UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 47 )*
LIN Broadcasting Corporation
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
0005327630
(CUSIP Number)
Marilyn J. Wasser Andrew A. Quartner
AT&T Corp. McCaw Cellular Communications, Inc.
32 Avenue of the Americas 1150 Connecticut Ave., NW
New York, NY 10013-2412 Washington, DC 20036
(212) 387-5400 (202) 223-9222
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 27, 1995
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3)
or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement
[ ]. (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are sent.<PAGE>
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))<PAGE>
<PAGE>
This Amendment No. 47 (the "Amendment") amends the Schedule
13D originally filed on April 7, 1988, as previously amended (the
"Schedule 13D"), with regard to the Common Stock, par value $.01
per share ("Common Stock"), of LIN Broadcasting Corporation, a
Delaware corporation ("LIN" or the "Issuer"), as set forth below.
Capitalized terms used without definition in this Amendment shall
have the meanings ascribed thereto in the Schedule 13D.
Item 4. Purpose of Transaction
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer
The information contained in Items 4 and 6 of the Schedule
13D is hereby supplemented by the following:
The parties to the Stockholders Litigation, by and through
their respective attorneys, have entered into a Stipulation and
Agreement of Compromise, Settlement and Release (the "Stipulation
of Settlement"), dated July 27, 1995, setting forth the terms of
the proposed settlement of the Stockholders Litigation.
The full text of the Stipulation of Settlement is attached
hereto as Exhibit 99.1.
Item 7. Material to be Filed as Exhibits
The information contained in Item 7 of the Schedule 13D is
hereby supplemented by the following:
99.1 Stipulation and Agreement of Compromise, Settlement and
Release, dated July 27, 1995.
<PAGE>
<PAGE>
SIGNATURE
The undersigned hereby agree that this Amendment to Schedule
13D is filed on behalf of each of them and, after reasonable
inquiry and to the best of their knowledge and belief, certify
that the information set forth in this statement is true,
complete and correct.
AT&T CORP.
By: MARILYN J. WASSER
-----------------------------
Date: July 28, 1995 Marilyn J. Wasser
Vice President-Law and Secretary
McCAW CELLULAR COMMUNICATIONS, INC.
By: ANDREW A. QUARTNER
-----------------------------
Date: July 28, 1995 Andrew A. Quartner
Senior Vice President-Law
MMM HOLDINGS, INC.
By: ANDREW A. QUARTNER
-----------------------------
Date: July 28, 1995 Andrew A. Quartner
Senior Vice President-Law
<PAGE>
<PAGE>
EXHIBIT INDEX
99.1 Stipulation and Agreement of Compromise, Settlement and
Release, dated July 27, 1995.
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
IN RE LIN BROADCASTING CORPORATION ) Consolidated
SHAREHOLDERS LITIGATION ) C.A. No. 14039
STIPULATION AND AGREEMENT OF
COMPROMISE, SETTLEMENT AND RELEASE
The parties to the above-captioned action, by and
through their respective attorneys, have entered into the
following Stipulation and Agreement of Compromise, Settlement and
Release (the "Stipulation") pursuant to the terms and conditions
set forth below and subject to the approval of the Delaware Court
of Chancery (the "Delaware Court"):
WHEREAS:
A. In April 1988, McCaw Cellular Communications, Inc.
("McCaw"), which is principally engaged in the business of
providing cellular communication services, and certain of its
affiliates filed a Statement on Schedule 13D with the Securities
and Exchange Commission reporting their aggregate beneficial
ownership of 2,820,400 Common Shares of LIN Broadcasting
Corporation ("LIN"). LIN is engaged primarily in the business of
providing cellular voice telephone and data services. Over the
course of the next 14 months, McCaw and its affiliates increased
their ownership to 5,089,500 Common Shares.
B. On June 8, 1989, McCaw commenced a tender offer
(the "McCaw Offer") pursuant to which it offered to purchase for
cash all of the LIN Common Shares it did not then own for $120
per LIN Common Share. On July 28, 1989, McCaw revised the price
at which it was offering to purchase LIN Common Shares to $110
per LIN Common Share.
C. On September 11, 1989, LIN entered into a merger
agreement with BellSouth Corporation, pursuant to which the
cellular operations of LIN and BellSouth would be combined into
LIN, with BellSouth holding a 50% equity interest in LIN, the
stockholders of LIN would receive a cash payment of $20 per LIN
Common Share and LIN's television operations would be spun off to
LIN's stockholders.
D. On October 10, 1989, McCaw revised the McCaw Offer
to offer to purchase 22 million LIN Common Shares for cash for
$125 per LIN Common Share, which would have provided McCaw with a
majority of LIN's voting stock. In addition, McCaw indicated its
intention to enter into a mutually satisfactory private market
value guarantee agreement as promptly as practicable following
consummation of its offer.
E. On November 20, 1989, in response to further
negotiations between LIN and BellSouth, McCaw again revised the
McCaw Offer to offer to purchase 22.5 million LIN Common Shares
for cash for $150 per LIN Common Share; to enter into a proposed
private market value guarantee agreement; and to cause LIN,
following successful completion of the McCaw Offer, to purchase
and distribute to LIN's stockholders, other than McCaw and its
affiliates, shares of Class A Common Stock of McCaw with an
aggregate market value of $425 million.
F. After further discussions, the final version of
the McCaw Offer ensued. McCaw agreed to a restructured
transaction that reduced the number of LIN Common Shares that it
would offer to purchase to 21.9 million, increased the purchase
price to $154.11 per LIN Common Share, dropped certain conditions
to its tender offer, and made certain changes to the proposed
private market value guarantee that resulted in its final form
(in final form, the "PMVG"), subject to the LIN Board of
Directors publicly announcing its recommendation that LIN's
stockholders accept the revised McCaw Offer. The LIN Board,
following discussion and based on advice from LIN's investment
advisors and legal counsel, by unanimous vote withdrew its
earlier recommendation of the transactions contemplated by the
BellSouth merger agreement and recommended that LIN's
stockholders accept the McCaw Offer once the conditions to that
offer were satisfied.
G. Thereafter, LIN requested that BellSouth terminate
the BellSouth merger agreement. McCaw subsequently entered into
a settlement agreement with BellSouth pursuant to which the
BellSouth merger agreement was terminated, and McCaw paid $66.5
million to BellSouth in respect of certain termination fees and
expenses contemplated by the BellSouth merger agreement.
H. On December 11, 1989, LIN and McCaw entered into
an agreement pursuant to which McCaw undertook to proceed with
the McCaw Offer on the terms described above and established
other terms, including the execution by McCaw and LIN, on the
same day, of the PMVG. The PMVG had been negotiated at arm's
length by McCaw and LIN prior to McCaw's acquisition of control
of LIN and was approved by the LIN Board prior to the time that
any of the members of the LIN Board were designated by or
otherwise affiliated with McCaw. On March 5, 1990, McCaw
acquired 21.9 million LIN Common Shares pursuant to the McCaw
Offer, bringing McCaw's aggregate ownership to 26,989,500 LIN
Common Shares, or approximately 52% of the outstanding LIN Common
Shares. McCaw has not increased its beneficial ownership of LIN
Common Shares since completion of the McCaw Offer.
I. McCaw and LIN thus entered into the PMVG on
December 11, 1989 as part of the agreement under which McCaw and
LIN agreed to McCaw's acquisition of control of LIN. The PMVG
provided, inter alia, that for as long as McCaw and its
affiliates or any member of a "group," as such term is used for
purposes of Schedule 13D under the Exchange Act (collectively
"Group Members") beneficially own in the aggregate at least 25%
of the outstanding LIN Common Shares on a fully diluted basis, or
McCaw's designees constitute a majority of the LIN Board, and any
LIN Common Shares are held by other persons, the following
provisions, among others, will apply:
i. Three members of the LIN Board will be independent
directors as determined under the New York Stock Exchange Rules
(the "LIN Independent Directors"). The current LIN Independent
Directors are persons who served on LIN's Board prior to the
completion by McCaw of the McCaw Offer.
ii. On or about January 1, 1995, the LIN Independent
Directors would designate an investment banking firm of
recognized national standing, and McCaw would designate an
investment banking firm of recognized national standing, in each
case to determine the private market value per LIN Common Share
pursuant to the terms of the PMVG.
J. On December 4, 1990, a number of LIN shareholders
brought an action in the United States District Court for the
Southern District of New York (the "Federal Court") against LIN,
McCaw and the directors of LIN, individually and derivatively,
and on behalf of LIN alleging, inter alia, that certain of the
actions of the LIN board that related to the acquisition of LIN
by McCaw were unlawful (the "LIN Action"). On June 6, 1992, the
LIN Action was settled upon notice to a class of LIN shareholders
(the "LIN Class") consisting of all holders of LIN common stock
at any time from and including June 7, 1989 through and including
March 5, 1990 (the "LIN Settlement"). As part of the LIN
Settlement, the LIN Class released all claims relating to or
arising out of the acquisition of LIN by McCaw, including all
claims relating to or arising out of the PMVG.
K. On November 4, 1992, McCaw and AT&T Corp.
("AT&T"), which is principally engaged in global information
movement and management, financial services and leasing,
announced publicly that they were discussing a proposed strategic
alliance, including a significant investment by AT&T in McCaw,
the purchase by AT&T from McCaw's controlling stockholders of an
option to obtain voting control of McCaw and the grant by AT&T to
McCaw of a 99-year license to use the AT&T service mark on
McCaw's wireless services. Discussions with respect to the
proposed alliance continued through 1992 and the first half of
1993. Officers of McCaw periodically reported to the LIN Board
on the status of the negotiations with respect to the proposed
AT&T/McCaw alliance.
L. In July 1993, AT&T representatives informed McCaw
representatives that AT&T wished to explore the desirability and
feasibility of a merger as a possible alternative to the
proposed strategic alliance. On August 14, 1993, AT&T made a
merger proposal to McCaw, and the terms thereof were negotiated
on August 14 and 15, 1993. On August 15, 1993, the proposed
merger was approved by the Boards of Directors of AT&T and McCaw
(the "AT&T/McCaw Merger"). On August 16, 1993, AT&T and McCaw
executed a merger agreement providing for the merger of McCaw and
a subsidiary of AT&T. On September 19, 1994, the AT&T/McCaw
Merger was consummated, and AT&T acquired all of the outstanding
shares of McCaw in exchange for shares of common stock, par value
$1.00 per share, of AT&T. Neither AT&T nor any of its
subsidiaries has acquired any LIN Common Shares except indirectly
through its acquisition of McCaw in such merger. At the time of
AT&T's acquisition of McCaw, there were five McCaw designees, in
addition to the three LIN Independent Directors, on the LIN
Board. Subsequent to that acquisition, two of the five McCaw
designees resigned from the LIN Board, the size of the LIN Board
was increased by three and five persons employed by AT&T were
elected to the LIN Board.
M. As required by the PMVG, a process commenced on
January 1, 1995 to determine the private market value per LIN
Common Share. Pursuant to a provision in the PMVG, McCaw and the
LIN Independent Directors each designated nationally recognized
investment banking firms to determine such firms' views of the
private market value per LIN Common Share as defined in the PMVG.
The LIN Independent Directors designated Bear, Stearns & Co.
Inc. ("Bear Stearns") and Lehman Brothers Inc. ("Lehman
Brothers"), acting jointly, for this purpose; McCaw designated
Morgan Stanley & Co. Incorporated ("Morgan Stanley"). The PMVG
defines private market value per LIN Common Share as "the private
market price per [LIN Common] Share (including control premium)
that an unrelated third party would pay if it were to acquire all
outstanding [LIN Common] Shares (including the [LIN Common]
Shares held by [McCaw] and its affiliates) in an arm's-length
transaction, assuming that [LIN] was being sold in a manner
designed to attract all possible participants (including the
Regional Bell Operating Companies) and to maximize stockholder
value, including if necessary through the sale or other
disposition (including tax-free spin-offs, if possible) of
businesses prohibited by legal restrictions to be owned by any
particular buyer or class of buyers (e.g., the Regional Bell
Operating Companies)."
N. Morgan Stanley and Bear Stearns and Lehman
Brothers conducted due diligence with respect to LIN, including
reviewing various sets of projections for LIN from LIN management
and from McCaw management. Each of the investment banking firms
also conducted various analyses to determine their views of the
private market value of LIN, including a discounted cash flow
analysis; an analysis of selected precedent transactions; an
analysis of potential purchasers; and an analysis of the public
trading prices of the shares of comparable companies. In
accordance with the instructions of both McCaw and the LIN
Independent Directors, Morgan Stanley and Bear Stearns and Lehman
Brothers did not solicit third-party interest with respect to an
acquisition of all or any part of LIN.
O. Pursuant to the PMVG, on January 31, 1995, Morgan
Stanley and Bear Stearns and Lehman Brothers exchanged their
initial views as to the private market value per LIN Common
Share. The initial view of Morgan Stanley was that the private
market value per LIN Common Share was $100. The initial view of
Bear Stearns and Lehman Brothers was that the private market
value per LIN Common Share was $162, assuming a closing date for
an acquisition of LIN of June 30, 1995. As contemplated by the
PMVG, at their January 31, 1995 meeting and during the period
from January 31, 1995 to February 15, 1995, Morgan Stanley and
Bear Stearns and Lehman Brothers consulted with one another with
respect to these views, which included discussion of the
methodologies employed by each of the firms in reaching their
initial views.
P. On February 15, 1995, Morgan Stanley and Bear
Stearns and Lehman Brothers delivered their final views as to the
private market value per LIN Common Share. The final view of
Morgan Stanley was that the private market value per LIN Common
Share was $105, assuming a closing date for an acquisition of LIN
of no earlier than June 30, 1995. The final view of Bear
Stearns and Lehman Brothers was that the private market value per
LIN Common Share was $155, assuming a closing date for an
acquisition of LIN of June 30, 1995. On February 15, 1995, the
last trading day prior to the public announcement of the final
views of Morgan Stanley and Bear Stearns and Lehman Brothers, the
high and low sales price per LIN Common Share on the Nasdaq
National Market were $141-1/2 and $138-1/2, respectively. On February
16, 1995, the day that the final views were disclosed, the high
and low sales prices were $132 and $129 per LIN Common Share,
respectively.
Q. Under the PMVG, because the final view of Bear
Stearns and Lehman Brothers was more than 110% of the final view
of Morgan Stanley, the investment banking firms were required to
agree upon and jointly designate another investment banking firm
of recognized national standing to determine the private market
value per LIN Common Share. Pursuant to these provisions, on
February 17, 1995, Wasserstein Perella, an independent nationally
recognized investment banking firm unaffiliated with AT&T, McCaw
and LIN, was engaged for this purpose.
R. Wasserstein Perella was provided with written
presentations from Morgan Stanley and Bear Stearns and Lehman
Brothers; conducted due diligence with respect to LIN, including
reviewing varying projections from LIN management and McCaw
management and other written materials and conducting interviews
with LIN management and McCaw management; conducted two lengthy
meetings with representatives of Morgan Stanley, Bear Stearns and
Lehman Brothers and counsel for McCaw and the LIN Independent
Directors, at which extensive presentations were made; received
legal advice with respect to the proper interpretation of the
PMVG and other related issues; and conducted its own analyses of
the private market value per LIN Common Share. The legal advice
provided to Wasserstein Perella by its counsel included advice as
to whether, in determining the private market value in accordance
with the definition of private market value contained in the
PMVG, AT&T and McCaw should be considered as potential buyers, an
issue as to which McCaw and the LIN Independent Directors had a
difference of views. Wasserstein Perella's counsel concluded
that, under this definition, AT&T and McCaw should not be
considered potential buyers.
S. On March 7, 1995, Wasserstein Perella determined
that the private market value per LIN Common Share, as defined
under the PMVG, is $127.50. Under the formula set forth in the
PMVG, $127.50 per LIN Common Share is the Private Market Price as
defined under the PMVG, because this amount is more than one-third
and less than two-thirds of the way between the $105 per
LIN Common Share and the $155 per LIN Common Share determined by
Morgan Stanley, and by Bear Stearns and Lehman Brothers,
respectively, as the private market value per LIN Common Share.
If Wasserstein Perella's determination were not in this middle
range, the Private Market Price would have been the average of
Wasserstein Perella's determination and the closer of the other
two appraisals, but not more than the higher view ($155) nor less
than the lower view ($105). On March 7, 1995, the last trading
day prior to the public announcement of Wasserstein Perella's
determination as to the private market value per LIN Common
Share, the high and low sales prices per LIN Common Share on the
Nasdaq National Market were $130.25 and $128.25, respectively.
T. Pursuant to the PMVG, McCaw was given 45 days to
determine whether it desired to proceed with an acquisition of
all the publicly held LIN common shares (the "LIN Public Shares")
at the Private Market Price. Under the PMVG, if McCaw decided to
proceed, it was required to enter into an agreement with LIN for
such acquisition. If McCaw decided not to proceed, the PMVG
would require McCaw to put LIN up for sale in its entirety under
the direction of the LIN Independent Directors in a manner
intended to maximize value for all LIN Common Shares.
U. On April 7, 1995, McCaw determined that it desired
to proceed with an acquisition of the LIN Public Shares at the
Private Market Price of $127.50 per LIN Common Share (the
"Original Merger"). On April 6, 1995, the last trading day prior
to the public announcement of McCaw's determination, the high and
low sales prices per LIN Common Share on the Nasdaq National
Market were $122.25 and $121.50, respectively. Subsequent to
McCaw's determination, representatives of the LIN Independent
Directors had discussions with representatives of McCaw with
respect to the terms on which the LIN Independent Directors would
be willing to vote in favor of, or abstain with respect to, the
acquisition of the LIN Public Shares by McCaw pursuant to the
PMVG. These discussions focused on: (I) the possibility of
McCaw increasing the price at which it would acquire the LIN
Public Shares and/or adding an accretion to the purchase price in
the event the Original Merger closed after June 30, 1995; (ii)
certain requested changes in the text of a draft of a proposed
merger agreement, including adding a guarantee from AT&T and a
representation that the funds for the purchase of the LIN Public
Shares would be provided by AT&T in the form of a capital
contribution and narrowing or eliminating the condition to
McCaw's obligation to consummate the Original Merger that there
be no pending litigation challenging the Original Merger or the
PMVG; and (iii) the possibility of seeking a fairness opinion
from Wasserstein Perella or another investment banking firm.
V. Following discussions between the representatives
of the LIN Independent Directors and of McCaw, on April 28, 1995,
the LIN Board met to consider a proposed form of merger agreement
(the "Original Merger Agreement"). At this meeting, the LIN
Board heard presentations from and asked questions of
representatives of Morgan Stanley, Bear Stearns, Lehman Brothers,
and Wasserstein Perella; heard presentations on the background of
the PMVG, the terms of the proposed Original Merger Agreement and
the status of pending litigation; and were advised by counsel
with respect to their duties under Delaware law. The LIN Board
then approved the Original Merger Agreement and the Original
Merger by a vote of six to three, with two directors abstaining.
The three LIN Independent Directors each voted no on the proposal
to approve the Original Merger Agreement presented to the LIN
Board, and two abstained. Following the meeting of the LIN
Board, McCaw, MMM Holdings, Inc. ("MMM"), a wholly-owned
subsidiary of McCaw, MMM Acquisition Corp. ("Merger Sub"), a
wholly-owned subsidiary of MMM, and LIN entered into the Original
Merger Agreement. The purpose of the Original Merger was to
effect the acquisition of all the LIN Public Shares by McCaw, as
contemplated by the PMVG.
W. A number of putative class action lawsuits
challenging the Original Merger and the PMVG process were filed
in several jurisdictions. There is now pending the consolidated
action entitled In re LIN Broadcasting Corporation Shareholders
Litigation, Consolidated C.A. No. 14039, in the Court of Chancery
of the State of Delaware, New Castle County (the "Delaware
Action"), and the actions entitled Katz v. Robert F. Allen, et
al., Index No. 95-104259, Luke v. Wasserstein Perella & Co., et
al., Index No. 95-105973, and Frank v. Alberg, et al., Index No.
95-108949, in the Supreme Court of the State of New York, County
of New York (the "New York State Court Actions") (collectively,
the "Actions"). The Actions were filed as putative class actions
on behalf of holders of LIN Common Shares, naming as defendants
AT&T, McCaw, MMM, certain individual officers and directors of
AT&T, McCaw and LIN (collectively, the "Individual Defendants"),
Wasserstein Perella, and Morgan Stanley. The Actions variously
seek injunctive relief, monetary damages and/or rescission on the
grounds that the conduct of the various defendants in connection
with the proposed plan of merger among LIN, McCaw and two
subsidiaries of McCaw and the determination of the private market
value of the LIN Common Shares pursuant to the PMVG, constitutes,
inter alia, a breach of the PMVG, unjust enrichment, and a breach
of fiduciary duties.
X. Another action, Newman v. McCaw Cellular
Communications and AT&T Corp., C.A. No. 95 Civ. 1583, in the
United States District Court for the Southern District of New
York (the "Federal Action"), that asserted certain federal
claims, was voluntarily dismissed without prejudice on June 22,
1995 pursuant to the filing of plaintiff's Notice of Voluntary
Dismissal dated June 21, 1995, in which plaintiff stated that
based on facts learned from defendants' counsel subsequent to the
commencement of the action, plaintiff no longer believed it could
prevail on its claims.
Y. One of the conditions to McCaw's obligation to
consummate the Merger under the Original Merger Agreement was
that no litigation be pending that questioned the validity or
legality of the PMVG or the proceedings thereunder or of the
Original Merger Agreement or the transactions contemplated
thereby, or which imposed or could impose any remedy, condition
or restriction in connection therewith unacceptable to McCaw.
The litigation described above, if left pending, would have
caused that condition not to be satisfied. The condition could,
however, have been waived by McCaw.
Z. Following plaintiffs' counsel's extensive factual
investigation, document discovery and consultation with experts,
arm's-length negotiations commenced between plaintiffs' counsel
and counsel for AT&T and McCaw. On June 22, 1995, the parties
executed a Memorandum of Understanding (the "Memorandum of
Understanding"), which contemplated the settlement of the Actions
and all claims that have been or could have been the subject of
the Actions (the "Settlement"), on the terms and subject to the
conditions set forth below. The Memorandum of Understanding was
subject to: (a) the drafting and execution of an appropriate
Stipulation and such other documentation as may be required to
obtain final Court approval of the Settlement; (b) the completion
by plaintiffs of appropriate discovery in the Actions reasonably
satisfactory to plaintiffs' counsel; (c) final Court approval of
the Settlement and dismissal of the Actions with prejudice and
without awarding costs to any party (except as provided in
paragraph 11 below); (d) the approval of the LIN Independent
Directors; and (e) the receipt of a fairness opinion from a
mutually acceptable investment banking firm. The Memorandum of
Understanding was to be null and void and of no force and effect
were any of these conditions not met or should plaintiffs'
counsel have determined after completion of discovery that the
Settlement was not fair and reasonable.
AA. At a meeting on June 30, 1995, the LIN Board
considered a proposed amended and restated merger agreement (the
"Merger Agreement") that reflected the terms of the Memorandum of
Understanding. The LIN Board also received the opinion and
financial presentation of Wasserstein Perella, the agreed-to
mutually-acceptable investment banking firm, to the effect that
the increased consideration as provided in the Merger Agreement
is fair from a financial point of view to the LIN public
stockholders. The LIN Independent Directors joined in the
unanimous approval by the LIN Board of Directors of the Merger
Agreement and the merger contemplated thereby (the "Merger") and
indicated their acceptance of the Memorandum of Understanding
setting forth the terms of the proposed litigation Settlement.
As contemplated by the Memorandum of Understanding as a condition
to the Settlement, the LIN Independent Directors have also
assented to the scheduled conversion of certain cellular systems
of LIN and its subsidiaries to provide equal access for long
distance carriers and the use by LIN and its subsidiaries of the
AT&T service mark in the marketing of certain services pending
the Merger.
BB. Plaintiffs in the foregoing litigation, through
their counsel, have completed appropriate discovery and believe
that the terms and conditions of the Settlement are fair,
reasonable, and in the best interests of the LIN public
stockholders. In reaching this conclusion, plaintiffs and their
attorneys have taken into account, among other things, the risks
of litigation and the substantial benefits the Settlement will
confer on LIN public stockholders and the members of the
Settlement Class (as defined below). Defendants believe that it
is in the best interests of all parties that the Actions be
settled and dismissed, because such settlement would avoid the
time, expense and risks associated with further litigation and
would allow repose of the Settled Claims, as defined below.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED,
subject to the approval of the Delaware Court, that all claims,
rights or causes of action, known or unknown, arising under
common law or statutory law, state or federal, including all
securities laws, that arise now or hereafter out of, or relate
to, directly or indirectly, or that are, were or could have been
asserted or in the future might have been asserted in connection
with the subject matter of the Actions and this Stipulation, any
of the facts, matters, transactions, occurrences or conduct
relating to or arising out of the subject matter of the Actions
and this Stipulation and any disclosures or non-disclosures
related thereto and all claims which have been, or could have
been, asserted relating to the Original Merger, the Merger, the
Original Merger Agreement, the Merger Agreement, the actions of
the LIN Board of Directors and the Independent Director
Defendants relating to the AT&T/McCaw Merger, the PMVG, the proxy
statement, or the actions of the Board of Directors of AT&T,
McCaw or LIN and the Independent Director Defendants relating to
the Original Merger, the Merger, the Original Merger Agreement or
the Merger Agreement (except for appraisal rights pursuant to
D.G.C.L. Section 262) (collectively, the "Settled Claims"), by any
plaintiff or any member of the Settlement Class (as defined in
paragraph 7 below), whether individually, directly,
representatively, derivatively or in any other capacity, against
any of the defendants, and any of the past or present officers,
directors, stockholders, employees, agents, attorneys, investment
bankers, commercial bankers, insurers, reinsurers, compensation
consultants, accountants, representatives, affiliates or
subsidiaries of AT&T, McCaw, LIN, MMM, Merger Sub, Morgan
Stanley, Wasserstein Perella, Bear Stearns, Lehman Brothers, or
any of the Individual Defendants or Independent Director
Defendants, and any of the heirs, executors, personal
representatives, trustees, beneficiaries, estates,
administrators, successors or assigns of any of them, shall be
compromised, settled, released and dismissed with prejudice, upon
and subject to the following terms and conditions:
1. Subject to the terms and conditions set forth
below, instead of the Original Merger, as a result of the
aforesaid litigation, McCaw will pay in the Merger $129.50 in
cash per LIN Common Share, plus the Additional Amount (as defined
below), plus the Accretion Amount (as defined below),
(collectively, the "Merger Consideration"). The term "Additional
Amount" means $0.25 less an amount equal to (x) the excess over
$4 million of the total fee awarded by a final and non-appealable
order of the Delaware Court to the plaintiffs'
attorneys in connection with the litigation Settlement (as
described in paragraph 11 below), divided by (y) the number of
LIN Common Shares issued and outstanding immediately prior to the
Effective Time (as described below), other than LIN Common Shares
owned by McCaw or any of its wholly-owned subsidiaries and LIN
Common Shares held in the treasury of LIN or by any wholly-owned
subsidiary of LIN. The term "Accretion Amount" means an amount,
if any, equal to the amount of simple interest that would accrue
on $129.50 plus the Additional Amount (if any) at a rate of five
and one-half percent (5.5%) per annum from, but not including,
September 15, 1995 through, and including the date upon which the
closing of the Merger (the "Closing") occurs. The term
"Effective Time" is the date upon which the Merger will be
consummated and become effective, which will be on the date and
at the time at which the certificate of merger to be filed
pursuant to the General Corporation Law of the State of Delaware
is accepted for filing by the Secretary of State of the State of
Delaware or such later date and time as may be specified, with
the approval of LIN and McCaw, in such certificate of merger.
The Merger Consideration (before the Accretion Amount)
constitutes from $2.00 to $2.25 per LIN Common Share above the
Private Market Price determined pursuant to the PMVG,
representing an aggregate increase of from $50 to $55 million
over the Private Market Price.
2. The parties to the Actions shall seek to obtain
final Court approval of the Settlement and the dismissal of the
Actions upon the terms set forth in this Stipulation. As part of
the Settlement, plaintiffs shall file a consolidated amended
complaint in the consolidated Delaware Action which, among other
things, incorporates the allegations made in the New York
Actions. The parties to the respective Actions will present the
Settlement to the Delaware Court for approval as soon as
practicable following appropriate notice to the Settlement Class
(as defined in paragraph 6 below), and will use their best
efforts to obtain final Court approval of the Settlement and the
dismissal of the Actions pending in the Delaware Court with
prejudice as to all claims asserted in the Actions as against the
named plaintiffs and the Settlement Class (as defined in
paragraph 6 below) with no right to opt-out of the Settlement and
without costs to any party (except as provided in paragraph 11
below) and the dismissal of the New York State Court Actions. As
used herein, "final Court approval" of the Settlement means that
the Delaware Court has entered an order dismissing the Delaware
Action with prejudice in accordance with the terms of paragraph 9
below and such order is finally affirmed on appeal or is no
longer subject to appeal.
3. Defendants have denied and continue to deny that
they have committed or attempted to commit any violations of law
or breaches of duty to LIN or its stockholders. Defendants are
entering into the Stipulation solely because the proposed
Settlement as described above would eliminate the burden, expense
and risk of further litigation and is in the best interests of
LIN and all its stockholders.
4. This Stipulation is not a concession or admission
of wrongdoing or liability by any person, and shall not be used
or construed as an admission of any fault, omission, liability or
wrongdoing on the part of any party hereto in any statement,
release or written document or financial report issued, filed or
made. Neither this Stipulation, nor the Exhibits hereto, nor the
fact of settlement, nor any settlement negotiations or
discussions, nor the judgments entered in the Actions, nor any
related document shall be offered or received in evidence as an
admission, concession, presumption or inference against any party
hereto in any proceeding other than such a proceeding as may be
necessary to consummate or enforce this Stipulation and the
Settlement.
5. The Settlement is conditioned upon consummation of
the Merger and (except as to McCaw's obligation to pay the costs
of notice to the Settlement Class) will not be binding upon any
party if the Merger Agreement is terminated in accordance with
its terms. AT&T and McCaw shall have the option to withdraw from
the Settlement in the event that the Merger is terminated or in
the event that final Court approval of the Settlement has not
been obtained by November 30, 1995. Plaintiffs shall have the
option to withdraw from the Settlement in the event that the
final proxy statement issued by LIN in connection with the Merger
is not substantially in the form in which it was filed by LIN
with the Securities and Exchange Commission ("SEC") on July 10,
1995, except for any changes made by LIN in response to comments
made by the SEC and any other changes reasonably satisfactory to
the Co-Chairs of the Plaintiffs' Executive Committee.
6. The Settlement Class of plaintiffs encompassed by
this Stipulation and Settlement, who through it have compromised,
settled and released all right to the Settled Claims, shall
consist of all record holders and beneficial owners of LIN shares
at any time on or after January 1, 1995 up to and including the
Effective Time of the Merger, including those who have sold their
LIN shares and thus no longer are current LIN shareholders.
Excluded from the Settlement Class are the defendants herein,
members of the immediate family of each of the Individual
Defendants, any person, firm, trust, corporation, officer,
director or other individual or entity in which any defendant has
a controlling interest or which is related to or affiliated with
any of the defendants and the legal representatives, heirs,
successors in interest or assigns of any such excluded party.
7. The obligations of defendants under this
Stipulation shall be in full settlement, compromise, release, and
discharge of the Settled Claims and are conditioned upon final
Court approval of the Settlement. Upon such approval, (a) the
defendants or any of them shall have no other or further
liability or obligation to any member of the Settlement Class
with respect to the Settled Claims; and (b) plaintiffs, for and
on behalf of each of their respective selves and each of their
respective heirs, affiliates, transferees, successors, or
assigns, immediate and remote, and for and on behalf of members
of the Settlement Class (hereafter all collectively referred to
as the "Releasing Persons"), shall be deemed to have fully and
forever released and discharged all the defendants and each of
the respective past or present officers, directors, stockholders,
employees, agents, attorneys, investment bankers, commercial
bankers, insurers, reinsurers, compensation consultants,
accountants, representatives, affiliates or subsidiaries of AT&T,
McCaw, LIN, MMM, Merger Sub, Morgan Stanley, Wasserstein Perella,
Bear Stearns, Lehman Brothers, the Individual Defendants, the
Independent Director Defendants, or any of the heirs, executors,
personal representatives, trustees, beneficiaries, estates,
administrators, successors or assigns of any of them
(collectively referred to as the "Released Persons") of and from
any and all Settled Claims as heretofore defined.
8. All Parties agree to use their best efforts to
obtain all approvals necessary and to do all things necessary or
helpful to effectuate the Stipulation according to its terms,
including the execution of all Exhibits or related documents as
soon as possible if such execution is necessary. As soon as
practicable after this Stipulation has been executed, the parties
shall apply jointly for a Scheduling Order in the form annexed
hereto as Exhibit A (the "Order") providing, among other things:
(a) that for purposes of settlement only, the Delaware
Action shall be maintained and proceed as a class action on
behalf of the Settlement Class, pursuant to Chancery Court Rules
23(a) and 23(b)(1) and 23(b)(2), on behalf of the Settlement
Class (as defined in paragraph 6 above), and that the plaintiffs
fairly and adequately represent the interests of the Settlement
Class (as defined above) in enforcing their rights in the
Actions.
(b) that (I) the Notice of Pendency of Class Actions,
Class Action Determination, Proposed Settlement of Class Actions,
Settlement Hearing, and Right to Appear, in the form annexed
hereto as Exhibit B (the "Notice"); and (ii) the Summary Notice
of Class Action Determination, Proposed Settlement of Class
Actions and Settlement Hearing in the form annexed hereto as
Exhibit C (the "Summary Notice"), are approved by the Delaware
Court, and that the mailing and publication of the Notice
substantially in the manner and form set forth in the Order and
the publication of the Summary Notice in the manner and form set
forth in the Order meet the requirements of Court of Chancery
Rule 23 and due process, constitute the best notice practicable
under the circumstances, and shall constitute due and sufficient
notice to all persons entitled thereto; and
(c) that a hearing (the "Settlement Hearing") shall be
held before the Delaware Court, at a time and date to be set by
the Delaware Court, to determine whether the proposed settlement
of the Delaware Action on the terms and conditions set forth in
the Stipulation is fair, reasonable and adequate and should be
approved by the Delaware Court, and whether a judgment should be
entered.
9. If the Settlement (including any modification
thereto made with the consent of the parties as provided for
herein), is approved by the Delaware Court following a hearing,
the parties shall jointly request the Delaware Court to enter an
Order and Final Judgment ("Final Order"), substantially in the
form annexed hereto as Exhibit D, among other things:
(a) approving the Settlement as fair, reasonable and
adequate, and directing consummation of the Settlement in
accordance with its terms and provisions;
(b) dismissing the Delaware Action as to all
defendants with prejudice as against all plaintiffs and all
members of the Settlement Class, without costs except as provided
herein, such dismissal to be subject only to compliance by the
parties with the terms and conditions of the Stipulation and any
Order of the Delaware Court with reference to the Stipulation;
and
(c) releasing and discharging, on behalf of the
Settlement Class and the plaintiffs, the Released Persons from
all Settled Claims.
10. This Stipulation is conditioned upon the entry of
an Order and Judgment of the Delaware Court in substantially the
form (including such modifications as may be ordered by the
Delaware Court with the consent of the parties) annexed hereto as
Exhibit D and the entry of Orders and Judgments in the New York
Court in each of the New York Actions dismissing each such
action.
11. (a) Plaintiffs' counsel intend to apply to the
Delaware Court for an award of attorneys' fees and reasonable
out-of-pocket disbursements (together, the "Fees"). Subject to
the terms and conditions of this Stipulation, plaintiffs' counsel
will apply for Fees of up to $4 million plus $.25 per LIN Merger
Share (together with any interest thereon as provided in
paragraph 11(d) below), which will not be opposed by the parties
or the Released Persons. "LIN Merger Shares" shall mean the LIN
Common Shares issued and outstanding immediately prior to the
Effective Time, other than LIN Common Shares owned by McCaw or
any of its wholly owned subsidiaries and LIN Common Shares held
in the treasury of LIN or by any wholly owned subsidiary of LIN.
(b) If final Court approval of the Settlement is
obtained and the Delaware Court awards Fees of $4 million or less
by a final order, McCaw will pay that amount to the plaintiffs'
attorneys and an additional $.25 per LIN Merger Share (plus any
portion of the Accretion Amount allocable to the $.25 per LIN
Merger Share) will be paid to the LIN public stockholders as
additional Merger Consideration. If the Delaware Court finally
awards total Fees of more than $4 million, McCaw will pay that
amount to the plaintiffs' attorneys, the amount in excess of $4
million will be deducted from the $.25 per LIN Merger Share
(together with any portion of the Accretion Amount allocable to
the $.25 per LIN Merger Share) and, if any amount remains after
such deduction, the remaining amount will be paid to the LIN
public stockholders as additional Merger Consideration. The
obligation of McCaw to pay the Fees in either such event is
conditioned upon the dismissal of each of the New York State
Court Actions.
(c) If final Court approval of the Settlement is
obtained and all other conditions to the Merger are satisfied or
waived but the amount of the Fees has not been approved by a
final Court order, McCaw will close the Merger and pay $129.50
per LIN Merger Share plus the Accretion Amount allocable to the
$129.50 per LIN Merger Share, if any, in the Merger. In such
case, McCaw will deposit $.25 per LIN Merger Share on the date of
the Closing (together with any portion of the Accretion Amount
allocable to said amount) with the Paying Agent (as defined in
the Merger Agreement) in an interest bearing account permitting
immediate access to the funds held in the account. Following
final Court determination of the Fees, the amount in such account
(including pro rata interest) will be paid in accordance with the
order of the Delaware Court to the plaintiffs' attorneys and the
balance, if any, will be paid to the LIN public stockholders who
receive the Merger Consideration. The obligation of McCaw to pay
the Fees in such event is conditioned upon the dismissal of each
of the New York State Court Actions.
(d) In the event that the Merger is consummated and,
for whatever reason, plaintiffs' counsel is not yet entitled to
the payment of the Fees, McCaw shall, within five days after the
consummation of the Merger, deposit with a bank or trust company
mutually designated by McCaw and plaintiffs' counsel the lesser
of $4 million or, in the event an award has been made, the
actual amount of Fees awarded by the Delaware Court, in an
interest bearing account permitting immediate access to the funds
held in the account. Such deposit shall be separate from the
deposit referred to in paragraph 11(c) above. Within five days
after plaintiff's counsel is entitled to the Fees, McCaw shall
cause all or such portion of the amount deposited in such account
to which plaintiffs' counsel is entitled pursuant to the final
award by the Delaware Court, together with any interest accrued
in such account allocable to the amount of the Fees awarded, to
be paid to plaintiffs' counsel. Any amount remaining in the
account that is not owed to plaintiffs' counsel shall be returned
to and be the property of McCaw.
(e) All payment of attorneys' fees and expenses shall
be made by wire transfer to an account designated by the
Co-Chairs of Plaintiffs' Executive Committee, Wolf Popper Ross
Wolf & Jones, L.L.P. and Bernstein Liebhard & Lifshitz.
(f) McCaw shall pay the costs and expenses related to
providing notice of the Settlement to the LIN stockholders.
12. This Stipulation, and the attached Exhibits,
represent the entire agreement between the parties hereto,
supersede any prior agreements or understandings between the
parties with respect to the subject matter hereof, and shall not
be modified unless in writing.
13. This Stipulation shall be binding upon and inure
to the benefit of the Parties hereto and their respective heirs,
executors, administrators, successors and assigns, and upon any
corporation or other entity with which any party hereto may merge
or consolidate.
14. The Exhibits to this Stipulation are incorporated
in and constitute an integral part of the Stipulation.
15. This Stipulation may be amended or any of its
provisions waived only by a writing executed by all signatories
hereto.
16. All counsel and any other person executing this
Stipulation and any of the Exhibits hereto or any related
settlement documents warrant and represent that they have the
full authority to do so.
17. This Stipulation may be executed in counterparts.
Dated: July 27, 1995
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
/s/
_____________________________________
By Norman Monhait
First Federal Plaza
Post Office Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Delaware Plaintiffs' Counsel
YOUNG, CONAWAY, STARGATT & TAYLOR
/s/
_____________________________________
By Josy Ingersoll
1100 North Market Street
Wilmington Trust Center
Wilmington, DE 19801
(302) 571-6600
- and -
WACHTELL, LIPTON, ROSEN & KATZ
/s/
_____________________________________
By Marc Wolinsky
51 West 52nd Street
New York, NY 10019
(212) 403-1000
Attorneys for Defendants AT&T Corp.,
McCaw Cellular Communications, Inc.
MMM Holdings, Inc. and the
Individual Director Defendants of
AT&T, McCaw and LIN (except the LIN
Independent Director Defendants)
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/
__________________________________
By A. Gilchrist Sparks III
1201 North Market Street
Post Office Box 1347
Wilmington, DE 19899-1347
(302) 658-9200
- and -
WEIL, GOTSHAL & MANGES
/s/
__________________________________
By Greg A. Danilow
767 Fifth Avenue
New York, NY 10153
(212) 310-8000
Attorneys for Defendant LIN
Broadcasting Corporation
SIMPSON THACHER & BARTLETT
/s/
__________________________________
By Michael J. Chepiga
425 Lexington Avenue
New York, NY 10017
(212) 455-2000
Attorneys for the LIN Independent
Director Defendants
SHEARMAN & STERLING
/s/
__________________________________
By Stuart Baskin
599 Lexington Avenue - 6th Floor
New York, NY 10022
(212) 848-4000
Attorneys for Defendant
Morgan Stanley & Co.
