<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
Commission File No. 0-21570 Commission File No. 333-32259
CHANCELLOR MEDIA CORPORATION CHANCELLOR MEDIA CORPORATION
OF LOS ANGELES
(Exact Name of Registrant (Exact Name of Registrant
as Specified in its Charter) as Specified in its Charter)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
75-2247099 75-2451687
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
433 EAST LAS COLINAS BOULEVARD, SUITE 1130, IRVING, TEXAS 75039
(Address of principal executive offices, including zip code)
(972) 869-9020
(Registrant's telephone number, including area code)
Indicate by check mark whether Chancellor Media Corporation and Chancellor Media
Corporation of Los Angeles (1) have filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Chancellor Media Corporation Yes X No
--- ---
Chancellor Media Corporation of Los Angeles Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of October 31, 1997,
59,635,539 shares of Common Stock of Chancellor Media Corporation were
outstanding and 1,040 shares of Common Stock of Chancellor Media Corporation of
Los Angeles were outstanding.
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INDEX
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PAGE NO.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHANCELLOR MEDIA CORPORATION
Consolidated Balance Sheets (unaudited)...................................... 2
Consolidated Statements of Operations (unaudited)............................ 4
Consolidated Statements of Cash Flows (unaudited)............................ 5
Notes to Consolidated Financial Statements (unaudited)....................... 6
CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
Consolidated Balance Sheets (unaudited)...................................... 13
Consolidated Statements of Operations (unaudited)............................ 15
Consolidated Statements of Cash Flows (unaudited)............................ 16
Notes to Consolidated Financial Statements (unaudited)....................... 17
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................................... 23
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................................ 29
Item 2. Changes in Securities and Use of Proceeds.................................... 30
Item 4. Submission of Matters to a Vote of Security Holders.......................... 31
Item 6. Exhibits and Reports on Form 8-K............................................. 33
</TABLE>
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PART I
ITEM 1 FINANCIAL STATEMENTS
CHANCELLOR MEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)
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DECEMBER 31, SEPTEMBER 30,
1996 1997
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ASSETS
Current assets:
Cash and cash equivalents $ 3,060 $ 15,982
Accounts receivable, net 85,159 186,309
Prepaid expenses and other assets 6,352 8,253
---------- ----------
Total current assets 94,571 210,544
Property and equipment, net 48,193 136,405
Intangible assets, net 853,643 3,828,014
Other assets 24,552 38,413
---------- ----------
$1,020,959 $4,213,376
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
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CHANCELLOR MEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, CONTINUED (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 26,366 $ 86,613
Current portion of long-term debt 26,500 --
Other current liabilities 284 126
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Total current liabilities 53,150 86,739
Long-term debt, excluding current portion 331,500 1,857,000
Deferred tax liability 86,098 421,408
Other liabilities 800 997
---------- ------------
Total liabilities 471,548 2,366,144
---------- ------------
Redeemable senior cumulative exchangeable preferred stock of subsidiary, par
value $.01 per share; 1,000,000 shares authorized, issued and outstanding
in 1997; liquidation preference of $119,445 -- 121,233
Redeemable cumulative exchangeable preferred stock of subsidiary, par value
$.01 per share; 3,600,000 shares authorized and 2,117,629 shares issued and
outstanding in 1997; liquidation preference of $211,763 -- 217,333
Convertible cumulative preferred stock, par value $.01 per share;
2,200,000 shares authorized, issued and outstanding in 1997; liquidation
preference of $110,000 -- 111,048
Stockholders' equity:
Preferred stock, 6,000,000 shares authorized; 5,990,000 shares of $3.00
convertible exchangeable preferred stock issued and outstanding in 1997 -- 299,500
Common stock, $.01 par value
Authorized 250,000,000 shares; issued and outstanding
39,038,848 shares in 1996 and 59,629,211 in 1997 390 596
Class B common stock, $.01 par value
Authorized 4,500,000 shares; issued and outstanding
3,116,066 shares in 1996 31 --
Paid-in capital 662,502 1,223,273
Accumulated deficit (113,512) (125,751)
---------- ------------
Total stockholders' equity 549,411 1,397,618
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$1,020,959 $ 4,213,376
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</TABLE>
See accompanying notes to consolidated financial statements.
3
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CHANCELLOR MEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1996 1997
--------- --------- --------- ---------
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Gross revenues $ 90,296 $ 166,817 $ 234,910 $ 382,994
Less agency commissions (11,528) (21,795) (29,780) (49,711)
--------- --------- --------- ---------
Net revenues 78,768 145,022 205,130 333,283
Station operating expenses excluding
depreciation and amortization 46,131 73,551 126,444 184,713
Depreciation and amortization 21,136 50,474 65,148 104,386
Corporate general and administrative 2,150 5,995 5,348 11,646
--------- --------- --------- ---------
Operating expenses 69,417 130,020 196,940 300,745
--------- --------- --------- ---------
Operating income 9,351 15,002 8,190 32,538
--------- --------- --------- ---------
Nonoperating income (expenses):
Interest expense, net (10,173) (22,295) (29,212) (45,036)
Gain on disposition of assets -- 5,057 -- 18,380
--------- --------- --------- ---------
Nonoperating expenses, net (10,173) (17,238) (29,212) (26,656)
Income (loss) before income taxes and
extraordinary item (822) (2,236) (21,022) 5,882
Income tax expense (benefit) (29) 985 (3,734) 5,244
Dividends on preferred stock
of subsidiary -- 2,779 -- 2,779
--------- --------- --------- ---------
Loss before extraordinary item (793) (6,000) (17,288) (2,141)
--------- --------- --------- ---------
Extraordinary item - loss on extinguishment
of debt, net of income tax benefit -- -- -- (4,350)
--------- --------- --------- ---------
Net loss (793) (6,000) (17,288) (6,491)
Preferred stock dividends 1,204 5,049 3,619 5,748
--------- --------- --------- ---------
Net loss attributable to common
Stockholders $ (1,997) $ (11,049) $ (20,907) $ (12,239)
========= ========= ========= =========
Loss per common share:
Before extraordinary item $ (0.07) $ (0.23) $ (0.74) $ (0.18)
Extraordinary item -- -- -- (0.10)
--------- --------- --------- ---------
Net loss $ (0.07) $ (0.23) $ (0.74) $ (0.28)
========= ========= ========= =========
Weighted average common shares outstanding
28,135 47,083 28,092 43,845
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
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CHANCELLOR MEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
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<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1997
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Cash flows from operating activities:
Net loss $ (17,288) $ (6,491)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 4,675 9,091
Amortization of goodwill, intangible
assets and other assets 60,473 95,295
Provisions for doubtful accounts 1,395 3,409
Deferred income tax expense (benefit) (3,734) 5,244
Gain on disposition of assets -- (18,380)
Dividends on preferred stock of subsidiary -- 2,779
Loss on extinguishment of debt -- 4,350
Changes in certain assets and liabilities
net of effects of acquisitions:
Accounts receivable (14,983) (15,171)
Prepaid expenses and other current assets (1,637) 4,481
Accounts payable and accrued expenses 1,446 8,445
Other assets (514) 54
Other liabilities (339) 197
----------- -----------
Net cash provided by operating activities 29,494 93,303
----------- -----------
Cash flows from investing activities:
Acquisitions, net of cash acquired (392,764) (2,083,701)
Escrow deposits on pending acquisitions (32,500) (10,005)
Proceeds from sale of assets 32,000 269,250
Capital expenditures (4,602) (6,436)
Other (5,777) (20,914)
----------- -----------
Net cash used by investing activities (403,643) (1,851,806)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 398,250 2,105,000
Principal payments on long-term debt (15,750) (606,000)
Payments on other liabilities (417) (158)
Proceeds from issuance of common stock and preferred stock 687 288,898
Dividend payments on preferred stock (3,619) (5,748)
Payments for debt issuance costs (3,924) (10,567)
----------- -----------
Net cash provided by financing activities 375,227 1,771,425
----------- -----------
Increase in cash and cash equivalents 1,078 12,922
Cash and cash equivalents at beginning of period 3,430 3,060
----------- -----------
Cash and cash equivalents at end of period $ 4,508 $ 15,982
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
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CHANCELLOR MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim financial
statements contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position, results of operations and
cash flows of Chancellor Media Corporation (formerly known as Evergreen Media
Corporation ("Evergreen")) and its subsidiaries (collectively, "Chancellor
Media") for the periods presented.
Interim periods are not necessarily indicative of results to be expected for
the year. It is suggested that these financial statements be read in conjunction
with the consolidated financial statements and the notes thereto included in
Evergreen's Annual Report on Form 10-K for the year ended December 31, 1996.
The consolidated financial statements include the accounts of Chancellor
Media and its subsidiaries, all of which are wholly-owned. All significant
intercompany balances and transactions have been eliminated in consolidation.
On August 8, 1996, Evergreen declared a three-for-two stock split effected
in the form of a stock dividend payable on August 26, 1996 to shareholders of
record at the close of business on August 19, 1996. All share and per share data
(other than authorized share data) contained in the accompanying financial
statements have been retroactively adjusted to give effect to the stock
dividend.
Loss per common share is based on the weighted average number of common
shares outstanding during the periods after giving retroactive effect to the
stock split. Stock options are not included in the calculation as their effect
would be antidilutive.
2. ACQUISITIONS AND DISPOSITIONS
1996 COMPLETED TRANSACTIONS
On January 17, 1996, Evergreen acquired Pyramid Communications, Inc.
("Pyramid"), a radio broadcasting company with nine FM and three AM radio
stations in five radio markets (Chicago, Philadelphia, Boston, Charlotte and
Buffalo) (the "Pyramid Acquisition"). The Pyramid Acquisition was effected
through the merger of a wholly-owned subsidiary of Evergreen with and into
Pyramid, with Pyramid surviving the merger as a wholly-owned subsidiary of
Evergreen. The total purchase price, including closing costs, allocated to net
assets acquired was approximately $316,343 in cash.
On May 3, 1996, Evergreen acquired WKLB-FM in Boston from Fairbanks
Communications for $34,000 in cash plus various other direct acquisition costs.
On November 26, 1996, Evergreen exchanged WKLB-FM in Boston (now known as
WROR-FM) for WGAY-FM in Washington, D.C. Evergreen had previously been operating
WGAY-FM under a time brokerage agreement and selling substantially all of the
broadcast time of WKLB-FM under a time brokerage agreement, in each case since
June 17, 1996, pending completion of the exchange.
On July 19, 1996, Evergreen sold WHTT-FM and WHTT-AM in Buffalo to Mercury
Radio for $19,500 in cash, and on August 1, 1996, Evergreen sold WSJZ-FM in
Buffalo to American Radio Systems for $12,500 in cash (collectively, the
"Buffalo Stations"). The assets of the Buffalo Stations were classified as
assets held for sale in the Pyramid Acquisition and no gain or loss was
recognized by Evergreen upon consummation of the sales. Evergreen had previously
entered into time brokerage agreements (effective April 15, 1996 for WSJZ-FM and
April 25, 1996 for WHTT-FM and WHTT-AM) to sell substantially all of the
broadcast time of these stations pending completion of the sales.
On August 14, 1996, Evergreen acquired KYLD-FM in San Francisco from
Crescent Communications for $44,000 in cash plus various other direct
acquisition costs. Evergreen had previously been operating KYLD-FM under a time
brokerage agreement since May 1, 1996.
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On October 18, 1996, Evergreen acquired WEDR-FM in Miami from affiliates of
the Rivers Group for $65,000 in cash plus various other direct acquisition
costs.
1997 COMPLETED TRANSACTIONS
On January 31, 1997, Evergreen acquired WWWW-FM and WDFN-AM in Detroit from
affiliates of Chancellor Broadcasting Company ("Chancellor") for $30,000 in cash
plus various other direct acquisition costs. Evergreen had previously provided
certain sales and promotional functions to WWWW-FM and WDFN-AM under a joint
sales agreement since February 14, 1996 and subsequently operated the stations
under a time brokerage agreement since April 1, 1996.
On January 31, 1997, Evergreen acquired KKSF-FM and KDFC-FM/AM in San
Francisco from affiliates of the Brown Organization for $115,000 in cash plus
various other direct acquisition costs. Evergreen had previously been operating
KKSF-FM and KDFC-FM/AM under a time brokerage agreement since November 1, 1996.
On July 21, 1997, Evergreen sold KDFC-FM to Bonneville International Corporation
("Bonneville") for $50,000 in cash. The assets of KDFC-FM were classified as
assets held for sale in connection with the purchase price allocation of the
acquisition of KKSF-FM/KDFC-FM/AM and no gain or loss was recognized by
Evergreen upon consummation of the sale.
On April 1, 1997, Evergreen acquired WJLB-FM and WMXD-FM in Detroit from
Secret Communications, L.P. ("Secret") for $168,000 in cash plus various other
direct acquisition costs. Evergreen had previously been operating WJLB-FM and
WMXD-FM under time brokerage agreements since September 1, 1996.
On April 3, 1997, Evergreen exchanged WQRS-FM in Detroit (which Evergreen
acquired on April 3, 1997 from Secret for $32,000 in cash plus various other
direct acquisition costs), to affiliates of Greater Media Radio, Inc. in return
for WWRC-AM in Washington, D.C. and $9,500 in cash. The net purchase price to
Evergreen of WWRC-AM was therefore $22,500. Evergreen had previously been
operating WWRC-AM under a time brokerage agreement since June 17, 1996.
On May 1, 1997, Evergreen acquired WDAS-FM/AM in Philadelphia from
affiliates of Beasley FM Acquisition Corporation for $103,000 in cash plus
various other direct acquisition costs.
On May 15, 1997, Evergreen exchanged five of its six stations in Charlotte,
North Carolina (WPEG-FM, WBAV-FM/AM, WRFX-FM and WFNZ-AM) for two FM stations in
Philadelphia (WIOQ-FM and WUSL-FM) owned by EZ Communications, Inc. ("EZ") in
Philadelphia, and also sold Evergreen's sixth radio station in Charlotte,
WNKS-FM, to EZ for $10,000 in cash and recognized a gain of $3,500.
On May 30, 1997, Evergreen acquired WPNT-FM in Chicago from affiliates of
Century Broadcasting Company for $75,750 in cash (including $2,000 for the
purchase of the station's accounts receivable) plus various other direct
acquisition costs. On June 19, 1997, Evergreen sold WPNT-FM in Chicago to
Bonneville for $75,000 in cash and recognized a gain of $500.
On June 3, 1997, Evergreen sold WEJM-FM in Chicago to affiliates of Crawford
Broadcasting for $14,750 in cash and recognized a gain of $9,257.
On July 2, 1997, Evergreen acquired WLTW-FM and WAXQ-FM in New York and
WMZQ-FM, WJZW-FM, WZHF-AM and WBZS-AM in Washington, D.C. from Viacom
International, Inc. ("Viacom") for approximately $612,388 in cash including
various other direct acquisition costs (the "Viacom Acquisition"). The Viacom
Acquisition was financed with (i) bank borrowings under the Senior Credit
Facility of $552,559; (ii) $53,750 in escrow funds paid by Evergreen on February
19, 1997 and (iii) $6,079 financed through working capital. In June 1997,
Evergreen issued 5,990,000 shares of $3.00 Convertible Exchangeable Preferred
Stock for net proceeds of $287,808 which were used to repay borrowings under the
Senior Credit Facility and subsequently were reborrowed on July 2, 1997 as part
of the financing of the Viacom Acquisition. On July 7, 1997, Evergreen sold
WJZW-FM in Washington, D.C. to affiliates of Capital Cities/ABC Radio for
$68,000 in cash. The assets of WJZW-FM, as well as
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the assets of WZHF-AM and WBZS-AM, which were also sold on August 13, 1997, were
accounted for as assets held for sale in connection with the purchase price
allocation of the Viacom Acquisition and no gain or loss was recognized by
Evergreen upon consummation of the sales.
On July 7, 1997, Evergreen sold the FCC authorizations and certain
transmission equipment previously used in the operation of KYLD-FM in San
Francisco to Susquehanna Radio Corporation ("Susquehanna") for $44,000 in cash
and recognized a gain of $1,726. Simultaneously therewith, Chancellor Radio
Broadcasting Company, a direct operating subsidiary of Chancellor ("CRBC"), sold
the call letters "KSAN-FM" (which CRBC previously used in San Francisco) to
Susquehanna. On July 7, 1997, Evergreen and CRBC entered into a time brokerage
agreement to enable Evergreen to operate KYLD-FM on the frequency previously
assigned to KSAN-FM, which has an improved broadcast signal in the San Francisco
market, and on July 7, 1997, CRBC changed the call letters of KSAN-FM to
KYLD-FM. Upon the consummation of the Chancellor Merger, Chancellor Media
changed the format of the new KYLD-FM to the format previously operated on the
old KYLD-FM.
On July 14, 1997, Evergreen completed the disposition of WLUP-FM in Chicago
to Bonneville for net proceeds of $80,000 which were held by a qualified
intermediary pending the completion of the deferred exchange of WLUP-FM for
KZPS-FM and KDGE-FM in Dallas. On October 7, 1997, Chancellor Media applied the
net proceeds from the disposition of WLUP-FM of $80,000 in cash, plus an
additional $3,500 and various other direct acquisition costs, in a deferred
exchange of WLUP-FM for KZPS-FM and KDGE-FM in Dallas. On June 29, 1997,
Evergreen paid $8,350 in escrow funds which have been classified as other assets
at September 30, 1997. Evergreen had previously operated KZPS-FM and KDGE-FM
under time brokerage agreements effective August 1, 1997.
On July 21, 1997, Evergreen entered into a time brokerage agreement with
CRBC whereby Evergreen began managing certain limited functions of CRBC'S
stations KBGG-FM, KNEW-AM and KABL-FM in San Francisco.
On August 13, 1997, Evergreen sold WBZS-AM and WZHF-AM in Washington, D.C.
(acquired as part of the Viacom Acquisition) and KDFC-AM in San Francisco to
affiliates of Douglas Broadcasting ("Douglas") for $18,000 in the form of a
promissory note which have been classified as other assets at September 30,
1997. The promissory note bears interest at 7 3/4%, with a balloon principal
payment due four years after closing. At closing, Douglas posted a $1,000 letter
of credit for the benefit of Evergreen that will remain outstanding until all
amounts due under the promissory note are paid.
On August 27, 1997, Evergreen sold WEJM-AM in Chicago to Douglas for $7,500
in cash and recognized a gain of $3,331.
On September 5, 1997, pursuant to an Amended and Restated Agreement and Plan
of Merger, dated as of February 19, 1997 and amended and restated on July 31,
1997 (the "Chancellor Merger Agreement"), among Chancellor, CRBC, Evergreen,
Evergreen Mezzanine Holdings Corporation ("EMHC") and Evergreen Media
Corporation of Los Angeles ("EMCLA"), (i) Chancellor was merged (the "Parent
Merger") with and into EMHC, a direct, wholly-owned subsidiary of Evergreen,
with EMHC remaining as the surviving corporation and (ii) CRBC was merged (the
"Subsidiary Merger") with and into EMCLA, a direct, wholly-owned subsidiary of
EMHC, with EMCLA remaining as the surviving corporation. Upon consummation of
the Parent Merger, Evergreen was renamed Chancellor Media Corporation and EMHC
was renamed Chancellor Mezzanine Holdings Corporation ("CMHC"). Upon
consummation of the Subsidiary Merger, EMCLA was renamed Chancellor Media
Corporation of Los Angeles ("CMCLA"). Consummation of the Chancellor Merger
added 52 radio stations (36 FM and 16 AM) to Evergreen's portfolio of stations,
including 13 stations in markets in which Evergreen previously operated. The
total purchase price allocated to net assets acquired was approximately
$1,998,383 which included (i) the conversion of each outstanding share of
Chancellor Class A and Class B Common Stock into 0.9091 shares of Chancellor
Media Common Stock, resulting in the issuance of 17,308,730 shares of Chancellor
Media Common Stock at a fair value of $31.00 per share, (ii) the assumption of
Chancellor's and CRBC's long-term debt of $949,000, (iii) the issuance of
2,117,629 shares of CMCLA's 12% Exchangeable Preferred Stock in exchange for
CRBC's substantially identical securities with a fair value of $215,570, (iv)
the issuance of 1,000,000 shares of CMCLA's 12 1/4% Series A Senior Cumulative
Exchangeable Preferred Stock in exchange for CRBC's substantially identical
securities with a fair value of $120,217, (v) the issuance of 2,200,000 shares
of Chancellor Media's 7% Convertible Preferred Stock in exchange for
Chancellor's substantially identical securities with a fair value of
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$111,048, (vi) the assumption of stock options issued to Chancellor stock
option holders with a fair value of $34,977 and (vii) estimated acquisition
costs of $31,000.
On October 28, 1997, Chancellor Media acquired Katz Media Group, Inc.
("KMG"), a full-service media representation firm, in a tender offer transaction
for a total purchase price of approximately $379,223 ("the Katz Acquisition")
which included (i) the conversion of each outstanding share of KMG Common Stock
into the right to receive $11.00 in cash, resulting in total cash payments of
$149,601, (ii) the assumption of long-term debt of KMG and its subsidiaries of
$222,122 and (iii) estimated acquisition costs of $7,500.
PENDING TRANSACTIONS
On April 4, 1997, Evergreen entered into agreements with Pacific and
Southern Company, Inc., a subsidiary of Gannett Co., Inc. ("P&S"), pursuant to
which Evergreen will acquire WGCI-AM and WGCI-FM in Chicago for $140,000,
KKBQ-AM and KKBQ-FM in Houston for $110,000 and KHKS-FM in Dallas for $90,000,
for an aggregate purchase price of $340,000 in cash (the "Gannett Acquisition").
The aggregate purchase price is subject to an upward adjustment of up to $10,000
depending on the timing of the closings. On April 10, 1997, Evergreen issued
letters of credit for the benefit of P&S in the aggregate amount of $34,000 to
secure Evergreen's obligations under the Gannett Agreements. Although there can
be no assurances, Chancellor Media expects that the Gannett Acquisition will be
completed in the fourth quarter of 1997.
On July 30, 1997, CRBC entered into an agreement to acquire KXPK-FM in
Denver from Ever Green Wireless LLC (which is unrelated to Chancellor Media) for
$26,000 in cash (including $1,655 paid by CRBC in escrow on July 30, 1997 and
classified as other assets at September 30, 1997) (the "Denver Acquisition").
CRBC also entered into an agreement to operate KXPK-FM under a time brokerage
agreement effective as of September 1, 1997. Although there can be no
assurances, Chancellor Media expects that the Denver Acquisition will be
completed in the first quarter of 1998.
On July 1, 1996, CRBC entered into an agreement with SFX Broadcasting, Inc.
("SFX"), pursuant to which CRBC agreed to exchange WAPE-FM and WFYV-FM in
Jacksonville and $11,000 in cash to SFX in return for WBAB-FM, WBLI-FM, WHFM-FM
and WGBB-AM in Nassau/Suffolk (Long Island) (the "SFX Exchange"). CRBC has been
operating WBAB-FM, WBLI-FM, WHFM-FM and WGBB-FM pursuant to time brokerage
agreements each effective July 1, 1996 and SFX has been operating WAPE-FM and
WFYV-FM pursuant to time brokerage agreements each effective July 1, 1996. On
November 6, 1997, the United States Department of Justice (the "DOJ") filed suit
against Chancellor Media seeking to enjoin, under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), Chancellor
Media's acquisition of the four Long Island properties from SFX. Chancellor
Media is unable to predict whether or when it will consummate the SFX Exchange.
On August 6, 1997, Evergreen and Chancellor announced that they had paid
$3,000 to Bonneville for an option to exchange Evergreen's station WTOP-AM in
Washington and Chancellor's stations KZLA-FM in Los Angeles and WGMS-FM in
Washington and $57,000 in cash for Bonneville's stations WNSR-FM in New York,
KLDE-FM in Houston and KBIG-FM in Los Angeles (the "Bonneville Option"). The
Bonneville Option was exercised on October 1, 1997, and definitive exchange
documentation is presently being negotiated. Chancellor Media has entered into
time brokerage agreements to operate KLDE-FM and KBIG-FM effective October 1,
1997 and WNSR-FM effective October 10, 1997 and has entered into time brokerage
agreements to sell substantially all of the broadcast time of WTOP-AM, KZLA-FM
and WGMS-FM effective October 1, 1997. Although there can be no assurances,
Chancellor Media expects that the Bonneville Option will be completed in the
fourth quarter of 1997 or the first quarter of 1998.
Consummation of each of the transactions discussed above is subject to
various conditions, including approval from the Federal Communications
Commission (the "FCC") and the expiration or early termination of any waiting
period required under the HSR Act. Chancellor Media believes that such
conditions will be satisfied in the ordinary course, but there can be no
assurance that this will be the case.
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Escrow funds of $10,005 paid by Chancellor Media in connection with the
acquisition of KZPS-FM and KDGE-FM in Dallas and the pending acquisition of
KXPK-FM in Denver have been classified as other assets in the accompanying
balance sheet at September 30, 1997.
SUMMARY OF NET ASSETS ACQUIRED
The Pyramid Acquisition, the Viacom Acquisition, the Chancellor Merger and
the acquisitions of WKLB-FM, KYLD-FM, WEDR-FM, WWWW-FM, WDFN-FM, KKSF-FM,
KDFC-FM/AM, WJLB-FM, WMXD-FM, WWRC-AM, WDAS-FM/AM and WPNT-FM discussed above
were accounted for as purchases. Accordingly, the accompanying consolidated
financial statements include the results of operations of the acquired entities
from the dates of acquisition.
A summary of the net assets acquired follows:
<TABLE>
<CAPTION>
NINE
YEAR ENDED MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
----------------------------
<S> <C> <C>
Working capital, including cash of $1,011 in 1996 and $5,927 in 1997 $ 11,218 $ 56,287
Property and equipment 11,519 92,503
Assets held for sale 32,000 131,000
Intangible assets 465,824 3,177,630
Deferred tax liability (61,218) (332,409)
----------- -----------
$ 459,343 $ 3,125,011
=========== ===========
</TABLE>
The pro forma consolidated condensed results of operations data for the nine
months ended September 30, 1997 and 1996, as if the 1996 Completed Transactions
and the 1997 Completed Transactions discussed above occurred at January 1,
1996, follow:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1997
----------- -----------
<S> <C> <C>
Net revenues $ 481,580 $ 571,782
Operating income (loss) (49,207) 12,495
Net loss (162,085) (112,286)
Net loss per common share $ (2.72) $ (1.88)
</TABLE>
The pro forma results are not necessarily indicative of what would have occurred
if the acquisitions had been in effect for the entire periods presented.
3. LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1996 and September
30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
----------- -----------
<S> <C> <C>
Senior Credit Facility $ 348,000 $ 1,457,000
11.59% Senior Secured Notes due 1999 10,000 --
9 3/8% Senior Subordinated Notes due 2004 -- 200,000
8 3/4% Senior Subordinated Notes due 2007 -- 200,000
----------- -----------
Total long-term debt 358,000 1,857,000
Less current portion 26,500 --
----------- -----------
$ 331,500 $ 1,857,000
</TABLE>
10
<PAGE> 12
Senior Credit Facility
On April 25, 1997, Evergreen entered into the Senior Credit Facility which
amended and restated its prior senior credit facility. Under the amended and
restated agreement, as amended on June 26, 1997, August 7, 1997 and October 28,
1997, Evergreen established a $1,250,000 revolving facility (the "Revolving Loan
Facility") and a $500,000 term loan facility (the "Term Loan Facility"). Upon
consummation of the Chancellor Merger, the aggregate commitments under the
Revolving Loan Facility and the Term Loan Facility were increased to $1,600,000
and $900,000, respectively. In connection with the amendment and restatement of
the Senior Credit Facility, Evergreen wrote off the unamortized balance of
deferred debt issuance costs of $4,350 (net of a tax benefit of $2,343) as an
extraordinary charge.
Borrowings under the Senior Credit Facility bear interest at a rate based,
at the option of Chancellor Media, on the participating banks' prime rate or
Eurodollar rate, plus an incremental rate. Without giving effect to the interest
rate swap and cap agreements described below, the interest rate on the $900,000
outstanding under the Term Loan at September 30, 1997 was 6.09%, based on
Eurodollar rates, and the interest rate on advances of $548,000 and $9,000
outstanding under the Revolving Loan Facility were 6.09% and 8.50%,
respectively, at September 30, 1997, based on the Eurodollar and prime rates,
respectively. Chancellor Media pays fees of 1/4% per annum on the aggregate
unused portion of the loan commitment, in addition to an annual agent's fee.
Pursuant to the Senior Credit Facility, Chancellor Media is required to enter
into interest hedging agreements that result in the fixing or placing a cap on
Chancellor Media's floating rate debt so that not less than 50% of the principal
amount of total debt outstanding has a fixed or capped rate.
The capital stock of Chancellor Media's subsidiaries is pledged to
secure the performance of Chancellor Media's obligations under the
Senior Credit Facility, and each of Chancellor Media's subsidiaries have
guaranteed those obligations. At October 31, 1997, Chancellor Media had drawn
$900,000 of the Term Loan Facility and $809,000 of the Revolving Loan Facility.
Required principal repayments of amounts outstanding under the Term Loan
Facility and commitment reductions under the Revolving Loan Facility commence on
September 30, 2000. Chancellor Media's ability to make additional borrowings
under the Senior Credit Facility is subject to compliance with certain financial
ratios and other conditions set forth in the Senior Credit Facility.
Senior Subordinated Notes
Upon consummation of the Chancellor Merger, Chancellor Media assumed all of
the obligations under CRBC's $200,000 aggregate principal amount 9 3/8% Senior
Subordinated Notes due 2004 (the "9 3/8% Notes") and the indenture governing
such securities, and Chancellor Media assumed all of the obligations under
CRBC's $200,000 aggregate principal amount 8 3/4% Senior Subordinated Notes due
2007 (the "8 3/4% Notes") and the indenture governing such securities. The
9 3/8% Notes and the 8 3/4% Notes are unsecured obligations of Chancellor
Media, subordinated in right of payment to all existing and any future senior
indebtedness of Chancellor Media. The notes are fully and unconditionally
guaranteed, on a joint and several basis, by certain wholly-owned subsidiaries
of Chancellor Media (the "Subsidiary Guarantors"). Except for certain
inconsequential subsidiaries, the Subsidiary Guarantors comprise all of
Chancellor Media's direct and indirect subsidiaries.
Other
On October 28, 1997, Chancellor Media borrowed approximately $155,000 under
the Senior Credit Facility to finance the Katz Acquisition. Additionally,
Chancellor Media refinanced outstanding borrowings under the credit facility of
Katz Media Corporation, a subsidiary of KMG ("KMC"), of $122,000 with borrowings
under the Senior Credit Facility, and assumed the obligations under the $100,000
aggregate principal amount of 10 1/2% Senior Subordinated Notes due 2007 of KMC,
(the "10 1/2% Notes") and the amended and restated indenture governing such
securities. The 10 1/2% Notes are unsecured obligations of Chancellor Media,
subordinated in right of payment to all existing and any future senior
indebtedness of Chancellor Media. The 10 1/2% Notes are fully and
unconditionally guaranteed, on a joint and several basis, by the Subsidiary
Guarantors.
11
<PAGE> 13
4. CONTINGENCIES
Chancellor Media is involved in several lawsuits that are incidental to its
business. A discussion of certain of these lawsuits is contained in Part II,
Item 1, "Legal Proceedings", of this Form 10-Q. Chancellor Media believes that
the ultimate resolution of the lawsuits will not have a material effect on its
financial position or results of operations.
12
<PAGE> 14
CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,060 $ 15,982
Accounts receivable, net 85,159 186,309
Prepaid expenses and other assets 6,352 8,253
---------- ----------
Total current assets 94,571 210,544
Property and equipment, net 48,193 136,405
Intangible assets, net 853,643 3,828,014
Other assets 24,552 38,413
---------- ----------
$1,020,959 $4,213,376
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
13
<PAGE> 15
CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
CONSOLIDATED BALANCE SHEETS, CONTINUED (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
----------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 26,366 $ 86,613
Current portion of long-term debt 26,500 --
Other current liabilities 284 126
----------- -----------
Total current liabilities 53,150 86,739
Long-term debt, excluding current portion 331,500 1,857,000
Deferred tax liability 86,098 421,408
Other liabilities 800 997
----------- -----------
Total liabilities 471,548 2,366,144
----------- -----------
Redeemable senior cumulative exchangeable preferred stock, par value $.01 per
share; 1,000,000 shares authorized, issued and outstanding
in 1997; liquidation preference of $119,445 -- 121,233
Redeemable cumulative exchangeable preferred stock, par value
$.01 per share; 3,600,000 shares authorized and 2,117,629 shares issued and
outstanding in 1997; liquidation preference of $211,763 -- 217,333
Stockholder's equity:
Common stock, $.01 par value
Authorized 1,000 shares; issued and outstanding
1,000 shares in 1996 and 1997 1 1
Paid-in capital 662,922 1,628,668
Accumulated deficit (113,512) (120,003)
----------- -----------
Total stockholder's equity 549,411 1,508,666
----------- -----------
$ 1,020,959 $ 4,213,376
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
14
<PAGE> 16
CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1996 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Gross revenues $ 90,296 $ 166,817 $ 234,910 $ 382,994
Less agency commissions (11,528) (21,795) (29,780) (49,711)
--------- --------- --------- ---------
Net revenues 78,768 145,022 205,130 333,283
Station operating expenses excluding
depreciation and amortization 46,131 73,551 126,444 184,713
Depreciation and amortization 21,136 50,474 65,148 104,386
Corporate general and administrative 2,150 5,995 5,348 11,646
--------- --------- --------- ---------
Operating expenses 69,417 130,020 196,940 300,745
--------- --------- --------- ---------
Operating income 9,351 15,002 8,190 32,538
--------- --------- --------- ---------
Nonoperating income (expenses):
Interest expense, net (10,173) (22,295) (29,212) (45,036)
Gain on disposition of assets -- 5,057 -- 18,380
--------- --------- --------- ---------
Nonoperating expenses, net (10,173) (17,238) (29,212) (26,656)
Income (loss) before income taxes and
extraordinary item (822) (2,236) (21,022) 5,882
Income tax expense (benefit) (29) 985 (3,734) 5,244
--------- --------- --------- ---------
Loss before extraordinary item (793) (3,221) (17,288) 638
--------- --------- --------- ---------
Extraordinary item - loss on extinguishment of
debt, net of income tax benefit -- -- -- (4,350)
--------- --------- --------- ---------
Net loss (793) (3,221) (17,288) (3,712)
Preferred stock dividends -- 2,779 -- 2,779
--------- --------- --------- ---------
Net loss attributable to common stock (793) (6,000) (17,288) (6,491)
--------- --------- --------- ---------
</TABLE>
See accompanying notes to consolidated financial statement.
15
<PAGE> 17
CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (17,288) $ (3,712)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 4,675 9,091
Amortization of goodwill, intangible
assets and other assets 60,473 95,295
Provisions for doubtful accounts 1,395 3,409
Deferred income tax expense (benefit) (3,734) 5,244
Gain on disposition of assets -- (18,380)
Loss on extinguishment of debt -- 4,350
Changes in certain assets and liabilities
net of effects of acquisitions:
Accounts receivable (14,983) (15,171)
Prepaid expenses and other current assets (1,637) 4,481
Accounts payable and accrued expenses 1,446 8,445
Other assets (514) 54
Other liabilities (339) 197
----------- -----------
Net cash provided by operating activities 29,494 93,303
----------- -----------
Cash flows from investing activities:
Acquisitions, net of cash acquired (392,764) (2,083,701)
Escrow deposits on pending acquisitions (32,500) (10,005)
Proceeds from sale of assets 32,000 269,250
Capital expenditures (4,602) (6,436)
Other (5,777) (20,914)
----------- -----------
Net cash used by investing activities (403,643) (1,851,806)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 398,250 2,105,000
Principal payments on long-term debt (15,750) (606,000)
Payments on other liabilities (417) (158)
Cash contributed by parent 687 288,898
Dividend to parent (3,619) (5,748)
Payments for debt issuance costs (3,924) (10,567)
----------- -----------
Net cash provided by financing activities 375,227 1,771,425
----------- -----------
Increase in cash and cash equivalents 1,078 12,922
Cash and cash equivalents at beginning of period 3,430 3,060
----------- -----------
Cash and cash equivalents at end of period $ 4,508 $ 15,982
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
16
<PAGE> 18
CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim financial
statements contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position, results of operations and
cash flows of Chancellor Media Corporation of Los Angeles (formerly known as
Evergreen Media Corporation of Los Angeles ("EMCLA")) and subsidiaries
(collectively, "CMCLA") for the periods presented. Chancellor Media Corporation
of Los Angeles is an indirect, wholly owned subsidiary of Chancellor Media
Corporation ("Chancellor Media").
Interim periods are not necessarily indicative of results to be expected for
the year. It is suggested that these financial statements be read in conjunction
with the consolidated financial statements and the notes thereto included in
Evergreen's Annual Report on Form 10-K for the year ended December 31, 1996.
The consolidated financial statements include the accounts of CMCLA and its
subsidiaries, all of which are wholly-owned. All significant intercompany
balances and transactions have been eliminated in consolidation.
2. ACQUISITIONS AND DISPOSITIONS
1996 COMPLETED TRANSACTIONS
On January 17, 1996, EMCLA acquired Pyramid Communications, Inc.
("Pyramid"), a radio broadcasting company with nine FM and three AM radio
stations in five radio markets (Chicago, Philadelphia, Boston, Charlotte and
Buffalo) (the "Pyramid Acquisition"). The Pyramid Acquisition was effected
through the merger of a wholly-owned subsidiary of EMCLA with and into Pyramid,
with Pyramid surviving the merger as a wholly-owned subsidiary of EMCLA. The
total purchase price, including closing costs, allocated to net assets acquired
was approximately $316,343 in cash.
On May 3, 1996, EMCLA acquired WKLB-FM in Boston from Fairbanks
Communications for $34,000 in cash plus various other direct acquisition costs.
On November 26, 1996, EMCLA exchanged WKLB-FM in Boston (now known as WROR-FM)
for WGAY-FM in Washington, D.C. EMCLA had previously been operating WGAY-FM
under a time brokerage agreement and selling substantially all of the broadcast
time of WKLB-FM under a time brokerage agreement, in each case since June 17,
1996, pending completion of the exchange.
On July 19, 1996, EMCLA sold WHTT-FM and WHTT-AM in Buffalo to Mercury Radio
for $19,500 in cash, and on August 1, 1996, EMCLA sold WSJZ-FM in Buffalo to
American Radio Systems for $12,500 in cash (collectively, the "Buffalo
Stations"). The assets of the Buffalo Stations were classified as assets held
for sale in the Pyramid Acquisition and no gain or loss was recognized by EMCLA
upon consummation of the sales. EMCLA had previously entered into time brokerage
agreements (effective April 15, 1996 for WSJZ-FM and April 25, 1996 for WHTT-FM
and WHTT-AM) to sell substantially all of the broadcast time of these stations
pending completion of the sales.
On August 14, 1996, EMCLA acquired KYLD-FM in San Francisco from Crescent
Communications for $44,000 in cash plus various other direct acquisition costs.
EMCLA had previously been operating KYLD-FM under a time brokerage agreement
since May 1, 1996.
On October 18, 1996, EMCLA acquired WEDR-FM in Miami from affiliates of the
Rivers Group for $65,000 in cash plus various other direct acquisition costs.
17
<PAGE> 19
1997 COMPLETED TRANSACTIONS
On January 31, 1997, EMCLA acquired WWWW-FM and WDFN-AM in Detroit from
affiliates of Chancellor Broadcasting Company ("Chancellor") for $30,000 in cash
plus various other direct acquisition costs. EMCLA had previously provided
certain sales and promotional functions to WWWW-FM and WDFN-AM under a joint
sales agreement since February 14, 1996 and subsequently operated the stations
under a time brokerage agreement since April 1, 1996.
On January 31, 1997, EMCLA acquired KKSF-FM and KDFC-FM/AM in San Francisco
from affiliates of the Brown Organization for $115,000 in cash plus various
other direct acquisition costs. EMCLA had previously been operating KKSF-FM and
KDFC-FM/AM under a time brokerage agreement since November 1, 1996. On July 21,
1997, EMCLA sold KDFC-FM to Bonneville International Corporation ("Bonneville")
for $50,000 in cash. The assets of KDFC-FM were classified as assets held for
sale in connection with the purchase price allocation of the acquisition of
KKSF-FM/KDFC-FM/AM and no gain or loss was recognized by EMCLA upon consummation
of the sale.
On April 1, 1997, EMCLA acquired WJLB-FM and WMXD-FM in Detroit from Secret
Communications, L.P. ("Secret") for $168,000 in cash plus various other direct
acquisition costs. EMCLA had previously been operating WJLB-FM and WMXD-FM under
time brokerage agreements since September 1, 1996.
On April 3, 1997, EMCLA exchanged WQRS-FM in Detroit (which EMCLA acquired
on April 3, 1997 from Secret for $32,000 in cash plus various other direct
acquisition costs), to affiliates of Greater Media Radio, Inc. in return for
WWRC-AM in Washington, D.C. and $9,500 in cash. The net purchase price to EMCLA
of WWRC-AM was therefore $22,500. EMCLA had previously been operating WWRC-AM
under a time brokerage agreement since June 17, 1996.
On May 1, 1997, EMCLA acquired WDAS-FM/AM in Philadelphia from affiliates of
Beasley FM Acquisition Corporation for $103,000 in cash plus various other
direct acquisition costs.
On May 15, 1997, EMCLA exchanged five of its six stations in Charlotte,
North Carolina (WPEG-FM, WBAV-FM/AM, WRFX-FM and WFNZ-AM) for two FM stations in
Philadelphia (WIOQ-FM and WUSL-FM) owned by EZ Communications, Inc. ("EZ") in
Philadelphia, and also sold EMCLA's sixth radio station in Charlotte, WNKS-FM,
to EZ for $10,000 in cash and recognized a gain of $3,500.
On May 30, 1997, EMCLA acquired WPNT-FM in Chicago from affiliates of
Century Broadcasting Company for $75,750 in cash (including $2,000 for the
purchase of the station's accounts receivable) plus various other direct
acquisition costs. On June 19, 1997, EMCLA sold WPNT-FM in Chicago to Bonneville
for $75,000 in cash and recognized a gain of $500.
On June 3, 1997, EMCLA sold in Chicago to affiliates of Crawford
Broadcasting for $14,750 in cash and recognized a gain of $9,257.
On July 2, 1997, EMCLA acquired WLTW-FM and WAXQ-FM in New York and WMZQ-FM,
WJZW-FM, WZHF-AM and WBZS-AM in Washington, D.C. from Viacom International, Inc.
("Viacom") for approximately $612,388 in cash including various other direct
acquisition costs (the "Viacom Acquisition"). The Viacom Acquisition was
financed with (i) bank borrowings under the Senior Credit Facility of $552,559;
(ii) $53,750 in escrow funds paid by EMCLA on February 19, 1997 and (iii) $6,079
financed through working capital. In June 1997, Evergreen issued 5,990,000
shares of $3.00 Convertible Exchangeable Preferred Stock for net proceeds of
$287,800 which were contributed to EMCLA and used to repay borrowings under the
Senior Credit Facility and subsequently were reborrowed on July 2, 1997 as part
of the financing of the Viacom Acquisition. On July 7, 1997, EMCLA sold WJZW-FM
in Washington, D.C. to affiliates of Capital Cities/ABC Radio for $68,000 in
cash. The assets of WJZW-FM, as well as the assets of WZHF-AM and WBZS-AM, which
were also sold on August 13, 1997, were accounted for as assets held for sale in
connection with the purchase price allocation of the Viacom Acquisition and no
gain or loss was recognized by Evergreen upon consummation of the sales.
18
<PAGE> 20
On July 7, 1997, EMCLA sold the FCC authorizations and certain transmission
equipment previously used in the operation of KYLD-FM in San Francisco to
Susquehanna Radio Corporation ("Susquehanna") for $44,000 in cash and recognized
a gain of $1,726. Simultaneously therewith, Chancellor Radio Broadcasting
Company, a direct operating subsidiary of Chancellor ("CRBC"), sold the call
letters "KSAN-FM" (which CRBC previously used in San Francisco) to Susquehanna.
On July 7, 1997, EMCLA and CRBC entered into a time brokerage agreement to
enable EMCLA to operate KYLD-FM on the frequency previously assigned to KSAN-FM,
which has an improved broadcast signal in the San Francisco market, and on July
7, 1997, CRBC changed the call letters of KSAN-FM to KYLD-FM. Upon the
consummation of the Chancellor Merger, CMCLA changed the format of the new
KYLD-FM to the format previously operated on the old KYLD-FM.
On July 14, 1997, EMCLA completed the disposition of WLUP-FM in Chicago to
Bonneville. On October 7, 1997, CMCLA applied the net proceeds from the
disposition of WLUP-FM of $80,000 in cash, plus an additional $3,500 and various
other direct acquisition costs, in a deferred exchange of WLUP-FM for KZPS-FM
and KDGE-FM in Dallas. On June 29, 1997, EMCLA paid $8,350 in escrow funds which
have been classified as other assets at September 30, 1997. EMCLA had previously
operated KZPS-FM and KDGE-FM under time brokerage agreements effective August 1,
1997.
On July 21, 1997, EMCLA entered into a time brokerage agreement with CRBC
whereby EMCLA began managing certain limited functions of CRBC'S stations
KBGG-FM, KNEW-AM and KABL-FM in San Francisco.
On August 13, 1997, EMCLA sold WBZS-AM and WZHF-AM in Washington, D.C.
(acquired as part of the Viacom Acquisition) and KDFC-AM in San Francisco to
affiliates of Douglas Broadcasting ("Douglas") for $18,000 in the form of a
promissory note. The promissory note bears interest at 7 3/4%, with a balloon
principal payment due four years after closing. At closing, Douglas posted a
$1,000 letter of credit for the benefit of EMCLA that will remain outstanding
until all amounts due under the promissory note are paid.
On August 27, 1997, EMCLA sold WEJM-AM in Chicago to Douglas for $7,500
million in cash and recognized a gain of $3,331.
On September 5, 1997, pursuant to an Amended and Restated Agreement and
Plan of Merger, dated as of February 19, 1997 and amended and restated on July
31, 1997 (the "Chancellor Merger Agreement"), among Chancellor, CRBC, Evergreen,
Evergreen Mezzanine Holdings Corporation ("EMHC") and Evergreen Media
Corporation of Los Angeles ("EMCLA"), (i) Chancellor was merged (the "Parent
Merger") with and into EMHC, a direct, wholly-owned subsidiary of Evergreen,
with EMHC remaining as the surviving corporation and (ii) CRBC was merged (the
"Subsidiary Merger") with and into EMCLA, a direct, wholly-owned subsidiary of
EMHC, with EMCLA remaining as the surviving corporation. Upon consummation of
the Parent Merger, Evergreen was renamed Chancellor Media Corporation and EMHC
was renamed Chancellor Mezzanine Holdings Corporation ("CMHC"). Upon
consummation of the Subsidiary Merger, EMCLA was renamed Corporation of Los
Angeles ("CMCLA"). Consummation of the Chancellor Merger added 52 radio stations
(36 FM and 16 AM) to Evergreen's portfolio of stations, including 13 stations in
markets in which Evergreen previously operated. The total purchase price
allocated to net assets acquired was approximately $1,998,383 which included (i)
the conversion of each outstanding share of Chancellor Class A and Class B
Common Stock into 0.9091 shares of Chancellor Media Common Stock, resulting in
the issuance of 17,308,730 shares of Chancellor Media Common Stock at a fair
value of $31.00 per share, (ii) the assumption of Chancellor's and CRBC's
long-term debt of $949,000, (iii) the issuance of 2,117,629 shares of CMCLA's
12% Exchangeable Preferred Stock in exchange for CRBC's substantially identical
securities with a fair value of $215,570, (iv) the issuance of 1,000,000 shares
of CMCLA's 12 1/4% Series A Senior Cumulative Exchangeable Preferred Stock in
exchange for CRBC's substantially identical securities with a fair value of
$120,217, (v) the issuance of 2,200,000 shares of Chancellor Media's 7%
Convertible Preferred Stock in exchange for Chancellor's substantially identical
securities with a fair value of $111,048, (vi) the assumption of stock options
issued to Chancellor stock option holders with a fair value of $34,977 and (vii)
estimated acquisition costs of $31,000.
On October 28, 1997, Chancellor Media acquired Katz Media Group, Inc.
("KMG"), a full-service media representation firm, in a tender offer transaction
for a total purchase price of approximately $379,223 (the "Katz Acquisition")
which included (i) the conversion of each outstanding share of KMG Common Stock
into the right to receive $11.00 in cash,
19
<PAGE> 21
resulting in total cash payments of $149,601, (ii) the assumption of long-term
debt of KMG and its subsidiaries of $222,122 and (iii) estimated acquisition
costs of $7,500.
PENDING TRANSACTIONS
On April 4, 1997, EMCLA entered into agreements with Pacific and Southern
Company, Inc., a subsidiary of Gannett Co., Inc. ("P&S"), pursuant to which
EMCLA will acquire WGCI-AM and WGCI-FM in Chicago for $140,000, KKBQ-AM and
KKBQ-FM in Houston for $110,000 and KHKS-FM in Dallas for $90,000, for an
aggregate purchase price of $340,000 in cash (the "Gannett Acquisition"). The
aggregate purchase price is subject to an upward adjustment of up to $10,000
depending on the timing of the closings. On April 10, 1997, EMCLA issued letters
of credit for the benefit of P&S in the aggregate amount of $34,000 to secure
EMCLA's obligations under the Gannett Agreements. Although there can be no
assurances, CMCLA expects that the Gannett Acquisition will be completed in the
fourth quarter of 1997.
On July 30, 1997, CRBC entered into an agreement to acquire KXPK-FM in
Denver from Ever Green Wireless LLC (which is unrelated to Chancellor Media) for
$26,000 in cash (including $1,655 paid by CRBC in escrow on July 30, 1997 and
classified as other assets at September 30, 1997) (the "Denver Acquisition").
CRBC also entered into an agreement to operate KXPK-FM under a time brokerage
agreement effective as of September 1, 1997. Although there can be no
assurances, CMCLA expects that the Denver Acquisition will be completed in the
first quarter of 1998.
On July 1, 1996, CRBC entered into an agreement with SFX Broadcasting, Inc.
("SFX") pursuant to which CRBC agreed to exchange WAPE-FM and WFYV-FM in
Jacksonville and $11,000 in cash to SFX in return for WBAB-FM, WBLI-FM, WHFM-FM
and WGBB-AM in Nassau/Suffolk (Long Island) (the "SFX Exchange"). CRBC has been
operating WBAB-FM, WBLI-FM, WHFM-FM and WGBB-FM pursuant to time brokerage
agreements each effective July 1, 1996 and SFX has been operating WAPE-FM and
WFYV-FM pursuant to time brokerage agreements each effective July 1, 1996. On
November 6, 1997, the United States Department of Justice (the "DOJ") filed suit
against CMCLA, seeking to enjoin, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), CMCLA's acquisition of the
four Long Island properties from SFX. CMCLA is unable to predict whether or when
it will consummate the SFX Exchange.
On August 6, 1997, Evergreen and Chancellor announced that they had paid
$3,000 to Bonneville for an option to exchange Evergreen's station WTOP-AM in
Washington and Chancellor's stations KZLA-FM in Los Angeles and WGMS-FM in
Washington and $57,000 in cash for Bonneville's stations WNSR-FM in New York,
KLDE-FM in Houston and KBIG-FM in Los Angeles (the "Bonneville Option"). The
Bonneville Option was exercised on October 1, 1997, and definitive exchange
documentation is presently being negotiated. CMCLA has entered into time
brokerage agreements to operate KLDE-FM and KBIG-FM effective October 1, 1997
and WNSR-FM effective October 10, 1997 and has entered into time brokerage
agreements to sell substantially all of the broadcast time of WTOP-AM WTOP-AM,
KZLA-FM and WGMS-FM effective October 1, 1997.
Consummation of each of the transactions discussed above is subject to
various conditions, including approval from the Federal Communications
Commission (the "FCC") and the expiration or early termination of any waiting
period required under the HSR Act. Chancellor Media believes that such
conditions will be satisfied in the ordinary course, but there can be no
assurance that this will be the case.
Escrow funds of $10,005 paid by CMCLA in connection with the acquisition of
KZPS-FM and KDGE-FM in Dallas and the pending acquisition of KXPK-FM in Denver
have been classified as other assets in the accompanying balance sheet at
September 30, 1997.
SUMMARY OF NET ASSETS ACQUIRED
The Pyramid Acquisition, the Viacom Acquisition, the Chancellor Merger and
the acquisitions of WKLB-FM, KYLD-FM, WEDR-FM, WWWW-FM, WDFN-FM, KKSF-FM,
KDFC-FM/AM, WJLB-FM, WMXD-FM,
20
<PAGE> 22
WWRC-AM, WDAS-FM/AM and WPNT-FM discussed above were accounted for as purchases.
Accordingly, the accompanying consolidated financial statements include the
results of operations of the acquired entities from the dates of acquisition.
A summary of the net assets acquired follows:
<TABLE>
<CAPTION>
NINE
YEAR ENDED MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
----------- -----------
<S> <C> <C>
Working capital, including cash of $1,011 in 1996 $ 11,218 $ 56,287
Property and equipment 11,519 92,503
Assets held for sale 32,000 131,000
Intangible assets 465,824 3,177,630
Deferred tax liability (61,218) (332,409)
----------- -----------
$ 459,343 $ 3,125,011
=========== ===========
</TABLE>
The proforma consolidated condensed results of operations data for the nine
months ended September 30, 1997 and 1996, as if the 1996 Completed Transactions
and the 1997 Completed Transactions discussed above occurred at January 1,
1996, follow:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1997
----------- -----------
<S> <C> <C>
Net revenues $ 481,580 $ 571,782
Operating income (loss) (49,207) 12,495
Net loss (162,085) (112,286)
</TABLE>
The pro forma results are not necessarily indicative of what would have occurred
if the acquisitions had been in effect for the entire periods presented.
3. LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1996 and September
30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
----------- -----------
<S> <C> <C>
Senior Credit Facility $ 348,000 $ 1,457,000
11.59% Senior Secured Notes due 1999 10,000 --
9 3/8% Senior Subordinated Notes due 2004 -- 200,000
8 3/4% Senior Subordinated Notes due 2007 -- 200,000
----------- -----------
Total long-term debt 358,000 1,857,000
Less current portion 26,500 --
----------- -----------
$ 331,500 $ 1,857,000
</TABLE>
Senior Credit Facility
On April 25, 1997, EMCLA entered into the Senior Credit Facility which
amended and restated its prior senior credit facility. Under the amended and
restated agreement, as amended on June 26, 1997, August 7, 1997, and October 28,
1997, EMCLA established a $1,250,000 revolving facility (the "Revolving Loan
Facility") and a $500,000 term loan facility (the "Term Loan Facility"). Upon
consummation of the Chancellor Merger, the aggregate commitments under the
Revolving Loan Facility and the Term Loan Facility were increased to $1,600,000
and $900,000, respectively. In connection with the amendment and restatement of
the Senior Credit Facility, EMCLA wrote off the unamortized balance of deferred
debt issuance costs of $4,350 (net of a tax benefit of $2,343) as an
extraordinary charge.
21
<PAGE> 23
Borrowings under the Senior Credit Facility bear interest at a rate based,
at the option of CMCLA, on the participating banks' prime rate or Eurodollar
rate, plus an incremental rate. Without giving effect to the interest rate swap
and cap agreements described below, the interest rate on the $900,000
outstanding under the Term Loan at September 30, 1997 was 6.09%, based on
Eurodollar rates, and the interest rate on advances of $548,000 and $9,000
outstanding under the Revolving Loan Facility were 6.09% and 8.50%,
respectively, at September 30, 1997, based on the Eurodollar and prime rates,
respectively. CMCLA pays fees of 1/4% per annum on the aggregate unused portion
of the loan commitment, in addition to an annual agent's fee. Pursuant to the
Senior Credit Facility, CMCLA is required to enter into interest hedging
agreements that result in the fixing or placing a cap on CMCLA's floating rate
debt so that not less than 50% of the principal amount of total debt outstanding
has a fixed or capped rate.
The capital stock of CMCLA and its subsidiaries is pledged to secure the
performance of CMCLA's obligations under the Senior Credit Facility, and each of
CMCLA's subsidiaries have guaranteed those obligations. At October 31, 1997,
CMCLA had drawn $900,000 of the Term Loan Facility and $809,000 of the Revolving
Loan Facility. Required principal repayments of amounts outstanding under the
Term Loan Facility and commitment reductions under the Revolving Loan Facility
commence on September 30, 2000. CMCLA's ability to make additional borrowings
under the Senior Credit Facility is subject to compliance with certain financial
ratios and other conditions set forth in the Senior Credit Facility.
Senior Subordinated Notes
Upon consummation of the Chancellor Merger, CMCLA assumed all of the
obligations under CRBC's $200,000 aggregate principal amount 9 3/8% Senior
Subordinated Notes due 2004 (the "9 3/8% Notes") and the indenture governing
such securities, and CMCLA assumed all of the obligations under CRBC's $200,000
aggregate principal amount 8 3/4% Senior Subordinated Notes due 2007 (the "8
3/4% Notes") and the indenture governing such securities. The 9 3/8% Notes and
the 8 3/4% Notes are unsecured obligations of CMCLA, subordinated in
right of payment to all existing and any future senior indebtedness of CMCLA.
The notes are fully and unconditionally guaranteed, on a joint and several
basis, by certain wholly-owned subsidiaries of CMCLA (the "Subsidiary
Guarantors"). Except for certain inconsequential subsidiaries, the Subsidiary
Guarantors comprise all of CMCLA's direct and indirect subsidiaries.
Other
On October 28, 1997, CMCLA borrowed approximately $155,000 under the Senior
Credit Facility to finance the Katz Acquisition. Additionally, CMCLA refinanced
outstanding borrowings under the credit facility of Katz Media Corporation, a
subsidiary of KMG ("KMC"), of $122,000 with borrowings under the Senior Credit
Facility, and assumed the obligations under the $100,000 aggregate principal
amount of 10 1/2% Senior Subordinated Notes due 2007 of KMC, (the "10 1/2%
Notes") and the amended and restated indenture governing such securities. The
10 1/2% Notes are unsecured obligations of CMCLA, subordinated in right of
payment to all existing and any future senior indebtedness of CMCLA. The 10 1/2%
Notes are fully and unconditionally guaranteed, on a joint and several basis, by
the Subsidiary Guarantors.
22
<PAGE> 24
4. CONTINGENCIES
Chancellor Media and CMCLA are involved in several lawsuits that are
incidental to their business. A discussion of certain of these lawsuits is
contained in Part II, Item 1, "Legal Proceedings", of this Form 10-Q. CMCLA
believes that the ultimate resolution of the lawsuits will not have a material
effect on its financial position or results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Since the acquisition by Chancellor Media Corporation ("Chancellor Media"),
Chancellor Media Corporation of Los Angeles ("CMCLA"), an indirect, wholly-owned
subsidiary of Chancellor Media, and their respective subsidiaries (collectively,
the "Company") in May of 1995 of Broadcasting Partners, Inc. ("BPI"), an
eleven-station radio broadcasting group owning eight stations in the nation's
ten largest radio markets (the "BPI Acquisition"), the Company has engaged in an
acquisition strategy concentrating on expanding the Company's presence in the
nation's largest radio markets. Implementation of this acquisition strategy was
significantly accelerated in 1996 and to date in 1997 due to passage of the
Telecommunications Act of 1996 and the associated relaxation of national and
local ownership limits. For a discussion of the various transactions completed
and agreements entered into since January 1, 1996 as part of the Company's
acquisition strategy, see the Notes to the Consolidated Financial Statements
contained in this Quarterly Report on Form 10-Q. Consummation of the Pending
Transactions (including the Gannett Acquisition, the Denver Acquisition, the SFX
Exchange and the Bonneville Option) will add a net total of eight stations in
the Company's current markets, and will expand the Company's station portfolio
to include a total of 12 radio station clusters of four or five FM stations
("superduopolies"), with seven in the 12 largest radio markets -- Los Angeles,
New York, Chicago, San Francisco, Philadelphia, Washington, D.C. and Detroit --
and five in other large markets -- Denver, Minneapolis-St. Paul, Phoenix,
Orlando and Nassau-Suffolk (Long Island).
The Company's results of operations from period to period have not
historically been comparable because of the impact of the various station
acquisitions and dispositions that the Company has completed. The chart below
summarizes the acquisitions and dispositions that the Company has completed
since January 1, 1996 through September 30, 1997:
<TABLE>
<CAPTION>
COST
DATE OF NUMBER OF (PROCEEDS)
TRANSACTION TRANSACTION STATIONS MARKET(S) (IN THOUSANDS)
----------- ----------- -------- --------- --------------
<S> <C> <C> <C> <C>
Pyramid Acquisition 1/96 9 FM Chicago, Philadelphia, Boston, $ 316,343
3 AM Charlotte, Buffalo
Acquisition 5/96 1 FM Boston $ 34,000
Disposition 8/96 1 FM Buffalo $ (12,500)
Disposition 7/96 1 FM Buffalo $ (19,500)
1 AM
Acquisition 8/96 1 FM San Francisco $ 44,000
Acquisition 10/96 1 FM Miami $ 65,000
</TABLE>
23
<PAGE> 25
<TABLE>
<S> <C> <C> <C> <C>
Exchange 11/96 1 FM in return Exchanged Boston for Washington, N/A
for 1 FM D.C.
Acquisition 1/97 1 FM Detroit $ 30,000
1 AM
Acquisition 1/97 2 FM San Francisco $ 115,000
1 AM
Acquisition 4/97 2 FM Detroit $ 168,000
Acquisition/Exchange 4/97 1 AM Washington, D.C. $ 22,500
Acquisition 5/97 1FM Philadelphia $ 103,000
1AM
Exchange 5/97 5 FM's in Exchanged Charlotte for N/A
return for 2 Philadelphia
FM's
Disposition 5/97 1 FM Charlotte $ (10,000)
Acquisition 5/97 1 FM Chicago $ 75,750
Disposition 6/97 1 FM Chicago $ (14,750)
Disposition 6/97 1 FM Chicago $ (75,000)
Acquisition 7/97 4 FM/2 AM New York, Washington, D.C. $ 612,388
Disposition 7/97 1 FM Washington, D.C $ (68,000)
Disposition 7/97 1 FM San Francisco $ (44,000)
Disposition 7/97 1 FM Chicago $ (80,000)
Disposition 8/97 3 AM San Francisco, Washington, D.C. $ (18,000)
Disposition 8/97 1 AM Chicago $ (7,500)
Chancellor Merger 9/97 36 FM/16 AM Los Angeles, New York, Chicago, $ 1,998,383
San Francisco, Washington, D.C.,
Atlanta, Denver, Minneapolis/St.
Paul, Phoenix, Cincinnati,
Pittsburgh, Sacramento, Orlando,
Nassau/Suffolk (Long Island),
Jacksonville, Riverside/San
Bernardino
</TABLE>
In the following analysis, management discusses the broadcast cash flow of
its radio station group. The performance of a radio station group is customarily
measured by its ability to generate broadcast cash flow. The two components of
broadcast cash flow are gross revenues (net of agency commissions) and operating
expenses (excluding depreciation and amortization and corporate general and
administrative expense). The primary source of revenues is the sale of
broadcasting time for advertising. The Company's most significant operating
expenses for purposes of the computation of broadcast cash flow are employee
salaries and commissions, programming expenses, and advertising and promotion
expenses. The Company strives to control these expenses by working closely with
local station management. The Company's revenues vary throughout the year. As is
typical in the radio
24
<PAGE> 26
broadcasting industry, the Company's first calendar quarter generally produces
the lowest revenues, and the fourth quarter generally produces the highest
revenues.
Data on broadcast cash flow, although not calculated in accordance with
generally accepted accounting principles, is widely used in the broadcast
industry as a measure of a company's operating performance. Nevertheless, this
measure should not be considered in isolation or as a substitute for operating
income, cash flows from operating activities or any other measure for
determining the Company's operating performance or liquidity that is calculated
in accordance with generally accepted accounting principles. Broadcast cash flow
does not take into account the Company's debt service requirements and other
commitments and, accordingly, broadcast cash flow is not necessarily indicative
of amounts that may be available for dividends, reinvestment in the Company's
business or other discretionary uses.
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996
Net revenues for the three months ended September 30, 1997 increased 84.1%
to $145.0 million compared to $78.8 million for the third quarter of 1996.
Station operating expenses excluding depreciation and amortization for the three
months ended September 30, 1997 increased 59.4% to $73.6 million compared to
$46.1 million for the three months ended September 30, 1996. Station operating
income excluding depreciation and amortization and corporate, general and
administrative expense (broadcast cash flow) for the three months ended
September 30, 1997 increased 119.0% to $71.5 million compared to $32.6 million
for the third quarter of 1996.
The increase in net revenues, station operating expenses, and broadcast cash
flow for the three months ended September 30, 1997 was primarily attributable to
the impact of the various station acquisitions, dispositions, and time brokerage
agreements, in addition to the overall net operational improvements realized by
the Company's radio stations.
Depreciation and amortization for the three months ended September 30, 1997
increased 138.8% to $50.5 million compared to $21.1 million for the third
quarter of 1996. The increase represents additional depreciation and
amortization due to the impact of recent acquisitions.
Corporate general and administrative expenses for the three months ended
September 30, 1997 increased 178.8% to $6.0 million compared to $2.2 million for
the third quarter of 1996. The increase is due to the growth of the Company, and
the related increase in properties and staff, primarily due to recent
acquisitions.
As a result of the above factors, the Company realized $15.0 million of
operating income for the three months ended September 30, 1997 compared to $9.4
million of operating income for the third quarter of 1996.
Interest expense for the three months ended September 30, 1997 increased
119.2% to $22.3 million compared to $10.2 million for the same period in 1996.
The net increase in interest expense is due to additional bank borrowings to
finance the acquisitions discussed above offset by repayment of borrowings under
the Senior Credit Facility from the net proceeds of the dispositions (discussed
above), the 1996 Offering and the offering in June 1997 of 5,990,000 shares of
$3.00 Convertible Preferred Stock (the "$3.00 Convertible Preferred Stock
Offering").
The Company recorded a gain on disposition of assets of $5.1 million for the
three months ended September 30, 1997 related to the dispositions of WEJM-AM in
Chicago ($3.4 million) and the FCC authorizations and certain transmission
equipment previously used in the operation of KYLD-FM in San Francisco ($1.7
million).
The income tax expense for the three months ended September 30, 1997 is
comprised of current federal and state tax expense and a deferred federal income
tax benefit.
25
<PAGE> 27
Dividends on preferred stock of CMCLA were $2.8 million for the three
months ended September 30, 1997, representing dividends on CMCLA's 12%
Exchangeable Preferred Stock and CMCLA's 12 1/4% Series A Senior Cumulative
Exchangeable Preferred Stock, each issued in September 1997 as part of the
Chancellor Merger.
Dividends paid on Chancellor Media's preferred stock were $5.0 million for
the three months ended September 30, 1997 compared to $1.2 million for the same
period in 1996. The increase in dividends is due to dividends on Chancellor
Media's $3.00 Convertible Preferred Stock issued in June 1997 and dividends on
Chancellor Media's 7% Convertible Preferred Stock issued in September 1997 as
part of the Chancellor Merger, offset by the conversion of a total of 1,608,297
shares of Evergreen's formerly outstanding convertible exchangeable preferred
stock into a total of 5,025,916 shares of Evergreen's Class A Common Stock and
the redemption by Evergreen of the remaining 1,703 shares of formerly
outstanding convertible exchangeable preferred stock during 1996.
The net loss attributable to common stockholders for the three months ended
September 30, 1997 was $11.0 million compared to a net loss of $2.0 million for
the third quarter of 1996. The net loss increase is primarily due to an increase
in noncash depreciation and amortization expenses related to the Viacom
Acquisition consummated on July 2, 1997 and the Chancellor Merger completed on
September 5, 1997.
The loss per common share for the three months ended September 30, 1997 was
$0.23 compared to a $0.07 loss per common share for the third quarter of 1996.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996
Net revenues for the nine months ended September 30, 1997 increased 62.5% to
$333.3 million compared to $205.1 for the nine months ended September 30, 1996.
Station operating expenses excluding depreciation and amortization for the nine
months ended September 30, 1997 increased 46.1% to $184.7 million compared to
$126.4 million for the nine months ended September 30, 1996. Station operating
income excluding depreciation and amortization and corporate, general and
administrative expense (broadcast cash flow) for the nine months ended September
30, 1997 increased 88.8% to $148.6 million compared to $78.7 million for the
nine months ended September 30, 1996.
The increase in net revenues, station operating expenses, and broadcast cash
flow for the nine months ended September 30, 1997 was primarily attributable to
the impact of the various station acquisitions, dispositions, and time brokerage
agreements, in addition to the overall net operational improvements realized by
the Company's radio stations.
Depreciation and amortization for the nine months ended September 30, 1997
increased 60.2% to $104.4 million compared to $65.1 million for the same period
in 1996. The increase represents additional depreciation and amortization due to
the impact of recent acquisitions, offset by decreases due to certain
intangibles which became fully amortized in 1996.
Corporate general and administrative expenses for the nine months ended
September 30, 1997 increased 117.8% to $11.6 million compared to $5.3 million
for the same period in 1996. The increase is due to the growth of the Company,
and the related increase in properties and staff, primarily due to recent
acquisitions.
As a result of the above factors, the Company realized $32.5 million of
operating income for the nine months ended September 30, 1997 compared to
operating income of $8.2 million for the same period in 1996.
Interest expense for the nine months ended September 30, 1997 increased
54.2% to $45.0 million compared to $29.2 million for the same period in 1996.
The net increase in interest expense is due to additional bank borrowings to
finance the acquisitions discussed above offset by repayment of borrowings under
the Senior Credit Facility from the net proceeds of the dispositions (discussed
above), the 1996 Offering and the Convertible Preferred Stock Offering.
26
<PAGE> 28
The Company recorded a gain on disposition of assets of $18.4 million for
the nine months ended September 30, 1997 related to the dispositions of WNKS-FM
in Charlotte ($3.5 million), WPNT-FM in Chicago ($0.5 million), WEJM-FM in
Chicago ($9.3 million), WEJM-AM in Chicago ($3.4 million) and the FCC
authorizations and certain transmission equipment previously used in the
operation of KYLD-FM in San Francisco ($1.7 million).
The income tax expense for the nine months ended September 30, 1997 is
comprised of current federal and state tax expense and a deferred federal income
tax benefit.
The Company recorded an extraordinary charge of $4.4 million (net of a tax
benefit of $2.3 million) for the nine months ended September 30, 1997,
consisting of the write-off of the unamortized balance of deferred debt issuance
costs related to the amendment and restatement of the Company's Senior Credit
Facility on April 25, 1997.
Dividends on preferred stock of CMCLA were $2.8 million for the nine months
ended September 30, 1997, representing dividends on CMCLA's 12% Exchangeable
Preferred Stock and CMCLA's 12 1/4% Series A Senior Cumulative Exchangeable
Preferred Stock issued in September 1997 as part of the Chancellor Merger.
Dividends paid on Chancellor Media's preferred stock were $5.7 million for
the nine months ended September 30, 1997 compared to $3.6 million for the same
period in 1996. The increase in dividends is due to dividends on Chancellor
Media's $3.00 Convertible Preferred Stock issued in June 1997 and dividends on
Chancellor Media's 7% Convertible Preferred Stock issued in September 1997 as
part of the Chancellor Merger, offset by the conversion of a total of 1,608,297
shares of Evergreen's formerly outstanding convertible exchangeable preferred
stock into a total of 5,025,916 shares of Evergreen's Class A Common Stock and
the redemption by Evergreen of the remaining 1,703 shares of formerly
outstanding convertible exchangeable preferred stock during 1996.
The net loss attributable to common stockholders for the nine months ended
September 30, 1997 was $12.2 million compared to a $20.9 million net loss for
the same period in 1996. The decrease in the net loss is primarily due to a
$18.4 million gain on the disposition of assets offset by a $4.4 million
extraordinary charge related to the write-off of bank loan fees recorded in the
second quarter of 1997.
The loss per common share for the nine months ended September 30, 1997 was
$0.28 compared to a $0.74 loss per common share for the same period in 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company historically has generated sufficient cash flow from operations
to finance its existing operational requirements and debt service requirements,
and the Company anticipates that this will continue to be the case. The Company
historically has used the proceeds of bank debt and private and public debt and
equity offerings, supplemented by cash flow from operations not required to fund
operational requirements and debt service, to fund implementation of its
acquisition strategy.
The total cash financing required to consummate the Gannett Acquisition, the
Denver Acquisition, the SFX Exchange and the Bonneville Option is expected to be
approximately $437.0 million (excluding a possible upward adjustment of $10.0
million for the Gannett Acquisition). Of this amount, approximately $4.7 million
has already been advanced by the Company in the form of escrow deposits or other
upfront payments. Accordingly, the Company will require at least $432.3 million
in additional financing to consummate the Gannett Acquisition, the Denver
Acquisition, the SFX Exchange and the Bonneville Option. The Company anticipates
that it will obtain this additional financing through borrowings under the
Senior Credit Facility. The Company from time to time may explore other
financing alternatives to supplement the financing available under the Senior
Credit Facility, including the public or private issuance of debt, common equity
or preferred equity securities.
In addition to debt service requirements under the Senior Credit Facility,
the Company is required to pay interest on the 9 3/8% Notes, the 8 3/4% Notes
and the 10 1/2% Notes. The 12 1/4% Preferred Stock and the 12% Preferred Stock
of CMCLA do not require the payment of cash dividends through February 14, 2001
and January 14, 2002, respectively, although CMCLA may incur accretion or issue
additional shares of such preferred stock, respectively,
27
<PAGE> 29
in lieu of cash dividends until such times. Cash dividend requirements of
Chancellor Media on its $3.00 Convertible Preferred Stock and the 7% Convertible
Preferred Stock are $25.7 million per year. Because Chancellor Media is a
holding company with no significant assets other than the common stock of CMHC,
Chancellor Media will rely solely on dividends from CMHC, which in turn is
expected to distribute dividends paid to it by CMCLA and KMG to Chancellor
Media, to permit Chancellor Media to pay cash dividends on the $3.00 Convertible
Preferred Stock and the 7% Convertible Preferred Stock. The Senior Credit
Facility, the indentures governing the 9 3/8% Notes, the 8 3/4% Notes and the 10
1/2% Notes and the certificates of designation for the 12% Preferred Stock and
the 12 1/4% Preferred Stock limit, but do not prohibit, CMCLA from paying such
dividends to CMHC.
FORWARD LOOKING STATEMENTS
When used in the preceding and following discussion, the words "expects,"
"anticipates" and similar expressions are intended to identify forward looking
statements. Such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those expressed in any of
the forward looking statements. Such risks and uncertainties include, but are
not limited to, industry-wide market factors and regulatory developments
affecting the Company's operations and the acquisitions and dispositions of
broadcast properties described elsewhere herein.
RECENTLY--ISSUED ACCOUNTING PRINCIPLES
In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 125, "Transfers of Financial Assets and
Extinguishments of Liabilities" ("SFAS No. 125"). SFAS No. 125 provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities. The provisions of SFAS No. 125 are
generally effective for transactions occurring after December 31, 1996. The
adoption of SFAS No. 125 is not expected to have a material impact on the
Company's financial statements.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
128"), which establishes new standards for computing and presenting earnings per
share. SFAS No. 128 is effective for financial statements issued for periods
ending after December 15, 1997 and requires restatement of all prior-period
earnings per share data. Early application of SFAS No. 128 is not permitted. The
Company's adoption of the provisions of SFAS No. 128 will result in the dual
presentation of basic and diluted earnings per share on the Company's income
statement. Diluted earnings per share as calculated under SFAS No. 128 is not
expected to materially differ from primary earnings per share amounts previously
presented.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 129, "Disclosure of Information about
Capital Structure" ("SFAS No. 129"). SFAS No. 129 is applicable to all entities
and requires that disclosure about an entity's capital structure include a brief
discussion of rights and privileges for securities outstanding. SFAS No. 129 is
effective for financial statements for periods ending after December 15, 1997.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130"). SFAS No. 130 requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. SFAS No. 130 is effective for financial statement
periods ending after December 15, 1997. Management does not anticipate that SFAS
No. 130 will have any effect on the Company's consolidated financial statements.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131 establishes
standards for reporting information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial reports issued to stockholders. It also
28
<PAGE> 30
establishes standards for related disclosures about products and services,
geographic areas, and major customers. SFAS No. 131 is effective for financial
statement periods ending after December 15, 1997. Management does not anticipate
that SFAS No. 131 will have any effect on the Company's consolidated financial
statements.
CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS
KPMG Peat Marwick, LLP ("Peat Marwick") has previously served as the
auditors for Chancellor Media, CMCLA and their respective subsidiaries
and has previously advised Chancellor Media, CMCLA and their respective
subsidiaries on federal, state and local tax matters. After an evaluation by
management of services provided by other independent accounting firms,
Chancellor Media and CMCLA dismissed Peat Marwick as their independent
accountants on September 23, 1997, and engaged Coopers & Lybrand L.L.P.
("Coopers") as the new independent accountants for Chancellor Media, CMCLA and
their respective subsidiaries as of such date. The decision to dismiss Peat
Marwick was approved by the Board of Directors of Chancellor Media and CMCLA.
Peat Marwick's reports on the financial statements of Chancellor Media,
CMCLA and their respective subsidiaries for the past two years did not contain
an adverse opinion or a disclaimer of opinion, and was not qualified or
modified as to uncertainty, audit scope or accounting principles. During the
two most recent fiscal years of Chancellor Media, CMCLA and their respective
subsidiaries and the subsequent interim period preceding the dismissal, there
were no disagreements with Peat Marwick on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of Peat Marwick, would
have caused Peat Marwick to make reference to the subject matter of the
disagreements in connection with its report. In addition, during the two most
recent fiscal years of Chancellor Media, CMCLA and their respective
subsidiaries and the subsequent interim period preceding the dismissal, there
were no events of the type requiring disclosure under Item 304(a)(1)(v) of
Regulation S-K.
During the two most recent fiscal years of Chancellor Media, CMCLA and their
respective subsidiaries and the subsequent interim period preceding the
dismissal of Peat Marwick, Chancellor Media, CMCLA and their respective
subsidiaries did not consult with Coopers regarding (i) the application of
accounting principles to a specified transaction (either completed or proposed),
(ii) the type of audit opinion that might be rendered on the financial
statements of Chancellor Media, CMCLA and their respective subsidiaries or (iii)
any matter that was the subject of a "disagreement" or a "reportable event" (as
each term is defined in Item 304(a)(2)(ii) of Regulation S-K). However, Coopers
previously served as the independent accountants for Chancellor. In connection
with the Chancellor Merger, Chancellor Media and CMCLA discussed with Coopers
various financial statement issues related to its historical association with
Chancellor, and also discussed the various filings submitted by Chancellor
Media, CMCLA, Chancellor and CRBC to the Commission in respect of the Chancellor
Merger, which filings included or incorporated by reference the financial
statements of Chancellor Media, CMCLA, Chancellor and CRBC.
Chancellor Media and CMCLA previously provided Peat Marwick with a copy of
the disclosures they made with respect to the change in accountants in
connection with the Current Report on Form 8-K, dated September 23, 1997 and
filed September 29, 1997, of Chancellor Media and CMCLA. Peat Marwick furnished
Chancellor Media and CMCLA with a letter addressed to the Commission stating
that it agreed with the statements made by Chancellor Media and CMCLA in such
Current Report, except that it was not in a position to agree or disagree with
the stated reasons for changing principal auditors, or with the statement that
the change was approved by the board of directors, or with the statements made
in the third paragraph of Item 4 of the Current Report on Form 8-K. A copy of
Peat Marwick's letter is attached as Exhibit 16.1 of this Current Report on Form
10-Q.
PART II
ITEM 1. - LEGAL PROCEEDINGS
In August 1993, the Company terminated an agreement with Sagittarius
Broadcasting Company (an affiliate of Infinity Broadcasting Corporation) and One
Twelve, Inc. (collectively, the "Claimants" or the "Plaintiffs") pursuant
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<PAGE> 31
to which programming featuring radio personality Howard Stern was broadcast on
radio station WLUP-AM (now WMVP-AM) in Chicago. The Claimants allege that
termination of the agreement was wrongful and have sued the Company in the
Supreme Court of the State of New York, County of New York (the "Court"). The
agreement required payments to the Claimants in the amount of $2.6 million plus
five percent of advertising revenues generated by the programming over the
three-year term of the agreement. A total of approximately $680,000 was paid to
the Claimants pursuant to the agreement prior to termination. Claimants'
complaint alleged claims for breach of contract, indemnification, breach of
fiduciary duty and fraud. Plaintiffs' aggregate prayer for relief totaled $45.0
million. On July 12, 1994, the Court granted motion to dismiss Plaintiffs'
claims for fraud and breach of fiduciary duty. On June 6, 1995, the Court denied
the Plaintiff's motion for summary judgment on their contract and
indemnification claims and this order has been affirmed on appeal. On May 17,
1996, after the close of discovery, the Company filed a motion for summary
judgment, seeking the dismissal of the remaining claims in the original
complaint. On July 1, 1996, Plaintiffs moved for leave to amend their complaint
in order to add claims for breach of the covenant of good faith and fair
dealing, tortious interference with business advantage and prima facia tort. In
the proposed amended complaint, Plaintiffs seek compensatory and punitive
damages in excess of $25.0 million. On March 13, 1997, the Court denied the
Company's motion for summary judgment, allowed Plaintiffs' request to amend the
complaint to add a claim for breach of the covenant of good faith and fair
dealing and denied Plaintiffs' request to amend the complaint to add claims for
tortious interference with business advantage and prima facia tort. On April 25,
1997, the Company filed a notice of appeal of the denial of the motion for
summary judgment. The Company believes that it acted within its rights in
terminating the agreement. On September 11, 1997, a five-judge panel on the N.Y.
State Supreme Court Appellate Division heard oral arguments on this matter. In
October 1997, that court granted a portion of the appeal seeking to strike
certain damages sought, but otherwise affirmed the denial of the motion for
summary judgment and sent the case back to the trial court for trial. The
Company believes that it acted within its rights in terminating the agreement.
The Company is also involved in various other claims and lawsuits which are
generally incidental to its business. The Company is vigorously contesting all
such matters and believes that their ultimate resolution will not have a
material adverse effect on its consolidated financial position or results of
operations.
ITEM 2. - CHANGES IN SECURITIES AND USE OF PROCEEDS
On September 5, 1997, in connection with the completion of the Chancellor
Merger, Chancellor Media issued 2,200,000 shares of its $50 liquidation
preference 7% Convertible Preferred Stock in exchange for an identical number of
shares of Chancellor's 7% Convertible Preferred Stock. In addition, on such
date, CMCLA (i) issued 2,117,629 shares of its $100 liquidation preference 12%
Exchangeable Preferred Stock in exchange for an identical number of shares of
CRBC's 12% Exchangeable Preferred Stock, (ii) issued 1,000,000 shares of its
$119.444944 liquidation preference 12 1/4% Series A Senior Cumulative
Exchangeable Preferred Stock in exchange for an identical number of shares of
CRBC's 12 1/4% Series A Senior Cumulative Exchangeable Preferred Stock, (iii)
assumed CRBC's obligations under its $200.0 million aggregate principal amount
of 9 3/8% Senior Subordinated Notes due 2004 and (iv) assumed CRBC's obligations
under its $200.0 million aggregate principal amount of 8 3/4% Senior
Subordinated Notes due 2007.
The general effect of the issuances and assumptions of these securities was
to qualify the rights of holders of Chancellor Media's Common Stock as to
payment of dividends, redemption payments and rights upon liquidation,
dissolution or winding-up of Chancellor Media or its subsidiaries. Among other
things, holders of 7% Convertible Preferred Stock have priority over holders of
Chancellor Media's Common Stock as to payment of dividends, redemption payments
and rights upon liquidation, dissolution or winding-up of the affairs of
Chancellor Media. Additionally, Chancellor Media is a holding company, and its
assets consist primarily of its investments in its subsidiaries. Consequently,
Chancellor Media relies upon distributions and other funds from CMCLA, as its
principal operating subsidiary, as well as from its other subsidiaries, to meet
its obligations. Holders of 9 3/8% Notes, 8 3/4% Notes, 12 1/4% Preferred Stock
and 12% Preferred Stock have priority over Chancellor Media, as the holder,
indirectly, of all of CMCLA's common stock, as to payment of dividends,
redemption payments and rights upon liquidation, dissolution or winding-up of
CMCLA. Accordingly, holders of such securities may be deemed to effectively have
priority over holders of Chancellor Media's Common Stock.
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<PAGE> 32
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Chancellor Media (which at the time, was still named Evergreen Media
Corporation) held its Annual Meeting of Stockholders on September 3, 1997,
in Irving, Texas. At the Annual Meeting, the following actions of the
stockholders of Chancellor Media were taken:
(i) The stockholders of the Company voted to approve the Chancellor Merger
and the transactions contemplated thereby, including without limitation
(1) the issuance of 0.9091 shares of Chancellor Media Common Stock to
Chancellor Broadcasting Company stockholders for each share of
Chancellor Broadcasting Company Class A and Class B Common Stock
outstanding immediately prior to the completion of the Chancellor
Merger, (2) the assumption by Chancellor Media of outstanding options
to purchase shares of Chancellor Broadcasting Company Class A Common
Stock held by officers, directors, employees and consultants of
Chancellor Broadcasting Company and (3) the amendment and restatement
of Chancellor Media's Certificate of Incorporation in the form attached
to the Chancellor Merger Agreement, as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS BROKER NON-VOTES
<S> <C> <C> <C> <C>
Class B Common Stock 31,140,650 0 0 0
All Common Stock 64,525,413 31,317 16,522 1,291,765
</TABLE>
(ii)The stockholders of Chancellor Media voted to reelect the eight
directors of Chancellor Media as follows:
<TABLE>
<CAPTION>
VOTES
------------------------------
DIRECTORS FOR WITHHELD
- --------- ---------- -------
<S> <C> <C>
Scott K. Ginsburg 65,497,539 367,478
James E. de Castro 65,497,671 367,346
Matthew E. Devine 65,496,939 368,078
Joseph M. Sitrick 65,587,739 277,278
Perry J. Lewis 65,498,449 366,568
Thomas J. Hodson 65,588,489 276,528
Eric L. Bernthal 65,497,889 367,128
Kenneth J. O'Keefe 65,497,739 277,278
</TABLE>
provided, that in connection with the transactions contemplated by the
Chancellor Merger, Messrs. Devine, Sitrick, O'Keefe and Bernthal agreed to
resign from the Board of Directors of Chancellor Media upon consummation of
the Chancellor Merger. On September 5, 1997, in connection with the
completion of the Chancellor Merger, Messrs. Devine, Sitrick, O'Keefe and
Bernthal resigned from the Board of Directors of Chancellor Media, and the
remaining members of the Board of Directors of Chancellor Media fixed the
size of the Board at ten and elected Thomas O. Hicks, Steven Dinetz,
Jeffrey A. Marcus, John H. Massey, Lawrence D. Stuart, Jr. and Eric C.
Neuman to fill vacancies on the Board of Directors of Chancellor Media.
Additionally, in connection with the completion of the Chancellor Merger,
the Board of Directors was classified into three classes, as follows:
Class I:
Perry J. Lewis
Eric C. Neuman
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<PAGE> 33
Class II:
James E. de Castro
Lawrence D. Stuart, Jr.
Steven Dinetz
Jeffrey A. Marcus
Class III:
Thomas O. Hicks
Scott K. Ginsburg
John H. Massey
Thomas J. Hodson
Each Class I director, Class II director and Class III director of
Chancellor Media will hold office until the 1998, 1999 and 2000 annual
stockholder meetings, respectively, and in all cases, until his or her
respective successor is duly elected of appointed and qualified.
(b) On July 31, 1997, Chancellor Media, as the sole stockholder of CMCLA at
that time, via unanimous written consent approved the Chancellor Merger
Agreement and the transactions contemplated thereby.
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<PAGE> 34
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
(f)2.9 Plan of Reorganization and Merger by and between Evergreen Media Corporation and Broadcasting Partners,
Inc., dated on January 31, 1995, as amended, including the Form of Registration Rights Agreement among
MLGA Fund I, L.P., MLGA Fund II, L.P. MLGA/BPI Partners I, L., P., MLGAL Partners, Limited Partnership and
Evergreen Media Corporation (see table of contents for a list of omitted schedules).
(g)2.9A Agreement dated as of January 31, 1995 among Evergreen Media Corporation, Broadcasting Partners, Inc., the
holders of the shares of capital stock of Broadcasting Partners, Inc. and Scott K. Ginsburg, holder of
shares of capital stock of Evergreen Media Corporation.
(f)2.10 Plan and Agreement of Merger among Evergreen Media Partners Corporation, Evergreen Media Corporation and
Broadcasting Partners, Inc., dated as of April 12, 1995.
(h)2.11 Agreement and Plan of Merger by and among Pyramid Communications, Inc., Evergreen Media Corporation and
Evergreen Media/Pyramid Corporation dated as of July 14, 1995 (see table of contents for list of omitted
exhibits and schedules).
(i)2.11A Amendment to Plan and Agreement of Merger by and among Pyramid Communications Inc., Evergreen Media
Corporation and Evergreen Media/Pyramid Corporation dated September 7, 1995.
(i)2.11B Amendment to Plan and Agreement of Merger by and among Pyramid Communications Inc., Evergreen Media
Corporation and Evergreen Media/Pyramid Corporation dated January 11, 1996.
(j)2.12 Purchase Agreement between Fairbanks Communications, Inc. and Evergreen Media Corporation dated October
12, 1995 (see table of contents for list of omitted exhibits and schedules).
(n)2.13 Option Agreement dated as of January 9, 1996 between Chancellor Broadcasting Company and Evergreen Media
Corporation (including Form of Advertising Brokerage Agreement and Form of Asset Purchase Agreement).
(o)2.14 Asset Purchase Agreement dated April 4, 1996 between American Radio System Corporation and Evergreen Media
Corporation of Buffalo (see table of contents for list of omitted exhibits and schedules).
(o)2.15 Asset Purchase Agreement dated April 11, 1996 between Mercury Radio Communications, L.P. and Evergreen
Media Corporation of Los Angeles, Evergreen Media/Pyramid Holding Corporation, WHTT (AM) License Corp.
(see table of contents for list of omitted exhibits and schedules).
(o)2.16 Asset Purchase Agreement dated April 19, 1996 between Crescent Communications L.P. and Evergreen Media
Corporation of Los Angeles (see table of contents for list of omitted exhibits and schedules).
</TABLE>
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<PAGE> 35
<TABLE>
<C> <S>
(p)2.17 Asset Purchase Agreement dated June 13, 1996 between Evergreen Media Corporation of Los Angeles and
Greater Washington Radio, Inc. (see table of contents for list of omitted exhibits and schedules).
(p)2.18 Asset Exchange Agreement dated June 13, 1996 among Evergreen Media Corporation of Los Angeles, Evergreen
Media Corporation of the Bay State, WKLB License Corp., Greater Media Radio, Inc. and Greater Washington
Radio, Inc. (see table of contents for list of omitted exhibit and schedules).
(p)2.19 Purchase Agreement dated June 27, 1996 between WEDR, Inc., Seller and Evergreen Media Corporation of Los
Angeles, Buyer. (See table of contents for list of omitted schedules.)
(p)2.21 Asset Purchase Agreement dated July 15, 1996 by and among Century Chicago Broadcasting L.P., an Illinois
limited partnership, Century Broadcasting Corporation, a Delaware Corporation, Evergreen Media Corporation
of Los Angeles a Delaware Corporation.
(p)2.22 Asset Purchase Agreement dated August 12, 1996 by and among Chancellor Broadcasting Company, Shamrock
Broadcasting, Inc. and Evergreen Media Corporation of the Great Lakes.
(p)2.23 Asset Purchase Agreement dated as of August 12, 1996 between Secret Communications Limited Partnership and
Evergreen Media Corporation of Los Angeles (WQRS-FM). (See table of content for list of omitted exhibits
and schedules.)
(p)2.24 Asset Purchase Agreement dated as of August 12, 1996 between Secret Communications Limited Partnership and
Evergreen Media Corporation of Los Angeles. (See table of contents for list of omitted schedules)
(q)2.25 Letter of intent dated August 27, 1996 between EZ Communications, Inc. Evergreen Media Corporation.
(q)2.26 Asset Purchase Agreement dated September 19, 1996 between Beasley-FM Acquisition Corp. WDAS License
Limited Partnership and Evergreen Media Corporation of Los Angeles.
(q)2.27 Asset Purchase Agreement dated September 19, 1996 between The Brown Organization and Evergreen Media
Corporation of Los Angeles.
(r)2.28 Stock Purchase Agreement by and between Viacom International, Inc. and Evergreen Media Corporation of Los
Angeles, dated February 16, 1997 (See table of contents for omitted schedule and exhibits).
(r)2.29 Agreement and Plan of Merger, by and among Evergreen Media Corporation, Chancellor Broadcasting Company
and Chancellor Radio Broadcasting Company, dated as of February 19, 1997.
(r)2.30 Stockholders Agreement, by and among Chancellor Broadcasting Company, Evergreen Media Corporation, Scott
K. Ginsburg (individually and as custodian for certain shares held by his children), HM2/Chancellor, L.P.,
Hicks, Muse, Tate & First Equity Fund II, L.P., HM2/HMW, L.P. The Chancellor Business Trust, HM2/HMD
Sacramento GP, L.P., Thomas O. Hicks, as Trustee of the William Cree Hicks 1992 Irrevocable Trust, Thomas
O. Hicks, as Trustee of the Catherine Forgave Hicks 1993 Irrevocable Trust, Thomas O. Hicks, as Trustee of
the John Alexander Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Mack Hardin Hicks 1984 Trust,
Thomas O. Hicks, as Trustee of Robert Bradley Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Thomas
O. Hicks, Jr. 1984 Trust, Thomas O. Hicks, and H. Rand Reynolds, as Trustee for the Muse Children's GS
Trust, and Thomas O. Hicks, dated as of February 19, 1997.
</TABLE>
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<PAGE> 36
<TABLE>
<C> <S>
(r)2.31 Joint Purchase Agreement, by and among Chancellor Radio Broadcasting Company, Evergreen Media Corporation
of Los Angeles, and Evergreen Media Corporation, dated as of February 19, 1997.
(s)2.32 Asset Exchange Agreement, by and among EZ Communications, Inc., Professional Broadcasting Incorporated, EZ
Philadelphia, Inc., Evergreen Media Corporation of Los Angeles, Evergreen Media Corporation of Charlotte,
Evergreen Media Corporation of the East, Evergreen Media Corporation of Carolinaland, WBAV/WBAV-FM/WPEG
License Corp. and WRFX License Corp., dated as of December 5, 1996 (See table of contents for list of
omitted schedules).
(s)2.33 Asset Purchase Agreement, by and among EZ Communications, Inc., Professional Broadcasting Incorporated, EZ
Charlotte, Inc., Evergreen Media Corporation of Los Angeles, Evergreen Media Corporation of Los Angeles,
Evergreen Media Corporation of the East and Evergreen Media Corporation of Carolinaland, dated as of
December 5, 1996 (See table of contents for list of omitted schedules).
(t)2.34 Asset Purchase Agreement by and between Pacific and Southern Company, Inc. and Evergreen Media Corporation
of Los Angeles (re: WGCI-AM and WGCI-FM), dated as of April 4, 1997 (see table of contents for list of
omitted schedules and exhibits).
(t)2.35 Asset Purchase Agreement by and between Pacific and Southern Company, Inc. and Evergreen Media Corporation
of Los Angeles (re: KKBQ-AM and KKBQ-FM), dated as of April 4, 1997 (see table of contents for list of
omitted schedules and exhibits).
(t)2.36 Asset Purchase Agreement by and between Pacific and Southern Company, Inc. and Evergreen Media Corporation
of Los Angeles (re: KHKS-FM), dated as of April 4, 1997 (see table of contents for list of omitted
schedules and exhibits).
(y)2.41 Amended and Restated Agreement and Plan of Merger among Chancellor Broadcasting Company, Chancellor Radio
Broadcasting Company, Evergreen Media Corporation, Evergreen Media Corporation of Los Angeles and
Evergreen Mezzanine Holdings Corporation, dated as of February 19, 1997, as amended and restated on July
31, 1997.
(gg)2.42 Option Agreement, by and among Evergreen Media Corporation, Chancellor Broadcasting Company, Bonneville
International Corporation and Bonneville Holding company, dated as of August 6, 1997.
*3.1C Amended and Restated Certificate of Incorporation of Chancellor Media.
*3.2B Amended and Restated Bylaws of Chancellor Media.
(ff)3.3 Certificate of Incorporation of Evergreen Media Corporation of Los Angeles.
(pp)3.3A Amendment to Certificate of Incorporation of Evergreen Media Corporation of Los Angeles, filed September
5, 1997
(ff)3.4 Bylaws of Chancellor Media Corporation of Los Angeles.
</TABLE>
35
<PAGE> 37
<TABLE>
<C> <S>
(t)4.10 Second Amended and Restated Loan Agreement dated as of April 25, 1997 among Evergreen Media Corporation of
Los Angeles, the financial institutions whose names appear as Lenders on the signature pages thereof (the
"Lenders"), Toronto Dominion Securities, Inc., as Arranging Agent, The Bank of New York and Bankers Trust
Company, as Co-Syndication Agents, NationsBank of Texas, N.A. and Union Bank of California, as
Co-Documentation Agents, and Toronto Dominion (Texas) Inc., as Administrative Agent for the Lenders,
together with certain collateral documents attached thereto as exhibits, including Assignment of
Partnership Interests, Assignment of Trust Interests, Borrower's Pledge Agreement, Parent Company
Guaranty, Stock Pledge Agreement, Subsidiary Guaranty and Subsidiary Pledge Agreement (see table of
contents for list of omitted schedules and exhibits).
(z)4.11 First Amendment to Second Amended and Restated Loan Agreement, dated June 26, 1997, among Evergreen Media
Corporation of Los Angeles, the Lenders, the Agents and the administrative Agent.
(y)4.12 Specimen Common Stock Certificate of Chancellor Media.
(y)4.13 Specimen 7% Convertible Preferred Stock Certificate of Chancellor Media.
(y)4.14 Form of Certificate of Designation for 7% Convertible Preferred Stock of Chancellor Media.
(aa)4.15 Indenture, dated as of February 14, 1996, governing the 9 3/8% Senior Subordinated Notes due 2004 of
CMCLA.
(bb)4.16 First Supplemental Indenture, dated as of February 14, 1996, to the Indenture dated February 14,
1996, governing the 9 3/8% Senior Subordinated Notes due 2004 of CMCLA.
(cc)4.17 Indenture, dated as of February 26, 1996, governing the 12 1/4% Subordinated Exchange Debentures due 2008
of CMCLA.
(dd)4.18 Indenture, dated as of January 23, 1997, governing the 12% Subordinated Exchange Debentures due 2009 of
CMCLA.
(ee)4.19 Indenture, dated as of June 24, 1997, governing the 8 3/4% Senior Subordinated Notes due 2004 of CMCLA.
(ff)4.21 Specimen 12 1/4% Series A Senior Cumulative Exchangeable Preferred Stock Certificate of CMCLA.
(ff)4.22 Specimen 12% Exchangeable Preferred Stock Certificate of CMCLA.
(ff)4.23 Form of Certificate of Designation for 12 1/4% Series A Senior Cumulative Exchangeable Preferred Stock of
CMCLA.
(ff)4.24 Form of Certificate of Designation for 12% Exchangeable Preferred Stock of CMCLA.
(pp)4.25 Second Amendment to Second Amended and Restated Loan Agreement, dated August 7, 1997, among Evergreen
Media Corporation of Los Angeles, the Lenders, the Agents and the Administrative Agent.
(hh)4.26 Second Supplemental Indenture, dated as of April 15, 1997, to the Indenture dated February 14, 1996,
governing the 9 3/8% Senior Subordinated Notes due 2004 of CMCLA.
(pp)4.27 Third Supplemental Indenture, dated as of September 5, 1997, to the Indenture dated February 14, 1996,
governing the 9 3/8% Senior Subordinated Notes due 2004 of CMCLA.
</TABLE>
36
<PAGE> 38
<TABLE>
<C> <S>
(pp)4.28 First Supplemental Indenture, dated as of September 5, 1997, to the Indenture dated June 24, 1997,
governing the 8 3/4% Senior Subordinated Notes due 2007 of CMCLA.
(pp)4.29 First Supplemental Indenture, dated as of September 5, 1997, to the Indenture dated February 26, 1997,
governing the 12 1/4% Subordinated Exchange Debentures due 2008 of CMCLA.
(pp)4.30 First Supplemental Indenture, dated as of September 5, 1997, to the Indenture dated January 23, 1997,
governing the 12% Subordinated Exchange Debentures due 2009 of CMCLA.
(qq)4.31 Specimen $3.00 Convertible Exchangeable Preferred Stock Certificate of Chancellor Media.
(qq)4.32 Certificate of Designation for $3.00 Convertible Exchangeable Preferred Stock of Chancellor Media.
(qq)4.33 Convertible Subordinated Exchange Indenture (including form of 6% Convertible Subordinated Exchange
Debenture attached thereto), dated June 16, 1997, between Evergreen Media Corporation and The Bank of
New York.
(f)10.23 Evergreen Media Corporation Stock Option Plan for Non-employee Directors.
**(n)10.26 Employment Agreement dated February 9, 1996 by and between Evergreen Media Corporation and Kenneth J.
O'Keefe.
(o)10.28 1995 Stock Option Plan for executive officers and key employees of Evergreen Media Corporation.
**(pp)10.30 First Amendment to Employment Agreement dated March 1, 1997 by and between Evergreen Media Corporation and
Kenneth J. O'Keefe.
**(pp)10.31 Employment Agreement dated September 4, 1997 by and among Evergreen Media Corporation, Evergreen Media
Corporation of Los Angeles and Scott K. Ginsburg.
**(pp)10.32 Employment Agreement dated September 4, 1997 by and among Evergreen Media Corporation, Evergreen Media
Corporation of Los Angeles and James de Castro.
**(pp)10.33 Employment Agreement dated September 4, 1997 by and among Evergreen Media Corporation, Evergreen Media
Corporation of Los Angeles and Matthew E. Devine.
**(pp)10.34 Second Amendment to Employment Agreement dated September 4, 1997 by and among Evergreen Media Corporation,
Evergreen Media Corporation of Los Angeles and Kenneth J. O'Keefe.
**(ii)10.35 Employment Agreement dated February 14, 1996 by and among Chancellor Broadcasting Company, Chancellor
Radio Broadcasting Company and Steven Dinetz.
(jj)10.36 Chancellor Broadcasting Company 1996 Stock Award Plan.
(kk)10.37 Chancellor Holdings Corp. 1994 Director Stock Option Plan.
(ll)10.38 Stock Option Grant Letter dated September 30, 1995 from Chancellor Corporation to Steven Dinetz.
</TABLE>
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<TABLE>
<C> <S>
(mm)10.39 Stock Option Grant Letter dated September 30, 1995 from Chancellor Corporation to Eric W. Neumann.
(nn)10.40 Stock Option Grant Letter dated September 30, 1995 from Chancellor Corporation to Marvin Dinetz.
(oo)10.41 Stock Option Grant Letter dated February 14, 1997 from Chancellor Broadcasting Company to Carl M. Hirsch.
(pp)16.1 Letter from KPMG Peat Marwick LLP to the Securities and Exchange Commission dated September 29, 1997.
*27.1 Financial Data Schedule of Chancellor Media Corporation.
*27.2 Financial Data Schedule of Chancellor Media Corporation of Los Angeles.
</TABLE>
<TABLE>
<C> <S>
* Filed herewith.
** Management contract or compensatory arrangement.
(a) Incorporated by reference to the identically numbered exhibit to Evergreen's Registration Statement on Form S-1, as
amended (Reg. No. 33-60036).
(f) Incorporated by reference to the identically numbered exhibit to Evergreen's Registration Statement on Form S-4, as
amended (Reg. No. 33-89838).
(g) Incorporated by reference to Exhibit No. 4.8 to Evergreen's Registration Statement on Form S-4, as amended (Reg. No.
33-89838).
(h) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on Form 8-K dated July 14,
1995.
(i) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on Form 8-K dated January
17, 1996.
(j) Incorporated by reference to the identically numbered exhibit to Evergreen's Quarterly Report on Form 10-Q for the
quarterly period ending June 30, 1995.
(k) Incorporated by reference to the identically numbered exhibit to Evergreen's Registration Statement on Form S-1, as
amended (Reg. No. 33-69752).
(n) Incorporated by reference to the identically numbered exhibit to Evergreen's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995.
(o) Incorporated by reference to the identically numbered exhibit to Evergreen's Quarterly Report on Form 10-Q for the
quarterly period ending March 31, 1996.
(p) Incorporated by reference to the identically numbered exhibit to Evergreen's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1996.
(q) Incorporated by reference to the identically numbered exhibit to Evergreen's Registration Statement on Form S-3, as
amended (Reg. No. 333-12453).
</TABLE>
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<TABLE>
<C> <S>
(r) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on Form 8-K dated February
16, 1997 and filed March 9, 1997.
(s) Incorporated by reference to the identically numbered exhibit to Evergreen's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996.
(t) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on Form 8-K dated April 1,
1997 and filed May 9, 1997.
(y) Incorporated by reference to the identically numbered exhibit of Evergreen's Registration Statement on Form S-4 (Reg.
No. 333-32677), filed August 1, 1997.
(z) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on form 8-K dated July 7,
1997 and filed July 31, 1997.
(aa) Incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K of Chancellor and CRBC, as filed on
February 29, 1996.
(bb) Incorporated by reference to Exhibit 4.5 to the Annual Report on Form 10-K of Chancellor, CRBC and Chancellor
Broadcasting Licensee Company for the fiscal year ended December 31, 1995.
(cc) Incorporated by reference to Exhibit 4.6 to the Current Report on Form 8-K of Chancellor and CRBC, as filed on
February 29, 1996.
(dd) Incorporated by reference to Exhibit 4.7 to the Current Report on Form 8-K of CRBC, as filed on February 6, 1997.
(ee) Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Chancellor and CRBC, as filed on July
17, 1997.
(ff) Incorporated by reference to the identically-numbered exhibit to EMCLA's Registration Statement on Form S-4 (Reg. No.
333-32259), dated July 29, 1997, as amended.
(gg) Incorporated by reference to the identically numbered exhibit to the Quarterly Report on Form 10-Q of Evergreen and
EMCLA for the quarterly period ending June 30, 1997.
(hh) Incorporated by reference to Exhibit 4.8 to the Quarterly Report on Form 10-Q of Chancellor and CRBC for the quarterly
period ending March 31, 1997.
(ii) Incorporated by reference to Exhibit 10.6 to Chancellor's Registration Statement on Form S-1 (Reg. No. 333-02782)
filed February 9, 1996.
(jj) Incorporated by reference to Exhibit 4.22 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(kk) Incorporated by reference to Exhibit 4.23 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(ll) Incorporated by reference to Exhibit 4.24 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(mm) Incorporated by reference to Exhibit 4.25 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
</TABLE>
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<TABLE>
<C> <S>
(nn) Incorporated by reference to Exhibit 4.26 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(oo) Incorporated by reference to Exhibit 4.27 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(pp) Incorporated by reference to the identically numbered exhibit to CMCLA's Registration Statement on Form S-4 (Reg. No.
333-36451), dated September 26, 1997, as amended.
(qq) Incorporated by reference to the identically numbered exhibit to Chancellor Media's Registration Statement on Form S-3
(Reg. No. 333-36855), dated October 1, 1997, as amended.
</TABLE>
(b) Current Reports on Form 8-K
1. Current Report on Form 8-K, dated July 7, 1997 and filed July 31, 1997, of
Evergreen, reporting certain events related to the Katz Acquisition and the
consummation of certain transactions previously described.
2. Current Report on Form 8-K, dated September 5, 1997 and filed September 17,
1997, as amended on Form 8-K/A, of Chancellor Media and CMCLA, reporting
the consummation of the Chancellor Merger and providing financial data
related to the consummation of the Chancellor Merger.
3. Current Report on Form 8-K, dated September 23, 1997 and filed September
29, 1997, of Chancellor Media and CMCLA, reporting the change in certifying
accountants.
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<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Chancellor Media Corporation Chancellor Media Corporation
of Los Angeles
By: /s/ Matthew E. Devine By: /s/ Matthew E. Devine
- ----------------------------------- -----------------------------------
Matthew E. Devine Matthew E. Devine
Senior Vice-President and Senior Vice-President and
Chief Financial Officer Chief Financial Officer
Date: November 14, 1997
41
<PAGE> 43
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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<C> <S>
(f)2.9 Plan of Reorganization and Merger by and between Evergreen Media Corporation and Broadcasting Partners,
Inc., dated on January 31, 1995, as amended, including the Form of Registration Rights Agreement among
MLGA Fund I, L.P., MLGA Fund II, L.P. MLGA/BPI Partners I, L., P., MLGAL Partners, Limited Partnership and
Evergreen Media Corporation (see table of contents for a list of omitted schedules).
(g)2.9A Agreement dated as of January 31, 1995 among Evergreen Media Corporation, Broadcasting Partners, Inc., the
holders of the shares of capital stock of Broadcasting Partners, Inc. and Scott K. Ginsburg, holder of
shares of capital stock of Evergreen Media Corporation.
(f)2.10 Plan and Agreement of Merger among Evergreen Media Partners Corporation, Evergreen Media Corporation and
Broadcasting Partners, Inc., dated as of April 12, 1995.
(h)2.11 Agreement and Plan of Merger by and among Pyramid Communications, Inc., Evergreen Media Corporation and
Evergreen Media/Pyramid Corporation dated as of July 14, 1995 (see table of contents for list of omitted
exhibits and schedules).
(i)2.11A Amendment to Plan and Agreement of Merger by and among Pyramid Communications Inc., Evergreen Media
Corporation and Evergreen Media/Pyramid Corporation dated September 7, 1995.
(i)2.11B Amendment to Plan and Agreement of Merger by and among Pyramid Communications Inc., Evergreen Media
Corporation and Evergreen Media/Pyramid Corporation dated January 11, 1996.
(j)2.12 Purchase Agreement between Fairbanks Communications, Inc. and Evergreen Media Corporation dated October
12, 1995 (see table of contents for list of omitted exhibits and schedules).
(n)2.13 Option Agreement dated as of January 9, 1996 between Chancellor Broadcasting Company and Evergreen Media
Corporation (including Form of Advertising Brokerage Agreement and Form of Asset Purchase Agreement).
(o)2.14 Asset Purchase Agreement dated April 4, 1996 between American Radio System Corporation and Evergreen Media
Corporation of Buffalo (see table of contents for list of omitted exhibits and schedules).
(o)2.15 Asset Purchase Agreement dated April 11, 1996 between Mercury Radio Communications, L.P. and Evergreen
Media Corporation of Los Angeles, Evergreen Media/Pyramid Holding Corporation, WHTT (AM) License Corp.
(see table of contents for list of omitted exhibits and schedules).
(o)2.16 Asset Purchase Agreement dated April 19, 1996 between Crescent Communications L.P. and Evergreen Media
Corporation of Los Angeles (see table of contents for list of omitted exhibits and schedules).
(p)2.17 Asset Purchase Agreement dated June 13, 1996 between Evergreen Media Corporation of Los Angeles and
Greater Washington Radio, Inc. (see table of contents for list of omitted exhibits and schedules).
</TABLE>
<PAGE> 44
<TABLE>
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(p)2.18 Asset Exchange Agreement dated June 13, 1996 among Evergreen Media Corporation of Los Angeles, Evergreen
Media Corporation of the Bay State, WKLB License Corp., Greater Media Radio, Inc. and Greater Washington
Radio, Inc. (see table of contents for list of omitted exhibit and schedules).
(p)2.19 Purchase Agreement dated June 27, 1996 between WEDR, Inc., Seller and Evergreen Media Corporation of Los
Angeles, Buyer. (See table of contents for list of omitted schedules.)
(p)2.21 Asset Purchase Agreement dated July 15, 1996 by and among Century Chicago Broadcasting L.P., an Illinois
limited partnership, Century Broadcasting Corporation, a Delaware Corporation, Evergreen Media Corporation
of Los Angeles a Delaware Corporation.
(p)2.22 Asset Purchase Agreement dated August 12, 1996 by and among Chancellor Broadcasting Company, Shamrock
Broadcasting, Inc. and Evergreen Media Corporation of the Great Lakes.
(p)2.23 Asset Purchase Agreement dated as of August 12, 1996 between Secret Communications Limited Partnership and
Evergreen Media Corporation of Los Angeles (WQRS-FM). (See table of content for list of omitted exhibits
and schedules.)
(p)2.24 Asset Purchase Agreement dated as of August 12, 1996 between Secret Communications Limited Partnership and
Evergreen Media Corporation of Los Angeles. (See table of contents for list of omitted schedules)
(q)2.25 Letter of intent dated August 27, 1996 between EZ Communications, Inc. Evergreen Media Corporation.
(q)2.26 Asset Purchase Agreement dated September 19, 1996 between Beasley-FM Acquisition Corp. WDAS License
Limited Partnership and Evergreen Media Corporation of Los Angeles.
(q)2.27 Asset Purchase Agreement dated September 19, 1996 between The Brown Organization and Evergreen Media
Corporation of Los Angeles.
(r)2.28 Stock Purchase Agreement by and between Viacom International, Inc. and Evergreen Media Corporation of Los
Angeles, dated February 16, 1997 (See table of contents for omitted schedule and exhibits).
(r)2.29 Agreement and Plan of Merger, by and among Evergreen Media Corporation, Chancellor Broadcasting Company
and Chancellor Radio Broadcasting Company, dated as of February 19, 1997.
(r)2.30 Stockholders Agreement, by and among Chancellor Broadcasting Company, Evergreen Media Corporation, Scott
K. Ginsburg (individually and as custodian for certain shares held by his children), HM2/Chancellor, L.P.,
Hicks, Muse, Tate & First Equity Fund II, L.P., HM2/HMW, L.P. The Chancellor Business Trust, HM2/HMD
Sacramento GP, L.P., Thomas O. Hicks, as Trustee of the William Cree Hicks 1992 Irrevocable Trust, Thomas
O. Hicks, as Trustee of the Catherine Forgave Hicks 1993 Irrevocable Trust, Thomas O. Hicks, as Trustee of
the John Alexander Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Mack Hardin Hicks 1984 Trust,
Thomas O. Hicks, as Trustee of Robert Bradley Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Thomas
O. Hicks, Jr. 1984 Trust, Thomas O. Hicks, and H. Rand Reynolds, as Trustee for the Muse Children's GS
Trust, and Thomas O. Hicks, dated as of February 19, 1997.
</TABLE>
<PAGE> 45
<TABLE>
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(r)2.31 Joint Purchase Agreement, by and among Chancellor Radio Broadcasting Company, Evergreen Media Corporation
of Los Angeles, and Evergreen Media Corporation, dated as of February 19, 1997.
(s)2.32 Asset Exchange Agreement, by and among EZ Communications, Inc., Professional Broadcasting Incorporated, EZ
Philadelphia, Inc., Evergreen Media Corporation of Los Angeles, Evergreen Media Corporation of Charlotte,
Evergreen Media Corporation of the East, Evergreen Media Corporation of Carolinaland, WBAV/WBAV-FM/WPEG
License Corp. and WRFX License Corp., dated as of December 5, 1996 (See table of contents for list of
omitted schedules).
(s)2.33 Asset Purchase Agreement, by and among EZ Communications, Inc., Professional Broadcasting Incorporated, EZ
Charlotte, Inc., Evergreen Media Corporation of Los Angeles, Evergreen Media Corporation of Los Angeles,
Evergreen Media Corporation of the East and Evergreen Media Corporation of Carolinaland, dated as of
December 5, 1996 (See table of contents for list of omitted schedules).
(t)2.34 Asset Purchase Agreement by and between Pacific and Southern Company, Inc. and Evergreen Media Corporation
of Los Angeles (re: WGCI-AM and WGCI-FM), dated as of April 4, 1997 (see table of contents for list of
omitted schedules and exhibits).
(t)2.35 Asset Purchase Agreement by and between Pacific and Southern Company, Inc. and Evergreen Media Corporation
of Los Angeles (re: KKBQ-AM and KKBQ-FM), dated as of April 4, 1997 (see table of contents for list of
omitted schedules and exhibits).
(t)2.36 Asset Purchase Agreement by and between Pacific and Southern Company, Inc. and Evergreen Media Corporation
of Los Angeles (re: KHKS-FM), dated as of April 4, 1997 (see table of contents for list of omitted
schedules and exhibits).
(y)2.41 Amended and Restated Agreement and Plan of Merger among Chancellor Broadcasting Company, Chancellor Radio
Broadcasting Company, Evergreen Media Corporation, Evergreen Media Corporation of Los Angeles and
Evergreen Mezzanine Holdings Corporation, dated as of February 19, 1997, as amended and restated on July
31, 1997.
(gg)2.42 Option Agreement, by and among Evergreen Media Corporation, Chancellor Broadcasting Company, Bonneville
International Corporation and Bonneville Holding company, dated as of August 6, 1997.
*3.1C Amended and Restated Certificate of Incorporation of Chancellor Media.
*3.2B Amended and Restated Bylaws of Chancellor Media.
(ff)3.3 Certificate of Incorporation of Evergreen Media Corporation of Los Angeles.
(pp)3.3A Amendment to Certificate of Incorporation of Evergreen Media Corporation of Los Angeles, filed September
5, 1997
(ff)3.4 Bylaws of Chancellor Media Corporation of Los Angeles.
</TABLE>
<PAGE> 46
<TABLE>
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(t)4.10 Second Amended and Restated Loan Agreement dated as of April 25, 1997 among Evergreen Media Corporation of
Los Angeles, the financial institutions whose names appear as Lenders on the signature pages thereof (the
"Lenders"), Toronto Dominion Securities, Inc., as Arranging Agent, The Bank of New York and Bankers Trust
Company, as Co-Syndication Agents, NationsBank of Texas, N.A. and Union Bank of California, as
Co-Documentation Agents, and Toronto Dominion (Texas) Inc., as Administrative Agent for the Lenders,
together with certain collateral documents attached thereto as exhibits, including Assignment of
Partnership Interests, Assignment of Trust Interests, Borrower's Pledge Agreement, Parent Company
Guaranty, Stock Pledge Agreement, Subsidiary Guaranty and Subsidiary Pledge Agreement (see table of
contents for list of omitted schedules and exhibits).
(z)4.11 First Amendment to Second Amended and Restated Loan Agreement, dated June 26, 1997, among Evergreen Media
Corporation of Los Angeles, the Lenders, the Agents and the administrative Agent.
(y)4.12 Specimen Common Stock Certificate of Chancellor Media.
(y)4.13 Specimen 7% Convertible Preferred Stock Certificate of Chancellor Media.
(y)4.14 Form of Certificate of Designation for 7% Convertible Preferred Stock of Chancellor Media.
(aa)4.15 Indenture, dated as of February 14, 1996, governing the 9 3/8% Senior Subordinated Notes due 2004 of
CMCLA.
(bb)4.16 First Supplemental Indenture, dated as of February 14, 1996, to the Indenture dated February 14, 1996,
governing the 9 3/8% Senior Subordinated Notes due 2004 of CMCLA.
(cc)4.17 Indenture, dated as of February 26, 1996, governing the 12 1/4% Subordinated Exchange Debentures due 2008
of CMCLA.
(dd)4.18 Indenture, dated as of January 23, 1997, governing the 12% Subordinated Exchange Debentures due 2009 of
CMCLA.
(ee)4.19 Indenture, dated as of June 24, 1997, governing the 8 3/4% Senior Subordinated Notes due 2004 of CMCLA.
(ff)4.21 Specimen 12 1/4% Series A Senior Cumulative Exchangeable Preferred Stock Certificate of CMCLA.
(ff)4.22 Specimen 12% Exchangeable Preferred Stock Certificate of CMCLA.
(ff)4.23 Form of Certificate of Designation for 12 1/4% Series A Senior Cumulative Exchangeable Preferred Stock of
CMCLA.
(ff)4.24 Form of Certificate of Designation for 12% Exchangeable Preferred Stock of CMCLA.
(pp)4.25 Second Amendment to Second Amended and Restated Loan Agreement, dated August 7, 1997, among Evergreen
Media Corporation of Los Angeles, the Lenders, the Agents and the Administrative Agent.
(hh)4.26 Second Supplemental Indenture, dated as of April 15, 1997, to the Indenture dated February 14, 1996,
governing the 9 3/8% Senior Subordinated Notes due 2004 of CMCLA.
(pp)4.27 Third Supplemental Indenture, dated as of September 5, 1997, to the Indenture dated February 14, 1996,
governing the 9 3/8% Senior Subordinated Notes due 2004 of CMCLA.
(pp)4.28 First Supplemental Indenture, dated as of September 5, 1997, to the Indenture dated June 24, 1997,
governing the 8 3/4% Senior Subordinated Notes due 2007 of CMCLA.
</TABLE>
<PAGE> 47
<TABLE>
<C> <S>
(pp)4.29 First Supplemental Indenture, dated as of September 5, 1997, to the Indenture dated February 26, 1997,
governing the 12 1/4% Subordinated Exchange Debentures due 2008 of CMCLA.
(pp)4.30 First Supplemental Indenture, dated as of September 5, 1997, to the Indenture dated January 23, 1997,
governing the 12% Subordinated Exchange Debentures due 2009 of CMCLA.
(qq)4.31 Specimen $3.00 Convertible Exchangeable Preferred Stock Certificate of Chancellor Media.
(qq)4.32 Certificate of Designation for $3.00 Convertible Exchangeable Preferred Stock of Chancellor Media.
(qq)4.33 Convertible Subordinated Exchange Indenture (including form of 6% Convertible Subordinated Exchange
Debenture attached thereto), dated June 16, 1997, between Evergreen Media Corporation and The Bank of New
York.
(f)10.23 Evergreen Media Corporation Stock Option Plan for Non-employee Directors.
**(n)10.26 Employment Agreement dated February 9, 1996 by and between Evergreen Media Corporation and Kenneth J.
O'Keefe.
(o)10.28 1995 Stock Option Plan for executive officers and key employees of Evergreen Media Corporation.
**(pp)10.30 First Amendment to Employment Agreement dated March 1, 1997 by and between Evergreen Media Corporation and
Kenneth J. O'Keefe.
**(pp)10.31 Employment Agreement dated September 4, 1997 by and among Evergreen Media Corporation, Evergreen Media
Corporation of Los Angeles and Scott K. Ginsburg.
**(pp)10.32 Employment Agreement dated September 4, 1997 by and among Evergreen Media Corporation, Evergreen Media
Corporation of Los Angeles and James de Castro.
**(pp)10.33 Employment Agreement dated September 4, 1997 by and among Evergreen Media Corporation, Evergreen Media
Corporation of Los Angeles and Matthew E. Devine.
**(pp)10.34 Second Amendment to Employment Agreement dated September 4, 1997 by and among Evergreen Media Corporation,
Evergreen Media Corporation of Los Angeles and Kenneth J. O'Keefe.
**(ii)10.35 Employment Agreement dated February 14, 1996 by and among Chancellor Broadcasting Company, Chancellor
Radio Broadcasting Company and Steven Dinetz.
(jj)10.36 Chancellor Broadcasting Company 1996 Stock Award Plan.
(kk)10.37 Chancellor Holdings Corp. 1994 Director Stock Option Plan.
(ll)10.38 Stock Option Grant Letter dated September 30, 1995 from Chancellor Corporation to Steven Dinetz.
(mm)10.39 Stock Option Grant Letter dated September 30, 1995 from Chancellor Corporation to Eric W. Neumann.
</TABLE>
<PAGE> 48
<TABLE>
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(nn)10.40 Stock Option Grant Letter dated September 30, 1995 from Chancellor Corporation to Marvin Dinetz.
(oo)10.41 Stock Option Grant Letter dated February 14, 1997 from Chancellor Broadcasting Company to Carl M. Hirsch.
(pp)16.1 Letter from KPMG Peat Marwick LLP to the Securities and Exchange Commission dated September 29, 1997.
*27.1 Financial Data Schedule of Chancellor Media Corporation.
*27.2 Financial Data Schedule of Chancellor Media Corporation of Los Angeles.
</TABLE>
<TABLE>
<C> <S>
* Filed herewith.
** Management contract or compensatory arrangement.
(a) Incorporated by reference to the identically numbered exhibit to Evergreen's Registration Statement on Form S-1, as
amended (Reg. No. 33-60036).
(f) Incorporated by reference to the identically numbered exhibit to Evergreen's Registration Statement on Form S-4, as
amended (Reg. No. 33-89838).
(g) Incorporated by reference to Exhibit No. 4.8 to Evergreen's Registration Statement on Form S-4, as amended (Reg. No.
33-89838).
(h) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on Form 8-K dated July 14,
1995.
(i) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on Form 8-K dated January
17, 1996.
(j) Incorporated by reference to the identically numbered exhibit to Evergreen's Quarterly Report on Form 10-Q for the
quarterly period ending June 30, 1995.
(k) Incorporated by reference to the identically numbered exhibit to Evergreen's Registration Statement on Form S-1, as
amended (Reg. No. 33-69752).
(n) Incorporated by reference to the identically numbered exhibit to Evergreen's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995.
(o) Incorporated by reference to the identically numbered exhibit to Evergreen's Quarterly Report on Form 10-Q for the
quarterly period ending March 31, 1996.
(p) Incorporated by reference to the identically numbered exhibit to Evergreen's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1996.
(q) Incorporated by reference to the identically numbered exhibit to Evergreen's Registration Statement on Form S-3, as
amended (Reg. No. 333-12453).
(r) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on Form 8-K dated February
16, 1997 and filed March 9, 1997.
</TABLE>
<PAGE> 49
<TABLE>
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(s) Incorporated by reference to the identically numbered exhibit to Evergreen's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996.
(t) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on Form 8-K dated April 1,
1997 and filed May 9, 1997.
(y) Incorporated by reference to the identically numbered exhibit of Evergreen's Registration Statement on Form S-4 (Reg.
No. 333-32677), filed August 1, 1997.
(aa) Incorporated by reference to the identically numbered exhibit to Evergreen's Current Report on form 8-K dated July 7,
1997 and filed July 31, 1997.
(aa) Incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K of Chancellor and CRBC, as filed on
February 29, 1996.
(bb) Incorporated by reference to Exhibit 4.5 to the Annual Report on Form 10-K of Chancellor, CRBC and Chancellor
Broadcasting Licensee Company for the fiscal year ended December 31, 1995.
(cc) Incorporated by reference to Exhibit 4.6 to the Current Report on Form 8-K of Chancellor and CRBC, as filed on
February 29, 1996.
(dd) Incorporated by reference to Exhibit 4.7 to the Current Report on Form 8-K of CRBC, as filed on February 6, 1997.
(ee) Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Chancellor and CRBC, as filed on July
17, 1997.
(ff) Incorporated by reference to the identically-numbered exhibit to EMCLA's Registration Statement on Form S-4 (Reg. No.
333-32259), dated July 29, 1997, as amended.
(gg) Incorporated by reference to the identically numbered exhibit to the Quarterly Report on Form 10-Q of Evergreen and
EMCLA for the quarterly period ending June 30, 1997.
(hh) Incorporated by reference to Exhibit 4.8 to the Quarterly Report on Form 10-Q of Chancellor and CRBC for the quarterly
period ending March 31, 1997.
(ii) Incorporated by reference to Exhibit 10.6 to Chancellor's Registration Statement on Form S-1 (Reg. No. 333-02782)
filed February 9, 1996.
(jj) Incorporated by reference to Exhibit 4.22 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(kk) Incorporated by reference to Exhibit 4.23 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(ll) Incorporated by reference to Exhibit 4.24 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(mm) Incorporated by reference to Exhibit 4.25 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(nn) Incorporated by reference to Exhibit 4.26 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
</TABLE>
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<TABLE>
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(oo) Incorporated by reference to Exhibit 4.27 to Chancellor Media's Registration Statement on Form S-8 (Reg. No.
333-35039), dated September 5, 1997.
(pp) Incorporated by reference to the identically numbered exhibit to CMCLA's Registration Statement on Form S-4 (Reg. No.
333-36451), dated September 26, 1997, as amended.
(qq) Incorporated by reference to the identically numbered exhibit to Chancellor Media's Registration Statement on Form S-3
(Reg. No. 333-36855), dated October 1, 1997, as amended.
</TABLE>
<PAGE> 1
EXHIBIT 3.1C
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EVERGREEN MEDIA CORPORATION
(ORIGINALLY INCORPORATED ON JUNE 22, 1988)
- -------------------------------------------------------------------------------
FIRST: The name of the corporation is Chancellor Media
Corporation (the "Corporation").
SECOND: The registered office of the Corporation in the State
of Delaware is located at Corporation Trust Center, 1209 Orange Street, in the
City of Wilmington, County of New Castle. The name of the registered agent of
the Corporation at such address is The Corporation Trust Company.
THIRD: The purpose for which the Corporation is organized is
to engage in any and all lawful acts and activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is 325,000,000 shares
consisting of (a) 50,000,000 shares of preferred stock, par value $.01 per share
(the "Preferred Stock"), (b) 200,000,000 shares of Common Stock, par value $.01
per share (the "Common Stock") and (c) 75,000,000 shares of Class A Common
Stock, par value $.01 per share (the "Class A Common Stock").
The designations, powers, preferences, rights, qualifications,
limitations, and restrictions of the Preferred Stock, the Common Stock and the
Class A Common Stock are as follows:
1. Reclassification of Existing Class A and Class B Common Stock.
(a) Upon the filing of this Amended and Restated Certificate
of Incorporation, each share of Class A Common Stock, par value $.01 per share,
of the Corporation outstanding shall be reclassified, changed and converted into
one share of the Common Stock, and each share of Class B Common Stock, par value
$.01 per share, of the Corporation outstanding shall be reclassified into one
share of Common Stock (such reclassifications collectively being the
"Reclassification").
(b) After the Reclassification, each holder of the shares of
capital stock of the Corporation being reclassified, changed and converted as
provided herein shall be entitled to receive, upon surrender at the office of
the Corporation or the transfer agent for the Common Stock of such holder's
certificate or certificates representing the shares being reclassified, duly
endorsed in blank or accompanied by duly executed proper instruments of
transfer, as promptly
<PAGE> 2
as practicable after such surrender one or more certificates evidencing the
Common Stock issuable to such holder in respect of the Reclassification. After
the Reclassification, pending the issuance and delivery of such certificates in
accordance herewith, the certificate or certificates evidencing the shares of
previously outstanding class A and class B common stock being reclassified shall
be deemed to evidence the shares of Common Stock issuable upon the
Reclassification.
2. Provisions Relating to the Preferred Stock.
(a) The Preferred Stock may be issued from time to time in one
or more classes or series, the shares of each class or series to have such
designations, powers, preferences and rights and such qualifications,
limitations and restrictions thereof as are stated and expressed herein and in
the resolution or resolutions providing for the issue of such class or series
adopted by the Board of Directors of the Corporation (the "Board of Directors")
as hereafter prescribed.
(b) Authority is hereby expressly granted to and vested in the
Board of Directors to authorize the issuance of the Preferred Stock from time to
time in one or more classes or series, and with respect to each class or series
of the Preferred Stock, to fix and state by the resolution or resolutions from
time to time adopted providing for the issuance thereof the following:
(i) whether or not the class or series is to have
voting rights, full, special or limited, or is to be without voting
rights, and whether or not such class or series is to be entitled to
vote as a separate class either alone or together with the holders of
one or more other classes or series of stock;
(ii) the number of shares to constitute the class
or series and the designations thereof;
(iii) the preferences and relative, participating,
optional or other special rights, if any, and the qualifications,
limitations or restrictions thereof, if any, with respect to any class
or series;
(iv) whether or not the shares of any class or
series shall be redeemable at the option of the Corporation or the
holders thereof or upon the happening of any specified event, and, if
redeemable, the redemption price or prices (which may be payable in the
form of cash, notes, securities or other property) and the time or
times at which, and the terms and conditions upon which, such shares
shall be redeemable and the manner of redemption;
(v) whether or not the shares of a class or
series shall be subject to the operation of retirement or sinking funds
to be applied to the purchase or redemption of such shares for
retirement, and, if such retirement or sinking fund or funds are to be
established, the annual amount thereof and the terms and provisions
relative to the operation thereof;
2
<PAGE> 3
(vi) the dividend rate, whether dividends are
payable in cash, securities of the Corporation or other property, the
conditions upon which and the times when such dividends are payable,
the preference to or the relation to the payment of dividends payable
on any other class or classes or series of stock, whether or not such
dividends shall be cumulative or noncumulative and, if cumulative, the
date or dates from which such dividends shall accumulate;
(vii) the preferences, if any, and the amounts
thereof which the holders of any class or series thereof shall be
entitled to receive upon the voluntary or involuntary dissolution of,
or upon any distribution of the assets of, the Corporation;
(viii) whether or not the shares of any class or
series, at the option of the Corporation or the holder thereof or upon
the happening of any specified event, shall be convertible into or
exchangeable for the shares of any other class or classes or of any
other series of the same or any other class or classes of stock,
securities, or other property of the Corporation and the conversion
price or prices or ratio or ratios or the rate or rates at which such
exchange may be made, with such adjustments, if any, as shall be stated
and expressed or provided for in such resolution or resolutions; and
(ix) such other special rights and protective
provisions with respect to any class or series as may to the Board of
Directors seem advisable.
(c) The shares of each class or series of the Preferred Stock
may vary from the shares of any other class or series thereof in any or all of
the foregoing respects. The Board of Directors may increase the number of shares
of the Preferred Stock designated for any existing class or series by a
resolution adding to such class or series authorized and unissued shares of the
Preferred Stock not designated for any other class or series. The Board of
Directors may decrease the number of shares of the Preferred Stock designated
for any existing class or series by a resolution subtracting from such class or
series authorized and unissued shares of the Preferred Stock designated for such
existing class or series, and the shares so subtracted shall become authorized,
unissued and undesignated shares of the Preferred Stock.
(d) The number of authorized shares of Preferred Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the Common
Stock and Class A Common Stock, each voting as a separate class, without a vote
of a majority of the holders of the Preferred Stock, or of any class or series
thereof, unless a vote of any such holders is required pursuant to the
certificate or certificates establishing such class or series of Preferred
Stock.
3. Provisions Relating to the Common Stock and Class A Common Stock.
(a) Except as otherwise set forth in this Paragraph 3, each
share of Common Stock and Class A Common Stock of the Corporation shall have
identical rights and privileges in every respect. The holders of shares of
Common Stock shall be entitled to vote as a class upon
3
<PAGE> 4
all matters submitted to a vote of the stockholders of the Corporation and shall
be entitled to one vote for each share of Common Stock held, and the holders of
shares of Class A Common Stock shall be entitled to vote upon all matters
submitted to a vote of the stockholders of the Corporation as a separate class
and shall be entitled to one vote for each share of Class A Common Stock held.
(b) Subject to the prior rights and preferences, if any,
applicable to shares of the Preferred Stock or any series thereof, the holders
of shares of the Common Stock and Class A Common Stock shall be entitled to
receive and participate ratably in such dividends (payable in cash, stock, or
otherwise) as may be declared thereon by the board of directors at any time and
from time to time out of any funds of the Corporation legally available
therefor.
(c) In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Corporation, after distribution in full of the
preferential amounts, if any, to be distributed to the holders of shares of the
Preferred Stock or any series thereof, the holders of shares of the Common Stock
and Class A Common Stock shall be entitled to receive all of the remaining
assets of the Corporation available for distribution to its stockholders,
ratably in proportion to the number of shares of the Common Stock or Class A
Common Stock held by them.
(d) With respect to any Going Private Transaction (as defined
below) between the Corporation and Scott K. Ginsburg or Affiliates of Scott K.
Ginsburg (as defined below), the holders of the Common Stock and the Class A
Common Stock shall each vote separately as a class. For purposes of this
Paragraph 3(d), the term "Going Private Transaction" shall mean any transaction
that is a "Rule 13e-3 Transaction," as such term is defined in Rule 13e-3(a)(3),
17 C.F.R. Section 240.13e-3, as amended from time to time, promulgated under the
Securities Exchange Act of 1934, as amended. The term "Affiliate of Scott K.
Ginsburg" shall mean (x) any corporation of which Scott K. Ginsburg is the
beneficial owner of 50% or more of the combined voting power of all classes of
equity securities, (y) any trust or other estate in which Scott K. Ginsburg
serves as trustee or in a similar capacity, or (z) any partnership, joint
venture, or unincorporated organization that is under the direct or indirect
control of Scott K. Ginsburg, such that Scott K. Ginsburg possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such entity whether through the ownership of voting securities, by
contract, or otherwise.
4. General.
(a) Subject to the foregoing provisions of this Certificate of
Incorporation, the Corporation may issue shares of its Common Stock and Class A
Common Stock from time to time for such consideration (not less than the par
value thereof) as may be fixed by the Board of Directors, which is expressly
authorized to fix the same in its absolute and uncontrolled discretion subject
to the foregoing conditions; provided, however, that notwithstanding the
foregoing, the Corporation may not issue shares of Class A Common Stock without
the unanimous vote or written consent of the Board of Directors of the
Corporation. Shares so issued for which the consideration shall have been paid
or delivered to the Corporation shall be
4
<PAGE> 5
deemed fully paid stock and shall not be liable to any further call or
assessment thereon, and the holders of such shares shall not be liable for any
further payments in respect of such shares.
(b) The Corporation shall have authority to create and issue
rights and options entitling their holders to purchase shares of the
Corporation's capital stock of any class or series or other securities of the
Corporation, and such rights and options shall be evidenced by instrument(s)
approved by the Board of Directors. The Board of Directors shall be empowered to
set the exercise price, duration, times for exercise, and other terms of such
options or rights; provided, however, that the consideration to be received for
any shares of capital stock subject thereto shall not be less than the par value
thereof.
FIFTH: The number of directors constituting the Board of
Directors shall be no less than five and no more than thirteen, plus such number
of directors as may be elected from time to time by the holders of any class or
series of Preferred Stock. Commencing on the date on which this Amended and
Restated Certificate of Incorporation shall become effective pursuant to the
General Corporation Law of the State of Delaware, the directors of the
Corporation shall be divided into three classes (the "Classified Directors")
with the first class ("Class I"), second class ("Class II") and the third class
("Class III") each to consist as nearly as practicable of an equal number of
directors. The term of office of the Class I directors shall expire at the 1998
annual meeting of stockholders, the term of office of the Class II directors
shall expire at the 1999 annual meeting of stockholders and the term of office
of the Class III directors shall expire at the 2000 annual meeting of
stockholders, with each director to hold office until his or her successor shall
have been duly elected and qualified. At each annual meeting of stockholders,
commencing with the 1998 annual meeting, Classified Directors elected to succeed
those Classified Directors whose terms then expire shall be elected for a term
of office to expire at the third succeeding annual meeting of stockholders after
their election.
SIXTH: The directors of the Corporation need not be elected by
written ballot unless the bylaws of the Corporation otherwise provide.
SEVENTH:The following provisions are included for the purpose
of ensuring that control and management of the Corporation remains with loyal
citizens of the United States and/or corporations formed under the laws of the
United States or any of the states of the United States, as required by the
Communications Act of 1934, as the same may be amended from time to time:
(a) The Corporation shall not issue to (i) a person
who is a citizen of a country other than the United States;
(ii) any entity organized under the laws of a government other
than the government of the United States or any state,
territory, or possession of the United States; (iii) a
government other than the government of the United States or
of any state, territory, or possession of the United States;
or (iv) a representative of, or an individual or entity
controlled by, any of the foregoing (individually, an "Alien";
collectively, "Aliens") in excess of 25% of the total number
of shares of capital stock of the Corporation outstanding at
any time and shall
5
<PAGE> 6
not permit the transfer on the books of the corporation of any
capital stock to any Alien that would result in the total
number of shares of such capital stock held by Aliens
exceeding such 25% limit.
(b) No Alien or Aliens shall be entitled to vote or
direct or control the vote of more than 25% of (i) the total
number of shares of capital stock of the Corporation
outstanding and entitled to vote at any time and from time to
time, or (ii) the total voting power of all shares of capital
stock of the Corporation outstanding and entitled to vote at
any time and from time to time.
(c) No Alien shall be qualified to act as an officer
of the Corporation, and no more than one-fourth of the total
number of directors of the Corporation at any time and from
time to time may be Aliens.
(d) The Board of Directors of the Corporation shall
have all powers necessary to implement the provisions of this
Article Seventh.
EIGHTH: No contract or transaction between the Corporation and
one or more of its directors, officers, or stockholders or between the
Corporation and any Person (as hereinafter defined) in which one or more of its
directors, officers, or stockholders are directors, officers, or stockholders,
or have a financial interest, shall be void or voidable solely for this reason,
or solely because the director or officer is present at or participates in the
meeting of the board or committee which authorizes the contract or transaction,
or solely because his, her, or their votes are counted for such purpose, if: (i)
the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the board of directors or
the committee, and the board of directors or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved, or ratified by the board of directors, a committee thereof, or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction. "Person" as used herein means any
corporation, partnership, association, firm, trust, joint venture, political
subdivision or instrumentality.
NINTH: The Corporation shall indemnify any Person who was, is,
or is threatened to be made a party to a proceeding (as hereinafter defined) by
reason of the fact that he or she (i) is or was a director, officer, employee or
agent of the Corporation, or (ii) is or was serving at the request of the
Corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise, to the fullest extent permitted under the
General Corporation Law of the State of Delaware, as the
6
<PAGE> 7
same exists or may hereafter be amended. Such right shall be a contract right
and as such shall run to the benefit of any director or officer who is elected
and accepts the position of director or officer of the Corporation or elects to
continue to serve as a director or officer of the Corporation while this Article
Ninth is in effect. Any repeal or amendment of this Article Ninth shall be
prospective only and shall not limit the rights of any such director or officer
or the obligations of the Corporation with respect to any claim arising from or
related to the services of such director or officer in any of the foregoing
capacities prior to any such repeal or amendment to this Article Ninth. Such
right shall include the right to be paid by the Corporation expenses incurred in
investigating or defending any such proceeding in advance of its final
disposition to the maximum extent permitted under the General Corporation Law of
the State of Delaware, as the same exists or may hereafter be amended. To the
extent that a director, officer, employee or agent of the corporation shall be
successful on the merits or otherwise in defense of any proceeding, or in
defense of any claim, issue, or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith. If a claim for indemnification or advancement of
expenses hereunder is not paid in full by the Corporation within sixty (60) days
after a written claim has been received by the Corporation, the claimant may at
any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim, and if successful in whole or in part, the claimant shall
also be entitled to be paid the expenses of prosecuting such claim. It shall be
a defense to any such action that such indemnification or advancement of costs
of defense is not permitted under the General Corporation Law of the State of
Delaware, but the burden of proving such defense shall be on the Corporation.
None of (i) the failure of the Corporation (including its board of directors or
any committee thereof, independent legal counsel, or stockholders) to have made
its determination prior to the commencement of such action that indemnification
of, or advancement of costs of defense to, the claimant is permissible in the
circumstances, (ii) an actual determination by the Corporation (including its
board of directors or any committee thereof, independent legal counsel, or
stockholders) that such indemnification or advancement is not permissible, or
(iii) the termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall be a
defense to the action or create a presumption that such indemnification or
advancement is not permissible. In the event of the death of any Person having a
right of indemnification under the foregoing provisions, such right shall inure
to the benefit of his or her heirs, executors, administrators, and personal
representatives. The rights conferred above shall not be exclusive of any other
right which any Person may have or hereafter acquire under any statute, bylaw,
resolution of stockholders or directors, agreement, or otherwise.
The Corporation may additionally indemnify any employee or
agent of the Corporation to the fullest extent permitted by law.
Without limiting the generality of the foregoing, to the
extent permitted by then applicable law, the grant of mandatory indemnification
pursuant to this Article Ninth shall extend to proceedings involving the
negligence of such Person.
The Board of Directors may authorize, by a vote of a majority
of a quorum of the Board of Directors, the Corporation to purchase and maintain
insurance on behalf of any person
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<PAGE> 8
who is or was a director, officer, employee or agent of the Corporation, or is
or was serving at the request of the Corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article Ninth.
As used herein, the term "proceeding" means any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such an action,
suit, or proceeding, and any inquiry or investigation that could lead to such an
action, suit, or proceeding.
TENTH: A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit. Any repeal or amendment of this Article
Tenth by the stockholders of the Corporation shall be prospective only, and
shall not adversely affect any limitation on the personal liability of a
director of the Corporation arising from an act or omission occurring prior to
the time of such repeal or amendment. In addition to the circumstances in which
a director of the Corporation is not personally liable as set forth in the
foregoing provisions of this Article Tenth, a director shall not be liable to
the Corporation or its stockholders to such further extent as permitted by any
law hereafter enacted, including without limitation any subsequent amendment to
the General Corporation Law of the State of Delaware.
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<PAGE> 9
IN WITNESS WHEREOF, the Corporation has caused this Amended
and Restated Certificate of Incorporation, which restates, integrates and
further amends all Articles of the Corporation's Restated Certificate of
Incorporation pursuant to Sections 242 and 245 of the Delaware General
Corporation Law, and which includes and incorporates by reference, without
amendment, the designations, powers and preferences, and the relative
participating, optional or other special rights, and the qualifications,
limitations and restrictions thereof, of the $3.00 Convertible Exchangeable
Preferred Stock of the Corporation (the shares of which series shall, upon the
effectiveness of this Amended and Restated Certificate of Incorporation, be
convertible into Common Stock of the Corporation rather than Class A Common
Stock of the Corporation, pursuant to and in accordance with, and to the extent
provided by, the terms of such series) as set forth in Exhibit A attached
hereto, to be signed by its duly authorized officer this 5th day of September,
1997.
EVERGREEN MEDIA CORPORATION
By: /s/ Matthew E. Devine
----------------------------------------
Name: Matthew E. Devine
Title: Executive Vice President, Chief
Financial Officer and Secretary
9
<PAGE> 1
EXHIBIT 3.2B
================================================================================
AMENDED AND RESTATED
BYLAWS
OF
CHANCELLOR MEDIA CORPORATION
A DELAWARE CORPORATION
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
ARTICLE 1. OFFICES.........................................................................................1
1.1. Registered Office and Agent.............................................................1
1.2. Other Offices...........................................................................1
ARTICLE 2. MEETINGS OF STOCKHOLDERS........................................................................1
2.1. Annual Meeting..........................................................................1
2.2. Special Meeting.........................................................................2
2.3. Place of Meetings.......................................................................2
2.4. Notice..................................................................................2
2.5. Voting List.............................................................................2
2.6. Quorum..................................................................................3
2.7. Required Vote; Withdrawal of Quorum.....................................................3
2.8. Method of Voting; Proxies...............................................................3
2.9. Record Date.............................................................................3
2.10. Conduct of Meeting......................................................................4
2.11. Inspectors..............................................................................4
ARTICLE 3. DIRECTORS.......................................................................................5
3.1. Management..............................................................................5
3.2. Number; Qualification; Election; Term...................................................5
3.3. Change in Number........................................................................6
3.4. Removal.................................................................................6
3.5. Vacancies...............................................................................6
3.6. Meetings of Directors...................................................................6
3.7. First Meeting...........................................................................6
3.8. Election of Officers....................................................................7
3.9. Regular Meetings........................................................................7
3.10. Special Meetings........................................................................7
3.11. Notice..................................................................................7
3.12. Quorum; Majority Vote...................................................................7
3.13. Procedure...............................................................................7
3.14. Presumption of Assent...................................................................7
3.15. Compensation............................................................................8
ARTICLE 4. COMMITTEES......................................................................................8
4.1. Designation.............................................................................8
4.2. Number; Qualification; Term.............................................................8
4.3. Authority...............................................................................8
</TABLE>
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
4.4. Committee Changes.......................................................................8
4.5. Alternate Members of Committees.........................................................8
4.6. Regular Meetings........................................................................8
4.7. Special Meetings........................................................................8
4.8. Quorum; Majority Vote...................................................................9
4.9. Minutes.................................................................................9
4.10. Compensation............................................................................9
4.11. Responsibility..........................................................................9
ARTICLE 5. NOTICE..........................................................................................9
5.1. Method..................................................................................9
5.2. Waiver.................................................................................10
ARTICLE 6. OFFICERS.......................................................................................10
6.1. Number; Titles; Term of Office.........................................................10
6.2. Removal................................................................................10
6.3. Vacancies..............................................................................10
6.4. Authority..............................................................................10
6.5. Compensation...........................................................................10
6.6. Chairman of the Board..................................................................10
6.7. President..............................................................................11
6.8. Chief Operating Officer................................................................11
6.9. Vice Presidents........................................................................11
6.10. Treasurer..............................................................................11
6.11. Assistant Treasurers...................................................................11
6.12. Secretary..............................................................................11
6.13. Assistant Secretaries..................................................................12
ARTICLE 7. CERTIFICATES AND SHAREHOLDERS..................................................................12
7.1. Certificates for Shares................................................................12
7.2. Replacement of Lost or Destroyed Certificates..........................................12
7.3. Transfer of Shares.....................................................................12
7.4. Registered Stockholders................................................................13
7.5. Regulations............................................................................13
7.6. Legends................................................................................13
ARTICLE 8. MISCELLANEOUS PROVISIONS.......................................................................13
8.1. Dividends..............................................................................13
8.2. Reserves...............................................................................13
8.3. Books and Records......................................................................13
8.4. Fiscal Year............................................................................13
8.5. Seal...................................................................................13
8.6. Resignations...........................................................................14
</TABLE>
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
8.7. Securities of Other Corporations.......................................................14
8.8. Telephone Meetings.....................................................................14
8.9. Action Without a Meeting...............................................................14
8.10. Invalid Provisions.....................................................................15
8.11. Mortgages, etc........................................................................15
8.12. Headings...............................................................................15
8.13. References.............................................................................15
8.14. Amendments.............................................................................15
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED
BYLAWS
OF
CHANCELLOR MEDIA CORPORATION
A DELAWARE CORPORATION
PREAMBLE
These bylaws are subject to, and governed by, the General
Corporation Law of the State of Delaware (the "Delaware General Corporation
Law") and the certificate of incorporation of Chancellor Media Corporation, a
Delaware corporation (the "Corporation"). In the event of a direct conflict
between the provisions of these bylaws and the mandatory provisions of the
Delaware General Corporation Law or the provisions of the certificate of
incorporation of the Corporation, such provisions of the Delaware General
Corporation Law or the certificate of incorporation of the Corporation, as the
case may be, will be controlling.
ARTICLE 1.
OFFICES
1.1. Registered Office and Agent. The registered office and
registered agent of the Corporation shall be as designated from time to time by
the appropriate filing by the Corporation in the office of the Secretary of
State of the State of Delaware.
1.2. Other Offices. The Corporation may also have offices at
such other places, both within and without the State of Delaware, as the board
of directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE 2.
MEETINGS OF STOCKHOLDERS
2.1. Annual Meeting. An annual meeting of stockholders of the
Corporation shall be held each calendar year on such date and at such time as
shall be designated from time to time by the board of directors and stated in
the notice of the meeting or in a duly executed waiver of notice of such
meeting. At such meeting, the stockholders shall elect directors and transact
such other business as may properly be brought before the meeting.
<PAGE> 6
2.2. Special Meeting. A special meeting of the stockholders
may be called at any time by the Chairman of the Board, the President, the board
of directors, and shall be called by the President or the Secretary at the
request in writing of the stockholders of record of not less than ten percent of
all shares entitled to vote at such meeting or as otherwise provided by the
certificate of incorporation of the Corporation. A special meeting shall be held
on such date and at such time as shall be designated by the person(s) calling
the meeting and stated in the notice of the meeting or in a duly executed waiver
of notice of such meeting. Only such business shall be transacted at a special
meeting as may be stated or indicated in the notice of such meeting or in a duly
executed waiver of notice of such meeting.
2.3. Place of Meetings. An annual meeting of stockholders may
be held at any place within or without the State of Delaware designated by the
board of directors. A special meeting of stockholders may be held at any place
within or without the State of Delaware designated in the notice of the meeting
or a duly executed waiver of notice of such meeting. Meetings of stockholders
shall be held at the principal executive office of the Corporation unless
another place is designated for meetings in the manner provided herein.
2.4. Notice. Written or printed notice stating the place, day,
and time of each meeting of the stockholders and, in case of a special meeting,
the purpose or purposes for which the meeting is called shall be delivered not
less than ten nor more than 60 days before the date of the meeting, either
personally or by mail, by or at the direction of the President, the Secretary,
or the officer or person(s) calling the meeting, to each stockholder of record
entitled to vote at such meeting. If such notice is to be sent by mail, it shall
be directed to such stockholder at his address as it appears on the records of
the Corporation, unless he shall have filed with the Secretary of the
Corporation a written request that notices to him be mailed to some other
address, in which case it shall be directed to him at such other address. Notice
of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy and shall not,
at the beginning of such meeting, object to the transaction of any business
because the meeting is not lawfully called or convened, or who shall, either
before or after the meeting, submit a signed waiver of notice, in person or by
proxy.
2.5. Voting List. At least ten days before each meeting of
stockholders, the Secretary or other officer of the Corporation who has charge
of the Corporation's stock ledger, either directly or through another officer
appointed by him or through a transfer agent appointed by the board of
directors, shall prepare a complete list of stockholders entitled to vote
thereat, arranged in alphabetical order and showing the address of each
stockholder and number of shares registered in the name of each stockholder. For
a period of ten days prior to such meeting, such list shall be kept on file at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of meeting or a duly executed waiver of notice of such
meeting or, if not so specified, at the place where the meeting is to be held
and shall be open to examination by any stockholder during ordinary business
hours. Such list shall be produced at such meeting and kept at the meeting at
all times during such meeting and may be inspected by any stockholder who is
present.
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<PAGE> 7
2.6. Quorum. The holders of a majority of the outstanding
shares entitled to vote on a matter, present in person or by proxy, shall
constitute a quorum at any meeting of stockholders, except as otherwise provided
by law, the certificate of incorporation of the Corporation, or these by-laws.
If a quorum shall not be present, in person or by proxy, at any meeting of
stockholders, the stockholders entitled to vote thereat who are present, in
person or by proxy, or, if no stockholder entitled to vote is present, any
officer of the Corporation may adjourn the meeting from time to time, without
notice other than announcement at the meeting (unless the board of directors,
after such adjournment, fixes a new record date for the adjourned meeting),
until a quorum shall be present, in person or by proxy. At any adjourned meeting
at which a quorum shall be present, in person or by proxy, any business may be
transacted which may have been transacted at the original meeting had a quorum
been present; provided that, if the adjournment is for more than 30 days or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the adjourned meeting.
2.7. Required Vote; Withdrawal of Quorum. When a quorum is
present at any meeting, the vote of the holders of at least a majority of the
outstanding shares entitled to vote who are present, in person or by proxy,
shall decide any question brought before such meeting, unless the question is
one on which, by express provision of statute, the certificate of incorporation
of the Corporation, or these bylaws, a different vote is required, in which case
such express provision shall govern and control the decision of such question.
The stockholders present at a duly constituted meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
2.8. Method of Voting; Proxies. Except as otherwise provided
in the certificate of incorporation of the Corporation or by law, each
outstanding share, regardless of class, shall be entitled to one vote on each
matter submitted to a vote at a meeting of stockholders. Elections of directors
need not be by written ballot. At any meeting of stockholders, every stockholder
having the right to vote may vote either in person or by a proxy executed in
writing by the stockholder or by his duly authorized attorney-in-fact. Each such
proxy shall be filed with the Secretary of the Corporation before or at the time
of the meeting. No proxy shall be valid after three years from the date of its
execution, unless otherwise provided in the proxy. If no date is stated in a
proxy, such proxy shall be presumed to have been executed on the date of the
meeting at which it is to be voted. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power or unless otherwise made
irrevocable by law.
2.9. Record Date. (a)For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders, or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion, or exchange of stock or for the purpose of
any other lawful action, the board of directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors, for any such determination of
stockholders, such date in any case to be not more than
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<PAGE> 8
60 days and not less than ten days prior to such meeting nor more than 60 days
prior to any other action. If no record date is fixed:
(i) The record date for determining
stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given or, if notice is waived, at
the close of business on the day next preceding the day on which the
meeting is held.
(ii) The record date for determining
stockholders for any other purpose shall be at the close of business on
the day on which the board of directors adopts the resolution relating
thereto.
(iii) A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of the meeting; provided, however, that
the board of directors may fix a new record date for the adjourned
meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the board of directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the board of directors, and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is adopted by the
board of directors. If no record date has been fixed by the board of directors,
the record date for determining stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the board of
directors is required by law or these bylaws, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
in the State of Delaware, principal place of business, or such officer or agent
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the board of directors and prior action by
the board of directors is required by law or these bylaws, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
board of directors adopts the resolution taking such prior action.
2.10. Conduct of Meeting. The Chairman of the Board, if such
office has been filled, and, if not or if the Chairman of the Board is absent or
otherwise unable to act, the President shall preside at all meetings of
stockholders. The Secretary shall keep the records of each meeting of
stockholders. In the absence or inability to act of any such officer, such
officer's duties shall be performed by the officer given the authority to act
for such absent or non-acting officer under these bylaws or by some person
appointed by the meeting.
2.11. Inspectors. The board of directors may, in advance of
any meeting of stockholders, appoint one or more inspectors to act at such
meeting or any adjournment thereof.
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<PAGE> 9
If any of the inspectors so appointed shall fail to appear or act, the chairman
of the meeting shall, or if inspectors shall not have been appointed, the
chairman of the meeting may, appoint one or more inspectors. Each inspector,
before entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors shall
determine the number of shares of capital stock of the Corporation outstanding
and the voting power of each, the number of shares represented at the meeting,
the existence of a quorum, and the validity and effect of proxies and shall
receive votes, ballots, or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots, or consents, determine the results, and do such acts as are
proper to conduct the election or vote with fairness to all stockholders. On
request of the chairman of the meeting, the inspectors shall make a report in
writing of any challenge, request, or matter determined by them and shall
execute a certificate of any fact found by them. No director or candidate for
the office of director shall act as an inspector of an election of directors.
Inspectors need not be stockholders.
ARTICLE 3.
DIRECTORS
3.1. Management. The business and property of the Corporation
shall be managed by the board of directors. Subject to the restrictions imposed
by law, the certificate of incorporation of the Corporation, or these bylaws,
the board of directors may exercise all the powers of the Corporation.
3.2. Number; Qualification; Election; Term. The number of
directors which shall constitute the entire board of directors shall be not less
than five nor more than thirteen, plus such number of directors as may be
elected from time to time by the holders of any class or series of preferred
stock of the Corporation. The first board of directors shall consist of the
number of directors named in the certificate of incorporation of the Corporation
or, if no directors are so named, shall consist of the number of directors
elected by the incorporator(s) at an organizational meeting or by unanimous
written consent in lieu thereof. Thereafter, within the limits above specified,
the number of directors which shall constitute the entire board of directors
shall be determined by resolution of the board of directors or by resolution of
the stockholders at the annual meeting thereof or at a special meeting thereof
called for that purpose. Except as otherwise required by law, the certificate of
incorporation of the Corporation, or these bylaws, the directors shall be
elected at an annual meeting of stockholders at which a quorum is present.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy and entitled to vote on the election of
directors. Except as otherwise required by law, the certificate of incorporation
of the Corporation, or these bylaws, each director so chosen shall hold office
until the first annual meeting of stockholders held after his election and until
his successor is elected and qualified or, if earlier, until his death,
resignation, or removal from office. None of the directors need be a stockholder
of the Corporation or a resident of the State of Delaware. Each director must
have attained the age of majority.
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<PAGE> 10
3.3. Change in Number. No decrease in the number of directors
constituting the entire board of directors shall have the effect of shortening
the term of any incumbent director.
3.4. Removal. Except as otherwise provided by law or in the
certificate of incorporation of the Corporation or these by-laws, at any meeting
of stockholders called expressly for that purpose, any director or the entire
board of directors may be removed, with or without cause, by a vote of the
holders of a majority of the shares then entitled to vote on the election of
directors.
3.5. Vacancies. Vacancies and newly-created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
the sole remaining director, provided, however, that if pursuant to a provision
of the certificate of incorporation a class of capital stock of the Corporation
shall have the right to vote as a class to elect a director, then the vacancy as
to a director so elected shall be filled by a vote of the holders of such class.
Each director so chosen shall hold office until the first annual meeting of
stockholders held after his election and until his successor is elected and
qualified or, if earlier, until his death, resignation, or removal from office.
If there are no directors in office, an election of directors may be held in the
manner provided by statute. If, at the time of filling any vacancy or any
newly-created directorship, the directors then in office shall constitute less
than a majority of the whole board of directors (as constituted immediately
prior to any such increase), the Court of Chancery may, upon application of any
stockholder or stockholders holding at least 10% of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or
newly-created directorships or to replace the directors chosen by the directors
then in office. Except as otherwise provided in these bylaws, when one or more
directors shall resign from the board of directors, effective at a future date,
a majority of the directors then in office, including those who have so
resigned, shall have the power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in these
bylaws with respect to the filling of other vacancies.
3.6. Meetings of Directors. The directors may hold their
meetings and may have an office and keep the books of the Corporation, except as
otherwise provided by statute, in such place or places within or without the
State of Delaware as the board of directors may from time to time determine or
as shall be specified in the notice of such meeting or duly executed waiver of
notice of such meeting.
3.7. First Meeting. Each newly elected board of directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as the
annual meeting of stockholders, and no notice of such meeting shall be
necessary.
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<PAGE> 11
3.8. Election of Officers. At the first meeting of the board
of directors after each annual meeting of stockholders at which a quorum shall
be present, the board of directors shall elect the officers of the Corporation.
3.9. Regular Meetings. Regular meetings of the board of
directors shall be held at such times and places as shall be designated from
time to time by resolution of the board of directors. Notice of such regular
meetings shall not be required.
3.10. Special Meetings. Special meetings of the board of
directors shall be held whenever called by the Chairman of the Board, the
President, or any director.
3.11. Notice. The Secretary shall give notice of each special
meeting to each director at least 24 hours before the meeting. Notice of any
such meeting need not be given to any director who shall, either before or after
the meeting, submit a signed waiver of notice or who shall attend such meeting
without protesting, prior to or at its commencement, the lack of notice to him.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the board of directors need be specified in the notice or
waiver of notice of such meeting.
3.12. Quorum; Majority Vote. At all meetings of the board of
directors, a majority of the directors fixed in the manner provided in these
bylaws shall constitute a quorum for the transaction of business. If at any
meeting of the board of directors there be less than a quorum present, a
majority of those present or any director solely present may adjourn the meeting
from time to time without further notice. Unless the act of a greater number is
required by law, the certificate of incorporation of the Corporation, or these
bylaws, the act of a majority of the directors present at a meeting at which a
quorum is in attendance shall be the act of the board of directors. At any time
that the certificate of incorporation of the Corporation provides that directors
elected by the holders of a class or series of stock shall have more or less
than one vote per director on any matter, every reference in these bylaws to a
majority or other proportion of directors shall refer to a majority or other
proportion of the votes of such directors.
3.13. Procedure. At meetings of the board of directors,
business shall be transacted in such order as from time to time the board of
directors may determine. The Chairman of the Board, if such office has been
filled, and, if not or if the Chairman of the Board is absent or otherwise
unable to act, the President shall preside at all meetings of the board of
directors. In the absence or inability to act of either such officer, a chairman
shall be chosen by the board of directors from among the directors present. The
Secretary of the Corporation shall act as the secretary of each meeting of the
board of directors unless the board of directors appoints another person to act
as secretary of the meeting. The board of directors shall keep regular minutes
of its proceedings which shall be placed in the minute book of the Corporation.
3.14. Presumption of Assent. A director of the Corporation who
is present at the meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as
secretary of the meeting before the adjournment thereof or shall forward any
dissent by certified
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<PAGE> 12
or registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
3.15. Compensation. The board of directors shall have the
authority to fix the compensation, including fees and reimbursement of expenses,
paid to directors for attendance at regular or special meetings of the board of
directors or any committee thereof; provided, that nothing contained herein
shall be construed to preclude any director from serving the Corporation in any
other capacity or receiving compensation therefor.
ARTICLE 4.
COMMITTEES
4.1. Designation. The board of directors may, by resolution
adopted by a majority of the entire board of directors, designate one or more
committees.
4.2. Number; Qualification; Term. Each committee shall consist
of one or more directors appointed by resolution adopted by a majority of the
entire board of directors. The number of committee members may be increased or
decreased from time to time by resolution adopted by a majority of the entire
board of directors. Each committee member shall serve as such until the earliest
of (i) the expiration of his term as director, (ii) his resignation as a
committee member or as a director, or (iii) his removal as a committee member or
as a director.
4.3. Authority. Each committee, to the extent expressly
provided in the resolution establishing such committee, shall have and may
exercise all of the authority of the board of directors in the management of the
business and property of the Corporation except to the extent expressly
restricted by law, the certificate of incorporation of the Corporation, or these
bylaws.
4.4. Committee Changes. The board of directors shall have the
power at any time to fill vacancies in, to change the membership of, and to
discharge any committee.
4.5. Alternate Members of Committees. The board of directors
may designate one or more directors as alternate members of any committee. Any
such alternate member may replace any absent or disqualified member at any
meeting of the committee. If no alternate committee members have been so
appointed to a committee or each such alternate committee member is absent or
disqualified, the member or members of such committee present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member.
4.6. Regular Meetings. Regular meetings of any committee may
be held without notice at such time and place as may be designated from time to
time by the committee and communicated to all members thereof.
4.7. Special Meetings. Special meetings of any committee may
be held whenever called by any committee member. The committee member calling
any special meeting
8
<PAGE> 13
shall cause notice of such special meeting, including therein the time and place
of such special meeting, to be given to each committee member at least two days
before such special meeting. Neither the business to be transacted at, nor the
purpose of, any special meeting of any committee need be specified in the notice
or waiver of notice of any special meeting.
4.8. Quorum; Majority Vote. At meetings of any committee, a
majority of the number of members designated by the board of directors shall
constitute a quorum for the transaction of business. If a quorum is not present
at a meeting of any committee, a majority of the members present may adjourn the
meeting from time to time, without notice other than an announcement at the
meeting, until a quorum is present. The act of a majority of the members present
at any meeting at which a quorum is in attendance shall be the act of a
committee, unless the act of a greater number is required by law, the
certificate of incorporation of the Corporation, or these bylaws.
4.9. Minutes. Each committee shall cause minutes of its
proceedings to be prepared and shall report the same to the board of directors
upon the request of the board of directors. The minutes of the proceedings of
each committee shall be delivered to the Secretary of the Corporation for
placement in the minute books of the Corporation.
4.10. Compensation. Committee members may, by resolution of
the board of directors, be allowed a fixed sum and expenses of attendance, if
any, for attending any committee meetings or a stated salary.
4.11. Responsibility. The designation of any committee and the
delegation of authority to it shall not operate to relieve the board of
directors or any director of any responsibility imposed upon it or such director
by law.
ARTICLE 5.
NOTICE
5.1. Method. Whenever by statute, the certificate of
incorporation of the Corporation, or these bylaws, notice is required to be
given to any committee member, director, or stockholder and no provision is made
as to how such notice shall be given, personal notice shall not be required and
any such notice may be given (a) in writing, by mail, postage prepaid, addressed
to such committee member, director, or stockholder at his address as it appears
on the books or (in the case of a stockholder) the stock transfer records of the
Corporation, or (b) by any other method permitted by law (including but not
limited to overnight courier service, telegram, telex, or telefax). Any notice
required or permitted to be given by mail shall be deemed to be delivered and
given at the time when the same is deposited in the United States mail as
aforesaid. Any notice required or permitted to be given by overnight courier
service shall be deemed to be delivered and given at the time delivered to such
service with all charges prepaid and addressed as aforesaid. Any notice required
or permitted to be given by telegram, telex, or telefax shall be deemed to be
delivered and given at the time transmitted with all charges prepaid and
addressed as aforesaid.
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<PAGE> 14
5.2. Waiver. Whenever any notice is required to be given to
any stockholder, director, or committee member of the Corporation by statute,
the certificate of incorporation of the Corporation, or these bylaws, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be equivalent to the
giving of such notice. Attendance of a stockholder, director, or committee
member at a meeting shall constitute a waiver of notice of such meeting, except
where such person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE 6.
OFFICERS
6.1. Number; Titles; Term of Office. The officers of the
Corporation shall be a President, one or more Chief Operating Officers, a
Secretary, and such other officers as the board of directors may from time to
time elect or appoint, including a Chairman of the Board, one or more Vice
Presidents (with each Vice President to have such descriptive title, if any, as
the board of directors shall determine), and a Treasurer. Each officer shall
hold office until his successor shall have been duly elected and shall have
qualified, until his death, or until he shall resign or shall have been removed
in the manner hereinafter provided. Any two or more offices may be held by the
same person. None of the officers need be a stockholder or a director of the
Corporation or a resident of the State of Delaware.
6.2. Removal. Any officer or agent elected or appointed by the
board of directors may be removed by the board of directors whenever in its
judgment the best interest of the Corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall not of itself
create contract rights.
6.3. Vacancies. Any vacancy occurring in any office of the
Corporation (by death, resignation, removal, or otherwise) may be filled by the
board of directors.
6.4. Authority. Officers shall have such authority and perform
such duties in the management of the Corporation as are provided in these bylaws
or as may be determined by resolution of the board of directors not inconsistent
with these bylaws.
6.5. Compensation. The compensation, if any, of officers and
agents shall be fixed from time to time by the board of directors; provided,
however, that the board of directors may delegate the power to determine the
compensation of any officer and agent (other than the officer to whom such power
is delegated) to the Chairman of the Board or the President.
6.6. Chairman of the Board. The Chairman of the Board, if
elected by the board of directors, shall have such powers and duties as may be
prescribed by the board of directors. Such officer shall preside at all meetings
of the stockholders and of the board of directors. Such officer may sign all
certificates for shares of stock of the Corporation.
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<PAGE> 15
6.7. President. The President shall be the chief executive
officer of the Corporation and, subject to the board of directors, he shall have
general executive charge, management, and control of the properties and
operations of the Corporation in the ordinary course of its business, with all
such powers with respect to such properties and operations as may be reasonably
incident to such responsibilities. If the board of directors has not elected a
Chairman of the Board or in the absence or inability to act of the Chairman of
the Board, the President shall exercise all of the powers and discharge all of
the duties of the Chairman of the Board. As between the Corporation and third
parties, any action taken by the President in the performance of the duties of
the Chairman of the Board shall be conclusive evidence that there is no Chairman
of the Board or that the Chairman of the Board is absent or unable to act.
6.8. Chief Operating Officer. The Chief Operating Officer(s)
shall have the day to day responsibility for the business operations of the
Corporation, reporting to the President and subject to the control of the board
of directors.
6.9. Vice Presidents. Each Vice President shall have such
powers and duties as may be assigned to him by the board of directors, the
Chairman of the Board, or the President, and (in order of their seniority as
determined by the board of directors or, in the absence of such determination,
as determined by the length of time they have held the office of Vice President)
shall exercise the powers of the President during that officer's absence or
inability to act. As between the Corporation and third parties, any action taken
by a Vice President in the performance of the duties of the President shall be
conclusive evidence of the absence or inability to act of the President at the
time such action was taken.
6.10. Treasurer. The Treasurer shall have custody of the
Corporation's funds and securities, shall keep full and accurate account of
receipts and disbursements, shall deposit all monies and valuable effects in the
name and to the credit of the Corporation in such depository or depositories as
may be designated by the board of directors, and shall perform such other duties
as may be prescribed by the board of directors, the Chairman of the Board, or
the President.
6.11. Assistant Treasurers. Each Assistant Treasurer shall
have such powers and duties as may be assigned to him by the board of directors,
the Chairman of the Board, or the President. The Assistant Treasurers (in the
order of their seniority as determined by the board of directors or, in the
absence of such a determination, as determined by the length of time they have
held the office of Assistant Treasurer) shall exercise the powers of the
Treasurer during that officer's absence or inability to act.
6.12. Secretary. Except as otherwise provided in these bylaws,
the Secretary shall keep the minutes of all meetings of the board of directors
and of the stockholders in books provided for that purpose, and he shall attend
to the giving and service of all notices. He may sign with the Chairman of the
Board or the President, in the name of the Corporation, all contracts of the
Corporation and affix the seal of the Corporation thereto. He may sign with the
Chairman of the Board or the President all certificates for shares of stock of
the Corporation, and he shall have charge of the certificate books, transfer
books, and stock papers as the board of
11
<PAGE> 16
directors may direct, all of which shall at all reasonable times be open to
inspection by any director upon application at the office of the Corporation
during business hours. He shall in general perform all duties incident to the
office of the Secretary, subject to the control of the board of directors, the
Chairman of the Board, and the President.
6.13. Assistant Secretaries. Each Assistant Secretary shall
have such powers and duties as may be assigned to him by the board of directors,
the Chairman of the Board, or the President. The Assistant Secretaries (in the
order of their seniority as determined by the board of directors or, in the
absence of such a determination, as determined by the length of time they have
held the office of Assistant Secretary) shall exercise the powers of the
Secretary during that officer's absence or inability to act.
ARTICLE 7.
CERTIFICATES AND SHAREHOLDERS
7.1. Certificates for Shares. Certificates for shares of stock
of the Corporation shall be in such form as shall be approved by the board of
directors. The certificates shall be signed by the Chairman of the Board or the
President or a Vice President and also by the Secretary or an Assistant
Secretary or by the Treasurer or an Assistant Treasurer. Any and all signatures
on the certificate may be a facsimile and may be sealed with the seal of the
Corporation or a facsimile thereof. If any officer, transfer agent, or registrar
who has signed, or whose facsimile signature has been placed upon, a certificate
has ceased to be such officer, transfer agent, or registrar before such
certificate is issued, such certificate may be issued by the Corporation with
the same effect as if he were such officer, transfer agent, or registrar at the
date of issue. The certificates shall be consecutively numbered and shall be
entered in the books of the Corporation as they are issued and shall exhibit the
holder's name and the number of shares.
7.2. Replacement of Lost or Destroyed Certificates. The board
of directors may direct a new certificate or certificates to be issued in place
of a certificate or certificates theretofore issued by the Corporation and
alleged to have been lost or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate or certificates representing shares
to be lost or destroyed. When authorizing such issue of a new certificate or
certificates the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the Corporation a bond with a
surety or sureties satisfactory to the Corporation in such sum as it may direct
as indemnity against any claim, or expense resulting from a claim, that may be
made against the Corporation with respect to the certificate or certificates
alleged to have been lost or destroyed.
7.3. Transfer of Shares. Shares of stock of the Corporation
shall be transferable only on the books of the Corporation by the holders
thereof in person or by their duly authorized attorneys or legal
representatives. Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate representing shares duly endorsed or accompanied by
proper evidence of succession, assignment, or authority to transfer, the
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<PAGE> 17
Corporation or its transfer agent shall issue a new certificate to the person
entitled thereto, cancel the old certificate, and record the transaction upon
its books.
7.4. Registered Stockholders. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
7.5. Regulations. The board of directors shall have the power
and authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer, and registration or the replacement of
certificates for shares of stock of the Corporation.
7.6. Legends. The board of directors shall have the power and
authority to provide that certificates representing shares of stock bear such
legends as the board of directors deems appropriate to assure that the
Corporation does not become liable for violations of federal or state securities
laws or other applicable law.
ARTICLE 8.
MISCELLANEOUS PROVISIONS
8.1. Dividends. Subject to provisions of law and the
certificate of incorporation of the Corporation, dividends may be declared by
the board of directors at any regular or special meeting and may be paid in
cash, in property, or in shares of stock of the Corporation. Such declaration
and payment shall be at the discretion of the board of directors.
8.2. Reserves. There may be created by the board of directors
out of funds of the Corporation legally available therefor such reserve or
reserves as the directors from time to time, in their discretion, consider
proper to provide for contingencies, to equalize dividends, or to repair or
maintain any property of the Corporation, or for such other purpose as the board
of directors shall consider beneficial to the Corporation, and the board of
directors may modify or abolish any such reserve in the manner in which it was
created.
8.3. Books and Records. The Corporation shall keep correct and
complete books and records of account, shall keep minutes of the proceedings of
its stockholders and board of directors and shall keep at its registered office
or principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.
8.4. Fiscal Year. The fiscal year of the Corporation shall be
fixed by the board of directors; provided, that if such fiscal year is not fixed
by the board of directors and the selection of the fiscal year is not expressly
deferred by the board of directors, the fiscal year shall be the calendar year.
8.5. Seal. The seal of the Corporation shall be such as from
time to time may be approved by the board of directors.
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<PAGE> 18
8.6. Resignations. Any director, committee member, or officer
may resign by so stating at any meeting of the board of directors or by giving
written notice to the board of directors, the Chairman of the Board, the
President, or the Secretary. Such resignation shall take effect at the time
specified therein or, if no time is specified therein, immediately upon its
receipt. Unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
8.7. Securities of Other Corporations. The Chairman of the
Board, the President, or any Vice President of the Corporation shall have the
power and authority to transfer, endorse for transfer, vote, consent, or take
any other action with respect to any securities of another issuer which may be
held or owned by the Corporation and to make, execute, and deliver any waiver,
proxy, or consent with respect to any such securities.
8.8. Telephone Meetings. Stockholders (acting for themselves
or through a proxy), members of the board of directors, and members of a
committee of the board of directors may participate in and hold a meeting of
such stockholders, board of directors, or committee by means of a conference
telephone or similar communications equipment by means of which persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this section shall constitute presence in person at such meeting,
except where a person participates in the meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting is
not lawfully called or convened.
8.9. Action Without a Meeting. (a) Unless otherwise provided
in the certificate of incorporation of the Corporation, any action required by
the Delaware General Corporation Law to be taken at any annual or special
meeting of the stockholders, or any action which may be taken at any annual or
special meeting of the stockholders, may be taken without a meeting, without
prior notice, and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders (acting for themselves
or through a proxy) of outstanding stock having not less than the minimum number
of votes that would be necessary to authorize or take such action at a meeting
at which the holders of all shares entitled to vote thereon were present and
voted and shall be delivered to the Corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Every written consent of stockholders
shall bear the date of signature of each stockholder who signs the consent and
no written consent shall be effective to take the corporate action referred to
therein unless, within sixty days of the earliest dated consent delivered in the
manner required by this Section 8.9(a) to the Corporation, written consents
signed by a sufficient number of holders to take action are delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office, principal place
of business, or such officer or agent shall be by hand or by certified or
registered mail, return receipt requested.
(b) Unless otherwise restricted by the
certificate of incorporation of the Corporation or by these bylaws, any action
required or permitted to be taken at a meeting of
14
<PAGE> 19
the board of directors, or of any committee of the board of directors, may be
taken without a meeting if a consent or consents in writing, setting forth the
action so taken, shall be signed by all the directors or all the committee
members, as the case may be, entitled to vote with respect to the subject matter
thereof, and such consent shall have the same force and effect as a vote of such
directors or committee members, as the case may be, and may be stated as such in
any certificate or document filed with the Secretary of State of the State of
Delaware or in any certificate delivered to any person. Such consent or consents
shall be filed with the minutes of proceedings of the board or committee, as the
case may be.
8.10. Invalid Provisions. If any part of these bylaws shall be
held invalid or inoperative for any reason, the remaining parts, so far as it is
possible and reasonable, shall remain valid and operative.
8.11. Mortgages, etc. With respect to any deed, deed of trust,
mortgage, or other instrument executed by the Corporation through its duly
authorized officer or officers, the attestation to such execution by the
Secretary of the Corporation shall not be necessary to constitute such deed,
deed of trust, mortgage, or other instrument a valid and binding obligation
against the Corporation unless the resolutions, if any, of the board of
directors authorizing such execution expressly state that such attestation is
necessary.
8.12. Headings. The headings used in these bylaws have been
inserted for administrative convenience only and do not constitute matter to be
construed in interpretation.
8.13. References. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
should include each other gender where appropriate.
8.14. Amendments. These bylaws may be altered, amended, or
repealed or new bylaws may be adopted by the stockholders or by the board of
directors at any regular meeting of the stockholders or the board of directors
or at any special meeting of the stockholders or the board of directors if
notice of such alteration, amendment, repeal, or adoption of new bylaws be
contained in the notice of such special meeting.
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<PAGE> 20
CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
(1) that I am the duly elected and Acting Secretary
of Chancellor Media Corporation, a Delaware corporation; and
(2) that the foregoing Bylaws, comprising eighteen
pages, constitute the Bylaws of said corporation as approved by the Board of
Directors of said corporation on July 30, 1997.
IN WITNESS WHEREOF, I have hereunto subscribed my name this
5th day of September, 1997.
/s/ Matthew E. Devine
--------------------------------
Matthew E. Devine, Secretary
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 9/30/97
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000894972
<NAME> CHANCELLOR MEDIA CORPORATION
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
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<SECURITIES> 0
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<CURRENT-ASSETS> 210,544
<PP&E> 191,931
<DEPRECIATION> 55,526
<TOTAL-ASSETS> 4,213,376
<CURRENT-LIABILITIES> 86,739
<BONDS> 1,857,000
449,614
299,500
<COMMON> 596
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,213,376
<SALES> 333,283
<TOTAL-REVENUES> 333,283
<CGS> 49,711
<TOTAL-COSTS> 300,745
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,036
<INCOME-PRETAX> 5,882
<INCOME-TAX> 5,244
<INCOME-CONTINUING> (2,141)
<DISCONTINUED> 0
<EXTRAORDINARY> (4,350)
<CHANGES> 0
<NET-INCOME> (12,239)
<EPS-PRIMARY> (0.28)
<EPS-DILUTED> (0.28)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 9/30/97
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001043102
<NAME> CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 15,982
<SECURITIES> 0
<RECEIVABLES> 193,993
<ALLOWANCES> 7,684
<INVENTORY> 0
<CURRENT-ASSETS> 210,544
<PP&E> 191,931
<DEPRECIATION> 55,526
<TOTAL-ASSETS> 4,213,376
<CURRENT-LIABILITIES> 86,739
<BONDS> 1,857,000
338,566
0
<COMMON> 1
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,213,376
<SALES> 333,283
<TOTAL-REVENUES> 333,283
<CGS> 49,711
<TOTAL-COSTS> 300,745
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,036
<INCOME-PRETAX> 5,882
<INCOME-TAX> 5,244
<INCOME-CONTINUING> 638
<DISCONTINUED> 0
<EXTRAORDINARY> (4,350)
<CHANGES> 0
<NET-INCOME> (6,491)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
