<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 1, 1996
INFINITY BROADCASTING CORPORATION
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-14702 13-2766282
- -------- ------- ----------
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
600 Madison Avenue, New York, New York 10022
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 750-6400
----------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Item 1. Changes in Control of Registrant.
---------------------------------
(b) On June 20, 1996, Westinghouse Electric Corporation
("Westinghouse"), R Acquisition Corp., a wholly owned subsidiary of Westinghouse
("Sub"), and Infinity Broadcasting Corporation (the "Corporation") entered into
an Agreement and Plan of Merger (the "Merger Agreement") providing, subject to
the terms and conditions set forth therein, for the merger of Sub with and into
the Corporation (the "Merger"). Pursuant to the terms of the Merger Agreement,
stockholders of the Corporation will receive in the Merger 1.71 shares of common
stock of Westinghouse in exchange for each share of common stock of the
Corporation. The consummation of the Merger is conditioned on, among other
things, the approval of the Federal Communications Commission, the stockholders
of Westinghouse and the stockholders of the Corporation.
In addition, on June 20, 1996, Westinghouse and certain
stockholders of the Corporation holding in the aggregate approximately 51
percent of the voting stock of the Corporation entered into a Stockholder
Agreement (the "Stockholder Agreement") providing, subject to the terms and
conditions set forth therein, that such stockholders will vote the shares of
stock of the Corporation held by them in favor of the Merger.
Copies of the Merger Agreement, the Stockholder Agreement and
a related press release are attached as exhibits hereto and are incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
----------------------------------
(c) Exhibits
2. Agreement and Plan of Merger, dated as of
June 20, 1996, among Westinghouse, Sub and the Corporation.
99.1. Stockholder Agreement, dated as of June 20,
1996, among Westinghouse and the other signatories thereto.
99.2. Press Release.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
INFINITY BROADCASTING CORPORATION
(Registrant)
Date: July 1, 1996
By: /s/ Farid Suleman
------------------------------
Farid Suleman
Vice President-Finance and
Chief Financial Officer
2
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
2 Agreement and Plan of Merger, dated as of
June 20, 1996, among Westinghouse, Sub and the
Corporation.
99.1 Stockholder Agreement, dated as of June 20,
1996, among Westinghouse and the other
signatories thereto.
99.2 Press Release.
3
<PAGE>
===============================================================================
AGREEMENT AND PLAN OF MERGER
among
WESTINGHOUSE ELECTRIC CORPORATION,
R ACQUISITION CORP.
and
INFINITY BROADCASTING CORPORATION
Dated as of June 20, 1996
===============================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER
SECTION 1.01.
The Merger.................................................... 2
SECTION 1.02.
Closing....................................................... 3
SECTION 1.03.
Effective Time................................................ 3
SECTION 1.04.
Effects of the Merger......................................... 3
SECTION 1.05.
Certificate of Incorporation and
By-laws..................................... 3
SECTION 1.06.
Directors..................................................... 4
SECTION 1.07.
Officers...................................................... 4
ARTICLE II
EFFECT OF THE MERGER ON THE
CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01.
Effect on Capital Stock....................................... 4
SECTION 2.02.
Exchange of Certificates...................................... 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01.
Representations and Warranties of
the Company................................. 9
SECTION 3.02.
Representations and Warranties of
Parent and Sub.............................. 25
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.01.
Conduct of Business........................................... 35
SECTION 4.02.
No Solicitation............................................... 40
ii
<PAGE>
PAGE
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01.
Preparation of the Form S-4 and the
Joint Proxy Statement; Stock-
holders Meetings............................ 42
SECTION 5.02.
Letters of the Company's
Accountants................................. 43
SECTION 5.03.
Letters of Parent's Accountants............................... 43
SECTION 5.04.
Access to Information;
Confidentiality............................. 44
SECTION 5.05.
Reasonable Efforts............................................ 44
SECTION 5.06.
Stock Options; Warrants....................................... 46
SECTION 5.07.
Benefit Plans................................................. 49
SECTION 5.08.
Indemnification, Exculpation and
Insurance................................... 49
SECTION 5.09.
Fees and Expenses............................................. 49
SECTION 5.10.
Public Announcements.......................................... 50
SECTION 5.11.
Affiliates.................................................... 51
SECTION 5.12.
NYSE Listing.................................................. 51
SECTION 5.13.
Stockholder Litigation........................................ 51
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01.
Conditions to Each Party's
Obligation to Effect the Merger............. 51
SECTION 6.02.
Conditions to Obligations of Parent
and Sub..................................... 53
SECTION 6.03.
Conditions to Obligation of the
Company..................................... 56
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01.
Termination................................................... 57
SECTION 7.02.
Effect of Termination......................................... 58
SECTION 7.03.
Amendment..................................................... 59
SECTION 7.04.
Extension; Waiver............................................. 59
SECTION 7.05.
Procedure for Termination,
Amendment, Extension or Waiver.............. 59
iii
<PAGE>
PAGE
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01.
Nonsurvival of Representations and
Warranties.................................. 60
SECTION 8.02.
Notices....................................................... 60
SECTION 8.03.
Definitions................................................... 61
SECTION 8.04.
Interpretation................................................ 62
SECTION 8.05.
Counterparts.................................................. 63
SECTION 8.06.
Entire Agreement; No Third Party
Beneficiaries............................... 63
SECTION 8.07.
Governing Law................................................. 63
SECTION 8.08.
Assignment.................................................... 64
SECTION 8.09.
Enforcement................................................... 64
iv
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of
June 20, 1996, among WESTINGHOUSE ELECTRIC
CORPORATION, a Pennsylvania corporation ("Parent"), R
ACQUISITION CORP., a Delaware corporation and a
wholly owned subsidiary of Parent ("Sub"), and
INFINITY BROADCASTING CORPORATION, a Delaware
corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and
the Company, and Parent acting as the sole stockholder of Sub, have approved the
merger of Sub with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued and
outstanding share of Class A Common Stock, par value $.002 per share, of the
Company ("Company Class A Common Stock"), each issued and outstanding share of
Class B Common Stock, par value $.002 per share, of the Company ("Company Class
B Common Stock") and each issued and outstanding share of Class C Common Stock,
par value $.002 per share, of the Company ("Company Class C Common Stock" and,
together with the Company Class A Common Stock and the Company Class B Common
Stock, the "Company Common Stock"), in each case other than shares owned
directly or indirectly by Parent or the Company, will be converted into the
right to receive the Merger Consideration (as defined in Section 2.01(c));
WHEREAS as a condition of the willingness of Parent to enter
into this Agreement, those individuals and trusts set forth on Schedule A
attached to the Stockholder Agreement (as defined below), as the holders of all
the outstanding Company Class B Common Stock (the "Principal Stockholders"),
have entered into the Stockholder Agreement dated as of the date hereof (the
"Stockholder Agreement") with Parent, which provides, among other things, that,
subject to the terms and conditions thereof, each Principal Stockholder will
vote his or its shares of Company Common Stock in favor of the Merger and the
approval and adoption of this Agreement;
WHEREAS the Board of Directors of the Company has
approved the terms of the Stockholder Agreement;
WHEREAS Parent, Sub and the Company desire to make
certain representations, warranties, covenants and
<PAGE>
2
agreements in connection with the Merger and also to
prescribe various conditions to the Merger; and
WHEREAS, for Federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
ARTICLE I
The Merger
----------
SECTION 1.01. The Merger. (a) Upon the terms and subject to
-----------
the conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time (as defined in Section 1.03). Following the
Effective Time, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Sub in accordance with the DGCL.
(b) At the election of Parent, any direct or indirect wholly
owned subsidiary (as defined in Section 8.03) of Parent may be substituted for
Sub as a constituent corporation in the Merger. In such event, the parties agree
to execute an appropriate amendment to this Agreement in order to reflect such
substitution.
(c) If at any time prior to the Effective Time Parent creates
a new public holding company that becomes the sole shareholder of Parent (the
"Holding Company"), the Holding Company shall be substituted for Parent for all
purposes hereunder (and shares of common stock of the Holding Company will be
issued as the Merger Consideration in the same manner and amount as shares of
Parent Common Stock (as defined in Section 2.01(c)) would have otherwise been
issued hereunder), and the parties agree to execute an appropriate amendment to
this Agreement in order to reflect such substitution.
<PAGE>
3
SECTION 1.02. Closing. The closing of the Merger (the
--------
"Closing") will take place at 10:00 a.m. on a date to be specified by the
parties (the "Closing Date"), which (subject to satisfaction or waiver of the
conditions set forth in Sections 6.01, 6.02 and 6.03) shall be no later than the
second business day after satisfaction or waiver of the conditions set forth in
Section 6.01, at the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825
Eighth Avenue, New York, New York 10019, unless another time, date or place is
agreed to in writing by the parties hereto.
SECTION 1.03. Effective Time. Subject to the provisions of
----------------
this Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State, or at
such other time as Sub and the Company shall agree should be specified in the
Certificate of Merger (the time the Merger becomes effective being hereinafter
referred to as the "Effective Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the
----------------------
effects set forth in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws. (a)
------------------------------------------
The certificate of incorporation of the Company, as in effect immediately prior
to the Effective Time, shall be amended as of the Effective Time so that
Articles FOUR, FIVE and SIX thereof read in their entirety as follows:
"ARTICLE FOUR
CAPITAL STRUCTURE
The total number of shares of capital stock which the
Corporation shall have authority to issue is 1,000 shares of common stock, par
value $1.00 per share (the "Common Stock").
ARTICLE FIVE
[Intentionally omitted]
<PAGE>
4
ARTICLE SIX
[Intentionally omitted]".
As so amended, such certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
(b) The by-laws of the Company as in effect at the Effective
Time shall be the by-laws of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable law.
SECTION 1.06. Directors. The directors of Sub 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 1.07. Officers. The officers of the Company
---------
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 II
Effect of the Merger on the Capital Stock of the
------------------------------------------------
Constituent Corporations; Exchange of Certificates
--------------------------------------------------
SECTION 2.01. Effect on Capital Stock. As of the Effective
-------------------------
Time, by virtue of the Merger and without any action on the part of the holder
of any shares of Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
---------------------
capital stock of Sub shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, par value
$1.00 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock.
------------------------------------------------------
Each share of Company Common Stock that
is owned by the Company or by any subsidiary of the
<PAGE>
5
Company and each share of Company Common Stock that is owned by Parent,
Sub or any other subsidiary of Parent shall automatically be cancelled
and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section
-------------------------------------
2.02(e), each issued and outstanding share of Company Common Stock
(other than shares to be cancelled in accordance with Section 2.01(b))
shall be converted into the right to receive 1.71 (the "Conversion
Number") fully paid and nonassessable shares of common stock, par value
$1.00 per share, of Parent ("Parent Common Stock") (the "Merger
Consideration"). As of the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate representing any such shares of Company Common Stock shall
cease to have any rights with respect thereto, except the right to
receive the Merger Consideration and any cash in lieu of fractional
shares of Parent Common Stock to be issued or paid in consideration
therefor upon surrender of such certificate in accordance with Section
2.02, without interest.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. As
------------------------- ---------------
of the Effective Time, Parent shall enter into an agreement with such bank or
trust company as may be designated by Parent (the "Exchange Agent"), which shall
provide that Parent shall deposit with the Exchange Agent as of the Effective
Time, for the benefit of the holders of shares of Company Common Stock, for
exchange in accordance with this Article II, through the Exchange Agent,
certificates representing the shares of Parent Common Stock (such shares of
Parent Common Stock, together with any dividends or distributions with respect
thereto with a record date after the Effective Time, and any cash payable in
lieu of any fractional shares of Parent Common Stock being hereinafter referred
to as the "Exchange Fund") issuable pursuant to Section 2.01 in exchange for
outstanding shares of Company Common Stock.
(b) Exchange Procedures. As soon as reasonably
--------------------
practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time
<PAGE>
6
represented outstanding shares of Company Common Stock (the "Certificates")
whose shares were converted into the right to receive the Merger Consideration
pursuant to Section 2.01, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Parent may reasonably specify)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive in exchange therefor
a certificate representing that number of whole shares of Parent Common Stock
and cash, if any, which such holder has the right to receive pursuant to the
provisions of this Article II, and the Certificate so surrendered shall
forthwith be cancelled. In the event of a transfer of ownership of Company
Common Stock which is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Parent Common Stock may
be issued to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such payment
shall pay any transfer or other taxes required by reason of the issuance of
shares of Parent Common Stock to a person other than the registered holder of
such Certificate or establish to the satisfaction of Parent that such tax has
been paid or is not applicable. Until surrendered as contemplated by this
Section 2.02, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Merger
Consideration and cash, if any, which the holder thereof has the right to
receive in respect of such Certificate pursuant to the provisions of this
Article II. No interest will be paid or will accrue on any cash payable to
holders of Certificates pursuant to the provisions of this Article II.
(c) Distributions with Respect to Unexchanged Shares. No
-----------------------------------------------------
dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Parent Common
<PAGE>
7
Stock represented thereby, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 2.02(e), and all such
dividends, other distributions and cash in lieu of fractional shares of Parent
Common Stock shall be paid by Parent to the Exchange Agent and shall be included
in the Exchange Fund, in each case until the surrender of such Certificate in
accordance with this Article II. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the holder
of the certificate representing whole shares of Parent Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of any cash payable in lieu of a fractional share of Parent Common Stock
to which such holder is entitled pursuant to Section 2.02(e) and the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Parent Common Stock, 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 such
surrender and with a payment date subsequent to such surrender payable with
respect to such whole shares of Parent Common Stock.
(d) No Further Ownership Rights in Company Common Stock. All
------------------------------------------------------
shares of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Article II (including any cash
paid pursuant to this Article II) shall be deemed to have been issued (and paid)
in full satisfaction of all rights pertaining to the shares of Company Common
Stock theretofore represented by such Certificates, subject, however, to the
------- -------
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have been
declared or made by the Company on such shares of Company Common Stock in
accordance with the terms of this Agreement or prior to the date of this
Agreement and which remain unpaid at the Effective Time, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be cancelled and exchanged as provided in this
Article II, except as otherwise provided by law.
<PAGE>
8
(e) No Fractional Shares. (i) No certificates or scrip
-----------------------
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates, no dividend or distribution of Parent
shall relate to such fractional share interests and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
shareholder of Parent.
(ii) Notwithstanding any other provision of this Agreement, each
holder of shares of Company Common Stock exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a share of Parent
Common Stock (after taking into account all Certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to such fractional part of a share of Parent Common Stock multiplied by
the closing price of a share of Parent Common Stock on the New York Stock
Exchange ("NYSE") Composite Transactions List (as reported by the Wall Street
-----------
Journal or, if not reported thereby, any other authoritative source) on the
- -------
Closing Date.
(f) Termination of Exchange Fund. Any portion of the Exchange
-----------------------------
Fund which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to Parent, upon demand, and
any holders of the Certificates who have not theretofore complied with this
Article II shall thereafter look only to Parent for payment of their claim for
the Merger Consideration, any cash in lieu of fractional shares of Parent Common
Stock and any dividends or distributions with respect to Parent Common Stock.
(g) No Liability. None of Parent, Sub, the Company or the
--------------
Exchange Agent shall be liable to any person in respect of any shares of Parent
Common Stock or any cash from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificate shall not have been surrendered prior to seven years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration, any cash payable to the holder of such Certificate pursuant to
this Article II or any dividends or distributions payable to the holder of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.01(d))), any such Merger
Consideration or cash shall, to the extent permitted by applicable law, become
the property of the
<PAGE>
9
Surviving Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall
------------------------------
invest any cash included in the Exchange Fund, as directed by Parent, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to Parent.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company.
-----------------------------------------------
Except as set forth with respect to a specifically identified representation and
warranty on the Disclosure Schedule delivered by the Company to Parent prior to
the execution of this Agreement (the "Company Disclosure Schedule"), the Company
represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of the
--------------------------------------------
Company and each of its significant subsidiaries (as defined in Section
8.03) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated
and has the requisite corporate power and authority to carry on its
business as now being conducted. Each of the Company and each of its
significant subsidiaries is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed or to be in good
standing individually or in the aggregate would not have a material
adverse effect (as defined in Section 8.03(c)) on the Company. The
Company has delivered to Parent prior to the execution of this
Agreement complete and correct copies of its certificate of
incorporation and by-laws and the certificates of incorporation and
by-laws (or comparable organizational documents) of its significant
subsidiaries, in each case as amended to date.
(b) Subsidiaries. As of the date hereof, the
-------------
Company Disclosure Schedule sets forth a true and
<PAGE>
10
complete list of each subsidiary of the Company. All the outstanding
shares of capital stock of each subsidiary of the Company have been
validly issued and are fully paid and nonassessable and are owned
directly or indirectly by the Company, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever (collectively, "Liens"). Except for the capital
stock of its subsidiaries, as of the date hereof, the Company does not
own, directly or indirectly, any capital stock or other ownership
interest in any corporation, limited liability company, partnership,
joint venture or other entity.
(c) Capital Structure. The authorized capital stock of the
-------------------
Company consists of 200,000,000 shares of Company Class A Common Stock,
17,500,000 shares of Company Class B Common Stock and 30,000,000 shares
of Company Class C Common Stock and 1,000,000 shares of preferred
stock, par value $.01 per share, of the Company ("Company Preferred
Stock"). Immediately following the Company's 1996 annual meeting, which
is scheduled for July 10, 1996, the number of authorized shares of
Company Class A Common Stock will increase to 300,000,000, if such
increase is approved by the Company's stockholders. At the close of
business on June 12, 1996, (i) 76,337,396 shares of Company Class A
Common Stock were issued and outstanding, (ii) 8,310,465 shares of
Company Class B Common Stock were issued and outstanding, (iii)
1,116,257 shares of Company Class C Common Stock were issued and
outstanding, (iv) no shares of Company Preferred Stock were issued and
outstanding, (v) 4,320,517 shares of Company Class A Common Stock and
no shares of Company Class B Common Stock or Company Class C Common
Stock were held by the Company in its treasury, (vi) 10,626,503 shares
of Company Class A Common Stock and 9,135,317 shares of Company Class B
Common Stock were reserved for issuance pursuant to the Stock Plans (as
defined in Section 5.06), (vii) 8,310,465 and 1,116,257 shares of
Company Class A Common Stock were reserved for issuance upon conversion
of the Company Class B Common Stock and Company Class C Common Stock,
respectively, each of which are convertible on a one-for-one basis into
shares of Company Class A Common Stock, (viii) 72,989 shares of Company
Class A Common Stock and 20,104,934 shares of Company Class C Common
Stock were reserved for issuance upon exercise of all
<PAGE>
11
outstanding warrants of the Company (the "Company Warrants") and (ix)
270,865 shares of Company Class A Common Stock and 37,988 shares of
Class B Common Stock were reserved for issuance pursuant to outstanding
deferred share awards under the Company's Deferred Share Plan. Except
as set forth above, at the close of business on June 12, 1996, no
shares of capital stock or other voting securities of the Company were
issued, reserved for issuance or outstanding. There are no outstanding
stock appreciation rights or rights (other than the Employee Stock
Options (as defined in Section 5.06)) to receive shares of Company
Common Stock on a deferred basis granted under the Stock Plans or
otherwise. The Company Disclosure Schedule sets forth a complete and
correct list, as of June 12, 1996, of the holders of all Employee Stock
Options, the number of shares subject to each such option and the
exercise prices thereof. 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. 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, there are no outstanding 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 is bound obligating the
Company or any of its subsidiaries 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 or
obligating the Company or any of its subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries. There are no
outstanding contractual obligations of the Company to vote or to
dispose of any shares of the capital stock of any of its subsidiaries.
As of the date of this Agreement, the Principal Stockholders are the
record owners of a number of shares of Company Common
<PAGE>
12
Stock that in the aggregate constitutes a majority of the votes
entitled to be cast at the Company Stockholders Meeting (as defined in
Section 5.01(b)).
(d) Authority; Noncontravention. The Company has all requisite
----------------------------
corporate power and authority to enter into this Agreement and, subject
to the Company Stockholder Approval (as defined in Section 3.01(l))
with respect to the Merger, to consummate the transactions contemplated
by this Agreement. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of the Company, subject, in the
case of the Merger, to the Company Stockholder Approval. This Agreement
has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms. The execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of
this Agreement will not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of the
Company or any of its subsidiaries under, (i) the certificate of
incorporation or by-laws of the Company or the comparable
organizational documents of any of its subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license
applicable to the Company or any of its subsidiaries or their
respective properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses
(ii) and (iii), any such conflicts, violations, defaults, rights,
Liens, judgments, orders, decrees, statutes, laws, ordinances, rules or
regulations that individually or in the aggregate would not (x) have a
material adverse effect on the Company, (y) impair the ability of the
Company
<PAGE>
13
to perform its obligations under this Agreement in any material respect
or (z) delay in any material respect or prevent the consummation of any
of the transactions contemplated by this Agreement or the Stockholder
Agreement. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal, state or local
government or any court, administrative or regulatory agency or
commission or other governmental authority or agency (a "Governmental
Entity"), is required by or with respect to the Company or any of its
subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the
transactions contemplated by this Agreement, except for (1) the filing
of a premerger notification and report form by the Company under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"); (2) the filing with the Securities and Exchange Commission
(the "SEC") of (A) a proxy statement relating to the Company
Stockholders Meeting (such proxy statement, together with the proxy
statement relating to the Parent Shareholders Meeting (as defined in
Section 5.01(c)), in each case as amended or supplemented from time to
time, the "Joint Proxy Statement"), and (B) such reports under Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with this Agreement
and the transactions contemplated by this Agreement; (3) the filing of
the Certificate of Merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business and such filings with
Governmental Entities to satisfy the applicable requirements of state
securities or "blue sky" laws; (4) such filings with and approvals of
the Federal Communications Commission or any successor entity (the
"FCC") as may be required under the Communications Act of 1934, as
amended, and the rules, regulations and policies of the FCC thereunder
(collectively, the "Communications Act"), including in connection with
the transfer of the FCC Licenses (as defined in Section 3.01(s)) for
the operation of the Licensed Facilities (as defined in Section
3.01(s)); (5) such other filings and consents as may be required under
any environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval necessitated by the
Merger or the transactions
<PAGE>
14
contemplated by this Agreement; and (6) such consents, approvals,
orders or authorizations the failure of which to be made or obtained
would not reasonably be expected to have a material adverse effect on
the Company.
(e) SEC Documents; Undisclosed Liabilities. The Company has
-----------------------------------------
filed all required reports, schedules, forms, statements and other
documents with the SEC since January 1, 1995 (the "SEC Documents"). As
of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC Documents when
filed contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Except to the extent that
information contained in any SEC Document has been revised or
superseded by a later filed SEC Document, none of the SEC Documents
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company
included in the SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited statements, as permitted by Form 10-Q
of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present in
all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the Filed
SEC Documents (as defined in Section 3.01(g)), and except for
liabilities and obligations incurred in the
<PAGE>
15
ordinary course of business consistent with past practice since the
date of the most recent consolidated balance sheet included in the
Filed SEC Documents, neither the Company nor any of its subsidiaries
has any material liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by generally
accepted accounting principles to be recognized or disclosed on a
consolidated balance sheet of the Company and its consolidated
subsidiaries or in the notes thereto.
(f) Information Supplied. None of the information supplied or
---------------------
to be supplied by the Company specifically for inclusion or
incorporation by reference in (i) the registration statement on Form
S-4 to be filed with the SEC by Parent in connection with the issuance
of Parent Common Stock in the Merger (the "Form S-4") will, at the time
the Form S-4 is filed with the SEC, at any time it is amended or
supplemented or at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) the Joint Proxy Statement
will, at the date it is first mailed to the Company's stockholders or
at the time of the Company Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. The Joint Proxy Statement will comply as to form
in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder, except that no representation or
warranty is made by the Company with respect to statements made or
incorporated by reference therein based on information supplied by
Parent or Sub specifically for inclusion or incorporation by reference
in the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except as disclosed
-------------------------------------
in the SEC Documents filed and publicly available prior to the date of
this Agreement (as amended to the date of this Agreement, the "Filed
SEC Documents"), since the date of the most recent audited financial
statements included in the Filed SEC Documents, the Company has
conducted its business only
<PAGE>
16
in the ordinary course, and there has not been (i) any material adverse
change (as defined in Section 8.03(c)) in the Company, (ii) any
declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any
of the Company's capital stock, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock, (iv) (x)
any granting by the Company to any executive officer or other key
employee of the Company of any increase in compensation, except for
normal increases in the ordinary course of business consistent with
past practice or as required under employment agreements in effect as
of the date of the most recent audited financial statements included in
the Filed SEC Documents or (y) any granting by the Company to any such
executive officer of any increase in severance or termination pay,
except as was required under any employment, severance or termination
agreements in effect as of the date of the most recent audited
financial statements included in the Filed SEC Documents, (v) any
damage, destruction or loss, whether or not covered by insurance, that
has or could reasonably be expected to have a material adverse effect
on the Company or (vi) except insofar as may have been disclosed in the
Filed SEC Documents or required by a change in generally accepted
accounting principles, any change in accounting methods, principles or
practices by the Company materially affecting its assets, liabilities
or business.
(h) Litigation. Except as disclosed in the Filed SEC
-----------
Documents, there is no suit, action or proceeding (including any
proceeding by or before the FCC other than proceedings to amend FCC
rules of general applicability to the radio industry) pending or, to
the knowledge of the Company, threatened against or affecting the
Company or any of its subsidiaries that individually or in the
aggregate could reasonably be expected to (i) have a material adverse
effect on the Company, (ii) impair the ability of the Company to
perform its obligations under this Agreement in any material respect or
(iii) delay in any material respect or prevent the consummation of any
of the transactions contemplated by this Agreement or the Stockholder
Agreement, nor is there any judgment, decree,
<PAGE>
17
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against the Company or any of its subsidiaries having, or
which could reasonably be expected to have, any effect referred to in
clause (i), (ii) or (iii) above.
(i) Absence of Changes in Benefit Plans. Except (x) as
-----------------------------------------
disclosed in the Filed SEC Documents or (y) for normal increases in the
ordinary course of business consistent with past practice or as
required by law, since the date of the most recent audited financial
statements included in the Filed SEC Documents, there has not been any
adoption or amendment in any material respect by the Company or any of
its significant subsidiaries of any collective bargaining agreement or
any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other material plan providing material
benefits to any current or former employee, officer or director of the
Company or any of its significant subsidiaries. Without limiting the
foregoing, except as disclosed in the Filed SEC Documents, since the
date of the most recent audited financial statements included in the
Filed SEC Documents, there has not been any change in any actuarial or
other assumption used to calculate funding obligations with respect to
any Pension Plan (as defined below), or in the manner in which
contributions to any Pension Plan are made or the basis on which such
contributions are determined. Except as disclosed in the Filed SEC
Documents, there exist no employment, consulting or severance
agreements currently in effect between the Company and any current or
former employee, officer or director of the Company providing for
annual compensation or annual payments in excess of $250,000.
(j) ERISA Compliance. (i) The Company has delivered or made
------------------
available to Purchaser each "employee pension benefit plan" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) (a "Pension Plan"), each "employee welfare
benefit plan" (as defined in Section 3(1) of ERISA) (a "Welfare Plan"),
each stock option, stock purchase, deferred compensation plan or
arrangement and each other employee fringe benefit plan or arrangement
maintained, contributed to or required to be maintained
<PAGE>
18
or contributed to by the Company, any of its significant subsidiaries
or any other person or entity that, together with the Company, is
treated as a single employer under Section 414(b), (c), (m) or (o) of
the Code (each, a "Commonly Controlled Entity") which is currently in
effect for the benefit of any current or former employees, officers,
directors or independent contractors of the Company or any of its
subsidiaries (collectively, "Benefit Plans"). The Company has delivered
or made available to Parent true, complete and correct copies of (x)
the most recent annual report on Form 5500 filed with the Internal
Revenue Service with respect to each Benefit Plan (if any such report
was required), (y) the most recent summary plan description for each
Benefit Plan for which such summary plan description is required and
(z) each currently effective trust agreement, insurance or group
annuity contract and each other funding or financing arrangement
relating to any Benefit Plan.
(ii) Each Benefit Plan has been administered in material
compliance with its terms, the applicable provisions of ERISA, the Code
and all other applicable laws and the terms of all applicable
collective bargaining agreements. To the knowledge of the Company,
there are no investigations by any governmental agency, termination
proceedings or other claims (except routine claims for benefits payable
under the Benefit Plans), suits or proceedings pending or threatened
against any Benefit Plan or asserting any rights or claims to benefits
under any Benefit Plan that, individually or in the aggregate, is
reasonably likely to result in a material adverse effect on the
Company.
(iii) (1) There has been no application for waiver or waiver of
the minimum funding standards imposed by Section 412 of the Code with
respect to any Pension Plan and (2) no Pension Plan has or had at any
time during the current plan year an "accumulated funding deficiency"
within the meaning of Section 412(a) of the Code.
(iv) Each Pension Plan that is intended to be a tax-qualified
plan has been the subject of a determination letter from the Internal
Revenue Service to the effect that such Pension Plan and related trust
is qualified and exempt from Federal income taxes under Sections 401(a)
and 501(a), respectively, of the Code;
<PAGE>
19
no such determination letter has been revoked, and, to the knowledge of
the Company, revocation has not been threatened; and such Pension Plan
has not been amended since the effective date of its most recent
determination letter in any respect that would adversely affect its
qualification. The Company has delivered or made available to Parent a
copy of the most recent determination letter received with respect to
each Pension Plan for which such a letter has been issued, as well as a
copy of any pending application for a determination letter. To the
knowledge of the Company, no event has occurred that could subject any
Pension Plan to tax under Section 511 of the Code.
(v) (1) Neither the Company nor any of its significant
subsidiaries has engaged in a "prohibited transaction" (as defined in
Section 4975 of the Code or Section 406 of ERISA) that involves the
assets of any Benefit Plan that is reasonably likely to subject the
Company, any of its significant subsidiaries, any employee of the
Company or its significant subsidiaries or, to the knowledge of the
Company, a non-employee trustee, non-employee administrator or other
non-employee fiduciary of any trust created under any Benefit Plan to
the tax or penalty on prohibited transactions imposed by Section 4975
of the Code; (2) within the past five years, no Pension Plan that is
subject to Title IV of ERISA has been terminated other than in a
standard termination in accordance with Section 4041(b) of ERISA (a
"Standard Termination") or, to the knowledge of the Company, has been
the subject of a "reportable event" (as defined in Section 4043 of
ERISA and the regulations thereunder) and no such Pension Plan is
reasonably expected to be terminated other than in a Standard
Termination; and (3) none of the Company, any of its significant
subsidiaries or, to the knowledge of the Company, any non-employee
trustee, non-employee administrator or other non-employee fiduciary of
any Benefit Plan has breached the fiduciary duty provisions of ERISA or
any other applicable law in a manner that, individually or in the
aggregate, is reasonably likely to, result in a material adverse effect
on the Company.
(vi) As of the most recent valuation date for each Pension Plan
that is a "defined benefit pension plan" (as defined in Section 3(35)
of ERISA) (a "Defined Benefit Plan"), there was not any amount of
"unfunded benefit liabilities" (based upon the plan's ongoing actuarial
assumptions used for funding purposes as set
<PAGE>
20
forth in the most recent actuarial report or valuation) under such
Defined Benefit Plan in excess of $5 million and the aggregate amount
of all such unfunded benefit liabilities under all such Defined Benefit
Plans as of such date did not exceed $20 million, and the Company is
not aware of any facts or circumstances that would materially change
the funded status of any such Defined Benefit Plan as of the date
hereof available as of the date hereof. The Company has furnished to
Parent the most recent actuarial report or valuation with respect to
each Defined Benefit Plan. To the knowledge of the Company, the
information supplied to the plan actuary by the Company and any of its
subsidiaries for use in preparing those reports or valuations was
complete and accurate in all material respects.
(vii) No Commonly Controlled Entity has incurred any liability
under Title IV of ERISA (other than for contributions not yet due to a
Defined Benefit Plan and other than for the payment of premiums to the
Pension Benefit Guaranty Corporation not yet due), which liability, to
the extent currently due, has not been fully paid as of the date hereof
and would not, individually or in the aggregate, be reasonably likely
to result in a material adverse effect on the Company.
(viii) No Commonly Controlled Entity has engaged in a transaction
described in Section 4069 of ERISA that could subject the Company to
liability at any time after the date hereof.
(ix) No Commonly Controlled Entity has withdrawn from any
multiemployer plan where such withdrawal has resulted in any
"withdrawal liability" (as defined in Section 4201 of ERISA) that has
not been fully paid.
(x) Except as specifically provided in this Agreement, no
employee of the Company or any of its subsidiaries will be entitled to
any additional benefits or any acceleration of the time of payment or
vesting of any benefits under any Benefit Plan or under any employment,
severance, termination or compensation agreement or as a result of the
transactions contemplated by this Agreement.
(k) Taxes. (i) Each of the Company and its
------
subsidiaries has filed all tax returns and reports
required to be filed by it or requests for extensions
<PAGE>
21
to file such returns or reports have been timely filed, granted and
have not expired, except to the extent that such failures to file or to
have extensions granted that remain in effect individually or in the
aggregate would not have a material adverse effect on the Company. All
returns filed by the Company and each of its subsidiaries are complete
and accurate in all material respects to the knowledge of the Company.
The Company and each of its subsidiaries has paid (or the Company has
paid on its behalf) all taxes shown as due on such returns, and the
most recent financial statements contained in the Filed SEC Documents
reflect an adequate reserve for all taxes payable by the Company and
its subsidiaries for all taxable periods and portions thereof accrued
through the date of such financial statements.
(ii) No deficiencies for any taxes have been proposed, asserted
or assessed against the Company or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or
in the aggregate would not have a material adverse effect on the
Company, and no requests for waivers of the time to assess any such
taxes have been granted or are pending that individually or in the
aggregate would have a material adverse effect on the Company. The
statute of limitations on assessment or collection of any Federal
income taxes due from the Company or any of its subsidiaries has
expired for all taxable years of the Company or any of its subsidiaries
through 1991. None of the assets or properties of the Company or any of
its subsidiaries is subject to any tax lien, other than any such liens
for taxes which are not due and payable, which may thereafter be paid
without penalty or the validity of which are being contested in good
faith by appropriate proceedings and for which adequate reserves are
being maintained in accordance with generally accepted accounting
principles ("Permitted Tax Liens").
(iii) As used in this Agreement, "taxes" shall include all
Federal, state and local income, franchise, use, property, sales,
excise and other taxes, tariffs or governmental charges of any nature
whatsoever, domestic or foreign, including any interest, penalties or
additions with respect thereto.
<PAGE>
22
(l) Voting Requirements. The affirmative vote of the holders
---------------------
of a majority of the voting power of all outstanding shares of the
Company Common Stock, voting as a single class, at the Company
Stockholders Meeting (the "Company Stockholder Approval") is the only
vote of the holders of any class or series of the Company's capital
stock necessary to approve and adopt this Agreement and the
transactions contemplated by this Agreement.
(m) State Takeover Statutes. The Board of Directors of the
--------------------------
Company has approved the terms of this Agreement and the Stockholder
Agreement and the consummation of the Merger and the other transactions
contemplated by this Agreement and the Stockholder Agreement, and such
approval is sufficient to render inapplicable to the Merger and the
other transactions contemplated by this Agreement and the Stockholder
Agreement the provisions of Section 203 of the DGCL. To the best of the
Company's knowledge, no other state takeover statute or similar statute
or regulation applies or purports to apply to the Merger, this
Agreement, the Stockholder Agreement or any of the transactions
contemplated by this Agreement or the Stockholder Agreement and no
provision of the certificate of incorporation, by-laws or other
governing instruments of the Company or any of its subsidiaries would,
directly or indirectly, restrict or impair the ability of Parent to
vote, or otherwise to exercise the rights of a stockholder with respect
to, shares of the Company and its subsidiaries that may be acquired or
controlled by Parent.
(n) Labor Matters. Neither the Company nor any of its
---------------
subsidiaries is the subject of any suit, action or proceeding which is
pending or, to the knowledge of the Company, threatened, asserting that
the Company or any of its subsidiaries has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or
applicable state statutes) or seeking to compel the Company or any of
its subsidiaries to bargain with any labor organization as to wages and
conditions of employment, in any such case, that is reasonably expected
to result in a material liability of the Company and its subsidiaries.
No strike or other labor dispute involving the Company or any of its
subsidiaries is pending or, to the knowledge of the Company,
threatened, and, to the knowledge of the
<PAGE>
23
Company, there is no activity involving any employees of the Company or
any of its subsidiaries seeking to certify a collective bargaining unit
or engaging in any other organizational activity, except for any such
dispute or activity which would not have a material adverse effect on
the Company.
(o) 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 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 and the
Stockholder Agreement based upon arrangements made by or on behalf of
the Company. The Company has furnished to Parent true and complete
copies of all agreements under which any such fees or expenses may be
payable and all indemnification and other agreements related to the
engagement of the persons to whom such fees may be payable.
(p) Opinion of Financial Advisor. The Company has received the
-----------------------------
opinion of Merrill Lynch & Co., dated the date of this Agreement, to
the effect that, as of such date, the Merger Consideration is fair to
the Company's stockholders from a financial point of view, a copy of
which opinion has been delivered to Parent.
(q) Compliance with Applicable Laws. Each of the Company and
----------------------------------
each of its subsidiaries has in effect all Federal, state and local
governmental approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights ("Permits") necessary
for it to own, lease or operate its properties and assets and to carry
on its business as now conducted, and there has occurred no default
under any such Permit, except for the lack of Permits and for defaults
under Permits which lack or default individually or in the aggregate
would not have a material adverse effect on the Company. Except as
disclosed in the Filed SEC Documents, the Company and its subsidiaries
are in compliance with all applicable statutes, laws, ordinances,
rules, orders and regulations of any Governmental Entity, except for
possible noncompliance which individually or in the aggregate would not
have a material adverse effect on the Company.
<PAGE>
24
(r) Contracts; Debt Instruments. (i) Neither the Company nor
-----------------------------
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
loan or credit agreement, note, bond, mortgage, indenture, lease,
permit, concession, franchise, license or any other contract,
agreement, arrangement or understanding to which it is a party or by
which it or any of its properties or assets is bound, except for
violations or defaults that individually or in the aggregate would not
have a material adverse effect on the Company.
(ii) The Company has made available to Parent (x) true and
correct copies of all loan or credit agreements, notes, bonds,
mortgages, indentures and other agreements and instruments pursuant to
which any indebtedness of the Company or any of its subsidiaries in an
aggregate principal amount in excess of $500,000 is outstanding or may
be incurred and (y) accurate information regarding the respective
principal amounts currently outstanding thereunder. For purposes of
this Agreement, "indebtedness" shall mean, with respect to any person,
without duplication, (A) all obligations of such person for borrowed
money, or with respect to deposits or advances of any kind to such
person, (B) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (C) all obligations of such
person under conditional sale or other title retention agreements
relating to property purchased by such person, (D) all obligations of
such person issued or assumed as the deferred purchase price of
property or services (excluding obligations of such person to creditors
for raw materials, inventory, services and supplies incurred in the
ordinary course of such person's business), (E) all capitalized lease
obligations of such person, (F) all obligations of others secured by
any Lien on property or assets owned or acquired by such person,
whether or not the obligations secured thereby have been assumed, (G)
all obligations of such person under interest rate or currency hedging
transactions (valued at the termination value thereof), (H) all letters
of credit issued for the account of such person and (I) all guarantees
and arrangements having the economic effect of a guarantee of such
person of any indebtedness of any other person.
<PAGE>
25
(s) FCC Licenses; Operations of Licensed Facilities. The
-----------------------------------------------------
Company and its subsidiaries have operated the radio stations for which
the Company or any of its subsidiaries holds licenses from the FCC, in
each case which are owned or operated by the Company and its
subsidiaries (the "Licensed Facilities") in material compliance with
the terms of the Permits issued by the FCC to the Company and its
subsidiaries (the "FCC Licenses") (complete and correct copies of each
of which have been made available to Parent), and in material
compliance with the Communications Act. The Company and its
subsidiaries have, since acquired by the Company, timely filed or made
all applications, reports and other disclosures required by the FCC to
be filed or made with respect to the Licensed Facilities and have
timely paid all FCC regulatory fees with respect thereto. The Company
and each of its subsidiaries have, and are the authorized legal holders
of, all FCC Licenses necessary or used in the operation of the
businesses of the Licensed Facilities as presently operated. All such
FCC Licenses are validly held and are in full force and effect,
unimpaired by any act or omission of the Company, each of its
subsidiaries (or their respective predecessors) or their respective
officers, employees or agents. As of the date hereof, no application,
action or proceeding is pending for the renewal or material
modification of any of the FCC Licenses and, to the best of the
Company's knowledge, there is not now before the FCC any material
investigation, proceeding, notice of violation, order of forfeiture or
complaint against the Company or any of its subsidiaries relating to
any of the Licensed Facilities that, if adversely decided, would have a
material adverse effect on the Company (and the Company is not aware of
any basis that would cause the FCC not to renew any of the FCC
Licenses). There is not now pending and, to the Company's knowledge,
there is not threatened, any action by or before the FCC to revoke,
suspend, cancel, rescind or modify in any material respect any of the
FCC Licenses that, if adversely decided, would have a material adverse
effect on the Company (other than proceedings to amend FCC rules of
general applicability to the radio industry).
SECTION 3.02. Representations and Warranties of Parent and
--------------------------------------------
Sub. Except as set forth with respect to a specifically identified
- ----
representation and warranty on the
<PAGE>
26
Disclosure Schedule delivered by Parent to the Company prior to the execution of
this Agreement (the "Parent Disclosure Schedule"), Parent and Sub represent and
warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of
-----------------------------------------------
Parent, Sub and Parent's significant subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite
corporate power and authority to carry on its business as now being
conducted. Each of Parent, Sub and Parent's significant subsidiaries is
duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed or to be in good standing individually or in the
aggregate would not have a material adverse effect on Parent. Parent
has delivered to the Company complete and correct copies of its
articles of incorporation and by-laws and the certificate of
incorporation and by-laws of Sub, in each case as amended to the date
hereof.
(b) Capital Structure. The authorized capital stock of Parent
------------------
consists of 630,000,000 shares of Parent Common Stock, which Parent
proposes to increase pursuant to the Charter Amendment (as defined in
Section 3.02(j)), subject to the Parent Shareholder Approval (as
defined in Section 3.02(j)), and 25,000,000 shares of preferred stock,
par value $1.00 per share ("Parent Preferred Stock"). At the close of
business on June 18, 1996, (i) 419,550,580 shares of Parent Common
Stock were issued and outstanding, (ii) 3,600,000 shares of Parent
Preferred Stock, all denominated as Series C Conversion Preferred
Stock, were issued and outstanding, (iii) 6,419,541 shares of Parent
Common Stock were held by Parent in its treasury, (iv) 36,000,000
shares of Parent Common Stock were reserved for issuance pursuant to
the conversion of the Series C Conversion Preferred Stock, (v)
51,379,144 shares of Parent Common Stock were reserved for issuance
pursuant to Parent's 1993 Long Term Incentive Plan, Parent's 1991 Long
Term Incentive Plan, Parent's 1984 Long Term Incentive Plan and
Parent's Deferred Compensation and Stock Plan for
<PAGE>
27
Directors and other stock-based plans (the "Parent Stock Plans") and
(vi) 5,000,000 shares of Parent Preferred Stock, all denominated as
Series A Participating Preferred Stock (subject to increase and
adjustment as set forth in the Rights Agreement and the Certificate of
Designations attached as an exhibit thereto) were reserved for issuance
in connection with the rights (the "Rights") to purchase shares of
Parent Preferred Stock pursuant to the Rights Agreement dated as of
December 28, 1995, between Parent and First Chicago Trust Company of
New York, as Rights Agent (the "Rights Agreement"). Except as set forth
above, at the close of business on June 18, 1996, no shares of capital
stock or other voting securities of Parent were issued, reserved for
issuance or outstanding. All outstanding shares of capital stock of
Parent are, and, subject to the Parent Shareholder Approval, all shares
which may be issued pursuant to this Agreement will be, when issued,
duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. There are no bonds, debentures, notes or
other indebtedness of Parent having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any
matters on which shareholders of Parent may vote. Except as set forth
above or as otherwise contemplated by this Agreement, there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Parent is
a party or by which it is bound obligating Parent to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of Parent or obligating Parent
to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or
undertaking. There are no outstanding contractual obligations of Parent
to repurchase, redeem or otherwise acquire any shares of capital stock
of Parent. As of the date of this Agreement, the authorized capital
stock of Sub consists of 1,000 shares of common stock, par value $1.00
per share, all of which have been validly issued, are fully paid and
nonassessable and are owned by Parent free and clear of any Lien.
(c) Authority; Noncontravention. Parent and Sub
----------------------------
have all requisite corporate power and authority to
enter into this Agreement and, subject to the Parent
<PAGE>
28
Shareholder Approval, to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement by Parent
and Sub and the consummation by Parent and Sub of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Parent and Sub, subject in
the case of Parent to the Parent Shareholder Approval. This Agreement
has been duly executed and delivered by Parent and Sub and constitutes
a valid and binding obligation of Parent and Sub, enforceable against
Parent and Sub in accordance with its terms. The execution and delivery
of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of
this Agreement by Parent or Sub, as the case may be, will not, conflict
with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of
a material benefit under, or result in the creation of any Lien upon
any of the properties or assets of Parent, Sub or any of Parent's other
subsidiaries under, (i) the articles or certificate of incorporation or
by-laws of Parent, Sub or such other subsidiary, subject in the case of
Parent to the Parent Shareholder Approval, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to
Parent, Sub or such other subsidiary or their respective properties or
assets or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent, Sub
or such other subsidiary or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, Liens, judgments, orders, decrees,
statutes, laws, ordinances, rules or regulations that individually or
in the aggregate would not (x) have a material adverse effect on
Parent, (y) impair the ability of Parent and Sub to perform their
respective obligations under this Agreement in any material respect or
(z) delay in any material respect or prevent the consummation of any of
the transactions contemplated by this Agreement or the Stockholder
Agreement. No consent, approval, order or authorization of, or
registration, declaration or
<PAGE>
29
filing with, any Governmental Entity is required by or with respect to
Parent or Sub in connection with the execution and delivery of this
Agreement or the consummation by Parent or Sub, as the case may be, of
any of the transactions contemplated by this Agreement, except for (1)
the filing of a premerger notification and report form by Parent under
the HSR Act; (2) the filing with the SEC of the Form S-4, the Joint
Proxy Statement relating to the Parent Shareholders Meeting and such
reports under Section 13 of the Exchange Act as may be required in
connection with this Agreement, the Stockholder Agreement and the
transactions contemplated by this Agreement; (3) the filing of the
Certificate of Merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business and such filings with
Governmental Entities to satisfy the applicable requirements of state
securities or "blue sky" laws; (4) such filings with and approvals of
the FCC as may be required under the Communications Act, including in
connection with the transfer of the FCC Licenses; (5) such filings with
and approvals of the NYSE to permit the shares of Parent Common Stock
that are to be issued in the Merger, upon exercise of the Company
Warrants and under the Stock Plans to be listed on the NYSE; (6) such
other filings and consents as may be required under any environmental,
health or safety law or regulation pertaining to any notification,
disclosure or required approval necessitated by the Merger or the
transactions contemplated by this Agreement; and (7) such consents,
approvals, orders or authorizations the failure of which to be made or
obtained would not reasonably be expected to have a material adverse
effect on Parent.
(d) SEC Documents; Undisclosed Liabilities. Parent has filed
----------------------------------------
all required reports, schedules, forms, statements and other documents
with the SEC since January 1, 1995 (the "Parent SEC Documents"). As of
their respective dates, the Parent SEC Documents complied in all
material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such Parent SEC Documents, and
none of the Parent SEC Documents when filed contained any untrue
statement of a material fact or omitted to state a material fact
required to be
<PAGE>
30
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Except to the extent that information contained in any Parent SEC
Document has been revised or superseded by a later filed Parent SEC
Document, none of the Parent SEC Documents contains any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of Parent included in
the Parent SEC Documents comply as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Parent and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed Parent SEC Documents (as
defined in Section 3.02(f)), and except for liabilities and obligations
incurred in the ordinary course of business consistent with past
practice since the date of the most recent consolidated balance sheet
included in the Filed Parent SEC Documents, neither Parent nor any of
its subsidiaries has any material liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) required by
generally accepted accounting to be recognized or disclosed on a
consolidated balance sheet of Parent and its consolidated subsidiaries
or in the notes thereto.
(e) Information Supplied. None of the information supplied or
---------------------
to be supplied by Parent or Sub specifically for inclusion or
incorporation by reference in (i) the Form S-4 will, at the time the
Form S-4 is filed with the SEC, at any time it is amended or
supplemented or at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state
any
<PAGE>
31
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) the Joint Proxy Statement
will, at the date the Joint Proxy Statement is first mailed to Parent's
shareholders or at the time of the Parent Shareholders Meeting, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. The Form S-4 will comply as to form in all
material respects with the requirements of the Securities Act and the
rules and regulations promulgated thereunder and the Joint Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation or warranty is
made by Parent or Sub with respect to statements made or incorporated
by reference in either the Form S-4 or the Joint Proxy Statement based
on information supplied by the Company specifically for inclusion or
incorporation by reference therein.
(f) Absence of Certain Changes or Events. Except as disclosed
-------------------------------------
in the Parent SEC Documents filed and publicly available prior to the
date of this Agreement (the "Filed Parent SEC Documents"), since the
date of the most recent audited financial statements included in the
Filed Parent SEC Documents, Parent has conducted its business only in
the ordinary course, and there has not been (i) any material adverse
change in Parent, (ii) except for regular quarterly dividends (in an
amount determined in a manner consistent with Parent's past practice)
with customary record and payment dates, any declaration, setting aside
or payment of any dividend or distribution (whether in cash, stock or
property) with respect to any of Parent's capital stock, (iii) any
split, combination or reclassification of any Parent Common Stock or
any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of
the Parent Common Stock or (iv) any damage, destruction or loss,
whether or not covered by insurance, that has or could reasonably be
expected to have a material adverse effect on Parent; it being
understood that, except for the creation of the holding company
described in Section 1.01(c), the foregoing
<PAGE>
32
exception for matters disclosed in the Filed Parent SEC Documents shall
not relate to any transaction contemplated by Parent's press release
dated as of June 10, 1996, relating to the possible separation of
Parent's broadcasting businesses from its other businesses.
(g) Litigation. Except as disclosed in the Filed Parent SEC
-----------
Documents, there is no suit, action or proceeding (including any
proceeding by or before the FCC other than proceedings to amend FCC
rules of general applicability to the radio industry) pending or, to
the knowledge of Parent, threatened against or affecting Parent or any
of its subsidiaries that individually or in the aggregate could
reasonably be expected to (i) have a material adverse effect on Parent,
(ii) impair the ability of Parent or Sub to perform its obligations
under this Agreement in any material respect or (iii) delay in any
material respect or prevent the consummation of any of the transactions
contemplated by this Agreement, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against Parent or any of its subsidiaries having, or which
could reasonably be expected to have, any effect referred to in clause
(i), (ii) or (iii) above.
(h) Brokers. No broker, investment banker, financial advisor
--------
or other person, other than Chase Securities Inc. and Salomon Brothers
Inc, the fees and expenses of which will be paid by Parent, 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 and the Stockholder Agreement based upon arrangements made by
or on behalf of Parent or Sub.
(i) Interim Operations of Sub. Sub was formed solely for the
----------------------------
purpose of engaging in the transactions contemplated hereby and has
engaged in no other business other than incident to its creation and
this Agreement and the transactions contemplated hereby.
(j) Voting Requirements. The affirmative vote at the Parent
---------------------
Shareholders Meeting of the holders of a majority of the voting power
of the outstanding shares of Parent Common Stock entitled to vote
generally in an annual election of directors (the "Parent Shareholder
<PAGE>
33
Approval") is the only vote of the holders of any class or series of
Parent's capital stock necessary (i) to approve and adopt the amendment
(the "Charter Amendment") to Parent's articles of incorporation to
create a sufficient number of authorized shares of Parent Common Stock
to permit the issuance of Parent Common Stock pursuant to the Merger
and (ii) to authorize, in accordance with the applicable rules of the
NYSE, the issuance of Parent Common Stock pursuant to the Merger.
(k) Taxes. (i) Each of Parent and its subsidiaries has filed
------
all tax returns and reports required to be filed by it or requests for
extensions to file such returns or reports have been timely filed,
granted and have not expired, except to the extent that such failures
to file or to have extensions granted that remain in effect
individually or in the aggregate would not have a material adverse
effect on Parent. All returns filed by Parent and each of its
subsidiaries are complete and accurate in all material respects to the
knowledge of Parent. Parent and each of its subsidiaries has paid (or
Parent has paid on its behalf) all taxes shown as due on such returns,
and the most recent financial statements contained in the Filed Parent
SEC Documents reflect an adequate reserve for all taxes payable by
Parent and its subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements. Of the
net operating loss carryovers available to Parent's federal
consolidated group as of January 1, 1996, no more than $100,000,000 are
subject to "separate return limitation year" restrictions under Section
1502 of the Code.
(ii) No deficiencies for any taxes have been proposed, asserted
or assessed against Parent or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or
in the aggregate would not have a material adverse effect on Parent,
and no requests for waivers of the time to assess any such taxes have
been granted or are pending that individually or in the aggregate would
have a material adverse effect on Parent. The Federal income tax
returns of Parent and each of its subsidiaries consolidated in such
returns have been examined by and settled with the United States
Internal Revenue Service for all years through 1989. The statute of
limitations
<PAGE>
34
on assessment or collection of any Federal income taxes due from Parent
or any of its subsidiaries has expired for all taxable years of Parent
or such subsidiaries through 1984. None of the assets or properties of
Parent or any of its subsidiaries is subject to any tax lien other than
Permitted Tax Liens.
(l) Compliance with Applicable Laws. Each of Parent and each
----------------------------------
of its subsidiaries has in effect all Permits necessary for it to own,
lease or operate its properties and assets and to carry on its business
as now conducted, and there has occurred no default under any such
Permit, except for the lack of Permits and for defaults under Permits
which lack or default individually or in the aggregate would not have a
material adverse effect on Parent. Except as disclosed in the Filed
Parent SEC Documents, Parent and its subsidiaries are in compliance
with all applicable statutes, laws, ordinances, rules, orders and
regulations of any Governmental Entity, except for possible
noncompliance which individually or in the aggregate would not have a
material adverse effect on Parent.
(m) Opinion of Financial Advisors. Parent has received the
--------------------------------
opinions of Chase Securities Inc. and Salomon Brothers Inc, in each
case dated June 19, 1996, to the effect that, as of such date, the
Conversion Number is fair to Parent from a financial point of view, a
signed copy of each such opinion has been delivered to the Company.
(n) FCC Licenses; Operations of Parent Licensed Facilities.
----------------------------------------------------------
Parent and its subsidiaries have operated the radio stations for which
Parent or any of its subsidiaries holds licenses from the FCC, in each
case which are owned or operated by Parent and its subsidiaries (the
"Parent Licensed Facilities") in material compliance with the terms of
the Permits issued by the FCC to the Parent and its subsidiaries
("Parent FCC Licenses") (complete and correct copies of each of which
have been made available to the Company), and in material compliance
with the Communications Act. Parent and its subsidiaries have timely
filed or made all applications, reports and other disclosures required
by the FCC to be filed or made with respect to the Parent Licensed
Facilities and have timely paid all FCC regulatory fees with respect
thereto. Parent and
<PAGE>
35
each of its subsidiaries have, and are the authorized legal holders of,
all Parent FCC Licenses necessary or used in the operation of the
businesses of the Parent Licensed Facilities as presently operated. All
such Parent FCC Licenses are validly held and are in full force and
effect, unimpaired by any act or omission of Parent, each of its
subsidiaries (or their respective predecessors) or their respective
officers, employees or agents. As of the date hereof, no application,
action or proceeding is pending for the renewal or material
modification of any of the Parent FCC Licenses and, to the best of
Parent's knowledge, there is not now before the FCC any material
investigation, proceeding, notice of violation, order of forfeiture or
complaint against Parent or any of its subsidiaries relating to any of
the Parent Licensed Facilities that, if adversely decided, would have a
material adverse effect on Parent (and Parent is not aware of any basis
that would cause the FCC not to renew any of the Parent FCC Licenses).
There is not now pending and, to Parent's knowledge, there is not
threatened, any action by or before the FCC to revoke, suspend, cancel,
rescind or modify in any material respect any of the Parent FCC
Licenses that, if adversely decided, would have a material adverse
effect on Parent (other than proceedings to amend FCC rules of general
applicability to the radio industry).
(o) FCC Qualifications. Parent and Sub are fully qualified
--------------------
under the Communications Act to be the transferees of control of the
FCC Licenses, provided, however, that the parties recognize that the
-------- -------
consummation of the Merger would cause Parent to exceed in certain
cases (i) the limits on ownership of television and radio stations
serving the same market imposed by the FCC's "one-to-a-market" rule, 47
C.F.R. ss. 73.3555(c), and (ii) the numerical limits on local multiple
radio station ownership imposed by Section 202(b) of the 1996
Telecommunications Act.
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business. (a) Conduct
-------------------- -------
of Business by the Company. During the period from the date
- ---------------------------
of this Agreement to the Effective Time, the Company shall,
<PAGE>
36
and shall cause its subsidiaries to, carry on their respective businesses in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted and in compliance in all material respects with all
applicable laws and regulations (including the Communications Act). Without
limiting the generality of the foregoing, during the period from the date of
this Agreement to the Effective Time, the Company shall not, and shall not
permit any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than dividends and distributions by a direct or indirect wholly owned
subsidiary of the Company to its parent, (y) split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (z) purchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
(other than (w) the issuance of Company Class A Common Stock or Company
Class B Common Stock, as applicable, upon the exercise of Employee
Stock Options outstanding on the date of this Agreement and in
accordance with their present terms, (x) the issuance of Company Class
A Common Stock upon conversion of Company Class B Common Stock and
Company Class C Common Stock in accordance with their present terms,
(y) the issuance of Company Class A Common Stock, Company Class B
Common Stock or Company Class C Common Stock, as applicable, upon the
exercise of warrants of the Company outstanding on the date of this
Agreement and in accordance with their present terms and (z) grants of
options on Company Class A Common Stock to persons other than executive
officers of the Company in the ordinary course of business consistent
with past practice, and the issuance of Company Class A Common Stock
upon exercise of such options, such options not to exceed an aggregate
of 500,000 shares);
<PAGE>
37
(iii) other than as contemplated by the Company's proxy statement
for its 1996 annual meeting, amend its certificate of incorporation,
by-laws or other comparable organizational documents;
(iv) except as set forth in Section 4.01 of the Company
Disclosure Schedule and subject to Section 4.01(c), acquire or agree to
acquire (x) by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any
business or any corporation, limited liability company, partnership,
joint venture, association or other business organization or division
thereof, (y) any assets that individually or in the aggregate are
material to the Company and its subsidiaries taken as a whole or (z)
any broadcast radio stations (provided that any such acquisition
--------
pursuant to a swap of assets without the payment by the Company of a
material amount of cash consideration along therewith shall require
only consultation with, and not approval of, Parent);
(v) except as set forth in Section 4.01 of the Company
Disclosure Schedule and subject to Section 4.01(c), sell, lease,
license, mortgage or otherwise encumber or subject to any Lien or
otherwise dispose of (x) any of its properties or assets, other than in
the ordinary course of business consistent with past practice, that are
material to the Company and its subsidiaries taken as a whole or (y)
any broadcast radio stations (provided that any such disposition
--------
pursuant to a swap without the payment by the Company of a material
amount of cash consideration along therewith shall require only
consultation with, and not approval of, Parent);
(vi) except as set forth in Section 4.01 of the Company
Disclosure Schedule (x) incur any indebtedness, except for borrowings
for working capital purposes not in excess of $10 million at any one
time outstanding incurred in the ordinary course of business consistent
with past practice and except for intercompany indebtedness between the
Company and any of its subsidiaries or between such subsidiaries, or
(y) make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any
direct or indirect wholly owned subsidiary of the Company or to
officers and employees
<PAGE>
38
of the Company or any of its subsidiaries for travel,
business or relocation expenses in the ordinary course
of business;
(vii) make or agree to make any new capital
expenditure or capital expenditures which in the
aggregate are in excess of $5,000,000;
(viii) make any tax election that could reasonably be expected to
have a material adverse effect on the Company or settle or compromise
any material income tax liability;
(ix) except in the ordinary course of business or except as
would not reasonably be expected to have a material adverse effect on
the Company, modify, amend or terminate any material contract or
agreement to which the Company or any subsidiary is a party or waive,
release or assign any material rights or claims thereunder;
(x) make any material change to its accounting
methods, principles or practices, except as may be
required by generally accepted accounting principles;
or
(xi) authorize, or commit or agree to take, any of
the foregoing actions.
(b) Conduct of Business by Parent. During the
------------------------------
period from the date of this Agreement to the Effective
Time, Parent shall not:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than regular quarterly cash dividends (in an amount determined in a
manner consistent with Parent's past practice) with customary record
and payment dates or (y) split, combine or reclassify any of its
capital stock or, except for the creation of the holding company
described in Section 1.01(c), issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for
shares of its capital stock;
(ii) amend Parent's articles of incorporation or by-laws in a
manner that would be materially adverse to the holders of Parent Common
Stock;
<PAGE>
39
(iii) except as set forth in Section 4.01 of the Parent Disclosure
Schedule and subject to Section 4.01(c), acquire or agree to acquire
any broadcast radio stations (whether through merger or by purchase of
assets or otherwise) (provided that any acquisition pursuant to a swap
--------
of assets without the payment by Parent of a material amount of cash
consideration along therewith shall require only consultation with, and
not approval of, the Company);
(iv) except as set forth in Section 4.01 of the Parent
Disclosure Schedule and subject to Section 4.01(c), sell or otherwise
dispose of any broadcast radio station (provided that any such
--------
disposition pursuant to a swap without the payment by Parent of a
material amount of cash consideration along therewith shall require
only consultation with, and not approval of, the Company); or
(v) authorize, or commit or agree to take, any of
the foregoing actions.
(c) Other Actions. The Company and Parent shall not, and shall
--------------
not permit any of their respective subsidiaries to, take any action that would,
or that could reasonably be expected to, result in (i) any of the
representations and warranties of such party set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect or (iii) any of the conditions to the Merger set forth in
Article VI not being satisfied. In addition, Parent and Sub, on the one hand,
and the Company, on the other hand, further covenant that from and after the
date hereof until the Effective Time, without the prior written consent of the
Company or Parent, as the case may be, neither Parent nor Sub, on the one hand,
nor the Company, on the other hand, shall, except as otherwise set forth in
Section 4.01(c) of the Parent Disclosure Schedule or of the Company Disclosure
Schedule, take any action that could reasonably be expected to impair or delay
in any material respect obtaining the FCC Order (as defined in Section 6.01(b))
or complying with or satisfying the terms thereof.
(d) Advice of Changes. The Company and Parent shall promptly
------------------
advise the other party orally and in writing of (i) any representation or
warranty made by it contained in this Agreement that is qualified as to
materiality
<PAGE>
40
becoming untrue or inaccurate in any respect or any such representation or
warranty that is not so qualified becoming untrue or inaccurate in any material
respect, (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement or (iii) any change or event having, or which, insofar
as can reasonably be foreseen, would have, a material adverse effect on such
party or on the truth of their respective representations and warranties or the
ability of the conditions set forth in Article VI to be satisfied; provided,
--------
however, that no such notification shall affect the representations, warranties,
- -------
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
SECTION 4.02. No Solicitation. (a) The Company shall not, nor
----------------
shall it permit any of its subsidiaries to, nor shall it authorize or permit any
officer, director or employee of or any investment banker, attorney or other
advisor or representative of, the Company or any of its subsidiaries to,
directly or indirectly, (i) solicit, initiate or encourage the submission of any
takeover proposal (as defined in Section 8.03), (ii) enter into any agreement
with respect to any takeover proposal or give any approval of the type referred
to in Section 3.01(m) with respect to any 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 may reasonably be
expected to lead to, any takeover proposal; provided, however, that if at any
-------- -------
time prior to the receipt of the Company Stockholder Approval, the Board of
Directors of the Company determines in good faith, based on the advice of
outside counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Company
may, in response to an unsolicited takeover proposal of the sort referred to in
clause (x) of Section 8.03(g) that involves consideration to the Company's
stockholders with a value that the Company's Board of Directors reasonably
believes, after receiving advice from the Company's financial advisor, is
superior to the consideration provided for in the Merger, and subject to
compliance with Section 4.02(c), (x) furnish information with respect to the
Company pursuant to a customary confidentiality agreement to any person making
such proposal and (y) participate in negotiations regarding such proposal.
Without limiting the foregoing, it is understood that any
<PAGE>
41
violation of the restrictions set forth in the preceding sentence by any
officer, director or employee of the Company or any of its subsidiaries or any
investment banker, attorney or other advisor or representative of the Company or
any of its subsidiaries, whether or not such person is purporting to act on
behalf of the Company or any of its subsidiaries or otherwise, shall be deemed
to be a breach of this Section 4.02(a) by the Company.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (x) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent, the approval or recommendation by such
Board of Directors or such committee of this Agreement or the Merger or (y)
approve or recommend, or propose to approve or recommend, any takeover proposal
except in connection with a superior proposal (as defined in Section 8.03(g))
and then only at or after the termination of this Agreement pursuant to Section
7.01(c).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company promptly shall advise
Parent orally and in writing of any request for information or of any takeover
proposal or any inquiry with respect to or which could reasonably be expected to
lead to any takeover proposal, the identity of the person making any such
request, takeover proposal or inquiry and all the terms and conditions thereof.
The Company will keep Parent fully informed of the status and details (including
amendments or proposed amendments) of any such request, takeover proposal or
inquiry.
(d) Nothing contained in this Section 4.02 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act; provided, however, neither
-------- -------
the Company nor its Board of Directors nor any committee thereof shall, except
as permitted by Section 4.02(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to the Merger or approve or recommend, or
propose to approve or recommend, a takeover proposal.
<PAGE>
42
ARTICLE V
Additional Agreements
---------------------
SECTION 5.01. Preparation of the Form S-4 and the Joint Proxy
-----------------------------------------------
Statement; Stockholders Meetings. (a) As soon as practicable following the date
- ----------------------------------
of this Agreement, the Company and Parent shall prepare and file with the SEC
the Joint Proxy Statement and Parent shall prepare and file with the SEC the
Form S-4, in which the Joint Proxy Statement will be included as a prospectus.
Each of the Company and Parent shall use all reasonable efforts to have the Form
S-4 declared effective under the Securities Act as promptly as practicable after
such filing. The Company will use all reasonable efforts to cause the Joint
Proxy Statement to be mailed to the Company's stockholders, and Parent will use
all reasonable efforts to cause the Joint Proxy Statement to be mailed to
Parent's shareholders, in each case as promptly as practicable after the Form
S-4 is declared effective under the Securities Act. Parent shall also take any
action (other than qualifying to do business in any jurisdiction in which it is
not now so qualified or to file a general consent to service of process)
required to be taken under any applicable state securities laws in connection
with the issuance of Parent Common Stock in the Merger and the Company shall
furnish all information concerning the Company and the holders of the Company
Common Stock as may be reasonably requested in connection with any such action.
(b) The Company will, as soon as practicable following the
date of this Agreement, duly call, give notice of, convene and hold a meeting of
its stockholders (the "Company Stockholders Meeting") for the purpose of
obtaining the Company Stockholder Approval. Without limiting the generality of
the foregoing, the Company agrees that its obligations pursuant to the first
sentence of this Section 5.01(b) shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
takeover proposal. The Company will, through its Board of Directors, recommend
to its stockholders the approval and adoption of this Agreement and the
transactions contemplated hereby, except to the extent that the Board of
Directors of the Company shall have withdrawn or modified its approval or
recommendation of this Agreement or the Merger and terminated this Agreement in
accordance with Section 4.02(b).
<PAGE>
43
(c) Parent will, as soon as practicable following the date of
this Agreement, duly call, give notice of, convene and hold a meeting of its
shareholders (the "Parent Shareholders Meeting") for the purpose of obtaining
the Parent Shareholder Approval. Parent will, through its Board of Directors,
recommend to its shareholders (i) the approval and adoption of the amendment to
its articles of incorporation to increase the authorized number of shares of
Parent Common Stock to permit the issuance of the Parent Common Stock pursuant
to the Merger and (ii) to authorize, in accordance with the applicable rules of
the NYSE, the issuance of Parent Common Stock pursuant to the Merger.
(d) Parent and the Company will use reasonable efforts to hold
the Company Stockholders Meeting and the Parent Shareholders Meeting on the same
date and as soon as practicable after the date hereof.
SECTION 5.02. Letters of the Company's Accountants. The
-----------------------------------------
Company shall use all reasonable efforts to cause to be delivered to Parent a
letter of KPMG Peat Marwick LLP, the Company's independent public accountants,
dated a date within two business days before the date on which the Form S-4
shall become effective and a letter of KPMG Peat Marwick LLP dated a date within
two business days before the Closing Date, each addressed to Parent, in form and
substance reasonably satisfactory to Parent and customary in scope and substance
for letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
SECTION 5.03. Letters of Parent's Accountants. Parent shall
---------------------------------
use all reasonable efforts to cause to be delivered to the Company letters of
KPMG Peat Marwick LLP, Price Waterhouse LLP and Coopers & Lybrand LLP, Parent's
independent public accountants for the relevant periods prior to the date
hereof, dated a date within two business days before the date on which the Form
S-4 shall become effective and letters of KPMG Peat Marwick LLP, Price
Waterhouse LLP and Coopers & Lybrand LLP dated a date within two business days
before the Closing Date, each addressed to the Company, in form and substance
reasonably satisfactory to the Company and customary in scope and substance for
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
<PAGE>
44
SECTION 5.04. Access to Information; Confidentiality. Subject
----------------------------------------
to the Confidentiality Agreement (as defined below), each of the Company and
Parent shall, and shall cause each of its respective subsidiaries to, afford to
the other party and to the officers, employees, accountants, counsel, financial
advisors and other representatives of such other party, reasonable access during
normal business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records and,
during such period, each of the Company and Parent shall, and shall cause each
of its respective subsidiaries to, furnish promptly to the other party (a) a
copy of each report, schedule, registration statement and other document filed
by it during such period pursuant to the requirements of Federal or state
securities laws and (b) all other information concerning its business,
properties and personnel as such other party may reasonably request. Each of the
Company and Parent will hold, and will cause its respective officers, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, any nonpublic information in accordance with the terms of
the Confidentiality Agreement dated as of June 12, 1996, between Parent and the
Company (the "Confidentiality Agreement").
SECTION 5.05. Reasonable Efforts. (a) Upon the terms and
--------------------
subject to the conditions set forth in this Agreement, each of the parties
agrees to use all reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the Merger and the
other transactions contemplated by this Agreement and the Stockholder Agreement,
including (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Entities (including the FCC (the "FCC
Application"), which the parties shall file as soon as practicable (and in any
event within 30 days) after the date hereof) and the making of all necessary
registrations and filings (including filings with Governmental Entities, such as
those referred to in Sections 3.01(d)(1)-(5) and 3.02(c)(1)-(5)) and the taking
of all reasonable steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the
obtaining of all necessary consents, approvals or waivers from third parties,
(iii) the defending of any
<PAGE>
45
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the Stockholder Agreement or the consummation of
the transactions contemplated by this Agreement or the Stockholder Agreement
(such as in connection with the transfer of the FCC Licenses), including seeking
to have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (iv) the execution and delivery of
any additional instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement and the Stockholder
Agreement; provided, however, that a party shall not be obligated to take any
-------- -------
action pursuant to the foregoing if the taking of such action or the obtaining
of any waiver, consent, approval or exemption is reasonably likely (x) to be
materially burdensome to such party and its subsidiaries taken as a whole or to
impact in a materially adverse manner the economic or business benefits of the
transactions contemplated by this Agreement or the Stockholder Agreement so as
to render inadvisable the consummation of the Merger or (y) to result in the
imposition of a condition or restriction of the type referred to in clause (ii),
(iii), (iv) or (v) of Section 6.02(d); provided further that Parent agrees to
----------------
offer in the FCC Application and to accept the conditions contained in the
proviso of Section 6.01(b).
(b) In connection with and without limiting the foregoing, the
Company and its Board of Directors shall (i) take all action necessary to ensure
that no state takeover statute or similar statute or regulation is or becomes
applicable to the Merger, this Agreement, the Stockholder Agreement or any of
the other transactions contemplated by this Agreement or the Stockholder
Agreement and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to the Merger, this Agreement, the Stockholder
Agreement or any other transaction contemplated by this Agreement or the
Stockholder Agreement, take all action necessary to ensure that the Merger and
the other transactions contemplated by this Agreement and the Stockholder
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and the Stockholder Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement.
<PAGE>
46
SECTION 5.06. Stock Options; Warrants. (a) As soon as
---------------------------
practicable following the date of this Agreement, the Board of Directors of the
Company (or, if appropriate, any committee administering the Stock Plans) shall
adopt such resolutions or take such other actions as may be required to effect
the following:
(i) adjust the terms of all outstanding (x) employee and
director stock options to purchase shares of Company Common Stock
("Employee Stock Options") granted under the Company's Stock Option
Plan, and the Company's 1996 Long-Term Incentive Plan (if adopted by
the Company's stockholders at the Company's 1996 annual meeting), in
each case as amended and restated through the date hereof, or any other
stock option plan, program, agreement or arrangement of the Company or
its subsidiaries (collectively, the "Stock Plans") and (y) employee
deferred share awards with respect to Company Common Stock ("Employee
Deferred Shares" and, together with the Employee Stock Options, the
"Employee Stock Awards") granted under the Company's Deferred Share
Plan or any other deferred share plan, program, agreement or
arrangement of the Company or its subsidiaries, in each case as amended
or restated through the date hereof (collectively, the "Deferred Share
Plans" and, together with the Stock Plans, the "Equity Plans"), whether
vested or unvested, as necessary to provide that, at the Effective
Time, (I) each Employee Stock Option outstanding immediately prior to
the Effective Time shall be deemed to constitute an option to acquire,
on the same terms and conditions as were applicable under such Employee
Stock Option, including vesting and the rights of the holder under the
terms of such Employee Stock Option, the same number of shares of
Parent Common Stock as the holder of such Employee Stock Option would
have been entitled to receive pursuant to the Merger had such holder
exercised such Employee Stock Option in full immediately prior to the
Effective Time (the "Deemed Parent Share Amount"), at a price per share
of Parent Common Stock equal to (A) the aggregate exercise price for
the shares of Company Common Stock otherwise purchasable pursuant to
such Employee Stock Option divided by (B) the aggregate Deemed Parent
Share Amount with respect to such Employee Stock Option (each, as so
adjusted, an "Adjusted Option"); provided, however, that in the case of
-------- -------
any option to which Section 421 of the Code applies by reason of its
qualification under
<PAGE>
47
any of Sections 422 through 424 of the Code ("qualified stock
options"), the option price, the number of shares purchasable pursuant
to such option and the terms and conditions of exercise of such option
shall be determined in order to comply with Section 424 of the Code and
(II) each Employee Deferred Share outstanding immediately prior to the
Effective Time shall be deemed to constitute a deferred share, subject
to the same terms and conditions as were applicable under the Employee
Deferred Share, including the rights of the holder under the terms of
such Employee Deferred Share, with respect to the number of shares of
Parent Common Stock that the holder of such Employee Deferred Share
would have been entitled to receive pursuant to the Merger had such
holder held the shares of Company Common Stock covered by such Employee
Deferred Share directly immediately prior to the Effective Time; and
(ii) subject to the consent of Parent, such consent not to be
unreasonably withheld, make such other changes to the Equity Plans as
the Company and Parent may determine appropriate to give effect to the
Merger, including the amendment of the Stock Plans to permit the
deferral of the payment of any shares of Parent Common Stock purchased
upon the exercise of any Adjusted Stock Option identified on Section
5.06 of the Company Disclosure Schedule pursuant to the election of the
holder thereof who is identified on Section 5.06 of the Company
Disclosure Schedule but only to the extent any such amendment would not
cause any amount that would otherwise be deductible by the Company or
Parent to fail to be so deductible.
(b) As soon as practicable after the Effective Time, Parent
shall deliver to the holders of Employee Stock Awards appropriate notices
setting forth such holders' rights pursuant to the respective Equity Plans and
the agreements evidencing the grants of such Employee Stock Awards shall
continue in effect on the same terms and conditions (subject to the adjustments
required by this Section 5.06 after giving effect to the Merger and the
provisions of paragraphs (a)(ii) and (e) of this Section 5.06). Parent shall
comply with the terms of the Equity Plans and ensure, to the extent required by,
and subject to the provisions of, the Stock Plans, that the Employee Stock
Options which qualified as qualified stock options prior to the Effective Time
continue to qualify as qualified stock options after the Effective Time.
<PAGE>
48
(c) Parent shall take such actions as are reasonably necessary
for the assumption of the Equity Plans of the Company pursuant to Section
5.06(a), including the reservation, issuance and listing of Parent Common Stock
as is necessary to effectuate the transactions contemplated by Section 5.06(a).
Upon or prior to the Effective Time, Parent shall prepare and file with the SEC
a registration statement on Form S-8 with respect to shares of Parent Common
Stock subject to Employee Stock Awards and shall use its best efforts to
maintain the effectiveness of a registration statement or registration
statements covering such Employee Stock Awards (and maintain the current status
of the prospectus or prospectuses contained therein) for so long as such
Employee Stock Awards remain outstanding. With respect to those individuals, if
any, who subsequent to the Effective Time will be subject to the reporting
requirements under Section 16(a) of the Exchange Act, where applicable, Parent
shall use its best efforts to administer the Equity Plans assumed pursuant to
Section 5.06(a) in a manner that complies with Rule 16b-3 promulgated under the
Exchange Act.
(d) A holder of an Adjusted Option may exercise such Adjusted
Option in whole or in part in accordance with its terms and the terms of the
related Stock Plan by delivering a properly executed notice of exercise to
Parent, together with the consideration therefor and the Federal withholding tax
information, if any, required in accordance with the related Stock Plan.
(e) All restrictions or limitations on transfer and vesting
with respect to Employee Stock Options awarded under the Stock Plans, to the
extent that such restrictions or limitations shall not have already lapsed,
shall remain in full force and effect with respect to such options after giving
effect to the Merger and the assumption by Parent as set forth above, except
that effective from and after the Effective Time the restrictions and
limitations on the vesting of Employee Options held as of the date hereof by
that individual listed on Section 5.06 of the Company Disclosure Schedule shall
lapse and shall be of no further effect.
(f) Parent shall cause the Surviving Corporation to deliver to
each holder of Company Warrants at or prior to the Effective Time the
undertakings required by Section 6.3 of each warrant certificate (as in effect
on the date hereof) that represents outstanding Company Warrants.
<PAGE>
49
SECTION 5.07. Benefit Plans. Except as provided in Section
---------------
5.06, Parent hereby agrees that for a period of one year immediately following
the Closing, it shall, or shall cause the Surviving Corporation to, continue to
maintain employee benefit plans, programs and policies for the employees of the
Company and its subsidiaries which, in the aggregate, provide benefits that are
no less favorable to those provided to them under such plans, programs and
policies on the date hereof.
SECTION 5.08. Indemnification, Exculpation and Insurance.
----------------------------------------------
Parent and Sub agree that all rights to indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Effective Time
now existing in favor of the current or former directors or officers of the
Company and its subsidiaries as provided in their respective certificates of
incorporation, by-laws (or comparable organizational documents) and
indemnification agreements shall survive the Merger and shall continue in full
force and effect in accordance with their terms for a period of not less than
six years from the Effective Time. Parent will cause to be maintained for a
period of not less than six years from the Effective Time the Company's current
directors' and officers' insurance and indemnification policy to the extent that
it provides coverage for events occurring prior to the Effective Time ("D&O
Insurance") for all persons who are directors and officers of the Company on the
date of this Agreement, so long as the annual premium therefor would not be in
excess of 200% of the last annual premium paid prior to the date of this
Agreement (the "Maximum Premium"); provided, however, that Parent may, in lieu
-------- -------
of maintaining such existing D&O Insurance as provided above, cause coverage to
be provided under any policy maintained for the benefit of Parent or any of its
subsidiaries, so long as the terms thereof are no less advantageous to the
intended beneficiaries thereof than the existing D&O Insurance. If the existing
D&O Insurance expires, is terminated or cancelled during such six-year period,
Parent will use all reasonable efforts to cause to be obtained as much D&O
Insurance as can be obtained for the remainder of such period for an annualized
premium not in excess of the Maximum Premium, on terms and conditions no less
advantageous to the covered persons than the existing D&O Insurance. The Company
represents to Parent that the Maximum Premium is $581,660.
SECTION 5.09. Fees and Expenses. (a) Except as
------------------
provided below in this Section 5.09, all fees and expenses
<PAGE>
50
incurred in connection with the Merger, this Agreement, the Stockholder
Agreement and the transactions contemplated by this Agreement and the
Stockholder Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated, except that each of Parent
and the Company shall bear and pay one-half of the costs and expenses incurred
in connection with the filing, printing and mailing of the Form S-4 and the
Joint Proxy Statement.
(b) The Company shall pay, or cause to be paid, in same day
funds to Parent the sum of (x) Parent's Expenses (as defined below) in an amount
up to but not to exceed $20,000,000 and (y) $100,000,000 (the "Termination Fee")
upon demand if (i) the Company terminates this Agreement pursuant to Section
7.01(c); or (ii) Parent terminates this Agreement pursuant to Section 7.01(b)(i)
or (b)(iv) at any time after a takeover proposal has been made and within one
year after such a termination, the person that made the takeover proposal (or an
affiliate thereof) completes a merger, consolidation or other business
combination with the Company or a significant subsidiary of the Company, or the
purchase from the Company or from a significant subsidiary of the Company of 20%
or more (in voting power) of the voting securities of the Company or of 20% or
more (in market value or book value) of the assets of the Company and its
subsidiaries, on a consolidated basis. "Expenses" shall mean reasonable and
reasonably documented out-of-pocket fees and expenses incurred or paid by or on
behalf of Parent in connection with the Merger or the consummation of any of the
transactions contemplated by this Agreement, including all fees and expenses of
counsel, commercial banks, investment banking firms, accountants, experts and
consultants to Parent.
SECTION 5.10. Public Announcements. Parent and Sub, on the one
---------------------
hand, and the Company, on the other hand, will consult with each other before
issuing, and provide each other the opportunity to review, comment upon and
concur with, any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Merger, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this
<PAGE>
51
Agreement and the Stockholder Agreement shall be in the form heretofore agreed
to by the parties.
SECTION 5.11. Affiliates. Prior to the Closing Date, the
-----------
Company shall deliver to Parent a letter identifying all persons who are, at the
time the Merger is submitted for approval to the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act.
The Company shall use reasonable efforts to cause each such person to deliver to
Parent on or prior to the Closing Date a written agreement in a form reasonably
acceptable to Parent and the Company. The Company shall not register, and shall
instruct its transfer agent not to register, the transfer of any certificate
representing Company Common Stock held by a Principal Stockholder, unless such
transfer is made in compliance with the terms of the Stockholder Agreement.
SECTION 5.12. NYSE Listing. Parent shall use all reasonable
-------------
efforts to cause the shares of Parent Common Stock to be issued in the Merger,
upon exercise of the Company Warrants and under the Stock Plans to be approved
for listing on the NYSE, subject to official notice of issuance, prior to the
Closing Date.
SECTION 5.13. Stockholder Litigation. The Company shall give
------------------------
Parent the opportunity to participate in the defense or settlement of any
stockholder litigation against the Company and its directors relating to the
transactions contemplated by this Agreement; provided, however, that Parent
-------- -------
shall have the right to prevent the Company from entering into any such
settlement without Parent's consent by agreeing to indemnify each director of
the Company for the amount of his individual liability (whether as director or
in another capacity), if any, arising from the underlying claim, net of
insurance, that is in excess of the amount, if any, that such director would
have been liable for under such settlement (whether as director or in another
capacity).
ARTICLE VI
Conditions Precedent
--------------------
SECTION 6.01. Conditions to Each Party's Obligation To Effect
-----------------------------------------------
the Merger. The respective obligation of each party to effect the Merger is
- -----------
subject to the
<PAGE>
52
satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Stockholder Approvals. Each of the Company
----------------------
Stockholder Approval and the Parent Shareholder Approval shall have
been obtained.
(b) FCC Order. The FCC shall have issued the FCC Order (as
-----------
defined below) approving the applications for transfer of control of
the FCC Licenses for the operation of the Licensed Facilities in
connection with the Merger, and the FCC Order shall have been obtained
without the imposition of any conditions or restrictions of the type
referred to in Section 6.02(d)(ii), (iii), (iv) or (v) that are not
acceptable to Parent in its sole discretion; provided that without
--------
triggering Parent's right to approve such conditions or restrictions,
the FCC Order (i) may condition consummation of the Merger on Parent
complying with the numerical limits on local multiple radio ownership
imposed by Section 202(b) of the 1996 Telecommunications Act through
receipt of a temporary waiver for a period of up to six months
following the Effective Time or otherwise, and (ii) may grant Parent
temporary, rather than permanent, waivers of the "one-to-a-market"
rule, 47 C.F.R. 73.3555(c), so long as such temporary waivers shall
remain in effect until at least six months following the effective date
of FCC action concluding the ongoing rulemaking proceeding in MM Docket
Nos. 91-221, 87-8 (FCC 94-322) and any successor rulemaking proceeding,
including in particular a rulemaking initiated by the FCC in response
to the 1996 Telecommunications Act, that considers the
"one-to-a-market" rule. The "FCC Order" shall be an action by the FCC
approving the transfer of the FCC Licenses for the operation of the
Licensed Facilities pursuant to the Merger which, except in each case
as may be waived in writing by Parent in its sole discretion, has not
been reversed, stayed, enjoined, set aside, annulled or suspended; with
respect to which no timely request for stay, petition for
reconsideration or appeal or sua sponte action of the FCC with
--- ------
comparable effect is pending; and as to which the time for filing any
such request, petition or appeal or for the taking of any such sua
---
sponte action by the FCC has expired.
------
<PAGE>
53
(c) HSR Act. The waiting period (and any extension thereof)
--------
applicable to the Merger under the HSR Act shall have been terminated
or shall have expired.
(d) No Injunctions or Restraints. No statute, rule,
----------------------------------
regulation, executive order, decree, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or 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.
(e) Form S-4. The Form S-4 shall have become effective under
---------
the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order, and Parent shall have received all
state securities or "blue sky" authorizations necessary to issue the
Parent Common Stock issuable pursuant to this Agreement.
(f) NYSE Listing. The shares of Parent Common Stock issuable
-------------
to the Company's stockholders pursuant to this Agreement, upon exercise
of the Company Warrants and under the Stock Plans shall have been
approved for listing on the NYSE, subject to official notice of
issuance.
SECTION 6.02. Conditions to Obligations of Parent and Sub. The
--------------------------------------------
obligations of Parent and Sub to effect the Merger are further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and
--------------------------------
warranties of the Company set forth in this Agreement shall be true and
correct (for all purposes of this Section 6.02(a) without giving effect
to any "materiality" or "material adverse effect" limitations contained
therein) as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in
which case as of such date), and except to the extent the failure of
such representations and warranties to be true and correct would not,
in the aggregate, have a material adverse effect on the Company. Parent
shall have received a
<PAGE>
54
certificate signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company
--------------------------------------------
shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing
Date, and Parent shall have received a certificate signed on behalf of
the Company by the chief executive officer and the chief financial
officer of the Company to such effect.
(c) Letters from Company Affiliates. Parent shall have
-----------------------------------
received from each person identified in the letter referred to in
Section 5.11 an executed copy of an agreement in a form reasonably
acceptable to Parent and the Company.
(d) No Litigation. There shall not be pending or threatened by
--------------
any Governmental Entity other than the FCC any suit, action or
proceeding (and there shall not be pending by any other person any
suit, action or proceeding which has a reasonable likelihood of
success), in each case (i) challenging the acquisition by Parent or Sub
of any shares of capital stock of the Company or the Surviving
Corporation, seeking to restrain or prohibit the consummation of the
Merger or any of the other transactions contemplated by this Agreement
or the Stockholder Agreement or seeking to obtain from the Company,
Parent or Sub any damages that are material in relation to the Company
and its subsidiaries taken as a whole or Parent and its subsidiaries
taken as a whole, as applicable, (ii) seeking to prohibit or limit the
ownership or operation by the Company, Parent or any of their
respective subsidiaries of any material portion of the business or
assets of the Company and its subsidiaries, taken as a whole, or Parent
and its subsidiaries, taken as a whole, as applicable, or to compel the
Company, Parent or any of their respective subsidiaries to dispose of
or hold separate any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or Parent and its
subsidiaries, taken as a whole, as applicable, as a result of the
Merger or any of the other transactions contemplated by this Agreement
or the Stockholder Agreement, (iii) seeking to impose limitations on
the ability of Parent to
<PAGE>
55
acquire or hold, or exercise full rights of ownership of, any shares of
capital stock of the Company or the Surviving Corporation, including
the right to vote the Company Common Stock, or common stock of the
Surviving Corporation, on all matters properly presented to the
stockholders of the Company or the Surviving Corporation, respectively,
(iv) seeking to prohibit Parent and its subsidiaries from effectively
controlling in any material respect the business or operations of the
Company and its subsidiaries, taken as a whole, or (v) which otherwise
could reasonably be expected to have a material adverse effect on the
Company or Parent. In addition, there shall not be any statute, rule,
regulation, judgment or order enacted, entered, enforced or promulgated
that is reasonably likely to result, directly or indirectly, in any of
the consequences referred to in clauses (ii) through (iv) above.
(e) Tax Opinions. Parent shall have received from Cravath,
--------------
Swaine & Moore, counsel to Parent, on the date of the Joint Proxy
Statement and on the Closing Date opinions, in each case dated as of
such respective dates and stating that the Merger will be treated for
Federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code and that Parent, Sub and the Company will
each be a party to that reorganization within the meaning of Section
368(b) of the Code. In rendering such opinions, counsel for Parent
shall be entitled to rely upon representations of officers of Parent,
Sub and the Company reasonably satisfactory in form and substance to
such counsel.
(f) Karmazin Employment Arrangements. The agreement dated as
----------------------------------
of the date hereof between Mel Karmazin and Parent relating to the
terms of employment of Mel Karmazin by Parent, as amended from time to
time, shall be in full force and effect and Parent shall not be aware
of any basis that would reasonably be expected to cause such agreement
to no longer be in full force and effect, in each case other than as a
result of breach by Parent thereunder.
(g) Compliance. After giving effect to the
-----------
consummation of the Merger, the Company shall be in
compliance with the provisions of any agreement
<PAGE>
56
referred to in Section 6.02(g) of the Company Disclosure Schedule.
SECTION 6.03. Conditions to Obligation of the Company. The
------------------------------------------
obligation of the Company to effect the Merger is further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and
--------------------------------
warranties of Parent and Sub set forth in this Agreement shall be true
and correct (for all purposes of this Section 6.03(a) without giving
effect to any "materiality" or "material adverse effect" limitations
contained therein) as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, except to
the extent such representations expressly relate to an earlier date (in
which case as of such date), and except to the extent the failure of
such representations and warranties to be true and correct would not,
in the aggregate, have a material adverse effect on the Company. The
Company shall have received a certificate signed on behalf of Parent by
an executive officer of Parent to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and
---------------------------------------------
Sub shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to
the Closing Date, and the Company shall have received a certificate
signed on behalf of Parent by an executive officer of Parent to such
effect.
(c) Tax Opinions. The Company shall have received from
--------------
Debevoise & Plimpton, counsel to the Company, on the date of the Joint
Proxy Statement and on the Closing Date opinions, in each case dated as
of such respective dates and stating that the Merger will be treated
for Federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code and that Parent, Sub and the Company will
each be a party to that reorganization within the meaning of Section
368(b) of the Code. In rendering such opinions, counsel for the Company
shall be entitled to rely upon representations of officers of Parent,
Sub and the Company reasonably satisfactory in form and substance to
such counsel.
<PAGE>
57
ARTICLE VII
Termination, Amendment and Waiver
---------------------------------
SECTION 7.01. Termination. This Agreement may be
------------
terminated at any time prior to the Effective Time, whether
before or after the Company Stockholder Approval or the
Parent Shareholder Approval:
(a) by mutual written consent of Parent, Sub and
the Company;
(b) by either Parent or the Company:
(i) if, upon a vote at a duly held Company
Stockholders Meeting or Parent Shareholders Meeting or any
adjournment thereof at which the Company Stockholder Approval
or the Parent Shareholder Approval, as the case may be, shall
have been voted upon, the Company Stockholder Approval or the
Parent Shareholder Approval, as the case may be, shall not
have been obtained;
(ii) if the Merger shall not have been consummated on
or before June 30, 1997, unless the failure to consummate the
Merger is the result of a willful and material breach of this
Agreement by the party seeking to terminate this Agreement;
provided, however, that the passage of such period shall be
-------- -------
tolled for any part thereof (but not exceeding 60 calendar
days in the aggregate) during which any party shall be subject
to a nonfinal order, injunction, decree, ruling or action
restraining, enjoining or otherwise prohibiting the
consummation of the Merger or the calling or holding of the
Company Stockholders Meeting or the Parent Shareholders
Meeting;
(iii) if any Governmental Entity shall have issued an
order, injunction, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting
the Merger and such order, injunction, decree, ruling or other
action shall have become final and nonappealable; or
(iv) in the event of a breach by the other
party of any representation, warranty, covenant or
<PAGE>
58
other agreement contained in this Agreement which (A) would
give rise to the failure of a condition set forth in Section
6.02(a) or (b) or Section 6.03(a) or (b), as applicable, and
(B) cannot be or has not been cured within 30 days after the
giving of written notice to the breaching party of such breach
(a "Material Breach") (provided that the terminating party is
not then in Material Breach of any representation, warranty,
covenant or other agreement contained in this Agreement); or
(c) by the Company if (i) the Board of Directors of the
Company shall have determined in good faith, based on the advice of
outside counsel, that it is necessary, in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, to
terminate this Agreement to enter into an agreement with respect to or
to consummate a transaction constituting a superior proposal, (ii) the
Company shall have given notice to Parent advising Parent that the
Company has received a superior proposal from a third party, specifying
the material terms and conditions (including the identity of the third
party), and that the Company intends to terminate this Agreement in
accordance with this Section 7.01(c), (iii) either (A) Parent shall not
have revised its takeover proposal within two business days from the
time on which such notice is deemed to have been given to Parent, or
(B) if Parent within such period shall have revised its takeover
proposal, the Board of Directors of the Company, after receiving advice
from the Company's financial advisor, shall have determined in its good
faith reasonable judgment that the third party's takeover proposal is
superior to Parent's revised takeover proposal, and (iv) the Company,
at the time of such termination, pays the Expenses and the Termination
Fee in accordance with Section 5.09.
SECTION 7.02. Effect of Termination. In the event of
------------------------
termination of this Agreement by either the Company or Parent as provided in
Section 7.01, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Sub or the Company,
other than the provisions of Section 3.01(o), Section 3.02(h), the last sentence
of Section 5.04, Section 5.09, this Section 7.02 and Article VIII and except to
the extent that such termination results from the willful
<PAGE>
59
and material breach by a party of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the
----------
parties at any time before or after the Company Stockholder Approval or the
Parent Shareholder Approval; provided, however, that after any such approval,
-------- -------
there shall not be made any amendment that by law requires further approval by
the stockholders of the Company or the shareholders of Parent without the
further approval of such stockholders or shareholders, as the case may be. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties.
SECTION 7.04. Extension; Waiver. At any time prior to the
-------------------
Effective Time, a party may (a) extend the time for the performance of any of
the obligations or other acts of the other parties, (b) waive any inaccuracies
in the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 7.03, waive compliance by the other parties with any
of the agreements or conditions contained in this Agreement. Any agreement on
the part of a party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure of
any party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION 7.05. Procedure for Termination, Amendment, Extension
------------------------------------------------
or Waiver. A termination of this Agreement pursuant to Section 7.01, an
- -----------
amendment of this Agreement pursuant to Section 7.03 or an extension or waiver
pursuant to Section 7.04 shall, in order to be effective, require in the case of
Parent, Sub or the Company, action by its Board of Directors or, except in the
case of Sub or the Company, with respect to any amendment to this Agreement, the
duly authorized designee of its Board of Directors.
<PAGE>
60
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties.
-----------------------------------------------
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.01 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
SECTION 8.02. Notices. All notices, requests, claims, demands
--------
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222
Telecopy No.: (412) 642-5224
Attention: Lou Briskman, Esq.
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Telecopy No.: (212) 474-3700
Attention: Peter S. Wilson, Esq.; and
(b) if to the Company, to
Infinity Broadcasting Corporation
600 Madison Avenue
New York, NY 10022
Telecopy No.: (212) 355-4541
Attention: Mr. Mel Karmazin
<PAGE>
61
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Telecopy No.: (212) 909-6836
Attention: Richard D. Bohm, Esq.
SECTION 8.03. Definitions. For purposes of this Agreement:
------------
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person;
(b) "indebtedness" has the meaning assigned
thereto in Section 3.01(r)(ii);
(c) "material adverse change" or "material adverse effect"
means, when used in connection with the Company or Parent, any change,
effect, event or occurrence that is materially adverse to the business,
properties, assets, condition (financial or otherwise) or results of
operations of such party and its subsidiaries taken as a whole other
than any change, effect, event or occurrence relating to the United
States economy in general or to the United States radio broadcasting
industry in general, and not specifically relating to the Company or
Parent or their respective subsidiaries;
(d) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity;
(e) a "significant subsidiary" means any subsidiary of the
Company that constitutes a significant subsidiary within the meaning of
Rule 1-02 of Regulation S-X of the SEC;
(f) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if
there are no such voting interests, 50% or more of the
<PAGE>
62
equity interests of which) is owned directly or
indirectly by such first person;
(g) "superior proposal" means (x) a bona fide takeover
proposal to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, more than 50% of the shares
and/or voting power of Company Common Stock then outstanding or all or
substantially all the assets of the Company, and (y) otherwise on terms
which the Board of Directors of the Company determines in its good
faith reasonable judgment to be more favorable to the Company's
stockholders than the Merger (based on the written opinion, with only
customary qualifications, of the Company's independent financial
advisor that the value of the consideration provided for in such
proposal is superior to the value of the consideration provided for in
the Merger), for which financing, to the extent required, is then
committed or which, in the good faith reasonable judgment of the Board
of Directors, based on advice from the Company's independent financial
advisor, is reasonably capable of being financed by such third party
and for which the Board of Directors determines, in its good faith
reasonable judgment, that such proposed transaction is reasonably
likely to be consummated without undue delay;
(h) "takeover proposal" means any proposal for a merger,
consolidation or other business combination involving the Company or
any proposal or offer to acquire in any manner, directly or indirectly,
an equity interest in, any more than 25% of the voting power of, or a
substantial portion of the assets of, the Company and its subsidiaries,
taken as a whole, other than the transactions contemplated by this
Agreement; and
(i) "taxes" has the meaning assigned thereto in
Section 3.01(k)(iii).
SECTION 8.04. Interpretation. When a reference is made in this
---------------
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, 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
<PAGE>
63
used in this Agreement, they shall be deemed to be followed by the words
"without limitation". The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. All terms defined
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term. Any agreement, instrument or
statute defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns and, in the case of an individual, to his heirs
and estate, as applicable.
SECTION 8.05. Counterparts. This Agreement may be executed in
-------------
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 8.06. Entire Agreement; No Third-Party Beneficiaries.
------------------------------------------------
This Agreement (including the documents and instruments referred to herein) and
the Confidentiality Agreement (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter of this Agreement and (b) except for
the provisions of Article II, Section 5.06 and Section 5.08, are not intended to
confer upon any person other than the parties any rights or remedies.
SECTION 8.07. Governing Law. This Agreement shall be governed
--------------
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
<PAGE>
64
SECTION 8.08. Assignment. Neither this Agreement nor any of
-----------
the rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, except that Sub may assign, in
its sole discretion, any of or all its rights, interests and obligations under
this Agreement to Parent or to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations under
this Agreement. Any assignment in violation of the preceding sentence shall be
void. 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.
SECTION 8.09. Enforcement. The parties agree that irreparable
------------
damage would occur and that the parties would not have any adequate remedy at
law 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 Federal court located in the
State of Delaware or in 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 itself 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 by this Agreement, (b) agrees that it 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 it will not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than a
<PAGE>
65
Federal court sitting in the State of Delaware or a Delaware state court.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
WESTINGHOUSE ELECTRIC
CORPORATION,
by /s/ Fredric G. Reynolds
---------------------------
Name: Fredric G. Reynolds
Title: Executive Vice President
and Chief Financial
Officer
R ACQUISITION CORP.,
by /s/ Louis J. Briskman
---------------------------
Name: Louis J. Briskman
Title: Vice President
INFINITY BROADCASTING
CORPORATION,
by /s/ Mel Karmazin
---------------------------
Name: Mel Karmazin
Title: President and Chief
Executive Officer
<PAGE>
STOCKHOLDER AGREEMENT dated as of
June 20, 1996, among WESTINGHOUSE ELECTRIC
CORPORATION, a Pennsylvania corporation ("Parent"),
and the individuals and other parties listed on
Schedule A attached hereto (each, a "Stockholder"
and, collectively, the
"Stockholders").
WHEREAS Parent, R Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Parent ("Sub"), and INFINITY BROADCASTING
CORPORATION, a Delaware corporation (the "Company"), propose to enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "Merger Agreement"; capitalized terms used but not
defined herein shall have the meanings set forth in the Merger Agreement)
providing for the merger of Sub with and into the Company (the "Merger"), upon
the terms and subject to the conditions set forth in the Merger Agreement; and
WHEREAS each Stockholder owns the number of shares of Class A
Common Stock, par value $.002 per share, of the Company (the "Class A Common
Stock") and of Class B Common Stock, par value $.002 per share, of the Company
(the "Class B Common Stock" and, together with the Class A Common Stock, the
"Common Stock") set forth opposite his or its name on Schedule A attached hereto
(such shares of Common Stock, together with any other shares of capital stock of
the Company acquired by such Stockholder after the date hereof and during the
term of this Agreement, being collectively referred to herein as the "Subject
Shares"); and
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Parent has requested that each Stockholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent to enter into, and in
consideration of its entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
<PAGE>
2
1. Representations and Warranties of each Stockholder. Each
----------------------------------------------------
Stockholder hereby, severally and not jointly, represents and warrants to Parent
as of the date hereof in respect of himself or itself as follows:
(a) Authority. The Stockholder has all requisite power and
----------
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder enforceable in
accordance with its terms. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby
and compliance with the terms hereof will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of
time or both) under any provision of, any trust agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Stockholder or to the Stockholder's
property or assets. If the Stockholder is married and the Stockholder's
Subject Shares constitute community property or otherwise need spousal
or other approval to be legal, valid and binding, this Agreement has
been duly authorized, executed and delivered by, and constitutes a
valid and binding agreement of, the Stockholder's spouse, enforceable
against such spouse in accordance with its terms. No trust of which
such Stockholder is a trustee requires the consent of any beneficiary
to the execution and delivery of this Agreement or to the consummation
of the transactions contemplated hereby. Each Stockholder will execute
a power of attorney in favor of at least two other Stockholders with
respect to the matters covered by Sections 3(a) and (b) in the event of
incapacity of any Stockholder.
(b) The Subject Shares. The Stockholder is the record and
---------------------
beneficial owner of, or is trustee of a trust that is the record holder
of, and whose beneficiaries are the beneficial owners of, and has good
and marketable title to, the Subject Shares set forth opposite his or
its name on Schedule A attached hereto, free and clear of any claims,
liens, encumbrances and security interests whatsoever. The Stockholder
does not own, of record or beneficially,
<PAGE>
3
any shares of capital stock of the Company other than the Subject
Shares set forth opposite his or its name on Schedule A attached
hereto. The Stockholder has the sole right to vote such Subject Shares,
and none of such Subject Shares is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of
such Subject Shares, except as contemplated by this Agreement.
2. Representations and Warranties of Parent. (a) Parent hereby
-----------------------------------------
represents and warrants to each Stockholder that Parent has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent, and the consummation of the transactions contemplated hereby, have
been duly authorized by all necessary corporate action on the part of Parent.
This Agreement has been duly executed and delivered by Parent and constitutes a
valid and binding obligation of Parent enforceable in accordance with its terms.
The execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time or both) under any provision of, the articles of incorporation
or by-laws of Parent, any trust agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise, license, judgment, order, notice, decree, statute, law, ordinance,
rule or regulation applicable to Parent or to Parent's property or assets.
3. Covenants of each Stockholder. Until the termination of
-------------------------------
this Agreement in accordance with Section 7, each Stockholder, severally and not
jointly, agrees as follows:
(a) At any meeting of stockholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment
thereof or in any other circumstances upon which a vote, consent or
other approval (including by written consent) with respect to the
Merger and the Merger Agreement is sought, the Stockholder shall,
including by initiating a written consent solicitation if requested by
Parent, vote (or cause to be voted) the Subject Shares (and each class
thereof) in favor of the Merger, the adoption by the Company of the
Merger Agreement and the approval of the
<PAGE>
4
terms thereof and each of the other transactions
contemplated by the Merger Agreement.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares (and
each class thereof) against (i) any merger agreement or merger (other
than the Merger Agreement and the Merger), consolidation, combination,
sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding up of or by the Company or any
other takeover proposal as such term is defined in Section 8.03(h) of
the Merger Agreement (a "Takeover Proposal") or (ii) any amendment of
the Company's certificate of incorporation or by-laws or other proposal
or transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any
of the other transactions contemplated by the Merger Agreement or
change in any manner the voting rights of each class of Company Common
Stock. Subject to Section 9, the Stockholder further agrees not to
commit or agree to take any action inconsistent with the foregoing.
(c) Except as provided in the immediately succeeding sentence
of this Section 3(c), the Stockholder agrees not to (i) sell, transfer,
pledge, assign or otherwise dispose of (including by gift)
(collectively, "Transfer"), or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to
the Transfer of, the Subject Shares to any person other than pursuant
to the terms of the Merger, (ii) enter into any voting arrangement,
whether by proxy, voting agreement or otherwise, in connection with,
directly or indirectly, any Takeover Proposal or (iii) convert (or
cause to be converted) any of the Subject Shares consisting of Class B
Common Stock into Class A Common Stock, and agrees not to commit or
agree to take any of the
<PAGE>
5
foregoing actions. Notwithstanding the foregoing, the following
Transfers (and any related conversions of Class B Common Stock into
Class A Common Stock) shall be permitted at any time:
(x) the Stockholder shall have the right, for estate
planning purposes, to Transfer Subject Shares to a transferee
if and only if such transfer will not result in the automatic
conversion of Class B Common Stock to Class A Common Stock and
only following the due execution and delivery to Parent by
each transferee of a counterpart to this Agreement;
(y) Mel Karmazin, a Stockholder identified on
Schedule A attached hereto (the "Designated Stockholder"),
shall have the right to Transfer (in the case of clauses (B)
and (C) below, after first converting such shares to shares of
Class A Common Stock) (A) 353,967 shares of Class A Common
Stock to satisfy certain existing obligations, (B) up to
750,000 shares of Class B Common Stock in order to satisfy
certain existing obligations and (C) up to that number of
shares of Class B Common Stock as may be reasonably necessary
to pay the reasonably estimated taxes incurred by the
Designated Stockholder in connection with any exercise of
options pursuant to Section 4(a), in each case so long as all
such shares are acquired by the Designated Stockholder
pursuant to exercises of options in respect of Class B Common
Stock after the date hereof; and
(z) Gerald Carrus and Michael A. Wiener, each
Stockholders identified on Schedule A attached hereto
(together with the Designated Stockholder, the "Principal
Stockholders"), shall each have the right to Transfer up to
100,000 shares of Class B Common Stock (after first converting
such shares to shares of Class A Common Stock).
(d) Subject to the terms of Section 9, during the term of this
Agreement, the Stockholder shall not, nor shall it permit any
investment banker, attorney or other adviser or representative of the
Stockholder to, (i) directly or indirectly solicit, initiate or
encourage the submission of, any Takeover Proposal or (ii) directly or
indirectly participate in any
<PAGE>
6
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 may
reasonably be expected to lead to, any Takeover Proposal.
(e) Until after the Merger is consummated or the Merger
Agreement is terminated, the Stockholder shall use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by the Merger Agreement.
(f) (i) In the event that the Merger Agreement shall have been
terminated under circumstances where Parent is or may become entitled
to receive the Termination Fee, each Stockholder shall pay to Parent on
demand an amount equal to all profit (determined in accordance with
Section 3(f)(ii)) of such Stockholder from the consummation of any
Takeover Proposal that is consummated within two years of such
termination.
(ii) For purposes of this Section 3(f), the profit of any
Shareholder from any Takeover Proposal shall equal (A) the aggregate
consideration received by such Stockholder pursuant to such Takeover
Proposal, valuing any non-cash consideration (including any residual
interest in the Company) at its fair market value on the date of such
consummation plus (B) the fair market value, on the date of
disposition, of all Subject Shares of such Stockholder disposed of
after the termination of the Merger Agreement and prior to the date of
such consummation less (C) the fair market value of the aggregate
consideration that would have been issuable or payable to such
Stockholder if he had received the Merger Consideration pursuant to the
Merger Agreement as originally executed, valued as of immediately prior
to the first public announcement by the Company of its intention to
terminate the Merger Agreement to pursue a superior proposal as if the
Merger had been consummated on the date of such public announcement.
(iii) In the event that (x) prior to the
Effective Time, a Takeover Proposal shall have been
<PAGE>
7
made and (y) the Effective Time of the Merger shall have occurred and
Parent for any reason shall have increased the amount of Merger
Consideration payable over that set forth in the Merger Agreement in
effect on the date hereof (the "Original Merger Consideration"), each
Stockholder shall pay to Parent on demand an amount in cash equal to
the product of (i) the number of Subject Shares of such Stockholder and
(ii) 100% of the excess, if any, of (A) the per share cash
consideration or the per share fair market value of any non-cash
consideration, as the case may be, received by the Stockholder as a
result of the Merger, as amended, determined as of the Effective Time
of the Merger, over (B) the fair market value of the Original Merger
Consideration determined as of the time of the first increase in the
amount of the Original Merger Consideration.
(iv) For purposes of this Section 3(f), the fair market value
of any non-cash consideration consisting of:
(A) securities listed on a national securities
exchange or traded on the NASDAQ/NMS shall
be equal to the average closing price per
share of such security as reported on such
exchange or NASDAQ/NMS for the five trading
days after the date of determination; and
(B) consideration which is other than cash
or securities of the form specified in
clause (i) of this Section 3(f)(iv)
shall be determined by a nationally
recognized independent investment
banking firm mutually agreed upon by the
parties within 10 business days of the
event requiring selection of such
banking firm; provided, however, that if
-------- -------
the parties are unable to agree within
two business days after the date of such
event as to the investment banking firm,
then the parties shall each select one
firm, and those firms shall select a
third investment banking firm, which
third firm shall make such
determination; provided further, that
-------- -------
the fees and expenses of such investment
<PAGE>
8
banking firm shall be borne equally by
Parent, on the one hand, and the
Stockholders, on the other hand. The
determination of the investment banking firm
shall be binding upon the parties.
(v) Any payment of profit under this Section 3(f) shall (x) if
paid in cash, be paid by wire transfer of same day funds to an account
designated by Parent and (y) if paid through a mutually agreed transfer
of securities, be paid through delivery of such securities, suitably
endorsed for transfer.
4. Additional Agreements of Designated Stockholder. (a) The
--------------------------------------------------
Designated Stockholder owns validly issued and outstanding options and warrants
to acquire a number of shares of Class A Common Stock and of Class B Common
Stock, in each case as set forth opposite his name on Schedule A attached
hereto. All such options and warrants are fully vested and freely exercisable by
the Designated Stockholder to acquire any or all such shares at any time at his
option; provided that the Designated Stockholder shall not take any action that
--------
would affect such full vesting or continued free exercisability and shall not
Transfer such options and warrants except pursuant to Section 3(c)(y). The
Designated Stockholder hereby agrees with Parent that, if so requested by Parent
at a time and from time to time prior to when Parent believes the record date
for a stockholder vote contemplated by Sections 3(a) or (b) is reasonably likely
to arise and Parent reasonably believes such exercise will be necessary to
ensure the required vote to approve the Merger, the Designated Stockholder will
exercise such number of options and/or warrants as are sufficient, after giving
effect to the exercises and any Transfers contemplated by Section 3(c)(y)(C), to
ensure that the Subject Shares continue to represent a majority of the
outstanding voting power of the outstanding capital stock of the Company
entitled to vote on the matters referred to in Sections 3(a) and (b) (the
"Sufficient Number"); provided, however, that, notwithstanding the foregoing,
-------- -------
the Designated Stockholder shall not be obligated to exercise options under this
Section 4(a) to the extent that the shortfall in reaching the Sufficient Number
of votes results from the death of one or more of the Principal Stockholders.
Any shares of Common Stock received by the Designated Stockholder upon such
exercise shall automatically at such time become "Subject Shares" for all
purposes hereunder
<PAGE>
9
(b) For a period of two years following the Effective Time,
except as otherwise required by law and except for the Transfer during the
second year of such two-year period of up to 20% of the aggregate number of
shares of Parent Common Stock received by the Designated Stockholder in the
Merger in exchange for the Subject Shares of the Designated Stockholder or
following the Effective Time upon the exercise of Adjusted Options (the "Subject
Parent Shares"), the Designated Stockholder agrees not to Transfer, or enter
into any contract, option or other arrangement (including any profit sharing
arrangement) with respect to the Transfer of, any such Subject Parent Shares,
provided he can transfer Subject Parent Shares to his former spouse as part of
the currently contemplated settlement so long as she agrees to be bound by the
terms of this Section 4(b).
5. Further Assurances. Each Stockholder will, from time to
--------------------
time, execute and deliver, or cause to be executed and delivered, such
additional or further consents, documents and other instruments as Parent may
reasonably request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
6. Assignment. Neither this Agreement nor any of the rights,
-----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Parent may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any holding company of Parent that may be created as
contemplated by Section 1.01(c) of the Merger Agreement or to any direct or
indirect wholly owned subsidiary of Parent. 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.
7. Termination. This Agreement shall terminate upon the
------------
earlier of (a) 15 months from the date hereof or (b) the Effective Time of the
Merger; provided, however, that the Company is not in breach of its obligations
-------- -------
under the Merger Agreement and none of the Stockholders are in breach of their
obligations under this Agreement, this Agreement shall terminate at the time the
Merger Agreement is terminated (i) pursuant to Section 7.01(a) thereof, (ii) by
the Company (A) pursuant to Section 7.01(b)(i) thereof as a result of the Parent
Shareholder Approval not having been obtained or (B) pursuant to Section
7.01(b)(ii)
<PAGE>
10
thereof (unless a Takeover Proposal has been made), or (iii) (unless a Takeover
Proposal has been made) otherwise pursuant to its terms solely because the FCC
shall have issued a final, nonappealable order that fails to satisfy the
conditions set forth in Section 6.01(b) (after giving effect to any waiver
thereof by Parent). Notwithstanding the foregoing, Sections 3(f) and 4(b) shall
survive the consummation of the Merger or the termination of the Merger
Agreement for the respective periods of time specified therein.
8. General Provisions.
-------------------
(a) Amendments. This Agreement may not be
-----------
amended except by an instrument in writing signed by
each of the parties hereto.
(b) Notice. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to Parent in
accordance with Section 8.02 of the Merger Agreement and to the
Stockholders at their respective addresses set forth on Schedule A
attached hereto (or at such other address for a party as shall be
specified by like notice).
(c) Interpretation. When a reference is made in this Agreement
---------------
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words
"include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
(d) Counterparts. This Agreement may be executed in one or
-------------
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the
counterparts have been signed by each of the parties and delivered to
the other party, it being understood that each party need not sign the
same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries.
-----------------------------------------------
This Agreement (including the documents and instruments referred to
herein) (i) constitutes the entire agreement and supersedes all prior
agreements
<PAGE>
11
and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (ii) is not intended to confer
upon any person other than the parties hereto any rights or remedies
hereunder.
(f) Governing Law. This Agreement shall be governed by, and
---------------
construed in accordance with, the laws of the State of Delaware
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.
9. Stockholder Capacity. No person executing this Agreement
----------------------
who is or becomes during the term hereof a director or officer of the Company
makes any agreement or understanding herein in his capacity as such director or
officer. Each Stockholder signs solely in his capacity as the record holder and
beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, such Stockholder's Subject Shares and nothing herein shall
limit or affect any actions taken by a Stockholder in his capacity as an officer
or director of the Company to the extent specifically permitted by the Merger
Agreement.
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 (i) 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, (ii) 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, (iii) agrees that such party will not
bring any action relating to this Agreement or the transactions contemplated
hereby in any court other than a Federal court sitting in the state of Delaware
or a Delaware state court and (iv) waives any right to trial by jury with
respect to
<PAGE>
12
any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
IN WITNESS WHEREOF, Parent has caused this Agreement to be
signed by its officer thereunto duly authorized and each Stockholder has signed
this Agreement, all as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION,
By: /s/ Frederic G. Reynolds
-------------------------------
Name: Frederic G. Reynolds
Title: Executive Vice President
and Chief Financial
Officer
Stockholders:
-------------
GERALD CARRUS
By: /s/ Gerald Carrus
-------------------------------
Name: Gerald Carrus
Title:
JRSW PARTNERS, L.P.
By: /s/ Gerald Carrus
-------------------------------
Name: Gerald Carrus
Title:
STEVEN D. CARRUS
By: /s/ Steven D. Carrus
-------------------------------
Name: Steven D. Carrus
Title:
MICHAEL A. WIENER
By: /s/ Michael A. Wiener
-------------------------------
Name: Michael A. Wiener
Title:
<PAGE>
THE ZENA AND MICHAEL A.
WIENER FOUNDATION
By: /s/ Michael A. Wiener
-------------------------------
Name: Michael A. Wiener
Title: Director and President
ZENA WIENER
By: /s/ Zena Wiener
-------------------------------
Name: Zena Wiener
Title:
THE ZENA WIENER 1994 TRUST
By: /s/ Zena Wiener
-------------------------------
Name: Zena Wiener
Title: Trustee
THE MICHAEL WIENER 1993 TRUST
By: /s/ Michael A. Wiener
-------------------------------
Name: Michael A. Wiener
Title: Trustee
MEL KARMAZIN
By:/s/ Mel Karmazin
---------------------------
Name: Mel Karmazin
Title:
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
- -----------------------------------------------------------------------------------------------------------------------
Shares of Class Shares of Class Options and
NAME A COMMON STOCK B COMMON STOCK DEFERRED SHARES WARRANTS
---- -------------- -------------- --------------- --------
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerald Carrus -- 3,897,027 -- --
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
- -------------------------------------------------------------------------------------------------------------
JRSW Partners, -- 225,000 -- --
L.P. (Carrus
family limited
partnership)
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
- -------------------------------------------------------------------------------------------------------------
Steven D. Carrus -- 750 -- --
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
<PAGE>
- -------------------------------------------------------------------------------------------------------------
Michael A. Wiener -- 3,164,976 -- --
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
- -------------------------------------------------------------------------------------------------------------
The Zena and -- 63,000 -- --
Michael A. Wiener
Foundation
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
- -------------------------------------------------------------------------------------------------------------
Zena Wiener -- 14,344 -- --
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
- -------------------------------------------------------------------------------------------------------------
The Zena Wiener -- 165,657 -- --
1994 Trust
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
<PAGE>
- -------------------------------------------------------------------------------------------------------------
The Michael Wiener -- 163,504 -- --
1993 Trust
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
- -------------------------------------------------------------------------------------------------------------
Mel Karmazin 353,967 616,207 5,985,480 72,989
c/o Infinity
Broadcasting
Corporation
600 Madison Avenue
New York, New York
10022
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
WESTINGHOUSE AND INFINITY TO MERGE
$3.9 Billion Stock Deal
Combines Major Broadcasting Companies in Rapidly
Consolidating Radio Industry
Mel Karmazin, Infinity's CEO, Will Become Chairman
and CEO of Radio Group and a Major Shareholder
NEW YORK, June 20 -- Westinghouse (NYSE: WX) and Infinity
(NYSE: INF) announced today a definitive merger agreement involving
approximately $3.9 billion in Westinghouse common stock, creating the country's
preeminent radio broadcaster.
Infinity shareholders will receive Westinghouse common shares
in exchange for their shares at a rate of 1.71 Westinghouse shares for every
share of Infinity stock. This transaction involves the issuance of approximately
205 million Westinghouse shares for Infinity's approximately 120 million shares,
on a fully diluted basis. Closing is expected by the end of 1996 following FCC
approval, the expiration of the Hart-Scott-Rodino waiting period and shareholder
approval of both Westinghouse and Infinity.
Michael H. Jordan, Chairman and Chief Executive Officer of
Westinghouse, said: "This is the right deal, with the right partner, in the
right industry. We're building on strength, combining two blue chip radio
franchises. I'm delighted that Mel Karmazin has agreed to lead our combined
radio groups and will become a major shareholder of Westinghouse, holding
approximately two percent of Westinghouse shares. Under his leadership, Infinity
has become the premier radio company. Mel brings the entrepreneurial spirit and
drive that will assist us in making Westinghouse/CBS the leading broadcast
company in the U.S."
The combined radio group includes 83 radio stations in 16
markets with 69 of these stations in the top 10 markets. Revenues of the group
are approximately $1.0 billion.
With a strong presence in all top U.S. markets, the new
combined radio company will be well positioned to take advantage of the
opportunities in this fast growing business. Ownership of radio clusters in
large markets
1
<PAGE>
provides clear efficiencies and broadened access to the served communities.
Improved news gathering and increased focus on public service will result from
these efficiencies to better serve the public interest. Westinghouse will
continue to build on synergies with its CBS TV stations in co-located markets.
Mr. Karmazin said, "This is a unique opportunity for
Infinity's shareholders and employees. Teaming with Mike Jordan and the
outstanding CBS radio group will open new opportunities for us all, and solidly
position our company in the broader media and broadcasting industry. I view the
strategies and leadership at Westinghouse as a new and dynamic force in the
broadcasting world and am looking forward to a long and rewarding relationship."
Mr. Karmazin and the other principal shareholders, holding
approximately 51% of the Infinity voting shares, have agreed to vote for this
transaction. Mr. Jordan has recommended to the Westinghouse Board that Mr.
Karmazin become a member of the board after the closing of the merger. Mr.
Karmazin will continue as President and CEO of Westwood One, Inc. (Nasdaq:
WONE).
CONTACT: Kevin Ramundo, 212-975-3835, or Jack Bergen,
212-975-3838, both of Westinghouse; or Farid
Suleman of Infinity, 212-975-4545
2
