SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
[X] Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1994
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ___________ to ___________
Commission File No. 0-2481
_________________________________________________________________
LIN BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 62-0673800
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5295 Carillon Point
Kirkland, Washington 98033
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(206) 828-1902
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
<PAGE>
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The number of shares outstanding of the registrant's Common
Stock was 51,695,750 as of March 31, 1995, excluding 3,630,268
treasury shares. The aggregate market value of the voting stock
held by non-affiliates of the registrant was $3,194,381,565 as of
March 31, 1995. (The term "affiliates" is deemed, for this
purpose only, to refer only to the directors of the registrant,
to McCaw Cellular Communications, Inc. and to AT&T Corp.)
DOCUMENTS INCORPORATED BY REFERENCE
None.
<PAGE>
<PAGE> 1
PART III
Item 10. Directors and Executive Officers of the Registrant.
Directors
The following table lists the individuals who serve as
directors of the Company and certain information concerning such
directors.
Name Age Position With the Company
- --------------- --- -------------------------
Tom A. Alberg 55 President, Chief Operating Officer
and Director
Dennis J. Carey 48 Director
Lewis M. Chakrin 47 Chairman of the Board
Harold S. Eastman 56 Director
W. Preston Granbery 51 Director
William G. Herbster 62 Director
Rolla G. Huff 38 Director
Wilma H. Jordan 46 Director
Richard W. Kislik 67 Director
Wayne M. Perry 45 Vice Chairman of the Board
Florence L. Walsh 33 Director
Tom A. Alberg became a director of the Company in 1991. Mr.
Alberg has been the President and Chief Operating Officer of the
Company since April 1991 and has been Executive Vice President of
McCaw Cellular Communications, Inc. ("McCaw") since July 1990.
Prior to July 1990, Mr. Alberg was the Chairman of the Executive
Committee and a partner in the Perkins Coie law firm. He is a
director of Digital Systems International, Inc., Active Voice
Corporation, and LIN Television Corporation.
Dennis J. Carey became a director of the Company in 1994.
Mr. Carey has been the Vice President, Finance and Audit of AT&T
Corp. ("AT&T") since February 1994. Prior to that he served as
Vice President, Business Development and International of General
Electric Corporation from February 1992 to February 1994 and as
Senior Vice President and General Manager Corporate Finance Group
of General Electric Capital Corporation from August 1987 to
February 1992. He is a director of LIN Television Corporation.
Lewis M. Chakrin became a director of the Company in 1994
and has been Chairman of the Board since March 1995. Mr. Chakrin
has been Vice President and General Manager, Global Wireless
Products Group of AT&T since April 1995. Prior to that he served
with AT&T as Vice President, Business Development - <PAGE>
<PAGE> 2
Communications Services Group from March 1994 to April 1995, Vice
President, Personal Communications Services from July 1991 to
March 1994, Director, Strategic Planning -- International
Communication Services from May 1990 to July 1991, and Sales Vice
President, Business Sales Division from September 1987 to May
1990. He is a director of LIN Television Corporation.
Harold S. Eastman became a director of the Company in 1990.
He was Vice Chairman of the Board of the Company from March 1990
to April 1992. Mr. Eastman is the President of Peregrine Capital
Co., a private investment company. He served as President of
McCaw from June 1989 to December 1991 and thereafter as Vice
Chairman of the Board of McCaw until April 1992.
W. Preston Granbery became a director of the Company in
1994. Mr. Granbery has been a General Attorney with the
Corporate and Securities Group of AT&T since 1988.
William G. Herbster became a director of the Company in
1976. Mr. Herbster is a financial consultant. He is a director
of Ithaca BanCorp, Inc. and LIN Television Corporation and Senior
Advisor to the Investment Fund for Foundations.
Rolla G. Huff became a director of the Company in 1994. Mr.
Huff has been the Chief Financial Officer of McCaw since April
1995. Prior to that he served as Financial Vice President and
Chief Financial Officer, Mergers and Acquisitions of AT&T from
October 1993 to April 1995 and with NCR Corp. as Controller, US
from January 1992 to September 1993, Director, Service Marketing
Europe from April 1991 to December 1991 and Director, Operations
from August 1989 to March 1991.
Wilma H. Jordan became a director of the Company in 1987.
Ms. Jordan is Co-Chairman of The Jordan, Edmiston Group, Inc., an
investment banking and management consulting firm for publishing
companies. She is a director of Ringier America Printing Co.,
Guideposts Associates, Inc., Clayton Homes, Inc. and LIN
Television Corporation.
Richard W. Kislik became a director of the Company in 1969.
Mr. Kislik has been a publishing consultant since 1985. He is a
director of LIN Television Corporation.
Wayne M. Perry became a director of the Company in 1990.
Mr. Perry has been Vice Chairman of the Board of the Company
since March 1990 and Vice Chairman of the Board of McCaw since
June 1989 and Secretary of McCaw since October 1994. From
December 1985 to June 1989, Mr. Perry served as President of
McCaw. <PAGE>
<PAGE> 3
Florence L. Walsh became a director of the Company in 1995.
Ms. Walsh has been the Assistant Treasurer - Corporate Finance of
AT&T since November 1994. Prior to that she served as the
Director, Domestic Finance of General Motors Corporation from
January 1989 to October 1994.
Arrangements for the Election of Directors. Ms. Jordan and
Messrs. Herbster and Kislik have been elected and serve as the
"Independent Directors" as defined in and in accordance with the
Private Market Value Guarantee between the Company and McCaw (the
"PMVG"). See "Item 1. Business - Private Market Value Guarantee
- - Independent Directors." Each of the remaining directors either
is or at the time of his or her election to the Board of
Directors was an employee of AT&T or McCaw.
Director Compensation. Directors who are not also officers
of the Company or its affiliates are compensated at the rate of
$30,000 per annum. In addition, directors who are not also
officers of the Company or its affiliates receive $1,500 for each
Board of Directors meeting attended and $1,500 for each committee
meeting attended, as long as that meeting is not held in
conjunction with a board meeting. Directors are also reimbursed
for any travel expenses incurred in connection with such
meetings.
In addition, each Independent Director receives $1,500 for
each meeting attended by him or her exclusive of full board or
committee meetings. Ms. Jordan and Messrs. Herbster and Kislik
each receive $250 per hour, or $2,000 per eight-hour day, for
additional services performed in their capacities as Independent
Directors, including time spent attending and preparing for
meetings of the Independent Directors and otherwise devoting
attention to those matters requiring consideration by the
Independent Directors. Ms. Jordan and Messrs. Herbster and
Kislik received $38,688, $37,790 and $57,625, respectively, for
such services rendered in 1994, which consisted primarily of time
spent reviewing materials and attending meetings of the
Independent Directors and meetings with their financial and legal
advisors concerning the spin-off to the Company's stockholders of
LIN Television Corporation (the "Television Spin-off") (see
"Certain Relationships and Related Transactions - Relationship
With LIN Television Corporation") and the PMVG process.
All directors of the Company have the option of deferring
their compensation under the Company's Deferred Compensation
Plan.
<PAGE>
<PAGE> 4
Executive Officers
The executive officers of the Company are:
Steven W. Hooper 42 Chief Executive Officer
Tom A. Alberg 55 President, Chief Operating Officer and
Director
Wayne M. Perry 45 Vice Chairman of the Board
Donald Guthrie 39 Senior Vice President-Finance
For additional information regarding Messrs. Alberg and
Perry, see "Directors."
Steven W. Hooper has been Chief Executive Officer of the
Company since March 1995 and Chief Executive Officer of McCaw
since January 1995. From 1993 to January 1995, he was Executive
Vice President and Chief Financial Officer of McCaw. From 1988
until 1993, he was Senior Vice President-Cellular Operations of
McCaw. Prior to 1988, Mr. Hooper served with McCaw as Executive
Vice President and Chief Operating Officer of its Cable Division
and in various financial positions.
Donald Guthrie became Vice President-Finance of the Company
in March 1990 and was promoted to Senior Vice President-Finance
in June 1992. Since February 1986, Mr. Guthrie has been a Senior
Vice President and the Treasurer of McCaw.
Compliance With Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 (the
"1934 Act") requires the Company's directors, certain of its
officers and the beneficial owners of more than ten percent of
its Common Stock to file reports related to their ownership of
the Company's common stock (the "Common Stock") and of changes in
such ownership with the Securities and Exchange Commission (the
"SEC") and the National Association of Securities Dealers. SEC
regulations also require the Company to identify in this proxy
statement any person subject to this requirement who failed to
file any such report on a timely basis. AT&T and Messrs. Carey
and Chakrin inadvertently filed late the initial report required
at the time each of them became a ten percent shareholder or
director of the Company.
<PAGE>
<PAGE> 5
Item 11. Executive Compensation.
The three tables set forth below provide information with
respect to the annual and long-term compensation for services in
all capacities to the Company for fiscal years 1994, 1993, and
1992 and the option grants, exercises and values in and at the
end of fiscal year 1994 of those persons who (i) served, at any
time during 1994, as the Company's Chief Executive Officer or
(ii) were, during 1994, the four other most highly compensated
executive officers of the Company (collectively, the "named
executive officers").
<PAGE>
<PAGE> 6
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Compensation
------------
Awards
Annual Compensation ----------
Name and -------------------------------- Securities All Other
Principal Salary Other Annual Underlying Compensation
Position (1) Year ($) Bonus($) Compensation($) Options (#) ($)(2)
- ------------ ---- ------- ------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Craig O. McCaw(3) 1994 $100,112 0 0 0 $ 2,469
Chairman of the 1993 100,000 0 0 0 2,308
Board and Chief 1992 100,200 0 0 0 2,225
Executive Officer
Tom A. Alberg (4) 1994 250,487 $250,000 0 50,000 15,977
President and Chief 1993 235,000 200,000 0 50,000 12,517
Operating Officer 1992 225,000 150,200 0 50,000 10,912
James L. Barksdale(5) 1994 525,487 467,000 0 0 14,967
Chairman of the 1993 525,000 400,000 0 0 14,506
Board and Chief 1992 500,200 300,000 $70,293 (6) 0 4,167
Executive
Officer
Gary R. Chapman (7) 1994 475,000 150,000 0 0 15,481 (8)
President-LIN 1993 404,600 150,000 0 20,000 163,014 (8)
Television Group 1992 385,000 125,000 0 20,000 160,839 (8)
Donald Guthrie (9) 1994 200,487 100,000 0 35,000 3,813
Senior Vice 1993 190,000 75,200 0 35,000 2,919
President-Finance 1992 180,000 60,200 0 30,000 2,650
(continued)<PAGE>
<PAGE> 7
Summary Compensation Table (continued)
<CAPTION>
Long-Term
Compensation
------------
Awards
Annual Compensation ----------
Name and -------------------------------- Securities All Other
Principal Salary Other Annual Underlying Compensation
Position (1) Year ($) Bonus($) Compensation($) Options (#) ($)(2)
- ------------ ---- -------- ------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wayne M. Perry (10) 1994 100,487 250,000 0 0 5,139
Vice Chairman 1993 100,000 0 0 0 4,975
of the Board 1992 100,000 0 0 0 4,885
- -------------------
(1) All amounts shown for Messrs. Alberg, Chapman and Guthrie were paid by the Company, and
all amounts shown for Messrs. McCaw, Barksdale and Perry were paid by McCaw. Upon
approval by the Independent Directors of the proposed intercompany reimbursement program
for 1994, each of the Company and McCaw will reimburse the other for a portion of such
executives' compensation (other than Mr. Chapman, who rendered services solely to the
Company prior to the completion of the Television Spin-off). See "Certain Relationships
and Related Transactions - Relationship with AT&T and McCaw - Other."
(2) Represents amounts paid for life and disability insurance premiums unless otherwise
indicated.
(3) Mr. McCaw resigned from his positions as Chairman of the Board and an executive officer of
the Company effective October 25, 1994. Mr. McCaw also received options to purchase
210,000 shares of McCaw's Class A Common Stock in 1993. All such options that were
outstanding at the time of the acquisition of McCaw by AT&T (the "McCaw/AT&T Merger") were
converted into options to purchase Common Stock of AT&T. Mr. McCaw also received from
McCaw additional compensation related solely to his employment with and services rendered
to McCaw.
<PAGE>
<PAGE> 8
(4) Mr. Alberg also received from McCaw additional compensation related solely to his
employment with and services rendered to McCaw.
(5) Mr. Barksdale was elected Chairman of the Board and Chief Executive Officer of the Company
on November 2, 1994. Mr. Barksdale resigned from all positions with the Company effective
January 13, 1995. Mr. Barksdale also received options to purchase 200,000 and 340,000
shares of McCaw's Class A Common Stock in 1993 and 1992, respectively. All such options
that were outstanding at the time of the McCaw/AT&T Merger were converted into options to
purchase common stock of AT&T. Mr. Barksdale also received from McCaw and AT&T additional
compensation related solely to his employment with and services rendered to McCaw.
(6) Represents a tax-equalization payment.
(7) Mr. Chapman resigned as an executive officer of the Company effective December 28, 1994
following the Television Spin-off. See "Certain Relationships and Related Transactions -
Relationship with LIN Television Corporation." Amounts reported are those paid to Mr.
Chapman for services rendered in 1994 for the entire year, although a portion of such
amounts was paid by LIN Television Corporation following completion of the Television
Spin-off.
(8) Amount for 1994 represents life and disability insurance premiums. Amounts for 1993 and
1992 represent $13,014 and $10,839, respectively, paid for life and disability insurance
premiums and a $150,000 payment in each year in consideration of Mr. Chapman's agreeing in
1990 to forego certain benefits under a severance agreement.
(9) Mr. Guthrie also received from McCaw additional compensation related solely to his
employment with and services rendered to McCaw.
(10) Mr. Perry also received from McCaw additional compensation related solely to his
employment with and services rendered to McCaw.
<PAGE>
<PAGE> 9
Option Grants in Fiscal Year 1994
<CAPTION>
Individual Grants
--------------------------------------------------
Number of Potential Realizable
Securities Percent of Value at Assumed
Underlying Total Options Annual Rates of Stock
Options Granted to Exercise Price Appreciation
Granted Employees in Price Expiration for Option Term (2)
Name (#) (1) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- --------------- --------- ------------ -------- ---------- -------- -------
<S> <C> <C> <C> <S> <C> <C> <C>
Craig O. McCaw 0 0 N/A N/A 0 0
Tom A. Alberg 50,000 16.581% $133.50 12/31/04 $4,197,872 $10,638,231
James L. Barksdale 0 0 N/A N/A 0 0
Gary R. Chapman 0 0 N/A N/A 0 0
Donald Guthrie 35,000 11.607% 133.50 12/31/04 $2,938,510 $7,446,762
Wayne M. Perry 0 0 N/A N/A 0 0
All stockholders(3) N/A N/A N/A N/A $4,330,439,664 $10,974,184,339
Named executive N/A N/A N/A N/A 0.16 0.16
officers' gain as %
of all stockholders'
gain
- ------------------
(1) All options granted to the named executive officers become exercisable in three annual
installments of 33%, 33% and 34% beginning one year after the grant date. The per share option
exercise prices represent the fair market value of the Common Stock on the date of grant. The
option term is 10 years. In the event of a change in control of the Company, other than
certain transactions with McCaw and certain transactions pursuant to the PMVG, officers of the<PAGE>
<PAGE> 10
Company who are subject to Section 16 of the 1934 Act may surrender vested options in exchange
for a cash payment by the Company. As a result of the closing of the McCaw/AT&T Merger, the
options to purchase Common Stock held by the named executive officers will vest (if not
otherwise vested prior thereto pursuant to their terms) if the optionee's employment with the
Company is terminated under certain circumstances. See "Employment Contracts and Termination
of Employment and Change-in-Control Arrangements."
(2) The dollar amounts under these columns are the result of calculations at the 5% and 10% assumed
appreciation rates set by the SEC and therefore are not intended to forecast possible future
appreciation, if any, of the Common Stock price. At the 5% and 10% assumed appreciation rates,
the price per share of Common Stock would be $217.46 and $346.26, respectively.
(3) Based on number of shares outstanding on December 31, 1994.
<PAGE>
<PAGE> 11
Aggregated Option Exercises in Fiscal Year 1994
and Fiscal Year-End Option Values
<CAPTION>
Number of Shares
Shares Underlying Unexercised Value of Unexercised
Acquired Options at Fiscal In-the-Money Options
on Value Year-End (#) at Fiscal Year-End($)(2)
Exercise Realized -------------------------- --------------------------
Name (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
- -------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <S> <C> <C> <C> <C> <C>
Craig O. McCaw N/A N/A 67,500 22,500 $4,662,137 $1,540,712
Tom A. Alberg 30,000 $1,967,500 20,000 130,000 1,123,978 3,768,369
James L. Barksdale N/A N/A 0 0 N/A N/A
Gary R. Chapman N/A N/A 59,220 33,000 4,599,207 1,575,824
Donald Guthrie N/A N/A 26,000 85,250 1,588,036 2,255,488
Wayne M. Perry 900 55,800 44,100 15,000 3,019,796 1,027,142
- -----------------
(1) This amount represents the aggregate of the number of shares acquired on exercise multiplied by
the difference between the closing price of the Common Stock on the Nasdaq National Market on
the respective option exercise date (or, if not exercised on a trading day, the nearest trading
day) minus the exercise price for the relevant option.
(2) This amount represents the aggregate of the number of in-the-money options multiplied by the
difference between the closing price of the Common Stock on the Nasdaq National Market on
December 30, 1994 (the final trading day in 1994) and the exercise prices for the relevant
options.
</TABLE>
<PAGE>
<PAGE> 12
Pension Plan
Until December 28, 1994, the Company maintained a defined
benefit retirement plan (the "Pension Plan") that covered certain
employees of the Company and its subsidiaries. On December 28,
1994, pursuant to the Employee Benefits Allocation Agreement
between the Company and LIN Television Corporation ("LIN
Television"), LIN Television assumed sponsorship of the Pension
Plan. See "Certain Relationships and Related Transactions -
Relationship With LIN Television Corporation." LIN Television
now is solely responsible for all liabilities and obligations
under the Pension Plan. Mr. Chapman continues to participate in
the Pension Plan as an employee of LIN Television.
Effective January 1, 1993, the Pension Plan was amended to
provide that any employees treated by the Company as employed by
a component of the Company that maintains an Internal Revenue
Code (the "Code") Section 401(k) plan providing for employer-matching
contributions are not eligible to participate in, or
accrue benefits under, the Pension Plan. After retirement from
or other termination with the Company, however, any employee who
was participating in the Pension Plan as of December 31, 1992, is
entitled to receive monthly payments under the Pension Plan based
on his or her average compensation and years of credited service
as of December 31, 1992, provided that he or she completes five
years of vesting service with the Company after attaining age 17.
Such payments begin at age 65, subject to the employee's election
to terminate from employment and receive reduced monthly payments
beginning at any time between ages 55 and 65. Due to this
amendment, Messrs. Alberg and Guthrie no longer accrue additional
benefits under the Pension Plan, but are entitled to receive
monthly payments of $459 and $329, respectively, under the
Pension Plan at age 65, provided they each become vested.
Messrs. McCaw, Barksdale and Perry did not participate in the
Pension Plan.
The following table shows the estimated annual retirement
benefits payable under the Pension Plan and the Company's
Supplemental Benefit Retirement Plan as an annuity for life upon
normal retirement for specified compensation and years of
credited service classifications, assuming retirement at age 65
on December 31, 1993. Benefits are computed by multiplying (i)
1.25% of the employee's average annual compensation for the three
consecutive years producing the highest average (excluding
benefits or payments received under any other benefit plan) times
(ii) the employee's number of years of credited service, up to a
maximum of 32 years. Section 401(a)(17) and 415 of the Code
limit the annual benefits that may be paid from a tax-qualified
retirement plan such as the Pension Plan. As permitted by the <PAGE>
<PAGE> 13
Employee Retirement Income Security Act of 1974 ("ERISA"), the
Company's Supplemental Benefit Retirement Plan authorizes the
payment out of the Company's general funds of any benefits
calculated under the provisions of the Pension Plan that may be
above the limits of Sections 401(a)(17) and 415 of the Code.
<PAGE> 14
Pension Plan Table
Three-Year
Average Years of Credited Service
Annual --------------------------------------------------------
Compensation 10 15 20 25 30 32
- ------------ ----- ---- ---- ---- ---- ----
$100,000 12,500 18,750 25,000 31,250 37,500 40,000
$200,000 25,000 37,500 50,000 62,500 75,000 80,000
$300,000 37,500 56,250 75,000 93,750 112,500 120,000
$400,000 50,000 75,000 100,000 125,000 150,000 160,000
$500,000 62,500 93,750 125,000 156,250 187,500 200,000
$750,000 93,750 140,625 187,500 234,375 281,500 300,000
As of December 31, 1994, Mr. Chapman had six years of credited service
under the Pension Plan and his three-year average annual compensation was
$613,200. Benefit amounts under the Pension Plan are not subject to any
deduction for Social Security benefits or other offset amounts.
<PAGE>
<PAGE> 15
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Employment Agreements. In 1990, Mr. Chapman entered into an
employment agreement with the Company, which replaced an already
existing severance compensation agreement. Mr. Chapman's
employment agreement provides for: (i) a term that currently ends
on December 31, 1995, subject to subsequent renewals; (ii) a
minimum base salary of $375,000, commencing on January 1, 1991;
(iii) a target annual bonus award at least equal to $125,000 per
year beginning after December 31, 1991, the actual amount payable
being determined by the Company based on performance guidelines;
and (iv) a retention bonus of $600,000, payable in four equal
annual installments beginning December 31, 1990. The agreement
also provides for options, participation in certain of the
Company's incentive compensation programs, and additional
severance benefits upon termination without cause, including the
right to require the Company to purchase certain of its shares
and vested options owned by Mr. Chapman as of the date of the
employment agreement based on the value of the greater of $112
per share and the "Private Market Price" of the Common Stock as
determined in accordance with the PMVG. See "Item 1. Business -
Private Market Value Guarantee." The agreement also requires the
Company to purchase on January 1, 1995, certain of its shares and
vested options owned by Mr. Chapman as of the date of the
employment agreement based on a value of the greater of $112 per
share and the Private Market Price. This agreement was assigned
to and assumed by LIN Television in connection with the
Television Spin-off.
In 1991, Mr. Guthrie entered into an employment agreement
with the Company. Mr. Guthrie's employment agreement provides
for (i) a term that currently ends on April 30, 1995, subject,
unless terminated, to subsequent automatic annual renewals; (ii)
a base salary that currently is $210,000; (iii) options and
bonuses as determined by the Board of Directors; and (iv) such
other benefits and perquisites as are provided to Company
employees or senior executives generally. In the event that Mr.
Guthrie is terminated without "cause," as defined in the
agreement, or his employment with the Company terminates as a
result of the expiration of the term of the agreement, he will
receive an amount equal to twelve months' salary and bonus and
all long-term compensation that would have vested during the
remaining term of the agreement will be immediately vested.
Amended and Restated 1969 Stock Option Plan. Pursuant to
the Company's Amended and Restated 1969 Stock Option Plan (the
"1969 Plan"), in the event of a change in control of the Company
(as defined in the 1969 Plan), other than certain transactions <PAGE>
<PAGE> 16
with McCaw and certain transactions pursuant to the PMVG,
officers of the Company who are subject to Section 16 of the 1934
Act may surrender vested options in exchange for a cash payment
by the Company. The amount of the cash payment per share is
determined by taking the difference between the exercise price of
the shares covered by the options so surrendered and the greater
of (i) the highest market price of the Common Stock during the
90-day period prior to the day of surrender and (ii) the highest
price paid to any stockholder of the Company in the transaction
or group of transactions resulting in the change in control.
Such options may be surrendered during the 60-day period
following the change in control.
As a result of the closing of the McCaw/AT&T Merger, options
to purchase shares of Common Stock outstanding on August 14, 1993
held by the named executive officers will vest (if not otherwise
vested prior thereto pursuant to their terms) at the time McCaw
or any affiliate consummates any acquisition of all or
substantially all the remaining shares of the Common Stock or the
Company is otherwise sold, whether pursuant to the PMVG or
otherwise. In addition, as a result of the closing of the
McCaw/AT&T Merger, all outstanding options to purchase Common
Stock held by the named executive officers will vest (if not
otherwise vested prior thereto pursuant to their terms) if the
optionee's employment with the Company is terminated under
certain circumstances.
Bonus and Severance Arrangements in Connection With the
McCaw/AT&T Merger. In connection with the McCaw/AT&T Merger, the
Company established an aggregate $7.75 million bonus pool for
certain persons employed by the Company and its subsidiaries as
of August 15, 1993, conditioned upon both consummation of the
McCaw/AT&T Merger (the "McCaw/AT&T Closing"), which occurred on
September 19, 1994, and the closing of any acquisition of all or
substantially all the remaining shares of Common Stock by McCaw
or of a sale of the Company (pursuant to the PMVG or otherwise)
(the "LIN Closing"). Except as provided under the Executive
Plan, as hereinafter defined, all bonuses payable to executive
officers are payable in three installments (50% at the LIN
Closing, 25% on the first anniversary of the McCaw/AT&T Closing
and 25% on the second anniversary of the McCaw/AT&T Closing), in
each case to persons who remain employed by the Company, its
ultimate parent or any of their subsidiaries at such times,
provided, that if the LIN Closing has not occurred by such
anniversary dates of the McCaw/AT&T Closing, such payments will
not be made until the date of the LIN Closing. The amounts of
the bonuses allocated to Messrs. Alberg and Guthrie are $700,000
and $509,000, respectively. Messrs. McCaw, Alberg, Barksdale,
Guthrie and Perry received bonuses under a similar bonus program
implemented by McCaw.<PAGE>
<PAGE> 17
Also in connection with the McCaw/AT&T Merger, the Company
established an Executive Separation Plan (the "Executive Plan").
The Executive Plan provides benefits to certain executives,
including Messrs. Alberg and Guthrie, in the event that they are
terminated (other than for cause, as defined in the Executive
Plan) on or after the McCaw/AT&T Closing or in the event that
they terminate their employment within six months following an
adverse change in working conditions (including a reduction in
salary or bonus opportunities in the absence of overall poor
performance, a material reduction in scope of responsibility,
authority or other conditions of employment, a notice that an
executive's employment location will be moved more than 40 miles
or certain decreases in executive perquisites or other employee
benefits) on or after the McCaw/AT&T Closing. Under the
Executive Plan, executives are entitled to a benefit payment
equal to any unpaid installments under the bonus pool, unless
terminated for consistently poor performance documented by
substantially contemporaneous notices. Mr. Perry is entitled to
receive severance benefits, and Messrs. Alberg and Guthrie are
entitled to additional severance benefits, in certain
circumstances under a severance program established by McCaw in
connection with the McCaw/AT&T Merger.
In addition, the Company has established an arrangement for
the payment of other benefits to certain of the Company's
officers, including Messrs. Alberg and Guthrie. In order to
receive this benefit, the individual must be an officer or
employee of the Company at the time of the LIN Closing. Such
payments will be made if the officer's employment with the
Company is terminated within 120 days of a LIN Closing under the
same circumstances as are described above with respect to the
Executive Plan. The amount of such benefits payable to Messrs.
Alberg and Guthrie would be $380,000 and $213,333, respectively.
The Compensation Committee has approved the payment to
certain officers and employees of the Company, including Messrs.
Alberg and Guthrie, at the time of the LIN Closing, of a bonus of
at least 50% of the bonus paid to such individual in 1994. The
amount of the bonus may be increased, in the discretion of the
Compensation Committee, based on performance, timing and such
other factors as are approved by the Compensation Committee. The
minimum amount of such bonuses payable to Messrs. Alberg and
Guthrie are $125,000 and $50,000, respectively.
In the event that all or any portion of any severance
payment, bonus, stock option or other compensation or benefit
payable to certain executives, including Messrs. Alberg and
Guthrie, as a result of the LIN Closing would subject any
executive to an excise tax under Section 4999 of the Code, such <PAGE>
<PAGE> 18
executive would be entitled to receive a tax gross-up payment to
cover such excise tax and related penalties and interest
(including any taxes payable in connection with the gross-up
payment).
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Principal Stockholders
Based upon filings with the SEC, the following persons are
known to the Company to be "beneficial owners" of 5% or more of
the Common Stock:
Shares
Name and Address Beneficially
of Beneficial Owner Owned Percent
- ------------------------- ------------- -------
AT&T Corp. 26,989,500 (1) 52.2%
32 Avenue of the Americas
New York, New York 10013
The Capital Group Companies, Inc. 3,362,500 (2) 6.5%
333 South Hope Street
Los Angeles, California 90071
(1) AT&T holds its shares of Common Stock through its wholly
owned subsidiary McCaw, which in turn holds its shares of
Common Stock through its wholly owned subsidiary MMM
Holdings, Inc. ("MMM"). McCaw and certain of its
subsidiaries have entered into an Agreement and Plan of
Merger with the Company, as contemplated by the PMVG,
pursuant to which McCaw will acquire all of the shares of
Common Stock it does not beneficially own at this time,
subject to the terms and conditions of such agreement. See
"Item 1. Business--Private Market Value Guarantee" and
"Certain Relations and Related Transactions - Relationship
with AT&T and McCaw - Status of PMVG Sale Process."
(2) Capital Guardian Trust Company and Capital Research and
Management Company, operating subsidiaries of The Capital
Group Companies, Inc., exercised, as publicly reported as of
December 31, 1994, investment discretion with respect to
141,400 and 3,221,100 shares of Common Stock, respectively,
which were owned by various institutional investors.
<PAGE>
<PAGE> 19
Security Ownership of Management
The following table shows the beneficial ownership of Common
Stock as of April 1, 1995 by the Company's (i) directors, (ii)
the named executive officers, and (iii) directors, named
executive officers and other executive officers as a group.
Shares Beneficially
Name Owned (1) Percent
- ----------------------- ------------------- -------
Tom A. Alberg 1,433 (2) *
Dennis J. Carey 0 *
Lewis M. Chakrin 0 *
Harold S. Eastman 0 *
W. Preston Granbery 0 *
William G. Herbster 3,480 (3) *
Rolla G. Huff 0 *
Wilma H. Jordan 578 *
Richard W. Kislik 8,410 *
Wayne M. Perry 45,000 (4) *
Florence L. Walsh 0 *
Craig O. McCaw 67,500 (5) *
James L. Barksdale 0 *
Gary R. Chapman 60,536 (6) *
Donald Guthrie 26,577 (7) *
All directors, named executive
officers and other executive
officers as a group (16 persons) 233,514 (8) *
- ------------------------
* Less than 1%
(1) Certain directors of the Company are directors and/or
officers of one or more of AT&T and McCaw, each of which
beneficially owns 26,989,500 shares of Common Stock. See
"Principal Stockholders." Such individuals disclaim
beneficial ownership of such shares.
(2) Includes options exercisable within 60 days to purchase
20,000 shares of Common Stock.
(3) Represents shares held of record by Mr. Herbster's wife.
(4) Includes options exercisable within 60 days to purchase
44,100 shares of Common Stock.
(5) Includes options exercisable within 60 days to purchase
67,500 shares of Common Stock.
<PAGE>
<PAGE> 20
(6) Includes options exercisable within 60 days to purchase
59,220 shares of Common Stock
(7) Includes options exercisable within 60 days to purchase
26,000 shares of Common Stock.
(8) Includes options exercisable within 60 days to purchase
216,820 shares of Common Stock.
Beneficial Ownership of Common Stock of AT&T
The following table shows the beneficial ownership of all
equity securities of AT&T, the Company's parent, as of April 1,
1995 by the Company's (i) directors, (ii) the named executive
officers, and (iii) directors, named executive officers and other
executive officers as a group.
Shares Beneficially Percent
Name Owned of Class
- ----------------------- ------------------- --------
Tom A. Alberg 105,453 (1) *
Dennis J. Carey 107,637 *
Lewis M. Chakrin 22,624 (2) *
Harold S. Eastman 100 *
W. Preston Granbery 10,370 (3) *
William G. Herbster 0 *
Rolla G. Huff 5,580 *
Wilma H. Jordan 275 (4) *
Richard W. Kislik 200 *
Wayne M. Perry 1,053,609 (5) 1.0
Florence L. Walsh 0 *
Craig O. McCaw 15,913,730 (6) *
James L. Barksdale 50,000 *
Gary R. Chapman 28 *
Donald Guthrie 45,600 (7) *
All directors, name executive
officers and other executive
officers as a group
(16 persons) 17,902,840 (8) 1.1
- -------------------------
(1) Includes options exercisable within 60 days to purchase
105,000 shares of AT&T Common Stock.
(2) Mr. Chakrin disclaims beneficial ownership of all such
shares.
(3) Includes options exercisable within 60 days to purchase
10,370 shares of AT&T Common Stock.<PAGE>
<PAGE> 21
(4) Includes 175 shares owned by Ms. Jordan's husband and as to
which she disclaims beneficial ownership.
(5) Includes 47,500 shares held by a trust as to which Mr. Perry
disclaims beneficial ownership. Also includes options
exercisable within 60 days to purchase 1,006,109 shares of
AT&T Common Stock.
(6) Includes options exercisable within 60 days to purchase
1,540,289 shares of AT&T Common Stock.
(7) Includes options exercisable within 60 days to purchase
45,500 shares of AT&T Common Stock.
(8) Includes options exercisable within 60 days to purchase
3,087,896 shares of AT&T Common Stock.
Item 13. Certain Relationships and Related Transactions.
Relationship With AT&T and McCaw
AT&T, through its wholly owned subsidiary McCaw, owns
approximately 52% of the outstanding shares of Common Stock. For
a description of the PMVG between the Company and McCaw, see
"Item 1. Business - Private Market Value Guarantee," together
with the update to "- Status of PMVG Sale Process" set forth
below.
Status of PMVG Sale Process. On April 7, 1995, AT&T and
McCaw announced that McCaw has decided to proceed with an
acquisition of all of the shares of Common Stock not owned by
McCaw or any of its affiliates.
On April 28, 1995, an Agreement and Plan of Merger was
executed and delivered by and among McCaw, MMM, MMM Acquisition
Corp., a wholly owned subsidiary of MMM ("Acquisition") and the
Company (the "Merger Agreement"). The Merger Agreement provides
for the merger of Acquisition with and into the Company (the
"Merger"), as a result of which the Company would become a wholly
owned subsidiary of McCaw. The Merger Agreement was approved by
the Company's Board of Directors, with six directors voting in
favor, three opposed and two abstaining, at a meeting held on
April 28, 1995. Upon the consummation of the Merger, the holders
of shares of Common Stock other than shares owned by McCaw or any
of its wholly owned subsidiaries and shares in the Company's
treasury or owned by any wholly owned subsidiary of the Company
(collectively, the "Public Shares") or by persons who perfect <PAGE>
<PAGE> 22
and maintain their right to dissent to the Merger will be
entitled to receive cash in the amount of $127.50, without
interest thereon, for each Public Share.
Consummation of the Merger is subject to certain conditions,
including but not limited to (i) the absence of any order or
injunction of any court or governmental authority preventing
consummation of the Merger or making consummation subject to any
condition or restriction not acceptable to McCaw in its
reasonable judgement, (ii) receipt of all necessary governmental
and third party consents unless the failure to obtain such
consents would not have a material adverse effect on the
business, properties, operations, condition (financial or other)
or prospects of the Company or McCaw, and (iii) that no suit,
action, investigation, inquiry, or other proceeding is pending by
or before any governmental authority which questions the validity
or legality of the PMVG or the proceedings thereunder or the
Merger Agreement or the transactions contemplated by the Merger
Agreement or which imposes or could impose any remedy, condition
or restriction in connection therewith that is unacceptable to
McCaw. In addition, the Merger is subject to the approval of the
holders of a majority of the Public Shares who are present and
entitled to vote at the meeting of stockholders at which the
Merger will be considered (the "Meeting").
The Merger must also be approved by the affirmative vote of
shares representing a majority of the shares of outstanding
Common Stock entitled to vote thereon. McCaw, which indirectly
owns approximately 52% of the voting power of the Common Stock,
has agreed that, if the Merger receives the necessary approval of
the holders of the Public Shares, it will vote or cause to be
voted all of the shares of Common Stock beneficially owned by it
and its affiliates and subsidiaries in favor of the Merger.
Accordingly, approval of the Merger by the affirmative vote of
holders of shares representing a majority of the outstanding
voting power of the Common Stock is assured.
The Merger Agreement may be terminated at any time by the
mutual written consent of the Company and McCaw or by mutual
action of their respective Boards of Directors. It also may be
terminated by action of the Board of Directors of either the
Company or McCaw if (i) the Merger has not been consummated by
December 31, 1995 or, if the Merger has received the necessary
approval of the holders of Public Shares and is being pursued in
good faith by McCaw but has not been completed due to regulatory
delays or litigation, August 31, 1996, (ii) an appropriate court
or governmental authority has issued a final and nonappealable
order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the Merger, or <PAGE>
<PAGE> 23
(iii) the Merger and the Merger Agreement do not receive at the
Meeting the affirmative vote of the holders of at least a
majority of the Public Shares present and entitled to vote at the
Meeting.
The Merger Agreement contains other terms and conditions,
including representations and warranties of the parties thereto
and certain covenants of the parties relating to the periods of
time before and after completion of the Merger. The foregoing
description of the Merger Agreement is qualified in its entirety
by reference to the Merger Agreement, a copy of which is being
filed with the Securities and Exchange Commission as an exhibit
hereto.
The terms of the Merger Agreement and other matters related
to the Merger will be described in greater detail in a proxy
statement to be prepared and delivered to the Company's
stockholders prior to the Meeting. The date of the Meeting has
not yet been established by the Board of Directors, but the
Company currently anticipates that the Meeting will be held
sometime during the third quarter of 1995.
A class action entitled Frank v. Tom A. Alberg, James L.
Barksdale, Harold S. Eastman, Craig O. McCaw, Wayne M. Perry,
John E. McCaw, John W. Stanton, McCaw Cellular Communications,
Inc., MMM Holdings, Inc., and AT&T Corp. was filed on April 10,
1995 (New York Supreme Court, New York County, Index No. 95-108949).
The plaintiff alleges that the defendants breached
various fiduciary duties to the Company's public stockholders by
failing to protect against, and by the individual defendants (as
directors of the Company) approving certain actions facilitating
the acquisition of McCaw by AT&T which resulted in, AT&T being
disregarded as a potential purchaser of the Company for purposes
of certain appraisals conducted pursuant to the PMVG. The
plaintiffs seek, among other remedies, monetary damages. The
Company cannot predict the possible outcome or effect on the
Company or the PMVG process of this action at this time.
Other. After McCaw acquired its interest in the Company in
March 1990, McCaw made available the services of its employees,
some of whom are elected to management positions with the
Company, with the understanding that the Company would reimburse
McCaw for these services. Under the PMVG, the approval of a
majority of the Independent Directors is required before the
Company enters into any material transaction with McCaw or its
affiliates. Pursuant to a proposal that has been approved by the
management of each of the Company and McCaw, and subject only to
the approval of the Independent Directors, McCaw will receive
reimbursement from the Company in the amount of $8.5 million for <PAGE>
<PAGE> 24
services rendered in 1994 in connection with various engineering,
research and development, marketing and other general management
activities and for payments to third parties, and the Company
will receive reimbursement from McCaw in the amount of $2.2
million for services rendered in 1994 in connection with various
operations, marketing and legal activities and for payments to
third parties. The respective reimbursement amounts include
actual amounts paid to third parties. Also included within this
reimbursement program is an allocation of the time devoted to the
affairs of each company by those employees who were involved in
the operation of both companies. The costs associated with such
employees, including salary, bonus, stock options awarded during
the year and other benefits, are then allocated between the
companies in the same proportion. As determined for purposes of
this allocation for 1994, Messrs. McCaw, Alberg, Barksdale,
Guthrie and Perry devoted 40% (through the McCaw/AT&T Closing),
80%, 40%, 80% and 30%, respectively, of their time to the affairs
of the Company; the balance of each executive's time was
allocated to McCaw. All of Mr. Chapman's time through the Spin-off Date
was devoted to the affairs of the Company.
For so long as the Company remains a majority-owned
subsidiary of McCaw, the Company and McCaw expect to annually
negotiate payments for the reimbursement of expenses incurred on
behalf of the Company by McCaw and on behalf of McCaw by the
Company for management assistance and other intercompany
services. The Company does not anticipate that the net amount of
its payments to McCaw will be material to the Company's business
operations or financial performance. The payments will continue
to be negotiated on an arm's-length basis, and will be subject to
the approval of the Independent Directors.
In addition to the transactions described above, the Company
(including its subsidiaries and other entities it controls or
manages) routinely enters into transactions with McCaw and AT&T
(including their respective subsidiaries and other entities they
control or manage, other than the Company) in the ordinary course
of business. The Company pays McCaw for providing cellular
service to the Company's subscribers under roaming agreements,
and McCaw pays the Company for similar services provided by the
Company to McCaw's subscribers. For roaming services provided
during 1994, the Company paid McCaw approximately $18.3 million
and McCaw paid the Company approximately $13.0 million. In
addition, the Company's Dallas cellular operation provided
switching, billing, and certain other services to an affiliate of
McCaw. Under this agreement, the Company's Dallas cellular
operation collects the revenues generated by the subscribers of
McCaw's affiliate and pays a contractually determined fee. Such
revenues amounted to approximately $1.2 million during 1994, and <PAGE>
<PAGE> 25
the payments to McCaw's affiliate amounted to approximately $1.0
million. The Company also reimburses McCaw for the cost of
programs, such as the North American Cellular Network, national
advertising campaigns and the National Account Services Program
(a sales force and support group that coordinates the sale of
cellular services to large companies), which McCaw manages for
all of its markets, as well as certain of the Company's markets,
and for the cost of goods and services purchased by the Company
from third parties through McCaw. The Company paid McCaw
approximately $1.3 million for expenses in connection with such
programs during 1994. The costs of such programs are shared by
all markets benefited (including, in certain cases, markets owned
by third parties), with the allocation based on actual per market
costs incurred or such factors as relative market population or
numbers of subscribers. The Company also maintains a regional
office that oversees and provides certain centralized services
for the Company's Dallas cellular operation as well as a cluster
of McCaw cellular markets located in Texas and adjacent states.
The costs of this office are allocated to all such markets, based
on their relative shares of the factors considered most relevant
to each particular cost. For example, the allocation of general
and administrative costs is based on population, while
engineering and operations costs are allocated based largely on
the relative number of cell sites in each market. McCaw's share
of such costs during 1994 was approximately $3.9 million.
During 1994, the Company purchased equipment, consisting
primarily of telephones and accessories, from AT&T for an
aggregate purchase price of approximately $13.4 million. The
Company also paid AT&T approximately $3.3 million to provide
customer support services in situations in which the volume of
such requests exceeded the Company's handling capacity. Finally,
the Company paid AT&T approximately $176,000 for various services
provided by AT&T, including engineering and design services and
cell site rentals.
All such agreements and arrangements between the Company and
McCaw or AT&T are on terms that the Company believes are as or
more favorable to it than would have been obtained with an
unrelated third party.
On June 19, 1992, the Company, McCaw and certain other
parties received court approval of a Stipulation of Settlement
setting forth terms by which shareholder litigation in the United
States District Court for the Southern District of New York (Katz
v. Pels) would be settled and shareholder litigation in the
Delaware Court of Chancery for New Castle County (In re LIN
Broadcasting Corp. Shareholders Litigation) would be dismissed.
Such litigation arose out of the transactions related to the <PAGE>
<PAGE> 26
acquisition by McCaw in 1990 of a majority of the Common Stock.
Under the terms of the settlement, the Company received from
McCaw payments of $1.35 million in July 1992 and $2 million on
each of June 30, 1993 and 1994 and will receive from McCaw a
further payment of $2 million on June 30, 1995. McCaw was also
required to transfer to the Company approximately a 2% interest
in the Galveston, Texas cellular market.
Relationship With LIN Television Corporation
On December 28, 1994 (the "Spin-off Date"), the Company
distributed to the holders of its Common Stock of record on
December 9, 1994 (the "Record Date"), all of the outstanding
common stock, $.01 par value, of the Company's subsidiary, LIN
Television. The distribution (the "Television Spin-off") was
made in the form of a stock dividend of one share of the common
stock of LIN Television (the "LIN Television Common Stock") for
every two shares of the Company's Common Stock held on the Record
Date. The Company did not receive any shares of LIN Television
Common Stock in respect of the Company's Common Stock held by the
Company as treasury shares. The "ex-distribution" date for the
Television Spin-off, as established by the Nasdaq National
Market, was December 29, 1994. Fractional shares of LIN
Television Common Stock to which holders of the Company's Common
Stock would have been entitled as a result of the Television
Spin-off have been aggregated and sold, and the cash proceeds
distributed to the record holders entitled thereto. The Internal
Revenue Service has ruled that receipt of shares of LIN
Television Common Stock in the Television Spin-off will not
result in the recognition of income, gain or loss for federal
income tax purposes (except with respect to any cash received in
lieu of a fractional share interest in LIN Television Common
Stock).
Also on December 28, 1994, pursuant to the Asset Purchase
Agreement, dated June 7, 1994, as amended, among the Company, LIN
Television, Cook Inlet Communications, Inc., an Alaska
corporation, and Cook Inlet Communications Corp., a Delaware
corporation ("CICC"), LIN Television acquired substantially all
the assets and assumed certain liabilities of WTNH-TV, New Haven-Hartford,
Connecticut, from CICC in exchange for $120,170,000 in
cash and approximately 11.5% of the LIN Television Common Stock
outstanding after giving effect to such issuance (together with
the Television Spin-off, the "Transaction"). The cash portion of
the purchase price is subject to post-closing adjustment.
Following the Transaction, approximately 42.3% of the LIN
Television Common Stock was publicly owned; approximately 11.5%
was held by CICC; and approximately 46.3% was held indirectly by <PAGE>
<PAGE> 27
McCaw. LIN Television Common Stock is quoted on the Nasdaq
National Market. Six of the ten initial directors of LIN
Television were designated by McCaw, and three of them currently
are officers of one or more of AT&T, McCaw and the Company. In
addition, all of the Independent Directors also serve as
directors of LIN Television.
In connection with the Television Spin-off, the Company and
LIN Television entered into a number of agreements, including: a
Distribution Agreement, which provides for, among other things,
the principal corporate transactions required to effect the
Television Spin-off and certain other agreements governing the
relationship between the Company and LIN Television; a Tax
Allocation Agreement, which provides for the allocation between
the Company and LIN Television of responsibilities, liabilities
and benefits relating to or affecting taxes paid or payable by
either of them or their respective subsidiaries for all taxable
periods before and after the Television Spin-off; a Management
Services Agreement, pursuant to which the Company and LIN
Television will each provide to the other, upon request and for
up to one year after the Television Spin-off, certain corporate
administrative services, such as tax, treasury and legal
services; and an Employee Benefits Allocation Agreement, which
provides for the treatment of outstanding options to purchase the
Company's Common Stock granted under the 1969 Plan and certain
other matters, including the allocation of retirement, medical,
disability and other employee welfare and benefit plans between
the Company and LIN Television.
LIN Television and certain subsidiaries of the Company also
entered into a Consulting Agreement, pursuant to which LIN
Television will provide management and operational consulting for
the television broadcasting operations retained by the Company
after the Television Spin-off, and a Right of First Refusal
Agreement, pursuant to which, in the event that the Company
receives and wishes to accept an offer to purchase assets
associated with the Company's television broadcasting operations,
LIN Television has the right to purchase such assets at the
offered price.
Prior to the Television Spin-off, the Company and McCaw
allocated to LIN Television each year a portion of the expenses
relating to certain corporate-level services, such as tax,
treasury and legal services, provided to LIN Television by the
Company and McCaw. LIN Television's portion of such expenses was
determined based on its revenues, wages and properties relative
to those of the Company and McCaw. The amount allocated to LIN
Television for the portion of 1994 preceding the Television Spin-off
was approximately $1.8 million. Due to limitations imposed <PAGE>
<PAGE> 28
under LIN Television's credit facility on payments by LIN
Television to its affiliates, LIN Television paid approximately
$578,000 of such amount in cash, with the forgiveness of the
balance of this expense being treated for accounting purposes as
a contribution to capital by the Company. As a result of the
separation of the Company and LIN Television pursuant to the
Television Spin-off, these allocations ceased on December 28,
1994.
Similarly, LIN Television provided certain corporate-level
services, consisting primarily of general and administrative and
accounting services, to the Company with respect to the
television broadcasting operations conducted by the Company other
than through LIN Television. The amount charged to the Company
and its subsidiaries for these services in 1994 was approximately
$494,000. Any such services provided in the future will be
provided only through the Consulting Agreement described above or
through such other agreements or arrangements as may be
established by the parties.
During the portion of 1994 ending on the Spin-off Date, the
Company was a party to a tax-sharing agreement with LIN
Television and its subsidiaries pursuant to which LIN Television
was included in the consolidated federal income tax return filed
by the Company. Pursuant to this agreement, LIN Television's
allocated share of the Company's current consolidated federal
income tax expense in 1994 is estimated to be approximately $22.7
million. This agreement further provided that LIN Television was
treated as if it had certain net operating loss carryforwards, as
a result of which LIN Television's share of the federal tax
expense has been forgiven. The forgiveness of this expense has
been treated for accounting purposes as a contribution to capital
by the Company.
During 1994, LIN Television provided to AT&T and its
subsidiaries, including McCaw, advertising time worth
approximately $1.5 million. The Company believes that the terms
of all such transactions were at least as favorable as those that
would result from arm's-length negotiations.
<PAGE>
<PAGE> 29
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a)(1) Financial Statements Filed**
Report of Ernst & Young LLP, Independent Auditors
Consolidated Financial Statements of the Company
- Consolidated Balance Sheets at December 31, 1994
and 1993
- Consolidated Statements of Operations for the
Years Ended December 31, 1994, 1993 and 1992
- Consolidated Statements of Stockholders' Equity
(Deficit) for the Years Ended December 31, 1994,
1993 and 1992
- Consolidated Statements of Cash Flows for the
Years Ended December 31, 1994, 1993 and 1992
- Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
Independent Auditors' Report
Report of Independent Public Accountants
Combined Financial Statements of the Company's
Unconsolidated Affiliates
- Combined Balance Sheets at December 31, 1994 and
1993
- Combined Statements of Income for the Years Ended
December 31, 1994, 1993 and 1992
- Combined Statements of Ventures' Equity for the
Years Ended December 31, 1994, 1993 and 1992
- Combined Statements of Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992
- Notes to the Combined Financial Statements
(a)(2) Financial Statement Schedules Filed**
Financial Statement Schedules of the Company
I - Condensed Financial Information of Registrant
II - Valuation and Qualifying Accounts and Reserves for
the Years Ended December 31, 1994, 1993 and 1992
- --------------------
** Previously filed.<PAGE>
<PAGE> 30
Financial Statement Schedule of the Company's
Unconsolidated Affiliates
II - Valuation and Qualifying Accounts and Reserves for
the Years Ended December 31, 1994, 1993 and 1992
All other schedules have been omitted because the
information is not required or is not applicable, or because the
information required is included in the financial statements or
the notes thereto.
(a)(3) Exhibits**
2.1 Agreement and Plan of Merger By and Among
McCaw Cellular Communications, Inc., MMM
Holdings, Inc., MMM Acquisition Corp. and LIN
Broadcasting Corporation dated April 28, 1995
(filed herewith).
3.1 Restated Certificate of Incorporation of LIN
Broadcasting Corporation (incorporated by
reference to Exhibit 3.1 to the Company's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1992)
3.2 Amended and Restated By Laws.
10.1* Amended and Restated 1969 Stock Option Plan
(incorporated by reference to Appendix A to
the Company's Proxy Statement for the Annual
Meeting of Stockholders held on June 2, 1994)
10.2(a)* Profit Sharing Plan, as amended and restated
effective January 1, 1989 (the "Profit Sharing
Plan") (incorporated by reference to Exhibit
10.2 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31,
1992)
10.2(b)* Amendment, adopted November 22, 1994, to the
Profit Sharing Plan
10.3* Deferred Compensation Plan, as amended
(incorporated by reference to Exhibit 10(d) to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1989)
10.4 Partnership Agreement, dated as of March 18,
1983, among LIN Cellular Communications
Corporation, Metromedia, Inc., and Cellular
Systems, Inc. (incorporated by reference to
Exhibit 10.11 to the Company's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1992)
- -------------------
** Previously filed (except as noted).<PAGE>
<PAGE> 31
10.5 Partnership Agreement, dated as of June 22,
1983, between Los Angeles Cellular Corporation
and LIN Cellular Communications Corporation
(incorporated by reference to Exhibit 10.12 to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992)
10.6 Stock Agreement, dated June 5, 1982, by and
among Radio Broadcasting Company, LIN
Broadcasting Corporation, LIN Cellular
Communications Corporation, Metromedia, Inc.,
and AWACS, Inc. (incorporated by reference to
Exhibit 10.13 to the Company's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1992)
10.7 Amended and Restated Partnership Agreement,
dated as of November 9, 1984, among LIN
Cellular Communications Corporation, D/FW
Signal, Inc., MCI Cellular Telephone Company,
Cellular Mobile Systems, Inc., and Mid-America
Cellular Systems, Inc. (incorporated by
reference to Exhibit 10.14 to the Company's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1992)
10.8 Amended and Restated Partnership Agreement,
dated as of December 12, 1984, among Metro
Mobile CTS, Cellular Systems, Inc., and
Houston Mobile Cellular Communications Company
(incorporated by reference to Exhibit 10.15 to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992)
10.9 Partnership Agreement, dated as of December
12, 1984, among American Mobile Communications
of Houston and the Gulf, Houston Cellular
Corporation, LIN Cellular Communications
Corporation, MCI Cellular Telephone Company,
Charisma Communications Corp. of the
Southwest, and Cellular Mobile Systems of
Texas, Inc. (incorporated by reference to
Exhibit 10.16 to the Company's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1992)
10.10 Partnership Agreement, dated as of September
1991, by and between Galveston Mobile
Corporation and LIN Cellular Communications
Corporation (incorporated by reference to
Exhibit 10.17 to the Company's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1992)
<PAGE>
<PAGE> 32
10.11 Agreement, dated December 11, 1989, between
the Company, MMM Holdings, Inc. and McCaw
Cellular Communications, Inc. (incorporated by
reference to Exhibit (c)(6) to Amendment No.
24 to Schedule 14D-1 and Amendment No. 30 to
Schedule 13D relating to the Offer filed by
MMM Holdings, Inc. and McCaw with the
Securities and Exchange Commission on December
12, 1989)
10.12(a) Private Market Value Guarantee, dated December
11, 1989, between the Company and McCaw
Cellular Communications, Inc. (the "Private
Market Value Guarantee") (incorporated by
reference to Exhibit (c)(7) to Amendment No.
24 to Schedule 14D-1 and Amendment No. 30 to
Schedule 13D relating to the Offer filed by
MMM Holdings, Inc. and McCaw with the
Securities and Exchange Commission on December
12, 1989)
10.12(b) First Amendment, dated June 7, 1994, to the
Private Market Value Guarantee (incorporated
by reference to Exhibit 99.1 to the Company's
Report on Form 8-K dated May 25, 1994)
10.13 Exercise, dated October 27, 1989, of the
Company's Rights of First Refusal to Acquire
the Interests of Metromedia Company in Metro
One Cellular Telephone Company, and Agreement
of Purchase and Sale, dated October 3, 1989,
by and between McCaw Cellular Communications,
Inc. and Metromedia Company (incorporated by
reference to Exhibit 10(u) to the Company's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1989)
10.14(a) Credit Agreement, dated as of August 1, 1990,
among LIN Cellular Network, Inc., Morgan
Guaranty Trust Company of New York and the
Lenders Named therein (the "1990 Credit
Agreement") (incorporated by reference to
Exhibit 10.21 to the Company's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1990)
10.14(b) Amendment No. 1, dated as of June 15, 1993, to
the 1990 Credit Agreement
10.14(c) Amendment No. 2, dated as of May 31, 1994, to
the 1990 Credit Agreement
<PAGE>
<PAGE> 33
10.15 Stock Acquisition Agreement, dated as of May
7, 1990, between LCH Cellular, Inc. and
Metromedia Company (incorporated by reference
to Exhibit (b)(i) to the Company's Quarterly
Report on Form 10-Q for the quarter ended June
30, 1990)
10.16 Restated Certificate of Incorporation of LCH
Communications, Inc. (formerly LCH Cellular,
Inc.) (incorporated by reference to Exhibit
(b)(ii) to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1990)
10.17 Stockholders Agreement, dated as of August 10,
1990, among Metromedia Company, LCH Holdings,
Inc. and LCH Communications, Inc.
(incorporated by reference to Exhibit (b)(iii)
to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1990)
10.18(a)* Employee Stock Purchase Plan (the "ESPP")
(incorporated by reference to Exhibit 4.3 to
the Company's Registration Statement on Form
S-8 dated March 13, 1991 (Registration No. 33-39282))
10.18(b)* Amendment, adopted November 2, 1994, to the
ESPP
10.19* Employment Agreement, dated as of October 17,
1990 of Gary Chapman (incorporated by
reference to Exhibit 10.28 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1991)
10.20* Employment Agreement, dated as of April 16,
1991, of Donald Guthrie (incorporated by
reference to Exhibit 10.30 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1991)
10.21(a)* LIN Broadcasting Corporation Retirement Plan
(the "Retirement Plan"), as amended and
restated as of January 1, 1989 (incorporated
by reference to Exhibit 10.31 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1991).
10.21(b)* Amendment to the Retirement Plan dated January
1, 1993 (incorporated by reference to Exhibit
10.32 to the Company's Annual Report on Form
10-K for the year ended December 31, 1992)
10.21(c)* Amendment, adopted November 22, 1994, to the
Retirement Plan
<PAGE>
<PAGE> 34
10.22(a)* LIN Broadcasting Corporation Supplemental
Benefit Retirement Plan dated January 1, 1990
(the "Supplemental Plan") (incorporated by
reference to Exhibit 10.33 to the Company's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1992)
10.22(b)* Amendment, adopted November 22, 1994, to the
Supplemental Plan
10.23* LIN Employee Plans, established in connection
with the McCaw-AT&T Merger Agreement
(incorporated by reference to Exhibit 10.34 to
the Company's Annual Report on Form 10-K for
the year ended December 31, 1993)
10.24* LIN Broadcasting Deferred Compensation Plan,
dated December 15, 1993 (incorporated by
reference to Exhibit 10.35 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1993)
10.25 Distribution Agreement, dated as of December
28, 1994, between the Company and LIN
Television Corporation ("LIN TV")
(incorporated by reference to Exhibit 2.4 to
the Report on Form 8-K dated December 28, 1994
filed by LIN Television Corporation)
10.26 Tax Allocation Agreement, dated as of December
28, 1994, between the Company and LIN TV
(incorporated by reference to Exhibit 99.1 to
the Report on Form 8-K dated December 28, 1994
filed by LIN Television Corporation)
10.27 Management Services Agreement, dated as of
December 28, 1994, between the Company and LIN
TV (incorporated by reference to Exhibit 99.2
to the Report on Form 8-K dated December 28,
1994 filed by LIN Television Corporation)
10.28 Employee Benefits Allocation Agreement, dated
as of December 28, 1994, between the Company
and LIN TV (incorporated by reference to
Exhibit 99.3 to the Report on Form 8-K dated
December 28, 1994 filed by LIN Television
Corporation)
10.29 Consulting Agreement, dated as of December 28,
1994, between LIN TV, LCH Communications, Inc.
and LIN Michigan Broadcasting Corporation
(incorporated by reference to Exhibit 99.4 to
the Report on Form 8-K dated December 28, 1994
filed by LIN Television Corporation)
<PAGE>
<PAGE> 35
10.30 Right of First Refusal Agreement, dated as of
December 28, 1994, between the Company and LIN
TV (incorporated by reference to Exhibit 99.5
to the Report on Form 8-K dated December 28,
1994 filed by LIN Television Corporation)
10.31(a) Asset Purchase Agreement, dated June 7, 1994
among the Company, LIN TV, Cook Inlet
Communications Corp. and Cook Inlet
Communications, Inc. (the "Asset Purchase
Agreement") (incorporated by reference to
Exhibit 99.1 to the Company's Report on Form
8-K dated December 28, 1994)
10.31(b) First Amendment, dated September 26, 1994. to
the Asset Purchase Agreement (incorporated by
reference to Exhibit 99.2 to the Company's
Report on Form 8-K dated December 28, 1994)
10.31(c) Second Amendment, dated December 6, 1994. to
the Asset Purchase Agreement (incorporated by
reference to Exhibit 99.3 to the Company's
Report on Form 8-K dated December 28, 1994)
10.32 Credit Agreement, dated as of June 15, 1994,
among LIN Cellular Network, Inc., Toronto
Dominion (Texas), Inc. and the Lenders named
therein
11 Statement regarding computation of earnings
per share
21 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
24 Powers of Attorney with respect to Certain
Signatures
27 Financial Data Schedule
* Management contract or compensatory plan or arrangement.
<PAGE>
<PAGE> 36
(b) Reports on Form 8-K
A report on Form 8-K dated December 28, 1994 relating to
the completion of the spin-off of LIN Television
Corporation, as well as the selection of appraisers
under the Private Market Value Guarantee process by the
Independent Directors of the Company and AT&T, was filed
dated December 28, 1994.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.
LIN BROADCASTING CORPORATION
By: TOM A. ALBERG
-----------------------
Tom A. Alberg
President, Chief Operating
Officer
May 1, 1995
<PAGE>
INDEX TO EXHIBITS
Exhibit No.
2.1 Agreement and Plan of Merger By and Among McCaw
Cellular Communications, Inc., MMM Holdings, Inc., MMM
Acquisition Corp. and LIN Broadcasting Corporation
dated April 28, 1995 (filed herewith).
3.1 Restated Certificate of Incorporation of LIN
Broadcasting Corporation (incorporated by reference to
Exhibit 3.1 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992)
3.2 Amended and Restated By Laws.
10.1* Amended and Restated 1969 Stock Option Plan
(incorporated by reference to Appendix A to the
Company's Proxy Statement for the Annual Meeting of
Stockholders held on June 2, 1994)
10.2(a)* Profit Sharing Plan, as amended and restated effective
January 1, 1989 (the "Profit Sharing Plan")
(incorporated by reference to Exhibit 10.2 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.2(b)* Amendment, adopted November 22, 1994, to the
Profit Sharing Plan
10.3* Deferred Compensation Plan, as amended (incorporated by
reference to Exhibit 10(d) to the Company's Annual
Report on Form 10-K for the fiscal year ended December
31, 1989)
10.4 Partnership Agreement, dated as of March 18, 1983,
among LIN Cellular Communications Corporation,
Metromedia, Inc., and Cellular Systems, Inc.
(incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.5 Partnership Agreement, dated as of June 22, 1983,
between Los Angeles Cellular Corporation and LIN
Cellular Communications Corporation (incorporated by
reference to Exhibit 10.12 to the Company's Annual
Report on Form 10-K for the fiscal year ended December
31, 1992)
10.6 Stock Agreement, dated June 5, 1982, by and among Radio
Broadcasting Company, LIN Broadcasting Corporation, LIN
Cellular Communications Corporation, Metromedia, Inc.,
and AWACS, Inc. (incorporated by reference to Exhibit
10.13 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992)
<PAGE>
<PAGE>
10.7 Amended and Restated Partnership Agreement, dated as of
November 9, 1984, among LIN Cellular Communications
Corporation, D/FW Signal, Inc., MCI Cellular Telephone
Company, Cellular Mobile Systems, Inc., and Mid-America
Cellular Systems, Inc. (incorporated by reference to
Exhibit 10.14 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.8 Amended and Restated Partnership Agreement, dated as of
December 12, 1984, among Metro Mobile CTS, Cellular
Systems, Inc., and Houston Mobile Cellular
Communications Company (incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.9 Partnership Agreement, dated as of December 12, 1984,
among American Mobile Communications of Houston and the
Gulf, Houston Cellular Corporation, LIN Cellular
Communications Corporation, MCI Cellular Telephone
Company, Charisma Communications Corp. of the
Southwest, and Cellular Mobile Systems of Texas, Inc.
(incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.10 Partnership Agreement, dated as of September 1991, by
and between Galveston Mobile Corporation and LIN
Cellular Communications Corporation (incorporated by
reference to Exhibit 10.17 to the Company's Annual
Report on Form 10-K for the fiscal year ended December
31, 1992)
10.11 Agreement, dated December 11, 1989, between the
Company, MMM Holdings, Inc. and McCaw Cellular
Communications, Inc. (incorporated by reference to
Exhibit (c)(6) to Amendment No. 24 to Schedule 14D-1
and Amendment No. 30 to Schedule 13D relating to the
Offer filed by MMM Holdings, Inc. and McCaw with the
Securities and Exchange Commission on December 12,
1989)
10.12(a) Private Market Value Guarantee, dated December 11,
1989, between the Company and McCaw Cellular
Communications, Inc. (the "Private Market Value
Guarantee") (incorporated by reference to Exhibit
(c)(7) to Amendment No. 24 to Schedule 14D-1 and
Amendment No. 30 to Schedule 13D relating to the Offer
filed by MMM Holdings, Inc. and McCaw with the
Securities and Exchange Commission on December 12,
1989)
10.12(b) First Amendment, dated June 7, 1994, to the Private
Market Value Guarantee (incorporated by reference to
Exhibit 99.1 to the Company's Report on Form 8-K dated
May 25, 1994)
<PAGE>
<PAGE>
10.13 Exercise, dated October 27, 1989, of the Company's
Rights of First Refusal to Acquire the Interests of
Metromedia Company in Metro One Cellular Telephone
Company, and Agreement of Purchase and Sale, dated
October 3, 1989, by and between McCaw Cellular
Communications, Inc. and Metromedia Company
(incorporated by reference to Exhibit 10(u) to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989)
10.14(a) Credit Agreement, dated as of August 1, 1990, among LIN
Cellular Network, Inc., Morgan Guaranty Trust Company
of New York and the Lenders Named therein (the "1990
Credit Agreement") (incorporated by reference to
Exhibit 10.21 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990)
10.14(b) Amendment No. 1, dated as of June 15, 1993, to the 1990
Credit Agreement
10.14(c) Amendment No. 2, dated as of May 31, 1994, to the 1990
Credit Agreement
10.15 Stock Acquisition Agreement, dated as of May 7, 1990,
between LCH Cellular, Inc. and Metromedia Company
(incorporated by reference to Exhibit (b)(i) to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1990)
10.16 Restated Certificate of Incorporation of LCH
Communications, Inc. (formerly LCH Cellular, Inc.)
(incorporated by reference to Exhibit (b)(ii) to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1990)
10.17 Stockholders Agreement, dated as of August 10, 1990,
among Metromedia Company, LCH Holdings, Inc. and LCH
Communications, Inc. (incorporated by reference to
Exhibit (b)(iii) to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1990)
10.18(a)* Employee Stock Purchase Plan (the "ESPP") (incorporated
by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-8 dated March 13, 1991
(Registration No. 33-39282))
10.18(b)* Amendment, adopted November 2, 1994, to the ESPP
10.19* Employment Agreement, dated as of October 17, 1990 of
Gary Chapman (incorporated by reference to Exhibit
10.28 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1991)
10.20* Employment Agreement, dated as of April 16, 1991, of
Donald Guthrie (incorporated by reference to Exhibit
10.30 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1991)
<PAGE>
<PAGE>
10.21(a)* LIN Broadcasting Corporation Retirement Plan (the
"Retirement Plan"), as amended and restated as of
January 1, 1989 (incorporated by reference to Exhibit
10.31 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1991).
10.21(b)* Amendment to the Retirement Plan dated January 1, 1993
(incorporated by reference to Exhibit 10.32 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1992)
10.21(c)* Amendment, adopted November 22, 1994, to the Retirement
Plan
10.22(a)* LIN Broadcasting Corporation Supplemental Benefit
Retirement Plan dated January 1, 1990 (the
"Supplemental Plan") (incorporated by reference to
Exhibit 10.33 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.22(b)* Amendment, adopted November 22, 1994, to the
Supplemental Plan
10.23* LIN Employee Plans, established in connection with the
McCaw-AT&T Merger Agreement (incorporated by reference
to Exhibit 10.34 to the Company's Annual Report on Form
10-K for the year ended December 31, 1993)
10.24* LIN Broadcasting Deferred Compensation Plan, dated
December 15, 1993 (incorporated by reference to Exhibit
10.35 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993)
10.25 Distribution Agreement, dated as of December 28, 1994,
between the Company and LIN Television Corporation
("LIN TV") (incorporated by reference to Exhibit 2.4 to
the Report on Form 8-K dated December 28, 1994 filed by
LIN Television Corporation)
10.26 Tax Allocation Agreement, dated as of December 28,
1994, between the Company and LIN TV (incorporated by
reference to Exhibit 99.1 to the Report on Form 8-K
dated December 28, 1994 filed by LIN Television
Corporation)
10.27 Management Services Agreement, dated as of December 28,
1994, between the Company and LIN TV (incorporated by
reference to Exhibit 99.2 to the Report on Form 8-K
dated December 28, 1994 filed by LIN Television
Corporation)
10.28 Employee Benefits Allocation Agreement, dated as of
December 28, 1994, between the Company and LIN TV
(incorporated by reference to Exhibit 99.3 to the
Report on Form 8-K dated December 28, 1994 filed by LIN
Television Corporation)
<PAGE>
<PAGE>
10.29 Consulting Agreement, dated as of December 28, 1994,
between LIN TV, LCH Communications, Inc. and LIN
Michigan Broadcasting Corporation (incorporated by
reference to Exhibit 99.4 to the Report on Form 8-K
dated December 28, 1994 filed by LIN Television
Corporation)
10.30 Right of First Refusal Agreement, dated as of December
28, 1994, between the Company and LIN TV (incorporated
by reference to Exhibit 99.5 to the Report on Form 8-K
dated December 28, 1994 filed by LIN Television
Corporation)
10.31(a) Asset Purchase Agreement, dated June 7, 1994 among the
Company, LIN TV, Cook Inlet Communications Corp. and
Cook Inlet Communications, Inc. (the "Asset Purchase
Agreement") (incorporated by reference to Exhibit 99.1
to the Company's Report on Form 8-K dated December 28,
1994)
10.31(b) First Amendment, dated September 26, 1994. to the Asset
Purchase Agreement (incorporated by reference to
Exhibit 99.2 to the Company's Report on Form 8-K dated
December 28, 1994)
10.31(c) Second Amendment, dated December 6, 1994. to the Asset
Purchase Agreement (incorporated by reference to
Exhibit 99.3 to the Company's Report on Form 8-K dated
December 28, 1994)
10.32 Credit Agreement, dated as of June 15, 1994, among LIN
Cellular Network, Inc., Toronto Dominion (Texas), Inc.
and the Lenders named therein
11 Statement regarding computation of earnings per share
21 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
24 Powers of Attorney with respect to Certain Signatures
27 Financial Data Schedule
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MCCAW CELLULAR COMMUNICATIONS, INC.,
MMM HOLDINGS, INC.,
MMM ACQUISITION CORP.
AND
LIN BROADCASTING CORPORATION
Dated April 28, 1995
<PAGE>
TABLE OF CONTENTS
ARTICLE I
1. Definitions.... . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
2. The Merger; Terms of the Merger . . . . . . . ............... 4
2.1. The Merger . . . . . . . . . . . . . . . . . . . . . . . 4
2.2. Effective Time . . . . . . ............................. 5
2.3. Closing. . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4. Certificate of Incorporation . . . . . . . . . . . . . . 5
2.5. The By-Laws. . . . . . . . . . . . . . . . . . . . . . . 5
2.6. Directors. . . . . . . . . . . . . . . . . . . . . . . . 5
2.7. Officers . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
3. Conversion of Shares; Option Plan;
Stockholders Meeting. . . . . . . . . . . . . . . . . . . . 6
3.1. Merger Consideration; Conversion or
Cancellation of Shares in the Merger . . . . . . . . . 6
3.2. Option Plan; Stock Purchase Plan . . . . . . . . . . . . 6
3.3. Stockholders' Meeting. . . . . . . . . . . . . . . . . . 8
ARTICLE IV
4. Dissenting Shares; Payment for Shares . . . . . . . . . . . . 9
4.1. Dissenting Shares. . . . . . . . . . . . . . . . . . . . 9
4.2. Payment for Shares . . . . . . . . . . . . . . . . . . . 9
ARTICLE V
5. Representations and Warranties of LIN . . . . . . . . . . . . 11
5.1. Organization, Etc. of LIN. . . . . . . . . . . . . . . . 11
5.2. Operations of Subsidiaries . . . . . . . . . . . . . . . 11
5.3. Agreement. . . . . . . . . . . . . . . . . . . . . . . . 12
5.4. Capital Stock. . . . . . . . . . . . . . . . . . . . . . 12
5.5. Brokers and Finders. . . . . . . . . . . . . . . . . . . 12
<PAGE>
5.6. Proxy Statement. . . . . . . . . . . . . . . . . . . . . 13
5.7. Delaware Section 203 . . . . . . . . . . . . . . . . . . 13
5.8. Rights Agreement . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI
6. Representations and Warranties of McCaw, Holdings
and Merger Sub. . . . . . . . . . . . . . . . . . . . . . . 14
6.1. Organization, Etc. of McCaw, Holdings
and Merger Sub . . . . . . . . . . . . . . . . . . . . 14
6.2. Agreement. . . . . . . . . . . . . . . . . . . . . . . . 14
6.3. Brokers and Finders. . . . . . . . . . . . . . . . . . . 14
6.4. Proxy Statement. . . . . . . . . . . . . . . . . . . . . 14
6.5. No Prior Activities. . . . . . . . . . . . . . . . . . . 15
6.6. Solvency . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII
7. Additional Covenants and Agreements . . . . . ............... 15
7.1. Conduct of Business of LIN . . . . . . . . . . . . . . . 15
7.2. Reasonable Efforts . . . . . . . . . . . ............... 16
7.3. Indemnification; Insurance . . . . . . . . . . . . . . . 16
7.4. New York Real Property Gains and
Transfer Tax . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII
8. Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1. Conditions to Each Party's Obligations . . . . . . . . . 17
8.2. Conditions to Obligations of McCaw, Holdings
and Merger Sub . . . . . . . . . . . . . . . . . . . . 18
8.3. Conditions to Obligations of LIN . . . . . . . . . . . . 19
ARTICLE IX
9. Termination, Amendment and Waiver . . . . . . . . . . . . . . 19
9.1. Termination by Mutual Consent. . . . . . . . . . . . . . 19
9.2. Termination by Either McCaw
or LIN . . . . . . . . . . . . . . . . . . . . . . . . 19
9.3. Amendment. . . . . . . . . . . . . . . . . . . . . . . . 20
9.4. Extension; Waiver. . . . . . . . . . . . . . . . . . . . 20
9.5. Effect of Termination and Abandonment. . . . . . . . . . 20
ARTICLE X
10. Miscellaneous and General . . . . . . . . . . ............... 21
10.1. Expenses . . . . . . . . . . . . . . . . . . . . . . . 21
10.2. Notices, Etc.. . . . . . . . . . . . . . . . . . . . . 21
10.3. Nonsurvival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . 22
10.4. No Assignment. . . . . . . . . . . . . . . . . . . . . 22
10.5. Entire Agreement . . . . . . . . . . . . . . . . . . . 22
10.6. Specific Performance . . . . . . . . . . . . . . . . . 23
10.7. Remedies Cumulative. . . . . . . . . . . . . . . . . . 23
10.8. No Waiver. . . . . . . . . . . . . . . . . . . . . . . 23
10.9. No Third Party Beneficiaries . . . . . . . . . . . . . 23
10.10. Public Announcements . . . . . . . . . . . . . . . . . 23
10.11. Certain Actions by LIN . . . . . . . . . . . . . . . . 23
10.12. Governing Law. . . . . . . . . . . . . . . . . . . . . 24
10.13. Name, Captions, Etc. . . . . . . . . . . . . . . . . . 24
10.14. Counterparts . . . . . . . . . . . . . . . . . . . . . 24
10.15. McCaw Guarantee. . . . . . . . . . . . . . . . . . . . 24
Exhibit A -- Private Market Value Guarantee, as amended
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated April 28, 1995, by and among McCaw Cellular
Communications, Inc., a Delaware corporation ("McCaw"), MMM
Holdings, Inc., a Delaware corporation and a direct Wholly Owned
Subsidiary of McCaw ("Holdings"), MMM Acquisition Corp., a
Delaware corporation and a direct Wholly Owned Subsidiary of
Holdings ("Merger Sub"), and LIN Broadcasting Corporation, a
Delaware corporation ("LIN").
RECITALS
WHEREAS, McCaw and Holdings are the beneficial owners
of approximately 52% of the outstanding LIN Common Shares;
WHEREAS, pursuant to and in accordance with the terms
of the PMVG, the Private Market Price has been set at $127.50
per LIN Common Share;
WHEREAS, pursuant to and in accordance with the terms
of the PMVG, McCaw has determined that it desires to proceed
with an acquisition of the LIN Public Shares at the Private
Market Price, on the terms and subject to the conditions set
forth in this Agreement;
WHEREAS, the Boards of Directors of McCaw, Holdings,
Merger Sub and LIN each have determined that it is in the best
interests of their respective stockholders for Merger Sub to
merge with and into LIN, upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, McCaw, Holdings, Merger Sub and LIN desire to
make certain representations, warranties, covenants and
agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements set forth
herein, McCaw, Holdings, Merger Sub and LIN hereby agree as
follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall
have the respective meanings set forth below:
"Affiliate": As defined in Rule 12b-2 under the
Exchange Act.
"Agreement": As defined in the preamble hereto.
"Assumption Ratio": As defined in Section 3.2(a).
"AT&T": AT&T Corp., a New York corporation.
"AT&T Common Shares": Shares of common stock, $1.00
par value per share, of AT&T.
"Authorization": Any consent, approval or
authorization of, or any expiration or termination of any
waiting period requirement (including pursuant to the HSR Act)
of, or any filing, registration, qualification, declaration or
designation with or by, any Governmental Body.
"Certificate of Merger": The certificate of merger
with respect to the Merger, containing the provisions required
by, and executed in accordance with, Section 251 of the DGCL.
"Certificates": As defined in Section 4.2.
"Closing": The closing of the Merger.
"Closing Date": The date on which the Closing occurs.
"Code": The Internal Revenue Code of 1986, as
amended, and all regulations promulgated thereunder, as in
effect from time to time.
"DGCL": The Delaware General Corporation Law.
"Dissenting Shares": As defined in Section 4.1.
"Effective Time": As defined in Section 2.2.
"Exchange Act": The Securities Exchange Act of 1934,
as amended.
"FCC": The Federal Communications Commission.
"Governmental Body": Any Federal, state, municipal,
political subdivision or other governmental department,
authority, commission, board, bureau, agency or instrumentality,
domestic or foreign.
"HSR Act": The Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Holdings": As defined in the preamble to this
Agreement.
"Indemnified Parties": As defined in Section 7.3(a).
"LIN": As defined in the preamble to this Agreement.
"LIN Board": The board of directors of LIN.
"LIN Common Shares": Shares of common stock, par
value $0.01 per share, of LIN;
"LIN Independent Directors": The three members of the
LIN Board designated as Independent Directors pursuant to and in
accordance with Section 1 of the PMVG.
"LIN Public Shares": LIN Common Shares not owned by
McCaw or any of its affiliates or any member of a "group", as
such term is used for purposes of Schedule 13D under the
Exchange Act, of which McCaw or its affiliates are members with
respect to securities of LIN.
"McCaw": As defined in the preamble to this
Agreement.
"Merger": The merger of Merger Sub with and into LIN
as contemplated by Section 2.1.
"Merger Consideration": As defined in Section 3.1(a).
"Merger Sub": As defined in the preamble to this
Agreement.
"NASDAQ": The National Association of Securities
Dealers Automated Quotations System.
"NYSE": The New York Stock Exchange, Inc.
"Options": As defined in Section 3.2.
"Option Plan": As defined in Section 3.2.
"PMVG": The Private Market Value Guarantee, dated
December 11, 1989, as amended, between McCaw and LIN, attached
hereto as Exhibit A.
"Paying Agent": As defined in Section 4.2.
"Person": Any individual or corporation, company,
partnership, trust, incorporated or unincorporated association,
joint venture or other entity of any kind.
"Private Market Price": The private market price per
LIN Common Share determined pursuant to Section 2(C) of the
PMVG.
"Proxy Statement": As defined in Section 3.3.
"Rights": The Preferred Share Purchase Rights issued
pursuant to the Rights Agreement.
"Rights Agreement": The Rights Agreement, dated as of
May 2, 1988, as amended and restated as of January 13, 1989 and
June 19, 1989 and as subsequently further amended, between LIN
and Manufacturers Hanover Trust Company, as Rights Agent.
"Schedule 13E-3": The Transaction Statement on
Schedule 13E-3 to be filed under the Exchange Act by AT&T,
McCaw, Holdings, Merger Sub and LIN with respect to the Merger.
"SEC": The Securities and Exchange Commission.
"Significant Subsidiary": As defined under Rule 12b-1
of the Exchange Act.
"Solvent": As defined in Section 6.6.
"Stock Purchase Plan": As defined in Section 3.2(c).
"Stockholders Meeting": As defined in Section 3.3.
"Subsidiary": As to any Person, any other Person of
which at least 50% of the equity or voting interest is owned,
directly or indirectly, by such first Person.
"Surviving Corporation": The surviving corporation in
the Merger.
"Wholly Owned Subsidiary": A Subsidiary of which 100%
of the equity interest is owned, directly or indirectly, by the
parent company.
ARTICLE II
THE MERGER; TERMS OF THE MERGER
2.1. The Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time, Merger Sub shall be
merged with and into LIN in accordance with the provisions of
Section 251 of the DGCL and with the effect provided in Sections
259 and 261 of the DGCL. The separate corporate existence of
Merger Sub shall thereupon cease and LIN shall be the Surviving
Corporation and shall continue to be governed by the laws of the
State of Delaware. At the election of McCaw, any Wholly Owned
Subsidiary of McCaw may be substituted for Merger Sub as a
constituent corporation in the Merger, provided that the parties
shall have executed an appropriate amendment to this Agreement
in accordance with Section 9.3 in form and substance reasonably
satisfactory to LIN and McCaw in order to reflect such
substitution.
<PAGE>
2.2. Effective Time. The Merger shall become
effective on the date and at the time (the "Effective Time")
that the Certificate of Merger shall have been 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 the Certificate of Merger).
2.3. Closing. Unless this Agreement shall have been
terminated and the transactions contemplated shall have been
abandoned pursuant to Section 9.1 or 9.2 and subject to the
fulfillment or waiver of the conditions set forth in Article
VIII, the Closing shall take place (i) at the offices of
Wachtell, Lipton, Rosen & Katz, New York, New York, as promptly
as practicable (but in any event within three business days)
following satisfaction of the condition set forth in Section
8.1(a) or (ii) at such other place and/or time and/or on such
other date as McCaw and LIN may agree or as may be necessary to
permit the fulfillment or waiver of the other conditions set
forth in Article VIII. The parties hereto shall use all
reasonable efforts to cause the Certificate of Merger to be
filed with the Secretary of State of the State of Delaware on
the Closing Date or as soon as practicable thereafter.
2.4. Certificate of Incorporation. The Certificate
of Incorporation of Merger Sub as in effect immediately prior to
the Effective Time shall be the Certificate of Incorporation of
the Surviving Corporation, until duly amended in accordance with
the terms thereof and of the DGCL, except that Article SECOND
thereof shall be amended to read as follows:
"The name of the Corporation (which is hereinafter
called the "Corporation") is LIN Broadcasting
Corporation."
2.5. The By-Laws. The By-Laws of Merger Sub in
effect at the Effective Time shall be the By-Laws of the
Surviving Corporation, until duly amended in accordance with the
terms thereof, of the Certificate of Incorporation of the
Surviving Corporation and of the DGCL.
2.6. Directors. The directors of Merger Sub at the
Effective Time shall, from and after the Effective Time, be the
directors of the Surviving Corporation until their successors
have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and By-Laws.
2.7. Officers. The officers of LIN at the Effective
Time shall, from and after the Effective Time, be the officers
of the Surviving Corporation until their successors have been
duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-Laws.
ARTICLE III
CONVERSION OF SHARES; OPTION
PLAN; STOCKHOLDERS MEETING
3.1. Merger Consideration; Conversion or Cancellation
of Shares in the Merger. Subject to the provisions of this
Article III, at the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, the
shares of the constituent corporations shall be converted as
follows:
(a) Each LIN Common Share 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, which LIN
Common Shares, by virtue of the Merger and without any
action on the part of the holders thereof, shall be
automatically cancelled and retired and shall cease to
exist with no payment being made with respect thereto, and
other than any Dissenting Shares) shall be converted into
the right to receive $127.50 in cash, without interest
thereon (the "Merger Consideration"), as set forth in
Section 4.2 hereof.
(b) Each share of capital stock of Merger Sub issued
and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued,
fully paid and nonassessable share of Common Stock, par
value $0.01 per share, of the Surviving Corporation.
Section 3.2. Option Plan; Stock Purchase Plan. (a)
Pursuant to the terms of the Amended and Restated 1969 Stock
Option Plan of LIN (the "Option Plan"), each option to purchase
LIN Common Shares outstanding at the Effective Time (each, an
"Option") issued pursuant to the Option Plan shall be assumed by
AT&T and shall constitute an option to acquire, on the same
terms and conditions as were applicable under such assumed
Option, a number of AT&T Common Shares equal to the product of
the Assumption Ratio and the number of LIN Common Shares
remaining subject to such Option as of the Effective Time, at a
price per AT&T Common Share equal to the aggregate exercise
price for the LIN Common Shares remaining subject to such Option
divided by the number of full AT&T Common Shares deemed to be
purchasable pursuant to such Option; provided, however, that (i)
subject to the provisions of clause (ii) below, the number of
AT&T Common Shares that may be purchased upon exercise of such
Option shall not include any fractional shares and, upon the
last such exercise of such Option, a cash payment shall be made
for any fractional share based upon the per share closing price
of AT&T Common Shares as reported in the NYSE Composite
Transactions on the date of such exercise, and (ii) in the case
of any Option to which Section 421 of the Code applies by reason
of its qualification under Section 422 or Section 423 of the
Code ("qualified stock options"), the option price, the number
of shares purchasable pursuant to such Option and the terms and
conditions of exercise of such Option shall be determined in
order to comply with Section 424 of the Code. For purposes of
the foregoing, the "Assumption Ratio" shall mean the per share
closing price of the LIN Common Shares on the date of approval
of the Merger by the LIN stockholders, as reported on NASDAQ,
divided by the per share closing price of AT&T Common Shares on
the date of approval of the Merger by the LIN stockholders, as
reported in the NYSE Composite Transactions (or if such date is
not a trading day, on the immediately preceding trading day).
The Assumption Ratio will be adjusted appropriately, if
necessary, to reflect any stock split, reverse stock split or
similar change in the AT&T Common Shares or the LIN Common
Shares that is not reflected in their respective per share
closing prices on the date of approval of the Merger; provided
that in no event will any such adjustment be made in respect of
quarterly cash dividends payable on the AT&T Common Shares or
the LIN Common Shares.
(b) McCaw shall cause AT&T to take all corporate
action necessary to reserve for issuance a sufficient number of
AT&T Common Shares for delivery upon exercise of the Options
assumed in accordance with Section 3.2(a). AT&T shall file a
registration statement on Form S-8 (or any successor form) or
another appropriate form, effective as of the Effective Time,
with respect to AT&T Common Shares subject to such Options and
shall use all reasonable efforts to maintain the effectiveness
of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses
contained therein) for so long as such Options remain
outstanding.
(c) LIN shall take such action as may be necessary so
that, from and after the Effective Time, no employee of LIN
shall be eligible to purchase LIN Common Shares pursuant to the
LIN Broadcasting Corporation Employee Stock Purchase Plan (the
"Stock Purchase Plan"). In lieu thereof, LIN employees who meet
the eligibility requirements thereof will be eligible to
purchase AT&T Common Shares pursuant to the McCaw Cellular
Communications, Inc. Employee Stock Purchase Plan.
(d) LIN shall take such action as may be necessary to
ensure that, following the Effective Time, no holder of Options
or any participant in the Option Plan, the Stock Purchase Plan
or any other plans, programs or arrangements of LIN or any of
its Subsidiaries shall have any right thereunder to acquire any
equity securities of LIN, the Surviving Corporation or any
Subsidiary thereof.
Section 3.3. Stockholders' Meeting. (a) As promptly
as practicable following the date hereof, LIN shall, in
accordance with applicable law and its Certificate of
Incorporation and By-Laws:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Stockholders
Meeting") for the purpose of considering and taking action
upon the Merger and this Agreement and such other matters
as may be necessary to consummate the transactions
contemplated herein;
(ii) prepare and file with the SEC a preliminary proxy
statement relating to the matters to be considered at the
Stockholders Meeting pursuant to this Agreement and use its
reasonable best efforts to obtain and furnish
the information required to be included by the SEC in the
Proxy Statement and, after consultation with McCaw, to
respond promptly to any comments made by the SEC with
respect to the preliminary proxy statement and to cause a
definitive proxy statement (the "Proxy Statement") to be
mailed to its stockholders; and
(iii) subject to the fiduciary obligations of the LIN
Board under applicable law as advised in writing by outside
counsel selected by the LIN Board, include in the Proxy
Statement the recommendation of the LIN Board that
stockholders of LIN vote in favor of the approval of the
Merger, the adoption of this Agreement and such other
matters as may be necessary to consummate the transactions
contemplated hereby.
(b) McCaw agrees that, if the Merger is approved by
the affirmative vote of at least a majority of the LIN Public
Shares present and entitled to vote at the Stockholders Meeting
pursuant to clause (ii) of Section 8.1(a), McCaw will vote, or
cause to be voted, all of the LIN Common Shares beneficially
owned by it, its affiliates or any of its Subsidiaries in favor
of the approval of the Merger, the adoption of this Agreement
and such other matters as may be necessary to consummate the
transactions contemplated hereby. In addition, each of LIN,
McCaw, Holdings and Merger Sub agrees that it will fully
cooperate in the preparation of the Proxy Statement and the
Schedule 13E-3.
<PAGE>
ARTICLE IV
DISSENTING SHARES; PAYMENT FOR SHARES
Section 4.1. Dissenting Shares. Notwithstanding
anything in this Agreement to the contrary, LIN Common Shares
outstanding immediately prior to the Effective Time and held by
a holder (if any) who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal for
such LIN Common Shares in accordance with Section 262 of the
DGCL ("Dissenting Shares") shall not be converted into the right
to receive the Merger Consideration, as provided in Section 3.1
hereof, unless and until such holder fails to perfect or
withdraws or otherwise loses his right to appraisal and payment
under the DGCL. If, after the Effective Time, any such holder
fails to perfect or withdraws or loses his right to appraisal,
such Dissenting Shares shall thereupon be treated as if they had
been converted as of the Effective Time into the right to
receive the Merger Consideration to which such holder is
entitled, without interest thereon. LIN shall give McCaw prompt
notice of any demands received by LIN for appraisal of LIN
Common Shares and McCaw shall have the right to participate in
all negotiations and proceedings with respect to such demands.
LIN shall not, except with the prior written consent of McCaw,
make any payment with respect to, or settle or offer to settle,
any such demands.
Section 4.2. Payment for Shares. (a) From and after
the Effective Time, a bank or trust company to be designated by
McCaw shall act as paying agent (the "Paying Agent") in
effecting the payment of the Merger Consideration for
certificates (the "Certificates") formerly representing LIN
Common Shares and entitled to payment of the Merger
Consideration pursuant to Section 3.1. At the Effective Time,
and from time to time thereafter, McCaw or Merger Sub shall
deposit, or cause to be deposited, in trust with the Paying
Agent for the benefit of the holders of LIN Common Shares such
amounts as may be necessary to permit the Paying Agent to make
the payments contemplated by paragraph (b) of this Section 4.2.
(b) Promptly after the Effective Time, but in no
event later than two business days after the date of the
Effective Time, the Paying Agent shall mail to each record
holder of Certificates that immediately prior to the Effective
Time represented LIN Common Shares (other than Certificates
representing LIN Common Shares held by McCaw, Holdings or Merger
Sub, any Wholly Owned Subsidiary of McCaw, Holdings or Merger
Sub, in the treasury of LIN or by any Wholly Owned Subsidiary of
LIN) a form of letter of transmittal which shall specify that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent and instructions for use in
surrendering such Certificates and receiving the Merger
Consideration therefor. Upon the surrender of each such
Certificate, together with such letter of transmittal duly
executed and any other required documents, the Paying Agent
shall pay the holder of such Certificate the Merger
Consideration multiplied by the number of LIN Common Shares
formerly represented by such Certificate, in consideration
therefor, and such Certificate shall forthwith be cancelled.
Until so surrendered, each such Certificate (other than
Certificates representing Dissenting Shares and Certificates
representing LIN Common Shares held by McCaw, Holdings or Merger
Sub, any Wholly Owned Subsidiary of McCaw, Holdings or Merger
Sub, in the treasury of LIN or by any Wholly Owned Subsidiary of
LIN) shall represent solely the right to receive the aggregate
Merger Consideration relating thereto. No interest shall be
paid or accrued on the Merger Consideration.
(c) Promptly following the date which is one year
after the Effective Time, the Paying Agent shall deliver to
McCaw all cash, Certificates and other documents in its
possession relating to the transactions described in this
Agreement, and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate formerly representing
a LIN Common Share (other than Certificates representing
Dissenting Shares and Certificates representing LIN Common
Shares held by McCaw, Holdings or Merger Sub, any Wholly Owned
Subsidiary of McCaw, Holdings or Merger Sub, in the treasury of
LIN or by any Wholly Owned Subsidiary of LIN) may surrender such
Certificate to McCaw and (subject to applicable abandoned
property, escheat and similar laws) receive in consideration
therefor the aggregate Merger Consideration relating thereto,
without any interest or dividends thereon.
(d) The Merger Consideration shall be net to each
holder of Certificates in cash, subject to reduction only for
any applicable federal back-up withholding or stock transfer
taxes payable by such holder.
(e) If payment of cash in respect of any Certificate
is to be made to a Person other than the Person in whose name
such Certificate is registered, it shall be a condition to such
payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and
that the Person requesting such payment shall have paid any
transfer and other taxes required by reason of such payment in
a name other than that of the registered holder of the
Certificate surrendered or shall have established to the
satisfaction of McCaw or the Paying Agent that such tax either
has been paid or is not payable.
(f) After the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving
Corporation of any LIN Common Shares which were outstanding
immediately prior to the Effective Time. If, after the
Effective Time, Certificates formerly representing LIN Common
Shares (other than Certificates representing LIN Common Shares
held by McCaw, Holdings or Merger Sub, any Wholly Owned
Subsidiary of McCaw, Holdings or Merger Sub, in the treasury of
LIN or by any Wholly Owned Subsidiary of LIN) are presented to
the Surviving Corporation or the Paying Agent, they shall be
surrendered and cancelled in return for the payment of the
aggregate Merger Consideration relating thereto, as provided in
this Article IV, subject to applicable law and the other
provisions of this Agreement in the case of Dissenting Shares.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF LIN
LIN hereby represents and warrants to McCaw, Holdings
and Merger Sub as follows:
5.1. Organization, Etc. of LIN. LIN is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate
power and authority to own and operate its properties, to carry
on its business as now conducted and proposed by LIN to be
conducted, to enter into this Agreement and (subject to the
approval of the LIN stockholders) to carry out the provisions of
this Agreement and consummate the transactions contemplated
hereby. LIN has obtained from the appropriate Governmental
Bodies (including, without limitation, the FCC) all approvals
and licenses necessary for the conduct of its business and
operations as currently conducted, which approvals and licenses
are valid and remain in full force and effect, except where the
failure to have obtained such approvals or licenses or the
failure of such licenses and approvals to be valid and in full
force and effect does not have and would not be reasonably
expected (so far as can be foreseen at the time) to have a
material adverse effect on the business, properties, operations,
condition (financial or other) or prospects of LIN and its
Subsidiaries taken as a whole.
5.2. Operations of Subsidiaries. Each Significant
Subsidiary of LIN (a) is a corporation or other legal entity
duly organized, validly existing and (if applicable) in good
standing under the laws of the jurisdiction of its organization
and has the full power and authority to own its properties and
conduct its business and operations as currently conducted,
except where the failure to be duly organized, validly existing
and in good standing does not have, and would not be reasonably
expected (so far as can be foreseen at the time) to have, a
material adverse effect on the business, properties, operations,
condition (financial or other) or prospects of LIN and its
Subsidiaries taken as a whole and (b) has obtained from the
appropriate Governmental Bodies (including, without limitation,
the FCC) all approvals and licenses necessary for the conduct of
its business and operations as currently conducted, which
licenses and approvals are valid and remain in full force and
effect, except where the failure to have obtained such approvals
and licenses or the failure of such licenses and approvals to be
valid and in full force and effect does not have and would not
be reasonably expected (so far as can be foreseen at the time)
to have a material adverse effect on the business, properties,
operations, condition (financial or other) or prospects of LIN
and its Subsidiaries taken as a whole.
5.3. Agreement. This Agreement and the consummation
of the transactions contemplated hereby have been duly approved
by the LIN Board and have been duly authorized by all other
necessary corporate action on the part of LIN (except for the
approval of LIN's stockholders contemplated by Section 8.1(a)).
This Agreement has been duly executed and delivered by a duly
authorized officer of LIN and constitutes a valid and binding
agreement of LIN, enforceable against LIN in accordance with its
terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
5.4. Capital Stock. The authorized capital stock of
LIN consists of (a) 150,000,000 LIN Common Shares, of which
51,714,366 shares are outstanding as of the date hereof, and (b)
2,000,000 shares of preferred stock, no par value, none of which
are outstanding as of the date hereof. All outstanding LIN
Common Shares are duly authorized, validly issued, fully paid
and nonassessable, and no class of capital stock of LIN is
entitled to preemptive rights. There are outstanding on the
date hereof no options, warrants or other rights to acquire
capital stock from LIN, except (i) Options representing in the
aggregate the right to purchase up to 1,610,931 LIN Common
Shares pursuant to the Option Plan and (ii) the Rights. Except
as disclosed in LIN's public filings under the Exchange Act
filed since January 1, 1995, all outstanding shares of capital
stock of the Significant Subsidiaries of LIN are owned by LIN or
a direct or indirect Wholly Owned Subsidiary of LIN, free and
clear of all liens, charges, encumbrances, claims and options of
any nature.
5.5. Brokers and Finders. Except for the fees and
expenses payable to Lehman Brothers Inc. and Bear Stearns & Co.,
Inc., which fees and expenses are reflected in their agreements
with LIN, copies of which have been furnished to McCaw, and
except for Wasserstein Perella & Co., Inc., whose fees and
expenses are reflected in their agreement with LIN and McCaw,
neither LIN nor the LIN Independent Directors has employed any
investment banker, broker, finder, consultant or intermediary
in connection with the transactions contemplated by this
Agreement which would be entitled to any investment banking,
brokerage, finder's or similar fee or commission in connection
with this Agreement or the transactions contemplated hereby.
5.6. Proxy Statement. The Proxy Statement will
comply in all material respects with the requirements of the
Exchange Act. The Proxy Statement will not, at the time filed
with the SEC, at the date it or any amendment or supplement is
mailed to stockholders and at the time of the Stockholders
Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading;
provided that the foregoing shall not apply to information
supplied by McCaw, Holdings or Merger Sub with respect to any
thereof or to AT&T specifically for inclusion or incorporation
by reference in the Proxy Statement. If at any time prior to
the Effective Time any event with respect to LIN, its officers
and directors or any of its Subsidiaries should occur which is
required to be described in an amendment of, or a supplement to,
the Proxy Statement, LIN shall notify McCaw thereof by reference
to this Section 5.6 and such event shall be so described, and
such amendment or supplement shall be promptly filed with the
SEC and, as required by law, disseminated to the stockholders of
LIN and such amendment or supplement shall comply with all
provisions of applicable law. The Proxy Statement will also
form a part of the Schedule 13E-3, which Schedule 13E-3 will
comply in all material respects with the requirements of the
Exchange Act.
Section 5.7. Delaware Section 203. The Board of
Directors of LIN has taken all appropriate and necessary action
such that the provisions of Section 203 of the DGCL will not
apply to any of the transactions contemplated by this Agreement.
Section 5.8. Rights Agreement. The Rights Agreement
has been amended to provide that (i) none of AT&T, McCaw,
Holdings or Merger Sub will become an "Acquiring Person," (ii)
no "Triggering Event," "Share Acquisition Date" or "Distribution
Date" (as such terms are defined in the Rights Agreement) will
occur and (iii) Section 13 of the Rights Agreement will not be
triggered, in each case as a result of the execution or delivery
of this Agreement or any amendment hereto or the consummation of
the transactions contemplated hereby (including, without
limitation, the Merger), with the effect that (x) none of such
events will trigger the exercisability of the Rights, the
separation of the Rights from the stock certificates to which
they are attached or any other provision of the Rights Agreement
and (y) the Rights will no longer be outstanding upon the
consummation of the Merger.
<PAGE>
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF
MCCAW, HOLDINGS AND MERGER SUB
McCaw, Holdings and Merger Sub each represents and
warrants to LIN as follows:
6.1. Organization, Etc. of McCaw, Holdings and Merger
Sub. Each of McCaw, Holdings and Merger Sub is a corporation
duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation, and each
has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now
conducted and proposed by it to be conducted, to enter into this
Agreement and to carry out the provisions of this Agreement and
consummate the transactions contemplated hereby.
6.2. Agreement. This Agreement and the consummation
of the transactions contemplated hereby have been duly approved
by the respective Boards of Directors of McCaw, Holdings and
Merger Sub, by the unanimous vote of those directors present,
and by Holdings as the sole stockholder of Merger Sub (no other
corporate action on the part of McCaw, Holdings or Merger Sub
being necessary). This Agreement has been duly executed and
delivered by a duly authorized officer of each of McCaw,
Holdings and Merger Sub and constitutes a valid and binding
agreement of each of McCaw, Holdings and Merger Sub, enforceable
against each in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
6.3. Brokers and Finders. Except for the fees and
expenses payable to Morgan Stanley & Co., Incorporated, which
fees and expenses will be paid by AT&T and McCaw, and except for
Wasserstein Perella & Co., Inc., whose fees and expenses are
reflected in their agreement with LIN and McCaw, none of AT&T,
McCaw, Holdings or Merger Sub has employed any investment
banker, broker, finder, consultant or intermediary in connection
with the transactions contemplated by this Agreement which would
be entitled to any investment banking, brokerage, finder's or
similar fee or commission in connection with this Agreement or
the transactions contemplated hereby.
6.4. Proxy Statement. None of the information to be
supplied by McCaw, Holdings or Merger Sub with respect to any
thereof or to AT&T for inclusion or incorporation by reference
in the Proxy Statement will, at the time of the mailing of the
Proxy Statement or at the time of the Stockholder Meeting,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein not
misleading. If at any time prior to the Effective Time any
event with respect to McCaw, Holdings or Merger Sub, or their
officers and directors or any of their Subsidiaries shall occur
which is required to be described in the Proxy Statement, McCaw
shall notify LIN thereof by reference to this Section 6.4 and
such event shall be so described, and an amendment or supplement
shall be promptly filed with the SEC and, as required by law,
disseminated to the stockholders of LIN. The Proxy Statement
will also form a part of the Schedule 13E-3, which Schedule 13E-3
will comply in all material respects with the requirements of
the Exchange Act.
6.5. No Prior Activities. Merger Sub has not
incurred, and will not incur, directly or through any
Subsidiary, any liabilities or obligations for borrowed money or
otherwise, except incidental liabilities or obligations not for
borrowed money incurred in connection with its organization.
Except as contemplated by this Agreement, Merger Sub (i) has not
engaged, directly or through any Subsidiary, in any business
activities of any type or kind whatsoever, (ii) has not entered
into any agreements or arrangements with any person or entity
and (iii) is not subject to or bound by any obligation or
undertaking.
6.6. Solvency. Assuming that LIN is Solvent
immediately prior to the Effective Time, the Surviving
Corporation will be Solvent at and immediately after the
Effective Time, after giving effect to the transactions
contemplated hereby. For purposes of this Agreement, "Solvent"
shall mean, with respect to LIN or the Surviving Corporation,
(i) that the fair valuation of such corporation's property (on
a consolidated basis) is, on the date of determination, greater
than the total amount of consolidated liabilities of such
corporation as of such date and (ii) that the present fair
saleable value of such corporation's assets is, on the date of
determination, greater than the amount that will be required to
pay such corporation's probable liability on its existing debts
as they become absolute and matured.
ARTICLE VII
ADDITIONAL COVENANTS AND AGREEMENTS
7.1. Conduct of Business of LIN. Except as
contemplated by this Agreement, during the period from the date
of this Agreement to the Effective Time, LIN will, and will
cause each of its Subsidiaries to, conduct its operations
according to, and not enter into any transaction other than in
accordance with, its ordinary course of business consistent with
past practice.
<PAGE>
7.2. Reasonable Efforts. LIN, McCaw, Holdings and
Merger Sub shall, and shall use all reasonable efforts to cause
their respective Subsidiaries to: (i) use all reasonable
efforts to promptly take, or cause to be taken, all other
actions and do, or cause to be done, all things necessary,
proper or appropriate to satisfy the conditions set forth in
Article VIII and to consummate and make effective the
transactions contemplated by this Agreement on the terms and
conditions set forth herein as soon as practicable (including
seeking to remove promptly any injunction or other legal barrier
that may prevent such consummation); and (ii) not take any
action (including, without limitation, effecting or agreeing to
effect or announcing an intention or proposal to effect, any
acquisition, business combination or other transaction) which
might reasonably be expected to impair the ability of the
parties to consummate the Merger at the earliest possible time
(regardless of whether such action would otherwise be permitted
or not prohibited hereunder).
7.3. Indemnification; Insurance. (a) McCaw and
Holdings agree that all rights to indemnification now existing
in favor of any of the present or former directors, officers or
employees of LIN or any of its Subsidiaries (the "Indemnified
Parties") as provided in its Certificate of Incorporation or
Bylaws, or otherwise in effect on the date of this Agreement
(including, without limitation, as provided in the PMVG), will
survive the Merger and continue in full force and effect and
McCaw and Holdings will cause the Surviving Corporation to honor
all such rights to indemnification.
(b) In the event of any claim, action, suit,
proceeding or investigation (whether arising before or after the
Effective Time) subject to the rights to indemnification
provided by paragraph (a) of this Section 7.3, (i) the Surviving
Corporation shall have the right, from and after the Effective
Time, to assume the defense thereof and McCaw and Holdings shall
not be liable to such Indemnified Parties for any legal expenses
of other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof,
(ii) the Indemnified Parties will cooperate in the defense of
any such matter and (iii) McCaw and Holdings will not be liable
for any settlement effected without their prior written consent;
provided that McCaw and Holdings will not have any obligation
hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such
determination shall have become final, that the indemnification
of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law.
(c) McCaw and Holdings shall cause to be maintained
in effect for not less than six years after the Effective Time
the current policies of directors' and officers' liability
insurance maintained by LIN with respect to matters occurring
prior to and including the Effective Time for all present and
past directors and officers of LIN or any of its Subsidiaries;
provided, however, that (i) McCaw and Holdings may substitute
therefor policies of at least the same coverage containing terms
and conditions which are no less advantageous to the directors
and officers covered thereby and (ii) McCaw and Holdings shall
not be required to pay in the aggregate an annual premium for
such insurance in excess of two times the last annual premium
paid prior to the date hereof, but in such case shall purchase
as much coverage as possible for such amount.
(d) In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions
contemplated by this Agreement is commenced, whether before or
after the Closing, the parties hereto agree to cooperate and use
their respective reasonable efforts to vigorously defend against
and respond thereto.
(e) This Section 7.3 is intended to benefit the
persons covered by the indemnification rights and/or insurance
policies referred to in this Section 7.3 and shall be binding on
all successors and assigns of McCaw, Holdings, Merger Sub, LIN
and the Surviving Corporation.
7.4. New York Real Property Gains and Transfer Tax.
Any liability arising out of New York State and/or New York City
Real Property Gains and Transfer Taxes, with respect to
interests in real property owned directly or indirectly by LIN
immediately prior to the Merger, if applicable and due with
respect to the Merger, shall be borne by LIN and expressly shall
not be a liability of the stockholders of LIN.
ARTICLE VIII
CONDITIONS
8.1. Conditions to Each Party's Obligations. The
respective obligations of each party to consummate the
transactions contemplated by this Agreement are subject to the
fulfillment at or prior to the Effective Time of each of the
following conditions, any or all of which may be waived (other
than the condition set forth in clause (ii) of Section 8.1(a))
in whole or in part by the party being benefitted thereby, to
the extent permitted by applicable law and the PMVG:
(a) Stockholder Approval. This Agreement and the
transactions contemplated hereby shall have been duly
approved at the Stockholders Meeting by (i) the requisite
holders of LIN Common Shares in accordance with applicable
law and the Certificate of Incorporation and By-Laws of LIN
and (ii) the affirmative vote of the holders of at least
a majority of the LIN Public Shares present and entitled to
vote at the Stockholders Meeting at which a majority of the
LIN Public Shares shall have been present.
(b) No Injunction. There shall not be in effect any
judgment, writ, order, injunction or decree of any court or
Governmental Body of competent jurisdiction, restraining,
enjoining or otherwise preventing consummation of the
transactions contemplated by this Agreement or permitting
such consummation only subject to any condition or
restriction unacceptable to McCaw in its reasonable
judgment; provided, however, that any party invoking this
condition shall use reasonable efforts to have any such
order or injunction vacated or any such other restriction
eliminated.
8.2. Conditions to Obligations of McCaw, Holdings and
Merger Sub. The respective obligations of McCaw, Holdings and
Merger Sub to consummate the transactions contemplated by this
Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following conditions, any or all
of which may be waived in whole or part by McCaw, Holdings and
Merger Sub, as the case may be, to the extent permitted by
applicable law:
(a) Representations and Warranties True. The
representations and warranties of LIN contained in Section
Article V shall have been true in all material respects
when made and at the time of the Closing with the same
effect as though such representations and warranties had
been made at such time, except for changes resulting from
the consummation of the transactions contemplated by this
Agreement.
(b) Performance. LIN shall have performed or
complied in all material respects with all agreements and
conditions contained herein required to be performed or
complied with by it prior to or at the time of the Closing.
(c) Government Consents, Etc. All Authorizations, if
any, required in connection with the execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby shall have been made or obtained, in
each case without limitation or restriction unacceptable to
McCaw in its reasonable judgment, except where the failure
to have obtained such Authorizations would not be
reasonably expected (so far as can be foreseen at the time)
to have a material adverse effect on the business,
properties, operations, condition (financial or other) or
prospects of (i) LIN and its Subsidiaries taken as a whole
or (ii) McCaw and its Subsidiaries taken as a whole.
(d) No Proceeding or Litigation. No suit, action,
investigation, inquiry or other proceeding by or before any
Governmental Body shall have been instituted and be pending
which questions the validity or legality of the PMVG or the
proceedings thereunder or of this Agreement or the
transactions contemplated hereby, or which imposes or could
impose any remedy, condition or restriction in connection
therewith unacceptable to McCaw.
(e) Third Party Consents. All required
authorizations, consents or approvals in connection with
the Merger of any third party (other than a Governmental
Body), if any, the failure to obtain which would have a
material adverse effect on (i) LIN and its Subsidiaries
taken as a whole or (ii) McCaw and its Subsidiaries taken
as a whole, shall have been obtained.
8.3. Conditions to Obligations of LIN. The
obligations of LIN to consummate the transactions contemplated
by this Agreement are subject to the fulfillment at or prior to
the Effective Time of each of the following conditions, any or
all of which may be waived in whole or in part by LIN to the
extent permitted by applicable law:
(a) Representations and Warranties True. The
representations and warranties of McCaw, Holdings and
Merger Sub contained in Article VI shall have been true in
all material respects when made and at the time of the
Closing with the same effect as though such representations
and warranties had been made at such time, except for
changes resulting from the consummation of the transactions
contemplated by this Agreement.
(b) Performance. Each of McCaw, Holdings and Merger
Sub shall have performed or complied in all material
respects with all agreements and conditions contained
herein required to be performed or complied with by it
prior to or at the time of the Closing.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1. Termination by Mutual Consent. This Agreement
may be terminated and the Merger may be abandoned at any time
prior to the Effective Time, before or after the approval by
holders of LIN Common Shares, either by the mutual written
consent of McCaw and LIN, or by mutual action of their
respective Boards of Directors.
9.2. Termination by Either McCaw or LIN. This
Agreement may be terminated (upon notice from the terminating
party to the other parties) and the Merger may be abandoned by
action of the Board of Directors of either McCaw or LIN if (a)
the Merger shall not have been consummated by December 31, 1995
or, if the condition set forth in Section 8.1(a) shall have been
satisfied and the Merger is being pursued in good faith by McCaw
but has not been completed due to regulatory delays or
litigation, August 31, 1996, (b) any court of competent
jurisdiction in the United States or Governmental Body in the
United States shall have issued an order, decree or ruling or
taken any other action permanently restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling
or other action shall have become final and nonappealable, or
(c) at the Stockholders Meeting, this Agreement and the Merger
shall not receive the affirmative vote of the holders of at
least a majority of the LIN Public Shares present and entitled
to vote at the Stockholders Meeting).
9.3. Amendment. Subject to the applicable provisions
of the DGCL, at any time prior to the Effective Time, the
parties hereto may modify, amend or supplement this Agreement,
by written agreement executed and delivered by duly authorized
officers of the respective parties with respect to any of the
terms contained herein; provided, however, that after approval
of the Merger by the stockholders of LIN, no such amendment or
modification shall be made which reduces the form or amount of
consideration payable in the Merger or adversely affects the
rights of LIN's stockholders hereunder without the approval of
such stockholders. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the
parties.
9.4. Extension; Waiver. At any time prior to the
Effective Time, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to Section
9.3, waive compliance with any of the agreements or conditions
(other than the condition set forth in clause (ii) of Section
8.1(a)) contained in this Agreement. Any agreement on the part
of a party to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
9.5. Effect of Termination and Abandonment. In the
event of termination of this Agreement and abandonment of the
Merger pursuant to this Article IX, no party hereto (or any of
its directors or officers) shall have any liability or further
obligation to any other party under this Agreement, except that
nothing herein will relieve any party from liability for any
breach of this Agreement. Except as and to the extent provided
in the PMVG, the termination of this Agreement and abandonment
of the Merger pursuant to this Article IX shall not affect in
any way the PMVG, which shall continue to be in full force and
effect to the extent of and in accordance with its terms.
<PAGE>
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1. Expenses. Each party shall bear its own
expenses, including the fees and expenses of any attorneys,
accountants, investment bankers, brokers, finders or other
intermediaries or other Persons engaged by it, incurred in
connection with this Agreement and the transactions contemplated
hereby, except as set forth in Section 7.4 and except that
expenses incurred in connection with printing and mailing the
Proxy Statement will be shared equally by McCaw, Holdings and
Merger Sub, on the one hand, and LIN, on the other.
10.2. Notices, Etc. All notices, requests, demands
or other communications required by or otherwise with respect to
this Agreement shall be in writing and shall be deemed to have
been duly given to any party when delivered personally (by
courier service or otherwise), when delivered by telecopy and
confirmed by return telecopy, or seven days after being mailed
by first-class mail, postage prepaid and return receipt
requested in each case to the applicable addresses set forth
below:
If to LIN:
LIN Broadcasting Corporation
5400 Carillon Point
Kirkland, Washington 98033
Attn: Mr. Tom A. Alberg
Telecopy: (206) 828-1835
with copies to:
David B. Chapnick, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Telecopy: (212) 455-2502
and
Jeffrey Weinberg, Esq.
Weil, Gotshal & Manges
767 Fifth Avenue
New York, NY 10153
Telecopy: (212) 310-8007
<PAGE>
If to McCaw, Holdings or Merger Sub:
McCaw Cellular Communications, Inc.
1150 Connecticut Avenue, N.W.
Suite 400
Washington, DC 20036
Attn: Andrew A. Quartner, Esq.
Telecopy: (202) 223-9095
with copies to:
AT&T Corp.
131 Morristown Rd., C64-A2029
Basking Ridge, New Jersey 07920
Attn: Marilyn J. Wasser, Esq.
Telecopy: (908) 953-4657
and
Steven A. Rosenblum, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
or to such other address as such party shall have designated by
notice so given to each other party.
10.3. Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement
(other than the representations and warranties set forth in
Sections 6.5 and 6.6) or in any instrument delivered pursuant to
this Agreement shall survive the Effective Time. This Section
10.3 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective
Time.
10.4. No Assignment. This Agreement shall be binding
upon and shall inure to the benefit of and be enforceable by the
parties and their respective successors and assigns; provided
that, except as otherwise expressly set forth in this Agreement,
neither the rights nor the obligations of any party may be
assigned or delegated without the prior written consent of the
other party.
10.5. Entire Agreement. This Agreement embodies the
entire agreement and understanding between the parties relating
to the subject matter hereof and supersedes all prior agreements
and understandings relating to such subject matter; provided,
however, that the parties hereto acknowledge and agree that this
Agreement shall not supersede or in any way modify the PMVG
which shall continue to be in full force and effect in
accordance with its terms.
<PAGE>
10.6. Specific Performance. The parties acknowledge
that money damages are not an adequate remedy for violations of
this Agreement and that any party may, in its sole discretion,
apply to a court of competent jurisdiction for specific
performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or
prevent any violation hereof and, to the extent permitted by
applicable law, each party waives any objection to the
imposition of such relief.
10.7. Remedies Cumulative. All rights, powers and
remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not
alternative, and the exercise or beginning of the exercise of
any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such
party.
10.8. No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this
Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon compliance by any other party hereto
with its obligations hereunder, and any custom or practice of
the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any
such or other right, power or remedy or to demand such
compliance.
10.9. No Third Party Beneficiaries. This Agreement is
not intended to be for the benefit of and shall not be
enforceable by any Person or entity who or which is not a party
hereto, except for the indemnification provisions contained in
Section 7.3, which provisions may be enforced by the parties
referred to therein.
10.10. Public Announcements. McCaw and LIN will agree
upon the timing and content of the initial press release to be
issued describing the transactions contemplated by this
Agreement, and will not make any public announcement thereof
prior to reaching such agreement unless required to do so by
applicable law or regulation. To the extent reasonably
requested by either party, each party will thereafter consult
with and provide reasonable cooperation to the other in
connection with the issuance of further press releases or other
public documents describing the transactions contemplated by
this Agreement.
10.11. Certain Actions by LIN. Notwithstanding
anything contained herein to the contrary, LIN shall not be
deemed to have breached this Agreement by virtue of any action
taken by LIN that is expressly approved by a majority of the
<PAGE>
members of the LIN Board who are employees of McCaw or its
affiliates other than LIN and its Subsidiaries.
10.12. Governing Law. This Agreement and all
disputes hereunder shall be governed by and construed and
enforced in accordance with the internal laws of the State of
Delaware, without regard to principles of conflict of laws.
10.13. Name, Captions, Etc. The name assigned this
Agreement and the section captions used herein are for
convenience of reference only and shall not affect the
interpretation or construction hereof. Unless otherwise
specified, (a) the terms "hereof", "herein" and similar terms
refer to this Agreement as a whole and (b) references herein to
Articles or Sections refer to articles or sections of this
Agreement.
10.14. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to
be an original, but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies
each signed by less than all, but together signed by all, the
parties hereto.
10.15. McCaw Guarantee. McCaw absolutely, irrevocably
and unconditionally guarantees the performance and satisfaction
of the obligations of each of Holdings, Merger Sub and the
Surviving Corporation under this Agreement.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed
and delivered by the parties set forth below.
MCCAW CELLULAR
COMMUNICATIONS, INC.
By: /s/ Wayne Perry
MMM HOLDINGS, INC.
By: /s/ Wayne Perry
MMM ACQUISITION CORP.
By: /s/ Marilyn Wasser
LIN BROADCASTING CORPORATION
By: /s/ Lewis Chakrin
