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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 4)
Under the Securities Exchange Act of 1934*
Paxson Communications Corporation
---------------------------------
(Name of Issuer)
Class A Common Stock, par value $.001 per share
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(Title of Class of Securities)
704231 10 9
--------------
(CUSIP Number)
Ed Grinacoff
Sandler Mezzanine General Partnership
767 Fifth Avenue, 45th Floor
New York, New York 10153
(212) 754-8100
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 4, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of less than five percent of
such class. See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page should be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
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CUSIP No. 704231 10 9
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Sandler Mezzanine General Partnership
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
Not Applicable (see Item 3)
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
New York
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 2,427,835 shares
Shares Bene- --------------------------------------------------------
ficially (8) Shared Voting Power 0 shares
Owned by --------------------------------------------------------
Each Report- (9) Sole Dispositive Power 2,427,835 shares
ing Person --------------------------------------------------------
With (10) Shared Dispositive Power 0 shares
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
- --------------------------------------------------------------------------------
2,427,835 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
5.9%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
PN
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Amendment No. 4
Statement Of
SANDLER MEZZANINE GENERAL PARTNERSHIP
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
PAXSON COMMUNICATIONS CORPORATION
Sandler Mezzanine General Partnership (the "Reporting Person") hereby
amends certain items of its Schedule 13D (the "Prior Schedule 13D"), with
respect to its beneficial ownership of shares of Class A Common Stock, par
value $.001 per share ("Class A Common Stock"), of Paxson Communications
Corporation, a Delaware corporation (the "Company").
Item 4. Purpose of Transaction
Item 4 of the Prior Schedule 13D is hereby amended and restated in its
entirety to read as follows:
The Reporting Person is the general partner of each of Sandler
Mezzanine Partners, L.P., Sandler Mezzanine Foreign Partners, L.P. and Sandler
Mezzanine T-E Partners, L.P. (collectively, the "Partnerships"). The
Partnerships hold, for investment purposes, warrants (the "Warrants"), which
are exercisable for shares of Class A Common Stock and Class B Common Stock,
par value $.001 per share ("Class B Common Stock"), of the Company. See Item 5.
Pursuant to (i) a U.S. Underwriting Agreement, dated March 28, 1996
(the "U.S. Underwriting Agreement"), among Smith Barney Inc., Painewebber
Incorporated, CIBC Wood Gundy Securities Corp. and BT Securities Corporation,
as representatives of the several U.S. underwriters (the "U.S. Underwriters"),
the Company, the Partnerships and certain other selling security holders and
(ii) an International Underwriting Agreement, dated March 28, 1996 (the
"International Underwriting Agreement"), among Smith Barney Inc., Painewebber
International (U.K.) Ltd., CIBC Wood Gundy Securities Corp., Bankers Trust
International plc, as lead managers of the several managers (the "International
Underwriters"), the Company, the Partnerships and certain other selling
security holders, the Partnerships sold to the U.S. Underwriters and the
International Underwriters (collectively, the "Underwriters") an aggregate of
28.77853 Warrants. The Underwriters immediately exercised such Warrants for
Class A Common Stock and Class B Common Stock (which Class B Common Stock was
then immediately converted into Class A Common Stock), thereby acquiring
797,322 shares of Class A Common Stock. In connection with such sale of
Warrants, the Partnerships received an aggregate of $12,119,294.40. A copy of
each of the U.S. Underwriting Agreement and the International Underwriting
Agreement has been incorporated by reference as an exhibit to this Schedule 13D.
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Also pursuant to the U.S. Underwriting Agreement and the International
Underwriting Agreement, the Underwriters had the option, which option expired
unexercised at 9:00 p.m., New York City time on April 29, 1996, to purchase an
aggregate of 9.47468 Warrants.
Pursuant to the September 1996 Agreement (as defined in Item 6 hereof)
and in connection with the Preferred Stock Offering (as defined in Item 6
hereof), the parties thereto provided for the Company's redemption of Senior
Preferred Stock (as defined in Item 6 hereof) from the proceeds of such public
offering and, effective upon such redemption, the waiver of the parties' rights
of first refusal and registration rights with respect to the Preferred Stock
Offering. See Item 6 for a discussion of the September 1996 Agreement. On
October 4, 1996 the Preferred Stock Offering was consummated, the Company
redeemed the Senior Preferred Stock pursuant to the September 1996 Agreement and
Michael J. Marocco and John A. Kornreich, who are affiliates of the Reporting
Person and were directors of the Company, resigned as directors of the Company.
Except as otherwise disclosed in this Schedule 13D, the Reporting
Person has not made any decision concerning its course of action with respect
to the Company. The Reporting Person could decide, depending on market and
other factors, to dispose of the Warrants (or the Class A Common Stock or Class
B Common Stock issuable upon exercise of the Warrants) beneficially owned by
it, to acquire additional shares of Class A Common Stock, Class B Common Stock
or Warrants, or to take any other available course of action. In this regard,
the Reporting Person intends to continuously review its investment in the
Company and may in the future determine to change its present plans and
proposals relating to the Company. In reaching any conclusion as to its future
course of action, the Reporting Person will take into consideration various
factors, including without limitation the Company's business and financial
condition and prospects, other developments concerning the Company, other
business opportunities available to the Reporting Person, developments with
respect to the business of the Reporting Person, developments in the Company's
industry generally, general economic conditions and money and stock market
conditions.
Other than as described in this Schedule 13D, the Reporting Person does
not have any present plans or proposals which relate to or would result in: (a)
the acquisition by any person of additional securities of the Company, or the
disposition of the securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (c) a sale or transfer of a material
amount of assets of the Company or of any of its subsidiaries; (d) any change
in the present board of directors or management of the issuer, including any
plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board; (e) any material change in the present
capitalization or dividend policy of the Company; (f) any other material change
in the Company's business or corporate structure; (g) changes in the Company's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Company by any person; (h) causing a
class of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association; (i) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to
any of those enumerated above.
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Notwithstanding anything contained herein, the Reporting Person
reserves the right, depending on other relevant factors, to purchase additional
shares of Class A Common Stock, Class B Common Stock, Warrants or other
securities of the Company, dispose of all or a portion of its holdings of
securities of the Company, or change its intention with respect to any and all
of the matters referred to in this Item.
See Item 6 for a discussion of certain arrangements between the
Reporting Person and the Company.
Item 5. Interest in Securities of the Issuer
Item 5 of the Prior Schedule 13D is hereby amended and restated in its
entirety to read as follows:
(a) The Reporting Person is the general partner of each of
the Partnerships. The Reporting Person beneficially owns through the
Partnerships the Warrants, which are presently exercisable for shares
of Class A Common Stock and shares of Class B Common Stock. As of the
date hereof, the Partnerships hold an aggregate of 85.80614 Warrants,
which are exercisable for an aggregate of approximately 1,820,876
shares of Class A Common Stock and an aggregate of approximately
606,959 shares of Class B Common Stock. Each share of Class B Common
Stock is convertible into one share of Class A Common Stock. As a
result, the Reporting Person beneficially owns approximately 2,427,835
shares of Class A Common Stock. The Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1996, reports that, as of July
31, 1996, 38,670,309 shares of Class A Common Stock were outstanding.
Accordingly, if the Warrants held by the Partnerships were fully
exercised and the shares of Class B Common Stock issuable to the
Partnerships upon such exercise were converted into Class A Common
Stock, the Reporting Person would beneficially own approximately 5.9%
of the Company's Class A Common Stock.
The Class B Common Stock and the Class A Common Stock vote as a
single class, with each share of Class B Common Stock entitled to 10
votes per share and each share of Class A Common Stock entitled to one
vote per share. Therefore, if the Warrants held by the Partnerships
are exercised and the shares of Class B Common Stock issuable upon the
exercise of the Warrants are not converted into shares of Class A
Common Stock, the Reporting Person would effectively have
approximately 6.1% voting power with respect to the Company's common
stock.
(b) The Reporting Person as general partner of the
Partnerships has sole power (i) to direct the voting of the 2,427,835
shares of Class A Common Stock issuable upon exercise of the Warrants
(and the conversion of Class B Common Stock issuable upon exercise of
the Warrants) and (ii) to direct the disposition of the Warrants and
any Class A Common Stock or Class B Common Stock issuable upon the
exercise of the Warrants. The Reporting Person does not share with
any person voting power or the power to dispose of the Warrants or any
Class A Common Stock or Class B Common Stock issuable upon exercise of
the Warrants.
(c) Except as described in Item 4 to this Schedule 13D, the
Reporting Person, for itself and as the general partner of each of the
Partnerships, has not effected any transactions during the past 60
days in respect of the Class A Common Stock.
(d) No person other than the Reporting Person, as the
general partner of each of the Partnerships, is known to have the
right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of the Warrants or the shares of Class A
Common Stock (issuable upon exercise of the Warrants), which are held
by the Partnerships.
(e) Item 5(e) of Schedule 13D is not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to the Securities of the Issuer
Item 6 of the Prior Schedule 13D is hereby amended and restated in its
entirety to read as follows:
The Reporting Person is an affiliate of each of Michael J. Marocco and
John A. Kornreich, who are both directors of the Company.
The Partnerships, the Company, Paxson Enterprises, Inc., Second Crystal
Diamond, L.P., and certain purchasers of the Company's preferred stock and
warrants entered into a Stockholders' Agreement, dated as of December 15, 1993
and as amended to date (as amended, the "Stockholders Agreement"), pursuant to
which (among other things) the Partnerships, under certain conditions, had a
limited right (which right was subsequently terminated as described below) to
require the Company to purchase any shares of the Class A Common Stock and
Class B Common Stock issuable upon exercise of the Warrants held by the
Partnerships. As described more fully below, the Stockholders Agreement also
provides that the Partnerships may make a registration demand request of the
Company for registration with the Securities and Exchange Commission
("Commission") of all or part of the shares of Class A Common Stock issued or
issuable pursuant to the exercise of the Warrants. A copy of the Stockholders
Agreement (including the registration rights provisions thereof) has been filed
as an exhibit to this Schedule 13D and the statements made herein are qualified
in their entirety by reference to the Stockholders Agreement which is hereby
incorporated by reference herein.
In connection with an amendment to the Stockholders Agreement and a
certain Exchange Agreement and Consent, dated as of December 22, 1994 (the
"Exchange Agreement"), among the Company, Second Crystal Diamond, L.P., Paxson
Enterprises, Inc., the Partnerships and certain other purchasers of the
Company's securities, certain call rights with respect to the Warrants held by
the Partnerships were terminated. A copy of the Exchange Agreement has been
incorporated by reference as an exhibit to this Schedule 13D and the statements
made herein are qualified in their entirety by reference to the Exchange
Agreement which is hereby incorporated by reference herein.
Under the terms of the Stockholders Agreement, the Partnerships have
redemption rights with respect to shares of the Company's 15% Cumulative
Compounding Redeemable Preferred Stock and Series B 15% Cumulative Compounding
Redeemable Preferred Stock (collectively, the "Senior Preferred Stock") that
can be triggered by a change in control of the Company, by certain
bankruptcy-related events or any failure to select Lowell W. Paxson as Chairman
and Chief Executive Officer of the Company in accordance with the succession
provisions contained in the Stockholders Agreement. In addition, subject to
certain limitations and only after December 15, 1999, the Partnerships have the
right to require any shares of Senior Preferred Stock to be purchased for cash
by the Company. If the Partnerships choose to exercise their put or similar
rights with respect to Senior Preferred Stock and the Company is unable to
purchase all of the shares on the applicable purchase date because of a
material contractual obligation that prohibits such a repurchase, the Company
is required to take reasonable actions to enable the Company to purchase the
securities subject to the put notice, and is required to engage a nationally
recognized investment banking firm in order to advise and assist the Company in
connection with such actions.
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The Stockholders Agreement also provides the Partnerships with the
right of first refusal to purchase, subject to certain conditions, their pro
rata share of any new securities the Company may issue.
Pursuant to registration rights granted in the Stockholders Agreement,
certain holders of Senior Preferred Stock, including the Partnerships, may
require the Company to register with the Commission under and in accordance
with the Securities Act of 1933, as amended ("Securities Act"), all or part of
their "Registrable Shares" (as defined in the Stockholders Agreement).
Registrable Shares are defined to include shares issued or issuable as "Warrant
Shares" (which is defined in the Stockholders Agreement and includes shares of
Class A Common Stock issuable upon exercise of the Warrants) (as adjusted for
certain stock splits, stock dividends, recapitalizations and similar events)
and any securities issued to the holders of Senior Preferred Stock pursuant to
their exercise of certain rights of first refusal. The Company is required to
effectuate a demand registration at the request of holders of Senior Preferred
Stock only if (i) it has been requested and consented to by the holders of a
majority of the Registrable Shares held by the holders of Senior Preferred
Stock, and (ii) the shares as to which registration is requested represent at
least 25% of the aggregate Registrable Shares held by holders of Senior
Preferred Stock participating in such registration. Generally, the holders of
Senior Preferred Stock as a group are entitled to three demand registrations.
If at any time the Company proposes to file on its own behalf or on
behalf of any holder or holders of any equity securities a registration
statement under the Securities Act (other than a registration statement on Form
S-4 or Form S-8 or any successor form for the registration of securities to be
offered pursuant to an employee benefit plan), then the Company must give
notice to the holders of Senior Preferred Stock and certain other stockholders
of their respective rights to include certain Registrable Shares held by such
persons in a piggy-back registration. The Company has the right to abandon any
such registration.
In the case of a demand or certain piggy-back registrations, the
Company will pay all registration expenses except underwriting discounts and
commissions and transfer taxes. In the case of a piggy-back registration, each
participating holder of Senior Preferred Stock and each of certain other
stockholders shall pay its pro rata share of the incremental registration
filing fees and shall pay all fees and disbursements of its counsel (other than
a single counsel for certain holders) incurred in connection therewith.
The registration rights provisions of the Stockholders Agreement
allocate Registrable Shares among participating holders of Senior Preferred
Stock and certain other stockholders if fewer than all the requested shares are
to be included in a registration statement. The registration rights of such
holders generally have priority over those of other parties that may have
registration rights.
Pursuant to an Agreement, dated as of March 26, 1996 (the "Agreement"),
by and among the Company, Second Crystal Diamond, L.P., Paxson Enterprises,
Inc., the Partnerships, National Union Fire Insurance Company of Pittsburgh,
PA, BT Investment Partners, Paribas North America, Inc. and Union Venture
Corporation, the Partnerships agreed to (i) terminate their rights to put
shares of Class A Common Stock and Class B Common Stock to the Company, (ii)
eliminate certain rights to approve certain investments by the Company, (iii)
permitted the Company to redeem the Senior Preferred Stock on or after December
15, 1996 (a year earlier than previously permitted) at a price of 105% of the
liquidation price thereof, (iv) permitted the Company to issue 2,000,000
additional shares of stock (or options to purchase the same), (v) permitted the
Company to issue 125,000 shares of common stock (or options to purchase the
same) at an exercise price of $3.42 per share, (vi) deleted certain
restrictions on the Company's ability to acquire businesses in consideration
for stock of the Company and (vii) modified certain rights of the parties to
register common stock of the Company. A copy of the Agreement has been
incorporated by reference as an exhibit to this Schedule 13D and the statements
made herein are qualified in their entirety by reference to the Agreement which
is hereby incorporated by reference herein.
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Pursuant to an Agreement, dated as of September 26, 1996, and executed
on October 2, 1996, among the Company, Second Crystal Diamond, L.P., Paxson
Enterprises, Inc., the Partnerships, National Union Fire Insurance Company of
Pittsburgh, PA, BT Investment Partners, Paribas North America, Inc. and Union
Venture Corporation, and in connection with a public offering (the "Preferred
Stock Offering") by the Company of exchangeable preferred stock, the parties
thereto provided for the Company's redemption of the Senior Preferred Stock
from the proceeds of such public offering and, effective upon such redemption,
the waiver of the parties' rights of first refusal and registration rights with
respect to the Preferred Stock Offering. In addition, the September 1996
Agreement eliminates certain rights of the Partnerships and National Union Fire
Insurance Company of Pittsburgh, PA under the Stockholders Agreement and
provides for the termination of certain rights thereunder of the holders of
Senior Preferred Stock, effective upon the redemption of the Senior Preferred
Stock by the Company. A copy of the September 1996 Agreement has been filed
as an exhibit to this Schedule 13D and the statements made herein are qualified
in their entirety by reference to the September 1996 Agreement which is hereby
incorporated by reference herein. On October 4, 1996 the Preferred Stock
Offering was consummated, the Company redeemed the Senior Preferred Stock
pursuant to the September 1996 Agreement and Michael J. Marocco and John A.
Kornreich, who are affiliates of the Reporting Person and were directors of the
Company, resigned as directors of the Company.
Item 7. Material to be Filed as Exhibits
Item 7 of the Prior Schedule 13D is hereby amended and restated in its
entirety to read as follows:
The following documents have been filed or incorporated by reference as
exhibits to this Schedule 13D (items marked with an * have been previously
filed):
*1. Stockholders' Agreement, dated as of December 15, 1993,
by and among Paxson Communications Corporation, Second Crystal
Diamond, L.P., Paxson Enterprises, Inc., and certain purchasers.
2. Exchange Agreement and Consent, dated as of December
22, 1994, among Paxson Communications Corporation, Second Crystal
Diamond, L.P., Paxson Enterprises, Inc., and certain purchasers of
securities of the Company (incorporated herein by reference to Exhibit
4.7 of Paxson Communications Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994 (Commission File No.
1-13452)).
3. Amended and Restated Stockholders' Agreement, dated as
of December 22, 1994, among Paxson Communications Corporation, Second
Crystal Diamond, L.P., Paxson Enterprises, Inc. and certain investors,
including the Amended and Restated Registration Rights Provisions
attached as Exhibit A thereto (incorporated herein by reference to
Exhibit 4.3 of Paxson Communications Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 (Commission File
No. 1-13452)).
4. Agreement, dated as of March 26, 1996, by and among
Paxson Communications Corporation, Second Crystal Diamond, L.P.,
Paxson Enterprises, Inc., Sandler Mezzanine Partners, L.P., Sandler
Mezzanine Foreign Partners, L.P., Sandler Mezzanine T-E Partners,
L.P., National Union Fire Insurance Company of Pittsburgh, PA, BT
Investment Partners, Inc., First Union Corporation of Virginia,
Paribas North America, Inc. and Union Venture Corporation
(incorporated herein by reference to Exhibit 9.1 of Paxson
Communications Corporation's Registration Statement on Form S-3 No.
333-473).
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<PAGE> 9
5. U.S. Underwriting Agreement, dated March 28, 1996,
among Smith Barney, Inc., Painewebber Incorporated, CIBC Wood Gundy
Securities Corp., BT Securities Corporation, as representatives of the
several U.S. underwriters, Paxson Communications Corporation, Sandler
Mezzanine Partners, L.P., Sandler Mezzanine Foreign Partners, L.P.,
Sandler Mezzanine T-E Partners, L.P. and certain other selling
security holders (incorporated herein by reference to Exhibit 1.1 of
Paxson Communications Corporation's Registration Statement on Form S-3
No. 333-473).
6. International Underwriting Agreement, dated March 28,
1996, among Smith Barney Inc., Painewebber International (U.K.) Ltd.,
CIBC Wood Gundy Securities Corp., Bankers Trust International plc, as
lead managers of the several managers, Paxson Communications
Corporation, Sandler Mezzanine Partners, L.P., Sandler Mezzanine
Foreign Partners, L.P., Sandler Mezzanine T-E Partners, L.P. and
certain other selling security holders (incorporated herein by
reference to Exhibit 1.2 of Paxson Communications Corporation's
Registration Statement on Form S-3 No. 333-473).
*99.7. Agreement, dated as of September 26, 1996, among Paxson
Communications Corporation, Second Crystal Diamond, L.P., Paxson
Enterprises, Inc., Sandler Mezzanine Partners, L.P., Sandler Mezzanine
Foreign Partners, L.P., Sandler Mezzanine T-E Partners, L.P., National
Union Fire Insurance Company of Pittsburgh, PA, BT Investment
Partners, Inc., First Union Corporation of Virginia, Paribas North
America, Inc. and Union Venture Corporation.
7
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information in this statement is true,
complete and correct.
Dated: October 4, 1996
SANDLER MEZZANINE GENERAL PARTNERSHIP
By: MJM Media Corp, its general partner
By: /s/ Michael J. Marocco
-------------------------------
Name: Michael J. Marocco
Title: President
8
