EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
Between
TRIBUNE COMPANY
and
THE TIMES MIRROR COMPANY
Dated as of March 13, 2000
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 13, 2000, between
Tribune Company, a Delaware corporation ("TRIBUNE"), and The Times Mirror
Company, a Delaware corporation (the "COMPANY").
WHEREAS, the Boards of Directors of Tribune and the Company each
have determined that it is advisable and in the best interests of their
respective stockholders for Tribune to acquire Company Common Shares in a tender
offer followed by a merger of the Company with and into Tribune, upon the terms
and subject to the conditions of this Agreement;
WHEREAS, in furtherance thereof, it is proposed that Tribune will
make a cash tender offer (as it may be amended from time to time as permitted
under this Agreement, the "OFFER") to acquire up to 28 million Company Common
Shares (with such Company Common Shares to be purchased on a pro rata basis
among Company Common Shares validly tendered and not withdrawn to the extent
exceeding such number) at a purchase price of $95 per Company Common Share (such
price or such higher price as may be paid in the Offer, the "PER SHARE CASH
AMOUNT"), net to the seller in cash;
WHEREAS, the respective Boards of Directors of the Company and
Tribune have each approved this Agreement and the merger (the "MERGER") of the
Company with and into Tribune following the consummation or expiration of the
Offer and upon the terms and subject to the conditions of this Agreement;
WHEREAS, the Board of Directors of the Company has determined that
the consideration to be paid for the Company Common Shares in the Offer and the
Merger, taken as a whole, is fair to the holders of such Company Common Shares
and to recommend that the holders of such Company Common Shares accept the Offer
and approve this Agreement and the transactions contemplated hereby;
WHEREAS, for United States federal income tax purposes, it is
intended that the Merger shall qualify as a tax-free reorganization within the
meaning of Section 368 of the Code;
WHEREAS, Tribune and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger; and
WHEREAS, Tribune has required, as a condition to its willingness to
enter into this Agreement, that certain stockholders (the "STOCKHOLDERS") of the
Company enter into a Voting Agreement (the "VOTING AGREEMENT") with Tribune,
substantially in the form attached hereto as Exhibit A, concurrently with the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein, Tribune and the Company
hereby agree as follows:
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ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the respective
meanings set forth below:
"AFFILIATE": As defined in Rule 12b-2 under the Exchange Act.
"AUTHORIZATION": As defined in Section 4.5.
"BENEFIT PLANS": As defined in Section 6.9(b).
"BLUE SKY LAWS": As defined in Section 4.5.
"CASH ELECTING OPTION": As defined in Section 3.4(a).
"CASH ELECTION": As defined in Section 3.1(c).
"CASH ELECTION NUMBER": As defined in Section 3.1(c)
"CASH ELECTION SHARES": As defined in Section 3.1(d).
"CASH FRACTION": As defined in Section 3.1(d).
"CERTIFICATE OF MERGER": The certificate of merger with respect to
the Merger, containing the provisions required by, and executed in accordance
with, Section 251 of the DGCL.
"CLASS I": As defined in Section 6.8(a).
"CLASS II": As defined in Section 6.8(a).
"CLASS III": As defined in Section 6.8(a).
"CLOSING": The closing of the Merger.
"CLOSING DATE": The date on which the Closing occurs.
"CODE": The Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder, as in effect from time to time.
"COMMON EXCHANGE RATIO": As defined in Section 3.1(b).
"COMMON MERGER CONSIDERATION": As defined in Section 3.2(b).
"COMPANY": As defined in the Preamble.
"COMPANY BENEFIT PLANS": As defined in Section 4.9(a).
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"COMPANY CHARTER": The Restated Certificate of Incorporation of
the Company, as amended to the date hereof.
"COMPANY COMMON CERTIFICATES": As defined in Section 3.1(g).
"COMPANY COMMON SHARES": Company Series A Common Shares and
Company Series C Common Shares.
"COMPANY DISCLOSURE STATEMENT": The disclosure statement, dated
the date of this Agreement, delivered by the Company to Tribune.
"COMPANY EMPLOYEES": As defined in Section 6.9(a).
"COMPANY FINANCIAL ADVISOR": As defined in Section 4.17.
"COMPANY INSTRUMENTS": As defined in Section 3.5.
"COMPANY OPTION": As defined in Section 3.4(a).
"COMPANY OPTION CASH OUT AMOUNT": As defined in Section 3.4(a).
"COMPANY PERMITS": As defined in Section 4.12(a).
"COMPANY PREFERRED SHARES": Company Series A Preferred Shares,
Company Series D-1 Preferred Shares and Company Series D-2 Preferred Shares.
"COMPANY SEC REPORTS": As defined in Section 4.6.
"COMPANY SERIES A COMMON SHARES": Shares of Series A Common
Stock, par value $1.00 per share, of the Company.
"COMPANY SERIES A PREFERRED SHARES": Shares of 8% Cumulative
Conversion Preferred Stock, Series A, par value $1.00 per share, of the Company.
"COMPANY SERIES B COMMON SHARES": Shares of Series B Common
Stock, par value $1.00 per share, of the Company.
"COMPANY SERIES B PREFERRED SHARES": As defined in
Section 4.3(a).
"COMPANY SERIES C COMMON SHARES": Shares of Series C Common
Stock, par value $1.00 per share, of the Company.
"COMPANY SERIES C-1 PREFERRED SHARES": Shares of Preferred
Stock, Series C-1, par value $1.00 per share, of the Company.
"COMPANY SERIES C-2 PREFERRED SHARES": Shares of Preferred
Stock, Series C-2, par value $1.00 per share, of the Company.
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"COMPANY SERIES D-1 PREFERRED SHARES": Shares of Preferred
Stock, Series D-1, par value $1.00 per share, of the Company.
"COMPANY SERIES D-2 PREFERRED SHARES": Shares of Preferred
Stock, Series D-2, par value $1.00 per share, of the Company.
"COMPANY STOCKHOLDER APPROVAL": As defined in Section 4.4(a).
"COMPANY STOCKHOLDERS' MEETING": As defined in Section 7.2(a).
"CONFIDENTIALITY AGREEMENT": The Confidentiality Agreement,
dated as of March 10, 2000, between Tribune and the Company.
"CONTRACT": As defined in Section 4.5.
"CONTROL": With respect to any Person, the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract, or otherwise.
"DGCL": The General Corporation Law of the State of Delaware.
"DISSENTING SHARES": As defined in Section 3.1(l).
"EFFECTIVE TIME": As defined in Section 2.5.
"ELECTION": As defined in Section 3.1(f).
"ELECTION DEADLINE": As defined in Section 3.1(i).
"EMPLOYMENT ARRANGEMENTS": As defined in Section 6.9(c).
"ENVIRONMENTAL LAWS": As defined in Section 4.14(a).
"ERISA": As defined in Section 4.9(a).
"EXCESS TRIBUNE COMMON SHARES": As defined in Section 3.2(d).
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXECUTIVE ARRANGEMENTS": As defined in Section 6.9(c).
"EXPIRATION DATE": As defined in Section 2.1(d).
"FCC": As defined in Section 5.9.
"FEE": As defined in Section 9.3(b).
"FORM OF ELECTION": As defined in Section 3.1(c).
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"FOUNDATION": As defined in Section 7.9.
"GAAP": As defined in Section 4.6.
"GOVERNMENTAL ENTITY": As defined in Section 4.5.
"HAZARDOUS SUBSTANCE": Any toxic or hazardous materials or
substances, including asbestos, buried contaminants, chemicals, flammable
explosives, radioactive materials, petroleum and petroleum products and other
substances defined as, or included in the definition of, "hazardous substances",
"hazardous wastes", "hazardous materials" or "toxic substances" under any
Environmental Law.
"HSR ACT": As defined in Section 4.5.
"INDEMNIFIED PARTIES": As defined in Section 6.6(a).
"INDEPENDENT DIRECTORS": As defined in Section 2.3.
"INSURANCE AMOUNT": As defined in Section 6.6(b).
"INTELLECTUAL PROPERTY": All industrial and intellectual property
rights, including Proprietary Technology, patents, patent applications, patent
rights, trademarks, trademark applications, trademark rights, trade names, trade
name rights and registrations, service marks, service xxxx applications, service
xxxx rights and registrations, copyrights, know-how, licenses, trade secrets,
proprietary processes, formulae and customer lists.
"INTELLECTUAL PROPERTY RIGHTS": As defined in Section 4.15.
"IRS": As defined in Section 4.9(a).
"KNOWLEDGE": As it is applied to the Company and its Subsidiaries or
Tribune and its Subsidiaries means actual knowledge of the executive officers of
the Company or Tribune, respectively, as listed in the most recent Annual Report
on Form 10-K of the Company or Tribune, respectively.
"LAW": Any federal, state, local or foreign law, statute, code,
ordinance, rule, regulation promulgated, or order, judgment, writ, stipulation,
award, injunction or decree entered, by a Governmental Entity.
"LIENS": As defined in Section 4.2.
"MATERIAL ADVERSE EFFECT": With respect to Tribune, a material
adverse effect on the business, properties, operations or condition (financial
or otherwise) of Tribune and its Subsidiaries taken as a whole, other than any
such effect arising out of or resulting from general economic conditions or from
changes in or generally affecting the industries in which Tribune and its
Subsidiaries operate or, except with respect to the representations and
warranties set forth in Section 5.4, any effect arising out of this Agreement or
the transactions contemplated hereby or the public announcement hereof. With
respect to the Company, a material adverse effect on
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the business, properties, operations or condition (financial or otherwise) of
the Company and its Subsidiaries, taken as a whole, other than any such effect
arising out of or resulting from general economic conditions or from changes in
or generally affecting the industries in which the Company and its Subsidiaries
operate or, except with respect to the representations and warranties set forth
in Section 4.5, any effect arising out of this Agreement or the transactions
contemplated hereby or the public announcement hereof.
"MATERIAL CONTRACTS": As defined in Section 4.10(a).
"MERGER": As defined in the Recitals.
"MINIMUM CONDITION": As defined in Annex I.
"MIXED CONSIDERATION": As defined in Section 3.1(b).
"MIXED ELECTION": As defined in Section 3.1(f).
"MULTIEMPLOYER PLAN": As defined in Section 4.9(b).
"MULTIPLE EMPLOYER PLAN": As defined in Section 4.9(b).
"NO ELECTION SHARES": As defined in Section 3.1(h).
"NYSE": The New York Stock Exchange, Inc.
"OFFER": As defined in the Recitals.
"OFFER DOCUMENTS": As defined in Section 2.1(c).
"OFFER TO PURCHASE": As defined in Section 2.1(c).
"PAYING AGENT": As defined in Section 3.1(g).
"PBGC": As defined in Section 4.9(b).
"PER SHARE CASH AMOUNT": As defined in the Recitals.
"PERMIT": Any permit, grant, authorization, exception, consent,
certificate, clearance, license, variance, exemption, order, concession,
franchise or approval of any Governmental Entity.
"PERSON": Any individual or corporation, company, partnership,
trust, incorporated or unincorporated association, joint venture or other
entity of any kind.
"PROPRIETARY TECHNOLOGY": All proprietary processes, formulae,
inventions, trade secrets, know-how, development tools and other proprietary
rights used by the Company and/or its Affiliates or Tribune and/or its
Subsidiaries, as the case may be, pertaining to any product, software or service
manufactured, marketed, licensed or sold by the Company and/or its Affiliates or
Tribune and/or its Subsidiaries, as the case may be, in the conduct of their
business
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or used, employed or exploited in the development, license, sale, marketing,
distribution or maintenance thereof, and all documentation and media
constituting, describing or relating to the above, including manuals, memoranda,
know-how, notebooks, software, records and disclosures.
"PROXY STATEMENT": As defined in Section 7.1(a).
"REGISTRATION STATEMENT": As defined in Section 7.1(a).
"REPRESENTATIVES" As defined in Section 7.3.
"RIGHTS": Tribune's preferred share purchase rights issued pursuant
to the Rights Agreement, dated as of December 12, 1997, by and between Tribune
and First Chicago Trust Company of New York, as Rights Agent.
"RULE 145 AFFILIATE": As defined in Section 7.8.
"SCHEDULE 14D-9": As defined in Section 2.2(b).
"SEC": The Securities and Exchange Commission.
"SECTION 16": As defined in Section 6.9(b).
"SECURITIES ACT": The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SHARE ISSUANCE": As defined in Section 5.3.
"SHARE PURCHASE DATE": As defined in Section 2.1(b).
"SHARES REPRESENTATIVE": As defined in Section 3.1(c).
"STOCK ELECTING OPTION": As defined in Section 3.4(a).
"STOCK ELECTION": As defined in Section 3.1(e).
"STOCKHOLDERS": As defined in the Preamble.
"SUBSIDIARY": With respect to any Person, any other Person of which
such first Person (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, a majority of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the Board of Directors or other governing body of such Person.
"SUPERIOR PROPOSAL": As defined in Section 6.3(c).
"SURVIVING CORPORATION": As defined in Section 2.4.
"TAKEOVER PROPOSAL": Any proposal for a merger, consolidation, share
exchange, business combination or other similar transaction involving the
Company or any of its Subsidiaries, or any proposal or offer to acquire,
directly or indirectly, 20% or more of the voting
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securities or equity interests of, or a substantial portion of the assets of,
the Company or any of its Subsidiaries, other than the transactions contemplated
by this Agreement.
"TAX": Any United States federal, state, county or local, or foreign
or provincial income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, value added, alternative or added minimum, ad
valorem or transfer tax, or any other tax, custom, duty or governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest or penalty imposed by any Governmental Entity.
"TAX RETURN": A report, return or other information (including any
attached schedules or any amendments to such report, return or other
information) required to be supplied to or filed with a Governmental Entity with
respect to any Tax, including an information return, claim for refund, amended
return or declaration or estimated Tax.
"368 REORGANIZATION": As defined in Section 7.6(a).
"TRIBUNE": As defined in the Preamble.
"TRIBUNE CHARTER AMENDMENT": An amendment to Tribune's Restated
ertificate of Incorporation containing the provisions set forth in Exhibit B.
"TRIBUNE COMMON SHARES": Shares of Common Stock, without par
alue, of Tribune
"TRIBUNE DISCLOSURE STATEMENT": The disclosure statement, dated
the date of this Agreement, delivered by Tribune to the Company.
"TRIBUNE OPTION": As defined in Section 3.4(a).
"TRIBUNE PERMITS": As defined in Section 5.9.
"TRIBUNE SEC REPORTS": As defined in Section 5.5.
"TRIBUNE STOCKHOLDER APPROVAL": As defined in Section 5.3.
"TRIBUNE STOCKHOLDERS' MEETING": As defined in Section 7.2(b).
"VOTING AGREEMENT": As defined in the Preamble.
"WELFARE PLAN": As defined in Section 6.9(b)
"WHOLLY-OWNED SUBSIDIARY": With respect to any Person, a Subsidiary
of such Person all of the equity and voting interest in which is owned, directly
or indirectly, by such Person.
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ARTICLE II
THE OFFER AND THE MERGER
SECTION 2.1. THE OFFER. (a) Provided that this Agreement shall not
have been terminated in accordance with Section 9.1 hereof and none of the
events set forth in Annex I hereto shall have occurred and be existing, Tribune
shall commence (within the meaning of Rule 14d-2 under the Exchange Act) the
Offer as promptly as reasonably practicable, but in no event later than seven
business days following the public announcement by Tribune and the Company of
the execution of this Agreement. The obligation of Tribune to accept for payment
and pay for any Company Common Shares tendered pursuant to the Offer shall be
subject to the satisfaction of the conditions set forth in Annex I. Tribune
expressly reserves the right from time to time, subject to Sections 2.1(b) and
2.1(d), without the consent of the Company to waive any such conditions and to
increase the Per Share Cash Amount. The Per Share Cash Amount shall be net to
the seller in cash, without interest, subject to reduction only for any
applicable withholding taxes or stock transfer taxes payable by the seller. The
Company agrees that no Shares held by the Company or any Subsidiary of the
Company will be tendered pursuant to the Offer.
(b) Without the prior written consent of the Company, Tribune shall
not (i) decrease the Per Share Cash Amount or change the form of consideration
payable in the Offer, (ii) seek to purchase fewer than 28 million Company Common
Shares, or (iii) impose conditions to the Offer in addition to those set forth
in Annex I hereto, or amend any other term or condition of the Offer in any
manner materially adverse to the holders of Company Common Shares. Upon the
terms and subject to the conditions of the Offer and this Agreement, Tribune
will accept for payment and purchase, as soon as permitted under the terms of
the Offer and applicable law, all Company Common Shares validly tendered and not
withdrawn prior to the expiration of the Offer. Tribune shall not provide for a
subsequent offering period in accordance with Rule 14d-11 under the Exchange
Act.
(c) The Offer shall be made by means of an offer to purchase (the
"OFFER TO PURCHASE") having the conditions set forth in Annex I hereto. As soon
as reasonably practicable on the date the Offer is commenced, Tribune shall file
with the SEC a Tender Offer Statement on Schedule TO (together with all
amendments and supplements thereto, the "SCHEDULE TO") with respect to the Offer
that will comply in all material respects with the provisions of all applicable
federal securities laws, and will contain (including as an exhibit) or
incorporate by reference the Offer to Purchase and forms of the related letter
of transmittal and summary advertisement (which documents, together with any
supplements or amendments thereto, are referred to collectively herein as the
"OFFER DOCUMENTS"), which shall be mailed to the holders of Company Common
Shares. Tribune agrees to promptly correct the Schedule TO and the Offer
Documents if and to the extent that they shall have become false or misleading
in any material respect (and the Company, with respect to information supplied
by it specifically for use in the Schedule TO or the Offer Documents, shall
promptly notify Tribune of any required corrections of such information and
shall cooperate with Tribune with respect to correcting such information) and to
supplement the Schedule TO or the Offer Documents to include any information
that shall become necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading (and the Company
shall supplement the information provided by it specifically for use in the
Schedule TO or the Offer Documents, shall promptly
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notify Tribune of any required corrections of such information and shall
cooperate with Tribune with respect to correcting such information) and Tribune
further agrees to supplement the Schedule TO or the Offer Documents to include
any information that shall become necessary in order to make the statements
therein that are based on such provided information, in light of the
circumstances under which they were made, not misleading, and to take all steps
necessary to cause the Schedule TO, as so corrected or supplemented, to be filed
with the SEC and the Offer Documents, as so corrected or supplemented, to be
disseminated to holders of Company Common Shares, in each case to the extent
required by applicable federal securities laws. The Company and its counsel
shall be given a reasonable opportunity to review and comment on the Schedule TO
and any Offer Documents before they are filed with the SEC.
(d) The Offer to Purchase shall provide for an initial expiration date
of 20 business days (as defined in Rule 14d-1 under the Exchange Act) from and
including the date of commencement of the Offer (the "EXPIRATION DATE"). Unless
this Agreement shall have been terminated pursuant to Section 9.1 hereof,
Tribune agrees that it shall not, without the consent of the Company, terminate
or withdraw the Offer or extend the expiration date of the Offer; provided,
however, that without the consent of the Company, Tribune shall have the right
to terminate or withdraw the Offer or extend the Offer from time to time, but in
any event not more than 20 days, if at the then-scheduled expiration date of the
Offer the conditions to the Offer described in Annex I hereto shall have not
been satisfied or earlier waived.
SECTION 2.2. COMPANY ACTION (a) The Company hereby approves of and
consents to the Offer and represents and warrants that the Board of Directors,
at a meeting duly called and held on March 12, 2000, acting by unanimous vote,
(i) approved and adopted this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, and the Voting Agreement; (ii)
recommended that the holders of Company Common Shares who desire cash for their
Shares at this time accept the Offer, tender their Company Common Shares
pursuant to the Offer and approve this Agreement and the transactions
contemplated hereby, including the Merger; and (iii) determined that this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, are advisable, fair to and in the best interests of the stockholders of
the Company.
(b) The Company hereby agrees to file with the SEC, as promptly as
practicable after the filing by Tribune of the Schedule TO with respect to the
Offer but in any event on the date such Schedule TO is filed with the SEC, a
Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together
with any amendments or supplements thereto, the "SCHEDULE 14D-9") that (i) will
comply in all material respects with the provisions of all applicable federal
securities laws and (ii) will include the opinion of the Company Financial
Advisor referred to in Section 4.17 hereof. The Company agrees to mail such
Schedule 14D-9 to the holders of Company Common Shares along with the Offer
Documents promptly after the commencement of the Offer. The Company agrees that
the Schedule 14D-9 and the Offer Documents shall contain the recommendations of
the Company's Board of Directors described in Sections 1.2(a) hereof. The
Company agrees promptly to correct the Schedule 14D-9 if and to the extent that
it shall become false or misleading in any material respect (and Tribune, with
respect to information supplied by it specifically for use in the Schedule
14D-9, shall promptly notify the Company of any required corrections of such
information and cooperate with the Company with respect to correcting such
information) and to
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supplement the information contained in the Schedule 14D-9 to include any
information that shall become necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading (and
Tribune shall supplement the information provided by it specifically for use in
the Schedule 14D-9 to include any information that shall become necessary in
order to make the statements therein that are based on such provided
information, in light of the circumstances under which they were made, not
misleading), and the Company shall take all steps necessary to cause the
Schedule 14D-9, as so corrected or supplemented, to be filed with the SEC and
disseminated to the holders of Company Common Shares, in each case to the extent
required by applicable federal securities laws. Tribune and its counsel shall be
given a reasonable opportunity to review and comment on the Schedule 14D-9
before it is filed with the SEC.
(c) In connection with the Offer, the Company shall promptly following
execution of this Agreement furnish Tribune with mailing labels containing the
names and addressees of all record holders of Company Common Shares,
non-objecting beneficial owners list and security position listings of Company
Common Shares held in stock depositories, each as of a recent date, and shall
promptly furnish Tribune with such additional information, including updated
lists of stockholders, mailing labels and security position listings, and such
other information and assistance as Parent or its agents may reasonably request
for the purpose of communicating the Offer to the record and beneficial holders
of Company Common Shares.
SECTION 2.3. DIRECTORS FOLLOWING OFFER. Promptly upon the purchase by
Tribune of Company Common Shares pursuant to the Offer, Tribune shall be
entitled to designate such number of directors on the Board of Directors of the
Company as will give Tribune, subject to compliance with Section 14(f) of the
Exchange Act, (a) in the event Tribune purchases at least 15 million Company
Common Shares pursuant to the Offer, representation on the Board of Directors of
the Company constituting a majority of the total number of directors on the
Board of Directors and (b) in the event Tribune purchases fewer than 15 million
Company Common Shares pursuant to the Offer, representation on the Board of
Directors of the Company in the same proportion as the number of Company Common
Shares purchased by Tribune pursuant to the Offer bears to the total number of
Company Common Shares deemed outstanding for financial reporting purposes. At
such time, the Company will also cause, if requested by Tribune,(i) each
committee of the Board of Directors of the Company, (ii) the board of directors
of each of the Company's Subsidiaries and (iii) if requested by Tribune, each
committee of each such Subsidiary board to include individuals designated by
Tribune constituting up to the same percentage of each such committee or board
as Tribune designees constitute on the Company's Board of Directors. The Company
shall, upon request by Tribune, promptly take all actions necessary to cause
Tribune's designees to be elected or appointed to the Board of Directors of the
Company in accordance with the terms of this Section 2.3, including by
increasing the size of the Board of Directors and/or, at the Company's election,
securing the resignations of such number of directors as is necessary to enable
Tribune's designees to be elected to the Company's Board of Directors in
accordance with the terms of this Section 2.3. Tribune's designees shall serve
as evenly as possible among the classes of the Company's Board of Directors. In
the event that Tribune's designees are appointed or elected to the Company's
Board of Directors, until the Effective Time, those continuing members of the
Company's Board of Directors who are directors on the date hereof and who are
neither officers of the Company nor designees, Affiliates or associates (within
the meaning of the federal securities laws) of Tribune shall be
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deemed the "INDEPENDENT DIRECTORS" for purposes of the provisions of this
Agreement. Subject to applicable law, the Company shall promptly take all action
necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under this Section
2.3 and shall include in the Schedule 14D-9 mailed to holders of Company Common
Shares promptly after the commencement of the Offer (or an amendment thereof or
an information statement pursuant to Rule 14f-1 if Tribune has not theretofore
designated directors or timely provided the requisite information) such
information with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14f-1 in order to fulfill its obligations
under this Section 2.3. Tribune will supply the Company any information with
respect to itself and its nominees, officers, directors and Affiliates required
by Section 14(f) and Rule 14f-1. Notwithstanding anything in this Agreement to
the contrary, following the time directors designated by Tribune are appointed
or elected to the Company's Board of Directors and prior to the Effective Time,
the affirmative vote of a majority of the Independent Directors shall be
required to (i) amend or terminate this Agreement on behalf of the Company, (ii)
exercise or waive any of the Company's rights or remedies hereunder, (iii)
extend the time for performance of Tribune's obligations hereunder, (iv) take
any other action by the Company in connection with this Agreement required to be
taken by the Company's Board of Directors, or (v) take any action on behalf of
the Company with respect to the matters covered by Section 6.9 or any other
action taken by the Company in connection with the transactions contemplated by
this Agreement, and such affirmative majority vote shall be sufficient to take
any such action. In the event the Merger Agreement is terminated after
consummation of the Offer, but without consummation of the Merger, Tribune will
secure the resignation from the Company's Board of Directors of such number of
Tribune's designees, if any, as may be necessary to cause Tribune's
representation on the Company's Board of Directors (and any committees thereof)
to be in the same proportion as the number of Company Common Shares then
beneficially owned by Tribune bears to the total number of Company Common Shares
deemed outstanding for financial reporting purposes.
SECTION 2.4. THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Company shall be merged with and into
Tribune in accordance with the provisions of Section 251 of the DGCL and with
the effect provided in the DGCL. The separate corporate existence of the Company
shall thereupon cease and Tribune shall be the surviving corporation in the
Merger (the "SURVIVING CORPORATION") and shall continue to be governed by the
laws of the State of Delaware.
SECTION 2.5. EFFECTIVE TIME. The Merger shall become effective on
the date and at the time (the "EFFECTIVE TIME") that the Certificate of Merger
shall have been accepted for filing by the Secretary of State of the State of
Delaware (or such later date and time as may be specified in the Certificate of
Merger), which shall be on the Closing Date or as soon as practicable
thereafter.
SECTION 2.6. CLOSING. Subject to the fulfillment or waiver of the
conditions set forth in Article VIII, the Closing shall take place (a) at the
offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx, at 9:00 a.m. local time on the earliest practicable date (but no
later than the fifth business day) following the satisfaction or waiver of the
conditions set forth in Article VIII (other than those conditions to be
satisfied or
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waived at the Closing) or (b) at such other place and/or time and/or on such
other date as Tribune and the Company may agree.
SECTION 2.7. CERTIFICATE OF INCORPORATION AND BY-LAWS. (a) At the
Effective Time, the certificate of incorporation of Tribune in effect
immediately prior to the Effective Time, as amended by the Tribune Charter
Amendment, shall be the certificate of incorporation of the Surviving
Corporation, until duly amended in accordance with the terms thereof and of the
DGCL.
(b) The by-laws of Tribune immediately prior to the Effective Time, as
amended by the by-law amendments contemplated by Exhibit C hereto, shall be the
by-laws of the Surviving Corporation, until duly amended in accordance with the
terms thereof, of the certificate of incorporation of the Surviving Corporation
and of the DGCL.
SECTION 2.8. DIRECTORS. Subject to Section 6.8(a), the directors
of Tribune immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be.
SECTION 2.9. OFFICERS. The officers of Tribune immediately prior
to the Effective Time shall be the officers of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY; EXCHANGE
OF CERTIFICATES
SECTION 3.1. EFFECT OF THE MERGER ON COMMON STOCK. At the Effective
Time, by virtue of the Merger and without any action on the part of any holder
of any capital stock of the Company:
(a) CANCELLATION OF CERTAIN COMPANY COMMON STOCK. Each Company Common
Share that is owned by the Company or by Tribune or any of Tribune's
Wholly-Owned Subsidiaries, shall be canceled and shall cease to exist, and no
stock of Tribune or other consideration shall be delivered in exchange therefor.
(b) CONVERSION OF COMPANY COMMON SHARES. Subject to the provisions of
this Section 3.1, each Company Common Share, other than Dissenting Shares and
shares canceled pursuant to Section 3.1(a), issued and outstanding immediately
prior to the Effective Time shall be converted into the right to receive (i) the
Per Share Cash Amount , without interest, or (ii) 2.5 Tribune Common Shares (the
"COMMON EXCHANGE RATIO") (together with associated Rights) or (iii) a
combination of cash and Tribune Common Shares (together with the associated
Rights) determined in accordance with this Section (the "MIXED CONSIDERATION").
(c) CASH ELECTION. Subject to the immediately following sentence, each
record holder of Company Common Shares immediately prior to the Effective Time
shall be entitled to elect to receive cash for all or any part of such holder's
Company Common Shares (a
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"CASH ELECTION"). Notwithstanding the foregoing and subject to Section 3.1(j),
the aggregate number of Company Common Shares that may be converted into the
right to receive cash in the Merger (the "CASH ELECTION NUMBER") shall be no
greater than (i) 28 million, minus (ii) the number of Company Common Shares
purchased in the Offer, minus (iii) any Dissenting Shares, minus (iv) any
Company Common Shares acquired by Tribune or any of its Wholly-Owned
Subsidiaries following consummation or expiration of the Offer and prior to the
Effective Time. Cash Elections shall be made on a form designed for that purpose
(a "FORM OF ELECTION"). A holder of record of Company Common Shares who holds
such Company Common Shares as nominee, trustee or in another representative
capacity (a "SHARES REPRESENTATIVE") may submit multiple Forms of Election;
PROVIDED, that such Shares Representative certifies that each such Form of
Election covers all the Company Common Shares held by such Shares Representative
for a particular beneficial owner.
(d) CASH ELECTION SHARES. If the aggregate number of Company Common
Shares covered by Cash Elections (the "CASH ELECTION SHARES") exceeds the Cash
Election Number, each Cash Election Share shall be converted into (i) the right
to receive an amount in cash, without interest, equal to the product of (A) the
Per Share Cash Amount and (B) a fraction (the "CASH FRACTION"), the numerator of
which shall be the Cash Election Number and the denominator of which shall be
the total number of Cash Election Shares, and (ii) a number of Tribune Common
Shares equal to the product of (A) the Common Exchange Ratio and (B) a fraction
equal to one minus the Cash Fraction.
(e) STOCK ELECTION. Each record holder of Company Common Shares
immediately prior to the Effective Time shall be entitled to elect to receive
Tribune Common Shares (together with the associated Rights) for all or any part
of such holder's Company Common Shares (a "STOCK ELECTION"). There shall not be
any limit on the number of Company Common Shares that may be converted into the
right to receive Tribune Common Shares in the Merger. Stock Elections shall be
made on a Form of Election. A Shares Representative may submit multiple Forms of
Election; PROVIDED, that such Shares Representative certifies that each such
Form of Election covers all the Company Common Shares held by such Shares
Representatives for a particular beneficial owner.
(f) MIXED ELECTION. Subject to the immediately following sentence,
each record holder of Company Common Shares immediately prior to the Effective
Time shall be entitled to elect to receive Tribune Common Shares (together with
the associated Rights) for part of such holder's Company Common Shares and cash
for the remaining part of such holder's Company Common Shares (the "MIXED
ELECTION" and, collectively with the Stock Election and the Cash Election, the
"ELECTION"). Notwithstanding the foregoing and subject to Section 3.1(j), the
aggregate number of Company Common Shares that may be converted into the right
to receive the Per Share Cash Amount shall be no greater than (i) 28 million
minus (ii) the number of Company Common Shares purchased in the Offer, minus
(iii) any Dissenting Shares, minus (iv) any Company Common Shares acquired by
Tribune or any of its Wholly-Owned Subsidiaries following the consummation or
expiration of the Offer and prior to the Effective Time. Mixed Elections shall
be made on a Form of Election. A Shares Representative may submit multiple Forms
of Election; PROVIDED, that such Shares Representative certifies that each such
Form of Election covers all the Company Common Shares held by such Shares
Representative for a particular beneficial owner. With respect to each holder of
Company
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Common Shares who makes a Mixed Election, the Company Common Shares such holder
elects to be converted into the right to receive the Per Share Cash Amount shall
be treated as Cash Election Shares for purposes of the provisions contained in
Section 3.1(c), (d) and (j), and the Company Common Shares such holder elects to
be converted into the right to receive Tribune Common Shares shall be treated as
Company Common Shares with respect to which Stock Elections are made for
purposes of the provisions contained in Sections 3.1(e) and (j).
(g) FORM OF ELECTION. To be effective, a Form of Election must be
properly completed, signed and submitted to Tribune's transfer agent and
registrar, as paying agent, or such other paying agent as may be selected by
Tribune and reasonably acceptable to the Company (the "PAYING AGENT"), and
accompanied by the certificates representing the Company Common Shares ("COMPANY
COMMON CERTIFICATES") as to which the election is being made (or by an
appropriate guarantee of delivery of such Company Common Certificates signed by
a firm that is a member of any registered national securities exchange or a
member of the National Association of Securities Dealers, Inc. or a bank,
broker, dealer, credit union, savings association or other entity that is a
member in good standing of the Securities Transfer Agent's Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program). Tribune shall have the discretion, which it may
delegate in whole or in part to the Paying Agent, to determine whether Forms of
Election have been properly completed, signed and submitted or revoked and to
disregard immaterial defects in Forms of Election. The decision of Tribune (or
the Paying Agent) in such matters shall be conclusive and binding. Neither
Tribune nor the Paying Agent shall be under any obligation to notify any person
of any defect in a Form of Election submitted to the Paying Agent. The Paying
Agent shall also make all computations contemplated by this Section 3.1, and all
such computations shall be conclusive and binding on the holders of Company
Common Shares and shall be subject to the provisions of Section 3.1(c), (d) and
(j).
(h) DEEMED NON-ELECTION. For the purposes hereof, a holder of Company
Common Shares who does not submit a Form of Election that is received by the
Paying Agent prior to the Election Deadline (the "NO ELECTION SHARES") shall be
deemed not to have made a Cash Election, Stock Election or Mixed Election. If
Tribune or the Paying Agent shall determine that any purported Election was not
properly made, the shares subject to such improperly made Election shall be
treated as No Election Shares. No Election Shares shall be treated by the
Company as Cash Election Shares and shall be subject to the provisions of
Sections 3.1(c), (d) and (j).
(i) ELECTION DEADLINE. Tribune and the Company shall each use all
reasonable best efforts to cause copies of the Form of Election to be mailed to
the record holders of the Company Common Shares not less than thirty days prior
to the Effective Time and to make the Form of Election available to all persons
who become record holders of Company Common Shares subsequent to the date of
such mailing and no later than the last business day prior to the Election
Deadline. A Form of Election must be received by the Paying Agent by 5:00 p.m.,
New York City time, on the seventh business day after the Effective Time (the
"ELECTION DEADLINE") in order to be effective. All elections may be revoked
until the Election Deadline in writing by the record holders submitting Forms of
Election.
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(j) ADJUSTMENT PER TAX OPINION. Notwithstanding anything in this
Article III to the contrary, the number of Company Common Shares to be converted
into the right to receive the Tribune Common Shares in the Merger shall be not
less than the number which would cause the ratio of (i) the average price per
Tribune Common Share on the NYSE on the Closing Date times the aggregate number
of Tribune Common Shares to be paid as Common Merger Consideration pursuant to
Section 3.1 with respect to Company Common Shares that are deemed outstanding
for federal income tax purposes, to (ii) the sum of (A) the amount set forth in
the preceding clause (i) plus (B) the aggregate Per Share Cash Amount to be paid
pursuant to Section 3.1 plus (C) the number of Dissenting Shares times the Per
Share Cash Amount plus (D) the aggregate amount of cash paid for Company Common
Shares purchased in the Offer plus (E) the aggregate amount of cash paid by
Tribune or any of its Wholly-Owned Subsidiaries to acquire Company Common Shares
following completion or expiration of the Offer and prior to the Effective Time
plus (F) any other amounts paid by Tribune or the Company (or any Person related
to Tribune or the Company within the meaning of Treasury Regulation Sections
1.368-1(e) and 1.368-1T(e)) to, or on behalf of, any stockholder of the Company
in connection with the sale, redemption or other disposition of any Company
stock in connection with the Merger for purposes of Treasury Regulation Sections
1.368-1(e) and 1.368-1T(e) plus (G) any extraordinary dividend distributed by
the Company prior to and in connection with the Merger for purposes of Treasury
Regulation Section 1.368-1T(e), to be 45%. To the extent the application of this
Section 3.1(j) results in the number of Company Common Shares to be converted
into the right to receive the Tribune Common Shares in the Merger being
increased, the number of Company Common Shares to be converted into the right to
receive the Per Share Cash Amount (and, therefore, the Cash Election Number)
will be reduced accordingly.
(k) ANTI-DILUTION PROVISIONS. In the event Tribune (i) changes (or
establishes a record date for changing) the number of Tribune Common Shares
issued and outstanding prior to the Effective Time as a result of a stock split,
stock dividend, stock combination, recapitalization, reclassification,
reorganization or similar transaction with respect to the outstanding Tribune
Common Shares or (ii) pays or makes an extraordinary dividend or distribution in
respect of Tribune Common Shares (other than a distribution referred to in
clause (i) of this sentence) and, in either case, the record date therefor shall
be prior to the Effective Time, the Common Merger Consideration shall be
proportionately adjusted. Regular quarterly cash dividends and increases thereon
shall not be considered extraordinary for purposes of the preceding sentence.
(l) DISSENTING SHARES. To the extent that holders thereof are entitled
to appraisal rights under Section 262 of the DGCL, Company Common Shares issued
and outstanding immediately prior to the Effective Time and held by a holder who
has properly exercised and perfected his demand for appraisal rights under
Section 262 of the DGCL (the "DISSENTING SHARES"), shall not be converted into
the right to receive the Common Merger Consideration, but the holders of
Dissenting Shares shall be entitled to receive from the Company such
consideration as shall be determined pursuant to Section 262 of the DGCL;
PROVIDED, however, that if any such holder shall have failed to perfect or shall
effectively withdraw or lose his right to appraisal and payment under the DGCL,
each of such holder's Company Common Shares shall thereupon be deemed to have
been converted as of the Effective Time into the right to receive the Per Share
Cash Amount, without any interest thereon, and such shares shall not be deemed
to be Dissenting Shares.
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(m) COMPANY ELECTIONS. The Company shall cause a Stock Election to be
made with respect to each Company Common Share owned beneficially or of record
by any Subsidiary of the Company or any other Affiliate of the Company
controlled by the Company.
SECTION 3.2. EXCHANGE OF CERTIFICATES.
(a) DEPOSIT WITH PAYING AGENT. As soon as practicable after the
Effective Time, Tribune shall deposit with the Paying Agent, pursuant to an
agreement in form and substance reasonably acceptable to Tribune and the
Company, an amount of cash and certificates representing Tribune Common Shares
required to effect the conversion of Company Common Shares into Tribune Common
Shares and cash in accordance with Section 3.1.
(b) EXCHANGE AND PAYMENT PROCEDURES. As soon as practicable after the
Effective Time or, if Tribune determines appropriate, together with or as part
of the Election Form, Tribune shall cause the Paying Agent to mail to each
holder of record as of the Effective Time of a Company Common Certificate
representing Company Common Shares that have been converted pursuant to Section
3.1: (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Company Common Certificates shall
pass, only upon actual delivery of the Company Common Certificates to the Paying
Agent) and (ii) instructions for effecting the surrender of the Company Common
Certificates and receiving the Common Merger Consideration which such holder
shall be entitled therefor pursuant to Section 3.1. Upon surrender of a Company
Common Certificate to the Paying Agent for cancellation, together with a duly
executed letter of transmittal and such other documents as the Paying Agent may
require, the holder of such Company Common Certificate shall be entitled to
receive in exchange therefor, as soon as practicable after the Effective Time,
(A) a certificate representing that number of Tribune Common Shares into which
the Company Common Shares previously represented by such Company Common
Certificate have been converted in accordance with Section 3.1, (B) the cash to
which such holder is entitled in accordance with Section 3.1 and (C) the cash in
lieu of fractional Tribune Common Shares to which such holder has the right to
receive pursuant to Section 3.2(d) (the Tribune Common Shares and cash described
in clauses (A), (B) and (C) above being referred to collectively as the "COMMON
MERGER CONSIDERATION"). In the event the Common Merger Consideration is to be
delivered to any Person who is not the Person in whose name the Company Common
Certificate surrendered in exchange therefor is registered in the transfer
records of Company, the Common Merger Consideration may be delivered to a
transferee if the Company Common Certificate is presented to the Paying Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence satisfactory to the Paying Agent that any applicable stock transfer
taxes have been paid. Until surrendered as contemplated by this Section 3.2,
each Company Common Certificate (other than a Company Common Certificate
representing Company Common Shares to be canceled in accordance with Section
3.1(a)) shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the Common Merger Consideration
contemplated by this Section 3.2. No interest will be paid or will accrue on any
cash payable to holders of Company Common Certificates pursuant to provisions of
this Article III.
(c) DISTRIBUTION WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions declared or made after the Effective Time with respect to
Tribune Common Shares
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with a record date after the Effective Time shall be paid to the holder of any
unsurrendered Company Common Certificate with respect to the Tribune Common
Shares represented thereby and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 3.2(d) until the holder of
record of such Company Common Certificate shall surrender such Company Common
Certificate. Subject to the effect of unclaimed property, escheat and other
applicable Laws, following surrender of any such Company Common Certificate,
there shall be paid to the record holder of the certificates representing whole
Tribune Common Shares issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of any cash payable in lieu of a fractional
Tribune Common Share to which such holder is entitled pursuant to Section 3.2(d)
and the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole Tribune Common Shares
and (ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to surrender
and a payment date subsequent to surrender payable with respect to such whole
Tribune Common Shares.
(d) NO FRACTIONAL SECURITIES. In lieu of any fractional securities,
each holder of Company Common Shares who would otherwise have been entitled to a
fraction of a Tribune Common Share upon surrender of Company Common Certificates
for exchange pursuant to this Article III will be paid an amount in cash,
without interest, equal to such holder's proportionate interest in the net
proceeds from the sale or sales in the open market by the Paying Agent, on
behalf of all such holders, of the aggregate fractional Tribune Common Shares
issued pursuant to this Article III. As soon as practicable following the
Effective Time, the Paying Agent shall determine the excess of (i) the number of
full Tribune Common Shares delivered to the Paying Agent by Tribune over (ii)
the aggregate number of full Tribune Common Shares to be distributed to holders
of Company Common Shares (such excess, the "EXCESS TRIBUNE COMMON SHARES"). The
Paying Agent, as agent for the former holders of Company Common Shares, shall
sell the Excess Tribune Common Shares at the prevailing prices on the NYSE. The
sales of the Excess Tribune Common Shares by the Paying Agent shall be executed
on the NYSE through one or more member firms of the NYSE and shall be executed
in round lots to the extent practicable. Tribune shall pay all commissions,
transfer taxes and other out-of-pocket transaction costs, including the expenses
and compensation of the Paying Agent, incurred in connection with such sale of
Excess Tribune Common Shares. Until the net proceeds of such sale have been
distributed to the former holders of Company Common Shares, the Paying Agent
will hold such proceeds in trust for such former holders. As soon as practicable
after the determination of the amount of cash to be paid to former holders of
Company Common Shares in lieu of any fractional interests, the Paying Agent
shall make available in accordance with this Agreement such amounts to such
former holders.
(e) TERMINATION OF PAYING AGENT. Any certificates representing Tribune
Common Shares deposited with the Paying Agent pursuant to Section 3.2(a) and not
exchanged within six months after the Effective Time pursuant this Section 3.2
shall be returned by the Paying Agent to Tribune, which shall thereafter act as
Paying Agent. All funds held by the Paying Agent for payment to the holders of
unsurrendered Company Common Certificates and unclaimed at the end of one year
from the Effective Time shall be returned to the Surviving Corporation, after
which time any holder of unsurrendered Company Common Certificates shall look as
a general creditor only to Tribune for payment of such funds to which such
holder may be due, subject to applicable Law.
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SECTION 3.3. EFFECT OF THE MERGER ON PREFERRED STOCK. At the Effective
Time, by virtue of the Merger and without any action on the part of any holder
of any capital stock of the Company:
(a) Each Company Preferred Share that is owned by the Company or by
Tribune shall be canceled and shall cease to exist, and no stock of Tribune or
other consideration shall be delivered in exchange therefor.
(b) Each Company Series A Preferred Share issued and outstanding
immediately prior to the Effective Time shall be converted, automatically and
without the requirement of any exchange of any certificate representing such
share, into one share of preferred stock of Tribune to be designated as the
Series C Convertible Preferred Stock. The terms of the Series C Convertible
Preferred Stock of Tribune shall be substantively identical to the terms of the
Company Series A Preferred, except that the number of Tribune Common Shares into
which each such share of Series C Convertible Preferred Stock of Tribune may be
converted, under the terms thereof, shall be calculated with respect to the
Common Share Value (as defined in the certificates of designations of the
Company Preferred Shares) of the Tribune Common Shares.
(c) Each Company Series D-1 Preferred Share issued and outstanding
immediately prior to the Effective Time, shall be converted, automatically and
without the requirement of any exchange of any certificate representing such
share, into one share of preferred stock of Tribune to be designated Series D-1
Convertible Preferred Stock. The terms of the Series D-1 Convertible Preferred
Stock of Tribune shall be substantively identical to the terms of the Company
Series D-1 Preferred Stock, except that the number of Tribune Common Shares into
which each such share of Series D-1 Convertible Preferred Stock of Tribune may
be converted, under the terms thereof, shall be calculated with respect to the
Common Share Value (as defined in the certificates of designations of the
Company Preferred Shares) of the Tribune Common Shares.
(d) Each share of Company Series D-2 Preferred Stock issued and
outstanding immediately prior to the Effective Time shall be converted,
automatically and without the requirement of any exchange of any certificate
representing such share, into one share of preferred stock of Tribune to be
designated Series D-2 Convertible Preferred Stock. The terms of the Series D-2
Convertible Preferred Stock of Tribune shall be substantively identical to the
terms of the Company Series D-2 Preferred Stock, except that the number of
Tribune Common Shares into which each such share of Series D-2 Convertible
Preferred Stock of Tribune may be converted, under the terms thereof, shall be
calculated with respect to the Common Share Value (as defined in the
certificates of designations of the Company Preferred Shares) of the Tribune
Common Shares.
(e) All the Company Preferred Shares converted into preferred stock of
Tribune pursuant to this Section 3.3 shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist as of the Effective Time,
and each certificate previously representing any such Company Preferred Shares
shall as of the Effective Time be deemed to represent as of the Effective Time
the number of shares of corresponding preferred stock of Tribune into which the
Company Preferred Shares represented by such certificate have been
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converted pursuant to this Section 3.3. At the request of any holder of a
certificate previously representing any such Company Preferred Shares, and upon
surrender of such certificate with such other documents as Tribune may
reasonably request, Tribune will issue a new certificate representing a number
of shares of the corresponding preferred stock of Tribune equal to the number of
Company Preferred Shares previously represented by such certificate.
SECTION 3.4. OPTIONS. (a) Each of the stock options, if any, to
purchase Company Common Shares (each, a "COMPANY OPTION") issued by the Company
pursuant to any stock option or similar plan of the Company, and any non-plan
options to acquire Company Common Shares set forth in Section 4.3(a) of the
Company Disclosure Statement issued by the Company pursuant to an option
agreement or otherwise issued by the Company, which are outstanding as of the
Effective Time shall, whether or not then exercisable and vested, become fully
exercisable and vested immediately prior to the Effective Time. Each holder of a
Company Option shall be given the opportunity, prior to the Election Deadline,
to elect either (i) to cause such Company Option (a "STOCK ELECTING OPTION") to
become and represent an option to purchase Tribune Common Shares (a "TRIBUNE
OPTION"), in accordance with paragraph (b) of this Section 3.4, or (ii) to cause
such Company Option (a "CASH ELECTING OPTION") to be cancelled in exchange for a
single lump sum cash payment (less any applicable income or employment or other
Tax withholding), without interest (the "COMPANY OPTION CASH OUT AMOUNT"), equal
to the product of (A) the number of Company Common Shares subject to such
Company Option immediately prior to the Effective Time and (B) the excess, if
any, of the Per Share Cash Amount over the exercise price per share of such
Company Option, in accordance with paragraph (c) of this Section 3.4. To the
extent any holder of a Company Option shall not have made an election with
respect to such Company Option prior to the Election Deadline, such Company
Option shall be deemed to be a Cash Electing Option.
(b) Each Stock Electing Option shall, by virtue of the Merger, and
without any further action on the part of any holder thereof, be assumed by
Tribune and converted into a Tribune Option to purchase that number of Tribune
Common Shares determined by multiplying the number of Company Common Shares
subject to such Company Option immediately prior to the Effective Time by the
Common Exchange Ratio, at an exercise price per Tribune Common Share equal to
the exercise price per share of such Company Option immediately prior to the
Effective Time divided by the Common Exchange Ratio, rounded down to the nearest
whole cent. If the foregoing calculation results in an assumed Company Option
being exercisable for a fraction of a Tribune Common Share, then the number of
Tribune Common Shares subject to such option shall be rounded up to the nearest
whole number of shares. The terms and conditions of each Tribune Option shall
otherwise remain as set forth in the Company Option converted into such Tribune
Option.
(c) Each Cash Electing Option shall, by virtue of the Merger, and
without any further action on the part of any holder thereof, be cancelled in
exchange for a single lump sum cash payment (less any applicable income or
employment or other tax withholding), without interest, equal to the Company
Option Cash Out Amount.
(d) The adjustment provided herein with respect to any options which
are "INCENTIVE STOCK OPTIONS" (as defined in Section 422 of the Code), if any,
shall be and is intended to be effected in a manner which is consistent with
Section 424(a) of the Code.
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(e) All restricted Company Series A Common Shares granted pursuant to
any equity plan or arrangements of the Company, and all individual awards of
restricted Company Series A Common Shares not granted pursuant to any such plan
or arrangement, shall become fully vested immediately prior to the Effective
Time and such Company Series A Common Shares shall be freed of restrictions and
issued to the relevant participant.
SECTION 3.5. COMPANY INSTRUMENTS. The Company's (1) 6.61% Debentures
due September 15, 2027, (2) 4.75% Liquid Yield Option Notes due April 15, 2017,
(3) 7.25% Debentures due March 1, 2013, (4) 7.25% Debentures due November 15,
2096, (5) 7.5% Debentures due July 1, 2023, (6) 4.25% Premium Equity
Participating Securities due March 15, 2001, (7) 6.65% Notes due October 15,
2001 and (8) 7.45% Notes due October 15, 2009 (collectively, the "COMPANY
INSTRUMENTS") outstanding immediately prior to the Effective Time shall be
assumed by Tribune and remain outstanding thereafter as an obligation of the
Surviving Corporation in accordance with their terms. From and after the
Effective Date, the holder of each Company Instrument that, prior to the
Effective Time, was, under certain circumstances and at certain times,
convertible into Company Common Shares, shall have the right, under the same
terms and circumstances and at such time as specified in the Company Instrument,
to convert such Company Instrument into the number of Tribune Common Shares
equal to the number of Company Common Shares into which such Company Instrument
could have been converted (had it then been convertible) immediately prior to
the Merger multiplied by the Common Exchange Ratio. Tribune shall enter into
supplemental indentures or other instruments with respect to such obligations in
accordance with the terms of the indentures or other instruments pursuant to
which the Company Instruments were issued.
SECTION 3.6. TRANSFER OF SHARES AFTER THE EFFECTIVE TIME. No transfers
of Company Common Shares or Company Preferred Shares shall be made on the stock
transfer books of the Company after the close of business on the day prior to
the date of the Effective Time.
SECTION 3.7. ESCHEAT. Neither Tribune nor the Company shall be liable
to any Person for shares or funds delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Laws.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Statement (it being understood and
agreed that each item in a section of the Company Disclosure Statement applies
only to such section and any other section to which it clearly applies) or in
the Company SEC Reports filed prior to the date hereof, the Company represents
and warrants to Tribune as follows:
SECTION 4.1. ORGANIZATION. The Company and each of its Subsidiaries is
a corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation
and has all requisite corporate or other power and authority to carry on its
business as now being conducted, except where the failure to be so organized,
existing or in good standing or to have such power and authority would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the
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Company or prevent or materially delay the consummation of the Offer or the
Merger. The Company and each of its Subsidiaries is duly qualified or licensed
to do business and in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed or in good standing would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or prevent or materially delay the consummation of
the Offer or the Merger. The Company has delivered to Tribune complete and
correct copies of the Company Charter and by-laws of the Company, each as in
effect on the date hereof.
SECTION 4.2. SUBSIDIARIES. Section 4.2 of the Company Disclosure
Statement lists each material Subsidiary of the Company and its jurisdiction of
incorporation or formation and identifies the Company's (direct or indirect)
percentage ownership interest therein. Except as set forth in Section 4.2 of the
Company Disclosure Statement, all of the outstanding shares of capital stock of
each such Subsidiary are owned by the Company, by another Wholly-Owned
Subsidiary of the Company or by the Company and one or more Wholly-Owned
Subsidiaries of the Company, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever
(collectively, "LIENS"), other than Liens that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company, and are duly authorized, validly issued, fully paid and nonassessable.
SECTION 4.3. CAPITALIZATION. The authorized capital stock of the
Company consists of 900,000,000 shares of common stock, par value $1.00 per
share, of which 500,000,000 are designated as Company Series A Common Shares,
300,000,000 are designated as Company Series C Common Shares and 100,000,000 may
be designated as Company Series A Common Shares, Company Series B Common Shares
or Company Series C Common Shares, and 33,000,000 shares of Preferred Stock, par
value $1.00 per share, of which 900,000 are designated as Company Series A
Preferred Shares, 25,000,000 are designated as Conversion Preferred Stock,
Series B ("COMPANY SERIES B PREFERRED SHARES"), 380,972 are designated as
Company Series C-1 Preferred Shares, 245,100 are designated as Company Series
C-2 Preferred Shares, 380,972 are designated as Company Series D-1 Preferred
Shares and 245,100 are designated as Company Series D-2 Preferred Shares. At the
close of business on March 2, 2000, (i) 112,157,907 Company Common Shares were
issued and outstanding, of which 93,928,315 are Company Series A Common Shares,
18,229,592 are Company Series C Common Shares and none are Company Series B
Common Shares, and (ii) 1,449,640 Company Preferred Shares were issued and
outstanding, of which 823,568 are Company Series A Preferred Shares, 380,972 are
Company Series D-1 Preferred Shares and 245,100 are Company Series D-2 Preferred
Shares and none are Company Series B Preferred Shares, Company Series C-1
Preferred Shares or Company Series C-2 Preferred Shares). For financial
reporting purposes, at the closing of business on March 2, 2000, (i) 77,870,911
Company Common Shares were issued and outstanding, of which 59,641,319 are
Company Series A Common Shares (including 16,372,895 shares subject to options
and 2,914,000 shares subject to Xxxxx), 18,229,592 are Company Series C Common
Shares and none are Company Series B Common Shares, and (ii) 213,733.6 Company
Preferred Shares were issued and outstanding, of which 88,519.2 are Company
Series A Preferred Shares, 76,194.4 are Company Series D-1 Preferred Shares and
49,020 are Company Series D-2 Preferred Shares and none are Company Series B
Preferred Shares, Company Series C-1 Preferred Shares or Company Series C-2
Preferred Shares. At the close of business on
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March 2, 2000, (A) 2,671,961 Company Series A Common Shares, 0 Company Series B
Common Shares, 0 Company Series C Common Shares and 0 Company Preferred Shares
were held by the Company in its treasury, and (B) 18,966,239 Company Series A
Common Shares were reserved for issuance upon exercise of Company Options or
issuance of restricted stock with an average exercise price of $51.63 per share.
Since March 2, 2000, no shares of capital stock of the Company have been issued,
except pursuant to exercise of options or conversion of convertible securities
of the Company outstanding as of March 2, 2000 in accordance with the terms
thereof. Except as set forth above, as of the date of this Agreement, no shares
of capital stock or other voting securities of the Company are issued, reserved
for issuance or outstanding. All outstanding shares of capital stock of the
Company are, and all shares which may be issued will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. Except as set forth in Section 4.3 of the Company Disclosure
Statement, there are no bonds, debentures, notes or other indebtedness of the
Company having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which stockholders of the
Company may vote. Except as set forth above or in Section 4.3 of the Company
Disclosure Statement, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind, to which the
Company or any of its Subsidiaries is a party or by which any of them or their
respective assets or properties is bound, obligating the Company or any of its
Subsidiaries, the loss of the value of which would reasonably be expected to
have a Material Adverse Effect on the Company, to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or of any of its Subsidiaries, the loss
of the value of which would reasonably be expected to have a Material Adverse
Effect on the Company, or obligating the Company or any of its Subsidiaries, the
loss of the value of which would reasonably be expected to have a Material
Adverse Effect on the Company, to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. Except as set forth in Section 4.3 of the Company Disclosure
Statement, there are no outstanding contractual obligations of the Company, or
any of its Subsidiaries, (1) to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or any of its Subsidiaries, (2) to vote
or dispose of any shares of capital stock of the Company, or any of its
Subsidiaries, (3) to register any shares of capital stock under the Securities
Act or any state securities law or (4) to grant preemptive or antidilutive
rights with respect to any capital stock of the Company or any of its
Subsidiaries.
SECTION 4.4. AUTHORITY. (a) At a meeting of the Board of Directors of
the Company duly called and held on March 12, 2000, the Board of Directors,
acting by unanimous vote, (i) determined that this Agreement and the
transactions contemplated hereby are advisable, fair to and in the best
interests of the Company's stockholders and that the consideration to be paid
for the Company Common Shares and Company Preferred Shares in the Offer and the
Merger is fair to the holders of such Shares, (ii) declared advisable and in all
respects approved and adopted this Agreement, the Offer, the Merger and the
other transactions contemplated hereby, and (iii) resolved to recommend the
approval and adoption of this Agreement and the Merger by the stockholders of
the Company. The Company has the requisite corporate power and authority to
execute and deliver this Agreement and, subject to the approval and adoption of
this Agreement by the holders of a majority of the voting power of the
outstanding Company Common Shares, voting together as a single class (the
"COMPANY STOCKHOLDER APPROVAL"), to consummate the transactions contemplated
hereby. The execution,
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delivery and performance of this Agreement and the consummation by the Company
of the Offer, the Merger and the other transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company, and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions so
contemplated, other than the Company Stockholder Approval. This Agreement has
been duly executed and delivered by the Company and, assuming this Agreement
constitutes a valid and binding obligation of Tribune, this Agreement
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to bankruptcy, insolvency,
moratorium and other principles of equity.
(b) The Company has taken all appropriate actions so that the
restrictions on business combinations contained in Section 203 of the DGCL and
in Article X of the Company Charter will not apply with respect to or as a
result of this Agreement, the Voting Agreement, or the transactions contemplated
hereby and thereby, including the Offer and the Merger, without any further
action on the part of the stockholders or the Board of Directors of the Company.
True and complete copies of all Board resolutions reflecting such actions have
been previously provided to Tribune. No other state takeover statute is
applicable to the Offer or the Merger. The execution and delivery of this
Agreement and/or the Voting Agreement does not constitute an unpermitted
transfer of any Company Series C Common Shares under Article V of the Company
Charter. The Board of Directors of the Company has not elected to effect a
conversion of the Company Series C Common Shares pursuant to Article V, Section
2.E.2.b of the Company Charter or Section 5(A)(2)(b) of the Certificate of
Designation of the Company Series C Common Shares.
SECTION 4.5. CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set
forth in Section 4.5 of the Company Disclosure Statement, and except for filings
and Permits as may be required under, and other applicable requirements of, the
Securities Act, the Exchange Act (including the filing with the SEC of the
Registration Statement), state securities or "blue sky" laws ("BLUE SKY LAWS"),
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), and the DGCL, none of the execution, delivery or performance of this
Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby will (a) conflict with or result in any breach of any
provision of the Company Charter or by-laws of the Company or of the similar
organizational documents of any of its material Subsidiaries; (b) require any
filing, registration, qualification, declaration or designation with or Permit
of, or termination of any waiting period requirement (each an "AUTHORIZATION")
by, any federal, state, local or foreign government or any court, tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency, domestic, foreign or supranational (a "GOVERNMENTAL
ENTITY"); (c) result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any loan or credit agreement, note, bond, mortgage,
indenture, lease, Permit, concession, franchise, license, contract, agreement or
other instrument, arrangement, understanding or obligation (each a "CONTRACT")
to which the Company or any of its Subsidiaries is a party or by which any of
them or any of their properties or assets may be bound; or (d) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company, any of its Subsidiaries or any of their properties or assets, except in
the case of clauses (b), (c) or (d) for failures to obtain Authorizations,
violations, breaches or defaults that would
-24-
not, individually or in the aggregate, reasonably be expected have a Material
Adverse Effect on the Company or prevent or materially delay the consummation of
the Offer or the Merger.
SECTION 4.6. REPORTS AND FINANCIAL STATEMENTS. The Company has timely
filed all registration statements, prospectuses, forms, reports and documents
required to be filed by it under the Securities Act or the Exchange Act since
January 1, 1998 (collectively, the "COMPANY SEC REPORTS"). The Company has
previously furnished or made available to Tribune true and complete copies of
all the Company SEC Reports filed prior to the date of this Agreement. The
Company SEC Reports (a) as of their respective dates, were prepared in
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and (b) did not at the time they were filed contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of the date of this
Agreement, no Subsidiary of the Company is subject to the periodic reporting
requirements of the Exchange Act. Each of the consolidated balance sheets
(including the related notes) included in the Company SEC Reports and the
audited consolidated balance sheet of the Company as of December 31, 1999
(including the related notes) attached to Section 4.6 of the Company Disclosure
Statement presents fairly, in all material respects, the consolidated financial
position of the Company and its Subsidiaries as of the respective dates thereof,
and the other related statements (including the related notes) included in the
Company SEC Reports and the other related audited statements of the Company as
at or for the period ended December 31, 1999 (including the related notes)
attached to Section 4.6 of the Company Disclosure Statement present fairly, in
all material respects, the results of operations and the changes in financial
position of the Company and its Subsidiaries for the respective periods or as of
the respective dates set forth therein, all in conformity with United States
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved, except as otherwise noted therein and subject, in the case
of the unaudited interim financial statements, to normal year-end adjustments.
All of the Company SEC Reports, as of their respective dates, complied as to
form in all material respects with the requirements of the Exchange Act and/or
the Securities Act, as applicable, and the applicable rules and regulations
thereunder.
SECTION 4.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1999, the Company and its Subsidiaries have conducted their businesses in the
ordinary course consistent with past practice, and, since such date, there has
not been (a) any Material Adverse Effect on the Company or any event, change,
effect or development that would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company or (b) any action
taken by the Company or any of its Subsidiaries from December 31, 1999 through
the date of this Agreement that, if taken during the period from the date of
this Agreement through the Effective Time, would constitute a breach of Section
6.1.
SECTION 4.8. NO UNDISCLOSED LIABILITIES. Except as and to the extent
disclosed or reserved against on the audited balance sheet of the Company as of
December 31, 1999 attached to Section 4.6 of the Company Disclosure Statement or
as incurred after the date thereof in the ordinary course of business consistent
with past practice and not prohibited by this Agreement, neither the Company nor
any of its Subsidiaries has any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by GAAP
to
-25-
be reflected on a consolidated balance sheet of the Company and its Subsidiaries
(or disclosed in the notes thereto).
SECTION 4.9. EMPLOYEE BENEFIT PLANS; LABOR MATTERS. (a) Section 4.9(a) of
the Company Disclosure Statement sets forth a true and complete list as of the
date of this Agreement of each material employee benefit plan as defined in
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained by the Company or any of its Subsidiaries (the "COMPANY
BENEFIT PLANS"). With respect to each Company Benefit Plan, the Company has
heretofore delivered or will deliver or make available to Tribune within 30 days
of the date of this Agreement a true, correct and complete copy of: (i) each
Company Benefit Plan, including all plan documents, trust agreements, and
insurance contracts and other funding vehicles; (ii) the most recent Annual
Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current
summary plan description and any material modifications thereto, if any (in each
case, whether or not required to be furnished under ERISA); (iv) the most recent
annual financial report, if any; (v) the most recent actuarial report, if any;
and (vi) the most recent determination letter from the Internal Revenue Service
(the "IRS"), if any. Except as provided in the foregoing documents delivered to
Tribune and except as provided in Section 4.9(a) of the Company Disclosure
Statement, there are no amendments to any Company Benefit Plan that have been
adopted or approved nor has the Company or any Company Subsidiary undertaken to
make any such amendments or to adopt or approve any new Plan which would
reasonably be expected to have a material impact on the liabilities of the
Company Benefit Plan.
(b) With respect to each Company Benefit Plan which is subject to
Title IV of ERISA, or Section 302 of ERISA or Section 412 or 4971 of the Code,
(i) the present value of accrued benefits under such Company Benefit Plan, based
upon the actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such Company Benefit Plan's actuary with respect to
such Company Benefit Plan, did not, as of its latest valuation date, exceed the
then current value of the assets of such Company Benefit Plan allocable to such
accrued benefits except with respect to one employee pension benefit plan
maintained by a Subsidiary of the Company, in which case such excess is not
greater than $10 million, (ii) no "reportable event" (within the meaning of
Section 4043 of ERISA) has occurred with respect to any Company Benefit Plan for
which the 30-day notice requirement has not been waived, (iii) there does not
exist any accumulated funding deficiency within the meaning of Section 412 of
the Code or Section 302 of ERISA, whether or not waived, (iv) all premiums to
the Pension Benefit Guaranty Corporation ("PBGC") have been timely paid in full,
(v) no liability (other than for premiums to the PBGC) under Title IV of ERISA
has been or is reasonably expected to be incurred by the Company or any of its
Subsidiaries and (vi) the PBGC has not instituted proceedings to terminate any
such Company Benefit Plan and, to the Company's knowledge, no condition exists
that presents a risk that such proceedings will be instituted or which would
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any such Company Benefit Plan, except
where the failure of any of the foregoing to be true would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company or prevent or materially delay the consummation of the Offer or the
Merger. Section 4.9(b) of the Company Disclosure Statement sets forth all
"multiemployer pension plans" (as such term is defined in section 3(37) of
ERISA) (a "MULTIEMPLOYER PLAN") or all plans that have two or more contributing
sponsors at least one of whom are not under common control, within the meaning
of Section 4063 of ERISA (a
-26-
"MULTIPLE EMPLOYER PLAN") of the Company or any Subsidiary of the Company. Total
withdrawal liability of all such multiemployer plans, if triggered, would not
create a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries nor any of their respective ERISA Affiliates has incurred any
withdrawal liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan that has not been satisfied in
full. None of the withdrawal liabilities of the Company and/or any of its
Subsidiaries for each Multiemployer Plan, if triggered, would reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay the Offer or the Merger.
(c) Each of the Company Benefit Plans has been operated and
administered in accordance with applicable Laws and administrative rules and
regulations under ERISA and the Code, except where a violation of any such Law,
rule or regulation would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Offer or the Merger. Each of the
Company Benefit Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter as to such
qualification from the IRS, and no event has occurred, either by reason of any
action or failure to act, which would cause the loss of any such qualification,
except where such action or failure to act can be cured without reasonably being
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company or prevent or materially delay the consummation of the Offer or the
Merger. Except as set forth in Section 4.9(c) of the Company Disclosure
Statement, no Company Benefit Plan provides benefits, including death or medical
benefits (whether or not insured), with respect to current or former employees
of the Company or any Subsidiary thereof beyond their retirement or other
termination of service, other than death benefits or retirement benefits under
any "employee pension plan" (as such term is defined in Section 3(2) of ERISA).
All contributions or other amounts payable by the Company or any Subsidiary
thereof as of the Effective Time with respect to each Company Benefit Plan have
been timely paid or accrued in accordance with the terms of each such Company
Benefit Plan. Except as set forth in Section 4.9(c) of the Company Disclosure
Statement, and subject to Tribune's obligations under Section 6.9, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (A) result in a restriction on Tribune's
ability to amend, modify or terminate any Company Benefit Plan, (B) trigger a
requirement for funding or the acceleration of funding of any Company Benefit
Plan, (C) commence a period during which a subsequent termination of employment
by a Company Employee will entitle such Company Employee to benefits in excess
of what would otherwise have been required in the absence of the transactions
contemplated hereby or (D) result in a reportable event within the meaning of
Section 4043(c) of ERISA for which a notice requirement has not been waived.
(d) No collective bargaining agreement or other labor union contract
is being negotiated by the Company or any Subsidiary thereof. There is no labor
dispute, strike, slowdown or work stoppage against the Company or any Subsidiary
thereof pending or, to the knowledge of the Company, threatened that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer or the Merger. To the knowledge of the Company, none
of the Company, any Subsidiary thereof or their respective representatives or
employees has committed any unfair labor practices in connection with the
operation of the respective businesses of the Company and its Subsidiaries, and
there is no charge or complaint against the Company or any
-27-
Subsidiary thereof by the National Labor Relations Board or any comparable state
or foreign agency pending or, to the knowledge of the Company, threatened,
except where such unfair labor practice, charge or complaint would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or prevent or materially delay the consummation of
the Offer or the Merger.
(e) The Company has identified in Section 4.9(e) of the Company
Disclosure Statement and has made available to Tribune true and complete copies
of (i) all severance and employment agreements with directors and executive
officers of the Company; (ii) all severance programs and policies of the Company
with or relating to its employees; and (iii) all plans, programs, agreements and
other arrangements of the Company with or relating to its employees which
contain change in control provisions. Except as set forth in Section 4.9(e) of
the Company Disclosure Statement, to the knowledge of the Company, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (either alone or in conjunction with any
other event, such as termination of employment) (A) result in any material
payment (including severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of the Company or any
Subsidiary thereof or Affiliate from the Company or any Subsidiary thereof or
Affiliate under any Company Benefit Plan or otherwise, (B) materially increase
any benefits otherwise payable under any Company Benefit Plan or (C) result in
any acceleration of the time of payment or vesting of any material benefits.
(f) Except as set forth in Section 4.9(e) of the Company Disclosure
Statement, neither the Company nor any Subsidiary thereof is a party to any
Contract, plan, or arrangement under which it is obligated to make or to
provide, or could become obligated to make or to provide, a payment or benefit
that would be nondeductible under Section 162(m) or 280G of the Code.
SECTION 4.10. CONTRACTS; INDEBTEDNESS. (a) Other than any Contract
(excluding Contracts that relate to the purchase of newsprint) involving
payments to or by the Company of less than $10 million per annum and less than
$25 million over the life of the Contract, there is no Contract to which Company
or any of its Subsidiaries is a party or by which it or any of its properties or
assets is bound, that (i) is material to the business, properties, assets,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries, taken as a whole, (ii) relates to the purchase of newsprint or
(iii) is a material lease of real property pursuant to which the Company or any
of its Subsidiaries is the lessee or sublessee thereunder (the Contracts
described in clauses (i), (ii) and (iii), collectively, "MATERIAL CONTRACTS") as
to which either the Company or any of its Subsidiaries is in violation or
default. Neither the Company nor any Subsidiary thereof has received written
notice from any third party alleging that the Company or any of its Subsidiaries
is in violation of or in default under (nor does there exist any condition which
upon the passage of time or the giving of notice would cause such a violation of
or default under) any Material Contract, except for violations or defaults that
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer or the Merger.
(b) Section 4.10(b) of the Company Disclosure Statement sets forth (i)
a list of all agreements, instruments and other obligations pursuant to which
any indebtedness for
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borrowed money or capitalized lease obligations of the Company or any of its
Subsidiaries in an aggregate principal amount in excess of $25 million is
outstanding or may be incurred and (ii) the respective principal amounts
outstanding thereunder as of the date of this Agreement.
SECTION 4.11. LITIGATION. There is no suit, claim, action, proceeding
or investigation pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger. Neither
the Company nor any of its Subsidiaries is subject to any outstanding order,
writ, injunction or decree that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger.
SECTION 4.12. COMPLIANCE WITH APPLICABLE LAW. The Company and its
Subsidiaries hold all Permits of all Governmental Entities necessary for the
lawful conduct of their respective businesses (the "COMPANY PERMITS"), except
for failures to hold such Permits that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Offer or the
Merger. The Company and its Affiliates are in compliance with the terms of the
Company Permits, except where the failure so to comply would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company or prevent or materially delay the consummation of the Offer or the
Merger. The businesses of the Company and its Affiliates are not being conducted
in violation of any Law, except for violations or possible violations that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or prevent or materially delay the consummation of
the Offer or the Merger and except as to Laws the effect or impact of which is
specifically addressed elsewhere in this Article IV. No investigation or review
by any Governmental Entity with respect to the Company or any of its
Subsidiaries is pending or, to the knowledge of the Company, threatened, nor has
any Governmental Entity indicated in writing an intention to conduct any such
investigation or review, other than, in each case, those the outcome of which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer or the Merger.
SECTION 4.13. TAXES. (a) Notwithstanding the provisions of Article IV,
the representations contained in this Section 4.13 are the only representations
of the Company that relate to Taxes, and no other provisions of Article IV are
intended to cover representations relating to Taxes. The Company and its
Subsidiaries have filed all income Tax Returns and all other material United
States federal, state, county, local and foreign Tax Returns required to be
filed by them. The Company and its Subsidiaries have paid all material Taxes
due, other than Taxes being contested in good faith or Taxes appropriate
reserves for which have been made in the Company's financial statements included
in the Company's audited financial statements contained in Section 4.6 of the
Company Disclosure Statement. The reserves provided in such financial statements
with respect to the disposition in 1998 of the outstanding stock of Xxxxxxx
Xxxxxx and Company Incorporated and Xxxxx, Inc., shall be treated as appropriate
for purposes of this Article IV and Section 8.3 hereof. There are no material
assessments or adjustments that have been asserted in writing against the
Company or its Subsidiaries for any period for which
-29-
the Company has not made appropriate reserves in the Company's financial
statements included in the Company's audited financial statements contained in
Section 4.6 of the Company Disclosure Statement.
(b) There are no material claims or assessments pending against the
Company or any of its Subsidiaries for any alleged deficiency in any Tax, and
the Company has not been notified in writing of any proposed material Tax claims
or assessments against the Company or any of its Subsidiaries (other than, in
each case, claims or assessments for which adequate reserves in the Company's
audited financial statements contained in Section 4.6 of the Company Disclosure
Statement have been established or which are being contested in good faith or
are immaterial in amount). Except as set forth in Section 4.13(b) of the Company
Disclosure Statement and subject to the qualifications set forth therein, there
are no material "deferred intercompany transactions" or "intercompany
transactions" the gain or loss in which would be required to be taken into
account under the consolidated return Treasury Regulations as a result of the
Merger.
(c) There are no Liens for Taxes on the assets of the Company or any
of its Subsidiaries, except for statutory Liens for current Taxes not yet due
and payable and except for Liens which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger.
SECTION 4.14. ENVIRONMENTAL MATTERS. (a) Except as set forth in
Section 4.14(a) of the Company Disclosure Statement or as set forth in the
Company SEC Reports filed prior to the date of this Agreement, neither the
Company nor any of its Subsidiaries has (i) placed, held, located, released,
transported or disposed of any Hazardous Substances on, under, from or at any of
the Company's or any of its Subsidiaries' properties or any other properties,
other than in a manner that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger, (ii)
any knowledge of the presence of any Hazardous Substances on, under or at any of
the Company's or any of its Subsidiaries' properties or any other property but
arising from the Company's or any of its Subsidiaries' properties, other than in
a manner that would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Offer or the Merger or (iii) received
any written notice (A) of any violation of any Law relating to any matter of
pollution, protection of the environment, environmental regulation or control or
regarding Hazardous Substances on, under or emanating from any of the Company's
or any of its Subsidiaries' properties or any other properties (collectively,
"ENVIRONMENTAL LAWS"), (B) of the institution or pendency of any suit, action,
claim, proceeding or investigation by any Governmental Entity or any third party
in connection with any such violation, (C) requiring the response to or
remediation of Hazardous Substances at or arising from any of the Company's or
any of its Subsidiaries' properties or any other properties or (D) demanding
payment for response to or remediation of Hazardous Substances at or arising
from any of the Company's or any of its Subsidiaries' properties or any other
properties, except for notices relating to any matter that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company or prevent or materially delay the consummation of the
Offer or the Merger.
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(b) Except as set forth in Section 4.14(b) of the Company Disclosure
Statement, no Environmental Law imposes any obligation upon the Company or its
Subsidiaries arising out of or as a condition to any transaction contemplated by
this Agreement, including any requirement to modify or to transfer any permit or
license, any requirement to file any notice or other submission with any
Governmental Entity, the placement of any notice, acknowledgment or covenant in
any land records, or the modification of or provision of notice under any
agreement, consent order or consent decree, except where the failure to meet
such condition would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay consummation of the Offer or the Merger. No Lien has been
placed upon any of the Company's or it Subsidiaries' properties under any
Environmental Law, except for Liens that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Offer or the
Merger.
SECTION 4.15. INTELLECTUAL PROPERTY. The Company and its Subsidiaries
own, or are validly licensed or otherwise have the right to use, all
Intellectual Property (collectively, "INTELLECTUAL PROPERTY RIGHTS") used in the
conduct of their businesses, except where the failure to own or possess valid
rights to such would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay consummation of the Offer or the Merger. Except as set forth in
Section 4.15 of the Company Disclosure Statement, no claims are pending or, to
the knowledge of the Company, threatened that the Company or any of its
Subsidiaries is infringing or otherwise adversely affecting the rights of any
Person with regard to any Intellectual Property Right which are reasonably
expected, individually or in the aggregate, to have a Material Adverse Effect on
the Company or prevent or materially delay consummation of the Offer or the
Merger. To the knowledge of the Company, except as set forth in Section 4.15 of
the Company Disclosure Statement, no person is infringing the rights of the
Company or any of its Subsidiaries with respect to any Intellectual Property
Right except for such infringement that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or prevent or materially delay consummation of the Offer or the Merger.
SECTION 4.16. REQUIRED VOTE. The Company Stockholder Approval is the
only vote of the holders of any capital stock of the Company necessary under
applicable Law or otherwise to consummate the Offer, the Merger and the other
transactions contemplated hereby.
SECTION 4.17. BROKERS. No broker, investment banker, financial advisor
or other Person, other than Xxxxxxx Xxxxx & Co. (the "COMPANY FINANCIAL
ADVISOR"), the fees and expenses of which will be paid by the Company, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company or any of its
Affiliates. The Company has heretofore furnished Tribune with a true and
complete copy of its engagement letter with the Company Financial Advisor (which
letter sets forth the method of calculation of any fees to be payable to the
Company Financial Advisor). In connection with this Agreement and the
transactions contemplated hereby, the Company is not subject to any obligation
or commitment to pay the legal fees or related expenses of any stockholder of
the Company.
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SECTION 4.18. OPINION OF FINANCIAL ADVISOR. The Company has received
the opinion of the Company Financial Advisor, dated the date of this Agreement,
to the effect that, as of the date of this Agreement, the Per Share Cash Amount
and the Common Merger Consideration to be received in the Offer and the Merger
by the holders of Company Common Shares is fair to such holders from a financial
point of view. A complete and correct signed copy of such opinion will be
delivered to Tribune as soon as practicable after the date of this Agreement,
and such opinion has not been withdrawn or modified.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TRIBUNE
Except as set forth in the Tribune Disclosure Statement (it being
understood and agreed that each item in a section of the Tribune Disclosure
Statement applies only to such section and any other section to which it clearly
applies) or in the Tribune SEC Reports filed prior to the date of this
Agreement, Tribune represents and warrants to the Company as follows:
SECTION 5.1. ORGANIZATION. Tribune and each of its Subsidiaries is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation
and has all requisite corporate or other power and authority to carry on its
business as now being conducted, except where the failure to be so organized,
existing or in good standing or to have such power and authority would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Tribune or prevent or materially delay the consummation of the
Offer or the Merger. Tribune and each of its Subsidiaries is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed or in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Tribune or prevent or materially delay the
consummation of the Offer or the Merger.
SECTION 5.2. CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of Tribune consists of 400,000,000 Tribune Common
Shares and 5,000,000 shares of preferred stock, without par value, of Tribune,
of which 1,600,000 shares are designated as Tribune Series B Preferred Shares
and 2,000,000 are designated as Tribune Series A Preferred Shares. At the close
of business on February 29, 2000, (i) 235,293,402 Tribune Common Shares were
issued and outstanding, 1,217,133 Tribune Series B Preferred Shares were issued
and outstanding and no Tribune Series A Preferred Shares were issued and
outstanding; (ii) 91,794,000 Tribune Common Shares, no Tribune Series B
Preferred Shares and no Tribune Series A Preferred Shares were held by Tribune
in its treasury; and (iii) not in excess of 25 million Tribune Common Shares
were reserved for issuance upon exercise of outstanding options to acquire such
shares. Except as set forth above, as of the date of this Agreement, no shares
of capital stock or other voting securities of Tribune are issued, reserved for
issuance or outstanding. As of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind, to which Tribune is a party or by
which Tribune or its assets or properties are bound, obligating Tribune to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of Tribune or obligating
Tribune to issue, grant, extend or enter into any such
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security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. The shares of Tribune Common Stock to be issued in connection with
the Merger, when issued as contemplated herein, will be duly authorized, validly
issued, fully paid and nonassessable and will not be issued in violation of any
preemptive rights.
SECTION 5.3. AUTHORITY. At a meeting of the Board of Directors of
Tribune duly called and held on March 12, 2000, the Board of Directors of
Tribune adopted resolutions approving this Agreement, the Voting Agreement and
the transactions contemplated hereby and thereby, including the Offer and the
Merger, the issuance of Tribune Common Shares in accordance with the Merger (the
"SHARE ISSUANCE") and the Tribune Charter Amendment, and resolved to recommend
the Merger, including the Share Issuance and the Tribune Charter Amendment, to
its stockholders. Tribune has the requisite corporate power and authority to
execute and deliver this Agreement and the Voting Agreement and, subject to the
approval of the Merger, including the Share Issuance and the Tribune Charter
Amendment, by the holders of a majority of the voting power of Tribune
(collectively, the "TRIBUNE STOCKHOLDER APPROVAL"), to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Voting Agreement, and the consummation by
Tribune of the Offer, the Merger, the Share Issuance, the Tribune Charter
Amendment and the other transactions contemplated hereby and thereby, have been
duly authorized by all necessary corporate action on the part of Tribune and no
other corporate proceedings on the part of Tribune are necessary to authorize
this Agreement or the Voting Agreement or to consummate the transactions so
contemplated, other than the Tribune Stockholder Approval. This Agreement and
the Voting Agreement have been duly executed and delivered by Tribune and,
assuming this Agreement and the Voting Agreement constitute valid and binding
obligations of the other parties hereto and thereto, constitute valid and
binding obligations of Tribune enforceable against it in accordance with their
terms, subject to bankruptcy, insolvency, moratorium and other principles or
equity.
SECTION 5.4. CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set
forth in Section 5.4 of the Tribune Disclosure Statement, and except for filings
and Permits as may be required under, and other applicable requirements of, the
Exchange Act, the Securities Act (including the filing with the SEC of the
Registration Statement), Blue Sky Laws, the HSR Act and the DGCL, none of the
execution, delivery or performance of this Agreement or the Voting Agreement by
Tribune nor the consummation by Tribune of the transactions contemplated hereby
or thereby will (a) conflict with or result in any breach of any provision of
the certificate of incorporation or by-laws of Tribune; (b) require any
Authorization of any Governmental Entity; (c) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
(or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any Contract
to which Tribune or any of its Subsidiaries is a party or by which any of them
or any of their properties or assets may be bound; or (d) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Tribune, any
of its Subsidiaries or any of their properties or assets, except in the case of
clauses (b), (c) or (d) for failures to obtain authorizations, violations,
breaches or defaults that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Tribune or prevent
or materially delay the consummation of the Offer or the Merger.
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SECTION 5.5. REPORTS AND FINANCIAL STATEMENTS. Tribune has timely
filed all registration statements, prospectuses, forms, reports and documents
required to be filed by it under the Securities Act or the Exchange Act since
January 1, 1998 (collectively, the "TRIBUNE SEC REPORTS"). The Tribune SEC
Reports (a) as of their respective dates, were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
(b) did not, at the time they were filed, contain any untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Each of the consolidated balance sheets
(including the related notes) included in the Tribune SEC Reports and the
audited consolidated balance sheet of Tribune as of December 26, 1999 (including
the related notes) attached to Section 5.5 of the Tribune Disclosure Statement
presents fairly, in all material respects, the consolidated financial position
of Tribune and its Subsidiaries as of the respective dates thereof, and the
other related statements (including the related notes) included in the Tribune
SEC Reports and the other related audited statements of Tribune as at or for the
period ended December 26, 1999 (including the related notes) attached to Section
5.5 of the Tribune Disclosure Statement present fairly, in all material
respects, the results of operations and the changes in financial position of
Tribune and its Subsidiaries for the respective periods or as of the respective
dates set forth therein, all in conformity with GAAP consistently applied during
the periods involved, except as otherwise noted therein and subject, in the case
of the unaudited interim financial statements, to normal year-end adjustments.
All of the Tribune SEC Reports, as of their respective dates, complied as to
form in all material respects with the requirements of the Exchange Act and/or
the Securities Act, as applicable, and the applicable rules and regulations
thereunder.
SECTION 5.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 26,
1999, there has not been (a) any Material Adverse Effect on Tribune or any
event, change, effect or development that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on Tribune
or (b) any action taken by Tribune or any of its Subsidiaries from December 26,
1999 through the date of this Agreement that, if taken during the period from
the date of this Agreement through the Effective Time, would constitute a breach
of Section 6.2.
SECTION 5.7. NO UNDISCLOSED LIABILITIES. Except as and to the extent
disclosed or reserved against on the balance sheet of Tribune as of December 26,
1999 attached to Section 5.5 of the Tribune Disclosure Statement or as incurred
after the date thereof in the ordinary course of business consistent with past
practice and not prohibited by this Agreement, neither Tribune nor any of its
Subsidiaries has any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by GAAP to be reflected
on a consolidated balance sheet of Tribune and its Subsidiaries (or disclosed in
the notes thereto).
SECTION 5.8. LITIGATION. There is no suit, claim, action, proceeding
or investigation pending or, to the knowledge of Tribune, threatened against
Tribune or any of its Subsidiaries that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Tribune or prevent
or materially delay the consummation of the Offer or the Merger. Neither Tribune
nor any of its Subsidiaries is subject to any outstanding order, writ,
injunction or decree that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on Tribune or prevent or materially
delay the consummation of the Offer or the Merger.
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SECTION 5.9. COMPLIANCE WITH APPLICABLE LAW. Tribune and its
Subsidiaries hold all Permits of all Governmental Entities necessary for the
lawful conduct of their respective businesses (the "TRIBUNE PERMITS"), except
for failures to hold such Permits that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Tribune
or prevent or materially delay consummation of the Offer of the Merger. Tribune
and its Affiliates are in compliance with the terms of the Tribune Permits,
except where the failure to so comply would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Tribune
or prevent or materially delay consummation of the Offer or the Merger. The
businesses of Tribune and its Subsidiaries are not being conducted in violation
of any Law, (including the Communications Act of 1934, as amended, and the rules
and regulations and published orders of the Federal Communications Commission
("FCC")), except for possible violations that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Tribune
or prevent or materially delay the consummation of the Offer or the Merger and
except as to Laws the effect or impact of which is specifically addressed
elsewhere in this Article V. No investigation or review by any Governmental
Entity with respect to Tribune or any of its Subsidiaries is pending or, to the
knowledge of Tribune, threatened, nor has any Governmental Entity indicated in
writing an intention to conduct any such investigation or review, other than, in
each case, those the outcome of which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Tribune
or prevent or materially delay the consummation of the Offer or the Merger. As
of the date hereof, to Tribune's knowledge, there is not pending or threatened
before the FCC any material investigation, proceeding, notice of violation,
order of forfeiture or complaint against Tribune or any of its Subsidiaries,
relating to any of the radio and television stations and associated facilities
for which Tribune or any of its Subsidiaries holds licenses from the FCC, in
each case which are owned or operated by Tribune or its Subsidiaries or relating
to FCC regulated services conducted by Tribune that, in each case, if adversely
decided, would have a Material Adverse Effect on Tribune.
SECTION 5.10. TAXES. (a) Notwithstanding the provisions of Article V,
the representations contained in this Section 5.10 are the only representations
of Tribune that relate to Taxes, and no other provisions of Article V are
intended to cover representations relating to Taxes. Tribune and its
Subsidiaries have filed all income Tax Returns and all other material United
States federal, state, county, local and foreign Tax Returns required to be
filed by them. Tribune and its Subsidiaries have paid all material Taxes due,
other than Taxes being contested in good faith or Taxes appropriate reserves for
which have been made in Tribune's financial statements included in Tribune's
audited financial statements contained in Section 5.5 of the Tribune Disclosure
Statement. There are no material assessments or adjustments that have been
asserted in writing against Tribune or its Subsidiaries for any period for which
Tribune has not made appropriate reserves in Tribune's audited financial
statements contained in Section 5.5 of the Tribune Disclosure Statement.
(b) There are no material claims or assessments pending against
Tribune or any of its Subsidiaries for any alleged deficiency in any Tax, and
Tribune has not been notified in writing of any proposed material Tax claims or
assessments against Tribune or any of its Subsidiaries (other than, in each
case, claims or assessments for which adequate reserves in Tribune's audited
financial statements contained in Section 5.5 of the Company Disclosure
Statement have been established or which are being contested in good faith or
are immaterial in
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amount). Subject to the qualifications set forth therein, there are no material
"deferred intercompany transactions" or "intercompany transactions" the gain or
loss in which would be required to be taken into account under the consolidated
return Treasury Regulations as a result of the Merger.
(c) There are no Liens for Taxes on the assets of Tribune or any of
its Subsidiaries, except for statutory Liens for current Taxes not yet due and
payable and except for Liens which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Tribune or prevent
or materially delay the consummation of the Offer or the Merger.
SECTION 5.11. INTELLECTUAL PROPERTY. Tribune and its Subsidiaries own,
or are validly licensed, or otherwise have the right to use, all Intellectual
Property Rights used in the conduct of their businesses, except where the
failure to own or possess valid rights to such would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Tribune
or prevent or materially delay consummation of the Offer or the Merger. Except
as set forth in Section 5.11 of the Tribune Disclosure Statement, no claims are
pending or, to the knowledge of Tribune, threatened that Tribune or any of its
Subsidiaries is infringing or otherwise adversely affecting the rights of any
Person with regard to any Intellectual Property Right which is reasonably
expected, individually or in the aggregate, to have a Material Adverse Effect on
Tribune or prevent or materially delay consummation of the Offer or the Merger.
To the knowledge of Tribune, except as set forth in Section 5.11 of Tribune
Disclosure Statement, no Person is infringing the rights of Tribune or any of
its Subsidiaries with respect to any Intellectual Property Right except for such
infringement that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Tribune or prevent or materially
delay consummation of the Offer or the Merger.
SECTION 5.12. REQUIRED VOTE. The Tribune Stockholder Approval is the
only vote of the holders of any capital stock of Tribune necessary under
applicable Law or otherwise to transactions contemplated hereby or by the Voting
Agreement.
SECTION 5.13. BROKERS. No broker, investment banker, financial advisor
or other Person, other xxxx Xxxxxxx Xxxxx & Co., the fees and expenses of which
will be paid by Tribune, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Tribune
ARTICLE VI
COVENANTS
SECTION 6.1. COMPANY INTERIM OPERATIONS. During the period from the
date of this Agreement through the Effective Time, the Company agrees as to
itself and its Subsidiaries that (except as set forth in Section 6.1 of the
Company Disclosure Statement, expressly contemplated or permitted by this
Agreement, or to the extent that Tribune shall otherwise consent in writing):
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(a) ORDINARY COURSE. The Company shall, and shall cause its
Subsidiaries to, carry on their respective businesses in all material respects
in the ordinary course consistent with past practice and shall use all
reasonable efforts to preserve intact their present business organizations, keep
available the services of their officers and key employees and preserve their
relationships with customers, suppliers and others having business dealings with
the Company and its Subsidiaries with the objective that the goodwill and
ongoing business of the Company and its Subsidiaries shall be unimpaired at the
Effective Time. Neither the Company nor any of its Subsidiaries shall engage in
the conduct of any business other than its existing businesses.
(b) DIVIDENDS; CHANGES IN STOCK. The Company shall not, and shall not
permit any of its Subsidiaries to, (i) declare or pay any dividends on or make
other distributions in respect of any of its capital stock, except (A) regular
dividends on outstanding Company Preferred Shares pursuant to the existing terms
of such securities, (B) regular quarterly cash dividends on outstanding Company
Common Shares, consistent with past practice, in an amount no greater than $0.22
per share per quarter (PROVIDED, that the Company and Tribune will cooperate
with respect to the record dates for dividends to be paid by the Company prior
to the Effective Time and by Tribune after the Effective Time so that the
holders of Company Common Shares do not receive dividends from both the Company
in respect of Company Common Shares and from Tribune in respect of Tribune
Common Shares, but will receive a dividend in respect of one or the other, for
any given quarter) and (C) dividends by a direct or indirect Wholly-Owned
Subsidiary of the Company to its parent entity, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (iii) repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or its Subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such shares
or other securities.
(c) ISSUANCE OF SECURITIES. The Company shall not, and shall not
permit any of its Subsidiaries to, issue, deliver, sell, pledge or encumber, or
authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any
shares of its capital stock of any class or any securities convertible into or
exchangeable for, or any rights, warrants, calls, subscriptions or options to
acquire, any such shares or convertible securities, or any other ownership
interest (including stock appreciation rights or phantom stock), other than the
issuance of Company Common Shares upon the exercise of Company Options
outstanding on the date of this Agreement and in accordance with the existing
terms of such Company Options.
(d) GOVERNING DOCUMENTS. The Company shall not, and shall not permit
any of its Subsidiaries to, amend or propose to amend its certificate of
incorporation or its by-laws (or similar organizational documents) or alter
through merger, liquidation, reorganization, restructuring or in any other
fashion the corporate structure or ownership of any of its Subsidiaries.
(e) LIQUIDATION OR MERGER; CHANGE OF CONTROL. The Company shall not,
and shall not permit any of its Subsidiaries to, (i) adopt a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization or (ii) enter into any agreement or
exercise any discretion providing for acceleration of payment or performance as
a result of a change of control of the Company or its Subsidiaries.
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(f) NO ACQUISITIONS. The Company shall not, and shall not permit any
of its Subsidiaries to, acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any Person (other than mergers between Wholly-Owned Subsidiaries and other than
such acquisitions in which the consideration is not individually in excess of
$25 million and not in the aggregate in excess of $100 million) or (ii) any
assets other than acquisitions in the ordinary course of business consistent
with past practice, which are not material, individually or in the aggregate, to
the Company and its Subsidiaries taken as a whole, and acquisitions of assets
that are not businesses or Persons and which are for consideration that is not
individually in excess of $25 million and not in the aggregate in excess of $100
million.
(g) NO DISPOSITIONS. Other than (i) dispositions in the ordinary
course of business consistent with past practice, which are not material,
individually or in the aggregate, to the Company and its Subsidiaries taken as a
whole, and (ii) dispositions of assets that are not businesses or Persons and
which are for consideration that is not individually in excess of $25 million
and not in the aggregate in excess of $100 million, the Company shall not, and
shall not permit any of its Subsidiaries to, sell, lease, license, encumber or
otherwise dispose of, or agree to sell, lease, license, encumber or otherwise
dispose of, any of its assets.
(h) INDEBTEDNESS. The Company shall not, and shall not permit any of
its Subsidiaries to, (i) incur any indebtedness for borrowed money or guarantee
any such indebtedness or issue or sell any debt securities or warrants or rights
to acquire any debt securities of the Company or any of its Subsidiaries,
guarantee any debt securities of others, enter into any "keep-well" or other
agreement to maintain any financial statement condition of another Person or
enter into any arrangement having the economic effect of any of the foregoing,
except for working capital borrowings incurred in the ordinary course of
business consistent with past practice and other indebtedness not in excess of
$100 million in the aggregate or (ii) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (A) to the
Company or any Wholly-Owned Subsidiary of the Company or (B) any advances to
employees in accordance with past practice.
(i) ADVICE OF CHANGES; FILINGS. The Company shall confer on a regular
and frequent basis with Tribune, report on operational matters and promptly
advise Tribune orally and in writing of any Material Adverse Effect on the
Company. The Company shall promptly provide to Tribune (and its counsel) copies
of all filings made by the Company with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby.
(j) TAX MATTERS. The Company shall not make any Tax election that
would have a material effect on the Tax liability of the Company or any of its
Subsidiaries or settle or compromise any material income Tax liability of the
Company or any of its Subsidiaries. The Company shall, before filing or causing
to be filed any material Tax Return of the Company or any of its Subsidiaries,
consult with Tribune and its advisors as to the positions and elections that may
be taken or made with respect to such Tax Return, and shall take such positions
or make such elections as the Company and Tribune shall jointly agree or,
failing such agreement, shall take positions or make elections consistent with
its past practice.
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(k) CAPITAL EXPENDITURES. The Company shall not, and shall not permit
any of its Subsidiaries to, enter into any Contracts, arrangements or
understandings requiring the purchase of equipment, materials, supplies or
services in excess of $10 million, for any individual Contract, arrangement or
understanding, or $50 million for all Contracts, arrangements or understandings
in the aggregate.
(l) DISCHARGE OF LIABILITIES. The Company shall not, and shall not
permit any of its Subsidiaries to, pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, of liabilities recognized or disclosed in the
most recent consolidated financial statements (or the notes thereto) of the
Company included in the Company SEC Reports filed prior to the date of this
Agreement or incurred since the date of such financial statements in the
ordinary course of business consistent with past practice.
(m) MATERIAL CONTRACTS. The Company shall not, and shall not permit
any of its Subsidiaries to enter into, modify in any material respect, amend in
any material respect or terminate (i) any Material Contract or any agreement set
forth in or of the type set forth in Section 4.10(b) of the Company Disclosure
Statement or (ii) any agreement having a term longer than one year and having an
aggregate value over its term greater than $10 million.
(n) AFFILIATES. The Company shall not, and shall not permit any of its
Subsidiaries to, enter into or amend or waive any right under any Contract with
any Affiliate of the Company (other than its Subsidiaries).
(o) LITIGATION AND CLAIMS. The Company shall not, and shall not permit
any of its Subsidiaries to, settle or compromise any material litigation, or
waive, release or assign any material rights or claims.
(p) EMPLOYEE MATTERS. Except as set forth in Section 6.1(p) of the
Company Disclosure Statement and except in connection with any employment offer
outstanding as of the date of this Agreement, the Company shall not, and shall
not permit any of its Subsidiaries to, (i) grant any increases in the
compensation of any of its directors, officers or employees, except for
increases required under employment agreements existing on the date of this
Agreement and increases for officers and employees in the ordinary course of
business consistent with past practice that, in any event, do not increase such
officer's or employee's aggregate cash compensation at target by more than 10%
over his aggregate cash compensation at target in effect on the date of this
Agreement, (ii) pay or agree to pay any pension retirement allowance or other
employee benefit not required or contemplated by any of the existing Company
Benefit Plans as in effect on the date of this Agreement, giving effect to any
modification to any Company Benefit Plan authorized by the Company's Board of
Directors prior to the date of this Agreement and previously delivered in
writing to Tribune, to any such director, officer or employee, whether past or
present, or to any other Person, (iii) pay or award or agree to pay or award any
stock option or equity incentive awards in excess of options to acquire 50,000
shares in the aggregate or in a manner that is inconsistent with past practice,
(iv) enter into any new, or amend any existing, employment, severance or
termination agreement with any such director, officer or employee which, in the
aggregate, would obligate the Company or its Subsidiaries to
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pay in excess of $1 million or (v) except as required to comply with applicable
Law, become obligated under any new Company Benefit Plan which was not in
existence on the date of this Agreement, or amend any such plan or arrangement
in existence on the date of this Agreement if such amendment would have the
effect of enhancing any benefits thereunder. The Company shall, as promptly as
practicable, provide Tribune with copies of any amendments to any Company
Benefit Plan (which shall be in accordance with the foregoing) made after the
date of this Agreement and prior to the Effective Time.
(q) ACCOUNTING. The Company shall not, and shall not permit any of its
Subsidiaries to, adopt any change, other than in the ordinary course of business
consistent with past practice or as required by the SEC or by law, in its
accounting policies, procedures or practices.
(r) OTHER ACTIONS. The Company shall not, and shall not permit any of
its Subsidiaries to, take any action that would, or that would reasonably be
expected to, result in (i) any of the representations and warranties of the
Company set forth in this Agreement becoming untrue or (ii) any of the
conditions set forth in Annex I or Section 8.1 or Section 8.3 not being
satisfied. The Company shall not, and shall not permit any of its Subsidiaries
to, authorize, recommend or propose (other than to T), or announce an intention
to, or enter into any Contract, agreement, commitment or arrangement to, do any
of the foregoing in this Section 6.1.
SECTION 6.2. TRIBUNE INTERIM OPERATIONS. During the period from the
date of this Agreement through the Effective Time, Tribune agrees that (except
as set forth in Section 6.2 of the Tribune Disclosure Statement, expressly
contemplated or permitted by this Agreement, or to the extent that the Company
shall otherwise consent in writing):
(a) DIVIDENDS; CHANGES IN STOCK. Tribune shall not declare or pay any
dividends on or make other distributions in respect of any of its capital stock,
except regular quarterly cash dividends (including any increases in the ordinary
course). The Company and Tribune will cooperate with respect to record dates for
dividends as provided in Section 6.1(b)(i)(B).
(b) GOVERNING DOCUMENTS. Tribune shall not amend or propose to amend
its certificate of incorporation or its by-laws in any manner that adversely
affects the rights of the Company's stockholders (it being understood that
neither the Tribune Charter Amendment nor the Tribune by-law amendments
contemplated hereby, nor any amendment to Tribune's Restated Certificate of
Incorporation increasing the number of authorized shares of common stock or
preferred stock of Tribune, will be deemed to affect adversely the rights of the
Company's stockholders).
(c) ACCOUNTING. Tribune shall not, and shall not permit any of its
Subsidiaries to, adopt any change, other than in the ordinary course of business
consistent with past practice or as required by the SEC or by law, in its
accounting policies, procedures or practices.
(d) NEW LINES OF BUSINESS. Tribune shall not, and shall not permit,
any of its Subsidiaries to, whether by merger, consolidation, acquisition or
otherwise, enter into any
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material line of business that is not part of, related to or in support of the
media business, other than incidentally as part of a larger acquisition within
an existing line of business.
(e) CERTAIN TRANSACTIONS. Tribune agrees that, prior to the Closing
Date, it shall not without the prior written consent of the Company (which
consent shall not be unreasonably withheld), agree to enter into any merger,
reorganization, share exchange, business combination or similar transaction
pursuant to which the stockholders of Tribune will receive any consideration
(whether payable in cash, securities, property or other consideration) in
exchange for their Tribune Common Shares unless (i) such transaction is not to
be consummated until after the Effective Time or the termination of this
Agreement pursuant to Section 9.1, (ii) such transaction would not be reasonably
expected to prevent or materially delay the consummation of the Merger, and
(iii) such transaction will not result in the Merger failing to qualify as a
reorganization under Section 368 of the Code.
(f) OTHER ACTIONS. Tribune shall not, and shall not permit any of its
Subsidiaries to, take any action that would, or that would reasonably be
expected to, result in (i) any of the representations and warranties of Tribune
set forth in this Agreement becoming untrue or (ii) any of the conditions set
forth in Section 8.1 or Section 8.2 not being satisfied. Tribune shall not, and
shall not permit any of its Subsidiaries to, authorize, recommend or propose
(other than to the Company), or announce an intention to, or enter into any
Contract, agreement, commitment or arrangement to, do any of the foregoing in
this Section 6.2.
SECTION 6.3. NO SOLICITATION. (a) Except as otherwise provided in this
Section 6.3, from the date hereof until the Effective Time or earlier
termination of this Agreement, the Company shall not, nor shall it permit any of
its Affiliates to, nor shall it authorize or permit any officer, director or
employee or any investment banker, attorney, accountant, agent or other advisor
or representative of the Company or any of its respective Affiliates to, (i)
solicit, initiate or encourage the submission of any Takeover Proposal, (ii)
enter into any Contract with respect to a Takeover Proposal or (iii) participate
in any discussions or negotiations regarding, or furnish to any Person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or could reasonably be
expected to lead to, any Takeover Proposal. The Company immediately shall cease
and cause to be terminated all existing discussions or negotiations with any
Persons conducted heretofore with respect to, or that could reasonably be
expected to lead to, any Takeover Proposal.
(b) The Company shall immediately advise Tribune orally and in writing
of any request for information or of any Takeover Proposal, the material terms
and conditions of such request or Takeover Proposal and the identity of the
Person making such request or Takeover Proposal. The Company will keep Tribune
fully and promptly informed of the status and details (including amendments or
proposed amendments) of any such request or Takeover Proposal.
(c) The Company may furnish information concerning its business,
properties or assets to any Person in response to a request for such information
made after the date of this Agreement which was not solicited, initiated or
encouraged, directly or indirectly, by the Company or any of its Affiliates or
their respective officers, directors, employees, investment
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bankers, attorneys, accountants, agents or other advisors, and may participate
in discussions and negotiations with such Person concerning a Takeover Proposal,
in each case if and only to the extent that (i) such Person has submitted a
written Takeover Proposal to the Company's Board of Directors which the Board of
Directors has determined in good faith, after consulting with and receiving
advice from the Company's outside legal and financial advisors, constitutes or
would reasonably be expected to result in a Superior Proposal and (ii) such
Person has entered into a confidentiality agreement with the Company that is no
less favorable to the Company than the Confidentiality Agreement. A "SUPERIOR
PROPOSAL" means a Takeover Proposal (a) that is more favorable to the Company
and its stockholders than the Offer and the Merger and (b) which is reasonably
capable of being consummated by the Person making such Takeover Proposal, taking
into account the legal, financial, regulatory and other aspects of such Takeover
Proposal. It is expressly understood and agreed that in determining whether a
Takeover Proposal constitutes a Superior Proposal, the Company's Board of
Directors shall consider (1) the impact that the consummation of such Takeover
Proposal would have on the editorial independence and quality of the Company's
properties and operations, (2) the ability of all the Company's stockholders to
receive stock consideration in exchange for their shares of stock of the Company
in the transaction contemplated by the Takeover Proposal in a manner that is
tax-free to the holders of such shares and (3) the factors set forth in Article
XI of the Company Charter. The Company will promptly provide to Tribune any
information regarding the Company provided to any Person making a Superior
Proposal which was not previously provided to Tribune. Nothing contained herein
shall affect any of the obligations of the parties to the Voting Agreement
contained in Paragraph 4 of the Voting Agreement.
(d) The Company's Board of Directors may withdraw or modify its
approval or recommendation of the Offer and the Merger in connection with a
Superior Proposal if (i) the Board of Directors determines in good faith, after
receipt of advice from outside counsel to the Company, that failure to do so
would be inconsistent with its fiduciary duties to the Company's stockholders
under applicable law and (ii) the Company notifies Tribune of any such
withdrawal or modification prior to its release to the public. Nothing contained
in this Agreement shall prevent the Board of Directors of the Company from
complying with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act.
(e) Notwithstanding anything to the contrary contained herein, the
Company shall not take any action to make the restrictions on business
combinations contained in Section 203 of the DGCL or the business combination
provisions currently contained in Article X of the Company Charter inapplicable
to any Takeover Proposal (including any Superior Proposal) prior to the
termination of this Agreement in accordance with its terms.
(f) Notwithstanding anything to the contrary contained herein, this
Agreement shall be submitted to the stockholders of the Company for the purpose
of approving this Agreement and the Merger, regardless of the recommendation or
any change in the recommendation of the Company's Board of Directors with
respect thereto.
SECTION 6.4. THIRD PARTY STANDSTILL AGREEMENTS. During the period from
the date of this Agreement until the Effective Time or earlier termination of
this Agreement, the Company shall not terminate, amend, modify or waive any
provision of any confidentiality or standstill agreement to which it or any of
its Subsidiaries is a party (other than any involving
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Tribune or its Subsidiaries). During such period, the Company agrees to enforce,
to the fullest extent permitted under applicable Law, the provisions of any such
agreements, including obtaining injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof in any
court of the United States or any state thereof having jurisdiction.
SECTION 6.5. CERTAIN LITIGATION. The Company agrees that, prior to the
termination of this Agreement pursuant to Article IX, it shall not settle any
litigation commenced after the date of this Agreement against the Company or any
of its directors by any stockholder of the Company relating to the Offer, the
Merger, this Agreement, the Voting Agreement or the other transactions
contemplated hereby, without the prior written consent of Tribune. In addition,
prior to the termination of this Agreement pursuant to Article IX, the Company
shall not voluntarily cooperate with any third party that may hereafter seek to
restrain or prohibit or otherwise oppose the Offer or the Merger and shall
cooperate with Tribune to resist any such effort to restrain or prohibit or
otherwise oppose the Offer or the Merger.
SECTION 6.6. INDEMNIFICATION. (a) The Company shall, to the fullest
extent permitted under applicable Law, indemnify and hold harmless and, after
the Effective Time, Tribune shall, to the fullest extent permitted under
applicable Law, indemnify and hold harmless, each present and former director
and officer of the Company and each Subsidiary of the Company and each such
individual who served at the request of the Company or any Subsidiary of the
Company as a director, officer, trustee, partner, fiduciary, employee or agent
of another corporation, partnership, joint venture, trust, pension or other
employee benefit plan or enterprise (collectively, the "INDEMNIFIED PARTIES")
against all costs and expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages, liabilities and settlement amounts
paid in connection with any claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), whether civil,
administrative or investigative, arising out of or pertaining to any action or
omission in their capacity as an officer or director of the Company or
Subsidiary of the Company, as applicable, in each case occurring prior to the
Effective Time (including the transactions contemplated by this Agreement).
(b) For six years from the Effective Time, Tribune shall use all
reasonable efforts to provide to the Company's current directors and officers
liability insurance protection of the same kind and scope as that provided by
the Company's directors' and officers' liability insurance policies in effect on
the date of this Agreement (true and complete copies of which have been made
available to T); PROVIDED, however, that in no event shall Tribune be required
to expend more than 200% of the current amount expended by the Company as of the
date of this Agreement (the "INSURANCE AMOUNT") to maintain or procure insurance
coverage pursuant hereto, and PROVIDED, further, that if Tribune is unable to
maintain or obtain the insurance called for by this Section 6.6(b), Tribune
shall use all reasonable efforts to obtain as much comparable insurance as
available for the Insurance Amount).
SECTION 6.7. LISTING OF TRIBUNE COMMON SHARES. Tribune will use all
reasonable efforts to cause the Tribune Common Shares to be issued in the Merger
pursuant to this Agreement to be listed for trading on the NYSE, subject to
official notice of issuance, prior to the Effective Time.
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SECTION 6.8. GOVERNANCE MATTERS. (a) Board of Directors. The Board of
Directors of Tribune shall take all necessary action such that, as of the
Effective Time, the Board of Directors of Tribune shall be increased by four
directorships, consisting of two additional directorships with respect to the
class ("CLASS I") of directors to be elected in 2001, one additional
directorship with respect to the class ("CLASS II") of directors to be elected
in 2002 and one additional directorship with respect to the class ("CLASS III")
of directors to be elected in 2003. The Board of Directors of Tribune shall take
all necessary action such that the individuals named on Schedule 6.8 are elected
to fill the newly created directorships in each such Class, as set forth on
Schedule 6.8, immediately after the effectiveness of such directorships.
(b) TRIBUNE CHARTER AND BY-LAWS. The Board of Directors of Tribune
shall take all action necessary such that the Tribune Charter Amendment
containing the terms set forth in Exhibit B, and the amendments to the By-laws
of Tribune set forth in Exhibit C, are effective as of the Effective Time.
(c) SUBSIDIARY ACTIONS. The Board of Directors of Tribune shall take
the actions set forth in Exhibit D hereto.
(d) BENEFICIARIES. Xxxxxxxx Trust I and Xxxxxxxx Trust II shall have
the power to enforce this Section 6.8 as third party beneficiaries hereof.
(e) Tribune covenants to take all necessary actions to amend the
Rights Agreement (as defined in the definition of "Rights") to permit Xxxxxxxx
Trust I and Xxxxxxxx Trust II, and the trustees of each, to beneficially own the
Tribune Common Shares acquired by them pursuant to this Agreement, or otherwise
beneficially owned by them as of the Effective Time, without becoming an
"Acquiring Person" or causing any other adverse consequences under the Rights
Agreement so long as they do not acquire beneficial ownership of any additional
Tribune Common Shares after the Effective Time.
SECTION 6.9. EMPLOYEE BENEFITS.
(a) OBLIGATIONS OF TRIBUNE; CONTINUANCE OF BENEFITS. For a period of
one year immediately following the Effective Time, the coverage and benefits
provided to employees and former employees of the Company and its Subsidiaries
("COMPANY EMPLOYEES") pursuant to employee benefits plans or arrangements
maintained by Tribune or any of its Subsidiaries shall be no less favorable, in
the aggregate, than those provided to such employees immediately prior to the
Effective Time. Except as provided in Sections 3.4 and 6.9(c), notwithstanding
the foregoing, nothing herein shall require (i) the continuation of any
particular benefit plan or prevent the amendment or termination thereof (subject
to the maintenance, in the aggregate, of the benefits) or (ii) Tribune to
continue or maintain any stock option, stock purchase or other incentive plan
related to the equity of the Company.
(b) PRE-EXISTING LIMITATIONS; DEDUCTIBLE; SERVICE CREDIT. With respect
to any incentive, benefits and perquisite plans and programs ("BENEFIT PLANS")
of Tribune or any Subsidiary of Tribune in which the Company Employees
participate effective as of the Effective Time or thereafter, Tribune shall: (i)
waive any limitations as to pre-existing conditions, exclusions and waiting
periods with respect to participation and coverage requirements
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applicable to the Company Employees under any Benefit Plan that is an employee
welfare benefit within the meaning of Section 3(1) of ERISA ("Welfare Plan") in
which such Company Employees may be eligible to participate after the Effective
Time (PROVIDED, however, that no such waiver shall apply to a pre-existing
condition, exclusion or waiting period applicable to any Company Employee to the
extent that he or she was, as of the Effective Time, excluded from participation
in a Company Benefit Plan by reason of such pre-existing condition, exclusion or
waiting period, and PROVIDED, further, that no such waiver shall apply to a
pre-existing condition, exclusion or waiting period of any Company Employee
unless the Company Employee enrolls in the applicable Welfare Plan when first
eligible to do so), (ii) in the event Company Employees are transferred to a new
Welfare Plan within the plan year beginning January 1, 2000, for purposes of
accumulating annual deductibles, co-payments and out-of-pocket requirements,
provide each Company Employee with credit for any co-payments and deductibles
paid prior to the Effective Time, but within such plan year, for purposes of
satisfying any applicable deductible or out-of-pocket requirements under any
Welfare Plan in which such employees may be eligible to participate after the
Effective Time, and (iii) recognize all service of the Company Employees with
the Company, for all purposes other than benefit accrual, in any Benefit Plan in
which such Company Employees may be eligible to participate after the Effective
Time. Prior to the Effective Time, the Board of Directors of Tribune, or an
appropriate committee of non-employee directors thereof, shall adopt a
resolution consistent with the interpretive guidance of the SEC so that the
acquisition by any officer or director of the Company who may become a covered
person of Tribune for purposes of Section 16 of the Exchange Act and the rules
and regulations thereunder ("SECTION 16") of Tribune Common Shares or options to
acquire Tribune Common Shares pursuant to this Agreement and the Merger shall be
an exempt transaction for purposes of Section 16.
(c) EMPLOYMENT AND SEVERANCE ARRANGEMENTS. As of the Effective Time,
Tribune shall assume, honor and perform in accordance with their terms all
employment, severance, change in control and other such agreements of the
Company and its Subsidiaries and Affiliates, giving effect to any amendment or
modification to any such agreement authorized by the Company's Board of
Directors prior to the date of this Agreement (the "EMPLOYMENT ARRANGEMENTS").
With respect to the Times Mirror Deferred Compensation Plan For Executives and
the Deferred Plan for Directors Fees, Tribune shall credit 9% interest per
annum, cumulative, from the date any amount is credited to a participant under
any such plans effective with respect to all amounts credited under such plans
as of the Effective Time, and on all amounts which may be deferred under such
plans in connection with the Merger or any termination of any employment related
thereto, whether credited with respect to deferrals before or after the
Effective Time until all such amounts are paid under the plan in accordance with
its terms. Tribune shall pay the reasonable attorney's fees of the individual
party to the applicable Employment Arrangement in the event such individual
party files a claim in good faith to enforce Tribune's obligations and prevails
in such action. Such individual parties are hereby specifically made a third
party beneficiary of this Section 6.9(c).
(d) SUCCESSOR OBLIGATIONS. Notwithstanding any other provision of this
Agreement, in the event Tribune sells or otherwise disposes of any Subsidiary of
the Company coincident with or within one year after the Effective Time, Tribune
shall require as a condition of such sale or disposition that the buyer shall
assume all obligations of Tribune under this Section 6.9. In the alternative,
Tribune may elect to guarantee the payment of such obligations.
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ARTICLE VII
ADDITIONAL ARRANGEMENTS
SECTION 7.1. REGISTRATION STATEMENT; PROXY STATEMENT. (a) As promptly
as practicable after the execution of this Agreement, Tribune and the Company
shall prepare and file with the SEC a joint proxy statement relating to the
meeting of the Company's stockholders to be held in connection with the Merger
and the meeting of Tribune's stockholders to be held in connection with the
Merger, including the Share Issuance and the Tribune Charter Amendment (together
with any amendments thereof or supplements thereto, the "PROXY STATEMENT"), and
Tribune shall prepare and file with the SEC a registration statement on Form S-4
(together with all amendments thereto, the "REGISTRATION STATEMENT") in which
the Proxy Statement shall be included as a prospectus, in connection with the
registration under the Securities Act of the Tribune Common Shares to be issued
to the stockholders of the Company pursuant to the Merger. Each of Tribune and
the Company will use all reasonable efforts to cause the Registration Statement
to become effective as promptly as practicable, and, prior to the effective date
of the Registration Statement, Tribune shall take all or any action required
under any applicable federal or state securities Laws in connection with the
issuance of Tribune Common Shares in the Merger. Each of Tribune and the Company
shall furnish all information concerning it and the holders of its capital stock
as the other may reasonably request in connection with such actions and the
preparation of the Registration Statement and the Proxy Statement. As promptly
as practicable after the Registration Statement shall have become effective,
each of the Company and Tribune shall mail the Proxy Statement to its
stockholders.
(b) No amendment or supplement to the Proxy Statement or the
Registration Statement will be made by Tribune or the Company without the
approval of the other party (which approval shall not be unreasonably withheld
or delayed). Tribune and the Company each will advise the other, promptly after
it receives notice thereof, of the time when the Registration Statement has
become effective or any supplement or amendment has been filed, of the issuance
of any stop order, the suspension of the qualification of the Tribune Common
Shares issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for an amendment of the Proxy Statement
or the Registration Statement or comments thereon and responses thereto or
requests by the SEC for additional information.
(c) The information supplied by Tribune for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of the Company, (iii) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to stockholders of
Tribune, (iv) the time of the Company Stockholders' Meeting, (v) the time of the
Tribune Stockholders' Meeting and (vi) the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. If at any time prior to the Effective Time any event or circumstance
relating to Tribune or any of its Subsidiaries, or their respective officers or
directors, should be discovered by Tribune which should be set forth in an
amendment or a supplement to the Registration Statement or Proxy Statement,
Tribune shall promptly inform the Company. All documents that Tribune is
responsible for filing with the SEC in connection with the transactions
contemplated hereby will comply as to form and substance in all material
respects with the applicable
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requirements of the Securities Act and the rules and regulations thereunder and
the Exchange Act and the rules and regulations thereunder.
(d) The information supplied by the Company for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of the Company, (iii) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to stockholders of
Tribune, (iv) the time of the Company Stockholders' Meeting, (v) the time of the
Tribune Stockholders' Meeting and (vi) the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. If at any time prior to the Effective Time any event or circumstance
relating to the Company or any of its Subsidiaries, or their respective officers
or directors, should be discovered by the Company which should be set forth in
an amendment or a supplement to the Registration Statement or Proxy Statement,
the Company shall promptly inform Tribune. All documents that the Company is
responsible for filing with the SEC in connection with the transactions
contemplated herein will comply as to form and substance in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations thereunder and the Exchange Act and the rules and regulations
thereunder.
SECTION 7.2. STOCKHOLDERS' MEETINGS.
(a) COMPANY STOCKHOLDERS' MEETING. The Company shall call and hold a
meeting of its stockholders (the "COMPANY STOCKHOLDERS' MEETING") as promptly as
practicable for the purpose of voting upon the approval of this Agreement and
the Merger, and the Company shall use its best efforts to hold the Company
Stockholders' Meeting as soon as practicable after the date on which the
Registration Statement becomes effective.
(b) TRIBUNE STOCKHOLDERS' MEETING. Tribune shall call and hold a
meeting of its stockholders (the "TRIBUNE STOCKHOLDERS' MEETING") as promptly as
practicable for the purpose of voting upon the approval of this Agreement and
the Merger, including the Share Issuance and the Tribune Charter Amendment, and
Tribune shall use its best efforts to hold the Tribune Stockholders' Meeting as
soon as practicable after the date on which the Registration Statement becomes
effective.
SECTION 7.3. ACCESS TO INFORMATION. Except as required pursuant
to any confidentiality agreement or similar agreement or arrangement to which
the Company or Tribune or any of their respective Subsidiaries is a party (which
such Person shall use reasonable best efforts to cause the counterparty thereto
to waive) or pursuant to applicable Law or the regulations or requirements of
any stock exchange or other regulatory organization with whose rules the parties
are required to comply, from the date of this Agreement to the Effective Time,
each party shall (and shall cause its Subsidiaries to): (a) provide to the other
party (and its officers, directors, employees, accountants, consultants, legal
counsel, agents and other representatives, collectively, "REPRESENTATIVES")
access at reasonable times upon prior notice to the officers, employees, agents,
properties, offices and other facilities of such party and its subsidiaries and
to the books and records thereof and (b) furnish promptly such information
concerning the business, properties, contracts, assets, liabilities, personnel
and other aspects of
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such party and its subsidiaries as the other party or its Representatives may
reasonably request. No investigation conducted pursuant to this Section 7.3
shall affect or be deemed to modify any representation or warranty made in this
Agreement. Each party will hold any information so obtained which is non-public
in accordance with the provisions of the Confidentiality Agreement.
SECTION 7.4. REASONABLE BEST EFFORTS. Each of the Company and Tribune
agrees to use reasonable best efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements that may be imposed on
itself with respect to the Offer and the Merger (which actions shall include
furnishing all information required under the HSR Act and in connection with
approvals of or filings with any other Governmental Entity) and shall promptly
cooperate with and furnish information to each other in connection with any such
requirements imposed upon any of them or any of their Subsidiaries in connection
with the Offer and the Merger. Each of the Company and Tribune shall, and shall
cause its Subsidiaries to, use reasonable best efforts to take all actions
necessary to obtain (and shall cooperate with each other in obtaining) any
Authorization of, or any exemption by, any Governmental Entity or other public
or private third party required to be obtained or made by Tribune, the Company
or any of their Subsidiaries in connection with the Offer and the Merger or the
taking of any action contemplated thereby or by this Agreement or the Voting
Agreement; PROVIDED, that Tribune shall not be required to agree, and the
Company shall not agree without Tribune's consent, to waive any substantial
rights or to accept any substantial limitation on its operations or to dispose
of any material assets in connection with obtaining any such Authorization
unless such waiver, limitation or disposition would not reasonably be expected
to have a Material Adverse Effect on the Company or on Tribune, and PROVIDED,
further, that at Tribune's written request, the Company shall agree to any such
waiver, limitation or disposal, which agreement may, at the Company's option, be
conditioned upon and effective only as of the Effective Time.
SECTION 7.5. NOTICES OF CERTAIN EVENTS. Each of the Company and
Tribune shall promptly notify the other of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental Entity in
connection with the transactions contemplated by this Agreement;
(c) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be reasonably expected to cause any
representation or warranty contained herein to be untrue or inaccurate in any
material respect at any time during the period commencing on the date of this
Agreement and ending at the Effective Time; and
(d) any failure of such party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
PROVIDED, however, that the delivery of any notice pursuant to this Section 7.5
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
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SECTION 7.6. TAX-FREE REORGANIZATION. (a) Prior to the Effective Time,
each party shall use its reasonable best efforts to cause the Merger to qualify
as a reorganization within the meaning of the provisions of Section 368 of the
Code ("368 REORGANIZATION"), and shall not knowingly take any action that would
cause the Merger not to so qualify. Tribune shall not knowingly take any action
after the Effective Time that would cause the Merger not to qualify as a 368
Reorganization.
(b) Each party shall use its reasonable best efforts to obtain the
opinions referred to in Sections 8.2(c) and 8.3(c).
SECTION 7.7. PUBLIC ANNOUNCEMENTS. So long as this Agreement is in
effect, the Company and Tribune will consult with each other before issuing any
press release or making any public statement with respect to this Agreement or
the transactions contemplated hereby and, subject to the immediately following
sentence will not issue any such press release or make any such public statement
without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, any such press
release or public statement as may be required by applicable Law or any listing
agreement with any national securities exchange may be issued without such
consent, if the party making such release or statement has used its reasonable
efforts to consult with the other party.
SECTION 7.8. AFFILIATES OF THE COMPANY. Within 30 days following the
date of this Agreement, the Company shall deliver to Tribune a letter
identifying all known Persons who may be deemed affiliates of the Company under
Rule 145 of the Securities Act (a "RULE 145 AFFILIATE"). The Company shall use
its reasonable best efforts to obtain a written agreement from each Rule 145
Affiliate as soon as practicable and, in any event, at least 30 days prior to
the Effective Time, substantially in the form of Exhibit E hereto.
SECTION 7.9. CHARITABLE CONTRIBUTIONS. For five years after the
Effective Time, Tribune will continue the existence and operation of the Times
Mirror Foundation (the "Foundation") and fund charitable contributions of the
Foundation consistent with past practice.
SECTION 7.10. VOTING AGREEMENT. Tribune shall not agree to any
amendment to the proviso contained in Paragraph 3 of the Voting Agreement
without the prior consent of the Board of Directors of the Company, which may be
withheld in the Board of Directors' sole discretion.
ARTICLE VIII
CONDITIONS PRECEDENT
SECTION 8.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing of the following conditions:
(a) STOCKHOLDER APPROVAL. Each of the Company Stockholder Approval and
the Tribune Stockholder Approval shall have been obtained.
(b) HSR PERIOD. The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
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(c) NO INJUNCTIONS OR RESTRAINTS. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; PROVIDED, however, that each of
the parties shall have used reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any injunction
or other order that may be entered, subject to the provisos set forth in the
last sentence of Section 7.4.
(d) REGISTRATION STATEMENT. The Registration Statement shall have been
declared effective and shall be effective at the Effective Time, and no stop
order suspending effectiveness shall have been issued, no action, suit,
proceeding or investigation by the SEC to suspend the effectiveness thereof
shall have been initiated and be continuing, and all necessary approvals under
state securities Laws or the Securities Act or the Exchange Act relating to the
issuance or trading of the Tribune Common Shares to be issued hereunder shall
have been received.
(e) LISTING OF TRIBUNE SHARES. The Tribune Common Shares to be issued
in the Merger shall have been approved for listing on the NYSE, subject only to
official notice of issuance.
SECTION 8.2. CONDITIONS TO THE COMPANY'S OBLIGATION TO EFFECT THE
MERGER.
The obligation of the Company to effect the Merger shall be subject to
the satisfaction at or prior to the Closing Date of the following additional
conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND WARRANTIES.
(i) Tribune shall have performed in all material respects each of its agreements
contained in this Agreement required to be performed at or prior to the
Effective Time and (ii) each of the representations and warranties of Tribune
contained in this Agreement that is qualified by materiality shall be true and
correct on and as of the Closing Date as if made on and as of such date (other
than to the extent that any such representation and warranty, by its terms, is
expressly limited to a specific date, in which case such representation and
warranty shall be true and correct as of such date) and each of such
representations and warranties that is not so qualified shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of such date (other than to the extent that any such representation and
warranty, by its terms, is expressly limited to a specific date, in which case
such representation and warranty shall be true and correct in all material
respects as of such date).
(b) OFFICER'S CERTIFICATE. Tribune shall have furnished to the Company
a certificate, dated the Closing Date, signed on behalf of Tribune by an
executive officer of Tribune, certifying to the effect that the conditions set
forth in Section 8.2(a) have been satisfied in full.
(c) TAX OPINION. The Company shall have received an opinion of Xxxxxx,
Xxxx & Xxxxxxxx LLP in form and substance reasonably satisfactory to the
Company, on the basis of certain facts, representations and assumptions set
forth in such opinion, dated the Effective Time, to the effect that the Merger
will be treated for federal income tax purposes as a
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368 Reorganization and that each of Tribune and the Company will be a party to
the reorganization within the meaning of Section 368 of the Code. In rendering
such opinion, such counsel shall be entitled to rely upon certain documentation
including representations of officers of the Company and Tribune.
Notwithstanding the foregoing, if the Offer has been made and Tribune
has purchased at least 15 million Company Common Shares pursuant to the Offer,
Section 8.2(a)(ii) shall not be a condition to the obligation of the Company to
effect the Merger and the certificate referred to in Section 8.2(b) shall only
be required to address satisfaction of the condition set forth in Section
8.2(a)(i).
SECTION 8.3. CONDITIONS TO TRIBUNE'S OBLIGATION TO EFFECT THE MERGER.
The obligation of Tribune to effect the Merger shall be subject to the
satisfaction at or prior to the Closing of the following additional conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND WARRANTIES.
(i) The Company shall have performed in all material respects each of its
agreements contained in this Agreement required to be performed at or prior to
the Effective Time and (ii) each of the representations and warranties of the
Company contained in this Agreement that is qualified by materiality shall be
true and correct on and as of the Closing Date as if made on and as of such date
(other than to the extent that any such representation and warranty, by its
terms, is expressly limited to a specific date, in which case such
representation and warranty shall be true and correct as of such date) and each
of such representations and warranties that is not so qualified shall be true
and correct in all material respects on and as of the Closing Date as if made on
and as of such date (other than to the extent that any such representation and
warranty is, by its terms, expressly limited to a specific date, in which case
such representation and warranty shall be true and correct in all material
respects as of such date).
(b) OFFICER'S CERTIFICATE. The Company shall have furnished to Tribune
a certificate, dated the Closing Date, signed on behalf of the Company by an
executive officer of the Company, certifying to the effect that the conditions
set forth in Section 8.3(a) have been satisfied in full.
(c) TAX OPINION. Tribune shall have received an opinion of Wachtell,
Lipton, Xxxxx & Xxxx, in form and substance reasonably satisfactory to Tribune,
on the basis of certain facts, representations and assumptions set forth in such
opinion, dated the Effective Time, to the effect that the Merger will be treated
for federal income tax purposes as a 368 Reorganization and that each of Tribune
and the Company will be a party to the reorganization within the meaning of
Section 368 of the Code. In rendering such opinion, such counsel shall be
entitled to rely upon certain documentation including representations of
officers of the Company and Tribune
(d) OTHER AUTHORIZATIONS. All Authorizations and exemptions required
by any Governmental Entity and other Persons in connection with the Merger and
the transactions contemplated hereby and the Voting Agreement shall have been
obtained or made, except to the extent the failure to obtain or make such
Authorizations or exemptions would not, individually or
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in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company or on Tribune.
Notwithstanding the foregoing, if the Offer has been made and Tribune
has purchased at least 15 million Company Common Shares pursuant to the Offer,
Section 8.3(a)(ii) shall not be a condition to the obligation of Tribune to
effect the Merger and the certificate referred to in Section 8.3(b) shall only
be required to address satisfaction of the condition set forth in Section
8.3(a)(i).
ARTICLE IX
TERMINATION
SECTION 9.1. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after the Company Stockholder
Approval or the Tribune Stockholder Approval:
(a) by mutual written consent of Tribune and the Company;
(b) by either Tribune or the Company:
(i) if any Governmental Entity of competent jurisdiction shall
have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the
consummation of the Merger and such order, decree or ruling or other
action shall have become final and nonappealable;
(ii) (A) if, at the Company Stockholders' Meeting (including any
adjournment thereof), the Company Stockholder Approval shall not have
been obtained or (B) if, at the Tribune Stockholders' Meeting
(including any adjournment thereof), the Tribune Stockholder Approval
shall not have been obtained; or
(iii) if the Merger shall not have been consummated by December
31, 2000, unless the failure to consummate the Merger is the result of
a breach of this Agreement by the party seeking to terminate this
Agreement;
(c) by Tribune if the Company shall have (i) failed to perform in any
material respect any material obligation or to comply in any material respect
with any material agreement or covenant of the Company to be performed or
complied with by it under this Agreement or (ii) breached in any material
respect any of its representations or warranties contained in this Agreement,
which failure or breach described in such clause (i) or (ii) cannot be cured,
such that the condition set forth in Section 8.3(a) cannot be satisfied on or
prior to December 31, 2000; provided, that, if Tribune purchases at least 15
million Company Common Shares in the Offer, only clause (i) of this paragraph
(c) shall give rise to a right of termination.
(d) by Tribune if (i) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified in a manner adverse to
Tribune its approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any
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Takeover Proposal, or (ii) the Board of Directors of the Company or any
committee thereof shall have resolved to do any of the foregoing;
(e) by the Company if Tribune shall have (i) failed to perform in any
material respect any material obligation or to comply in any material respect
with any material agreement or covenant of Tribune to be performed or complied
with by it under this Agreement or (ii) breached in any material respect any of
its representations or warranties contained in this Agreement, which failure or
breach described in such clause (i) or (ii) cannot be cured, such that the
condition set forth in Section 8.2(a) cannot be satisfied on or prior December
31, 2000, provided, that, if Tribune purchases at least 15 million Company
Common Shares in the Offer, only clause (i) of this paragraph (e) shall give
rise to a right of termination.
SECTION 9.2. EFFECT OF TERMINATION. In the event of a termination of
this Agreement by either the Company or Tribune as provided in Section 9.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Tribune or the Company or their respective officers or
directors, except with respect to the last sentence of Section 7.3, Section 9.3
and this Section 9.2; PROVIDED, however, that nothing herein shall relieve any
party of liability for any material breach hereof.
SECTION 9.3. FEES AND EXPENSES. (a) Except as otherwise provided in
this Section 9.3, all costs and expenses incurred in connection with the Merger,
this Agreement and the transactions contemplated by this Agreement shall be paid
by the party incurring such fees or expenses, whether or not the Merger is
consummated; PROVIDED that the Company and Tribune shall share equally all fees
and expenses, other than attorneys' and accounting fees and expenses, incurred
in relation to the printing, filing and mailing of the Registration Statement
and the Proxy Statement.
(b) In the event (i) this Agreement is terminated by Tribune pursuant
to Section 9.1(d) or Section 9.1(b)(ii)(A) at any time after the Company's Board
of Directors has modified or withdrawn its approval or recommendation of the
Offer, the Merger or this Agreement or (ii)(A) prior to the time of the Company
Stockholder's Meeting a Takeover Proposal is made by a third party, (B) the
Company Stockholder Approval is not obtained and (C) on or prior to the 12-month
anniversary of the termination of this Agreement a Takeover Proposal is
consummated or the Company or any of its Subsidiaries or Affiliates enters into
an agreement or letter of intent (or resolves or announces an intention to do
so) with respect to a Takeover Proposal with a third party, then promptly
following such termination in the case of clause (i) or such event in the case
of clause (ii) the Company shall pay to Tribune the sum of $250 million in cash
(the "FEE"); PROVIDED, that payment of the Fee shall not prevent Tribune from
seeking any remedies available to it against the parties to the Voting Agreement
for a breach thereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time or the
termination of this Agreement.
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SECTION 10.2. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
(i) if to Tribune, to:
Tribune Company
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
and to:
Sidley & Austin
One Bank Xxx Xxxxx
00 Xxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(ii) if the Company, to:
The Times Mirror Company
Times Xxxxxx Xxxxxx Xxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
and to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
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or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. on a business
day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt.
SECTION 10.3. AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors at
any time before or after obtaining the Company Stockholder Approval or Tribune
Stockholder Approval, but, after any such approval, no amendment shall be made
which by Law requires further approval by the stockholders of the Company or
Tribune, as applicable, without obtaining such further approval. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
SECTION 10.4. EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (a) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by Law.
SECTION 10.5. INTERPRETATION. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or a
Section of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
SECTION 10.6. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
SECTION 10.7. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement (together with the Exhibits hereto, the Confidentiality Agreement and
the other documents and the instruments referred to herein) (a) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof,
and (b) except as provided in Sections 6.6, 6.8 and 6.9(c), is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
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SECTION 10.8. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without regard to
the conflicts of law rules of such State.
SECTION 10.9. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either of the
parties hereto (whether by operation of Law or otherwise) without the prior
written consent of the other party; provided, that Tribune may assign its rights
and obligations under this Agreement with respect to the Offer without the
consent of the Company to a Wholly-Owned Subsidiary of Tribune (provided that
such assignment shall not relieve the Company of its obligations hereunder).
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
SECTION 10.10. ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at Law or in equity. In
addition, each of the parties hereto (a) consents to submit such party to the
personal jurisdiction of any federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (b) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a federal court sitting in the State
of Delaware or a Delaware state court.
SECTION 10.11. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
SECTION 10.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
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IN WITNESS WHEREOF, Tribune and the Company have each caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
Tribune Company
By /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
The Times Mirror Company
By /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board,
President and
Chief Executive Officer
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ANNEX I
CONDITIONS TO THE OFFER. Notwithstanding any other provision of the
Offer, Tribune shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated
under the Exchange Act (relating to Tribune's obligation to pay for or return
tendered Company Common Shares promptly after termination or withdrawal of the
Offer), pay for, and (subject to any such rules or regulations) may delay the
acceptance for payment of any tendered Company Common Shares and (except as
provided in the Merger Agreement) amend or terminate the Offer as to any Company
Common Shares not then paid for if (i) there shall not have been validly
tendered and not withdrawn prior to the expiration of the Offer at least 15
million Company Common Shares (the "MINIMUM CONDITION") or (ii) any applicable
waiting period (and any extension thereof) under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer or (iii) at any
time after the date of the Merger Agreement and prior to the time of payment for
any such Company Common Shares (whether or not any Company Common Shares have
theretofore been accepted for payment or paid for pursuant to the Offer), any of
the following events shall occur and be continuing or conditions exists:
(a) there shall have been any action taken, or any statute, rule,
regulation, executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other Governmental Entity or other legal restraint or
prohibition which (i) prohibits, or makes illegal, the acceptance for payment,
payment for or purchase of Company Common Shares or the consummation of the
Offer, the Merger or the other transactions contemplated by this Agreement, (ii)
renders Tribune unable to accept for payment, pay for or purchase some or all of
the Company Common Shares , (iii) imposes material limitations on the ability of
Tribune to effectively exercise full rights of ownership of the Company Common
Shares , including the right to vote the Company Common Shares purchased by it
or (iv) otherwise has or is reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company or T; or
(b) the Merger Agreement shall have been terminated in accordance with
its terms or any event shall have occurred which gives Tribune the right to
terminate the Merger Agreement or not consummate the Merger; or
(c) since the date of the Merger Agreement there shall have occurred
any event, change, effect or development that, individually or in the aggregate
with any other event, change, effect or development, has had or would reasonably
be expected to have a Material Adverse Effect on the Company or prevent or
materially delay consummation of the Offer or the Merger; or
(d) (i) any of the representations and warranties of the Company
contained in the Merger Agreement that is qualified by materiality shall not be
true and correct in all respects as of the date of determination, as if made at
and as of such time (except to the extent that any such representation or
warranty, by its terms, is expressly limited to a specific date, in which case
such representation or warranty shall not be true and correct as of such date)
or (ii) any of such representations and warranties that is not so qualified
shall not be true and correct in all
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material respects as of the date of determination, as if made at and as of such
time (except to the extent that any such representation or warranty, by its
terms, is expressly limited to a specific date, in which case such
representation or warranty shall not be true and correct in all material
respects as of such date); or
(e) the Company shall have failed to perform in all material respects
each of its agreements contained in the Merger Agreement required to be
performed at or prior to the date of determination; or
(f) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation (whether or not mandatory) by any
Governmental Entity on, or other event that materially and adversely affects,
the extension of credit by banks or other lending institutions or (iv) in the
case of any of the foregoing existing at the time of the execution of the Merger
Agreement, a material acceleration or worsening thereof; or
(g) the Board of Directors of the Company or any committee thereof,
(i) shall have withdrawn or modified in a manner adverse to Tribune (including
by amendment of the Schedule 14D-9) its approval or recommendation of the Offer,
the Merger or the Merger Agreement or recommended or approved any Takeover
Proposal or (ii) shall have resolved to do any of the foregoing;
which in the good faith judgment of Tribune, in any such case, and regardless
of the circumstances (including any action or inaction by Tribune) giving rise
to such condition makes it inadvisable to proceed with the Offer or the
acceptance for payment of or payment for the Company Common Shares.
The foregoing conditions are for the sole benefit of Tribune and may
be waived by Tribune, in whole or in part, at any time and from time to time, in
the sole discretion of Tribune. The failure by Tribune at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time.
The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "MERGER
AGREEMENT" shall be deemed to refer to the Agreement to which this Annex I is
appended.
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