<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
QUARTERLY REPORT
UNDER
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
_______________
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13D OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 1-10321
THE ACKERLEY GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 91-1043807
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1301 FIFTH AVENUE
SUITE 4000
SEATTLE, WASHINGTON 98101
(206) 624-2888
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Title of Class Outstanding at May 1, 1998
- --------------------------------------------------------------------------------
Common Stock, $.01 par value 20,572,213 shares
Class B Common Stock, $.01 par value 11,053,270 shares
================================================================================
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TABLE OF CONTENTS
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<CAPTION> PAGE
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PART I- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997.......................... 1
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1997............. 2
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1997............. 3
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.......... 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS................. 5
PART II- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.............................. 11
SIGNATURES.................................................... 11
</TABLE>
i
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
THE ACKERLEY GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
_______________
<TABLE>
<CAPTION>
ASSETS
(Unaudited)
March 31, December 31,
1998 1997
----------- ------------
(In thousands)
<S> <C> <C>
Current assets:
Cash and cash equivalents......................... $ 4,079 $ 3,656
Accounts receivable, net.......................... 48,661 52,923
Current portion of broadcast rights............... 5,656 7,349
Prepaid expenses.................................. 12,258 12,360
Deferred tax assets............................... 11,209 11,499
Other current assets.............................. 4,810 4,734
-------- --------
Total current assets........................... 86,673 92,521
Property and equipment, net......................... 104,641 94,968
Intangibles, net.................................... 52,480 42,318
Other assets 39,104 36,578
-------- --------
Total assets................................... $282,898 $266,385
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable.................................. $ 10,556 $ 9,103
Accrued interest.................................. 7,465 3,995
Other accrued liabilities......................... 19,641 19,071
Deferred revenue.................................. 11,689 23,857
Current portion of broadcasting obligations....... 7,239 8,346
Current portion of long-term debt................. 13,742 16,130
-------- --------
Total current liabilities...................... 70,332 80,502
Long-term debt, net of current portion.............. 241,347 213,294
Litigation accrual.................................. 8,063 8,072
Other long-term liabilities......................... 7,817 9,426
-------- --------
Total liabilities.............................. 327,559 311,294
Stockholders' deficiency:
Common stock, par value $.01 per share--authorized
50,000,000 shares; issued 21,947,159 shares at
March 31, 1998 and 21,855,398 shares at
December 31, 1997; and outstanding 20,572,213
shares at March 31, 1998 and 20,480,452 shares
at December 31, 1997............................. 219 218
Class B common stock, par value $.01 per share--
authorized 11,406,510 shares; and issued and
outstanding 11,053,270 shares at March 31, 1998
and 11,053,510 shares at December 31, 1997....... 111 111
Capital in excess of par value...................... 9,887 9,816
Deficit............................................. (44,789) (44,965)
Less common stock in treasury, at cost.............. (10,089) (10,089)
-------- --------
Total stockholders' deficiency.................... (44,661) (44,909)
-------- --------
Total liabilities and stockholders' deficiency.... $282,898 $266,385
======== ========
</TABLE>
See Notes to Consolidated Condensed Financial Statements
1
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THE ACKERLEY GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
UNAUDITED
_______________
<TABLE>
<CAPTION>
For the Three Month
Periods Ended March 31,
------------------------
1998 1997
------- -------
<S> <C> <C>
(In thousands, except
per share amounts)
Revenue........................................... $89,629 $79,246
Less agency commissions and discounts............. (8,583) (7,792)
------- -------
Net revenue....................................... 81,046 71,454
Expenses:
Operating expenses.............................. 69,388 59,242
Depreciation and amortization expense........... 3,843 3,231
Interest expense................................ 6,510 6,163
------- -------
Total expenses................................ 79,741 68,636
------- -------
Income before income taxes........................ 1,305 2,818
Income tax benefit (expense)...................... (496) 376
------- -------
Net income........................................ $ 809 $ 3,194
======= =======
Net income per common share....................... $ 0.03 $ 0.10
======= =======
Earnings per common share, assuming dilution...... $ 0.03 $ 0.10
======= =======
Dividends per common share........................ $ 0.02 $ 0.02
======= =======
Dividends per common share, assuming dilution..... $ 0.02 $ 0.02
======= =======
Weighted average number of common shares.......... 31,458 31,166
Weighted average number of common shares,
assuming dilution................................. 31,692 31,769
</TABLE>
See Notes to Consolidated Condensed Financial Statements
2
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THE ACKERLEY GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
UNAUDITED
_______________
<TABLE>
<CAPTION>
For the Three Month
Periods Ended March 31,
-----------------------
1998 1997
--------- -------
(In thousands)
<S> <C> <C>
Net cash provided by (used in) operating
activities:.................................... $ (751) $ 6,577
Cash flows from investing activities:
Proceeds from sale of property................ 76 123
Capital expenditures.......................... (11,976) (5,015)
Payments for acquisitions..................... (10,756) ---
Other, net.................................... (513) 492
--------- -------
Net cash used in investing activities......... (23,169) (4,400)
Cash flows from financing activities:
Borrowings under credit agreements............ 171,750 3,000
Payments under credit agreements.............. (145,483) (2,008)
Proceeds from stock issuance.................. 72 ---
Other, net.................................... (1,996) (670)
--------- -------
Net cash provided by financing activities..... 24,343 322
--------- -------
Net increase in cash and cash equivalents....... 423 2,499
Cash and cash equivalents at beginning of
period......................................... 3,656 2,910
--------- -------
Cash and cash equivalents at end of period...... $ 4,079 $ 5,409
========= =======
Supplemental disclosure of noncash
transactions:
Broadcast rights acquired and broadcast
obligations assumed........................ $ 29 $ 17
Property and equipment acquired
through barter............................. 602 86
</TABLE>
See Notes to Consolidated Condensed Financial Statements
3
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THE ACKERLEY GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. The balance sheet at December 31, 1997 has been derived
from the audited consolidated financial statements at that date. The
accompanying consolidated condensed financial statements do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
normal and recurring adjustments necessary for a fair presentation of the
financial position and the results of operations for such periods have been
included. These consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
The results of operations for any interim period are not necessarily
indicative of anticipated results for the full year. The Company's results of
operations may vary from quarter to quarter due in part to the timing of
acquisitions and to seasonal variations in the operations of the broadcasting
and sports & entertainment segments. In particular, the Company's net revenue
and net income historically have been affected positively during the NBA
basketball season (the first, second, and fourth quarters) and by increased
advertising activity in the second and fourth quarters.
Certain prior year's amounts have been reclassified to conform to the 1998
presentation.
NOTE 2. DEBT
In January 1998, the Company replaced its 1996 Credit Agreement with a new
credit agreement (the "Credit Agreement"). The Credit Agreement currently
permits borrowings of up to $77.5 million, due to restrictions related to the
Company's 10 3/4% Senior Secured Notes due 2003 (the "Senior Notes"), including
up to $10.0 million in standby letters of credit. The Credit Agreement further
provides that if the Company redeems the Senior Notes prior to December 15,
1998, the maximum permissible borrowings under the Credit Agreement will be
increased by $187.5 million, which will consist of a $120.0 million term loan
facility and an increase in its revolving credit facility of $67.5 million.
The Company can choose to have interest calculated under the Credit
Agreement at rates based on either a Base Rate or LIBOR rate plus defined
margins. The margins and the fees on the letter of credit facility vary based
on the Company's total leverage ratio. Principal repayments under the Credit
Agreement are due quarterly from March 2000 through June 2005.
In February 1998, New Century Seattle Partners, L.P., a Delaware limited
partnership that owns radio stations KJR(AM), KJR-FM and KUBE(FM) (the
"Partnership"), replaced its previous credit agreement with a new credit
agreement providing for borrowings up to $35.0 million. The borrowings are
secured by a pledge of all Partnership assets.
NOTE 3. INCOME TAXES
The Company has no significant current income tax liabilities primarily
as a result of operating losses incurred in prior years. However, the Company
will continue to pay federal income taxes under
4
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the alternative minimum tax until the operating loss carryforwards are
substantially reduced. In addition, the Company will incur state income tax
expense in certain states in which it operates.
During the first quarter of 1997, the Company reduced the valuation
allowance for deferred tax assets which resulted in the recording of a deferred
tax asset of $1.6 million. The recognized deferred tax asset was based on the
Company's expected utilization of net operating loss carryforwards and reversal
of certain temporary differences between financial statement carrying amounts
and the tax bases of existing assets and liabilities.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The Company reported net income of $0.8 million for the first three
months of 1998, a $2.4 million or 75% decrease from the first three months of
1997. Net revenues for the first three months of 1998 increased over the same
period last year by $9.5 million, or 13%, while the Company's Operating Cash
Flow (as defined below) decreased $0.5 million, or 5%.
On April 15, 1998, the Company paid a $.02 per share dividend. Effective
April 30, 1998, the Partnership redeemed all the interests of Century
Management, Inc., its general partner ("CMI"), for approximately $17.8 million
following receipt of the required approval of the Federal Communications
Commission. Upon closing, KJR Radio, Inc. became the Partnership's sole general
partner and licensee of the radio stations held by the Partnership and AK Media
Group, Inc., the Company's principal operating subsidiary, became the
Partnership's nominal and sole limited partner.
As with many media companies that have grown through acquisitions, the
Company's acquisitions and dispositions of television and radio stations have
resulted in significant non-cash and non-recurring charges to income. For this
reason, in addition to net income, management believes that Operating Cash Flow
(defined as net revenue less operating expenses before amortization,
depreciation, and interest expenses) is an appropriate measure of the Company's
financial performance. Similarly, management believes that Segment Operating
Cash Flow (defined as Operating Cash Flow before corporate overhead) is an
appropriate measure of the financial performance of the Company's segments.
These measures exclude certain expenses that management does not consider to be
costs of ongoing operations. The Company uses Operating Cash Flow to pay
interest and principal on its long-term debt as well as to finance capital
expenditures. Operating Cash Flow and Segment Operating Cash Flow, however, are
not to be considered alternatives to net income as an indicator of the Company's
operating performance or to cash flows as a measure of the Company's liquidity.
5
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RESULTS OF OPERATIONS
The following tables set forth certain historical financial and operating
data for the three month periods ended March 31, 1998 and 1997, including net
revenue, operating expenses, and Operating Cash Flow information by segment:
<TABLE>
<CAPTION>
THREE MONTHS PERIODS ENDED MARCH 31,
-------------------------------------------------------------
1998 1997
--------------------------- --------------------------
(DOLLARS IN THOUSANDS)
AS % OF AS % OF
AMOUNT NET REVENUE AMOUNT NET REVENUE
------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Net revenue............................ $81,046 100.0% $71,454 100.0%
Segment operating expenses............. 66,331 81.8 57,204 80.1
Corporate overhead..................... 3,057 3.8 2,038 2.7
------- -------
Total operating expenses..... 69,388 85.6 59,242 82.8
------- -------
Operating Cash Flow.................... 11,658 14.4 12,212 17.2
Other expenses:
Depreciation and amortization...... 3,843 4.7 3,231 4.5
Interest expense................... 6,510 8.0 6,163 8.6
------- -------
Total other expenses......... 10,353 12.7 9,394 13.1
------- -------
Income before income taxes............. 1,305 1.7 2,818 4.0
Income tax benefit (expense)........... (496) (0.6) 376 0.5
------- -------
Net income............................. $809 1.1 $3,194 4.6
</TABLE>
6
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<TABLE>
<CAPTION> THREE MONTHS PERIOD ENDED
MARCH 31,
--------------------------------
1998 1997
------- -------
(Dollars in thousands)
<S> <C> <C>
Net revenue:
Out-of-home media............................................ $26,467 $24,904
Broadcasting................................................. 27,591 22,742
Sports & entertainment....................................... 26,988 23,808
------- -------
Total net revenue.......................................... $81,046 $71,454
======= =======
Segment operating expenses:
Out-of-home media............................................ $18,962 $17,308
Broadcasting................................................. 17,308 13,381
Sports & entertainment....................................... 30,061 26,515
------- -------
Total segment operating expenses........................... $66,331 $57,204
======= =======
Operating Cash Flow:
Out-of-home media............................................ $ 7,505 $ 7,596
Broadcasting................................................. 10,283 9,361
Sports & entertainment....................................... (3,073) (2,707)
------- -------
Total segment Operating Cash Flow.......................... 14,715 14,250
Corporate overhead........................................... (3,057) (2,038)
------- -------
Total Operating Cash Flow.................................. $11,658 $12,212
======= =======
Change in net revenue from prior periods:
Out-of-home media............................................ 6.3% 17.4%
Broadcasting................................................. 21.3% 12.8%
Sports & entertainment....................................... 13.4% 10.5%
Change in total net revenue................................ 13.4% 13.6%
Segment operating expenses as a % of segment net revenue:
Out-of-home media............................................ 71.6% 69.5%
Broadcasting................................................. 62.7% 58.8%
Sports & entertainment....................................... 111.4% 111.4%
Total segment operating expenses as a % of total net
revenue................................................... 81.8% 82.9%
Operating Cash Flow as a % of segment net revenue:
Out-of-home media............................................ 28.4% 30.5%
Broadcasting................................................. 37.3% 41.2%
Sports & entertainment....................................... (11.4)% (11.4)%
Total Operating Cash Flow as a % of total net revenue...... 14.4% 17.1%
</TABLE>
7
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THREE MONTH PERIOD ENDED MARCH 31, 1998 COMPARED WITH THREE MONTH PERIOD ENDED
MARCH 31, 1997
Net Revenue. Net revenue for the quarter ended March 31, 1998 increased
$9.5 million, or 13%, to $81.0 million from $71.5 million for the first quarter
of 1997. Changes in net revenues were as follows:
. Out-of-Home Media. For the first quarter of 1998, the Company's out-of-
home media segment's net revenue increased $1.6 million, or 6%, compared
to the first quarter of 1997. This increase was mainly due to increased
national advertising sales.
. Broadcasting. The Company's broadcasting segment showed an increase of
$4.9 million in net revenue, or 21%, for the quarter ended March 31,
1998 compared to the corresponding period in the prior fiscal year. This
increase resulted primarily from the addition of television stations
WUTR and WIVT in June 1997 and July 1997, respectively, as well as
higher local sales at the Company's television and radio stations.
. Sports & Entertainment. The sports & entertainment segment's net
revenue increased $3.2 million, or 13%, for the first quarter of 1998
compared to the first quarter of 1997, primarily due to increased ticket
and Seattle SuperSonics team sponsorship sales.
Segment Operating Expenses (Excluding Corporate Overhead). Segment
operating expenses (excluding corporate overhead) for the first quarter of 1998
were $66.3 million, an increase of $9.1 million, or 16%, over segment operating
expenses (excluding corporate overhead) of $57.2 million for the first quarter
of 1997. Changes in segment operating expenses (excluding corporate overhead)
were as follows:
. Out-of-Home Media. Operating expenses for the Company's out-of-home
media segment for the quarter ended March 31, 1998 were $19.0 million,
an increase of $1.7 million, or 10%, over the first quarter of 1997.
This increase was due mainly to the effects of increased sales activity.
. Broadcasting. Operating expenses for the Company's broadcasting segment
for the first quarter of 1998 were $17.3 million, an increase of $3.9
million, or 29%, over the first quarter of 1997. This increase was
mainly due to the addition of television stations WUTR and WIVT in June
1997 and July 1997, respectively, and higher program, promotion and
production expenses in conjunction with the expansion of local news
programming.
. Sports & Entertainment. Operating expenses from the Company's sports &
entertainment segment for the first quarter of 1998 were $30.1 million,
an increase of $3.5 million, or 13%, compared to the first quarter of
1997. This increase was mainly attributable to increased basketball
operating expenses related to team costs.
Corporate Overhead. Corporate overhead for the quarter ended March 31,
1998 increased by $1.0 million, or 50%, to $3.1 million, mainly due to personnel
costs, travel and entertainment, insurance and the utilization of outside
services, primarily for public relations.
Operating Cash Flow. As a result of the above, Operating Cash Flow
decreased $0.5 million or 5% for the three months ended March 31, 1998 from the
same period in 1997. The $0.9 million increase in the broadcast segment's
Operating Cash Flow was offset by a $0.3 million decrease in the sports &
entertainment segment's Operating Cash Flow, the $0.1 million decrease in the
out-of-home media
8
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segment's Operating Cash Flow, and the $1.0 million increase in corporate
overhead for the 1998 quarter. Operating Cash Flow as a percentage of net
revenue decreased to 14% for the three months ended March 31, 1998 from 17% for
the comparable period in 1997.
Depreciation and Amortization Expense. Depreciation and amortization
expenses increased $0.6 million, or 19%, to $3.8 million in the first quarter of
1998 as compared to $3.2 million in the first quarter of 1997.
Interest Expense. Interest expense for the quarter ended March 31, 1998
increased $0.3 million, or 6%, to $6.5 million from $6.2 million in the first
quarter of 1997, mainly due to higher average debt balances during the first
quarter 1998 compared to the same period in 1997.
Income Tax Expense. For the first quarter of 1998, the Company incurred a
$0.5 million income tax expense compared to an income tax benefit of $0.4
million for the first quarter of 1997. The benefit resulted from the
recognition of a $1.6 million deferred tax asset during the first quarter of
1997.
Net Income. Net income was $0.8 million for the three months ended March
31, 1998, a decrease of $2.4 million, or 75%, from $3.2 million for the
comparable period in 1997. Net income as a percentage of net revenue was 1% for
the first quarter of 1998, compared to 5% for the first quarter of 1997.
LIQUIDITY AND CAPITAL RESOURCES
On January 28, 1998, the Company replaced its existing $77.5 million credit
agreement with a new $265.0 million credit agreement (the "Credit Agreement").
The Credit Agreement currently permits borrowings of up to $77.5 million, due to
restrictions related to the $120.0 million aggregate principal amount of 10 3/4%
Senior Notes due 2003 (the "Senior Notes"), including up to $10.0 million in
standby letters of credit. The Credit Agreement further provides that if the
Company redeems its Senior Notes prior to December 15, 1998, the maximum
permissible borrowings under the Credit Agreement will be increased by $187.5
million, which will consist of a $120.0 million term loan facility and an
increase in the revolving credit facility of $67.5 million. In addition, in
February 1998 the Partnership replaced its previous credit agreement with a new
credit agreement (the "Partnership Credit Agreement"), which provides for
borrowings of up to $35.0 million.
As of March 31, 1998, the Company had outstanding revolving credit
borrowings of $67.0 million under the Credit Agreement and $9.7 million
available for future borrowings thereunder, and the Partnership had $19.5
million of borrowings outstanding under the Partnership Credit Agreement and
$15.5 million available for future borrowings thereunder. The Company will be
required to repay outstanding revolving credit borrowings under the Credit
Agreement in quarterly installments from March 2000 through June 2005. The term
loan facility under the Credit Agreement will become available if the Company
redeems the Senior Notes prior to December 15, 1998. In such event, and if the
Company makes term borrowings under the Credit Agreement, it will be required to
repay outstanding borrowings under the term loan facility in quarterly
installments from March 1999 through June 2005.
The Company can choose to have interest calculated under the Credit
Agreement at a Base Rate or LIBOR rate plus defined margins. As of March 31,
1998, the annual interest rate of borrowings outstanding under the Credit
Agreement was approximately 7.06% and under the Partnership Credit Agreement was
approximately 7.69%.
9
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The Company had $32.5 million aggregate principal amount of 11.20% Senior
Subordinated Notes, Series B, due December 15, 1998 and 10.48% Senior
Subordinated Notes due December 15, 2000 (collectively, the "Subordinated
Notes") outstanding at March 31, 1998. The Subordinated Notes require principal
repayments of $12.5 million, $10.0 million, and $10.0 million in 1998, 1999, and
2000, respectively.
The Company has pledged the stock of all of its corporate subsidiaries to
secure its obligations under the Credit Agreement and the indenture related to
the Senior Notes (the "Indenture"). Similarly, the Partnership has pledged all
its assets as collateral for borrowings under the Partnership Credit Agreement.
In addition, the Credit Agreement, the Indenture, and the note agreements
related to the Subordinated Notes restrict, among other things, the Company's
ability to assume or issue new debt, declare and pay dividends, repurchase
shares of Common Stock and Class B Common Stock, and dispose of assets. They
also contain restrictive covenants requiring the Company to maintain certain
financial ratios. As of March 31, 1998, the Company was in compliance with all
such ratios and covenants.
The Company's working capital increased to $16.3 million at March 31, 1998
from $12.0 million at December 31, 1997 primarily due to a reduction of the
current portion of long-term debt resulting from the refinancing described above
and the collection of receivables.
The Company expended $12.0 million for capital expenditures in the first
quarter of 1998, compared to $5.0 million in the corresponding quarter in 1997.
Capital expenditures for new property and equipment of $12.0 million in the
first three months of 1998 were primarily for a new aircraft for the Seattle
SuperSonics, broadcasting equipment, and advertising signs and displays.
For the periods presented, the Company has financed its working capital
needs primarily from cash provided by operating activities. Over that period,
long-term liquidity needs, including for acquisitions, have been financed
primarily through additions to long-term debt, principally through bank
borrowings and the sale of senior and subordinated debt securities. Capital
expenditures for new property and equipment have been financed with both cash
provided by operating activities and long-term debt. Cash used in operating
activities for the first three months of 1998 was $0.8 million, a decrease from
cash provided by operating activities of $6.6 million for the first quarter of
1997.
On April 15, 1998, the Company paid its shareholders a cash dividend of
$.02 per share.
10
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PART II - OTHER INFORMATION
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.0 Fourth Restated Certificate of Incorporation.
10.1 Second Amendment to the Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P., dated
March 10, 1998.
10.2 Third Amendment to the Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P., dated
April 30, 1998.
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE ACKERLEY GROUP, INC.
DATED: May 12, 1998 BY: /s/ Denis M. Curley
----------------------------------
Denis M. Curley
Executive Vice President and Chief
Financial Officer, Treasurer and
Secretary Principal Financial Officer)
11
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<TABLE>
<CAPTION>
EXHIBIT INDEX
<S> <C>
3.0 Fourth Restated Certificate of Incorporation.
10.1 Second Amendment to the Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P., dated
March 10, 1998.
10.2 Third Amendment to the Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P., dated
April 30, 1998.
27 Financial Data Schedule
</TABLE>
<PAGE>
EXHIBIT 3.0
FOURTH RESTATED
CERTIFICATE OF INCORPORATION
OF
THE ACKERLEY GROUP, INC.
The present name of this corporation is The Ackerley Group, Inc. (the
"Corporation"). The Corporation was incorporated under the name Ackerley
Incorporated. By adopting this Fourth Restated Certificate of Incorporation,
the Third Restated Certificate of Incorporation is being further amended by
adding Article FOURTH, Part 7. The original Certificate of Incorporation of the
Corporation was filed on June 9, 1978. This Fourth Restated Certificate of
Incorporation was duly proposed by the directors and adopted by the stockholders
of the Corporation in accordance with the provisions of accordance with the
provisions of Sections 245, 242, and 228 of the Delaware General Corporation
Law.
The Corporation's Third Restated Certificate of Incorporation is amended
and restated to read in full as follows:
FIRST: The name of the Corporation is The Ackerley Group, Inc.
SECOND: The registered office of the Corporation in the State of Delaware
is located at Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, and the name of its registered agent at such address is
The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
FOURTH: The total number of shares of all classes of stock which the
Corporation is authorized to issue is SIXTY-ONE MILLION FOUR HUNDRED SIX
THOUSAND FIVE HUNDRED TEN (61,406,510), divided into two (2) classes as follows:
(i) Fifty Million (50,000,000) shares of Common Stock with a par value of One
Cent ($.01) per share (the "Common Stock"); and (ii) Eleven Million Four Hundred
Six Thousand Five Hundred Ten (11,406,510) shares of Class B Common Stock with a
par value of One Cent ($.01) per share (the "Class B Common Stock").
A statement of the designations and the powers, preferences and rights and
the qualifications, limitation or restrictions shall be as to the Common Stock
and Class B Common Stock as set forth below:
COMMON STOCK
Except as otherwise provided herein, all shares of Common Stock and Class B
Common Stock will be identical and will entitle the holders thereof to the same
rights and privileges.
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Part 1. Voting Rights.
Except as otherwise required by law, the holders of Common Stock will be
entitled to one (1) vote per share on all matters to be voted on by the
Corporation's stockholders. The holders of Class B Common Stock will be
entitled to ten (10) votes per share on all matters to be voted on by the
Corporation's stockholders. Neither the Common Stock nor the Class B Common
Stock shall have cumulative voting rights, whether voting as separate classes or
a single class. Except as otherwise required by law, Common Stock and Class B
Common Stock shall vote as a single class on all matters presented for a vote of
the stockholders of the Corporation.
Part 2. Restrictions an Transfer of Class B Common Stock.
(a) No person holding shares of Class B Common Stock of record (a "Class B
Holder") may transfer, and the Corporation shall not register the transfer of,
any shares of Class B Common Stock, whether by sale, assignment, gift, bequest,
appointment, or otherwise, except to a Permitted Transferee (a "Permitted
Transfer"). The term Permitted Transferee has the following meanings with
respect to each Class B Holder:
(i) The following persons shall be "Permitted Transferees" of each
Class B Holder who is a natural person:
A. The spouse or former spouse of such Class B Holder; any
Original Holder (as defined in clause (c) of this Part 2) or the
spouse or former spouse of any Original Holder; any lineal descendant
of any Original Holder or of the spouse or former spouse of any
Original Holder; and any spouse or former spouse of such lineal
descendant (hereinafter such Class B Holder's "Family Members");
B. The trustee or trustees of a voting trust of which a
Controlling Number (as defined in clause (c) of this Part 2) of such
trustees are any of the following (each a "Qualified Persons"): (1)
such Class B Holder, (2) one of such Class B Holder's Family Members,
(3) an executive officer (as defined in Rule 3b-7 of the General Rules
and Regulations under the Exchange Act, as in effect on July 21, 1987,
the effective date of the Second Restated Certificate of
Incorporation) of the Corporation or any wholly owned subsidiary of
the Corporation, or (4) any person who is the duly designated initial
or subsequent successor of an Original Holder in accordance with the
terms of such voting trust;
C. The trustee or trustees of a trust (other than a voting
trust) solely for the benefit, of such Class B Holder or one or more
of such Class B Holder's Permitted Transferees described in each
subclause of this clause (a) other than subclause (b) or this
subclause (c);
D. Any organization contributions to which are deductible for
federal income, estate or gift tax purposes or any split-interest
trust described in Section 664 of the Internal Revenue Code as it may
from time to time be amended, and of which a Controlling Number of the
members of the Board or Directors or other
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governing body or group having the ultimate authority, inter alia, to
vote, dispose or direct the voting or disposition of the shares of
Class B Common Stock held by such organization ("Governing Body") are
Qualified Persons (a "Charitable Organization");
E. A corporation of which a majority of the outstanding shares
of capital stock entitled to vote generally for the election of
directors is beneficially owned by, or a partnership of which a
majority of the partnership interests entitled to participate in the
management of the partnership are beneficially owned by, such Class B
Holder or his or her Permitted Transferees described in each subclause
of this clause (i) other than this subclause (E); and
F. If the Class B Holder is deceased, bankrupt or insolvent,
the estate of such Class B Holder.
(ii) In the case of one or more Class B Holders holding shares of
Class B Common Stock as trustees pursuant to a voting trust or any other
trust (other than a Charitable Organization or a trust described in clause
(d) below) as a result of a Permitted Transfer, "Permitted Transferee"
means, with respect to each share of Class B Common Stock so transferred to
such trustees, (A) any person who transferred such share of Class B Common
Stock to such trustees and (B) any Permitted Transferee of any such
transferor, and, with respect to each Subsequent Class B Share (as defined
in (c) of this Part 2) held by such trustees, any person who is a Permitted
Transferee with respect to the share of Class B Common Stock in respect of
which such Subsequent Class B Share was issued.
(iii) In the case of one or more Class B Holders holding shares of
Class B Common Stock as trustees pursuant to a trust (other than a voting
trust or a Charitable Organization) which was irrevocable on July 21, 1987,
the effective date of the Second Restated Certificate of Incorporation,
"Permitted Transferee" means any person to whom or for whose benefit
principal may be distributed either during or at the end of the term of
such trust whether by power of appointment or otherwise.
(iv) In the case of any Charitable Organization that is a Class B
Holder, "Permitted Transferee" means, (A) with respect to any share of
Class B Common Stock transferred to such Charitable Organization in a
Permitted Transfer, the transferor in such Permitted Transfer and any
Permitted Transferee of such transferor and (B) with respect to each
Subsequent Class B Share held by such Charitable Organization, any person
who is a Permitted Transferee with respect to the share of Class B Common
Stock in respect of which such Subsequent Class B share was issued.
(v) In the case of a Class B Holder that is a corporation or
partnership (other than a Charitable Organization) holding shares of Class
B Common Stock as a result of a Permitted Transfer, "Permitted Transferee"
means with respect to each share of Class B Common Stock so transferred to
such corporation or partnership (A) any person who transferred such share
are of Class B Common Stock to such corporation or partnership
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and (B) any Permitted Transferee of any such transferor, and, with respect
to each Subsequent Class B Share held by such corporation or partnership,
any person who is a Permitted Transferee with respect to the share of Class
B Common Stock in respect of which such Subsequent Class B Share was
issued.
(vi) In the case of a Class B Holder that is the estate of a
deceased, bankrupt or insolvent Class B Holder, "Permitted Transferee"
means a Permitted Transferee of such deceased, bankrupt or insolvent Class
B Holder.
(b) Notwithstanding anything to the contrary set forth herein, any Class B
Holder may pledge his shares of Class B Common Stock to a pledgee pursuant to a
bona fide pledge of such shares as collateral security for indebtedness due to
the pledgee, provided that such shares shall not be transferred to or registered
in the name of pledgee and shall remain subject to the provisions of this Part
2. In the event of foreclosure or other similar action with respect to such
shares by the pledgee, such pledges shares of Class B Common Stock may only he
transferred to a Permitted Transferee of the pledgor or converted into shares of
Common Stock, as the pledgee may elect.
(c) For purposes of this Part 2:
(i) The term "Controlling Number" means the minimum number of
trustees, in the case of a trust, or members of a Governing Body, in the
case of any other form of entity, whose affirmative vote is necessary to
take any action on, or whose negative vote, abstention or failure to attend
is sufficient to prevent any action with respect to the voting or
disposition of shares of capital stock held by such entity;
(ii) The term "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(iii) The term "Original Holder" means any person to whom or trust to
which shares of Class B Common Stock are issued in connection with the
first issuance of such shares as a part of the 1987 stock dividend of the
Corporation.
(iv) The term "Subsequent Class B Share" means any share of Class B
Common Stock issued by the Corporation to a Class B Holder in respect of an
existing share of Class B Common Stock held by such Class B Holder.
(v) The relationship of any person that is derived by or through
legal adoption shall be considered a natural one.
(vi) A minor for whom shares of Class B Common Stock are held
pursuant to the Uniform Gifts to Minors Act, as in effect in any state, or
any similar law, shall be considered a Class B Holder.
(vii) Unless otherwise specified, the term "person" means both
natural persons and legal entities.
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(viii) Without derogating from the election conferred upon the
Corporation pursuant to paragraph clause (d) below, each reference to a
corporation shall include any successor corporation resulting from merger
or consolidation, and each reference to a partnership shall include any
successor partnership resulting from the death or withdrawal of a partner.
(ix) The term "beneficial owner" has the meaning ascribed to such term
in Rule 13d-3 of the General Rules and Regulations under the Exchange Act,
as in effect on July 21, 1987, the effective date of the Second Restated
Certificate of Incorporation.
(d) If at any time after July 21, 1987, the effective date of the Second
Restated Certificate of Incorporation, any of the following events shall occur:
(i) A Controlling Number of the trustees of any voting trust that is
a Class B Holder shall cease to be Qualified Persons;
(ii) A Controlling Number of the Governing Body of any Charitable
Organization that is a Class B Holder shall cease to be Qualified Persons;
or
(iii) A corporation or partnership that first became a Class B Holder
as a result of a Permitted Transfer shall thereafter by reason of any
transfer of the beneficial ownership of the capital stock or partnership
interests thereof cease to be a Permitted Transferee of the transferor in
such Permitted Transfer;
then, at any time after the occurrence of any such event, upon the election of
the Corporation given by written notice to the trustees of such voting trust,
Charitable Organization, corporation or, partnership, as the case may be,
without further act on anyone's part, each share of Class B Common Stock held by
such entity shall be converted into one share of Common Stock, effective upon
the giving of such notice, and the stock certificates formerly representing the
shares of Class B Common Stock held by such entity shall thereupon and
thereafter be deemed to represent such shares of Common Stock.
(e) Anything contained in this Part 2 to the contrary notwithstanding:
(i) Shares of Class B Common Stock may be registered in the names of
more than one person only if each person in whose name the shares of Class
B Common Stock are to be registered is a Permitted Transferee of each such
other person. If shares of Class B Common Stock are registered in the
names of more than one person in accordance with this subclause (i), then
any transfer of such shares of Class B Common Stock to any Permitted
Transferee of any person in whose name such shares are registered shall he
a Permitted Transfer.
(ii) Any transfer of shares of Class B Common Stock to an employee
benefit plan established and maintained by the Corporation or any wholly
owned subsidiary of the Corporation or any trustee or fiduciary with
respect to any such plan in such capacity
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shall be a Permitted Transfer, and any such plan, trustee or fiduciary
shall be a Permitted Transferee of any Class B Holder.
(f) Any purported transfer of record or beneficial ownership of shares of
Class B Common Stock other than in accordance, with the terms of this Part 2
shall, without any act on anyone's part, result in the conversion of each share
of the purportedly transferred share of Class B Common Stock into one share of
Common Stock effective on the date of such purported transfer, and the stock
certificates formerly representing such shares of Class B Common Stock shall
thereupon and thereafter be deemed to represent such number of shares of Common
Stock.
(g) Shares of Class B Common Stock may be issued to, or registered in the
names of the beneficial owners thereof, or in "street" or "nominee" name. The
Corporation may, in connection with preparing a list of stockholders entitled to
vote at any meeting of stockholders, or as a condition to the transfer or the
registration of shares of Class B Common Stock on the Corporation's books,
require the furnishing of such affidavits or other proof as it deems necessary
to establish that the registered owner of such shares is in fact the beneficial
owner of such shares.
(h) The Corporation shall note on the certificates for shares of Class B
Common Stock that the shares represented by such certificates are subject to the
restrictions on transfer and registration of transfer imposed by this Part 2.
Part 3. Dividends. When and as dividends are declared thereon, whether
payable in cash, property or securities of the Corporation, the holders of the
Common Stock and Class B Common Stock will be entitled to share equally, share
for share, in such dividends.
Part 4. Conversion.
4.01 Conversion of Class B Common Stock. Each record holder of Class B
Common Stock is entitled, at any time to convert any or all of the shares of
such holder's Class B Common Stock into the same number of shares of Common
Stock; provided, that no holder of Class B Common Stock is entitled to convert
any share or shares of Class B Common Stock to the extent that, as a result of
such conversion, such holder or its affiliates would directly or indirectly own,
control, or have power to vote a greater quantity of securities of any kind
issued by the Corporation than such holder and its affiliates are permitted to
own, control or have power to vote under any law or under any regulation, rule
or other requirement of any governmental authority at any time applicable to
such holder and its affiliates. The Corporation shall at all times reserve and
keep available, solely for the purpose of issuance upon conversion of
outstanding shares of Class B Common Stock, such number of shares of Common
Stock as may be issuable upon the conversion of all such outstanding shares of
Class B Common Stock.
4.02 Conversion Procedure.
(a) Each conversion of shares of Class B Common Stock into shares of
Common Stock will be effected by the surrender of the certificate or
certificates representing the shares to be converted at the principal office of
the Corporation or, at the Corporation's election, at the
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<PAGE>
office of the Corporation's designated transfer agent at any time during normal
business hours, together with a written notice by the holder of such Class B
Common Stock, stating that such holder desires to convert the shares, or a
stated number of shares, of Class B Common Stock represented by such certificate
or certificates into Common Stock and that upon such conversion such holder and
its affiliates will not directly or indirectly own, control or have the power to
vote a greater quantity of securities of any kind issued by the Corporation than
such holder and its affiliates are permitted to own, control or have the power
to vote under any applicable law, regulation, rule or other governmental
requirement (and the receipt of such statement will obligate the Corporation to
issue such Common Stock). Such conversion will be deemed to have been effected
on the date on which such certificate or certificates have been surrendered and
such notice has been received, and at such time the rights of the holder of the
converted Class B Common Stock as such holder will cease and the person or
persons in whose name or names the certificate or certificates for shares of
Common Stock are to be issued upon such conversion will be deemed to have become
the holder or holders of record of the shares of Common Stock represented
thereby.
(b) Promptly after such surrender and the receipt of such written notice,
the Corporation will issue, and deliver in accordance with the surrendering
holder's instructions (a) the certificate or certificates for the Common Stock
issuable upon such conversion and (b) a certificate representing any Class B
Common Stock which was represented by the certificate or certificates delivered
to the Corporation in connection with such conversion but which was not
converted.
(c) If the Corporation in any manner subdivides or combines the
outstanding shares of the class of Common Stock or Class B Common Stock, the
outstanding shares of the other class will be proportionately subdivided or
combined.
(d) The issuance of certificates for Common Stock upon conversion of Class
B Common Stock, will be made without charge to the holders of such shares for
any issuance tax in respect thereof or other cost incurred by the Corporation in
connection with such conversion and the related issuance of Common Stock.
(e) The Corporation will not close its books against the transfer of Class
B Common Stock or of Common Stock issued or issuable upon conversion of Class B
Common Stock in any manner which would interfere with the timely conversion of
Class B Common Stock.
Part 5. Registration of Transfer.
The Corporation will keep at its principal office (or such other place as
the Corporation reasonably designates) a register for the registration of shares
of Common Stock and Class B Common Stock. Upon the surrender of any certificate
representing shares of any such class at such place, the Corporation or its
designated transfer agent will, at the request of the registered holder of such
certificate, execute and deliver a new certificate or certificates in exchange
therefor representing in the aggregate the number of shares of such class
represented by the surrendered certificate, and the Corporation forthwith will
cancel such surrendered certificate. Each such new certificate will be
registered in such name and will represent such number of
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shares of such class as is requested by the holder of the surrendered
certificate and will be substantially identical in form to the surrendered
certificate. The issuance of new certificates will be made without charge to the
holders of the surrendered certificates for any issuance tax in respect thereof
or other cost incurred by the Corporation in connection with such issuance.
Part 6. Replacement.
Upon receipt of evidence, reasonably satisfactory to the Corporation (an
affidavit of the registered holder will be satisfactory) of the ownership and
the loss, theft, destruction or mutilation of any certificate evidencing one or
more shares of Common Stock or Class B Common Stock, and in the case of any such
loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to
the Corporation (provided that if the holder is an institutional investor its
own agreement will be satisfactory) or, in the case of any such mutilation upon
surrender of such certificate, the Corporation will (at its expense) execute and
deliver in lieu of such certificate a new certificate of like kind representing
the number of shares of such class represented by such lost, stolen, destroyed
or mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate.
Part 7. New York Stock Exchange, Inc.
Nothing contained in this Certificate shall impair the settlement of
transactions entered into through the facilities of the New York Stock Exchange,
Inc.
FIFTH: So long as the Corporation or any of its subsidiaries hold
authority from the Federal Communications Commission (or any successor thereto)
to operate any television or radio broadcast station, if the Corporation has
reason to believe that the ownership, or proposed ownership, of shares of
capital stock of the Corporation by any stockholder or any person presenting any
shares of capital stock of the Corporation for transfer into his name (a
"Proposed Transferee") may be inconsistent with, or in violation of, any
provision of the Federal Communications Laws (as hereinafter defined) such
stockholder or Proposed Transferee, upon request of the Corporation, shall
furnish promptly to the Corporation such information (including without
limitation, information with respect to citizenship, other ownership interests
and affiliations) as the Corporation shall reasonably request to determine
whether the ownership of, or the exercise of any rights with respect to, shares
of capital stock of the Corporation by such stockholder or Proposed Transferee
is inconsistent with, or in violation of, the Federal Communications Laws. For
purposes of this Article FIFTH, the term "Federal Communications Laws" shall
mean any law of the United States now or hereafter in effect (and any regulation
thereunder) pertaining to the ownership of, or the exercise of rights of
ownership with respect to capital stock of corporations holding, directly or
indirectly, television or radio station authorizations, including, without
limitation, the Communications Act of 1934, as amended (the "Communications
Act") , and regulations thereunder pertaining to the ownership, or the exercise
of the rights of ownership, of capital stock of corporations holding, directly
or indirectly, television or radio station authorizations, by (i) aliens, as
defined in or under the Communications Act, as it may be amended from time to
time, (ii) persons and entities having interests in television or radio
stations, newspapers and cable television systems or (iii) persons
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or entities, unilaterally or otherwise, seeking direct or indirect control of
the Corporation, as construed under the Communications Act, without having
obtained any requisite prior Federal regulatory approval to such control.
If any stockholder or Proposed Transferee from whom information is
requested should fail to respond to such request pursuant to the first paragraph
of this Article or the Corporation shall conclude that the ownership of, or the
exercise of any rights of ownership with respect to, shares of capital stock of
the Corporation, by such stockholder or Proposed Transferee, could result in any
inconsistency with, or violation of, the Federal Communications Laws, the
Corporation may refuse to permit the transfer of shares of capital stock of the
Corporation to such Proposed Transferee, or may suspend those rights of stock
ownership the exercise of which would result in any inconsistency with, or
violation of, the Federal Communications Laws, such refusal of transfer or
suspension to remain in effect until the requested information has been received
or until the Corporation has determined that such transfer, or the exercise of
such suspended rights, as the case may be, is permissible under the Federal
Communications Laws, and the Corporation may exercise any and all appropriate
remedies, at law or in equity, in any court of competent jurisdiction, against
any such stockholder or Proposed Transferee, with a view towards obtaining such
information or preventing or curing any situation which would cause any
inconsistency with, or violation of, any provision of the Federal Communications
Laws.
The Corporation may note on the certificates of its capital stock that the
shares represented by such certificates are subject to the restrictions set
forth in this Article.
For purposes of this Article, the word "person" shall include not only
natural persons but partnerships, associations, corporations, joint ventures and
other entities and the word "regulation" shall include not only regulations but
rules, published policies and published controlling interpretations by an
administrative agency or body empowered to administer a statutory provision of
the Federal Communications Laws.
SIXTH: Provisions for the management of the business and for the conduct
of the affairs of the Corporation and provisions creating, defining, limiting
and regulating the powers of this Corporation, the directors and stockholders
are as follows:
(1) The board of directors shall have the power to make, adopt, alter,
amend and repeal the bylaws of the Corporation without the assent or vote of the
stockholders, including, without limitation, the power to fix, from time to
time, the number of directors which shall constitute the whole board of
directors of the Corporation subject to the right of the stockholders to alter,
amend and repeal the bylaws made by the board of directors,
(2) Election of directors of the Corporation need not be written ballot
unless the bylaws so provide.
(3) In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the board of directors of the Corporation are
hereby expressly empowered to exercise all such powers and to do all such acts
and things as may be exercised or done by the
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Corporation; subject, nevertheless, to the provisions of the statutes of the
State of Delaware and of the Certificate of Incorporation as they may be
amended, altered or changed from time to time and to any bylaws from time to
time made by the directors or stockholders; provided, however, that no bylaws so
made shall invalidate any prior act of the board of directors which would have
been valid if such bylaw had not been made.
SEVENTH: The Corporation shall, to the full extent permitted by law,
including, without limitation, Section 145 of the Delaware General Corporation
Law, indemnify all directors, officers, employees, agents and other persons whom
it may indemnify pursuant thereto against any liability, and the expenses
incurred in defense of such liability, that may be asserted, against or incurred
by such person arising out of such person's status with or service to or at the
request of the Corporation. The Corporation shall pay the expenses of any
director or officer in defense of such liability in advance of the final
disposition of the matter upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Corporation. Nothing contained
herein shall be deemed to require or make mandatory the purchase and maintenance
of insurance as may be permitted under Section 145(g) of the Delaware General
Corporation Law.
EIGHTH: No director or former director of the Corporation shall be
personally liable to this Corporation or any of its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (a) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) pursuant to Section
174 of the Delaware General Corporation Law, (d) for any transaction from which
the director derived an improper personal benefit, or (e) for any act or
omission occurring prior to the date this Article EIGHTH became effective. Any
repeal or modification of this Article EIGHTH shall not adversely affect any
right or protection of a director or former director of the Corporation existing
at the time of such repeal or modification with respect to acts or omissions
occurring prior to such repeal or modification.
IN WITNESS WHEREOF, this Fourth Restated Certificate of Incorporation,
which restates and integrates and does further amend the provisions of the
Corporation's Third Restated Certificate of Incorporation, and having been duly
adopted by the Board of Directors of the Corporation and approved by a majority
of the votes held by the Corporation's shareholders in accordance with Sections
242 and 245 of the General Corporation Laws of the State of Delaware, has been
executed this 4th day of May, 1998, by the Corporation's duly authorized
officer.
THE ACKERLEY GROUP, INC.
By: /s/ Denis M. Curley
Denis M. Curley
Co-President and Chief Financial Officer,
Secretary and Treasurer
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EXHIBIT 10.1
SECOND AMENDMENT TO
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF NEW CENTURY SEATTLE PARTNERS, L.P.
This Second Amendment to the Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P. (this "Second Amendment") dated
as of March 10, 1998 is made and entered into by and among Century Management,
Inc. ("Century"), KJR Radio, Inc. ("KJR/LP") and The Ackerley Group, Inc. f/k/a
Ackerley Communications, Inc. ("Ackerley").
RECITALS:
A. NCSI, CMI, ASDP/New Century, Inc. ("ASDP/LP"), UnionBanCal Venture
Corporation f/k/a Union Venture Corporation ("UVC/LP"), KJR and Ackerley are
parties to that certain Amended and Restated Limited Partnership Agreement of
New Century Seattle Partners, L.P., dated as of July 14, 1994.
B. The Amended and Restated Limited Partnership Agreement was amended pursuant
to an Amendment, Waiver and Consent to Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P. dated as of April __, 1996 (as
amended, the "Limited Partnership Agreement").
C. Pursuant to a Purchase, Redemption and Termination Agreement, made as of
the 17th day of February, 1998, by and among Alta Subordinated Debt Partners
III, L.P. ("ASDP"), ASDP/LP, UVC/LP, the PARTNERSHIP, New Century Seattle
License Partnership (the "License Partnership"), New Century Seattle Partners
(the "Operating Partnership"), NCSI, Century, KJR/LP and Ackerley, the
PARTNERSHIP satisfied all outstanding obligations to ASDP/LP and UVC/LP, and
ASDP/LP and UVC/LP withdrew as partners of the PARTNERSHIP and relinquished
their entire ownership interests in the PARTNERSHIP, including all of their
rights and obligations under the Limited Partnership Agreement.
D. The parties wish to amend the Partnership Agreement to reflect the
withdrawal of ASDP/NC and UVC as partners of the PARTNERSHIP and to make certain
other changes to the Limited Partnership Agreement as set forth herein.
AGREEMENT:
In consideration of the above recitals and of the mutual covenants and
conditions contained herein, the parties hereto agree as follows:
1. Defined Terms. Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned thereto in the Limited
Partnership Agreement.
2. Withdrawal of Partners. The Limited Partnership Agreement is amended
to reflect the withdrawal of ASDP/NC and UVC as partners of the PARTNERSHIP.
<PAGE>
3. Distributions. Section 4.1(a) is amended to reflect that, as of
January 1, 1998, all CASH AVAILABLE for DISTRIBUTION shall be distributed to
KJR/LP.
4. Satisfaction of Obligations. All obligations of the Partnership under
the Securities Purchase Agreement, and the UVC/LP Securities Purchase Agreement
to ASDP, ASDP/LP and UVC/LP have been satisfied.
5. Ratification. Except as specifically amended hereinabove, the Limited
Partnership Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
6. Counterparts. This Second Amendment may be executed in two or more
counterparts, each of which shall be deemed and original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Second Amendment to
Amended and Restated Limited Partnership Agreement of New Century Seattle
Partners, L.P. as of the day and year first above written.
CENTURY MANAGEMENT, INC.
By: /s/ Lance W. Anderson
---------------------
Name: Lance W. Anderson
Title: Secretary/Treasurer
KJR RADIO, INC.
By: /s/ Denis M. Curley
-------------------
Name: Denis M. Curley
Title: Secretary/Treasurer
THE ACKERLEY GROUP, INC.
By: /s/ Denis M. Curley
-------------------
Name: Denis M. Curley
Title: Secretary/Treasurer
<PAGE>
EXHIBIT 10.2
THIRD AMENDMENT TO
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF NEW CENTURY SEATTLE PARTNERS, L.P.
This Third Amendment to the Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P. (this "Third Amendment") dated
as of April 30, 1998 is made and entered into by and among KJR Radio, Inc.
("KJR/LP") and The Ackerley Group, Inc. f/k/a Ackerley Communications, Inc.
("Ackerley") and AK Media Group, Inc. ("AKMG").
RECITALS:
A. Century Management, Inc. ("CMI"), ASDP/New Century, Inc. ("ASDP/LP"),
UnionBanCal Venture Corporation f/k/a Union Venture Corporation ("UVC/LP"), KJR
and Ackerley entered into a certain Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P. (the "Partnership"), dated as of
July 14, 1994.
B. The Amended and Restated Limited Partnership Agreement was amended pursuant
to an Amendment, Waiver and Consent to Amended and Restated Limited Partnership
Agreement of New Century Seattle Partners, L.P. dated as of April __, 1996.
C. Pursuant to a Purchase, Redemption and Termination Agreement, made as of
the 17th day of February, 1998, by and among Alta Subordinated Debt Partners
III, L.P. ("ASDP"), ASDP/LP, UVC/LP, the Partnership, New Century Seattle
License Partnership (the "License Partnership"), New Century Seattle Partners
(the "Operating Partnership"), NCSI, Century, KJR/LP and Ackerley, the
Partnership satisfied all outstanding obligations to ASDP/LP and UVC/LP, and
ASDP/LP and UVC/LP withdrew as partners of the Partnership and relinquished
their entire ownership interests in the Partnership, including all of their
rights and obligations under the Partnership Agreement.
D. The Amended and Restated Limited Partnership Agreement was amend pursuant
to a Second Amendment to Amended and Restated Limited Partnership Agreement of
New Century Seattle Partners, L.P. dated as of March 10, 1998 (as amended, the
"Partnership Agreement") to reflect the withdrawal of ASDP/NC and UVC as
partners of the Partnership and to make certain other changes to the Partnership
Agreement.
E. Pursuant to a Partnership Redemption Agreement dated as of February 11,
1998 by and between the Partnership, CMI and KJR/LP, the Partnership agreed that
it would redeem the interest of CMI in the Partnership in accordance with the
terms of said agreement.
F. Simultaneously with the execution of this Amendment, the parties are
closing transaction contemplated by the Partnership Redemption Agreement. This
Amendment confirms the withdrawal of CMI as the General Partner and the
relinquishment of CMI Partnership Interest, and authorizes the replacement of
KJR/LP as the General Partner and the admission of AKMG/LP as a limited partner,
all on the terms and conditions set forth below.
<PAGE>
AGREEMENT:
In consideration of the above recitals and of the mutual covenants and
conditions contained herein, the parties hereto agree as follows:
1. Defined Terms. Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned thereto in the Partnership
Agreement.
2. Withdrawal of General Partner. The Partnership Agreement is amended
to reflect the withdrawal of CMI as the General Partner.
3. Relinquishment of Partnership Interest. The Partnership Agreement is
amended to reflect the relinquishment of CMI's Partnership Interest.
4. Replacement of General Partner. The Partnership Agreement is amended
to reflect the replacement of KJR/LP as the General Partner. KJR/LP's
Partnership Interest shall hereinafter be deemed a general partnership interest.
5. Admission of AKMG/LP. The Partnership Agreement is amended reflect the
admission of AKMG/LP as a Limited Partner with a 1% Partnership Interest.
6. Ratification. Except as specifically amended hereinabove, the Limited
Partnership Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
7. Counterparts. This Third Amendment may be executed in two or more
counterparts, each of which shall be deemed and original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Third Amendment to
Amended and Restated Limited Partnership Agreement of New Century Seattle
Partners, L.P. as of the day and year first above written.
CENTURY MANAGEMENT, INC.
By: /s/ Lance W. Anderson
---------------------
Name: Lance W. Anderson
Title: Secretary/Treasurer
<PAGE>
KJR RADIO, INC.
By: /s/ Denis M. Curley
-------------------
Name: Denis M. Curley
Title: Secretary/Treasurer
THE ACKERLEY GROUP, INC.
By: /s/ Denis M. Curley
-------------------
Name: Denis M. Curley
Title: Secretary/Treasurer
AK MEDIA GROUP, INC.
By: /s/ Denis M. Curley
-------------------
Name: Denis M. Curley
Title: Secretary/Treasurer
<TABLE> <S> <C>
<PAGE>
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 4,079
<SECURITIES> 0
<RECEIVABLES> 49,953
<ALLOWANCES> 1,292
<INVENTORY> 0
<CURRENT-ASSETS> 86,673
<PP&E> 244,921
<DEPRECIATION> 140,280
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<CURRENT-LIABILITIES> 70,332
<BONDS> 0
0
0
<COMMON> 330
<OTHER-SE> (44,991)
<TOTAL-LIABILITY-AND-EQUITY> 282,898
<SALES> 0
<TOTAL-REVENUES> 81,046
<CGS> 0
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