<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
PEGASUS COMMUNICATIONS CORPORATION
-------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock, Par Value $.01
-------------------------------------------------------------------------
(Title of Class of Securities)
705904100
-------------------------------------------------------------------------
(CUSIP NUMBER)
Jeanelle F. de Jager
Fleet Equity Partners
50 Kennedy Plaza
RI MO F12C
Providence, RI 02903
(401) 278-6770
-------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
April 27, 1998
-------------------------------------------------------------------------
(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 [ ].
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Fleet Venture Resources, Inc.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds OO
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Rhode Island
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 406,186
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
CO
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Fleet Growth Resources II, Inc.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds Not applicable
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 174,079
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
CO
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Fleet Growth Resources, Inc.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds Not applicable
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Rhode Island
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 174,079
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
CO
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Fleet Equity Partners VI, L.P.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds OO
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 174,079
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
PN
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Fleet Private Equity Co., Inc.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds Not applicable
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Rhode Island
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 580,265
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
CO
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Silverado IV Corp.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds Not applicable
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 174,079
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
CO
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Chisholm Partners III, L.P.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds OO
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 147,611
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
PN
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Silverado III, L.P.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds Not applicable
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 147,611
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
PN
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Silverado III Corp.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds Not applicable
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 147,611
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
CO
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Kennedy Plaza Partners
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds OO
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Rhode Island
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 10,179
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
PN
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Robert M. Van Degna
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds Not applicable
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 738,055
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
IN
- --------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP NO. 705904100
- --------------------------------------------------------------------------------
1) Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
Habib Y. Gorgi
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds Not applicable
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power: 0
Beneficially Owned
By Each Reporting
Person With 8) Shared Voting Power: 6,842,506
9) Sole Dispositive Power: 0
10) Shared Dispositive Power: 738,055
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,842,506
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
/ /
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
43.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person
IN
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
This Schedule 13D is filed in connection with the closing of the transactions
under that certain Agreement and Plan of Merger dated January 8, 1998 (the
"Agreement") among the Issuer, certain of its shareholders, Pegasus DTS
Merger Sub, Inc. ("Merger Sub"), Digital Television Services, Inc. ("DTS")
and certain of its stockholders, pursuant to which Merger Sub, a wholly-owned
subsidiary of the Issuer, merged into DTS and DTS became a wholly-owned
subsidiary of the Issuer (the "Merger"). In connection with the Merger, the
Issuer issued 5,471,296 shares of its Class A Common Stock, par value $.01
per share, to the former stockholders of DTS in exchange for all of the
issued and outstanding shares of the capital stock of DTS. In connection
with the Merger, the Issuer and the Reporting Persons entered into the Voting
Agreement (as defined herein) with certain of the persons to whom those
shares were issued. Because of the Voting Agreement, the Reporting Persons
share voting power over the shares held by the other parties to the Voting
Agreement and, under the Commission's rules, are deemed to beneficially own
them. The purpose of this Schedule 13D is to reflect the Reporting Persons'
deemed beneficial ownership of these shares.
- --------------------------------------------------------------------------------
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the Class A Common Stock, par value $.01
per share ("Class A Common Stock"), of Pegasus Communications Corporation (the
"Issuer"). The Issuer is a Delaware corporation and its principal executive
offices are located at 5 Radnor Corporate Center, Suite 454, 100 Matsonford
Road, Radnor, PA 19087.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by the following (collectively, the "Reporting
Persons"):
(i) by virtue of their direct beneficial ownership of Class A Common
Stock, by each of Fleet Venture Resources, Inc., a Rhode Island
Corporation ("FVR"), Fleet Equity Partners VI, L.P., a Delaware
limited partnership ("FEP6"), Chisholm Partners III, L.P., a
Delaware limited partnership ("CP3"), and Kennedy Plaza Partners,
a Rhode Island general partnership ("KPP"),
(ii) by virtue of being the sole general partners of FEP6, by Fleet
Growth Resources II, Inc., a Delaware corporation ("FGR2"), and
Silverado IV Corp., a Delware corporation ("S4C"),
(iii) by virtue of the ownership of all of the outstanding common stock
of FGR2, by Fleet Growth Resources, Inc., a Rhode Island
corporation ("FGR"),
(iv) by virtue of the ownership of all of the outstanding common stock
of FGR and all of the outstanding common stock of FVR, by Fleet
Private Equity Co., Inc., a Rhode Island corporation ("FPEC"),
(v) by virtue of being the sole general partner of CP3, by Silverado
III, L.P., a Delaware limited partnership ("S3LP"),
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Page 15 of 24
(vi) by virtue of being the sole general partner of S3LP, by Silverado
III Corp., a Delaware corporation ("S3C"),
(vii) by virtue of their ownership of a majority of the outstanding
common stock of S3C and S4C, and by virtue of their officer and
director positions and roles with FVR, FGR, FGR2, FPEC, S3C, S4C,
and KPP, by Robert M. Van Degna and Habib Y. Gorgi.
Fleet Financial Group, Inc., a Rhode Island corporation ("FFG"), owns all
of the outstanding common stock of FPEC.
The Reporting Persons are deemed to be part of a "group" as a result of the
Voting Agreement (as defined in Item 6) and, pursuant to an agreement between
the Reporting Persons (which is filed with this Schedule 13D as Exhibit 1) and
as permitted by Rule 13d-1(f) under the Securities Exchange Act of 1934, the
Reporting Persons are filing this joint statement.
By signing this Statement, each Reporting Person agrees that this Statement
is filed on its behalf. No Reporting Person assumes responsibility for the
completeness or accuracy of the information concerning any other Reporting
Person.
Shares of the Issuer's Class B Common Stock, par value $.01 per share (the
"Class B Common Stock") are convertible into shares of Class A Common Stock on a
one-for-one basis at any time at the option of the holder. In addition, shares
of Class B Common Stock are automatically converted into Class A Common Stock
upon transfer to persons who are not Permitted Transferees (as this term is
defined in the Issuer's Amended and Restated Certificate of Incorporation).
Holders of Class A Common Stock are entitled to one vote per share, and holders
of Class B Common Stock are entitled to ten votes per share.
By reason of the Voting Agreement described in Item 6, the Reporting
Persons share voting power over the shares of Class A Common Stock (and the
4,581,900 shares of Class A Common Stock issuable upon conversion of the
outstanding shares of Class B Common Stock) held by the persons identified in
Item 6 and are deemed to be beneficial owners thereof. The Reporting Persons
are advised that certain of the persons described in Item 6 are separately
filing one or more statements on Schedule 13D, pursuant to Rule 13d-1(f)(2),
with respect to their beneficial ownership of the Issuer's securities.
Certain information concerning the executive officers and directors of
FGR2, FGR, FVR, FPEC, FFG, S3C, and S4C (collectively, the "Fleet Directors and
Officers") is set forth on Schedule A attached hereto, which is incorporated
herein by this reference.
(b) The principal business address of each of FVR, FEP6, FGR2, FGR, FPEC,
CP3, S3LP, S3C, S4C, KPP, and Messrs. Van Degna and Gorgi is 50 Kennedy Plaza,
Providence, Rhode Island 02903. The principal business address of FFG is 1
Federal Street, Boston, Massachusetts 02110.
(c) The principal business of each of FEP6, FGR2, FGR, FVR, FPEC, CP3,
S3LP, S3C, S4C, and KPP is making and managing private equity investments, and,
in the case of FGR2, and
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Page 16 of 24
S4C, acting as the general partners of FEP6, in the case of S3LP, acting as the
general partner of CP3, in the case of S3C, acting as the general partner of
S3LP. FFG is principally engaged in the business of providing diversified
financial services, including services relating to commercial banking, consumer
banking, investment services, asset collection and management services to its
subsidiaries, financial institutions and individuals. Mr. Van Degna is Chairman
and CEO of each of FPEC, FVR, FGR, FGR2, and Chairman, CEO and Treasurer of S3C
and S4C, and Managing General Partner of Kennedy Plaza Partners. Mr. Gorgi is
President of FPEC, FVR, FGR, FGR2, and President and Secretary of S3C and S4C,
and Managing General Partner of Kennedy Plaza Partners.
(d) None of the Reporting Persons or, to the knowledge of the Reporting
Persons, any of the Fleet Directors and Officers, has, during the last five
years, been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) (a "Criminal Conviction").
(e) None of the Reporting Persons or, to the knowledge of the Reporting
Persons, any of the Fleet Directors and Officers, has, during the last five
years, been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction resulting in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, Federal or state securities laws or finding any violation with respect to
such laws (a "Civil Violation").
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As provided in the Merger Agreement, the consideration given by each
Reporting Person for the Class A Common Stock held by it or him (and described
in Item 5) consisted solely of shares of the outstanding capital stock of DTS.
ITEM 4. PURPOSE OF TRANSACTION.
The composition of the Issuer's board of directors has been changed to
satisfy the requirements of the Voting Agreement, as more fully described in
Item 6. Otherwise, neither of the Reporting Persons, any Director or Executive
Officer has any present plans, or contemplates any present proposals, that
relate to or would result in any of the transactions described in Item 4 of
Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date hereof, the Reporting Persons, the Directors and
Executive Officers are deemed to be the beneficial owners of the number and
percentage of the Issuer's Class A Common Stock set forth below:
FVR is the direct beneficial owner of 406,186 Class A Common Stock shares,
or approximately 2.6% of the 15,858,884 Class A Common Stock shares deemed
outstanding (the "Outstanding Shares") as of December 31, 1997 (adjusted to
include shares issued in the Merger and assumes conversion of all Class B Common
Stock into Class A Common Stock). By virtue of the relationship reported under
Item 2 of this Statement, FPEC, FFG, and Messrs. Van Degna and
<PAGE>
Page 17 of 24
Gorgi may be deemed to share indirect beneficial ownership of the Class A Common
Stock directly beneficially owned by FVR. Messrs. Van Degna and Gorgi disclaim
beneficial ownership of the shares not held directly by them.
FEP6 is the direct beneficial owner of 174,079 Class A Common Stock shares,
or approximately 1.1% of the Outstanding Shares. By virtue of the relationships
reported unter Item 2 of this Statement, FGR2, FGR, FPEC, FFG, S4C, and Messrs.
Van Degna and Gorgi may be deemed to share beneficial ownership of the Class A
Common Stock directly beneficially owned by FEP6. Messrs. Van Degna and Gorgi
disclaim beneficial ownership of the shares not held directly by them.
CP3 is the direct beneficial owner of 147,611 Class A Common Stock shares,
or approximately 0.9% of the Outstanding Shares. By virtue of the relationship
reported under Item 2 of this Statement, S3LP, S3C and Messrs. Van Degna and
Gorgi may be deemed to share indirect beneficial ownership of the Class A Common
Stock directly beneficially owned by CP3. Messrs. Van Degna and Gorgi disclaim
beneficial ownership of the shares not held directly by them.
KPP is the direct beneficial owner of 10,179 Class A Common Stock shares,
or approximately 0.1% of the Outstanding Shares. By virtue of the relationship
reported under Item 2 of this Statement, Messrs. Van Degna and Gorgi may be
deemed to share indirect beneficial ownership of the Class A Common Stock
directly beneficially owned by KPP. Messrs. Van Degna and Gorgi disclaim
beneficial ownership of the shares not held directly by them.
The information included in the Voting Agreement (as defined in Item 6, and
attached hereto as Exhibit 1) is hereby incorporated in its entirety by this
reference. By virtue of the arrangements described in Item 6, the Stockholders
may be deemed to constitute a group. Except as specifically set forth in this
item 5(a), each of the Reporting Persons disclaims beneficial ownership of
shares held by the other Stockholders.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
On April 27, 1998, a wholly-owned subsidiary of the Issuer merged (the
"Merger") into Digital Television Services, Inc., a Delaware corporation
("DTS"), as a result of which DTS became a wholly owned subsidiary of the
Issuer, and the Issuer issued 5,471,296 shares of Class A Common Stock to the
former stockholders of DTS. In connection with the Merger, the Issuer and the
Reporting Persons entered into a voting agreement dated April 27, 1998 (the
"Voting Agreement") with Pegasus Capital, L.P., Pegasus Communications Holdings,
Inc., Whitney Equity Partners, L.P., Columbia Capital Corporation, Columbia DBS,
Inc., and Marshall W. Pagon (collectively, the "Stockholders"). The Voting
Agreement obligates the parties thereto to vote their shares of the
<PAGE>
Page 18 of 24
Issuer's Class A Common Stock and Class B Common Stock to elect to the Issuer's
board of directors three persons designated by Mr. Pagon, one person designated
by CCC, one person designated by Whitney Equity Partners, L.P., one person
designated by Chisholm Partners III, L.P., and three Independent Directors (as
defined in the Voting Agreement). It also requires there to be audit,
compensation and nominating committees of the Issuer's board of directors, each
consisting of one member designated by Mr. Pagon, one member designated by a
majority of the directors designated by CCC, Whitney Equity Partners, L.P. and
Chisholm Partners III, L.P., and one member designated by a majority of the
Independent Directors. The Voting Agreement is filed as Exhibit 2 to this
Schedule 13D.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement dated May 7, 1998.
2. Voting Agreement dated April 27, 1998.
<PAGE>
Page 19 of 24
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 7, 1998
Fleet Venture Resources, Inc.
By: /s/ Robert M. Van Degna
------------------------------
Robert M. Van Degna
Chairman & CEO
<PAGE>
Page 20 of 24
SCHEDULE A
I. DIRECTORS AND EXECUTIVE OFFICERS OF FPEC, FVR, FGR, FGR2
(A) DIRECTORS PRINCIPAL OCCUPATION
Robert M. Van Degna Chairman and CEO, FPEC
Habib Y. Gorgi President, FPEC
H. Jay Sarles Vice Chairman and Chief Administrative Officer, FFG
Brian T. Moynihan Senior Vice President, FFG
Douglas L. Jacobs Senior Vice President and Treasurer, FFG
(B) EXECUTIVE OFFICERS PRINCIPAL OCCUPATION
Robert M. Van Degna Chairman and CEO, FPEC
Habib Y. Gorgi President, FPEC
Michael A. Gorman Senior Vice President, FPEC
Thadeus J. Mocarski Senior Vice President, FPEC
Riordon B. Smith Senior Vice President, FPEC
Cynthia L. Balasco Vice President, Assistant Secretary, Controller, and
CFO, FPEC
II. DIRECTORS AND EXECUTIVE OFFICERS OF S3C AND S4C.
(A) DIRECTORS PRINCIPAL OCCUPATION
Robert M. Van Degna Chairman and CEO, FPEC
Habib Y. Gorgi President, FPEC
(B) EXECUTIVE OFFICERS PRINCIPAL OCCUPATION
Robert M. Van Degna Chairman and CEO, FPEC
Habib Y. Gorgi President, FPEC
Michael A. Gorman Senior Vice President, FPEC
Thadeus J. Mocarski Senior Vice President, FPEC
Riordon B. Smith Senior Vice President, FPEC
Cynthia L. Balasco Vice President, Assistant Secretary, Controller, and
CFO, FPEC
<PAGE>
Page 21 of 24
III. DIRECTORS AND EXECUTIVE OFFICERS OF FFG
(A) DIRECTORS PRINCIPAL OCCUPATION/ADDRESS
Joel B. Alvrod President and Managing Director, Shawmut Capital
Partners, Inc.
One Federal Street
Boston, MA 02110
William Barnett, III President and CEO, William Barnett & Son, Inc.
P.O. Box 131
1300 Hayne Street
Arcadia, SC 20320
Bradford R. Boss Chairman, A.T. Cross Company
One Albion Road
Lincoln, RI 02865
Stillman B. Brown President, Harcott Corporation
196 Trumball Street, 4th Floor
Hartford, CT 06103
Paul J. Choquette, Jr. Chairman and CEO, Gilbane Building Company
Seven Jackson Walkway
Providence, RI 02940
Kim B. Clark Dean of Faculty, Harvard Business School
Soldiers Field Rd.
Boston, MA 02163
John T. Collins Chairman and CEO, The Collins Group, Inc.
60 State Street, Suite 700
Boston, MA 02109
James F. Hardymon Chairman and CEO, Textron, Inc.
40 Westminster Street
Providence, RI 02903
Marian L. Heard President and CEO, United Way of Massachusetts Bay
245 Sommer Street, Suite 1401
Boston, MA 02210
Robert M. Kavner Chief Executive Officer and President, In Command
Corp.
6331 San Ignacio Avenue
San Jose, CA 95119
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Page 22 of 24
Raymond C. Kennedy Chairman, Kendall Holdings, Inc.
745 Warren Street
Hudson, NY 12534
Robert J. Matura Chairman and CEO, Treefort Fellows and Robert J. Matura
Associates
84 Lynam Road
Stamford, CT 06903
Arthur C. Milot Private Investor
P.O. Box 456
Jamestown, RI 02835
Terrence Murray Chairman and CEO
Fleet Financial Group, Inc.
One Federal Street
Boston, MA 02110
Thomas D. O'Connor, Sr. Chairman and CEO, Mohawk Paper Mills, Inc.
465 Saratoga Street
P.O. Box 497
Cohoes, NY 12047
Michael B. Picotte Managing General Partner and CEO, The Picotte Companies
20 Corporate Woods Boulevard, Suite 600
Albany, NY 12211
Thomas C. Quick President and CEO, Quick & Reilly/Fleet Securities,
Inc.
P.O. Box 48
New York, NY 10274
Lois D. Rice Guest Scholar, Program in Economic Studies
Brookings Institution
2332 Massachusetts Avenue, N. W.
Washington, DC 20008
John R. Riedman Chairman, Riedman Corp.
Riedman Tower
45 East Avenue
Rochester, NY 14604
Thomas M. Ryan Vice Chairman and CEO, CVS Corporation
1 CVS Drive
Woonsocket, RI 02895
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Page 23 of 24
Samuel O. Thier, M.D. President and CEO, Partners HealthCare Systems, Inc.
Prudential Tower, 11th Floor
800 Boylston Street
Boston, MA 02199
Paul R. Tregurtha Chairman and CEO, Mormac Marine Group, Inc.
Three Landmark Square
Stamford, CT 06901
(B) EXECUTIVE OFFICERS PRINCIPAL OCCUPATION/BUSINESS ADDRESS
Terrence Murray Chairman and CEO
Fleet Financial Group, Inc.
One Federal Street
Boston, MA 02110
Robert J. Higgins President and Chief Operating Officer
Fleet Financial Group, Inc.
One Federal Street
Boston, MA 02110
H. Jay Sarles Vice Chairman and Chief Administrative Officer
Fleet Financial Group, Inc.
One Federal Street
Boston, MA 02110
Eugene M. McQuade Vice Chairman and Chief Financial Officer
Fleet Financial Group, Inc.
One Federal Street
Boston, MA 02110
Gunnar S. Overstrom, Jr Vice Chairman
Fleet Financial Group, Inc.
777 Main Street
Hartford, CT 06115
Michael R. Zucchini Vice Chairman and Chief Technology Officer
Fleet Financial Group
50 Kennedy Plaza
Providence, RI 02903
William C. Mutterperl Executive Vice President, Secretary and General Counsel
Fleet Financial Group, Inc.
One Federal Street
Boston, MA 02110
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Page 24 of 24
M. Anne Szostak Executive Vice President
Fleet Financial Group
50 Kennedy Plaza
Providence, RI 02903
Douglas L. Jacobs Senior Vice President and Treasurer
Fleet Financial Group
75 State Street
Boston, MA 02109
Robert C. Lamb, Jr. Controller and Chief Accounting Officer
Fleet Financial Group
50 Kennedy Plaza
Providence, RI 02903
<PAGE>
Page 1 of 1
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f)(1)(iii) under the Securities Exchange Act
of 1934, as amended, the persons named below agree to the joint filing on behalf
of each of them of a Schedule 13D with respect to the Class A Common Stock, par
value $.01 per share, of Pegasus Communications Corporation, a Delaware
corporation, and any further amendments thereto. This Joint Filing Agreement
shall be filed as an Exhibit to the Schedule 13D.
Date: May 7, 1998
/s/ Robert M. Van Degna
---------------------------------------------
Robert M. Van Degna, individually and as Chairman and
Chief Executive Officer of Fleet Growth Resources, II,
Inc., general partner of Fleet Equity Partners VI,
L.P.; as Chairman and Chief Executive Officer of
Silverado III Corp., general partner of Silverado III,
L.P., general partner of Chisholm Partners III, L.P.;
and as Chairman and Chief Executive Officer of Fleet
Growth Resources, Inc., Fleet Venture Resources, Inc.,
Fleet Private Equity Co., Inc. and Silverado IV Corp.
/s/ Habib Y. Gorgi
---------------------------------------------
Habib Y. Gorgi, individually and as Managing General
Partner of Kennedy Plaza Partners
<PAGE>
EXHIBIT 2
VOTING AGREEMENT, dated April 27, 1998, among PEGASUS COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company"); COLUMBIA CAPITAL
CORPORATION, a Virginia corporation, and COLUMBIA DBS, INC., a Virginia
corporation; WHITNEY EQUITY PARTNERS, L.P., a Delaware limited partnership;
FLEET VENTURE RESOURCES, INC., a Rhode Island corporation, FLEET EQUITY PARTNERS
VI, L.P., a Delaware limited partnership, CHISHOLM PARTNERS III, L.P., a
Delaware limited partnership, and KENNEDY PLAZA PARTNERS, a Rhode Island general
partnership; and PEGASUS COMMUNICATIONS HOLDINGS, INC., a Delaware corporation,
PEGASUS CAPITAL, L.P., a Pennsylvania limited partnership, PEGASUS SCRANTON
OFFER CORP, a Delaware corporation, PEGASUS NORTHWEST OFFER CORP, a Delaware
corporation, and MARSHALL W. PAGON, an individual.
The Company, Pegasus DTS Merger Sub, Inc., a Delaware corporation ("Merger
Sub"), Digital Television Services, Inc., a Delaware corporation ("DTS"), and
certain shareholders of the Company and of DTS are parties to an Agreement and
Plan of Merger dated January 8, 1998 (the "Merger Agreement"). Certain of the
DTS Parties (this and certain other terms are defined in Section 1) or certain
of their equity holders are shareholders of DTS.
PCH, PCLP, PSOC and PNOC hold all the issued and outstanding shares of
Class B Common Stock. Pagon controls PCH, PCLP, PSOC and PNOC.
At the Closing held today under the Merger Agreement, Merger Sub is being
merged with and into DTS, DTS is thereby becoming a wholly-owned subsidiary of
the Company, and certain of the DTS Parties or certain of their equity holders
are receiving shares of Class A Common Stock as the Merger Consideration. It is
a condition precedent to the Closing that the parties execute and deliver this
Agreement.
NOW, THEREFORE, in consideration of the completion of the transactions
contemplated by the Merger Agreement and of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows,
intending to be legally bound.
SECTION 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms have the
following terms have the following meanings:
"AUDIT COMMITTEE": the audit committee of the Board of Directors
referred to in Section 3.4.
<PAGE>
"BOARD OF DIRECTORS": the Board of Directors of the Company.
"CHISHOLM": Chisholm Partners III, L.P., a Delaware limited
partnership.
"CHISHOLM DESIGNEE": a person designated by Chisholm to serve as a
director in accordance with this Agreement.
"CLASS A COMMON STOCK": the Company's Class A Common Stock, par value
$0.01 per share.
"CLASS B COMMON STOCK": the Company's Class B Common Stock, par value
$0.01 per share.
"COLUMBIA CAPITAL": Columbia Capital Corporation, a Virginia
corporation.
"COLUMBIA DESIGNEE": a person designated by Columbia Capital to serve
as a director in accordance with this Agreement.
"COLUMBIA PARTIES": Columbia Capital and Columbia DBS, Inc., a
Virginia corporation.
"COLUMBIA PRINCIPALS": each of James B. Murray, Jr., David P. Mixer,
Mark R. Warner, Robert B. Blow, Mark J. Kington, Harry F. Hopper, III, R. Philip
Herget, III, Neil P. Byrne, Barton Schneider and James Fleming.
"COMMITTEE": the Audit Committee, the Compensation Committee or the
Nominating Committee.
"COMPENSATION COMMITTEE": the compensation committee of the Board of
Directors referred to in Section 3.4.
"COVERED SHARES": (a) the shares of Class A Common Stock received as
the Merger Consideration by the shareholders of DTS that are parties to this
Agreement; and (b) all shares of voting securities of the Company now or
hereafter beneficially owned (within the meaning of the Securities Exchange Act
of 1934) by PCH, PCLP, PSOC, PNOC or Pagon.
"DESIGNATION RIGHT LOSS EVENT": With respect to any person, any of
the following, as determined by a majority of the Independent Directors (whose
determination shall be conclusive):
(a) such person's designee as a director commits a breach of
fiduciary duty to the Company or a material violation of any federal or
state securities law in connection with the purchase or sale of any of the
Company's securities;
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(b) such person (or, in the case of Columbia Capital, any Columbia
Principal who owns at the time 100,000 or more shares of Class A Common
Stock) commits a material violation of any federal or state securities law
in connection with the purchase or sale of any of the Company's securities;
(c) such person materially breaches its or his noncompetition or
confidentiality agreement with the Company;
(d) such person shall own, control, manage or be financially
interested, directly or indirectly, in any business (other than a less than
5% interest in a publicly held company) that competes with the Company or
any of its Subsidiaries in any geographic area in which the Company does
business; but this paragraph (d) shall not apply (1) to any investment held
on November 5, 1997, (2) to any investment in a business that comes into
competition with the Company or any of its Subsidiaries as a result of the
Company's acquisition or establishment of a new business or its expansion
into a geographic area in which it did not previously operate if such
person shall have held such investment before the Company's management
proposes to the Board of Directors such acquisition, establishment or
expansion, (3) to any investment in an investment fund or pool that itself
makes or holds an investment in a competitive business if such person (A)
is regularly engaged in making investment of that kind and (B) does not
have the power to, and does not in fact, exercise an influence on the
decision of the fund or pool in making the investment in the competitive
business, and (4) unless prior to the exercise by a majority of the
Independent Directors of the right to terminate the relevant person's right
to designate a director, such person is given notice of the potential
applicability of this paragraph (d) and a reasonable opportunity to cure or
modify the relationship to the satisfaction of a majority of the
Independent Directors;
(e) such person shall violate Section 2; or
(f) any director designated by such person shall take or omit to take
any action in his capacity as a director or Committee member in a manner
materially inconsistent with this Agreement, and the Person who has the
right to designate such director has not obtained such director's
resignation as a director within 30 days after being requested to do so by
the Board of Directors.
"DIRECTOR" or "DIRECTOR": a member of the Board of Directors.
"DTS": as defined in the recitals.
"DTS DESIGNEE": a Columbia Designee, a Chisholm Designee or a Whitney
Designee.
"DTS PARTIES": the Columbia Parties, Whitney and the Fleet Parties.
3
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"FLEET PARTIES": Chisholm, Fleet Venture Resources, Inc., a Rhode
Island corporation, Fleet Equity Partners VI, L.P., a Delaware limited
partnership, and Kennedy Plaza Partners, a Rhode Island general partnership.
"INDEPENDENT DIRECTOR": a natural person who (a) is not Marshall W.
Pagon or a Columbia Principal or an officer, employee or principal of the
Company, PCH, PCLP, PSOC, PNOC, any of the Columbia Parties, Whitney, any of the
Fleet Parties, DTS, or any of their subsidiaries or affiliates, or any spouse or
sibling, or any ancestor or lineal descendant of any such person, spouse or
sibling ("immediate family") (b) is not a former officer or employee of any such
person, (c) does not in addition to such person's role as a director, act on a
regular basis, either individually or as a member or representative of an
organization, serving as a professional adviser, legal counsel or consultant to
any such person, if, in the reasonable discretion of the Nominating Committee,
such relationship is material to any such person, and (d) does not represent,
and is not a member of the immediate family of, a person who would not satisfy
the requirements of the preceding clauses (a), (b) and (c) of this sentence. A
person who has been or is a partner, officer or director of an organization that
has customary commercial, industrial, banking or underwriting relationships with
any of the persons named in clause (a) of the preceding sentence that are
carried on in the ordinary course of business and on an arms-length basis and
who otherwise satisfies the requirements set forth in clauses (a), (b), (c) and
(d) of the first sentence of this definition, may qualify as a Independent
Director unless, in the reasonable discretion of the Nominating Committee, such
person is not independent or may not be independent with respect to the
management of the business and affairs of the Company. A person shall not be
disqualified as an Independent Director under clause (b), (c) or (d) above
solely because of such person's (or a member of such person's immediate
family's) having served in any capacity with a business (other than DTS)
acquired by the Company, or solely because such person is a representative or
designee of any such business (whether or not the Company shall enter into a
consulting agreement with such person in connection with such acquisition).
"MERGER AGREEMENT": as defined in the recitals.
"MERGER CONSIDERATION": as defined in the Merger Agreement.
"PAGON": Marshall W. Pagon, an individual.
"PAGON DESIGNEE": a person designated by Pagon (or, in the event of
his death or incapacity, by PCLP or another person appointed by Pagon for this
purpose) to serve as a director in accordance with this Agreement.
"PCH": Pegasus Communications Holdings, Inc., a Delaware corporation.
"PCLP": Pegasus Capital, L.P., a Pennsylvania limited partnership.
"PNOC": Pegasus Northwest Offer Corp, a Delaware corporation.
"PSOC": Pegasus Scranton Offer Corp, a Delaware corporation.
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"PERMITTED TRANSFEREE": as defined in the Company's certificate of
incorporation on the date hereof.
"PERSON or "PERSON": an individual, a partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
"SUBSIDIARY": as defined in the Merger Agreement.
"WHITNEY": Whitney Equity Partners, L.P., a Delaware limited
partnership.
"WHITNEY DESIGNEE": a person designated by Whitney to serve as a
director in accordance with this Agreement.
SECTION 2
VOTING
Section 2.1 Each party warrants to the others that it has voting control
over the number of Covered Shares set forth opposite its name on Exhibit A.
Each party shall vote all Covered Shares held by it, or over which it has the
power to direct the voting, as specified in this Agreement and shall take any
and all other action necessary or appropriate to implement the provisions of
this Agreement, including without limitation proposing and voting on amendments
to the Company's certificate of incorporation and by-laws as may be necessary to
fully implement the provisions hereof. No party shall permit any Covered Shares
held by it, or over which it has the power to direct the voting, to be voted in
any manner inconsistent with this Agreement. "Voting" includes the execution of
written consents.
SECTION 3
COMPOSITION OF BOARD OF DIRECTORS
AND COMMITTEES
Section 3.1 BOARD OF DIRECTORS. Except as otherwise provided in Section
3.3, the Board of Directors shall consist of nine members, of whom:
(a) three will be Pagon Designees;
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(b) one will be a Columbia Designee until Columbia Capital ceases to
have the right to designate a director under Section 4.1;
(c) one will be a Whitney Designee until Whitney ceases to have the
right to designate a director under Section 4.1;
(d) one will be a Chisholm Designee until Chisholm ceases to have the
right to designate a director under Section 4.1; and
(e) three will be Independent Directors, who shall be the persons
identified in Section 3.5(e) (so long as they continue to satisfy the
definition of "Independent Director") or their successors (who satisfy the
definition of "Independent Director") nominated by the Nominating
Committee.
Section 2.1 shall apply to the election of directors specified in this Section
3.1.
Section 3.2 VACANCIES CAUSED BY RESIGNATION, ETC.. Any vacancy in the
Board of Directors or a Committee caused by the resignation, removal, incapacity
or death of a Pagon Designee or a DTS Designee shall be filled by a person
designated by the party that had the right to designate the resigned, removed,
incapacitated or dead director or Committee member, except as provided in
Section 3.3. Section 2.1 shall apply to the election of directors and Committee
members specified in this Section 3.2.
Section 3.3 OTHER VACANCIES.
(a) If Columbia Capital, Whitney or Chisholm ceases to have the right
to designate a director pursuant to Section 4.1, such party shall promptly cause
the director designated by it to resign if so requested by Pagon (or, in the
event of his death or incapacity, by PCLP or another person appointed for Pagon
for this purpose), except that in case of the loss pursuant to
Section 4.1(a)(1), (b)(1) or (c)(1) of the right of Columbia Capital, Whitney or
Chisholm to designate a director, as the case may be, which also results in the
termination of this Agreement pursuant to Section 4.3, such party shall cause
the director designated by it to resign not later than the date on which this
Agreement terminates. Failing such resignation, such director may be removed in
the manner provided by law. If a vacancy occurs in the Board of Directors by
reason of any such required resignation or permitted removal, the Board of
Directors (as constituted after giving effect to such vacancy) shall either (1)
reduce the number of directors to eliminate the vacancy or (2) instruct the
Nominating Committee to nominate an Independent Director to fill the vacancy.
(b) The size of the Board of Directors may be increased as provided
by law. Each director elected to fill any position created by an increase in
the size of the Board of Directors shall be an Independent Director.
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(c) No party to this Agreement will take any action to fill a vacancy
created under this Section 3.3 by a person who is not an Independent Director.
Otherwise, Section 2.1 shall NOT apply to the election of directors to fill
vacancies created under this Section 3.3
Section 3.4 COMMITTEES. The Board of Directors shall establish an Audit
Committee, a Nominating Committee and a Compensation Committee, each of which
shall consist of three directors who shall be (1) a director designated by
Pagon, (2) a director designated by a majority of the DTS Designees then serving
as directors; and (3) one of the Independent Directors specified in
Section 3.1(e) designated by the Board of Directors in the manner provided by
law. The Audit Committee and the Compensation Committee shall have the powers
and functions of the present audit committee and compensation committee of the
Board of Directors. The Nominating Committee shall nominate all persons (other
than the Pagon Designees and the DTS Designees) to serve as directors, which
nominee shall be subject to election by the shareholders of the Company or
subject to appointment by the Board of Directors to fill vacancies. The Company
shall not establish a committee with the authority to act on all or
substantially all matters on which the Board of Directors may act (commonly
known as an "executive committee") without the consent of a majority of the DTS
Designees.
Section 3.5 INITIAL DESIGNATIONS. The parties make the following
designations pursuant to this Section 3:
(a) Two of the Pagon Designees are Pagon and Robert N. Verdecchio.
(b) The Columbia Designee is Harry F. Hopper, III.
(c) The Whitney Designee is Michael C. Brooks.
(d) The Chisholm Designee is Riordon B. Smith.
(e) The Independent Directors specified in Section 3.1(e) are James
J. McEntee, III, Mary C. Metzger and Donald W. Weber, each of whom is
currently a director of the Company.
Immediately following the execution of this Agreement, the Board of Directors
shall take such action as shall be required to create vacancies on the Board of
Directors and to elect persons to the Board of Directors as specified in this
Section 3.5. The parties will make their designations to the Committees at a
later date.
Section 3.6 SUBSEQUENT DESIGNATIONS. Except as provided in Section 3.5,
each party to this Agreement that is entitled to designate one or more directors
or Committee members shall do so by written notice to each of the other parties
to this Agreement and to the Secretary of the Company, signed by the Person
making such designation.
Section 3.7 REMOVAL. Any director may be removed by the shareholders of
the Company in the manner provided by law, except that no DTS Designee may be
removed without
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the written consent of the party that designated him unless such party shall
have ceased to have the right to designate a director pursuant to Section 4.1.
Section 2.1 shall apply to this Section 3.7.
Section 3.8 CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER. For so
long as this Agreement is in effect, Pagon will be elected by the Board of
Directors as Chairman, President and Chief Executive Officer of the Company,
except in case of incapacity.
Section 3.9 PREFERRED STOCK. If the holders of the Company's 12-3/4%
Series A Cumulative Exchangeable Preferred Stock shall become entitled to elect
directors in accordance with the terms thereof, this Agreement shall not apply
to any additional directorships to which their rights apply.
Section 3.10 FAILURE OR DELAY IN MAKING DESIGNATIONS. No failure or
delay by any party in making any designation of a director or Committee member
(including the fact that Pagon has made only two of his three designations in
Section 3.5(a)) shall constitute a waiver of such party's right to make
designations in the future.
SECTION 4
TERMINATION
Section 4.1 TERMINATION OF DESIGNATION RIGHTS.
(a) Columbia Capital shall cease to have the right to designate a
director if at any time (1) the Columbia Parties and the Columbia Principals
collectively own less than half the Covered Shares received by the Columbia
Parties and the Columbia Principals pursuant to the Merger Agreement, or (2) a
Designation Right Loss Event occurs with respect to any Columbia Party or any
Columbia Principal.
(b) Whitney shall cease to have the right to designate a director if
at any time (1) Whitney owns less than half the Covered Shares received by it
pursuant to the Merger Agreement, or (2) a Designation Right Loss Event occurs
with respect to Whitney.
(c) Chisholm shall cease to have the right to designate a director if
at any time (1) the Fleet Parties collectively own less than half the Covered
Shares received by them pursuant to the Merger Agreement, or (2) a Designation
Right Loss Event occurs with respect to any Fleet Party.
(d) For purposes of this Section 4.1, a party no longer owns Covered
Shares distributed to its equity holders unless the distributee is also a party
to this Agreement or, in the case of the Columbia Parties, is a Columbia
Principal. Continuing ownership of Covered Shares shall be determined by the
specific identification method.
8
<PAGE>
(e) For purposes of this Section 4.1, if the Columbia Parties, the
Columbia Principals, the Fleet Parties and Whitney, or any of them, shall
transfer any Covered Shares to a partnership or limited liability company wholly
owned by such transferors immediately following the Closing, then for purposes
of this Section 4.1 the transferor shall be deemed to own a portion of the
Covered Shares transferred to such partnership or limited liability company,
which portion shall be designated in writing by such partnership or limited
liability company to the Company at the time of the transfer of such Covered
Shares, as long as (i) such partnership or limited liability company continues
to own such Covered Shares, and (ii) such transferors continue to own all of the
equity interests in such partnership or limited liability company.
Section 4.2 TERMINATION OF VOTING OBLIGATIONS.
(a) The obligations of any party under Section 2.1 shall terminate
with respect to any Covered Share upon the sale or other transfer of such
Covered Share to any person who is not a party to this Agreement and is not
required by subsection (b) to become a party to this Agreement.
(b) PCH, PCLP, PSOC or PNOC shall not sell or otherwise transfer any
Covered Shares to a Permitted Transferee unless the Permitted Transferee agrees
in writing to be bound by, and to become a party to, this Agreement (including
the requirements of this subsection) to the same extent as its transferor, as it
relates to the Covered Shares so transferred.
Section 4.3 TERMINATION OF AGREEMENT. This Agreement shall terminate in
its entirety on the date of the meeting of the Company's shareholders at which
directors are scheduled to be elected next following the date on which all of
Columbia Capital, Whitney and Chisholm shall cease to have the right to
designate a director pursuant to Section 4.1. Neither Section 2 nor the
requirements of this Agreement relating to actions by the Nominating Committee
shall apply to the election of directors to occur at such meeting.
SECTION 5
MISCELLANEOUS
Section 5.1 NOTICES. Except as otherwise provided below, whenever it is
provided in this Agreement that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties hereto, or whenever any of the parties hereto, wishes to provide
to or serve upon the other party any other communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be delivered in person or sent
by telecopy, as specified in the Merger Agreement.
Section 5.2 ENTIRE AGREEMENT. This Agreement represents the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes any and all prior oral and written agreements,
arrangements and understandings among the parties hereto with respect to such
subject matter; and this Agreement can be amended, supplemented or
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<PAGE>
changed, and any provision hereof can be waived or a departure from any
provision hereof can be consented to, only by a written instrument making
specific reference to this Agreement signed by all parties to this Agreement
other than (a) the Columbia Parties if Columbia Capital shall no longer have the
right to designate a director pursuant to Section 4.1, (b) Whitney if Whitney
shall no longer have the right to designate a director pursuant to Section 4.1,
or (c) the Fleet Parties if Chisholm shall no longer have the right to designate
a director under Section 4.1.
Section 5.3 PARAGRAPH HEADINGS. The paragraph headings contained in
this Agreement are for general reference purposes only and shall not affect in
any manner the meaning, interpretation or construction of the terms or other
provisions of this Agreement.
Section 5.4 APPLICABLE LAW. This Agreement shall be governed by,
construed and enforced in accordance with the laws of Delaware applicable to
contracts to be made, executed, delivered and performed wholly within such state
and, in any case, without regard to the conflicts of law principles of such
state.
Section 5.5 SEVERABILITY. If any provision of this Agreement shall be
held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.
Section 5.6 NO WAIVER. The failure of any party at any time or times to
require performance of any provision hereof shall not affect the right at a
later time to enforce the same. No waiver by any party of any condition, and no
breach of any provision, term, covenant, representation or warranty contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
Section 5.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same original instrument. Not all
parties need sign the same counterpart. Delivery by facsimile of a signature
page to this Agreement shall have the same effect as delivery of an original
executed counterpart.
10
<PAGE>
Section 5.8 SUCCESSORS AND ASSIGNS. Subject to Section 4.1(d), this
Agreement shall inure to the benefit of and be binding upon the successors,
assigns and transferees of each of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
the date first written above.
PEGASUS COMMUNICATIONS CORPORATION
By: /s/ Howard E. Verlin
----------------------------------------
Howard E. Verlin,
Vice President
PEGASUS CAPITAL, L.P.
By: Pegasus Capital, Ltd., General Partner
By: /s/ Howard E. Verlin
----------------------------------------
Howard E. Verlin,
Vice President
PEGASUS COMMUNICATIONS HOLDINGS, INC.
By: /s/ Howard E. Verlin
----------------------------------------
Howard E. Verlin,
Vice President
PEGASUS SCRANTON OFFER CORP
By: /s/ Howard E. Verlin
----------------------------------------
Howard E. Verlin,
Vice President
PEGASUS NORTHWEST OFFER CORP
By: /s/ Howard E. Verlin
----------------------------------------
Howard E. Verlin,
Vice President
<PAGE>
/s/ Marshall W. Pagon
----------------------------------------
Marshall W. Pagon
FLEET VENTURE RESOURCES, INC.
By: /s/ Riordon B. Smith
----------------------------------------
Riordon B. Smith
Senior Vice President
FLEET EQUITY PARTNERS VI, L.P.
By: Fleet Growth Resources II, Inc.
Its General Partner
By: /s/ Riordon B. Smith
----------------------------------------
Riordon B. Smith
Senior Vice President
CHISHOLM PARTNERS III, L.P.
By: Silverado III L.P., its general partner
By: Silverado III Corp., its general partner
By: /s/ Riordon B. Smith
----------------------------------------
Riordon B. Smith
Senior Vice President
KENNEDY PLAZA PARTNERS
By: /s/ Riordon B. Smith
----------------------------------------
Riordon B. Smith
General Partner
<PAGE>
WHITNEY EQUITY PARTNERS, L.P.
By: J.H. Whitney Equity Partners LLC
Its General Partner
By: /s/ Daniel J. O'Brien
----------------------------------------
Daniel J. O'Brien
Managing Member
COLUMBIA CAPITAL CORPORATION
By: /s/ Neil P. Byrne
----------------------------------------
Neil P. Byrne
Vice President
COLUMBIA DBS, INC.
By: /s/ Neil P. Byrne
----------------------------------------
Neil P. Byrne
Vice President
<PAGE>
EXHIBIT A
COVERED SHARES
---------------------------------------------
SHAREHOLDER CLASS A COMMON STOCK CLASS B COMMON STOCK
- ------------------------------- -------------------- --------------------
Whitney Equity Partners, L.P. 959,473
Fleet Venture Resources, Inc. 406,186
Fleet Equity Partners VI, L.P. 174,079
Chisholm Partners III, L.P. 147,611
Kennedy Plaza Partners 10,179
Columbia Capital Corporation 429,812
Columbia DBS, Inc. 18,316
Pegasus Capital, L.P. 1,217,348
Pegasus Communications Holdings, Inc. 3,123,856
Pegasus Northwest Offer Corp. 122,338
Pegasus Scranton Offer Corp. 118,358
Marshall W. Pagon 12,699
