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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 36
TO
SCHEDULE 14D-9
(WITH RESPECT TO THE TENDER OFFER BY QVC NETWORK, INC.)
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SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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PARAMOUNT COMMUNICATIONS INC.
(NAME OF SUBJECT COMPANY)
PARAMOUNT COMMUNICATIONS INC.
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS
(TITLE OF CLASS OF SECURITIES)
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699216 10 7
(CUSIP NUMBER OF CLASS OF SECURITIES)
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DONALD ORESMAN, ESQ.
PARAMOUNT COMMUNICATIONS INC.
15 COLUMBUS CIRCLE
NEW YORK, NEW YORK 10023-7780
(212) 373-8000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF
OF THE PERSON FILING STATEMENT)
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COPY TO:
JOEL S. HOFFMAN, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 455-2000
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<PAGE>
This Amendment No. 36 supplements and amends to the extent indicated herein
the Solicitation/Recommendation Statement on Schedule 14D-9 of Paramount
Communications Inc., filed with the Securities and Exchange Commission on
November 8, 1993 (as supplemented and amended through the date hereof, the
"Schedule 14D-9"), with respect to the Current QVC Offer (as described herein
and therein). Capitalized terms used herein and not otherwise defined herein
have the meanings ascribed to such terms in the Schedule 14D-9.
ITEM 2. TENDER OFFER OF THE BIDDER
The response to Item 2 is hereby supplemented and amended as follows:
On February 15, 1994, QVC issued a press release, a copy of which
is filed as Exhibit No. 120 to the Schedule 14D-9 and is incorporated
herein by reference.
On February 15, 1994, Paramount issued a press release, a copy of
which is filed as Exhibit No. 121 to the Schedule 14D-9 and is incorporated
herein by reference.
ITEM 3. IDENTITY AND BACKGROUND
The response to Item 3(b) is hereby supplemented and amended as follows:
Effective February 11, 1994, the employment agreements between
Paramount and Messrs. Davis, Oresman and Nelson were amended to permit
the respective officers to tender to Viacom their Shares which are
subject to sale restrictions. The amendments provide that the cash proceeds
of such tenders will be free of restrictions but that Shares which are not
purchased by Viacom will remain subject to the sale restrictions. Copies
of each of the amendments are filed as Exhibit No. 122 to the Schedule
14D-9 and are incorporated herein by reference.
On February 14, 1994, Viacom delivered a letter to Paramount, a copy
of which is filed as Exhibit No. 123 to the Schedule 14D-9 and is
incorporated herein by reference.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT
COMPANY
The responses to Items 7(a) and 7(b) are hereby supplemented and amended
as follows:
(a) On February 15, 1994, Viacom issued a press release, a copy
of which is filed as Exhibit No. 124 to the Schedule 14D-9 and is
incorporated herein by reference.
Reference is made to Paramount's press release filed as Exhibit No.
121 to the Schedule 14D-9, which press release is incorporated herein by
reference.
(b) Reference is made to Viacom's letter filed as Exhibit No. 123 to
the Schedule 14D-9, which letter is incorporated herein by reference.
<PAGE>
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
The response to Item 8 is hereby supplemented and amended as follows:
On February 14, 1994, QVC's attorneys delivered a letter to Paramount,
a copy of which is filed as Exhibit No. 125 to the Schedule 14D-9 and is
incorporated herein by reference. On February 14, 1994, Paramount delivered
a response letter to QVC's attorneys, a copy of which is filed as Exhibit
No. 126 to the Schedule 14D-9 and is incorporated herein by reference.
On February 14, 1994, Lazard delivered a letter to Paramount
reaffirming its earlier opinion dated February 4, 1994, as delivered to
the Paramount Board and previously filed as Exhibit No. 105 to the Schedule
14D-9. A copy of Lazard's February 14 letter is filed as Exhibit No. 127
to the Schedule 14D-9 and is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
The response to Item 9 is hereby supplemented and amended to add the
following:
Exhibit 120 - Press Release issued by QVC on February 15, 1994.
Exhibit 121 - Press Release issued by Paramount on
February 15, 1994.
Exhibit 122 - Amendments, each dated as of February 11, 1994,
to the Employment Agreements between Paramount and
each of Martin S. Davis, Donald Oresman and Ronald
L. Nelson.
Exhibit 123 - Letter from Viacom to Paramount dated
February 14, 1994.
Exhibit 124 - Press Release issued by Viacom on
February 15, 1994.
Exhibit 125 - Letter from Wachtell, Lipton, Rosen & Katz to
Paramount dated February 14, 1994.
Exhibit 126 - Letter from Paramount to Wachtell, Lipton, Rosen
& Katz dated February 14, 1994.
Exhibit 127 - Letter from Lazard to Paramount dated
February 14, 1994.
2
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
PARAMOUNT COMMUNICATIONS INC.
By DONALD ORESMAN
...................................
Name: Donald Oresman
Title: Executive Vice President
Dated: February 15, 1994
3
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE NO.
- --------- ----------- ---------
1* Pages 5, 6 and 10-20 of Paramount's Proxy Statement dated
January 29, 1993 for its 1993 Annual Meeting of Stockholders.
2* Employment Agreement with Robert Greenberg, a senior vice
president of Paramount, dated as of April 5, 1993.
3* Press Release issued on November 6, 1993.
4* Letter to Stockholders of Paramount dated November 8, 1993
with respect to the Viacom Offer.
5* Letter to Stockholders of Paramount dated November 8, 1993
with respect to the QVC Offer.
6* Amended and Restated Agreement and Plan of Merger, dated as
of October 24, 1993, between Paramount and Viacom.
7* Amendment No. 1, dated as of November 6, 1993, to the Amended
and Restated Agreement and Plan of Merger.
8* Stock Option Agreement, dated as of September 12, 1993, as
amended on October 24, 1993, between Paramount and Viacom.
9* Voting Agreement, dated as of September 12, 1993, as amended
on October 24, 1993, between Paramount and Amusements.
10* Press Release issued by Viacom on November 12, 1993.
11* Press Release issued on November 15, 1993.
12* Letter to Stockholders of Paramount dated November 16, 1993 with
respect to the QVC Offer.
13* Press Release issued by QVC on November 20, 1993.
14* Press Release issued by Viacom on November 19, 1993.
15* Press Release issued by QVC on November 22, 1993.
16* Press Release issued by Viacom on November 22, 1993.
17* Press Release issued by QVC on November 23, 1993.
18* Press Release issued by Viacom on November 23, 1993.
19* Press Release issued by QVC on November 24, 1993.
20* Press Release issued by Viacom on November 24, 1993.
21* Memorandum Opinion in QVC Network, Inc. v. Paramount Communications
Inc., et al., Civ. Action No. 13208 (Del. Ch. November 24, 1993).
22* Preliminary Injunction Order in QVC Network, Inc. v. Paramount
Communications Inc., et al., Civ. Action No. 13208 (Del. Ch.
November 24, 1993).
23* Press Release issued by Paramount on November 24, 1993.
24* Press Release issued by Viacom on November 24, 1993.
25* Press Release issued by Viacom on November 26, 1993.
26* Press Release issued by Viacom on November 29, 1993.
27* Order of the Delaware Supreme Court dated November 29, 1993.
28* Press Release issued by QVC on December 1, 1993.
29* Revised Memorandum Opinion in QVC Network, Inc. v. Paramount
Communications Inc., et al., Civ. Action No. 13208 (Del. Ch.
November 24, 1993).
30* Press Release issued by QVC on December 10, 1993.
31* Press Release issued by Paramount on December 9, 1993.
32* Press Release issued by Viacom on December 9, 1993.
33* Order in Paramount Communications Inc., et al. v. QVC
Network, Inc., Civ. Action No. 13208 (Del. December 9, 1993).
34* Press Release issued by QVC on December 9, 1993.
35* Letter from Richards, Layton & Finger to Vice Chancellor
Jack B. Jacobs of the Delaware Court of Chancery dated
December 10, 1993.
36* Bidding Procedures of Paramount dated December 14, 1993.
37* Press Release issued by Paramount on December 14, 1993.
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* Previously filed.
<PAGE>
EXHIBIT DESCRIPTION PAGE NO.
- --------- ----------- ---------
38* Letter to Stockholders of Paramount dated December 14,
1993 with respect to the Viacom Offer and the QVC Offer.
39* Press Release issued by QVC on December 14, 1993.
40* Press Release issued by Viacom on December 14, 1993.
41* Press Release issued by QVC on December 16, 1993.
42* Letter from Wachtell, Lipton, Rosen & Katz to Lazard dated
December 14, 1993.
43* Letter from Simpson Thacher & Bartlett to Wachtell, Lipton,
Rosen & Katz dated December 15, 1993.
44* Press Release issued by Paramount on December 15, 1993.
45* Letter from the Delaware Chancery Court to Young, Conaway,
Stargatt & Taylor; Richards, Layton & Finger; Morris & Morris;
and Morris, Nichols, Arsht & Tunnell dated December 14, 1993.
46* Revised pages to the Memorandum Opinion in QVC Network, Inc.
v. Paramount Communications Inc., et al., Civ. Action No.
13208 (Del. Ch. November 24, 1993).
47* Letter from Shearman & Sterling to Lazard dated December 15, 1993.
48* Letter from Simpson Thacher & Bartlett to Shearman & Sterling
dated December 16, 1993.
49* Letter from Simpson Thacher & Bartlett to Wachtell, Lipton,
Rosen & Katz dated December 17, 1993.
50* Press Release issued by Paramount on December 20, 1993.
51* Press Release issued by QVC on December 22, 1993.
52* Press Release issued by Paramount on December 22, 1993.
53* Agreement and Plan of Merger, dated as of December 22, 1993,
between Paramount and QVC.
54* Voting Agreement dated December 22, 1993 among BellSouth
Corporation, Comcast Corporation, Cox Enterprises, Inc.,
Advance Publications, Inc. and Arrow Investments, L.P.
55* Letter to Stockholders of Paramount dated December 23, 1993
with respect to the Revised QVC Offer and the Viacom Offer.
56* Opinion of Lazard dated December 21, 1993.
57* Notice of Termination dated December 22, 1993 delivered by
Paramount to Viacom.
58* Exemption Agreement, dated as of December 22, 1993, between
Viacom and Paramount.
59* First Amendment, dated as of December 27, 1993, to Agreement
and Plan of Merger, dated as of December 22, 1993, between
Paramount and QVC.
60* Press Release issued by QVC on January 7, 1994.
61* Press Release issued by QVC on January 10, 1994.
62* Press Release issued by Paramount on January 7, 1994.
63* Press Release issued by Viacom on January 7, 1994.
64* Press Release issued by Viacom on January 9, 1994.
65* Letter from Wachtell, Lipton, Rosen & Katz to the Paramount
Board dated January 11, 1994.
66* Letter from Shearman & Sterling to the Paramount Board dated
January 12, 1994.
67* Letter from Paramount to Wachtell, Lipton, Rosen & Katz dated
January 13, 1994.
68* Press Release issued by Paramount on January 12, 1994.
69* Letter from Simpson Thacher & Bartlett to Shearman & Sterling
and Wachtell, Lipton, Rosen & Katz dated January 13, 1994.
70* Letter to Stockholders of Paramount dated January 13, 1994
with respect to the Current QVC Offer and the Revised Viacom Offer.
71* Opinion of Lazard dated January 12, 1994.
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* Previously filed.
<PAGE>
EXHIBIT DESCRIPTION PAGE NO.
- --------- ----------- ---------
72* Letter from Wachtell, Lipton, Rosen & Katz to Simpson Thacher
& Bartlett dated January 14, 1994.
73* Letter from Simpson Thacher & Bartlett to Wachtell, Lipton,
Rosen & Katz dated January 18, 1994.
74* Letter from the Commission to Simpson Thacher & Bartlett dated
January 15, 1994.
75* Press Release issued by Paramount on January 18, 1994.
76* Press Release issued by Viacom on January 18, 1994.
77* Press Release issued by QVC on January 19, 1994.
78* Notice of Termination dated January 21, 1994 delivered by
Paramount to QVC.
79* Exemption Agreement, dated as of January 21, 1994, between
QVC and Paramount.
80* Press Release issued by Paramount on January 21, 1994.
81* Letter to Stockholders of Paramount dated January 24, 1994
with respect to the Current QVC Offer and the Revised
Viacom Offer.
82* Opinion of Lazard dated January 21, 1994.
83* Agreement and Plan of Merger, dated as of January 21, 1994,
between Paramount and Viacom.
84* Voting Agreement, dated as of January 21, 1994, between
Paramount and Amusements.
85* Letter from Viacom to Paramount dated January 19, 1994.
86* Letter from Wachtell, Lipton, Rosen & Katz to Paramount dated
January 20, 1994.
87* Letter from Shearman & Sterling to Paramount dated
January 21, 1994.
88* Letter from Wachtell, Lipton, Rosen & Katz to Paramount dated
January 24, 1994.
89* Letter from Paramount to Wachtell, Lipton, Rosen & Katz dated
January 24, 1994.
90* Letter from Shearman & Sterling to Paramount dated January 25, 1994.
91* Letter from Paramount to Shearman & Sterling dated January 25, 1994.
92* First Amendment, dated as of January 27, 1994, to Exemption
Agreement, dated as of January 21, 1994, between QVC and Paramount.
93* Letter from Simpson Thacher & Bartlett to Shearman & Sterling
and Wachtell, Lipton, Rosen & Katz dated January 27, 1994.
94* First Amendment, dated as of January 27, 1994, to Agreement and
Plan of Merger, dated as of January 21, 1994, between Viacom
and Paramount.
95* First Amendment, dated as of January 27, 1994, to Exemption
Agreement, dated as of December 22, 1993, between Viacom and
Paramount.
96* Form of Agreement and Plan of Merger between QVC and Paramount.
97* Press Release issued by QVC on February 1, 1994.
98* Press Release issued by Viacom on February 1, 1994.
99* Press Release issued by QVC on February 1, 1994.
100* Press Release issued by Paramount on February 1, 1994.
101* Press Release issued by Viacom on February 1, 1994.
102* Press Release issued by Viacom on February 1, 1994.
103* Press Release issued by Paramount on February 4, 1994.
104* Letter to Stockholders of Paramount dated February 7, 1994 with
respect to the Current QVC Offer and the Current Viacom Offer.
105* Opinion of Lazard dated February 4, 1994.
106* Amended and Restated Agreement and Plan of Merger, dated as
of February 4, 1994, between Paramount and Viacom.
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* Previously filed.
<PAGE>
EXHIBIT DESCRIPTION PAGE NO.
- --------- ----------- ---------
107* Form of Agreement and Plan of Merger between Paramount and
QVC.
108* Opinion in Paramount Communications Inc., et al. v. QVC
Network, Inc., Civ. Action No. 13208 (Del. February 4,
1994).
109* Letter from Viacom to the Paramount Board dated February
10, 1994.
110* Letter from Paramount to Wachtell, Lipton, Rosen & Katz
dated February 11, 1994.
111* Press Release issued by Paramount on February 11, 1994.
112* Letter from Wachtell, Lipton, Rosen & Katz to Simpson
Thacher & Bartlett dated February 8, 1994.
113* Letter from Paramount to Wachtell, Lipton, Rosen & Katz
dated February 10, 1994.
114* Press Release issued by QVC on February 13, 1994.
115* Letter from Wachtell, Lipton, Rosen & Katz to Paramount
dated February 11, 1994.
116* Letter from Paramount to Wachtell, Lipton, Rosen & Katz
dated February 11, 1994.
117* Letter from Paramount to Viacom dated February 11, 1994.
118* Letter from QVC's attorneys to Paramount dated February 11, 1994.
119* Press Release issued by Viacom on February 13, 1994.
120 Press Release issued by QVC on February 15, 1994.
121 Press Release issued by Paramount on February 15, 1994.
122 Amendments, each dated as of February 11, 1994, to the
Employment Agreements between Paramount and each of
Martin S. Davis, Donald Oresman and Ronald L. Nelson.
123 Letter from Viacom to Paramount dated February 14, 1994.
124 Press Release issued by Viacom on February 15, 1994.
125 Letter from Wachtell, Lipton, Rosen & Katz to Paramount
dated February 14, 1994.
126 Letter from Paramount to Wachtell, Lipton, Rosen & Katz
dated February 14, 1994.
127 Letter from Lazard to Paramount dated February 14, 1994.
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* Previously filed.
NEWS FROM QVC
WEST CHESTER, Pa., Feb. 15 -- QVC (NASDAQ: QCVN) announced today that, as of
the expiration of its offer at 12:00 midnight, New York City time, on
February 14, 1994, QVC did not receive the minimum condition in its tender
offer for 50.1 percent of the common stock of Paramount Communications Inc.
(NYSE: PCI). As of 12:00 midnight, New York City time, on February 14, 1994,
approximately 10,424,712 shares had been tendered to QVC in its offer. QVC
also announced that Paramount had informed QVC that Viacom (AMEX: VIA) received
the minimum condition in its tender offer prior to the expiration date of its
offer, had taken the action required by the Viacom-Paramount Merger Agreement
and had delivered to Paramount a completion certificate pursuant to the
bidding procedures. Accordingly, pursuant to its obligations under the QVC-
Paramount Exemption Agreement, QVC stated that it has terminated its tender
offer for 50.1 percent of the common stock of Paramount.
Contact:
(press) Michael Rourke or Donald Van de Mark, 212-371-5999, or (investors)
William F. Costello, 215-430-8948, all of QVC; or (investors) Diana Brainerd
of Abernathy/MacGregor/Scanlon, 212-371-5999
PARAMOUNT COMMUNICATIONS INC.
NEWS
FOR IMMEDIATE RELEASE FEBRUARY 15, 1994
NEW YORK, February 15 -- Paramount Communications Inc. (NYSE:
PCI) announced today it has been informed that more than 50.1% of
the shares of Paramount had been tendered to Viacom pursuant to
its tender offer. In accordance with the bidding procedures, QVC
has terminated its tender offer and Viacom has extended its offer
until midnight March 1, 1994, in order to enable stockholders who
tendered their shares to QVC to switch to the Viacom offer.
Martin S. Davis, chairman and chief executive officer of
Paramount Communications, said, "the Board of Directors has
obtained a price for Paramount that offers stockholders a very
significant premium for their shares consisting of a substantial
amount of cash, a continuing equity interest in a Paramount-
Viacom combined entity, and back-end protection." Mr. Davis
further stated, "The Board has obtained the best value for
stockholders under bidding procedures that have operated smoothly
and have effectively provided stockholders with a meaningful
choice between two impressive proposals."
Mr. Davis also "urged stockholders who want to obtain cash
pursuant to the Viacom proposal to tender their shares to Viacom
on or prior to March 1, if they have not already done so. We are
determined to complete the merger of these two great companies
and the transition to a new management structure as quickly and
smoothly as possible," he added.
###
(Attached is a copy of a letter Mr. Davis sent to all Paramount
employees.)
Contact: Paramount Communications Inc. Kekst and Company
Jerry Sherman Jeffrey Z. Taufield
212-373-8725 212-593-2655
Carl D. Folta
212-373-8530
<PAGE>
PARAMOUNT COMMUNICATIONS INC.
February 15, 1994
Dear Fellow Employee:
Now that the spirited bidding process for the acquisition of our
Company is over and Viacom has emerged victorious, let us all
join in congratulating Sumner Redstone and his colleagues. It is
our firm belief that the values we envisioned in our original
merger agreement with Viacom will be achieved.
The hectic and unpredictable flood of events has made the last
five months challenging for us all. We should all take pride
that we have continued to maintain our focus on the crucial day-
to-day business of our Company.
A strategic philosophy of enhancing shareholder value by
strengthening and expanding our entertainment and publishing
operations has successfully guided this Company for more than a
decade. Four years ago, we began to reevaluate our strategic
opportunities in light of dramatic changes in the entertainment
and information fields, our strong cash position and the
desirability of a major entertainment acquisition.
Our goal, as always, was to enable Paramount to realize its full
potential. In the course of that review, we explored a number of
strategic choices. We ultimately concluded that the future
growth of Paramount would best be served by a strategic merger
with Viacom, which we announced on September 12. Under the
agreement, Paramount shareholders would have received a
combination of stock and cash, which, at that time, represented a
substantial premium over the market price of Paramount's stock.
Shortly thereafter, we received an unsolicited bid from QVC
Network, followed by a Delaware court ruling that we secure the
highest offer for the Company.
Therefore, our Board, which, as always, had been carefully
considering shareholders' interests, directed our investment
banking and legal advisors to design a fair auction process, with
the assurance that the shareholders would have the final say on
which offer to accept.
<PAGE>
We can all be tremendously proud of building Paramount. Thirty-
five years ago, Charles Bluhdorn created the foundation of
Paramount (then Gulf + Western Industries, Inc.). Through
internal growth and acquisitions over more than two decades, he
built a quintessential conglomerate, spanning a broad range of
businesses.
When I became chairman and chief executive officer of this
Company in 1983, we recognized that economic and operating
environments had changed and only dramatic action could maximize
the Company's potential. Accordingly, to create even greater
shareholder value, we initiated one of the largest corporate
transformations ever undertaken.
Our action plan began with the decision to enhance the asset base
and financial strength of the Company through carefully
considered divestitures and to invest the proceeds of these sales
in entertainment and publishing, businesses with significant
opportunities to expand and with the outlook for dramatic long-
term earnings. Overall, we divested non-entertainment and non-
publishing assets, yielding nearly $6 billion, which we used to
retire debt, buy back stock and invest in core businesses.
Phase one, which began in 1983, included the sale of some 50
businesses that did not meet performance criteria and the
divestiture of a $900-million securities portfolio of investments
in 45 companies. Phase two, which began in 1985, consisted of
the sale of our Consumer and Industrial Products Group, which
included more than 90 business units, for approximately $1
billion in cash. This full price was only possible after a
planned program of strengthening those businesses was
successfully completed. Phase three, in 1989, was the sale of
The Associates, the consumer/commercial finance operation, for
$3.35 billion, which freed the Company from the increasingly
complex and significant capital requirements of the financial
services operations.
While much has been written about the growth of Paramount's
entertainment operations, the phenomenal expansion of our
publishing business has received far less notice. Our recently
announced agreement to acquire Macmillan caps a remarkable story
of growth in both the size and scope of our publishing
operations. Through strategic acquisitions and internal growth
we have built Simon & Schuster, a small but highly regarded
consumer publisher with annual sales of approximately $200
million in 1982, into Paramount Publishing, a leader in
educational publishing as well as in consumer and business,
professional and technical markets with estimated sales,
including Macmillan, of approximately $2 billion annually.
<PAGE>
By any measure, our efforts have been a resounding success. Over
the past eleven years, in the businesses that comprise Paramount
Communications today, we have increased revenues by 200 percent
and operating income by 500 percent. As a result, our long-term
shareholders have seen the value of their investment in Paramount
(giving effect to a two-for-one stock split in May 1988) increase
more than fourteen fold, from $5.75 per share at the close of
fiscal 1982, to more than $80 per share in February 1994.
Since nearly half of the consideration going to shareholders will
be in stock, we think the long-term prospects are equally
crucial. They will be greatly enhanced through a business
combination with Viacom, with its closely related entertainment
assets, under the leadership of Sumner Redstone, Frank Biondi and
its gifted management team. We know that the merger will enable
Paramount to grow and increase its potential for the benefit of
the loyal employees, deep talent roster and shareholders of both
companies.
Going forward, there is no doubt that your skills and your
dedication will continue to carry the Paramount tradition to even
greater heights.
Sincerely,
/s/ Martin
Amendment dated as of February 11, 1994, to the Amended
and Restated Agreement dated as of October 1, 1985 and restated
as of June 23, 1989 (the "Agreement") between Paramount
Communications Inc. (the "Company") and Martin S. Davis (the
"Executive").
WHEREAS, the Executive is employed pursuant to the
Agreement and was granted thereunder restricted shares of
Paramount common stock (the "Shares");
WHEREAS, the Shares are subject to transfer
restrictions set forth in the Agreement which will prevent the
Executive from tendering such Shares to Viacom Inc. ("Viacom")
pursuant to its currently outstanding tender offer for approximately
51% of the Company's common stock;
WHEREAS, the Company and the Executive wish to remove
these transfer restrictions but only to the extent required to
permit Executive to tender his Shares to, and only with respect
to those Shares purchased for cash by, Viacom pursuant to such
offer;
NOW, THEREFORE, the Company and the Executive agree
that Section 11.2(b) of the Agreement shall be amended by adding
the following provisions at the end thereof:
Notwithstanding the foregoing, Shares may be tendered by
Executive to Viacom Inc. ("Viacom") pursuant to its tender
offer, instituted prior to February 11, 1994, for
approximately 51% of the Shares of Company Common Stock for
cash; provided that any Shares not purchased by Viacom for
cash shall remain subject to the restrictions and other
terms and conditions set forth in this Agreement and any
cash received in exchange for Shares pursuant to such tender
offer shall be free of all restrictions.
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed and the Executive has executed this
Amendment as of the date first above written.
PARAMOUNT COMMUNICATIONS INC.
By:
---------------------------
---------------------------
Martin S. Davis
<PAGE>
Amendment dated as of February 11, 1994, to the Amended
and Restated Agreement dated as of October 1, 1985 and restated
as of June 23, 1989 (the "Agreement") between Paramount
Communications Inc. (the "Company") and Donald Oresman (the
"Executive").
WHEREAS, the Executive is employed pursuant to the
Agreement and was granted thereunder restricted shares of
Paramount common stock (the "Shares");
WHEREAS, the Shares are subject to transfer
restrictions set forth in the Agreement which will prevent the
Executive from tendering such Shares to Viacom Inc. ("Viacom")
pursuant to its currently outstanding tender offer for
approximately 51% of the Company's common stock;
WHEREAS, the Company and the Executive wish to remove
these transfer restrictions but only to the extent required to
permit Executive to tender his Shares to, and only with respect
to those Shares purchased for cash by, Viacom pursuant to such
offer;
NOW, THEREFORE, the Company and the Executive agree
that Section 10.2(b) of the Agreement shall be amended by adding
the following provisions at the end thereof:
Notwithstanding the foregoing, Shares may be tendered by
Executive to Viacom Inc. ("Viacom") pursuant to its tender
offer, instituted prior to February 11, 1994, for
approximately 51% of the Shares of Company common stock for
cash; provided that any Shares not purchased by Viacom for
cash shall remain subject to the restrictions and other
terms and conditions set forth in this Agreement and any
cash received in exchange for Shares pursuant to such tender
offer shall be free of all restrictions.
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed and the Executive has executed this
Amendment as of the date first above written.
PARAMOUNT COMMUNICATIONS INC.
By:
---------------------------
---------------------------
Donald Oresman
<PAGE>
Amendment dated as of February 11, 1994, to the
Agreement dated as of January 12, 1993 (the "Agreement") between
Paramount Communications Inc. (the "Company") and Ronald L.
Nelson (the "Executive").
WHEREAS, the Executive is employed pursuant to the
Amended and Restated Agreement dated as of November 17, 1987 and
restated as of June 23, 1989, as modified by an Amendment dated
as of December 21, 1992 (the "Amendment");
WHEREAS, pursuant to the Agreement, the Executive was
granted restricted shares of Paramount common stock (the
"Shares") in consideration for the extension of his employment
term as set forth in the Amendment;
WHEREAS, the Shares are subject to transfer
restrictions set forth in the Agreement which will prevent the
Executive from tendering such Shares to Viacom Inc. ("Viacom")
pursuant to its currently outstanding tender offer for
approximately 51% of the Company's common stock;
WHEREAS, the Company and the Executive wish to remove
these transfer restrictions but only to the extent required to
permit Executive to tender his Shares to, and only with respect
to those Shares purchased for cash by, Viacom pursuant to such
offer;
NOW, THEREFORE, the Company and the Executive agree
that Section 1.2(b) of the Agreement shall be amended by adding
the following provisions at the end thereof:
Notwithstanding the foregoing, Shares may be tendered by
Executive to Viacom Inc. ("Viacom") pursuant to its tender
offer, instituted prior to February 11, 1994, for
approximately 51% of the Shares of Company common stock for
cash; provided that any Shares not purchased by Viacom for
cash shall remain subject to the restrictions and other
terms and conditions set forth in this Agreement and any
cash received in exchange for Shares pursuant to such tender
offer shall be free of all restrictions.
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed and the Executive has executed this
Amendment as of the date first above written.
PARAMOUNT COMMUNICATIONS INC.
By:
---------------------------
---------------------------
Ronald L. Nelson
VIACOM
February 14, 1994
Donald Oresman, Esq.
Executive Vice President and General Counsel
Paramount Communications Inc.
15 Columbus Circle
New York, NY 10023
Dear Donald:
In response to your letter of February 11, this confirms that the
allegations in the third paragraph of Wachtell, Lipton's letter of February
11 are without merit. Viacom has consistently abided by, and accurately
described, the bidding procedures and complied with federal securities laws,
and will continue to do so.
Regards,
/s/ Philippe
Philippe P. Dauman
NEWS FROM VIACOM
VIACOM IS WINNER OF PARAMOUNT
- -- BIDDING RULES ESTABLISHED BY PARAMOUNT BOARD REQUIRE QVC TO DROP ITS BID --
New York, New York, February 15, 1994 -- Viacom Inc. (ASE: VIA and VIAB)
announced today that as of midnight, February 14, 1994, 91,662,047 shares
of the common stock of Paramount Communications Inc. (NYSE: PCI),
representing approximately 74.6% of the outstanding shares on a fully
diluted basis, had been tendered into Viacom's tender offer and not
withdrawn, including 68,394,648 shares tendered pursuant to notices of
guaranteed delivery. Therefore, Viacom is the winner of Paramount.
Viacom also announced that it had waived certain conditions of its tender
offer to the extent required by the merger agreement between Viacom and
Paramount and had extended its tender offer to midnight, New York City
time, on March 1, 1994 in order to permit all Paramount's shareholders to
tender to Viacom. Viacom also announced that it will promptly deliver a
certificate to the Board of Directors of Paramount confirming that it has
taken these steps. Under the exemption agreement between Paramount and QVC
Network, Inc., QVC is required to terminate its tender offer for Paramount
as soon as it receives a certificate signed by Paramount that these events
have occurred. Viacom said that it expected that these steps would be
completed prior to the opening of business today.
-more-
<PAGE>
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Sumner M. Redstone, Chairman of Viacom, declared, "We remain resolute in
our intentions and unwavering in our conviction that the combination of
Viacom, Paramount and Blockbuster will create a global media powerhouse of
unparalleled proportions in the entertainment industry. Today is only the
beginning of the creation of this vast new enterprise."
Mr. Redstone continued, "We are gratified that the shareholders of
Paramount share the Viacom vision for the future. For our part, we are
convinced that the combination of the diversified and formidable assets and
management talent of Viacom, Paramount and Blockbuster, bolstered by the
support of our strategic partner, NYNEX, will produce an entertainment
giant of enormous value to all of our shareholders. We are unequivocally
committed to our shareholders and to building the value of their investment
in Viacom, and we have absolute confidence in our ability to do so.
"Looking back over the last few months, we would like to recognize the
members of the Paramount management and Board, particularly Paramount's
Chairman, Martin Davis, who have comported themselves admirably under
enormous pressure and intense scrutiny and with only one objective, namely
the interests of the Paramount shareholders. We also would like to recognize
the employees of Paramount who have lived through great uncertainty with
the utmost professionalism and dedication. All of us at Viacom applaud
their conduct."
-more-
<PAGE>
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Frank J. Biondi, Jr., President and Chief Executive Officer of Viacom Inc.
and of the new combined company, said, "We look forward to bringing
together the talented employees who have built these terrific companies.
Viacom, Paramount and Blockbuster are three of the most creative and
dynamic organizations in our industry. We have all seen the tremendous
accomplishments they have achieved as three separate companies. Working
together, they will be an unparalleled worldwide force.
"We will do everything in our power to expedite the completion of the
merger with Paramount. We are committed to treating all of the employees
of the new entity with fairness and respect as we combine the three
companies. It is time to move on to the exciting challenges before us."
Viacom said that the conditions that had been waived were all of the
conditions to its tender offer, except the Minimum Condition, the Rights
Condition, the Supermajority Condition, the Section 203 Condition and the
Injunction Condition. The conditions are described in Viacom's Offer to
Purchase as supplemented through the fourth supplement. Viacom said that
it expected that all of the remaining conditions to its tender offer would
be met prior to its expiration date.
# # #
A Fact Sheet on the combined Viacom/Paramount/Blockbuster entity is attached.
Contact: Viacom Inc. Edelman
Raymond A. Boyce Elliot Sloane
212/258-6530 212/704-8126
<PAGE>
VIACOM/PARAMOUNT/BLOCKBUSTER FACT SHEET
CORPORATE PROFILE: The combination of Viacom, Paramount and Blockbuster
will create a global leader in the production and distribution of
entertainment and communication products, with an array of world-class
franchises and brand names. The companies participate in the fastest
growing segments of the entertainment marketplace, including:
. Cable network programming
. Video, music and interactive retail distribution
. Motion picture and television production
. Cable television systems
. Television and radio broadcasting
. Entertainment centers, theme parks
. Publishing
. Interactive/Multimedia products
. Motion picture theaters
CABLE NETWORK PROGRAMMING: Viacom owns and operates the largest group of
basic and premium networks, including MTV, MTV Europe, VH-1, Nickelodeon,
Nick at Nite, Showtime, The Movie Channel and FLIX. Viacom's brand equity
and global impact is unparalleled. In addition to its significant domestic
distribution, MTV now reaches more than 251 million homes in 88 territories
around the world. Viacom also participates in three joint venture cable
services: Comedy Central, Lifetime and All News Channel.
Paramount is co-owner of USA Network, a leading advertiser-supported basic
cable television network. USA includes the Sci-Fi Channel, a basic cable
channel devoted exclusively to science fiction, horror and adventure
programming. In addition, Paramount's Madison Square Garden Network is the
largest regional cable sports network in the country, providing programming
to nearly 5 million subscribers through 231 affiliates.
VIDEO, MUSIC AND INTERACTIVE RETAIL DISTRIBUTION: With more than 3,500
video stores operating in nine countries and domestically in 49 states,
Blockbuster is the largest retailer of home video products in the world.
Growing from a base of 19 video stores just six years ago, Blockbuster now
commands more than 15% of the domestic home video market and is larger than
the next 550 competitors combined. The home video marketplace is larger
than that of movie theaters, premium cable and pay-per-view combined.
Blockbuster's growth in this explosive marketplace is expected to continue
into the future.
<PAGE>
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Blockbuster also is a leader in the retail distribution of music product.
With the acquisitions of the Sound Warehouse, Music Plus, and Super Club
music retail chains, the recent development of the Blockbuster Music Plus
concept, and the joint venture agreement with Virgin Retail Group to build
megastores around the world, Blockbuster operates more than 500 music
stores in seven countries and throughout the United States.
With more than 600 million consumer visits to its retail stores each year
and an active data base of more than 40 million consumers who have rented
and purchased product in their retail stores, Blockbuster is the leading
global retail distributor of entertainment product in the world.
MOTION PICTURE AND TELEVISION PRODUCTION: Viacom has an enormous
syndication library that includes Roseanne, The Cosby Show, A Different
World, I Love Lucy, The Twilight Zone and Hawaii 5-0. It also produces
programs for broadcast television, including Matlock, Diagnosis Murder, and
the Perry Mason made-for-TV movies. Viacom's first-run syndication
programs include The Montel Williams Show, Nick News and This Morning's
Business.
Paramount Pictures produces motion pictures for distribution to theatrical
markets in the United States and abroad. Paramount has a motion picture
library of approximately 890 films. In video, Paramount holds leadership
positions.
Paramount Television is at the forefront in the production and distribution
of television programming for commercial networks, first-run syndication
and cable services, currently producing 30 1/2 hours weekly. Its network
programming lineup for the 1993-1994 television season includes, Wings,
Frasier, Big Wave Dave's, Viper, The Mommies and Sister Sister. In first-
run syndication, Paramount produces Star Trek: The Next Generation, Deep
Space Nine, The Untouchables, Entertainment Tonight, The Maury Povich Show,
The Arsenio Hall Show and Hard Copy. The Paramount television library
includes Cheers, Star Trek, Happy Days, Laverne & Shirley and Taxi.
Through its recent investments in both Spelling Entertainment Group and
Republic Pictures Corporation, Blockbuster is now a leading producer and
distributor of filmed entertainment, with over 20,000 hours of programming
available for domestic and international distribution.
Blockbuster owns 70.5% of Spelling, a producer and distributor of filmed
entertainment supported by a film library of approximately 12,000 hours.
This library includes more than 55 off-network series, such as Little House
on the Prairie, Dallas, Twin Peaks, and an array of feature films including
Basic Instinct, Total Recall, Platoon, and the Rambo trilogy. Spelling also is
the producer of the hit network series Beverly Hills 90210 and Melrose Place.
Blockbuster owns approximately 37% of Republic, an independent producer and
distributor of filmed entertainment. Republic distributes its extensive
classic library and contemporary product to television, home video and
theaters across the world. Republic is the 10th largest distributor in the
home video industry. Its library includes The Quiet Man, High Noon, as
well as the popular television series Bonanza.
<PAGE>
-3-
CABLE TELEVISION SYSTEMS: Viacom Cable owns and operates cable television
systems in three regions of the U.S. serving approximately 1.1 million
subscribers. In mid-1994, Viacom, in conjunction with AT&T, will be
launching a test of consumer acceptance of interactive entertainment and
information services at its Castro Valley, California, cable system.
TELEVISION AND RADIO BROADCASTING: Viacom owns five network-affiliated
television stations (three NBC and two CBS affiliates) and 14 radio
stations, making it the sixth largest radio group in the U.S., ranked by
market reach.
The Paramount Stations Group owns and operates four independent and three
Fox-affiliated stations.
PUBLISHING: Paramount Publishing, through such major imprints as Simon &
Schuster, Pocket Books, Silver Burdett Ginn, and Prentice Hall, is one of
the world's leading publishers of educational materials, from textbooks to
computer-based learning systems, and has significant operations serving the
domestic and international consumer and business, technical and
professional markets.
ENTERTAINMENT FACILITIES AND THEME PARKS: Paramount owns and operates five
regional theme parks. Paramount also owns and operates Madison Square
Garden, one of the premiere showplaces for sports, concerts and other live
entertainment, at its Arena and the Paramount Theater, as well as the New
York professional basketball and hockey team franchises, the Knicks and the
Rangers.
Through its 19.6% equity in Discovery Zone, Inc., which owns and franchises
indoor children's recreational fitness centers known as FunCenters,
Blockbuster has a strong presence in the entertainment center marketplace.
The company has franchise rights to develop 100 Discovery Zone FunCenters
in the U.S. and formed a joint venture with Discovery Zone to develop 10
FunCenters in the U.K. Blockbuster also has a six-month option to acquire
50.1% of Discovery Zone.
This year, Blockbuster opened the initial phase of a family entertainment
facility called Blockbuster Golf and Games, in Sunrise, Florida.
Additional entertainment facilities are planned at various other U.S.
sites.
Blockbuster recently announced a joint venture with Sony Music
Entertainment (SME) and Pace Entertainment where the three companies
combined their seven existing amphitheaters into a partnership to be
managed by Pace. Existing locations are in Charlotte, Phoenix, San
Bernadino, Pittsburgh, Raleigh, Houston and Nashville.
<PAGE>
-4-
INTERACTIVE/MULTIMEDIA PRODUCTS: Viacom New Media and Paramount Technology
Group both develop and publish interactive software for a variety of
platforms in the multimedia marketplace. Paramount's Computer Curriculum
unit is the country's foremost and fastest-growing producer of computer-
based learning systems. Blockbuster also is the largest wholesaler and
retailer of interactive home video games in the world.
MOTION PICTURE THEATERS: Paramount owns the Famous Players motion picture
theater chain, which has 441 screens in Canada. Paramount is also joint-
owner of the 341-screen Cinamerica theater circuit, and reaches 345 screens
in nine countries through a joint venture, United Cinemas International.
WACHTELL, LIPTON, ROSEN & KATZ
February 14, 1994
VIA FACSIMILE
- -------------
Donald Oresman, Esq.
Paramount Communications Inc.
15 Columbus Circle
New York, New York 10023
Dear Donald:
In light of the continued decline in the price of Viacom stock and
the substantial difference in favor of the QVC offer for Paramount, QVC
requests that the Paramount Board of Directors forthwith reconsider its
recommendation of the Viacom offer.
Very truly yours,
/s/ Martin
Martin Lipton
PARAMOUNT COMMUNICATIONS INC.
February 14, 1994
Martin Lipton, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Dear Martin:
Lazard Freres has reconfirmed its prior opinion given to the Paramount
Board February 4, 1994.
Sincerely,
/s/ Donald
LAZARD FRERES & CO.
February 14, 1994
Mr. Donald Oresman
Executive Vice President,
Chief Administrative Officer,
General Counsel & Secretary
Paramount Communications Inc.
15 Columbus Circle
New York, NY 10023-7780
Dear Mr. Oresman:
You have inquired as to whether, as of this date, we
would reaffirm our written opinion furnished to the Board of
Directors of Paramount Communications Inc. ("Paramount") set
forth in the letter, dated February 4, 1994 (the "February 4,
1994 Letter"), or whether we would change that opinion in light
of the current market prices of the common stock (the "QVC
Common Stock") of QVC Network, Inc. ("QVC") and the Class B
common stock (the "Viacom Class B Common Stock") of Viacom Inc.
("Viacom"). All defined terms used in this letter have the
same meanings as contained in the February 4, 1994 Letter, and
all of the terms, conditions, assumptions and limitations
contained in the February 4, 1994 Letter are made a part of
this analysis and advice and are incorporated herein by
reference.
Based on and subject to the foregoing and such other
factors as we deem revelant, including our assessment of
economic, monetary and market conditions existing on the date
of this letter, we want to advise you that, as of this date, we
reaffirm our written opinion set forth in the February 4, 1994
Letter.
Very truly yours,
/s/ Lazard Freres & Co.
