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EXHIBIT 3
October 23 , 1998
Pulitzer Publishing Company
000 Xxxxx Xxxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Ladies and Gentlemen:
Reference is hereby made to the Agreement and Plan of Merger by
and among Pulitzer Publishing Company ("Pulitzer"), Pulitzer Inc. ("New
Pulitzer") and Hearst-Argyle Television, Inc. ("Hearst-Argyle") dated as of May
25, 1998 (the "Merger Agreement"). Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed thereto in the Merger
Agreement.
Each of the undersigned (each, a "5% Stockholder") expects to
receive shares of New Pulitzer Class B Common Stock and New Pulitzer Common
Stock and shares of Hearst-Argyle Merger Stock pursuant to the proposed
reorganization transactions of Pulitzer contemplated by the Merger Agreement. It
has been explained to each 5% Stockholder that Pulitzer has requested a private
letter ruling from the IRS relating to the federal income tax treatment of
Pulitzer and its stockholders upon Pulitzer's distribution of New Pulitzer Stock
to its stockholders and such stockholders' exchange of shares of Pulitzer Class
B Common Stock and Pulitzer Common Stock for shares of Hearst-Argyle Merger
Stock in connection with the Contribution, the Distribution (the Contribution
and Distribution being collectively referred to herein as the "Spin-Off") and
the Merger.
In order to facilitate Pulitzer's request for a private letter
ruling from the IRS, each 5% Stockholder hereby represents that he, she or it
has no present plan or intention to dispose of any of the shares of
Hearst-Argyle Merger Stock or New Pulitzer Stock which he, she or it will
receive in the Spin-Off and the Merger and further agrees that in the absence of
unanticipated events or circumstances necessitating a change of his, her or its
present plans and intentions, he, she or it will not directly or indirectly
offer, offer to sell, contract to sell, pledge or grant any option to purchase
or otherwise dispose of or transfer (or announce any offer, offer to sell, sale,
contract to sell, pledge or grant any option to purchase or other disposition or
transfer) any of such shares of New Pulitzer Stock or Hearst-Argyle Merger Stock
for a period of one year after the Spin-Off and the Merger (the "Restricted
Period"), except for the following possible dispositions ("Permitted
Dispositions"):
(i) gifts of Hearst-Argyle Merger Stock or New Pulitzer Stock
to charitable organizations, charitable trusts or charitable
split-interest trusts (of which, in the case of a gift to a
charitable split-interest trust, the non-charitable beneficiary or
beneficiaries is or are such 5% Stockholder or one or more family
members, as defined in Section 267(c)(4) of the Code, of such 5%
Stockholder);
(ii) gifts of Hearst-Argyle Merger Stock or New Pulitzer
Stock for estate planning purposes to one or more family members
(as defined in Section 267(c)(4) of the Code) of such 5%
Stockholder or to entities if such 5% Stockholder or one or more
family members ( as defined in Section 267(c)(4) of the Code) of
such 5% Stockholder would be deemed under the constructive
ownership rules of Section 267(c)(1) of the Code to own the
Hearst-Argyle Merger Stock or New Pulitzer Stock owned by such
entity; and
(iii) simultaneous sales of such 5% Stockholder's
Hearst-Argyle Merger Stock and New Pulitzer Stock in amounts that
represent equal proportions of the Hearst-Argyle Merger Stock and
New Pulitzer Stock received by such 5% Stockholder in the Spin-Off
and the Merger.
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October 23 , 1998
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Notwithstanding the foregoing, all Permitted Dispositions by the 5% Stockholders
collectively during the Restricted Period will not exceed in the aggregate the
number of shares of either Hearst-Argyle stock or New Pulitzer stock having a
fair market value, immediately after the Spin-Off and the Merger, equal to 9.5%
of the fair market value of all of such corporation's outstanding stock at such
time. In this regard, each of the 5% Stockholders will be entitled to engage in
a Permitted Disposition during the Restricted Period only to the extent such
Permitted Disposition, when combined with all prior Permitted Dispositions by
such 5% Stockholder during the Restricted Period, will not exceed 3.15% of the
issued and outstanding stock of each of Hearst-Argyle and New Pulitzer, unless
otherwise agreed in writing by each of the other 5% Stockholders. For this
purpose, Marital Trust B U/I Xxxxxx Xxxxxxxx, Xx. Dated 6/12/74, as amended
10/20/92, and the Pulitzer Family Trust shall be considered a single 5%
Stockholder.
Each of the undersigned understands and acknowledges that Pulitzer
and the IRS will rely upon the representations set forth in this letter and
agrees that this letter shall be binding upon such 5% Stockholder and his, her
or its successors, heirs, personal representatives and assigns.
Very truly yours,
MARITAL TRUST B U/I XXXXXX XXXXXXXX,
XX. DATED 6/12/74, AS AMENDED 10/20/92
By: /s/ Xxxxx Xxxx Pulitzer
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Xxxxx Xxxx Pulitzer, Successor Trustee
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Successor Trustee
By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx, Successor Trustee
PULITZER FAMILY TRUST
By: /s/ Xxxxx Xxxx Pulitzer
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Xxxxx Xxxx Pulitzer, Trustee
TRUST DATED 3/22/82 FBO XXXXXXX X. XXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Trustee
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
