<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1999
REGISTRATION NO. 333-69701
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PULITZER PUBLISHING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 43-0496290
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
900 NORTH TUCKER BOULEVARD
ST. LOUIS, MISSOURI 63101
(314) 340-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
RONALD H. RIDGWAY
PULITZER PUBLISHING COMPANY
900 NORTH TUCKER BOULEVARD
ST. LOUIS, MISSOURI 63101
(314) 340-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO
THE AGENT FOR SERVICE, SHOULD BE SENT TO:
RICHARD A. PALMER, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
(212) 318-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plan, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES TO BE AMOUNT TO BE AGGREGATE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value
per share.................. 1,665,545 $79.13 $131,794,575.90 $36,638.89
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee. Such
estimates have been calculated in accordance with Rule 457(c) under the
Securities Act of 1933, as amended, and are based upon the average of the
high and low prices per share of the registrant's Common Stock on the New
York Stock Exchange, Inc. on December 18, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION. DATED FEBRUARY 26, 1999.
1,000,000 Shares
PULITZER PUBLISHING COMPANY
Common Stock
----------------------
All of the shares of Common Stock in the offering are being sold by the
selling stockholders identified in this prospectus. The Company will not receive
any of the proceeds from the sale of the shares.
The Common Stock is listed on the New York Stock Exchange under the symbol
"PTZ." The last reported sale price of the Common Stock on February 24, 1999 was
$81.06 per share.
----------------------
Prospective investors should see "Risk Factors," which begin on page 7 of
this prospectus, for certain information that should be considered before
investing in the Common Stock.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------------
<TABLE>
<CAPTION>
Per Share Total
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<S> <C> <C>
Initial public offering price........................ $ $
Underwriting discount................................ $ $
Proceeds, before expenses, to the selling
stockholders....................................... $ $
</TABLE>
The underwriter may, under certain circumstances, purchase up to an
additional 126,000 shares from the selling stockholders at the initial public
offering price less the underwriting discount.
----------------------
The underwriter expects to deliver the shares against payment in New York,
New York on , 1999.
GOLDMAN, SACHS & CO.
----------------------
Prospectus dated March , 1999.
<PAGE> 3
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may inspect and
copy any document we file at the SEC's public reference facilities in
Washington, D.C., New York, New York, or Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from the SEC's web site on the Internet
at http://www.sec.gov. This web site contains reports, proxy and information
statements and other information regarding the Company and other registrants
that file electronically with the SEC.
The SEC allows us to "incorporate by reference" the information contained
in documents we file with the SEC (File No. 1-9329), which means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information that we file with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until the
selling stockholders sell all the shares:
1. Our Annual Report on Form 10-K for the year ended December 31, 1997 (except
that Items 7 and 8 and Schedule II of this Annual Report are not incorporated
by reference as they are superseded by the information set forth in our
Current Report on Form 8-K filed on January 22, 1999, which is incorporated
by reference);
2. Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998, as amended by Form 10-Q/A (except that
Items 1 and 2 and Exhibit 27 of these Quarterly Reports are not incorporated
by reference as they are superseded by the information set forth in our
Current Report on Form 8-K filed on January 22, 1999, which is incorporated
by reference);
3. Our Current Reports on Form 8-K filed on June 11, 1998, September 4, 1998,
December 16, 1998 and January 22, 1999;
4. Our Joint Proxy Statement/Prospectus with Hearst-Argyle, dated February 11,
1999;
5. The description of our capital stock contained in our Registration Statement
on Form 8-A filed on November 17, 1986;
6. Hearst-Argyle's Annual Report on Form 10-K for the year ended December 31,
1997, as amended by the Form 10-K/A filed on December 16, 1998, the Form
10-K/A filed on January 15, 1999 and the Form 10-K/A filed on February 11,
1999;
7. Hearst-Argyle's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, as amended by the Form 10-Q/A filed on December 10, 1998 and the Form
10-Q/A filed on February 11, 1999; Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, as amended by the Form 10-Q/A filed on December
10, 1998 and the Form 10-Q/A filed on February 11, 1999; and Quarterly Report
on Form 10-Q for the quarter ended September 30, 1998, as amended by the Form
10-Q/A filed on February 11, 1999;
8. Hearst-Argyle's Current Reports on Form 8-K filed on January 13, 1998, March
31, 1998, and May 27, 1998; Current Report on Form 8-K filed on September 17,
1998, as amended by the Form 8-K/A filed on December 7, 1998; Current Report
on Form 8-K filed on September 29, 1998, as amended by the Form 8-K/A filed
on December 16, 1998; and Current Report on Form 8-K filed on December 16,
1998, as amended by the Form 8-K/A filed on January 26, 1999 and Form 8-K/A
filed on February 10, 1999;
9. The description of Hearst-Argyle Series A Common Stock contained in
Hearst-Argyle's Registration Statement on Form 8-A/A filed on July 14, 1998;
10. Argyle Television, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1996; and
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11. Argyle Television, Inc.'s Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997.
You may request a copy of our filings, at no cost, by writing or
telephoning our Secretary at the following address:
Pulitzer Publishing Company
900 North Tucker Boulevard
St. Louis, Missouri 63101
(314) 340-8000
You may request a copy of Hearst-Argyle's filings, at no cost, by writing
or telephoning the Secretary of Hearst-Argyle at the following address:
Hearst-Argyle Television, Inc.
888 Seventh Avenue
New York, New York 10106
(212) 887-6800
This Prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-69701). You should rely only on the information
incorporated by reference or provided in this prospectus or any supplement. We
have not authorized anyone else to provide you with different information. The
selling stockholders will not make an offer of these shares in any state where
the offer is not permitted. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of those documents.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements that are
subject to risks and uncertainties. You can find many of these forward-looking
statements by looking for words such as "believes," "expects," "anticipates" or
similar expressions. For all forward-looking statements, we claim the protection
of the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. You should understand that, in
addition to factors discussed elsewhere in this prospectus and in the documents
that are incorporated by reference, the following important factors could affect
our future results and/or those of Hearst-Argyle and New Pulitzer and could
cause those results to differ materially from those expressed in each
forward-looking statement:
- Material adverse changes in economic conditions in the relevant markets;
- The failure to occur of, or significant delay in, the expected closing of
the proposed merger;
- Future regulatory actions and conditions concerning broadcast radio and
television stations or their operating areas;
- The possibility that currently unanticipated difficulties may arise in
integrating the operations of two major businesses; and
- Competition in the respective broadcast television and newspaper markets.
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PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus and may
not contain all of the information that is important to you. You should
carefully read this document to understand the terms of our securities. You
should also read the documents we have referred you to in the section entitled
"Where You Can Find More Information" on page 2 for information on our company
and our financial statements and on Hearst-Argyle and its financial statements.
INVESTMENT IN PULITZER PUBLISHING COMPANY'S COMMON STOCK
The selling stockholders are selling shares of our common stock. However,
you should be aware that we and Pulitzer Inc., a subsidiary of ours, entered
into an amended and restated merger agreement with Hearst-Argyle Television,
Inc. dated as of May 25, 1998. This merger agreement provides that Hearst-Argyle
will acquire our television and radio broadcasting operations. Hearst-Argyle
will accomplish this acquisition by merging us into Hearst-Argyle. Our newspaper
publishing and related new media businesses will continue as Pulitzer Inc.,
which we refer to in this document as "New Pulitzer."
Prior to the merger, we will transfer to New Pulitzer all of our assets,
other than our broadcasting assets, and then distribute the shares of New
Pulitzer to our stockholders in a tax-free "spin-off" on a share-for-share
basis. As part of the spin-off, we will also transfer the net proceeds of $700
million in new financing, and New Pulitzer will assume certain liabilities
unrelated to the broadcasting assets. After the spin-off, we will have only our
broadcasting assets and the indebtedness under the $700 million new financing
and will merge into Hearst-Argyle. As a result of the merger, Hearst-Argyle will
assume the indebtedness under the new financing.
In the merger, Hearst-Argyle has agreed to issue to our stockholders
37,096,774 shares of Hearst-Argyle Series A common stock in exchange for our
stockholders' shares of our stock. We refer to the Hearst-Argyle Series A common
stock as the "Hearst-Argyle stock."
We refer to the merger and spin-off as the "Transactions." We expect to
hold our special stockholders' meeting in connection with the merger on March
17, 1999. We also expect the closing of the Transactions to occur shortly after
the meeting. The special stockholders' meeting and the closing are subject to
certain conditions and rights which are further described in this prospectus.
You should consider the risks described in the section entitled "Risk
Factors" which begins on page 7 in determining whether to invest in our common
stock. In particular, you should consider that if and when the Transactions are
completed, each holder of our common stock will receive, first, common stock of
New Pulitzer in connection with the spin-off and, second, Hearst-Argyle stock in
connection with the merger. However, we cannot assure that the Transactions will
be completed. When considering an investment in our common stock, you are
advised to evaluate Hearst-Argyle, New Pulitzer and us, as if the Transactions
will occur, as well as if the Transactions will not occur.
THE COMPANY
We are engaged primarily in newspaper publishing and television and radio
broadcasting. We operate and publish two major metropolitan daily newspapers:
the St. Louis Post-Dispatch, the only major daily newspaper serving the St.
Louis metropolitan area; and The Arizona Daily Star, serving the Tucson
metropolitan area. In addition, our Pulitzer Community Newspaper group operates
and publishes 12 dailies which serve smaller markets, primarily in the West and
Midwest. Our television and radio broadcasting operations consist of nine
network-affiliated television stations and five radio stations.
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Publishing
Both major metropolitan daily newspapers have weekly total market coverage
sections to provide advertisers with market saturation. In addition, both
newspapers also offer an electronic news, information and communication web site
on the Internet. We provide full access on a subscription basis to these
"electronic publication" web sites, as well as full Internet access.
Our 12 daily community newspapers have a combined average daily circulation
of approximately 162,000. The smaller markets served by these newspapers and
their locations provide us with further diversification and participation in
several higher growth areas of the United States.
We derive our publishing revenues primarily from advertising and
circulation. Advertising and circulation have averaged approximately 87% of
total publishing revenue over the last five years. We continue to seek ways to
leverage our newspaper assets, such as electronic publishing, voice services
delivered by phone, electronic dissemination of information via the world wide
web/Internet and alternative newspaper delivery systems to provide advertisers
with either targeted or total market coverage.
New Pulitzer will retain and continue to operate our newspaper publishing
and related new media businesses.
Broadcasting
We currently own and operate eight network-affiliated VHF television
stations, one network-affiliated UHF television station, two satellite network
television stations rebroadcasting KOAT, four AM radio stations and one FM radio
station. We have diversified our revenues by purchasing properties in different
geographic regions of the United States in an effort to insulate ourselves from
regional economic downturns.
Historically, advertising during local news programs has accounted for a
significant portion of each station's total revenues, with percentages
approaching 50% at some stations. We believe that our stations are particularly
strong in local news programming.
We intend to sell this broadcasting business to Hearst-Argyle.
General
The Pulitzer Publishing Company was founded by the first Joseph Pulitzer in
1878 to publish the original St. Louis Post-Dispatch and has operated
continuously since that time under the direction of the Pulitzer family. We were
reorganized as a Delaware corporation in October 1986. Michael E. Pulitzer, a
grandson of the founder, currently serves as our Chairman of the Board,
President and Chief Executive Officer.
On December 18, 1998, New Pulitzer entered into an employment agreement
with Robert C. Woodworth pursuant to which Mr. Woodworth will serve as President
and Chief Executive Officer of New Pulitzer for an initial term of three years,
beginning January 1, 1999. Mr. Woodworth has over 25 years of newspaper
publishing experience, having served with Capital Cities, Capital Cities/ABC
and, most recently, Knight-Ridder, Inc. in various senior management capacities.
In the event the Transactions do not occur, we will assume all provisions of the
employment agreement with Mr. Woodworth, including the provisions relating to
his position, rights and entitlements.
Our principal executive offices are located at 900 North Tucker Boulevard,
St. Louis, Missouri 63101, and our telephone number is (314) 340-8000.
5
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HEARST-ARGYLE
Hearst-Argyle owns or manages 17 television stations reaching approximately
12.0% of U.S. television households. Hearst-Argyle is the largest "pure-play"
(owning television stations only) publicly-owned television broadcast company in
the U.S. and is the fourth-largest, non-network-owned television group. Formed
as a Delaware corporation in 1994 under the name Argyle Television, Inc.,
Hearst-Argyle is the successor to the combined operations of Argyle Television,
Inc. and the television broadcast group of The Hearst Corporation. Hearst-Argyle
currently owns 13 television stations, programs one other television station
under a time brokerage agreement, and manages three additional television
stations and two radio stations that are owned or operated by The Hearst
Corporation. Hearst-Argyle has an option to acquire one of the managed
television stations and The Hearst Corporation's interests in another of the
managed television stations. Hearst-Argyle also has a right of first refusal
with respect to the third managed television station.
Effective June 1, 1998, Hearst-Argyle completed a tax-deferred exchange
with STC Broadcasting, Inc. and certain related entities whereby Hearst-Argyle
exchanged its television stations WNAC-TV, Providence, Rhode Island, and
WDTN-TV, Dayton, Ohio, for television stations KSBW-TV, Monterey-Salinas,
California, and WPTZ-TV/WNNE-TV, Burlington, Vermont/Plattsburgh, New York. The
order of the FCC approving the combination of Argyle Television, Inc. and the
television group of The Hearst Corporation required divestiture of WNAC and
WDTN.
On January 5, 1999 and effective January 1, 1999 for accounting purposes,
Hearst-Argyle acquired through a merger transaction all of the partnership
interests in Kelly Broadcasting Co. for approximately $520 million in cash,
subject to a working capital adjustment. We refer to this transaction as the
Kelly Transaction. As a result of the Kelly Transaction, Hearst-Argyle acquired
television broadcast station KCRA-TV, Sacramento, California, and the
programming rights under an existing Time Brokerage Agreement with Channel 58,
Inc. with respect to television broadcast station KQCA-TV, Sacramento,
California. In addition, Hearst-Argyle acquired substantially all of the assets
and certain of the liabilities of Kelleproductions, Inc. for approximately $10
million in cash.
In late December 1998 and early January 1999, Hearst-Argyle issued $450
million aggregate principal amount of senior notes to institutional investors.
The notes have a maturity of 12 years, with an average life of ten years, and
bear interest at 7.18% per annum.
The Hearst-Argyle stock is listed on the New York Stock Exchange under the
symbol "HTV." The reports filed by Hearst-Argyle with the SEC contain additional
information regarding Hearst-Argyle.
Hearst-Argyle is organized under the laws of the State of Delaware, its
principal executive offices are located at 888 Seventh Avenue, New York, New
York 10106 and its telephone number is (212) 887-6800.
6
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should consider carefully the following risk factors, as well as the other
information set forth in this prospectus.
RISK FACTORS ASSOCIATED WITH THE SPIN-OFF AND THE MERGER
Consummation of the Transactions is Subject to Many Factors. One of the
most significant risks in purchasing our shares in this offering is that the
Transactions may not be completed. The completion of the Transactions is subject
to many factors, including the following:
- Our ability to obtain new financing in the amount of $700 million, the
net proceeds of which will be transferred to New Pulitzer in the
spin-off;
- Consents of various third parties; and
- Approval by the holders of our common stock, voting separately as a
class, of an amendment to our Restated Certificate of Incorporation. This
amendment is required in connection with the spin-off to permit us to
distribute shares of New Pulitzer for shares of our stock pursuant to the
merger agreement.
Because of these and other factors, we cannot assure if or when the
spin-off or the merger will be completed. If the Transactions are not completed,
purchasers of the shares will not receive shares of New Pulitzer or
Hearst-Argyle and will continue to own our shares. On February 26, 1998, the
last business day before we announced our intention to explore strategic
alternatives relating to our broadcasting division, the price of our shares
closed at $67.63 per share. Since that time, the price of our shares has closed
as low as $64.94 and as high as $90.00.
Federal Income Tax Risks Relating to the Spin-Off. We have received a
ruling from the IRS that the spin-off will qualify as a reorganization and
tax-free distribution to our stockholders under the Internal Revenue Code of
1986. A ruling from the IRS, while generally binding on the IRS, may under
certain circumstances be revoked or modified by the IRS retroactively. However,
we are not currently aware of any facts or circumstances that would cause the
IRS to revoke or modify its ruling. If the spin-off did not qualify as a
reorganization and tax-free distribution to our stockholders under the Code:
- The fair market value of the New Pulitzer stock received by each of our
stockholders in the spin-off would be taxable to such stockholder as a
dividend to the extent of such stockholder's pro rata share of our
current and accumulated earnings and profits; and
- The fair market remaining value, if any, of the New Pulitzer stock
received in the spin-off by each of our stockholders would be treated
first as a recovery of the adjusted tax basis of our stock owned by such
stockholder and then as taxable capital gain.
In the spin-off, we will recognize taxable gain in an amount equal to the
excess, if any, of the fair market value of the New Pulitzer stock distributed
to our stockholders over the adjusted tax basis of such New Pulitzer stock in
our hands immediately prior to the distribution. There is no assurance that the
IRS will agree with our determination of the fair market value of the New
Pulitzer stock or the resulting tax. Under the merger agreement, New Pulitzer
will be liable and will indemnify Hearst-Argyle and its subsidiaries for certain
of our unpaid tax liabilities resulting from the spin-off.
Federal Income Tax Risks Relating to the Merger. Our counsel has issued its
legal opinion that the merger will qualify as a reorganization that is tax-free
to our stockholders, except to the extent of any cash received by our
stockholders in lieu of fractional shares of Hearst-Argyle stock. However,
opinions of counsel are not binding on the IRS or the courts, and we cannot
assure that
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the IRS will agree with the conclusions set forth in our counsel's opinion. If
the merger did not qualify as a tax-free reorganization:
- Each of our stockholders would recognize gain or loss equal to the
difference between:
(a) the fair market value of the Hearst-Argyle stock received by such
stockholder plus any cash received by such stockholder in lieu of a
fractional share of Hearst-Argyle stock; and
(b) the adjusted tax basis of our stock held by such stockholder
immediately before the merger.
- We would recognize taxable gain in an amount equal to the excess of:
(a) the sum of (1) the aggregate fair market value of the Hearst-Argyle
stock received by our stockholders, (2) the amount of cash received
by our stockholders in lieu of fractional shares of Hearst-Argyle
stock and (3) the amount of our liabilities assumed by Hearst-Argyle
in the merger, over
(b) the aggregate adjusted tax basis of our assets.
Under the merger agreement, we will be liable and will indemnify
Hearst-Argyle and its subsidiaries against our tax liabilities attributable to
any tax period (or portion of such tax period) prior to completion of the
merger, except for any of our tax liability that results from the merger not
qualifying as a reorganization under the Code due to actions or inactions of
Hearst-Argyle after completion of the merger, or due primarily to
Hearst-Argyle's breach of certain covenants concerning the representations which
it has made in connection with the private letter ruling request which we filed
with the IRS. In addition, if the merger did not qualify as a reorganization,
the spin-off would probably not qualify as a tax-free distribution to our
stockholders.
WE URGE EACH PROSPECTIVE INVESTOR TO CONSULT WITH HIS, HER OR ITS TAX
ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES OF THE TRANSACTIONS.
RISK FACTORS RELATED TO THE HEARST-ARGYLE STOCK
Reliance on Network Affiliation Agreements; Television Programming. The
success of each of the television stations owned by Hearst-Argyle depends upon,
among other things, network programming obtained through network affiliation
agreements. There is no assurance that the programming will achieve or maintain
satisfactory viewership levels in the future. In addition, although
Hearst-Argyle expects to be able to renew the network affiliation agreements,
there is no assurance that the renewals will be obtained on as favorable terms
or at all. The termination, non-renewal or renewal at less favorable terms of
the affiliation agreements could have an adverse effect on the operations of
Hearst-Argyle.
Television programming is one of Hearst-Argyle's most significant operating
cost components. There is no assurance that Hearst-Argyle will not be exposed in
the future to increased television programming costs. Should an increase occur,
it could have an adverse effect on Hearst-Argyle's results from operations. In
addition, television networks recently have been seeking to have their
affiliates share programming costs and to change the structure of network
compensation. Hearst-Argyle cannot predict the nature or scope of any such
cost-sharing and compensation changes or the effect, if any, on Hearst-Argyle's
operations.
Dependence on Advertising; Effect of Economic Conditions. Hearst-Argyle
relies to a significant extent upon sales of advertising for its revenues. On a
pro forma basis giving effect to Argyle Television, Inc.'s merger transaction
with the television broadcast group of The Hearst Corporation, advertising
revenue accounted for 92.3% of Hearst-Argyle's total revenues for the year ended
December 31, 1997. For the nine months ended September 30, 1998, advertising
revenue accounted for 93.3% of the total revenues of Hearst-Argyle. The
Hearst-Argyle stations are located in highly-competitive markets and compete for
advertising revenues with other television stations, as well as other media, in
their respective markets. There is no assurance that Hearst-Argyle will be able
to
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continue to compete successfully for such advertising revenues, upon which
Hearst-Argyle's results of operations are and will continue to be dependent.
In addition, Hearst-Argyle's ability to generate advertising revenues is
and will continue to be heavily dependent on the relative popularity of its
programming and cyclical changes in the national economy and regional economic
conditions in each of the markets in which its stations operate. Hearst-Argyle's
revenues could therefore be adversely affected by a future local, regional or
national recessionary environment. In addition, advertising revenues in
even-numbered years benefit from advertising placed by candidates for political
offices. Proposals have been advanced in the U.S. Congress to require television
broadcast stations to provide advertising time to political candidates at no
charge, which would eliminate in whole or in part advertising revenues from
political candidates.
Control by Majority Stockholder; Conflicts of Interest. Currently, Hearst
Broadcasting, Inc., a subsidiary of The Hearst Corporation, elects nine of the
11 directors of Hearst-Argyle and owns approximately 87.1% of the outstanding
common stock of Hearst-Argyle. As a result, The Hearst Corporation is able to
control substantially all actions to be taken by Hearst-Argyle stockholders and
is able to maintain control over the operations and business of Hearst-Argyle.
This control, as well as certain other factors, may make Hearst-Argyle a less
attractive target for a takeover than it otherwise might be, or render more
difficult or discourage transactions involving an actual or potential change of
control of Hearst-Argyle. In addition, the interests of The Hearst Corporation,
which owns or has significant investments in other businesses, including cable
television networks, newspapers, magazines and electronic media, may from time
to time be competitive with, or otherwise diverge from, the interests of
Hearst-Argyle, particularly with respect to new business opportunities and
future acquisitions.
In addition, under current law and existing contractual arrangements,
Hearst-Argyle is not allowed, without The Hearst Corporation's consent, to
acquire television broadcast stations in New York, Michigan, Texas, California,
Washington and Missouri. As a result, Hearst-Argyle's ability to make
acquisitions is restricted. Even with the consent of The Hearst Corporation,
such acquisitions would be permitted to occur only if The Hearst Corporation
were to agree to sell its newspapers in the corresponding markets. Additionally,
The Hearst Corporation is not precluded from purchasing television stations,
newspapers or other assets in other markets, the ownership of which assets by
The Hearst Corporation could preclude, under FCC rules, Hearst-Argyle from
owning television stations in such markets in the future.
The Hearst Corporation and Hearst-Argyle are parties to a series of
agreements where the interests of the two parties could conflict. Hearst-Argyle
believes that the terms of these agreements are reasonable to both parties.
There is no assurance, however, that more favorable terms would not be available
from third parties.
Television Industry Competition and Technology. The television broadcast
industry is highly competitive. Some of the stations that compete with
Hearst-Argyle's stations are owned and operated by large national or regional
companies that may have greater resources, including financial resources, than
Hearst-Argyle. There is no assurance that any one of Hearst-Argyle's stations
will compete successfully and maintain or increase its current audience share or
revenue share. The following are some of the factors that have fractionalized
television viewing audiences and/or affect the industry generally:
- Technological innovation and the resulting proliferation of programming
alternatives such as cable, direct satellite-to-home services,
pay-per-view and home video and entertainment systems;
- The aggregate viewership of the major television networks has declined
over the past decade;
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<PAGE> 11
- Increased demand for programming and rising production costs which may
increase programming costs or make it more difficult to acquire
programming;
- The formation and success of new television networks such as UPN and the
WB Network; and
- The FCC's adoption of rules for implementing digital television,
otherwise known as DTV, service in the United States and implementation
of DTV, which may provide a competitive advantage to, and is expected to
impose significant additional costs on, stations implementing DTV.
Regulatory Matters. Generally, Hearst-Argyle depends upon its continuing
ability to maintain broadcasting licenses from the FCC. While broadcasting
licenses are typically renewed by the FCC, there is no assurance that the FCC
will renew the licenses for Hearst-Argyle's stations or that, if renewed, the
renewal terms will be for the customary eight-year periods. The non-renewal or
revocation of one or more of the FCC licenses held by Hearst-Argyle could have a
material adverse effect on the operations of Hearst-Argyle.
The FCC restricts the common ownership or control of certain media
interests in the same market, including television and radio broadcast stations.
In addition, no person is permitted to hold an interest in television stations
collectively reaching more than 35% of all U.S. television households, subject
to a 50% discount for UHF television stations. As a result of prohibitions by
the FCC's "television duopoly" and "one-to-a-market" rules on certain
combinations created as a result of the merger, we and Hearst-Argyle received,
on November 24, 1998, the consent of the FCC for the transfer of control of our
television stations to Hearst-Argyle. We and Hearst-Argyle also received the
following waivers of the FCC's rules:
- temporary, six-month waiver of the television duopoly rule to permit the
common ownership of WBAL-TV, Baltimore, Maryland, and WGAL(TV),
Lancaster, Pennsylvania, for a brief period of time following the
completion of the merger;
- conditional waiver of the television duopoly rule to permit the common
ownership of WWWB(TV), Lakeland, Florida, and WESH(TV), Daytona Beach,
Florida;
- conditional waiver of the television duopoly rule to permit the common
ownership of WLWT(TV), Cincinnati, Ohio, and WLKY-TV, Louisville,
Kentucky;
- continued permanent waiver of the television duopoly rule to permit the
common ownership of KCCI(TV), Des Moines, Iowa, and KETV(TV), Omaha,
Nebraska;
- continued waiver of the one-to-a-market rule to permit the common
ownership of WXII-TV, Winston-Salem, North Carolina, and WXII(AM),
Kernersville, North Carolina; and
- continued waiver of the one-to-a-market rule to permit the common
ownership of WLKY-TV, Louisville, Kentucky, and WLKY(AM), Louisville,
Kentucky.
The FCC requires that licensees subject to conditional waivers of the
duopoly rule comply with the rule, if it is not changed to allow permanent
common ownership of stations (as the FCC is currently considering).
Petition to Deny Transfer Applications. On July 20, 1998, WLOS Licensee,
Inc., licensee of WLOS(TV), Asheville, North Carolina, filed with the FCC a
petition to deny the FCC transfer application with respect to WYFF(TV). WLOS
claimed that we lacked the requisite qualifications to be an FCC licensee.
Pulitzer Broadcasting Company, a subsidiary of ours, filed an opposition to
WLOS's petition, and WLOS submitted a reply to the Pulitzer Broadcasting
opposition. In granting the transfer application with respect to WYFF(TV), the
FCC considered the merits of the WLOS petition and denied it. While WLOS had
until December 28, 1998 to ask the FCC to reconsider its grant of the transfer
application, WLOS filed no such request.
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<PAGE> 12
Acquisition of KCRA-TV. On August 28, 1998, Hearst-Argyle filed an
application seeking the consent of the FCC to the Kelly Transaction involving
KCRA-TV and KSBW(TV). Currently, the two stations have overlapping contours,
which is prohibited by the FCC's duopoly rule. However, the FCC is considering
changes to this rule in an ongoing rulemaking proceeding. The FCC has adopted a
policy of granting waivers conditioned on the outcome of the rulemaking
proceeding in certain situations in which the stations are located in separate
television markets and have no Grade A signal contour overlap. The FCC has
granted Hearst-Argyle's application seeking the modification of the facilities
of KSBW(TV) in a manner that would eliminate the Grade A contour overlap between
the two stations. On December 11, 1998, the FCC granted its consent to the Kelly
Transaction. Because of the signal contour overlap between KCRA and
Hearst-Argyle's KSBW (TV), the FCC's grant was conditioned on (i) Hearst-Argyle
completing the modification of the KSBW facilities that will eliminate the Grade
A signal contour overlap between the stations within nine months of the
consummation of the Kelly Transaction; and (ii) the outcome of the pending FCC
rulemaking considering changes to the duopoly rule that would, if adopted, allow
the common ownership of certain stations, including KCRA and the modified KSBW,
with overlapping Grade B signal contours. As noted above, the FCC requires that
licensees subject to duopoly waivers conditioned on the outcome of the pending
rulemaking proceeding come into compliance with the duopoly rule if the rule is
not changed to allow permanent common ownership of the stations.
Risks Associated with Integration of the Combined Operations and Possible
Expansion. As a result of the merger, the Kelly Transaction and other recent
transactions, Hearst-Argyle has expanded and will expand significantly into both
new and familiar markets. As part of its business strategy, Hearst-Argyle
intends to expand further through the acquisition of additional television
stations or television station groups. As a result, Hearst-Argyle's management
is and probably will be managing a substantially larger number of television
stations than it has historically. There is no assurance that Hearst-Argyle will
implement and manage effectively the organizational and operational systems
necessary for optimal management and integration of its newly acquired or future
television stations. As a result, the merger and any future acquisitions may
have an adverse effect on Hearst-Argyle's financial position and results of
operations. In addition, such acquisition opportunities may become limited due
to industry consolidation, competition for acquisition targets and FCC rules.
There is no assurance that future acquisitions will be available on attractive
terms, if at all.
Shares Eligible for Future Sale; Dilution; Share Repurchase Program. After
the completion of the merger, our stockholders will own shares of Hearst-Argyle
stock. All of the shares of Hearst-Argyle stock generally will be freely
tradeable without restriction or further registration under the Securities Act.
However, affiliates of Hearst-Argyle (as defined by the SEC) may generally sell
their shares only subject to certain restrictions as to timing, manner, volume,
notice and the availability of current public information regarding
Hearst-Argyle.
No prediction is made as to the effect, if any, that sales of shares of
Hearst-Argyle Series A common stock, or the availability of shares for future
sale, will have on the market price of the stock prevailing from time to time
following the merger. Sales of substantial amounts of stock in the public
market, or the perception that sales could occur, could depress the prevailing
market price for the stock. Sales may also make it more difficult for
Hearst-Argyle to sell equity securities or equity-related securities in the
future at a time and price that it deems appropriate.
As part of its share repurchase program, Hearst-Argyle may repurchase up to
$300 million of Hearst-Argyle stock from time to time. As of February 9, 1999,
Hearst-Argyle had repurchased 1,835,727 shares for an aggregate consideration of
$54.0 million. In addition, Hearst Broadcasting has notified Hearst-Argyle of
its intention to purchase up to 10 million shares of Hearst-Argyle stock from
time to time. As of February 9, 1999 and subsequent to the public announcement
of the Merger, Hearst Broadcasting had purchased 4,132,698 shares for an
aggregate consideration of $124.5 million. These repurchases and purchases may
affect the market price of the Hearst-Argyle stock.
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<PAGE> 13
Dividend Policy; Limitation on Dividends. Since its inception,
Hearst-Argyle has not paid any dividends on the Hearst-Argyle stock and does not
anticipate that it will pay any dividends on the stock in the foreseeable
future. Hearst-Argyle's senior credit facility limits the ability of Hearst-
Argyle to pay dividends on the stock under certain conditions.
Impact on Net Income. Both the merger and the Kelly Transaction will result
in a decline in pro forma net income of Hearst-Argyle. This decline is
attributable to the increase in depreciation and amortization resulting from the
write-up of the assets of the properties acquired in the merger and the Kelly
Transaction.
Uncertainty as to the Market Price of Hearst-Argyle Stock Issued in
Merger. In the merger, our stockholders will receive 37,096,774 shares of
Hearst-Argyle stock, regardless of the market price of Hearst-Argyle stock at
the time of the merger. Because of this and because the market price of
Hearst-Argyle stock is subject to fluctuation, the actual aggregate market value
of the Hearst-Argyle stock to be received by our stockholders in the merger is
also subject to fluctuation. The market price of Hearst-Argyle stock may be
influenced by many factors, including those disclosed elsewhere in this
prospectus.
RISK FACTORS RELATED TO THE NEW PULITZER STOCK
New Pulitzer Lacks an Operating History as a Stand-Alone Newspaper
Company. New Pulitzer was formed in May 1998 for purposes of effecting the
Transactions and does not have any operating history. Although we have a
substantial operating history with respect to the newspaper publishing and
related new media businesses to be contributed to New Pulitzer, we cannot assure
that New Pulitzer will be able to continue or improve such operating history.
New Pulitzer May Not Be Able to Compete Effectively. New Pulitzer will face
significant competition for readership and advertising revenues from other
newspapers and other publications, as well as with other news and advertising
media. Many of these competitors may be larger and have greater financial
resources than will New Pulitzer. We cannot assure that New Pulitzer will be
able to compete effectively in its markets.
New Pulitzer's Financial Condition Depends on Local Economies. New
Pulitzer's advertising revenues and, to a lesser extent, circulation revenues
will depend on a variety of factors specific to the communities that our
newspapers serve. These factors include the size and demographic characteristics
of the local population, local economic conditions in general, and the related
retail segments in particular. If the local economy or prevailing retail
environment of the communities that New Pulitzer's newspapers will serve were to
be adversely affected, New Pulitzer's financial condition or results of
operations may be adversely affected.
New Pulitzer Relies Heavily on the St. Louis Post-Dispatch and The Arizona
Daily Star. Both the Post-Dispatch and the Star have historically generated a
significant portion of our newspaper revenue, advertising revenue and operating
cash flow. New Pulitzer expects that both of these newspapers will continue to
have a similar impact for the foreseeable future. A significant decline in the
performance of the Post-Dispatch or the Star or in general advertising spending
could have a material adverse effect on New Pulitzer's business, financial
condition and results of operations.
New Pulitzer's Quarterly Results May Vary. New Pulitzer expects that
seasonal fluctuations will affect its results of operations from period to
period. You should not expect results of operations in any period to be
indicative of the results to be expected for any future periods.
New Pulitzer's Acquisition Strategy May Adversely Affect Its Business. New
Pulitzer anticipates that it will grow through acquisitions of daily and
non-daily newspapers and similar publications. Acquisitions may expose New
Pulitzer to particular risks, such as diversion of management's attention,
assumption of liabilities and amortization of goodwill and other acquired
intangible assets. These and other risks could have a material adverse effect on
the financial condition or results of operations of New Pulitzer, depending on
the value and nature of the consideration paid by New
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<PAGE> 14
Pulitzer. These acquisitions may have a dilutive impact on New Pulitzer's
earnings per share. New Pulitzer will compete for acquisition targets with other
companies. We cannot assure that New Pulitzer will be successful in identifying
acquisition opportunities, assessing the value, strengths and weaknesses of such
opportunities, generating the cash flow necessary to capitalize on such
opportunities, consummating such opportunities on terms favorable to New
Pulitzer or managing the publications it acquires and improving their operating
efficiency.
The Price of Newsprint May Increase. Although we generally obtain newsprint
at relatively favorable prices, we cannot assure that New Pulitzer will continue
to obtain its newsprint at those prices. Significant increases in newsprint
prices could adversely affect New Pulitzer's business, financial condition and
results of operations
New Pulitzer May Be Adversely Affected By Changes in Environmental Laws and
Regulations. New Pulitzer's operations will be subject to federal, state and
local environmental laws and regulations pertaining to air and water quality,
storage tanks and the management and disposal of wastes at its facilities.
Neither we nor New Pulitzer can predict whether future events, such as changes
in existing laws and regulations or the discovery of conditions not currently
known to them, may give rise to additional costs that could be material.
Furthermore, actions by federal, state and local governments concerning
environmental matters could result in laws or regulations that could have a
material adverse effect on the financial condition or results of operations of
New Pulitzer.
Potential Litigation Exposure. From time to time, we have been involved in
various claims and lawsuits incidental to the ordinary course of our business,
including matters such as libel, slander and defamation actions and complaints
alleging discrimination. While we cannot predict the results of litigation, we
and New Pulitzer believe that the ultimate outcome of existing litigation will
not have a material adverse effect on the consolidated financial statements of
New Pulitzer and its subsidiaries.
New Pulitzer May Become Obligated to Pay Certain Former
Stockholders. Pursuant to the merger agreement, New Pulitzer will pay and
indemnify Hearst-Argyle against any liabilities and/or expenses arising from any
claim or dispute relating to certain agreements entered into by us with certain
of our former stockholders. We agreed under certain circumstances to make
additional payments to those former stockholders. For many reasons, we and New
Pulitzer cannot determine at this time the additional amounts, if any, payable
by New Pulitzer under these agreements with respect to the merger. Depending on
the ultimate resolution of the meaning and application of various provisions of
those agreements, we believe that the amount of the additional payments, if any,
could be material to the consolidated financial statements of New Pulitzer.
Our Principal Stockholders May Control New Pulitzer and May Influence Many
Key Decisions. Following the completion of the Transactions and subject to the
terms of a New Pulitzer voting agreement, a small number of New Pulitzer
stockholders may control the stockholder vote of New Pulitzer stock on any
matter in which all shares of New Pulitzer stock are voted together as a single
class. This control and concentration of voting power may make New Pulitzer a
less attractive target for a takeover than it otherwise might be. This control
and concentration of power may also render more difficult or discourage
transactions involving an actual or potential change of control of New Pulitzer.
As a result, holders of New Pulitzer stock may not receive any premium above
market price for their New Pulitzer stock that would otherwise be offered in
connection with any attempt to acquire control of New Pulitzer.
Certain Certificate of Incorporation and By-Law Provisions May Discourage
the Acquisition of New Pulitzer. Certain provisions of New Pulitzer's
Certificate of Incorporation and By-laws could have the effect of discouraging
or making it more difficult for a third party to acquire a majority of the
outstanding capital stock of New Pulitzer.
The Price of New Pulitzer Stock May Vary. Prior to the completion of the
Transactions, New Pulitzer stock will not have any trading market. The New York
Stock Exchange, Inc. has approved
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<PAGE> 15
the listing, subject to official notice of issuance, of the New Pulitzer common
stock to be distributed to the holders of our common stock in the spin-off. We
cannot assure that the prices at which the New Pulitzer common stock will trade
after the completion of the Transactions will be favorable.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of our common
stock by the selling stockholders.
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<PAGE> 16
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
selling stockholders as of January 21, 1999. The selling stockholders
beneficially own shares of our common stock and/or our Class B common stock, and
these shares of Class B common stock may be converted into our common stock
pursuant to our Restated Certificate of Incorporation and a voting trust
agreement, as each may be amended from time to time. The shares of common stock
are being registered to permit public secondary trading of the shares of common
stock. See "Underwriting."
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF NUMBER OF SHARES PERCENT OF
OF COMMON STOCK AGGREGATE VOTING NUMBER OF OF CLASS B AGGREGATE VOTING
AND/OR CLASS B POWER OF COMMON SHARES OF COMMON STOCK POWER OF COMMON
COMMON STOCK STOCK AND CLASS B COMMON STOCK BENEFICIALLY STOCK AND CLASS B
BENEFICIALLY OWNED COMMON STOCK BEING OFFERED OWNED AFTER COMMON STOCK
PRIOR TO CONVERSION PRIOR TO CONVERSION AFTER CONVERSION AND AFTER CONVERSION
NAME OF SELLING STOCKHOLDER AND OFFERING AND OFFERING CONVERSION(12) OFFERING AND OFFERING
- --------------------------- ------------------- ------------------- -------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Emily Rauh Pulitzer, as
Trustee of the Pulitzer
Family Trust U/D/T dtd
6/8/94, as amended(1)(2)... 629,665 3.9% 299,405 330,260 2.2%
Spring Foundation(2)(3)...... 169,595 1.1% 169,595 0 0.0%
Margaret J. Warner and Kate
C. Moore as Trustees of the
David and Katherine Moore
1998 Charitable Remainder
Trust dtd 10/5/98(4)(5).... 60,150(6) * 58,455 0 0.0%
Margaret J. Warner and Kate
C. Moore as Trustees of the
David and Katherine Moore
1999 Charitable Remainder
Trust dtd 2/11/99(5)(7).... 230,000(8) * 213,545 16,455 *
Michael E. Pulitzer, Trustee,
U/I/T dtd 3/22/82 F/B/O
Michael E.
Pulitzer(9)(10)............ 3,638,590 22.7% 245,667 3,392,923 22.3%
The Ceil and Michael E.
Pulitzer Foundation,
Inc.(10)(11)............... 51,113 * 13,333 37,780 *
</TABLE>
- -------------------------
* Less than one percent.
(1) Emily Rauh Pulitzer is a director of the Company and a beneficiary of the
Pulitzer Family Trust.
(2) Prior to this offering and excluding shares which may be deemed to be
beneficially owned solely as a trustee of the Pulitzer Voting Trust, Emily
Rauh Pulitzer beneficially owned an aggregate of 6,780,667 shares of our
Class B common stock. Assuming the sale of all shares being offered hereby,
including the full exercise by Goldman Sachs of its option to purchase an
aggregate of 126,000 additional shares from certain selling stockholders,
Ms. Pulitzer will beneficially own 6,280,667 shares of our Class B common
stock or 41.7% of the aggregate voting power of our common stock and Class
B common stock.
(3) Emily Rauh Pulitzer is an officer and a director of the Spring Foundation.
The Spring Foundation is a private operating foundation established by Ms.
Pulitzer to further the arts.
(4) David E. Moore is a director of the Company and a beneficiary of this
trust.
(5) Prior to this offering and excluding shares which may be deemed
beneficially owned solely as a trustee of the Pulitzer Voting Trust, Mr.
Moore beneficially owned an aggregate of 3,986,819 shares of our Class B
common stock and common stock. Assuming the sale of all shares being
offered hereby, including the
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<PAGE> 17
full exercise by Goldman Sachs of its option to purchase an aggregate of
126,000 additional shares from certain selling stockholders, Mr. Moore will
beneficially own 3,698,364 shares of our Class B common stock or 24.5% of
the aggregate voting power of our common stock and Class B common stock.
(6) This trust owns an aggregate of 60,150 shares of our common stock and does
not own any shares of our Class B common stock.
(7) David E. Moore is a beneficiary of this trust.
(8) This trust will own up to an aggregate of 230,000 shares of our common
stock which will be contributed by David E. Moore. This trust will not own
any shares of our Class B common stock.
(9) Michael E. Pulitzer is Chairman of the Board, President and Chief Executive
Officer of the Company and a beneficiary of this trust.
(10) Prior to this offering and excluding shares which may be deemed
beneficially owned solely as a trustee of the Pulitzer Voting Trust,
Michael E. Pulitzer beneficially owned an aggregate of 3,735,873 shares of
our Class B common stock. Assuming the sale of all shares being offered
hereby, including the full exercise by Goldman Sachs of its option to
purchase an aggregate of 126,000 additional shares from certain selling
stockholders, Mr. Pulitzer will beneficially own 3,398,328 shares of our
Class B common stock or 22.5% of the aggregate voting power of our common
stock and Class B common stock.
(11) Michael E. Pulitzer is an officer and a director of this foundation.
(12) This assumes Goldman Sachs does not exercise its option to purchase an
aggregate of 126,000 additional shares from the selling stockholders. If
Goldman Sachs exercises in full its option, the additional number of common
shares being offered after conversion by each selling stockholder would be
as follows: Emily Rauh Pulitzer, as Trustee of the Pulitzer Family Trust
(31,000 shares), Margaret J. Warner and Kate C. Moore as Trustees of the
David and Katherine Moore 1999 Charitable Remainder Trust (16,455) and
Michael E. Pulitzer, as Trustee (78,545 shares).
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<PAGE> 18
LEGAL MATTERS
The validity of the issuance of the shares of our common stock offered will
be passed upon for us by Fulbright & Jaworski L.L.P., New York, New York. As of
January 21, 1999, William Bush, a partner of such firm, owned options to
purchase an aggregate of 3,334 shares of our common stock.
EXPERTS
Our financial statements and the related financial statement schedule as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 incorporated in this prospectus by reference from our Current
Report on Form 8-K, filed on January 22, 1999, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing. The financial statements of our broadcasting subsidiaries as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 incorporated in this prospectus by reference from our Current
Report on Form 8-K, filed on January 22, 1999, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements and the related financial statement
schedule of Hearst-Argyle incorporated in this prospectus by reference from
Hearst-Argyle's Annual Report on Form 10-K, as amended by Form 10-K/A, for the
year ended December 31, 1997, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and schedule of Argyle Television, Inc. included in Argyle
Television, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1996, as set forth in their report, which is incorporated in this prospectus by
reference. The consolidated financial statements and schedule of Argyle
Television, Inc. are incorporated by reference in reliance on their report,
given on their authority as experts in accounting and auditing.
The financial statements as of December 31, 1997 and 1996 and for each of
the three years in the period ended December 31, 1997 of Kelly Broadcasting Co.,
which appear in Hearst-Argyle's Current Reports on Form 8-K dated September 17,
1998, as amended by Form 8-K/A dated December 7, 1998, incorporated by reference
in this prospectus, have been incorporated herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm, as experts in accounting and auditing.
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<PAGE> 19
UNDERWRITING
The Company, Hearst-Argyle, the selling stockholders and Goldman, Sachs &
Co. ("Goldman Sachs") have entered into an underwriting agreement with respect
to the shares being offered. Subject to certain conditions, Goldman Sachs has
agreed to purchase shares.
If Goldman Sachs sells more shares than the total number being offered,
Goldman Sachs has an option to buy up to an additional 126,000 shares from the
selling stockholders to cover such sales. They may exercise that option for 30
days but not after the fifth business day before the effective time of the
merger.
The following tables show the per share and total underwriting discounts
and commissions to be paid to Goldman Sachs by the selling stockholders. Such
amounts are shown assuming both no exercise and full exercise of Goldman Sachs'
option to purchase 126,000 additional shares.
<TABLE>
<CAPTION>
Paid by the Selling Stockholders No Exercise Full Exercise
-------------------------------- ----------- -------------
<S> <C> <C>
Per share........................................ $ $
Total............................................ $ $
</TABLE>
Shares sold by Goldman Sachs to the public will initially be offered at the
initial public offering price set forth on the cover of this prospectus. Any
shares sold by Goldman Sachs to securities dealers may be sold at a discount of
up to $ per share from the initial public offering price. Any such
securities dealers may resell any shares purchased from Goldman Sachs to certain
other brokers or dealers at a discount of up to $ per share from the initial
public offering price. If all of the shares are not sold at the initial offering
price, Goldman Sachs may change the offering price and the other selling terms.
The Company and the selling stockholders have agreed with Goldman Sachs not
to dispose of or hedge any of their common stock or securities convertible into
or exchangeable for shares of common stock during the period from the date of
this prospectus continuing through the date 90 days after the date of this
prospectus, except with the prior written consent of Goldman Sachs. This
agreement does not apply to any existing employee benefit plans.
In connection with the offering, Goldman Sachs may purchase and sell shares
of common stock in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by Goldman Sachs of a greater number of
shares than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the common stock while
the offering is in progress.
These activities by Goldman Sachs may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the
common stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by Goldman
Sachs at any time. These transactions may be effected on the NYSE, in the
over-the-counter market or otherwise.
The selling stockholders estimate that their share of the total expenses of
the offering, excluding underwriting discounts and commissions, will be
approximately $ , payable by the Company.
The Company and the selling stockholders have agreed to indemnify Goldman
Sachs against certain liabilities, including liabilities under the Securities
Act of 1933.
U-1
<PAGE> 20
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No dealer, salesperson or other person has been authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information.. 2
Cautionary Statement Concerning
Forward-Looking Statements......... 3
Prospectus Summary................... 4
Investment in Pulitzer Publishing
Company's Common Stock.......... 4
The Company........................ 4
Hearst-Argyle...................... 6
Risk Factors......................... 7
Risk Factors Associated with the
Spin-Off and the Merger......... 7
Risk Factors Related to the Hearst-
Argyle Stock.................... 8
Risk Factors Related to the New
Pulitzer Stock.................. 12
Use of Proceeds...................... 14
Selling Stockholders................. 15
Legal Matters........................ 17
Experts.............................. 17
Underwriting......................... U-1
</TABLE>
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1,000,000 Shares
PULITZER PUBLISHING
COMPANY
Common Stock
---------------------
PROSPECTUS
---------------------
GOLDMAN, SACHS & CO.
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------------------------------------------------------
<PAGE> 21
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates (other than the SEC
registration fee) of the expenses in connection with the issuance and
distribution of the shares being registered. None of the following expenses is
being paid by the selling stockholders.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 36,638.89
Legal fees and expenses..................................... $ 75,000.00
Accounting fees and expenses................................ $ 30,000.00
Printing fees and expenses.................................. $ 30,000.00
Miscellaneous expenses...................................... $ 9,361.11
-----------
Total.................................................. $181,000.00
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware grants
corporations the power to indemnify their directors, officers, employees and
agents in accordance with the provisions set forth therein.
Article XI of the Restated Certificate of Incorporation of the Company
provides for indemnification of directors, officers, employees and agents of the
Company to the fullest extent provided by law. The Company currently maintains
directors' and officers' liability insurance. Sections 1, 2, 3 and 10 of Article
XI include basic indemnification provisions and provide as follows:
(1) Action Not By or on Behalf of Corporation. The Company shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against judgments and
amounts paid in settlement and expenses (including attorneys' fees), actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(2) Action By or on Behalf of Corporation. The Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the Company or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Company unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability and in view of all
of the circumstances of
II-1
<PAGE> 22
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
(3) Successful Defense. To the extent that a director, officer, employee or
agent of the corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 1 or 2 of
Article XI, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(10) A director's liability to the Company for breach of duty to the
Company or its stockholders shall be limited to the fullest extent permitted by
Delaware law as now in effect or hereafter amended. In particular, no director
of the Company shall be personally liable to the Company or any of its
stockholders for monetary damages for breach of fiduciary duty as director,
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation law, as the same exists or
hereafter may be amended, or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Company, in
addition to the limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended Delaware General
Corporation law. Any repeal or modification of Article XI by the stockholders of
the Company shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Company existing at
the time of such repeal or modification.
ITEM 16. EXHIBITS.
(a) Exhibits.
<TABLE>
<C> <S>
1 Underwriting Agreement by and among the Company, the selling
stockholders, Goldman, Sachs & Co. and Hearst-Argyle
Television, Inc.
5 Opinion of Fulbright & Jaworski L.L.P.*
10.1 Employment Agreement with Robert C. Woodworth.*
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5).*
23.2 Consent of Deloitte & Touche LLP with respect to the audited
financial statements of the Company and its wholly-owned
subsidiary Pulitzer Broadcasting Company.*
23.3 Consent of Deloitte & Touche LLP with respect to the audited
financial statements of Hearst-Argyle.*
23.4 Consent of Ernst & Young LLP with respect to the audited
financial statements of Argyle Television, Inc.*
23.5 Consent of PricewaterhouseCoopers LLP with respect to the
audited financial statements of Kelly Broadcasting Co.*
24 Power of Attorney (included on signature page).*
</TABLE>
- ---------------
* Previously filed.
II-2
<PAGE> 23
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
II-3
<PAGE> 24
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Louis and State of Missouri on the 26th day of
February, 1999.
PULITZER PUBLISHING COMPANY
By: /s/ MICHAEL E. PULITZER
-----------------------------------
Michael E. Pulitzer
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<C> <S> <C>
/s/ MICHAEL E. PULITZER Director, Chairman of the February 26, 1999
- --------------------------------------------- Board, President and Chief
Michael E. Pulitzer Executive Officer (principal
executive officer)
/s/ RONALD H. RIDGWAY Director, Senior Vice February 26, 1999
- --------------------------------------------- President -- Finance
Ronald H. Ridgway (principal financial and
accounting officer)
* Director February 26, 1999
- ---------------------------------------------
William Bush
* Director, Senior Vice February 26, 1999
- --------------------------------------------- President -- Broadcast
Ken J. Elkins Operations
* Director February 26, 1999
- ---------------------------------------------
Alice B. Hayes
* Director February 26, 1999
- ---------------------------------------------
David E. Moore
* Director, Senior Vice February 26, 1999
- --------------------------------------------- President -- Newspaper
Nicholas G. Penniman IV Operations
* Director February 26, 1999
- ---------------------------------------------
Emily Rauh Pulitzer
* Director February 26, 1999
- ---------------------------------------------
James M. Snowden, Jr.
*By: /s/ RONALD H. RIDGWAY
--------------------------------------
Ronald H. Ridgway
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
1 Underwriting Agreement by and among the Company, the selling
stockholders, Goldman, Sachs & Co. and Hearst-Argyle
Television, Inc.
5 Opinion of Fulbright & Jaworski L.L.P.*
10.1 Employment Agreement with Robert C. Woodworth.*
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5).*
23.2 Consent of Deloitte & Touche LLP with respect to the audited
financial statements of the Company and its wholly-owned
subsidiary Pulitzer Broadcasting Company.*
23.3 Consent of Deloitte & Touche LLP with respect to the audited
financial statements of Hearst-Argyle.*
23.4 Consent of Ernst & Young LLP with respect to the audited
financial statements of Argyle Television, Inc.*
23.5 Consent of PricewaterhouseCoopers LLP with respect to the
audited financial statements of Kelly Broadcasting Co.*
24 Power of Attorney (included on signature page).*
</TABLE>
- ---------------
* Previously filed.
II-6
<PAGE> 1
EXHIBIT 1
PULITZER PUBLISHING COMPANY
COMMON STOCK
------------------
UNDERWRITING AGREEMENT
March __, 1999
GOLDMAN, SACHS & CO.,
85 BROAD STREET,
NEW YORK, NEW YORK 10004
Ladies and Gentlemen:
Certain stockholders named in Schedule II hereto (the "Selling
Stockholders") of Pulitzer Publishing Company, a Delaware corporation (the
"Company"), propose, subject to the terms and conditions stated herein, to sell
to Goldman, Sachs & Co. (the "Underwriter") an aggregate of 1,000,000 shares
(the "Firm Shares") and, at the election of the Underwriter, up to 126,000
additional shares (the "Optional Shares") of the common stock, par value $.01
per share of the Company (the "Common Stock"). The Firm Shares and the Optional
Shares, which the Underwriter elects to purchase pursuant to Section 2 hereof
are herein collectively called the "Shares".
As issuer of the Shares, the Company is a party to this Agreement.
After the completion of the transactions contemplated by this Agreement, the
Company is expected to complete a tax-free spin-off in which all of the
Company's non-broadcasting assets will be transferred to a subsidiary, the
shares of which will be distributed to the Company's stockholders. Thereafter,
pursuant to an amended and restated merger agreement dated as of May 25, 1998
(the "Merger Agreement"), by and among the Company, such subsidiary and
Hearst-Argyle Television, Inc., a Delaware corporation ("Hearst-Argyle"), the
Company will merge (the "Merger") with and into Hearst-Argyle. In the Merger,
Hearst-Argyle will issue shares of its Series A common stock (the "Hearst-Argyle
Stock") in exchange for the Company's Common Stock, including the Shares, and
its Class B Common Stock, par value $.01 per share (the "Class B Common Stock").
Because the Shares will, upon consummation of the Merger, be exchanged for
shares of Hearst-Argyle Stock (the "Share Exchange"), Hearst-Argyle has agreed
to be a party to this Agreement solely to the extent expressly set forth below.
1. (a) The Company represents and warrants to, and agrees with,
the Underwriter that:
(i) A registration statement on Form S-3 (File No.
333-69701) (the "Initial Registration Statement") in respect
of the Shares has been filed
<PAGE> 2
with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
pre-effective or post-effective amendments thereto, each in
the form heretofore delivered or to be delivered to the
Underwriter and, excluding exhibits to the Initial
Registration Statement, but including all documents
incorporated by reference in the prospectus included therein,
have been declared effective by the Commission in such form;
other than pre-effective amendments to the Initial
Registration Statement and a registration statement, if any,
increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing and other than Hearst-Argyle's
Registration Statement on Form S-4, no other document with
respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed,
or transmitted for filing, with the Commission; and no stop
order suspending the effectiveness of the Initial Registration
Statement, any pre-effective or post-effective amendments
thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or
filed with the Commission pursuant to Rule 424(a) under the
Act, is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including (i) the information contained
in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with
Section 5(i) hereof and deemed by virtue of Rule 430A under
the Act to be part of the Initial Registration Statement at
the time it was declared effective and (ii) the documents
incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the
Initial Registration Statement became effective, each as
amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the
form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus"; and any reference herein
to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment
to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement;
2
<PAGE> 3
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filling thereof,
conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished
in writing to the Company by the Underwriter expressly for use
therein or by a Selling Stockholder expressly for use in the
preparation of the answers therein to Item 7 of Form S-3;
(iii) The documents filed with the Commission by the
Company, including the Joint Proxy Statement/Prospectus of the
Company and Hearst-Argyle (except with respect to information
furnished by Hearst-Argyle expressly for use in such Joint
Proxy Statement/Prospectus), and incorporated by reference in
the Prospectus, when they became effective or were filed with
the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder, and, when read together with the other information
in the Prospectus, none of such documents contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents
become effective or are filed by the Company with the
Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder and, when read together with the other information
in the Prospectus, at the date of the Prospectus, will not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by the Underwriter expressly for use therein;
(iv) The Registration Statement conforms and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the
applicable filing date
3
<PAGE> 4
as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by the Underwriter or Hearst-Argyle expressly for use
therein;
(v) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, which loss or
interference is material to the Company, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there
has not been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus;
(vi) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is
subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction; and
each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation;
(vii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(viii) All of the outstanding shares of capital stock
of the Company, including without limitation the Shares, have
been duly and validly authorized, and such outstanding shares
of capital stock other than the Shares are, and upon
conversion by certain of the Selling Stockholders of the
requisite shares of the Class B Common Stock into Common Stock
as described in the Prospectus (the "Conversion"), the Shares
will be, duly and
4
<PAGE> 5
validly issued and fully paid and non-assessable and the
Shares will conform to the description thereof contained in
the Prospectus;
(ix) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate
of Incorporation or By-laws of the Company or any statute or
any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, any of
its subsidiaries or any of its properties; and no consent,
approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated
by this Agreement, except the registration under the Act of
the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriter;
(x) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the
subject, which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries;
and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xi) Neither the Company nor any of its subsidiaries
is in violation of its Certificate of Incorporation or By-laws
or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
(xii) The Company is not and, after giving effect to
the offering and sale of the Shares, will not be an
"investment company", as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment
Company Act");
5
<PAGE> 6
(xiii) Deloitte & Touche LLP, who have certified
certain financial statements of the Company and its
subsidiaries, are independent public accountants as required
by the Act and the rules and regulations of the Commission
thereunder; and
(xiv) The Company has reviewed its operations and
that of its subsidiaries and any third parties with which the
Company or any of its subsidiaries has a material relationship
to evaluate the extent to which the business or operations of
the Company or any of its subsidiaries will be affected by the
Year 2000 Problem. As a result of such review, except as
disclosed in the Prospectus, the Company has no reason to
believe, and does not believe, that the Year 2000 Problem will
have a material adverse effect on the general affairs,
management, the current or future consolidated financial
position, business prospects, stockholders' equity or results
of operations of the Company and its subsidiaries (a "Material
Adverse Effect") or result in any material loss or
interference with the Company's business or operations. The
"Year 2000 Problem" as used herein means any significant risk
that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the
operation of mechanical or electrical systems of any kind will
not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1,
2000.
(b) Each of the Selling Stockholders severally represents and
warrants to, and agrees with, the Underwriter and the Company and
Hearst-Argyle that:
(i) All consents, approvals, authorizations and
orders necessary for the execution and delivery by such
Selling Stockholder of this Agreement and the Power of
Attorney and the Custody Agreement hereinafter referred to,
and for the sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder, have been obtained; and such
Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power-of-Attorney and the
Custody Agreement and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such
Selling Stockholder hereunder and the compliance by such
Selling Stockholder with all of the provisions of this
Agreement, the Power of Attorney and the Custody Agreement and
the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any statute, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the property
or assets of such Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws or similar gov-
6
<PAGE> 7
erning instruments of such Selling Stockholder if such Selling
Stockholder is a corporation, foundation or trust or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling
Stockholder;
(iii) Upon the Conversion, such Selling Stockholder
will have, and immediately prior to each Time of Delivery (as
defined in Section 4 hereof) such Selling Stockholder will
have, good and valid title to the Shares to be sold by such
Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, when the Shares are
delivered pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or
claims, will pass to the Underwriter;
(iv) During the period beginning from the date hereof
and continuing to and including, 1999, such Selling
Stockholder will not offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any
securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that
are convertible into or exchangeable for, or that represent
the right to receive, stock or any such substantially similar
securities (other than pursuant to employee stock option plans
existing on, or upon the conversion or exchange of convertible
or exchangeable securities outstanding as of, the date of this
Agreement), without the prior written consent of the
Underwriter provided that, for the avoidance of ambiguity
hereunder, the participation in Share Exchange shall not be
deemed to constitute a sale or disposition under this
subsection (iv);
(v) Such Selling Stockholder has not taken and will
not take, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(vi) To the extent that any statements or omissions
made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement
thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling
Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the
Prospectus and any further amendments or supplements to the
Registration Statement and the Prospectus, when they become
effective or are filed with the Commission, as the case may
be, will, conform in all material respects to the requirements
of the Act and the rules and regulations of the Commission
thereunder and will not 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;
(vii) In order to document the Underwriter's
compliance with the reporting and withholding provisions of
the Tax Equity and Fiscal Responsi-
7
<PAGE> 8
bility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to the
Underwriter prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in
lieu thereof);
(viii) Certificates in negotiable form representing
all of the Shares to be sold by such Selling Stockholder
hereunder have been placed in custody under a Custody
Agreement, in the form heretofore furnished to the Underwriter
(the "Custody Agreement"), duly executed and delivered by such
Selling Stockholder to [NAME OF CUSTODIAN], as custodian (the
"Custodian"), and such Selling Stockholder has duly executed
and delivered a Power of Attorney, in the form heretofore
furnished to the Underwriter (the "Power of Attorney"),
appointing the persons indicated in Schedule III hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact
(the "Attorneys-in-Fact") with authority to execute and
deliver this Agreement on behalf of such Selling Stockholder,
to determine the purchase price to be paid by the Underwriter
to the Selling Stockholders as provided in Section 2 hereof,
to authorize the delivery of the Shares to be sold by such
Selling Stockholder hereunder, and otherwise to act on behalf
of such Selling Stockholder in connection with the
transactions contemplated by this Agreement and the Custody
Agreement; and
(ix) The Shares represented by the certificates held
in custody for such Selling Stockholder under the Custody
Agreement are subject to the interests of the Underwriter
hereunder; the arrangements made by such Selling Stockholder
for such custody, and the appointment by such Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney,
are to that extent irrevocable and not subject to termination
by such Selling Stockholder or by operation of law; the
obligations of the Selling Stockholders hereunder shall not be
terminated by operation of law, whether by the death or
incapacity of any individual Selling Stockholder or, in the
case of an estate or trust, by the death or incapacity of any
executor or trustee or the termination of such estate or
trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the
occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be
terminated, or if any such partnership or corporation should
be dissolved, or if any other such event should occur, before
the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of
the Selling Stockholders in accordance with the terms and
conditions of this Agreement and of the Custody Agreements and
all other actions required to be taken hereunder or under the
Custody Agreement shall be taken; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney and the
Custodian under the Custody Agreement shall be as valid as if
such death, incapacity, termination, dissolution or other
event had not occurred, regardless of whether or not the
Custodian, the
8
<PAGE> 9
Attorneys-in-Fact, or any of them, shall have received notice
of such death, incapacity, termination, dissolution or other
event.
(c) Hearst-Argyle represents and warrants to, and agrees with,
the Underwriter and the Company that:
(i) The documents filed with the Commission by
Hearst-Argyle or Argyle Television, Inc., including the Joint
Proxy Statement/Prospectus of the Company and Hearst-Argyle
(but only with respect to information furnished by
Hearst-Argyle expressly for use in such Joint Proxy
Statement/Prospectus), and incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder, and, when read together with the other information
in the Prospectus, none of such documents contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents
become effective or are filed by Hearst-Argyle with the
Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder and, when read together with the other information
in the Prospectus, at the date of the Prospectus, will not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(ii) All information relating to Hearst-Argyle
contained in the Registration Statement, the Prospectus and
any further amendments or supplements to the Registration
Statement or the Prospectus, when they become effective or are
filed with the Commission, as the case may be, do not and will
not as of the appropriate effective date (as to the
Registration Statement and any amendments thereto) and as to
the appropriate filing date (as to the Prospectus and any
amendment or supplement thereto) 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;
(iii) Since the respective dates as of which
information is given in the Prospectus, there has not been any
material adverse change, or any development which could
reasonably be expected to cause a material adverse change, in
the general affairs, management, financial position or results
of operations of Hearst-Argyle and its subsidiaries, taken as
a whole, otherwise than as set forth or contemplated in the
Prospectus;
9
<PAGE> 10
2. Subject to the terms and conditions herein set forth, each of
the Selling Stockholders agrees, severally and not jointly, to
sell to the Underwriter, and the Underwriter agrees to
purchase from each of the Selling Stockholders, at a purchase
price per share of $..........., (a) the number of Firm Shares
set forth beside such Selling Stockholder's name on Schedule
II hereto and (b) in the event and to the extent that the
Underwriter shall exercise the election to purchase Optional
Shares as provided below, each of the Selling Stockholders
agrees, severally and not jointly, to sell to the Underwriter,
and the Underwriter agrees to purchase from each of the
Selling Stockholders, at the purchase price per share set
forth in this Section 2, the Optional Shares as provided
below.
The Selling Stockholders, as and to the extent indicated in
Schedule I hereto, hereby grant, severally and not jointly, to
the Underwriter the right to purchase at its election up to
126,000 Optional Shares, at the purchase price per share set
forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such
election to purchase Optional Shares shall be made in
proportion to the number of Optional Shares to be sold by each
Selling Stockholder selling Optional Shares. Any such election
to purchase Optional Shares may be exercised only by written
notice from the Underwriter to the Attorneys-in-Fact, given
within a period of 30 calendar days after the date of this
Agreement, but in no event later than the fifth business day
prior to the effective time of the Merger, and setting forth
the aggregate number of Optional Shares to be purchased and
the date on which such Optional Shares are to be delivered, as
determined by you but in no event shall the date of such
purchase be earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the
Attorneys-in-Fact otherwise agree in writing, later than one
business day prior to the effective time of the Merger.
3. Upon the authorization by you of the release of the
Firm Shares, the Underwriter proposes to offer the Firm Shares
for sale upon the terms and conditions set forth in the
Prospectus.
4. (a) The Shares to be purchased by the Underwriter hereunder,
in definitive form, and in such authorized denominations and
registered in such names as the Underwriter may request upon
at least forty-eight hours prior notice to the Selling
Stockholders shall be delivered by or on behalf of the Selling
Stockholders to the Underwriter, through the facilities of the
Depository Trust Company ("DTC"), for the account of the
Underwriter, against payment by or on behalf of the
Underwriter of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by [the
Custodian] [each of the Selling Stockholders][, as their
interests may appear,] to the Underwriter at least forty-eight
hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office
of DTC or its designated custodian (the "Designated Office").
The time and date of such delivery and payment
10
<PAGE> 11
shall be, with respect to the Firm Shares, 9:30 a.m., New York
time, on ............., 19.. or such other time and date as
Goldman, Sachs & Co. and the Selling Stockholders may agree
upon in writing, and, with respect to the Optional Shares,
9:30 a.m., New York time, on the date specified by Goldman,
Sachs & Co. in the written notice given by Goldman, Sachs &
Co. of the Underwriter's election to purchase such Optional
Shares, or such other time and date as Goldman, Sachs & Co.
and the Selling Stockholders may agree upon in writing. Such
time and date for delivery of the Firm Shares is herein called
the "First Time of Delivery", such time and date for delivery
of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such
time and date for delivery is herein called a "Time of
Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7
hereof, including the cross receipt for the Shares and any
additional documents requested by the Underwriter pursuant to
Section 7(l) hereof, will be delivered at the offices of
[Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue,
New York, New York, 10022] (the "Closing Location"), and the
Shares will be delivered at the Designated Office, all at such
Time of Delivery. A meeting will be held at the Closing
Location at .......p.m., New York City time, on the New York
Business Day next preceding such Time of Delivery, at which
meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section
4, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with the Underwriter:
(i) To prepare the Prospectus in a form approved by
the Underwriter and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of
business on the second business day following the execution
and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to
make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the last Time of
Delivery which shall be disapproved by the Underwriter
promptly after reasonable notice thereof; to advise the
Underwriter, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus
or any amended Prospectus has been filed and to furnish the
Underwriter with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to
be filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with
the offering or sale of the Shares, and during
11
<PAGE> 12
such same period to advise the Underwriter, promptly after it
receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of such Shares for offering or
sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the
use of any Preliminary Prospectus or prospectus or suspending
any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action
as the Underwriter may reasonably request to qualify the
Shares for offering and sale under the securities laws of such
jurisdictions as the Underwriter may request and to comply
with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(iii) Prior to 10:00 A.M., New York City time, on the
New York Business Day next succeeding the date of this
Agreement and from time to time, to furnish the Underwriter
with copies of the Prospectus in New York City in such
quantities as the Underwriter may reasonably request, and, if
the delivery of a prospectus is required at any time prior to
the expiration of nine months after the time of issuance of
the Prospectus in connection with the offering or sale of the
Shares and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or
the Exchange Act, to notify the Underwriter and upon its
request to file such document and to prepare and furnish
without charge to the Underwriter and to any dealer in
securities as many copies as the Underwriter may from time to
time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case the
Underwriter is required to deliver a prospectus in connection
with sales of any of the Shares at any time nine months or
more after the time of issue of the Prospectus, upon the
Underwriter's request but at the expense of the Underwriter,
to prepare and deliver to the Underwriter as many copies as
the Underwriter may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
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<PAGE> 13
(iv) To make generally available to its security
holders as soon as practicable, but in any event not later
than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the
Act), an earnings statement of the Company or its successor
and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of
the Commission thereunder (including, at the option of the
Company, Rule 158);
(v) During the period beginning from the date hereof
and continuing to and including the date ninety days after the
date of the Prospectus, not to offer, sell, contract to sell
or otherwise dispose of, except as provided hereunder, any
securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that
are convertible into or exchangeable for, or that represent
the right to receive, Common Stock or any such substantially
similar securities (other than pursuant to employee stock
option plans existing on, or upon the conversion or exchange
of convertible or exchangeable securities outstanding as of,
the date of this Agreement), without the Underwriter's prior
written consent, provided that, for the avoidance of ambiguity
hereunder, the Share Exchange shall not be deemed to
constitute a sale or disposition under this subsection (v);
(vi) If the Company elects to rely upon Rule 462(b),
the Company shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00
P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay the
Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the Act; and
5. The Company and each of the Selling Stockholders covenant and
agree with one another and with the Underwriter that the
Company will pay or cause to be paid the following:(i)the
fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares
under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriter and dealers;
(ii)the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Blue Sky Memorandum,
closing documents (including compilations thereof) and any
other documents in connection with the offering, purchase,
sale and delivery of the Shares; (iii)all expenses in
connection with the qualification of the Shares for offering
and sale under state securities laws as provided in Section
5(ii) hereof, including the fees and disbursements of counsel
for the Underwriter in connection with such qualification and
in connection with the Blue Sky survey(s);(iv)the cost of
preparing certificates for the Shares;(v)the cost and charges
of any transfer
13
<PAGE> 14
agent or registrar or dividend disbursing agent; and all other
costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and
10 hereof, the Underwriter will pay all of its own costs and
expenses, including the fees of its counsel, transfer taxes on
resale of any of the Shares by it, and any advertising
expenses connected with any offers it may make.
7. The obligations of the Underwriter hereunder shall be subject,
in the discretion of the Underwriter, to the condition that
all representations and warranties and other statements of the
Company, the Selling Stockholders and Hearst-Argyle herein
are, at and as of each Time of Delivery, true and correct, the
condition that the Company, the Selling Stockholders and
Hearst-Argyle shall have performed all of their respective
obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Underwriter's reasonable satisfaction;
(b) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the
Underwriter, shall have furnished to the Underwriter such written
opinion or opinions (a draft of each such opinion is attached as Annex
II(a) hereto), dated such Time of Delivery, with respect to the matters
covered in paragraphs (i), (ii), (v), (x), (xi) and (xii) of subsection
(c) below as well as such other related matters as the Underwriter may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Fulbright & Jaworski L.L.P., counsel for the Company,
shall have furnished to the Underwriter their written opinion (a draft
of each such opinion is attached as Annex II(b) hereto), dated each
Time of Delivery, in form and substance satisfactory to the
Underwriter, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of
14
<PAGE> 15
Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company, including without limitation the
Shares, have been duly and validly authorized and issued and
are fully paid and non-assessable;
(iii) The Shares conform to the description thereof
contained in the Prospectus;
(iv) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a
whole; and to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) This Agreement has been duly authorized, executed
and delivered by the Company;
(vi) The Merger Agreement has been duly authorized,
executed and delivered and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except
as the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally or by equitable principles of general applicability;
and the Merger Agreement conforms in all material respects to
the description thereof in the Prospectus;
(vii) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is
subject, except a conflict, breach, violation or default which
would not do any of the following: (1) in any way adversely
affect the ability of the Company to comply with all of the
provisions of this Agreement; (2) in any way adversely affect
the consummation of the transactions herein contemplated; or
(3) have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or
results of operations of the Company and its
15
<PAGE> 16
subsidiaries, taken as a whole, nor will such action result in
any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the
Company, any of its subsidiaries or any of its properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except such as
have been obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriter;
(ix) To the best of such counsel's knowledge, neither
the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument known to such counsel to which the
Company is a party or by which it or any of its properties may
be bound and which is material to the Company and its
subsidiaries, taken as a whole;
(x) The Company is not an "Investment Company", as
such term is defined in the Investment Company Act;
(xi) The documents filed by the Company and
incorporated by reference in the Prospectus or any further
amendment or supplement thereto made by the Company prior to
such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need
express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form
in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and
(xii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the
financial statements and related schedules therein and the
documents filed by Hearst-Argyle and incorporated by reference
in the Prospectus, as to which such counsel need express no
opinion), comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder.
16
<PAGE> 17
In rendering such opinion, such counsel shall state that, although it
has not undertaken, except as otherwise indicated, to determine independently,
and does not assume any responsibility for, the accuracy, completeness or
fairness of the statements in the Registration Statement, it has participated in
the preparation of the Registration Statement and the Prospectus of the Company,
including review and discussion of the contents thereof, and, relying as to
materiality with regard to factual matters to a certain extent upon officers and
other representatives of the Company, nothing has come to such counsel's
attention that has caused it to believe that the Registration Statement, at the
time the Registration Statement became effective and at each Time of Delivery,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of its date and at each Time of
Delivery, or any documents filed by the Company with the Commission and
incorporated by reference in the Prospectus (including the Joint Proxy
Statement/Prospectus of the Company and Hearst-Argyle), at the time they were
filed with the Commission, at the date of the Prospectus and at each Time of
Delivery, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that (i) such counsel does not express any opinion with respect to the financial
statements or other financial information and schedules included in the
Registration Statement or the Prospectus or such incorporated documents and (ii)
such counsel does not express any opinion with respect to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by Hearst-Argyle expressly for use in the Registration
Statement or the Prospectus or with respect to any documents filed with the
Commission by Hearst-Argyle (except for the Joint Proxy Statement/Prospectus of
the Company and Hearst-Argyle, exclusive of any information furnished by
Hearst-Argyle expressly for use in such Joint Proxy Statement/Prospectus), and
incorporated by reference in the Prospectus.
(d) Each of Fulbright & Jaworski L.L.P., the counsel for each
of the Selling Stockholders, other than the David and Katherine Moore
1998 Charitable Remainder Trust and the David and Katherine Moore 1999
Charitable Remainder Trust, and Debevoise & Plimpton, the counsel for
the David and Katherine Moore 1998 Charitable Remainder Trust and the
David and Katherine Moore 1999 Charitable Remainder Trust, as indicated
on Schedule III hereto, shall have furnished to you their written
opinion with respect to each of the respective Selling Stockholders for
whom they are acting as counsel (a draft of each such opinion is
attached as Annex II(c) hereto), dated such Time of Delivery, in form
and substance satisfactory to the Underwriter, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have
been duly executed and delivered by such Selling Stockholder
(except that an opinion need not be given with respect to a
Power-of-Attorney by counsel for the David and Katherine Moore
1998 Charitable Remainder Trust and the David and Katherine
Moore 1999 Charitable Remainder Trust) and constitute valid
and binding agreements of such Selling Stockholder in
accordance with their terms;
17
<PAGE> 18
(ii) This Agreement has been duly executed and
delivered by or on behalf of such Selling Stockholder; and the
sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with
all of the provisions of this Agreement, the Power of Attorney
and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such
Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets
of such Selling Stockholder is subject, nor will such action
result in any violation of the provisions of the Certificate
of Incorporation or By-laws or similar governing documents of
such Selling Stockholder if such Selling Stockholder is a
corporation, a foundation or a trust or any order, statute,
rule or regulation known to such counsel of any court or
governmental agency or body of the United States or the State
of New York having jurisdiction over such Selling Stockholder
or the property of such Selling Stockholder;
(iii) No consent, approval, authorization or order of
any United States or New York court or governmental agency or
body is required for the consummation of the transactions
contemplated by this Agreement in connection with the Shares
to be sold by such Selling Stockholder hereunder, except [NAME
ANY SUCH CONSENT, APPROVAL, AUTHORIZATION OR ORDER] which
[HAS] [HAVE] been duly obtained and [IS] [ARE] in full force
and effect, such as have been obtained under the Act and such
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares
by the Underwriter; and
(iv) Upon (A) payment for the Shares to be sold by
such Selling Stockholder in accordance with this Agreement,
(B) registration of the transfer of such Shares to, and
registration of such Shares in the name of, Cede & Co. or such
other nominee designated by DTC and (C) the crediting of such
Shares to the account maintained by DTC for the Underwriter,
assuming such account is a "securities account" (as defined in
Section 8-501 of the Uniform Commercial Code as currently in
effect in the State of New York (the "UCC")), (1) the
Underwriter will acquire "security entitlement" (as based on
an "adverse claim" (as defined in Section 8-102 of the UCC) in
respect of such shares and (2) no action based on an "adverse
claim" (as defined in Section 8-102 of the UCC) to such Shares
may be asserted against the Underwriter with respect to such
security entitlement, assuming that the Underwriter does not
have "notice" (within the meaning of Section 8- 105 of the
UCC) of any "adverse claim" as defined in Section 8-102 of
the UCC to such Shares.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any juxrisdiction other than the United States and the
State of New York.
18
<PAGE> 19
(e) Rogers & Wells LLP, counsel for Hearst-Argyle, shall have
furnished to the Underwriter their written opinions (a draft of each
such opinion is attached as Annex I(d) hereto), dated each Time of
Delivery, respectively, in form and substance satisfactory to the
Underwriter, to the effect that the Merger Agreement has been duly
authorized, executed and delivered by Hearst-Argyle and is a valid and
binding agreement of Hearst-Argyle, enforceable in accordance with its
terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or by equitable principles of general applicability.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Delaware, and that such counsel is not admitted in the State of Delaware. In
rendering such opinion, such counsel may also rely on certificates and written
statements of officers, directors, stockholders, employees and accountants of
Hearst-Argyle and public officials. Such counsel shall also state that nothing
has come to the attention of such counsel that leads it to believe that the
documents filed with the Commission by Hearst-Argyle and incorporated by
reference in the Prospectus, at the time they were filed with the Commission, at
the date of the Prospectus and at each Time of Delivery, contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel expresses no
belief with respect to the financial statements, financial schedules and
financial information and operating data, and other financial data included or
incorporated by reference in or omitted from such documents, the Registration
Statement or the Prospectus). The foregoing statement may be qualified by a
statement to the effect that such counsel does not pass upon or otherwise assume
any responsibility for the accuracy, completeness, or fairness of the statements
contained in such documents, the Registration Statement or the Prospectus.
(f) On the date of the Prospectus, at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, Deloitte & Touche, LLP, the independent
accountants of the Company who have certified the financial statements
of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement, shall have furnished to the
Underwriter a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to the Underwriter, to the
effect set forth in Annex II hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex
I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement is attached as Annex I(b) hereto);
(g) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each time of Delivery, Deloitte & Touche, LLP, the
19
<PAGE> 20
independent accountants of Hearst-Argyle who have certified the
financial statements of Hearst-Argyle and its subsidiaries included or
incorporated by reference in the Registration Statement, shall have
furnished to the Underwriter a letter or letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to the
Underwriter, to the effect set forth in Annex II hereto (the executed
copy of the letter delivered prior to the execution of this Agreement
is attached as Annex I(a) hereto and a draft of the form of letter to
be delivered on the effective date of any post-effective amendment to
the Registration Statement is attached as Annex I(b) hereto);
(h) (i) Neither the Company, Hearst-Argyle nor any of their
respective subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company,
Hearst-Argyle, or any of their respective subsidiaries or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company, Hearst-Argyle, or any of their
respective subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of the Underwriter so material
and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in
the Prospectus;
(i) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's or Hearst-Argyle's debt
securities or preferred stock by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities or preferred stock;
(j) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's or
Hearst-Argyle's securities on the New York Stock Exchange; (iii) a
general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iv) in the judgment
of the Underwriter makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered
at the Time of Delivery on the terms and in the manner contemplated in
the Prospectus;
20
<PAGE> 21
(k) The Shares at each Time of Delivery shall have been duly
listed on the New York Stock Exchange;
(l) The Company shall have complied with the provisions of
Section 5(iii) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(m) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to the Underwriter at each Time of
Delivery certificates of officers of the Company and of the Selling
Stockholders, respectively, satisfactory to the Underwriter as to the
accuracy of the representations and warranties of the Company and of
the Selling Stockholders, respectively, herein at and as of such Time
of Delivery, as to the performance by the Company and the Selling
Stockholders of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery and as to such other
matters as the Underwriter may reasonably request, and the Company
shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (h) of this Section.
8. (a) The Company and each of the Selling Stockholders, jointly
and severally, will indemnify and hold harmless the Underwriter against
any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any of the documents incorporated
by reference in the Prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Underwriter for any legal or other
expenses reasonably incurred by the Underwriter in connection with
investigating or defending any such action or claim as such expenses
are incurred; provided, however, that the Company and the Selling
Stockholders shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement, the Prospectus, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Company by the Underwriter expressly for use therein and provided
further that the indemnification obligation of each Selling Stockholder
under this subsection 8(a) shall be limited to (i) such Selling
Stockholder's pro rata portion of any indemnification obligation
arising under this subsection 8(a), based upon the percentage of the
total Shares sold by such Selling Stockholder, and (ii) the actual net
proceeds (before deducting expenses) received by such Selling
Stockholder from the sale by such Selling Stockholder of Shares
hereunder.
(b) The Underwriter will indemnify and hold harmless the
Company and each Selling Stockholder against any losses, claims,
damages or liabilities to which the Company, Hearst-Argyle or such
Selling Stockholder may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus,
21
<PAGE> 22
the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement, the
Prospectus, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the
Underwriter expressly for use therein; and will reimburse the Company
and each Selling Stockholder for any legal or other expenses reasonably
incurred by the Company or such Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include any
statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the
Underwriter on the other from the offering of the
22
<PAGE> 23
Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection
(c) above, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriter on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholders on the one hand and the
Underwriter on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting
expenses) received by the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriter. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders on the
one hand or the Underwriter on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each of the Selling
Stockholders and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (d), the Underwriter shall not be
required to contribute any amount in excess of the amount by which the
total price at which the Shares were offered to the public exceeds the
amount of any damages which the Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company and the Selling
Stockholders under this Section 8 shall be in addition to any liability
which the Company and the respective Selling Stockholders may otherwise
have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the Underwriter within the meaning of the
Act; and the obligations of the Underwriter under this Section 8 shall
be in addition to any liability which the Underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who
controls the Company or any Selling Stockholder within the meaning of
the Act.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Selling
Stockholders, Hearst- Argyle and the Underwriter, as set forth in this
Agreement or made by or on behalf of them, respec-
23
<PAGE> 24
tively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of the Underwriter or any
controlling person of the Underwriter, or the Company, or any officer
or director or controlling person of the Company, or any of the Selling
Stockholders or any controlling person of any Selling Stockholder, or
Hearst-Argyle or any officer or director or controlling person of
Hearst-Argyle, and shall survive delivery of and payment for the
Shares.
10. If for any reason, any Shares are not delivered by or on
behalf of the Selling Stockholders as provided herein, each of the
Selling Stockholders pro rata (based on the number of Shares to be sold
by such Selling Stockholder) will reimburse the Underwriter for all
out-of-pocket expenses approved in writing by the Underwriter,
including fees and disbursements of counsel, reasonably incurred by the
Underwriter in making preparations for the purchase, sale and delivery
of such Shares, but the Company and the Selling Stockholders shall then
be under no further liability to the Underwriter in respect of the
Shares not so delivered except as provided in Sections 6 and 8 hereof.
11. In all dealings with any Selling Stockholder hereunder, the
Underwriter and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of such Selling
Stockholder made or given by any or all of the Attorneys-in-Fact for
such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriter shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Underwriter as set forth in this
Agreement; if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary, with a copy to Fulbright &
Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103, Attention Richard
A. Palmer, Esq.; if to any Selling Stockholder, other than the David and
Katherine Moore 1998 Charitable Remainder Trust and the David and Katherine
Moore 1999 Charitable Remainder Trust, shall be delivered or sent by mail, telex
or facsimile transmission to Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New
York, New York 10103, Attention: Richard A. Palmer, Esq., and if to the David
and Katherine Moore 1998 Charitable Remainder Trust or the David and Katherine
Moore 1999 Charitable Remainder Trust, shall be delivered or sent by mail, telex
or facsimile transmission to Debevoise & Plimpton, 875 Third Avenue, New York,
New York 10022, Attention: [ ]; and if to Hearst-Argyle shall be delivered or
sent by mail, telex or facsimile transmission to Hearst-Argyle Television, Inc.
888 Seventh Avenue, New York, New York, 10106, Attention: Secretary, with a copy
to Rogers & Wells LLP, 200 Park Avenue, New York, New York 10166, Attention:
Bonnie A. Barsamian, Esq.; provided, however, that any notice to the Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth on the first
page of this Agreement. Any such statements, requests, notices or agreements
shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriter, the Company, Hearst-Argyle (but only to
the extent expressly set forth herein), the Selling Stockholders and,
to the extent provided in Sections 8 and 9
24
<PAGE> 25
hereof, the officers and directors of the Company and each person who
controls the Company, any Selling Stockholder, the officers and
directors of Hearst-Argyle and each person who controls Hearst-Argyle
(but only to the extent expressly set forth herein), or the
Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. No purchaser of any of the
Shares from the Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall
together constitute one and the same instrument.
25
<PAGE> 26
[IF THE FOREGOING IS IN ACCORDANCE WITH YOUR UNDERSTANDING, PLEASE SIGN
AND RETURN TO US [ONE FOR THE COMPANY, ONE FOR EACH SELLING STOCKHOLDER, ONE FOR
HEARST- ARGYLE AND ONE FOR THE UNDERWRITER PLUS ONE FOR EACH COUNSEL]
COUNTERPARTS HEREOF.]
Very truly yours,
Pulitzer Publishing Company
By:
--------------------------------------
Name:
Title:
Hearst-Argyle Television, Inc.
By:
--------------------------------------
Name:
Title:
Selling Stockholders:
The Pulitzer Family Trust
By:
--------------------------------------
Name:
Title:
Spring Foundation
By:
--------------------------------------
Name:
Title:
The David and Katherine Moore
1998 Charitable Remainder Trust
By:
-------------------------------------
Name:
Title:
26
<PAGE> 27
The David and Katherine Moore
1999 Charitable Remainder Trust
By:
----------------------------------
Name:
Title:
U/I/T dtd 3/22/82 F/B/O
Michael E. Pulitzer
By:
----------------------------------
Name:
Title:
The Ceil and Michael E. Pulitzer
Foundation, Inc.
By:
----------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
By:
--------------------------------------
(Goldman, Sachs & Co.)
27
<PAGE> 28
SCHEDULE I
<TABLE>
<CAPTION>
Maximum Number
of Optional
Number of Shares Which
Firm Shares May be
Underwriter to be Purchased Purchased
----------- --------------- ---------
<S> <C> <C>
Goldman, Sachs & Co. 1,000,000 126,000
------------------- ---------------
Total................................. 1,000,000 126,000
========== ========
</TABLE>
28
<PAGE> 29
SCHEDULE II
<TABLE>
<CAPTION>
Number of Optional
Shares to be
Total Number of Sold if
Firm Shares Maximum Option
to be Sold Exercised
---------- ---------
The Selling Stockholders:
<S> <C> <C>
(a) Emily Rauh Pulitzer, as Trustee of The Pulitzer Family Trust
(b) Spring Foundation
(c) Margaret J. Warner and Kate C. Moore, as Trustees
of the David and Katherine Moore 1998 Charitable
Remainder Trust
(d) Margaret J. Warner and Kate C. Moore, as Trustees
of the David and Katherine Moore 1999 Charitable
Remainder Trust
(e) Michael E. Pulitzer, Trustee, U/I/T dtd 3/22/82 F/B/O Michael E.
Pulitzer
(f) The Ceil and Michael E. Pulitzer Foundation, Inc.
Total 1,000,000 126,000
</TABLE>
(a) This Selling Stockholder is represented by FULBRIGHT & JAWORSKI L.L.P., NEW
YORK, NEW YORK and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN
TWO)], and each of them, as the Attorneys-in-Fact for such Selling Stockholder.
(b) This Selling Stockholder is represented by FULBRIGHT & JAWORSKI L.L.P., NEW
YORK, NEW YORK and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN
TWO)], and each of them, as the Attorneys-in-Fact for such Selling Stockholder.
(c) This Selling Stockholder is represented by DEBEVOISE & PLIMPTON, NEW YORK,
NEW YORK.
29
<PAGE> 30
(d) This Selling Stockholder is represented by DEBEVOISE & PLIMPTON, NEW YORK,
NEW YORK.
(e) This Selling Stockholder is represented by FULBRIGHT & JAWORSKI, NEW YORK,
NEW YORK and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Stockholder.
(f) This Selling Stockholder is represented by FULBRIGHT & JAWORSKI, NEW YORK,
NEW YORK and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Stockholder.
30
<PAGE> 31
SCHEDULE III
Attorneys-in-Fact
Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103, as to
Emily Rauh Pulitzer as Trustee of the Pulitzer Family Trust, Spring Foundation,
Michael E. Pulitzer, Trustee, U/I/T dtd 3/22/82 F/B/O Michael E. Pulitzer and
The Ceil and Michael E. Pulitzer Foundation, Inc.
1
<PAGE> 32
ANNEX II
Pursuant to Section 7(f) and 7(g) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent
certified public accountants with respect to the Company and its
subsidiaries within the meaning of the Act and the applicable published
rules and regulations thereunder;
(ii) In their
opinion, the financial statements
and any supplementary financial
information and schedules (and, if
applicable, financial forecasts
and/or pro forma financial
information) examined by them and
included or incorporated by
reference in the Registration
Statement or the Prospectus comply
as to form in all material respects
with the applicable accounting
requirements of the Act or the
Exchange Act, as applicable, and the
related published rules and
regulations thereunder; and, if
applicable, they have made a review
in accordance with standards
established by the American
Institute of Certified Public
Accountants of the consolidated
interim financial statements,
selected financial data, pro forma
financial information, financial
forecasts and/or condensed financial
statements derived from audited
financial statements of the Company
for the periods specified in such
letter, as indicated in their
reports thereon, copies of which
have been [SEPARATELY] furnished to
the Underwriter (the
"Underwriter")[AND ARE ATTACHED
HERETO];
(iii)
They have made a review in
accordance with standards
established by the American
Institute of Certified Public
Accountants of the unaudited
condensed consolidated statements of
income, consolidated balance sheets
and consolidated statements of cash
flows included in the Prospectus
and/or included in the Company's
quarterly report on Form 10-Q
incorporated by reference into the
Prospectus as indicated in their
reports thereon copies of which
[HAVE BEEN SEPARATELY FURNISHED TO
THE UNDERWRITER][ARE ATTACHED
HERETO]; and on the basis of
specified procedures including
inquiries of officials of the
Company who have responsibility for
financial and accounting matters
regarding whether the unaudited
condensed consolidated financial
statements referred to in paragraph
(vi)(A)(i) below comply as to form
in all material respects with the
applicable accounting requirements
of the [ACT AND THE EXCHANGE] Act
and the related pub-
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<PAGE> 33
lished rules and regulations,
nothing came to their attention that
caused them to believe that the
unaudited condensed consolidated
financial statements do not comply
as to form in all material respects
with the applicable accounting
requirements of the [ACT AND THE
EXCHANGE] Act and the related
published rules and regulations;
(iv)The unaudited
selected financial information with
respect to the consolidated results
of operations and financial
position of the Company for the
five most recent fiscal years
included in the Prospectus and
included or incorporated by
reference in Item 6 of the
Company's Annual Report on Form
10-K for the most recent fiscal
year agrees with the corresponding
amounts (after restatement where
applicable) in the audited
consolidated financial statements
for such five fiscal years which
were included or incorporated by
reference in the Company's Annual
Reports on Form 10-K for such
fiscal years;
(v) They have
compared the information in the
Prospectus under selected captions
with the disclosure requirements of
Regulation S-K and on the basis of
limited procedures specified in such
letter nothing came to their
attention as a result of the
foregoing procedures that caused
them to believe that this
information does not conform in all
material respects with the
disclosure requirements of Items
301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis
of limited procedures, not
constituting an examination in
accordance with generally accepted
auditing standards, consisting of a
reading of the unaudited financial
statements and other information
referred to below, a reading of the
latest available interim financial
statements of the Company and its
subsidiaries, inspection of the
minute books of the Company and its
subsidiaries since the date of the
latest audited financial statements
included or incorporated by
reference in the Prospectus,
inquiries of officials of the
Company and its subsidiaries
responsible for financial and
accounting matters and such other
inquiries and procedures as may be
specified in such letter, nothing
came to their attention that caused
them to believe that:
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<PAGE> 34
(A) (i) the
unaudited condensed consolidated
statements of income, consolidated
balance sheets and consolidated
statements of cash flows included in
the Prospectus and/or included or
incorporated by reference in the
Company's Quarterly Reports on Form
10-Q incorporated by reference in
the Prospectus do not comply as to
form in all material respects with
the applicable accounting
requirements of the Exchange Act as
it applies to Form 10-Q and the
related published rules and
regulations, or (ii) any material
modifications should be made to the
unaudited condensed consolidated
statements of income, consolidated
balance sheets and consolidated
statements of cash flows included in
the Prospectus or included in the
Company's Quarterly Reports on Form
10-Q incorporated by reference in
the Prospectus, for them to be
conformity with generally accepted
accounting principles;
(B) any other
unaudited income statement data and
balance sheet items included in the
Prospectus do not agree with the
corresponding items in the
unaudited consolidated financial
statements from which such data and
items were derived, and any such
unaudited data and items were not
determined on a basis substantially
consistent with the basis for the
corresponding amounts in the
audited consolidated financial
statements included or incorporated
by reference in the Company's
Annual Report on Form 10-K for the
most recent fiscal year;
(C) the unaudited
financial statements which were not
included in the Prospectus but from
which were derived the unaudited
condensed financial statements
referred to in Clause (A) and any
unaudited income statement data and
balance sheet items included in the
Prospectus and referred to in Clause
(B) were not determined on a basis
substantially consistent with the
basis for the audited financial
statements included or incorporated
by reference in the Company's Annual
Report on Form 10-K for the most
recent fiscal year;
(D) any unaudited
pro forma consolidated condensed
financial statements included or
incorporated by reference in the
Prospectus do not comply as to form
in all material respects with the
applicable accounting requirements
of the Act and the published rules
and regulations thereun-
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<PAGE> 35
der or the pro forma adjustments
have not been properly applied to
the historical amounts in the
compilation of those statements;
(E) as of a
specified date not more than five
days prior to the date of such
letter, there have been any changes
in the consolidated capital stock
(other than issuances of capital
stock upon exercise of options and
stock appreciation rights, upon
earn-outs of performance shares and
upon conversions of convertible
securities, in each case which were
outstanding on the date of the
latest balance sheet included or
incorporated by reference in the
Prospectus) or any increase in the
consolidated long-term debt of the
Company and its subsidiaries, or any
decreases in consolidated net
current assets or stockholders'
equity or other items specified by
the Underwriter, or any increases in
any items specified by the
Underwriter, in each case as
compared with amounts shown in the
latest balance sheet included or
incorporated by reference in the
Prospectus, except in each case for
changes, increases or decreases
which the Prospectus discloses have
occurred or may occur or which are
described in such letter; and
(F) for the period
from the date of the latest
financial statements included or
incorporated by reference in the
Prospectus to the specified date
referred to in Clause (E) there were
any decreases in consolidated net
revenues or operating profit or the
total or per share amounts of
consolidated net income or other
items specified by the Underwriter,
or any increases in any items
specified by the Underwriter, in
each case as compared with the
comparable period of the preceding
year and with any other period of
corresponding length specified by
the Underwriter, except in each case
for increases or decreases which the
Prospectus discloses have occurred
or may occur or which are described
in such letter; and
(vii) In addition to the examination
referred to in their report(s) included or incorporated by reference in
the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and (vi)
above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Underwriter which are derived
from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Underwriter
or in
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<PAGE> 36
documents incorporated by reference in the Prospectus specified by the
Underwriter, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
5
