SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 21, 1996
----------------------------
SFX BROADCASTING, INC.
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(Exact name of registrant as specified in charter)
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<CAPTION>
<S> <C> <C>
Delaware 0-22486 13-3649750
(State or Other Jurisdiction (Commission File No.) (IRS Employer Identification No.)
of Incorporation)
</TABLE>
150 East 58th Street, 19th Floor, New York, New York 10155
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 407-9191
--------------------------
N/A
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
Resignation of President and Chief Executive Officer
SFX Broadcasting, Inc. (the "Company") entered into an Amended and
Restated Agreement dated June 19, 1996 (the "Amended Hicks Agreement") with R.
Steven Hicks, the President, Chief Executive Officer and Chief Operating
Officer and a Director of the Company, pursuant to which, among other things,
Mr. Hicks resigned as an officer and a director of the Company and the Company
repurchased all of Mr. Hicks' securities of the Company. In addition, Mr.
Hicks agreed not to compete for the period of approximately one year with the
Company or Multi-Market Radio, Inc., a Delaware corporation ("MMR") with which
the Company has entered into a previously disclosed agreement and plan of
merger, in any market in which the Company or MMR currently owns and operates,
provides programming to or sells advertising on behalf of any radio stations
and up to eight additional markets in which the Company or MMR has entered
into agreements to purchase radio stations on or before the merger. Pursuant
to the Amended Hicks Agreement, the Company paid Mr. Hicks an aggregate amount
of $18.7 million and agreed to forgive on June 19, 1999 a $2.0 million loan to
Mr. Hicks, plus accrued and unpaid interest of $0.3 million, if Mr. Hicks has
complied with certain provisions of the agreement. The foregoing summary of
the Amended Hicks Agreement is not intended to be complete and is subject to,
and qualified in its entirety by reference to, the Amended Hicks Agreement, a
copy of which is being filed with the Commission as an exhibit to this report.
Appointment of Officers
Upon the resignation of Mr. Hicks, Robert F.X. Sillerman reassumed
the position of the sole Chief Executive Officer of the Company and D.
Geoffrey Armstrong, the Chief Financial Officer of the Company, was
appointed the Chief Operating Officer. In addition, the Company entered into
an agreement effective as of June 24, 1996 with Thomas P. Benson pursuant to
which Mr. Benson was appointed the Vice President of Financial Affairs.
Pursuant to the agreement the Company agreed to appoint Mr. Benson as the
Chief Financial Officer upon the resignation by Mr. Armstrong as the Chief
Financial Officer. The Company anticipates that Mr. Armstrong will resign as
the Chief Financial Officer of the Company upon the consummation of the merger
with MMR. The agreement with Mr. Benson has a three-year term and provides
that Mr. Benson shall devote substantially all of his business time to the
affairs of the Company. Upon the execution of the agreement, Mr. Benson
received a $25,000 bonus and during the term of the agreement, he will receive
a base salary of $150,000 per year to be increased annually by five percent.
In addition, Mr. Benson is entitled to receive an annual incentive bonus in an
amount equal to at least $25,000 and options to purchase a minimum of 3,000
shares of Class A Common Stock of the Company per year.
Prior to joining the Company, Thomas P. Benson was the Vice President
- - External and International Reporting for American Express Travel Related
Services Company from September 1995 to June 1996. Prior to September 1995,
Mr. Benson was a Senior Manager in Ernst & Young's Information, Communications
and Entertainment Group. Mr. Benson holds a Bachelor in Science degree from
the State University of New York at Binghamton and a Masters of Business
Administration degree from Columbia Business School. He is a member of the
American Institute of Certified Public Accountants and the New York State
Society of Certified Public Accountants.
Unaudited Pro Forma Condensed Combined Financial Statements of the Company
Set forth below are Unaudited Pro Forma Condensed Combined Financial
Statements of the Company revised to give effect to (i) the Amended Hicks
Agreement, (ii) exercise on May 31, 1996 of the overallotment option granted
by the Company to the initial purchasers in connection with the sale of the
Company's 6 1/2% Series D Cumulative Convertible Exchangeable Preferred Stock
due May 31, 2007 and (iii) the Company's repurchase on May 31, 1996 of
$79,406,000 of its 11 3/4% Senior Subordinated Notes due 2000 of which
$594,000 in aggregate liquidation value remain outstanding.
The Unaudited Pro Forma Condensed Combined Balance Sheet at March 31,
1996 is presented as if the Company had completed (i) the acquisition of
Liberty Broadcasting, Incorporated (the "Liberty Acquisition"), the
acquisition of substantially all of the assets of Prism Radio Partners L.P.
(the "Prism Acquisition"), the acquisition by merger of MMR (the "MMR Merger")
after giving effect to (a) the acquisition by MMR of radio stations WKSS-FM
and of WMYB-FM (the "MMR Myrtle Beach Acquisition") and (b) the disposition by
MMR of radio stations KOLL-
<PAGE>
FM, WRXR-FM and WKBG-FM (the "MMR Disposition"), the acquisitions by the
Company, pursuant to four separate agreements, of all of the assets of ten
radio stations in five markets (collectively, the "Additional Acquisitions")
and the exchange of the Company's radio stations KRLD-AM and the Company's
Texas State Networks for radio station KKRW-FM of CBS, Inc. (the "Houston
Exchange")(the Liberty Acquisition, the Prism Acquisition, the MMR Merger, the
Additional Acquisitions and the Houston Exchange are hereinafter collectively
referred to as the "Acquisitions"), (ii) the sale of three of the stations to
be acquired in the Liberty Acquisition (the "Washington Disposition"), the
sale of three of the stations to be acquired in the Prism Acquisition (the
"Louisville Disposition") and the sale of radio station KTCK-AM (the "Dallas
Disposition") (the Washington Disposition, the Louisville Disposition and the
Dallas Disposition are hereinafter collectively referred to as the
"Dispositions"), (iii) the private placement by the Company of $450.0 million
in aggregate principal amount of the 10 3/4 Senior Subordinated Notes due 2006
(the "Note Offering") and $149.5 million in aggregate amount of its 6 1/2%
Series D Cumulative Convertible Preferred Stock due May 31, 2007 (the
"Preferred Stock Offering," and together with the Note Offering, the
"Financing"), (iv) the Company's purchase for cash (the "Tender Offer") of
$79,406,000 of its 11 3/8 Senior Subordinated Notes due 2000, (v) the
implementation of the Amended Hicks Agreement and the agreement with Mr.
Armstrong dated as of April 15, 1996 (the "Armstrong Agreement"), (vi) the
repayment of the credit agreement (the "Old Credit Agreement") and (vii) the
implementation of the Termination Agreement between the Company and Sillerman
Communications Management Corporation ("SCMC Termination Agreement") as of
March 31, 1996. The Acquisitions, the Dispositions, the Financing, the Tender
Offer, the Amended Hicks Agreement, the Armstrong Agreement, the Old Credit
Agreement and the SCMC Termination Agreement are hereinafter collectively
referred to as the "Transactions." No adjustment has been made to the
Unaudited Pro Forma Condensed Combined Balance Sheet for the Houston Exchange
as it will be recorded at a carryover basis. The MMR Myrtle Beach Acquisition
has not been reflected in the Unaudited Pro Forma Condensed Combined Statement
of Operations as it would have no material impact.
The Unaudited Pro Forma Condensed Combined Statement of Operations
for the year ended December 31, 1995 and three months ended March 31, 1996 and
1995 are presented as if the Company had completed (i) the acquisition by the
Company of radio station KYXY-FM (the "San Diego Acquisition"), the Company's
acquisition of radio station KTCK-AM (the "Dallas Acquisition") and the
Company's acquisition of radio stations WTDR-FM and WLYT-FM (the "Charlotte
Acquisition")(the Dallas Acquisition, the San Diego Acquisition and the
Charlotte Acquisition are hereinafter collectively referred to as the "Recent
Acquisitions") and (ii) Transactions as of January 1, 1995. The MMR Myrtle
Beach Acquisition has not been reflected in the Unaudited Pro Forma Condensed
Combined Statement of Operations as it would not have a material impact.
In the opinion of management, all adjustments necessary to fairly
present this pro forma information have been made. The Unaudited Pro Forma
Condensed Combined Financial Statements are based upon, and should be read in
conjunction with, the historical financial statements and the respective notes
to such financial statements contained in the Forms 8-K filed on May 9, 1996
and May 30, 1996. The pro forma information does not purport to be indicative
of the results that would have been reported had such events actually occurred
on the dates specified, nor is it indicative of the Company's future results
if the aforementioned transactions are completed. The Company cannot predict
whether the consummation of the Acquisitions or the Dispositions will conform
to the assumptions used in the preparation of the Unaudited Pro Forma
Condensed Combined Financial Statements.
The Unaudited Pro Forma Statement of Operations data include
adjustments to station operating expenses to reflect anticipated savings that
management believes it will be able to achieve through the implementation of
its strategy. There can be no assurance that the Company will be able to
achieve such savings. Such data also assume that the proceeds of the
Dispositions will be available to the Company to consummate the Acquisitions,
although the Dispositions are expected to occur at a later date.
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<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
MARCH 31, 1996
(in thousands)
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<CAPTION>
Liberty Prism
SFX Acquisition Acquisition
Broadcasting, Including Including Other
Inc. As Washington Louisville Additional Acquisitions/
Reported Dispositions(1) Dispositions(2) Acquisitions(3) Dispositions(4) Financing(5)
------------- --------------- -------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets.......... $ 22,750 $ 14,851 $ 7,230 $ 5,817 $ 10,575 $ 140,817 (a)
450,000 (b)
(18,000)(c)
(107,162)(d)
Property and equipment, net 18,157 14,365 7,797 8,524 (1,228) -
Intangible assets, net.. 154,256 108,799 14,281 27,080 (9,117) 18,000 (c)
(5,705)(d)
Other assets............ 7,689 - - - - -
------------- --------------- -------------- --------------- --------------- ------------
Total assets............ $ 202,852 $ 138,015 $ 29,308 $ 41,421 $ 230 $ 477,950
============= =============== ============== =============== =============== ============
LIABILITIES AND STOCKHOLERS'S EQUITY
Current liabilities..... $ 9,549 $ 7,460 $ 5,404 $ 2,846 - $ (283)(d)
Other liabilities....... 2,092 1,101 - - - -
Long-term debt:
New Credit Agreement.. - - - - - -
Note Offering......... - - - - - 450,000 (b)
Old Notes and Old Credit
Agreement........... 98,500 - - - - (97,906)(d)
Acquired company debt. - 70,140 13,319 11,570 - -
Deferred taxes.......... 7,415 10,318 - 783 - -
Redeemable preferred stock
Series B Notes........ 1,806 - - - - -
Series C Preferred Stock 1,550 - - - - -
Series D Preferred Stock - - - - - 149,500 (a)
Stockholders' equity.... 81,940 48,996 10,585 26,222 230 (14,678)(d)
(8,683)(a)
------------- --------------- -------------- --------------- --------------- ------------
Total liabilities and
stockholders' equity... $ 202,852 $ 138,015 $ 29,308 $ 41,421 $ 230 $ 477,950
============= =============== ============== =============== =============== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>
Pro Forma For
the Transactions
Pro Forma Other than the MMR Pro Forma For
Adjustments(6) MMR Merger Merger(7) the Transactions
-------------- ---------------- --------- ----------------
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ASSETS
Current assets.......... $(23,500)(a) $ 132,794 $ (53,100) $ 79,694
(211,000)(b)
(85,750)(c)
(63,500)(d)
(8,334)(e)
(2,000)(g)
Property and equipment, net - 47,615 2,619 50,234
Intangible assets, net.. 124,016 (b) 518,465 140,115 658,580
56,442 (c)
22,079 (d)
8,334 (e)
Other assets............ 3,415 (f) 8,854 1,926 10,780
(2,250)(a)
-------------- ---------------- --------- ----------------
Total assets............ $(182,048) $ 707,728 $ 91,560 $ 799,288
============== ================ ========= ================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities..... $ (5,404)(c) $ 16,726 $ 3,127 $ 19,853
(2,846)(d)
Other liabilities....... _ 3,193 3,621 6,814
Long-term debt:
New Credit Agreement.. - - - -
Note Offering......... - 450,000 - 450,000
Old Notes and Old Credit
Agreement........... - 594 - 594
Acquired company debt. (70,140)(b) - - -
(13,319)(c)
(11,570)(d)
32,152 (b)
Deferred taxes.......... (783)(d) 49,885 12,812 62,697
Redeemable preferred stock
Series B Notes........ - 1,806 - 1,806
Series C Preferred Stock (1,550)(g) - - -
Series D Preferred Stock - 149,500 - 149,500
Stockholders' equity.... (26,222)(d) 36,024 72,000 108,024
(48,996)(b)
(10,585)(c)
(25,750)(a)
3,415 (f)
(450)(g)
-------------- ---------------- --------- ----------------
Total liabilities and
stockholders' equity... $(182,048) $ 707,728 $ 91,560 $ 799,288
============== ================ ========= ================
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<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(1) Liberty Acquisition
Reflects the Liberty Acquisition for $236.0 million adjusted for the
Washington Dispositions of $25.0 million. No gain or loss will be
recognized in connection with the Washington Dispositions.
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<CAPTION>
Liberty as Washington Liberty
Reported Dispositions as Adjusted
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(in thousands)
<S> <C> <C> <C>
ASSETS
Current assets.............................................. $ 14,851 $ - $ 14,851
Property and equipment, net................................. 15,765 (1,400) 14,365
Intangible assets, net...................................... 132,399 (23,600) 108,799
------------ -------------- -------------
Total assets.......................................... $ 163,015 $ (25,000) $ 138,015
============ ============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities......................................... $ 9,135 $ (1,675) $ 7,460
Other liabilities........................................... 1,101 - 1,101
Long-term debt.............................................. 70,140 - 70,140
Deferred taxes.............................................. 10,318 - 10,318
Stockholders' equity........................................ 72,321 (23,325) $ 48,996
------------ -------------- -------------
Total liabilities and stockholders' equity................. $ 163,015 $ (25,000) $ 138,015
============ ============== =============
</TABLE>
(2) Prism Acquisition
Reflects the Prism Acquisition for $105.25 million adjusted for the
Louisville Dispositions of $19.5 million. No gain or loss will be
recognized on the Louisville Dispositions.
<TABLE>
<CAPTION>
Prism as Louisville Prism
Reported Dispositions as Adjusted
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(in thousands)
ASSETS
<S> <C> <C> <C>
Current assets.............................................. $ 7,230 $ - $ 7,230
Property and equipment, net................................. 9,206 (1,409) 7,797
Intangible assets, net...................................... 32,372 (18,091) 14,281
------------ -------------- -------------
Total assets.......................................... $ 48,808 $(19,500) $ 29,308
============ ============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities......................................... $ 5,404 $ __ $ 5,404
Long-term debt.............................................. 13,319 __ 13,319
Stockholders' equity........................................ 30,085 (19,500) 10,585
------------ -------------- -------------
Total liabilities and stockholders' equity................. $ 48,808 $ (19,500) $ 29,308
============ ============== =============
</TABLE>
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<PAGE>
(3) Additional Acquisitions
Reflects the acquisition of radio stations (i) WRDU-FM, WTRG-FM,
WMAG-FM, WMFR-AM, WTCK-AM and WHSL-FM from HMW Communications, Inc. (the
"Raleigh-Greensboro Acquisitions") for a purchase price of approximately
$43.0 million (the WTRG-FM/WRDU-FM stations in Raleigh, North Carolina
purchase price of $32.0 million is based on a multiple of 11 times
broadcast cash flow of $2.9 million), (ii) WROQ-FM from ABS Greenville
Partners, L.P. (the "Greenville Acquisition") of approximately $14.0
million and (iii) WSTZ-FM and WZRX-AM from Lewis Broadcasting, Inc. and
WJDX-FM from Spur Jackson, L.P. (the "Jackson Acquisitions") for a
purchase price of $6.5 million. The aggregate purchase price is $63.5
million.
<TABLE>
<CAPTION>
Raleigh- The Additional
Greensboro Greenville Jackson Acquisitions
Acquisitions Acquisition Dispositions Combined
-------------- ------------- -------------- ----------------
(in thousands)
<S> <C> <C> <C> <C>
ASSETS
Current assets............................................... $ 5,325 $ 146 $ 346 $ 5,817
Property and equipment, net.................................. 7,762 350 412 8,524
Intangible assets, net....................................... 21,694 1,607 3,779 27,080
-------------- ------------- -------------- ----------------
Total assets........................................... $ 34,781 $ 2,103 $ 4,537 $ 41,421
============== ============= ============== ================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities.......................................... $ 2,278 $ 506 $ 62 $ 2,846
Long-term debt............................................... 51 11,519 - 11,570
Deferred taxes............................................... 783 - - 783
Stockholders' equity......................................... 31,669 (9,922) 4,475 26,222
-------------- ------------- -------------- ----------------
Total liabilities and stockholders' equity.................. $ 34,781 $ 2,103 $ 4,537 $ 41,421
============== ============= ============== ================
</TABLE>
(4) Other Acquisitions and Dispositions
To reflect the Dallas Disposition for $11.5 million which is net of
payment anticipated to be made to the seller of the station to the
Company. No adjustment has been made to the pro forma balance sheet for
the Houston Exchange as it will be recorded at historical cost. See note
6(g) for the effect of the related redemption of the Company's Series C
Preferred Stock.
<TABLE>
<CAPTION>
Sale Proceeds KTCK-AM Adjustment
--------------- --------- ------------
(in thousands)
<S> <C> <C> <C>
ASSETS
Current assets........................................................ $ 11,500 $ 925 $ 10,575
Property and equipment, net........................................... - 1,228 (1,228)
Intangible assets, net................................................ - 9,117 (9,117)
--------------- --------- ------------
Total assets.................................................... $ 11,500 $ 11,270 $ 230
=============== ========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities................................................... $ __ $ __ $ __
Long-term debt........................................................ - - -
Stockholders' equity.................................................. 11,500 11,270 230
--------------- --------- ------------
Total liabilities and stockholders' equity........................... $ 11,500 $ 11,270 $ 230
=============== ========= ============
</TABLE>
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<PAGE>
(5) Financing
(a) To reflect the Preferred Stock Offering for $149,500,000
and the costs related to its issuance of $8,683,000, a net
of $140,817,000.
(b) To reflect the $450,000,000 of gross proceeds from the
Note Offering.
(c) Represents financing costs related to the New Credit
Agreement and the Note Offering comprised of estimated (i)
fees relating to the Note Offering of $12,645,000, (ii) fees
for the New Credit Agreement of $3,000,000 and (iii) other
fees of $2,355,000.
(d) To repurchase the Old Notes that were tendered for an
aggregate price of $88,379,000 which includes their carrying
cost of $79,406,000 and estimated costs related to the
Tender Offer and the Consent Solicitation of $8,973,000.
Also reflects the redemption of $18,500,000 of long-term
debt plus accrued interest of $283,000 associated with the
Old Credit Agreement which was used to finance the Company's
Charlotte Acquisition in February, 1996. An extraordinary
loss aggregating approximately $14,678,000 will be
recognized at the time these transactions are consummated
consisting of $8,973,000 in costs associated with the Tender
Offer and the Consent Solicitation and $5,705,000 related to
the write-off of deferred financing costs.
(6) Pro Forma Adjustments
(a) The Company has allocated approximately $23.5 million of
the proceeds of the Financing to make payments to Mr. Hicks
pursuant to the Amended Hicks Agreement and Mr. Armstrong
pursuant to the Armstrong Agreement as follows: (i) $100,000
in consideration of Mr. Hicks' having agreed to terminate
his employment arrangement with the Company on June 19,
1996, (ii) approximately $18.4 million to purchase 143,874
of the shares of Class B Common Stock and 26,318 shares of
Class A Common Stock owned by Mr. Hicks plus his options or
rights to acquire options to purchase an aggregate of
410,000 shares of Class A Common Stock, (iii) $100,000 in
connection with the non-competition and non-solicitation
provision in the Amended Hicks Agreement, (iv) approximately
$300,000 in connection with Mr. Hicks' existing auto lease
and premises leased by Capstar, Inc. and (v) $4.6 million to
Mr. Armstrong in consideration of his waiver of the "Change
of Control" provision in his employment agreement and to
purchase his options or rights to acquire options to
purchase 200,000 shares of Class A Common Stock. In
addition, the Amended Hicks Agreement provides that the
Company will forgive its loan to him in the approximate
amount of $2,250,000, including accrued but unpaid interest,
if he complies with defined elements of the agreement over
the next 3 years.
In connection with the Amended Hicks Agreement and the
Armstrong Agreement, the Company will record a nonrecurring
charge to earnings of approximately $19,350,000 in the
second quarter of 1996.
(b) To reflect the Liberty Acquisition for $236,000,000 net of
proceeds to be received from the Washington Dispositions of
$25,000,000, the recording of the related excess of the
purchase price paid over the net book value of the assets
carried on the adjusted balance sheet of $124,016,000 and
deferred taxes of $32,152,000 and the adjustments to remove
the long-term debt of $70,140,000 which is not being
assumed, and the stockholders' equity of $48,996,000 of the
Liberty Acquisition.
(c) To reflect the Prism Acquisition for $105,250,000, net of
proceeds to be received from the Louisville Dispositions of
$19,500,000, the recording of the related excess of the
purchase price paid over the net book value of the assets
carried on the balance sheet of $56,442,000 and the
adjustments to remove the current liabilities of $5,404,000,
long-term debt of $13,319,000 and stockholders' equity of
$10,585,000 of Prism.
(d) To reflect the $63,500,000 aggregate purchase price to be
paid for the Additional Acquisitions, the recording of the
related excess of the purchase price paid over the net book
value of the assets carried on the balance sheets of
$22,079,000 and the adjustments to remove current
liabilities of $2,846,000, long-term debt of $11,570,000,
deferred taxes of $783,000 and stockholders' equity of
$26,222,000 of the Additional Acquisitions.
(e) To reflect acquisition costs related to the Liberty, the
Prism Acquisition and the Additional Acquisitions.
(f) To reflect the SCMC Termination Agreement under which
warrants to purchase up to 600,000 shares of Class A Common
Stock at $33 3/4 per share (fair value of approximately
$9,000,000) will be granted to SCMC and a $2,000,000 loan
plus accrued interest of $171,000 made by the Company to
SCMC will be forgiven. One half of the value of the warrant
and loan forgiveness of $11,171,000 will be charged to
earnings during the three month period ended June 30, 1996,
and upon completion of the MMR Merger, the remainder will be
allocated to the Triathlon agreement and amortized over the
ten year life of the agreement. The net effect of these
transactions on stockholders' equity is an increase of
$3,415,000.
(g) In connection with the Dallas Disposition, the Company will
redeem its Series C Preferred Stock for $2.0 million, which
will result in a corresponding charge of $450,000 to the
gain or loss on the Dallas Disposition.
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<PAGE>
(7) MMR Merger
<TABLE>
<CAPTION>
Multi-Market Radio, Inc.
---------------------------------------------------------------------------------
MMR MMR Hartford Pro Forma
As Reported Dispositions(a) Acquisition(b) Adjustments As Adjusted
------------- ---------------- ---------------- ------------- -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets................................. $ 7,868 $ 5,835 $ 1,030 $ (13,600)(b) $ (53,100)
(51,567)(c)
(2,666)(d)
Property and equipment, net.................... 3,649 (1,389) 359 - 2,619
Intangible assets, net......................... 53,999 (9,717) 4,148 70,556 (e) 140,115
12,463 6,000 (c) __
2,666 (d) __
Other assets .................................. 1,926 - - - 1,926
------------- ---------------- ---------------- ------------- -------------
Total assets............................. $ 67,442 $ (5,271) $ 18,000 $ 11,389 $ 91,560
============= ================ ================ ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities............................ $ 3,155 $ (28) $ __ $ __ $ 3,127
Other liabilities.............................. 3,621 - - - 3,621
Debt, including current portion................ 41,167 - 4,400 (51,567)(c) -
6,000 (c)
Deferred taxes ................................ 7,373 - - 5,439 (e) 12,812
Stockholders' equity........................... 12,126 (5,243) 13,600 (13,600)(b) 72,000
65,117 (e)
------------- ---------------- ---------------- ------------- -------------
Total liabilities and stockholders' equity.... $ 67,442 $ (5,271) $ 18,000 $ 11,389 $ 91,560
============= ================ ================ ============= =============
</TABLE>
(a) Represents the sale of WRSF-FM which occurred in March 1996 for $950,000
and the pending sales of KOLL-FM for $4,100,000 and WRXR-FM and WKBG-FM
for $5,000,000. In the aggregate, a loss of approximately $1,471,000
will be recognized upon the sales, principally relating to WRXR-FM and
WKBG-FM.
(b) To reflect the pending MMR Hartford Acquisition for $18,000,000,
including the corresponding excess of purchase price paid, $12,463,000
over the net book value of assets acquired. It is assumed that
$13,600,000 of the purchase price to be paid in the MMR Hartford
Acquisition will be financed with the proceeds to be received by MMR
upon exercise of the outstanding MMR Class A Warrants.
(c) Repayment of $41,167,000 of existing MMR indebtedness plus indebtedness
to be incurred to finance the MMR Hartford Acquisition of $4,400,000 and
approximately $6,000,000 related to prepayment premiums which will
increase the purchase price of MMR.
(d) Includes acquisition costs associated with the MMR Merger of $1,666,000
and the $1,000,000 purchase price of the MMR Myrtle Beach Acquisition.
(e) To reflect the MMR Merger, assuming the Company's stock price is between
$33.00 per share and $40.00 per share, at an estimated purchase price of
$72,000,000 including the excess of the purchase price paid over the net
book value of the assets acquired, including deferred taxes, of
$70,556,000.
- 7 -
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Liberty Prism
Acquisition Acquisition
SFX including including
Broadcasting, Washington Louisville Additional Other Acquisitions/
Inc. Dispositions(1) Disposition(2) Acquisitions(3) Dispositions(4)
-------------- ---------------- ---------------- ---------------- --------------------
<S> <C> <C> <C> <C> <C>
Net Revenues.................. $ 19,800 $ 10,122 $ 6,068 $ 2,417 $ (2,020)
Station operating expenses.... 14,056 7,985 5,370 1,730 (2,608)
Depreciation, amortization and
acquisition related costs... 2,299 (**) 2,451 558 716 (93)
Corporate expenses............ 1,210 605 373 63 30
Other......................... - - - - -
-------------- ---------------- ---------------- ---------------- --------------------
Operating Income.............. 2,235 (919) (233) (92) 651
Interest expense, including
amortization of deferred
financing costs............. 3,384 1,940 357 242 (477)
Other expense (income)........ (164) - - (280) (31)
Income tax expense (benefit).. - (916) - 93 -
-------------- ---------------- ---------------- ---------------- --------------------
Net income (loss)............. (985) (1,943) (590) (147) 1,159
Preferred stock dividend
requirement................. 136 - - - -
-------------- ---------------- ---------------- ---------------- --------------------
Net loss applicable to common
shares...................... $ (1,121) $ (1,943) $ (590) $ (147) $ 1,159
============== ================ ================ ================ ====================
Net loss per common share..... $ (0.15)
==============
Average common shares
outstanding................. 7,458
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pro Forma For
the Transactions
other than the Pro Forma for
Financing & MMR Merger the Transactions
Pro Forma and the Recent MMR and the Recent
Adjustments(5) Acquisitions Merger(6) Acquisitions
--------------- ------------------ ---------- -----------------
<S> <C> <C> <C> <C>
Net Revenues.................. $ 2,645 (a) $ 39,032 (*) $ 5,080 $ 44,112 (*)
Station operating expenses.... (632)(b) 25,901 2,902 28,803
Depreciation, amortization and
acquisition related costs... 574 (c) 6,981 960 7,941
(408)(c)
353 (c)
138 (c)
201 (d)
52 (e)
140 (f)
Corporate expenses............ 549 (g) 1,759 60 1,819
(1,071)(g)
Other......................... - - 65 65
--------------- ------------------ ---------- -----------------
Operating Income.............. 2,749 4,391 1,093 5,484
Interest expense, including
amortization of deferred
financing costs............. 12,094 (h) 12,561 - 12,561
(5,429)(h)
450 (h)
Other expense (income)........ - (475) - (475)
Income tax expense (benefit).. 823 (i) - - -
--------------- ------------------ ---------- -----------------
Net income (loss)............. (5,189) (7,695) 1,093 (6,602)
Preferred stock dividend
requirement................. 2,429 (j) 2,565 - 2,565
--------------- ------------------ ---------- -----------------
Net loss applicable to common
shares...................... $ (7,618) $ (10,260) $ 1,093 $ (9,167)
=============== ================== ========== ==================
Net loss per common share..... $ (1.38) $ (0.97)
================== ==================
Average common shares
outstanding................. 7,458 9,459
</TABLE>
- ------------
(*) Includes $2,645,000 of fees from Triathlon; see Note 5(a).
(**) Includes $277,000 of acquisition related costs.
- 8 -
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Liberty Prism
Acquisition Acquisition
SFX including including
Broadcasting, Washington Louisville Additional Other Acquisitions/
Inc. Dispositions(1) Disposition(2) Acquisitions(3) Dispositions(4)
--------------- ---------------- --------------- ---------------- --------------------
<S> <C> <C> <C> <C> <C>
Net Revenues.................. $ 13,717 $ 10,564 $ 5,726 $ 3,844 $ (1,440)
Station operating expenses.... 9,676 8,587 5,557 3,250 (1,218)
Depreciation and amortization 1,697 1,780 511 580 -
Corporate expenses............ 807 654 420 45 30
Other......................... - - - - (37)
--------------- ---------------- --------------- ---------------- --------------------
Operating Income.............. 1,537 (457) (762) (31) (215)
Interest expense, including
amortization of deferred
acquisition costs........... 2,432 1,405 427 191 (454)
Other expense (income)........ 3 52 - (36) (90)
Income tax expense
(benefit)................... (377) 6 - 120 -
--------------- ---------------- --------------- ---------------- --------------------
Net income (loss)............. (521) (1,920) (1,189) (306) 329
Preferred stock dividend
requirement................. 71 - - - -
--------------- ---------------- --------------- ---------------- --------------------
Net loss applicable to
common shares................. $ (592) $ (1,920) $ (1,189) $ (306) $ 329
=============== ================ =============== ================ ====================
$ (0.10)
===============
Net loss per common share.....
Average common shares
outstanding................. 5,916
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pro Forma For
the Transactions
and the Recent Pro Forma for
Financing & Acquisitions the Transactions
Pro Forma other than the MMR and the Recent
Adjustments(5) MMR Merger Merger(6) Acquisitions
-------------- ----------------- ---------- ----------------
<S> <C> <C> <C> <C>
Net Revenues.................. $ 2,780 (a) $ 35,191 (*) $ 4,976 $ 40,167 (*)
Station operating expenses.... (632)(b) 27,186 3,125 30,311
1,966 (a)
Depreciation and amortization 574 (c) 7,093 1,095 8,188
(408)(c)
353 (c)
138 (c)
201 (d)
52 (e)
140 (f)
1,475 (a)
Corporate expenses............ 549 (g) 1,423 60 1,483
(1,149)(g)
67 (a)
Other......................... - (37) 80 43
-------------- ----------------- ---------- ----------------
Operating Income.............. (546) (474) 616 142
Interest expense, including
amortization of deferred
acquisition costs........... 12,094 (h) 12,561 - 12,561
(3,984)(h)
450 (h)
Other expense (income)........ - (71) - (71)
Income tax expense
(benefit)................... 251 (i) - - -
-------------- ----------------- ---------- ----------------
Net income (loss)............. (9,357) (12,964) 616 (12,348)
Preferred stock dividend
requirement................. 2,429 2,500 - 2,500
-------------- ----------------- ---------- ----------------
Net loss applicable to
common shares................. $(11,786) $ (15,464) $ 616 $ (14,848)
============== ================= ========== ================
$ (2.07) $ (1.57)
================= ================
Net loss per common share.....
Average common shares
outstanding................. 7,458 9,459
</TABLE>
- ------------
(*) Includes $625,000 of fees from Triathlon; see Note 5(a).
- 9 -
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Liberty Prism
Acquisition Acquisition
SFX including including
Broadcasting, Washington Louisville Additional Other Acquisitions/
Inc. Dispositions(1) Disposition(2) Acquisitions(3) Dispositions(4)
--------------- ---------------- ---------------- ---------------- -------------------
<S> <C> <C> <C> <C> <C>
Net Revenues.................. $ 76,830 $ 50,518 $ 26,959 $ 18,463 $ (9,967)
Station operating expenses.... 51,039 32,781 22,411 15,570 (9,689)
Depreciation, amortization and
duopoly integration costs..... 9,137 (**) 9,092 2,232 2,947 (124)
Corporate expenses............ 3,797 4,653 2,027 265 120
Other......................... 5,000 - - - (5,000)
--------------- ---------------- ---------------- ---------------- -------------------
Operating Income.............. 7,857 3,992 289 (319) 4,726
Interest expense, including
amortization of deferred
financing costs............. 12,903 7,275 1,565 948 (1,841)
Other expense (income)........ (650) - (200) (201) (498)
Income tax expense ........... (2,725) - 562 -
--------------- ---------------- ---------------- ---------------- -------------------
Net income (loss)............. (4,396) (558) (1,076) (1,628) 7,065
Preferred stock dividend
requirement.................. 291 - - - -
--------------- ---------------- ---------------- ---------------- -------------------
Net loss applicable to
common shares................. $ (4,687) $ (558) $ (1,076) $ (1,628) $ 7,065
=============== ================ ================ ================ ===================
Net loss per common share..... $ (0.71)
===============
Average common shares
outstanding................. 6,596
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pro Forma For
the Transactions
other than the Pro Forma for
Financing & MMR Merger the Transactions
Pro Forma and the Recent MMR and the Recent
Adjustments(5) Acquisitions Merger(6) Acquisitions
--------------- ----------------- ----------- ------------------
<S> <C> <C> <C> <C>
Net Revenues.................. $ 5,739 (a) $ 168,542 (*) $ 22,966 $ 191,508 (*)
Station operating expenses.... (4,938)(b) 109,140 12,892 122,032
1,966 (a)
Depreciation, amortization and
duopoly integration costs..... 2,297 (c) 28,957 4,261 33,218
(1,632)(c)
1,411 (c)
552 (c)
804 (d)
208 (e)
559 (f)
1,474 (a)
Corporate expenses............ 2,196 (g) 6,060 240 6,300
(7,065)(g)
67 (a)
Other......................... - - 281 281
--------------- ----------------- ----------- ------------------
Operating Income.............. 7,840 24,385 5,292 29,677
Interest expense, including
amortization of deferred
financing costs............. 48,375 (h) 50,243 - 50,243
(20,782)(h)
1,800 (h)
Other expense (income)........ - (1,549) - (1,549)
Income tax expense ........... 2,163 (i) - - -
--------------- ----------------- ----------- ------------------
Net income (loss)............. (23,716) (24,309) 5,292 (19,017)
Preferred stock dividend
requirement.................. 9,718 (j) 10,009 - 10,009
--------------- ----------------- ----------- ------------------
Net loss applicable to
common shares................. $ (33,434) $ (34,318) $ 5,292 $ (29,026)
=============== ================= =========== ==================
Net loss per common share..... $ (4.60) $ (3.07)
================= ==================
Average common shares
outstanding................. 7,458 9,459
</TABLE>
- ------------
(*) Includes $3,584,000 of fees from Triathlon; see Note 5(a).
(**) Includes $1,400,000 of duopoly integration costs.
- 10 -
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
(1) Liberty Acquisition
Reflects the net effect of the historical operations of the Liberty
Stations adjusted for the Washington Dispositions.
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996
------------------------------------------------
Liberty As Washington Liberty As
Reported Dispositions Adjusted
------------ -------------- ------------
(In Thousands)
<S> <C> <C> <C>
Net revenues..................................................... $ 10,563 $ (441) $ 10,122
Station operating expenses....................................... 8,802 (817) 7,985
Depreciation & amortization...................................... 2,839 (388) 2,451
Corporate expenses............................................... 649 (44) 605
------------ -------------- ------------
Operating income (loss).......................................... (1,727) 808 (919)
Interest expense, net............................................ 2,210 (270) 1,940
Income tax expense (benefit)..................................... (916) - (916)
------------ -------------- ------------
Net income (loss)................................................ $ (3,021) $ 1,078 $ (1,943)
============ ============== ============
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1995
------------------------------------------------------------------
Liberty As Beck Ross Washington Liberty as
Reported Acquisition Dispositions Adjusted
------------ ------------- -------------- ------------
(In Thousands)
<S> <C> <C> <C> <C>
Net revenues........................................ $ 8,772 $ 2,486 $ (694) $ 10,564
Station operating expenses.......................... 7,513 2,121 (1,047) 8,587
Depreciation & amortization......................... 2,043 40 (303) 1,780
Corporate expenses.................................. 654 - - 654
------------ ------------- -------------- ------------
Operating income (loss)............................. (1,438) 325 656 (457)
Interest expense, net............................... 1,405 - - 1,405
Other expense....................................... - - 52 52
Income tax expense (benefit)........................ 6 - - 6
------------ ------------- -------------- ------------
Net income (loss)................................... $ (2,849) $ 325 $ 604 $ (1,920)
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1995
------------------------------------------------------------------
Liberty as Beck Ross Washington Liberty as
Reported Acquisition Dispositions Adjusted
------------ ------------- -------------- ------------
(In Thousands)
<S> <C> <C> <C> <C>
Net revenues........................................ $ 51,407 $ 2,486 $ (3,375) $ 50,518
Station operating expenses.......................... 34,725 2,121 (4,065) 32,781
Depreciation & amortization......................... 10,429 40 (1,377) 9,092
Corporate expenses.................................. 4,653 - - 4,653
------------ ------------- -------------- ------------
Operating income (loss)............................. 1,600 325 2,067 3,992
Interest expense, net............................... 7,373 - (98) 7,275
Income tax expense.................................. (2,725) - - (2,725)
------------ ------------- -------------- ------------
Net income (loss) $ (3,048) $ 325 $ 2,165 $ (558)
============ ============= ============== ============
</TABLE>
- 11 -
<PAGE>
(2) Prism Acquisition
Reflects the net effect of the historical operations of the Prism
Acquisition adjusted for the Louisville Dispositions.
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996
----------------------------------------------
Prism as Louisville Prism as
Reported Dispositions Adjusted
---------- -------------- ----------
(in thousands)
<S> <C> <C> <C>
Net revenues................................................. $ 7,051 $ (983) $ 6,068
Station operation expenses................................... 6,161 (791) 5,370
Depreciation and amortization................................ 737 (179) 558
Corporate expenses........................................... 373 - 373
---------- -------------- ----------
Operating income/(loss)...................................... (220) (13) (233)
Interest expense............................................. 357 - 357
---------- -------------- ----------
Net loss..................................................... $ (577) $ (13) $ (590)
========== ============== ==========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1995
----------------------------------------------
Prism as Louisville Prism as
Reported Dispositions Adjusted
---------- -------------- ----------
(in thousands)
<S> <C> <C> <C>
Net revenues................................................. $ 6,795 $ (1,069) $ 5,726
Station operation expenses................................... 6,669 (1,112) 5,557
Depreciation and amortization................................ 673 (162) 511
Corporate expenses........................................... 420 - 420
---------- -------------- ----------
Operating income/(loss)...................................... (967) 205 (762)
Interest expense............................................. 427 - 427
---------- -------------- ----------
Net loss..................................................... $ (1,394) $ 205 $ (1,189)
========== ============== ==========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------------------------
Prism as Louisville Prism as
Reported Dispositions Adjusted
---------- -------------- ----------
(in thousands)
<S> <C> <C> <C>
Net revenues................................................. $ 32,572 $ (5,613) $ 26,959
Station operation expenses................................... 26,979 (4,568) 22,411
Depreciation and amortization................................ 2,946 (714) 2,232
Corporate expenses........................................... 2,027 - 2,027
---------- -------------- ----------
Operating income/(loss)...................................... 620 (331) 289
Interest expense............................................. 1,565 - 1,565
Other income/(loss).......................................... (200) - (200)
---------- -------------- ----------
Net loss..................................................... $ (745) $ (331) $ (1,076)
========== ============== ==========
</TABLE>
- 12 -
<PAGE>
(3) Additional Acquisitions
Reflects the net effect of the combined historical operations of the
Raleigh-Greensboro Acquisitions, the Greenville Acquisition and the
Jackson Acquisitions.
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996
----------------------------------------------------------
Raleigh- Additional
Greensboro Greenville Jackson Acquisitions
Acquisitions Acquisition Acquisitions Combined
-------------- ------------- -------------- -------------
(In Thousands)
<S> <C> <C> <C> <C>
Net revenues...................................... $ 1,938 $ 360 $ 119 $ 2,417
Station operating expenses........................ 1,374 250 106 1,730
Depreciation & amortization....................... 584 123 9 716
Corporate expenses................................ - 63 - 63
-------------- ------------- -------------- -------------
Operating income (loss)........................... (20) (76) 4 (92)
Interest expense, net............................. 58 184 - 242
Other expense (income)............................ (280) - - (280)
Income tax expense................................ 93 - - 93
-------------- ------------- -------------- -------------
Net income (loss)................................. $ 109 $ (260) $ 4 $ (147)
============== ============= ============== =============
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1995
----------------------------------------------------------
Raleigh- Additional
Greensboro Greenville Jackson Acquisitions
Acquisitions Acquisition Acquisitions Combined
-------------- ------------- -------------- --------------
(In Thousands)
<S> <C> <C> <C> <C>
Net revenues...................................... $ 2,784 $ 773 $ 287 $ 3,844
Station operating expenses........................ 2,330 635 285 3,250
Depreciation & amortization....................... 426 127 27 580
Corporate expenses................................ - 45 - 45
-------------- ------------- -------------- --------------
Operating income (loss)........................... 28 (34) (25) (31)
Interest expense, net............................. 2 189 - 191
Other expense (income)............................ (36) - - (36)
Income tax expense benefit........................ 120 - - 120
-------------- ------------- -------------- --------------
Net income (loss)................................. $ (58) $ (223) $ (25) $ (360)
============== ============= ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------------------------------------
Raleigh- Additional
Greensboro Greenville Jackson Acquisitions
Acquisitions Acquisition Acquisitions Combined
-------------- ------------- -------------- -------------
(In Thousands)
<S> <C> <C> <C> <C>
Net revenues...................................... $ 12,688 $ 4,074 $ 1,701 $ 18,463
Station operating expenses........................ 10,982 3,238 1,350 15,570
Depreciation & amortization....................... 2,325 514 108 2,947
Corporate expenses................................ - 195 70 265
-------------- ------------- -------------- -------------
Operating income (loss)........................... (619) 127 173 (319)
Interest expense, net............................. 156 792 - 948
Other expense (income)............................ (203) 2 - (201)
Income tax expense................................ 562 - - 562
-------------- ------------- -------------- -------------
Net income (loss)................................. $ (1,134) $ (667) $ 173 $ (1,628)
============== ============= ============== =============
</TABLE>
- 13 -
<PAGE>
(4) Other Acquisitions/Dispositions
To reflect the exchange of KRLD-AM and the Texas State Networks for
KKRW-FM in the Houston Exchange, and the sale of KTCK-AM in the Dallas
Disposition.
<TABLE>
<CAPTION>
Three Months Ended March 31, 1996
-----------------------------------------------------------------------
Dispositions Acquisition Adjustments(*) Net
--------------------------------- ------------- ---------------- -------
KRLD-AM TSN KTCK-AM KKRW-FM
--------- ----- --------- -------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net revenues.......................... $ (2,109) $ (515) $ (1,022) $ 1,626 $ - $(2,020)
Station operating expenses............ (1,991) (532) (1,241) 1,156 - (2,608)
Depreciation and amortization......... (341) (63) (93) 152 252 (93)
Corporate expenses.................... - - - 30 - 30
--------- ----- --------- ------------- ---------------- -------
Operating income (loss)............... 223 80 312 288 (252) 651
Interest expense...................... (369) (106) (2) - - (477)
Other income - - (31) - (31)
--------- ----- --------- ------------- ---------------- -------
Net loss (income) $ 592 $ 186 $ 314 $ 319 $ (252) $ 1,159
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 1995
-----------------------------------------------------------------------
Dispositions Acquisition Adjustments(*) Net
--------------------------------- ------------- ---------------- -------
KRLD-AM TSN KTCK-AM KKRW-FM
--------- ----- --------- -------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net revenues $ (1,758) $ (684) $ (426) $ 1,428 $ - $(1,440)
Station operating expenses (1,805) (541) (295) 1,423 - (1,218)
Depreciation and amortization (305) (199) - 84 420 0
Corporate expenses - - - 30 - 30
Other income (expense) - - (37) - - (37)
--------- ----- --------- ------------- ---------------- -------
Operating income (loss) 352 56 (94) (109) (420) (215)
Interest expense (359) (95) - - - (454)
Other income - - (50) (40) - (90)
--------- ----- --------- ------------- ---------------- -------
Net loss (income) $ 711 $ 151 $ (44) $ (69) $ (420) $ 329
========= ===== ========= ============= ================ =======
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 1995
-----------------------------------------------------------------------
Dispositions Acquisition Adjustments(*) Net
--------------------------------- ------------- ---------------- -------
KRLD-AM TSN KTCK-AM KKRW-FM
--------- ----- --------- -------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net revenues $ (9,792) $(3,196) $ (4,096) $ 7,117 $ - $(9,967)
Station operating expenses (8,881) (2,261) (3,714) 5,167 - (9,689)
Depreciation and amortization (1,350) (725) (124) 371 1,704 (124)
Corporate expenses - - - 120 - 120
Write-down of broadcast rights........ (5,000) - - - - (5,000)
--------- ----- --------- ------------- ---------------- -------
Operating income (loss) 5,439 (210) (258) 1,459 (1,704) 4,726
Interest expense (1,433) (403) (5) - - (1,841)
Other income - - (323) (175) - (498)
--------- ----- --------- ------------- ---------------- -------
Net loss $ 6,872 $ 193 $ 70 $ 1,634 $ (1,704) $ 7,065
========= ===== ========= ============= ================ =======
</TABLE>
- --------------
(*) To reflect historical depreciation of KRLD-AM and TSN and disposition of
KTCK-AM.
- 14 -
<PAGE>
(5) Financing and Pro Forma Adjustments
(a) Reflects the results of radio stations (located in San
Diego, Charlotte and Dallas) acquired in the Recent Acquisitions
during the year ended December 31, 1995 and fees of $3,584,000 and
$2,645,000 incurred by Triathlon and payable to SCMC for the year
ended December 31, 1995 and the three months ended March 31, 1996,
respectively of which $2,584,000 and $2,020,000, respectively,
represent fees based upon acquisition and financing activities in
the respective periods. Future fees may be lesser or greater based
upon future acquisition and financing activity by Triathlon. Minimum
annual fees will be $1,000,000 per year commencing at such time as
Triathlon spends an amount equal to the net proceeds of its last
public offering, of which $625,000 is due in the first calendar
quarter. For purposes of the pro forma statement of operations for
the three months ended March 31, 1995, the fees relating to
Triathlon of $625,000 noted above were assumed to be earned during
the quarter ended March 31, 1995.
(b) Reflects anticipated cost savings expected to be
realized following the Liberty Acquisition, the Prism Acquisition
and the Additional Acquisitions, consisting principally of the
elimination of certain duplicative technical, sales and general and
administrative functions due to operating a cluster of stations in
each of its principal markets, a reduction of employee benefit costs
and commission rates and the elimination of programming personnel
due to automation and simulcasting.
In addition to the cost savings identified above which are
reflected in the pro forma adjustments, the Company has identified
certain additional expenses of approximately $936,000 which are not
expected to recur or are expected to recur in reduced amounts. These
expenses consist primarily of (i) non-recurring marketing costs of
approximately $471,000 related to the Company's stations operating
in San Diego, California; Charlotte, North Carolina and
Greenville-Spartanburg, South Carolina, incurred by the prior owners
of such stations, (ii) costs associated with barter arrangements of
approximately $98,000 related to the Company's stations operating in
Raleigh, North Carolina, (iii) costs of third party service
providers of approximately $272,000 related to the Prism Stations,
and (iv) employee relocation expenses of approximately $95,000
incurred by the prior owners of Prism.
While management believes that such cost savings and the
elimination of non-recurring expenses are reasonably achievable, the
Company's ability to achieve such cost savings and to eliminate the
non-recurring expenses is subject to numerous factors, many of which
are beyond the Company's control. There can be no assurance that the
Company will realize such cost savings.
The Company believes that if KYXY-FM and KMKX-FM, each
operating in San Diego, California, had been owned and operated by
the Company during all of fiscal 1995 and had such stations achieved
the same audience share during fiscal 1995 as they had during the
three months ended March 31, 1996, revenues would have been
increased by approximately $1.8 million. There can be no assurance
that the stations will continue to achieve the current audience
share or that they will achieve the related revenue increases.
(c) Reflects increased amortization of intangible assets
resulting from the purchase price allocation: Liberty ($574,000),
($574,000) and ($2,297,000) for the three months ended March 31,
1996 and 1995 and year ended December 31, 1995, respectively; Prism
($353,000), ($353,000) and ($1,411,000) for the three months ended
March 31, 1996 and 1995 and year ended December 31, 1995,
respectively; Additional Acquisitions ($138,000), ($138,000) and
($552,000) for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively and an adjustment to
decrease the amortization of intangible assets resulting from
changes in the amortization period at Liberty ($408,000), ($408,000)
and ($1,632,000) for the three months ended March 31, 1996 and 1995
and year ended December 31, 1995, respectively.
(d) Reflects $201,000, $201,000 and $804,000 in amortization
of goodwill arising from the deferred tax recorded in connection
with the Liberty Acquisition for the three months ended March 31,
1996 and 1995 and year ended December 31, 1995, respectively.
- 15 -
<PAGE>
(e) Amortization of $52,000, $52,000 and $208,000 for
acquisition costs associated with the Acquisitions for the three
months ended March 31, 1996 and 1995 and year ended December 31,
1995, respectively.
(f) To reflect $140,000, $140,000 and $559,000 in
amortization relating to the present value of the Triathlon
consulting fees assigned to the Company under its agreement with
SCMC for the three months ended March 31, 1996 and 1995 and year
ended December 31, 1995, respectively.
(g) To record incremental corporate overhead charges of
$549,000, $549,000 and $2,196,000 for the three months ended March
31, 1996 and 1995 and year ended December 31, 1995, respectively,
relating to increases in personnel, professional fees and
administrative expenses associated with the increased size of the
Company due to the Acquisitions and the elimination of $1,071,000,
$1,149,000 and $7,065,000 for the three months ended March 31, 1996
and 1995 and year ended December 31, 1995, respectively of the
corporate overhead of the sellers.
(h) To reflect interest expense of $12,094,000, $12,094,000
and $48,375,000 for the three months ended March 31, 1996 and 1995
and year ended December 31, 1995, respectively, related to the
$450,000,000 Note Offering at 10.75%, amortization of deferred
financing costs of $450,000, $450,000 and $1,800,000 for the three
months ended March 31, 1996 and 1995 and year ended December 31,
1995, respectively, and the elimination of existing interest expense
of $5,429,000, $3,984,000 and $20,782,000 related to the Company and
the sellers for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively.
(i) Elimination of $823,000, $251,000 and $2,163,000 in tax
benefits associated with the sellers for the three months ended
March 31, 1996 and 1995 and year ended December 31, 1995,
respectively.
(j) To record the Series D Preferred Stock dividend at a
rate of 6.5%.
(6) MMR Merger
Reflects the net effect of the historical operations of MMR as
adjusted for acquisitions and dispositions.
<TABLE>
<CAPTION>
Multi-Market Radio, Inc.
Three Months Ended March 31, 1996
(In Thousands)
MMR MMR
As Dispositions Hartford Pro Forma Pro Forma
Reported (a) Acquisition Adjustments as Adjusted
---------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net revenues...................... $ 4,826 $ (589) $ 843 $ - $ 5,080
Station operating expenses........ 3,093 (638) 704 (257) (b) 2,902
Depreciation & amortization....... 423 (73) 122 441 (c) 960
47 (d)
Corporate expenses................ 622 - - (622) (e) 60
60 (e)
Non-cash compensation charge...... 65 - - - 65
---------- -------------- ------------- ------------- -------------
Operating income (loss)........... 623 122 17 331 1,093
Interest expense, net............. 1,339 - 98 (1,437) (f) -
Other expense (income)............ 2,042 - - (2,042) (f) -
Income tax expense................ - - 2 (2) (f) -
---------- -------------- ------------- ------------- -------------
Income (loss) before extraordinary item $ (2,758) $ 122 $ (83) $ 3,812 $ 1,093
========== ============== ============= ============= =============
</TABLE>
- 16 -
<PAGE>
<TABLE>
<CAPTION>
Multi-Market Radio, Inc.
Three Months Ended March 31, 1995
(In Thousands)
---------------------------------------------------------------------------------------
Southern
MMR Starr 1st
MMR Hartford Quarter Pro Forma Pro Forma as
As Reported Dispositions(a) Acquisition 1995 Adjustments Adjusted
------------- ---------------- ------------- ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues................... $ 1,796 $ (401) $ 889 $ 2,692 $ - $ 4,976
Station operating expenses..... 1,255 (365) 629 1,863 (257)(b) 3,125
Depreciation & amortization.... 299 (62) 43 327 441 (c) 1,095
47 (d)
Corporate expenses............. 220 - - - (220)(e) 60
60 (e)
Non-cash compensation charge... 80 - - - - 80
------------- ---------------- ------------- ----------- ------------- --------------
Operating income (loss)........ (58) 26 217 502 (71) 616
Interest expense, net.......... 311 - 131 - (442)(f) -
Other expense (income)......... (1) - - - 1 (f) -
Income tax expense............. 6 - - - (6)(f) -
------------- ---------------- ------------- ----------- ------------- --------------
Income (loss) before extraordinary
item........................... $ (374) $ 26 $ 86 $ 502 $ 376 $ 616
============= ================ ============= =========== ============= ==============
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1995
Multi-Market Radio, Inc.
(in thousands)
---------------------------------------------------------------------------------------
MMR Southern
MMR Hartford Starr Pro Forma Pro Forma
As Reported Dispositions(a) Acquisition 1st Q 1995 Adjustments as Adjusted
------------- ---------------- ------------- ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues................... $ 18,288 $ (2,422) $ 4,408 $ 2,692 $ - $ 22,966
Station operating expenses..... 11,026 (2,247) 3,276 1,863 (1,026)(b) 12,892
Depreciation & amortization.... 1,750 (304) 538 327 1,764 (c) 4,261
186 (d)
Corporate expenses............. 1,666 - - - 240 (e) 240
(1,666)(e)
Non-cash compensation charge... 281 - - - - 281
------------- ---------------- ------------- ----------- ------------- --------------
Operating income (loss)........ 3,565 129 594 502 502 5,292
Interest expense, net.......... 4,966 - - - (4,966)(f) -
Other expense (income)......... (11) - - - 11 (f) -
Income tax expense (benefit)... (59) - - - 59 (f) -
------------- ---------------- ------------- ----------- ------------- --------------
Income (loss) before extraordinary
item........................... $ (1,331) $ 129 $ 594 $ 502 $ 5,398 $ 5,292
============= ================ ============= =========== ============= ==============
</TABLE>
- -------------------
(a) Reflects the elimination of the operations of stations, WRSF-FM
sold on April 10, 1996 and the pending sales of KOLL-FM and WRXR-FM and
WKBG-FM.
(b) Reflects cost savings of $257,000, $257,000 and $1,026,000 for
the three months ended March 31, 1996 and 1995 and year ended December 31,
1995, respectively, anticipated with the MMR Hartford Acquisition,
- 17 -
<PAGE>
consisting principally of the elimination of certain duplicative technical
sales and general and administrative functions due to operating a cluster of
stations in the Company's markets and the elimination of programming personnel
due to automation and simulcasting. For a discussion of these anticipated cost
savings see "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
(c) Reflects $441,000, $441,000 and $1,764,000 for the three months
ended March 31, 1996 and 1995 and year ended December 31, 1995, respectively,
in amortization of intangible assets recorded in connection with the MMR
Merger.
(d) Amortization of $47,000, $47,000 and $186,000 for acquisition
costs associated with the MMR Merger for the three months ended March 31, 1996
and 1995 and year ended December 31, 1995, respectively.
(e) To record incremental corporate overhead charges of $60,000,
$60,000 and $240,000 associated with the MMR Merger for the three months ended
March 31, 1996 and 1995 and year ended December 31, 1995, respectively and to
eliminate MMR's existing corporate overhead of $622,000, $220,000 and
$1,666,000 for the three months ended March 31, 1996 and 1995 and year ended
December 31, 1995, respectively.
(f) Elimination of a nonrecurring loss (income) of $2,042,000,
($1,000) and $11,000 for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively, interest expense of $1,437,000,
$442,000 and $4,966,000 for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively, tax expense (benefit) of $2,000,
$6,000 and ($59,000) for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively.
Item 7. Financing Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
10.1 Amended and Restated Agreement dated June 19, 1996 by and
between SFX Broadcasting, Inc. and R. Steven Hicks.
10.2 Employment Agreement made as of June 24, 1996 between SFX
Broadcasting, Inc. and Tom Benson.
99.0 Press release dated June 20, 1996.
- 18 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereto duly authorized.
SFX BROADCASTING, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------
Name: Robert F.X. Sillerman
Title: President and
Chief Executive Officer
Date: June 21, 1996
- 19 -
AMENDED AND RESTATED AGREEMENT
This Amended and Restated Agreement (the "Amended and Restated
Agreement") is dated June 19, 1996, by and between SFX Broadcasting, Inc., a
Delaware corporation, its successors and assigns ("SFX"), and R. Steven Hicks,
an individual residing at 1702 Windsor Road, Austin, Texas 78703 ("Hicks").
WHEREAS, Hicks is currently the President, Chief Executive Officer,
Chief Operating Officer and a director of SFX;
WHEREAS, SFX and Hicks entered into an Agreement dated as of
April 16, 1996 (the "Agreement");
WHEREAS, SFX and Hicks have mutually agreed to amend and restate the
Agreement on the terms set forth below;
WHEREAS, Hicks is the beneficial owner of 26,318 shares of Class A
Common Stock of SFX, 143,874 shares of Class B Common Stock of SFX and the
options, or the right to be granted options, to purchase additional shares of
Class A Common Stock of SFX as set forth on Schedule A to this Amended and
Restated Agreement (collectively, the "Hicks Securities");
WHEREAS, it is in the best interests of SFX and Hicks, that on
June 19, 1996 (the "Closing Date") Hicks sell to SFX and SFX purchases from
Hicks all of the Hicks Securities;
WHEREAS, in connection with the execution of the Employment Agreement
(as hereinafter defined), SFX extended a loan in the principal amount of
$2.0 million to Hicks which loan has accrued and unpaid interest in the amount
of $297,863.00 as of March 31, 1996 (the "Hicks Loan"); and
WHEREAS, it is the desire of the parties to amend the provisions
relating to the Hicks Loan as stated in this Amended and Restated Agreement;
WHEREAS, the Board of Directors of SFX has approved the terms and
conditions of this Amended and Restated Agreement (with Hicks not
participating in the discussions and abstaining from voting thereon).
NOW, THEREFORE, for and in consideration of the premises and the
covenants and agreements contained herein, and other valuable consideration
the adequacy of which is hereby acknowledged, the parties hereby agree as
follows:
1. Termination of Employment Agreement.
In consideration for a one-time payment of $100,000 to be made by SFX
to Hicks on the Closing Date, the Amended and Restated Employment Agreement
dated as of April 1, 1995, by and between SFX and Hicks (the "Employment
Agreement"), and all the rights afforded to Hicks
<PAGE>
thereunder shall terminate effective as of the Closing Date, except that the
Hicks Loan will remain outstanding as provided in Section 4 below.
Hicks hereby agrees to submit his resignation upon the execution of
this Amended and Restated Agreement, such resignation to be effective on the
Closing Date, from all corporate offices, directorships and other positions
held by Hicks in SFX and all subsidiaries (whether or not wholly-owned) of
SFX. In addition, Hicks hereby agrees not to make any request of SFX or take
any other action that will require the filing of a Form 8-K pursuant to Item 6
thereof or the disclosure required by Item 7(g) of Schedule 14A.
2. Sale of Securities
On the Closing Date Hicks hereby agrees to sell to SFX, and SFX
hereby agrees to purchase from Hicks for an amount of $18,422,544 in cash to
be wired on the Closing Date, the Hicks Securities.
Hicks represents and warrants to SFX that the Hicks Securities
represent all of the securities of SFX held by him or in respect of which he
is deemed to be the "beneficial owner" under Rule 13d-3 under the Exchange Act
(as defined in Section 5) and that there are no restrictions on the
transferability to SFX of the Hicks Securities. Hicks covenants and agrees
that between the date hereof and the Closing Date he will not acquire or
become the beneficial owner of any additional securities of SFX.
3. Noncompetition.
In consideration for a one-time payment of $100,000 by SFX to Hicks,
from the Closing Date until the date which is the earlier of one year from the
completion of the consummation, or abandonment, of the merger agreement with
Multi-Market Radio, Inc., ("MMR") or October 31, 1997 (the "Non-Competition
Expiration Date"), Hicks agrees not to, and agrees that he will not take any
action to cause Gulfstar Broadcasting, Inc. ("Gulfstar"), Capstar Broadcasting
Partners or any affiliate (as such term is defined herein) of Hicks, Muse,
Tate & Furst in which Hicks has an ownership interest or to which Hicks acts
as an advisor, to
(i) compete, or own any direct or indirect interest in or provide any
services to any person or entity, for his own or its account or as an
employee, officer, director, partner, joint venturer, shareholder of
a person or entity or otherwise, which is in the business of owning
or operating one or more radio stations licensed to or having a
transmitter site within any county in the Metro survey areas of the
following Arbitron-defined markets:
Nashville, TN Greensboro, NC
Jackson, MS Raleigh-Durham, NC
Greenville- Spartanburg, SC Charlotte, NC
Dallas, TX Houston, TX
Springfield-Northampton, MA San Diego, CA
Myrtle Beach, SC Biloxi-Gulfport-Pascagoula, MS
- 2 -
<PAGE>
Little Rock, AK Hartford, CT
Daytona Beach, FL New Haven, CT
Jacksonville, FL Augusta, GA
Louisville, KY Providence, RI
Richmond, VA Baltimore, MD
Washington, DC
or any eight additional markets in which SFX or MMR has entered into
one or more agreements to purchase one or more radio stations on or
before the earlier of the consummation of the merger with MMR (the
"Markets") or October 31, 1996, provided however, that on the date
(a) SFX no longer owns, operates, provides programming to or sells
advertising on behalf of any radio station in any one of the Markets
or (b) the merger with MMR is abandoned, Hicks will not be bound by
this Section 3(i) with respect to the Markets referred to in this
Section 3(i)(a) or the markets in which MMR owns, operates, provides
programming to or sells advertising on behalf of one or more radio
stations,
(ii) hire, attempt to hire or solicit the employment of any employees
of SFX or MMR, except employees who are not officers and directors
currently based in Austin, Texas, for his own account or as an
employee, officer, director, partner, joint venturer, shareholder of
a person or entity or otherwise, and
(iii) utilize or disseminate any confidential information about the
business and strategy of SFX or MMR or interfere with, disrupt, or
attempt to disrupt any past, present or prospective relationship,
contractual or otherwise, of SFX or MMR.
SFX hereby agrees to provide Hicks with written notice of the
entering into any agreement to purchase, provide programming to or sell
advertising on behalf of one or more radio stations by SFX or MMR between the
date of this agreement and the consummation of the merger with MMR. Notice
shall be given by first class mail to the address set forth above in the
preamble to this agreement and shall be deemed given on the third day after
such mailing.
4. Additional Agreements
A. Hicks Loan
Upon the termination of the Employment Agreement as provided in
Section 1 hereof, the Hicks Loan will remain outstanding, all amounts unpaid
under the Hicks Loan will continue to be outstanding and accumulated interest
will continue to accrue at the interest rate set forth in the note evidencing
the Hicks Loan.
SFX agrees to release any shares being held as collateral under the
Hicks Loan on the Closing Date.
- 3 -
<PAGE>
SFX agrees that the Hicks Loan will be forgiven on the third
anniversary of the Closing provided that Hicks has complied with
Section 3, 8 and 9 of this Amended and Restated Agreement in all material
respects.
B. Auto Loan
SFX hereby agrees to make a one-time payment in the amount of $50,000
in connection with Hicks' existing auto lease on the Closing Date.
C. Austin Office Lease
SFX hereby agrees that it will continue to make the lease payments it
is currently making for the premises leased by Capstar, Inc. at 600 Congress
Avenue, Suite 1270, Austin, Texas 7870 (the "Austin Premises") and that upon
termination of its occupation thereof, SFX will make a one-time payment to
Capstar, Inc. in an amount equal to the product of $9,586.40 and the number of
months between the date of termination and July 1998, prorated for the number
of days in any partial month. Hicks hereby undertakes to assist SFX or to
cause Capstar, Inc. to assist SFX, in connection with any negotiations which
SFX may undertake with the landlord of the Austin Premises with respect to
such premises without prejudice to Hicks or Capstar, Inc.'s contractual
obligations under the lease agreement with such landlord.
5. Release by Hicks.
Except for the rights created by this Amended and Restated Agreement
and Claims (as defined below) arising from or based on a breach of this
Amended and Restated Agreement, Hicks, for himself, and each of his Affiliates
(as defined in Section 5 hereof), spouse, attorneys, agents, representatives,
heirs, executors, administrators, successors, assigns, insurers, and all
persons acting by, through, under, or in concert with any of them, does hereby
fully, finally and forever unconditionally release, acquit and discharge SFX
and each of its officers, directors, subsidiaries (whether or not wholly-owned),
Affiliates, agents, representatives, employees, attorneys, successors, assigns,
insurers, and all persons acting by, through, under, or in concert with any of
them, of and from any and all potential or actual complaints, claims at law or
equity, disputes, demands, sums of money, duties, liabilities, obligations,
promises, agreements, controversies, actions, causes of action, suits, rights,
damages, personal injuries, loss of wages, costs, losses, debts, charges,
expenses and attorneys' fees of any and every nature whatsoever arising out of
or related to or based on acts or failures to act (collectively, "Claims") on or
prior to the date hereof, whether in law or in equity, known or unknown, matured
or unmatured, liquidated or unliquidated, vested or contingent, including, but
not limited to, any Claims relating to the Employment Agreement or Hicks
ownership of the Hicks Securities, any insurance coverage, benefits, premiums,
or medical expenses, or any alleged conduct of SFX and/or any other released
person or entity which might be alleged by Hicks to constitute any form or type
of discrimination, or in any way related to Hicks's employment, hiring, wages,
conditions of employment, termination of employment with SFX, or any matter,
cause, thing, claim, right or action. Any lawsuit or administrative complaint
filed in violation of this Amended and Restated Agreement shall automatically
constitute a breach of this Amended and Restated Agreement, and
- 4 -
<PAGE>
in addition to any other legal remedies available to SFX, Hicks shall be
required to immediately return, and SFX shall be entitled to immediately
receive, all consideration paid to Hicks or on his behalf by SFX under this
Amended and Restated Agreement. Notwithstanding anything to the contrary in
the foregoing sentence, any proceedings instituted by Hicks to enforce his
rights under this Amended and Restated Agreement will not constitute a breach
hereunder.
6. Release by SFX.
Except for the rights created by this Amended and Restated Agreement
and Claims arising from or based on a breach of this Amended and Restated
Agreement, SFX, for itself and each of its subsidiaries (whether or not wholly
owned), Affiliates (other than officers and directors, except in their
corporate capacities), attorneys, agents, representatives, successors,
assigns, insurers, and all persons acting by, through, under, or in concert
with any of them, does hereby fully, finally and forever unconditionally
release, acquit and discharge Hicks and each of his Affiliates, agents,
representatives, heirs, beneficiaries, executors, administrators, attorneys,
successors, assigns, insurers, and all persons acting by, through, under, or
in concert with any of them, of and from any and all known Claims against
Hicks, or any such other parties, arising on or prior to the date hereof,
whether in law or in equity, matured or unmatured, liquidated or unliquidated,
or vested or contingent.
7. No Assignment.
Each party to this Amended and Restated Agreement represents and
warrants that it has not assigned or otherwise transferred to any person or
entity any right, title or interest to any Claims released hereby.
8. Standstill Agreement.
(a) Hicks hereby agrees that for a period from the date of this
Amended and Restated Agreement until the date which is three years after the
Closing Date, unless and until he shall have been specifically invited or
authorized in writing by SFX, he will not individually or will not cause any
"partnership, limited partnership, syndicate or other group" (as those terms
are used within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) with which he is affiliated,
including any of his Affiliates and Associates (as these terms are defined in
Rule 405 under the Securities Act of 1933, as amended (the "Securities Act")),
to, directly or indirectly, solicit, seek or offer to effect, negotiate with
or provide any information to any person with respect to, become engaged by
any third party, or make any statement, proposal or inquiry, whether written
or oral, either alone or in concert with others, to the Board of Directors of
SFX or MMR, to any director or officer of SFX or MMR or to any shareholder or
securityholder of SFX or MMR, or otherwise make any public announcement or
proposal or offer whatsoever with respect to, (i) any form of business
combination or transaction involving SFX or MMR including, without limitation,
a merger, consolidation, tender or exchange offer, sale or purchase of assets
or securities, or dissolution or liquidation of SFX or MMR, (ii) any form of
restructuring, recapitalization or similar transaction
- 5 -
<PAGE>
with respect to SFX or MMR, or (iii) any proposal or other statement to be
presented to SFX's or MMR's stockholders at any regular or special meeting.
(b) Hicks hereby agrees that from the date of this Amended and
Restated Agreement until the date which is three years after the Closing Date,
without the prior written consent of SFX, he will not, and will not cause each
of his Affiliates and Associates to, undertake, or become engaged by a third
party with a view toward any of the following, individually or as part of a
"partnership, limited partnership, syndicate or other group," directly or
indirectly, through one or more intermediaries or otherwise:
(i) acquire, offer or propose to acquire, or agree to
acquire, by purchase or otherwise, (A) any securities entitled to, or
that may be entitled to, vote generally in the election of SFX's or
MMR's Board of Directors (collectively, "Voting Securities"), or (B)
any direct or indirect rights or options to acquire (through
purchase, exchange, conversion or otherwise) any Voting Securities,
or (C) any assets or securities of SFX or MMR or any of their
subsidiaries;
(ii) (A) make, or in any way participate, in any
"solicitation" of "proxies" (as such terms are defined in Regulation
14A under the Exchange Act) or any activity specified in Rule
14a-1(1)(2) under the Exchange Act with respect to the Voting
Securities (including by the execution of action by written consent),
become a "participant" in any "election contest" (as such terms are
used in Rule 14a-11 of the Exchange Act) with respect to SFX or MMR,
(B) seek to advise, encourage or influence any person or entity with
respect to the voting of any Voting Securities, (C) demand a copy of
the SFX's or MMR's stock ledger, list of its shareholders, or other
books and records, or (D) call or seek to call, directly or
indirectly, any special meeting of stockholders of SFX or MMR for any
reason whatsoever;
(iii) participate in or encourage the formation of any group
which owns or seeks or offers to acquire beneficial ownership of
securities of SFX or MMR or any assets of SFX or MMR or any of its
subsidiaries or rights to acquire such securities or which seeks or
offers to effect control, or to influence in any manner the
management, policies or affairs, of SFX or MMR or for the purpose of
circumventing any provisions of this Amended and Restated Agreement;
(iv) initiate, propose or otherwise solicit stockholders for
the approval of one or more stockholder proposals, as described in
Rule 14a-8 of the Exchange Act, with respect to SFX or MMR, or as is
otherwise now or hereafter provided for the submission of proposals
by stockholders in the By-Laws of SFX or MMR; or
(v) otherwise act, alone or in concert with others
(including by providing financing to another party), to seek or offer
to control or influence, in any manner, the management, Board of
Directors, policies or affairs of SFX or MMR.
- 6 -
<PAGE>
Notwithstanding the foregoing and except as set forth herein, the
provisions of this Section 8 shall not prevent or prohibit Hicks and his
Affiliates and Associates from exercising the voting rights of Voting
Securities owned by them of record or beneficially held for them in street
name.
9. No Harmful Acts.
As the decision to enter into this Amended and Restated Agreement has
been mutually agreed upon by SFX and Hicks and it is in the best interest of
both parties to enter into this Amended and Restated Agreement to facilitate
the transactions contemplated hereby, Hicks hereby agrees that he and his
immediate family members will not make any statements which could reasonably
be interpreted to be derogatory or harmful concerning SFX or any of its
officers, employees or directors, or take any action calculated to be harmful
to the business or affairs of SFX. SFX hereby agrees that it and its officers
and directors will not make any statements which could reasonably be
interpreted to be derogatory or harmful to Hicks.
10. Officer and Director Liability Insurance
SFX agrees that Hicks' indemnification rights provided in SFX's
By-Laws, insofar as they relate to acts prior to Closing Date, will remain in
effect and will not be modified. In addition, SFX further agrees that the
existing coverage under SFX's directors and officers liability insurance
policy for acts of Hicks prior to the date hereof will not be modified and SFX
will take commercially reasonable steps to renew the existing policy at the
end of the present coverage period or secure a replacement policy that
provides coverage for acts of Hicks prior to the date hereof substantially
identical to the coverage provided under the existing policy.
11. Nature of Settlement.
It is further agreed and understood that this Amended and Restated
Agreement does not constitute, and shall not be construed as, an admission by
SFX or Hicks of any breach of contract or other violation by either of them of
any right of each other, any harm to SFX or Hicks of any kind whatsoever, or
any violation by either of any federal, state or local statute, law, ordinance
or regulation.
12. Execution of Documents.
Each party to this Amended and Restated Agreement agrees to timely
sign and execute such other documents as shall be reasonably necessary to
effect this Amended and Restated Agreement. Further, each party to this
Amended and Restated Agreement agrees it will fully and timely cooperate to
effect the terms of this Amended and Restated Agreement and will not
unreasonably withhold its consent nor refuse nor fail to sign any document to
carry out the intents and purposes of this Amended and Restated Agreement.
- 7 -
<PAGE>
13. Return of Property.
SFX and Hicks agree to make available for collection at a mutually
agreeable time all documents and tangible items that are the property of the
other including, but not limited to, computer disks, computer software,
documents containing customer information, personnel files, and other
documents or tangible items that Hicks came into possession of at any time.
SFX agrees that all leasehold improvements and fixtures at 600 Congress
Avenue, Suite 1270, Austin, Texas 78701 are solely the personal property of
Hicks or Capstar, Inc.
14. Term; Termination.
This Amended and Restated Agreement shall terminate on the third
anniversary of the Closing Date. Notwithstanding anything to the contrary in
the foregoing sentence, if Hicks dies during the term of this Amended and
Restated Agreement, this Amended and Restated Agreement shall automatically
terminate and neither SFX nor Hicks' estate shall have any further obligation
to the other.
15. Remedies.
Without intending to limit the remedies available to SFX, Hicks
acknowledges that a breach of any of the covenants contained in this Amended
and Restated Agreement may result in material irreparable injury to SFX or one
of its subsidiaries for which there is no adequate remedy at law, that it may
not be possible to measure damages for such injuries precisely and that, in
the event of such a breach or threat thereof, SFX may be entitled to obtain a
temporary restraining order and/or a preliminary or permanent injunction
restraining Hicks from engaging in activities prohibited by this Amended and
Restated Agreement, or requiring Hicks to comply with this Amended and
Restated Agreement, or such other equitable relief as may be required to
enforce any of the covenants in such sections.
16. Opportunity for Examination.
Hicks agrees and acknowledges that he has read this Amended and
Restated Agreement carefully and that he fully understands all of its
provisions, and Hicks acknowledges that he had the opportunity to consult with
legal counsel regarding the terms and conditions of this Amended and Restated
Agreement, and that he had ample time to review this Amended and Restated
Agreement. By signing below, Hicks acknowledges that he has voluntarily
accepted the terms and conditions of this Amended and Restated Agreement.
17. Authority.
Each party to this Amended and Restated Agreement represents and
warrants that it has the authority to execute this Amended and Restated
Agreement, that the execution and performance hereof does not conflict with,
violate or result in a breach of any agreement, court order, statute or
regulation to which such party is a party or by which it or its property is
bound, and that this Amended and Restated Agreement has been duly and validly
executed by such party
- 8 -
<PAGE>
and constitutes a binding obligation of such party, enforceable in accordance
with its terms. Contemporaneously with the execution hereof, SFX is providing
Hicks with a resolution of its Board of Directors approving this Amended and
Restated Agreement and authorizing its execution on behalf of SFX.
18. Entirety and Amendments.
This Amended and Restated Agreement embodies the entire agreement
between the parties, supersedes all prior agreements and understandings, if
any, relating to the subject matter hereof, and may be amended only by an
instrument in writing executed by both parties.
19. Survival.
If any provision of this Amended and Restated Agreement or any
document contemplated to be delivered or executed pursuant hereto is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provisions shall be fully severable, the
appropriate document shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof; and the
remaining provisions hereof or thereof shall remain in full force and effect
and shall not be affected by the illegal, invalid, or unenforceable provision
or by its severance herefrom or therefrom.
20. Choice of Law and Submission to Jurisdiction.
This Amended and Restated Agreement shall in all respects be
interpreted, enforced and governed under the laws of the State of New York,
without reference to the provisions thereof relating to conflicts of laws.
21. Construction.
This Amended and Restated Agreement shall be construed without regard
to the identity of the person who drafted the various provisions of this
Amended and Restated Agreement. Each and every provision of this Amended and
Restated Agreement shall be construed as though all of the parties
participated equally in the drafting of the same. Consequently, the parties
acknowledge and agree that any rule of construction that a document is to be
construed against the drafting party shall not be applicable to this Amended
and Restated Agreement.
22. Section Headings.
The section headings contained in this Amended and Restated Agreement
are inserted for convenience of reference only and shall not affect the
meaning or interpretation of this Amended and Restated Agreement.
- 9 -
<PAGE>
23. Counterparts.
This Amended and Restated Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
24. Notice of Breach.
The parties hereby agree that in the event of the breach of this
Amended and Restated Agreement by either party that the breaching party shall
be given written notice of such breach at the address stated in the preamble
of this Amended and Restated Agreement by the other party and that the
breaching party shall have ten (10) business days thereafter within which to
cure such breach.
25. Press Releases; Publicity
No press release, periodic report to be filed with the Securities and
Exchange Commission or other publicity by SFX relating to this Amended and
Restated Agreement or Hicks' involvement with SFX, shall be filed or
disseminated unless the contents of the same shall have first been approved by
Hicks, which approval shall not be unreasonably withheld, unless legal counsel
for SFX shall have first advised SFX in writing that any information contained
there in to which Hicks shall have objected is required by law to be contained
therein, and SFX shall furnish Hicks with a copy of such press release,
periodic report or publicity at least twenty-four hours prior to the time it
is scheduled to be filed or disseminated.
IN WITNESS WHEREOF, the parties have executed this Amended and
Restated Agreement as of the date first written above.
SFX BROADCASTING, INC.
Address: 150 East 58th Street
New York, New York 10022
By: /s/ Robert F. X. Sillerman
_____________________________________
Robert F. X. Sillerman, Executive Chairman
Address: 1702 Windsor Road
Austin, Texas 78703
/s/ R. Steven Hicks
--------------------------------------
R. STEVEN HICKS
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<PAGE>
SCHEDULE A
VESTED STOCK OPTIONS PURSUANT TO THE 1993 STOCK OPTION PLAN
vested options to purchase 30,000 shares of Class A Common
Stock of SFX at an exercise price of $13.50 and unvested
options to purchase an additional 100,000 shares of Class A
Common Stock of SFX at an exercise price of $13.50
VESTED STOCK OPTIONS PURSUANT TO THE 1994 STOCK OPTION PLAN
vested options to purchase 30,000 shares of Class A Common
Stock of SFX at an exercise price of $13.00
VESTED STOCK OPTIONS PURSUANT TO THE 1995 STOCK OPTION PLAN
unvested options to purchase 25,000 shares of Class A Common
Stock of SFX at an exercise price of $21.25
OTHER STOCK OPTIONS
options to purchase 100,000 shares of Class A Common Stock
of SFX to be granted pursuant to Section 3(e) of the
Employment Agreement
options to purchase 100,000 shares of Class A Common Stock
of SFX at an exercise price of $13.00 granted by the Board
of Directors at its meeting of November 11, 1995
EMPLOYMENT AGREEMENT
AGREEMENT made as of June 24, 1996 (the "Employment Agreement"),
between SFX BROADCASTING, INC., a Delaware corporation (the "Employer") and
TOM BENSON (the "Executive").
In consideration of the mutual covenants and agreements herein set
forth, the parties hereto agree as follows:
1. Employment. Upon the terms and subject to the conditions of
this Employment Agreement, Employer hereby employs the Executive and the
Executive hereby accepts employment by Employer on the terms hereinafter set
forth.
2. Term. The term of the Executive's employment hereunder shall
commence on the date hereof and continue for a period of three (3) years (the
"Term") unless terminated earlier in accordance with the provisions of this
Employment Employment Agreement.
3. Executive's Position, Duties, and Authority.
3.1. The Employer shall employ the Executive, and the
Executive shall serve, as the Vice President of Financial Affairs of the
Employer and of any successor by merger, acquisition of substantially all of
the assets of the Employer or otherwise. In addition, the Executive shall
serve as the Chief Financial Officer of the Employer upon the resignation of
the Employer's current chief financial officer. The Executive shall have
executive duties, functions, authority and responsibilities commensurate with
the office or offices he from time to time holds with the Employer.
3.2. The Executive shall devote substantially all of his
business time to the business and affairs of the Employer and to the
fulfillment of his duties hereunder in a diligent and competent fashion to the
best of his abilities.
3.3. The Executive covenants and agrees that for so long as
he is actively employed by the Employer he shall inform the Employer of each
business opportunity directly related to the business of the Employer of which
he becomes aware, and that he will not, directly or indirectly, exploit any
such opportunity for his own account, nor will he render any services to any
other person or business, or acquire any interest of any type in any other
business, which is in competition with the Employer; provided, however, that
the foregoing shall not be deemed to prohibit the Executive from acquiring,
solely as an investment, (i) up to 10% of any securities of a partnership,
trust,
<PAGE>
corporation or other entity so long as he remains a passive investor in such
entity and such entity is not, directly or indirectly, in competition with the
Employer, or (ii) up to .5% of any securities of any publicly traded
partnership, trust, corporation or other entity provided he remains a passive
investor in such entity.
4. Base Salary. During the Term, the Employer shall pay or cause to
be paid to the Executive an annual base salary of $150,000 (the "Base Salary)
payable in accordance with the Employer's normal payroll practices. The Base
Salary will be increased annually on the anniversary of this Agreement by five
(5) percent The Employer shall deduct from the Base Salary and all other cash
amounts payable by the Company under the provisions of this Employment
Agreement to the Executive, or, if applicable, to his estate, legal
representatives or other beneficiary designated in writing by the Executive
(a "designee"), all social security taxes, all federal, state and municipal
taxes and all other charges and deductions which now or hereafter are imposed by
law as charges on the compensation of the Executive or charges on cash benefits
payable by the Employer hereunder to his estate, legal representatives or
designee
5. Incentive Compensation.
5.1 Primary Bonus. The Executive shall be entitled to
receive an annual incentive bonus (the "Bonus") during the continuance of the
Executive's employment hereunder in an amount equal to at least $25,000. The
Primary Bonus shall be payable within a reasonable period of time not to
exceed ninety (90) days following the end of each fiscal year of the Employer.
5.2 Stock Options. During each year of the Term, the
Employer shall grant ten (10) year options or stock appreciation rights to the
Executive to purchase a minimum of 3,000 shares of the Class A Common Stock of
the Employer at an exercise equal to lowest exercise price of any options
granted to employee's of the Company during each year of the Term of this
Employment Agreement provided that no options shall be granted at an exercise
price below that mandated by any stock option plan that the Company should
then have in effect.
5.3 Signing Bonus. Upon the execution of this
Agreement, the Employer shall pay the Executive a bonus in the amount of
$25,000.
6. Expenses. The Company shall reimburse the Executive,
upon production of reasonable detailed accounts and vouchers or other
reasonable evidence of payment by the
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<PAGE>
Executive, all in accordance with the Company's regular procedures in effect
from time to time and in form suitable to establish the validity of such
expenses for tax purposes, all ordinary, reasonable and necessary travel,
entertainment and other expenses as shall be incurred by him in the
performance of his duties hereunder.
7. Benefits. During the Term, the Executive shall be eligible to
participate in any pension or profit-sharing plan or program of the Employer
now existing or established hereafter, in accordance with and to the extent
that he is eligible under the general provisions thereof. The Executive shall
also be eligible to participate in any group life insurance, hospitalization,
medical, health and accident, disability or similar plan or program of the
Employer, now existing or established hereafter, in accordance with and to the
extent that he is eligible under the general provisions thereof. The Employer
shall reimburse the Executive for any "COBRA" payments from the date hereof
and continuing through the date that the Executive shall become eligible under
the terms of the Employer's health and general insurance plans.
8. Life Insurance. The Employer shall have the right to obtain life
insurance on the life of Executive and to be the beneficiary of such policy.
The Executive shall cooperate in assisting the Employer to obtain such
insurance. The Employer shall continue to pay all premiums on such policies
and shall maintain such policies, subject to the insurability of the
Executive, if required to keep such policies in effect during the Term.
9. Indemnification. The Company shall indemnify and hold harmless the
Executive and his legal representatives to the fullest extent permitted by the
laws of the State of Delaware, and the Executive shall be entitled to the
protection of such insurance policies which the Company hereby agrees to
maintain for the benefit of its directors and officers, against all costs,
charges or expenses whatsoever incurred or sustained by him or his legal
representatives in connection with any action, suit or proceeding to which he
or his legal representatives may be made a party by reason of his being or
having been an officer of the Company, or because of actions taken purportedly
on behalf of the Company. The Company shall, upon request by the Executive,
promptly advance or pay any amount for costs, charges or expenses (including,
but not limited to, legal fees and expenses incurred by counsel retained by
the Executive) in respect of his right to indemnification hereunder, subject
to a later determination as to the Executive's ultimate right to receive such
payment
- 3 -
<PAGE>
10. Confidential Information. The Executive acknowledges that his
employment by the Employer has brought and will bring him into close contact
with confidential proprietary information of the Employer, including
information regarding costs, profits, markets, sales, products, key personnel,
pricing policies, operational methods, technical processes, other business
affairs and methods, plans for future developments, and other information not
readily available to the public, the disclosure of which to third parties
would in each case have a material adverse effect on the Employer's business
operations (the "Confidential Information"). In recognition of the foregoing,
the Executive covenants and agrees that:
(a) he will keep secret all Confidential Information and will not
intentionally disclose Confidential Information to anyone outside of the
Employer and its representatives other than in the course of performance of
his duties hereunder, either during or for a two year period after the Term
except with the Employer's written consent, provided that (i) the Executive
shall have no such obligation to the extent Confidential Information is or
becomes publicly known other than as a result of the Executive's breach of his
obligations hereunder and (ii) the Executive may, after giving prior notice to
the Employer to the extent practicable under the circumstances, disclose such
matters to the extent required by applicable laws or governmental regulations
or judicial or regulatory process after giving the Employer notice of such
judicial or regulatory process; and
(b) he will, at the Executive's option, either (i) deliver promptly
to the Employer on termination of his employment by the Employer or at any
other time the Employer may so request, and at the Employer's request, all
memoranda, notes, records, reports and other documents (and all copies
thereof) relating to the Employer's business, which he obtained while employed
by, or otherwise serving or acting on behalf of, the Employer and which he may
then possess or have under his control (the "Records"); or (ii) in lieu of
subclause (i) above, the Executive shall destroy all of the Records and shall
deliver to the Employer, a certificate to that affect.
- 4 -
<PAGE>
11. Termination.
11.1. Notwithstanding the provisions of Sections 1 and 2
hereof, this Employment Agreement may be terminated prior to the expiration of
the Term by the Employer upon the happening of any of the following events:
(i) Upon the death of the Executive;
(ii) Upon the Total Disability of the Executive
(which is hereby defined as the Executive being unable to perform his duties
hereunder on account of illness or other incapacity for ninety (90) days in
any period of twelve consecutive months ("Total Disability");
(iii) Upon the occurrence of any material breach
of any material covenant of the Executive contained in this Employment
Agreement, or in the event of willful malfeasance, gross negligence, or gross
or willful misconduct in the performance of his duties hereunder having a
material adverse effect on the business of the Employer; or
(iv) Upon the conviction of the Executive of any
felony or misdemeanor involving illegal drugs.
11.2. In the event that this Employment Agreement is
terminated in accordance with this Section 11.1, the Executive, the
Executive's estate, legal representatives or designee shall be entitled to
receive, in full satisfaction of all obligations due to the Executive from the
Employer hereunder, all accrued but unpaid Base Salary through the date of
termination and any unpaid Bonus through the date of termination pro rated for
the year of termination.
12. Non-competition.
12.1. For a period of one year following the termination of
the Executive's employment hereunder the Executive will not become employed
by, or become an officer, director or general partner of, any partnership,
corporation or other entity which is engaged in a business which is directly
competitive in any city with any business in which the Employer is engaged on
the date of such termination or in which the Employer has an agreement to
engage in business; provided, however, the Executive shall not be prohibited
from engaging in any otherwise restricted conduct if the competition of such
competing entity with the Employer is insubstantial to the entire business of
such entity and the Executive does not have significant involvement in such
competing business.
- 5 -
<PAGE>
12.2. The Executive hereby acknowledges that:
(i) the respective times and area provided in
Section 12.1, above, are reasonable in scope and necessary for the protection
of the business and good will of the Employer and that a significant portion
of the Base Salary payable hereunder has been allocated to the provisions of
Section 12.1:
(ii) since it is the understanding and desire of
the parties hereto that the covenants contained in Section 12.1, above, be
enforced to the fullest extent possible under the laws and public policies
applied in each jurisdiction in which enforcement may be sought, should any
particular provision of such covenant be deemed invalid or unenforceable, such
provision shall be deemed amended to delete therefrom the invalid portion, and
the deletion shall apply only with respect to the operation of such
provisions;
(iii) to the extent a provision is deemed
unenforceable by virtue of its scope, but may be made enforceable by
limitation thereof, such provision shall be enforceable only to the extent
permissible under the laws and public policies applied in the jurisdiction to
which enforcement is sought; and
(iv) the Executive's obligation and undertaking
provided for in this Section 12 shall, to the extent applicable, continue
beyond the termination of the Executive's relationship with the Employer
hereunder to the extent provided herein.
12.3. The Executive acknowledges that the services to be
rendered by him hereunder are extraordinary and unique and are vital to the
success of the Employer's business, and that the breach of any of the
covenants undertaken hereunder would cause substantial damage to the Employer
impossible to exact ascertainment. Therefore, in the event of the breach or
threatened breach by the Executive of any of the terms and conditions of this
Employment Agreement to be performed by him, the Employer shall be entitled,
in addition to any other rights or remedies available to it, to institute and
prosecute proceedings in any court of competent jurisdiction, to seek
immediate injunctive relief with notice but without bond.
13. Notices. All notices, requests, consents and other
communications, required or permitted to be given hereunder, shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by prepaid telegram, or mailed first class, postage prepaid, by
registered
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<PAGE>
or certified mail, as follows (or to such other or additional address as
either party shall designate by notice in writing to the other in accordance
herewith):
13.1 If to the Employer:
SFX Broadcasting, Inc.
150 East 58th Street, 19th Floor
New York, New York 10155
Attention: Legal Department
13.2 If to the Executive:
Thomas P. Benson
27 Radcliff Drive
Huntington, New York 11743
13.3 Copies of all communications given hereunder shall
also be delivered or sent, in like fashion, to Baker & McKenzie (attention:
Michael Burrows, Esq.) at 805 Third Avenue, New York, New York 10022.
14. General.
14.1 Governing Law. This Employment Agreement
shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York.
14.2 Captions. The section headings contained
herein are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Employment Agreement.
14.3 Entire Agreement. This Employment
Agreement including any Exhibits attached hereto sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings,
written or oral, between the parties, except as specifically provided herein.
- 7 -
<PAGE>
14.4 Successors and Assigns. This Employment
Agreement, and the Executive's rights and obligations hereunder, may not be
assigned by the Executive, except that the Executive may designate pursuant to
section 14.6 one or more beneficiaries to receive any amounts that would
otherwise be payable hereunder to the Executive's estate. This Employment
Agreement shall be binding on any successor to the Employer, whether by
merger, acquisition of substantially all of the Employer's assets or a
controlling interest in its stock or otherwise (each, a "Change of Control"),
as fully as if such successor were a signatory hereto and the Employer shall
cause such successor to, and such successor shall, expressly assume the
Employer's obligations hereunder. The term "Employer" as used in this
Employment Agreement, shall include all such successors. Notwithstanding the
foregoing, in the event that there is a Change of Control, the Executive shall
have the right to terminate this Employment Agreement upon the closing of such
event and in such event, (i) the Employer hereby agrees to pay the Executive,
upon the closing of any such event, one hundred percent (100%) of the total
consideration that would be due the Executive for the then unexpired Term and
(ii) all outstanding stock options of the Executive, notwithstanding any
agreement to contrary, shall immediately vest. Should the Employer fail to pay
the Executive any amounts due pursuant to this Section 14.4 within fifteen
(15) days of the closing of such Change of Control, the Executive shall be
entitled to receive the amounts set forth herein plus interest at the Chemical
Bank prime rate plus two (2) percent.
14.5 Amendments; Waivers. This Employment
Agreement cannot be changed, modified or amended, and no provision or
requirement hereof may be waived, without an affirmative vote of the Board
after the affirmative recommendation of the Compensation Committee
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<PAGE>
of the Board, and the consent in writing of the Executive and the Employer.
The failure of a party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such party at a later
time to enforce the same. No waiver by a party of the breach of any term or
covenant contained in this Employment Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the
breach of any other term or covenant contained in this Employment Agreement.
14.6 Beneficiaries. Whenever this Employment
Agreement provides for any payment to the Executive's estate, such payment may
be made instead to such beneficiary or beneficiaries as the Executive may have
designated in a writing filed with the Employer. The Executive shall have the
right to revoke any such designation and to redesignate a beneficiary or
beneficiaries by written notice to the Employer (and to any applicable
insurance company) to such effect.
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<PAGE>
14.7 Vacation. The Executive shall be
entitled to paid vacation time at the rate of not less than four (4) weeks per
Term year during the Term of his employment hereunder.
IN WITNESS WHEREOF, the parties have duly executed this
Employment Agreement as of the date first above written.
SFX BROADCASTING, INC.
By: /s/ Robert F.X. Sillerman
_______________________________
Name: Robert F. X. Sillerman
Title: Executive Chairman
/s/ Thomas R. Benson
-----------------------------------
Tom Benson
- 10 -
[LETTERHEAD]
FOR IMMEDIATE RELEASE For further information:
Cynthia A. Bond
Director, Investor Relations
(212) 407-9126
SFX BROADCASTING BUYS BACK 555,000 SHARES AND OPTIONS
NEW YORK, June 20, 1996 -- SFX Broadcasting, Inc. (NASDAQ: SFXBA) today
announced that it has bought back from R. Steven Hicks, the outgoing President
and Chief Executive Officer of SFX, 170,192 Class A and B Common Shares at
$38.00 per share and options to purchase 385,000 shares of Class A Common Stock
at prices ranging form $18.75 to $27.00 per share. The shares and the options
represent approximately 6.6 percent of the fully diluted shaers of SFX.
Mr. Hicks has signed a non-compete agreement which precludes him from
owning radio stations or investing in properties in markets where SFX or Multi-
Market Radio, Inc. (NASDAQ: RAIOA) is operating at the time of SFX's merger with
Multi-Market Radio for the twelve months following the merger with Multi-Market
Radio. In addition, SFX wil buy out the employment agreement of Mr. Hicks who
resigned from SFX's Board of Directors effective June 19, 1996.
Robert F. X. Sillerman, Executive Chairman of SFX Broadcasting, said,
"Steve and I have been partenrs since the creation of Capstar Communications,
the predecessor of SFX. There is no question that SFX could not have reached its
current levels of achievement without Steve's guidance, vision and
participation. He has been a great partner who has contributed immensely to
SFX's success. The Board's and Steve's decision to end our relationship a few
months early is only a result of the accelerating pace of consolidation within
our industry. With Steve gravitating toward strategic investing, rather than
hands-on operations, conflicts would have inevitably arisen. This early
transaction eliminates any possibility of that."
Additionally, the company has formalized D. Geoffrey Armstrong's
transition to and assumption of the additional responsbilities of Chief
Operating Officer. Mr. Armstrong will contniue in his role as Chief Financial
Officer of the company. Until the consummation of SFX's merger with Multi-Market
Radio, Mr. Sillerman, who has been a chief executive officer, will be the sole
Chief Executive Officer. Upon the completion of the merger, Michael G. Ferrel,
the President and Chief Executive Officer of Multi-Market Radio, will assume
those responsibilities.
With the anticipated consummation of all previously announced
transactions, SFX will own and operate or provide services to the following
radio stations:
- list of stations follows -
<PAGE>
KKRW (FM) Houston, TX WGNA (FM) Albany, NY
KODA (FM) Houston, TX WPYX (FM) Albany, NY
KQUE (FM) Houston, TX WGNA-AM Albany, NY
KNUZ-AM Houston, TX WTRY-AM Albany, NY
WHFS (FM) Wash, DC/Baltimore, MD WYSR (FM) Albany, NY
WHFM (FM) Long Island, NY WMYI (FM) Greenville-Spartanburg, SC
WBAB (FM) Long Island, NY WGVL-AM Greenville-Spartanburg, SC
WBLI (FM) Long Island, NY WSSL (FM) Greenville-Spartanburg, SC
WGBB-AM Long Island, NY WROQ (FM) Greenville, Spartanburg, SC
KMKX (FM) San Diego, CA KWFM (FM) Tucson, AZ
KYXY (FM) San Diego, CA KRQQ (FM) Tucson, AZ
WSNE (FM) Providence, RI KNST-AM Tucson, AZ
WHJY (FM) Providence, RI KCEE-AM Tucson, AZ
WHJJ (FM) Providence, RI WHMP (FM) Springfield, Northampton, MA
WHCN (FM) Hartford, CT WHMP-AM Springfield, Northampton, MA
WMRQ (FM) Hartford, CT WPKX (FM) Springfield, Northampton, MA
WKSS (FM) Hartford, CT KRZZ (FM) Wichita, KS
WPOP-AM Hartford, CT KKRD (FM) Wichita, KS
WTCK-AM Greensboro, NC* KNSS-AM Wichita, KS
WMAG (FM) Greensboro, NC* WPLR (FM) New Haven, CT
WHSL (FM) Greensboro, NC** WYBC (FM) New Haven, CT*
WMFR-AM Greensboro, NC* WGNE (FM) Daytona Beach, FL
WSIX (FM) Nashville, TN WCHZ (FM) Augusta, GA*
WRVW (FM) Nashville, TN WAEG (FM) Augusta, GA***
WIVY (FM) Jacksonville, FL WAEJ (FM) Augusta, GA***
WPDG-AM Jacksonville, FL WJDS-AM Jackson, MS
WOKV-AM Jacksonville, FL WKTF (FM) Jackson, MS
WKQL (FM) Jacksonville, FL WMSI (FM) Jackson, MS
WLYT (FM) Charlotte, NC WSTZ (FM) Jackson, MS
WTDR (FM) Charlotte, NC WZRX-AM Jackson, MS
WDCG (FM) Raleigh, NC WJDX (FM) Jackson, MS**
WRDU (FM) Raleigh, NC WKNN (FM) Biloxi, MS
WTRG (FM) Raleigh, NC WMJY (FM) Biloxi, MS
WZZU (FM) Raleigh, NC WVCO (FM) Myrtle Beach, SC***
WMXB (FM) Richmond, VA WYAK (FM) Myrtle Bach, SC***
WMYB (FM) Myrtle Beach, SC***
* Joint Selling Agreement (JSA)
** JSA with option to buy
*** Local Marketing Agreement
Under contract to be sold or swapped by SFX are the Texas State Networks, a
group of regional radio networks; KRLD-AM and KTCK-AM in Dallas; WXTR (FM), WXVR
(FM) and WQSI-AM in Washington, DC; WVEZ (FM), WWKY-AM, and WTFX (FM) in
Louisville, KY; KOLL (FM) in Little Rock, AR; and WRXR (FM) and WKBG (FM) in
Augusta, GA.
