, which report is included on Form
8-K/A of Infinity Broadcasting Corporation dated May 15, 1996. We also consent
to the reference to our firm under the caption "Experts."
Coopers & Lybrand L.L.P.
New York, New York
September 30, 1996
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Westinghouse Electric Corporation on Form S-4 of our report dated April 3, 1996
on our audits of the combined financial statements of the operating subsidiaries
of Granum Holdings, L.P. as of December 31, 1995 and 1994 and for each of the
three years in the period ended December 31, 1995, appearing in Form 8-K/A of
Infinity Broadcasting Corporation dated September 5, 1996.
We also consent to the reference to us under the heading "Experts" in the
Prospectus, which is a part of this Registration Statement.
Deloitte & Touche LLP
New York, New York
September 30, 1996
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 22nd day of August, 1996.
/s/ Frank C. Carlucci
---------------------
<PAGE> 2
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 22nd day of August, 1996.
/s/ R. E. Cawthorn
------------------
<PAGE> 3
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 30th day of August, 1996.
/s/ George H. Conrades
----------------------
<PAGE> 4
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 22nd day of August, 1996.
/s/ Gary M. Clark
-----------------
<PAGE> 5
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 22nd day of August, 1996.
/s/ Michael H. Jordan
---------------------
<PAGE> 6
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 22nd day of August, 1996.
/s/ David K.P. Li
-----------------
<PAGE> 7
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 22nd day of August, 1996.
/s/ David T. McLaughlin
-----------------------
<PAGE> 8
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 25th day of August, 1996.
/s/ Richard R. Pivirotto
------------------------
<PAGE> 9
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 21st day of August, 1996.
/s/ Paula Stern
---------------
<PAGE> 10
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 21st day of August, 1996.
/s/ R. D. Walter
----------------
<PAGE> 11
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"), which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1933, as amended, a Registration
Statement on Form S-4, hereby constitutes and appoints Michael H. Jordan, Gary
M. Clark, Fredric G. Reynolds and Louis J. Briskman, his/her true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, his/her true and lawful attorney-in-fact and agent, for him/her and
in his/her name, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto, with power where
appropriate to affix the corporate seal of Westinghouse thereto and to attest
said seal, and to file said Registration Statement and each such amendment,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform any and all acts and things requisite and necessary to be
done in and about the premises as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 23rd day of August, 1996.
/s/ Fredric G. Reynolds
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<PAGE> 1
Exhibit 99.1
PLEASE MARK YOUR
[ X ] VOTES IN THIS
MANNER.
The shares represented by this proxy card will be voted as specified below, but
if no specification is made they will be voted FOR items 1 and 2, and at the
discretion of the proxies on any other manner that may properly come before
the meeting.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
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<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Amendment [ ] [ ] [ ] 2. Issuance of [ ] [ ] [ ]
to Restated Common Stock
Articles of Pursuant to
Incorporation Merger
to Increase Agreement
Number of
Authorized
Shares of
Common Stock
</TABLE>
If you plan to attend the Special Meeting,
please check this box. [ ]
Change of Address (on reverse) [ ]
- --------------------------------------------------------------------------------
SIGNATURE (S)_______________________________________ DATE______________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Detach Proxy Card here
----------------
ADMISSION TICKET
----------------
SPECIAL MEETING
OF
SHAREHOLDERS OF
WESTINGHOUSE ELECTRIC CORPORATION
, 1996
A.M.
- --------------------------------------------------------------------------------
<PAGE> 2
PROXY
WESTINGHOUSE ELECTRIC CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
SPECIAL MEETING OF SHAREHOLDERS, _________________, 1996
(See Proxy Statement for discussion of items)
Michael H. Jordan, Fredric G. Reynolds and Louis J. Briskman, and each of them,
jointly and severally, proxies, with power of substitution, to vote all
shares of common stock which the undersigned is entitled to vote on all
matters which may properly come before the Special Meeting of Shareholders
of Westinghouse Electric Corporation on ___________________________, 1996,
or any adjournment thereof. If you are a participant in the Westinghouse
Savings Program or the Westinghouse de Puerto Rico Retirement Savings Plan,
this proxy card will also constitute voting instructions to the Trustees
under these plans.
(change of address)
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
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(If you have written in the above space,
please mark the corresponding box on
the reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES ON
THE REVERSE SIDE. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND
RETURN THIS PROXY CARD.
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SEE REVERSE SIDE
----------------
<PAGE> 1
Exhibit 99.2
Infinity Broadcasting Corporation Proxy Form
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
[ ], 1996
The undersigned, a stockholder of record of Infinity Broadcasting Corporation
(the "Company") as of the close of business on [ ], 1996, hereby appoints
Michael A. Wiener and Gerald Carrus, or either of them, each with full power of
substitution, as proxies to vote all stock in the Company that the undersigned
would be entitled to vote on all matters that may properly come before the
Special Meeting of Stockholders on [ ], 1996 and any adjournments or
postponements thereof (the "Special Meeting").
Returned proxy forms will be voted: (1) as specified on the matter referenced
on the reverse side of this Proxy Form: (2) IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATION WHERE A CHOICE IS NOT SPECIFIED; and (3) in
accordance with the judgment of the proxies on any other matters that properly
come before the Special Meeting.
Your shares will not be voted unless your signed and dated Proxy Form is
returned or you otherwise vote at the Special Meeting.
SIGNATURE(S) DATED: , 1996
------------------------------- ----------------
Please sign as registered and return promptly in the enclosed envelope.
Executors, trustees and others signing in a representative capacity should
include their names and the capacity in which they sign.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
- -----------------------------------------------------------------------------
The Board of Directors recommends a vote FOR the Company's proposal relating
to:
FOR AGAINST ABSTAIN
Approval and adoption of the [ ] [ ] [ ]
Agreement and Plan of Merger
dated as of June 20, 1996, as
amended, among Westinghouse
Electric Corporation, R
Acquisition Corp. and the
Company, and the transactions
contemplated thereby.
Please complete, sign and date and return promptly.
