<PAGE>
As filed with the Securities and Exchange Commission on May 5, 2000
Registration No. 333-35422
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
Tribune Company
(Exact Name of Registrant as Specified in its Charter)
Delaware 2711 36-1880355
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Classification Identification Number)
Incorporation or Code Number)
Organization)
435 North Michigan Avenue
Chicago, Illinois 60611
(312) 222-9100
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------
Crane H. Kenney, Esq.
Senior Vice President, General Counsel and Secretary
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
(312) 222-9100
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
---------------
Copies to:
Steven A. Rosenblum, Esq. Jerome L. Coben, Esq. Peter F. Ziegler, Esq.
Wachtell, Lipton, Rosen Skadden, Arps, Slate, Gibson, Dunn & Crutcher
& Katz Meagher & Flom LLP LLP
51 West 52nd Street 300 South Grand Avenue 333 South Grand Avenue
New York, New York Los Angeles, California Los Angeles, California
10019 90071 90071
(212) 403-1000 (213) 687-5000 (213) 229-7000
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effectiveness of this Registration Statement and the
satisfaction or waiver of all other conditions to the merger of The Times
Mirror Company with and into Registrant pursuant to the Agreement and Plan of
Merger, dated as of March 13, 2000, described in the enclosed proxy
statement/prospectus.
If the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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- ---------------------------------------------------------------------------------
<CAPTION>
Proposed
Proposed Maximum
Title of each Class of Amount Maximum Aggregate Amount of
Securities to be to be Offering Price Offering Registration
Registered(1) Registered(2) Per Share(3) Price(3) Fee(3)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, without
par value............. 233,893,643 $38.325 $8,963,973,868 $2,328,441
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</TABLE>
(1) The Registration Statement relates to the common stock, without par value,
of the Registrant issuable to holders of series A common stock, par value
$1 per share, and series C common stock, par value $1 per share, of Times
Mirror (together, the "Times Mirror common stock") in connection with the
merger.
(2) The number of shares to be registered pursuant to this Registration
Statement is based on the maximum number of shares of Tribune common stock
issuable to stockholders of Times Mirror in the merger.
(3) The amount of registration fee, calculated pursuant to Rule 457(f)(1) and
457(c) of the Securities Act, is based on an initial fee of $2,205,358,
paid with the filing of the original Registration Statement, with respect
to 221,728,670 shares based on an April 14, 2000 share price of $37.675 and
a fee of $123,083, paid with the filing of this Amendment, with respect to
12,164,973 shares based on a May 3, 2000 share price of $38.325. The
foregoing Times Mirror share prices reflect an exchange ratio of 2.5 shares
of Tribune common stock per share of Times Mirror common stock and
represent the average of the high and low prices of Times Mirror common
stock on their respective dates, as reported on the New York Stock
Exchange, Inc.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
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<PAGE>
John W. Madigan [TRIBUNE LOGO] Tribune Company
Chairman, President and 435 North Michigan Avenue
Chief Executive Officer Chicago, Illinois
60611-4001
Dear Stockholder:
We invite you to a special meeting of stockholders at 9:00 a.m., Chicago
time, on June 12, 2000 at Tribune Company, Campbell Hall, 7th Floor, 435 North
Michigan Avenue, Chicago, Illinois. At the meeting, we will ask you to approve
the Tribune-Times Mirror merger agreement, including the merger of Times Mirror
into Tribune, the issuance of shares of Tribune common stock in the merger, and
an amendment to Tribune's charter authorizing additional Tribune shares and
making other changes that we describe in the attached proxy
statement/prospectus. WE URGE YOU TO READ THIS DOCUMENT, INCLUDING THE SECTION
DESCRIBING RISK FACTORS THAT BEGINS ON PAGE 17.
In the merger, we will convert each share of Times Mirror common stock not
owned by Tribune into 2.5 shares of Tribune common stock or, at the election of
the Times Mirror stockholder, $95 in cash. The cash election will be available
only to the extent that Tribune has purchased fewer than 28 million shares of
Times Mirror common stock prior to the merger. If too many Times Mirror
stockholders elect cash, we will provide the available cash to electing
stockholders on a pro rata basis, and give them shares of Tribune common stock
for their remaining shares of Times Mirror common stock. We will convert shares
of Times Mirror preferred stock into shares of Tribune preferred stock having
the same terms. The Tribune common stock, including the shares issued to
stockholders of Times Mirror as a result of the proposed merger, will continue
to be listed on the New York Stock Exchange, the Chicago Stock Exchange and the
Pacific Stock Exchange under the trading symbol "TRB."
Tribune currently owns 23,305,244 shares of Times Mirror common stock (about
40% of the outstanding shares). We acquired these shares in a tender offer that
we completed on April 17, 2000 under the merger agreement and in the open
market. Following the tender offer, 13 Tribune designees became members of
Times Mirror's 27 member board of directors.
In order to complete the merger and acquire the remaining Times Mirror
shares, we need the approval of both Tribune's stockholders and Times Mirror's
stockholders. This requires the approval of the holders of a majority of the
voting power of each company's outstanding shares. The holders of a majority of
Times Mirror's voting power have already agreed to vote in favor of the merger
agreement and the merger, which assures that we will obtain the necessary Times
Mirror stockholder approval.
The Tribune board of directors has approved the Tribune-Times Mirror merger
agreement and unanimously recommends that Tribune stockholders vote "FOR" the
approval of the merger agreement, including approval of the merger, the
issuance of shares of Tribune common stock in the merger, and the charter
amendment. The merger will create the nation's premier local-market media
company, with extensive operations in broadcasting, publishing and interactive
services. We think this transaction is compelling from a business and financial
standpoint, and we believe it will create significant shareholder value over
time. By joining together with Times Mirror, we are building a national
footprint for our company with the scale and scope to stay competitive and grow
in the consolidating media marketplace.
We provide additional information in the proxy statement/prospectus attached
to this letter. Please review this document carefully. Regardless of your plans
for attending in person, it is important that your shares be represented at the
meeting. You may vote your shares via a toll-free telephone number or the
Internet or you may sign, date and return the enclosed proxy card and/or voting
instruction card in the envelope provided. You can change your vote by
submitting a proxy and/or voting instructions at a later date, using the same
procedures, in which case your later proxy and/or voting instructions will
count and we will revoke your earlier proxy and/or voting instructions. If you
attend the meeting, you may vote in person even though you previously submitted
your proxy.
Sincerely,
/s/ John W. Madigan
May 5, 2000
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE COMMON STOCK TO BE ISSUED
UNDER THIS PROXY STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY
STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated May 5, 2000, and is first being
mailed to stockholders on or about May 11, 2000.
<PAGE>
[TRIBUNE LOGO]
----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
----------------
We will hold a special meeting of stockholders of Tribune Company at Tribune
Company, Campbell Hall, 7th Floor, 435 North Michigan Avenue, Chicago,
Illinois, at 9:00 a.m., Chicago time on Monday, June 12, 2000. At the meeting,
we will ask you:
1. To approve and adopt the Agreement and Plan of Merger, dated as of
March 13, 2000, between Tribune and Times Mirror, and the transactions
contemplated by the merger agreement. Approval of the merger agreement will
constitute approval of:
. the merger of Times Mirror and Tribune;
. the issuance of shares of Tribune common stock in the merger; and
. an amendment to Tribune's charter to increase the authorized number
of shares of Tribune common stock to 1.4 billion and the authorized
number of shares of Tribune preferred stock to 12 million, and to
permit amendment of certain provisions of Tribune's bylaws only by
the vote of all of the holders of the outstanding Tribune voting
stock or all of the members of the Tribune board of directors.
2. To transact any other business as may properly come before the
special meeting or any adjournment or postponement of the special meeting.
You are entitled to notice of and to vote at the meeting or any adjournment
only if you were a stockholder of record at the close of business on May 5,
2000. You do not need an admission ticket to attend the meeting, but we will
need to confirm your stock ownership before admitting you to the meeting. If
you hold your shares through a bank, broker or other record holder, you may
vote in person at your special meeting only if you obtain a proxy from the
record holder with respect to your shares.
Whether or not you plan to attend the meeting in person, WE URGE YOU TO VOTE
YOUR SHARES VIA THE TOLL-FREE TELEPHONE NUMBER OR THE INTERNET OR BY MARKING,
SIGNING, DATING AND RETURNING THE PROXY CARD AND/OR VOTING INSTRUCTION CARD
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. The voting instruction card
relates to shares held under employee benefit plans. You may revoke your proxy
at any time, and sending your proxy will not affect your right to attend the
meeting and vote in person.
By Order of the Board of Directors,
/s/ Crane H. Kenney
CRANE H. KENNEY
Senior Vice President, General Counsel and Secretary
May 5, 2000
<PAGE>
Times Mirror
[TIMES MIRROR LOGO] Times Mirror Square
Efrem Zimbalist III
Los Angeles, CA 90053
Executive Vice President
and Chief Financial Officer
May 5, 2000
Dear Stockholder:
We would like to invite you to a special meeting of stockholders at 9:30
a.m., Los Angeles time, on June 12, 2000, at The Times Mirror Company, Harry
Chandler Auditorium, Times Mirror Square, Los Angeles, California. At the
meeting, we will ask you to approve the merger agreement between Times Mirror
and Tribune and the merger of Times Mirror into Tribune.
In the merger, Tribune will convert each share of Times Mirror common stock
that you own into 2.5 shares of Tribune common stock, or, at your election,
into $95 in cash. The cash consideration will be available only to the extent
that Tribune has purchased fewer than 28 million shares of Times Mirror common
stock prior to the merger. If you elect to receive cash, but too many other
Times Mirror stockholders also elect cash, Tribune will provide the available
cash to you on a pro rata basis, and give you shares of Tribune common stock
for your remaining shares of Times Mirror common stock. At the same time,
Tribune will convert shares of Times Mirror preferred stock into shares of
Tribune preferred stock with the same terms.
In order to complete the merger, we need the approval of both the Times
Mirror stockholders and the Tribune stockholders. This requires the affirmative
vote of holders of a majority of the voting power of each company's outstanding
shares. The Chandler Trusts, which own approximately 73% of the voting power of
the outstanding shares of the Times Mirror common stock, have already agreed to
vote in favor of the merger agreement and the merger. In addition, Tribune
currently owns 23,305,244 shares of Times Mirror common stock, or about 11% of
the voting power of the outstanding shares. Tribune acquired these shares in a
tender offer that Tribune completed on April 17, 2000, as authorized by the
merger agreement, and in the open market. Following the tender offer, 13
Tribune designees became members of the 27 member Times Mirror board of
directors.
You are entitled to notice of and to vote at the special meeting only if you
hold your shares of Times Mirror common stock at the close of business on May
5, 2000. Each holder of a share of Times Mirror series A common stock will be
entitled to cast one vote and each holder of a share of Times Mirror series C
common stock will be entitled to cast ten votes.
Your board of directors has approved the merger agreement and the merger and
has determined that the terms of the merger are advisable, fair to you, and in
your best interests. Therefore, your board of directors recommends that you
vote "FOR" the approval of the merger agreement and the merger.
We provide additional information about the merger and the merger agreement
in the proxy statement/prospectus attached to this letter. Please review this
information carefully. You should pay particularly close attention to the
section entitled "Risk Factors" which begins on page 17. You can find out how
to obtain additional information regarding Tribune and Times Mirror in the
section entitled "Where You Can Find More Information" on page 97.
Please sign, date and return your proxy card in the enclosed postage-paid
envelope or follow the instructions on the proxy card to vote your shares by
telephone as soon as possible so that your shares will be voted at the special
meeting. If you change your mind and later decide to attend the meeting and
vote in person, or if you wish to revoke your proxy for any reason prior to the
vote at the meeting you may do so by submitting a proxy at a later date, using
the same procedures, and your proxy will have no further effect. If you attend
the meeting, you may vote in person even though you previously submitted your
proxy. If you do plan to attend the meeting, please check the appropriate box
on the proxy card.
Thank you for the support you have given us over the years.
Sincerely,
/s/ Efrem Zimbalist III
Efrem Zimbalist III
Executive Vice President
and Chief Financial Officer
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE COMMON STOCK TO BE ISSUED UNDER
THIS PROXY STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY
STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated May 5, 2000, and is first being
mailed to stockholders on or about May 11, 2000.
<PAGE>
[TIMES MIRROR LOGO]
----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
----------------
June 12, 2000
at 9:30 a.m., Los Angeles time
To the Stockholders of Times Mirror:
We will hold a special meeting of stockholders of Times Mirror at The Times
Mirror Company, Harry Chandler Auditorium, Times Mirror Square, Los Angeles,
California at 9:30 a.m., Los Angeles time on Monday, June 12, 2000, for the
following purposes:
1. To consider and vote upon a proposal to adopt the Agreement and Plan
of Merger, dated as of March 13, 2000, between Tribune and Times Mirror.
The merger agreement, if adopted, will merge Times Mirror into Tribune. In
the merger, each share of Times Mirror common stock not owned by Tribune
will be converted, at the election of you and your fellow Times Mirror
stockholders, into either 2.5 shares of Tribune common stock or $95 in
cash, subject to a limit on the total amount of cash consideration.
Adoption of the merger agreement will also constitute approval of the
merger and the other transactions contemplated by the merger agreement.
2. To transact such other business as may properly come before the
special meeting or any adjournment thereof.
These items of business are described in the attached proxy
statement/prospectus which provides you with detailed information concerning
Times Mirror, Tribune and the merger. You are entitled to notice of and to vote
at the meeting only if you were a stockholder of record at the close of
business on May 5, 2000, which is the day that your Board of Directors fixed as
the record date.
Please complete, sign, date and return the accompanying proxy in the
enclosed self-addressed stamped white envelope, or vote your shares by
telephone. Please see the enclosed proxy card for instructions. Returning the
proxy does NOT deprive you of your right to attend the meeting and to vote your
shares in person.
We appreciate your interest in Times Mirror and consideration of this
matter.
By Order of the Board of Directors,
/s/ Stephen C. Meier
STEPHEN C. MEIER
Secretary
May 5, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
QUESTIONS AND ANSWERS ABOUT THE MERGER.................................... 4
SUMMARY................................................................... 7
The Companies........................................................... 7
Tribune Company......................................................... 7
The Times Mirror Company................................................ 7
Stockholder Approvals................................................... 7
Appraisal Rights........................................................ 7
United States Federal Income Tax Consequences........................... 8
Recommendations to Stockholders......................................... 8
Opinions of Financial Advisors.......................................... 8
Interests of Certain Persons in the Merger.............................. 8
Tribune Board Representation and Los Angeles Times Subsidiary Matters... 9
Conditions to the Merger................................................ 9
Termination of the Merger Agreement..................................... 9
Termination Fees........................................................ 10
Regulatory Matters...................................................... 10
Accounting Treatment.................................................... 10
Selected Historical and Pro Forma Financial Information................. 11
Tribune Company Selected Historical Financial Information............... 11
The Times Mirror Company Selected Historical Financial Information...... 12
Unaudited Selected Pro Forma Condensed Consolidated Financial
Information............................................................ 13
Comparative Per Share Information....................................... 14
Comparative Per Share Market Price and Dividend Information............. 15
RISK FACTORS.............................................................. 17
The Merger Consideration Will Not Change Even if Our Stock Prices
Change................................................................. 17
Integration of Tribune and Times Mirror Operations May Be Difficult..... 17
The Interests of Times Mirror Directors and Officers in the Merger May
Be Different From the Interests of Other Stockholders.................. 17
Federal Communications Commission Rules Restrict Ownership of a
Broadcast License and a Newspaper in the Same Market................... 17
Failure to Complete the Merger Could Adversely Affect Times Mirror's
Stock Price and Future Business and Operations......................... 18
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS................ 19
THE SPECIAL MEETINGS...................................................... 20
Date, Time and Place of the Special Meetings............................ 20
What You Will Vote On................................................... 20
Stockholder Record Date for the Special Meetings........................ 20
Quorum.................................................................. 21
Vote Required for Approval.............................................. 21
Voting Your Shares...................................................... 21
Voting Electronically or by Telephone................................... 22
Cost of Solicitation.................................................... 23
THE MERGER................................................................ 24
The Companies........................................................... 24
Background of the Merger................................................ 24
Recommendation of the Tribune Board and Tribune's Reasons for the
Merger................................................................. 29
Recommendation of the Times Mirror Board and Times Mirror's Reasons for
the Merger............................................................. 30
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Page
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<S> <C>
Opinion of Tribune's Financial Advisor.................................. 32
Opinion of Times Mirror's Financial Advisor............................. 37
Certain Financial Projections (Unaudited)............................... 42
Accounting Treatment.................................................... 44
United States Federal Income Tax Consequences of the Merger............. 44
Antitrust............................................................... 46
Federal Communications Commission....................................... 46
Appraisal Rights........................................................ 46
Federal Securities Laws Consequences; Stock Transfer Restriction
Agreements............................................................. 48
Exchange Procedures..................................................... 48
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS........... 50
INTERESTS OF CERTAIN PERSONS IN THE MERGER................................ 56
Mark H. Willes, Former Chairman of the Board, President and Chief
Executive Officer of Times Mirror...................................... 56
Other Times Mirror Executives........................................... 57
Indemnification and Insurance........................................... 59
Interests of the Chandler Trusts........................................ 59
THE MERGER AGREEMENT...................................................... 60
The Tender Offer........................................................ 60
The Merger.............................................................. 60
Conversion of Shares of Times Mirror Common Stock....................... 60
Conversion of Shares of Times Mirror Preferred Stock.................... 62
Stock Options and Other Awards.......................................... 62
Debt Securities......................................................... 63
Proxy Statement and Registration Statement.............................. 63
Representations and Warranties.......................................... 63
Interim Business Operations............................................. 64
No Solicitation......................................................... 65
Tribune Board Representation and Los Angeles Times Subsidiary Matters... 67
The Charter Amendment................................................... 68
Public Announcements.................................................... 68
Efforts................................................................. 69
Employee Benefit Plans.................................................. 69
Indemnification; Directors' and Officers' Insurance..................... 69
Notification of Certain Matters......................................... 70
Takeover Restrictions................................................... 70
Certain Litigation...................................................... 70
Listing of Tribune Common Stock......................................... 70
Tax-Free Reorganization................................................. 70
Charitable Contributions................................................ 71
Conditions to Completion of the Merger.................................. 71
Termination............................................................. 72
Fees and Expenses....................................................... 73
Amendment............................................................... 73
Extension; Waiver....................................................... 73
Accounting Treatment.................................................... 73
THE VOTING AGREEMENT...................................................... 74
OWNERSHIP OF TIMES MIRROR COMMON STOCK.................................... 76
Beneficial Ownership of Certain Stockholders............................ 76
Beneficial Ownership of Directors and Management of Times Mirror........ 78
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Page
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<S> <C>
DESCRIPTION OF TRIBUNE CAPITAL STOCK..................................... 81
Authorized Capital Stock............................................... 81
Tribune Common Stock................................................... 81
Tribune Series A Junior Participating Preferred Stock.................. 82
Tribune Series B Convertible Preferred Stock........................... 82
Tribune Series C, Series D-1 and Series D-2 Preferred Stock............ 84
Transfer Agent and Registrar........................................... 85
COMPARISON OF STOCKHOLDER RIGHTS......................................... 86
Authorized Capital Stock............................................... 86
Size of the Board of Directors......................................... 87
Classification of the Board of Directors............................... 87
Election of Directors.................................................. 87
Removal of Directors................................................... 87
Vacancies.............................................................. 88
Limitation of Director Liability....................................... 88
Indemnification of Directors and Officers.............................. 88
Annual Meeting of Stockholders......................................... 89
Special Meeting of Stockholders........................................ 89
Action by Written Consent.............................................. 89
Advance Notice Requirements for Stockholder Nominations and Other
Business.............................................................. 90
Amendments to Charter.................................................. 90
Amendments to Bylaws................................................... 91
Vote Required for Extraordinary Corporate Transactions................. 92
Business Combinations with Interested Stockholders..................... 92
Dissenters' Rights..................................................... 93
Dividends.............................................................. 93
Rights of Inspection................................................... 93
Rights Agreement....................................................... 93
STOCK EXCHANGE LISTING; DELISTING AND DEREGISTRATION OF TIMES MIRROR
COMMON STOCK............................................................ 96
REPRESENTATION OF THE CHANDLER TRUSTS ON THE TRIBUNE BOARD OF DIRECTORS.. 96
INDEPENDENT ACCOUNTANTS.................................................. 96
LEGAL MATTERS............................................................ 97
WHERE YOU CAN FIND MORE INFORMATION...................................... 97
</TABLE>
<TABLE>
<S> <C>
ANNEX A--Agreement and Plan of Merger..................................... A-1
ANNEX B--Voting Agreement................................................. B-1
ANNEX C--Amendments to Tribune Company Charter............................ C-1
ANNEX D--Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated.... D-1
ANNEX E--Opinion of Goldman, Sachs & Co................................... E-1
ANNEX F--Section 262 of the Delaware General Corporation Law.............. F-1
PART II--Information Not Required in Prospectus........................... II-1
Item 20. Indemnification of Directors and Officers...................... II-1
Item 21. Exhibits and Financial Statement Schedules..................... II-1
Item 22. Undertakings................................................... II-2
SIGNATURES................................................................ II-4
EXHIBIT INDEX............................................................. II-6
</TABLE>
3
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: Why are the companies proposing the merger?
A: We believe that the merger will create the nation's premier local-market
media company, with extensive operations in broadcasting, publishing and
interactive services. The combined company will have operations in 18 of
the top 30 U.S. markets and will be the only media company with newspaper
and television combinations in the nation's three largest markets--New
York, Los Angeles and Chicago.
We believe that Tribune and Times Mirror are a great strategic fit. Like
Tribune, Times Mirror is a strong, successful company with world-class
media assets including the Los Angeles Times, Newsday, The Baltimore Sun
and The Hartford Courant. In addition, Times Mirror has an excellent
Internet division serving targeted online communities. We believe that the
merger will give Tribune's interactive business a truly national presence
and create one of the largest providers of interactive news, information
and entertainment services in the United States. Finally, we believe that
the merger will create significant shareholder value over time and enable
Tribune to stay competitive and grow in the consolidating media
marketplace.
Q: What will I receive in exchange for my shares of Times Mirror common stock?
A: For each share of Times Mirror common stock, you will receive, at your
election, 2.5 shares of Tribune common stock or, to the extent cash is
available, $95 in cash. The cash election will be available only to the
extent that Tribune has purchased fewer than 28 million shares of Times
Mirror common stock prior to the merger. As of the date of this proxy
statement/prospectus, Tribune has purchased 23,305,244 shares of Times
Mirror common stock in a tender offer that Tribune completed on April 17,
2000 and in the open market.
If too many Times Mirror stockholders elect cash, we will provide the
available cash on a pro rata basis to stockholders electing cash, and give
them shares of Tribune common stock for their remaining shares of Times
Mirror common stock. We will pay cash in lieu of any fractional shares of
Tribune common stock.
Q: What do I need to do to get my cash or shares of Tribune common stock?
A: If you are a Times Mirror stockholder, we are separately mailing to you a
GREEN form of election and letter of transmittal. The form of election and
letter of transmittal contains instructions for exchanging your shares.
Please carefully review, complete and return the GREEN form in the GREEN
envelope according to the instructions contained in the form. You must
return the GREEN form in the GREEN envelope. Do not send in your stock
certificates with your proxy cards and/or voting instructions.
Q: When do the companies expect to complete the merger?
A: We are working to complete the merger as quickly as possible. We hope to
complete the merger in the second quarter of 2000. However, we cannot
assure you that we will complete the merger by then.
Q: What stockholder approvals are required to approve the merger?
A: We must obtain the approval of Tribune's and Times Mirror's stockholders.
This requires the affirmative vote of a majority of the voting power of
each company's outstanding shares. The holders of a majority of Times
Mirror's voting power have already agreed to vote in favor of the merger
agreement and the merger, which assures that we will obtain the necessary
Times Mirror stockholder approval.
Q: Who is entitled to vote on the merger?
A: For Tribune, only holders of record of Tribune voting stock at the close of
business on May 5, 2000 may vote on the merger proposal. For Times Mirror,
only holders of record of Times Mirror common stock at the close of
business on May 5, 2000 may vote on the merger proposal. In either case, if
you own shares on the record date through a bank, broker or other record
holder, you may vote in person at your special meeting only if you obtain a
proxy from the record holder with respect to your shares.
4
<PAGE>
Q: When and where is the special meeting?
A: Tribune will hold the special meeting on Monday, June 12, 2000, at 9:00
a.m., Chicago time, at Tribune Company, Campbell Hall, 7th Floor, 435 North
Michigan Avenue, Chicago, Illinois.
Times Mirror will hold the special meeting on Monday, June 12, 2000, at
9:30 a.m., Los Angeles time, at The Times Mirror Company, Harry Chandler
Auditorium, Times Mirror Square, Los Angeles, California.
Q: What do I need to do now?
A: After carefully reading and considering the information contained in this
proxy statement/prospectus, please respond by completing, signing and
dating your WHITE proxy card and/or voting instructions and returning it
and/or them in the enclosed postage paid WHITE envelope. You may also
submit your proxy and/or voting instructions through the Internet (for
Tribune stockholders only) or by telephone. Please vote using one of these
methods as soon as possible so that we may vote your shares at your special
meeting.
If you are a Times Mirror stockholder, please carefully review, complete
and return the GREEN form of election and letter of transmittal in the
GREEN envelope according to the instructions contained in the form that we
are separately mailing to you.
Q: What if I don't vote?
A: Except as provided in the next paragraph, if you fail to respond, it will
have the same effect as a vote against the merger. If you respond and do
not indicate your voting preference, we will count your proxy and/or voting
instructions as a vote in favor of the merger. If you respond and abstain
from voting, your proxy and/or voting instructions will have the same
effect as a vote against the merger.
If you own shares of Tribune common stock pursuant to a Tribune employee
stock plan and do not provide voting instructions prior to June 8, 2000,
the trustee or nominee of the applicable plan will vote your shares (and
any shares not allocated to a specific account) in the same proportion as
the shares in each plan for which voting instructions are received. If you
own shares of Times Mirror common stock pursuant to the Times Mirror ESOP
or PAYSOP and do not provide voting instructions by June 8, 2000, your
shares will be voted by the trustee of the applicable plan.
Q: Can I change my vote after I have delivered my proxy or voting
instructions?
A: Yes. You can change your vote at any time before we vote your proxy at the
special meeting. You can do this in one of three ways. First, you can
revoke your proxy. Second, you can submit a new proxy. If you choose either
of these two methods, you must submit your notice of revocation or your new
proxy to the secretary of Tribune or Times Mirror, as appropriate, before
your special meeting. If you hold your shares through an account at a
brokerage firm or bank, you should contact your brokerage firm or bank to
change your vote. Third, if you are a holder of record, you can attend the
special meeting and vote in person. If you submit your proxy electronically
through the Internet (for Tribune stockholders only) or by telephone, you
can change your vote by submitting a proxy at a later date, using the same
procedures, in which case your later proxy will count and we will revoke
your earlier proxy.
If you own shares of Tribune common stock pursuant to a Tribune employee
stock plan, you can change your voting instructions at any time prior to
June 8, 2000. You can do this in one of two ways. First, you can revoke
your voting instructions. Second, you can submit new voting instructions.
If you choose either of these two methods, you must submit your notice of
revocation or your new voting instructions to the secretary of Tribune
prior to June 8, 2000. If you submit your voting instructions
electronically through the Internet or by telephone, you can change your
vote by submitting new voting instructions at any time prior to June 8,
2000, using the same procedures, in which case your later voting
instructions will count and we will revoke your earlier voting
instructions.
Q: Whom should I call if I have questions?
A: If you have questions about the merger or how to submit your proxy, or if
you need additional
5
<PAGE>
copies of this proxy statement/prospectus or the enclosed proxy card or
voting instructions, you should contact:
. if you are a Tribune stockholder:
Georgeson Shareholder
Communications Inc.
17 State Street, 10th Floor
New York, New York 10004
Banks & Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
or
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
Attention: Investor Contact
Telephone: (312) 222-3787
. if you are a Times Mirror stockholder:
Georgeson Shareholder
Communications Inc.
17 State Street, 10th Floor
New York, New York 10004
Banks & Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
or
The Times Mirror Company
Times Mirror Square
Los Angeles, California 90053
Attention: Investor Contacts
Telephone: (213) 237-3955
6
<PAGE>
SUMMARY
This summary highlights selected information about the merger and may not
contain all of the information that is important to you. To understand the
merger better, you should read this entire document carefully, as well as those
additional documents to which we refer you. See "Where You Can Find More
Information" on page 97.
The Companies (See Page 24)
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
(312) 222-9100
website: http://www.tribune.com
Tribune Company is a media company. Through its subsidiaries, Tribune
publishes newspapers, books, educational materials and information in print and
digital formats, and broadcasts, develops and distributes information and
entertainment principally in metropolitan areas in the United States. For
additional information about Tribune and its businesses, see "The Merger--The
Companies--Tribune Company" and "Where You Can Find More Information."
The Times Mirror Company
Times Mirror Square
Los Angeles, California 90053
(213) 237-3700
website: http://www.timesmirror.com
The Times Mirror Company engages principally in the newspaper publishing,
professional information and magazine publishing businesses. Times Mirror
publishes the Los Angeles Times, Newsday, The Baltimore Sun, The Hartford
Courant, The Morning Call, The (Stamford) Advocate, Greenwich Time and several
smaller newspapers. Times Mirror also provides information to the aviation
market and publishes magazines. For additional information about Times Mirror
and its businesses, see "The Merger--The Companies--The Times Mirror Company"
and "Where You Can Find More Information."
Stockholder Approvals (See Page 21)
Approval of Tribune's Stockholders. Tribune stockholders will vote on a
proposal to approve and adopt the merger agreement and the merger. This will
include approval of the issuance of Tribune common stock in the merger and
approval of an amendment to Tribune's charter as contemplated by the merger
agreement. The charter amendment, which we attach as Annex C to this proxy
statement/prospectus, would increase the number of Tribune's authorized shares
of common stock to 1.4 billion shares and the number of its authorized shares
of preferred stock to 12 million shares. It would also permit amendment of
certain provisions of Tribune's bylaws only by the vote of all of the holders
of the outstanding Tribune voting stock or all of the members of the Tribune
board of directors.
As of the record date, the directors and executive officers of Tribune and
their affiliates owned and were entitled to vote 4,824,586 shares (or 1.94%) of
Tribune common stock.
Approval of Times Mirror's Stockholders. Times Mirror stockholders will vote
on a proposal to approve and adopt the merger agreement and the merger. Holders
of a majority of the voting power of Times Mirror have agreed to vote in favor
of the merger.
As of April 18, 2000, the directors and executive officers of Times Mirror
and their affiliates owned and were entitled to vote 1,780,835 shares of Times
Mirror series A common stock (or 0.90% of the voting power of the outstanding
shares of Times Mirror series A common stock and Times Mirror series C common
stock, voting together as a single class). As of the record date, the directors
and executive officers of Times Mirror and their affiliates owned and were
entitled to vote 14,526,056 shares of Times Mirror series C common stock (or
73.11% of the voting power of the outstanding shares of Times Mirror series A
common stock and Times Mirror series C common stock, voting together as a
single class).
Appraisal Rights (See Page 46)
Under the Delaware General Corporation Law, only holders of Times Mirror
series C common
7
<PAGE>
stock have appraisal rights. Holders of Times Mirror series C common stock
wanting to exercise appraisal rights must strictly comply with the rules
governing the exercise of appraisal rights or lose those rights. We describe
the procedures for exercising appraisal rights in this proxy
statement/prospectus and we attach the provisions of Delaware law that govern
appraisal rights as Annex F to this proxy statement/prospectus.
United States Federal Income Tax Consequences (See Page 44)
Tribune and Times Mirror will not complete the merger unless they receive
legal opinions to the effect that the merger will qualify as a reorganization
for U.S. federal income tax purposes. Assuming the merger qualifies as a
reorganization, stockholders of Times Mirror who exchange their shares solely
for cash will recognize gain or loss for federal income tax purposes.
Stockholders of Times Mirror who exchange their shares for a combination of
Tribune common stock and cash in the tender offer and the merger may recognize
gain, but not loss, in the exchange. Stockholders of Times Mirror who exchange
their shares solely for Tribune common stock will not recognize gain or loss
for federal income tax purposes, other than gain or loss attributable to the
receipt of cash in lieu of fractional shares of Tribune common stock.
You should read "The Merger--United States Federal Income Tax Consequences
of the Merger" starting on page 44 for a more complete discussion of the
federal income tax consequences of the merger. You should also consult your own
tax advisor with respect to other tax consequences of the merger or any special
circumstances that may affect the tax treatment to you of the cash or stock
that you receive in the merger.
Recommendations to Stockholders (See Page 29)
Tribune. The Tribune board of directors believes that the terms of the
merger are advisable and in the best interests of the Tribune stockholders. The
Tribune board unanimously recommends that you vote FOR the merger proposal,
including the issuance of shares of Tribune common stock in the merger and the
proposed Tribune charter amendment.
Times Mirror. The Times Mirror board of directors believes that the terms of
the merger are advisable, fair to, and in the best interests of, the
stockholders of Times Mirror. The Times Mirror board unanimously recommends
that you vote FOR the merger proposal.
Opinions of Financial Advisors (See Page 32)
Opinion of Tribune's Financial Advisor. In deciding to approve the merger,
the Tribune board of directors considered the opinion of its financial advisor,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, that, as of the date of the
opinion and based upon and subject to the factors and assumptions set forth
therein, the consideration into which each outstanding share of Times Mirror
common stock would be converted in the tender offer and the merger, taken
together and not separately, was fair from a financial point of view to
Tribune. We attach the full text of this opinion as Annex D to this proxy
statement/prospectus. Tribune urges its stockholders to read the opinion of
Merrill Lynch in its entirety.
Opinion of Times Mirror's Financial Advisor. In deciding to approve the
merger, the Times Mirror board of directors considered the oral opinion,
subsequently confirmed in writing, of its financial advisor, Goldman, Sachs &
Co., that, as of the date of the written opinion, the stock consideration and
cash consideration to be received by the holders of Times Mirror common stock,
in the aggregate, is fair from a financial point of view to the holders of
shares of Times Mirror common stock receiving such consideration. We attach the
full text of this opinion as Annex E to this proxy statement/prospectus. Times
Mirror urges its stockholders to read the opinion of Goldman, Sachs & Co. in
its entirety.
Interests of Certain Persons in the Merger (See Page 56)
Some of the directors and executive officers of Times Mirror have interests
in the merger that are different from, and/or are in addition to, the interests
of Times Mirror's stockholders. These interests include the potential for
appointment to the Tribune board, the receipt of benefits and severance
payments as a result of the merger, and the right to continued indemnification
and insurance coverage
8
<PAGE>
by Tribune for acts or omissions occurring prior to the merger. For information
concerning the interests of the Chandler Trusts in the merger, see "The Merger
Agreement--Tribune Board Representation and Los Angeles Times Subsidiary
Matters" and "Representation of the Chandler Trusts on the Tribune Board of
Directors."
Tribune Board Representation and Los Angeles Times Subsidiary Matters (See Page
67)
Together, Chandler Trust No. 1 and Chandler Trust No. 2 hold shares of Times
Mirror common stock having approximately 73% of Times Mirror's voting power,
and have agreed to vote in favor of the merger. When we complete the merger,
Tribune will increase the size of its board of directors to sixteen, and will
appoint four individuals associated with the Chandler Trusts to the Tribune
board. Three of these four individuals will form a special nominating committee
of the Tribune board. The members of this special nominating committee will be
entitled to renominate themselves, or to nominate their successors, until the
Chandler Trusts either terminate or dispose of more than 15% of the shares of
Tribune common stock that they acquire in the merger.
In addition, this special nominating committee will appoint 40% of the
members of the board of directors of a separate subsidiary holding the Los
Angeles Times. Appointment of the publisher of the Los Angeles Times and, with
some exceptions, the disposition of the Los Angeles Times, will require
approval of 75% of the members of the subsidiary board. This approval may not
be unreasonably withheld.
Conditions to the Merger (See Page 71)
Completion of the merger requires:
. approval and adoption of the merger agreement and the merger by the Tribune
stockholders and by the Times Mirror stockholders;
. the absence of any law or injunction preventing the merger;
. approval of the Tribune common stock to be issued in the merger for listing
on the New York Stock Exchange;
. compliance in all material respects by Tribune and Times Mirror with their
merger agreement covenants;
. receipt of legal opinions from counsel to Tribune and counsel to Times Mirror
to the effect that the merger will qualify as a reorganization under the
Internal Revenue Code; and
. receipt of any authorizations, consents, approvals or exemptions required to
be obtained pursuant to the merger agreement.
Termination of the Merger Agreement (See Page 72)
Tribune and Times Mirror may mutually agree to terminate the merger
agreement at any time. In addition, either company may terminate the merger
agreement if specified events do or do not occur. These include:
. if a law, court order or other government action prohibits the merger and can
no longer be appealed;
. if the stockholders of Tribune or Times Mirror vote against the merger and
the merger agreement; and
. if we do not complete the merger by December 31, 2000, unless the failure to
complete the merger is the result of a breach of the merger agreement by the
party seeking to terminate the merger agreement.
In addition, Tribune may terminate the merger agreement:
. if Times Mirror fails to perform in any material respect any agreement that
it is required to perform before the completion of the merger; or
. if the board of directors of Times Mirror withdraws or modifies, in a manner
adverse to Tribune, its recommendation of the merger or approves or
recommends an alternative transaction, or resolves to do either.
In addition, Times Mirror may terminate the merger agreement if Tribune
fails to perform in any material respect any agreement that it is required to
perform before the completion of the merger.
9
<PAGE>
Termination Fees (See Page 73)
The merger agreement requires Times Mirror to pay Tribune a termination fee
of $250 million under certain circumstances. Times Mirror must pay this fee:
. if Tribune terminates the merger agreement after the Times Mirror board of
directors changes its recommendation in a manner adverse to Tribune or
recommends an alternative transaction with a third party;
. if the merger agreement terminates because the Times Mirror stockholders vote
against the merger following a modification or withdrawal of the
recommendation of the Times Mirror board of directors; or
. if, prior to the Times Mirror special meeting, a third party makes a takeover
proposal, Times Mirror does not obtain stockholder approval, and on or prior
to the 12-month anniversary of termination of the merger agreement, a third
party completes an alternative transaction involving Times Mirror or Times
Mirror enters into an agreement covering an alternative transaction with a
third party.
Regulatory Matters (See Page 46)
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, we could not
complete the merger until we furnished certain information and documentary
material for review by the Federal Trade Commission and the Antitrust Division
of the Department of Justice and we satisfied the required waiting period. Both
Tribune and Times Mirror filed a Hart-Scott-Rodino Premerger Notification and
Report Form on March 27, 2000. Under the Hart-Scott-Rodino Act, the waiting
period for the merger expired on April 26, 2000.
Accounting Treatment (See Page 73)
We will account for the merger using the purchase method of accounting under
U.S. generally accepted accounting principles. See "Unaudited Selected Pro
Forma Condensed Consolidated Financial Information" and "The Merger--Accounting
Treatment."
10
<PAGE>
Selected Historical and Pro Forma Financial Information
In the table below, we provide you with Tribune's selected historical
financial information for each of the five years in the period ended December
26, 1999. Tribune derived the consolidated statement of income data for the
years ended December 26, 1999, December 27, 1998 and December 28, 1997 and the
consolidated balance sheet data as of December 26, 1999 and December 27, 1998
from audited consolidated financial statements, incorporated herein by
reference. Tribune derived the consolidated statement of income data for the
years ended December 29, 1996 and December 31, 1995 and the consolidated
balance sheet data as of December 28, 1997, December 29, 1996 and December 31,
1995 from audited consolidated financial statements not incorporated herein by
reference.
This information is only a summary and you should read it together with the
financial information incorporated by reference in this proxy
statement/prospectus. See "Where You Can Find More Information" on page 97.
Tribune Company
Selected Historical Financial Information
(In millions, except per share data)
<TABLE>
<CAPTION>
For the Year Ended
12/26/99 12/27/98 12/28/97 12/29/96 12/31/95
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Operating revenues............. $3,222 $2,981 $2,720 $2,406 $2,245
Income from continuing opera-
tions......................... 1,483(1) 414 394 283 245
Basic earnings per share from
continuing operations......... $ 6.17 $ 1.63 $ 1.53 $ 1.07 $ 0.87
Diluted earnings per share from
continuing operations......... $ 5.62 $ 1.50 $ 1.40 $ 0.99 $ 0.81
Weighted average common shares
outstanding--Basic............ 237 242 246 246 259
Weighted average common shares
outstanding--Diluted.......... 262 267 271 272 286
</TABLE>
<TABLE>
<CAPTION>
12/26/99 12/27/98 12/28/97 12/29/96 12/31/95
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total assets..................... $8,798 $5,936 $4,778 $3,701 $3,288
Long-term debt, less current ma-
turities........................ 2,694 1,616 1,521 980 757
Cash dividends per share......... $ 0.36 $ 0.34 $ 0.32 $ 0.30 $ 0.28
</TABLE>
- --------
(1) Includes non-operating items as follows: gain on change in fair values of
derivatives and related investments of $131 million, gain on
reclassification of investments of $666 million, and gain on sales of
subsidiary and investments of $270 million, totaling approximately $1
billion.
11
<PAGE>
In the table below, we provide you with Times Mirror's selected historical
financial information for each of the five years in the period ended December
31, 1999. Times Mirror derived the consolidated statement of income data for
the years ended December 31, 1999, December 31, 1998 and December 31, 1997 and
the consolidated balance sheet data as of December 31, 1999 and December 31,
1998 from audited consolidated financial statements and their notes in Times
Mirror's Annual Report on Form 10-K, as amended, for the year ended December
31, 1999, which we incorporate herein by reference. Times Mirror derived the
consolidated statement of income data for the years ended December 31, 1996 and
December 31, 1995 and the consolidated balance sheet data as of December 31,
1997, December 31, 1996 and December 31, 1995 from audited consolidated
financial statements not incorporated herein by reference.
This information is only a summary and you should read it together with the
financial information incorporated by reference in this proxy
statement/prospectus. See "Where You Can Find More Information" on page 97.
The Times Mirror Company
Selected Historical Financial Information
(In millions, except per share data)
<TABLE>
<CAPTION>
For the Year Ended December 31,
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Operating revenues.................. $3,029 $2,784 $2,645 $2,551 $2,529
Income (loss) from continuing opera-
tions.............................. 259 134(1) 235 182 (209)(2)
Basic earnings (loss) per share from
continuing operations.............. $ 3.53 $ 1.32 $ 2.18 $ 1.36 $(2.61)
Diluted earnings (loss) per share
from continuing operations......... $ 3.38 $ 1.29 $ 2.12 $ 1.32 $(2.61)
Weighted average common shares out-
standing--Basic.................... 68 85 93 102 114
Weighted average common shares out-
standing--Diluted.................. 73 87 97 105 114
</TABLE>
<TABLE>
<CAPTION>
December 31,
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Total assets........................ $3,897 $4,158 $3,172 $3,179 $3,445
Long-term debt, less current maturi-
ties............................... 1,562 941 925 459 247
Common stock subject to put op-
tions.............................. 27 23 14 38 --
Cash dividends declared per share... $ 0.80 $ 0.72 $ 0.55 $ 0.30 $ 0.24
</TABLE>
- --------
(1) Includes pretax charges comprised of restructuring and one-time charges of
$156 million and other charges that did not qualify for accounting
classification as restructuring charges of $19 million.
(2) Includes pretax charges comprised of restructuring and one-time charges of
$413 million and other charges that did not qualify for accounting
classification as restructuring charges of $46 million.
12
<PAGE>
Unaudited Selected Pro Forma Condensed Consolidated Financial Information
In the table below, we provide you with unaudited pro forma condensed
consolidated financial statements for Tribune as if its merger with Times
Mirror had been completed on January 1, 1999 for income statement purposes and
on December 26, 1999 for balance sheet purposes. These pro forma financial
statements give effect to Times Mirror's contribution of assets to TMCT II,
LLC, which occurred on September 3, 1999, as if the transaction occurred on
January 1, 1999. The data set forth below give effect to the merger using the
purchase method of accounting.
We prepared this information based upon currently available data. You should
read these unaudited pro forma condensed consolidated financial statements in
conjunction with the separate historical financial statements and accompanying
notes of Tribune and of Times Mirror, which we incorporate by reference in this
proxy statement/prospectus.
We have provided these pro forma condensed consolidated financial statements
for informational purposes only in response to requirements of the Securities
and Exchange Commission. We do not claim that they represent what Tribune's
financial position or results of operations would actually have been if the
transaction had in fact occurred at such dates or that they project Tribune's
financial position or results of operations for any future date or period.
For further discussion of the pro forma adjustments and more detailed pro
forma financial statements, see "Unaudited Pro Forma Condensed Consolidated
Financial Statements" on page 50.
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Acquisition
Tribune Times Mirror Pro Forma Adjusted
December 26, 1999 December 31, 1999 Adjustments Pro Forma
----------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>
Balance Sheet Data
Cash and cash equiva-
lents.................. $ 631,018 $ 144,319 $ (675,337) $ 100,000
Total assets............ 8,797,691 3,897,371 5,602,688 18,297,750
Total current liabili-
ties................... 860,596 866,130 24,161 1,750,887
Total non-current lia-
bilities............... 4,467,197 2,631,512 2,637,864 9,736,573
Total stockholders' eq-
uity................... 3,469,898 399,729 2,940,663 6,810,290
</TABLE>
Pro Forma Condensed Consolidated Statement of Income (Unaudited)
For the Year Ended December 26, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
LLC
Transaction Acquisition
Times Pro Forma Pro Forma Adjusted
Tribune Mirror Adjustments Adjustments Pro Forma
---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Income Statement Data
Operating revenues...... $3,221,890 $3,029,249 $ -- $ -- $6,251,139
Income from continuing
operations attributable
to common stockhold-
ers.................... $1,464,411 $ 240,996 $(23,745) $(294,932) $1,386,730
Earnings per share from
continuing operations
Basic................... $ 6.17 $ 4.30
Diluted (1)............. $ 5.62 $ 3.92
Cash dividends per
share.................. $ 0.36 $ 0.36
</TABLE>
- --------
(1) Excluding the impact of non-operating items, net, historical diluted
earnings per share from continuing operations for Tribune were $1.54 and
adjusted pro forma diluted earnings per share from continuing operations
were $0.87.
13
<PAGE>
Comparative Per Share Information
Historical and Pro Forma Per Share Data
In the table below, we provide selected historical and unaudited pro forma
per share data for Tribune and historical and equivalent unaudited pro forma
per share data for Times Mirror. The unaudited pro forma financial data give
effect to the acquisition of Times Mirror and Times Mirror's contribution of
assets to TMCT II, LLC, which occurred on September 3, 1999, as if such
transactions occurred on January 1, 1999. We determined the unaudited pro forma
equivalent per share data for Times Mirror based on the unaudited pro forma
amounts per share for Tribune, multiplied by 2.5. The data set forth below give
effect to the merger using the purchase method of accounting. You should read
the information set forth below in conjunction with the historical consolidated
financial data of Tribune incorporated by reference herein and the Unaudited
Pro Forma Condensed Consolidated Financial Statements on page 50.
<TABLE>
<CAPTION>
At or for
the Year
Ended
December 26,
1999
------------
<S> <C>
Tribune
Basic earnings per share from continuing operations
Historical........................................................ $ 6.17
Pro forma combined................................................ 4.30
Diluted earnings per share from continuing operations
Historical........................................................ 5.62
Pro forma combined................................................ 3.92
Book value per share
Historical........................................................ 14.59
Pro forma combined................................................ 21.14
Common dividends per share
Historical........................................................ 0.36
Pro forma combined................................................ 0.36
Times Mirror
Basic earnings per share from continuing operations
Historical........................................................ $ 3.53
Pro forma equivalent.............................................. 10.75
Diluted earnings per share from continuing operations
Historical........................................................ 3.38
Pro forma equivalent.............................................. 9.80
Book value per share
Historical........................................................ 6.69
Pro forma equivalent.............................................. 52.85
Common dividends per share
Historical........................................................ 0.80
Pro forma equivalent.............................................. 0.90
</TABLE>
14
<PAGE>
Comparative Per Share Market Price
and Dividend Information
The shares of Tribune common stock principally trade on the New York Stock
Exchange under the symbol "TRB." The shares of Times Mirror series A common
stock principally trade on the New York Stock Exchange under the symbol "TMC."
The shares of Times Mirror series C common stock do not trade in an established
trading market. Shares of the series C common stock do trade in the over-the-
counter market, but automatically convert into shares of Times Mirror series A
common stock on a share-for-share basis upon transfer of such shares to a non-
permitted transferee.
The table below provides you with the high and low sales prices of (a)
Tribune common stock as reported on the New York Stock Exchange Composite Tape,
(b) Times Mirror series A common stock as reported on the New York Stock
Exchange Composite Tape and (c) Times Mirror series C common stock as reported
on the over-the-counter market, in each case, based on published financial
sources.
<TABLE>
<CAPTION>
TIMES MIRROR TRIBUNE (1)
Series Series Series Series Cash Cash
A High A Low C High C Low Dividends High Low Dividends
------- ------ ------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fiscal 1997
First Quarter.......... $ 59.38 $46.13 $57.00 $47.25 $0.10 $21.19 $17.75 $0.080
Second Quarter......... 58.88 52.88 58.13 52.88 0.15 25.16 19.88 0.080
Third Quarter.......... 58.81 49.06 58.13 51.25 0.15 27.41 24.00 0.080
Fourth Quarter......... 61.75 52.13 61.00 55.00 0.15 30.75 25.78 0.080
Fiscal 1998
First Quarter.......... $ 64.56 $56.94 $63.38 $57.75 $0.18 $34.38 $29.16 $0.085
Second Quarter......... 65.81 58.06 64.44 61.00 0.18 36.19 31.41 0.085
Third Quarter.......... 63.69 52.31 62.00 50.00 0.18 37.53 25.00 0.085
Fourth Quarter......... 61.44 48.94 60.00 51.75 0.18 33.75 22.38 0.085
Fiscal 1999
First Quarter.......... $ 59.94 $53.31 $58.81 $48.00 $0.20 $34.88 $30.16 $0.090
Second Quarter......... 63.31 53.38 62.00 53.31 0.20 44.56 32.25 0.090
Third Quarter.......... 66.81 57.25 65.25 52.00 0.20 49.97 42.09 0.090
Fourth Quarter......... 72.63 62.94 70.75 60.00 0.20 60.88 46.00 0.090
Fiscal 2000
First Quarter.......... $ 94.88 $47.69 $90.00 $50.00 $0.22 $55.69 $27.88 $0.100
Second Quarter (through
May 4, 2000).......... $102.56 $92.69 $94.00 $85.00 -- $41.44 $36.31 $0.100
</TABLE>
- --------
(1) On July 27, 1999, the board of directors of Tribune declared a two-for-one
common stock split, distributed on September 9, 1999, to stockholders of
record at close of business on August 19, 1999. In this table, we have
restated the figures for the periods before that date to reflect the stock
split.
15
<PAGE>
The closing price for Tribune common stock was:
. $37.19 on March 10, 2000, the last trading day before we announced the
execution of the merger agreement; and
. $37.94 on May 4, 2000, the last trading day before the date of this
proxy statement/prospectus.
The closing price for Times Mirror series A common stock was:
. $47.94 on March 10, 2000, the last trading day before we announced the
execution of the merger agreement; and
. $95.00 on May 4, 2000, the last trading day before the date of this
proxy statement/prospectus.
The closing price for Times Mirror series C common stock was:
. $50.00 on February 29, 2000, the last day on which a trade occurred in
such shares before the execution of the merger agreement; and
. $91.00 on April 25, 2000, the last day on which a trade occurred in such
shares before the date of this proxy statement/prospectus.
The equivalent per share price (which is the value you would have received
for each share of Times Mirror common stock you own if the merger had been
completed and you had exchanged your shares of Times Mirror common stock for
shares of Tribune common stock on the dates listed) was:
. $92.98 on March 10, 2000, the last day on which a trade occurred in
shares of Times Mirror series A common stock before the execution of the
merger agreement;
. $97.35 on February 29, 2000, the last day on which a trade occurred in
shares of Times Mirror series C common stock prior to the execution of
the merger agreement;
. $94.85 on May 4, 2000, the last day on which a trade occurred in shares
of Times Mirror series A common stock before the date of this proxy
statement/prospectus; and
. $100.47 on April 25, 2000, the last day on which a trade occurred in
shares of Times Mirror series C common stock before the date of this
proxy statement/prospectus.
We urge you to obtain current market quotations before voting your shares.
The 2.5 to 1 exchange ratio fixed by the merger agreement will not change even
if our stock prices change. For this reason, the market value of the shares of
Tribune common stock that holders of Times Mirror common stock will receive in
the merger may vary significantly from the market value of the shares of
Tribune common stock that holders of Times Mirror common stock would receive if
the merger were consummated on the date of this proxy statement/prospectus.
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RISK FACTORS
In addition to the other information included in this proxy
statement/prospectus (including the matters addressed in "Cautionary Statement
Concerning Forward-Looking Statements"), you should consider the following in
determining whether to vote in favor of the merger.
The Merger Consideration Will Not Change Even if Our Stock Prices Change
When we complete the merger, we will convert each share of Times Mirror
common stock into 2.5 shares of Tribune common stock or, at the election of the
Times Mirror stockholder, $95 in cash. The cash election will be available only
to the extent that Tribune has purchased fewer than 28 million shares of Times
Mirror common stock prior to the merger. As of the date of this proxy
statement/prospectus, Tribune has purchased 23,305,244 shares of Times Mirror
common stock in a tender offer that Tribune completed on April 17, 2000 and in
the open market. The merger agreement does not contain any provision that would
adjust the exchange ratio based on fluctuations in the price of either
company's common stock. The value of the stock consideration you receive
depends on the market price of Tribune common stock at the time we complete the
merger. The market price of Tribune common stock could decline before the
effective time of the merger. This could happen due to market conditions or
other factors. Times Mirror may not terminate the merger agreement solely
because the market price of Tribune's common stock declines.
Integration of Tribune and Times Mirror Operations May Be Difficult
The merger involves the integration of two companies that have previously
operated independently. Tribune may not be able to integrate Times Mirror's
operations without encountering difficulties or experiencing the loss of key
employees, customers or suppliers. In addition, we cannot assure you that we
will realize the benefits we expect from this integration.
The Interests of Times Mirror Directors and Officers in the Merger May Be
Different From the Interests of Other Stockholders
Some of the directors and officers of Times Mirror have interests in the
merger that are different from, and/or are in addition to, the interests of
Times Mirror's stockholders. These interests include the potential for
appointment to the Tribune board, the receipt of benefits and severance
payments as a result of the merger, and the right to continued indemnification
and insurance coverage by Tribune for acts or omissions occurring prior to the
merger. These interests may influence these directors and officers in making
their recommendation that you vote in favor of the adoption of the merger
agreement. See "Interests of Certain Persons in the Merger," "Tribune Board
Representation and Los Angeles Times Subsidiary Matters" and "Representation of
the Chandler Trusts on the Tribune Board of Directors."
Federal Communications Commission Rules Restrict Ownership of a Broadcast
License and a Newspaper in the Same Market
After the merger, Tribune will own both a newspaper and a television
broadcast license in each of Los Angeles, Hartford and New York. Under the
rules of the Federal Communications Commission, a broadcast license will not be
granted to a party which owns a newspaper in the same market. The Federal
Communications Commission's policy with respect to this rule permits a
broadcaster who acquires a newspaper in its market to hold that newspaper until
the later of one year or the next renewal date for its broadcast license. The
renewal dates for the broadcast licenses in the markets which will be affected
by the merger are August 1, 2006 (Los Angeles), December 1, 2006 (Hartford) and
February 1, 2007 (New York).
We cannot assure you that this rule will be revised or eliminated prior to
the dates set forth above. If this rule has not been revised or eliminated
before the dates specified above, Tribune will either request waivers or
otherwise seek appropriate relief. We cannot assure you that Tribune will
obtain any such waivers or relief on terms acceptable to Tribune, if at all.
Absent acceptable waivers or relief from this rule, Tribune could have to
dispose of either its broadcast licenses or the newspapers it would acquire in
the Los Angeles, Hartford and New York markets as a result of the merger.
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Failure to Complete the Merger Could Adversely Affect Times Mirror's Stock
Price and Future Business and Operations
If we do not complete the merger for any reason, Times Mirror may be subject
to the following material risks:
. the price of Times Mirror common stock may decline to the extent that
the current market price of Times Mirror common stock reflects a market
assumption that we will complete the merger;
. if Times Mirror is acquired by or enters into an agreement to be
acquired by another party prior to the 12-month anniversary of the
termination of the merger agreement, Times Mirror may be required to pay
a fee of $250 million and may be subject to other legal remedies
available to Tribune;
. a potential competing bidder for Times Mirror may no longer be
interested in acquiring Times Mirror;
. Times Mirror must pay its own costs related to the merger, such as
legal, accounting and financial advisor fees, even if the merger is not
completed; and
. the business and operations of Times Mirror, including the management of
Times Mirror, could be disrupted.
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CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Tribune
and Times Mirror each make forward-looking statements in this proxy
statement/prospectus and in other documents filed with the Securities and
Exchange Commission to which we refer you. These statements may include
statements regarding the period following completion of the merger. For each of
these forward-looking statements we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995.
Words such as "anticipate," "estimate," "expects," "projects," "intends,"
"plans," "believes" and similar words and terms identify forward-looking
statements. All forward-looking statements are management's present
expectations of future events and are subject to a number of factors and
uncertainties that could cause actual results to differ materially. These
factors and uncertainties include risks related to the businesses of Tribune
and Times Mirror, as well as the factors relating to the merger discussed under
"Risk Factors." Stockholders should not place undue reliance on the forward-
looking statements, which speak only as of the date of this proxy
statement/prospectus or the date of the document incorporated by reference in
this proxy statement/prospectus. Neither Tribune nor Times Mirror is under any
obligation, and each expressly disclaims any obligation, to update or alter any
forward-looking statements.
For additional information about risks and uncertainties that could cause
actual results to differ materially from those described in the forward-looking
statements, please see the annual report on Form 10-K that Tribune has filed
with the Securities and Exchange Commission and the annual report on Form 10-K,
as amended, that Times Mirror has filed with the Securities and Exchange
Commission.
The cautionary statements set forth above also apply to all subsequent
forward-looking statements attributable to Tribune or Times Mirror or any
person acting on their behalf relating to the matters we describe in this proxy
statement/prospectus.
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THE SPECIAL MEETINGS
We are furnishing this proxy statement/prospectus in connection with the
solicitation of proxies by each of Tribune's and Times Mirror's board of
directors in connection with the merger proposal and other related matters. We
are first sending this proxy statement/prospectus to stockholders of Tribune
and Times Mirror on or about May 11, 2000. You should read this proxy
statement/prospectus carefully before voting your shares.
Date, Time and Place of the Special Meetings
The special meetings are scheduled to be held as follows:
For Tribune stockholders: For Times Mirror stockholders:
June 12, 2000 June 12, 2000
9:00 a.m., Chicago time 9:30 a.m., Los Angeles time
Tribune Company The Times Mirror Company
Campbell Hall, 7th Floor Harry Chandler Auditorium
435 North Michigan Avenue Times Mirror Square
Chicago, Illinois Los Angeles, California
What You Will Vote On
Tribune. At the special meeting, we will ask you to consider and vote upon
the following items:
1. To approve and adopt the merger agreement. Approval of the merger
agreement will include approval of the merger of Times Mirror with and
into Tribune, the issuance of shares of Tribune common stock in the
merger, and the amendment to Tribune's restated certificate of
incorporation to increase the authorized number of shares of Tribune
common stock and Tribune preferred stock and to permit amendment of
certain provisions of Tribune's bylaws only by the vote of all of the
holders of the outstanding Tribune voting stock or all of the members of
the Tribune board of directors. The proposed amendment to Tribune's
restated certificate of incorporation is attached as Annex C to this
proxy statement/prospectus.
2. To transact any other business as may properly come before the special
meeting or any adjournment or postponement of the special meeting.
Times Mirror. At the special meeting, you will be asked to consider and vote
upon the following items:
1. To approve and adopt the merger agreement and the transactions
contemplated by the merger agreement.
2. To transact any other business as may properly come before the special
meeting or any adjournment or postponement of the special meeting.
Stockholder Record Date for the Special Meetings
Tribune. Tribune's board of directors has fixed the close of business on May
5, 2000 as the record date for determination of Tribune's stockholders entitled
to notice of and to vote at the special meeting. On May 3, 2000, there were
228,969,744 shares of Tribune common stock entitled to notice of and to vote at
the special meeting held by approximately 6,053 holders of record.
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Times Mirror. Times Mirror's board of directors has fixed the close of
business on May 5, 2000 as the record date for determination of Times Mirror's
stockholders entitled to notice of and to vote at the special meeting. On April
28, 2000 there were 40,199,738 shares of Times Mirror series A common stock and
15,906,860 shares of Times Mirror series C common stock entitled to notice of
and to vote at the special meeting, held by approximately 2,502 and 828 holders
of record, respectively. On April 28, 2000 there were 96,249,256 shares of
Times Mirror series A common stock outstanding, held by approximately 2,506
holders of record and 15,906,860 shares of Times Mirror series C common stock
outstanding, held by approximately 832 holders of record. Certain shares of
Times Mirror common stock held by TMCT, LLC and TMCT II, LLC are not entitled
to vote.
Quorum
Tribune. In order to have a quorum, holders of record of shares of Tribune
common stock having a majority of the votes entitled to be cast must be
represented in person or by proxy at the special meeting. Regardless of whether
a quorum is present or represented, the chairman of the meeting, or
stockholders represented in person or by proxy voting a majority of the votes
cast by such stockholders, will have the power to adjourn the meeting to
another time and/or place.
Times Mirror. In order to have a quorum, holders of record of a majority in
voting interest of the Times Mirror series A common stock and the Times Mirror
series C common stock entitled to vote at the special meeting must be
represented in person or by proxy at the special meeting. If a quorum is not
present, a majority in interest of the stockholders present in person or by
proxy and entitled to vote may adjourn the meeting.
Vote Required for Approval
Tribune. The merger agreement proposal must be approved by the affirmative
vote of a majority of the voting power of the Tribune common stock. Each share
of Tribune common stock is entitled to cast one vote. As of May 3, 2000, the
directors and executive officers of Tribune and their affiliates owned and were
entitled to vote 4,824,586 shares (or 1.94%) of Tribune common stock.
Times Mirror. The merger agreement proposal must be approved by the
affirmative vote of holders of a majority of the voting power of the
outstanding shares of Times Mirror series A common stock and Times Mirror
series C common stock, voting together as a single class. Each share of Times
Mirror series A common stock is entitled to cast one vote. Each share of Times
Mirror series C common stock is entitled to cast 10 votes. As of April 18,
2000, the directors and executive officers of Times Mirror and their affiliates
owned and were entitled to vote 1,780,835 shares of Times Mirror series A
common stock (or 0.90% of the voting power of the outstanding shares of Times
Mirror series A common stock and Times Mirror series C common stock, voting
together as a single class). As of April 18, 2000, the directors and executive
officers of Times Mirror and their affiliates owned and were entitled to vote
14,526,056 shares of Times Mirror series C common stock (or 73.11% of the
voting power of the outstanding shares of Times Mirror series A common stock
and Times Mirror series C common stock, voting together as a single class). The
holders of a majority of Times Mirror's voting power have already agreed to
vote in favor of the merger agreement proposal.
Voting Your Shares
All shares of Tribune common stock represented by properly executed proxies
or voting instructions received before or at the Tribune special meeting and
all shares of Times Mirror common stock represented by properly executed
proxies or voting instructions received before or at the Times Mirror special
meeting will, unless the proxies or voting instructions are revoked, be voted
in accordance with the instructions indicated on those proxies or voting
instructions. If no instructions are indicated on a properly executed proxy
card or voting instructions, the shares will be voted FOR adoption of the
merger agreement. You are urged to mark the box on the proxy card and/or voting
instructions to indicate how to vote your shares.
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If a properly executed proxy card or voting instruction is returned and the
stockholder has abstained from voting on any matter, the Tribune common stock
or Times Mirror common stock represented by the proxy or voting instructions
will be considered present at the special meeting for purposes of determining a
quorum. However, an abstention will not be considered to have been voted in
favor of the merger proposal. If your shares are held in an account at a
brokerage firm or bank, you must instruct such firm or bank on how to vote your
shares. If an executed proxy card is returned by a broker or bank holding
shares which indicates that the broker or bank does not have discretionary
authority to vote at the special meeting, the shares will be considered present
at the meeting for purposes of determining the presence of a quorum, but will
not be considered to have been voted in favor of adoption of the merger
proposal. Your broker or bank will vote your shares only if you provide
instructions on how to vote by following the information provided to you by
your broker. Except as provided in the immediately following two sentences,
abstentions, failures to respond and broker non-votes will have the same effect
as a vote against adoption of the merger agreement. If you own shares of
Tribune common stock pursuant to a Tribune employee stock plan and do not
provide voting instructions prior to June 8, 2000, the trustee or nominee of
the applicable plan will vote your shares (and any shares not allocated to a
specific account) in the same proportion as the shares in each plan for which
voting instructions are received. If you own shares of Times Mirror common
stock pursuant to the Times Mirror ESOP or PAYSOP and do not provide voting
instructions by June 8, 2000, your shares will be voted by the trustee of the
applicable plan.
No other matters other than those mentioned above are expected to be brought
before either special meeting. If, however, other matters are presented, the
persons named as proxies will vote in accordance with their judgment with
respect to those matters, unless authority to do so is withheld in the proxy.
A stockholder may revoke his or her proxy at any time before it is voted by:
. notifying in writing the Corporate Secretary of Tribune Company at 435
North Michigan Avenue, Chicago, Illinois 60611, if you are a Tribune
stockholder, or the Secretary of The Times Mirror Company at Times
Mirror Square, Los Angeles, California 90053, if you are a Times Mirror
stockholder;
. submitting a subsequently dated proxy; or
. appearing in person and voting at the special meeting if you are a
holder of record.
If you own shares of Tribune common stock pursuant to a Tribune employee
stock plan, you can change your voting instructions at any time prior to June
8, 2000. You can do this in one of two ways. First, you can revoke your voting
instructions. Second, you can submit new voting instructions. If you choose
either of these two methods, you must submit your notice of revocation or your
new voting instructions to the secretary of Tribune prior to June 8, 2000. If
you submit your voting instructions electronically through the Internet or by
telephone, you can change your vote by submitting new voting instructions at
any time prior to June 8, 2000, using the same procedures, in which case your
later voting instructions will count and we will revoke your earlier voting
instructions.
In order to vote in person at a special meeting stockholders must attend the
meeting and cast their votes in accordance with the procedures at the special
meeting. Attendance at the special meeting will not in and of itself constitute
revocation of a proxy.
Voting Electronically or by Telephone
Because Delaware, the state in which both Tribune and Times Mirror are
incorporated, permits electronic submission of proxies through the Internet or
by telephone, instead of submitting proxies by mail on the enclosed proxy card
or voting instructions, many stockholders will have the option to submit their
proxies or voting instructions electronically through the Internet or by
telephone. Please note that there are separate arrangements for using the
Internet and telephone depending on whether your shares are registered in your
company's stock records in your name or in the name of a brokerage firm or
bank. Stockholders should check their proxy card or voting instructions
forwarded by their broker, bank or other holder of record to see which options
are available.
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The Internet and telephone procedures described below for submitting your
proxy or voting instructions are designed to authenticate stockholders'
identities, to allow stockholders to have their shares voted and to confirm
that their instructions have been properly recorded. We have been advised by
counsel that the procedures that have been put in place are consistent with the
requirements of Delaware law and the bylaws of Tribune and Times Mirror.
Stockholders submitting proxies or voting instructions via the Internet should
understand that there may be costs associated with electronic access, such as
usage charges from Internet access providers and telephone companies, that
would be borne by the stockholder.
Tribune holders of record may submit their proxies and/or voting
instructions:
. through the Internet by visiting a website established for that purpose
at http://www.eproxyvote.com/trb and following the instructions; or
. by telephone by calling the toll-free number (1-877-779-8683) and
following the recorded instructions.
Times Mirror holders of record may submit their proxies:
. if your shares are held in the Times Mirror Savings Plus Plan and/or the
Times Mirror Employee Stock Ownership Plan, by telephone by calling the
toll-free number (1-888-221-0694) and following the recorded
instructions;
. otherwise, by telephone by calling the toll-free number (1-877-289-2364)
and following the recorded instructions.
Cost of Solicitation
Tribune and Times Mirror will equally share the expenses incurred in
connection with the printing and mailing of this proxy statement/prospectus.
Tribune has retained Georgeson Shareholder Communications Inc., for a fee of
$15,000 plus additional charges related to telephone calls and other services,
to assist in the solicitation of proxies. Times Mirror has retained Georgeson
Shareholder Communications Inc., at an estimated cost of $10,000 plus
reimbursement of expenses, to assist in the solicitation of proxies. Tribune,
Times Mirror and their respective proxy solicitors will also request banks,
brokers and other intermediaries holding shares of Tribune or Times Mirror
common stock beneficially owned by others to send this proxy
statement/prospectus to, and obtain proxies from, the beneficial owners and
will reimburse the holders for their reasonable expenses in so doing.
Solicitation of proxies by mail may be supplemented by telephone, telegram and
other electronic means, advertisements and personal solicitation by the
directors, officers or employees of Tribune and Times Mirror. No additional
compensation will be paid to directors, officers or employees for such
solicitation.
Times Mirror stockholders should not send in their stock certificates with
their proxy cards and/or voting instructions.
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THE MERGER
This section of the proxy statement/prospectus describes material aspects of
the proposed merger, including the merger agreement. While we believe that the
description covers the material terms of the merger, this summary may not
contain all of the information that is important to you. You should carefully
read this entire proxy statement/prospectus and the other documents we refer to
for a more complete understanding of the merger. In addition, we incorporate by
reference important business and financial information about each of us into
this proxy statement/prospectus. You may obtain the information that we
incorporate by reference without charge by following the instructions in the
section entitled "Where You Can Find More Information."
The Companies
Tribune Company. Tribune is a media company engaged, through its
subsidiaries, in the publishing of newspapers, books, educational materials and
information in print and digital formats and the broadcasting, development and
distribution of information and entertainment principally in metropolitan areas
in the United States.
The principal executive offices of Tribune are located at 435 North Michigan
Avenue, Chicago, Illinois 60611. Its telephone number at such offices is (312)
222-9100.
The Times Mirror Company. Times Mirror is engaged principally in the
newspaper publishing, professional information and magazine publishing
businesses. The Company publishes the Los Angeles Times, Newsday, The Baltimore
Sun, The Hartford Courant, The Morning Call, The (Stamford) Advocate, Greenwich
Time and several smaller newspapers. The Company also provides information to
the aviation market and publishes magazines.
Times Mirror's principal executive offices are located at Times Mirror
Square, Los Angeles, California 90053. Its telephone number at such offices is
(213) 237-3700.
Background of the Merger
On April 25, 1999, John Madigan, Chairman, President and Chief Executive
Officer of Tribune, met with Mark Willes, Chairman of the Board, President and
Chief Executive Officer of Times Mirror. At this meeting, Mr. Madigan proposed
to Mr. Willes the possibility of a business combination between Tribune and
Times Mirror. At the end of the meeting, Mr. Willes requested more detailed
information about the proposal.
On May 27, 1999, Mr. Madigan sent a letter to Mr. Willes describing
Tribune's view of the strategic benefits of the proposed combination. On June
8, 1999, Mr. Willes called Mr. Madigan to request financial projections
supporting the benefits of the combination. Mr. Madigan responded to Mr.
Willes' request with a letter dated June 9, 1999, which contained pro forma
projections for the combination. These projections were based on a merger
between Tribune and Times Mirror in which 50% of the consideration would be
paid in Tribune common stock and 50% of the consideration would be paid in
cash, at a price of $82.50 per share.
Mr. Willes replied with a letter to Mr. Madigan dated June 17, 1999. Mr.
Willes' letter requested that correspondence regarding a business combination
between Tribune and Times Mirror cease, citing the perceived inability of the
Chandler Trusts to be able to agree to this type of transaction, but expressed
interest in a possible joint venture between Tribune's Los Angeles television
station and Times Mirror's Los Angeles newspaper. On June 21, 1999, Mr. Madigan
and Mr. Willes discussed by telephone the possibility of a Los Angeles
television/newspaper joint venture.
On July 1, 1999, Mr. Willes sent Mr. Madigan a letter stating that, after
consulting with his associates, Times Mirror would decline Tribune's offer to
explore the possible joint venture. On July 15, 1999,
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Mr. Madigan responded with a letter to Mr. Willes stating that he regretted Mr.
Willes' decision to abandon the discussions. There were no further discussions
between Tribune and Times Mirror on the subject of a business combination until
November 1999.
On November 9, 1999, Jack Fuller, President of Tribune Publishing, and
Thomas Unterman, then Chief Financial Officer of Times Mirror and the Manager
of Rustic Canyon Partners, LLC, the general partner of TMCT Ventures, which is
a venture capital fund in which the Chandler Trusts have an 80% interest, met
at a regularly scheduled meeting of the board of another company on which they
both serve. During a break in the meeting, the participants engaged in a
general discussion of issues regarding Times Mirror. At the end of the break,
Messrs. Fuller and Unterman had a brief discussion regarding whether a
transaction between Times Mirror and Tribune could be feasible for the Chandler
Trusts. Mr. Unterman said he would be in Chicago over Thanksgiving and might be
available then to talk.
On November 11, 1999, Mr. Fuller spoke with Mr. Unterman by telephone to
arrange a meeting with Mr. Unterman on November 27. On November 27, 1999,
Messrs. Madigan and Fuller met with Mr. Unterman and told him that Tribune
would be interested in exploring the possibility of a combination. Mr. Unterman
explained his understanding of certain transaction parameters resulting from
certain requirements of the Chandler Trusts that might affect the ability of
the Chandler Trusts to engage in such a transaction. At the end of this
meeting, a meeting between Messrs. Madigan and Fuller and representatives of
the Chandler Trusts was suggested.
On January 5, 2000, Messrs. Madigan and Fuller met with representatives of
the Chandler Trusts to discuss the possibility of a business combination
between Tribune and Times Mirror. At the conclusion of this meeting, it was
agreed that discussions should continue and that representatives of the
Chandler Trusts would visit Tribune management in Chicago in February. On
February 9, 2000, members of Tribune's senior management made a presentation to
representatives of the Chandler Trusts regarding the strategic and financial
rationale supporting a transaction between the companies.
On February 14, 2000, Tribune's board of directors met at a regularly
scheduled meeting and discussed the possible combination. The Tribune board
authorized continued discussions with the Chandler Trusts and discussions with
Times Mirror. Thereafter, representatives of Tribune and representatives of the
Chandler Trusts continued their discussions. This included discussion of the
structure of the proposed transaction because of the desire of the Chandler
Trusts to engage in a tax-free transaction and discussion of possible
participation in governance by some persons associated with the Chandler
Trusts. The governance participation discussed was with respect to the Tribune
board of directors and a separate board that would be created to oversee the
Los Angeles Times.
On February 29, 2000, representatives of the Chandler Trusts met with Mr.
Willes to inform him of their intention to pursue a transaction with Tribune
and to propose that the Times Mirror board of directors approve such a
transaction. Times Mirror contacted Goldman, Sachs & Co. and engaged Goldman,
Sachs & Co. as its financial advisor in connection with the possible sale of
all or a portion of Times Mirror.
On March 1, 2000, representatives of the Chandler Trusts met with members of
the senior management of Times Mirror and representatives from Times Mirror's
regular outside corporate counsel, Gibson, Dunn & Crutcher LLP, and Goldman,
Sachs & Co., to describe the status of the discussions between the Chandler
Trusts and Tribune, the requirements of the Chandler Trusts in order to proceed
with a transaction and their interest in addressing the Times Mirror board of
directors on the transaction and in moving forward with a transaction promptly.
Representatives of the Chandler Trusts indicated that they expected that Times
Mirror would receive a proposal from Tribune shortly, possibly as early as
March 3, 2000, following a scheduled meeting of the Tribune board of directors.
On March 2, 2000, during an executive session of a regularly scheduled
meeting of the Times Mirror board of directors, Mr. Willes advised the non-
Chandler Trusts members of the Times Mirror board of the
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status of developments and Gibson, Dunn & Crutcher LLP and Times Mirror's
financial advisors addressed various aspects of the proposed transaction. The
directors approved the retention of Goldman, Sachs & Co. as Times Mirror's
financial advisor with respect to the proposed transaction, and decided to
retain Skadden, Arps, Slate, Meagher & Flom LLP as special counsel to the non-
Chandler Trusts members of the Times Mirror board of directors, with Gibson,
Dunn & Crutcher LLP continuing to represent Times Mirror. The Chandler Trusts
directors and the legal advisors (Munger, Tolles & Olson LLP) and financial
advisors (Morgan Stanley & Co., Incorporated) to the Chandler Trusts then
joined the meeting and made a presentation regarding the background of their
discussions with Tribune, the specific requirements of a transaction that were
necessary for the Chandler Trusts to proceed, the strategic advantages of a
combination with Tribune and the desire of the Chandler Trusts to move forward
with a transaction. The representatives of the Chandler Trusts indicated that
there had been no detailed discussions about price.
On March 3, 2000, the Tribune board of directors met and approved an offer
to acquire Times Mirror through a merger at $90 per share of Times Mirror
common stock, on the terms described below, subject to the offer not being
disclosed to the public or any third party. Mr. Madigan then sent a letter to
the Times Mirror board of directors and the Trustees of the Chandler Trusts
setting forth Tribune's offer. The offer provided for a 50% cash/50% stock
election merger, at a price of $90 in cash per share of Times Mirror common
stock or its equivalent in Tribune common stock. The offer also contemplated
participation in governance by some persons associated with the Chandler
Trusts, both with respect to the Tribune board and a separate Los Angeles Times
board. The offer was conditioned on the agreement of the Chandler Trusts to
commit to vote all of their shares of Times Mirror common stock in favor of the
proposed merger and against any competing transactions, and on the merger
agreement not being terminable if a competing proposal was made to Times Mirror
unless the stockholders of Times Mirror failed to approve the transaction at a
meeting of such stockholders.
On March 6, 2000, counsel for Tribune provided Gibson, Dunn & Crutcher LLP,
Skadden, Arps, Slate, Meagher & Flom LLP and counsel for the Chandler Trusts
with a proposed form of merger agreement and voting agreement reflecting the
terms of Tribune's offer. On March 8, 2000, the non-Chandler Trusts members of
the Times Mirror board of directors convened with their financial and legal
advisors to review the Tribune offer. Representatives of Skadden, Arps, Slate,
Meagher & Flom LLP reviewed with the directors their duties in the context of
the proposal as well as the impact of the provision of Times Mirror's restated
certificate of incorporation that would permit the directors in their sole
discretion in connection with their approval of a merger to convert shares of
the high voting Times Mirror series C common stock (including those held by the
Chandler Trusts) to shares of low voting Times Mirror series A common stock.
Goldman, Sachs & Co. reviewed Times Mirror's current and projected financial
performance, Tribune's business, strategy, financial performance and reputation
in the market, and various valuation models for Times Mirror and other
newspaper acquisitions which had been recently completed. Goldman, Sachs & Co.
also addressed the potential interest of other acquirors. After an extended
discussion, these directors directed their advisors to indicate to Tribune and
the Chandler Trusts that the price of $90 per share of Times Mirror common
stock was too low and would need to be increased before Times Mirror was
prepared to pursue a transaction with Tribune. These directors further
indicated that they had significant reservations about the scope of the voting
agreement required by Tribune, particularly in light of the Times Mirror
restated certificate of incorporation provisions permitting the conversion of
the shares of Times Mirror series C common stock into shares of Times Mirror
series A common stock in certain circumstances.
On March 9, 2000, representatives of Times Mirror met with representatives
of the Chandler Trusts and reviewed the Times Mirror board's reaction to the
proposal, the need for an increased price and the board's resistance to the
scope of the voting agreement. In the course of those discussions, the Times
Mirror restated certificate of incorporation provision providing for conversion
of the shares of Times Mirror series C common stock was discussed. The
representatives of the Chandler Trusts forcefully objected to the non-Chandler
Trusts directors' view of the availability of that provision, indicating their
belief that any conversion pursuant to such provision was intended to be
effective only upon consummation of a transaction and not in advance of such
consummation, and stated that any attempt to utilize the provision would be
litigated by the Chandler Trusts.
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The parties discussed possible alternative structures for the transaction that
might ensure that the public stockholders were treated at least as favorably as
the Chandler Trusts and would permit another potential acquiror to make a
competing proposal.
On March 10, 2000, representatives of Tribune, Times Mirror and the Chandler
Trusts met to discuss the terms of the proposed merger and to commence
management interviews and due diligence. The representatives of Times Mirror
told the representatives of Tribune that, while the Times Mirror board of
directors had not yet authorized any transaction, they believed that any
transaction would need to be at a higher price than $90 per share of Times
Mirror common stock, and with a structure that would ensure that the public
stockholders had the opportunity to receive all stock for their shares of Times
Mirror common stock if they so desired. The Times Mirror representatives also
suggested the possibility of a cash tender offer as a first step in a two-step
acquisition, in order to allow Times Mirror stockholders the opportunity to
receive cash for their shares of Times Mirror common stock significantly
earlier than they would in a one-step merger. The representatives of the
Chandler Trusts told the Tribune representatives that the Chandler Trusts
agreed with the foregoing Times Mirror position and further required a
structure that would guarantee that the Chandler Trusts could elect to receive
all stock in the transaction. Finally, the Times Mirror representatives also
objected to Tribune's requirement that the Chandler Trusts enter into a
proposed voting agreement unconditionally obligating them to vote their shares
of Times Mirror common stock, representing approximately 67% of the Times
Mirror voting power, in favor of the merger.
On March 11, 2000, the Tribune board of directors met to approve increasing
the price of the cash portion of its offer to $92.50 per share of Times Mirror
common stock (leaving the stock portion at $90 per share of Times Mirror common
stock), to provide for a tender offer preceding the merger for up to 28 million
shares of Times Mirror common stock, and to provide for an unlimited stock
election in the merger, subject to the Chandler Trusts entering into a voting
agreement requiring the Chandler Trusts to vote their shares of Times Mirror
series C common stock in favor of the merger at their full voting power.
Following this meeting, representatives of Tribune informed representatives of
Times Mirror and of the Chandler Trusts of these revisions to Tribune's
proposal.
In the afternoon of March 11, the non-Chandler Trust members of the Times
Mirror board met with their legal and financial advisors to consider the status
of the discussions with representatives of Tribune and the Chandler Trusts as
well as the terms of the revised proposal from Tribune. Representatives from
Goldman, Sachs & Co. and Skadden, Arps, Slate, Meagher & Flom LLP advised these
directors that, while the revised Tribune proposal now provided all Times
Mirror stockholders who desired to receive all Tribune common stock for their
shares of Times Mirror common stock with the opportunity to do so, the proposal
still did not permit termination of the merger agreement by Times Mirror in the
event of a proposal from a third party and continued to be conditioned upon the
Chandler Trusts entering into a voting agreement at the time of execution of
any merger agreement requiring the Chandler Trusts to vote their shares of
Times Mirror series C common stock at their full voting power in favor of the
merger, thus assuring stockholder approval of the transaction proposed by
Tribune. The advisors also conveyed to these directors the views of the
representatives of the Chandler Trusts that the Times Mirror board did not have
the right to convert the shares of Times Mirror series C common stock into
shares of Times Mirror series A common stock in a manner that would prevent the
shares of Times Mirror series C common stock from voting on the proposed merger
at their full voting power, and that any attempt to do so would be vigorously
resisted by the Chandler Trusts. At the end of the meeting, these directors
instructed their advisors to continue to seek to improve the economic terms of
the proposed transaction and to seek to modify the terms of the voting
agreement.
The directors who are associated with the Chandler Trusts then joined the
meeting and the full Times Mirror board reviewed and approved various actions
taken by the Executive Compensation Subcommittee of the Compensation Committee
on March 2, 2000 with respect to severance and other employee benefits upon a
change of control of Times Mirror. Following that portion of the meeting, Mr.
Madigan and other Tribune executives made a presentation to the full Times
Mirror board of directors, joined by certain trustees of the
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Chandler Trusts, regarding the financial performance and future prospects of
Tribune and the perceived benefits of the Tribune-Times Mirror combination.
In the evening of March 11, representatives of Times Mirror and
representatives of the Chandler Trusts informed the Tribune representatives
that Times Mirror and the Chandler Trusts would be willing to agree to a
transaction at $95 in cash per share of Times Mirror common stock for up to 28
million shares of Times Mirror common stock and an exchange ratio of 2.5 shares
of Tribune common stock for each share of Times Mirror common stock that did
not elect cash (representing a value of $93 in Tribune common stock for each
share of Times Mirror common stock electing Tribune common stock based on the
closing price of the Tribune common stock on March 10, 2000). The
representatives of Times Mirror and of the Chandler Trusts also said that they
would agree to the proposed voting agreement; provided, however, that, in the
event a third party were to submit a competing bid prior to completion of the
Tribune tender offer that caused the Times Mirror board to change its
recommendation, the Chandler Trusts' commitment to vote in favor of the
transactions with Tribune would apply only to 28% of the total voting power of
Times Mirror, with the remaining shares of Times Mirror common stock held by
the Chandler Trusts voted in proportion to the vote of the shares of Times
Mirror common stock not held by the Chandler Trusts. The representatives of
Tribune informed the Times Mirror representatives and the Chandler Trusts'
representatives that they would be willing to recommend that the Tribune board
approve these economic terms, but only if the Chandler Trusts agreed
unconditionally to vote all of their shares of Times Mirror common stock in
favor of the transaction and the board did not take any action to convert the
shares of Times Mirror series C common stock into shares of Times Mirror series
A common stock. Tribune also indicated that its proposal, by its terms, would
expire on March 13 if it was not accepted by that time.
On March 12, 2000, counsel for Tribune met with Skadden, Arps, Slate,
Meagher & Flom LLP to discuss possible means of resolving the parties'
disagreement with respect to the terms of the voting agreement with the
Chandler Trusts. Following these meetings, the Tribune representatives informed
the Times Mirror representatives and the Chandler Trusts' representatives that
they would be willing to recommend to the Tribune board that it approve a
voting agreement providing that the Chandler Trusts' vote in favor of the
transaction with Tribune would be reduced to 40% of the total voting power of
Times Mirror (with the remaining shares of Times Mirror common stock held by
the Chandler Trusts voted in proportion to the vote of the shares of Times
Mirror common stock not held by the Chandler Trusts) in the event a competing
offer were made that caused the Times Mirror board to change its recommendation
of the Tribune offer within 20 days of the announcement of the execution of the
merger agreement, but only in the event that the exchange ratio was 2.35 shares
of Tribune common stock for each share of Times Mirror common stock that did
not elect cash. The representatives of Times Mirror responded that, based upon
the overall terms of the proposed transaction, they would be willing to support
these terms in their presentation to the Times Mirror board if the exchange
ratio remained at the previously proposed 2.5. The representatives of Times
Mirror and of the Chandler Trusts also provided the Tribune representatives
with their other comments on the proposed forms of merger agreement and voting
agreement.
In the evening of March 12, 2000, the board of directors of Tribune met,
approved the revisions to the Tribune proposal described above, but with an
exchange ratio of 2.5, authorized Tribune to enter into the merger agreement
and the voting agreement on these terms, and resolved to recommend approval of
the transaction to Tribune stockholders. Following the meeting of the Tribune
board of directors, the board of directors of Times Mirror met, and after
reviewing all aspects of the proposed transaction, approved the transaction on
these revised terms, authorized Times Mirror to enter into the merger
agreement, and resolved to recommend approval of the transaction to Times
Mirror stockholders. On March 13, 2000, following finalization of the merger
agreement and the voting agreement on these terms, Tribune and Times Mirror
executed the merger agreement, and Tribune, the Chandler Trusts and the other
parties to the voting agreement executed the voting agreement.
On March 21, 2000, Tribune commenced a tender offer for up to 28 million
shares of Times Mirror common stock. Pursuant to the tender offer, Tribune
purchased 23,148,044 shares of Times Mirror common
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stock, or approximately 40% of the outstanding shares of Times Mirror common
stock, at the price of $95 net, in cash, per share of Times Mirror common
stock. The tender offer was completed as of midnight on April 17, 2000.
Recommendation of the Tribune Board and Tribune's Reasons for the Merger
On March 3, March 11 and March 12, 2000, the Tribune board of directors met
to review and evaluate the terms of a potential transaction with Times Mirror.
On March 12, the Tribune board of directors unanimously determined that it is
advisable, consistent with, in furtherance of, and otherwise in the best
interests of Tribune and its stockholders for Tribune to acquire up to 50% of
the outstanding shares of Times Mirror common stock in a tender offer for $95
per share in cash followed by a merger of Times Mirror with and into Tribune
in which each of the remaining outstanding shares of Times Mirror common stock
would be converted into the right to receive either 2.5 shares of Tribune
common stock or, to the extent available, $95 in cash. In reaching its
decision regarding the transaction with Times Mirror, the Tribune board of
directors considered, among other things:
. financial and strategic factors in connection with such a transaction;
. the results of its due diligence analysis;
. the analysis of Tribune management and Merrill Lynch of the financial
information of Times Mirror, Tribune and the combined company, which
included financial forecasts provided by Tribune relating to the
earnings, cash flow, assets, liabilities and prospects of Tribune and
Times Mirror, as well as the amount and timing of the cost savings and
related expenses and synergies expected to result from the transaction;
. legal considerations for the Tribune board of directors in applying its
fiduciary responsibilities to the proposed transaction;
. the terms and conditions of the merger agreement and the voting
agreement; and
. the support of the Chandler Trusts for the proposed transaction and
their willingness to enter into the voting agreement.
Moreover, the board of directors considered its view of or belief in each
of the following factors:
. Following completion of the merger, Tribune will have 11 daily
newspapers, 22 television stations and four radio stations. The combined
company will be one of the largest providers of interactive news and
information services in the U.S. and the largest multi-media company in
four of the nation's five most populous states--California, New York,
Illinois and Florida.
. Led by top interactive sites in New York, Los Angeles and Chicago, the
merger will create an Internet company with approximately $55 million in
projected 2000 revenue and an estimated 3.4 million unique monthly
visitors. This will place the combined company in the top 20 ranking for
news/information/entertainment interactive services.
. The combined company's Internet assets will provide marketers with a
powerful network that reaches a national audience and delivers deep
local market impact. The scale will enable Tribune to bring powerful
news and information services to its markets, as well as world-class
technology. The combined multi-media newsgathering resources and
technology assets will allow the combined company to deliver compelling
broadband news, advertising and information choices to consumers in the
future.
. The merger will enable Tribune to provide a compelling set of marketing
solutions in top metro newspaper markets and increase revenue from the
rapidly expanding national advertising category, including national
retailers.
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. The merger will bring together a worldwide newsgathering organization of
extraordinary quality, scope and depth, providing the public in the
communities served with news and opinion that is both diverse and
comprehensive. The combined company will have an expanded presence in
foreign bureaus and Washington, D.C., and increased national coverage
from other bureaus around the U.S.
. The combined company will provide opportunities for advertisers to reach
major market consumers in any media form--broadcast, newspapers or
interactive services. In addition, the combined company will benefit
consumers by giving them rich and diverse choices for obtaining news,
information and entertainment.
. The combined company can achieve significant cost savings related to the
consolidation of Internet operations, back office efficiencies and
newsprint purchasing and Times Mirror's newspaper margins can move
closer to Tribune's higher margins.
. Times Mirror is one of only a few very large, profitable, quality news
and information companies in the country. Its reputation for quality and
integrity complements that of Tribune. Consequently, Tribune management
believes that there is a strong cultural fit between the two
institutions. The combined company has won 82 Pulitzer Prizes.
In addition, the board received a report from Merrill Lynch, including its
written opinion to the effect that, as of the date of the opinion and based
upon and subject to the factors and assumptions set forth therein, the
consideration into which each outstanding share of Times Mirror common stock
would be converted in the tender offer and the merger, taken together and not
separately, was fair from a financial point of view to Tribune. A copy of
Merrill Lynch's written opinion, dated March 12, 2000, which sets forth the
procedures followed, the matters reviewed and the assumptions made by Merrill
Lynch, is attached as Annex D to this proxy statement/prospectus, and is
incorporated herein by reference. Tribune's stockholders are urged to read
Merrill Lynch's opinion in its entirety. See "The Merger--Opinion of Tribune's
Financial Advisor."
The foregoing discussion of the information and factors considered and given
weight by the Tribune board of directors is not intended to be exhaustive. In
view of the variety of factors considered in connection with its evaluation and
approval of the tender offer, the merger, the merger agreement and the
transactions contemplated thereby, the Tribune board did not find it
practicable to, and did not, quantify or otherwise assign relative weights to
the specific factors considered in reaching its determination. In addition,
individual members of the Tribune board may have assigned different weights to
different factors.
Recommendation of the Times Mirror Board and Times Mirror's Reasons for the
Merger
On March 12, 2000, the Times Mirror board of directors unanimously:
. determined that the merger agreement and the transactions contemplated
thereby, including the tender offer and the merger, are advisable, fair
to, and in the best interests of, the stockholders of Times Mirror;
. approved and adopted the merger agreement, the tender offer, the merger
and the other transactions contemplated thereby; and
. recommended that the holders of shares of Times Mirror common stock who
desire cash consideration for their shares of Times Mirror common stock
accept the tender offer and tender their shares of Times Mirror common
stock pursuant to the tender offer, and approve and adopt the merger
agreement and the transactions contemplated thereby.
In making its determination and recommendation with respect to the
transaction with Tribune, the Times Mirror board of directors considered a
number of factors, including, without limitation, the factors mentioned in the
section entitled "Background of the Merger" above and the following:
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. The financial and other terms of the tender offer, the merger, the
merger agreement and the related transaction agreements.
. The historical and recent market prices for the shares of Times Mirror
common stock, and that the $95 per share cash consideration to be paid
in the tender offer and the 2.5 shares of Tribune common stock to be
exchanged in the merger, on a blended basis, represented a significant
premium of approximately 100% over the closing price on the New York
Stock Exchange of the Times Mirror series A common stock ($47.94) on the
last trading day prior to the announcement of the execution of the
merger agreement.
. The oral opinion of Goldman, Sachs & Co. received by the Times Mirror
board of directors on March 12, 2000, which was subsequently confirmed
by its written opinion, that as of the date of the opinion, the stock
consideration and cash consideration to be received by the holders of
Times Mirror common stock in the aggregate is fair from a financial
point of view to the holders of shares of Times Mirror common stock
receiving such consideration. A copy of Goldman Sachs & Co.'s written
opinion, dated March 13, 2000, which sets forth the procedures followed,
the matters reviewed and the assumptions made by Goldman Sachs & Co., is
attached as Annex E to this proxy statement/prospectus, and is
incorporated herein by reference. Times Mirror's stockholders are urged
to read Goldman, Sachs & Co.'s opinion in its entirety.
. The terms and conditions of the merger agreement and the tender offer
and, in particular, the structure of the transaction providing Times
Mirror stockholders with the option of receiving (i) cash for their
shares of Times Mirror common stock pursuant to the tender offer,
subject to certain conditions, (ii) shares of Tribune common stock on a
tax-free basis or (iii) a combination of cash and shares of Tribune
common stock.
. The fact that the Times Mirror stockholders will have the opportunity to
hold equity in Tribune, a corporation with significant and diverse
businesses and moreover, that stockholders electing to receive shares of
Tribune common stock will continue to have the opportunity to obtain a
control premium in a future transaction involving Tribune.
. The fact that Tribune's editorial independence and journalism quality is
consistent with Times Mirror's traditions and integrity in the media
field.
. The fact that the Chandler Trusts, who are parties to the voting
agreement and hold approximately 32% of the outstanding shares of Times
Mirror common stock (including their interests in TMCT, LLC and TMCT II,
LLC) and control approximately 67% of the voting power of Times Mirror,
were in favor of the merger, the tender offer and the transactions
contemplated thereby.
. The high likelihood that the transactions contemplated by the merger
agreement and the tender offer would be consummated, particularly in
light of Tribune's reputation, ability to finance the transactions, lack
of any financing condition in the merger agreement and ability to
terminate the tender offer and the merger agreement only in limited
circumstances.
. Times Mirror's future prospects, financial resources and condition,
ability to access the capital markets, as well as the increased
competition in all segments of Times Mirror's business from other
companies and the significant challenges that Times Mirror would face if
it did not proceed with the proposed transaction with Tribune.
. The belief by the Times Mirror board that, after review by independent
members of the Times Mirror board, the transactions were fair and
equitable to, and presented an attractive valuation for, Times Mirror
stockholders.
The Times Mirror board additionally considered potential detriments involved
in the tender offer and the merger, which include, but are not limited to, the
following:
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. Provisions of Times Mirror's charter discussed above under the caption
"Background of the Merger" relating to and affected by the conversion of
shares of Times Mirror series C common stock into shares of Times Mirror
series A common stock in conjunction with the merger and the views of
the Chandler Trusts with respect to such conversion.
. The conditions imposed during the negotiation of the merger and the
terms of the merger agreement limiting Times Mirror's ability to
consider other proposals by third parties and requiring Times Mirror to
pay a $250 million termination fee under certain circumstances, which
make it more difficult for Times Mirror to engage in a transaction
superior to that contemplated by the merger agreement.
The Times Mirror board, however, determined that the foregoing detriments were
outweighed by the potential benefits of the transactions described above.
The foregoing discussion of the information and factors considered and given
weight by the Times Mirror board of directors is not intended to be exhaustive.
In view of the variety of factors considered in connection with its evaluation
and approval of the tender offer, the merger, the merger agreement and the
transactions contemplated thereby, the Times Mirror board did not find it
practicable to, and did not, quantify or otherwise assign relative weights to
the specific factors considered in reaching its determination. In addition,
individual members of the Times Mirror board may have assigned different
weights to different factors.
Opinion of Tribune's Financial Advisor
Tribune retained Merrill Lynch to act as its exclusive financial advisor in
connection with a possible business combination. On March 12, 2000, Merrill
Lynch rendered to the board of directors of Tribune its oral opinion,
subsequently confirmed in writing, that, as of such date and based upon and
subject to the factors and assumptions set forth therein, the consideration
into which each outstanding share of Times Mirror common stock would be
converted in the tender offer and the merger, taken together and not separately
(referred to for purposes of Merrill Lynch's opinion and analysis as the
"transaction") was fair from a financial point of view to Tribune.
THE FULL TEXT OF MERRILL LYNCH'S WRITTEN OPINION, WHICH SETS FORTH THE
ASSUMPTIONS MADE, MATTERS CONSIDERED, AND QUALIFICATIONS AND LIMITATIONS ON THE
REVIEW UNDERTAKEN BY MERRILL LYNCH, IS ATTACHED AS ANNEX D TO THIS PROXY
STATEMENT/PROSPECTUS AND IS INCORPORATED IN THIS PROXY STATEMENT/PROSPECTUS BY
REFERENCE. THE SUMMARY OF THE MERRILL LYNCH OPINION SET FORTH IN THIS PROXY
STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF THE MERRILL LYNCH OPINION. TRIBUNE STOCKHOLDERS ARE URGED TO READ THE
MERRILL LYNCH OPINION IN ITS ENTIRETY. THE MERRILL LYNCH OPINION WAS PROVIDED
TO THE BOARD OF DIRECTORS OF TRIBUNE FOR THE BOARD'S USE AND BENEFIT AND IS
DIRECTED ONLY TO THE FAIRNESS FROM A FINANCIAL POINT OF VIEW OF THE
CONSIDERATION INTO WHICH EACH OUTSTANDING SHARE OF TIMES MIRROR COMMON STOCK
WOULD BE CONVERTED IN THE TRANSACTION, DOES NOT ADDRESS THE MERITS OF THE
UNDERLYING DECISION BY TRIBUNE TO ENGAGE IN THE TRANSACTION AND DOES NOT
CONSTITUTE A RECOMMENDATION TO ANY TRIBUNE STOCKHOLDER AS TO HOW THAT
STOCKHOLDER SHOULD VOTE ON THE PROPOSED MERGER, OR ANY OTHER MATTERS RELATING
TO THE TRANSACTION. MERRILL LYNCH DID NOT EXPRESS ANY OPINION AS TO THE PRICES
AT WHICH THE SHARES OF TRIBUNE COMMON STOCK WOULD TRADE FOLLOWING THE
ANNOUNCEMENT OR CONSUMMATION OF THE TRANSACTION.
The consideration into which each outstanding share of Times Mirror common
stock would be converted in the transaction was determined through negotiations
between Tribune and Times Mirror. Merrill Lynch provided advice to Tribune
during the course of the negotiations.
The summary set forth below does not purport to be a complete description of
the analyses underlying the Merrill Lynch opinion. The preparation of a
fairness opinion is a complex analytic process involving various determinations
as to the most appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances and, therefore,
such an opinion is not readily susceptible to
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partial analysis or summary description. In arriving at its opinion, Merrill
Lynch did not attribute any particular weight to any analysis or factor
considered by it, but rather made qualitative judgments as to the significance
and relevance of each analysis and factor. Accordingly, Merrill Lynch believes
that its analyses must be considered as a whole and that selecting portions of
its analyses, without considering all analyses, would create an incomplete view
of the process underlying its opinion.
In performing its analyses, numerous assumptions were made with respect to
industry performance, general business, economic, market and financial
conditions and other matters, many of which are beyond the control of Merrill
Lynch, Tribune and Times Mirror. Any estimates contained in the analyses
performed by Merrill Lynch are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than
suggested by those analyses. Additionally, estimates of the value of businesses
or securities do not purport to be appraisals or to reflect the prices at which
those businesses or securities might actually be sold. Accordingly, these
analyses and estimates are inherently subject to substantial uncertainty. In
addition, the Merrill Lynch opinion was among several factors taken into
consideration by the board of directors of Tribune in making its determination
to approve the merger agreement and the merger. Consequently, the Merrill Lynch
analyses described below should not be viewed as determinative of the decision
of the board of directors of Tribune or Tribune's management with respect to
the fairness of the consideration into which each outstanding share of Times
Mirror common stock would be converted in the transaction.
In arriving at its opinion, Merrill Lynch, among other things:
. reviewed certain publicly available business and financial information
relating to Times Mirror and Tribune that Merrill Lynch deemed to be
relevant;
. reviewed certain information, including financial forecasts, relating to
the business, earnings, cash flow, assets, liabilities and prospects of
Times Mirror and Tribune, as well as the amount and timing of the cost
savings and related expenses and synergies expected to result from the
transaction furnished to Merrill Lynch by Times Mirror and Tribune,
respectively;
. conducted discussions with members of senior management and
representatives of Times Mirror and Tribune concerning the matters
described in the preceding two bullet points, as well as their
respective businesses and prospects before and after giving effect to
the transaction and the cost savings and related expenses and synergies
expected to result from the transaction;
. reviewed the market prices and valuation multiples for the Times Mirror
common stock and the Tribune common stock and compared them with those
of certain publicly traded companies that Merrill Lynch deemed to be
relevant;
. reviewed the results of operations of Times Mirror and Tribune and
compared them with those of certain publicly traded companies that
Merrill Lynch deemed to be relevant;
. compared the proposed financial terms of the transaction with the
financial terms of certain other transactions that Merrill Lynch deemed
to be relevant;
. participated in certain discussions and negotiations among
representatives of Times Mirror, the controlling stockholder of Times
Mirror and Tribune and their financial and legal advisors;
. reviewed the potential pro forma impact of the transaction;
. reviewed a draft of the merger agreement and the voting agreement by and
among Tribune and certain significant stockholders of Times Mirror; and
. reviewed such other financial studies and analyses and took into account
such other matters as Merrill Lynch deemed necessary, including its
assessment of general economic, market and monetary conditions.
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In preparing its opinion, Merrill Lynch assumed and relied on the accuracy
and completeness of all information supplied or otherwise made available to
Merrill Lynch, discussed with or reviewed by or for Merrill Lynch, or publicly
available, and Merrill Lynch did not assume any responsibility for
independently verifying such information or undertake an independent evaluation
or appraisal of any of the assets or liabilities of Times Mirror or Tribune and
was not furnished with any such evaluation or appraisal. In addition, Merrill
Lynch did not assume any obligation to conduct any physical inspection of the
properties or facilities of Times Mirror or Tribune. With respect to the
financial forecast information and the cost savings and related expenses and
synergies expected to result from the transaction furnished to or discussed
with Merrill Lynch by Times Mirror or Tribune, Merrill Lynch assumed that they
had been reasonably prepared and reflected the best currently available
estimates and judgment of Times Mirror's or Tribune's management as to the
expected future financial performance of Times Mirror or Tribune, as the case
may be, and the cost savings and related expenses and synergies expected to
result from the transaction. Merrill Lynch further assumed that the merger
would qualify as a tax-free reorganization for U.S. federal income tax
purposes. Merrill Lynch also assumed that the final form of the merger
agreement and the voting agreement by and among Tribune and certain significant
stockholders of Times Mirror would be substantially similar to the last draft
reviewed by Merrill Lynch.
Merrill Lynch's opinion is necessarily based upon market, economic and other
conditions as they exist and can be evaluated on, and on the information made
available to Merrill Lynch as of, the date of the opinion. Merrill Lynch
assumed that in the course of obtaining the necessary regulatory or other
consents or approvals (contractual or otherwise) for the transaction, no
restrictions, including any divestiture requirements or amendments or
modifications, will be imposed that will have a material adverse effect on the
contemplated benefits of the transaction.
Set forth below is a summary of the material analyses presented by Merrill
Lynch to the board of directors of Tribune on March 12, 2000 in connection with
the Merrill Lynch opinion.
Comparable Company Analysis. A comparable public company analysis reviews a
business's operating performance and outlook relative to a group of publicly
traded peer companies to determine an implied unaffected market trading value.
Merrill Lynch concluded that there were no publicly traded companies that were
directly comparable to Times Mirror. Accordingly, as a proxy for publicly
traded companies comparable to Times Mirror, Merrill Lynch, using publicly
available information and estimates of future financial results taken from
selected Wall Street equity research reports, compared certain financial and
other operating information related to Times Mirror with that of a group of
companies in the newspaper and magazine publishing/professional information
industry. For purposes of its analysis, Merrill Lynch identified the following
fourteen companies in the newspaper and magazine publishing/professional
information industry:
. Dow Jones & Company, Inc.;
. The New York Times Company;
. Gannett Co., Inc.;
. Journal Register Company;
. Hollinger International Inc.;
. The Washington Post Company;
. McClatchy Newspapers, Inc.;
. The E.W. Scripps Company;
. A.H. Belo Corporation;
. Knight-Ridder, Inc.;
. Lee Enterprises, Incorporated;
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. Pulitzer Inc.;
. Media General, Inc.; and
. Central Newspapers, Inc.
Merrill Lynch analyzed the adjusted market capitalization of each of the
foregoing companies as a multiple of estimated 2000 earnings before interest,
taxes, depreciation and amortization (referred to as EBITDA) and determined
that the relevant multiples ranged from 6.5x to 8.0x. The adjusted market
capitalization of each of the selected companies listed above was calculated as
equity value plus total debt plus the face value of preferred stock, if any,
plus the value of minority interests, if any, minus cash and marketable
securities and adjusted for off-balance sheet assets. Estimated 2000 EBITDA for
the selected companies was based on selected Wall Street equity research
reports. Based upon the application of the multiple analysis for the comparable
companies, Merrill Lynch calculated a summary reference range of implied per
share value of Times Mirror common stock of $58 to $72.
No company in the group of comparable companies is identical to Times
Mirror. Accordingly, an analysis of the results of such a comparison is not
purely mathematical; rather, it involves complex considerations and judgments
concerning differences in historical and projected financial, trading and
operating characteristics of the comparable companies and other factors that
could affect the value of such companies and Times Mirror.
Comparable Acquisition Transaction Analysis. A comparable acquisition
transaction analysis provides an implied valuation range based upon financial
information of companies which have been acquired in selected recent
transactions and which are in the same or similar industries as the business
being valued. Merrill Lynch reviewed the publicly available financial terms and
financial statistics of eight selected acquisition transactions in the
newspaper and magazine publishing/professional information industry over an
observation period beginning June 1993 and extending through October 1999. For
purposes of its valuation analysis, Merrill Lynch determined that the following
acquisition transactions were most comparable to the proposed transaction
between Times Mirror and Tribune:
. McClatchy Newspapers, Inc./The News and Observer Publishing Company;
. McClatchy Newspapers, Inc./Cowles Media Co., Inc.;
. The E.W. Scripps Company/Harte-Hanks, Inc.;
. Seattle Times (Blethen Corp.)/Guy Gannett Communications (five
newspapers);
. The New York Times Company/Worcester Telegram & Gazette Inc.;
. The New York Times Company/Affiliated Publications, Inc. (Boston Globe);
. Knight-Ridder, Inc./ABC Newspaper Group; and
. Gannett Co., Inc./Newsquest PLC.
For the selected acquisition transactions listed above, Merrill Lynch
analyzed the transaction value as a multiple of EBITDA of the target company
for the year in which the transaction occurred (based on publicly available
information and selected Wall Street equity research reports) and determined
that the relevant multiples ranged from 10.5x to 12.0x. The transaction value
of each of the selected acquisition transactions was calculated as offer value
plus total debt plus the face value of preferred stock, if any, plus the value
of minority interests, if any, minus cash and marketable securities and
adjusted for off-balance sheet assets. Based upon the application of the
multiple analysis for the comparable acquisition transactions, Merrill Lynch
calculated a summary reference range of implied per share value of Times Mirror
common stock of $95 to $109.
No company utilized in the comparable acquisition transaction analysis was
identical to Times Mirror. Accordingly, an analysis of the results of this
comparison is not purely mathematical; rather, it involves
35
<PAGE>
complex considerations and judgments primarily concerning differences in
historical and projected financial, operating and trading characteristics of
the companies involved in such other acquisition transactions and the
circumstances surrounding those transactions.
Discounted Cash Flow Analysis. A discounted cash flow analysis provides
insight into the intrinsic value of a business based on the projected earnings
and capital requirements and the net present value of the subsequent cash flows
anticipated to be generated by the assets of the business. Merrill Lynch
performed a discounted cash flow analysis by estimating the present value of
the future streams of the stand-alone, unlevered, after-tax free cash flows
that could be produced by Times Mirror for fiscal years 2000 through 2004,
based upon forecasts for those years prepared by the managements of Tribune and
Times Mirror. Ranges of estimated terminal values were calculated for fiscal
year 2004 based on estimated one year forward 2005 EBITDA exit multiples
ranging from 7.0x to 8.0x. Merrill Lynch discounted the free cash flow streams
and the estimated terminal values to a present value based upon an estimated
discount rate ranging from 9.0% to 11.0%. Based upon the discounted cash flow
analysis, Merrill Lynch calculated a summary reference range of implied per
share value of Times Mirror common stock of $68 to $82, before taking into
account estimated synergies anticipated by the management of Tribune to result
from the transaction. Merrill Lynch further determined that the summary
reference range of implied per share value of Times Mirror common stock would
increase to $103 to $117 after taking into account those synergies.
Sum-of-the-Parts Valuation Analysis. A sum-of-the parts valuation analysis
reviews a business's operating performance and outlook on a segment-by-segment
basis and compares each segment's performance to a group of publicly traded
peer companies to determine an implied market value for the enterprise as a
whole. Merrill Lynch performed a sum-of-the-parts valuation analysis for Times
Mirror Newspapers, Jeppesen Sanderson and Magazine Publishing segments by
separately analyzing projections for those segments provided by the managements
of Tribune and Times Mirror. For the Newspapers and Jeppesen Sanderson
segments, Merrill Lynch analyzed estimated 2000 EBITDA, and for the Magazine
Publishing segment, Merrill Lynch analyzed estimated 2000 revenues. Based on a
group of publicly-traded peer companies, Merrill Lynch applied relevant
multiple ranges to those projections to arrive at a range of enterprise values
for each of those segments. After subtracting estimated overhead costs and net
debt and adjusting for off balance sheet assets and assets held for sale,
Merrill Lynch calculated a summary reference range of implied per share value
of Times Mirror common stock of $95 to $117.
Historical Stock Price Analysis. Merrill Lynch observed that the 52-week
trading range of Times Mirror's common stock for the period preceding March 11,
2000 was from $47.94 to $72.63.
Research Analysts' Price Targets. Merrill Lynch also reviewed publicly
available equity research reports from selected Wall Street investment banks
and observed that the range of price targets for the per share value of Times
Mirror's common stock published in those reports ranged from $68 to $80.
Pro Forma Combination Analysis. Merrill Lynch discussed with the board of
directors of Tribune the potential pro forma impact of the transaction on
Tribune's reported earnings per share and cash earnings per share (defined as
diluted earnings per share before amortization of goodwill and intangibles),
after taking into account estimated synergies anticipated by the management of
Tribune to result from the transaction and assuming that 17 million to 28
million shares of Times Mirror common stock have been converted into cash in
the transaction. Based on financial information provided by the managements of
Tribune and Times Mirror and based on the synergy and share conversion
assumptions discussed above, Merrill Lynch analyzed the potential pro forma
effect on Tribune's projected reported earnings per share and cash earnings per
share for the years 2001 through 2005, by comparing those projections to the
combined projected earnings per share and cash earnings per share for Tribune
and Times Mirror as a combined entity. The pro forma combination analysis
indicated that the transaction would result in a dilution to Tribune's reported
earnings per share in 2001 of approximately 16% to 17% (depending on the actual
number of shares converted into cash, as discussed above) and an accretion to
reported earnings per share within three years following consummation of the
transaction.
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<PAGE>
The analysis further indicated that the transaction would be accretive to
Tribune's cash earnings per share within the first full year following
consummation of the transaction (i.e., in 2001).
As described above, Merrill Lynch's opinion and presentation to the board of
directors of Tribune was one of many factors taken into consideration by the
board in making its determination to recommend the merger agreement and the
transactions contemplated by the merger agreement. Consequently, the analyses
described above should not be viewed as determinative of the opinion of the
board of directors or management of Tribune with respect to the value of Times
Mirror or whether the board would have been willing to recommend a merger at a
different level of consideration.
Tribune retained Merrill Lynch to act as its financial advisor in connection
with the transaction. Merrill Lynch was selected by Tribune based on Merrill
Lynch's qualifications, expertise and reputation, as well as Merrill Lynch's
familiarity with Tribune. Merrill Lynch is an internationally recognized
investment banking and advisory firm. Merrill Lynch, as part of its investment
banking business, is continuously engaged in the valuation of businesses and
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for corporate and other
purposes.
Pursuant to an engagement letter dated February 29, 2000, Tribune engaged
Merrill Lynch to provide financial advisory services to it in connection with
the transaction, including, among other things, rendering the Merrill Lynch
opinion. Pursuant to the terms of the engagement letter, Tribune agreed to pay
Merrill Lynch a customary fee in connection with the transaction. In addition,
Tribune has agreed to reimburse Merrill Lynch for its out-of-pocket expenses,
including attorneys' fees, incurred in connection with its engagement, and to
indemnify Merrill Lynch and certain related persons against certain liabilities
and expenses arising out of or in conjunction with its rendering of services
under its engagement.
Merrill Lynch has, in the past, provided financial advisory and financing
services to Tribune, Times Mirror and their affiliates and may continue to do
so and has received, and may receive, fees for the rendering of such services.
In addition, in the ordinary course of Merrill Lynch's business, Merrill Lynch
may actively trade Times Mirror common stock and other securities of Times
Mirror, as well as shares of Tribune common stock, for its own account and for
the accounts of its customers and, accordingly, may at any time hold a long or
short position in such securities.
Opinion of Times Mirror's Financial Advisor
On March 13, 2000, Goldman, Sachs & Co. delivered its written opinion to the
board of directors of Times Mirror that as of the date of that opinion, the
stock consideration and cash consideration to be received by the holders of
shares of Times Mirror common stock, in the aggregate, are fair from a
financial point of view to the holders of shares of Times Mirror common stock
receiving such consideration.
THE FULL TEXT OF THE WRITTEN OPINION OF GOLDMAN, SACHS & CO. DATED MARCH 13,
2000, WHICH IDENTIFIES ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON
THE REVIEW UNDERTAKEN IN CONNECTION WITH THE OPINION, IS ATTACHED AS ANNEX E TO
THIS PROXY STATEMENT/PROSPECTUS. STOCKHOLDERS OF TIMES MIRROR ARE URGED TO, AND
SHOULD, READ THIS OPINION IN ITS ENTIRETY.
In connection with its opinion, Goldman, Sachs & Co. reviewed, among other
things:
. the merger agreement;
. the restated certificate of incorporation of Times Mirror dated January
20, 1995, as amended on January 31, 1995;
. Annual Reports to stockholders and Annual Reports on Form 10-K of Times
Mirror and Tribune for the five years ended December 31, 1998 and the
five fiscal years ended December 27, 1998, respectively;
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<PAGE>
. the draft Annual Reports to stockholders and Annual Reports on Form 10-K
of Times Mirror and Tribune for the year ended December 31, 1999 and the
fiscal year ended December 26, 1999, respectively;
. certain interim reports to stockholders and Quarterly Reports on Form
10-Q of Times Mirror and Tribune;
. certain other communications from Times Mirror and Tribune to their
respective stockholders; and
. certain internal financial analyses and forecasts for Times Mirror and
Tribune prepared by their respective managements.
Goldman, Sachs & Co. also held discussions with members of the senior
managements of Times Mirror and Tribune regarding their assessment of the
strategic rationale for, and potential benefits of, the transaction
contemplated by the merger agreement and the past and current business
operations, financial condition and future prospects of their respective
companies. In addition, Goldman, Sachs & Co.:
. reviewed the reported price and trading activity for Times Mirror common
stock and Tribune common stock;
. compared certain financial and stock market information for Times Mirror
and Tribune with similar information for certain other companies the
securities of which are publicly traded; and
. reviewed the financial terms of certain recent business combinations in
the newspaper industry specifically and in other industries generally
and performed such other studies and analyses as it considered
appropriate.
Goldman, Sachs & Co. relied upon the accuracy and completeness of all of the
financial and other information discussed with or reviewed by it and assumed
such accuracy and completeness for purposes of rendering its opinion. In
addition, Goldman, Sachs & Co. did not make an independent evaluation or
appraisal of the assets and liabilities of Times Mirror or Tribune or any of
their respective subsidiaries and Goldman, Sachs & Co. has not been furnished
with any such evaluation or appraisal. The opinion of Goldman, Sachs & Co. was
provided for the information and assistance of the board of directors of Times
Mirror in connection with its consideration of the transaction contemplated by
the merger agreement and such opinion does not constitute a recommendation as
to how any holder of shares of Times Mirror common stock should vote with
respect to such transaction or whether or not any holder of shares of Times
Mirror common stock should tender such shares in connection with such
transaction or elect to receive the stock consideration or cash consideration.
The following is a summary of the material financial analyses used by
Goldman, Sachs & Co. in connection with providing its written opinion to Times
Mirror's board of directors on March 13, 2000. Goldman, Sachs & Co. utilized
substantially the same type of financial analyses in connection with providing
the written opinion attached as Annex E to this proxy statement/prospectus.
THE FOLLOWING SUMMARIES OF FINANCIAL ANALYSES INCLUDE INFORMATION PRESENTED
IN TABULAR FORMAT. YOU SHOULD READ THESE TABLES TOGETHER WITH THE TEXT OF EACH
SUMMARY.
(i) Historical Stock Trading Analysis. Goldman, Sachs & Co. reviewed the
historical trading prices and volumes for Times Mirror series A common stock
and Times Mirror series C common stock. In addition, Goldman, Sachs & Co.
analyzed the consideration to be received by holders of shares of Times Mirror
common stock pursuant to the merger agreement in relation to the March 10, 2000
closing price, the one-month, three-month, six-month average market prices and
the fifty-two week high of Times Mirror series A common stock.
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<PAGE>
Such analysis indicated that the price per share to be paid pursuant to the
merger agreement represented:
PREMIUM TO TIMES MIRROR SHARES
<TABLE>
<CAPTION>
Closing Price on 1 Month 3 Month 6 Month 52-Week
Offer Price* March 10, 2000 Average Average Average High**
------------ ---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$93.83 $47.94 $52.45 $60.13 $63.74 $72.63
95.7% 78.9% 56.0% 47.2% 29.2%
</TABLE>
- --------
* Weighted average offer price assumes 28 million shares of Times Mirror
common stock are tendered for cash, the LYONs (convertible into 2.9 million
shares) are not converted and 38 million shares of Times Mirror common stock
(including 7.3 million options, calculated on a treasury stock basis)
receive Tribune common stock.
** Based on the 52-week period from March 10, 1999 to March 10, 2000.
(ii) Selected Companies Analysis. Goldman, Sachs & Co. reviewed and compared
certain financial information relating to Times Mirror and Tribune to
corresponding financial information, ratios and public market multiples for the
following six publicly traded corporations in the newspaper industry:
. Dow Jones & Company, Inc.;
. E.W. Scripps Company;
. Gannett Co., Inc.;
. Knight-Ridder, Inc.;
. New York Times Co.; and
. Washington Post Co.
Goldman, Sachs & Co. also calculated and compared various financial
multiples and ratios based on information it obtained from filings with the
Securities and Exchange Commission, Institutional Brokers Estimate System
estimates and Goldman, Sachs & Co. research analysts' estimates. The multiples
and ratios of Times Mirror were calculated using the closing price of the Times
Mirror series A common stock on March 10, 2000 and the multiples and ratios of
Tribune were calculated using the closing price of Tribune common stock on
March 10, 2000. The multiples and ratios for Times Mirror and Tribune were
based on information provided by Institutional Brokers Estimate System
estimates and Goldman, Sachs & Co. research analysts' estimates. The multiples
and ratios for each of the selected companies were based on the most recent
publicly available information as of March 10, 2000. Goldman, Sachs & Co.'s
analyses of the selected companies compared the leveraged market
capitalization, which is the market value of common equity plus the book value
of debt less cash, as a multiple of the selected companies' estimated calendar
year 2000 and 2001 earnings before interest, taxes, depreciation and
amortization, or EBITDA, to the results for Times Mirror and Tribune.
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<PAGE>
The results of these analyses, based on Goldman, Sachs & Co. research
analysts' estimates, are summarized as follows:
<TABLE>
<CAPTION>
Selected Companies
Levered Market
Capitalization
as a multiple of EBITDA: Range Median Times Mirror Tribune
------------------------ ----- ------ ------------ -------
<S> <C> <C> <C> <C>
2000E 6.4x-12.9x 10.8x 6.9x 11.2x
2001E 6.0x-12.1x 9.6x 6.4x 10.7x
Goldman, Sachs & Co. also compared the selected companies' estimated
calendar year 2000 and 2001 price/earnings ratios to the results for Times
Mirror and Tribune. The results of these analyses, based on Institutional
Brokers Estimate System median earnings per share estimates, are summarized as
follows:
<CAPTION>
Selected Companies
Price/Earnings
Ratio: Range Median Times Mirror Tribune
-------------- ----- ------ ------------ -------
<S> <C> <C> <C> <C>
2000E 12.4x-23.1x 19.8x 12.8x 21.1x
2001E 11.3x-20.2x 18.5x 11.5x 18.6x
</TABLE>
Goldman, Sachs & Co. also considered:
. five-year earnings per share growth rate based on Institutional Brokers
Estimate System, median earnings per share and growth estimates;
. estimated calendar year 2001 price/earnings ratios to the growth rate
provided by Institutional Brokers Estimate System; and
. dividend yield, based on filings with the Securities and Exchange
Commission.
The results of these analyses are summarized as follows:
<TABLE>
<CAPTION>
Selected
Companies
Range Median Times Mirror Tribune
---------- ------ ------------ -------
<S> <C> <C> <C> <C>
5 Year EPS Growth Rate* 10.0%-13.0% 12.0% 11.5% 13.0%
Estimated 2001E P/E to Growth
Rate Ratio* 1.0%-1.9% 1.4% 1.0% 1.4%
Dividend Yield 0.9%-1.9% 1.5% 1.8% 1.8%
</TABLE>
--------
*Based on Institutional Brokers Estimate System earnings per share and
growth estimates.
(iii) Discounted Cash Flow Analysis. Goldman, Sachs & Co. performed a
discounted cash flow analysis on Times Mirror using Times Mirror's management
projections for the years 2000 through 2002 and a range ofestimated revenue
growth rates and EBITDA margins for the years 2003 through 2009. Goldman, Sachs
& Co. calculated a net present value of free cash flows for the years 2000
through 2009 using discount rates ranging from 9.0% to 11.0% and using terminal
values in the year 2009 based on multiples ranging from 9.0x EBITDA to 11.0x
EBITDA. Goldman, Sachs & Co. calculated implied per share values of shares of
Times Mirror common stock using annual revenue growth rates ranging from 3.5%
to 5.0% and EBITDA margins in the year 2009 ranging from 21.0% to 25.0%, grown
ratably from management estimates in the year 2002. The terminal values in the
year 2009 were calculated based on a multiple of 10.0x EBITDA. These values
were then discounted to present value using a discount rate of 10.0%. This
analysis resulted in implied share values ranging from $76.25-99.90.
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<PAGE>
(iv) Selected Analysis of Multiples for Comparable Transactions. Goldman,
Sachs & Co. analyzed certain information, relating to the following eight
selected transactions in the newspaper industry since 1992:
. the Gannett Co., Inc. acquisition of Honolulu Advertiser;
. the News Corp. acquisition of San Antonio Express News;
. the New York Times Co. acquisition of Boston Globe and BCI
Communications;
. the McClatchy Newspapers, Inc. acquisition of Raleigh News and Observer;
. the Knight-Ridder, Inc. acquisition of Capital Cities;
. the TCI Communications acquisition of Kearns-Tribune Newspapers;
. the McClatchy Newspapers, Inc. acquisition of Minneapolis Star Tribune;
and
. the Hearst Corp. acquisition of San Francisco Chronicle.
Goldman, Sachs & Co.'s analyses of the selected transactions compared the
leveraged aggregate consideration as a multiple of the estimated EBITDA for the
year following the year in which the transaction occurred, or Forward EBITDA,
to the results for the proposed transaction.
The results of this analysis are summarized as follows:
<TABLE>
<CAPTION>
Levered Market
Capitalization
as a multiple Selected Transactions Proposed
of: Range Median Transaction
-------------- ----------- ------ -----------
<S> <C> <C> <C>
Forward EBITDA 11.0x-14.5x 12.4x 11.6x
</TABLE>
(v) Sum-of-the-Parts Valuation. Goldman, Sachs & Co. also analyzed, using
revenue and EBITDA estimates provided by Times Mirror management, the after-tax
value of each of the principal businesses (newspapers, Jeppesen and consumer
magazines), discontinued assets/minority investments, net pension assets and
net corporate expenses of Times Mirror, net debt, and summed them to derive an
aggregate estimated valuation per share of Times Mirror common stock on an
after-tax basis of $74-93, based on 68.9 million fully diluted shares based on
a price of Times Mirror common stock of $93.83 per share.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying Goldman, Sachs & Co.'s opinion. In arriving at its fairness
determination, Goldman, Sachs & Co. considered the results of all such
analyses. No company or transaction used in the above analyses as a comparison
is directly comparable to Times Mirror or Tribune or the contemplated
transaction.
The analyses were prepared solely for purposes of Goldman, Sachs & Co.
providing its opinion to Times Mirror's board of directors as to the fairness
from a financial point of view of the stock consideration and cash
consideration to be received by the holders of shares of Times Mirror common
stock, in the aggregate. These analyses do not purport to be appraisals or
necessarily reflect the prices at which businesses or securities actually may
be sold. Analyses based upon forecasts of future results are not necessarily
indicative of actual future results, which may be significantly more or less
favorable than suggested by such analyses. Because such analyses are inherently
subject to uncertainty, being based upon numerous factors or events beyond the
control of the parties or their respective advisors, none of Times Mirror,
Tribune, Goldman, Sachs & Co. or any other person assumes responsibility if
future results are materially different from those forecast.
As described above, Goldman, Sachs & Co.'s opinion to the board of directors
of Times Mirror was one of many factors taken into consideration by Times
Mirror's board of directors in making its determination to approve the merger
agreement. The foregoing summary does not purport to be a complete description
of the
41
<PAGE>
analyses performed by Goldman, Sachs & Co., more fully described in its written
opinion attached as Annex E to this proxy statement/prospectus.
Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements, and valuations for estate, corporate and other purposes. Goldman,
Sachs & Co. is familiar with Times Mirror, having provided certain investment
banking services to Times Mirror from time to time, including having acted as
financial advisor to Times Mirror in connection with the indirect purchase of a
securities investment portfolio and real estate interests with the Chandler
Trusts in August 1997 and a similar transaction in September 1999; the
disposition of Matthew Bender and Company, Inc., and fifty percent of Shepard's
Company in July 1998 and of Mosby, Inc. in October 1998; the disposition of
Allen Communication in February 2000; and having acted as its financial advisor
in connection with, and having participated in certain of the negotiations
leading to, the merger agreement.
Goldman, Sachs & Co. has also acted as financial advisor to the Chandler
Trusts in connection with the stock exchange involving Cox Cable Communication,
Inc., Times Mirror and the Chandler Trusts in July 1994, and may provide
investment banking services to the Chandler Trusts in the future.
Goldman, Sachs & Co. has also provided certain investment banking services
to Tribune from time to time, including in connection with various commercial
paper and medium-term note financings and may also provide investment banking
services to Tribune and its subsidiaries in the future. Times Mirror selected
Goldman, Sachs & Co. as its financial advisor because it is a nationally
recognized investment banking firm that has substantial experience in
transactions similar to the merger.
Goldman, Sachs & Co. provides a full range of financial advisory and
securities services and, in the course of its normal trading activities, may
from time to time effect transactions and hold securities, including derivative
securities, of Times Mirror or Tribune for its own account and for the account
of customers.
Pursuant to a letter agreement dated March 3, 2000, Times Mirror engaged
Goldman, Sachs & Co. to act as its financial advisor in connection with the
contemplated transaction. Pursuant to the terms of this engagement letter,
Times Mirror has agreed to pay Goldman, Sachs & Co. the following fees: (a) a
retention fee of $2 million in cash, (b) a transaction fee of .35% of the
aggregate consideration paid for the purchase of 50% or more of the outstanding
common stock or the assets (based on the book value thereof) of Times Mirror,
less any fees already paid pursuant to (a) above.
Times Mirror has agreed to reimburse Goldman, Sachs & Co. for its reasonable
out-of-pocket expenses, including attorneys' fees and taxes, and to indemnify
Goldman, Sachs & Co. against certain liabilities, including certain liabilities
under the federal securities laws.
Certain Financial Projections (Unaudited)
In the course of discussions between representatives of Times Mirror and
Tribune, Times Mirror provided Tribune's representatives with certain
projections of future operating performance of Times Mirror prepared by Times
Mirror's management for fiscal years 2000, 2001 and 2002. Such information has
been set forth below for the limited purpose of giving stockholders access to
projections by Times Mirror's management that were available for review by
Tribune in connection with the tender offer.
The projected financial information set forth below necessarily reflects
numerous assumptions with respect to general business and economic conditions
and other matters, many of which are inherently uncertain or beyond Times
Mirror's or Tribune's control, and does not take into account any changes in
Times Mirror's operations or capital structure which may result from the tender
offer and the merger. Among other factors, the projected financial information
assumes: revenue growth of 6% in 2000, 5% in 2001 and 6% in 2002; operating
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<PAGE>
margin of 16.7% in 2000, 17.5% in 2001 and 18% in 2002; expense growth of 4.7%
in 2000, 4.2% in 2001 and 4.9% in 2002; cost of funds of 7.5% in 2000, 7.6% in
2001 and 7.8% in 2002; a tax rate of 43% in 2000, 43% in 2001 and 43% in 2002;
and capital expenditures of $180 million in 2000, $125 million in 2001 and $125
million in 2002. It is not possible to predict whether the assumptions made in
preparing the projected financial information will be valid, and actual results
may prove to be materially higher or lower than those contained in the
projections. The inclusion of this information should not be regarded as an
indication that Tribune, Times Mirror or any other person who received this
information considered it a reliable predictor of future events, and this
information should not be relied on as such. Neither Tribune nor its
representatives assumes any responsibility for the validity, reasonableness,
accuracy or completeness of the projected financial information, and Times
Mirror has made no representations to Tribune regarding such information.
2000-2002 Business Plan
(In millions, other than percentages and earnings per share figures)
<TABLE>
<CAPTION>
Plan Plan Plan
2000 2001 2002
------ ------ ------
<S> <C> <C> <C>
Total Revenue......................................... $3,215 $3,385 $3,574
Operating Profit...................................... $ 535 $ 592 $ 643
Margin............................................. 16.7% 17.5% 18.0%
Interest Expense (Net)................................ $ (122) $ (123) $ (127)
Other Income.......................................... $ 22 $ 7 $ 6
------ ------ ------
Pretax Earnings....................................... $ 435 $ 476 $ 522
Taxes................................................. $ (187) $ (205) $ (224)
------ ------ ------
Net Income............................................ $ 248 $ 271 $ 298
Preferred Dividends................................... $ (8) $ (8) $ (8)
------ ------ ------
Net income attributable to shares of Times Mirror
common stock......................................... $ 240 $ 263 $ 290
Diluted Earnings per Share............................ $ 3.70 $ 4.05 $ 4.45
Diluted shares of Times Mirror common stock........... 66.6 66.6 66.6
</TABLE>
Cautionary Statement Concerning Forward-Looking Statements. Certain matters
discussed herein, including, without limitation, the plan projections, are
forward-looking statements that involve risks and uncertainties. Such
information has been included in this proxy statement/prospectus for the
limited purpose of giving stockholders access to projections by Times Mirror's
management that were made available to Tribune. Information was prepared by
Times Mirror's management for internal use and not with a view to publication.
The foregoing plan projections were based on assumptions concerning Times
Mirror's operations and business prospects in 2000 through 2002, including the
assumption that Times Mirror would continue to operate under the same ownership
structure as then existed. The plan projections were also based on other
revenue, expense and operating assumptions. Certain of these assumptions are
set forth in the immediately preceding paragraph. Information of this type is
based on estimates and assumptions that are inherently subject to significant
economic and competitive uncertainties and contingencies, all of which are
difficult to predict and many of which are beyond Times Mirror's control. Such
uncertainties and contingencies include, but are not limited to, changes in the
economic conditions in which Times Mirror operates; greater than anticipated
competition or price pressures; new product offerings; better or worse than
expected customer growth resulting in the need to expand operations and make
capital investments; and the impact of investments required to enter new
markets. Accordingly, there can be no assurance that the projected results
would be realized or that actual results would not be significantly higher or
lower than those set forth above. In addition, the plan projections were not
prepared with a view to public disclosure or compliance with the published
guidelines of the Securities and Exchange Commission or the guidelines
established by the American Institute of Certified Public Accountants regarding
projections and forecasts, and are included in this proxy statement/prospectus
only because such information was made available to Tribune by Times Mirror.
Neither Tribune's nor Times Mirror's independent
43
<PAGE>
accountants have examined, compiled or applied any agreed upon procedures to
this information, and, accordingly, do not express an opinion or any form of
assurance with respect thereto and assume no responsibility for this
information. Neither Tribune nor its representatives assumes any responsibility
for the validity, reasonableness, accuracy or completeness of the projected
financial information, and Times Mirror has made no representations to Tribune
regarding such information. Neither Tribune nor Times Mirror intends to provide
any updated information with respect to any forward-looking statements.
Accounting Treatment
The merger will be accounted for using the purchase method of accounting for
financial accounting purposes in accordance with U.S. generally accepted
accounting principles. Purchase accounting requires that the purchase price and
costs of the acquisition be allocated to all of the assets acquired and
liabilities assumed, based on their relative fair values. See "Unaudited Pro
Forma Condensed Consolidated Financial Statements."
United States Federal Income Tax Consequences of the Merger
The following general discussion summarizes the anticipated material United
States federal income tax consequences of the merger to holders of Times Mirror
common stock who exchange such stock for Tribune common stock and/or cash in
the merger. This discussion addresses only such stockholders who hold their
Times Mirror common stock as a capital asset, and does not address all of the
United States federal income tax consequences that may be relevant to
particular stockholders in light of their individual circumstances or to
stockholders who are subject to special rules, such as:
. financial institutions;
. mutual funds;
. tax-exempt organizations;
. insurance companies;
. dealers in securities or foreign currencies;
. traders in securities who elect to apply a mark-to-market method of
accounting;
. foreign holders;
. persons who hold such shares as a hedge against currency risk or as part
of a straddle, constructive sale or conversion transaction; or
. holders who acquired their shares upon the exercise of employee stock
options or otherwise as compensation.
The following discussion is not binding on the Internal Revenue Service. It
is based upon the Internal Revenue Code of 1986, as amended (the "Code"), laws,
regulations, rulings and decisions in effect as of the date of this proxy
statement/prospectus, all of which are subject to change, possibly with
retroactive effect. Tax consequences under state, local and foreign laws, and
federal laws other than federal income tax laws, are not addressed.
Holders of Times Mirror common stock are strongly urged to consult their tax
advisors as to the specific tax consequences to them of the merger, including
the applicability and effect of federal, state, local and foreign income and
other tax laws in their particular circumstances.
It is a condition to the completion of the merger that:
. Tribune receive an opinion of Wachtell, Lipton, Rosen & Katz, dated as
of the effective time of the merger, to the effect that the merger will
be treated for federal income tax purposes as a reorganization within
the meaning of Section 368 of the Code and that each of Tribune and
Times Mirror will be a party to the reorganization within the meaning of
Section 368 of the Code; and
44
<PAGE>
. Times Mirror receive an opinion of Gibson, Dunn & Crutcher LLP, dated as
of the effective time of the merger, to the effect that the merger will
be treated for federal income tax purposes as a reorganization within
the meaning of Section 368 of the Code and that each of Tribune and
Times Mirror will be a party to the reorganization within the meaning of
Section 368 of the Code.
In rendering such opinions, such counsel will be entitled to rely upon certain
documentation including representations of officers of Tribune and Times
Mirror. An opinion of counsel represents counsel's best legal judgment and is
not binding on the Internal Revenue Service or any court. No ruling has been,
or will be, sought from the Internal Revenue Service as to the United States
federal income tax consequences of the merger. The following discussion of U.S.
federal income tax consequences of the merger to Times Mirror stockholders
assumes that the merger will qualify as a reorganization within the meaning of
Section 368 of the Code.
The receipt of cash in exchange for shares of Times Mirror common stock in
the merger will be a taxable transaction for federal income tax purposes and
may also be a taxable transaction under applicable state, local, foreign and
other tax laws. For federal income tax purposes, if a Times Mirror stockholder
exchanges all of his or her shares of Times Mirror common stock solely for cash
in the merger, such stockholder will generally recognize gain or loss equal to
the difference between the amount of cash received and the tax basis for the
shares of Times Mirror common stock exchanged. Any recognized gain or loss will
be capital gain or loss and any such capital gain or loss will be long term if,
as of the date of sale or exchange, such stockholder has held the shares of
Times Mirror common stock for more than one year or will be short term if, as
of such date, such stockholder has held the shares of Times Mirror common stock
for one year or less.
Stockholders who exchange shares of Times Mirror common stock for a
combination of Tribune common stock and cash in the tender offer and the merger
will recognize gain, but not loss, in the exchange. The gain, if any,
recognized will equal the lesser of:
. the amount of cash received in the exchange; and
. the amount of gain realized in the exchange.
The amount of gain that is realized in the exchange will equal the excess of:
. the sum of the cash plus the fair market value of the Tribune common
stock received in the exchange over
. the tax basis of the shares of Times Mirror common stock surrendered in
the exchange.
Any gain recognized will be treated as capital gain except in the case in which
the receipt of the cash has the effect of the distribution of a dividend for
United States federal income tax purposes (under Sections 302 and 356 of the
Code) in which case such recognized gain generally will be treated as ordinary
dividend income. In general, the receipt of cash by a Times Mirror stockholder
who does not actually or constructively (under Section 318 of the Code) own any
Tribune common stock will not have the effect of the distribution of a
dividend. Times Mirror stockholders should consult their own tax advisors to
determine the applicability of the foregoing rules in light of their specific
facts and circumstances. The aggregate tax basis in the Tribune common stock
received in the merger will be equal to the aggregate tax basis in the Times
Mirror common stock surrendered in the tender offer and the merger, decreased
by the amount of cash received and increased by the amount of gain, if any,
recognized or any amount treated as a dividend. The holding period of the
Tribune common stock received in the merger by a holder of Times Mirror common
stock will include the holding period of Times Mirror common stock that he or
she surrendered in the merger.
Holders of Times Mirror common stock who did not tender any shares of Times
Mirror common stock in the tender offer and who exchange all of their shares of
Times Mirror common stock solely for shares of Tribune common stock in the
merger will not recognize gain or loss for United States federal income tax
purposes, except with respect to cash, if any, they receive in lieu of a
fractional share of Tribune common stock. Each holder's aggregate tax basis in
the Tribune common stock received in the merger will be the same
45
<PAGE>
as his or her aggregate tax basis in the Times Mirror common stock surrendered
in the merger, decreased by the amount of any tax basis allocable to any
fractional share interest for which cash is received. The holding period of the
Tribune common stock received in the merger by a holder of Times Mirror common
stock will include the holding period of Times Mirror common stock that he or
she surrendered in the merger.
A holder of Times Mirror common stock who receives cash in lieu of a
fractional share of Tribune common stock will recognize gain or loss equal to
the difference between the amount of cash received and his or her tax basis in
the Tribune common stock that is allocable to the fractional share. That gain
or loss generally will constitute capital gain or loss. In the case of an
individual stockholder, any such capital gain generally will be subject to a
maximum United States federal income tax rate of 20% if the individual has held
his or her Times Mirror common stock for more than 12 months on the date of the
merger. The deductibility of capital losses is subject to limitations for both
individuals and corporations.
Antitrust
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the merger
could not be completed until the expiration of a 30 calendar-day waiting period
following the filing of certain required information and documentary material
concerning the merger with the Federal Trade Commission and the Antitrust
Division of the Department of Justice. Each of Tribune and Times Mirror filed a
Premerger Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 with the Federal Trade Commission and the Antitrust
Division of the Department of Justice on March 27, 2000. The required waiting
period with respect to the merger expired at 11:59 p.m., New York City time, on
April 26, 2000.
The Federal Trade Commission and the Antitrust Division of the Department of
Justice may scrutinize the legality under the antitrust laws of the merger. At
any time before completion of the merger, the Federal Trade Commission or the
Antitrust Division of the Department of Justice could take any action under the
antitrust laws that either considers necessary or desirable in the public
interest, including seeking to enjoin the merger or the divestiture of
substantial assets of Tribune, Times Mirror or any of their respective
subsidiaries or affiliates. Private parties as well as state attorneys general
may also bring legal actions under the antitrust laws under certain
circumstances.
Based upon an examination of publicly available information relating to the
businesses in which Times Mirror is engaged, Tribune and Times Mirror believe
that the merger should not violate the applicable antitrust laws. Nevertheless,
Tribune and Times Mirror cannot be certain that a challenge to the merger on
antitrust grounds will not be made, or, if such challenge is made, what the
result will be.
Federal Communications Commission
Because the merger does not involve the transfer or assignment of a
broadcast license, no Federal Communications Commission application is required
in connection therewith. The Federal Communications Commission does have a rule
that provides that a broadcast license with respect to a market will not be
granted to a party which owns a newspaper in the same market. The Federal
Communications Commission has, however, adopted a policy that permits a
broadcaster who acquires a newspaper in its market to hold that newspaper until
the later of one year or its next renewal date for its broadcast license. The
renewal dates for the broadcast licenses in the markets which will be affected
by the combination of Times Mirror and Tribune are August 1, 2006 (Los
Angeles), December 1, 2006 (Hartford) and February 1, 2007 (New York). If such
rule has not been revised or eliminated by those dates, Tribune will request
waivers of the rule or otherwise seek appropriate relief.
Appraisal Rights
The following summary of the provisions of Section 262 of the Delaware
General Corporation Law is not intended to be a complete statement of the
provisions and is qualified in its entirety by reference to the full text of
Section 262 of the Delaware General Corporation Law, a copy of which is
attached to this proxy statement/prospectus as Annex F and is incorporated into
this summary by reference.
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<PAGE>
Under the Delaware General Corporation Law, only holders of Times Mirror
series C common stock are entitled to appraisal rights. Holders of Times Mirror
series C common stock wanting to exercise appraisal rights must strictly comply
with the rules governing the exercise of appraisal rights or lose those rights.
If the merger is completed, each holder of Times Mirror series C common
stock who (1) files written notice with Times Mirror of an intention to
exercise rights to appraisal of his or her shares prior to the Times Mirror
special meeting, and (2) follows the procedures set forth in Section 262 of the
Delaware General Corporation Law, will be entitled to be paid for his or her
shares of Times Mirror series C common stock by Tribune the fair value in cash
of the shares of Times Mirror series C common stock, as the case may be. All
written demands for appraisal rights should be mailed or delivered to The Times
Mirror Company, Times Mirror Square, Los Angeles, California 90053, Attention:
Corporate Secretary. The fair value of shares of Times Mirror series C common
stock will be determined by the Delaware Court of Chancery, exclusive of any
element of value arising from the merger. The shares of Times Mirror series C
common stock with respect to which holders have perfected their appraisal
rights in accordance with Section 262 of the Delaware General Corporation Law
and have not effectively withdrawn or lost their appraisal rights are referred
to in this section as the "dissenting shares."
Within ten days after the effective date of the merger, Tribune, as the
surviving corporation in the merger, must mail a notice to all stockholders who
have complied with (1) above notifying such stockholders of the effective date
of the merger. Within 120 days after the effective date of the merger, holders
of shares of Times Mirror series C common stock may file a petition in the
Delaware Court of Chancery for the appraisal of their shares, although they
may, within 60 days of the effective date of the merger, withdraw their demand
for appraisal. Within 120 days of the effective date of the merger, the holders
of dissenting shares may also, upon written request, receive from Tribune a
statement setting forth the aggregate number of shares with respect to which
demands for appraisals have been received.
Appraisal rights are available only to the record holder of shares. If you
wish to exercise appraisal rights but have a beneficial interest in shares
which are held of record by or in the name of another person, such as a broker
or nominee, you should act promptly to cause the record holder to follow the
procedures set forth in Section 262 of the Delaware General Corporation Law to
perfect your appraisal rights.
A demand for appraisal should be signed by or on behalf of the stockholder
exactly as the stockholder's name appears on the stockholder's stock
certificates. If the shares are owned of record in a fiduciary capacity, such
as by a trustee, guardian or custodian, the demand should be executed in that
capacity, and if the shares are owned of record by more than one person, as in
a joint tenancy or tenancy in common, the demand should be executed by or on
behalf of all joint owners. An authorized agent, including one or more joint
owners, may execute a demand for appraisal on behalf of a record holder;
however, in the demand the agent must identify the record owner or owners and
expressly disclose that the agent is executing the demand as an agent for the
record owner or owners. A record holder such as a broker who holds shares as
nominee for several beneficial owners may exercise appraisal rights for the
shares held for one or more beneficial owners and not exercise rights for the
shares held for other beneficial owners. In this case, the written demand
should state the number of shares for which appraisal rights are being
demanded. When no number of shares is stated, the demand will be presumed to
cover all shares held of record by the broker or nominee.
If any holder of shares of Times Mirror series C common stock who demands
appraisal of his or her shares under Section 262 of the Delaware General
Corporation Law fails to perfect, or effectively withdraws or loses the right
to appraisal, his or her shares will be converted into a right to receive the
consideration with respect to the holder's dissenting shares in accordance with
the merger agreement. Dissenting shares lose their status as dissenting shares
if:
. the merger is abandoned;
. the dissenting stockholder fails to make a timely written demand for
appraisal;
. the dissenting shares are voted in favor of the merger;
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<PAGE>
. neither Tribune nor the stockholder files a complaint or intervenes in a
pending action within 120 days after the effective date of the merger;
or
. the stockholder delivers to Tribune, as the surviving corporation,
within 60 days of the effective date of the merger, or thereafter with
Tribune's approval, a written withdrawal of the stockholder's demand for
appraisal of the dissenting shares, although no appraisal proceeding in
the Delaware Court of Chancery may be dismissed as to any stockholder
without the approval of the court.
Failure to follow the steps required by Section 262 of the Delaware General
Corporation Law for perfecting appraisal rights may result in the loss of
appraisal rights, in which event a Times Mirror stockholder will be entitled to
receive the consideration with respect to the holder's dissenting shares in
accordance with the merger agreement. In view of the complexity of the
provisions of Section 262 of the Delaware General Corporation Law, holders of
Times Mirror series C common stock who are considering objecting to the merger
should consult their own legal advisors.
Federal Securities Laws Consequences; Stock Transfer Restriction Agreements
All shares of Tribune common stock received by Times Mirror stockholders in
the merger will be freely transferable, except that shares of Tribune common
stock received by persons who are deemed to be "affiliates" of Times Mirror
under the Securities Act of 1933 at the time of the special meeting may be
resold by them only in transactions permitted by Rule 145 under the Securities
Act of 1933 or as otherwise permitted under the Securities Act of 1933. Persons
who may be deemed to be affiliates of Times Mirror for such purposes generally
include individuals or entities that control, are controlled by or are under
common control with Times Mirror and include directors and executive officers
of Times Mirror. The merger agreement requires Times Mirror to use its
reasonable best efforts to cause each of such affiliates to execute a written
agreement to the effect that such persons will not offer, sell or otherwise
dispose of any of the shares of Tribune common stock issued to them in the
merger in violation of the Securities Act of 1933 or the related Securities and
Exchange Commission rules.
Exchange Procedures
At the effective time of the merger, each issued and outstanding share of
Times Mirror common stock, other than dissenting shares and shares owned by
Times Mirror or Tribune, will be converted into the right to receive either 2.5
shares of Tribune common stock (together with the associated preferred share
purchase rights) or $95 in cash, without interest, or a combination of cash and
Tribune common stock (together with the associated preferred share purchase
rights), subject to an overall limit on the amount of cash consideration
available in the merger. The cash election will be available only to the extent
that Tribune has purchased fewer than 28 million shares of Times Mirror common
stock prior to the merger. If too many Times Mirror stockholders elect cash,
Tribune will provide the available cash to electing stockholders on a pro rata
basis, and give them shares of Tribune common stock for their remaining shares
of Times Mirror common stock.
If you are a record holder of shares of Times Mirror common stock, we are
separately mailing to you a GREEN form of election and letter of transmittal.
In addition, we will make the form of election and letter of transmittal
available to all persons who become record holders of shares of Times Mirror
common stock after the date of such mailing and no later than the last business
day prior to the election deadline (defined below). The form of election and
letter of transmittal contains instructions for exchanging your shares for cash
and/or Tribune common stock. Please carefully review, complete and return the
GREEN form in the GREEN envelope according to the instructions contained in the
form. In order to be effective, a form of election and letter of transmittal
must be received by the paying agent by 5:00 p.m., New York City time, on the
seventh business day after the effective time of the merger (such day, the
"election deadline"). All elections may be revoked in writing until the
election deadline by the record holders submitting forms of election.
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<PAGE>
Upon surrender of a certificate representing shares of Times Mirror common
stock to the paying agent for cancellation, together with a duly executed
letter of transmittal and such other documents as the paying agent may require,
the holder of such certificate will be entitled to receive in exchange
therefor, as soon as practicable after the effective time of the merger:
. a certificate representing that number of shares of Tribune common stock
into which the shares of Times Mirror common stock previously
represented by such Times Mirror certificate have been converted;
. the cash to which such holder is entitled; and
. the cash in lieu of fractional shares of Tribune common stock which such
holder has the right to receive.
In the event cash and/or shares of Tribune common stock are to be delivered to
any person who is not the person in whose name the Times Mirror certificate
surrendered in exchange therefor is registered in the transfer records of Times
Mirror, the cash and/or shares of Tribune common stock may be delivered to such
person if the Times Mirror certificate is presented to the paying agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence satisfactory to the paying agent that any applicable stock transfer
taxes have been paid. Until so surrendered, each Times Mirror certificate will
be deemed at any time after the effective time of the merger to represent only
the right to receive (upon such surrender) cash and/or shares of Tribune common
stock pursuant to the merger. No interest will be paid or will accrue on any
cash payable to holders of Times Mirror certificates.
Holders of certificates previously representing Times Mirror common stock
will not be paid dividends or distributions on the Tribune common stock into
which their shares have been converted with a record date after the merger, and
will not be paid cash for any fractional shares of Tribune common stock, until
their certificates are surrendered to the paying agent for exchange. When their
certificates are surrendered, any unpaid dividends and any cash instead of
fractional shares will be paid without interest.
In lieu of any fractional shares of Tribune common stock, each holder of
shares of Times Mirror common stock who would otherwise have been entitled to a
fraction of a share of Tribune common stock will be paid an amount in cash,
without interest, equal to such holder's proportionate interest in the net
proceeds from the sale or sales in the open market by the paying agent, on
behalf of all such holders, of the aggregate fractional shares of Tribune
common stock issued. Tribune will pay all commissions, transfer taxes and other
out-of-pocket transaction costs, including the expenses and compensation of the
paying agent, incurred in connection with such sale.
The cash election will be available only to the extent that Tribune has
purchased fewer than 28 million shares of Times Mirror common stock prior to
the merger. If too many Times Mirror stockholders elect cash, Tribune will
provide the available cash to electing stockholders on a pro rata basis so that
each share of Times Mirror common stock electing cash will be converted into
the right to receive:
. an amount in cash (without interest), equal to the product of (a) $95
and (b) a fraction (the "cash fraction"), the numerator of which will be
28 million minus the number of shares of Times Mirror common stock that
Tribune has purchased in the tender offer and in the market prior to the
merger and the denominator of which will be the total number of shares
of Times Mirror common stock electing cash; and
. a number of shares of Tribune common stock equal to the product of (a)
2.5 and (b) a fraction equal to one minus the cash fraction.
In the event that a holder of shares of Times Mirror common stock fails to make
an election with respect to the consideration to be received in the merger,
such holder will be treated as having elected the cash consideration with
respect to such shares.
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<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial
statements present the pro forma financial position at December 26, 1999 and
the pro forma results of operations for the year then ended for Tribune. These
pro forma financial statements give effect to the acquisition of Times Mirror
using the purchase method of accounting as if such acquisition had occurred at
the beginning of fiscal year 1999 for purposes of the pro forma condensed
consolidated statement of income and as if such acquisition had occurred at the
end of fiscal year 1999 for purposes of the pro forma condensed consolidated
balance sheet. Certain Times Mirror accounts have been reclassified to conform
with Tribune's presentation. In addition, the pro forma condensed consolidated
statement of income gives effect to Times Mirror's contribution of assets to
TMCT II, LLC, which occurred on September 3, 1999, as if the transaction
occurred at the beginning of the year.
The pro forma adjustments are based upon currently available information.
The assumptions underlying the calculation of the pro forma adjustments are
considered appropriate under the circumstances. These unaudited pro forma
condensed consolidated financial statements should be read in conjunction with
Tribune's Consolidated Financial Statements and the Notes thereto for the year
ended December 26, 1999 along with Management's Discussion and Analysis of
Operations, which are set forth in Exhibit 13 of Tribune's Annual Report on
Form 10-K for the fiscal year ended December 26, 1999 and are incorporated
herein by reference.
The pro forma condensed consolidated financial statements are provided for
informational purposes only in response to requirements of the Securities and
Exchange Commission and do not purport to represent what Tribune's financial
position or results of operations would actually have been if the transaction
had in fact occurred at such dates or to project Tribune's financial position
or results of operations for any future date or period.
50
<PAGE>
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Tribune Times Mirror Acquisition
December 26, December 31, Pro Forma Adjusted
1999 1999 Adjustments Pro Forma
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Assets
Cash and cash
equivalents.............. $ 631,018 $ 144,319 $ (675,337)A $ 100,000
Short-term investments.... 435,770 -- (297,082)A 138,688
Accounts receivable, net.. 594,949 363,361 -- 958,310
Inventories............... 112,689 35,082 15,600 C 163,371
Broadcast rights.......... 253,129 -- -- 253,129
Net assets of discontinued
operations............... -- 173,090 -- 173,090
Other current assets...... 56,996 170,796 -- 227,792
---------- ---------- ---------- -----------
Total current assets.. 2,084,551 886,648 (956,819) 2,014,380
---------- ---------- ---------- -----------
Net properties............ 712,536 966,095 -- 1,678,631
Broadcast rights.......... 192,070 -- -- 192,070
Goodwill and intangible
assets, net.............. 3,150,648 794,741 6,355,659 D 10,301,048
America Online stock
related to PHONES debt... 1,304,000 -- -- 1,304,000
Other investments......... 1,175,634 575,704 -- 1,751,338
Prepaid pension costs..... 48,108 445,175 190,889 E 684,172
Other assets.............. 130,144 229,008 12,959 F 372,111
---------- ---------- ---------- -----------
Total assets.......... $8,797,691 $3,897,371 $5,602,688 $18,297,750
---------- ---------- ---------- -----------
Liabilities and
Stockholders' Equity
Short-term debt........... $ 30,689 $ 254,834 $ -- $ 285,523
Accounts payable.......... 176,552 179,461 -- 356,013
Employee compensation and
benefits................. 122,333 110,311 -- 232,644
Contracts payable for
broadcast rights......... 276,307 -- -- 276,307
Accrued liabilities....... 254,715 321,524 24,161 G 600,400
---------- ---------- ---------- -----------
Total current
liabilities.......... 860,596 866,130 24,161 1,750,887
---------- ---------- ---------- -----------
PHONES debt related to
America Online stock..... 1,328,480 -- -- 1,328,480
Other long-term debt...... 1,365,712 1,562,240 2,193,700 A 5,121,652
Deferred income taxes..... 1,251,377 482,062 508,650 H 2,242,089
Contracts payable for
broadcast rights......... 269,698 -- -- 269,698
Compensation and other
obligations.............. 251,930 587,210 (93,197) I 774,654
28,711 G
---------- ---------- ---------- -----------
Total non-current
liabilities.......... 4,467,197 2,631,512 2,637,864 9,736,573
---------- ---------- ---------- -----------
Preferred stock, net of
treasury stock........... 281,093 106,820 -- 387,913
Common stock, net of
treasury stock, and
additional paid-in
capital.................. (1,355,683) (1,518,763) 1,518,763 J 1,877,889
3,233,572 B
Retained earnings......... 4,195,318 1,784,793 (1,784,793)J 4,195,318
Other..................... 349,170 26,879 (26,879)J 349,170
---------- ---------- ---------- -----------
Total stockholders'
equity............... 3,469,898 399,729 2,940,663 6,810,290
---------- ---------- ---------- -----------
Total liabilities and
stockholders'
equity............... $8,797,691 $3,897,371 $5,602,688 $18,297,750
---------- ---------- ---------- -----------
</TABLE>
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<PAGE>
Pro Forma Condensed Consolidated Statement of Income (Unaudited)
For the Year Ended December 26, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
LLC
Transaction Acquisition
Times Pro Forma Pro Forma Adjusted
Tribune Mirror Adjustments Adjustments Pro Forma
---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Operating revenues...... $3,221,890 $3,029,249 $ -- $ -- $6,251,139
Operating expenses
Cost of sales......... 1,454,058 1,546,492 -- -- 3,000,550
Selling, general and
administrative....... 775,233 867,296 -- -- 1,642,529
Depreciation and
amortization of
intangible assets.... 222,159 144,955 -- 164,338 C 531,452
---------- ---------- -------- --------- ----------
Total operating
expenses........... 2,451,450 2,558,743 -- 164,338 5,174,531
---------- ---------- -------- --------- ----------
Operating profit........ 770,440 470,506 -- (164,338) 1,076,608
Net interest expense.... (65,595) (56,914) (51,523)A (218,011)D (392,043)
Other, net.............. (21,545) (24,117) 11,447 B (17,774)E (51,989)
Non-operating items,
net.................... 1,756,779 49,816 -- (13,900)F 1,792,695
---------- ---------- -------- --------- ----------
Income from continuing
operations
before income taxes.... 2,440,079 439,291 (40,076) (414,023) 2,425,271
Income taxes............ (957,029) (180,229) 16,331 G 109,125 G (1,011,802)
---------- ---------- -------- --------- ----------
Income from continuing
operations............. $1,483,050 $ 259,062 $(23,745) $(304,898) $1,413,469
Preferred dividends, net
of tax................. (18,639) (18,066) -- 9,966 H (26,739)
Income from continuing
operations attributable
to common
stockholders........... $1,464,411 $ 240,996 $(23,745) $(294,932) $1,386,730
Weighted average shares
outstanding............ 237,367 84,815 322,182
Earnings per share from
continuing operations
Basic................. $ 6.17 $ 4.30
Diluted (1)........... $ 5.62 $ 3.92
Book value per common
share.................. $ 14.59 $ 21.14
Cash dividends per
share.................. $ 0.36 $ 0.36
</TABLE>
- --------
(1) Excluding the impact of non-operating items, net, historical diluted
earnings per share from continuing operations for Tribune were $1.54 and
adjusted pro forma diluted earnings per share from continuing operations
were $0.87.
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Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Times Mirror Transaction
On March 13, 2000, Tribune and Times Mirror announced the signing of the
merger agreement, pursuant to which Tribune made a tender offer for up to a
total of 28 million shares of Times Mirror common stock (approximately 48% of
the shares of Times Mirror common stock deemed outstanding for financial
reporting purposes) at a price of $95 per share. Tribune completed the tender
offer at midnight on April 17, 2000 and purchased 23,148,044 shares of Times
Mirror common stock. Under the merger agreement, Times Mirror will merge into
Tribune, subject to satisfaction of certain conditions including approval of
the stockholders of Tribune and Times Mirror. In the merger, each remaining
share of Times Mirror common stock will be converted into the right to receive
2.5 shares of Tribune common stock or, to the extent available, $95 in cash.
The cash election will be available only to the extent that Tribune has
purchased fewer than 28 million shares of Times Mirror common stock prior to
the merger. As of the date of this proxy statement/prospectus, Tribune has
purchased 23,305,244 shares of Times Mirror common stock in a tender offer that
closed on April 17, 2000 and in the open market. The pro forma condensed
consolidated financial statements assume (a) 28 million shares of Times Mirror
common stock are purchased for cash and (b) a Tribune common stock price of
$38.125 per share, which represents a recent average of Tribune's common stock
price. If fewer than 28 million shares of Times Mirror common stock are
purchased for cash or the market price of Tribune common stock varies from the
$38.125 per share assumed value, the market price used to value the shares
issued by Tribune, the number of shares of Tribune common stock issued and the
goodwill from the transaction will change. The market price of the shares of
Tribune common stock issued by Tribune will be based on an average of Tribune's
share price prior to the effective time of the merger. If the share price of
Tribune common stock increases or decreases by $1 per share, goodwill and
amortization expense will increase or decrease by approximately $85 million and
$2 million, respectively.
For financial accounting purposes, the acquisition of Times Mirror will be
accounted for using the purchase method of accounting. Accordingly, Times
Mirror's assets and liabilities have been adjusted, on a preliminary basis, to
reflect their fair values in the unaudited pro forma condensed consolidated
balance sheet as of December 26, 1999. The estimated effects resulting from
these adjustments have been reflected in the unaudited pro forma condensed
consolidated statement of income. The allocation of the estimated purchase
price and the estimated transaction fees and expenses included in the unaudited
pro forma condensed consolidated financial statements are preliminary. Final
amounts may differ from those set forth herein and such differences may be
material.
The unaudited pro forma condensed consolidated financial statements do not
reflect any potential cost savings, revenue enhancements or other synergies
that could result from the acquisition of Times Mirror or any disposition of
assets that may occur after the acquisition.
TMCT II, LLC Transaction
On September 3, 1999, Times Mirror completed a recapitalization involving
agreements with the Chandler Trusts. The recapitalization resulted in the
formation of a new limited liability company, TMCT II, LLC.
Pursuant to the TMCT II, LLC contribution agreement, Times Mirror, certain
of its subsidiaries and the Chandler Trusts made the following capital
contributions to TMCT II, LLC:
. Times Mirror and certain of its subsidiaries contributed preferred units
issued by the operating partnerships of eight unrelated real estate
investment trusts with an aggregate purchase price of $600 million and
$635 million in cash or cash equivalents; and
. The Chandler Trusts contributed Times Mirror common stock and preferred
stock.
Times Mirror's purchase of the real estate investment trusts was partially
funded with the proceeds of a $550 million short-term bank line of credit.
Times Mirror refinanced the line of credit with $600 million of long-term debt
in October 1999.
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Times Mirror, certain of its subsidiaries and the Chandler Trusts share in
the cash flow of the various assets held by TMCT II, LLC. The cash flow from
the real estate investment trusts and the TMCT II, LLC portfolio is largely
allocated to the Chandler Trusts with the remaining portion of the cash flow
from the real estate investment trusts and the TMCT II, LLC portfolio primarily
allocated to the Times Mirror subsidiaries. The cash flow from the shares of
Times Mirror common stock and preferred stock contributed by the Chandler
Trusts is largely allocated to Times Mirror with the remaining portion of the
cash flow from such shares primarily allocated to the Chandler Trusts. Due to
the allocations of the economic benefits in TMCT II, LLC, for financial
reporting purposes, 80% of the shares of Times Mirror common stock and
preferred stock contributed by the Chandler Trusts are included in treasury
stock, 80% of the preferred stock dividends are excluded from preferred stock
dividends and 80% of the dividends on the common stock are effectively
eliminated.
The pro forma adjustments from these transactions are described below.
Notes to Condensed Consolidated Balance Sheet
A. To record the estimated cash and short-term investments used and
additional debt issued to purchase 28 million shares of Times Mirror
common stock at a price of $95 per share, make payments with respect to
any options to purchase Times Mirror common stock in connection with the
merger and pay transaction costs.
B. To reflect the issuance of 84.8 million shares of Tribune common stock
at a value of $38.125 per share.
C. To adjust inventories to fair value.
D. To eliminate Times Mirror's net goodwill and intangible assets balance,
to record estimated identifiable intangible assets of $1 billion, and to
record the excess purchase price over the fair value of the net assets
acquired.
E. To record the fair value of Times Mirror's pension assets and
obligations.
F. To record interest rate swaps at fair value.
G. To record the unfavorable newsprint price hedging contracts at fair
value.
H. To record the tax effects of pro forma adjustments related to the
increase in fair value of net assets acquired.
I. To record Times Mirror's unfunded post-retirement liabilities at fair
value.
J. To eliminate Times Mirror's equity accounts.
Notes to Condensed Consolidated Statement of Income
A. To record interest expense on debt incurred to fund the TMCT II, LLC
transaction, which has been calculated assuming an interest rate of 7.0%
from the beginning of 1999 through September 3, 1999, and to record
reduced interest income from the beginning of 1999 through September 3,
1999 related to the cash and cash equivalents contributed to TMCT II,
LLC and cash paid for transaction expenses, which has been calculated
assuming an interest rate of 5.1%.
B. To record Times Mirror's proportionate equity share in TMCT II, LLC's
income from the beginning of 1999 through September 3, 1999 consisting
of a 20% share of the real estate investment trusts and
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the TMCT II, LLC portfolio, which is assumed to earn a 6.95% return per
year for purposes of the pro forma income statement.
C. To record incremental amortization of intangibles from a preliminary
allocation of purchase price. Identifiable intangible assets have been
amortized over periods ranging from 5 to 25 years. Goodwill has been
amortized over 40 years.
D. To record interest expense on debt incurred to fund the acquisition,
which has been calculated assuming an interest rate of 7.5%, and to
record reduced interest income related to the cash and short-term
investments used to fund the acquisition, which has been calculated
assuming an interest rate of 5.5%.
E. To reflect additional equity losses on certain Tribune investments for
which conversion from the cost-to-equity method is required due to
increased ownership interests acquired in the transaction.
F. To record the change in the fair value of Times Mirror's investment in
America Online, net of the change in the derivative component of the
Premium Equity Participating Securities. This adjustment is made as a
result of the requirement to conform Times Mirror's accounting policy
for derivatives to FAS 133, Accounting for Derivative Instruments and
Hedging Activities, the standard currently applied by Tribune.
G. To record the tax effect of the pro forma adjustments.
H. To adjust historical preferred dividend requirements resulting from the
replacement of preferred stock issued by Times Mirror in January 2000
with Tribune preferred stock.
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INTERESTS OF CERTAIN PERSONS IN THE MERGER
At a special meeting on March 2, 2000, the Executive Compensation
Subcommittee of the Compensation Committee of the Times Mirror board of
directors adopted, among other things, certain benefits, payments and
arrangements for Times Mirror's executive officers and directors upon a change
of control of Times Mirror. On March 11, 2000, at a special meeting, the board
of directors of Times Mirror reviewed, ratified and approved, among other
things, the Executive Compensation Subcommittee's actions with respect to the
matters set forth below.
When considering the recommendation of the Times Mirror board of directors,
you should be aware that the Times Mirror directors and officers may have
interests in the merger that are different from or are in addition to yours.
Mark H. Willes, Former Chairman of the Board, President and Chief Executive
Officer of Times Mirror
Prior to the approval of the terms set forth under this caption, the Times
Mirror board of directors reviewed reports from Times Mirror's compensation
consultants, which indicated that the level of benefits approved by the
Executive Compensation Subcommittee brings Mr. Willes' retirement benefits into
line with competitive practices for treatment of chief executive officers of
comparable companies.
Mr. Willes will remain with Times Mirror until the effective time of the
merger, at which time his employment will terminate. Until such time, his
annual base salary will remain at its current level of $1,000,000 and Mr.
Willes will continue to participate in the executive bonus incentive plan at
his current target level of $1,000,000. His bonus incentive award for the year
2000 will be paid at the maximum level of $2,225,000, without any proration
regardless of when the merger occurs. In the event that the effective time of
the merger is in the year 2001, he will receive a bonus payment for the year
2001 equal to $2,225,000, prorated to the effective time of the merger. Bonus
payments will be paid or deferred in accordance with Mr. Willes' deferral
election under the Times Mirror Deferred Compensation Plan for Executives.
Mr. Willes will receive additional payments equal to one-quarter of the year
2000 bonus award and the year 2001 bonus award, if any (which represents the
value of an award under the matching bonus restricted stock program of Times
Mirror), without the requirement to place on deposit any personally owned
shares of Times Mirror stock. Mr. Willes will receive severance pay equal to
three times his current annual base salary plus three times his highest bonus
payment in the last three years in the amount of $9,243,750. This amount will
be paid in the event that Mr. Willes continues his employment with Times Mirror
through the term of the contract, in the event of his death or disability
before the end of the contract or in the event that Times Mirror terminates his
employment before the end of the contract. In the event that any portion of any
change of control, severance or any other payment to Mr. Willes is considered
an excess parachute payment subject to excise tax, Mr. Willes will receive an
additional payment that constitutes a full gross up for such excise tax.
The severance payments will be paid to Mr. Willes in approximately equal
payments over the three-year period after the effective time of the merger. Mr.
Willes will not receive any additional stock option grants. During his
employment with Times Mirror, options will continue to vest in accordance with
terms of the grants. At the effective time of the merger, all stock options
will become fully vested, and Mr. Willes will receive the value of his
outstanding stock options in accordance with his elections under the terms of
the merger agreement. While an employee of Times Mirror during the term of his
contract, restricted stock will continue to vest in accordance with the terms
of the grant until the effective time of the merger, at which time the
restricted stock award will be freed of restrictions in accordance with the
actions of the Times Mirror board of directors with regard to the 1987
Restricted Stock Plan. Mr. Willes will also continue to be eligible to
participate in the matching bonus restricted stock program. During the term of
his employment, matching bonus restricted stock will continue to vest in
accordance with the terms of each grant, provided that personal shares remain
on deposit with Times Mirror. At the effective time of the merger, all shares
of restricted stock will be freed of
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restrictions. Mr. Willes will also continue to participate in the Times Mirror
Pension Plan and 401(k) Plan, as well as the Supplemental Executive Retirement
Plan, including credit for severance payments under the terms of those plans.
In the event Mr. Willes continues his employment through the effective time
of the merger, in the event of Mr. Willes' death or disability before the
effective time of the merger, or in the event that his employment is terminated
by Times Mirror before the effective time of the merger, Mr. Willes will
receive the special retirement benefit provided for in a retirement agreement
with Times Mirror. Regardless of his date of termination of employment under
the terms of this employment agreement, the enhanced benefit of $970,000 per
year would commence on April 1, 2002 and would be payable as a 50% joint and
survivor annuity with his wife as the joint annuitant. This benefit equals the
total pension benefit from Times Mirror, including benefits earned under the
Times Mirror Pension Plan and the Supplemental Executive Retirement Plan. In
the event that Mr. Willes voluntarily terminates his employment prior to the
effective time of the merger, he will receive a retirement benefit determined
under the terms of the Supplemental Executive Retirement Plan, based on his
highest five-year average salary plus his highest five year average bonus, and
benefit service earned with Times Mirror plus 15 years of service, which
benefit will be reduced by Times Mirror early retirement factors and $204,332
per year and will be payable as a subsidized 50% joint and survivor annuity.
This payment may commence as of any date that Mr. Willes selects. In accordance
with Times Mirror's practices, if Mr. Willes continues his employment through
the effective time of the merger or if his employment is terminated by Times
Mirror before the effective time of the merger, Mr. Willes will be provided
with company-paid financial counseling, furnished and functional office space
and secretarial support for seven years after the termination of his
employment.
Other Times Mirror Executives
The following benefits, payments and arrangements were approved for other
Times Mirror executive officers upon a change in control of Times Mirror.
Base Salaries. Base salaries will continue at current levels until the
effective time of the merger, subject to review and adjustment under Times
Mirror's regular salary review procedures.
Bonus Incentive Awards. If the merger occurs at any time during the year
2000, for each executive officer who is an active employee of Times Mirror as
of the effective time of the merger and of Tribune as of December 31, 2000, the
Executive Incentive Plan bonus incentive award for the year 2000 will be paid
at the maximum level of 225% of the full-year bonus incentive target; provided
that if an executive's employment is terminated by Tribune without cause prior
to December 31, 2000, such executive will be entitled to the full-year bonus
incentive award. If the merger occurs during the year 2001, the bonus award for
2000 will be paid at the maximum level without any proration to any executive
who is an employee as of December 31, 2000. The awards will be paid or deferred
in accordance with the executive's deferral election under the Times Mirror
Deferred Compensation Plan regarding the year 2000 bonus. Bonus awards will be
paid at the earlier of the executive's termination of employment by Tribune
without cause or December 31, 2000. Provided an executive officer is an active
employee of Times Mirror as of the effective time of the merger, if the merger
occurs in the year 2001, the Executive Incentive Plan bonus incentive award for
the year 2001 will be a prorated amount of the year 2000 bonus award earned,
and will be paid or deferred as of the effective time of the merger.
Special Severance Payments. In the event that an executive officer is
terminated as of the effective time of the merger or within the severance
protection period (as described under the caption "Severance Protection
Period"), and is eligible for severance, the following severance amounts will
be paid: 3 times the sum of current salary plus highest bonus within the last
three years for Horst A. Bergmann, Kathryn M. Downing, Raymond A. Jansen, Jr.
and Efrem Zimbalist III; 2.5 times the sum of current salary plus highest bonus
within
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the last three years for Roger H. Molvar and James R. Simpson; and 2 times the
sum of current salary plus highest bonus within the last three years for Edward
L. Blood, Rajender K. Chandhok, Debra A. Gastler and William A. Niese.
Eligibility for Severance. For Kathryn M. Downing, special severance
payments will be paid if, during the severance protection period described
below, her employment is terminated by Tribune for any reason, or if she
chooses to leave the employment of Tribune voluntarily. For other executive
officers, special severance payments will be paid if, during the severance
protection period described below, the executive is involuntarily terminated by
Tribune without cause or voluntarily terminates employment for good reason.
Severance Protection Period. For executive officers, the special severance
protection period will be the 24-month period after the effective time of the
merger.
Excess Parachute Payments. In the event that any portion of any change of
control, severance or any other payment to an executive officer of Times
Mirror, including the payments to Mr. Willes described above, is considered an
excess parachute payment subject to excise tax, the executive officer will
receive an additional payment that constitutes a full gross up for such excise
tax.
Executive Perquisites. Executive officers who are currently eligible for
company-paid or reimbursed perquisites (including, without limitation,
financial counseling, executive physicals, club memberships) will have these
benefits extended during the severance protection period and the period of the
severance, if any.
Outplacement. Executive officers will receive outplacement services for a
period of one year after termination of employment, up to a maximum of $15,000,
or may elect to receive the specified amount as a cash payment in lieu of
outplacement services.
Deferred Compensation Plan for Executives and Directors. The deferred
compensation plan currently provides that in the event of a change of control,
participants may elect to receive an immediate lump sum payment with a 10%
penalty for the unscheduled withdrawal.
Excess Pension Plan. Provided an executive officer is an employee at the
effective time of the merger, benefits earned under the Excess Pension Plan
will be fully vested at the effective time of the merger.
Qualified Retirement Plans. Times Mirror's qualified retirement plans will
be amended to provide that benefits earned by participants who are employees at
the effective time of the merger will be fully vested at the effective time of
the merger.
COBRA Reimbursement Payment. Executive officers whose employment is
terminated within the severance protection period will receive a payment equal
to the number of months of severance they are eligible to receive (up to a
maximum of 18 months) times the COBRA premium for the managed care program at
the time of their termination of employment.
Supplemental Executive Retirement Plan. The Supplemental Executive
Retirement Plan provides that, upon the change of control, Supplemental
Executive Retirement Plan benefits accrued to the effective time of the merger
will become fully vested. All Supplemental Executive Retirement Plan
participants who receive a year 2000 bonus incentive award will have such
payment included in the computation of their final average compensation under
the Supplemental Executive Retirement Plan. Further, all Supplemental Executive
Retirement Plan participants will receive credit under the Supplemental
Executive Retirement Plan for any special severance payments which may be paid
as a result of the merger.
Retiree Medical Benefits. Executive officers who have met the age and
service requirements for retiree medical benefits as of the date of the change
of control and who are terminated on account of the change of control will be
eligible for Times Mirror's pre- and post-age 65 retiree medical coverage or an
equivalent or better health care plan provided by Tribune.
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Indemnification and Insurance
The merger agreement provides that after the effective time of the merger,
Tribune will, to the fullest extent permitted under applicable law, indemnify
and hold harmless, each present and former director and officer of Times Mirror
and each subsidiary of Times Mirror and each such individual who served at the
request of Times Mirror or any subsidiary of Times Mirror as a director,
officer, trustee, partner, fiduciary, employee or agent of another corporation,
partnership, joint venture, trust, pension or other employee benefit plan or
enterprise against all costs and expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and settlement
amounts paid in connection with any claim, action, suit, proceeding or
investigation (whether arising before or after the effective time of the
merger), whether civil, administrative or investigative, arising out of or
pertaining to any action or omission in their capacity as an officer or
director of Times Mirror or any subsidiary of Times Mirror, as applicable, in
each case occurring prior to the effective time of the merger (including the
transactions contemplated by the merger agreement).
The merger agreement further provides that for six years from the effective
time of the merger, Tribune will use all reasonable efforts to provide to Times
Mirror's current directors and officers liability insurance protection of the
same kind and scope as that provided by Times Mirror's directors' and officers'
liability insurance policies in effect on the date of the merger agreement. In
no event will Tribune be required to expend more than 200% of the amount
expended by Times Mirror as of the date of the merger agreement to maintain or
procure such insurance coverage. If Tribune is unable to maintain or obtain
such insurance, Tribune will use all reasonable efforts to obtain as much
comparable insurance as available at such expense.
Interests of the Chandler Trusts
For information concerning the interests of the Chandler Trusts in the
merger, see "The Merger Agreement--Tribune Board Representation and Los Angeles
Times Subsidiary Matters" and "Representation of the Chandler Trusts on the
Tribune Board of Directors."
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THE MERGER AGREEMENT
We believe this summary describes the material terms of the merger
agreement. However, we recommend that you read carefully the complete agreement
for the precise legal terms of the merger agreement and other information that
may be important to you. The merger agreement, attached as Annex A to this
proxy statement/prospectus, is incorporated herein by reference.
The Tender Offer
The merger agreement contemplated the commencement of a tender offer by
Tribune for up to 28 million shares of Times Mirror common stock and prescribed
the conditions to the completion of the tender offer. Pursuant to the tender
offer, Tribune purchased 23,148,044 shares of Times Mirror common stock, or
approximately 40% of the outstanding shares of Times Mirror common stock, at
the price of $95 net, in cash, per share of Times Mirror common stock. The
tender offer was completed as of midnight on April 17, 2000.
The Merger
The merger agreement provides that Times Mirror will be merged with and into
Tribune on the earliest practicable date (but no later than the fifth business
day) following the satisfaction or waiver of the conditions to the merger
contained in the merger agreement. As a result of the merger, the separate
corporate existence of Times Mirror will cease and Tribune will continue as the
surviving corporation.
The merger agreement provides that Jeffrey Chandler, Roger Goodan, William
Stinehart, Jr. and Thomas Unterman will become additional directors of Tribune
as of the effective time of the merger. Messrs. Goodan and Stinehart are
currently directors of Times Mirror. Mr. Chandler is a beneficiary and a
trustee of the Chandler Trusts. Mr. Goodan is a beneficiary of the Chandler
Trusts. Mr. Stinehart is a trustee of the Chandler Trusts. Mr. Unterman was
Chief Financial Officer of Times Mirror until December 27, 1999 and is Manager
of Rustic Canyon Partners, LLC, the general partner of TMCT Ventures, which is
a venture capital fund in which the Chandler Trusts have an 80% interest. Under
the terms of the merger agreement, the officers of Tribune immediately before
the effective time of the merger will be the officers of the surviving
corporation until their resignation or removal. The merger agreement provides
that, at the effective time of the merger, the restated certificate of
incorporation of Tribune immediately before the effective time of the merger,
amended as contemplated by the merger agreement, will be the restated
certificate of incorporation of the surviving corporation. The merger agreement
also provides that the bylaws of Tribune immediately before the effective time
of the merger, amended as contemplated by the merger agreement, will be the
bylaws of the surviving corporation.
Conversion of Shares of Times Mirror Common Stock
Subject to the remainder of this paragraph and subject to certain tax
considerations described below, at the effective time of the merger:
. shares of Times Mirror common stock owned by Tribune, any wholly-owned
subsidiary of Tribune, or by Times Mirror, will be cancelled and will
cease to exist; and
. holders of shares of Times Mirror common stock (other than holders of
shares of Times Mirror series C common stock who perfect their appraisal
rights under Delaware law) will have the right to elect to have each of
their shares of Times Mirror common stock exchanged for:
- 2.5 shares of Tribune common stock (together with the associated
preferred share purchase rights);
- $95 in cash, without interest; or
- a combination of cash and shares of Tribune common stock (together
with the associated preferred share purchase rights).
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The cash election will be available only to the extent that Tribune has
purchased fewer than 28 million shares of Times Mirror common stock prior to
the merger. If too many Times Mirror stockholders elect cash, Tribune will
provide the available cash to electing stockholders on a pro rata basis so that
each share of Times Mirror common stock electing cash will be converted into
the right to receive:
. an amount in cash (without interest), equal to the product of (a) $95
and (b) a fraction (the "cash fraction"), the numerator of which will be
28 million minus the number of shares of Times Mirror common stock that
Tribune has purchased in the tender offer and in the market prior to the
merger and the denominator of which will be the total number of shares
of Times Mirror common stock electing cash; and
. a number of shares of Tribune common stock equal to the product of (a)
2.5 and (b) a fraction equal to one minus the cash fraction.
In the event that a holder of shares of Times Mirror common stock fails to make
an election with respect to the consideration to be received in the merger,
such holder will be treated as having elected the cash consideration with
respect to such shares.
Tribune or the designated paying agent will be entitled to deduct and
withhold from the consideration otherwise payable pursuant to the merger
agreement amounts that Tribune or the paying agent is required to deduct and
withhold under the Internal Revenue Code of 1986, as amended, the rules and
regulations promulgated thereunder or any provision of state, local or foreign
tax law.
Times Mirror has agreed to cause each subsidiary of or other affiliate
controlled by Times Mirror to elect to receive shares of Tribune in the merger.
Notwithstanding the above, the number of shares of Times Mirror common stock
to be converted into the right to receive shares of Tribune common stock in the
merger will be at least as many shares as would cause the ratio of:
. the average price per share of Tribune common stock on the New York
Stock Exchange on the closing date of the merger times the aggregate
number of shares of Tribune common stock to be paid as merger
consideration with respect to shares of Times Mirror common stock that
are deemed outstanding for federal income tax purposes, to
. the sum of:
- the amount set forth in the first bullet point, plus
- the aggregate cash consideration to be paid in the merger, plus
- the number of dissenting shares of Times Mirror common stock times
$95, plus
- the aggregate amount of cash paid for shares of Times Mirror common
stock purchased in the tender offer, plus
- the aggregate amount of cash paid by Tribune or any of its wholly-
owned subsidiaries to acquire shares of Times Mirror common stock
following completion or expiration of the tender offer and prior to
the effective time of the merger, plus
- any other amounts paid by Tribune or Times Mirror (or any Person
related to Tribune or Times Mirror within the meaning of Treasury
Regulation Sections 1.368-1(e) and 1.368-1T(e)) to, or on behalf of,
any stockholder of Times Mirror in connection with the sale,
redemption or other disposition of any Times Mirror stock in
connection with the merger for purposes of Treasury Regulation
Sections 1.368-1(e) and 1.368-1T(e), plus
- any extraordinary dividend distributed by Times Mirror prior to and
in connection with the merger for purposes of Treasury Regulation
Section 1.368-1T(e)
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to be 45%. If the provisions described in this paragraph result in an increase
in the number of shares of Times Mirror common stock required to be converted
into the right to receive shares of Tribune common stock in the merger, the
number of shares of Times Mirror common stock entitled to be converted into $95
in cash will be reduced accordingly.
Conversion of Shares of Times Mirror Preferred Stock
At the effective time of the merger, each share of each series of preferred
stock, par value $1 per share, of Times Mirror issued and outstanding
immediately prior to the effective time of the merger (and not owned by Times
Mirror or Tribune) will be converted, automatically and without the requirement
of any exchange of any certificate, into one share of preferred stock of
Tribune. Each share of preferred stock of Tribune will have terms that are
substantively identical to the terms of the corresponding Times Mirror
preferred stock.
Stock Options and Other Awards
Each of the stock options, if any, to purchase shares of Times Mirror common
stock issued by Times Mirror which are outstanding as of the effective time of
the merger will, whether or not then exercisable and vested, become fully
exercisable and vested immediately prior to the effective time of the merger.
Each holder of an option to purchase shares of Times Mirror common stock may
elect either:
. to cause such option to become and represent an option to purchase
shares of Tribune common stock (a "stock electing option"); or
. to cause such option to be cancelled in exchange for a single lump sum
cash payment (less any applicable income or employment or other tax
withholding), without interest, equal to the product of (a) the number
of shares of Times Mirror common stock subject to such option
immediately prior to the effective time of the merger and (b) the
excess, if any, of $95 over the exercise price per share of such option
(a "cash electing option").
To the extent any holder of an option to purchase Times Mirror common stock
does not make an election with respect to such option prior to the election
deadline, such option will be deemed to be a cash electing option.
Each stock electing option will, by virtue of the merger, be converted into
an option to purchase that number of shares of Tribune common stock equal to
the number of shares of Times Mirror common stock which could have been
obtained upon the exercise of the option immediately prior to the effective
time of the merger, multiplied by 2.5. The exercise price will be adjusted to
equal the exercise price for such option immediately before the effective time
of the merger divided by 2.5, rounded down to the nearest whole cent. If the
foregoing calculation results in an option being exercisable for a fraction of
a share of Tribune common stock, then the number of shares of Tribune common
stock subject to such option will be rounded up to the nearest whole number of
shares. Tribune will assume the obligations of Times Mirror under the Times
Mirror option plans and the other terms of such options will continue to apply
in accordance with the terms of the plans under which they were issued.
Each cash electing option will, by virtue of the merger, be cancelled in
exchange for a single lump sum cash payment (less any applicable income or
employment or other tax withholding), without interest, equal to the amount
described in the second bullet point above.
All restricted shares of Times Mirror common stock granted pursuant to any
equity plan or arrangements of Times Mirror, and all individual awards of
restricted shares of Times Mirror common stock not granted pursuant to any such
plan or arrangement, will become fully vested immediately prior to the
effective time of the merger and such shares of Times Mirror common stock will
be freed of restrictions and issued to the relevant participant.
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Debt Securities
Times Mirror's publicly-traded debt securities outstanding immediately prior
to the effective time of the merger will be assumed by Tribune and remain
outstanding as an obligation of Tribune in accordance with their terms. After
the effective time of the merger, the holder of each such security that, prior
to the effective time of the merger, was, under certain circumstances and at
certain times, convertible into shares of Times Mirror common stock, will have
the right, under the same circumstances and at the same times, to convert such
security into the number of shares of Tribune common stock equal to the number
of shares of Times Mirror common stock into which such security could have been
converted (had it then been convertible) immediately prior to the merger
multiplied by 2.5.
Proxy Statement and Registration Statement
Tribune and Times Mirror agreed in the merger agreement that they would as
promptly as practicable:
. prepare and file with the Securities and Exchange Commission a proxy
statement relating to the meeting of Tribune's stockholders to be held
in connection with the merger and the meeting of Times Mirror's
stockholders to be held in connection with the merger; and
. convene meetings of their respective stockholders for the purpose of
considering and taking action upon the merger agreement.
In addition, Tribune agreed in the merger agreement that it would as promptly
as practicable prepare and file with the Securities and Exchange Commission a
registration statement on Form S-4 with respect to the shares of Tribune common
stock issuable to the Times Mirror stockholders in the merger. Furthermore,
Tribune and Times Mirror agreed:
. to use all reasonable efforts to cause the registration statement to
become effective as promptly as practicable; and
. to mail the proxy statement/prospectus to their respective stockholders
as promptly as practicable after the registration statement becomes
effective.
Representations and Warranties
Times Mirror made customary representations and warranties to Tribune in the
merger agreement with respect to, among other matters:
. organization;
. subsidiaries;
. capitalization;
. authority;
. consents and approvals;
. conflicts;
. Securities and Exchange Commission reports and financial statements;
. absence of certain changes or events;
. absence of undisclosed liabilities;
. employee benefit plans;
. labor matters;
. contracts;
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. indebtedness;
. litigation;
. compliance with law;
. taxes;
. environmental matters;
. intellectual property;
. the required stockholder vote to approve the merger agreement;
. brokers; and
. the opinion of its financial advisor.
Tribune made customary representations and warranties to Times Mirror with
respect to, among other matters:
. organization;
. capitalization;
. authority;
. consents and approvals;
. conflicts;
. Securities and Exchange Commission reports and financial statements;
. absence of certain changes or events;
. absence of undisclosed liabilities;
. litigation;
. compliance with law;
. taxes;
. intellectual property;
. the required stockholder vote to approve the merger agreement; and
. brokers.
Interim Business Operations
The merger agreement obligates Times Mirror and its subsidiaries, from the
date of the merger agreement until the effective time of the merger, to conduct
their businesses in all material respects in the ordinary course consistent
with past practice and obligates Times Mirror and its subsidiaries to use all
reasonable efforts to preserve intact their business organizations, keep
available the services of their officers and key employees, and preserve their
relationships with customers, suppliers and others with which they have
business dealings. The merger agreement also contains specific restrictive
covenants as to certain activities of Times Mirror and its subsidiaries prior
to the effective time of the merger without the prior written consent of
Tribune relating to, among other things:
. dividends or other distributions;
. changes in stock;
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. repurchases or redemptions of securities;
. issuances or sales of its securities;
. amendments to Times Mirror's restated certificate of incorporation or
amended and restated bylaws;
. liquidation;
. merger;
. change of control transactions;
. material acquisitions or dispositions;
. indebtedness;
. tax matters;
. capital expenditures;
. discharge of liabilities;
. material contracts;
. affiliate contracts;
. settlement of litigation and claims;
. employee matters;
. changes in accounting methods; and
. certain other material events or transactions.
The merger agreement also contains specific restrictive covenants as to
certain activities of Tribune and its subsidiaries prior to the effective time
of the merger without the prior written consent of Times Mirror relating to,
among other things:
. dividends or other distributions;
. changes in stock;
. amendments to Tribune's restated certificate of incorporation or bylaws;
. changes in accounting methods;
. new lines of business;
. certain business combinations or similar transactions; and
. certain other material events or transactions.
No Solicitation
The merger agreement provides that until the effective time of the merger or
earlier termination of the merger agreement, neither Times Mirror nor any of
its affiliates, officers, directors, employees, investment bankers, attorneys,
accountants, agents or other advisors or representatives may:
. solicit, initiate or encourage the submission of any takeover proposal
(as defined below);
. enter into any contract with respect to a takeover proposal;
. participate in any discussions or negotiations regarding a takeover
proposal;
. furnish to any person any information with respect to a takeover
proposal; or
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. take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or could reasonably be expected to lead to,
any takeover proposal.
In addition, the merger agreement requires Times Mirror to immediately cease
and terminate all existing discussions or negotiations with any persons with
respect to, or that could reasonably be expected to lead to, any takeover
proposal. A "takeover proposal" means any proposal for a merger, consolidation,
share exchange, business combination or other similar transaction involving
Times Mirror or any of its subsidiaries, or any proposal or offer to acquire,
directly or indirectly, 20% or more of the voting securities or equity
interests of, or a substantial portion of the assets of, Times Mirror or any of
its subsidiaries, other than the transactions contemplated by the merger
agreement.
Times Mirror is required under the merger agreement to immediately advise
Tribune orally and in writing of:
. any request for information concerning any takeover proposal or of any
takeover proposal;
. the material terms and conditions of such request or takeover proposal;
and
. the identity of the person making such request or takeover proposal.
Times Mirror has agreed to keep Tribune fully and promptly informed of the
status and details of any such request or takeover proposal.
Times Mirror is permitted, under the merger agreement, to furnish
information concerning its business, properties or assets to any person in
response to a request for such information made after the date of the merger
agreement which was not solicited, initiated or encouraged, directly or
indirectly, by Times Mirror, its affiliates, officers, directors, employees,
investment bankers, attorneys, accountants, agents or other advisors or
representatives and may participate in discussions and negotiations with such
person concerning a takeover proposal, in each case, if and only to the extent
that:
. such person has submitted a written takeover proposal to the Times
Mirror board of directors which the board of directors has determined in
good faith, after consulting with and receiving advice from Times
Mirror's outside legal and financial advisors, constitutes or would
reasonably be expected to result in a superior proposal (as defined
below); and
. such person has entered into a confidentiality agreement with Times
Mirror that is no less favorable to Times Mirror than the
confidentiality agreement between Tribune and Times Mirror.
A "superior proposal" means a takeover proposal:
. that is more favorable to Times Mirror and its stockholders than the
tender offer and the merger based on the criteria set forth in the
merger agreement; and
. which is reasonably capable of being completed by the person making such
takeover proposal, taking into account the legal, financial, regulatory
and other aspects of such takeover proposal.
In determining whether a takeover proposal constitutes a superior proposal,
the Times Mirror board of directors will consider:
. the impact that the completion of the takeover proposal would have on
the editorial independence and quality of Times Mirror's properties and
operations;
. the ability of all of Times Mirror's stockholders to receive stock
consideration tax-free in exchange for their shares of Times Mirror
common stock; and
. the factors set forth in Article XI of the Times Mirror restated
certificate of incorporation.
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Pursuant to the merger agreement, the Times Mirror board of directors may
withdraw or modify its approval or recommendation of the tender offer and the
merger in connection with a superior proposal if:
. the board of directors determines in good faith, after receipt of advice
from outside counsel to Times Mirror, that failure to do so would be
inconsistent with its fiduciary duties to Times Mirror's stockholders
under applicable law; and
. Times Mirror notifies Tribune of any such withdrawal or modification
prior to its release to the public.
Times Mirror has agreed to submit the merger agreement and the merger to its
stockholders for approval, regardless of the recommendation or any change in
the recommendation of the Times Mirror board of directors. Times Mirror has
further agreed that it will not take any action to make the restrictions on
business combinations contained in Section 203 of the Delaware General
Corporation Law or the business combination provisions currently contained in
Article X of the Times Mirror restated certificate of incorporation
inapplicable to any takeover proposal (including any superior proposal) prior
to the termination of the merger agreement in accordance with its terms.
Times Mirror has agreed that until the effective time of the merger or
earlier termination of the merger agreement, it will not terminate, amend,
modify or waive any provision of any confidentiality or standstill agreement to
which it or any of its subsidiaries is a party. During such period, Times
Mirror will enforce, to the fullest extent permitted under applicable law, the
provisions of any such agreements, including obtaining injunctions to prevent
any breaches of such agreements and to enforce specifically the terms and
provisions thereof in any court of the United States or any state thereof
having jurisdiction.
Tribune Board Representation and Los Angeles Times Subsidiary Matters
Tribune has agreed that four persons associated with the Chandler Trusts,
Messrs. Chandler, Goodan, Stinehart and Unterman, will become directors of
Tribune upon the closing of the merger, bringing the number of directors of
Tribune to 16. As of the effective time of the merger, Tribune will amend its
bylaws to provide for a special nominating committee to be comprised of three
of these four persons (initially Messrs. Chandler, Goodan and Stinehart). At
each Tribune stockholders' meeting at which directors are to be elected, the
special nominating committee will nominate a number of individuals for election
to the board of directors of Tribune as is necessary to ensure that, assuming
the election of such individuals, there will be three directors on the Tribune
board who were among the initial four persons added to the Tribune board or
were nominated by the special nominating committee. The special nominating
committee will remain in effect until the earlier of:
. the termination of the Chandler Trusts; and
. the sale, distribution or other disposition by the Chandler Trusts of
more than 15% of the aggregate number of shares of Tribune common stock
issued to the Chandler Trusts in the merger.
During the time when the special nominating committee is in effect, the
special nominating committee will fill any vacancies on the Tribune board of
directors due to the resignation, removal, retirement or death of any director
who is a member of the special nominating committee (and such replacement will
become a member of the special nominating committee). In addition, at least one
director who is a member of the special nominating committee will be on each
other committee of the board of directors of Tribune unless the special
nominating committee otherwise agrees. The bylaws of Tribune will further
provide that the provisions relating to the special nominating committee and
the members thereof may only be amended or repealed and any inconsistent
provision may only be adopted, by the affirmative vote of all of the holders of
the outstanding stock of Tribune entitled to vote or of all of the members of
the Tribune board of directors. In addition, the Tribune stockholders will be
asked to approve an amendment (attached as Annex C to this proxy
statement/prospectus) to the restated certificate of incorporation of Tribune,
setting forth the same requirement.
Tribune has also agreed that, following the effective time of the merger, it
will maintain its interest in the Los Angeles Times in a separate subsidiary
with its own board of directors. The special nominating committee will appoint
forty percent of the members of the board of directors of the Los Angeles Times
subsidiary. The
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full board of directors of Tribune (or its delegate) will appoint the remainder
of the members of the board of directors of the Los Angeles Times subsidiary.
Approval of 75% of the board of directors of the Los Angeles Times subsidiary
will be required:
. to approve the appointment of the publisher of the Los Angeles Times;
and
. to sell, transfer or otherwise dispose of the Los Angeles Times, other
than as part of a sale of all or substantially all of Tribune's
publishing group, as a result of a change of control of Tribune or as
required by governmental or regulatory authorities.
Such approval may not be unreasonably withheld.
The Chandler Trusts and the members of the special nominating committee are
third-party beneficiaries of these board and subsidiary provisions and are
entitled to enforce them.
The Charter Amendment
Tribune has agreed to amend its restated certificate of incorporation in
order to:
. increase the authorized number of shares of common stock and preferred
stock of Tribune as the Tribune board of directors determines necessary
or appropriate in light of the merger and the issuance of shares of
Tribune common stock and preferred stock in connection therewith; and
. provide that the bylaws described above with respect to the appointment
of persons associated with the Chandler Trusts to the Tribune board, and
the creation and operation of the special nominating committee, may be
amended or repealed, and any inconsistent provision may be adopted, only
by the affirmative vote of all of the holders of the outstanding Tribune
voting stock or all of the members of the Tribune board.
If Tribune stockholders approve the merger proposal, and the merger is
completed, Tribune will amend its restated certificate of incorporation as set
forth in Annex C to this proxy statement/prospectus. This charter amendment
will increase the number of authorized shares of Tribune common stock from 400
million to 1.4 billion. This is the number that the Tribune board of directors
has determined appropriate in light of the current number of shares of Tribune
common stock outstanding, the number of shares of Tribune common stock to be
issued in the merger, and the desire to have a reasonable number of authorized
but unissued shares of Tribune common stock above the number that will be
outstanding after the issuance of shares in the merger to be used for stock
splits or dividends, or other corporate purposes.
The charter amendment will also increase the number of authorized shares of
Tribune preferred stock from 5 million to 12 million. This is the number that
the Tribune board of directors has determined appropriate in light of the
number of shares of Tribune preferred stock currently issued or reserved for
issuance and the number of shares of Tribune preferred stock to be issued in
the merger or reserved for issuance thereafter.
In addition to increasing the number of authorized shares of Tribune common
stock and preferred stock, the charter amendment will provide that the new
Article VIII of Tribune's bylaws, which will be adopted pursuant to the merger
agreement to effect the provisions described above with respect to the
appointment of new directors and the creation and operation of the special
nominating committee, may be amended or repealed, and any inconsistent
provision may be adopted, only by the affirmative vote of all of the holders of
the outstanding Tribune voting stock or all of the members of the Tribune
board.
The text of the charter amendment is attached as Annex C to this proxy
statement/prospectus and Tribune encourages all stockholders to read it in
full.
Public Announcements
Tribune and Times Mirror have agreed to consult with each other before
issuing any press release or other public statements with respect to the merger
agreement, the tender offer or the merger, and each has agreed not to issue any
such press release or make any such public statement without the prior written
consent of the other party, not to be unreasonably withheld or delayed, except
as may be required by law or in accordance with any listing agreement with any
national securities exchange.
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Efforts
Times Mirror and Tribune have agreed:
. to use reasonable best efforts to take, or cause to be taken, all
actions necessary to comply promptly with all legal requirements that
may be imposed on them with respect to the tender offer and the merger,
including furnishing all information required under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 and in connection with
approvals of or filings with any other governmental entity;
. to promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or any of
their subsidiaries in connection with the tender offer and the merger;
and
. to use reasonable best efforts to take all actions necessary to obtain
any authorization, consent or approval of, or any exemption by, any
governmental entity or other public or private third party required to
be obtained or made by Tribune, Times Mirror or any of their
subsidiaries in connection with the tender offer and the merger.
Notwithstanding the foregoing, Tribune will not be required to agree, and Times
Mirror will not agree without Tribune's consent, to waive any substantial
rights or to accept any substantial limitation on its operations or to dispose
of any material assets in connection with obtaining any such authorization,
consent or approval unless such waiver, limitation or disposition would not
reasonably be expected to have a material adverse effect on Times Mirror or on
Tribune. Furthermore, at Tribune's written request, Times Mirror will agree to
any such waiver, limitation or disposal, which agreement may, at Times Mirror's
option, be conditioned upon and effective only as of the effective time of the
merger.
Employee Benefit Plans
Under the terms of the merger agreement, from the effective time of the
merger until the first anniversary thereof, Tribune will provide coverage and
benefits to employees and former employees of Times Mirror and its subsidiaries
that are no less favorable, in the aggregate, than those provided to such
employees immediately prior to the effective time of the merger. The merger
agreement also specifies the treatment of pre-existing conditions, deductibles
and service credit with respect to employees and former employees of Times
Mirror and its subsidiaries who participate in any employee benefit plans of
Tribune following the effective time of the merger. In addition, Tribune has
agreed to assume, honor and perform, in accordance with their terms, all
employment, severance and change in control and other such agreements of Times
Mirror and its subsidiaries and affiliates.
Indemnification; Directors' and Officers' Insurance
Times Mirror will, to the fullest extent permitted under applicable law,
indemnify and hold harmless and, after the effective time of the merger,
Tribune will, to the fullest extent permitted under applicable law, indemnify
and hold harmless each present and former director and officer of Times Mirror
and each subsidiary of Times Mirror and each such individual who served at the
request of Times Mirror or any subsidiary of Times Mirror as a director,
officer, trustee, partner, fiduciary, employee or agent of another corporation,
partnership, joint venture, trust, pension or other employee benefit plan or
enterprise against all costs and expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and settlement
amounts paid in connection with any claim, action, suit, proceeding or
investigation (whether arising before or after the effective time of the
merger), whether civil, administrative or investigative, arising out of or
pertaining to any action or omission in their capacity as an officer or
director of Times Mirror or any subsidiary of Times Mirror, as applicable, in
each case occurring prior to the effective time of the merger (including the
transactions contemplated by the merger agreement).
For six years from the effective time of the merger, Tribune will use all
reasonable efforts to provide to Times Mirror's current directors and officers
liability insurance protection of the same kind and scope as that
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provided by Times Mirror's directors' and officers' liability insurance
policies in effect on the date of the merger agreement. In no event will
Tribune be required to expend more than 200% of the amount expended by Times
Mirror as of the date of the merger agreement to maintain or procure such
insurance coverage. If Tribune is unable to maintain or obtain such insurance,
Tribune will use all reasonable efforts to obtain as much comparable insurance
as available for such expenditure.
Notification of Certain Matters
Each of Times Mirror and Tribune has agreed to promptly notify the other of:
. any notice or other communication from any person alleging that the
consent of such person is or may be required in connection with the
transactions contemplated by the merger agreement;
. any notice or other communication from any governmental entity in
connection with the transactions contemplated by the merger agreement;
. the occurrence, or non-occurrence, of any event, the occurrence, or non-
occurrence, of which would be reasonably expected to cause any
representation or warranty contained in the merger agreement to be
untrue or inaccurate in any material respect; and
. any failure of such party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under the
merger agreement.
Takeover Restrictions
In the merger agreement, Times Mirror has represented that it has taken all
appropriate actions so that the restrictions on business combinations contained
in Section 203 of the Delaware General Corporation Law and in Article X of the
Times Mirror restated certificate of incorporation will not apply with respect
to or as a result of the merger agreement, the voting agreement, or the
transactions contemplated thereby, including the tender offer and the merger.
Times Mirror has represented further that the execution and delivery of the
merger agreement and/or the voting agreement does not constitute an unpermitted
transfer of any shares of Times Mirror series C common stock under Article V of
the Times Mirror restated certificate of incorporation and that the board of
directors of Times Mirror has not elected to effect a conversion of the shares
of Times Mirror series C common stock to shares of Times Mirror series A common
stock pursuant to the Times Mirror restated certificate of incorporation or the
certificate of designation of the Times Mirror series C common stock.
Certain Litigation
Times Mirror has agreed that, prior to the termination of the merger
agreement, it will not settle any litigation commenced after the date of the
merger agreement against Times Mirror or any of its directors by any
stockholder of Times Mirror relating to the tender offer, the merger, the
merger agreement or the voting agreement, or the other transactions
contemplated thereby, without the prior written consent of Tribune. Prior to
the termination of the merger agreement, Times Mirror will not voluntarily
cooperate with any third party that may seek to restrain or prohibit or
otherwise oppose the tender offer or the merger and will cooperate with Tribune
to resist any such effort to restrain or prohibit or otherwise oppose the
tender offer or the merger.
Listing of Tribune Common Stock
Tribune has agreed to use all reasonable efforts to cause the shares of
Tribune common stock to be issued in the merger pursuant to the merger
agreement to be listed for trading on the New York Stock Exchange, subject to
official notice of issuance, prior to the effective time of the merger.
Tax-Free Reorganization
Prior to the effective time of the merger, each of Tribune and Times Mirror
will use its reasonable best efforts to cause the merger to qualify as a
reorganization within the meaning of Section 368 of the Internal
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Revenue Code of 1986, as amended, and will not knowingly take any action that
would cause the merger not to so qualify. Tribune has agreed to not knowingly
take any action after the effective time of the merger that would cause the
merger not to qualify as a reorganization within the meaning of Section 368 of
the Internal Revenue Code of 1986, as amended.
Charitable Contributions
Tribune has agreed, for five years after the effective time of the merger,
to continue the existence and operation of the Times Mirror Foundation and fund
charitable contributions of the Times Mirror Foundation consistent with past
practice.
Conditions to Completion of the Merger
Pursuant to the merger agreement, the respective obligations of Tribune and
Times Mirror to complete the merger are subject to the satisfaction, at or
before the effective time of the merger, of each of the following conditions:
. the approval and adoption of the merger agreement by the affirmative
vote of holders of a majority of the voting power of the outstanding
shares of Times Mirror common stock;
. the approval and adoption of the merger agreement (including the
issuance of Tribune common stock and the charter amendment) by the
affirmative vote of a majority of the voting power of Tribune;
. the absence of any statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other
governmental entity or other legal restraint or prohibition preventing
the consummation of the merger;
. the effectiveness of the registration statement relating to this proxy
statement and prospectus and the absence of any stop order suspending
such effectiveness or any action, suit, proceeding or investigation by
the Securities and Exchange Commission to suspend such effectiveness and
the receipt of all necessary approvals under state securities laws or
the Securities Act of 1933, or the Securities Exchange Act of 1934, as
amended, relating to the issuance or trading of the Tribune common stock
to be issued pursuant to the merger agreement; and
. approval of the Tribune common stock to be issued in the merger for
listing on the New York Stock Exchange, subject only to official notice
of issuance.
Pursuant to the merger agreement, the obligation of Times Mirror to
consummate the merger is subject to the satisfaction, at or before the
effective time of the merger, of each of the following additional conditions:
. Tribune shall have performed in all material respects each of its
agreements contained in the merger agreement required to be performed on
or prior to the date of the closing of the merger;
. Tribune shall have furnished to Times Mirror a certificate signed on
behalf of Tribune by an executive officer of Tribune, certifying to the
effect that the condition described in the previous bullet point, has
been satisfied in full; and
. Times Mirror shall have received an opinion of Gibson, Dunn & Crutcher
LLP in form and substance reasonably satisfactory to Times Mirror, dated
the effective time of the merger, to the effect that the merger will be
treated for federal income tax purposes as a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended,
and that each of Tribune and Times Mirror will be a party to the
reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended.
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Pursuant to the merger agreement, the obligation of Tribune to consummate
the merger is subject to the satisfaction, at or before the effective time of
the merger, of each of the following additional conditions:
. Times Mirror shall have performed in all material respects each of its
agreements contained in the merger agreement required to be performed at
or prior to the date of the closing of the merger;
. Times Mirror shall have furnished to Tribune a certificate, dated the
date of the closing of the merger, signed on behalf of Times Mirror by
an executive officer of Times Mirror, certifying to the effect that the
condition described in the previous bullet point has been satisfied in
full;
. Tribune shall have received an opinion of Wachtell, Lipton, Rosen &
Katz, in form and substance reasonably satisfactory to Tribune, dated
the effective time of the merger, to the effect that the merger will be
treated for federal income tax purposes as a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended,
and that each of Tribune and Times Mirror will be a party to the
reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended; and
. all authorizations, consents, approvals and exemptions required by any
governmental entity and other persons in connection with the merger and
the transactions contemplated by the merger agreement and the voting
agreement shall have been obtained or made, except to the extent the
failure to obtain or make such authorizations, consents, approvals or
exemptions would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on Times Mirror or on
Tribune.
Termination
The merger agreement may be terminated at any time prior to the effective
time of the merger, whether before or after the Times Mirror stockholder
approval or the Tribune stockholder approval:
. by mutual written consent of Tribune and Times Mirror;
. by either Tribune or Times Mirror:
- if any governmental entity of competent jurisdiction has issued an
order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the completion of
the merger and such order, decree or ruling or other action has
become final and nonappealable;
- if, at the meeting of Times Mirror stockholders (including any
adjournment thereof), the Times Mirror stockholder approval is not
obtained;
- if, at the meeting of Tribune stockholders (including any
adjournment thereof), the Tribune stockholder approval is not
obtained; or
- if the merger is not consummated by December 31, 2000, unless the
failure to consummate the merger is the result of a breach of the
merger agreement by the party seeking to terminate the merger
agreement;
. by Tribune if:
- Times Mirror has failed to perform in any material respect any
material obligation or to comply in any material respect with any
material agreement or covenant of Times Mirror to be performed or
complied with by it under the merger agreement;
- the board of directors of Times Mirror or any committee thereof has
withdrawn or modified in a manner adverse to Tribune its approval or
recommendation of the tender offer, the merger or the merger
agreement, or approved or recommended any takeover proposal, or the
board of directors of Times Mirror or any committee thereof has
resolved to do any of the foregoing; and
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. by Times Mirror if:
- Tribune has failed to perform in any material respect any material
obligation or to comply in any material respect with any material
agreement or covenant of Tribune to be performed or complied with by
it under the merger agreement.
Fees and Expenses
Except as described below, all costs and expenses incurred in connection
with the merger, the merger agreement and the transactions contemplated by the
merger agreement will be paid by the party to the merger agreement incurring
such fees or expenses, whether or not the merger is consummated; provided, that
Times Mirror and Tribune will share equally all fees and expenses, other than
attorneys' and accounting fees and expenses, incurred in relation to the
printing, filing and mailing of the registration statement and the proxy
statement included therein.
If Tribune terminates the merger agreement after:
. the Times Mirror board changes its recommendation in a manner adverse to
Tribune or recommends another transaction; or
. the Times Mirror stockholders vote against the merger following a
modification or withdrawal of the recommendation of the Times Mirror
board of directors
Times Mirror will pay a $250 million fee to Tribune.
In addition, if prior to the time of the Times Mirror stockholders' meeting,
a takeover proposal is made by a third party, the Times Mirror stockholder
approval is not obtained, and on or prior to the 12-month anniversary of the
termination of the merger agreement a takeover proposal with a third party is
completed or Times Mirror or any of its subsidiaries or affiliates enters into
an agreement covering a takeover proposal with a third party, then Tribune will
be entitled to the $250 million fee.
Payment of the $250 million fee will not prevent Tribune from seeking any
remedies available to it against the parties to the voting agreement for any
breach thereof.
Amendment
The merger agreement may be amended by Times Mirror and Tribune, by action
taken or authorized by their respective boards of directors, at any time before
or after obtaining the Times Mirror stockholder approval relating to the merger
or Tribune stockholder approval relating to the merger, but, after any such
approval, no amendment may be made which by law requires further approval by
the stockholders of Times Mirror or Tribune, as applicable, without obtaining
such further approval.
Extension; Waiver
At any time prior to the effective time of the merger, Times Mirror and
Tribune, by action taken or authorized by their respective boards of directors,
may, to the extent legally allowed:
. extend the time for the performance of any of the obligations or other
acts of the other parties hereto;
. waive any inaccuracies in the representations and warranties contained
in the merger agreement or in any document delivered pursuant to the
merger agreement; or
. waive compliance with any of the agreements or conditions contained in
the merger agreement.
Accounting Treatment
The acquisition of Times Mirror will be accounted for by Tribune using the
purchase method of accounting.
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THE VOTING AGREEMENT
The following summary description of the voting agreement is qualified in
its entirety by reference to the agreement itself, attached as Annex B to this
proxy statement/prospectus.
Concurrently with the execution of the merger agreement, Tribune entered
into the voting agreement with the Chandler Trusts and certain other
significant stockholders of Times Mirror. The Chandler Trusts hold
approximately 73% of the voting power of the outstanding shares of the Times
Mirror common stock.
Each of the significant stockholders party to the voting agreement
(including the Chandler Trusts) has agreed that it will not sell, transfer or
dispose of any shares of, interests in, securities convertible into or voting
rights with respect to, its Times Mirror common stock, other than pursuant to
the merger or a transfer to a party who executes a counterpart of the voting
agreement, in form and substance reasonably satisfactory to Tribune, agreeing
to be bound by its terms and provisions.
Each significant stockholder party to the voting agreement (including the
Chandler Trusts) has further agreed to vote, or cause to be voted, all of the
shares of capital stock of Times Mirror beneficially owned by it, or with
respect to which it has the right to vote, at any meeting of stockholders of
Times Mirror (including any adjournment or postponement thereof), or pursuant
to any action by written consent:
. in favor of the merger agreement, the merger, the other transactions
contemplated by the merger agreement, and any actions required in
furtherance thereof;
. against any action or agreement that could reasonably be expected to
result in a breach in any material respect of any covenant,
representation or warranty, or any other obligation of Times Mirror,
under the merger agreement or any related agreement or is intended, or
could reasonably be expected, to materially impede, interfere with,
delay, postpone or adversely affect the merger or the other transactions
contemplated by the merger agreement; and
. against any takeover proposal.
The voting agreement further provides that if the board of directors of
Times Mirror modifies or withdraws its approval or recommendation of the tender
offer and the merger in connection with a superior proposal on or prior to
April 2, 2000, the vote of the Chandler Trusts with respect to the matters
described in the three bullet points above, would be reduced to 40% of the
voting power of Times Mirror (with the remaining shares held by the Chandler
Trusts voted in proportion to the vote of the shares not held by them). Because
the board of directors of Times Mirror did not modify or withdraw its approval
or recommendation of the tender offer or the merger on or prior to April 2,
2000, no such reduction in voting power will occur.
In addition, under the terms of the voting agreement, each of the Chandler
Trusts has agreed that it will not, and will not permit or authorize any of its
directors, managers, members, trustees, stockholders, officers, employees,
affiliates, agents or advisors to:
. initiate, solicit or encourage any discussions, inquiries or proposals
with any third party that constitute or may reasonably be expected to
lead to a takeover proposal;
. provide any such person with information or assistance; or
. discuss or negotiate with any such person with respect to a possible
takeover proposal.
Each Chandler Trust will notify Tribune as promptly as practicable of any
inquiry, discussion or proposal that constitutes or may reasonably be expected
to lead to a takeover proposal promptly after it becomes aware of such inquiry,
discussion or proposal.
Each significant stockholder party to the voting agreement (including the
Chandler Trusts) has agreed to waive any and all appraisal, dissenters or
similar rights that it may have with respect to the merger and the
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other transactions contemplated by the merger agreement pursuant to the
Delaware General Corporation Law or other applicable law. The voting agreement
also provides that each of TMCT, LLC, TMCT II, LLC, Eagle New Media
Investments, LLC and Chandis Acquisition Corporation (each a significant
stockholder party to the voting agreement), will elect to receive Tribune
common stock in the merger in respect of the shares of Times Mirror common
stock owned beneficially or of record by it.
In the event that the merger agreement is terminated, the voting agreement
requires the Chandler Trusts to vigorously oppose and seek to prevent any
effort by Times Mirror and/or the board of directors of Times Mirror, prior to
the first anniversary of the termination of the merger agreement, to convert
any shares of Times Mirror series C common stock into shares of Times Mirror
series A common stock in connection with a takeover proposal (other than a
conversion that would take effect immediately prior to or contemporaneously
with the consummation of the transactions contemplated by such takeover
proposal). The obligations of the Chandler Trusts to vigorously oppose and seek
to prevent described in the immediately preceding sentence include the
obligation of the Chandler Trusts to commence and maintain litigation
contesting such conversion and pursue such litigation diligently and in good
faith.
The voting agreement may be terminated at the option of Tribune, on the one
hand, or any of the significant stockholders party thereto (including the
Chandler Trusts), on the other hand, at any time after the earlier of:
. the day following the effective time of the merger; and
. termination of the merger agreement in accordance with its terms.
Regardless of the termination of the voting agreement, the obligation of the
Chandler Trusts described in the immediately preceding paragraph will survive
until the earlier of:
. the day following the effective time of the merger; and
. the later of
- the first anniversary of the termination of the merger agreement;
and
- the resolution of any litigation brought by the Chandler Trusts
pursuant to the provisions described in the immediately preceding
paragraph.
The voting agreement may also be terminated, as to any of the significant
stockholders parties thereto (including the Chandler Trusts), by the mutual
agreement of Tribune and such significant stockholder. The termination as to
such significant stockholder will not affect the obligations of any of the
other significant stockholders under the voting agreement. No termination of
the voting agreement will relieve any party from liability for any material
breach of its obligations under the voting agreement committed prior to such
termination. Furthermore, termination of the voting agreement will not relieve
the Chandler Trusts from liability for any material breach of the obligations
described in the immediately preceding paragraph, during the period that those
obligations survive the termination of the voting agreement.
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<PAGE>
OWNERSHIP OF TIMES MIRROR COMMON STOCK
Beneficial Ownership of Certain Stockholders
The following table sets forth the ownership of the outstanding shares of
the voting securities of Times Mirror as of April 28, 2000 (except as otherwise
noted), held by persons known to Times Mirror to beneficially own more than 5%
of the outstanding shares of a class of voting securities of Times Mirror and
by certain employee benefit plan trusts maintained by Times Mirror for various
qualified retirement plans for employees of Times Mirror and its subsidiaries.
Unless otherwise indicated, beneficial ownership numbers represent shares over
which the beneficial owner has sole voting and dispositive power.
<TABLE>
<CAPTION>
Times Mirror Times Mirror
Name and Address of Beneficial Series A Percent of Series C Percent of
Owner Common Stock Series(1) Common Stock Series(1)
- ------------------------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
The Trustees of the Chandler
Trusts(2)(3)................. -- -- 14,521,654 91.29%
350 West Colorado Boulevard
Suite 230
Pasadena, CA 91105
Tribune Company(8)............ 23,305,244 57.97% -- --
435 North Michigan Avenue
Chicago, IL 60611
The Times Mirror Employee
Stock Ownership Trust(4)..... 2,864,934 7.13% 1,356,244 8.53%
Times Mirror Square
Los Angeles, CA 90053
Times Mirror Savings Plus Plan
Trust(5)..................... 2,057,887 5.12% 137,092 *
Times Mirror Square
Los Angeles, CA 90053
Putnam Investments, Inc.(6)... 2,018,969 5.02% -- --
Marsh & McLennan Companies,
Inc.
Putnam Investment Management,
Inc.
The Putnam Advisory Company,
Inc.
One Post Office Square
Boston, MA 02109
FMR Corp.(7).................. 4,227,771 10.52% -- --
82 Devonshire Street
Boston, MA 02109
</TABLE>
- --------
* Less than 1%
(1) The percentages are based on the number of shares outstanding for voting
purposes of each class of voting securities as of April 28, 2000, as
reflected in the records of Times Mirror. Shares of Times Mirror series C
common stock automatically convert on a share-for-share basis into shares
of Times Mirror series A common stock upon being transferred, other than
transfers to certain permitted transferees as specified in Times Mirror's
restated certificate of incorporation.
(2) Concurrently with the execution of the merger agreement, the Chandler
Trusts entered into a voting agreement with Tribune. Please see the
description of the voting agreement under the caption "Voting Agreement"
above. On April 28, 2000, the Chandler Trusts owned in the aggregate
14,521,654 shares of Times Mirror series C common stock. In addition to
her interests in shares held by the Chandler Trusts, Gwendolyn Garland
Babcock, a trustee of the Chandler Trusts, holds 23,800 shares of Times
Mirror series A common stock (over all of which Mrs. Babcock has sole
voting and dispositive power), including 20,000 shares of Times Mirror
series A common stock which she may acquire upon exercise of outstanding
stock options and 2,057 stock units deferred under The Times Mirror Non-
Employee Directors Stock Plan. Her husband holds 900 shares of Times
Mirror series A common stock and 448 shares of Times Mirror series C
common stock. In addition to Mrs. Babcock, four other trustees of the
Chandler
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<PAGE>
Trusts own Times Mirror series A common stock individually or as trustee as
follows: 113,801 shares of Times Mirror series A common stock and 57,264
shares of Times Mirror series C common stock owned by Camilla Chandler Frost
plus 106,650 shares of Times Mirror series A common stock held by a
foundation controlled by her, her son, and William Stinehart, Jr.; 9,330
shares by William Stinehart, Jr. (of which he has sole voting and
dispositive power over 8,587 shares), including 5,000 shares of Times Mirror
series A common stock which he may acquire upon the exercise of outstanding
stock options, 3,587 stock units deferred under The Times Mirror Non-
Employee Directors Stock Plan and 1,243 shares held as co-trustee, of which
he disclaims beneficial ownership; and 24,865 shares by Warren B. Williamson
(over all of which Mr. Williamson has sole voting and dispositive power),
including 20,000 shares of Times Mirror series A common stock which he may
acquire upon the exercise of outstanding stock options and 4,582 stock units
deferred under The Times Mirror Non-Employee Directors Stock Plan. On April
28, 2000, the individuals who act as trustees of the Chandler Trusts
beneficially owned, indirectly, in their capacities as individuals and as
trustees of the Chandler and other trusts an aggregate of 279,346 shares of
Times Mirror series A common stock and 14,579,366 shares of Times Mirror
series C common stock constituting 0.69% of the shares of Times Mirror
series A common stock and 91.65% of the shares of Times Mirror series C
common stock outstanding on that date, representing 73.30% of the combined
voting power of all outstanding shares of Times Mirror series A and Times
Mirror series C common stock. Unless otherwise indicated, all beneficial
ownership figures reported in this footnote represent shares over which the
beneficial owner shares voting and dispositive power with others.
(3) The number of shares indicated above excludes 4,001,067 shares of Times
Mirror series A common stock held by TMCT, LLC and 12,432,973 shares of
Times Mirror series A common stock held by TMCT II, LLC. Such shares may
be deemed to be beneficially owned by the Chandler Trusts under Section
13(d) of the Securities Exchange Act of 1934. The Chandler Trusts and
their respective trustees, however, disclaim beneficial ownership of such
shares. In addition, TMCT, LLC holds 411,784 shares of Times Mirror series
A preferred stock and TMCT II, LLC holds 380,972 shares of series D-1
preferred stock and 245,100 shares of series D-2 preferred stock. The
Chandler Trusts and their respective trustees disclaim beneficial
ownership of such shares.
(4) Based on holdings as of January 31, 2000, shares of Times Mirror stock
allocated to participants' accounts in The Times Mirror Employee Stock
Ownership Plan are voted by the participants themselves on matters
presented at meetings of stockholders. Shares with respect to which no
participant directions are received are customarily voted by Fidelity
Management Trust Company, as the trustee of The Times Mirror Employee Stock
Ownership Plan. Effective for purposes of the Times Mirror stockholder
approval of the merger, however, Times Mirror has exercised its authority
under the trust agreement with Fidelity Management Trust Company to appoint
LaSalle Bank, N.A., in the capacity of a fiduciary independent of Times
Mirror and Fidelity Management Trust Company, to vote the shares held in
The Times Mirror Employee Stock Ownership Plan with respect to which no
participant directions are received. Under The Times Mirror Employee Stock
Ownership Plan trust agreement, the decision of whether to tender the
shares of Times Mirror stock allocated to participants' accounts in The
Times Mirror Employee Stock Ownership Plan pursuant to the tender offer is
made by the participants themselves, and accordingly, participant
directions on whether to tender such shares will be solicited.
Notwithstanding the directions of participants, however, Times Mirror has
exercised its authority under The Times Mirror Employee Stock Ownership
Plan trust agreement to appoint LaSalle Bank, N.A. as an independent
fiduciary to determine whether the exercise of the tender rights as
directed by participants is consistent with the provisions of the Employee
Retirement Income Security Act of 1974, as amended. LaSalle Bank, N.A., as
independent fiduciary will also exercise the tender rights pertaining to
the shares with respect to which no participant directions are received.
The Plan Administration Committee, which is appointed by the board of
directors of Times Mirror, also has authority and responsibility for the
disposition of the investment of the assets held in The Times Mirror
Employee Stock Ownership Plan, including the stock. This Committee consists
of four officers of Times Mirror, three of whom are Mark H. Willes, Kathryn
M. Downing and Efrem Zimbalist III.
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<PAGE>
(5) Based on holdings as of January 31, 2000, shares of Times Mirror stock
held in the Times Mirror Savings Plus Plan accounts or allocated to
participants' Payroll-Based Stock Ownership Plan accounts are voted by the
participants themselves on matters presented at meetings of stockholders.
Shares allocated to the Times Mirror Savings Plus Plan accounts with
respect to which no participant directions are received will remain
unvoted. Shares allocated to the Payroll-Based Stock Ownership Plan
accounts with respect to which no participant directions are received are
customarily voted by Fidelity Management Trust Company, as trustee of the
Times Mirror Savings Plus Plan. Effective for purposes of the Times Mirror
stockholder approval of the merger, however, Times Mirror has exercised
its authority under the trust agreement with Fidelity Management Trust
Company to appoint LaSalle Bank, N.A. as independent fiduciary, to vote
the shares allocated to the Payroll-Based Stock Ownership Plan accounts
with respect to which no participant directions are received. The decision
of whether to tender the shares of Times Mirror stock held in the Times
Mirror Savings Plus Plan accounts pursuant to the tender offer is made by
the participants themselves, and, accordingly, participant directions on
whether to tender such shares will be solicited. Fidelity Management Trust
Company will tender such shares pursuant to participants' directions. With
respect to any such shares for which no directions are received, Fidelity
Management Trust Company will not tender such shares. Times Mirror has
appointed LaSalle Bank, N.A. as independent fiduciary to determine whether
to tender shares of Times Mirror stock held in participants' Payroll-Based
Stock Ownership Plan accounts pursuant to the tender offer.
(6) This information is based solely on a Schedule 13G dated April 11, 2000
filed with the Securities and Exchange Commission by Putnam Investments,
Inc. Putnam Investments, Inc, a wholly-owned subsidiary of Marsh &
McLennan Companies, Inc., wholly owns Putnam Investment Management, Inc.,
which is the investment adviser to the Putnam family of mutual funds, and
The Putnam Advisory Company, Inc., which is the investment adviser to
Putnam's institutional clients. Putnam Investment Management, Inc. and The
Putnam Advisory Company, Inc. both have dispositive power over the shares
as investment managers, but each of the mutual fund's trustees have voting
power over the shares held by each fund, and The Putnam Advisory Company,
Inc. has shared voting power over the shares held by the institutional
clients.
(7) This information is based solely on a Schedule 13G dated February 14, 2000
filed with the Securities and Exchange Commission by FMR Corp. as a parent
holding company on behalf of certain stockholders of FMR Corp. and its
investment advisory subsidiary Fidelity Management & Research Company.
Fidelity Management & Research Company is the beneficial owner of
2,152,017 shares of Times Mirror series A common stock as a result of
acting as investment adviser to various registered investment companies.
Edward C. Johnson 3d, Chairman of FMR Corp., FMR Corp., through its
control of Fidelity Management & Research Company, and the investment
companies, each has sole power to dispose of the 2,152,017 shares owned by
the investment companies. Neither Mr. Johnson nor FMR Corp. has the sole
power to vote the 2,152,017 shares owned directly by the investment
companies, which power resides in the board of trustees of the investment
companies. Fidelity Management Trust Company, a subsidiary of FMR Corp.,
is the beneficial owner of 2,075,754 shares of Times Mirror series A
common stock as a result of it serving as investment manager of
institutional accounts. Mr. Johnson and FMR Corp., through its control of
Fidelity Management Trust Company, each has sole dispositive power over
2,075,754 shares and sole power to vote 2,075,754 shares of Times Mirror
series A common stock owned by the institutional accounts. Strategic
Advisers, Inc., a subsidiary of FMR Corp. and a registered investment
adviser, does not have sole power to vote or direct the voting of shares
of certain securities held for clients and has sole dispositive power over
such securities. As such, FMR Corp.'s beneficial ownership may include
shares beneficially owned through Strategic Advisers, Inc. See also Notes
4 and 5 above.
(8) Tribune purchased these shares pursuant to a tender offer which was
completed as of midnight on April 17, 2000 and in the open market.
Beneficial Ownership of Directors and Management of Times Mirror
The following table shows the beneficial ownership as of April 18, 2000
(except as otherwise noted) of Times Mirror's common stock, including shares as
to which a right to acquire ownership exists within the meaning of Rule 13d-
3(d)(1) under the Securities Exchange Act of 1934, of each director, certain
executive
78
<PAGE>
officers, and a group of such persons and other executive officers. For this
purpose, the rules of the Securities and Exchange Commission require that every
person who has or shares the power to vote or dispose of shares of stock be
reported as a "beneficial owner" of all shares as to which such power exists.
As a consequence, many persons may be deemed to be the "beneficial owners" of
the same securities and for this reason all shares of series C common stock
held by the trustees of the Chandler Trusts (see Notes (2) and (3) above) are
included in the shares reported in the table below as "beneficially owned" by
each director who is also a trustee of the Chandler Trusts.
None of the persons listed below beneficially owns any shares of Times
Mirror's series A preferred stock, series D-1 preferred stock or series D-2
preferred stock (see Note 3 above). Unless otherwise indicated, beneficial
ownership numbers represent shares over which the beneficial owner has sole
voting and dispositive power.
Table of Beneficial Ownership of Management
<TABLE>
<CAPTION>
Times Mirror Series A Times Mirror Series C
Common Stock Common Stock
--------------------------- ------------------------
Percent of Percent of
Name Total(1)(2) Series(3) Total(1) Series(3)
---- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Susan Babcock............. 4,170 * -- *
Donald R. Beall........... 25,334(4)(5) * -- --
Horst A. Bergmann......... 138,313(6) * -- *
John E. Bryson............ 26,727(4) * -- --
Bruce Chandler............ 20,248 * 14,521,654(7) 91.29%
Phillip B. Doherty........ -- -- -- --
Kathryn M. Downing........ 126,190(6) * -- --
Dennis J. FitzSimons...... -- -- -- --
Clayton W. Frye, Jr....... 20,000 * -- *
Jack Fuller............... -- -- -- --
Roger Goodan.............. 12,590(5) * -- --
David J. Granat........... -- -- -- --
Donald C. Grenesko........ -- -- -- --
David D. Hiller........... -- -- -- --
Raymond A. Jansen, Jr..... 107,883(6) * -- --
Crane H. Kenney........... -- -- -- --
Timothy J. Landon......... -- -- -- --
Sherry L. Lansing......... 10,400 * -- --
Dawn Gould Lepore......... 12,503(4) * -- --
Luis E. Lewin............. -- -- -- --
John W. Madigan........... -- -- -- --
R. Mark Mallory........... -- -- -- --
Ruthellyn Musil........... -- -- -- --
James E. O'Dell........... -- -- -- --
Dr. Alfred E. Osborne,
Jr....................... 25,787(4) * 385 *
Robert W. Schult.......... 13,973 * -- --
William Stinehart, Jr..... 8,587(4)(5) * 14,521,654(7) 91.29%
Thomas Unterman(10)....... 196,184(6) * 258 *
Mark H. Willes(11)........ 693,948(6) 1.75% -- --
Warren B. Williamson...... 24,865(4) * 14,521,654(7) 91.29%
Dr. Edward Zapanta........ 18,636(4)(8) * -- --
Efrem Zimbalist III....... 47,426(6) * 219 *
All directors and
executive officers as a
group (25 persons,
including those named
above)................... 1,780,835(9) 4.50% 14,526,056 91.32%
</TABLE>
- --------
* Less than 1%
79
<PAGE>
(1) Includes shares held under Times Mirror's Savings Plus Plan (including
the Payroll-Based Stock Ownership Plan) and Employee Stock Ownership Plan
and allocated to the accounts of the executive officers as of February 8,
2000. Also includes shares held in Times Mirror's Dividend Reinvestment
Plan as of December 31, 1999. Shares of Times Mirror series C common
stock automatically convert into shares of Times Mirror series A common
stock upon being transferred, other than transfers to certain permitted
transferees as specified in Times Mirror's restated certificate of
incorporation.
(2) Includes shares which may be acquired upon the exercise of outstanding
stock options and that are currently exercisable within 60 days of April
18, 2000 as follows: 4,170 by Ms. Babcock; 20,000 by Mr. Beall; 128,592
by Mr. Bergmann; 23,653 by Mr. Bryson; 20,000 by Mr. Chandler; 110,850 by
Ms. Downing; 20,000 by Mr. Frye; 10,400 by Mr. Goodan; 94,900 by Mr.
Jansen; 10,400 by Ms. Lansing; 10,400 by Ms. Lepore; 20,000 by Dr.
Osborne; 12,700 by Mr. Schult; 5,000 by Mr. Stinehart; 174,065 by Mr.
Unterman; 588,200 by Mr. Willes; 20,000 by Mr. Williamson; 15,000 by Dr.
Zapanta; and 37,450 by Mr. Zimbalist.
(3) The percentages are based upon the numbers of shares outstanding for
voting purposes for each class of voting securities as of April 18, 2000,
as reflected in the records of Times Mirror.
(4) Includes shares deferred under The Times Mirror Company Non-Employee
Directors Stock Plan.
(5) Includes shares held in trust, or other capacities, as to which
beneficial ownership is disclaimed. Mr. Beall shares voting and
dispositive power with respect to 1,243 shares. Includes 150 shares owned
by Mr. Goodan's daughter, who lives in his household. See Note (2)
beginning on page 76 for voting and dispositive power of other persons
indicated.
(6) Includes shares of restricted stock, including shares granted under the
matching restricted stock program of The Times Mirror Company 1996
Management Incentive Plan.
(7) Includes shares held in the Chandler Trusts. See Notes (2) and (3)
beginning on page 76.
(8) Includes shares held in an Individual Retirement Account.
(9) Includes options that are currently exercisable within 60 days. As a
result of the tender offer and the merger, an aggregate 1,285,000
additional options granted to executive officers may become exercisable
at an average exercise price of $56.30 and the restrictions on 87,283
shares of restricted stock may lapse at such time.
(10) On terminal leave of absence pursuant to the severance agreement dated as
of December 27, 1999.
(11) Mr. Willes is no longer chairman of the board, president and chief
executive officer of The Times Mirror Company, but remains a director.
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<PAGE>
DESCRIPTION OF TRIBUNE CAPITAL STOCK
The following description of certain terms of the capital stock of Tribune
is not meant to be complete and is qualified by reference to the restated
certificate of incorporation of Tribune, the bylaws of Tribune, and the
Delaware General Corporation Law. Copies of the restated certificate of
incorporation and bylaws of Tribune are incorporated by reference herein.
Authorized Capital Stock
The restated certificate of incorporation of Tribune authorizes Tribune to
issue up to 400,000,000 shares of common stock, without par value, and
5,000,000 shares of preferred stock, without par value, of which 1,600,000 are
designated as Tribune series B convertible preferred stock and 2,000,000 are
designated as Tribune series A junior participating preferred stock. As of May
3, 2000, Tribune had 228,969,744 shares of Tribune common stock issued and
outstanding, 1,215,633 shares of Tribune series B convertible preferred stock
issued and outstanding and no shares of Tribune series A junior participating
preferred stock issued and outstanding. In addition, as of May 3, 2000, there
were 98,009,746 shares of Tribune common stock held in Tribune's treasury. If
Tribune stockholders approve the merger proposal, the number of authorized
shares of Tribune common stock will be increased to 1,400,000,000 and the
number of authorized shares of Tribune preferred stock will be increased to
12,000,000.
Tribune Common Stock
Dividend Rights.
Holders of Tribune common stock are entitled to receive dividends as
declared by the Tribune board of directors. However, no dividend will be
declared or paid on Tribune's common stock until Tribune has paid (or declared
and set aside funds for payment of) all dividends which have accrued on all
classes of Tribune's preferred stock.
Voting Rights.
. Holders of Tribune common stock are entitled to one vote per share.
. Article VI of Tribune's restated certificate of incorporation governing
votes with respect to a change of control (described below) may be
amended only by the affirmative vote of the holders of at least 66 2/3%
of the outstanding capital stock of the Tribune entitled to vote
thereon.
. The bylaws of Tribune may be made, altered, amended and repealed by the
stockholders, but only by the affirmative vote of the holders of 80% of
the outstanding stock of Tribune entitled to vote.
. Any action required or permitted to be taken at any annual or special
meeting of stockholders of Tribune may be taken without a meeting only
if a consent in writing setting forth the action so taken shall be
signed by all stockholders entitled to vote with respect to the subject
matter thereof.
. The affirmative vote of 80% of the outstanding stock of Tribune entitled
to vote is required to amend or repeal the provisions set forth in the
two preceding bullet points.
. Under the charter amendment to be adopted in connection with the merger,
the bylaw provisions relating to the special nominating committee to be
established by Tribune may be amended only by the vote of all of the
holders of the outstanding Tribune voting stock or all of the members of
the Tribune board of directors.
Classified Board.
The Tribune board of directors is divided into three classes of four
directors each. Directors hold office for staggered terms of three years each,
so that the term of one class expires at each annual meeting. Following the
effective time of the merger, the Tribune board of directors will be expanded
to 16 members, divided into three classes of five, five and six directors
respectively.
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<PAGE>
Liquidation Rights.
In the event of any liquidation, dissolution or winding up of Tribune, after
payments to holders of Tribune preferred stock of amounts determined by the
board of directors plus any accrued dividends, Tribune's remaining assets will
be divided among holders of Tribune common stock.
Preemptive or Other Subscription Rights.
Holders of Tribune common stock do not have any preemptive right to
subscribe to any additional issue or sale of the capital stock of Tribune or to
acquire any security convertible into capital stock of Tribune.
Conversion, Redemption, Sinking Fund and Other Rights.
No conversion, redemption or sinking fund provisions apply to the Tribune
common stock, and the Tribune common stock is not liable to further call or
assessment by Tribune. All issued and outstanding shares of Tribune common
stock are fully paid and non-assessable.
Restrictions on Alienability.
There are no restrictions on the alienability of the Tribune common stock.
Change in Control.
A merger or consolidation to which Tribune is a party but not the surviving
party, or a sale, lease or exchange to any party of all or substantially all of
the assets of Tribune must be authorized by the holders of at least 66 2/3% of
the outstanding capital stock of Tribune entitled to vote thereon, or such
greater percentage of such stock as may be required by other applicable
provisions of the restated certificate of incorporation.
Interested Party Transactions.
None of the following transactions may be effectuated unless a meeting of
the Tribune stockholders is held to act thereon and voting securities
representing at least 80% of the votes entitled to be cast are cast in favor
thereof:
. an acquisition by Tribune of stock of an interested party (defined
below);
. a sale, lease or exchange of all or the major portion of the assets of
Tribune or an interested party to the other;
. a merger or consolidation to which Tribune and an interested party are
parties; or
. an amendment or repeal of the provision governing interested party
transactions.
An "interested party" means any person, firm or corporation, or any group
thereof acting in concert, which owns of record or beneficially, directly or
indirectly, more than 10% of any class of stock of Tribune.
Tribune Series A Junior Participating Preferred Stock
See "Comparison of Stockholder Rights--Rights Agreement."
Tribune Series B Convertible Preferred Stock
Dividend Rights.
Each share of Tribune series B convertible preferred stock pays a cumulative
dividend of 7.75% per annum, payable semi-annually in arrears.
Voting Rights.
. Each share of Tribune series B convertible preferred stock is voted with
the Tribune common stock with an entitlement to 18.32 votes per
preferred share.
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. The vote of at least 66 2/3% of the outstanding shares of series B
convertible preferred stock, voting separately as a series, is necessary
to adopt any alteration, amendment or repeal of any provision of the
Tribune restated certificate of incorporation or the certificate of
designations relating to the Tribune series B convertible preferred
stock, if such amendment, alteration, or repeal would alter or change
the powers, preferences or special rights of the shares of the Tribune
series B convertible preferred stock so as to affect them adversely.
. In addition to any vote of stockholders required by law, the vote of the
holders of a majority of the outstanding shares of Tribune series B
convertible preferred stock is required to increase the par value of the
Tribune common stock or otherwise increase the capital of Tribune
allocable to the Tribune common stock for purposes of Delaware law if,
as a result thereof, the surplus of Tribune for purposes of Delaware law
would be less than the amount of preferred dividends that would accrue
on the then outstanding shares of Tribune series B convertible preferred
stock during the following three years.
Liquidation Rights.
Each share of Tribune series B convertible preferred stock has a liquidation
value of $220 per share, plus an amount equal to all accrued and unpaid
dividends. Neither the merger, consolidation or combination of Tribune with or
into any other corporation, nor the sale, lease, transfer or other exchange of
all or any portion of the assets of Tribune (or any purchase or redemption of
some or all of the shares of any class or series of stock of Tribune) shall be
deemed to be a dissolution, liquidation or winding up of the affairs of Tribune
with respect to the liquidation provisions governing the Tribune series B
convertible preferred stock.
Preemptive or Other Subscription Rights.
Holders of Tribune series B convertible preferred stock do not have any
preemptive right to subscribe to any additional issue or sale of the capital
stock of Tribune or to acquire any security convertible into capital stock of
Tribune.
Conversion, Redemption, Sinking Fund and Other Rights.
. Each share of Tribune series B convertible preferred stock is
convertible into 16 shares of Tribune common stock.
. The shares of Tribune series B convertible preferred stock are
redeemable, in whole or in part, at the option of Tribune at any time at
$220 per share, plus an amount equal to all accrued and unpaid
dividends. Tribune, at its option, may make payment of the redemption
price required upon redemption of shares of Tribune series B convertible
preferred stock in cash or in shares of Tribune common stock, or in a
combination of such shares and cash. The shares of Tribune series B
convertible preferred stock are redeemable by the holder of such shares
under certain limited circumstances specified in the certificate of
designations of the Tribune series B convertible preferred stock.
. No sinking fund provisions apply to the Tribune series B convertible
preferred stock, and the Tribune series B convertible preferred stock is
not liable to further call or assessment by Tribune.
. All issued and outstanding shares of Tribune series B convertible
preferred stock are fully paid and non-assessable.
Restrictions on Alienability.
Shares of the Tribune series B convertible preferred stock are issued only
to a trustee acting on behalf of an employee stock ownership plan or other
employee benefit plan of Tribune. In the event of any transfer of shares of the
Tribune series B convertible preferred stock, including a distribution to
participants of an
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<PAGE>
employee benefit plan, to any person other than Tribune or the trustee of any
such plan, the shares of the Tribune series B convertible preferred stock so
transferred will be automatically converted into shares of Tribune common
stock.
Tribune Series C, Series D-1 and Series D-2 Preferred Stock
At the effective time of the merger, Tribune will designate three new series
of preferred stock--Tribune series C, series D-1 and series D-2 preferred
stock, each with a par value of $1 per share. The Tribune series C preferred
stock will have substantively identical terms as the Times Mirror series A
preferred stock. The Tribune series D-1 preferred stock will have substantively
identical terms as the Times Mirror series D-1 preferred stock. The Tribune
series D-2 preferred stock will have substantively identical terms as the Times
Mirror series D-2 preferred stock. The applicable certificates of designations
will designate: 900,000 shares of Tribune series C preferred stock, 380,972
shares of Tribune series D-1 preferred stock, and 245,100 shares of Tribune
series D-2 preferred stock. Tribune expects that at the effective time of the
merger there will be issued and outstanding approximately: 823,568 shares of
Tribune series C preferred stock, 380,972 shares of Tribune series D-1
preferred stock, and 245,100 shares of Tribune series D-2 preferred stock.
Dividend Rights.
. Each share of Times Mirror series C preferred stock will pay a
cumulative dividend of 8% per annum, payable quarterly in arrears.
. Each share of Times Mirror series D-1 preferred stock will pay a
cumulative dividend of 5.8% per annum, payable quarterly in arrears,
with increases based on a fixed and certain schedule.
. Each share of Times Mirror series D-2 preferred stock will pay a
cumulative dividend of 5.8% per annum, payable quarterly in arrears,
with increases based on a fixed and certain schedule.
Voting Rights.
The Tribune series C, series D-1 and series D-2 preferred stock will
generally have no voting rights, other than certain voting rights in connection
with extraordinary circumstances.
Liquidation Rights.
Each share of Tribune series C, series D-1 and series D-2 preferred stock
will have a liquidation value of $500 per share, plus an amount equal to all
accrued and unpaid dividends.
Preemptive or Other Subscription Rights.
Holders of Tribune series C, series D-1 and series D-2 preferred stock will
not have any preemptive right to subscribe to any additional issue or sale of
the capital stock of Tribune or to acquire any security convertible into
capital stock of Tribune.
Conversion, Redemption, Sinking Fund and Other Rights.
Shares of the Tribune series C, series D-1 and series D-2 preferred stock
will be convertible into Tribune common stock in 2025 at the earliest. The
conversion factor will be calculated by dividing $500 plus accrued and unpaid
dividends by the average closing prices of Tribune common stock for the 20
trading days immediately preceding the conversion date. No redemption or
sinking fund provisions will apply to any of the Tribune series C, series D-1
and series D-2 preferred stock, and such stock will not be liable to further
call or assessment by Tribune. All issued and outstanding shares of Tribune
series C, series D-1 and series D-2 preferred stock will be fully paid and non-
assessable.
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Restrictions on Alienability.
There will be no restrictions on the alienability of the Tribune series C,
series D-1 or series D-2 preferred stock.
Transfer Agent and Registrar
The principal transfer agent and registrar for Tribune common stock is First
Chicago Trust Company of New York, a division of EquiServe.
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COMPARISON OF STOCKHOLDER RIGHTS
Each of Tribune and Times Mirror is organized under the laws of the State of
Delaware. Any differences, therefore, in the rights of holders of Tribune
common stock and Times Mirror common stock arise primarily from differences in
their respective certificates of incorporation and bylaws. Upon completion of
the merger, holders of Times Mirror common stock will become holders of Tribune
common stock and their rights will be governed by Delaware law, the Tribune
restated certificate of incorporation, the Tribune bylaws and the Tribune
rights agreement.
This section of the proxy statement/prospectus describes the material
differences between the rights of Tribune stockholders and Times Mirror
stockholders. This section does not include a complete description of all
differences among the rights of these stockholders, nor does it include a
complete description of the specific rights of these stockholders. In addition,
the identification of some of the differences in the rights of these
stockholders as material is not intended to indicate that other differences
that are equally important do not exist. All Tribune stockholders and Times
Mirror stockholders are urged to read carefully the relevant provisions of
Delaware law, as well as the restated certificates of incorporation and bylaws
of each of Tribune and Times Mirror. Copies of the restated certificates of
incorporation and bylaws of Tribune and Times Mirror will be sent to Tribune
stockholders and Times Mirror stockholders, as applicable, upon request. See
"Where You Can Find More Information."
Upon completion of the merger, Tribune will amend its restated certificate
of incorporation and bylaws as described under "The Merger Agreement--Tribune
Board Representation and Los Angeles Times Subsidiary Matters" and "--The
Charter Amendment."
The following terms are used in this section as defined below:
. A "related person" is a person or entity, or an affiliate or associate
of such person or entity, that beneficially owns, in the aggregate, five
percent or more of the outstanding voting interests of Times Mirror.
However, the term "related person" does not include (1) any person or
entity that beneficially owned five percent or more of the Times Mirror
common stock on the date upon which Times Mirror was incorporated in the
State of Delaware, or (2) any employee benefit plan established to
provide benefits for Times Mirror employees, any trust plan related
thereto, or any trustee or fiduciary when acting in such capacity with
respect to any such plan or trust.
. The term "continuing director" means, as to any related person, any
member of the board of directors who is unaffiliated with and is not the
related person and was a member of the board of directors of Times
Mirror prior to the date upon which Times Mirror was incorporated in the
State of Delaware or thereafter became a member of the board prior to
the time that the related person became a related person, and any
successor of a continuing director who is recommended to succeed a
continuing director by a majority of continuing directors then on the
board.
. The term "disinterested shares" means, as to any related person, shares
of Times Mirror voting stock held by stockholders other than such
related person.
Authorized Capital Stock
Tribune. The Tribune restated certificate of incorporation authorizes the
issuance of up to 400,000,000 shares of common stock, without par value, and
5,000,000 shares of preferred stock, without par value, of which 1,600,000 are
designated as Tribune series B convertible preferred stock and 2,000,000 are
designated as Tribune series A junior participating preferred stock. As of May
3, 2000, Tribune had 228,969,744 shares of Tribune common stock issued and
outstanding, 1,215,633 shares of Tribune series B convertible preferred stock
issued and outstanding and no shares of Tribune series A junior participating
preferred stock issued and outstanding.
Times Mirror. The Times Mirror restated certificate of incorporation
authorizes the issuance of up to 900,000,000 shares of Times Mirror common
stock, par value $1.00 per share, of which 500,000,000 are designated as Times
Mirror series A common stock, 300,000,000 are designated as Times Mirror series
C common stock and 100,000,000 may be designated as Times Mirror series A
common stock, Times Mirror
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series B common stock or Times Mirror series C common stock; and 33,000,000
shares of Times Mirror preferred stock, par value $1.00 per share, of which
900,000 are designated Times Mirror series A preferred stock, 25,000,000 are
designated as Times Mirror series B convertible preferred stock, 380,972 are
designated as Times Mirror series C-1 preferred stock, 245,100 are designated
as Times Mirror series C-2 preferred stock, 380,972 are designated as Times
Mirror series D-1 preferred stock and 245,100 are designated as Times Mirror
series D-2 preferred stock. As of April 28, 2000, there were 96,249,256 shares
of series A common stock outstanding (of which 44,308,248 shares are considered
outstanding for financial reporting purposes), no shares of series B common
stock outstanding and 15,906,860 shares of series C common stock outstanding
(all of which are considered outstanding for financial reporting purposes). As
of April 28, 2000, there were 823,568 shares of Times Mirror series A preferred
stock outstanding, no shares of Times Mirror series B convertible preferred
stock outstanding, no shares of Times Mirror series C-1 preferred stock
outstanding, no shares of Times Mirror series C-2 preferred stock outstanding,
380,972 shares of Times Mirror series D-1 preferred stock outstanding and
245,100 shares of Times Mirror series D-2 preferred stock outstanding.
Size of the Board of Directors
Tribune. The board of directors is currently fixed pursuant to the bylaws at
twelve directors. The bylaws require that the number of directors be not less
than ten nor more than fifteen. Upon completion of the merger, the bylaws will
be amended to increase the maximum number of directors to sixteen.
Times Mirror. The board of directors is currently fixed pursuant to the
amended and restated bylaws at twenty-seven directors. The amended and restated
bylaws require that the number of directors be not less than fifteen nor more
than thirty.
Classification of the Board of Directors
Tribune. The board of directors is divided into three classes as nearly
equal as possible, with each class serving a staggered three-year term.
Times Mirror. The board of directors is divided into three classes as nearly
equal as possible, with each class serving a staggered three-year term.
Election of Directors
General. Delaware law permits stockholders to cumulate their votes and
either cast them for one candidate or distribute them among two or more
candidates in the election of directors only if expressly authorized in a
corporation's charter.
Tribune. In elections for directors, the nominees receiving the highest
number of votes cast for the number of director positions to be filled shall be
elected. The Tribune restated certificate of incorporation does not authorize
cumulative voting.
Times Mirror. Under the terms of the Times Mirror restated certificate of
incorporation, stockholders have the right to elect directors by cumulative
voting, with each share allocated a number of votes equal to the votes to which
the share is entitled times the number of directors to be elected, which votes
may be cast for one candidate or distributed among any two or more candidates.
The persons receiving the greatest number of votes, up to the number of
directors then to be elected, shall be the persons then elected to the board of
directors. Each share of series A common stock entitles the holder to one vote
and each share of series C common stock entitles the holder to ten votes.
Removal of Directors
General. Delaware law provides that, except in the case of a classified
board of directors or where cumulative voting applies, a director, or the
entire board of directors, of a corporation may be removed, with or
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without cause, by the affirmative vote of a majority of the shares of the
corporation entitled to vote at an election of directors.
Tribune. Any one or more directors may be removed from office only for
cause, and only by the affirmative vote of holders of at least a majority of
the voting power of all of the then outstanding shares of voting stock of
Tribune, voting together as a single class.
Times Mirror. Directors may be removed only for cause and only by a majority
of the votes entitled to be cast by the holders of all shares of capital stock
entitled to vote generally in the election of directors. Additionally, if the
proposal to remove a director is made by or on behalf of a related person,
removal will also require the affirmative vote of a majority of the votes
entitled to be cast by the holders of all shares of capital stock entitled to
vote generally in the election of directors held by persons other than such
related person.
Vacancies
General. Delaware law provides that vacancies and newly created
directorships resulting from a resignation or any increase in the authorized
number of directors elected by all of the stockholders having the right to vote
as a single class may be filled by a majority of the directors then in office,
unless the governing documents of a corporation provide otherwise.
Tribune. Any vacancy occurring in the board of directors may be filled by a
majority of the directors then in office, although less than a quorum, except
that vacancies occurring with respect to any member of the special nominating
committee that Tribune will create will be filled by the remaining members of
that committee. See "The Merger Agreement--Tribune Board Representation and Los
Angeles Times Subsidiary Matters."
Times Mirror. Any vacancy on the board may be filled by vote of the majority
of the remaining directors, although less than a quorum.
Limitation of Director Liability
General. Delaware law provides that a corporation may include in its
certificate of incorporation a provision limiting or eliminating the liability
of its directors to the corporation and its stockholders for monetary damages
arising from a breach of fiduciary duty, except for:
. a breach of the duty of loyalty to the corporation or its stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. payment of a dividend or the repurchase or redemption of stock in
violation of Delaware law; or
. any transaction from which the director derived an improper personal
benefit.
Tribune. The Tribune restated certificate of incorporation tracks the
provisions of the Delaware statute described above.
Times Mirror. The Times Mirror restated certificate of incorporation tracks
the provisions of the Delaware statute described above.
Indemnification of Directors and Officers
General. Under Delaware law, a corporation generally may indemnify directors
and officers for actions taken in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interests of the corporation;
and, with respect to any criminal proceeding, had no reasonable cause to
believe that such conduct was unlawful. In addition, Delaware law provides that
a corporation may advance to a director or
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officer expenses incurred in defending any action upon receipt of an
undertaking by the director or officer to repay the amount advanced if it is
ultimately determined that he or she is not entitled to indemnification. The
statutory provisions for indemnification do not exclude any other rights a
person seeking indemnification may have under any bylaw, agreement, vote of
stockholders, vote of disinterested directors or otherwise.
Tribune. The restated certificate of incorporation permits indemnification
of directors and officers to the fullest extent authorized by the Delaware
General Corporation Law.
Times Mirror. The restated certificate of incorporation permits
indemnification of directors and officers to the fullest extent permitted by
the Delaware General Corporation Law.
Annual Meeting of Stockholders
General. If an annual meeting for the election of directors is not held on
the date designated therefore, Delaware law requires the directors to cause the
meeting to be held as soon thereafter as convenient. If they fail to do so for
a period of 30 days after the designated date, or if no date has been
designated for a period of 13 months after the organization of the corporation
or after its last annual meeting, then, upon application of any stockholder or
director, the Court of Chancery may order a meeting to be held.
Tribune. The annual meeting of the stockholders is held on such date (not a
legal holiday) and at such time as is designated by resolution of the board of
directors, for the purpose of electing directors and for the transaction of
such other business as may properly be brought before the meeting.
Times Mirror. Annual meetings of the stockholders of Times Mirror for the
purpose of electing directors and for the transaction of such other business as
may come before such meetings may be held at such time, date and place as the
board of directors determines by resolution.
Special Meeting of Stockholders
General. Delaware law permits the board of directors or any other person
authorized by a corporation's charter or bylaws to call a special meeting of
stockholders.
Tribune. Special meetings of the stockholders may be called by the Chief
Executive Officer or the board of directors. Business transacted at any special
meeting of stockholders are limited to the purpose stated in the notice of
meeting.
Times Mirror. A special meeting of stockholders may be called only by the
board of directors or by a majority of the members of the board. Furthermore,
if a proposal requiring stockholder approval is made by or on behalf of a
related person or a director affiliated with a related person, the affirmative
vote of a majority of the directors who (1) are unaffiliated with the relevant
related person and who were members of the board of directors before Times
Mirror was incorporated in the State of Delaware, or (2) became a member of the
board of directors before the relevant related person became a related person,
is also required to call a special meeting of stockholders.
Action by Written Consent
General. Delaware law provides that, unless otherwise stated in the
certificate of incorporation, any action which may be taken at an annual
meeting or special meeting of stockholders may be taken without a meeting, if a
consent in writing is signed by the holders of the outstanding stock having the
minimum number of votes necessary to authorize the action at a meeting of
stockholders.
Tribune. Any action required or permitted to be taken at any annual or
special meeting of stockholders may be taken without a meeting only if a
consent in writing setting forth the action so taken shall be signed by all
stockholders entitled to vote with respect to the subject matter thereof.
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Times Mirror. Any election or other action by stockholders must be effected
at an annual or special meeting of stockholders, and may not be effected by
written consent without a meeting.
Advance Notice Requirements for Stockholder Nominations and Other Business
Tribune. For business to be properly brought before an annual meeting by a
stockholder, the stockholder must give timely notice thereof in writing to the
Secretary of Tribune. To be timely, a stockholder's notice must be delivered to
the Secretary not later than the close of business on the 90th day nor earlier
than the close of business on the 120th day prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the event that
the date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 120th day prior to such
annual meeting and not later than the close of business on the later of the
90th day prior to such annual meeting or the 10th day following the day on
which public announcement of the date of such meeting is first made.
In order to properly nominate an individual for election to the board of
directors, a stockholder's notice must be delivered to the Secretary not
earlier than the close of business on the 120th day prior to such meeting and
not later than the close of business on the later of the 90th day prior to such
meeting or the 10th day following the day on which such notice of the date of
the meeting is mailed to the stockholders or public announcement thereof is
made, whichever occurs first.
Times Mirror. A stockholder must furnish written notice to the Times Mirror
Secretary of any nomination or business proposal to be brought before a
stockholders' meeting not less than 30 nor more than 60 days prior to the
meeting as originally scheduled. However, if Times Mirror gives less than 40
days public notice of a meeting date, a stockholder must furnish notice of a
nomination or business proposal not later than the close of business on the
10th day following the mailing or the public disclosure of the notice of the
meeting date.
Amendments to Charter
General. Under Delaware law, an amendment to the certificate of
incorporation of a corporation requires the approval of the corporation's board
of directors and the approval of holders of a majority of the outstanding stock
entitled to vote upon the proposed amendment, unless a higher vote is required
by the corporation's certificate of incorporation.
Tribune.
. Amendment of the provision of the restated certificate of incorporation
relating to mergers and consolidations (see "Vote Required for
Extraordinary Corporate Transactions," below) requires the affirmative
vote of holders of at least 66 2/3% of the outstanding capital stock of
Tribune entitled to vote thereon.
. Amendment of the provision of the restated certificate of incorporation
relating to interested party transactions (see "Business Combinations
with Interested Stockholders," below) requires the votes of voting
securities representing at least 80% of the votes entitled to be cast.
. Amendment of the provision of the restated certificate of incorporation
governing stockholder amendments to the bylaws (see "Amendments to
Bylaws," below) requires the affirmative vote of 80% of the outstanding
stock of Tribune entitled to vote.
Times Mirror. In addition to any affirmative vote required by applicable law
and any voting rights granted to or held by the holders of preferred stock, any
amendment of any provision of the restated certificate of incorporation must be
approved by a majority of the directors of Times Mirror then in office and by
the affirmative vote of the holders of a majority of the voting interests of
Times Mirror. If the amendment relates to:
. defined terms;
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. authorized capital stock;
. number of directors and limitation of liability of directors;
. election of directors;
. cumulative voting;
. business combinations;
. factors to consider when evaluating a proposed transaction;
. indemnification;
. stockholder votes;
. stockholder proposals;
. special meetings; or
. amendment of corporate documents
such amendment must be approved by either:
. a majority of the authorized number of directors, and if one or more
related persons exist, by a majority of the directors who are continuing
directors with respect to all related persons; or
. by the affirmative vote of the holders of not less than 80% of the
voting interests of Times Mirror and, if the amendment is proposed by or
on behalf of a related person or a director affiliated with a related
person, by the affirmative vote of the holders of a majority of the
voting interests of the disinterested shares.
Amendments to Bylaws
General. Under Delaware law, stockholders entitled to vote have the power to
adopt, amend or repeal bylaws. In addition, a corporation may, in its
certificate of incorporation, confer this power on the board of directors. The
stockholders always have the power to adopt, amend or repeal the bylaws, even
though the board may also be delegated the power.
Tribune. The board of directors is expressly authorized to make, alter,
amend and repeal the bylaws by the affirmative vote of a majority of the whole
board of directors at any regular or special meeting. The bylaws may also be
made, altered, amended and repealed by the stockholders, but only by the
affirmative vote of the holders of 80% of the outstanding stock of the
corporation entitled to vote. Under the charter amendment to be adopted in
connection with the merger, the bylaw provisions relating to the special
nominating committee to be established by Tribune may be amended only by the
vote of all of the holders of the outstanding Tribune voting stock or all of
the members of the Tribune board of directors.
Times Mirror. Generally, the bylaws may be amended by the board of directors
or the stockholders. If the amendment relates to:
. the number and term of office of directors; or
. vacancies on the board of directors
such amendment must be approved by either:
. a majority of the authorized number of directors, and if one or more
related persons exist, by a majority of the directors who are continuing
directors with respect to all related persons; or
. by the affirmative vote of the holders of not less than 80% of the
voting interests of Times Mirror and, if the amendment is proposed by or
on behalf of a related person or a director affiliated with a related
person, by the affirmative vote of the holders of a majority of the
voting interests of the disinterested shares.
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Vote Required for Extraordinary Corporate Transactions
General. Delaware law provides that the holders of a majority of the shares
entitled to vote must approve any fundamental corporate transactions such as
mergers, sales of all or substantially all of the corporation's assets,
dissolutions, etc. A corporation may increase the minimum percentage vote
required.
Tribune. A merger or consolidation to which Tribune is a party but not the
surviving party, or a sale, lease or exchange to any party of all or
substantially all of the assets of Tribune must be authorized by the holders of
at least 66 2/3% of the outstanding capital stock of Tribune entitled to vote
thereon, or such greater percentage of such stock as may be required by other
applicable provisions of the restated certificate of incorporation.
Times Mirror. Except as provided immediately below, the Times Mirror
corporate documents do not require a heightened vote for extraordinary
corporate transactions and such matters are subject to Delaware law as
described above. See "Business Combinations with Interested Stockholders."
Business Combinations with Interested Stockholders
General. Section 203 of the Delaware General Corporation Law, in general,
prohibits a business combination between a corporation and an interested
shareholder within three years of the time such shareholder became an
interested shareholder, unless (a) prior to such time the board of directors of
the corporation approved either the business combination or the transaction
that resulted in the shareholder becoming an interested shareholder, (b) upon
consummation of the transaction that resulted in the shareholder becoming an
interested shareholder, the interested shareholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, exclusive of shares owned by directors who are also officers and by
certain employee stock plans or (c) at or subsequent to such time, the business
combination is approved by the board of directors and authorized by the
affirmative vote at a shareholders' meeting of at least 66 2/3% of the
outstanding voting stock which is not owned by the interested shareholder. The
restrictions of Section 203 of the Delaware General Corporation Law do not
apply to corporations that have elected, in the manner provided therein, not to
be subject to Section 203 of the Delaware General Corporation Law or, with
certain exceptions, which do not have a class of voting stock that is listed on
a national securities exchange or authorized for quotation on the Nasdaq or
held of record by more than 2,000 shareholders. Neither Tribune nor Times
Mirror has elected not to be governed by Section 203 of the Delaware General
Corporation Law.
Tribune. None of the following transactions may be effectuated unless a
meeting of the Tribune stockholders is held to act thereon and voting
securities representing at least 80% of the votes entitled to be cast are cast
in favor thereof:
. an acquisition by Tribune of stock of an interested party;
. a sale, lease or exchange of all or the major portion of the assets of
Tribune or an interested party to the other;
. a merger or consolidation to which Tribune and an interested party are
parties; or
. an amendment or repeal of the provision governing interested party
transactions.
An "interested party" is any person, firm or corporation, or any group thereof
acting in concert, which owns of record or beneficially, directly or
indirectly, more than 10% of any class of stock of Tribune.
Times Mirror. Subject to certain exceptions summarized below, any business
combination must be approved by (1) the affirmative vote of the holders of not
less than 80% of the votes entitled to be cast by the holders of all shares of
capital stock entitled to vote generally in the election of directors and (2)
the affirmative vote of the holders of a majority of the disinterested shares.
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"Business combinations" generally include the following:
. mergers or reorganizations of Times Mirror or its subsidiaries with or
into a related person;
. mergers or reorganizations of a related person with or into Times Mirror
or one of its subsidiaries;
. reorganizations that would have the effect of increasing the voting
power of a related person;
. certain acquisitions by Times Mirror of securities issued by or assets
of a related person; and
. liquidations, sales or transfers to a related person of Times Mirror's
assets, which assets constitute a substantial part of Times Mirror.
A business combination does not need to satisfy the foregoing approval
requirements if the business combination has been approved by a majority of
directors who (1) are unaffiliated with the relevant related person and who
were members of the Times Mirror board of directors before Times Mirror
incorporated in the State of Delaware, or (2) became a member of the board of
directors before the relevant related person became a related person. Business
combinations in which Times Mirror stockholders are to receive cash, securities
or other property in exchange for their shares of capital stock do not need the
80% vote if (1) the value of the consideration meets certain thresholds of
fairness, as specified in restated certificate of incorporation, and (2) the
business combination is approved by the affirmative vote of the holders of a
majority of the disinterested shares.
Dissenters' Rights
General. Delaware law does not afford appraisal rights to holders of shares
that are either listed on a national securities exchange, quoted on Nasdaq or
held of record by more than 2,000 stockholders, provided that such shares will
be converted into stock of the surviving corporation or another corporation,
which corporation in either case must also be listed on a national securities
exchange, quoted on Nasdaq or held of record by more than 2,000 stockholders.
In addition, Delaware law denies appraisal rights to stockholders of the
surviving corporation in a merger if the surviving corporation's stockholders
weren't required to approve the merger.
Dividends
General. Delaware law permits a corporation to pay dividends out of surplus
or, if the corporation does not have adequate surplus, out of net profits for
the current or immediately preceding fiscal year, provided that such payment
will not reduce capital below the amount of capital represented by all classes
of shares having a preference upon the distribution of assets.
Rights of Inspection
General. Under Delaware law, a stockholder may inspect a corporation's books
and records during normal business hours as long as such inspection is for a
proper purpose, and as long as the stockholder has made proper written demand
stating the purpose of the inspection. A proper purpose is any purpose
reasonably related to the interests of the inspecting person as a stockholder.
Rights Agreement
In 1997, Tribune adopted a stockholder rights plan pursuant to a rights
agreement with First Chicago Trust Company of New York, as rights agent. Set
forth below is a summary of the material provisions of the rights agreement.
The summary does not include a complete description of all of the terms of the
rights agreement. All Tribune stockholders and Times Mirror stockholders are
urged to read carefully the relevant provisions of Tribune's rights agreement,
copies of which will be sent to Tribune stockholders and Times Mirror
stockholders upon request. See "Where You Can Find More Information."
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Exercisability of Rights. Under the Tribune rights agreement, one right,
referred to as a Tribune right, attaches to each share of Tribune common stock
outstanding and, when exercisable, entitles the registered holder to purchase
from Tribune one two-hundredth of a share of Tribune series A junior
participating preferred stock at a purchase price of $125, subject to customary
antidilution adjustments.
The Tribune rights will not become exercisable until the earlier of:
. ten days following a public announcement that a person (other than the
Robert R. McCormick Tribune Foundation or the Cantigny Foundation or any
successor charitable entities, collectively referred to as the
foundations) has become the beneficial owner of 10% or more of the
Tribune common stock then outstanding; or
. ten business days, or such later date as may be determined by the board
of directors of Tribune, following the commencement of, or the
announcement of an intention to commence, a tender offer or exchange
offer that would result in a person becoming the beneficial owner of 10%
or more of the Tribune common stock then outstanding.
"Flip In" Feature. In the event a person (other than the foundations)
becomes the beneficial owner of 10% or more of the Tribune common stock
outstanding, each holder of a Tribune right, except for that person, will have
the right to acquire, upon exercise of the Tribune right, instead of one two-
hundredth of a share of Tribune series A junior participating preferred stock,
shares of Tribune common stock having a value equal to twice the exercise price
of the Tribune right. For example, if we assume that the purchase price of $125
is in effect on the date that the flip-in feature of the Tribune rights is
exercised, any holder of a Tribune right, except for the person (other than the
foundations) that has become the beneficial owner of 10% or more of the Tribune
common stock then outstanding, may exercise his or her Tribune right by paying
to Tribune $125 in order to receive from Tribune shares of Tribune common stock
having a value equal to $250.
"Exchange" Feature. At any time after a person (other than the foundations)
becomes the beneficial owner of 10% or more, but less than 50%, of the Tribune
common stock then outstanding, the board of directors of Tribune may, at its
option, exchange all or some of the Tribune rights, except for those held by
such person, for Tribune common stock at an exchange ratio of one share of
Tribune common stock or one two-hundredth of a share of Tribune series A junior
participating preferred stock for each Tribune right, subject to adjustment.
"Flip Over" Feature. In the event that, after a person acquires 10% or more
of the Tribune common stock:
. Tribune is acquired in a merger or other business combination
transaction; or
. 50% or more of its consolidated assets or earning power is sold,
then each holder of a Tribune right, except for a person (other than the
foundations) that is the beneficial owner of 10% or more of the Tribune common
stock then outstanding, will have the right to receive, upon exercise of the
Tribune right, the number of shares of the acquiring company's common stock
having a value equal to twice the exercise price of the Tribune right.
Redemption of Rights. At any time prior to the acquisition by a person
(other than the foundations) of beneficial ownership of 10% or more of the
Tribune common stock then outstanding, the board of directors of Tribune may
redeem all of the Tribune rights at a redemption price of $0.005 per right,
subject to adjustment. The right to exercise the Tribune rights will terminate
upon redemption and, at that time, the holders of the Tribune rights will have
the right to receive only the redemption price for each Tribune right they
hold.
Amendment of Rights. At any time before a person (other than the
foundations) becomes the beneficial owner of 10% or more of the Tribune common
stock then outstanding, the terms of the existing Tribune rights agreement may
be amended by the board of directors of Tribune without the approval of the
holders of the
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rights. However, after the date any person (other than the foundations)
acquires at least 10% of Tribune's outstanding common stock, the rights
agreement may not be amended in any manner that would adversely affect the
interests of the holders of the Tribune rights, excluding the interests of the
acquiror. In connection with the merger, the Tribune rights agreement will be
amended to make certain exceptions with respect to the Chandler Trusts.
Termination of Rights. If not previously exercised, the Tribune rights will
expire on January 5, 2008, unless Tribune earlier redeems or exchanges the
Tribune rights or extends the expiration date.
Anti-Takeover Effects. The Tribune rights have anti-takeover effects. Once
the Tribune rights have become exercisable, in most cases the Tribune rights
will cause substantial dilution to a person that attempts to acquire or merge
with Tribune. Accordingly, the existence of the Tribune rights may deter
potential acquirors from making a takeover proposal or a tender offer. The
Tribune rights should not interfere with any merger or other business
combination approved by the board of directors of Tribune because Tribune may
redeem the Tribune rights and because the Tribune board of directors can amend
the Tribune rights agreement so that a transaction approved by the Tribune
board of directors would not cause the Tribune rights to become exercisable.
Series A Junior Participating Preferred Stock. In connection with the
Tribune rights, the board of directors of Tribune has authorized the issuance
of 2,000,000 shares of Tribune preferred stock designated as Tribune series A
junior participating preferred stock. The number of authorized shares of series
A junior participating preferred stock will be increased in connection with the
merger. Tribune designed the dividend, liquidation, voting and redemption
features of the Tribune series A junior participating preferred stock so that
the value of one two-hundredth of a share of Tribune series A junior
participating preferred stock approximates the value of one share of Tribune
common stock. Shares of Tribune series A junior participating preferred stock
may only be purchased after the Tribune rights have become exercisable. The
rights of the Tribune series A junior participating preferred stock as to
dividends, liquidation and voting, and in the event of mergers or
consolidations, are protected by customary antidilution provisions.
Times Mirror has not adopted a stockholder rights plan.
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STOCK EXCHANGE LISTING; DELISTING AND DEREGISTRATION
OF TIMES MIRROR COMMON STOCK
It is a condition to the merger that the shares of Tribune common stock to
be issued in the merger be approved for listing on the New York Stock Exchange,
subject to official notice of issuance. If the merger is completed, the Times
Mirror common stock will no longer be listed on the New York Stock Exchange or
any other exchange.
REPRESENTATION OF THE CHANDLER TRUSTS ON THE TRIBUNE BOARD OF DIRECTORS
Tribune has agreed that four persons associated with the Chandler Trusts,
Messrs. Chandler, Goodan, Stinehart and Unterman, will become directors of
Tribune upon the closing of the merger, bringing the number of Tribune
directors to 16. Messrs. Chandler and Unterman will be in the class of
directors with terms expiring in 2001. Mr. Goodan will be in the class of
directors with terms expiring in 2002. Mr. Stinehart will be in the class of
directors with terms expiring in 2003. Set forth below is information regarding
each of Messrs. Chandler, Goodan, Stinehart and Unterman:
. Jeffrey Chandler, 58, is president and chief executive officer of
Chandler Ranch Co., one of the largest growers of avocados in
California. Previously, he was president and chief executive officer of
Western Telecommunications, Inc. He is also a trustee and a beneficiary
of the Chandler Trusts.
. Roger Goodan, 53, is Vice President of Marketing for Schlumberger
Oilfield Services North America. He has held this position since
February 1998. Prior to that, Mr. Goodan held management positions
throughout Schlumberger including positions in operations, engineering
and finance since 1973. Mr. Goodan has been a director of Times Mirror
since December 1998. He is also a director of the Offshore Energy Center
in Houston and the Stanford University Department of Athletics. He is
also a beneficiary of the Chandler Trusts.
. William Stinehart, Jr., 55, is a partner in the law firm of Gibson, Dunn
& Crutcher LLP where he has practiced law since 1969. Mr. Stinehart is a
member of the Board of Trustees of the Harvey and Mildred Mudd
Foundation. Mr. Stinehart has been a director of Times Mirror since
1991. He is also a trustee of the Chandler Trusts.
. Thomas Unterman, 55, is the managing member of Rustic Canyon Group, a
private equity investment firm. Previously, he was executive vice
president and chief financial officer of Times Mirror, responsible for
the company's finance functions, including accounting, audit, strategic
development, tax and investor relations. Mr. Unterman is a director of
Hollywood, Inc. and Ticketmaster Online-CitySearch, Inc.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, independent accountants, have audited the
consolidated financial statements of Tribune incorporated by reference in its
Annual Report on Form 10-K for the year ended December 26, 1999, as set forth
in their report, which is incorporated in this proxy statement/prospectus.
These consolidated financial statements are incorporated by reference in
reliance on PricewaterhouseCoopers LLP's report, given on their authority as
experts in accounting and auditing.
The consolidated financial statements of Times Mirror appearing in Times
Mirror's Annual Report (Form 10-K) for the year ended December 31, 1999, as
amended by Form 10-K/A dated March 30, 2000, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included
therein and incorporated by reference in this proxy statement/prospectus and
elsewhere in the registration statement. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
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LEGAL MATTERS
The validity of the Tribune common stock to be issued in connection with the
merger will be passed upon by Crane H. Kenney, Esq., Senior Vice President,
General Counsel and Secretary of Tribune. Mr. Kenney is a participant in
Tribune's stock option plan and various other employee benefit plans offered to
employees of Tribune.
Wachtell, Lipton, Rosen & Katz, counsel for Tribune, and Gibson, Dunn &
Crutcher LLP, counsel for Times Mirror, will pass upon certain Federal income
tax consequences of the merger for Tribune and Times Mirror, respectively.
WHERE YOU CAN FIND MORE INFORMATION
Tribune and Times Mirror file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any such reports, statements or other information filed
by either company at the Securities and Exchange Commission's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please
call the Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the public reference rooms. The filings of Tribune and Times
Mirror with the Securities and Exchange Commission are also available to the
public from commercial document retrieval services and at the web site
maintained by the Securities and Exchange Commission at "http://www.sec.gov."
Tribune has filed a Registration Statement on Form S-4 to register with the
Securities and Exchange Commission the Tribune common stock to be issued to
Times Mirror stockholders in the merger. This document is a part of that
registration statement and constitutes a prospectus of Tribune in addition to
being a proxy statement of Times Mirror for Times Mirror's special meeting and
a proxy statement of Tribune for Tribune's special meeting. As allowed by rules
of the Securities and Exchange Commission, this document does not contain all
the information you can find in the registration statement or the exhibits to
the registration statement.
The Securities and Exchange Commission allows us to "incorporate by
reference" information into this proxy statement/prospectus. This means that we
can disclose important information to you by referring you to another document
filed separately with the Securities and Exchange Commission. The information
incorporated by reference is deemed to be part of this proxy
statement/prospectus, except for any information superseded by information in
this proxy statement/prospectus. This proxy statement/prospectus incorporates
important business and financial information about Tribune and Times Mirror
that is not included in or delivered with this proxy statement/prospectus. This
proxy statement/prospectus incorporates by reference the documents set forth
below that have previously been filed with the Securities and Exchange
Commission.
Tribune SEC Filing (File No. 1-8572) Period/File Date
Annual Report on Form 10-K Year ended December 26, 1999
Current Reports on Form 8-K Filed on March 13, 2000 and March
14, 2000
Proxy Statement The information contained in
Tribune's Proxy Statement for its
2000 annual meeting of stockholders
to be held on May 2, 2000, that has
been incorporated by reference in
its Form 10-K for the year ended
December 26, 1999
Times Mirror SEC Filing Period/File Date
(File No. 1-13492)
Annual Report on Form 10-K as Year ended December 31, 1999
amended by Amendment No. 1 on Form
10-K/A
Current Reports on Form 8-K Filed on March 14, 2000 and April
25, 2000
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We are also incorporating by reference additional documents that Tribune and
Times Mirror file with the Securities and Exchange Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
between the date of this proxy statement/prospectus and the date of the special
meetings.
Tribune has supplied all information contained or incorporated by reference
in this document relating to Tribune, and Times Mirror has supplied all
information contained or incorporated by reference in this document relating to
Times Mirror. Tribune and Times Mirror will send you the documents incorporated
by reference without charge, excluding exhibits to the information that is
incorporated by reference, unless the exhibits have been specifically
incorporated by reference in this document.
Stockholders may obtain documents incorporated by reference in this document
without charge by requesting them in writing or by telephone from the
appropriate party at the following addresses:
<TABLE>
<S> <C>
Tribune Company The Times Mirror Company
435 North Michigan Avenue Times Mirror Square
Chicago, Illinois 60611 Los Angeles, California 90053
Attention: Investor Contact Attention: Investor Contacts
Telephone: (312) 222-3787 Telephone: (213) 237-3955
</TABLE>
IF YOU WOULD LIKE TO REQUEST DOCUMENTS, INCLUDING ANY DOCUMENTS WE MAY
SUBSEQUENTLY FILE WITH THE SECURITIES AND EXCHANGE COMMISSION BEFORE THE
SPECIAL MEETINGS, PLEASE DO SO BY JUNE 5, 2000 SO THAT YOU WILL RECEIVE THEM
BEFORE THE SPECIAL MEETINGS.
This proxy statement/prospectus does not constitute an offer to sell, or a
solicitation of an offer to purchase, the securities offered by this proxy
statement/prospectus, or the solicitation of a proxy, in any jurisdiction to or
from any person to whom or from whom it is unlawful to make such offer,
solicitation of an offer or proxy solicitation in such jurisdiction. Neither
the delivery of this proxy statement/prospectus nor any distribution of
securities pursuant to this proxy statement/prospectus shall, under any
circumstances, create any implication that there has been no change in the
information set forth or incorporated into this proxy statement/prospectus by
reference or in our affairs since the date of this proxy statement/prospectus.
You should rely only on the information contained or incorporated by
reference in this proxy statement/prospectus to vote on the merger. We have not
authorized anyone to provide you with information that is different from what
is contained in this proxy statement/prospectus. This proxy
statement/prospectus is dated May 5, 2000. You should not assume that the
information contained in this proxy statement/prospectus is accurate as of any
date other than such date, and neither the mailing of the proxy
statement/prospectus to stockholders nor the issuance of Tribune common stock
in the merger shall create any implication to the contrary.
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ANNEX A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
Between
TRIBUNE COMPANY
and
THE TIMES MIRROR COMPANY
Dated as of March 13, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 13, 2000, between Tribune
Company, a Delaware corporation ("Tribune"), and The Times Mirror Company, a
Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Tribune and the Company each have
determined that it is advisable and in the best interests of their respective
stockholders for Tribune to acquire Company Common Shares in a tender offer
followed by a merger of the Company with and into Tribune, upon the terms and
subject to the conditions of this Agreement;
WHEREAS, in furtherance thereof, it is proposed that Tribune will make a
cash tender offer (as it may be amended from time to time as permitted under
this Agreement, the "Offer") to acquire up to 28 million Company Common Shares
(with such Company Common Shares to be purchased on a pro rata basis among
Company Common Shares validly tendered and not withdrawn to the extent
exceeding such number) at a purchase price of $95 per Company Common Share
(such price or such higher price as may be paid in the Offer, the "Per Share
Cash Amount"), net to the seller in cash;
WHEREAS, the respective Boards of Directors of the Company and Tribune have
each approved this Agreement and the merger (the "Merger") of the Company with
and into Tribune following the consummation or expiration of the Offer and upon
the terms and subject to the conditions of this Agreement;
WHEREAS, the Board of Directors of the Company has determined that the
consideration to be paid for the Company Common Shares in the Offer and the
Merger, taken as a whole, is fair to the holders of such Company Common Shares
and to recommend that the holders of such Company Common Shares accept the
Offer and approve this Agreement and the transactions contemplated hereby;
WHEREAS, for United States federal income tax purposes, it is intended that
the Merger shall qualify as a tax-free reorganization within the meaning of
Section 368 of the Code;
WHEREAS, Tribune and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Offer and the
Merger; and
WHEREAS, Tribune has required, as a condition to its willingness to enter
into this Agreement, that certain stockholders (the "Stockholders") of the
Company enter into a Voting Agreement (the "Voting Agreement") with Tribune,
substantially in the form attached hereto as Exhibit A, concurrently with the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements set forth herein, Tribune and the Company hereby agree
as follows:
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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.
"Authorization": As defined in Section 4.5.
"Benefit Plans": As defined in Section 6.9(b).
"Blue Sky Laws": As defined in Section 4.5.
"Cash Electing Option": As defined in Section 3.4(a).
"Cash Election": As defined in Section 3.1(c).
"Cash Election Number": As defined in Section 3.1(c).
"Cash Election Shares": As defined in Section 3.1(d).
"Cash Fraction": As defined in Section 3.1(d).
"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.
"Class I": As defined in Section 6.8(a).
"Class II": As defined in Section 6.8(a).
"Class III": As defined in Section 6.8(a).
"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.
"Common Exchange Ratio": As defined in Section 3.1(b).
"Common Merger Consideration": As defined in Section 3.2(b).
"Company": As defined in the Preamble.
"Company Benefit Plans": As defined in Section 4.9(a).
"Company Charter": The Restated Certificate of Incorporation of the
Company, as amended to the date hereof.
"Company Common Certificates": As defined in Section 3.1(g).
"Company Common Shares": Company Series A Common Shares and Company
Series C Common Shares.
"Company Disclosure Statement": The disclosure statement, dated the date
of this Agreement, delivered by the Company to Tribune.
"Company Employees": As defined in Section 6.9(a).
"Company Financial Advisor": As defined in Section 4.17.
"Company Instruments": As defined in Section 3.5.
"Company Option": As defined in Section 3.4(a).
"Company Option Cash Out Amount": As defined in Section 3.4(a).
A-3
<PAGE>
"Company Permits": As defined in Section 4.12(a).
"Company Preferred Shares": Company Series A Preferred Shares, Company
Series D-1 Preferred Shares and Company Series D-2 Preferred Shares.
"Company SEC Reports": As defined in Section 4.6.
"Company Series A Common Shares": Shares of Series A Common Stock, par
value $1.00 per share, of the Company.
"Company Series A Preferred Shares": Shares of 8% Cumulative Conversion
Preferred Stock, Series A, par value $1.00 per share, of the Company.
"Company Series B Common Shares": Shares of Series B Common Stock, par
value $1.00 per share, of the Company.
"Company Series B Preferred Shares": As defined in Section 4.3(a).
"Company Series C Common Shares": Shares of Series C Common Stock, par
value $1.00 per share, of the Company.
"Company Series C-1 Preferred Shares": Shares of Preferred Stock, Series
C-1, par value $1.00 per share, of the Company.
"Company Series C-2 Preferred Shares": Shares of Preferred Stock, Series
C-2, par value $1.00 per share, of the Company.
"Company Series D-1 Preferred Shares": Shares of Preferred Stock, Series
D-1, par value $1.00 per share, of the Company.
"Company Series D-2 Preferred Shares": Shares of Preferred Stock, Series
D-2, par value $1.00 per share, of the Company.
"Company Stockholder Approval": As defined in Section 4.4(a).
"Company Stockholders' Meeting": As defined in Section 7.2(a).
"Confidentiality Agreement": The Confidentiality Agreement, dated as of
March 10, 2000, between Tribune and the Company.
"Contract": As defined in Section 4.5.
"control": With respect to any Person, the possession, direct or
indirect, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise.
"DGCL": The General Corporation Law of the State of Delaware.
"Dissenting Shares": As defined in Section 3.1(l).
"Effective Time": As defined in Section 2.5.
"Election": As defined in Section 3.1(f).
"Election Deadline": As defined in Section 3.1(i).
"Employment Arrangements": As defined in Section 6.9(c).
"Environmental Laws": As defined in Section 4.14(a).
"ERISA": As defined in Section 4.9(a).
"Excess Tribune Common Shares": As defined in Section 3.2(d).
A-4
<PAGE>
"Exchange Act": The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Executive Arrangements": As defined in Section 6.9(c).
"Expiration Date": As defined in Section 2.1(d).
"FCC": As defined in Section 5.9.
"Fee": As defined in Section 9.3(b).
"Form of Election": As defined in Section 3.1(c).
"Foundation": As defined in Section 7.9.
"GAAP": As defined in Section 4.6.
"Governmental Entity": As defined in Section 4.5.
"Hazardous Substance": Any toxic or hazardous materials or substances,
including asbestos, buried contaminants, chemicals, flammable explosives,
radioactive materials, petroleum and petroleum products and other
substances defined as, or included in the definition of, "hazardous
substances", "hazardous wastes", "hazardous materials" or "toxic
substances" under any Environmental Law.
"HSR Act": As defined in Section 4.5.
"Indemnified Parties": As defined in Section 6.6(a).
"Independent Directors": As defined in Section 2.3.
"Insurance Amount": As defined in Section 6.6(b).
"Intellectual Property": All industrial and intellectual property
rights, including Proprietary Technology, patents, patent applications,
patent rights, trademarks, trademark applications, trademark rights, trade
names, trade name rights and registrations, service marks, service mark
applications, service mark rights and registrations, copyrights, know-how,
licenses, trade secrets, proprietary processes, formulae and customer
lists.
"Intellectual Property Rights": As defined in Section 4.15.
"IRS": As defined in Section 4.9(a).
"Knowledge": As it is applied to the Company and its Subsidiaries or
Tribune and its Subsidiaries means actual knowledge of the executive
officers of the Company or Tribune, respectively, as listed in the most
recent Annual Report on Form 10-K of the Company or Tribune, respectively.
"Law": Any federal, state, local or foreign law, statute, code,
ordinance, rule, regulation promulgated, or order, judgment, writ,
stipulation, award, injunction or decree entered, by a Governmental Entity.
"Liens": As defined in Section 4.2.
"Material Adverse Effect": With respect to Tribune, a material adverse
effect on the business, properties, operations or condition (financial or
otherwise) of Tribune and its Subsidiaries taken as a whole, other than any
such effect arising out of or resulting from general economic conditions or
from changes in or generally affecting the industries in which Tribune and
its Subsidiaries operate or, except with respect to the representations and
warranties set forth in Section 5.4, any effect arising out of this
Agreement or the transactions contemplated hereby or the public
announcement hereof. With respect to the Company, a material adverse effect
on the business, properties, operations or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, other
than any such effect arising out of or resulting from general economic
conditions or from changes in or generally affecting the industries in
which the Company and its Subsidiaries operate or, except with respect to
the representations and warranties set forth in Section 4.5, any effect
arising out of this Agreement or the transactions contemplated hereby or
the public announcement hereof.
A-5
<PAGE>
"Material Contracts": As defined in Section 4.10(a).
"Merger": As defined in the Recitals.
"Minimum Condition": As defined in Annex I.
"Mixed Consideration": As defined in Section 3.1(b).
"Mixed Election": As defined in Section 3.1(f).
"Multiemployer Plan": As defined in Section 4.9(b).
"Multiple Employer Plan": As defined in Section 4.9(b).
"No Election Shares": As defined in Section 3.1(h).
"NYSE": The New York Stock Exchange, Inc.
"Offer": As defined in the Recitals.
"Offer Documents": As defined in Section 2.1(c).
"Offer to Purchase": As defined in Section 2.1(c).
"Paying Agent": As defined in Section 3.1(g).
"PBGC": As defined in Section 4.9(b).
"Per Share Cash Amount": As defined in the Recitals.
"Permit": Any permit, grant, authorization, exception, consent,
certificate, clearance, license, variance, exemption, order, concession,
franchise or approval of any Governmental Entity.
"Person": Any individual or corporation, company, partnership, trust,
incorporated or unincorporated association, joint venture or other entity
of any kind.
"Proprietary Technology": All proprietary processes, formulae,
inventions, trade secrets, know-how, development tools and other
proprietary rights used by the Company and/or its Affiliates or Tribune
and/or its Subsidiaries, as the case may be, pertaining to any product,
software or service manufactured, marketed, licensed or sold by the Company
and/or its Affiliates or Tribune and/or its Subsidiaries, as the case may
be, in the conduct of their business or used, employed or exploited in the
development, license, sale, marketing, distribution or maintenance thereof,
and all documentation and media constituting, describing or relating to the
above, including manuals, memoranda, know-how, notebooks, software, records
and disclosures.
"Proxy Statement": As defined in Section 7.1(a).
"Registration Statement": As defined in Section 7.1(a).
"Representatives": As defined in Section 7.3.
"Rights": Tribune's preferred share purchase rights issued pursuant to
the Rights Agreement, dated as of December 12, 1997, by and between Tribune
and First Chicago Trust Company of New York, as Rights Agent.
"Rule 145 Affiliate": As defined in Section 7.8.
"Schedule 14D-9": As defined in Section 2.2(b).
"SEC": The Securities and Exchange Commission.
"Section 16": As defined in Section 6.9(b).
"Securities Act": The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"Share Issuance": As defined in Section 5.3.
A-6
<PAGE>
"Share Purchase Date": As defined in Section 2.1(b).
"Shares Representative": As defined in Section 3.1(c).
"Stock Electing Option": As defined in Section 3.4(a).
"Stock Election": As defined in Section 3.1(e).
"Stockholders": As defined in the Preamble.
"Subsidiary": With respect to any Person, any other Person of which such
first Person (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, a majority of the stock or other
equity interests the holders of which are generally entitled to vote for
the election of the Board of Directors or other governing body of such
Person.
"Superior Proposal": As defined in Section 6.3(c).
"Surviving Corporation": As defined in Section 2.4.
"Takeover Proposal": Any proposal for a merger, consolidation, share
exchange, business combination or other similar transaction involving the
Company or any of its Subsidiaries, or any proposal or offer to acquire,
directly or indirectly, 20% or more of the voting securities or equity
interests of, or a substantial portion of the assets of, the Company or any
of its Subsidiaries, other than the transactions contemplated by this
Agreement.
"Tax": Any United States federal, state, county or local, or foreign or
provincial income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, value added, alternative or added minimum,
ad valorem or transfer tax, or any other tax, custom, duty or governmental
fee or other like assessment or charge of any kind whatsoever, together
with any interest or penalty imposed by any Governmental Entity.
"Tax Return": A report, return or other information (including any
attached schedules or any amendments to such report, return or other
information) required to be supplied to or filed with a Governmental Entity
with respect to any Tax, including an information return, claim for refund,
amended return or declaration or estimated Tax.
"368 Reorganization": As defined in Section 7.6(a).
"Tribune": As defined in the Preamble.
"Tribune Charter Amendment": An amendment to Tribune's Restated
Certificate of Incorporation containing the provisions set forth in Exhibit
B.
"Tribune Common Shares": Shares of Common Stock, without par value, of
Tribune.
"Tribune Disclosure Statement": The disclosure statement, dated the date
of this Agreement, delivered by Tribune to the Company.
"Tribune Option": As defined in Section 3.4(a).
"Tribune Permits": As defined in Section 5.9.
"Tribune SEC Reports": As defined in Section 5.5.
"Tribune Stockholder Approval": As defined in Section 5.3.
"Tribune Stockholders' Meeting": As defined in Section 7.2(b).
"Voting Agreement": As defined in the Preamble.
"Welfare Plan": As defined in Section 6.9(b).
"Wholly-Owned Subsidiary": With respect to any Person, a Subsidiary of
such Person all of the equity and voting interest in which is owned,
directly or indirectly, by such Person.
A-7
<PAGE>
ARTICLE II
THE OFFER AND THE MERGER
SECTION 2.1. The Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Section 9.1 hereof and none of the events set
forth in Annex I hereto shall have occurred and be existing, Tribune shall
commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer as
promptly as reasonably practicable, but in no event later than seven business
days following the public announcement by Tribune and the Company of the
execution of this Agreement. The obligation of Tribune to accept for payment
and pay for any Company Common Shares tendered pursuant to the Offer shall be
subject to the satisfaction of the conditions set forth in Annex I. Tribune
expressly reserves the right from time to time, subject to Sections 2.1(b) and
2.1(d), without the consent of the Company to waive any such conditions and to
increase the Per Share Cash Amount. The Per Share Cash Amount shall be net to
the seller in cash, without interest, subject to reduction only for any
applicable withholding taxes or stock transfer taxes payable by the seller. The
Company agrees that no Shares held by the Company or any Subsidiary of the
Company will be tendered pursuant to the Offer.
(b) Without the prior written consent of the Company, Tribune shall not (i)
decrease the Per Share Cash Amount or change the form of consideration payable
in the Offer, (ii) seek to purchase fewer than 28 million Company Common
Shares, or (iii) impose conditions to the Offer in addition to those set forth
in Annex I hereto, or amend any other term or condition of the Offer in any
manner materially adverse to the holders of Company Common Shares. Upon the
terms and subject to the conditions of the Offer and this Agreement, Tribune
will accept for payment and purchase, as soon as permitted under the terms of
the Offer and applicable law, all Company Common Shares validly tendered and
not withdrawn prior to the expiration of the Offer. Tribune shall not provide
for a subsequent offering period in accordance with Rule 14d-11 under the
Exchange Act.
(c) The Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") having the conditions set forth in Annex I hereto. As soon as
reasonably practicable on the date the Offer is commenced, Tribune shall file
with the SEC a Tender Offer Statement on Schedule TO (together with all
amendments and supplements thereto, the "Schedule TO") with respect to the
Offer that will comply in all material respects with the provisions of all
applicable federal securities laws, and will contain (including as an exhibit)
or incorporate by reference the Offer to Purchase and forms of the related
letter of transmittal and summary advertisement (which documents, together with
any supplements or amendments thereto, are referred to collectively herein as
the "Offer Documents"), which shall be mailed to the holders of Company Common
Shares. Tribune agrees to promptly correct the Schedule TO and the Offer
Documents if and to the extent that they shall have become false or misleading
in any material respect (and the Company, with respect to information supplied
by it specifically for use in the Schedule TO or the Offer Documents, shall
promptly notify Tribune of any required corrections of such information and
shall cooperate with Tribune with respect to correcting such information) and
to supplement the Schedule TO or the Offer Documents to include any information
that shall become necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading (and the
Company shall supplement the information provided by it specifically for use in
the Schedule TO or the Offer Documents, shall promptly notify Tribune of any
required corrections of such information and shall cooperate with Tribune with
respect to correcting such information) and Tribune further agrees to
supplement the Schedule TO or the Offer Documents to include any information
that shall become necessary in order to make the statements therein that are
based on such provided information, in light of the circumstances under which
they were made, not misleading, and to take all steps necessary to cause the
Schedule TO, as so corrected or supplemented, to be filed with the SEC and the
Offer Documents, as so corrected or supplemented, to be disseminated to holders
of Company Common Shares, in each case to the extent required by applicable
federal securities laws. The Company and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule TO and any Offer
Documents before they are filed with the SEC.
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(d) The Offer to Purchase shall provide for an initial expiration date of 20
business days (as defined in Rule 14d-1 under the Exchange Act) from and
including the date of commencement of the Offer (the "Expiration Date"). Unless
this Agreement shall have been terminated pursuant to Section 9.1 hereof,
Tribune agrees that it shall not, without the consent of the Company, terminate
or withdraw the Offer or extend the Expiration Date of the Offer; provided,
however, that without the consent of the Company, Tribune shall have the right
to terminate or withdraw the Offer or extend the Offer from time to time, but
in any event not more than 20 days, if at the then-scheduled Expiration Date of
the Offer the conditions to the Offer described in Annex I hereto shall have
not been satisfied or earlier waived.
SECTION 2.2. Company Action. (a) The Company hereby approves of and consents
to the Offer and represents and warrants that the Board of Directors, at a
meeting duly called and held on March 12, 2000, acting by unanimous vote, (i)
approved and adopted this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, and the Voting Agreement; (ii) recommended
that the holders of Company Common Shares who desire cash for their Shares at
this time accept the Offer, tender their Company Common Shares pursuant to the
Offer and approve this Agreement and the transactions contemplated hereby,
including the Merger; and (iii) determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are
advisable, fair to and in the best interests of the stockholders of the
Company.
(b) The Company hereby agrees to file with the SEC, as promptly as
practicable after the filing by Tribune of the Schedule TO with respect to the
Offer but in any event on the date such Schedule TO is filed with the SEC, a
Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together
with any amendments or supplements thereto, the "Schedule 14D-9") that (i) will
comply in all material respects with the provisions of all applicable federal
securities laws and (ii) will include the opinion of the Company Financial
Advisor referred to in Section 4.17 hereof. The Company agrees to mail such
Schedule 14D-9 to the holders of Company Common Shares along with the Offer
Documents promptly after the commencement of the Offer. The Company agrees that
the Schedule 14D-9 and the Offer Documents shall contain the recommendations of
the Company's Board of Directors described in Sections 1.2(a) hereof. The
Company agrees promptly to correct the Schedule 14D-9 if and to the extent that
it shall become false or misleading in any material respect (and Tribune, with
respect to information supplied by it specifically for use in the Schedule 14D-
9, shall promptly notify the Company of any required corrections of such
information and cooperate with the Company with respect to correcting such
information) and to supplement the information contained in the Schedule 14D-9
to include any information that shall become necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (and Tribune shall supplement the information provided by it
specifically for use in the Schedule 14D-9 to include any information that
shall become necessary in order to make the statements therein that are based
on such provided information, in light of the circumstances under which they
were made, not misleading), and the Company shall take all steps necessary to
cause the Schedule 14D-9, as so corrected or supplemented, to be filed with the
SEC and disseminated to the holders of Company Common Shares, in each case to
the extent required by applicable federal securities laws. Tribune and its
counsel shall be given a reasonable opportunity to review and comment on the
Schedule 14D-9 before it is filed with the SEC.
(c) In connection with the Offer, the Company shall promptly following
execution of this Agreement furnish Tribune with mailing labels containing the
names and addressees of all record holders of Company Common Shares, non-
objecting beneficial owners list and security position listings of Company
Common Shares held in stock depositories, each as of a recent date, and shall
promptly furnish Tribune with such additional information, including updated
lists of stockholders, mailing labels and security position listings, and such
other information and assistance as Parent or its agents may reasonably request
for the purpose of communicating the Offer to the record and beneficial holders
of Company Common Shares.
SECTION 2.3. Directors Following Offer. Promptly upon the purchase by
Tribune of Company Common Shares pursuant to the Offer, Tribune shall be
entitled to designate such number of directors on the Board of Directors of the
Company as will give Tribune, subject to compliance with Section 14(f) of the
Exchange Act, (a) in the event Tribune purchases at least 15 million Company
Common Shares pursuant to the Offer, representation on the Board of Directors
of the Company constituting a majority of the total number of
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directors on the Board of Directors and (b) in the event Tribune purchases
fewer than 15 million Company Common Shares pursuant to the Offer,
representation on the Board of Directors of the Company in the same proportion
as the number of Company Common Shares purchased by Tribune pursuant to the
Offer bears to the total number of Company Common Shares deemed outstanding for
financial reporting purposes. At such time, the Company will also cause, if
requested by Tribune, (i) each committee of the Board of Directors of the
Company, (ii) the board of directors of each of the Company's Subsidiaries and
(iii) if requested by Tribune, each committee of each such Subsidiary board to
include individuals designated by Tribune constituting up to the same
percentage of each such committee or board as Tribune designees constitute on
the Company's Board of Directors. The Company shall, upon request by Tribune,
promptly take all actions necessary to cause Tribune's designees to be elected
or appointed to the Board of Directors of the Company in accordance with the
terms of this Section 2.3, including by increasing the size of the Board of
Directors and/or, at the Company's election, securing the resignations of such
number of directors as is necessary to enable Tribune's designees to be elected
to the Company's Board of Directors in accordance with the terms of this
Section 2.3. Tribune's designees shall serve as evenly as possible among the
classes of the Company's Board of Directors. In the event that Tribune's
designees are appointed or elected to the Company's Board of Directors, until
the Effective Time, those continuing members of the Company's Board of
Directors who are directors on the date hereof and who are neither officers of
the Company nor designees, Affiliates or associates (within the meaning of the
federal securities laws) of Tribune shall be deemed the "Independent Directors"
for purposes of the provisions of this Agreement. Subject to applicable law,
the Company shall promptly take all action necessary pursuant to Section 14(f)
of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill
its obligations under this Section 2.3 and shall include in the Schedule 14D-9
mailed to holders of Company Common Shares promptly after the commencement of
the Offer (or an amendment thereof or an information statement pursuant to Rule
14f-1 if Tribune has not theretofore designated directors or timely provided
the requisite information) such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section 2.3. Tribune will supply
the Company any information with respect to itself and its nominees, officers,
directors and Affiliates required by Section 14(f) and Rule 14 f-1.
Notwithstanding anything in this Agreement to the contrary, following the time
directors designated by Tribune are appointed or elected to the Company's Board
of Directors and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors shall be required to (i) amend or
terminate this Agreement on behalf of the Company, (ii) exercise or waive any
of the Company's rights or remedies hereunder, (iii) extend the time for
performance of Tribune's obligations hereunder, (iv) take any other action by
the Company in connection with this Agreement required to be taken by the
Company's Board of Directors, or (v) take any action on behalf of the Company
with respect to the matters covered by Section 6.9 or any other action taken by
the Company in connection with the transactions contemplated by this Agreement,
and such affirmative majority vote shall be sufficient to take any such action.
In the event the Merger Agreement is terminated after consummation of the
Offer, but without consummation of the Merger, Tribune will secure the
resignation from the Company's Board of Directors of such number of Tribune's
designees, if any, as may be necessary to cause Tribune's representation on the
Company's Board of Directors (and any committees thereof) to be in the same
proportion as the number of Company Common Shares then beneficially owned by
Tribune bears to the total number of Company Common Shares deemed outstanding
for financial reporting purposes.
SECTION 2.4. The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Company shall be merged with and into
Tribune in accordance with the provisions of Section 251 of the DGCL and with
the effect provided in the DGCL. The separate corporate existence of the
Company shall thereupon cease and Tribune shall be the surviving corporation in
the Merger (the "Surviving Corporation") and shall continue to be governed by
the laws of the State of Delaware.
SECTION 2.5. 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 in the Certificate of
Merger), which shall be on the Closing Date or as soon as practicable
thereafter.
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SECTION 2.6. Closing. Subject to the fulfillment or waiver of the conditions
set forth in Article VIII, the Closing shall take place (a) at the offices of
Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, California,
at 9:00 a.m. local time on the earliest practicable date (but no later than the
fifth business day) following the satisfaction or waiver of the conditions set
forth in Article VIII (other than those conditions to be satisfied or waived at
the Closing) or (b) at such other place and/or time and/or on such other date
as Tribune and the Company may agree.
SECTION 2.7. Certificate of Incorporation and By-Laws. (a) At the Effective
Time, the certificate of incorporation of Tribune in effect immediately prior
to the Effective Time, as amended by the Tribune Charter Amendment, shall be
the certificate of incorporation of the Surviving Corporation, until duly
amended in accordance with the terms thereof and of the DGCL.
(b) The by-laws of Tribune immediately prior to the Effective Time, as
amended by the by-law amendments contemplated by Exhibit C hereto, 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.
SECTION 2.8. Directors. Subject to Section 6.8(a), the directors of Tribune
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 2.9. Officers. The officers of Tribune immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY; EXCHANGE OF
CERTIFICATES
SECTION 3.1. Effect of the Merger on Common Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of any holder of any
capital stock of the Company:
(a) Cancellation of Certain Company Common Stock. Each Company Common
Share that is owned by the Company or by Tribune or any of Tribune's
Wholly-Owned Subsidiaries, shall be canceled and shall cease to exist, and
no stock of Tribune or other consideration shall be delivered in exchange
therefor.
(b) Conversion of Company Common Shares. Subject to the provisions of
this Section 3.1, each Company Common Share, other than Dissenting Shares
and shares canceled pursuant to Section 3.1(a), issued and outstanding
immediately prior to the Effective Time shall be converted into the right
to receive (i) the Per Share Cash Amount, without interest, or (ii) 2.5
Tribune Common Shares (the "Common Exchange Ratio") (together with
associated Rights) or (iii) a combination of cash and Tribune Common Shares
(together with the associated Rights) determined in accordance with this
Section (the "Mixed Consideration").
(c) Cash Election. Subject to the immediately following sentence, each
record holder of Company Common Shares immediately prior to the Effective
Time shall be entitled to elect to receive cash for all or any part of such
holder's Company Common Shares (a "Cash Election"). Notwithstanding the
foregoing and subject to Section 3.1(j), the aggregate number of Company
Common Shares that may be converted into the right to receive cash in the
Merger (the "Cash Election Number") shall be no greater than (i) 28
million, minus (ii) the number of Company Common Shares purchased in the
Offer, minus (iii) any Dissenting Shares, minus (iv) any Company Common
Shares acquired by Tribune or any of its Wholly-
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Owned Subsidiaries following consummation or expiration of the Offer and
prior to the Effective Time. Cash Elections shall be made on a form
designed for that purpose (a "Form of Election"). A holder of record of
Company Common Shares who holds such Company Common Shares as nominee,
trustee or in another representative capacity (a "Shares Representative")
may submit multiple Forms of Election; provided, that such Shares
Representative certifies that each such Form of Election covers all the
Company Common Shares held by such Shares Representative for a particular
beneficial owner.
(d) Cash Election Shares. If the aggregate number of Company Common
Shares covered by Cash Elections (the "Cash Election Shares") exceeds the
Cash Election Number, each Cash Election Share shall be converted into (i)
the right to receive an amount in cash, without interest, equal to the
product of (A) the Per Share Cash Amount and (B) a fraction (the "Cash
Fraction"), the numerator of which shall be the Cash Election Number and
the denominator of which shall be the total number of Cash Election Shares,
and (ii) a number of Tribune Common Shares equal to the product of (A) the
Common Exchange Ratio and (B) a fraction equal to one minus the Cash
Fraction.
(e) Stock Election. Each record holder of Company Common Shares
immediately prior to the Effective Time shall be entitled to elect to
receive Tribune Common Shares (together with the associated Rights) for all
or any part of such holder's Company Common Shares (a "Stock Election").
There shall not be any limit on the number of Company Common Shares that
may be converted into the right to receive Tribune Common Shares in the
Merger. Stock Elections shall be made on a Form of Election. A Shares
Representative may submit multiple Forms of Election; provided, that such
Shares Representative certifies that each such Form of Election covers all
the Company Common Shares held by such Shares Representatives for a
particular beneficial owner.
(f) Mixed Election. Subject to the immediately following sentence, each
record holder of Company Common Shares immediately prior to the Effective
Time shall be entitled to elect to receive Tribune Common Shares (together
with the associated Rights) for part of such holder's Company Common Shares
and cash for the remaining part of such holder's Company Common Shares (the
"Mixed Election" and, collectively with the Stock Election and the Cash
Election, the "Election"). Notwithstanding the foregoing and subject to
Section 3.1(j), the aggregate number of Company Common Shares that may be
converted into the right to receive the Per Share Cash Amount shall be no
greater than (i) 28 million minus (ii) the number of Company Common Shares
purchased in the Offer, minus (iii) any Dissenting Shares, minus (iv) any
Company Common Shares acquired by Tribune or any of its Wholly-Owned
Subsidiaries following the consummation or expiration of the Offer and
prior to the Effective Time. Mixed Elections shall be made on a Form of
Election. A Shares Representative may submit multiple Forms of Election;
provided, that such Shares Representative certifies that each such Form of
Election covers all the Company Common Shares held by such Shares
Representative for a particular beneficial owner. With respect to each
holder of Company Common Shares who makes a Mixed Election, the Company
Common Shares such holder elects to be converted into the right to receive
the Per Share Cash Amount shall be treated as Cash Election Shares for
purposes of the provisions contained in Section 3.1(c), (d) and (j), and
the Company Common Shares such holder elects to be converted into the right
to receive Tribune Common Shares shall be treated as Company Common Shares
with respect to which Stock Elections are made for purposes of the
provisions contained in Sections 3.1(e) and (j).
(g) Form of Election. To be effective, a Form of Election must be
properly completed, signed and submitted to Tribune's transfer agent and
registrar, as paying agent, or such other paying agent as may be selected
by Tribune and reasonably acceptable to the Company (the "Paying Agent"),
and accompanied by the certificates representing the Company Common Shares
("Company Common Certificates") as to which the election is being made (or
by an appropriate guarantee of delivery of such Company Common Certificates
signed by a firm that is a member of any registered national securities
exchange or a member of the National Association of Securities Dealers,
Inc. or a bank, broker, dealer, credit union, savings association or other
entity that is a member in good standing of the Securities Transfer Agent's
Medallion
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Program, the New York Stock Exchange Medallion Signature Guarantee Program
or the Stock Exchange Medallion Program). Tribune shall have the
discretion, which it may delegate in whole or in part to the Paying Agent,
to determine whether Forms of Election have been properly completed, signed
and submitted or revoked and to disregard immaterial defects in Forms of
Election. The decision of Tribune (or the Paying Agent) in such matters
shall be conclusive and binding. Neither Tribune nor the Paying Agent shall
be under any obligation to notify any person of any defect in a Form of
Election submitted to the Paying Agent. The Paying Agent shall also make
all computations contemplated by this Section 3.1, and all such
computations shall be conclusive and binding on the holders of Company
Common Shares and shall be subject to the provisions of Section 3.1(c), (d)
and (j).
(h) Deemed Non-Election. For the purposes hereof, a holder of Company
Common Shares who does not submit a Form of Election that is received by
the Paying Agent prior to the Election Deadline (the "No Election Shares")
shall be deemed not to have made a Cash Election, Stock Election or Mixed
Election. If Tribune or the Paying Agent shall determine that any purported
Election was not properly made, the shares subject to such improperly made
Election shall be treated as No Election Shares. No Election Shares shall
be treated by the Company as Cash Election Shares and shall be subject to
the provisions of Sections 3.1(c), (d) and (j).
(i) Election Deadline. Tribune and the Company shall each use all
reasonable best efforts to cause copies of the Form of Election to be
mailed to the record holders of the Company Common Shares not less than
thirty days prior to the Effective Time and to make the Form of Election
available to all persons who become record holders of Company Common Shares
subsequent to the date of such mailing and no later than the last business
day prior to the Election Deadline. A Form of Election must be received by
the Paying Agent by 5:00 p.m., New York City time, on the seventh business
day after the Effective Time (the "Election Deadline") in order to be
effective. All elections may be revoked until the Election Deadline in
writing by the record holders submitting Forms of Election.
(j) Adjustment Per Tax Opinion. Notwithstanding anything in this Article
III to the contrary, the number of Company Common Shares to be converted
into the right to receive the Tribune Common Shares in the Merger shall be
not less than the number which would cause the ratio of (i) the average
price per Tribune Common Share on the NYSE on the Closing Date times the
aggregate number of Tribune Common Shares to be paid as Common Merger
Consideration pursuant to Section 3.1 with respect to Company Common Shares
that are deemed outstanding for federal income tax purposes, to (ii) the
sum of (A) the amount set forth in the preceding clause (i) plus (B) the
aggregate Per Share Cash Amount to be paid pursuant to Section 3.1 plus (C)
the number of Dissenting Shares times the Per Share Cash Amount plus (D)
the aggregate amount of cash paid for Company Common Shares purchased in
the Offer plus (E) the aggregate amount of cash paid by Tribune or any of
its Wholly-Owned Subsidiaries to acquire Company Common Shares following
completion or expiration of the Offer and prior to the Effective Time plus
(F) any other amounts paid by Tribune or the Company (or any Person related
to Tribune or the Company within the meaning of Treasury Regulation
Sections 1.368-1(e) and 1.368-1T(e)) to, or on behalf of, any stockholder
of the Company in connection with the sale, redemption or other disposition
of any Company stock in connection with the Merger for purposes of Treasury
Regulation Sections 1.368-1(e) and 1.368-1T(e) plus (G) any extraordinary
dividend distributed by the Company prior to and in connection with the
Merger for purposes of Treasury Regulation Section 1.368-1T(e), to be 45%.
To the extent the application of this Section 3.1(j) results in the number
of Company Common Shares to be converted into the right to receive the
Tribune Common Shares in the Merger being increased, the number of Company
Common Shares to be converted into the right to receive the Per Share Cash
Amount (and, therefore, the Cash Election Number) will be reduced
accordingly.
(k) Anti-Dilution Provisions. In the event Tribune (i) changes (or
establishes a record date for changing) the number of Tribune Common Shares
issued and outstanding prior to the Effective Time as a result of a stock
split, stock dividend, stock combination, recapitalization,
reclassification, reorganization or similar transaction with respect to the
outstanding Tribune Common Shares or (ii) pays or makes an extraordinary
dividend or distribution in respect of Tribune Common Shares (other than a
distribution
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referred to in clause (i) of this sentence) and, in either case, the record
date therefor shall be prior to the Effective Time, the Common Merger
Consideration shall be proportionately adjusted. Regular quarterly cash
dividends and increases thereon shall not be considered extraordinary for
purposes of the preceding sentence.
(l) Dissenting Shares. To the extent that holders thereof are entitled
to appraisal rights under Section 262 of the DGCL, Company Common Shares
issued and outstanding immediately prior to the Effective Time and held by
a holder who has properly exercised and perfected his demand for appraisal
rights under Section 262 of the DGCL (the "Dissenting Shares"), shall not
be converted into the right to receive the Common Merger Consideration, but
the holders of Dissenting Shares shall be entitled to receive from the
Company such consideration as shall be determined pursuant to Section 262
of the DGCL; provided, however, that if any such holder shall have failed
to perfect or shall effectively withdraw or lose his right to appraisal and
payment under the DGCL, each of such holder's Company Common Shares shall
thereupon be deemed to have been converted as of the Effective Time into
the right to receive the Per Share Cash Amount, without any interest
thereon, and such shares shall not be deemed to be Dissenting Shares.
(m) Company Elections. The Company shall cause a Stock Election to be
made with respect to each Company Common Share owned beneficially or of
record by any Subsidiary of the Company or any other Affiliate of the
Company controlled by the Company.
SECTION 3.2. Exchange of Certificates.
(a) Deposit with Paying Agent. As soon as practicable after the Effective
Time, Tribune shall deposit with the Paying Agent, pursuant to an agreement in
form and substance reasonably acceptable to Tribune and the Company, an amount
of cash and certificates representing Tribune Common Shares required to effect
the conversion of Company Common Shares into Tribune Common Shares and cash in
accordance with Section 3.1.
(b) Exchange and Payment Procedures. As soon as practicable after the
Effective Time or, if Tribune determines appropriate, together with or as part
of the Election Form, Tribune shall cause the Paying Agent to mail to each
holder of record as of the Effective Time of a Company Common Certificate
representing Company Common Shares that have been converted pursuant to Section
3.1: (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Company Common Certificates shall
pass, only upon actual delivery of the Company Common Certificates to the
Paying Agent) and (ii) instructions for effecting the surrender of the Company
Common Certificates and receiving the Common Merger Consideration which such
holder shall be entitled therefor pursuant to Section 3.1. Upon surrender of a
Company Common Certificate to the Paying Agent for cancellation, together with
a duly executed letter of transmittal and such other documents as the Paying
Agent may require, the holder of such Company Common Certificate shall be
entitled to receive in exchange therefor, as soon as practicable after the
Effective Time, (A) a certificate representing that number of Tribune Common
Shares into which the Company Common Shares previously represented by such
Company Common Certificate have been converted in accordance with Section 3.1,
(B) the cash to which such holder is entitled in accordance with Section 3.1
and (C) the cash in lieu of fractional Tribune Common Shares to which such
holder has the right to receive pursuant to Section 3.2(d) (the Tribune Common
Shares and cash described in clauses (A), (B) and (C) above being referred to
collectively as the "Common Merger Consideration"). In the event the Common
Merger Consideration is to be delivered to any Person who is not the Person in
whose name the Company Common Certificate surrendered in exchange therefor is
registered in the transfer records of Company, the Common Merger Consideration
may be delivered to a transferee if the Company Common Certificate is presented
to the Paying Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence satisfactory to the Paying Agent that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 3.2, each Company Common Certificate (other than a
Company Common Certificate representing Company Common Shares to be canceled in
accordance with Section 3.1(a)) shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Common
Merger Consideration contemplated by
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this Section 3.2. No interest will be paid or will accrue on any cash payable
to holders of Company Common Certificates pursuant to provisions of this
Article III.
(c) Distribution with Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the Effective Time with respect to Tribune
Common Shares with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Company Common Certificate with respect to the
Tribune Common Shares represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 3.2(d)
until the holder of record of such Company Common Certificate shall surrender
such Company Common Certificate. Subject to the effect of unclaimed property,
escheat and other applicable Laws, following surrender of any such Company
Common Certificate, there shall be paid to the record holder of the
certificates representing whole Tribune Common Shares issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount of
any cash payable in lieu of a fractional Tribune Common Share to which such
holder is entitled pursuant to Section 3.2(d) and the amount of dividends or
other distributions with a record date after the Effective Time theretofore
paid with respect to such whole Tribune Common Shares and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole Tribune Common
Shares.
(d) No Fractional Securities. In lieu of any fractional securities, each
holder of Company Common Shares who would otherwise have been entitled to a
fraction of a Tribune Common Share upon surrender of Company Common
Certificates for exchange pursuant to this Article III will be paid an amount
in cash, without interest, equal to such holder's proportionate interest in the
net proceeds from the sale or sales in the open market by the Paying Agent, on
behalf of all such holders, of the aggregate fractional Tribune Common Shares
issued pursuant to this Article III. As soon as practicable following the
Effective Time, the Paying Agent shall determine the excess of (i) the number
of full Tribune Common Shares delivered to the Paying Agent by Tribune over
(ii) the aggregate number of full Tribune Common Shares to be distributed to
holders of Company Common Shares (such excess, the "Excess Tribune Common
Shares"). The Paying Agent, as agent for the former holders of Company Common
Shares, shall sell the Excess Tribune Common Shares at the prevailing prices on
the NYSE. The sales of the Excess Tribune Common Shares by the Paying Agent
shall be executed on the NYSE through one or more member firms of the NYSE and
shall be executed in round lots to the extent practicable. Tribune shall pay
all commissions, transfer taxes and other out-of-pocket transaction costs,
including the expenses and compensation of the Paying Agent, incurred in
connection with such sale of Excess Tribune Common Shares. Until the net
proceeds of such sale have been distributed to the former holders of Company
Common Shares, the Paying Agent will hold such proceeds in trust for such
former holders. As soon as practicable after the determination of the amount of
cash to be paid to former holders of Company Common Shares in lieu of any
fractional interests, the Paying Agent shall make available in accordance with
this Agreement such amounts to such former holders.
(e) Termination of Paying Agent. Any certificates representing Tribune
Common Shares deposited with the Paying Agent pursuant to Section 3.2(a) and
not exchanged within six months after the Effective Time pursuant this Section
3.2 shall be returned by the Paying Agent to Tribune, which shall thereafter
act as Paying Agent. All funds held by the Paying Agent for payment to the
holders of unsurrendered Company Common Certificates and unclaimed at the end
of one year from the Effective Time shall be returned to the Surviving
Corporation, after which time any holder of unsurrendered Company Common
Certificates shall look as a general creditor only to Tribune for payment of
such funds to which such holder may be due, subject to applicable Law.
SECTION 3.3. Effect of the Merger on Preferred Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of any holder of any
capital stock of the Company:
(a) Each Company Preferred Share that is owned by the Company or by
Tribune shall be canceled and shall cease to exist, and no stock of Tribune
or other consideration shall be delivered in exchange therefor.
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(b) Each Company Series A Preferred Share issued and outstanding
immediately prior to the Effective Time shall be converted, automatically
and without the requirement of any exchange of any certificate representing
such share, into one share of preferred stock of Tribune to be designated
as the Series C Convertible Preferred Stock. The terms of the Series C
Convertible Preferred Stock of Tribune shall be substantively identical to
the terms of the Company Series A Preferred, except that the number of
Tribune Common Shares into which each such share of Series C Convertible
Preferred Stock of Tribune may be converted, under the terms thereof, shall
be calculated with respect to the Common Share Value (as defined in the
certificates of designations of the Company Preferred Shares) of the
Tribune Common Shares.
(c) Each Company Series D-1 Preferred Share issued and outstanding
immediately prior to the Effective Time, shall be converted, automatically
and without the requirement of any exchange of any certificate representing
such share, into one share of preferred stock of Tribune to be designated
Series D-1 Convertible Preferred Stock. The terms of the Series D-1
Convertible Preferred Stock of Tribune shall be substantively identical to
the terms of the Company Series D-1 Preferred Stock, except that the number
of Tribune Common Shares into which each such share of Series D-1
Convertible Preferred Stock of Tribune may be converted, under the terms
thereof, shall be calculated with respect to the Common Share Value (as
defined in the certificates of designations of the Company Preferred
Shares) of the Tribune Common Shares.
(d) Each share of Company Series D-2 Preferred Stock issued and
outstanding immediately prior to the Effective Time shall be converted,
automatically and without the requirement of any exchange of any
certificate representing such share, into one share of preferred stock of
Tribune to be designated Series D-2 Convertible Preferred Stock. The terms
of the Series D-2 Convertible Preferred Stock of Tribune shall be
substantively identical to the terms of the Company Series D-2 Preferred
Stock, except that the number of Tribune Common Shares into which each such
share of Series D-2 Convertible Preferred Stock of Tribune may be
converted, under the terms thereof, shall be calculated with respect to the
Common Share Value (as defined in the certificates of designations of the
Company Preferred Shares) of the Tribune Common Shares.
(e) All the Company Preferred Shares converted into preferred stock of
Tribune pursuant to this Section 3.3 shall no longer be outstanding and
shall automatically be cancelled and shall cease to exist as of the
Effective Time, and each certificate previously representing any such
Company Preferred Shares shall as of the Effective Time be deemed to
represent as of the Effective Time the number of shares of corresponding
preferred stock of Tribune into which the Company Preferred Shares
represented by such certificate have been converted pursuant to this
Section 3.3. At the request of any holder of a certificate previously
representing any such Company Preferred Shares, and upon surrender of such
certificate with such other documents as Tribune may reasonably request,
Tribune will issue a new certificate representing a number of shares of the
corresponding preferred stock of Tribune equal to the number of Company
Preferred Shares previously represented by such certificate.
SECTION 3.4. Options. (a) Each of the stock options, if any, to purchase
Company Common Shares (each, a "Company Option") issued by the Company pursuant
to any stock option or similar plan of the Company, and any non-plan options to
acquire Company Common Shares set forth in Section 4.3(a) of the Company
Disclosure Statement issued by the Company pursuant to an option agreement or
otherwise issued by the Company, which are outstanding as of the Effective Time
shall, whether or not then exercisable and vested, become fully exercisable and
vested immediately prior to the Effective Time. Each holder of a Company Option
shall be given the opportunity, prior to the Election Deadline, to elect either
(i) to cause such Company Option (a "Stock Electing Option") to become and
represent an option to purchase Tribune Common Shares (a "Tribune Option"), in
accordance with paragraph (b) of this Section 3.4, or (ii) to cause such
Company Option (a "Cash Electing Option") to be cancelled in exchange for a
single lump sum cash payment (less any applicable income or employment or other
Tax withholding), without interest (the "Company Option Cash Out Amount"),
equal to the product of (A) the number of Company Common Shares subject to such
Company Option immediately prior to the Effective Time and (B) the excess, if
any, of the Per Share Cash Amount over
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the exercise price per share of such Company Option, in accordance with
paragraph (c) of this Section 3.4. To the extent any holder of a Company Option
shall not have made an election with respect to such Company Option prior to
the Election Deadline, such Company Option shall be deemed to be a Cash
Electing Option.
(b) Each Stock Electing Option shall, by virtue of the Merger, and without
any further action on the part of any holder thereof, be assumed by Tribune and
converted into a Tribune Option to purchase that number of Tribune Common
Shares determined by multiplying the number of Company Common Shares subject to
such Company Option immediately prior to the Effective Time by the Common
Exchange Ratio, at an exercise price per Tribune Common Share equal to the
exercise price per share of such Company Option immediately prior to the
Effective Time divided by the Common Exchange Ratio, rounded down to the
nearest whole cent. If the foregoing calculation results in an assumed Company
Option being exercisable for a fraction of a Tribune Common Share, then the
number of Tribune Common Shares subject to such option shall be rounded up to
the nearest whole number of shares. The terms and conditions of each Tribune
Option shall otherwise remain as set forth in the Company Option converted into
such Tribune Option.
(c) Each Cash Electing Option shall, by virtue of the Merger, and without
any further action on the part of any holder thereof, be cancelled in exchange
for a single lump sum cash payment (less any applicable income or employment or
other tax withholding), without interest, equal to the Company Option Cash Out
Amount.
(d) The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Code), if any,
shall be and is intended to be effected in a manner which is consistent with
Section 424(a) of the Code.
(e) All restricted Company Series A Common Shares granted pursuant to any
equity plan or arrangements of the Company, and all individual awards of
restricted Company Series A Common Shares not granted pursuant to any such plan
or arrangement, shall become fully vested immediately prior to the Effective
Time and such Company Series A Common Shares shall be freed of restrictions and
issued to the relevant participant.
SECTION 3.5. Company Instruments. The Company's (1) 6.61% Debentures due
September 15, 2027, (2) 4.75% Liquid Yield Option Notes due April 15, 2017, (3)
7.25% Debentures due March 1, 2013, (4) 7.25% Debentures due November 15, 2096,
(5) 7.5% Debentures due July 1, 2023, (6) 4.25% Premium Equity Participating
Securities due March 15, 2001, (7) 6.65% Notes due October 15, 2001 and (8)
7.45% Notes due October 15, 2009 (collectively, the "Company Instruments")
outstanding immediately prior to the Effective Time shall be assumed by Tribune
and remain outstanding thereafter as an obligation of the Surviving Corporation
in accordance with their terms. From and after the Effective Date, the holder
of each Company Instrument that, prior to the Effective Time, was, under
certain circumstances and at certain times, convertible into Company Common
Shares, shall have the right, under the same terms and circumstances and at
such time as specified in the Company Instrument, to convert such Company
Instrument into the number of Tribune Common Shares equal to the number of
Company Common Shares into which such Company Instrument could have been
converted (had it then been convertible) immediately prior to the Merger
multiplied by the Common Exchange Ratio. Tribune shall enter into supplemental
indentures or other instruments with respect to such obligations in accordance
with the terms of the indentures or other instruments pursuant to which the
Company Instruments were issued.
SECTION 3.6. Transfer of Shares after the Effective Time. No transfers of
Company Common Shares or Company Preferred Shares shall be made on the stock
transfer books of the Company after the close of business on the day prior to
the date of the Effective Time.
SECTION 3.7. Escheat. Neither Tribune nor the Company shall be liable to any
Person for shares or funds delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Laws.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Statement (it being understood
and agreed that each item in a section of the Company Disclosure Statement
applies only to such section and any other section to which it clearly applies)
or in the Company SEC Reports filed prior to the date hereof, the Company
represents and warrants to Tribune as follows:
SECTION 4.1. Organization. The Company and each of its Subsidiaries is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation
and has all requisite corporate or other power and authority to carry on its
business as now being conducted, except where the failure to be so organized,
existing or in good standing or to have such power and authority would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or prevent or materially delay the consummation
of the Offer or the Merger. The Company and each of its Subsidiaries is duly
qualified or licensed to do business and in good standing in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary,
except in such jurisdictions where the failure to be so duly qualified or
licensed or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger. The
Company has delivered to Tribune complete and correct copies of the Company
Charter and by-laws of the Company, each as in effect on the date hereof.
SECTION 4.2. Subsidiaries. Section 4.2 of the Company Disclosure Statement
lists each material Subsidiary of the Company and its jurisdiction of
incorporation or formation and identifies the Company's (direct or indirect)
percentage ownership interest therein. Except as set forth in Section 4.2 of
the Company Disclosure Statement, all of the outstanding shares of capital
stock of each such Subsidiary are owned by the Company, by another Wholly-Owned
Subsidiary of the Company or by the Company and one or more Wholly-Owned
Subsidiaries of the Company, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"), other than Liens that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company, and are duly authorized, validly issued, fully paid and nonassessable.
SECTION 4.3. Capitalization. The authorized capital stock of the Company
consists of 900,000,000 shares of common stock, par value $1.00 per share, of
which 500,000,000 are designated as Company Series A Common Shares, 300,000,000
are designated as Company Series C Common Shares and 100,000,000 may be
designated as Company Series A Common Shares, Company Series B Common Shares or
Company Series C Common Shares, and 33,000,000 shares of Preferred Stock, par
value $1.00 per share, of which 900,000 are designated as Company Series A
Preferred Shares, 25,000,000 are designated as Conversion Preferred Stock,
Series B ("Company Series B Preferred Shares"), 380,972 are designated as
Company Series C-1 Preferred Shares, 245,100 are designated as Company Series
C-2 Preferred Shares, 380,972 are designated as Company Series D-1 Preferred
Shares and 245,100 are designated as Company Series D-2 Preferred Shares. At
the close of business on March 2, 2000, (i) 112,157,907 Company Common Shares
were issued and outstanding, of which 93,928,315 are Company Series A Common
Shares, 18,229,592 are Company Series C Common Shares and none are Company
Series B Common Shares, and (ii) 1,449,640 Company Preferred Shares were issued
and outstanding, of which 823,568 are Company Series A Preferred Shares,
380,972 are Company Series D-1 Preferred Shares and 245,100 are Company Series
D-2 Preferred Shares and none are Company Series B Preferred Shares, Company
Series C-1 Preferred Shares or Company Series C-2 Preferred Shares). For
financial reporting purposes, at the closing of business on March 2, 2000, (i)
77,870,911 Company Common Shares were issued and outstanding, of which
59,641,319 are Company Series A Common Shares (including 16,372,895 shares
subject to options and 2,914,000 shares subject to Lyons), 18,229,592 are
Company Series C Common Shares and none are Company Series B Common Shares, and
(ii) 213,733.6 Company Preferred Shares were issued and outstanding, of which
88,519.2 are Company Series A Preferred Shares, 76,194.4 are Company
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Series D-1 Preferred Shares and 49,020 are Company Series D-2 Preferred Shares
and none are Company Series B Preferred Shares, Company Series C-1 Preferred
Shares or Company Series C-2 Preferred Shares. At the close of business on
March 2, 2000, (A) 2,671,961 Company Series A Common Shares, 0 Company Series B
Common Shares, 0 Company Series C Common Shares and 0 Company Preferred Shares
were held by the Company in its treasury, and (B) 18,966,239 Company Series A
Common Shares were reserved for issuance upon exercise of Company Options or
issuance of restricted stock with an average exercise price of $51.63 per
share. Since March 2, 2000, no shares of capital stock of the Company have been
issued, except pursuant to exercise of options or conversion of convertible
securities of the Company outstanding as of March 2, 2000 in accordance with
the terms thereof. Except as set forth above, as of the date of this Agreement,
no shares of capital stock or other voting securities of the Company are
issued, reserved for issuance or outstanding. All outstanding shares of capital
stock of the Company are, and all shares which may be issued will be, when
issued, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. Except as set forth in Section 4.3 of the Company
Disclosure Statement, there are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of the Company may vote. Except as set forth above or in Section
4.3 of the Company Disclosure Statement, there are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind, to which the Company or any of its Subsidiaries is a party or by
which any of them or their respective assets or properties is bound, obligating
the Company or any of its Subsidiaries, the loss of the value of which would
reasonably be expected to have a Material Adverse Effect on the Company, to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company or of any of
its Subsidiaries, the loss of the value of which would reasonably be expected
to have a Material Adverse Effect on the Company, or obligating the Company or
any of its Subsidiaries, the loss of the value of which would reasonably be
expected to have a Material Adverse Effect on the Company, to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. Except as set forth in
Section 4.3 of the Company Disclosure Statement, there are no outstanding
contractual obligations of the Company, or any of its Subsidiaries, (1) to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its Subsidiaries, (2) to vote or dispose of any shares of
capital stock of the Company, or any of its Subsidiaries, (3) to register any
shares of capital stock under the Securities Act or any state securities law or
(4) to grant preemptive or antidilutive rights with respect to any capital
stock of the Company or any of its Subsidiaries.
SECTION 4.4. Authority. (a) At a meeting of the Board of Directors of the
Company duly called and held on March 12, 2000, the Board of Directors, acting
by unanimous vote, (i) determined that this Agreement and the transactions
contemplated hereby are advisable, fair to and in the best interests of the
Company's stockholders and that the consideration to be paid for the Company
Common Shares and Company Preferred Shares in the Offer and the Merger is fair
to the holders of such Shares, (ii) declared advisable and in all respects
approved and adopted this Agreement, the Offer, the Merger and the other
transactions contemplated hereby, and (iii) resolved to recommend the approval
and adoption of this Agreement and the Merger by the stockholders of the
Company. The Company has the requisite corporate power and authority to execute
and deliver this Agreement and, subject to the approval and adoption of this
Agreement by the holders of a majority of the voting power of the outstanding
Company Common Shares, voting together as a single class (the "Company
Stockholder Approval"), to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation by
the Company of the Offer, the Merger and the other transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company, and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the transactions so
contemplated, other than the Company Stockholder Approval. This Agreement has
been duly executed and delivered by the Company and, assuming this Agreement
constitutes a valid and binding obligation of Tribune, this Agreement
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to bankruptcy, insolvency,
moratorium and other principles of equity.
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(b) The Company has taken all appropriate actions so that the restrictions
on business combinations contained in Section 203 of the DGCL and in Article X
of the Company Charter will not apply with respect to or as a result of this
Agreement, the Voting Agreement, or the transactions contemplated hereby and
thereby, including the Offer and the Merger, without any further action on the
part of the stockholders or the Board of Directors of the Company. True and
complete copies of all Board resolutions reflecting such actions have been
previously provided to Tribune. No other state takeover statute is applicable
to the Offer or the Merger. The execution and delivery of this Agreement and/or
the Voting Agreement does not constitute an unpermitted transfer of any Company
Series C Common Shares under Article V of the Company Charter. The Board of
Directors of the Company has not elected to effect a conversion of the Company
Series C Common Shares pursuant to Article V, Section 2.E.2.b of the Company
Charter or Section 5(A)(2)(b) of the Certificate of Designation of the Company
Series C Common Shares.
SECTION 4.5. Consents and Approvals; No Violations. Except as set forth in
Section 4.5 of the Company Disclosure Statement, and except for filings and
Permits as may be required under, and other applicable requirements of, the
Securities Act, the Exchange Act (including the filing with the SEC of the
Registration Statement), state securities or "blue sky" laws ("Blue Sky Laws"),
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the DGCL, none of the execution, delivery or performance of this
Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby will (a) conflict with or result in any breach
of any provision of the Company Charter or by-laws of the Company or of the
similar organizational documents of any of its material Subsidiaries; (b)
require any filing, registration, qualification, declaration or designation
with or Permit of, or termination of any waiting period requirement (each an
"Authorization") by, any federal, state, local or foreign government or any
court, tribunal, administrative agency or commission or other governmental or
other regulatory authority or agency, domestic, foreign or supranational (a
"Governmental Entity"); (c) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under, any
of the terms, conditions or provisions of any loan or credit agreement, note,
bond, mortgage, indenture, lease, Permit, concession, franchise, license,
contract, agreement or other instrument, arrangement, understanding or
obligation (each a "Contract") to which the Company or any of its Subsidiaries
is a party or by which any of them or any of their properties or assets may be
bound; or (d) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company, any of its Subsidiaries or any of their
properties or assets, except in the case of clauses (b), (c) or (d) for
failures to obtain Authorizations, violations, breaches or defaults that would
not, individually or in the aggregate, reasonably be expected have a Material
Adverse Effect on the Company or prevent or materially delay the consummation
of the Offer or the Merger.
SECTION 4.6. Reports and Financial Statements. The Company has timely filed
all registration statements, prospectuses, forms, reports and documents
required to be filed by it under the Securities Act or the Exchange Act since
January 1, 1998 (collectively, the "Company SEC Reports"). The Company has
previously furnished or made available to Tribune true and complete copies of
all the Company SEC Reports filed prior to the date of this Agreement. The
Company SEC Reports (a) as of their respective dates, were prepared in
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and (b) did not at the time they were filed contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of the date of
this Agreement, no Subsidiary of the Company is subject to the periodic
reporting requirements of the Exchange Act. Each of the consolidated balance
sheets (including the related notes) included in the Company SEC Reports and
the audited consolidated balance sheet of the Company as of December 31, 1999
(including the related notes) attached to Section 4.6 of the Company Disclosure
Statement presents fairly, in all material respects, the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
thereof, and the other related statements (including the related notes)
included in the Company SEC Reports and the other related audited statements of
the Company as at or for the period ended December 31, 1999 (including the
related notes) attached to Section 4.6 of the Company Disclosure Statement
present fairly, in all material respects, the results of operations and the
changes in
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financial position of the Company and its Subsidiaries for the respective
periods or as of the respective dates set forth therein, all in conformity with
United States generally accepted accounting principles ("GAAP") consistently
applied during the periods involved, except as otherwise noted therein and
subject, in the case of the unaudited interim financial statements, to normal
year-end adjustments. All of the Company SEC Reports, as of their respective
dates, complied as to form in all material respects with the requirements of
the Exchange Act and/or the Securities Act, as applicable, and the applicable
rules and regulations thereunder.
SECTION 4.7. Absence of Certain Changes or Events. Since December 31, 1999,
the Company and its Subsidiaries have conducted their businesses in the
ordinary course consistent with past practice, and, since such date, there has
not been (a) any Material Adverse Effect on the Company or any event, change,
effect or development that would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company or (b) any action
taken by the Company or any of its Subsidiaries from December 31, 1999 through
the date of this Agreement that, if taken during the period from the date of
this Agreement through the Effective Time, would constitute a breach of Section
6.1.
SECTION 4.8. No Undisclosed Liabilities. Except as and to the extent
disclosed or reserved against on the audited balance sheet of the Company as of
December 31, 1999 attached to Section 4.6 of the Company Disclosure Statement
or as incurred after the date thereof in the ordinary course of business
consistent with past practice and not prohibited by this Agreement, neither the
Company nor any of its Subsidiaries has any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that would be required
by GAAP to be reflected on a consolidated balance sheet of the Company and its
Subsidiaries (or disclosed in the notes thereto).
SECTION 4.9. Employee Benefit Plans; Labor Matters. (a) Section 4.9(a) of
the Company Disclosure Statement sets forth a true and complete list as of the
date of this Agreement of each material employee benefit plan as defined in
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained by the Company or any of its Subsidiaries (the "Company
Benefit Plans"). With respect to each Company Benefit Plan, the Company has
heretofore delivered or will deliver or make available to Tribune within 30
days of the date of this Agreement a true, correct and complete copy of: (i)
each Company Benefit Plan, including all plan documents, trust agreements, and
insurance contracts and other funding vehicles; (ii) the most recent Annual
Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current
summary plan description and any material modifications thereto, if any (in
each case, whether or not required to be furnished under ERISA); (iv) the most
recent annual financial report, if any; (v) the most recent actuarial report,
if any; and (vi) the most recent determination letter from the Internal Revenue
Service (the "IRS"), if any. Except as provided in the foregoing documents
delivered to Tribune and except as provided in Section 4.9(a) of the Company
Disclosure Statement, there are no amendments to any Company Benefit Plan that
have been adopted or approved nor has the Company or any Company Subsidiary
undertaken to make any such amendments or to adopt or approve any new Plan
which would reasonably be expected to have a material impact on the liabilities
of the Company Benefit Plan.
(b) With respect to each Company Benefit Plan which is subject to Title IV
of ERISA, or Section 302 of ERISA or Section 412 or 4971 of the Code, (i) the
present value of accrued benefits under such Company Benefit Plan, based upon
the actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such Company Benefit Plan's actuary with respect
to such Company Benefit Plan, did not, as of its latest valuation date, exceed
the then current value of the assets of such Company Benefit Plan allocable to
such accrued benefits except with respect to one employee pension benefit plan
maintained by a Subsidiary of the Company, in which case such excess is not
greater than $10 million, (ii) no "reportable event" (within the meaning of
Section 4043 of ERISA) has occurred with respect to any Company Benefit Plan
for which the 30-day notice requirement has not been waived, (iii) there does
not exist any accumulated funding deficiency within the meaning of Section 412
of the Code or Section 302 of ERISA, whether or not waived, (iv) all premiums
to the Pension Benefit Guaranty Corporation ("PBGC") have been timely paid in
full, (v) no liability (other than for premiums to the PBGC) under Title IV of
ERISA has been or is reasonably expected to be incurred by the Company or any
of its Subsidiaries and (vi) the PBGC has not instituted proceedings to
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terminate any such Company Benefit Plan and, to the Company's knowledge, no
condition exists that presents a risk that such proceedings will be instituted
or which would constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any such Company
Benefit Plan, except where the failure of any of the foregoing to be true would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer or the Merger. Section 4.9(b) of the Company
Disclosure Statement sets forth all "multiemployer pension plans" (as such term
is defined in section 3(37) of ERISA) (a "Multiemployer Plan") or all plans
that have two or more contributing sponsors at least one of whom are not under
common control, within the meaning of Section 4063 of ERISA (a "Multiple
Employer Plan") of the Company or any Subsidiary of the Company. Total
withdrawal liability of all such multiemployer plans, if triggered, would not
create a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries nor any of their respective ERISA Affiliates has incurred any
withdrawal liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan that has not been satisfied in
full. None of the withdrawal liabilities of the Company and/or any of its
Subsidiaries for each Multiemployer Plan, if triggered, would reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay the Offer or the Merger.
(c) Each of the Company Benefit Plans has been operated and administered in
accordance with applicable Laws and administrative rules and regulations under
ERISA and the Code, except where a violation of any such Law, rule or
regulation would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Company or prevent or materially delay
the consummation of the Offer or the Merger. Each of the Company Benefit Plans
intended to be "qualified" within the meaning of Section 401(a) of the Code has
received a favorable determination letter as to such qualification from the
IRS, and no event has occurred, either by reason of any action or failure to
act, which would cause the loss of any such qualification, except where such
action or failure to act can be cured without reasonably being expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Offer or the
Merger. Except as set forth in Section 4.9(c) of the Company Disclosure
Statement, no Company Benefit Plan provides benefits, including death or
medical benefits (whether or not insured), with respect to current or former
employees of the Company or any Subsidiary thereof beyond their retirement or
other termination of service, other than death benefits or retirement benefits
under any "employee pension plan" (as such term is defined in Section 3(2) of
ERISA). All contributions or other amounts payable by the Company or any
Subsidiary thereof as of the Effective Time with respect to each Company
Benefit Plan have been timely paid or accrued in accordance with the terms of
each such Company Benefit Plan. Except as set forth in Section 4.9(c) of the
Company Disclosure Statement, and subject to Tribune's obligations under
Section 6.9, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (A) result in a
restriction on Tribune's ability to amend, modify or terminate any Company
Benefit Plan, (B) trigger a requirement for funding or the acceleration of
funding of any Company Benefit Plan, (C) commence a period during which a
subsequent termination of employment by a Company Employee will entitle such
Company Employee to benefits in excess of what would otherwise have been
required in the absence of the transactions contemplated hereby or (D) result
in a reportable event within the meaning of Section 4043(c) of ERISA for which
a notice requirement has not been waived.
(d) No collective bargaining agreement or other labor union contract is
being negotiated by the Company or any Subsidiary thereof. There is no labor
dispute, strike, slowdown or work stoppage against the Company or any
Subsidiary thereof pending or, to the knowledge of the Company, threatened
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer or the Merger. To the knowledge of the Company, none
of the Company, any Subsidiary thereof or their respective representatives or
employees has committed any unfair labor practices in connection with the
operation of the respective businesses of the Company and its Subsidiaries, and
there is no charge or complaint against the Company or any Subsidiary thereof
by the National Labor Relations Board or any comparable state or foreign agency
pending or, to the knowledge of the Company, threatened, except where such
unfair labor practice, charge or complaint would not, individually or
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in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company or prevent or materially delay the consummation of the Offer or the
Merger.
(e) The Company has identified in Section 4.9(e) of the Company Disclosure
Statement and has made available to Tribune true and complete copies of (i) all
severance and employment agreements with directors and executive officers of
the Company; (ii) all severance programs and policies of the Company with or
relating to its employees; and (iii) all plans, programs, agreements and other
arrangements of the Company with or relating to its employees which contain
change in control provisions. Except as set forth in Section 4.9(e) of the
Company Disclosure Statement, to the knowledge of the Company, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (either alone or in conjunction with any
other event, such as termination of employment) (A) result in any material
payment (including severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of the Company or any
Subsidiary thereof or Affiliate from the Company or any Subsidiary thereof or
Affiliate under any Company Benefit Plan or otherwise, (B) materially increase
any benefits otherwise payable under any Company Benefit Plan or (C) result in
any acceleration of the time of payment or vesting of any material benefits.
(f) Except as set forth in Section 4.9(e) of the Company Disclosure
Statement, neither the Company nor any Subsidiary thereof is a party to any
Contract, plan, or arrangement under which it is obligated to make or to
provide, or could become obligated to make or to provide, a payment or benefit
that would be nondeductible under Section 162(m) or 280G of the Code.
SECTION 4.10. Contracts; Indebtedness. (a) Other than any Contract
(excluding Contracts that relate to the purchase of newsprint) involving
payments to or by the Company of less than $10 million per annum and less than
$25 million over the life of the Contract, there is no Contract to which
Company or any of its Subsidiaries is a party or by which it or any of its
properties or assets is bound, that (i) is material to the business,
properties, assets, condition (financial or otherwise) or operations of the
Company and its Subsidiaries, taken as a whole, (ii) relates to the purchase of
newsprint or (iii) is a material lease of real property pursuant to which the
Company or any of its Subsidiaries is the lessee or sublessee thereunder (the
Contracts described in clauses (i), (ii) and (iii), collectively, "Material
Contracts") as to which either the Company or any of its Subsidiaries is in
violation or default. Neither the Company nor any Subsidiary thereof has
received written notice from any third party alleging that the Company or any
of its Subsidiaries is in violation of or in default under (nor does there
exist any condition which upon the passage of time or the giving of notice
would cause such a violation of or default under) any Material Contract, except
for violations or defaults that would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger.
(b) Section 4.10(b) of the Company Disclosure Statement sets forth (i) a
list of all agreements, instruments and other obligations pursuant to which any
indebtedness for borrowed money or capitalized lease obligations of the Company
or any of its Subsidiaries in an aggregate principal amount in excess of $25
million is outstanding or may be incurred and (ii) the respective principal
amounts outstanding thereunder as of the date of this Agreement.
SECTION 4.11. Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on the Company
or prevent or materially delay the consummation of the Offer or the Merger.
Neither the Company nor any of its Subsidiaries is subject to any outstanding
order, writ, injunction or decree that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger.
SECTION 4.12. Compliance with Applicable Law. (a) The Company and its
Subsidiaries hold all Permits of all Governmental Entities necessary for the
lawful conduct of their respective businesses (the
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"Company Permits"), except for failures to hold such Permits that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or prevent or materially delay the consummation
of the Offer or the Merger. The Company and its Affiliates are in compliance
with the terms of the Company Permits, except where the failure so to comply
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer or the Merger. The businesses of the Company and its
Affiliates are not being conducted in violation of any Law, except for
violations or possible violations that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Offer or the
Merger and except as to Laws the effect or impact of which is specifically
addressed elsewhere in this Article IV. No investigation or review by any
Governmental Entity with respect to the Company or any of its Subsidiaries is
pending or, to the knowledge of the Company, threatened, nor has any
Governmental Entity indicated in writing an intention to conduct any such
investigation or review, other than, in each case, those the outcome of which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer or the Merger.
SECTION 4.13. Taxes. (a) Notwithstanding the provisions of Article IV, the
representations contained in this Section 4.13 are the only representations of
the Company that relate to Taxes, and no other provisions of Article IV are
intended to cover representations relating to Taxes. The Company and its
Subsidiaries have filed all income Tax Returns and all other material United
States federal, state, county, local and foreign Tax Returns required to be
filed by them. The Company and its Subsidiaries have paid all material Taxes
due, other than Taxes being contested in good faith or Taxes appropriate
reserves for which have been made in the Company's financial statements
included in the Company's audited financial statements contained in Section 4.6
of the Company Disclosure Statement. The reserves provided in such financial
statements with respect to the disposition in 1998 of the outstanding stock of
Matthew Bender and Company Incorporated and Mosby, Inc., shall be treated as
appropriate for purposes of this Article IV and Section 8.3 hereof. There are
no material assessments or adjustments that have been asserted in writing
against the Company or its Subsidiaries for any period for which the Company
has not made appropriate reserves in the Company's financial statements
included in the Company's audited financial statements contained in Section 4.6
of the Company Disclosure Statement.
(b) There are no material claims or assessments pending against the Company
or any of its Subsidiaries for any alleged deficiency in any Tax, and the
Company has not been notified in writing of any proposed material Tax claims or
assessments against the Company or any of its Subsidiaries (other than, in each
case, claims or assessments for which adequate reserves in the Company's
audited financial statements contained in Section 4.6 of the Company Disclosure
Statement have been established or which are being contested in good faith or
are immaterial in amount). Except as set forth in Section 4.13(b) of the
Company Disclosure Statement and subject to the qualifications set forth
therein, there are no material "deferred intercompany transactions" or
"intercompany transactions" the gain or loss in which would be required to be
taken into account under the consolidated return Treasury Regulations as a
result of the Merger.
(c) There are no Liens for Taxes on the assets of the Company or any of its
Subsidiaries, except for statutory Liens for current Taxes not yet due and
payable and except for Liens which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger.
SECTION 4.14. Environmental Matters. (a) Except as set forth in Section
4.14(a) of the Company Disclosure Statement or as set forth in the Company SEC
Reports filed prior to the date of this Agreement, neither the Company nor any
of its Subsidiaries has (i) placed, held, located, released, transported or
disposed of any Hazardous Substances on, under, from or at any of the Company's
or any of its Subsidiaries' properties or any other properties, other than in a
manner that would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Company or prevent or materially delay
the consummation of the Offer or the Merger, (ii) any knowledge of the presence
of any Hazardous Substances on, under or at any
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of the Company's or any of its Subsidiaries' properties or any other property
but arising from the Company's or any of its Subsidiaries' properties, other
than in a manner that would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Offer or the Merger or (iii) received
any written notice (A) of any violation of any Law relating to any matter of
pollution, protection of the environment, environmental regulation or control
or regarding Hazardous Substances on, under or emanating from any of the
Company's or any of its Subsidiaries' properties or any other properties
(collectively, "Environmental Laws"), (B) of the institution or pendency of any
suit, action, claim, proceeding or investigation by any Governmental Entity or
any third party in connection with any such violation, (C) requiring the
response to or remediation of Hazardous Substances at or arising from any of
the Company's or any of its Subsidiaries' properties or any other properties or
(D) demanding payment for response to or remediation of Hazardous Substances at
or arising from any of the Company's or any of its Subsidiaries' properties or
any other properties, except for notices relating to any matter that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer or the Merger.
(b) Except as set forth in Section 4.14(b) of the Company Disclosure
Statement, no Environmental Law imposes any obligation upon the Company or its
Subsidiaries arising out of or as a condition to any transaction contemplated
by this Agreement, including any requirement to modify or to transfer any
permit or license, any requirement to file any notice or other submission with
any Governmental Entity, the placement of any notice, acknowledgment or
covenant in any land records, or the modification of or provision of notice
under any agreement, consent order or consent decree, except where the failure
to meet such condition would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company or prevent or
materially delay consummation of the Offer or the Merger. No Lien has been
placed upon any of the Company's or it Subsidiaries' properties under any
Environmental Law, except for Liens that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Offer or the
Merger.
SECTION 4.15. Intellectual Property. The Company and its Subsidiaries own,
or are validly licensed or otherwise have the right to use, all Intellectual
Property (collectively, "Intellectual Property Rights") used in the conduct of
their businesses, except where the failure to own or possess valid rights to
such would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company or prevent or materially delay
consummation of the Offer or the Merger. Except as set forth in Section 4.15 of
the Company Disclosure Statement, no claims are pending or, to the knowledge of
the Company, threatened that the Company or any of its Subsidiaries is
infringing or otherwise adversely affecting the rights of any Person with
regard to any Intellectual Property Right which are reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect on the
Company or prevent or materially delay consummation of the Offer or the Merger.
To the knowledge of the Company, except as set forth in Section 4.15 of the
Company Disclosure Statement, no person is infringing the rights of the Company
or any of its Subsidiaries with respect to any Intellectual Property Right
except for such infringement that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay consummation of the Offer or the Merger.
SECTION 4.16. Required Vote. The Company Stockholder Approval is the only
vote of the holders of any capital stock of the Company necessary under
applicable Law or otherwise to consummate the Offer, the Merger and the other
transactions contemplated hereby.
SECTION 4.17. Brokers. No broker, investment banker, financial advisor or
other Person, other than Goldman Sachs & Co. (the "Company Financial Advisor"),
the fees and expenses of which will be paid by the Company, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or any of its Affiliates. The
Company has heretofore furnished Tribune with a true and complete copy of its
engagement letter with the Company Financial Advisor (which letter sets forth
the method of calculation of any fees to be payable to the Company Financial
Advisor). In connection with this Agreement
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and the transactions contemplated hereby, the Company is not subject to any
obligation or commitment to pay the legal fees or related expenses of any
stockholder of the Company.
SECTION 4.18. Opinion of Financial Advisor. The Company has received the
opinion of the Company Financial Advisor, dated the date of this Agreement, to
the effect that, as of the date of this Agreement, the Per Share Cash Amount
and the Common Merger Consideration to be received in the Offer and the Merger
by the holders of Company Common Shares is fair to such holders from a
financial point of view. A complete and correct signed copy of such opinion
will be delivered to Tribune as soon as practicable after the date of this
Agreement, and such opinion has not been withdrawn or modified.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TRIBUNE
Except as set forth in the Tribune Disclosure Statement (it being understood
and agreed that each item in a section of the Tribune Disclosure Statement
applies only to such section and any other section to which it clearly applies)
or in the Tribune SEC Reports filed prior to the date of this Agreement,
Tribune represents and warrants to the Company as follows:
SECTION 5.1. Organization. Tribune and each of its Subsidiaries is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation
and has all requisite corporate or other power and authority to carry on its
business as now being conducted, except where the failure to be so organized,
existing or in good standing or to have such power and authority would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Tribune or prevent or materially delay the consummation of
the Offer or the Merger. Tribune and each of its Subsidiaries is duly qualified
or licensed to do business and in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed or in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Tribune or prevent or materially delay the
consummation of the Offer or the Merger.
SECTION 5.2. Capitalization. As of the date of this Agreement, the
authorized capital stock of Tribune consists of 400,000,000 Tribune Common
Shares and 5,000,000 shares of preferred stock, without par value, of Tribune,
of which 1,600,000 shares are designated as Tribune Series B Preferred Shares
and 2,000,000 are designated as Tribune Series A Preferred Shares. At the close
of business on February 29, 2000, (i) 235,293,402 Tribune Common Shares were
issued and outstanding, 1,217,133 Tribune Series B Preferred Shares were issued
and outstanding and no Tribune Series A Preferred Shares were issued and
outstanding; (ii) 91,794,000 Tribune Common Shares, no Tribune Series B
Preferred Shares and no Tribune Series A Preferred Shares were held by Tribune
in its treasury; and (iii) not in excess of 25 million Tribune Common Shares
were reserved for issuance upon exercise of outstanding options to acquire such
shares. Except as set forth above, as of the date of this Agreement, no shares
of capital stock or other voting securities of Tribune are issued, reserved for
issuance or outstanding. As of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind, to which Tribune is a party or by
which Tribune or its assets or properties are bound, obligating Tribune to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of Tribune or obligating
Tribune to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. The
shares of Tribune Common Stock to be issued in connection with the Merger, when
issued as contemplated herein, will be duly authorized, validly issued, fully
paid and nonassessable and will not be issued in violation of any preemptive
rights.
SECTION 5.3. Authority. At a meeting of the Board of Directors of Tribune
duly called and held on March 12, 2000, the Board of Directors of Tribune
adopted resolutions approving this Agreement, the Voting Agreement and the
transactions contemplated hereby and thereby, including the Offer and the
Merger, the
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issuance of Tribune Common Shares in accordance with the Merger (the "Share
Issuance") and the Tribune Charter Amendment, and resolved to recommend the
Merger, including the Share Issuance and the Tribune Charter Amendment, to its
stockholders. Tribune has the requisite corporate power and authority to
execute and deliver this Agreement and the Voting Agreement and, subject to the
approval of the Merger, including the Share Issuance and the Tribune Charter
Amendment, by the holders of a majority of the voting power of Tribune
(collectively, the "Tribune Stockholder Approval"), to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Voting Agreement, and the consummation by
Tribune of the Offer, the Merger, the Share Issuance, the Tribune Charter
Amendment and the other transactions contemplated hereby and thereby, have been
duly authorized by all necessary corporate action on the part of Tribune and no
other corporate proceedings on the part of Tribune are necessary to authorize
this Agreement or the Voting Agreement or to consummate the transactions so
contemplated, other than the Tribune Stockholder Approval. This Agreement and
the Voting Agreement have been duly executed and delivered by Tribune and,
assuming this Agreement and the Voting Agreement constitute valid and binding
obligations of the other parties hereto and thereto, constitute valid and
binding obligations of Tribune enforceable against it in accordance with their
terms, subject to bankruptcy, insolvency, moratorium and other principles or
equity.
SECTION 5.4. Consents and Approvals; No Violations. Except as set forth in
Section 5.4 of the Tribune Disclosure Statement, and except for filings and
Permits as may be required under, and other applicable requirements of, the
Exchange Act, the Securities Act (including the filing with the SEC of the
Registration Statement), Blue Sky Laws, the HSR Act and the DGCL, none of the
execution, delivery or performance of this Agreement or the Voting Agreement by
Tribune nor the consummation by Tribune of the transactions contemplated hereby
or thereby will (a) conflict with or result in any breach of any provision of
the certificate of incorporation or by-laws of Tribune; (b) require any
Authorization of any Governmental Entity; (c) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
(or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any Contract
to which Tribune or any of its Subsidiaries is a party or by which any of them
or any of their properties or assets may be bound; or (d) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Tribune,
any of its Subsidiaries or any of their properties or assets, except in the
case of clauses (b), (c) or (d) for failures to obtain authorizations,
violations, breaches or defaults that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Tribune
or prevent or materially delay the consummation of the Offer or the Merger.
SECTION 5.5. Reports and Financial Statements. Tribune has timely filed all
registration statements, prospectuses, forms, reports and documents required to
be filed by it under the Securities Act or the Exchange Act since January 1,
1998 (collectively, the "Tribune SEC Reports"). The Tribune SEC Reports (a) as
of their respective dates, were prepared in accordance with the requirements of
the Securities Act or the Exchange Act, as the case may be, and (b) did not, at
the time they were filed, contain any untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of the consolidated balance sheets (including the related
notes) included in the Tribune SEC Reports and the audited consolidated balance
sheet of Tribune as of December 26, 1999 (including the related notes) attached
to Section 5.5 of the Tribune Disclosure Statement presents fairly, in all
material respects, the consolidated financial position of Tribune and its
Subsidiaries as of the respective dates thereof, and the other related
statements (including the related notes) included in the Tribune SEC Reports
and the other related audited statements of Tribune as at or for the period
ended December 26, 1999 (including the related notes) attached to Section 5.5
of the Tribune Disclosure Statement present fairly, in all material respects,
the results of operations and the changes in financial position of Tribune and
its Subsidiaries for the respective periods or as of the respective dates set
forth therein, all in conformity with GAAP consistently applied during the
periods involved, except as otherwise noted therein and subject, in the case of
the unaudited interim financial statements, to normal year-end adjustments. All
of the Tribune SEC Reports, as of their respective dates, complied as to form
in all material respects with the requirements of the Exchange Act and/or the
Securities Act, as applicable, and the applicable rules and regulations
thereunder.
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SECTION 5.6. Absence of Certain Changes or Events. Since December 26, 1999,
there has not been (a) any Material Adverse Effect on Tribune or any event,
change, effect or development that would reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect on Tribune or (b) any
action taken by Tribune or any of its Subsidiaries from December 26, 1999
through the date of this Agreement that, if taken during the period from the
date of this Agreement through the Effective Time, would constitute a breach of
Section 6.2.
SECTION 5.7. No Undisclosed Liabilities. Except as and to the extent
disclosed or reserved against on the balance sheet of Tribune as of December
26, 1999 attached to Section 5.5 of the Tribune Disclosure Statement or as
incurred after the date thereof in the ordinary course of business consistent
with past practice and not prohibited by this Agreement, neither Tribune nor
any of its Subsidiaries has any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by GAAP
to be reflected on a consolidated balance sheet of Tribune and its Subsidiaries
(or disclosed in the notes thereto).
SECTION 5.8. Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Tribune, threatened against
Tribune or any of its Subsidiaries that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on Tribune or
prevent or materially delay the consummation of the Offer or the Merger.
Neither Tribune nor any of its Subsidiaries is subject to any outstanding
order, writ, injunction or decree that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Tribune or prevent
or materially delay the consummation of the Offer or the Merger.
SECTION 5.9. Compliance with Applicable Law. Tribune and its Subsidiaries
hold all Permits of all Governmental Entities necessary for the lawful conduct
of their respective businesses (the "Tribune Permits"), except for failures to
hold such Permits that would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Tribune or prevent or
materially delay consummation of the Offer of the Merger. Tribune and its
Affiliates are in compliance with the terms of the Tribune Permits, except
where the failure to so comply would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Tribune or prevent
or materially delay consummation of the Offer or the Merger. The businesses of
Tribune and its Subsidiaries are not being conducted in violation of any Law,
(including the Communications Act of 1934, as amended, and the rules and
regulations and published orders of the Federal Communications Commission
("FCC")), except for possible violations that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Tribune
or prevent or materially delay the consummation of the Offer or the Merger and
except as to Laws the effect or impact of which is specifically addressed
elsewhere in this Article V. No investigation or review by any Governmental
Entity with respect to Tribune or any of its Subsidiaries is pending or, to the
knowledge of Tribune, threatened, nor has any Governmental Entity indicated in
writing an intention to conduct any such investigation or review, other than,
in each case, those the outcome of which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Tribune
or prevent or materially delay the consummation of the Offer or the Merger. As
of the date hereof, to Tribune's knowledge, there is not pending or threatened
before the FCC any material investigation, proceeding, notice of violation,
order of forfeiture or complaint against Tribune or any of its Subsidiaries,
relating to any of the radio and television stations and associated facilities
for which Tribune or any of its Subsidiaries holds licenses from the FCC, in
each case which are owned or operated by Tribune or its Subsidiaries or
relating to FCC regulated services conducted by Tribune that, in each case, if
adversely decided, would have a Material Adverse Effect on Tribune.
SECTION 5.10. Taxes. (a) Notwithstanding the provisions of Article V, the
representations contained in this Section 5.10 are the only representations of
Tribune that relate to Taxes, and no other provisions of Article V are intended
to cover representations relating to Taxes. Tribune and its Subsidiaries have
filed all income Tax Returns and all other material United States federal,
state, county, local and foreign Tax Returns required to be filed by them.
Tribune and its Subsidiaries have paid all material Taxes due, other than Taxes
being contested in good faith or Taxes appropriate reserves for which have been
made in Tribune's financial statements included in Tribune's audited financial
statements contained in Section 5.5 of the Tribune Disclosure Statement.
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There are no material assessments or adjustments that have been asserted in
writing against Tribune or its Subsidiaries for any period for which Tribune
has not made appropriate reserves in Tribune's audited financial statements
contained in Section 5.5 of the Tribune Disclosure Statement.
(b) There are no material claims or assessments pending against Tribune or
any of its Subsidiaries for any alleged deficiency in any Tax, and Tribune has
not been notified in writing of any proposed material Tax claims or assessments
against Tribune or any of its Subsidiaries (other than, in each case, claims or
assessments for which adequate reserves in Tribune's audited financial
statements contained in Section 5.5 of the Company Disclosure Statement have
been established or which are being contested in good faith or are immaterial
in amount). Subject to the qualifications set forth therein, there are no
material "deferred intercompany transactions" or "intercompany transactions"
the gain or loss in which would be required to be taken into account under the
consolidated return Treasury Regulations as a result of the Merger.
(c) There are no Liens for Taxes on the assets of Tribune or any of its
Subsidiaries, except for statutory Liens for current Taxes not yet due and
payable and except for Liens which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Tribune or prevent
or materially delay the consummation of the Offer or the Merger.
SECTION 5.11. Intellectual Property. Tribune and its Subsidiaries own, or
are validly licensed, or otherwise have the right to use, all Intellectual
Property Rights used in the conduct of their businesses, except where the
failure to own or possess valid rights to such would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Tribune or prevent or materially delay consummation of the Offer or the Merger.
Except as set forth in Section 5.11 of the Tribune Disclosure Statement, no
claims are pending or, to the knowledge of Tribune, threatened that Tribune or
any of its Subsidiaries is infringing or otherwise adversely affecting the
rights of any Person with regard to any Intellectual Property Right which is
reasonably expected, individually or in the aggregate, to have a Material
Adverse Effect on Tribune or prevent or materially delay consummation of the
Offer or the Merger. To the knowledge of Tribune, except as set forth in
Section 5.11 of Tribune Disclosure Statement, no Person is infringing the
rights of Tribune or any of its Subsidiaries with respect to any Intellectual
Property Right except for such infringement that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Tribune or prevent or materially delay consummation of the Offer or the Merger.
SECTION 5.12. Required Vote. The Tribune Stockholder Approval is the only
vote of the holders of any capital stock of Tribune necessary under applicable
Law or otherwise to transactions contemplated hereby or by the Voting
Agreement.
SECTION 5.13. Brokers. No broker, investment banker, financial advisor or
other Person, other than Merrill Lynch & Co., the fees and expenses of which
will be paid by Tribune, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Tribune.
ARTICLE VI
COVENANTS
SECTION 6.1. Company Interim Operations. During the period from the date of
this Agreement through the Effective Time, the Company agrees as to itself and
its Subsidiaries that (except as set forth in Section 6.1 of the Company
Disclosure Statement, expressly contemplated or permitted by this Agreement, or
to the extent that Tribune shall otherwise consent in writing):
(a) Ordinary Course. The Company shall, and shall cause its Subsidiaries
to, carry on their respective businesses in all material respects in the
ordinary course consistent with past practice and shall
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use all reasonable efforts to preserve intact their present business
organizations, keep available the services of their officers and key
employees and preserve their relationships with customers, suppliers and
others having business dealings with the Company and its Subsidiaries with
the objective that the goodwill and ongoing business of the Company and its
Subsidiaries shall be unimpaired at the Effective Time. Neither the Company
nor any of its Subsidiaries shall engage in the conduct of any business
other than its existing businesses.
(b) Dividends; Changes in Stock. The Company shall not, and shall not
permit any of its Subsidiaries to, (i) declare or pay any dividends on or
make other distributions in respect of any of its capital stock, except (A)
regular dividends on outstanding Company Preferred Shares pursuant to the
existing terms of such securities, (B) regular quarterly cash dividends on
outstanding Company Common Shares, consistent with past practice, in an
amount no greater than $0.22 per share per quarter (provided, that the
Company and Tribune will cooperate with respect to the record dates for
dividends to be paid by the Company prior to the Effective Time and by
Tribune after the Effective Time so that the holders of Company Common
Shares do not receive dividends from both the Company in respect of Company
Common Shares and from Tribune in respect of Tribune Common Shares, but
will receive a dividend in respect of one or the other, for any given
quarter) and (C) dividends by a direct or indirect Wholly-Owned Subsidiary
of the Company to its parent entity, (ii) split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its capital stock or (iii) repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or its Subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities.
(c) Issuance of Securities. The Company shall not, and shall not permit
any of its Subsidiaries to, issue, deliver, sell, pledge or encumber, or
authorize or propose the issuance, delivery, sale, pledge or encumbrance
of, any shares of its capital stock of any class or any securities
convertible into or exchangeable for, or any rights, warrants, calls,
subscriptions or options to acquire, any such shares or convertible
securities, or any other ownership interest (including stock appreciation
rights or phantom stock), other than the issuance of Company Common Shares
upon the exercise of Company Options outstanding on the date of this
Agreement and in accordance with the existing terms of such Company
Options.
(d) Governing Documents. The Company shall not, and shall not permit any
of its Subsidiaries to, amend or propose to amend its certificate of
incorporation or its by-laws (or similar organizational documents) or alter
through merger, liquidation, reorganization, restructuring or in any other
fashion the corporate structure or ownership of any of its Subsidiaries.
(e) Liquidation or Merger; Change of Control. The Company shall not, and
shall not permit any of its Subsidiaries to, (i) adopt a plan of complete
or partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization or (ii) enter into any agreement
or exercise any discretion providing for acceleration of payment or
performance as a result of a change of control of the Company or its
Subsidiaries.
(f) No Acquisitions. The Company shall not, and shall not permit any of
its Subsidiaries to, acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business
or any Person (other than mergers between Wholly-Owned Subsidiaries and
other than such acquisitions in which the consideration is not individually
in excess of $25 million and not in the aggregate in excess of $100
million) or (ii) any assets other than acquisitions in the ordinary course
of business consistent with past practice, which are not material,
individually or in the aggregate, to the Company and its Subsidiaries taken
as a whole, and acquisitions of assets that are not businesses or Persons
and which are for consideration that is not individually in excess of $25
million and not in the aggregate in excess of $100 million.
(g) No Dispositions. Other than (i) dispositions in the ordinary course
of business consistent with past practice, which are not material,
individually or in the aggregate, to the Company and its Subsidiaries
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taken as a whole, and (ii) dispositions of assets that are not businesses
or Persons and which are for consideration that is not individually in
excess of $25 million and not in the aggregate in excess of $100 million,
the Company shall not, and shall not permit any of its Subsidiaries to,
sell, lease, license, encumber or otherwise dispose of, or agree to sell,
lease, license, encumber or otherwise dispose of, any of its assets.
(h) Indebtedness. The Company shall not, and shall not permit any of its
Subsidiaries to, (i) incur any indebtedness for borrowed money or guarantee
any such indebtedness or issue or sell any debt securities or warrants or
rights to acquire any debt securities of the Company or any of its
Subsidiaries, guarantee any debt securities of others, enter into any
"keep-well" or other agreement to maintain any financial statement
condition of another Person or enter into any arrangement having the
economic effect of any of the foregoing, except for working capital
borrowings incurred in the ordinary course of business consistent with past
practice and other indebtedness not in excess of $100 million in the
aggregate or (ii) make any loans, advances or capital contributions to, or
investments in, any other Person, other than (A) to the Company or any
Wholly-Owned Subsidiary of the Company or (B) any advances to employees in
accordance with past practice.
(i) Advice of Changes; Filings. The Company shall confer on a regular
and frequent basis with Tribune, report on operational matters and promptly
advise Tribune orally and in writing of any Material Adverse Effect on the
Company. The Company shall promptly provide to Tribune (and its counsel)
copies of all filings made by the Company with any Governmental Entity in
connection with this Agreement and the transactions contemplated hereby.
(j) Tax Matters. The Company shall not make any Tax election that would
have a material effect on the Tax liability of the Company or any of its
Subsidiaries or settle or compromise any material income Tax liability of
the Company or any of its Subsidiaries. The Company shall, before filing or
causing to be filed any material Tax Return of the Company or any of its
Subsidiaries, consult with Tribune and its advisors as to the positions and
elections that may be taken or made with respect to such Tax Return, and
shall take such positions or make such elections as the Company and Tribune
shall jointly agree or, failing such agreement, shall take positions or
make elections consistent with its past practice.
(k) Capital Expenditures. The Company shall not, and shall not permit
any of its Subsidiaries to, enter into any Contracts, arrangements or
understandings requiring the purchase of equipment, materials, supplies or
services in excess of $10 million, for any individual Contract, arrangement
or understanding, or $50 million for all Contracts, arrangements or
understandings in the aggregate.
(l) Discharge of Liabilities. The Company shall not, and shall not
permit any of its Subsidiaries to, pay, discharge, settle or satisfy any
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business consistent
with past practice or in accordance with their terms, of liabilities
recognized or disclosed in the most recent consolidated financial
statements (or the notes thereto) of the Company included in the Company
SEC Reports filed prior to the date of this Agreement or incurred since the
date of such financial statements in the ordinary course of business
consistent with past practice.
(m) Material Contracts. The Company shall not, and shall not permit any
of its Subsidiaries to enter into, modify in any material respect, amend in
any material respect or terminate (i) any Material Contract or any
agreement set forth in or of the type set forth in Section 4.10(b) of the
Company Disclosure Statement or (ii) any agreement having a term longer
than one year and having an aggregate value over its term greater than $10
million.
(n) Affiliates. The Company shall not, and shall not permit any of its
Subsidiaries to, enter into or amend or waive any right under any Contract
with any Affiliate of the Company (other than its Subsidiaries).
(o) Litigation and Claims. The Company shall not, and shall not permit
any of its Subsidiaries to, settle or compromise any material litigation,
or waive, release or assign any material rights or claims.
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(p) Employee Matters. Except as set forth in Section 6.1(p) of the
Company Disclosure Statement and except in connection with any employment
offer outstanding as of the date of this Agreement, the Company shall not,
and shall not permit any of its Subsidiaries to, (i) grant any increases in
the compensation of any of its directors, officers or employees, except for
increases required under employment agreements existing on the date of this
Agreement and increases for officers and employees in the ordinary course
of business consistent with past practice that, in any event, do not
increase such officer's or employee's aggregate cash compensation at target
by more than 10% over his aggregate cash compensation at target in effect
on the date of this Agreement, (ii) pay or agree to pay any pension
retirement allowance or other employee benefit not required or contemplated
by any of the existing Company Benefit Plans as in effect on the date of
this Agreement, giving effect to any modification to any Company Benefit
Plan authorized by the Company's Board of Directors prior to the date of
this Agreement and previously delivered in writing to Tribune, to any such
director, officer or employee, whether past or present, or to any other
Person, (iii) pay or award or agree to pay or award any stock option or
equity incentive awards in excess of options to acquire 50,000 shares in
the aggregate or in a manner that is inconsistent with past practice, (iv)
enter into any new, or amend any existing, employment, severance or
termination agreement with any such director, officer or employee which, in
the aggregate, would obligate the Company or its Subsidiaries to pay in
excess of $1 million or (v) except as required to comply with applicable
Law, become obligated under any new Company Benefit Plan which was not in
existence on the date of this Agreement, or amend any such plan or
arrangement in existence on the date of this Agreement if such amendment
would have the effect of enhancing any benefits thereunder. The Company
shall, as promptly as practicable, provide Tribune with copies of any
amendments to any Company Benefit Plan (which shall be in accordance with
the foregoing) made after the date of this Agreement and prior to the
Effective Time.
(q) Accounting. The Company shall not, and shall not permit any of its
Subsidiaries to, adopt any change, other than in the ordinary course of
business consistent with past practice or as required by the SEC or by law,
in its accounting policies, procedures or practices.
(r) Other Actions. The Company shall not, and shall not permit any of
its Subsidiaries to, take any action that would, or that would reasonably
be expected to, result in (i) any of the representations and warranties of
the Company set forth in this Agreement becoming untrue or (ii) any of the
conditions set forth in Annex I or Section 8.1 or Section 8.3 not being
satisfied. The Company shall not, and shall not permit any of its
Subsidiaries to, authorize, recommend or propose (other than to Tribune),
or announce an intention to, or enter into any Contract, agreement,
commitment or arrangement to, do any of the foregoing in this Section 6.1.
SECTION 6.2. Tribune Interim Operations. During the period from the date of
this Agreement through the Effective Time, Tribune agrees that (except as set
forth in Section 6.2 of the Tribune Disclosure Statement, expressly
contemplated or permitted by this Agreement, or to the extent that the Company
shall otherwise consent in writing):
(a) Dividends; Changes in Stock. Tribune shall not declare or pay any
dividends on or make other distributions in respect of any of its capital
stock, except regular quarterly cash dividends (including any increases in
the ordinary course). The Company and Tribune will cooperate with respect
to record dates for dividends as provided in Section 6.1(b)(i)(B).
(b) Governing Documents. Tribune shall not amend or propose to amend its
certificate of incorporation or its by-laws in any manner that adversely
affects the rights of the Company's stockholders (it being understood that
neither the Tribune Charter Amendment nor the Tribune by-law amendments
contemplated hereby, nor any amendment to Tribune's Restated Certificate of
Incorporation increasing the number of authorized shares of common stock or
preferred stock of Tribune, will be deemed to affect adversely the rights
of the Company's stockholders).
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(c) Accounting. Tribune shall not, and shall not permit any of its
Subsidiaries to, adopt any change, other than in the ordinary course of
business consistent with past practice or as required by the SEC or by law,
in its accounting policies, procedures or practices.
(d) New Lines of Business. Tribune shall not, and shall not permit, any
of its Subsidiaries to, whether by merger, consolidation, acquisition or
otherwise, enter into any material line of business that is not part of,
related to or in support of the media business, other than incidentally as
part of a larger acquisition within an existing line of business.
(e) Certain Transactions. Tribune agrees that, prior to the Closing
Date, it shall not without the prior written consent of the Company (which
consent shall not be unreasonably withheld), agree to enter into any
merger, reorganization, share exchange, business combination or similar
transaction pursuant to which the stockholders of Tribune will receive any
consideration (whether payable in cash, securities, property or other
consideration) in exchange for their Tribune Common Shares unless (i) such
transaction is not to be consummated until after the Effective Time or the
termination of this Agreement pursuant to Section 9.1, (ii) such
transaction would not be reasonably expected to prevent or materially delay
the consummation of the Merger, and (iii) such transaction will not result
in the Merger failing to qualify as a reorganization under Section 368 of
the Code.
(f) Other Actions. Tribune shall not, and shall not permit any of its
Subsidiaries to, take any action that would, or that would reasonably be
expected to, result in (i) any of the representations and warranties of
Tribune set forth in this Agreement becoming untrue or (ii) any of the
conditions set forth in Section 8.1 or Section 8.2 not being satisfied.
Tribune shall not, and shall not permit any of its Subsidiaries to,
authorize, recommend or propose (other than to the Company), or announce an
intention to, or enter into any Contract, agreement, commitment or
arrangement to, do any of the foregoing in this Section 6.2.
SECTION 6.3. No Solicitation. (a) Except as otherwise provided in this
Section 6.3, from the date hereof until the Effective Time or earlier
termination of this Agreement, the Company shall not, nor shall it permit any
of its Affiliates to, nor shall it authorize or permit any officer, director or
employee or any investment banker, attorney, accountant, agent or other advisor
or representative of the Company or any of its respective Affiliates to, (i)
solicit, initiate or encourage the submission of any Takeover Proposal, (ii)
enter into any Contract with respect to a Takeover Proposal or (iii)
participate in any discussions or negotiations regarding, or furnish to any
Person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or could
reasonably be expected to lead to, any Takeover Proposal. The Company
immediately shall cease and cause to be terminated all existing discussions or
negotiations with any Persons conducted heretofore with respect to, or that
could reasonably be expected to lead to, any Takeover Proposal.
(b) The Company shall immediately advise Tribune orally and in writing
of any request for information or of any Takeover Proposal, the material
terms and conditions of such request or Takeover Proposal and the identity
of the Person making such request or Takeover Proposal. The Company will
keep Tribune fully and promptly informed of the status and details
(including amendments or proposed amendments) of any such request or
Takeover Proposal.
(c) The Company may furnish information concerning its business,
properties or assets to any Person in response to a request for such
information made after the date of this Agreement which was not solicited,
initiated or encouraged, directly or indirectly, by the Company or any of
its Affiliates or their respective officers, directors, employees,
investment bankers, attorneys, accountants, agents or other advisors, and
may participate in discussions and negotiations with such Person concerning
a Takeover Proposal, in each case if and only to the extent that (i) such
Person has submitted a written Takeover Proposal to the Company's Board of
Directors which the Board of Directors has determined in good faith, after
consulting with and receiving advice from the Company's outside legal and
financial advisors, constitutes or would reasonably be expected to result
in a Superior Proposal and (ii) such Person has entered into a
confidentiality agreement with the Company that is no less favorable to the
Company than
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the Confidentiality Agreement. A "Superior Proposal" means a Takeover
Proposal (a) that is more favorable to the Company and its stockholders
than the Offer and the Merger and (b) which is reasonably capable of being
consummated by the Person making such Takeover Proposal, taking into
account the legal, financial, regulatory and other aspects of such Takeover
Proposal. It is expressly understood and agreed that in determining whether
a Takeover Proposal constitutes a Superior Proposal, the Company's Board of
Directors shall consider (1) the impact that the consummation of such
Takeover Proposal would have on the editorial independence and quality of
the Company's properties and operations, (2) the ability of all the
Company's stockholders to receive stock consideration in exchange for their
shares of stock of the Company in the transaction contemplated by the
Takeover Proposal in a manner that is tax-free to the holders of such
shares and (3) the factors set forth in Article XI of the Company Charter.
The Company will promptly provide to Tribune any information regarding the
Company provided to any Person making a Superior Proposal which was not
previously provided to Tribune. Nothing contained herein shall affect any
of the obligations of the parties to the Voting Agreement contained in
Paragraph 4 of the Voting Agreement.
(d) The Company's Board of Directors may withdraw or modify its approval
or recommendation of the Offer and the Merger in connection with a Superior
Proposal if (i) the Board of Directors determines in good faith, after
receipt of advice from outside counsel to the Company, that failure to do
so would be inconsistent with its fiduciary duties to the Company's
stockholders under applicable law and (ii) the Company notifies Tribune of
any such withdrawal or modification prior to its release to the public.
Nothing contained in this Agreement shall prevent the Board of Directors of
the Company from complying with Rule 14d-9 and Rule 14e-2 promulgated under
the Exchange Act.
(e) Notwithstanding anything to the contrary contained herein, the
Company shall not take any action to make the restrictions on business
combinations contained in Section 203 of the DGCL or the business
combination provisions currently contained in Article X of the Company
Charter inapplicable to any Takeover Proposal (including any Superior
Proposal) prior to the termination of this Agreement in accordance with its
terms.
(f) Notwithstanding anything to the contrary contained herein, this
Agreement shall be submitted to the stockholders of the Company for the
purpose of approving this Agreement and the Merger, regardless of the
recommendation or any change in the recommendation of the Company's Board
of Directors with respect thereto.
SECTION 6.4. Third Party Standstill Agreements. During the period from the
date of this Agreement until the Effective Time or earlier termination of this
Agreement, the Company shall not terminate, amend, modify or waive any
provision of any confidentiality or standstill agreement to which it or any of
its Subsidiaries is a party (other than any involving Tribune or its
Subsidiaries). During such period, the Company agrees to enforce, to the
fullest extent permitted under applicable Law, the provisions of any such
agreements, including obtaining injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof in any
court of the United States or any state thereof having jurisdiction.
SECTION 6.5. Certain Litigation. The Company agrees that, prior to the
termination of this Agreement pursuant to Article IX, it shall not settle any
litigation commenced after the date of this Agreement against the Company or
any of its directors by any stockholder of the Company relating to the Offer,
the Merger, this Agreement, the Voting Agreement or the other transactions
contemplated hereby, without the prior written consent of Tribune. In addition,
prior to the termination of this Agreement pursuant to Article IX, the Company
shall not voluntarily cooperate with any third party that may hereafter seek to
restrain or prohibit or otherwise oppose the Offer or the Merger and shall
cooperate with Tribune to resist any such effort to restrain or prohibit or
otherwise oppose the Offer or the Merger.
SECTION 6.6. Indemnification. (a) The Company shall, to the fullest extent
permitted under applicable Law, indemnify and hold harmless and, after the
Effective Time, Tribune shall, to the fullest extent permitted under applicable
Law, indemnify and hold harmless, each present and former director and officer
of the
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Company and each Subsidiary of the Company and each such individual who served
at the request of the Company or any Subsidiary of the Company as a director,
officer, trustee, partner, fiduciary, employee or agent of another corporation,
partnership, joint venture, trust, pension or other employee benefit plan or
enterprise (collectively, the "Indemnified Parties") against all costs and
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and settlement amounts paid in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, administrative or investigative,
arising out of or pertaining to any action or omission in their capacity as an
officer or director of the Company or Subsidiary of the Company, as applicable,
in each case occurring prior to the Effective Time (including the transactions
contemplated by this Agreement).
(b) For six years from the Effective Time, Tribune shall use all reasonable
efforts to provide to the Company's current directors and officers liability
insurance protection of the same kind and scope as that provided by the
Company's directors' and officers' liability insurance policies in effect on
the date of this Agreement (true and complete copies of which have been made
available to Tribune); provided, however, that in no event shall Tribune be
required to expend more than 200% of the current amount expended by the Company
as of the date of this Agreement (the "Insurance Amount") to maintain or
procure insurance coverage pursuant hereto, and provided, further, that if
Tribune is unable to maintain or obtain the insurance called for by this
Section 6.6(b), Tribune shall use all reasonable efforts to obtain as much
comparable insurance as available for the Insurance Amount).
SECTION 6.7. Listing of Tribune Common Shares. Tribune will use all
reasonable efforts to cause the Tribune Common Shares to be issued in the
Merger pursuant to this Agreement to be listed for trading on the NYSE, subject
to official notice of issuance, prior to the Effective Time.
SECTION 6.8. Governance Matters. (a) Board of Directors. The Board of
Directors of Tribune shall take all necessary action such that, as of the
Effective Time, the Board of Directors of Tribune shall be increased by four
directorships, consisting of two additional directorships with respect to the
class ("Class I") of directors to be elected in 2001, one additional
directorship with respect to the class ("Class II") of directors to be elected
in 2002 and one additional directorship with respect to the class ("Class III")
of directors to be elected in 2003. The Board of Directors of Tribune shall
take all necessary action such that the individuals named on Schedule 6.8 are
elected to fill the newly created directorships in each such Class, as set
forth on Schedule 6.8, immediately after the effectiveness of such
directorships.
(b) Tribune Charter and By-Laws. The Board of Directors of Tribune shall
take all action necessary such that the Tribune Charter Amendment containing
the terms set forth in Exhibit B, and the amendments to the By-laws of Tribune
set forth in Exhibit C, are effective as of the Effective Time.
(c) Subsidiary Actions. The Board of Directors of Tribune shall take the
actions set forth in Exhibit D hereto.
(d) Beneficiaries. Chandler Trust I and Chandler Trust II shall have the
power to enforce this Section 6.8 as third party beneficiaries hereof.
(e) Tribune covenants to take all necessary actions to amend the Rights
Agreement (as defined in the definition of "Rights") to permit Chandler Trust I
and Chandler Trust II, and the trustees of each, to beneficially own the
Tribune Common Shares acquired by them pursuant to this Agreement, or otherwise
beneficially owned by them as of the Effective Time, without becoming an
"Acquiring Person" or causing any other adverse consequences under the Rights
Agreement so long as they do not acquire beneficial ownership of any additional
Tribune Common Shares after the Effective Time.
SECTION 6.9. Employee Benefits.
(a) Obligations of Tribune; Continuance of Benefits. For a period of one
year immediately following the Effective Time, the coverage and benefits
provided to employees and former employees of the Company and its Subsidiaries
("Company Employees") pursuant to employee benefits plans or arrangements
maintained by
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Tribune or any of its Subsidiaries shall be no less favorable, in the
aggregate, than those provided to such employees immediately prior to the
Effective Time. Except as provided in Sections 3.4 and 6.9(c), notwithstanding
the foregoing, nothing herein shall require (i) the continuation of any
particular benefit plan or prevent the amendment or termination thereof
(subject to the maintenance, in the aggregate, of the benefits) or (ii) Tribune
to continue or maintain any stock option, stock purchase or other incentive
plan related to the equity of the Company.
(b) Pre-Existing Limitations; Deductible; Service Credit. With respect to
any incentive, benefits and perquisite plans and programs ("Benefit Plans") of
Tribune or any Subsidiary of Tribune in which the Company Employees participate
effective as of the Effective Time or thereafter, Tribune shall: (i) waive any
limitations as to pre-existing conditions, exclusions and waiting periods with
respect to participation and coverage requirements applicable to the Company
Employees under any Benefit Plan that is an employee welfare benefit within the
meaning of Section 3(1) of ERISA ("Welfare Plan") in which such Company
Employees may be eligible to participate after the Effective Time (provided,
however, that no such waiver shall apply to a pre-existing condition, exclusion
or waiting period applicable to any Company Employee to the extent that he or
she was, as of the Effective Time, excluded from participation in a Company
Benefit Plan by reason of such pre-existing condition, exclusion or waiting
period, and provided, further, that no such waiver shall apply to a pre-
existing condition, exclusion or waiting period of any Company Employee unless
the Company Employee enrolls in the applicable Welfare Plan when first eligible
to do so), (ii) in the event Company Employees are transferred to a new Welfare
Plan within the plan year beginning January 1, 2000, for purposes of
accumulating annual deductibles, co-payments and out-of-pocket requirements,
provide each Company Employee with credit for any co-payments and deductibles
paid prior to the Effective Time, but within such plan year, for purposes of
satisfying any applicable deductible or out-of-pocket requirements under any
Welfare Plan in which such employees may be eligible to participate after the
Effective Time, and (iii) recognize all service of the Company Employees with
the Company, for all purposes other than benefit accrual, in any Benefit Plan
in which such Company Employees may be eligible to participate after the
Effective Time. Prior to the Effective Time, the Board of Directors of Tribune,
or an appropriate committee of non-employee directors thereof, shall adopt a
resolution consistent with the interpretive guidance of the SEC so that the
acquisition by any officer or director of the Company who may become a covered
person of Tribune for purposes of Section 16 of the Exchange Act and the rules
and regulations thereunder ("Section 16") of Tribune Common Shares or options
to acquire Tribune Common Shares pursuant to this Agreement and the Merger
shall be an exempt transaction for purposes of Section 16.
(c) Employment and Severance Arrangements. As of the Effective Time, Tribune
shall assume, honor and perform in accordance with their terms all employment,
severance, change in control and other such agreements of the Company and its
Subsidiaries and Affiliates, giving effect to any amendment or modification to
any such agreement authorized by the Company's Board of Directors prior to the
date of this Agreement (the "Employment Arrangements"). With respect to the
Times Mirror Deferred Compensation Plan For Executives and the Deferred Plan
for Directors Fees, Tribune shall credit 9% interest per annum, cumulative,
from the date any amount is credited to a participant under any such plans
effective with respect to all amounts credited under such plans as of the
Effective Time, and on all amounts which may be deferred under such plans in
connection with the Merger or any termination of any employment related
thereto, whether credited with respect to deferrals before or after the
Effective Time until all such amounts are paid under the plan in accordance
with its terms. Tribune shall pay the reasonable attorney's fees of the
individual party to the applicable Employment Arrangement in the event such
individual party files a claim in good faith to enforce Tribune's obligations
and prevails in such action. Such individual parties are hereby specifically
made a third party beneficiary of this Section 6.9(c).
(d) Successor Obligations. Notwithstanding any other provision of this
Agreement, in the event Tribune sells or otherwise disposes of any Subsidiary
of the Company coincident with or within one year after the Effective Time,
Tribune shall require as a condition of such sale or disposition that the buyer
shall assume all obligations of Tribune under this Section 6.9. In the
alternative, Tribune may elect to guarantee the payment of such obligations.
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ARTICLE VII
ADDITIONAL ARRANGEMENTS
SECTION 7.1. Registration Statement; Proxy Statement. (a) As promptly as
practicable after the execution of this Agreement, Tribune and the Company
shall prepare and file with the SEC a joint proxy statement relating to the
meeting of the Company's stockholders to be held in connection with the Merger
and the meeting of Tribune's stockholders to be held in connection with the
Merger, including the Share Issuance and the Tribune Charter Amendment
(together with any amendments thereof or supplements thereto, the "Proxy
Statement"), and Tribune shall prepare and file with the SEC a registration
statement on Form S-4 (together with all amendments thereto, the "Registration
Statement") in which the Proxy Statement shall be included as a prospectus, in
connection with the registration under the Securities Act of the Tribune Common
Shares to be issued to the stockholders of the Company pursuant to the Merger.
Each of Tribune and the Company will use all reasonable efforts to cause the
Registration Statement to become effective as promptly as practicable, and,
prior to the effective date of the Registration Statement, Tribune shall take
all or any action required under any applicable federal or state securities
Laws in connection with the issuance of Tribune Common Shares in the Merger.
Each of Tribune and the Company shall furnish all information concerning it and
the holders of its capital stock as the other may reasonably request in
connection with such actions and the preparation of the Registration Statement
and the Proxy Statement. As promptly as practicable after the Registration
Statement shall have become effective, each of the Company and Tribune shall
mail the Proxy Statement to its stockholders.
(b) No amendment or supplement to the Proxy Statement or the Registration
Statement will be made by Tribune or the Company without the approval of the
other party (which approval shall not be unreasonably withheld or delayed).
Tribune and the Company each will advise the other, promptly after it receives
notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the issuance of any
stop order, the suspension of the qualification of the Tribune Common Shares
issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for an amendment of the Proxy Statement
or the Registration Statement or comments thereon and responses thereto or
requests by the SEC for additional information.
(c) The information supplied by Tribune for inclusion in the Registration
Statement and the Proxy Statement shall not, at (i) the time the Registration
Statement is declared effective, (ii) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to the stockholders of
the Company, (iii) the time the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to stockholders of Tribune, (iv) the time
of the Company Stockholders' Meeting, (v) the time of the Tribune Stockholders'
Meeting and (vi) the Effective Time, 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 or circumstance relating to Tribune
or any of its Subsidiaries, or their respective officers or directors, should
be discovered by Tribune which should be set forth in an amendment or a
supplement to the Registration Statement or Proxy Statement, Tribune shall
promptly inform the Company. All documents that Tribune is responsible for
filing with the SEC in connection with the transactions contemplated hereby
will comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations thereunder.
(d) The information supplied by the Company for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of the Company, (iii) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to stockholders of
Tribune, (iv) the time of the Company Stockholders' Meeting, (v) the time of
the Tribune Stockholders' Meeting and (vi) the Effective Time, 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
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misleading. If at any time prior to the Effective Time any event or
circumstance relating to the Company or any of its Subsidiaries, or their
respective officers or directors, should be discovered by the Company which
should be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, the Company shall promptly inform Tribune. All
documents that the Company is responsible for filing with the SEC in connection
with the transactions contemplated herein will comply as to form and substance
in all material respects with the applicable requirements of the Securities Act
and the rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
SECTION 7.2. Stockholders' Meetings.
(a) Company Stockholders' Meeting. The Company shall call and hold a meeting
of its stockholders (the "Company Stockholders' Meeting") as promptly as
practicable for the purpose of voting upon the approval of this Agreement and
the Merger, and the Company shall use its best efforts to hold the Company
Stockholders' Meeting as soon as practicable after the date on which the
Registration Statement becomes effective.
(b) Tribune Stockholders' Meeting. Tribune shall call and hold a meeting of
its stockholders (the "Tribune Stockholders' Meeting") as promptly as
practicable for the purpose of voting upon the approval of this Agreement and
the Merger, including the Share Issuance and the Tribune Charter Amendment, and
Tribune shall use its best efforts to hold the Tribune Stockholders' Meeting as
soon as practicable after the date on which the Registration Statement becomes
effective.
SECTION 7.3. Access to Information. Except as required pursuant to any
confidentiality agreement or similar agreement or arrangement to which the
Company or Tribune or any of their respective Subsidiaries is a party (which
such Person shall use reasonable best efforts to cause the counterparty thereto
to waive) or pursuant to applicable Law or the regulations or requirements of
any stock exchange or other regulatory organization with whose rules the
parties are required to comply, from the date of this Agreement to the
Effective Time, each party shall (and shall cause its Subsidiaries to): (a)
provide to the other party (and its officers, directors, employees,
accountants, consultants, legal counsel, agents and other representatives,
collectively, "Representatives") access at reasonable times upon prior notice
to the officers, employees, agents, properties, offices and other facilities of
such party and its subsidiaries and to the books and records thereof and (b)
furnish promptly such information concerning the business, properties,
contracts, assets, liabilities, personnel and other aspects of such party and
its subsidiaries as the other party or its Representatives may reasonably
request. No investigation conducted pursuant to this Section 7.3 shall affect
or be deemed to modify any representation or warranty made in this Agreement.
Each party will hold any information so obtained which is non-public in
accordance with the provisions of the Confidentiality Agreement.
SECTION 7.4. Reasonable Best Efforts. Each of the Company and Tribune agrees
to use reasonable best efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements that may be imposed on
itself with respect to the Offer and the Merger (which actions shall include
furnishing all information required under the HSR Act and in connection with
approvals of or filings with any other Governmental Entity) and shall promptly
cooperate with and furnish information to each other in connection with any
such requirements imposed upon any of them or any of their Subsidiaries in
connection with the Offer and the Merger. Each of the Company and Tribune
shall, and shall cause its Subsidiaries to, use reasonable best efforts to take
all actions necessary to obtain (and shall cooperate with each other in
obtaining) any Authorization of, or any exemption by, any Governmental Entity
or other public or private third party required to be obtained or made by
Tribune, the Company or any of their Subsidiaries in connection with the Offer
and the Merger or the taking of any action contemplated thereby or by this
Agreement or the Voting Agreement; provided, that Tribune shall not be required
to agree, and the Company shall not agree without Tribune's consent, to waive
any substantial rights or to accept any substantial limitation on its
operations or to dispose of any material assets in connection with obtaining
any such Authorization unless such waiver, limitation or disposition would not
reasonably be expected to have a Material Adverse Effect on the Company or on
Tribune, and provided, further, that at Tribune's written request, the Company
shall agree to any such waiver,
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limitation or disposal, which agreement may, at the Company's option, be
conditioned upon and effective only as of the Effective Time.
SECTION 7.5. Notices of Certain Events. Each of the Company and Tribune
shall promptly notify the other of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental Entity in
connection with the transactions contemplated by this Agreement;
(c) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be reasonably expected to cause any
representation or warranty contained herein to be untrue or inaccurate in
any material respect at any time during the period commencing on the date
of this Agreement and ending at the Effective Time; and
(d) any failure of such party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section
7.5 shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
SECTION 7.6. Tax-Free Reorganization. (a) Prior to the Effective Time, each
party shall use its reasonable best efforts to cause the Merger to qualify as a
reorganization within the meaning of the provisions of Section 368 of the Code
("368 Reorganization"), and shall not knowingly take any action that would
cause the Merger not to so qualify. Tribune shall not knowingly take any action
after the Effective Time that would cause the Merger not to qualify as a 368
Reorganization.
(b) Each party shall use its reasonable best efforts to obtain the opinions
referred to in Sections 8.2(c) and 8.3(c).
SECTION 7.7. Public Announcements. So long as this Agreement is in effect,
the Company and Tribune will consult with each other before issuing any press
release or making any public statement with respect to this Agreement or the
transactions contemplated hereby and, subject to the immediately following
sentence will not issue any such press release or make any such public
statement without the prior consent of the other party, which consent shall not
be unreasonably withheld or delayed. Notwithstanding the foregoing, any such
press release or public statement as may be required by applicable Law or any
listing agreement with any national securities exchange may be issued without
such consent, if the party making such release or statement has used its
reasonable efforts to consult with the other party.
SECTION 7.8. Affiliates of the Company. Within 30 days following the date of
this Agreement, the Company shall deliver to Tribune a letter identifying all
known Persons who may be deemed affiliates of the Company under Rule 145 of the
Securities Act (a "Rule 145 Affiliate"). The Company shall use its reasonable
best efforts to obtain a written agreement from each Rule 145 Affiliate as soon
as practicable and, in any event, at least 30 days prior to the Effective Time,
substantially in the form of Exhibit E hereto.
SECTION 7.9. Charitable Contributions. For five years after the Effective
Time, Tribune will continue the existence and operation of the Times Mirror
Foundation (the "Foundation") and fund charitable contributions of the
Foundation consistent with past practice.
SECTION 7.10. Voting Agreement. Tribune shall not agree to any amendment to
the proviso contained in Paragraph 3 of the Voting Agreement without the prior
consent of the Board of Directors of the Company, which may be withheld in the
Board of Directors' sole discretion.
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ARTICLE VIII
CONDITIONS PRECEDENT
SECTION 8.1. Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to
the satisfaction prior to the Closing of the following conditions:
(a) Stockholder Approval. Each of the Company Stockholder Approval and
the Tribune Stockholder Approval shall have been obtained.
(b) HSR Period. The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated.
(c) No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other Governmental Entity or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties shall have used reasonable
efforts to prevent the entry of any such injunction or other order and to
appeal as promptly as possible any injunction or other order that may be
entered, subject to the provisos set forth in the last sentence of Section
7.4.
(d) Registration Statement. The Registration Statement shall have been
declared effective and shall be effective at the Effective Time, and no
stop order suspending effectiveness shall have been issued, no action,
suit, proceeding or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities Laws or the Securities Act or the Exchange
Act relating to the issuance or trading of the Tribune Common Shares to be
issued hereunder shall have been received.
(e) Listing of Tribune Shares. The Tribune Common Shares to be issued in
the Merger shall have been approved for listing on the NYSE, subject only
to official notice of issuance.
SECTION 8.2. Conditions to the Company's Obligation to Effect the Merger.
The obligation of the Company to effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of the following additional
conditions:
(a) Performance of Obligations; Representations and Warranties. (i)
Tribune shall have performed in all material respects each of its
agreements contained in this Agreement required to be performed at or prior
to the Effective Time and (ii) each of the representations and warranties
of Tribune contained in this Agreement that is qualified by materiality
shall be true and correct on and as of the Closing Date as if made on and
as of such date (other than to the extent that any such representation and
warranty, by its terms, is expressly limited to a specific date, in which
case such representation and warranty shall be true and correct as of such
date) and each of such representations and warranties that is not so
qualified shall be true and correct in all material respects on and as of
the Closing Date as if made on and as of such date (other than to the
extent that any such representation and warranty, by its terms, is
expressly limited to a specific date, in which case such representation and
warranty shall be true and correct in all material respects as of such
date).
(b) Officer's Certificate. Tribune shall have furnished to the Company a
certificate, dated the Closing Date, signed on behalf of Tribune by an
executive officer of Tribune, certifying to the effect that the conditions
set forth in Section 8.2(a) have been satisfied in full.
(c) Tax Opinion. The Company shall have received an opinion of Gibson,
Dunn & Crutcher LLP in form and substance reasonably satisfactory to the
Company, on the basis of certain facts, representations and assumptions set
forth in such opinion, dated the Effective Time, to the effect that the
Merger will be treated for federal income tax purposes as a 368
Reorganization and that each of Tribune and the
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Company will be a party to the reorganization within the meaning of Section
368 of the Code. In rendering such opinion, such counsel shall be entitled
to rely upon certain documentation including representations of officers of
the Company and Tribune.
Notwithstanding the foregoing, if the Offer has been made and Tribune has
purchased at least 15 million Company Common Shares pursuant to the Offer,
Section 8.2(a)(ii) shall not be a condition to the obligation of the Company to
effect the Merger and the certificate referred to in Section 8.2(b) shall only
be required to address satisfaction of the condition set forth in Section
8.2(a)(i).
SECTION 8.3. Conditions to Tribune's Obligation to Effect the Merger. The
obligation of Tribune to effect the Merger shall be subject to the satisfaction
at or prior to the Closing of the following additional conditions:
(a) Performance of Obligations; Representations and Warranties. (i) The
Company shall have performed in all material respects each of its
agreements contained in this Agreement required to be performed at or prior
to the Effective Time and (ii) each of the representations and warranties
of the Company contained in this Agreement that is qualified by materiality
shall be true and correct on and as of the Closing Date as if made on and
as of such date (other than to the extent that any such representation and
warranty, by its terms, is expressly limited to a specific date, in which
case such representation and warranty shall be true and correct as of such
date) and each of such representations and warranties that is not so
qualified shall be true and correct in all material respects on and as of
the Closing Date as if made on and as of such date (other than to the
extent that any such representation and warranty is, by its terms,
expressly limited to a specific date, in which case such representation and
warranty shall be true and correct in all material respects as of such
date).
(b) Officer's Certificate. The Company shall have furnished to Tribune a
certificate, dated the Closing Date, signed on behalf of the Company by an
executive officer of the Company, certifying to the effect that the
conditions set forth in Section 8.3(a) have been satisfied in full.
(c) Tax Opinion. Tribune shall have received an opinion of Wachtell,
Lipton, Rosen & Katz, in form and substance reasonably satisfactory to
Tribune, on the basis of certain facts, representations and assumptions set
forth in such opinion, dated the Effective Time, to the effect that the
Merger will be treated for federal income tax purposes as a 368
Reorganization and that each of Tribune and the Company will be a party to
the reorganization within the meaning of Section 368 of the Code. In
rendering such opinion, such counsel shall be entitled to rely upon certain
documentation including representations of officers of the Company and
Tribune.
(d) Other Authorizations. All Authorizations and exemptions required by
any Governmental Entity and other Persons in connection with the Merger and
the transactions contemplated hereby and the Voting Agreement shall have
been obtained or made, except to the extent the failure to obtain or make
such Authorizations or exemptions would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or on Tribune.
Notwithstanding the foregoing, if the Offer has been made and Tribune has
purchased at least 15 million Company Common Shares pursuant to the Offer,
Section 8.3(a)(ii) shall not be a condition to the obligation of Tribune to
effect the Merger and the certificate referred to in Section 8.3(b) shall only
be required to address satisfaction of the condition set forth in Section
8.3(a)(i).
ARTICLE IX
TERMINATION
SECTION 9.1. Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after the Company Stockholder Approval
or the Tribune Stockholder Approval:
(a) by mutual written consent of Tribune and the Company;
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(b) by either Tribune or the Company:
(i) if any Governmental Entity of competent jurisdiction shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the
Merger and such order, decree or ruling or other action shall have
become final and nonappealable;
(ii) (A) if, at the Company Stockholders' Meeting (including any
adjournment thereof), the Company Stockholder Approval shall not have
been obtained or (B) if, at the Tribune Stockholders' Meeting
(including any adjournment thereof), the Tribune Stockholder Approval
shall not have been obtained; or
(iii) if the Merger shall not have been consummated by December 31,
2000, unless the failure to consummate the Merger is the result of a
breach of this Agreement by the party seeking to terminate this
Agreement;
(c) by Tribune if the Company shall have (i) failed to perform in any
material respect any material obligation or to comply in any material
respect with any material agreement or covenant of the Company to be
performed or complied with by it under this Agreement or (ii) breached in
any material respect any of its representations or warranties contained in
this Agreement, which failure or breach described in such clause (i) or
(ii) cannot be cured, such that the condition set forth in Section 8.3(a)
cannot be satisfied on or prior to December 31, 2000; provided, that, if
Tribune purchases at least 15 million Company Common Shares in the Offer,
only clause (i) of this paragraph (c) shall give rise to a right of
termination.
(d) by Tribune if (i) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified in a manner adverse to
Tribune its approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any Takeover Proposal, or (ii) the
Board of Directors of the Company or any committee thereof shall have
resolved to do any of the foregoing;
(e) by the Company if Tribune shall have (i) failed to perform in any
material respect any material obligation or to comply in any material
respect with any material agreement or covenant of Tribune to be performed
or complied with by it under this Agreement or (ii) breached in any
material respect any of its representations or warranties contained in this
Agreement, which failure or breach described in such clause (i) or (ii)
cannot be cured, such that the condition set forth in Section 8.2(a) cannot
be satisfied on or prior to December 31, 2000, provided, that, if Tribune
purchases at least 15 million Company Common Shares in the Offer, only
clause (i) of this paragraph (e) shall give rise to a right of termination.
SECTION 9.2. Effect of Termination. In the event of a termination of this
Agreement by either the Company or Tribune as provided in Section 9.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Tribune or the Company or their respective officers
or directors, except with respect to the last sentence of Section 7.3, Section
9.3 and this Section 9.2; provided, however, that nothing herein shall relieve
any party of liability for any material breach hereof.
SECTION 9.3. Fees and Expenses. (a) Except as otherwise provided in this
Section 9.3, all costs and expenses incurred in connection with the Merger,
this Agreement and the transactions contemplated by this Agreement shall be
paid by the party incurring such fees or expenses, whether or not the Merger is
consummated; provided that the Company and Tribune shall share equally all fees
and expenses, other than attorneys' and accounting fees and expenses, incurred
in relation to the printing, filing and mailing of the Registration Statement
and the Proxy Statement.
(b) In the event (i) this Agreement is terminated by Tribune pursuant to
Section 9.1(d) or Section 9.1(b)(ii)(A) at any time after the Company's Board
of Directors has modified or withdrawn its approval or recommendation of the
Offer, the Merger or this Agreement or (ii)(A) prior to the time of the Company
Stockholder's Meeting a Takeover Proposal is made by a third party, (B) the
Company Stockholder Approval is not obtained and (C) on or prior to the 12-
month anniversary of the termination of this Agreement a Takeover Proposal is
consummated or the Company or any of its Subsidiaries or Affiliates enters into
an agreement or letter of intent (or resolves or announces an intention to do
so) with respect to a Takeover Proposal with a third
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party, then promptly following such termination in the case of clause (i) or
such event in the case of clause (ii) the Company shall pay to Tribune the sum
of $250 million in cash (the "Fee"); provided, that payment of the Fee shall
not prevent Tribune from seeking any remedies available to it against the
parties to the Voting Agreement for a breach thereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time or the
termination of this Agreement.
SECTION 10.2. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and
shall be given,
(i) if to Tribune, to:
Tribune Company
435 North Michigan Avenue, Suite 2300
Chicago, IL 60611
Attention: General Counsel
Fax: (312) 222-4206
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Steven A. Rosenblum, Esq.
Fax: (212) 403-2000
and to:
Sidley & Austin
One Bank One Plaza
10 South Dearborn
Chicago, Illinois 60603
Attention: Larry A. Barden, Esq.
Fax: (312) 853-7036
(ii) if to the Company, to:
The Times Mirror Company
Times Mirror Square Sixth Floor
Los Angeles, CA 90053
Attention: General Counsel
Fax: (213) 237-7696
with a copy to:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, CA 90071
Attention: Peter F. Ziegler
Fax: (213) 229-7520
and to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071-3144
Attention: Jerome L. Coben
Fax: (213) 687-5600
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or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. on a business
day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt.
SECTION 10.3. Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors
at any time before or after obtaining the Company Stockholder Approval or
Tribune Stockholder Approval, but, after any such approval, no amendment shall
be made which by Law requires further approval by the stockholders of the
Company or Tribune, as applicable, without obtaining such further approval.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
SECTION 10.4. Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument 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 those
rights. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by Law.
SECTION 10.5. Interpretation. When a reference is made in this Agreement to
an Article or a Section, such reference shall be to an Article or a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
SECTION 10.6. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
SECTION 10.7. Entire Agreement; No Third Party Beneficiaries. This Agreement
(together with the Exhibits hereto, the Confidentiality Agreement and the other
documents and the instruments referred to herein) (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof, and
(b) except as provided in Sections 6.6, 6.8 and 6.9(c), is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
SECTION 10.8. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware without regard to the
conflicts of law rules of such State.
SECTION 10.9. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either of the parties
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other party; provided, that Tribune may assign its rights and
obligations under this Agreement with respect to the Offer without the consent
of the Company to a Wholly-Owned Subsidiary of Tribune (provided that such
assignment shall not relieve the Company of its obligations hereunder). Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors
and assigns.
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SECTION 10.10. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at Law or in equity. In
addition, each of the parties hereto (a) consents to submit such party to the
personal jurisdiction of any federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (b) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a federal court sitting in the
State of Delaware or a Delaware state court.
SECTION 10.11. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby
be consummated as originally contemplated to the fullest extent possible.
SECTION 10.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
IN WITNESS WHEREOF, Tribune and the Company have each caused this Agreement
to be signed by their respective officers thereunto duly authorized as of the
date first written above.
Tribune Company
/s/ John W. Madigan
By ______________________________
Name: John W. Madigan
Title: Chairman, President and
Chief Executive Officer
The Times Mirror Company
/s/ Mark H. Willes
By ______________________________
Name: Mark H. Willes
Title: Chairman of the Board,
President and Chief
Executive Officer
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ANNEX I
Conditions to the Offer. Notwithstanding any other provision of the Offer,
Tribune shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Exchange Act (relating to Tribune's obligation to pay for
or return tendered Company Common Shares promptly after termination or
withdrawal of the Offer), pay for, and (subject to any such rules or
regulations) may delay the acceptance for payment of any tendered Company
Common Shares and (except as provided in the Merger Agreement) amend or
terminate the Offer as to any Company Common Shares not then paid for if (i)
there shall not have been validly tendered and not withdrawn prior to the
expiration of the Offer at least 15 million Company Common Shares (the "Minimum
Condition") or (ii) any applicable waiting period (and any extension thereof)
under the HSR Act shall not have expired or been terminated prior to the
expiration of the Offer or (iii) at any time after the date of the Merger
Agreement and prior to the time of payment for any such Company Common Shares
(whether or not any Company Common Shares have theretofore been accepted for
payment or paid for pursuant to the Offer), any of the following events shall
occur and be continuing or conditions exists:
(a) there shall have been any action taken, or any statute, rule,
regulation, executive order, decree, temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other Governmental Entity or other legal
restraint or prohibition which (i) prohibits, or makes illegal, the
acceptance for payment, payment for or purchase of Company Common Shares or
the consummation of the Offer, the Merger or the other transactions
contemplated by this Agreement, (ii) renders Tribune unable to accept for
payment, pay for or purchase some or all of the Company Common Shares,
(iii) imposes material limitations on the ability of Tribune to effectively
exercise full rights of ownership of the Company Common Shares, including
the right to vote the Company Common Shares purchased by it or (iv)
otherwise has or is reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company or Tribune; or
(b) the Merger Agreement shall have been terminated in accordance with
its terms or any event shall have occurred which gives Tribune the right to
terminate the Merger Agreement or not consummate the Merger; or
(c) since the date of the Merger Agreement there shall have occurred any
event, change, effect or development that, individually or in the aggregate
with any other event, change, effect or development, has had or would
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay consummation of the Offer or the Merger; or
(d) (i) any of the representations and warranties of the Company
contained in the Merger Agreement that is qualified by materiality shall
not be true and correct in all respects as of the date of determination, as
if made at and as of such time (except to the extent that any such
representation or warranty, by its terms, is expressly limited to a
specific date, in which case such representation or warranty shall not be
true and correct as of such date) or (ii) any of such representations and
warranties that is not so qualified shall not be true and correct in all
material respects as of the date of determination, as if made at and as of
such time (except to the extent that any such representation or warranty,
by its terms, is expressly limited to a specific date, in which case such
representation or warranty shall not be true and correct in all material
respects as of such date); or
(e) the Company shall have failed to perform in all material respects
each of its agreements contained in the Merger Agreement required to be
performed at or prior to the date of determination; or
(f) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) a declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States, (iii) any limitation (whether or not mandatory) by
any Governmental Entity on, or other event that materially and adversely
affects, the extension of credit by banks or other lending institutions or
(iv) in the
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case of any of the foregoing existing at the time of the execution of the
Merger Agreement, a material acceleration or worsening thereof; or
(g) the Board of Directors of the Company or any committee thereof, (i)
shall have withdrawn or modified in a manner adverse to Tribune (including
by amendment of the Schedule 14D-9) its approval or recommendation of the
Offer, the Merger or the Merger Agreement or recommended or approved any
Takeover Proposal or (ii) shall have resolved to do any of the foregoing;
which in the good faith judgment of Tribune, in any such case, and regardless
of the circumstances (including any action or inaction by Tribune) giving rise
to such condition makes it inadvisable to proceed with the Offer or the
acceptance for payment of or payment for the Company Common Shares.
The foregoing conditions are for the sole benefit of Tribune and may be
waived by Tribune, in whole or in part, at any time and from time to time, in
the sole discretion of Tribune. The failure by Tribune at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time.
The capitalized terms used in this Annex I shall have the meanings set forth
in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
appended.
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ANNEX B
VOTING AGREEMENT
This Voting Agreement (the "Agreement"), dated as of March 13, 2000, is
entered into by and among Tribune Company, a Delaware corporation ("Tribune"),
and the entities set forth on Schedule I hereto (the "Stockholders").
Tribune and The Times Mirror Company, a Delaware corporation (the
"Company"), are, concurrently with execution of this Agreement, entering into
an Agreement and Plan of Merger, dated as of March 13, 2000 (the "Merger
Agreement"), providing for, among other things, a merger of the Company with
and into Tribune (the "Merger"). Terms that are defined in the Merger Agreement
and not defined in this Agreement will have the meanings ascribed thereto in
the Merger Agreement.
As a condition to its willingness to enter into the Merger Agreement,
Tribune has required that the Stockholders agree, and each Stockholder is
willing to agree, to the matters set forth herein. In consideration of the
foregoing, including the execution and delivery by Tribune of the Merger
Agreement, and the agreements set forth below, the parties hereto agree as
follows:
1. Each Stockholder represents, warrants and agrees that (a) Schedule I
hereto sets forth the number, class and series of shares of capital stock
of the Company of which the undersigned is the record or beneficial owner
(the "Shares"), (b) as of the date hereof, it owns the Shares, free and
clear of all liens, charges, encumbrances, voting agreements and
commitments of every kind, except as disclosed in Schedule I, and (c) it
has sole voting and dispositive power over all of the Shares.
2. Each Stockholder agrees that it will not contract to sell, sell or
otherwise transfer or dispose of any of the Shares, or any interest
therein, or securities convertible into, or any voting rights with respect
to, any of the Shares, other than (a) pursuant to the Merger or (b) a
transfer to a party who executes a counterpart of this letter agreement, in
form and substance reasonably satisfactory to Tribune, agreeing to be bound
by the terms and provisions hereof. Without limiting the foregoing, each
Stockholder agrees that it will not grant any proxies or powers of attorney
or enter into a voting agreement or other arrangement with respect to any
Shares or deposit any Shares into a voting trust. Each of Chandler Trust I
and Chandler Trust II hereby agrees that it shall not convert any Company
Series C Common Shares into Company Series A Common Shares.
3. Each Stockholder agrees that it will vote, or cause to be voted, all
of the shares of capital stock of the Company beneficially owned by it, or
with respect to which it has the right to vote, including the Shares, at
any meeting of stockholders of the Company (including any adjournment or
postponement thereof), or pursuant to any action by written consent:
(a) in favor of the Merger Agreement, the Merger, the other
transactions contemplated by the Merger Agreement, and any actions
required in furtherance thereof;
(b) against any action or agreement that (i) could reasonably be
expected to result in a breach in any material respect of any covenant,
representation or warranty, or any other obligation of the Company,
under the Merger Agreement or any related agreement or (ii) is
intended, or could reasonably be expected, to materially impede,
interfere with, delay, postpone or adversely affect the Merger or the
other transactions contemplated by the Merger Agreement; and
(c) against any Takeover Proposal (other than the Merger);
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provided, that if the Board of Directors of the Company modifies or
withdraws its approval or recommendation of the Offer and the Merger in
connection with a Superior Proposal pursuant to Section 6.3 of the Merger
Agreement on or prior to April 2, 2000, the shares of capital stock of the
Company beneficially owned by Chandler Trust I and Chandler Trust II, or
with respect to which Chandler Trust I or Chandler Trust II has the right
to vote, which, in the aggregate, carry 40% of the total voting power of
the outstanding shares of the capital stock of the Company shall be voted,
or shall be caused to be voted, as set forth in clauses (a), (b) or (c) of
this Paragraph 3, and the remaining portion of the voting power of the
capital stock of the Company beneficially owned by Chandler Trust I and
Chandler Trust II, or with respect to which Chandler Trust I or Chandler
Trust II has the right to vote, shall be voted, or shall be caused to be
voted, with respect to the matters set forth in clauses (a), (b) and (c) of
this Paragraph 3 in the same proportion, based on the actual votes cast, as
all shares of voting capital stock of the Company (other than shares owned
by Chandler Trust I or Chandler Trust II, or with respect to which Chandler
Trust I or Chandler Trust II has the right to vote, but including shares
owned by Tribune and any of its Affiliates, or with respect to which
Tribune or any of its Affiliates has the right to vote) are voted on such
matters.
4. Each Stockholder agrees to cooperate fully with Tribune in connection
with the Merger Agreement and the transactions contemplated thereby,
including, without limitation, by executing an affiliate letter provided
for in Section 7.8 of the Merger Agreement within the applicable time
periods specified in Section 7.8 of the Merger Agreement. Each of Chandler
Trust I and Chandler Trust II agrees that it will not, and it shall not
permit or authorize any of its directors, managers, members, trustees,
stockholders, officers, employees, Affiliates, agents or advisors to,
initiate, solicit or encourage any discussions, inquiries or proposals with
any third party that constitute or may reasonably be expected to lead to a
Takeover Proposal, or provide any such Person with information or
assistance or discuss or negotiate with any such Person with respect to a
possible Takeover Proposal. Each of Chandler Trust I and Chandler Trust II
agrees to notify Tribune as promptly as practicable of any inquiry,
discussion or proposal that constitutes or may reasonably be expected to
lead to a Takeover Proposal promptly after it becomes aware of such
inquiry, discussion or proposal.
5. Each Stockholder who owns shares of preferred stock of the Company as
shown on Schedule I hereto hereby confirms that it is the beneficial and
record holder of the outstanding shares of preferred stock of the Company
as shown on Schedule I hereto, which, in the aggregate, constitute all the
outstanding shares of such preferred stock, and that the Merger Agreement,
the Merger and the other transactions contemplated by the Merger Agreement
do not require approval or adoption thereof by the holders of any
outstanding shares of preferred stock of the Company. To the extent that,
notwithstanding the foregoing, such approval is required, each such
Stockholder hereby consents, in accordance with Section 228 of the DGCL, to
the Merger Agreement, the Merger and the other transactions contemplated by
the Merger Agreement.
6. Without limiting the provisions of the Merger Agreement, in the event
(a) of any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of shares of capital stock of the Company affecting
any of the Shares, or (b) any Stockholder shall become the beneficial owner
of any additional shares of capital stock of the Company or other
securities entitling the holder thereof to vote or give consent with
respect to the matters set forth in paragraph 3 or paragraph 5 hereof, then
the terms of this Agreement shall apply to the shares of capital stock or
other securities of the Company held by such Stockholder immediately
following the effectiveness of the events described in clause (a) or such
Stockholder becoming the beneficial owner thereof as described in clause
(b), as though they were Shares of such Stockholder hereunder. Each
Stockholder hereby agrees, while this Agreement is in effect, to notify
Tribune of the number of any new Shares acquired by such Stockholder, if
any, after the date hereof.
7. Each Stockholder hereby waives any and all appraisal, dissenters or
similar rights that it may have with respect to the Merger and the other
transactions contemplated by the Merger Agreement pursuant to the DGCL or
other applicable Law.
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8. Each of TMCT, LLC, TMCT II, LLC, Eagle New Media Investments, LLC and
Chandis Acquisition Corporation hereby agrees that it shall make the Stock
Election with respect to any Company Common Shares owned beneficially or of
record by it.
9. In the event that the Merger Agreement is terminated, Chandler Trust
I and Chandler Trust II hereby agree to vigorously oppose and seek to
prevent any effort by the Company and/or the Board of Directors of the
Company, prior to the first anniversary of the termination of the Merger
Agreement, to convert any Company Series C Common Shares into Company
Series A Common Shares in connection with a Takeover Proposal (other than a
conversion that would take effect immediately prior to or contemporaneously
with the consummation of the transactions contemplated by such Takeover
Proposal). The obligations of Chandler Trust I and Chandler Trust II to
vigorously oppose and seek to prevent set forth in the immediately
preceding sentence shall include, without limitation, the obligation of
Chandler Trust I and Chandler Trust II to commence and maintain litigation
contesting such conversion and pursue such litigation diligently and in
good faith.
10. Each of Tribune and each Stockholder represents and warrants that it
has all necessary power and authority to enter into this Agreement, that
this Agreement is the legal, valid and binding agreement of Tribune or such
Stockholder, as the case may be, and that this Agreement is enforceable
against Tribune or such Stockholder, as the case may be, in accordance with
its terms.
11. This Agreement may be terminated at the option of Tribune, on the
one hand, or any of the Stockholders, on the other hand, at any time after
the earlier of (a) the day following the Effective Time and (b) termination
of the Merger Agreement in accordance with its terms; provided, that the
obligations of Chandler Trust I and Chandler Trust II under paragraph 9
shall survive until the earlier of (i) the day following the Effective Time
and (ii) the later of (A) the first anniversary of the termination of the
Merger Agreement in accordance with its terms and (B) the resolution of any
litigation brought pursuant to paragraph 9. This Agreement may also be
terminated, as to any Stockholder, by the mutual agreement of Tribune and
such Stockholder; provided, that such termination as to such Stockholder
will not affect the obligations of any other Stockholder hereunder. No
termination of this Agreement will relieve any party from liability for any
material breach of its obligations hereunder committed prior to such
termination (or committed during the time period set forth in the proviso
to the first sentence of this paragraph 11).
12. The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with the terms hereof or were otherwise breached and that each
party shall be entitled to specific performance of the terms hereof in
addition to any other remedy which may be available at law or in equity.
13. All notices and other communications hereunder shall be in writing
and shall be deemed given upon (a) confirmation of a receipt of a facsimile
transmission, (b) confirmed delivery by an overnight courier or when
delivered by hand, or (c) confirmation of receipt when sent by certified or
registered mail, postage prepaid, addressed, in the case of Tribune, to the
address set forth for Tribune in the Merger Agreement (with copies as set
forth in the Merger Agreement) and in the case of a Stockholder, to the
address set forth under such Stockholder's name on Schedule I hereto (or at
such other address for any party as shall be specified by like notice).
14. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by
the parties hereto; provided, that, with respect to the rights and
obligations of any Stockholder under this Agreement, this Agreement may be
amended with the approval of such Stockholder and Tribune, notwithstanding
the failure to obtain the approval of any other Stockholder.
15. This Agreement shall not be assigned by operation of law or
otherwise without the prior written consent of the other parties hereto.
This Agreement will be binding upon, inure to the benefit of and be
enforceable by each party and such party's respective heirs, beneficiaries,
executors, representatives and permitted assigns.
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16. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
17. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, without
rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
18. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without giving effect to the
provisions thereof relating to conflicts of law).
19. The representations, warranties, covenants and agreements of the
Stockholders in this Agreement are made severally, and not jointly, by each
Stockholder.
20. The Company is hereby expressly made a third party beneficiary to
the proviso set forth in paragraph 3.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers, trustees or other representatives of Tribune
Company and of each Stockholder on the day and year first written above.
Tribune Company
/s/
By:_________________________________
Name:
Chandler Trust I
/s/
By:_________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
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Chandler Trust II
/s/
By:_________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
/s/
__________________________________
Trustee
TMCT, LLC
By: The Times Mirror Company, as
Managing Member
/s/
By:__________________________________
Name:
Title:
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TMCT II, LLC
By: The Times Mirror Company, as
Managing Member
/s/
By:_________________________________
Name:
Title:
Eagle New Media Investments, LLC
By: The Times Mirror Company, as
Sole Manager
/s/
By:_________________________________
Name:
Title:
Chandis Acquisition Corporation
/s/
By:_________________________________
Name:
Title:
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<PAGE>
ANNEX C
AMENDMENTS TO TRIBUNE COMPANY CHARTER
The first paragraph of Article FOURTH is hereby amended and restated to
read in its entirety as follows:
"FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is one billion four hundred twelve million
(1,412,000,000) shares consisting of (A) twelve million (12,000,000) shares of
Preferred Stock, without par value, issuable in one or more series as
hereinafter provided, and (B) one billion four hundred million (1,400,000,000)
shares of Common Stock (without par value)."
A new Article FOURTEENTH is hereby added to read in its entirety as
follows:
"FOURTEENTH: Notwithstanding any other provision in this Restated
Certificate of Incorporation, no provision of Article VIII of the by-laws of
the corporation (for so long as such Article VIII is in effect) may be
altered, amended or repealed, nor may any provision inconsistent therewith be
adopted, including by means of merger, consolidation, asset transfer or other
transaction with any affiliated entity in which the corporation is not the
surviving or continuing entity, except by the affirmative vote of all of the
holders of outstanding stock of the corporation entitled to vote or of all of
the members of the Board of Directors."
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ANNEX D
[Merrill Lynch & Co. Logo]
March 12, 2000
Board of Directors
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
Members of the Board of Directors:
Tribune Company (the "Acquiror") and The Times Mirror Company (the
"Company") propose to enter into an Agreement and Plan of Merger (the
"Agreement") pursuant to which (i) the Acquiror would commence a tender offer
(the "Offer") for up to 28 million shares of the Series A Common Stock and
Series C Common Stock, each with par value $1.00 per share, of the Company (the
"Company Common Shares"), in which each Company Common Share acquired in the
Offer would be exchanged for $95 per share (the "Per Share Cash Amount"), and
(ii) the Company would be merged with and into the Acquiror in a merger (the
"Merger") in which each outstanding Company Common Share would be converted
into the right to receive (a) the Per Share Cash Amount, (b) 2.5 shares (the
"Exchange Ratio") of the common stock, without par value, of the Acquiror (the
"Acquiror Shares"), or (c) a combination of cash and Acquiror Shares, as
provided in the Agreement (the "Mixed Consideration" and, together with the Per
Share Cash Amount and the Exchange Ratio, the "Consideration"). Pursuant to the
Agreement, each Company Preferred Share (except for Company Preferred Shares
owned by the Company or the Acquiror) issued and outstanding immediately prior
to the Effective Time shall be converted into one share of preferred stock of
the Acquiror, the terms of which shall be substantively identical to the terms
of such Company Preferred Share, except that the number of Acquiror Shares into
which each such Company Preferred Share may be converted, under the terms
thereof, shall be calculated with respect to the Common Share Value of the
Acquiror Shares. You have informed us that the aggregate number of Company
Common Shares that may be converted into the right to receive cash in the
Merger shall be no greater than (i) 28 million, minus (ii) the number of
Company Common Shares purchased in the Offer, minus (iii) any Dissenting
Shares, minus (iv) any Company Common Shares acquired by the Acquiror or any of
its Wholly-Owned Subsidiaries following consummation or expiration of the Offer
and prior to the Effective Time. You have further informed us that there shall
be no limit on the number of Company Common Shares that may be converted into
the right to receive Acquiror Shares in the Merger. The Offer and the Merger,
taken together and not separately, are referred to as the "Transaction".
Capitalized terms used herein and not otherwise defined have the respective
meanings given them in the Agreement.
You have asked us whether, in our opinion, the Consideration being paid by
the Acquiror in the Transaction is fair from a financial point of view to the
Acquiror.
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed certain publicly available business and financial
information relating to the Company and the Acquiror that we deemed to be
relevant;
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(2) Reviewed certain information, including financial forecasts,
relating to the business, earnings, cash flow, assets, liabilities and
prospects of the Company and the Acquiror, as well as the amount and timing
of the cost savings and related expenses and synergies expected to result
from the Transaction (the "Expected Synergies") furnished to us by the
Company and the Acquiror, respectively;
(3) Conducted discussions with members of senior management and
representatives of the Company and the Acquiror concerning the matters
described in clauses 1 and 2 above, as well as their respective businesses
and prospectus before and after giving effect to the Transaction and the
Expected Synergies;
(4) Reviewed the market prices and valuation multiples for the Company
Common Shares and the Acquiror Shares and compared them with those of
certain publicly traded companies that we deemed to be relevant;
(5) Reviewed the results of operations of the Company and the Acquiror
and compared them with those of certain publicly traded companies that we
deemed to be relevant;
(6) Compared the proposed financial terms of the Transaction with the
financial terms of certain other transactions that we deemed to be
relevant;
(7) Participated in certain discussions and negotiations among
representatives of the Company, the controlling shareholder of the Company
and the Acquiror and their financial and legal advisors;
(8) Reviewed the potential pro forma impact of the Transaction;
(9) Reviewed a draft of the Agreement and the Voting Agreement by and
among the Acquiror and the entities set forth on Schedule I thereto (the
"Voting Agreement"); and
(10) Reviewed such other financial studies and analyses and took into
account such other matters as we deemed necessary, including our assessment
of general economic, market and monetary conditions.
In preparing our opinion, we have assumed and relied on the accuracy and
completeness of all information supplied or otherwise made available to us,
discussed with or reviewed by or for us, or publicly available, and we have not
assumed any responsibility for independently verifying such information or
undertaken an independent evaluation or appraisal of any of the assets or
liabilities of the Company or the Acquiror or been furnished with any such
evaluation or appraisal. In addition, we have not assumed any obligation to
conduct any physical inspection of the properties or facilities of the Company
or the Acquiror. With respect to the financial forecast information and the
Expected Synergies furnished to or discussed with us by the Company or the
Acquiror, we have assumed that they have been reasonably prepared and reflect
to the best currently available estimates and judgment of the Company's or the
Acquiror's management as to the expected future financial performance of the
Company or the Acquiror, as the case may be, and the Expected Synergies. We
have further assumed that the Merger will qualify as a tax-free reorganization
for U.S. federal income tax purposes. We have also assumed that the final form
of the Agreement and the Voting Agreement will be substantially similar to the
last draft reviewed by us.
Our opinion is necessarily based upon market, economic and other conditions
as they exist and can be evaluated on, and on the information made available to
us as of, the date hereof. We have assumed that in the course of obtaining the
necessary regulatory or other consents or approvals (contractual or otherwise)
for the Transaction, no restrictions, including any divestiture requirements or
amendments or modifications, will be imposed that will have a material adverse
effect on the contemplated benefits of the Transaction.
We are acting as financial advisor to the Acquiror in connection with the
Transaction and will receive a fee from the Acquiror for our services, a
significant portion of which is contingent upon the consummation of the
Transaction. In addition, the Acquiror has agreed to indemnify us for certain
liabilities arising out of our engagement. We have, in the past, provided
financial advisory and financing services to the Acquiror, the Company and
their affiliates and may continue to do so and have received, and may receive,
fees for the rendering of such services. In addition, in the ordinary course of
our business, we may actively trade the
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<PAGE>
Company Common Shares and other securities of the Company, as well as the
Acquiror Shares and other securities of the Acquiror, for our own account and
for the accounts of customers and, accordingly, may at any time hold a long or
short position in such securities.
This opinion is for the use and benefit of the Board of Directors of the
Acquiror. Our opinion does not address the merits of the underlying decision by
the Acquiror to engage in the Transaction and does not constitute a
recommendation to any shareholder of the Acquiror as to how such shareholder
should vote on the proposed Merger or any matter related to the Transaction.
We are not expressing any opinion herein as to the prices at which the
Acquiror Shares will trade following the announcement or consummation of the
Transaction.
On the basis of and subject to the foregoing, we are of the opinion that, as
of the date hereof, the Consideration being paid by the Acquiror in the
Transaction is fair from a financial point of view to the Acquiror.
Very truly yours,
/s/ Merrill Lynch, Pierce, Fenner & Smith
Incorporated
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
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ANNEX E
[LOGO]
[GOLDMAN SACHS]
PERSONAL AND CONFIDENTIAL
March 13, 2000
Board of Directors
The Times Mirror Company
Times Mirror Square
Los Angeles, CA 90053
Ladies and Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to the holders of the outstanding shares of Series A Common Stock, par
value $1.00 per share (the "Series A Shares"), and the outstanding shares of
Series C Common Stock, par value $1.00 per share (the "Series C Shares", and,
together with the Series A Shares, the "Shares"), of The Times Mirror Company
(the "Company") of the Stock Consideration (as defined below) and the Cash
Consideration (as defined below), in the aggregate, proposed to be paid in the
Tender Offer (as defined below) and the Merger (as defined below) pursuant to
the Agreement and Plan of Merger, dated as of March 13, 2000, between Tribune
Company ("Tribune") and the Company (the "Agreement"). The Agreement provides
for a tender offer for up to 28,000,000 Shares (the "Tender Offer") pursuant to
which Tribune will pay $95 per Share in cash for each Share accepted (the "Cash
Consideration"). The Agreement further provides that following completion of
the Tender Offer, the Company will be merged with and into Tribune (the
"Merger") and each outstanding share not owned by Tribune will be converted
into 2.5 shares of Common Stock, without par value, of Tribune (the "Tribune
Shares"), as more fully set forth in the Agreement (the "Stock Consideration").
Holders of Shares may elect, with respect to all or a portion of their Shares,
to convert such Shares into the right to receive the same Cash Consideration
paid for Shares tendered pursuant to the Tender Offer, subject to certain
procedures and limitations contained in the Agreement, as to which procedures
and limitations we are expressing no opinion. We understand that there are no
restrictions in the Agreement limiting the ability of any holder of Shares to
receive the Stock Consideration, if such holder decides to elect to receive the
Stock Consideration.
Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes. We are
familiar with the Company having provided certain investment banking services
to the Company from time to time, including having acted as financial advisor
to the Company in connection with the indirect purchase of a securities
investment portfolio and real estate investment trust interests with the
Chandler Trusts in August 1997 and a similar transaction in September 1999, the
disposition of Matthew Bender and Company, Inc., and fifty percent of Shepard's
Company in July 1998 and of Mosby, Inc. in October 1998, and the disposition of
Allen Communication in February 2000, and having acted as its financial advisor
in connection with, and having participated in certain of the negotiations
leading to, the Agreement. We also have acted as financial advisor to the
Chandler Trusts in connection with the stock exchange involving Cox Cable
Communication, Inc., the Company and the Chandler Trusts in July 1994, and may
provide investment banking services to the Chandler Trusts in the future. We
also have provided certain investment banking services to Tribune from time to
time, including in connection with various commercial paper and medium-term
note financings and may provide investment banking services to Tribune and its
subsidiaries in the future. Goldman, Sachs & Co. provides a full range of
financial advisory and securities services and, in the course of its normal
trading activities, may from time to time effect transactions and hold
securities, including derivative securities, of the Company or Tribune for its
own account and for the accounts of customers.
E-1
<PAGE>
In connection with this opinion, we have reviewed, among other things, the
Agreement; the Restated Certificate of Incorporation of the Company dated
January 20, 1995, as amended on January 31, 1995; Annual Reports to
Stockholders and Annual Reports on Form 10-K of the Company and Tribune for the
five years ended December 31, 1998 and the five fiscal years ended December 27,
1998, respectively, and, in addition, the draft Annual Reports to Stockholders
and Annual Reports on Form 10-K of the Company and Tribune for the year ended
December 31, 1999 and the fiscal year ended December 27, 1999, respectively;
certain interim reports to stockholders and Quarterly Reports on Form 10-Q of
the Company and Tribune; certain other communications from the Company and
Tribune to their respective stockholders; and certain internal financial
analyses and forecasts for the Company and Tribune prepared by their respective
managements. We also have held discussions with members of the senior
management of the Company and Tribune regarding their assessment of the
strategic rationale for, and the potential benefits of, the transaction
contemplated by the Agreement and the past and current business operations,
financial condition and future prospects of their respective companies. In
addition, we have reviewed the reported price and trading activity for the
Shares and the Tribune Shares, compared certain financial and stock market
information for the Company and Tribune with similar information for certain
other companies the securities of which are publicly traded, reviewed the
financial terms of certain recent business combinations in the newspaper
industry specifically and in other industries generally and performed such
other studies and analyses as we considered appropriate.
We have relied upon the accuracy and completeness of all of the financial
and other information discussed with or reviewed by us and have assumed such
accuracy and completeness for purposes of rendering this opinion. In addition,
we have not made an independent evaluation or appraisal of the assets and
liabilities of the Company or Tribune or any of their subsidiaries and we have
not been furnished with any such evaluation or appraisal. Our advisory services
and the opinion expressed herein are provided for the information and
assistance of the Board of Directors of the Company in connection with its
consideration of the transaction contemplated by the Agreement and such opinion
does not constitute a recommendation as to how any holder of Shares should vote
with respect to such transaction or whether or not any holder of Shares should
tender such Shares in connection with such transaction or elect to receive the
Stock Consideration or Cash Consideration.
Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, it is our opinion that as of the date hereof the Stock
Consideration and Cash Consideration to be received by the holders of Shares,
in the aggregate, are fair from a financial point of view to the holders of
Shares receiving such Consideration.
Very truly yours,
/s/ Goldman, Sachs & Co.
_________________________
(GOLDMAN, SACHS & CO.)
E-2
<PAGE>
ANNEX F
Section 262 of the Delaware General Corporation Law
Appraisal Rights.
(a) Any stockholder of a corporation of this State who holds shares of stock on
the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise complied with
subsection (d) of this section and who has neither voted in favor of the merger
or consolidation nor consented thereto in writing pursuant to (S)228 of this
title shall be entitled to an appraisal by the Court of Chancery of the fair
value of the stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share"
mean and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or series
of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to (S)251 (other than a merger effected pursuant to (S)251(g)
of this title), (S)252, (S)254, (S)257, (S)258, (S)263 or (S)264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of (S)251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
(S)(S)251, 252, 254, 257, 258, 263 and 264 of this title to accept for such
stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
F-1
<PAGE>
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under (S)253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets
of the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are
available pursuant to subsections (b) or (c) hereof that appraisal rights
are available for any or all of the shares of the constituent corporations,
and shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder's shares shall deliver
to the corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such stockholder's shares. A proxy or vote against
the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation shall
notify each stockholder of each constituent corporation who has complied
with this subsection and has not voted in favor of or consented to the
merger or consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to (S)228 or
(S)253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
F-2
<PAGE>
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10
days after such stockholder's written request for such a statement is received
by the surviving or resulting corporation or within 10 days after expiration of
the period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the stockholders
who have complied with this section and who have become entitled to appraisal
rights. The Court may require the stockholders who have demanded an appraisal
for their shares and who hold stock represented by certificates to submit their
certificates of stock to the Register in Chancery for notation thereon of the
pendency of the appraisal proceedings; and if any stockholder fails to comply
with such direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court may,
in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on the
list filed by the surviving or resulting
F-3
<PAGE>
corporation pursuant to subsection (f) of this section and who has submitted
such stockholder's certificates of stock to the Register in Chancery, if such
is required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such stockholder, in the
case of holders of uncertificated stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed upon
the parties as the Court deems equitable in the circumstances. Upon application
of a stockholder, the Court may order all or a portion of the expenses incurred
by any stockholder in connection with the appraisal proceeding, including,
without limitation, reasonable attorney's fees and the fees and expenses of
experts, to be charged pro rata against the value of all the shares entitled to
an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for all appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the merger or consolidation
as provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the
Court of Chancery shall be dismissed as to any stockholder without the approval
of the Court, and such approval may be conditioned upon such terms as the Court
deems just.
(l) The shares of the surviving or resulting corporation to which the shares of
such objecting stockholders would have been converted had they assented to the
merger or consolidation shall have the status of authorized and unissued shares
of the surviving or resulting corporation.
F-4
<PAGE>
PART II--Information Not Required in Prospectus
Item 20. Indemnification of Directors and Officers.
Section 145(a) of the Delaware General Corporation Law ("DGCL") provides, in
general, that a corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, other than an action by or in the right of the
corporation, because the person is or was a director or officer of the
corporation. Such indemnity may be against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding, if
the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and if, with
respect to any criminal action or proceeding, the person did not have
reasonable cause to believe the person's conduct was unlawful.
Section 145(b) of the DGCL provides, in general, that a corporation shall
have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor because the
person is or was a director or officer of the corporation, against any expenses
(including attorneys' fees) actually and reasonably incurred by the person in
connection with the defense or settlement of such action or suit if the person
acted in good faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to be indemnified for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 145(g) of the DGCL provides, in general, that a corporation shall
have the power to purchase and maintain insurance on behalf of any person who
is or was a director or officer of the corporation against any liability
asserted against the person in any such capacity, or arising out of the
person's status as such, whether or not the corporation would have the power to
indemnify the person against such liability under the provisions of the law.
Article TWELFTH of the Registrant's restated certificate of incorporation
provides that the Registrant shall indemnify its directors and officers to the
fullest extent permitted by Delaware law. In accordance with Section 102(b)(7)
of the DGCL, the Registrant's restated certificate of incorporation provides
that no directors of the Registrant shall be personally liable to the
Registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director except for (i) breach of the director's duty of loyalty to
the Registrant or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
unlawful payment of dividends under Section 174 of the DGCL or (iv)
transactions from which the director derives an improper personal benefit.
Pursuant to Section 145 of the DGCL and the Registrant's restated
certificate of incorporation, the directors and officers of the Registrant are
covered by Directors and Officers Liability and Corporation Reimbursement
insurance policies.
The foregoing statements are subject to the detailed provisions of Section
145 of the DGCL and Article TWELFTH of the restated certificate of
incorporation of the Registrant.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits.
See Exhibit Index.
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<PAGE>
(b) Financial Statement Schedules.
None.
(c) Item 4(b) Information.
The opinions of Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Goldman, Sachs & Co. are attached as Annexes D and E, respectively, to the
proxy statement/prospectus.
Item 22. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder, through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c) of
the Securities Act of 1933, the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(c) The undersigned Registrant hereby undertakes that every prospectus: (i)
that is filed pursuant to the immediately preceding paragraph, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Securities Act of
1933, and is used in connection with an offering of securities subject to Rule
415, will be filed as a part of an amendment to the registration statement and
will not be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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<PAGE>
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, and will be governed by the final adjudication of such
issue.
(e) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(f) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(g) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago,
State of Illinois, as of May 5, 2000.
Tribune Company
By: /s/ Crane H. Kenney
----------------------------------
Crane H. Kenney
Senior Vice President,
General Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated as of May 5, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
* Chairman, President and
______________________________________ Chief Executive Officer and
John W. Madigan Director (principal
executive officer)
* Senior Vice
______________________________________ President/Finance
Donald C. Grenesko and Administration
(principal financial officer)
* Vice President and
______________________________________ Controller (principal
R. Mark Mallory accounting officer)
* Director
______________________________________
James C. Dowdle
* Director
______________________________________
Diego E. Hernandez
* Director
______________________________________
Robert E. La Blanc
* Director
______________________________________
Nancy Hicks Maynard
* Director
______________________________________
Andrew J. McKenna
* Director
______________________________________
Kristie Miller
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
* Director
______________________________________
James J. O'Connor
* Director
______________________________________
Donald H. Rumsfeld
* Director
______________________________________
Patrick G. Ryan
* Director
______________________________________
Dudley S. Taft
* Director
______________________________________
Arnold R. Weber
*By: /s/ Crane H. Kenney
_________________________________
Crane H. Kenney
Attorney-in-Fact
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of March 13, 2000, between
Tribune Company and The Times Mirror Company, attached as Annex A
to the proxy statement/prospectus which is part of this
registration statement.
3.1 Restated Certificate of Incorporation of Tribune Company, dated
April 21, 1987; Certificate of Designations of Series B
Convertible Preferred Stock, dated April 4, 1989 (Exhibit 3.1 to
Annual Report on Form 10-K for 1991).
3.1a Amended Certificate of Designation of Series A Junior
Participating Preferred Stock, dated December 2, 1997 (Exhibit
3.1a to Annual Report on Form 10-K for 1997).
3.1b Form of Certificate of Designation of Series C Preferred Stock.
3.1c Form of Certificate of Designation of Series D-1 Preferred Stock.
3.1d Form of Certificate of Designation of Series D-2 Preferred Stock.
3.2 Bylaws of Tribune Company as Amended and in effect on December 14,
1999 (Exhibit 3.2 to Annual Report on Form 10-K for 1999).
4 Rights Agreement between Tribune Company and First Chicago Trust
Company of New York, as Rights Agent, dated as of December 12,
1997 (Exhibit 1 to Form 8-K Current Report dated December 12,
1997).
5.1 Opinion of Crane H. Kenney, Esq., as to the legality of the
securities being registered.
8.1 Opinion of Wachtell, Lipton, Rosen & Katz regarding certain U.S.
income tax aspects of the merger.
8.2 Opinion of Gibson, Dunn & Crutcher LLP regarding certain U.S.
income tax aspects of the merger.
23.1 Consent of Crane H. Kenney, Esq. (included in Exhibit 5.1 hereto).
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ernst & Young LLP.
23.4 Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 8.1
hereto).
23.5 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 8.2
hereto).
99.1 Voting Agreement, dated as of March 13, 2000, by and among Tribune
Company and the entities set forth on the schedule attached
thereto, attached as Annex B to the proxy statement/prospectus
which is part of this registration statement.
99.2 Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated,
attached as Annex D to the proxy statement/prospectus which is
part of this registration statement.
99.3 Opinion of Goldman, Sachs & Co., attached as Annex E to the proxy
statement/prospectus which is part of this registration statement.
99.4 Consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated.
99.5 Consent of Goldman, Sachs & Co.
99.6 Form of Proxy for Special Meeting of Stockholders of Tribune
Company.
99.7 Form of Voting Instructions for Special Meeting of Stockholders of
Tribune.
99.8 Forms of Proxy for Special Meeting of Stockholders of The Times
Mirror Company.
99.9 Consent of Jeffrey Chandler to be named a director of Tribune
Company.
99.10 Consent of Roger Goodan to be named a director of Tribune Company.
99.11 Consent of William Stinehart, Jr. to be named a director of
Tribune Company.
99.12 Consent of Thomas Unterman to be named a director of Tribune
Company.
</TABLE>
II-6
<PAGE>
EXHIBIT 3.1b
CERTIFICATE OF DESIGNATION
OF THE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C
(PAR VALUE $1.00 PER SHARE)
OF
TRIBUNE COMPANY
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
The undersigned duly authorized officer of Tribune Company, a corporation
organized and existing under the General Corporation Law (the "DGCL") of the
State of Delaware (the "Company"), in accordance with the provisions of Section
103 thereof, and pursuant to Section 151 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Restated Certificate of Incorporation of the Company, the Board of Directors of
the Company (the "Board" or "Board of Directors") on ____, 2000 adopted the
following resolution creating 900,000 shares of Preferred Stock, par value $1.00
per share, each designated as set forth below:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board of Directors by provisions of the Restated Certificate of
Incorporation of the Company (the "Certificate of Incorporation"), and the DGCL,
the issuance of a series of the Company's preferred stock, par value $1.00 per
share (the "Preferred Stock"), which shall consist of 900,000 of the 12,000,000
shares of Preferred Stock that the Company now has authority to issue, be, and
the same hereby is, authorized, and the Board of Directors hereby fixes the
powers, designations, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions, of the
shares of such series (in addition to the powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions, set forth in the Certificate of
Incorporation that may be applicable to the Preferred Stock) as follows:
1. Designation and Rank. The designation of such series of the Preferred
--------------------
Stock authorized by this resolution shall be the 8% Cumulative Convertible
Preferred Stock, Series C (the "Series C Preferred Stock"). The number of
shares of Series C Preferred Stock shall be 900,000. The Series C Preferred
Stock shall rank prior to the Common Stock (as hereinafter defined) of the
Company and to all other classes and series of equity securities of the Company
now or hereafter authorized, issued or outstanding (the Common Stock and such
other classes
<PAGE>
and series of equity securities not expressly designated as ranking on a parity
with or senior to the Series C Preferred Stock collectively may be referred to
herein as the "Junior Stock") as to dividend rights and rights upon liquidation,
winding up or dissolution of the Company, other than any classes or series of
equity securities of the Company expressly designated as ranking on a parity
with (the "Parity Stock") or senior to (the "Senior Stock") the Series C
Preferred Stock as to dividend rights and rights upon liquidation, winding up or
dissolution of the Company. The Series C Preferred Stock shall be subject to
creation of Senior Stock, Parity Stock and Junior Stock, to the extent not
expressly prohibited by the Certificate of Incorporation or Section 5(c)(i) or
5(c)(ii) hereof, with respect to the payment of dividends and upon liquidation.
2. Cumulative Dividends; Priority.
------------------------------
(a) Payment of Dividends.
--------------------
(i) The holders of record of shares of Series C
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available therefor, cumulative cash
dividends from the date of issuance of such shares at the rate per annum per
share of 8% ($40 per annum) (the "Dividend Rate"), which shall be payable
quarterly in arrears on the tenth day of March, June, September and December in
each year (or if such day is a non-business day, on the next business day),
commencing on June 10, 2000 (each of such dates a "Dividend Payment Date").
Notwithstanding the foregoing, the Dividend Rate in effect for the period ending
on the first Dividend Payment Date shall be that percentage that would result in
an accrued dividend for such period equal to the dividend that would have
accrued at the regular Dividend Rate if the Series C Preferred Stock had been
issued on March 1, 2000. No interest, or sum of money in lieu of interest, shall
be payable in respect of any dividend payment or payments on the Series C
Preferred Stock that may be in arrears.
(ii) Each declared dividend shall be payable to holders
of record as they appear on the stock books of the Company at the close of
business on such record dates, not more than 60 calendar days preceding the
applicable Dividend Payment Dates therefor, as are determined by the Board of
Directors (each of such dates a "Record Date"). Quarterly dividend periods (each
a "Dividend Period") shall commence on and include the eleventh day of March,
June, September and December of each year and shall end on and include the date
immediately preceding the next following Dividend Payment Date. Dividends on the
shares of Series C Preferred Stock shall be fully cumulative and shall accrue
(whether or not declared) from the first day of each Dividend Period; provided,
however, that the initial dividend payable in respect of the initial Dividend
Period and the amount of any dividend payable for any other Dividend Period
shorter than a full Dividend Period shall be computed on the basis of a 360-day
year composed of twelve 30-day months and the actual number of days elapsed in
the relevant Dividend Period.
(b) Priority as to Dividends.
------------------------
(i) Subject to the provisions hereof, no cash dividend
or other distribution (other than in Common Stock or other Junior Stock) shall
be declared or paid or set apart for payment on Preferred Stock that constitutes
Parity Stock or Junior Stock with respect to dividends for any Dividend Period
unless full dividends on the Series C Preferred Stock for the
-2-
<PAGE>
immediately preceding Dividend Period have been or contemporaneously are
declared and paid (or declared and a sum sufficient for the payment thereof set
apart for such payment). When dividends are not paid in full (or declared and a
sum sufficient for such full payment not so set apart) upon the Series C
Preferred Stock and any Parity Stock, all dividends declared upon shares of
Series C Preferred Stock and any Parity Stock shall be declared pro rata with
respect thereto, so that in all cases the amount of dividends declared per share
on the Series C Preferred Stock and such Parity Stock shall bear to each other
the same ratio that accrued dividends for the then current Dividend Period per
share on the shares of Series C Preferred Stock (which shall include any
accumulation in respect of unpaid dividends for prior Dividend Periods) and
dividends, including accumulations, if any, of such Parity Stock, bear to each
other.
(ii) Except as provided in the preceding paragraph,
full dividends on the Series C Preferred Stock must be declared and paid or set
apart for payment for the immediately preceding Dividend Period before (A) any
cash dividend or other distribution (other than in Common Stock or other Junior
Stock) shall be declared or paid or set aside for payment upon the Common Stock
or any other Junior Stock of the Company or (B) any Common Stock or any other
Junior Stock is redeemed, purchased or otherwise acquired by the Company for any
consideration (or any moneys are paid to or made available for a sinking fund
for the redemption of any shares of any such stock), except by redemption into
or exchange for Junior Stock or (C) any Series C Preferred Stock or Parity Stock
is redeemed, purchased or otherwise acquired by the Company for any
consideration (or any moneys are paid to or made available for a sinking fund
for the redemption of any shares of any such stock). The Company shall not
permit any subsidiary of the Company to purchase or otherwise acquire for
consideration any shares of stock of the Company if under the preceding
sentence, the Company would be prohibited from purchasing or otherwise acquiring
such shares at such time and in such manner.
(iii) No dividend shall be paid or set aside for
holders of the Series C Preferred Stock for any Dividend Period unless full
dividends on any Preferred Stock that constitutes Senior Stock with respect to
dividends for that period have been or contemporaneously are declared and paid
(or declared and a sum sufficient for the payment thereof set apart for such
payment).
(c) Adjustment to Dividend Rate. If the dividends received deduction
---------------------------
contained in Section 243 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any comparable provision that may be adopted subsequently (the
"DRD"), should be reduced or eliminated, then, upon receipt by the Company of
one or more written requests signed by holders of record of at least 50% of the
outstanding shares of Series C Preferred Stock (a "Rate Adjustment Request"),
the Company shall, for Dividends Periods commencing on or after such Rate
Adjustment Request, adjust the Dividend Rate by multiplying such rate by a
fraction, the numerator of which is .895 and the denominator of which is [1 -
.35 (1 - DRDP)]. For purposes of the preceding formula, "DRDP" shall mean the
DRD percentage specified in Section 243(a)(1) of the Code, or any comparable
provision that may be adopted subsequently.
The Dividend Rate shall be adjusted only to take into account
reductions in the DRDP from the current 70 percent rate. In the case of any
particular dividend payment, no adjustment to the Dividend Rate shall be made to
the extent that such dividend payment is not made out of the "earnings and
profits" of the Company as determined under the Code. If, at the
-3-
<PAGE>
time of the payment of a particular dividend, it is reasonably uncertain whether
such dividend (or portion thereof) will be paid out of the earnings and profits
of the Company, such dividend (or portion thereof) shall be presumed not to be
paid out of earnings and profits and, accordingly, no adjustment to the Dividend
Rate shall be made. If, and to the extent that, such dividend is subsequently
determined to have been paid out of earnings and profits, the Company shall, on
the next Dividend Payment Date, increase the amount of the dividend payment to
take into account the adjustment to the Dividend Rate that would have been made
had the previous dividend (or portion thereof) been treated as having been paid
out of earnings and profits of the Company.
The objective of this provision 2(c) is, in the event of a
reduction of the DRDP, to provide to holders of the Preferred Stock with the
same amount of net dividends, on an after Federal tax basis, as would have been
received at the time of issuance of the Preferred Stock, taking into account the
highest Federal income tax rate applicable to corporations and the 70 percent
DRD prevailing at the time of issuance of the Preferred Stock. Accordingly, if
fundamental changes are made to the Federal income tax system (e.g., replacement
of the DRD with a dividends received credit), no adjustment to the Dividend Rate
shall be made if the dividends received by holders of the Preferred Stock, on an
after Federal tax basis, is not altered. All determinations required to be made
hereunder shall be made by the Board of Directors in its sole discretion.
3. Conversion at Option of the Company.
-----------------------------------
(a) General.
-------
(i) The shares of the Series C Preferred Stock shall not be
convertible at the option of the Company except (A) following receipt of a Rate
Adjustment Request (as contemplated by Section 2(c)) or (B) upon the later to
occur of (x) the date on which a written notice has been mailed or otherwise
distributed by the Company to each record holder of the Series C Preferred Stock
stating that the assets of either Chandler Trust No. 1 or Chandler Trust No. 2
have been distributed to the beneficiaries thereof and (y) February 1, 2025 (the
date of receipt of a Rate Adjustment Request or such later date being the
"Convertibility Date"). Subject to and upon compliance with the provisions of
this Section 3, shares of Series C Preferred Stock may be converted, in whole or
in part, at the election of the Company by resolution of the Board of Directors,
upon notice as provided in Section 3(b), at any time or from time to time on or
after the Convertibility Date. Conversion shall be made by delivering to the
holders of Series C Preferred Stock, in respect of the conversion of each share
of Series C Preferred Stock so converted, certificates representing the number
of fully paid and nonassessable shares (the "Conversion Shares") of common
stock, no par value per share, of the Company ("Common Stock") equal to the
quotient of (1) $500 plus accrued and unpaid dividends on such shares of Series
C Preferred Stock to the Conversion Date (as hereinafter defined) divided by (2)
the Common Share Value (as hereinafter defined). The aggregate number of shares
of Common Stock that a holder of shares of Series C Preferred Stock that have
been converted is entitled to receive pursuant to this Section 3 or Section 4 is
hereinafter referred to as the "Aggregate Conversion Shares."
-4-
<PAGE>
(ii) The "Common Share Value" shall mean the average of the
closing prices of the Common Stock for the 20 days during which trades of Common
Stock occurred immediately preceding the Valuation Date (as defined below), as
reported in The Wall Street Journal, or, if no closing prices were so reported,
the average of the mean between the high bid and low asked price per share of
Common Stock for each of the 20 days during which trades of Common Stock
occurred immediately preceding the Valuation Date in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use, or, if the Common
Stock is not then quoted by any such organization, the average of the mean
between the closing bid and asked prices per share of Common Stock for each of
the 20 days during which trades of Common Stock occurred immediately preceding
the Valuation Date, as furnished by a professional market maker making a market
in the Common Stock, or, if there is no such market maker, the fair market value
of a share of Common Stock determined by whatever method the Board of Directors
reasonably determines to use. In the case of a conversion pursuant to this
Section 3, the "Valuation Date" shall mean the Conversion Notice Date (as
defined in Section 3(b)), and in the case of any conversion pursuant to Section
4, the "Valuation Date" shall mean the Conversion Time (as hereinafter defined).
(b) Notice of Conversion. Notice of any conversion, setting forth (i)
--------------------
the Conversion Date, (ii) a statement that dividends on the shares of Series C
Preferred Stock to be converted will cease to accrue on such Conversion Date,
and (iii) the method(s) by which the holders may surrender the certificates
representing shares of Series C Preferred Stock that have been converted and
obtain the Conversion Shares therefor, shall be mailed, postage prepaid, on a
date (the "Conversion Notice Date") that is at least 15 days but not more than
45 days prior to said Conversion Date to each holder of record of the Series C
Preferred Stock to be converted at his, her or its address as the same shall
appear on the books of the Company. If less than all the shares of the Series C
Preferred Stock owned by such holder are then to be converted, the notice shall
specify the number of shares thereof that are to be converted and the numbers of
the certificates representing such shares.
(c) Method of Conversion. The surrender of any certificate evidencing
shares of Series C Preferred Stock that have been converted shall be made by the
holder thereof by the surrender of the certificate or certificates formerly
representing the shares of Series C Preferred Stock converted (with proper
endorsement or instruments of transfer) to the Company at the principal office
of the Company (or such other office or agency of the Company as the Company may
designate in writing to the holder or holders of the Series C Preferred Stock)
at any time during its usual business hours. Shares of Series C Preferred Stock
called for conversion shall be deemed to have been converted, and the shares of
Common Stock to be issued in respect of the shares of Series C Preferred Stock
converted shall be deemed to have been issued, as of the close of business on
the date fixed for conversion (the "Conversion Date"), without regard to when
certificates evidencing such Series C Preferred Stock are surrendered pursuant
to this Section 3(c) or certificates evidencing such Common Stock are issued
pursuant to Section 3(d). The rights of the holder of Series C Preferred Stock
that has been converted, except for the right to receive the Aggregate
Conversion Shares therefor in accordance herewith, shall cease on the Conversion
Date. In the case of lost or destroyed certificates evidencing ownership of
shares of Series C Preferred Stock that have been converted, the holder shall
submit proof of loss or destruction and such indemnity as shall be required by
the Company.
-5-
<PAGE>
(d) Issuance of Certificates for Common Stock. As soon as practicable
-----------------------------------------
after its receipt of any certificate or certificates formerly evidencing
ownership of shares of Series C Preferred Stock that have been converted, the
Company shall issue and shall deliver to the person for whose account such
certificates formerly representing shares of Series C Preferred Stock were so
surrendered, or on his, her or its written order, a certificate or certificates
for the number of full shares of Common Stock issuable upon the conversion of
such shares of Series C Preferred Stock and a check or cash payment (if any) to
which such holder is entitled with respect to fractional shares as determined by
the Company, in accordance with Section 3(e) hereof.
(e) Fractional Shares. No fractional shares or scrip representing
-----------------
fractional shares shall be issued upon the conversion of any shares of Series C
Preferred Stock, but the holder thereof will receive in cash an amount equal to
the value of such fractional share of Common Stock based on the Common Share
Value. If more than one share of Series C Preferred Stock shall be converted at
one time for the account of the same holder, the number of full shares issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of such shares so surrendered.
(f) Payment of Taxes. The Company shall pay any tax in respect of the
----------------
issuance of stock certificates on conversion of shares of Series C Preferred
Stock. The Company shall not, however, be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of
stock in any name other than that of the holder of the shares converted, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of any such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
(g) Common Stock Reserved for Conversion. The Company shall at all
------------------------------------
times from and after the Conversion Date reserve and keep available out of its
authorized and unissued Common Stock the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series C Preferred
Stock and shall take all such action as may be required from time to time in
order that it may validly and legally issue fully paid and non-assessable shares
of Common Stock upon conversion of the Series C Preferred Stock.
4. Conversion at the Option of Holders.
-----------------------------------
(a) General. After the later to occur of (i) the date on which a
-------
written notice has been mailed or otherwise distributed by the Company to each
record holder of the Series C Preferred Stock stating that the assets of either
Chandler Trust No. 1 or Chandler Trust No. 2 have been distributed to the
beneficiaries thereof and (ii) February 1, 2025, the holder of any Series C
Preferred Stock may convert pursuant to this Section 4 all or any part (in whole
number of shares only) of the Series C Preferred Stock held by such holder into
fully paid and non-assessable shares of Common Stock. The number of shares of
Common Stock into which a share of Series C Preferred Stock may be converted
shall be equal to the quotient of (1) $500 plus accrued and unpaid dividends on
such shares of Series C Preferred Stock to the Conversion Time divided by (2)
the Common Share Value.
-6-
<PAGE>
(b) Method of Conversion. Each conversion of Series C Preferred Stock
--------------------
shall be effected by the surrender of the certificate or certificates
representing the shares of Series C Preferred Stock to be converted (with proper
endorsement or instruments of transfer) to the Company at the principal office
of the Company (or such other office or agency of the Company as the Company may
designate in writing to the holder or holders of the Series C Preferred Stock)
at any time during its usual business hours, together with written notice by the
holder of such Series C Preferred Stock stating that such holder desires to
convert the shares of Series C Preferred Stock, or a stated number of such
shares, represented by such certificate or certificates, which notice shall also
specify the name or names (with addresses) and denominations in which the
certificate or certificates for the Common Stock shall be issued and shall
include instructions for delivery thereof. Any conversion pursuant to this
Section 4 shall be deemed to have been effected as of the close of business on
the date on which such certificate or certificates shall have been surrendered
and such notice shall have been received, and at such time (the "Conversion
Time") the rights of the holder of Series C Preferred Stock (or specified
portion thereof) as such holder shall cease and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock are to
be issued upon conversion shall be deemed to have become the holder or holders
of record of the shares of Common Stock represented thereby. In the case of lost
or destroyed certificates evidencing ownership of shares of Series C Preferred
Stock to be converted, the holder shall submit proof of loss or destruction and
such indemnity as shall be required by the Company.
(c) Issuance of Certificates for Common Stock. As soon as practicable
-----------------------------------------
after its receipt of any certificate or certificates evidencing ownership of
shares of Series C Preferred Stock to be converted pursuant to this Section 4,
the Company shall issue and shall deliver to the person for whose account such
shares of Series C Preferred Stock were so surrendered, or on his, her or its
written order, a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such shares of Series C Preferred
Stock and a check or cash payment (if any) to which such holder is entitled with
respect to fractional shares as determined by the Company, in accordance with
Section 4(d) hereof.
(d) Fractional Shares. No fractional shares or scrip representing
-----------------
fractional shares shall be issued upon the conversion of any shares of Series C
Preferred Stock, but the holder thereof will receive in cash an amount equal to
the value of such fractional share of Common Stock based on the Common Share
Value. If more than one share of Series C Preferred Stock shall be converted at
one time for the account of the same holder, the number of full shares issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of such shares so surrendered.
(e) Payment of Taxes. The Company shall pay any tax in respect of the
----------------
issuance of stock certificates on conversion of shares of Series C Preferred
Stock. The Company shall not, however, be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of
stock in any name other than that of the holder of the shares converted, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of any such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
-7-
<PAGE>
(f) Common Stock Reserved for Conversion. The Company shall at all
------------------------------------
times from and after the Conversion Time reserve and keep available out of its
authorized and unissued Common Stock the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series C Preferred
Stock and shall take all such action as may be required from time to time in
order that it may validly and legally issue fully paid and non-assessable shares
of Common Stock upon conversion of the Series C Preferred Stock.
5. Voting Rights.
-------------
(a) General Voting Rights. Except as expressly provided hereinafter in
---------------------
this Section 5, or as otherwise from time to time required by applicable law,
the Series C Preferred Stock shall have no voting rights.
(b) Voting Rights Upon Dividend Arrears.
-----------------------------------
(i) Right to Elect Directors. In the event that an amount equal
------------------------
to six quarterly dividend payments on the Series C Preferred Stock shall have
accrued and be unpaid (the occurrence of such contingency marking the beginning
of a period herein referred to as the "Default Period," which shall extend until
such time as all accrued and unpaid dividends for all previous Dividend Periods
and for the current Dividend Period on all shares of Series C Preferred Stock
then outstanding shall have been declared and paid or declared and a sum
sufficient for such full payment set apart for payment), the holders of the
Series C Preferred Stock shall have the right, voting separately as a class
together with holders of shares of any Parity Stock upon which like voting
rights have been conferred and are exercisable (such shares of Series C
Preferred Stock and shares of Parity Stock are hereinafter referred to as
"Voting Parity Stock"), to elect two members of the Board of Directors, each
member to be in addition to the then authorized number of directors, at the next
annual meeting of stockholders or at a special meeting called as described below
and thereafter until the Default Period shall have ended.
(ii) Special Meeting; Written Consent. Whenever such voting right
--------------------------------
shall vest, it may be exercised initially by the vote of the holders of a
plurality of the voting power of Series C Preferred Stock and Voting Parity
Stock present and voting as a single class, in person or by proxy, at a special
meeting of holders of the Series C Preferred Stock and Voting Parity Stock or at
the next annual meeting of stockholders. A special meeting for the exercise of
such right shall be called by the Secretary of the Company as promptly as
possible, and in any event within 10 days after receipt of a written request
signed by the holders of record of at least 25% of the outstanding shares of the
Series C Preferred Stock and Voting Parity Stock, subject to any applicable
notice requirements imposed by law or regulation. Notwithstanding the provisions
of this paragraph, no such special meeting shall be required to be held during
the 90-day period preceding the date fixed for the annual meeting of
stockholders. Any action required or permitted to be taken at any such meeting
of such holders may be taken by a consent or consents in writing of such
stockholders, setting forth the action so taken, which consent or consents shall
be signed by the holders of Series C Preferred Stock and Voting Parity Stock
representing a majority of the voting power of shares of such Series C Preferred
Stock and Voting Parity Stock and shall be delivered to the Company in the
manner set forth from time to time in the DGCL.
-8-
<PAGE>
(iii) Term of Office of Directors. Any director who shall have
---------------------------
been elected by holders of the Series C Preferred Stock and Voting Parity Stock
entitled to vote in accordance with this subparagraph (b) shall hold office for
a term expiring (subject to the earlier expiry of such term, as set forth below)
at the annual meeting of stockholders at which the term of office of his class
shall expire and during such term may be removed at any time, only for cause,
by, and only by, the affirmative vote of the holders of record of a majority of
the voting power of the Series C Preferred Stock and Voting Parity Stock present
and voting as a single class, in person or by proxy, at a special meeting of
such stockholders called for such purpose, and any vacancy created by such
removal may also be filled at such meeting. A meeting for the removal of a
director elected by the holders of the Series C Preferred Stock and Voting
Parity Stock and the filling of the vacancy created thereby shall be called by
the Secretary of the Company as promptly as possible and in any event within 10
days after receipt of a request therefor signed by the holders of not less than
25% of the aggregate outstanding voting power of the Series C Preferred Stock
and Voting Parity Stock, subject to any applicable notice requirements imposed
by law or regulation. Such meeting shall be held at the earliest practicable
date thereafter, provided that no such meeting shall be required to be held
during the 90-day period preceding the date fixed for the annual meeting of
stockholders. Simultaneously with the expiration of the Default Period, the
terms of office of all directors elected by the holders of the shares of Series
C Preferred Stock and the Voting Parity Stock pursuant hereto then in office
shall, without further action, thereupon terminate unless otherwise required by
law. Upon such termination the number of directors constituting the Board of
Directors of the Company shall, without further action, be reduced by two,
subject always to the increase of the number of directors pursuant to the
foregoing provisions in the case of the future right of holders of the shares of
Series C Preferred Stock and Voting Parity Stock to elect directors as provided
above.
(iv) Vacancies. Any vacancy caused by the death, resignation or
---------
removal of a director who shall have been elected in accordance with this
subparagraph (b) may be filled by the remaining director so elected or, if not
so filled, by a vote of holders of a plurality of the voting power of the Series
C Preferred Stock and Voting Parity Stock present and voting as a single class,
in person or by proxy, at a meeting called for such purpose. Unless such vacancy
shall have been filled by the remaining director as aforesaid, such meeting
shall be called by the Secretary of the Company at the earliest practicable date
after such death or resignation, and in any event within 10 days after receipt
of a written request signed by the holders of record of at least 25% of the
outstanding shares of the Series C Preferred Stock and Voting Parity Stock,
subject to any applicable notice requirements imposed by law or regulation.
Notwithstanding the provisions of this paragraph, no such special meeting shall
be required to be held during the 90-day period preceding the date fixed for the
annual meeting of stockholders.
(v) Stockholders' Right to Call Meeting. If any meeting of the
-----------------------------------
holders of the Series C Preferred Stock and Voting Parity Stock required by this
subparagraph (b) to be called shall not have been called within 30 days after
personal service of a written request therefor upon the Secretary of the Company
or within 30 days after mailing the same within the United States of America by
registered mail addressed to the Secretary of the Company at its principal
executive offices, subject to any applicable notice requirements imposed by law
or regulation, then the holders of record of at least 25% of the outstanding
shares of the Series C Preferred Stock and Voting Parity Stock may designate in
writing one of their number to call such meeting at the expense of the Company,
and such meeting may be called by
-9-
<PAGE>
such person so designated upon the notice required for annual meetings of
stockholders or such shorter notice (but in no event shorter than permitted by
law or regulation) as may be acceptable to the holders of a majority of the
total voting power of the Series C Preferred Stock and Voting Parity Stock. Any
holder of Series C Preferred Stock and Voting Parity Stock so designated shall
have access to the Series C Preferred Stock and Voting Parity Stock books of the
Company for the purpose of causing such meeting to be called pursuant to these
provisions.
(vi) Quorum. At any meeting of the holders of the Series C
------
Preferred Stock called in accordance with the provisions of this subparagraph
(b) for the election or removal of directors, the presence in person or by proxy
of the holders of a majority of the total voting power of the Series C Preferred
Stock and Voting Parity Stock shall be required to constitute a quorum; in the
absence of a quorum, the holders of a majority of the total number of votes
present in person or by proxy shall have power to adjourn the meeting from time
to time without notice other than an announcement at a meeting, until a quorum
shall be present.
(c) Voting Rights on Extraordinary Matters.
--------------------------------------
(i) So long as any shares of Series C Preferred Stock shall be
outstanding, the holders of the Series C Preferred Stock shall have the right,
voting separately as a class together with holders of shares of any Voting
Parity Stock (with two-thirds of the voting power of such stock at the time
outstanding given in person or by proxy at a meeting at which the holders of
such shares shall be entitled to vote separately as a class, or by a consent or
consents in writing setting forth such approval, which consent shall be
delivered to the Company in the manner set forth from time to time in the DGCL,
required for approval by such holders), to vote on: (i) the liquidation or
dissolution of the Company; (ii) any proposal to authorize, create or issue, or
increase the authorized or issued amount of, any class or series of capital
stock ranking pari passu with, or prior to, the shares of the Series C Preferred
Stock in powers, rights or preferences upon the liquidation, dissolution or
winding up of affairs of the Company or as to dividends; and (iii) any proposal
to amend by merger, amendment or otherwise (or otherwise alter or repeal) the
Certificate of Incorporation (or this resolution) if such amendment, alteration
or repeal would increase or decrease the aggregate number of authorized shares
of Series C Preferred Stock or any Voting Parity Stock, increase or decrease the
par value of the shares of Series C Preferred Stock or any Voting Parity Stock,
or alter or change the powers, preferences, or special rights of the shares of
Series C Preferred Stock or any Voting Parity Stock so as to affect them
adversely. An amendment that increases the number of authorized shares of any
class or series of Preferred Stock or authorizes the creation or issuance of
other classes or series of Preferred Stock, in each case ranking junior to the
Series C Preferred Stock with respect to the payment of dividends and
distribution of assets upon liquidation, dissolution or winding up shall not be
considered to be such an adverse change.
(ii) So long as any shares of Series C Preferred Stock shall be
outstanding and unless the consent or approval of a greater number of shares
shall then be required by applicable law, without first obtaining the approval
of the holders of at least two-thirds of the voting power of the Series C
Preferred Stock at the time outstanding (voting separately as a class together
with the holders of shares of Voting Parity Stock) giving in person or by proxy
at a meeting at which the holders of such shares shall be entitled to vote
separately as a class (or by a consent or consents in writing setting forth such
approval, which consent shall
-10-
<PAGE>
be delivered to the Company in the manner set forth from time to time in the
DGCL), the Company shall not either directly or indirectly or through merger or
consolidation with any other entity, (i) authorize, create or issue, or increase
the authorized or issued amount of, any class or series of capital stock that
would place or have the effect of placing restrictions on the obligation of the
Company to pay dividends to the holders of Series C Preferred Stock or to
perform any of its obligations to the holders of Series C Preferred Stock at any
time; or (ii) authorize, enter into or permit to exist any covenant or agreement
that would place or have the effect of placing restrictions on the obligations
of the Company to pay dividends to holders of Series C Preferred Stock or to
perform any of its other obligations to the holders of Series C Preferred Stock
at any time; provided, however, that notwithstanding the foregoing, the Company
may from time to time enter into credit agreements and indentures that provide
for limitations on the ability of the Company to pay dividends on its capital
stock generally, so long as the Board of Directors determines, in its sole
discretion, that such limitation is necessary in order to obtain financing on
commercially reasonable terms.
(d) One Vote Per Share. In connection with any matter on which holders
------------------
of the Series C Preferred Stock are entitled to vote as provided in
subparagraphs (b) and (c) above, or any other matter on which the holders of the
Series C Preferred Stock are entitled to vote as one class or otherwise pursuant
to applicable law or the provisions of the Certificate of Incorporation, each
holder of Series C Preferred Stock shall be entitled to one vote for each share
of Series C Preferred Stock held by such holder.
6. No Sinking Fund. No sinking fund will be established for the
---------------
retirement or redemption of shares of Series C Preferred Stock.
7. Liquidation Rights; Priority.
----------------------------
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or involuntary, after payment or
provision for payment of the debts and other liabilities of the Company, the
holders of shares of the Series C Preferred Stock shall be entitled to receive,
out of the assets of the Company, whether such assets are capital or surplus and
whether or not any dividends as such are declared, $500 per share plus an amount
equal to all accrued and unpaid dividends for the then-current plus all prior
Dividend Periods, and no more, before any distribution shall be made to the
holders of the Common Stock or any other class of stock or series thereof
ranking junior to the Series C Preferred Stock with respect to the distribution
of assets upon liquidation, dissolution or winding up of the Company. Unless
specifically designated as junior or senior to the Series C Preferred Stock with
respect to the liquidation, dissolution or winding up of the affairs of the
Company or as to dividends, all other series or classes of Preferred Stock of
the Company shall rank on a parity with the Series C Preferred Stock with
respect to the distribution of assets.
(b) Nothing contained in this Section 7 shall be deemed to prevent
conversion of shares of the Series C Preferred Stock by the Company in the
manner provided in Section 3. Neither the merger nor consolidation of the
Company into or with any other entity, nor the merger or consolidation of any
other entity into or with the Company, nor a sale, transfer or lease of all or
any part of the assets of the Company, shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this Section 7.
-11-
<PAGE>
(c) Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, stating a payment date
and the place where the distributable amounts shall be payable, shall be given
by mail, postage prepaid, no less than 30 days prior to the payment date stated
therein, to the holders of record of the Series C Preferred Stock at their
respective addresses as the same shall appear on the books of the Company.
(d) If the amounts available for distribution with respect to the
Series C Preferred Stock and all other outstanding stock of the Company ranking
on a parity with the Series C Preferred Stock upon liquidation, dissolution or
winding up are not sufficient to satisfy the full liquidation rights of all the
outstanding Series C Preferred Stock and stock ranking on a parity therewith,
then the holders of each series of such stock will share ratably in any such
distribution of assets in proportion to the full respective preferential amount
(which in the case of the Series C Preferred Stock shall mean the amounts
specified in Section 7(a) and in the case of any other series of preferred stock
may include accumulated dividends if contemplated by such series) to which they
are entitled.
8. Status of Shares Converted. Shares of Series C Preferred Stock
--------------------------
converted or purchased or otherwise acquired for value by the Company, shall,
after such event, have the status of authorized and unissued shares of Preferred
Stock without designation and may be reissued by the Company at any time as
shares of any series of Preferred Stock.
-12-
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Company by its Chairman of the Board and attested by its Secretary this
___ day of ___, 2000.
____________________________
John W. Madigan
Chairman, President and
Chief Executive Officer
Attest:
_______________________________
Crane H. Kenney
Vice President, General Counsel
and Secretary
-13-
<PAGE>
EXHIBIT 3.1c
CERTIFICATE OF DESIGNATION
OF THE
PREFERRED STOCK, SERIES D-1
(PAR VALUE $1.00 PER SHARE)
OF
TRIBUNE COMPANY
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
The undersigned duly authorized officer of Tribune Company, a
corporation organized and existing under the General Corporation Law (the
"DGCL") of the State of Delaware (the "Company"), in accordance with the
provisions of Section 103 thereof, and pursuant to Section 151 thereof, DOES
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the Company, the Board
of Directors of the Company (the "Board" or "Board of Directors") on ____, 2000
adopted the following resolution creating 380,972 shares of Preferred Stock,
Series D-1 (in addition to the shares of Preferred Stock, Series D-2, which were
also created on such date), par value $1.00 per share, each designated as set
forth below:
RESOLVED, that pursuant to the authority expressly granted to
and vested in the Board of Directors by provisions of the Restated Certificate
of Incorporation of the Company (the "Certificate of Incorporation"), and the
DGCL, the issuance of a series of the Company's preferred stock, par value $1.00
per share (the "Preferred Stock"), which shall consist of 380,972 shares of
Preferred Stock be, and the same hereby is, authorized, and the Board of
Directors hereby fixes the powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions, of the shares of such series (in addition to the
powers, designations, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions, set forth
in the Certificate of Incorporation that may be applicable to the Preferred
Stock) as follows:
1. Designation and Rank. The designation of such series of the
--------------------
Preferred Stock authorized by this resolution shall be the Preferred Stock,
Series D-1 (the "Series D-1 Preferred Stock"). The number of shares of Series
D-1 Preferred Stock shall be 380,972. The Series D-1 Preferred Stock shall rank
prior to the Common Stock (as hereinafter defined) of the Company and to all
other classes and series of equity securities of the Company now or hereafter
<PAGE>
authorized, issued or outstanding (the Common Stock and such other classes and
series of equity securities not expressly designated as ranking on a parity with
or senior to the Series D-1 Preferred Stock collectively may be referred to
herein as the "Junior Stock") as to dividend rights and rights upon liquidation,
winding up or dissolution of the Company, other than (a) the Company's (i) 8%
Cumulative Convertible Preferred Stock, Series C (the "Series C Preferred
Stock") and (ii) Series D-2 Preferred Stock (the "Series D-2 Preferred Stock"),
with respect to which the Series D-1 Preferred Stock is expressly designated as
ranking on a parity as to dividend rights and rights upon liquidation, winding
up or dissolution of the Company; and (b) any other classes or series of equity
securities of the Company expressly designated as ranking on a parity with
(collectively with the Series C Preferred Stock and the Series D-2 Preferred
Stock, the "Parity Stock") or senior to (the "Senior Stock") the Series D-1
Preferred Stock as to dividend rights and rights upon liquidation, winding up or
dissolution of the Company. The Series D-1 Preferred Stock shall be subject to
creation of Senior Stock, Parity Stock and Junior Stock, to the extent not
expressly prohibited by the Certificate of Incorporation or Section 5(c)(i) or
5(c)(ii) hereof, with respect to the payment of dividends and upon liquidation.
2. Cumulative Dividends; Priority.
------------------------------
(a) Payment of Dividends.
--------------------
(i) The holders of record of shares of Series D-1
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available therefor, cumulative cash
dividends from the date of issuance of such shares at the rate per annum per
share of 5.8% (i.e., $29 per annum) (the "Dividend Rate"), as adjusted from time
to time pursuant to Section 2(c) hereof. Dividends shall be payable quarterly on
the tenth day of March, June, September and December in each year (or if such
day is a non-business day, on the next business day) with respect to the quarter
ending on the last day of such month, commencing on June 10, 2000 (each of such
dates a "Dividend Payment Date"). No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on the
Series D-1 Preferred Stock that may be in arrears. Notwithstanding the
foregoing, for purposes of calculating the dividend to be paid with respect to
the period (the "Initial Dividend Period") from the date of issuance of such
shares through June 30, 2000 (payable on June 10, 2000), it shall be assumed
that the Series D-1 Preferred Stock were issued on April 1, 2000.
(ii) Each declared dividend shall be payable to
holders of record as they appear on the stock books of the Company at the close
of business on such record dates, not more than 60 calendar days preceding the
applicable Dividend Payment Dates therefor, as are determined by the Board of
Directors (each of such dates a "Record Date"). Quarterly dividend periods (each
a "Dividend Period") shall commence on and include the first day of January,
April, July, and October of each year and shall end on and include the last day
of March, June, September and December, respectively of such year. Dividends on
the shares of Series D-1 Preferred Stock shall be fully cumulative and shall
accrue (whether or not declared) from the first day of each Dividend Period;
provided, however, that the amount of any dividend payable for any Dividend
Period shorter than a full Dividend Period (other than the Initial Dividend
Period, which shall be calculated as set forth in Section 2(a)(i) hereof), shall
be computed on the
2
<PAGE>
basis of a 360-day year composed of twelve 30-day months and the actual number
of days elapsed in the relevant Dividend Period.
(b) Priority as to Dividends.
------------------------
(i) Subject to the provisions hereof, no cash
dividend or other distribution (other than in Common Stock or other Junior
Stock) shall be declared or paid or set apart for payment on Preferred Stock
that constitutes Parity Stock or Junior Stock with respect to dividends for any
Dividend Period unless full dividends on the Series D-1 Preferred Stock for the
immediately preceding Dividend Period have been or contemporaneously are
declared and paid (or declared and a sum sufficient for the payment thereof set
apart for such payment). When dividends are not paid in full (or declared and a
sum sufficient for such full payment not so set apart) upon the Series D-1
Preferred Stock and any Parity Stock, all dividends declared upon shares of
Series D-1 Preferred Stock and any Parity Stock shall be declared pro rata with
respect thereto, so that in all cases the amount of dividends declared per share
on the Series D-1 Preferred Stock and such Parity Stock shall bear to each other
the same ratio that accrued dividends for the then-current Dividend Period per
share on the shares of Series D-1 Preferred Stock (which shall include any
accumulation in respect of unpaid dividends for prior Dividend Periods) and
dividends, including accumulations, if any, of such Parity Stock, bear to each
other.
(ii) Except as provided in the preceding paragraph,
full dividends on the Series D-1 Preferred Stock must be declared and paid or
set apart for payment for the immediately preceding Dividend Period before (A)
any cash dividend or other distribution (other than in Common Stock or other
Junior Stock) shall be declared or paid or set aside for payment upon the Common
Stock or any other Junior Stock of the Company or (B) any Common Stock or any
other Junior Stock is redeemed, purchased or otherwise acquired by the Company
for any consideration (or any moneys are paid to or made available for a sinking
fund for the redemption of any shares of any such stock), except by redemption
into or exchange for Junior Stock or (C) any Series D-1 Preferred Stock or
Parity Stock is redeemed, purchased or otherwise acquired by the Company for any
consideration (or any moneys are paid to or made available for a sinking fund
for the redemption of any shares of any such stock). The Company shall not
permit any subsidiary of the Company to purchase or otherwise acquire for
consideration any shares of stock of the Company if under the preceding
sentence, the Company would be prohibited from purchasing or otherwise acquiring
such shares at such time and in such manner.
(iii) No dividend shall be paid or set aside for
holders of the Series D-1 Preferred Stock for any Dividend Period unless full
dividends on any Preferred Stock that constitutes Senior Stock with respect to
dividends for that period have been or contemporaneously are declared and paid
(or declared and a sum sufficient for the payment thereof set apart for such
payment).
(c) Adjustment to Dividend Rate.
---------------------------
(i) The Dividend Rate shall not be adjusted prior
to the end of the Dividend Period ending on December 31, 2001.
3
<PAGE>
(ii) The Dividend Rate for each subsequent year
(commencing with the year that begins on January 1, 2002) shall be adjusted
upward in accordance with Schedule A attached hereto.
----------
(iii) Increases in the Dividend Rate are subject
to the following limitation: the Dividend Rate shall, under no circumstances,
exceed 8.4% per annum.
3. Conversion at Option of the Company.
-----------------------------------
(a) General.
-------
(i) The shares of the Series D-1 Preferred Stock
shall not be convertible at the option of the Company except upon the later to
occur of (x) the date on which a written notice has been mailed or otherwise
distributed by the Company to each record holder of the Series D-1 Preferred
Stock stating that the assets of either Chandler Trust No. 1 or Chandler Trust
No. 2 have been distributed to the beneficiaries thereof and (y) February 1,
2025 (such later date being the "Convertibility Date"). Subject to and upon
compliance with the provisions of this Section 3, shares of Series D-1 Preferred
Stock may be converted, in whole or in part, at the election of the Company by
resolution of the Board of Directors, upon notice as provided in Section 3(b),
at any time or from time to time on or after the Convertibility Date. Conversion
shall be made by delivering to the holders of Series D-1 Preferred Stock, in
respect of the conversion of each share of Series D-1 Preferred Stock so
converted, certificates representing the number of fully paid and non-assessable
shares (the "Conversion Shares") of common stock, no par value per share, of the
Company ("Common Stock") equal to the quotient of (1) $500 plus accrued and
unpaid dividends on such shares of Series D-1 Preferred Stock to the Conversion
Date (as hereinafter defined) divided by (2) the Common Share Value (as
hereinafter defined). The aggregate number of shares of Common Stock that a
holder of shares of Series D-1 Preferred Stock that have been converted is
entitled to receive pursuant to this Section 3 or Section 4 is hereinafter
referred to as the "Aggregate Conversion Shares."
(ii) The "Common Share Value" shall mean the
average of the closing prices of the Common Stock for the 20 days during which
trades of Common Stock occurred immediately preceding the Valuation Date (as
defined below), as reported in The Wall Street Journal, Western Edition, or, if
no closing prices were so reported, the average of the mean between the high bid
and low asked price per share of Common Stock for each of the 20 days during
which trades of Common Stock occurred immediately preceding the Valuation Date
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other system then in
use, or, if the Common Stock is not then quoted by any such organization, the
average of the mean between the closing bid and asked prices per share of Common
Stock for each of the 20 days during which trades of Common Stock occurred
immediately preceding the Valuation Date, as furnished by a professional market
maker making a market in the Common Stock, or, if there is no such market maker,
the fair market value of a share of Common Stock determined by whatever method
the Board of Directors reasonably determines to use. In the case of a conversion
pursuant to this Section 3, the "Valuation Date" shall mean the Conversion
Notice Date (as defined in Section 3(b)), and in the case of any conversion
pursuant to Section 4, the "Valuation Date" shall mean the Conversion Time (as
hereinafter defined).
4
<PAGE>
(b) Notice of Conversion. Notice of any conversion,
--------------------
setting forth (i) the Conversion Date (as defined in Section 3(c) hereof), (ii)
a statement that dividends on the shares of Series D-1 Preferred Stock to be
converted will cease to accrue on such Conversion Date, and (iii) the method(s)
by which the holders may surrender the certificates representing shares of
Series D-1 Preferred Stock that have been converted and obtain the Conversion
Shares therefor, shall be mailed, postage prepaid, on a date (the "Conversion
Notice Date") that is at least 15 days but not more than 45 days prior to said
Conversion Date to each holder of record of the Series D-1 Preferred Stock to be
converted at his, her or its address as the same shall appear on the books of
the Company. If less than all the shares of the Series D-1 Preferred Stock owned
by such holder are then to be converted, the notice shall specify the number of
shares thereof that are to be converted and the numbers of the certificates
representing such shares.
(c) Method of Conversion. The surrender of any
--------------------
certificate evidencing shares of Series D-1 Preferred Stock that have been
converted shall be made by the holder thereof by the surrender of the
certificate or certificates formerly representing the shares of Series D-1
Preferred Stock converted (with proper endorsement or instruments of transfer)
to the Company at the principal office of the Company (or such other office or
agency of the Company as the Company may designate in writing to the holder or
holders of the Series D-1 Preferred Stock) at any time during its usual business
hours. Shares of Series D-1 Preferred Stock called for conversion shall be
deemed to have been converted, and the shares of Common Stock to be issued in
respect of the shares of Series D-1 Preferred Stock converted shall be deemed to
have been issued, as of the close of business on the date fixed for conversion
(the "Conversion Date"), without regard to when certificates evidencing such
Series D-1 Preferred Stock are surrendered pursuant to this Section 3(c) or
certificates evidencing such Common Stock are issued pursuant to Section 3(d).
The rights of the holder of Series D-1 Preferred Stock that has been converted,
except for the right to receive the Aggregate Conversion Shares therefor in
accordance herewith (and any cash payments to which such holder is entitled
pursuant to Section 3(e) hereof), shall cease on the Conversion Date. In the
case of lost or destroyed certificates evidencing ownership of shares of Series
D-1 Preferred Stock that have been converted, the holder shall submit proof of
loss or destruction and such indemnity as shall be required by the Company.
(d) Issuance of Certificates for Common Stock. As
-----------------------------------------
soon as practicable after its receipt of any certificate or certificates
formerly evidencing ownership of shares of Series D-1 Preferred Stock that have
been converted, the Company shall issue and shall deliver to the person for
whose account such certificates formerly representing shares of Series D-1
Preferred Stock were so surrendered, or on his, her or its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares of Series D-1 Preferred Stock and a
check or cash payment (if any) to which such holder is entitled with respect to
fractional shares as determined by the Company, in accordance with Section 3(e)
hereof.
(e) Fractional Shares. No fractional shares or scrip
-----------------
representing fractional shares shall be issued upon the conversion of any shares
of Series D-1 Preferred Stock, but the holder thereof will receive in cash an
amount equal to the value of such fractional share of Common Stock based on the
Common Share Value. If more than one share of Series D-1 Preferred Stock shall
be converted at one time for the account of the same holder, the number of
5
<PAGE>
full shares issuable upon conversion thereof shall be computed on the basis of
the aggregate number of such shares so surrendered.
(f) Payment of Taxes. The Company shall pay any tax
----------------
in respect of the issuance of stock certificates on conversion of shares of
Series D-1 Preferred Stock. The Company shall not, however, be required to pay
any tax that may be payable in respect of any transfer involved in the issuance
and delivery of stock in any name other than that of the holder of the shares
converted, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of any such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
(g) Common Stock Reserved for Conversion. The
------------------------------------
Company shall at all times from and after the Conversion Date reserve and keep
available out of its authorized and unissued Common Stock the full number of
shares of Common Stock deliverable upon the conversion of all outstanding shares
of Series D-1 Preferred Stock and shall take all such action as may be required
from time to time in order that it may validly and legally issue fully paid and
nonassessable shares of Common Stock upon conversion of the Series D-1 Preferred
Stock.
4. Conversion at the Option of Holders.
-----------------------------------
(a) General. After the later to occur of (i) the
-------
date on which a written notice has been mailed or otherwise distributed by the
Company to each record holder of the Series D-1 Preferred Stock stating that the
assets of either Chandler Trust No. 1 or Chandler Trust No. 2 have been
distributed to the beneficiaries thereof and (ii) February 1, 2025, the holder
of any Series D-1 Preferred Stock may convert pursuant to this Section 4 all or
any part (in whole number of shares only) of the Series D-1 Preferred Stock held
by such holder into fully paid and nonassessable shares of Common Stock. The
number of shares of Common Stock into which a share of Series D-1 Preferred
Stock may be converted shall be equal to the quotient of (1) $500 plus accrued
and unpaid dividends on such shares of Series D-1 Preferred Stock to the
Conversion Time divided by (2) the Common Share Value.
(b) Method of Conversion. Each conversion of Series
--------------------
D-1 Preferred Stock shall be effected by the surrender of the certificate or
certificates representing the shares of Series D-1 Preferred Stock to be
converted (with proper endorsement or instruments of transfer) to the Company at
the principal office of the Company (or such other office or agency of the
Company as the Company may designate in writing to the holder or holders of the
Series D-1 Preferred Stock) at any time during its usual business hours,
together with written notice by the holder of such Series D-1 Preferred Stock
stating that such holder desires to convert the shares of Series D-1 Preferred
Stock, or a stated number of such shares, represented by such certificate or
certificates, which notice shall also specify the name or names (with addresses)
and denominations in which the certificate or certificates for the Common Stock
shall be issued and shall include instructions for delivery thereof. Any
conversion pursuant to this Section 4 shall be deemed to have been effected as
of the close of business on the date on which such certificate or certificates
shall have been surrendered and such notice shall have been received, and at
such time (the "Conversion Time") the rights of the holder of Series D-1
Preferred Stock (or specified portion thereof) as such holder shall cease and
the person or persons in whose name or names
6
<PAGE>
any certificate or certificates for shares of Common Stock are to be issued upon
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby. In the case of lost or destroyed
certificates evidencing ownership of shares of Series D-1 Preferred Stock to be
converted, the holder shall submit proof of loss or destruction and such
indemnity as shall be required by the Company.
(c) Issuance of Certificates for Common Stock. As
-----------------------------------------
soon as practicable after its receipt of any certificate or certificates
evidencing ownership of shares of Series D-1 Preferred Stock to be converted
pursuant to this Section 4, the Company shall issue and shall deliver to the
person for whose account such shares of Series D-1 Preferred Stock were so
surrendered, or on his, her or its written order, a certificate or certificates
for the number of full shares of Common Stock issuable upon the conversion of
such shares of Series D-1 Preferred Stock and a check or cash payment (if any)
to which such holder is entitled with respect to fractional shares as determined
by the Company, in accordance with Section 4(d) hereof.
(d) Fractional Shares. No fractional shares or scrip
-----------------
representing fractional shares shall be issued upon the conversion of any shares
of Series D-1 Preferred Stock, but the holder thereof will receive in cash an
amount equal to the value of such fractional share of Common Stock based on the
Common Share Value. If more than one share of Series D-1 Preferred Stock shall
be converted at one time for the account of the same holder, the number of full
shares issuable upon conversion thereof shall be computed on the basis of the
aggregate number of such shares so surrendered.
(e) Payment of Taxes. The Company shall pay any tax
----------------
in respect of the issuance of stock certificates on conversion of shares of
Series D-1 Preferred Stock. The Company shall not, however, be required to pay
any tax that may be payable in respect of any transfer involved in the issuance
and delivery of stock in any name other than that of the holder of the shares
converted, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of any such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
(f) Common Stock Reserved for Conversion. The
------------------------------------
Company shall at all times from and after the Conversion Time reserve and keep
available out of its authorized and unissued Common Stock the full number of
shares of Common Stock deliverable upon the conversion of all outstanding shares
of Series D-1 Preferred Stock and shall take all such action as may be required
from time to time in order that it may validly and legally issue fully paid and
nonassessable shares of Common Stock upon conversion of the Series D-1 Preferred
Stock.
5. Voting Rights.
-------------
(a) General Voting Rights. Except as expressly
---------------------
provided hereinafter in this Section 5, or as otherwise from time to time
required by applicable law, the Series D-1 Preferred Stock shall have no voting
rights.
7
<PAGE>
(b) Voting Rights Upon Dividend Arrears.
-----------------------------------
(i) Right to Elect Directors. In the event
------------------------
that an amount equal to six quarterly dividend payments on the Series D-1
Preferred Stock shall have accrued and be unpaid (the occurrence of such
contingency marking the beginning of a period herein referred to as the "Default
Period," which shall extend until such time as all accrued and unpaid dividends
for all previous Dividend Periods and for the current Dividend Period on all
shares of Series D-1 Preferred Stock then outstanding shall have been declared
and paid or declared and a sum sufficient for such full payment set apart for
payment), the holders of the Series D-1 Preferred Stock shall have the right,
voting separately as a class together with holders of shares of the Series D-2
Preferred Stock and any other Parity Stock upon which like voting rights have
been conferred and are exercisable (such shares of Series D-1 Preferred Stock,
shares of Series D-2 Preferred Stock, and other shares of Parity Stock are
hereinafter referred to as "Voting Parity Stock"), to elect two members of the
Board of Directors, each member to be in addition to the then authorized number
of directors, at the next annual meeting of stockholders or at a special meeting
called as described below and thereafter until the Default Period shall have
ended.
(ii) Special Meeting; Written Consent.
--------------------------------
Whenever such voting right shall vest, it may be exercised initially by the vote
of the holders of a plurality of the voting power of Series D-1 Preferred Stock
and Voting Parity Stock present and voting as a single class, in person or by
proxy, at a special meeting of holders of the Series D-1 Preferred Stock and
Voting Parity Stock or at the next annual meeting of stockholders. A special
meeting for the exercise of such right shall be called by the Secretary of the
Company as promptly as possible, and in any event within 10 days after receipt
of a written request signed by the holders of record of at least 25% of the
outstanding shares of the Series D-1 Preferred Stock and Voting Parity Stock,
subject to any applicable notice requirements imposed by law or regulation.
Notwithstanding the provisions of this paragraph, no such special meeting shall
be required to be held during the 90-day period preceding the date fixed for the
annual meeting of stockholders. Any action required or permitted to be taken at
any such special meeting of such holders may be taken by a consent or consents
in writing of such stockholders, setting forth the action so taken, which
consent or consents shall be signed by the holders of Series D-1 Preferred Stock
and Voting Parity Stock representing a majority of the voting power of shares of
such Series D-1 Preferred Stock and Voting Parity Stock and shall be delivered
to the Company in the manner set forth from time to time in the DGCL.
(iii) Term of Office of Directors. Any
---------------------------
director who shall have been elected by holders of the Series D-1 Preferred
Stock and Voting Parity Stock entitled to vote in accordance with this
subparagraph (b) shall hold office for a term expiring (subject to the earlier
expiry of such term, as set forth below) at the annual meeting of stockholders
at which the term of office of his class shall expire and during such term may
be removed at any time, only for cause, by, and only by, the affirmative vote of
the holders of record of a majority of the voting power of the Series D-1
Preferred Stock and Voting Parity Stock present and voting as a single class, in
person or by proxy, at a special meeting of such stockholders called for such
purpose, and any vacancy created by such removal may also be filled at such
meeting. A meeting for the removal of a director elected by the holders of the
Series D-1 Preferred Stock
8
<PAGE>
and Voting Parity Stock and the filling of the vacancy created thereby shall be
called by the Secretary of the Company as promptly as possible and in any event
within 10 days after receipt of a request therefor signed by the holders of not
less than 25% of the aggregate outstanding voting power of the Series D-1
Preferred Stock and Voting Parity Stock, subject to any applicable notice
requirements imposed by law or regulation. Such meeting shall be held at the
earliest practicable date thereafter, provided that no such meeting shall be
required to be held during the 90-day period preceding the date fixed for the
annual meeting of stockholders. Simultaneously with the expiration of the
Default Period, the terms of office of all directors elected by the holders of
the shares of Series D-1 Preferred Stock and the Voting Parity Stock pursuant
hereto then in office shall, without further action, thereupon terminate unless
otherwise required by law. Upon such termination the number of directors
constituting the Board of Directors of the Company shall, without further
action, be reduced by two, subject always to the increase of the number of
directors pursuant to the foregoing provisions in the case of the future right
of holders of the shares of Series D-1 Preferred Stock and Voting Parity Stock
to elect directors as provided above.
(iv) Vacancies. Any vacancy caused by the
---------
death, resignation or removal of a director who shall have been elected in
accordance with this subparagraph (b) may be filled by the remaining director so
elected or, if not so filled, by a vote of holders of a plurality of the voting
power of the Series D-1 Preferred Stock and Voting Parity Stock present and
voting as a single class, in person or by proxy, at a meeting called for such
purpose. Unless such vacancy shall have been filled by the remaining director as
aforesaid, such meeting shall be called by the Secretary of the Company at the
earliest practicable date after such death or resignation, and in any event
within 10 days after receipt of a written request signed by the holders of
record of at least 25% of the outstanding shares of the Series D-1 Preferred
Stock and Voting Parity Stock, subject to any applicable notice requirements
imposed by law or regulation. Notwithstanding the provisions of this paragraph,
no such special meeting shall be required to be held during the 90-day period
preceding the date fixed for the annual meeting of stockholders.
(v) Stockholders' Right to Call Meeting.
-----------------------------------
If any meeting of the holders of the Series D-1 Preferred Stock and Voting
Parity Stock required by this subparagraph (b) to be called shall not have been
called within 30 days after personal service of a written request therefor upon
the Secretary of the Company or within 30 days after mailing the same within the
United States of America by registered mail addressed to the Secretary of the
Company at its principal executive offices, subject to any applicable notice
requirements imposed by law or regulation, then the holders of record of at
least 25% of the outstanding shares of the Series D-1 Preferred Stock and Voting
Parity Stock may designate in writing one of their number to call such meeting
at the expense of the Company, and such meeting may be called by such person so
designated upon the notice required for annual meetings of stockholders or such
shorter notice (but in no event shorter than permitted by law or regulation) as
may be acceptable to the holders of a majority of the total voting power of the
Series D-1 Preferred Stock and Voting Parity Stock. Any holder of Series D-1
Preferred Stock and Voting Parity Stock so designated shall have access to the
Series D-1 Preferred Stock and Voting Parity Stock books of the Company for the
purpose of causing such meeting to be called pursuant to these provisions.
(vi) Quorum. At any meeting of the holders
------
of the Series D-1 Preferred Stock called in accordance with the provisions of
this subparagraph (b) for the election
9
<PAGE>
or removal of directors, the presence in person or by proxy of the holders of a
majority of the total voting power of the Series D-1 Preferred Stock and Voting
Parity Stock shall be required to constitute a quorum; in the absence of a
quorum, the holders of a majority of the total number of votes present in person
or by proxy shall have power to adjourn the meeting from time to time without
notice other than an announcement at the meeting, until a quorum shall be
present.
(c) Voting Rights on Extraordinary Matters.
--------------------------------------
(i) So long as any shares of Series D-1
Preferred Stock shall be outstanding, the holders of the Series D-1 Preferred
Stock shall have the right, voting separately as a class together with holders
of shares of any Voting Parity Stock (with two-thirds of the voting power of
such stock at the time outstanding given in person or by proxy at a meeting at
which the holders of such shares shall be entitled to vote separately as a
class, or by a consent or consents in writing setting forth such approval, which
consent shall be delivered to the Company in the manner set forth from time to
time in the DGCL, required for approval by such holders), to vote on: (i) the
liquidation or dissolution of the Company; (ii) any proposal to authorize,
create or issue, or increase the authorized or issued amount of, any class or
series of capital stock ranking pari passu with, or prior to, the shares of the
Series D-1 Preferred Stock in powers, rights or preferences upon the
liquidation, dissolution or winding up of the affairs of the Company or as to
dividends; and (iii) any proposal to amend by merger, amendment or otherwise (or
otherwise alter or repeal) the Certificate of Incorporation (or this resolution)
if such amendment, alteration or repeal would increase or decrease the aggregate
number of authorized shares of Series D-1 Preferred Stock or any Voting Parity
Stock, increase or decrease the par value of the shares of Series D-1 Preferred
Stock or any Voting Parity Stock, or alter or change the powers, preferences, or
special rights of the shares of Series D-1 Preferred Stock or any Voting Parity
Stock so as to affect them adversely. An amendment that increases the number of
authorized shares of any class or series of Preferred Stock or authorizes the
creation or issuance of other classes or series of Preferred Stock, in each case
ranking junior to the Series D-1 Preferred Stock with respect to the payment of
dividends and distribution of assets upon liquidation, dissolution or winding up
shall not be considered to be such an adverse change.
(ii) So long as any shares of Series D-1
Preferred Stock shall be outstanding and unless the consent or approval of a
greater number of shares shall then be required by applicable law, without first
obtaining the approval of the holders of at least two-thirds of the voting power
of the Series D-1 Preferred Stock at the time outstanding (voting separately as
a class together with the holders of shares of Voting Parity Stock) given in
person or by proxy at a meeting at which the holders of such shares shall be
entitled to vote separately as a class (or by a consent or consents in writing
setting forth such approval, which consent shall be delivered to the Company in
the manner set forth from time to time in the DGCL), the Company shall not
either directly or indirectly or through merger or consolidation with any other
entity, (i) authorize, create or issue, or increase the authorized or issued
amount of, any class or series of capital stock that would place or have the
effect of placing restrictions on the obligation of the Company to pay dividends
to the holders of Series D-1 Preferred Stock or to perform any of its
obligations to the holders of Series D-1 Preferred Stock at any time; or (ii)
authorize, enter into or permit to exist any covenant or agreement that would
place or have the effect of placing restrictions on the obligations of the
Company to pay dividends to holders of Series D-1 Preferred Stock or to perform
any of its other obligations to the holders of Series D-1 Preferred
10
<PAGE>
Stock at any time; provided, however, that notwithstanding the foregoing, the
Company may from time to time enter into credit agreements and indentures that
provide for limitations on the ability of the Company to pay dividends on its
capital stock generally, so long as the Board of Directors determines, in its
sole discretion, that such limitation is necessary in order to obtain financing
on commercially reasonable terms.
(d) One Vote Per Share. In connection with any
------------------
matter on which holders of the Series D-1 Preferred Stock are entitled to vote
as provided in subparagraphs (b) and (c) above, or any other matter on which the
holders of the Series D-1 Preferred Stock are entitled to vote as one class or
otherwise pursuant to applicable law or the provisions of the Certificate of
Incorporation, each holder of Series D-1 Preferred Stock shall be entitled to
one vote for each share of Series D-1 Preferred Stock held by such holder.
(e) Except as otherwise required by law, the holders
of Series D-1 Preferred Stock and holders of Series D-2 Preferred Stock will
vote together as a single class.
6. No Sinking Fund. No sinking fund will be established for
---------------
the retirement or redemption of shares of Series D-1 Preferred Stock.
7. Liquidation Rights; Priority.
----------------------------
(a) In the event of any liquidation, dissolution or
winding up of the affairs of the Company, whether voluntary or involuntary,
after payment or provision for payment of the debts and other liabilities of the
Company, the holders of shares of the Series D-1 Preferred Stock shall be
entitled to receive, out of the assets of the Company, whether such assets are
capital or surplus and whether or not any dividends as such are declared, $500
per share plus an amount equal to all accrued and unpaid dividends for the
then-current plus all prior Dividend Periods, and no more, before any
distribution shall be made to the holders of the Common Stock or any other class
of stock or series thereof ranking junior to the Series D-1 Preferred Stock with
respect to the distribution of assets upon liquidation, dissolution or winding
up of the Company. The Series D-2 Preferred Stock and, unless specifically
designated as junior or senior to the Series D-1 Preferred Stock with respect to
the liquidation, dissolution or winding up of the affairs of the Company or as
to dividends, all other series or classes of Preferred Stock of the Company
shall rank on a parity with the Series D-1 Preferred Stock with respect to the
distribution of assets.
(b) Nothing contained in this Section 7 shall be
deemed to prevent conversion of shares of the Series D-1 Preferred Stock by the
Company in the manner provided in Section 3. Neither the merger nor
consolidation of the Company into or with any other entity, nor the merger or
consolidation of any other entity into or with the Company, nor a sale, transfer
or lease of all or any part of the assets of the Company, shall be deemed to be
a liquidation, dissolution or winding up of the Company within the meaning of
this Section 7.
(c) Written notice of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, stating a
payment date and the place where the distributable amounts shall be payable,
shall be given by mail, postage prepaid, no less than 30
11
<PAGE>
days prior to the payment date stated therein, to the holders of record of the
Series D-1 Preferred Stock at their respective addresses as the same shall
appear on the books of the Company.
(d) If the amounts available for distribution with
respect to the Series D-1 Preferred Stock and all other outstanding stock of the
Company ranking on a parity with the Series D-1 Preferred Stock upon
liquidation, dissolution or winding up are not sufficient to satisfy the full
liquidation rights of all the outstanding Series D-1 Preferred Stock and stock
ranking on a parity therewith, then the holders of each series of such stock
will share ratably in any such distribution of assets in proportion to the full
respective preferential amount (which in the case of the Series D-1 Preferred
Stock shall mean the amounts specified in Section 7(a) and in the case of any
other series of preferred stock may include accumulated dividends if
contemplated by such series) to which they are entitled.
8. Status of Shares Converted. Shares of Series D-1 Preferred
--------------------------
Stock converted or purchased or otherwise acquired for value by the Company,
shall, after such event, have the status of authorized and unissued shares of
Preferred Stock without designation and may be reissued by the Company at any
time as shares of any series of Preferred Stock.
12
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Company by its Chairman of the Board and attested by
its Secretary this ___ day of ___, 2000.
--------------------------------------
John W. Madigan
Chairman, President and
Chief Executive Officer
Attest:
- ----------------------------
Crane H. Kenney
Vice President, General Counsel
13
<PAGE>
Schedule A
----------
Dividend Rates
--------------
Year Dividend Rate
---- -------------
2000 5.80%
2001 5.80%
2002 6.01%
2003 6.22%
2004 6.44%
2005 6.67%
2006 6.91%
2007 7.15%
2008 7.41%
2009 7.67%
2010 7.95%
2011 8.23%
2012 and thereafter 8.40%
14
<PAGE>
EXHIBIT 3.1d
CERTIFICATE OF DESIGNATION
OF THE
PREFERRED STOCK, SERIES D-2
(PAR VALUE $1.00 PER SHARE)
OF
TRIBUNE COMPANY
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
The undersigned duly authorized officer of Tribune Company, a
corporation organized and existing under the General Corporation Law (the
"DGCL") of the State of Delaware (the "Company"), in accordance with the
provisions of Section 103 thereof, and pursuant to Section 151 thereof, DOES
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation of the Company, the Board of
Directors of the Company (the "Board" or "Board of Directors") on _____ 2000
adopted the following resolution creating 245,100 shares of Preferred Stock,
Series D-2 (in addition to the shares of Preferred Stock, Series D-1, which were
also created on such date), par value $1.00 per share, each designated as set
forth below:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors by provisions of the Restated Certificate of
Incorporation of the Company (the "Certificate of Incorporation"), and the DGCL,
the issuance of a series of the Company's preferred stock, par value $1.00 per
share (the "Preferred Stock"), which shall consist of 245,100 of the shares of
Preferred Stock, be, and the same hereby is, authorized, and the Board of
Directors hereby fixes the powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions, of the shares of such series (in addition to the
powers, designations, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions, set forth
in the Certificate of Incorporation that may be applicable to the Preferred
Stock) as follows:
1. Designation and Rank. The designation of such series of the
--------------------
Preferred Stock authorized by this resolution shall be the Preferred Stock,
Series D-2 (the "Series D-2 Preferred Stock"). The number of shares of Series
D-2 Preferred Stock shall be 245,100. The Series D-2 Preferred Stock shall rank
prior to the Common Stock (as hereinafter defined) of the Company and to all
other classes and series of equity securities of the Company now or hereafter
<PAGE>
authorized, issued or outstanding (the Common Stock and such other classes and
series of equity securities not expressly designated as ranking on a parity with
or senior to the Series D-2 Preferred Stock collectively may be referred to
herein as the "Junior Stock") as to dividend rights and rights upon liquidation,
winding up or dissolution of the Company, other than (a) the Company's (i) 8%
Cumulative Convertible Preferred Stock, Series C (the "Series C Preferred
Stock") and (ii) Series D-1 Preferred Stock (the "Series D-1 Preferred Stock"),
with respect to which the Series D-2 Preferred Stock is expressly designated as
ranking on a parity as to dividend rights and rights upon liquidation, winding
up or dissolution of the Company; and (b) any other classes or series of equity
securities of the Company expressly designated as ranking on a parity with
(collectively with the Series C Preferred Stock and the Series D-1 Preferred
Stock, the "Parity Stock") or senior to (the "Senior Stock") the Series D-2
Preferred Stock as to dividend rights and rights upon liquidation, winding up or
dissolution of the Company. The Series D-2 Preferred Stock shall be subject to
creation of Senior Stock, Parity Stock and Junior Stock, to the extent not
expressly prohibited by the Certificate of Incorporation or Section 5(c)(i) or
5(c)(ii) hereof, with respect to the payment of dividends and upon liquidation.
2. Cumulative Dividends; Priority.
------------------------------
(a) Payment of Dividends.
--------------------
(i) The holders of record of shares of Series D-2 Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available therefor, cumulative cash dividends
from the date of issuance of such shares at the rate per annum per share of 5.8%
(i.e., $29 per annum) (the "Dividend Rate"), as adjusted from time to time
pursuant to Section 2(c) hereof. Dividends shall be payable quarterly on the
tenth day of March, June, September and December in each year (or if such day is
a non-business day, on the next business day) with respect to the quarter ending
on the last day of such month, commencing on June 10, 2000 (each of such dates a
"Dividend Payment Date"). No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series D-
2 Preferred Stock that may be in arrears. Notwithstanding the foregoing, for
purposes of calculating the dividend to be paid with respect to the period (the
"Initial Dividend Period") from the date of issuance of such shares through June
30, 2000 (payable June 10, 2000) it shall be assumed that the shares of the
Series D-2 Preferred Stock were issued on April 1, 2000.
(ii) Each declared dividend shall be payable to holders of
record as they appear on the stock books of the Company at the close of business
on such record dates, not more than 60 calendar days preceding the applicable
Dividend Payment Dates therefor, as are determined by the Board of Directors
(each of such dates a "Record Date"). Quarterly dividend periods (each a
"Dividend Period") shall commence on and include the first day of January,
April, July, and October of each year and shall end on and include the last day
of March, June, September and December, respectively of such year. Dividends on
the shares of Series D-2 Preferred Stock shall be fully cumulative and shall
accrue (whether or not declared) from the first day of each Dividend Period;
provided, however, that the amount of any dividend payable for any Dividend
Period shorter than a full Dividend Period (other than the Initial Dividend
Period, which shall be calculated as set forth in Section 2(a)(i) hereof) shall
be computed on the
2
<PAGE>
basis of a 360-day year composed of twelve 30-day months and the actual number
of days elapsed in the relevant Dividend Period.
(b) Priority as to Dividends.
------------------------
(i) Subject to the provisions hereof, no cash dividend or other
distribution (other than in Common Stock or other Junior Stock) shall be
declared or paid or set apart for payment on Preferred Stock that constitutes
Parity Stock or Junior Stock with respect to dividends for any Dividend Period
unless full dividends on the Series D-2 Preferred Stock for the immediately
preceding Dividend Period have been or contemporaneously are declared and paid
(or declared and a sum sufficient for the payment thereof set apart for such
payment). When dividends are not paid in full (or declared and a sum sufficient
for such full payment not so set apart) upon the Series D-2 Preferred Stock and
any Parity Stock, all dividends declared upon shares of Series D-2 Preferred
Stock and any Parity Stock shall be declared pro rata with respect thereto, so
that in all cases the amount of dividends declared per share on the Series D-2
Preferred Stock and such Parity Stock shall bear to each other the same ratio
that accrued dividends for the then-current Dividend Period per share on the
shares of Series D-2 Preferred Stock (which shall include any accumulation in
respect of unpaid dividends for prior Dividend Periods) and dividends, including
accumulations, if any, of such Parity Stock, bear to each other.
(ii) Except as provided in the preceding paragraph, full
dividends on the Series D-2 Preferred Stock must be declared and paid or set
apart for payment for the immediately preceding Dividend Period before (A) any
cash dividend or other distribution (other than in Common Stock or other Junior
Stock) shall be declared or paid or set aside for payment upon the Common Stock
or any other Junior Stock of the Company or (B) any Common Stock or any other
Junior Stock is redeemed, purchased or otherwise acquired by the Company for any
consideration (or any moneys are paid to or made available for a sinking fund
for the redemption of any shares of any such stock), except by redemption into
or exchange for Junior Stock or (C) any Series D-2 Preferred Stock or Parity
Stock is redeemed, purchased or otherwise acquired by the Company for any
consideration (or any moneys are paid to or made available for a sinking fund
for the redemption of any shares of any such stock). The Company shall not
permit any subsidiary of the Company to purchase or otherwise acquire for
consideration any shares of stock of the Company if under the preceding
sentence, the Company would be prohibited from purchasing or otherwise acquiring
such shares at such time and in such manner.
(iii) No dividend shall be paid or set aside for holders of the
Series D-2 Preferred Stock for any Dividend Period unless full dividends on any
Preferred Stock that constitutes Senior Stock with respect to dividends for that
period have been or contemporaneously are declared and paid (or declared and a
sum sufficient for the payment thereof set apart for such payment).
(c) Adjustment to Dividend Rate.
---------------------------
(i) The Dividend Rate shall not be adjusted prior to the end of
the Dividend Period ending on December 31, 2001.
3
<PAGE>
(ii) The Dividend Rate for each subsequent year (commencing with
the year that begins January 1, 2002) shall be adjusted upward in accordance
with
Schedule A attached hereto.
- ----------
(iii) Increases in the Dividend Rate are subject to the
following limitation: the Dividend Rate shall, under no circumstances, exceed
8.4% per annum.
3. Conversion at Option of the Company.
-----------------------------------
(a) General.
-------
(i) The shares of the Series D-2 Preferred Stock shall not be
convertible at the option of the Company except upon the later to occur of (x)
the date on which a written notice has been mailed or otherwise distributed by
the Company to each record holder of the Series D-2 Preferred Stock stating that
the assets of either Chandler Trust No. 1 or Chandler Trust No. 2 have been
distributed to the beneficiaries thereof and (y) February 1, 2025 (such later
date being the "Convertibility Date"). Subject to and upon compliance with the
provisions of this Section 3, shares of Series D-2 Preferred Stock may be
converted, in whole or in part, at the election of the Company by resolution of
the Board of Directors, upon notice as provided in Section 3(b), at any time or
from time to time on or after the Convertibility Date. Conversion shall be made
by delivering to the holders of Series D-2 Preferred Stock, in respect of the
conversion of each share of Series D-2 Preferred Stock so converted,
certificates representing the number of fully paid and nonassessable shares (the
"Conversion Shares") of common stock, no par value per share, of the Company
("Common Stock") equal to (subject to Section 3(h) hereof) the quotient of (1)
$500 plus accrued and unpaid dividends on such shares of Series D-2 Preferred
Stock to the Conversion Date (as hereinafter defined) divided by (2) the Common
Share Value (as hereinafter defined). The aggregate number of shares of Common
Stock (and, if applicable, "Conversion Preferred," as such term is defined
below) that a holder of shares of Series D-2 Preferred Stock that have been
converted is entitled to receive pursuant to this Section 3 or Section 4 is
hereinafter referred to as the "Aggregate Conversion Shares."
(ii) The "Common Share Value" shall mean the average of the
closing prices of the Common Stock for the 20 days during which trades of Common
Stock occurred immediately preceding the Valuation Date (as defined below), as
reported in The Wall Street Journal, Western Edition, or, if no closing prices
were so reported, the average of the mean between the high bid and low asked
price per share of Common Stock for each of the 20 days during which trades of
Common Stock occurred immediately preceding the Valuation Date in the over-the-
counter market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or such other system then in use, or, if the
Common Stock is not then quoted by any such organization, the average of the
mean between the closing bid and asked prices per share of Common Stock for each
of the 20 days during which trades of Common Stock occurred immediately
preceding the Valuation Date, as furnished by a professional market maker making
a market in the Common Stock, or, if there is no such market maker, the fair
market value of a share of Common Stock determined by whatever method the Board
of Directors reasonably determines to use. In the case of a conversion pursuant
to this Section 3, the "Valuation Date" shall mean the Conversion Notice Date
(as defined in Section 3(b)), and in
4
<PAGE>
the case of any conversion pursuant to Section 4, the "Valuation Date" shall
mean the Conversion Time (as hereinafter defined).
(b) Notice of Conversion. Notice of any conversion, setting forth (i) the
--------------------
Conversion Date (as defined in Section 3(c) hereof), (ii) a statement that
dividends on the shares of Series D-2 Preferred Stock to be converted will cease
to accrue on such Conversion Date, and (iii) the method(s) by which the holders
may surrender the certificates representing shares of Series D-2 Preferred Stock
that have been converted and obtain the Conversion Shares therefor, shall be
mailed, postage prepaid, on a date (the "Conversion Notice Date") that is at
least 15 days but not more than 45 days prior to said Conversion Date to each
holder of record of the Series D-2 Preferred Stock to be converted at his, her
or its address as the same shall appear on the books of the Company. If less
than all the shares of the Series D-2 Preferred Stock owned by such holder are
then to be converted, the notice shall specify the number of shares thereof that
are to be converted and the numbers of the certificates representing such
shares. If applicable, the notice shall also specify the "Maximum Number"
applicable to, and the amount of "Conversion Cash" to be received by (absent an
election pursuant to Section 3(h)(v) hereof to receive "Conversion Preferred")
such holder (as such terms are defined below).
(c) Method of Conversion. The surrender of any certificate evidencing
--------------------
shares of Series D-2 Preferred Stock that have been converted shall be made by
the holder thereof by the surrender of the certificate or certificates formerly
representing the shares of Series D-2 Preferred Stock converted (with proper
endorsement or instruments of transfer) to the Company at the principal office
of the Company (or such other office or agency of the Company as the Company may
designate in writing to the holder or holders of the Series D-2 Preferred Stock)
at any time during its usual business hours. Shares of Series D-2 Preferred
Stock called for conversion shall be deemed to have been converted, and the
shares of Common Stock (and, if applicable, Conversion Preferred) to be issued
in respect of the shares of Series D-2 Preferred Stock converted shall be deemed
to have been issued, as of the close of business on the date fixed for
conversion (the "Conversion Date"), without regard to when certificates
evidencing such Series D-2 Preferred Stock are surrendered pursuant to this
Section 3(c) or certificates evidencing such Common Stock (and, if applicable,
Conversion Preferred) are issued pursuant to Section 3(d). The rights of the
holder of Series D-2 Preferred Stock that has been converted, except for the
right to receive the Aggregate Conversion Shares therefor in accordance herewith
(and any cash payments to which such holder is entitled pursuant to Sections
3(e) and (h) hereof), shall cease on the Conversion Date. In the case of lost
or destroyed certificates evidencing ownership of shares of Series D-2 Preferred
Stock that have been converted, the holder shall submit proof of loss or
destruction and such indemnity as shall be required by the Company.
(d) Issuance of Certificates for Common Stock. As soon as practicable
-----------------------------------------
after its receipt of any certificate or certificates formerly evidencing
ownership of shares of Series D-2 Preferred Stock that have been converted, the
Company shall issue and shall deliver to the person for whose account such
certificates formerly representing shares of Series D-2 Preferred Stock were so
surrendered, or on his, her or its written order, a certificate or certificates
for the number of full shares of Common Stock (and, if applicable, Conversion
Preferred) issuable upon the conversion of such shares of Series D-2 Preferred
Stock and a check or cash payment (if any) to which such holder is entitled with
respect to fractional shares or Conversion
5
<PAGE>
Cash as determined by the Company, in accordance with Sections 3(e) and (h)
hereof, respectively.
(e) Fractional Shares. No fractional shares or scrip representing
-----------------
fractional shares shall be issued upon the conversion of any shares of Series D-
2 Preferred Stock, but the holder thereof will receive in cash an amount equal
to the value of such fractional share of Common Stock based on the Common Share
Value. If more than one share of Series D-2 Preferred Stock shall be converted
at one time for the account of the same holder, the number of full shares
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of such shares so surrendered.
(f) Payment of Taxes. The Company shall pay any tax in respect of the
----------------
issuance of stock certificates on conversion of shares of Series D-2 Preferred
Stock. The Company shall not, however, be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of
stock in any name other than that of the holder of the shares converted, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of any such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
(g) Common Stock Reserved for Conversion. The Company shall at all times
------------------------------------
from and after the Conversion Date reserve and keep available out of its
authorized and unissued Common Stock the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series D-2
Preferred Stock and shall take all such action as may be required from time to
time in order that it may validly and legally issue fully paid and nonassessable
shares of Common Stock upon conversion of the Series D-2 Preferred Stock.
(h) Limitation of the Number of Shares of Common Stock
--------------------------------------------------
(i) The number of shares of Common Stock into which the Series
D-2 Preferred Stock may be converted shall be limited, as set forth herein.
(ii) The maximum number of shares of Common Stock into which the
Series D-2 Preferred Stock may be converted is, in the aggregate, [7,392,355]
shares of Common Stock (the "Maximum Number"). If the Company in any manner
subdivides or combines the outstanding shares of Common Stock, then the Maximum
Number shall be adjusted appropriately.
(iii) On conversion, no holder shall be entitled to receive more
shares of Common Stock than its pro rata share of the Maximum Number (a holder's
"Pro Rata Number"), which shall be calculated by dividing (A) the number of
shares of Series D-2 Preferred Stock held by such holder which are then being
converted, by (B) 245,100.
(iv) If, as a result of Section 3(h)(iii), immediately above, a
holder's Pro Rata Number is less than the number of shares of Common Stock to
which such holder would otherwise be entitled (a holder's "Unrestricted
Number"), then, such holder shall be entitled to receive from the Company a cash
payment ("Conversion Cash") equal to:
6
<PAGE>
(A) the Common Share Value, multiplied by
(B) the positive difference between (a) such holder's
Unrestricted Number minus (b) such holder's Pro Rata Number.
(v) In lieu of Conversion Cash, a holder may elect, by providing written
notice to the Company, which notice must be received by the Company at least
five days prior to the Conversion Date, to exchange, in lieu of conversion, the
number of shares of Series D-2 Preferred Stock held by such holder which as a
result of Section 3(h)(iii) cannot be fully converted into such holder's
Unrestricted Number, for a like number of shares of a new series of preferred
stock of the Company (the "Conversion Preferred") which shall be identical to
the Series D-2 Preferred Stock, except that it shall (A) not be convertible into
or exchangeable for Common Stock and (B) be redeemable, at liquidation value
plus accrued but unpaid dividends, by the Company at any time.
4. Conversion at the Option of Holders.
-----------------------------------
(a) General. After the later to occur of (i) the date on which a
-------
written notice has been mailed or otherwise distributed by the Company to each
record holder of the Series D-2 Preferred Stock stating that the assets of
either Chandler Trust No. 1 or Chandler Trust No. 2 have been distributed to the
beneficiaries thereof and (ii) February 1, 2025, the holder of any Series D-2
Preferred Stock may convert pursuant to this Section 4 all or any part (in whole
number of shares only) of the Series D-2 Preferred Stock held by such holder
into fully paid and non-assessable shares of Common Stock. Subject to Section
4(g) below, the number of shares of Common Stock into which a share of Series D-
2 Preferred Stock may be converted shall be equal to the quotient of (1) $500
plus accrued and unpaid dividends on such shares of Series D-2 Preferred Stock
to the Conversion Date divided by (2) the Common Share Value.
(b) Method of Conversion. Each conversion of Series D-2
--------------------
Preferred Stock shall be effected by the surrender of the certificate or
certificates representing the shares of Series D-2 Preferred Stock to be
converted (with proper endorsement or instruments of transfer) to the Company at
the principal office of the Company (or such other office or agency of the
Company as the Company may designate in writing to the holder or holders of the
Series D-2 Preferred Stock) at any time during its usual business hours,
together with written notice by the holder of such Series D-2 Preferred Stock
stating that such holder desires to convert the shares of Series D-2 Preferred
Stock, or a stated number of such shares, represented by such certificate or
certificates, which notice shall also specify the name or names (with addresses)
and denominations in which the certificate or certificates for the Common Stock
(and, if applicable, Conversion Preferred) shall be issued and shall include
instructions for delivery thereof. If such holder desires to receive Conversion
Preferred in lieu of any Conversion Cash that may be payable to such holder, the
notice shall so state. Any conversion pursuant to this Section 4 shall be deemed
to have been effected as of the close of business on the date on which such
certificate or certificates shall have been surrendered and such notice shall
have been received, and at such time (the "Conversion Time") the rights of the
holder of Series D-2 Preferred Stock (or specified portion thereof) as such
holder shall cease and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock (and, if applicable,
Conversion Preferred) are to be issued upon conversion shall be deemed to have
become the holder or
7
<PAGE>
holders of record of the shares of Common Stock (and, if applicable, Conversion
Preferred) represented thereby. In the case of lost or destroyed certificates
evidencing ownership of shares of Series D-2 Preferred Stock to be converted,
the holder shall submit proof of loss or destruction and such indemnity as shall
be required by the Company.
(c) Issuance of Certificates for Common Stock. As soon as practicable
-----------------------------------------
after its receipt of any certificate or certificates evidencing ownership of
shares of Series D-2 Preferred Stock to be converted pursuant to this Section 4,
the Company shall issue and shall deliver to the person for whose account such
shares of Series D-2 Preferred Stock were so surrendered, or on his, her or its
written order, a certificate or certificates for the number of full shares of
Common Stock (and, if applicable, Conversion Preferred) issuable upon the
conversion of such shares of Series D-2 Preferred Stock and a check or cash
payment (if any) to which such holder is entitled with respect to fractional
shares or Conversion Cash as determined by the Company, in accordance with
Sections 4(d) and (g) hereof, respectively.
(d) Fractional Shares. No fractional shares or scrip representing
-----------------
fractional shares shall be issued upon the conversion of any shares of Series D-
2 Preferred Stock, but the holder thereof will receive in cash an amount equal
to the value of such fractional share of Common Stock based on the Common Share
Value. If more than one share of Series D-2 Preferred Stock shall be converted
at one time for the account of the same holder, the number of full shares
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of such shares so surrendered.
(e) Payment of Taxes. The Company shall pay any tax in respect of the
----------------
issuance of stock certificates on conversion of shares of Series D-2 Preferred
Stock. The Company shall not, however, be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of
stock in any name other than that of the holder of the shares converted, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of any such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
(f) Common Stock Reserved for Conversion. The Company shall at all times
------------------------------------
from and after the Conversion Time reserve and keep available out of its
authorized and unissued Common Stock the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series D-2
Preferred Stock and shall take all such action as may be required from time to
time in order that it may validly and legally issue fully paid and nonassessable
shares of Common Stock upon conversion of the Series D-2 Preferred Stock.
(g) Limitation of the Number of Shares of Common Stock.
--------------------------------------------------
(i) The number of shares of Common Stock into which the Series
D-2 Preferred Stock may be converted shall be limited, as set forth herein.
(ii) On conversion, no holder shall be entitled to receive more
shares of Common Stock than its Pro Rata Number.
8
<PAGE>
(iii) If, as a result of Section 4(g)(ii), immediately above, a holder's
Pro Rata Number is less than such holder's Unrestricted Number, then such holder
shall be entitled to receive from the Company the Conversion Cash.
(iv) In lieu of Conversion Cash, a holder may elect, by providing notice of
such election in the notice of conversion delivered pursuant to Section 4(b), to
exchange, in lieu of conversion, the number of shares of Series D-2 Preferred
Stock held by such holder which as a result of Section 4(g)(iii) cannot be fully
converted into such holder's Unrestricted Number, for a like number of shares of
Conversion Preferred.
5. Voting Rights.
-------------
(a) General Voting Rights. Except as expressly provided hereinafter in
---------------------
this Section 5, or as otherwise from time to time required by applicable law,
the Series D-2 Preferred Stock shall have no voting rights.
(b) Voting Rights Upon Dividend Arrears.
-----------------------------------
(i) Right to Elect Directors. In the event that an amount equal
------------------------
to six quarterly dividend payments on the Series D-2 Preferred Stock shall have
accrued and be unpaid (the occurrence of such contingency marking the beginning
of a period herein referred to as the "Default Period," which shall extend until
such time as all accrued and unpaid dividends for all previous Dividend Periods
and for the current Dividend Period on all shares of Series D-2 Preferred Stock
then outstanding shall have been declared and paid or declared and a sum
sufficient for such full payment set apart for payment), the holders of the
Series D-2 Preferred Stock shall have the right, voting separately as a class
together with holders of shares of the Series D-1 Preferred Stock and any other
Parity Stock upon which like voting rights have been conferred and are
exercisable (such shares of Series D-1 Preferred Stock, shares of Series D-2
Preferred Stock, and other shares of Parity Stock are hereinafter referred to as
"Voting Parity Stock"), to elect two members of the Board of Directors, each
member to be in addition to the then authorized number of directors, at the next
annual meeting of stockholders or at a special meeting called as described below
and thereafter until the Default Period shall have ended.
(ii) Special Meeting; Written Consent. Whenever such voting
--------------------------------
right shall vest, it may be exercised initially by the vote of the holders of a
plurality of the voting power of Series D-2 Preferred Stock and Voting Parity
Stock present and voting as a single class, in person or by proxy, at a special
meeting of holders of the Series D-2 Preferred Stock and Voting Parity Stock or
at the next annual meeting of stockholders. A special meeting for the exercise
of such right shall be called by the Secretary of the Company as promptly as
possible, and in any event within 10 days after receipt of a written request
signed by the holders of record of at least 25% of the outstanding shares of the
Series D-2 Preferred Stock and Voting Parity Stock, subject to any applicable
notice requirements imposed by law or regulation. Notwithstanding the provisions
of this paragraph, no such special meeting shall be required to be held during
the 90-day period preceding the date fixed for the annual meeting of
stockholders. Any action required or permitted to be taken at any such special
meeting of such holders may be taken by a consent or consents in writing of such
stockholders, setting forth the action so taken, which consent or consents shall
be signed by the holders of Series D-2 Preferred Stock and
9
<PAGE>
Voting Parity Stock representing a majority of the voting power of shares of
such Series D-2 Preferred Stock and Voting Parity Stock and shall be delivered
to the Company in the manner set forth from time to time in the DGCL.
(iii) Term of Office of Directors. Any director who shall have been
---------------------------
elected by holders of the Series D-2 Preferred Stock and Voting Parity Stock
entitled to vote in accordance with this subparagraph (b) shall hold office for
a term expiring (subject to the earlier expiry of such term, as set forth below)
at the annual meeting of stockholders at which the term of office of his class
shall expire and during such term may be removed at any time, only for cause,
by, and only by, the affirmative vote of the holders of record of a majority of
the voting power of the Series D-2 Preferred Stock and Voting Parity Stock
present and voting as a single class, in person or by proxy, at a special
meeting of such stockholders called for such purpose, and any vacancy created by
such removal may also be filled at such meeting. A meeting for the removal of a
director elected by the holders of the Series D-2 Preferred Stock and Voting
Parity Stock and the filling of the vacancy created thereby shall be called by
the Secretary of the Company as promptly as possible and in any event within 10
days after receipt of a request therefor signed by the holders of not less than
25% of the aggregate outstanding voting power of the Series D-2 Preferred Stock
and Voting Parity Stock, subject to any applicable notice requirements imposed
by law or regulation. Such meeting shall be held at the earliest practicable
date thereafter, provided that no such meeting shall be required to be held
during the 90-day period preceding the date fixed for the annual meeting of
stockholders. Simultaneously with the expiration of the Default Period, the
terms of office of all directors elected by the holders of the shares of Series
D-2 Preferred Stock and the Voting Parity Stock pursuant hereto then in office
shall, without further action, thereupon terminate unless otherwise required by
law. Upon such termination the number of directors constituting the Board of
Directors of the Company shall, without further action, be reduced by two,
subject always to the increase of the number of directors pursuant to the
foregoing provisions in the case of the future right of holders of the shares of
Series D-2 Preferred Stock and Voting Parity Stock to elect directors as
provided above.
(iv) Vacancies. Any vacancy caused by the death, resignation or removal of
---------
a director who shall have been elected in accordance with this subparagraph (b)
may be filled by the remaining director so elected or, if not so filled, by a
vote of holders of a plurality of the voting power of the Series D-2 Preferred
Stock and Voting Parity Stock present and voting as a single class, in person or
by proxy, at a meeting called for such purpose. Unless such vacancy shall have
been filled by the remaining director as aforesaid, such meeting shall be called
by the Secretary of the Company at the earliest practicable date after such
death or resignation, and in any event within 10 days after receipt of a written
request signed by the holders of record of at least 25% of the outstanding
shares of the Series D-2 Preferred Stock and Voting Parity Stock, subject to any
applicable notice requirements imposed by law or regulation. Notwithstanding
the provisions of this paragraph, no such special meeting shall be required to
be held during the 90-day period preceding the date fixed for the annual meeting
of stockholders.
(v) Stockholders' Right to Call Meeting. If any meeting of the holders of
-----------------------------------
the Series D-2 Preferred Stock and Voting Parity Stock required by this
subparagraph (b) to be called shall not have been called within 30 days after
personal service of a written request therefor upon the Secretary of the Company
or within 30 days after mailing the same
10
<PAGE>
within the United States of America by registered mail addressed to the
Secretary of the Company at its principal executive offices, subject to any
applicable notice requirements imposed by law or regulation, then the holders of
record of at least 25% of the outstanding shares of the Series D-2 Preferred
Stock and Voting Parity Stock may designate in writing one of their number to
call such meeting at the expense of the Company, and such meeting may be called
by such person so designated upon the notice required for annual meetings of
stockholders or such shorter notice (but in no event shorter than permitted by
law or regulation) as may be acceptable to the holders of a majority of the
total voting power of the Series D-2 Preferred Stock and Voting Parity Stock.
Any holder of Series D-2 Preferred Stock and Voting Parity Stock so designated
shall have access to the Series D-2 Preferred Stock and Voting Parity Stock
books of the Company for the purpose of causing such meeting to be called
pursuant to these provisions.
(vi) Quorum. At any meeting of the holders of the Series D-2
------
Preferred Stock called in accordance with the provisions of this subparagraph
(b) for the election or removal of directors, the presence in person or by proxy
of the holders of a majority of the total voting power of the Series D-2
Preferred Stock and Voting Parity Stock shall be required to constitute a
quorum; in the absence of a quorum, the holders of a majority of the total
number of votes present in person or by proxy shall have power to adjourn the
meeting from time to time without notice other than an announcement at the
meeting, until a quorum shall be present.
(c) Voting Rights on Extraordinary Matters.
--------------------------------------
(i) So long as any shares of Series D-2 Preferred Stock shall be
outstanding, the holders of the Series D-2 Preferred Stock shall have the right,
voting separately as a class together with holders of shares of any Voting
Parity Stock (with two-thirds of the voting power of such stock at the time
outstanding given in person or by proxy at a meeting at which the holders of
such shares shall be entitled to vote separately as a class, or by a consent or
consents in writing setting forth such approval, which consent shall be
delivered to the Company in the manner set forth from time to time in the DGCL,
required for approval by such holders), to vote on: (i) the liquidation or
dissolution of the Company; (ii) any proposal to authorize, create or issue, or
increase the authorized or issued amount of, any class or series of capital
stock ranking pari passu with, or prior to, the shares of the Series D-2
Preferred Stock in powers, rights or preferences upon the liquidation,
dissolution or winding up of the affairs of the Company or as to dividends; and
(iii) any proposal to amend by merger, amendment or otherwise (or otherwise
alter or repeal) the Certificate of Incorporation (or this resolution) if such
amendment, alteration or repeal would increase or decrease the aggregate number
of authorized shares of Series D-2 Preferred Stock or any Voting Parity Stock,
increase or decrease the par value of the shares of Series D-2 Preferred Stock
or any Voting Parity Stock, or alter or change the powers, preferences, or
special rights of the shares of Series D-2 Preferred Stock or any Voting Parity
Stock so as to affect them adversely. An amendment that increases the number of
authorized shares of any class or series of Preferred Stock or authorizes the
creation or issuance of other classes or series of Preferred Stock, in each case
ranking junior to the Series D-2 Preferred Stock with respect to the payment of
dividends and distribution of assets upon liquidation, dissolution or winding up
shall not be considered to be such an adverse change.
(ii) So long as any shares of Series D-2 Preferred Stock shall be
outstanding and unless the consent or approval of a greater number of shares
shall then be
11
<PAGE>
required by applicable law, without first obtaining the approval of the holders
of at least two-thirds of the voting power of the Series D-2 Preferred Stock at
the time outstanding (voting separately as a class together with the holders of
shares of Voting Parity Stock) given in person or by proxy at a meeting at which
the holders of such shares shall be entitled to vote separately as a class (or
by a consent or consents in writing setting forth such approval, which consent
shall be delivered to the Company in the manner set forth from time to time in
the DGCL), the Company shall not either directly or indirectly or through merger
or consolidation with any other entity, (i) authorize, create or issue, or
increase the authorized or issued amount of, any class or series of capital
stock that would place or have the effect of placing restrictions on the
obligation of the Company to pay dividends to the holders of Series D-2
Preferred Stock or to perform any of its obligations to the holders of Series D-
2 Preferred Stock at any time; or (ii) authorize, enter into or permit to exist
any covenant or agreement that would place or have the effect of placing
restrictions on the obligations of the Company to pay dividends to holders of
Series D-2 Preferred Stock or to perform any of its other obligations to the
holders of Series D-2 Preferred Stock at any time; provided, however, that
notwithstanding the foregoing, the Company may from time to time enter into
credit agreements and indentures that provide for limitations on the ability of
the Company to pay dividends on its capital stock generally, so long as the
Board of Directors determines, in its sole discretion, that such limitation is
necessary in order to obtain financing on commercially reasonable terms.
(d) One Vote Per Share. In connection with any matter on which holders of
------------------
the Series D-2 Preferred Stock are entitled to vote as provided in subparagraphs
(b) and (c) above, or any other matter on which the holders of the Series D-2
Preferred Stock are entitled to vote as one class or otherwise pursuant to
applicable law or the provisions of the Certificate of Incorporation, each
holder of Series D-2 Preferred Stock shall be entitled to one vote for each
share of Series D-2 Preferred Stock held by such holder.
(e) Except as otherwise required by law, the holders of Series D-2
Preferred Stock and holders of Series D-1 Preferred Stock will vote together as
a single class.
6. No Sinking Fund. No sinking fund will be established for the
---------------
retirement or redemption of shares of Series D-2 Preferred Stock.
7. Liquidation Rights; Priority.
----------------------------
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or involuntary, after payment or
provision for payment of the debts and other liabilities of the Company, the
holders of shares of the Series D-2 Preferred Stock shall be entitled to
receive, out of the assets of the Company, whether such assets are capital or
surplus and whether or not any dividends as such are declared, $500 per share
plus an amount equal to all accrued and unpaid dividends for the then-current
plus all prior Dividend Periods, and no more, before any distribution shall be
made to the holders of the Common Stock or any other class of stock or series
thereof ranking junior to the Series D-2 Preferred Stock with respect to the
distribution of assets upon liquidation, dissolution or winding up of the
Company. The Series D-2 Preferred Stock and, unless specifically designated as
junior or senior to the Series D-2 Preferred Stock with respect to the
liquidation, dissolution or winding up of the affairs of the Company or as to
dividends, all other series or classes of Preferred Stock of the
12
<PAGE>
Company shall rank on a parity with the Series D-2 Preferred Stock with respect
to the distribution of assets.
(b) Nothing contained in this Section 7 shall be deemed to prevent
conversion of shares of the Series D-2 Preferred Stock by the Company in the
manner provided in Section 3. Neither the merger nor consolidation of the
Company into or with any other entity, nor the merger or consolidation of any
other entity into or with the Company, nor a sale, transfer or lease of all or
any part of the assets of the Company, shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this Section 7.
(c) Written notice of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Company, stating a payment date and the
place where the distributable amounts shall be payable, shall be given by mail,
postage prepaid, no less than 30 days prior to the payment date stated therein,
to the holders of record of the Series D-2 Preferred Stock at their respective
addresses as the same shall appear on the books of the Company.
(d) If the amounts available for distribution with respect to the Series D-
2 Preferred Stock and all other outstanding stock of the Company ranking on a
parity with the Series D-2 Preferred Stock upon liquidation, dissolution or
winding up are not sufficient to satisfy the full liquidation rights of all the
outstanding Series D-2 Preferred Stock and stock ranking on a parity therewith,
then the holders of each series of such stock will share ratably in any such
distribution of assets in proportion to the full respective preferential amount
(which in the case of the Series D-2 Preferred Stock shall mean the amounts
specified in Section 7(a) and in the case of any other series of preferred stock
may include accumulated dividends if contemplated by such series) to which they
are entitled.
8. Status of Shares Converted. Shares of Series D-2 Preferred Stock
--------------------------
converted or purchased or otherwise acquired for value by the Company, shall,
after such event, have the status of authorized and unissued shares of Preferred
Stock without designation and may be reissued by the Company at any time as
shares of any series of Preferred Stock.
13
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Company by its Chairman of the Board and attested by its Secretary this
___ day of ___, 2000.
----------------------------
John W. Madigan
Chairman, President and
Chief Executive Officer
Attest:
- -------------------------------
Crane H. Kenney
Vice President, General Counsel
14
<PAGE>
Schedule A
----------
Dividend Rates
--------------
Year Dividend Rate
---- -------------
2000 5.80%
2001 5.80%
2002 6.01%
2003 6.22%
2004 6.44%
2005 6.67%
2006 6.91%
2007 7.15%
2008 7.41%
2009 7.67%
2010 7.95%
2011 8.23%
2012 and thereafter 8.40%
15
<PAGE>
EXHIBIT 5.1
[Letterhead of Tribune Company]
May 5, 2000
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
Dear Sirs:
With reference to the registration statement on Form S-4 (the
"Registration Statement") that Tribune Company (the "Company") proposes to file
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the shares of the Company's common stock, without par
value (the "Common Stock"), to be issued pursuant to the Agreement and Plan of
Merger, dated as of March 13, 2000, between the Company and The Times Mirror
Company, I am of the opinion that:
1. the Company is a duly organized and validly existing
corporation under the laws of the State of Delaware;
2. the issuance of the Common Stock has been duly authorized
by appropriate corporate action of the Company; and
3. when the Common Stock has been issued and delivered
pursuant to a sale in the manner described in the
Registration Statement, such Common Stock will be validly
issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the filing of the Registration Statement.
I also consent to the making of the statement with respect to me in the related
Proxy Statement/Prospectus under the heading "Legal Matters."
Very truly yours,
/s/ CRANE H. KENNEY
Crane H. Kenney
Senior Vice President, General
Counsel and Secretary
<PAGE>
EXHIBIT 8.1
[Letterhead Of Wachtell, Lipton, Rosen & Katz]
May 5, 2000
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-4 (the
"Registration Statement") of Tribune Company, a Delaware corporation
("Tribune"), relating to the merger (the "Merger") of The Times Mirror Company,
a Delaware corporation, with and into Tribune.
We have participated in the preparation of the discussion set forth in
the section entitled "The Merger--United States Federal Income Tax Consequences
of the Merger" in the Registration Statement. In our opinion, such discussion,
insofar as it relates to the United States federal income tax consequences of
the Merger, is accurate in all material respects.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement, and to the
references therein to us. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended.
Very truly yours,
/s/ WACHTELL, LIPTON, ROSEN & KATZ
<PAGE>
EXHIBIT 8.2
[Letterhead of Gibson, Dunn & Crutcher LLP]
May 5, 2000
The Times Mirror Company
Times Mirror Square
Los Angeles, California 92614
Re: Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as counsel to The Times Mirror Company, a Delaware
corporation ("Times Mirror"), in connection with the preparation and execution
of the Agreement and Plan of Merger (the "Merger Agreement"), dated as of March
13, 2000, by and between Times Mirror and Tribune Company, a Delaware
corporation ("Tribune"). Pursuant to the Merger Agreement, Times Mirror will
merge with and into Tribune (the "Merger"). At your request, we have examined
the form of Registration Statement on Form S-4 (Registration Number 333-35422)
filed by Tribune with the U.S. Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act") on May 5, 2000 (the
"Registration Statement"), in connection with the registration under the
Securities Act of shares of Tribune's common stock to be issued to the
stockholders of Times Mirror upon consummation of the Merger.
You have requested our opinion regarding the accuracy of the federal income
tax matters described in the Registration Statement under the caption "United
States Federal Income Tax Consequences of the Merger."
In rendering this opinion, we have reviewed the Merger Agreement, the
Registration Statement and such other documents as we have deemed necessary or
appropriate. We have relied upon the truth and accuracy at all relevant times
of the facts, statements, covenants, representations and warranties contained in
the Merger Agreement and the Registration Statement. We have also assumed the
authenticity of original documents submitted to us, the conformity to the
originals of documents submitted to us as copies, and the due and valid
execution and delivery of all such documents where due execution and delivery
are a prerequisite to the effectiveness thereof.
<PAGE>
Based upon the foregoing, it is our opinion that the discussion in the
Registration Statement, under the caption "United States Federal Income Tax
Consequences of the Merger," to the extent it constitutes descriptions of legal
matters or legal conclusions is accurate in all material respects.
This opinion represents our best judgment regarding the application of
federal income tax laws under the Internal Revenue Code of 1986, as amended,
existing judicial decisions, administrative regulations and published rulings
and procedures. Our opinion is not binding upon the Internal Revenue Service or
the courts, and there is no assurance that the Internal Revenue Service will not
successfully assert a contrary position. Furthermore, no assurance can be given
that future legislative, judicial or administrative changes, on either a
prospective or retroactive basis, would not adversely affect the accuracy of the
conclusions stated herein. We undertake no responsibility to advise you of any
new developments in the application or interpretation of the federal income tax
laws. Furthermore, in the event any one of the statements, representations,
warranties or assumptions upon which we have relied to issue this opinion is
incorrect, our opinion might be adversely affected and may not be relied upon.
This opinion addresses only the matters described above, and does not
address any other federal, state, local or foreign tax consequences that may
result from the Merger or any other transaction undertaken in connection with
the Merger.
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement and to the use of our name under the captions "Legal
Matters" and "United States Federal Income Tax Consequences of the Merger" in
the Registration Statement. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Securities Act, nor do we thereby admit that we are experts with respect
to any part of such Registration Statement within the meaning of the term
"experts" as used in the Securities Act.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
2
<PAGE>
EXHIBIT 23.2
CONSENT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Tribune Company of our report dated January 21, 2000,
except for Note 17, which is as of February 14, 2000, relating to the financial
statements, which appears in Tribune Company's 1999 Annual Report to
Shareholders, which is incorporated by reference in its Annual Report on Form
10-K for the year ended December 26, 1999. We also consent to the incorporation
by reference of our report dated January 21, 2000, except for Note 17, which is
as of February 14, 2000, relating to the financial statement schedule, which
appears in such Annual Report on Form 10-K. We also consent to the reference to
us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
May 5, 2000
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement on Form S-4 and related proxy statement/prospectus of
Tribune Company and The Times Mirror Company and to the incorporation by
reference therein of our report dated February 2, 2000, with respect to the
consolidated financial statements and schedule of The Times Mirror Company
included in its Annual Report (Form 10-K) for the year ended December 31, 1999,
as amended by Form 10-K/A dated March 30, 2000, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Los Angeles, California
May 4, 2000
<PAGE>
EXHIBIT 99.4
CONSENT OF
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
We hereby consent to the use of our opinion letter dated March 12, 2000 to
the Board of Directors of Tribune Company included as Annex D to the Proxy
Statement/Prospectus which forms a part of the Registration Statement on Form
S-4 relating to the proposed merger of The Times Mirror Company with and into
Tribune Company, and to the references to such opinion in such Proxy
Statement/Prospectus under the captions "Summary--Opinions of Financial
Advisors" and "The Merger--Opinion of Tribune's Financial Advisor." In giving
such consent, we do not admit that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder, nor do we thereby admit that we are experts with
respect to any part of such Registration Statement within the meaning of the
term "experts" as used in the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission promulgated
thereunder.
/s/ Merrill Lynch, Pierce, Fenner & Smith
Incorporated
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
New York, New York
May 5, 2000
<PAGE>
EXHIBIT 99.5
[LOGO OF GOLDMAN, SACHS & CO.]
PERSONAL AND CONFIDENTIAL
May 2, 2000
Board of Directors
The Times Mirror Company
Times Mirror Square
Los Angeles, CA 90053
Re: Joint Proxy Statement/Prospectus on Form S-4
Ladies and Gentlemen:
Reference is made to our opinion letter dated March 13, 2000 with respect to
the fairness from a financial point of view to the holders of the outstanding
shares of Series A Common Stock, par value $1.00 per share (the "Series A
Shares"), and the outstanding shares of Series C Common Stock, par value $1.00
per share (the "Series C Shares," and, together with the Series A Shares, the
"Shares"), of The Times Mirror Company (the "Company") of the Stock
Consideration (as defined therein) and the Cash Consideration (as defined
therein) proposed to be paid in the Tender Offer (as defined therein) and the
Merger (as defined therein) pursuant to the Agreement and Plan of Merger, dated
as of March 13, 2000, between Tribune Company ("Tribune") and the Company.
The foregoing opinion letter is provided for the information and assistance
of the Board of Directors of the Company in connection with its consideration
of the transaction contemplated therein and is not to be used, circulated,
quoted or otherwise referred to for any other purpose, nor is it to be filed
with, included in or referred to in whole or in part in any registration
statement, proxy statement or any other document, except in accordance with our
prior written consent. We understand that the Company has determined to include
our opinion in the above-referenced Joint Proxy Statement/Prospectus.
In that regard, we hereby consent to the reference to the opinion of our
Firm under the caption "Item 4. Solicitation or Recommendation" and to the
inclusion of the foregoing opinion in the above-mentioned Joint Proxy
Statement/Prospectus. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933 or the rules and regulations of the Securities
and Exchange Commission thereunder.
Very truly yours,
/s/ Goldman, Sachs & Co.
GOLDMAN, SACHS & CO.
<PAGE>
EXHIBIT 99.6
TRIBUNE COMPANY PROXY CARD
- --------------------------------------------------------------------------------
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 12, 2000
("TRIBUNE SPECIAL MEETING")
The undersigned stockholder of Tribune Company ("Tribune"), a Delaware
corporation, hereby acknowledges receipt of notice of the Tribune Special
Meeting and the related proxy statement/prospectus and hereby appoints each of
JOHN W. MADIGAN and CRANE H. KENNEY, proxy and attorney-in-fact, each with full
power of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the Tribune Special Meeting to be held on Monday,
June 12, 2000, at 9:00 a.m., Chicago time, at Tribune Company, Campbell Hall,
7th Floor, 435 North Michigan Avenue, Chicago, Illinois 60611, and at any
adjournments or postponements thereof, and to vote as indicated herein all of
the common shares, without par value, of Tribune which the undersigned would be
entitled to vote if then and there personally present, on the matters set forth
on the reverse side hereof.
To vote by telephone or via the Internet, please see the reverse side of this
card. To vote by mail, please complete, sign and date this card on the reverse
side and mail it promptly in the enclosed envelope. Tribune's directors
recommend a vote FOR proposal 1.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED BY THE
STOCKHOLDER. IF NO SPECIFICATIONS ARE MADE, THIS PROXY WILL BE VOTED "FOR"
PROPOSAL 1, AND WITH DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE TRIBUNE SPECIAL MEETING OR ANY POSTPONEMENTS OR
ADJOURNMENTS THEREOF.
. FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL .
TRIBUNE
PLEASE RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
<PAGE>
[X] Please mark your vote as in this example.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TRIBUNE.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
- -------------------------------------------------------------------------------
1. Proposal to approve, authorize and adopt the merger agreement (the "Merger
Agreement"), dated as of March 13, 2000, between Tribune and The Times
Mirror Company ("Times Mirror").
Approval of the Merger Agreement includes approval of the merger of Times Mirror
with and into Tribune, the issuance of shares of Tribune common stock in the
merger, and the amendment to Tribune's restated certificate of incorporation to
increase the authorized number of shares of Tribune common stock and Tribune
preferred stock and to permit amendment of certain provisions of Tribune's
bylaws only by the vote of all of the holders of the outstanding Tribune voting
stock or all of the members of the Tribune board of directors, all as more fully
described in the proxy statement/prospectus.
FOR [_] AGAINST [_] ABSTAIN [_]
2. By returning this proxy card you are conferring upon management the
authority to vote upon such other business as may properly come before the
Tribune Special Meeting or any postponements or adjournments thereof.
- --------------------------------------------------------------------------------
Please sign exactly as your name appears herein. If shares are held jointly, all
holders should sign. When signing as attorney, executor, administrator, trustee
or guardian, please give your full title. If a corporation, please sign in full
corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person, indicating, where proper,
the official or representative capacity.
_______________________________________
_______________________________________
SIGNATURE(S) DATE
. FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY BY MAIL .
------------------
------------------
TRIBUNE
Dear Stockholder:
We encourage you to vote your shares electronically either by telephone or via
the Internet. This will eliminate the need to return your proxy card. You
will need your proxy card and Social Security Number (where applicable) when
voting your shares electronically. The Voter Control Number that appears in
the box above, just below the perforation, must be used in order to vote by
telephone or via the Internet.
The EquiServe Vote by Telephone and Vote by Internet systems can be accessed
24-hours a day, seven days a week up until the day prior to the meeting.
TO VOTE BY TELEPHONE:
---------------------
Using a touch-tone phone call toll-free: 1-877-PRX-VOTE (1-877-779-8683)
TO VOTE BY INTERNET:
--------------------
Log on to the Internet and go to the website: http://www.eproxyvote.com/trb
Note: If you vote over the Internet, you may incur costs such as
telecommunication and Internet access charges for which you will be
responsible.
THANK YOU FOR VOTING YOUR SHARES.
YOUR VOTE IS IMPORTANT!
DO NOT RETURN THIS PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR THE INTERNET.
<PAGE>
EXHIBIT 99.7
TRIBUNE COMPANY VOTING INSTRUCTION CARD
- -------------------------------------------------------------------------------
For Special Meeting of Stockholders to be Held June 12, 2000 ("Tribune Special
Meeting")
The undersigned stockholder of Tribune Company ("Tribune"), a Delaware
corporation, hereby acknowledges receipt of notice of the Tribune Special
Meeting and the related proxy statement/prospectus and hereby instructs The
Northern Trust Company, as Trustee for the Tribune Company Employee Stock
Ownership Plan, Vanguard Fiduciary Trust Company, as Trustee for the Tribune
Company Savings Incentive Plan, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as nominee under the Tribune Company Employee Stock Purchase
Plan, to vote as indicated herein all of the common shares, without par value,
of Tribune, and all of the preferred shares, without par value, of Tribune,
held in my respective plan accounts, at the Tribune Special Meeting to be held
on Monday, June 12, 2000, at 9:00 a.m., Chicago time, at Tribune Company,
Campbell Hall, 7th Floor, 435 North Michigan Avenue, Chicago, Illinois 60611,
and at any adjournments or postponements thereof, on the matters set forth on
the reverse side hereof.
To vote by telephone or via the Internet, please see the reverse side of this
card. To vote by mail, please complete, sign and date this card on the reverse
side and mail it promptly in the enclosed envelope. Tribune's directors
recommend a vote FOR proposal 1.
THIS VOTING INSTRUCTION CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED AS
SPECIFIED BY THE STOCKHOLDER. IF NO SPECIFICATIONS ARE MADE, THIS VOTING
INSTRUCTION CARD WILL BE VOTED "FOR" PROPOSAL 1, AND WITH DISCRETIONARY
AUTHORITY ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE TRIBUNE
SPECIAL MEETING OR ANY POSTPONEMENTS OR ADJOURNMENTS THEREOF.
FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR COMPLETED VOTING INSTRUCTION CARD
BY MAIL
TRIBUNE
Dear Benefit Plan Participant:
You own Tribune stock as a participant in the Employee Stock Ownership Plan,
Savings Incentive Plan and/or Employee Stock Purchase Plan. One of the
privileges of stock ownership is the right to vote at the Tribune Special
Meeting.
You may indicate your vote by completing the perforated voting instruction card
that appears directly above and returning it to First Chicago Trust Company, a
Division of EquiServe, in the enclosed envelope. Alternatively, you may follow
the telephonic or Internet voting procedures set forth on the reverse side
hereof. Employee involvement is one of Tribune's values, so I encourage you to
participate in this important process. Your vote is confidential and will be
seen only by First Chicago Trust Company, a Division of EquiServe, as
tabulating agent for the plan trustees and administrator.
Sincerely
/s/ JOHN W. MADIGAN
<PAGE>
[X] Please mark your vote as in this example.
This voting instruction card is solicited on behalf of the Board of Directors
of Tribune.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR proposal 1.
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Proposal to approve, authorize and adopt the merger agreement (the "Merger Agreement"), dated as of March 13, 2000, between
Tribune and The Times Mirror Company ("Times Mirror").
Approval of the Merger Agreement includes approval of the merger of Times Mirror with and into Tribune, the issuance of shares of
Tribune common stock in the merger, and the amendment to Tribune's restated certificate of incorporation to increase the authorized
number of shares of Tribune common stock and Tribune preferred stock and to permit amendment of certain provisions of Tribune's
bylaws only by the vote of all of the holders of the outstanding Tribune voting stock or all of the members of the Tribune board of
directors, all as more fully described in the proxy statement/prospectus.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. By returning this voting instruction card you are conferring upon management the authority to vote upon such other business as
may properly come before the Tribune Special Meeting or any postponements or adjournments thereof.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please sign exactly as your name appears herein. If shares are held jointly,
all holders should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person, indicating,
where proper, the official or representative capacity.
_____________________________________________
_____________________________________________
SIGNATURE(S) DATE
FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR COMPLETED VOTING INSTRUCTION CARD
BY MAIL
-----------------
-----------------
TRIBUNE
Dear Benefit Plan Participant:
We encourage you to vote your shares electronically either by telephone or via
the Internet. This will eliminate the need to return your voting instruction
card. You will need your voting instruction card and Social Security Number
(where applicable) when voting your shares electronically. The Voter Control
Number that appears in the box above, just below the perforation, must be used
in order to vote by telephone or via the Internet.
The EquiServe Vote by Telephone and Vote by Internet systems can be accessed
24-hours a day, seven days a week prior to June 8, 2000.
To Vote By Telephone:
--------------------
Using a touch-tone phone call toll-free: 1-877-PRX-VOTE (1-877-779-8683)
To Vote By Internet:
-------------------
Log on to the Internet and go to the website: http://www.eproxyvote.com/trb
Note: If you vote over the Internet, you may incur costs such as
telecommunication and Internet access charges for which you will be
responsible.
THANK YOU FOR VOTING YOUR SHARES.
YOUR VOTE IS IMPORTANT!
DO NOT RETURN THIS PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR THE INTERNET.
<PAGE>
EXHIBIT 99.8
[TIMES MIRROR LOGO]
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF SHAREHOLDERS, JUNE 12, 2000
The undersigned, revoking all prior proxies, hereby appoints Efrem
Zimbalist III, Roger H. Molvar and William A. Niese, or each or any of them, as
proxies for the undersigned, with full power of substitution, to vote all shares
of Series A Common Stock and Series C Common Stock which the undersigned is
entitled to vote at the Special Meeting of Shareholders of The Times Mirror
Company to be held at 9:30 a.m. Los Angeles time, on June 12, 2000 in the Harry
Chandler Auditorium, Times Mirror Square, Los Angeles, California 90053, or at
any adjournment or postponement thereof, upon such business as may properly come
before the meeting or at any postponement or adjournment thereof including
without limiting such general authorization, the proposals described on the
reverse side of this WHITE card and in the accompanying proxy statement.
Unless otherwise specified on the reverse side, this proxy will be voted
FOR the approval of the Agreement and Plan of Merger, dated as of March 13,
2000, between Tribune Company and The Times Mirror Company.
SERIES A and SERIES C COMMON STOCK
(continued, and to be signed on the reverse side)
FOLD AND DETACH HERE
<PAGE>
THE TIMES MIRROR COMPANY
PLEASE MARK VOTE IN OVAL USING DARK INK ONLY.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1.
1. Adoption of the Agreement and Plan of Merger, dated as of March 13, 2000,
between Tribune Company and The Times Mirror Company.
FOR AGAINST ABSTAIN
( ) ( ) ( )
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments,
postponements, continuations or reschedulings thereof. However, no proxy that is
voted against Proposal 1 will be voted in favor of adjournment, postponement,
continuation or rescheduling of the meeting for the purpose of allowing
additional time to solicit additional votes or proxies in favor of adoption of
the Agreement and Plan of Merger.
Check here if you plan to attend the meeting. ( )
The undersigned agrees that said proxies may vote
in accordance with their discretion with respect
to any other matters which may properly come
before the meeting. The undersigned instructs
such proxies to vote as directed on this proxy.
This proxy should be dated, signed by the
shareholder exactly as printed at the left and
returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so
indicate.
Dated: __________________________, 2000
______________________________________
(Signature)
______________________________________
(Signature if held jointly)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
CONTROL NUMBER [TIMES MIRROR LOGO]
[BOX]
VOTE BY TELEPHONE
Call [STAR] [STAR] Toll Free [STAR] [STAR] On a Touch Tone Telephone
(877) 289-2364 - ANYTIME
There is NO CHARGE for this call
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card, and gives them
discretion to vote on such other matters as may properly come before the
meeting. You will be asked to enter a Control Number which is located on the
box on the left side of this form. If you enter your Control Number, but do not
make a choice of any item, your shares will be voted FOR ITEM 1.
Have this proxy card in hand when you vote. To vote as the Board of Directors
recommends on Item 1, press 1. When asked, please confirm your vote by pressing
1 again. If you do not plan on voting as the Board recommends, please press 0
and follow the recorded instructions.
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK THIS WHITE PROXY CARD UNLESS YOU PLAN
TO ATTEND THE SPECIAL MEETING. PLEASE CHECK THE APPROPRIATE BOX ON THE REVERSE
SIDE OF THIS WHITE PROXY CARD AND RETURN THIS WHITE PROXY CARD TO HARRIS TRUST
COMPANY OF CALIFORNIA USING THE ENCLOSED WHITE ENVELOPE TO RSVP YOUR ATTENDANCE
AT THE SPECIAL MEETING TO BE HELD ON JUNE 12, 2000 AT 9:30 A.M., LOS ANGELES
TIME, IN THE HARRY CHANDLER AUDITORIUM, TIMES MIRROR SQUARE, LOS ANGELES,
CALIFORNIA 90053. PROXIES SUBMITTED BY TELEPHONE MUST BE RECEIVED BY 9:30 A.M.,
LOS ANGELES TIME, ON SATURDAY, JUNE 10, 2000.
THANK YOU FOR VOTING!
<PAGE>
[TIMES MIRROR LOGO]
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF SHAREHOLDERS, JUNE 12, 2000
TO: Participants in the Times Mirror Savings Plus Plan
and The Times Mirror Employee Stock Ownership Plan
The Times Mirror Savings Plus Plan (the "SPP") and The Times Mirror
Employee Stock Ownership Plan (the "ESOP") provide that the Trustee shall vote
all the shares of Times Mirror Common Stock held in the SPP (including PAYSOP)
and all shares allocated to participants' accounts under the ESOP at any meeting
of shareholders of the Company in accordance with written instructions from the
participants. Please mark your voting instructions for the June 12, 2000 Special
Meeting of Shareholders or any adjournment or postponement thereof in the spaces
provided on the reverse side of this WHITE card, sign and date the form and
return it to the Company's transfer agent in the enclosed WHITE postage prepaid
envelope. Please return this card promptly.
THE TRUSTEE
You may receive other instruction cards for shares registered in a different
manner. If so, please sign and return all such instruction cards in the enclosed
WHITE envelope.
SERIES A and SERIES C COMMON STOCK
TO: Trustee for the Times Mirror Savings Plan and The Times Mirror Employee
Stock Ownership Plan
Please vote all shares of Times Mirror Series A and Series C Common Stock
held in my account under the Times Mirror Savings Plan (including PAYSOP) and
all such shares allocated to my account under The Times Mirror Employee Stock
Ownership Plan as follows:
(continued, and to be signed on the reverse side)
FOLD AND DETACH HERE
<PAGE>
THE TIMES MIRROR COMPANY
PLEASE MARK VOTE IN OVAL USING DARK INK ONLY.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1.
1. Adoption of the Agreement and Plan of Merger, dated as of March 13, 2000,
between Tribune Company and The Times Mirror Company.
FOR AGAINST ABSTAIN
( ) ( ) ( )
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments,
postponements, continuations or reschedulings thereof. However, no proxy that is
voted against Proposal 1 will be voted in favor of adjournment, postponement,
continuation or rescheduling of the meeting for the purpose of allowing
additional time to solicit additional votes or proxies in favor of adoption of
the Agreement and Plan of Merger.
Check here if you plan to attend the meeting. ( )
NOTE: Your voting instructions are solicited for
shares in your Savings Plus Plan account
(including PAYSOP) and shares allocated to your
account under the ESOP. All such shares will be
voted as you direct, but if you fail to return
your instructions, your shares held in the ESOP
and in the PAYSOP portion of the Savings Plus Plan
will be voted by the Trustee. Your shares in the
Savings Plus Plan, exclusive of the PAYSOP
account, will remain unvoted and will be recorded
as abstentions if you fail to return your
instructions.
Dated: __________________________, 2000
______________________________________
(Signature - please sign exactly as imprinted at
left)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
CONTROL NUMBER [TIMES MIRROR LOGO]
[BOX]
VOTE BY TELEPHONE
Call [STAR] [STAR] Toll Free [STAR] [STAR] On a Touch Tone Telephone
(888) 221-0694 - ANYTIME
There is NO CHARGE for this call
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card, and gives them
discretion to vote on such other matters as may properly come before the
meeting. You will be asked to enter a Control Number which is located on the
box on the left side of this form. If you enter your Control Number, but do not
make a choice of any item, your shares will be voted FOR ITEM 1.
Have this proxy card in hand when you vote. To vote as the Board of Directors
recommends on Item 1, press 1. When asked, please confirm your vote by pressing
1 again. If you do not plan on voting as the Board recommends, please press 0
and follow the recorded instructions.
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK THIS WHITE PROXY CARD UNLESS YOU PLAN
TO ATTEND THE SPECIAL MEETING. PLEASE CHECK THE APPROPRIATE BOX ON THE REVERSE
SIDE OF THIS WHITE PROXY CARD AND RETURN THIS WHITE PROXY CARD TO HARRIS TRUST
COMPANY OF CALIFORNIA USING THE ENCLOSED WHITE ENVELOPE TO RSVP YOUR ATTENDANCE
AT THE SPECIAL MEETING TO BE HELD ON JUNE 12, 2000 AT 9:30 A.M., LOS ANGELES
TIME, IN THE HARRY CHANDLER AUDITORIUM, TIMES MIRROR SQUARE, LOS ANGELES,
CALIFORNIA 90053. PROXIES SUBMITTED BY TELEPHONE MUST BE RECEIVED BY 9:30 A.M.,
LOS ANGELES TIME, ON SATURDAY, JUNE 10, 2000.
THANK YOU FOR VOTING!
<PAGE>
EXHIBIT 99.9
CONSENT OF PERSON TO BE NAMED A DIRECTOR
The undersigned, who has agreed to serve as a member of the Board of Directors
of Tribune Company (the "Company") hereby grants the Company consent to use his
name in its Registration Statement on Form S-4 and all amendments, including
post-effective amendments, to the Registration Statement (or any other
Registration Statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933).
Dated: April 19, 2000 /s/ Jeffrey Chandler
--------------------
Jeffrey Chandler
<PAGE>
EXHIBIT 99.10
CONSENT OF PERSON TO BE NAMED A DIRECTOR
The undersigned, who has agreed to serve as a member of the Board of Directors
of Tribune Company (the "Company") hereby grants the Company consent to use his
name in its Registration Statement on Form S-4 and all amendments, including
post-effective amendments, to the Registration Statement (or any other
Registration Statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933).
Dated: April 27, 2000 /s/ Roger Goodan
----------------
Roger Goodan
<PAGE>
EXHIBIT 99.11
CONSENT OF PERSON TO BE NAMED A DIRECTOR
The undersigned, who has agreed to serve as a member of the Board of Directors
of Tribune Company (the "Company") hereby grants the Company consent to use his
name in its Registration Statement on Form S-4 and all amendments, including
post-effective amendments, to the Registration Statement (or any other
Registration Statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933).
Dated: April 19, 2000 /s/ William Stinehart, Jr.
--------------------------
William Stinehart, Jr.
<PAGE>
EXHIBIT 99.12
CONSENT OF PERSON TO BE NAMED A DIRECTOR
The undersigned, who has agreed to serve as a member of the Board of Directors
of Tribune Company (the "Company") hereby grants the Company consent to use his
name in its Registration Statement on Form S-4 and all amendments, including
post-effective amendments, to the Registration Statement (or any other
Registration Statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933).
Dated: April 17, 2000 /s/ Thomas Unterman
-------------------
Thomas Unterman
