Exhibit 10(a)
SHAREHOLDERS' AGREEMENT dated as of
September 22, 1995, among Time Warner Inc., a
Delaware corporation ("Parent"), R. E.
▇▇▇▇▇▇, III, an individual (the "Principal
Shareholder"), and certain associates and
affiliates of the Principal Shareholder
listed on the signature pages hereto
(collectively with the Principal Shareholder,
the "Shareholders").
Parent, Time Warner Acquisition Corp. ("Sub"), a
Delaware corporation and a wholly owned subsidiary of Parent, and
▇▇▇▇▇▇ Broadcasting System, Inc. (the "Company"), a Georgia
corporation, are entering into an Agreement and Plan of Merger
dated as of the date hereof (as amended from time to time
pursuant to Section 1.01 thereof, the "Merger Agreement"). The
Merger (as defined in the Merger Agreement) is subject to certain
conditions, including the approval of the Merger and the approval
and adoption of the Merger Agreement: by the holders of a
majority of the outstanding shares of Class C Convertible
Preferred Stock, par value $.125 per share, of the Company (the
"Class C Preferred Stock"), voting as a separate class; by the
holders of a majority of the voting power of the outstanding
shares of Class A Common Stock, par value $.0625 per share, of
the Company (the "Class A Common Stock"), and Class B Common
Stock, par value $.0625 per share, of the Company (the "Class B
Common Stock"; together with the Class A Common Stock, the
"Common Stock"), voting as a single class; and by the holders of
a majority of the voting power of the outstanding shares of
Common Stock and Class C Preferred Stock, voting as a single
class.
Each Shareholder is the record and beneficial owner of
the shares of Class A Common Stock and Class B Common Stock (such
shares of Class A Common Stock and Class B Common Stock, together
with any shares of capital stock of the Company acquired by such
Shareholder after the date hereof and during the term of this
Agreement, being collectively referred to herein as the
"Shareholder Shares" of such Shareholder) set forth opposite such
Shareholder's name on Schedule I hereto.
As a condition to the willingness of Parent to enter
into the Merger Agreement, and as an inducement to it to do so,
each Shareholder has agreed for the benefit of Parent as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements contained
in this Agreement, the parties hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Capitalized terms used but not
defined herein, and the terms "affiliate", "person" and "subsidiary",
shall have the meanings assigned to such terms in the Merger
Agreement.
ARTICLE II
Covenants of the Shareholders
SECTION 2.01. Agreement to Vote. At any meeting of the
shareholders of the Company held prior to the Termination Date
(as defined in Section 5.04), however called, and at every
adjournment thereof prior to the Termination Date, or in
connection with any written consent of the shareholders of the
Company given prior to the Termination Date, each Shareholder
shall, and the Principal Shareholder shall cause any Shareholder
that is his controlled affiliate to, vote the Shareholder Shares
(and each class thereof) of such Shareholder that such
Shareholder is entitled to vote, (a) in favor of the approval of
the Merger and each of the other transactions contemplated by the
Merger Agreement and in favor of the approval and adoption of the
Merger Agreement, and any actions required in furtherance hereof
and thereof; (b) against any action or agreement that would,
directly or indirectly, result in a breach in any material
respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger
Agreement; and (c) against any takeover proposal (as defined in
the Merger Agreement) or any other action or agreement that,
directly or indirectly, is inconsistent with or that is
reasonably likely, directly or indirectly, to impede, interfere
with, delay, postpone or attempt to discourage the Merger or any
other transaction contemplated by the Merger Agreement. None of
the Shareholders shall, nor shall the Principal Shareholder
permit any Shareholder that is a
controlled affiliate of the Principal Shareholder to, enter into
any agreement or understanding with any person prior to the
Termination Date, directly or indirectly, to vote, grant any
proxy or give instructions with respect to the voting of the
Shareholder Shares of such Shareholder in any manner inconsistent
with the preceding sentence.
SECTION 2.02. Proxies and Voting Agreements. (a) Each
Shareholder hereby revokes any and all previous proxies granted with
respect to matters set forth in Section 2.01 for the Shareholder
Shares of such Shareholder.
(b) Prior to the Termination Date, none of the
Shareholders shall, nor shall the Principal Shareholder permit
any Shareholder that is a controlled affiliate of the Principal
Shareholder to, directly or indirectly, except as contemplated
hereby, grant any proxies or powers of attorney with respect to
matters set forth in Section 2.01, deposit any of the Shareholder
Shares owned by such Shareholder into a voting trust or enter
into a voting agreement with respect to any of the Shareholder
Shares, in each case with respect to such matters.
SECTION 2.03. Transfer of Shareholder Shares by any
Shareholder. Prior to the Termination Date, none of the
Shareholders shall, nor shall the Principal Shareholder permit
any Shareholder that is a controlled affiliate of the Principal
Shareholder to, (a) place any Encumbrance (as defined in the
Shareholders' Agreement (as defined in Section 3.01)) on any
Shareholder Shares of such Shareholder, other than pursuant to
this Agreement, or (b) make any Disposition (as defined in the
Shareholders' Agreement) of any Shareholder Shares owned by such
Shareholder, other than a disposition by operation of law in
connection with the Merger, if, in the case of this clause (b),
the effect thereof would be to create a Prohibited Effect (as
defined in the Shareholders' Agreement), determined as if The
▇▇▇▇▇▇ Foundation, Inc., and the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Charitable
Remainder Unitrust No. 2 (collectively, the "Specified Holders")
did not own any shares of Company Capital Stock.
SECTION 2.04. Dissenters' Rights. None of the
Shareholders shall, nor shall the Principal Shareholder permit
any Shareholder that is a controlled affiliate of the Principal
Shareholder to, give notice pursuant to Section 1321 of the
Georgia BCC of such Shareholder's intent to demand payment for
any shares of Company Capital Stock,
or take any other action to exercise dissenters' rights under
Article 13 of the Georgia BCC, if the Merger is effectuated.
ARTICLE III
Representations, Warranties and
Additional Covenants of the Shareholders
Each Shareholder represents, warrants and covenants to
Parent, as to himself or itself and, in the case of the Principal
Shareholder, as to each other Shareholder, that:
SECTION 3.01. Ownership. Such Shareholder is as of the
date hereof the beneficial and record owner of the Shareholder
Shares set forth opposite the name of such Shareholder on
Schedule I hereto, such Shareholder has the sole right to vote
such Shareholder Shares and there are no restrictions on rights
of disposition or other Liens pertaining to such Shareholder
Shares other than the Shareholders' Agreement dated as of June 3,
1987, as amended by the First Amendment dated as of April 15,
1988, among the Company, the Principal Shareholder and the
original holders of the Series C Preferred Stock (the
"Shareholders' Agreement"). None of the Shareholder Shares of
such Shareholder is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting
of such Shareholder Shares, other than the Shareholders'
Agreement.
SECTION 3.02. Authority and Non-Contravention. The
Principal Shareholder has the right, power and authority, and
each other Shareholder has the corporate power and authority (in
the case of a Shareholder that is a corporation), and in each
case such Shareholder has been duly authorized by all necessary
action (including consultation, approval or other action by or
with any other person), to execute, deliver and perform this
Agreement and consummate the transactions contemplated hereby.
Such actions by such Shareholder (a) require no action by or in
respect of, or filing with, any Governmental Entity with respect
to such Shareholder, other than any required filings under
Section 13 of the Exchange Act, and (b) do not and will not
contravene or constitute a default under, or give rise to a right
of termination, cancellation or acceleration of any right or
obligation of such Shareholder or to a loss
of any benefit of such Shareholder under, any provision of
applicable law or regulation or any agreement (including the
Shareholders' Agreement), judgment, injunction, order, decree or
other instrument binding on such Shareholder or result in the
imposition of any Lien on any asset of such Shareholder or any of
its affiliates (other than as provided in this Agreement with
respect to Shareholder Shares).
SECTION 3.03. Binding Effect. This Agreement has been
duly executed and delivered by such Shareholder and is the valid
and binding agreement of such Shareholder, enforceable against
such Shareholder in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium
or other similar laws relating to creditors' rights generally and
by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief are
subject.
SECTION 3.04. Total Shares. The Shareholder Shares
listed in Schedule I hereto opposite the name of such Shareholder
and, in the case of the Principal Shareholder, opposite the name
of the other Shareholders listed therein, are the only shares of
capital stock of the Company owned beneficially or of record as
of the date hereof by such Shareholder, and such Shareholder does
not have any option to purchase or right to subscribe for or
otherwise acquire any securities of the Company and has no other
interest in or voting rights with respect to any other securities
of the Company.
SECTION 3.05. Finder's Fees. No investment banker,
broker or finder is entitled to a commission or fee from the
Company, Parent or Sub in respect of this Agreement based upon
any arrangement or agreement made by or on behalf of such
Shareholder, except as otherwise provided in the Merger Agreement
or the Company Disclosure Letter.
SECTION 3.06. Reasonable Efforts. (a) Prior to the
Termination Date, the Principal Shareholder shall use reasonable
efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with Parent in
doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable,
the Merger and the other transactions contemplated by the Merger
Agreement and this Agreement, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals
from Governmental Entities and the making of all necessary
registrations and filings (including any necessary filings under
the HSR Act relating to the acquisition of the Company or
relating to the acquisition of Parent Common Stock in the Merger
and all other necessary filings with Governmental Entities, if
any) and the taking of all reasonable steps as may be necessary
to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties,
(iii) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging the Merger
Agreement or this Agreement or the consummation of any of the
transactions contemplated by the Merger Agreement and this
Agreement, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental
Entity vacated or reversed, and (iv) the execution and delivery
of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes
of, the Merger Agreement and this Agreement.
(b) On or prior to the Closing Date, each Shareholder
shall execute and deliver to Parent the Investors' Agreement in
the form attached as Exhibit C-1 to the Merger Agreement.
SECTION 3.07. Certain Payments. (a) If the Merger
Agreement is terminated pursuant to Section 7.01(e) of the Merger
Agreement, each Shareholder shall pay to Parent an amount equal
to all profit (determined in accordance with Section 3.07(b)) of
such Shareholder from the consummation of any takeover proposal
(i) that is consummated within 18 months of such termination or
(ii) with respect to which a definitive agreement is executed
within 18 months of such termination. Such payment shall be made
by each Shareholder (A) within three business days of the receipt
of any cash consideration under such takeover proposal, in an
amount equal to the lesser of the profit of such Shareholder and
the aggregate consideration under such takeover proposal paid to
such Shareholder in cash; (B) within three business days after
receipt by such Shareholder of cash proceeds from the sale of any
non-cash consideration in the form of securities received on
consummation of such takeover proposal, but in any event within
30 days of such consummation, the lesser of the remaining profit
of such Shareholder and such cash proceeds; provided, however,
that if such securities have not been sold by such Shareholder at
the end of such 30-day period, such Shareholder shall transfer to
Parent (x) an amount of
such securities with a fair market value on the date of transfer
equal to the remaining profit of such Shareholder (or if the fair
market value of all such unsold securities is less than such
remaining profit, all such unsold securities) or (y) at the
option of such Shareholder, cash in an amount equal to such
remaining profit; and (C) within three business days after
receipt by such Shareholder of cash proceeds from the sale of any
other non-cash consideration received on consummation of such
takeover proposal, but in any event within six months of such
consummation, cash in an amount equal to the remaining profit of
such Shareholder. Each Shareholder shall use all reasonable
efforts to sell, within 30 days of such consummation, a portion
of such other non-cash consideration sufficient to provide cash
with which to pay over any profit of such Shareholder that
remains unpaid following the application of amounts under clauses
(A) and (B) above.
(b) The profit of any Shareholder, for the purposes of
Section 3.07(a), from any takeover proposal shall equal (i) the
aggregate consideration received by such Shareholder pursuant to
such takeover proposal, valuing any non-cash consideration
(including any residual interest in the Company) at its fair
market value on the date of such consummation, plus (ii) the fair
market value, on the date of disposition, of all Shareholder
Shares of such Shareholder disposed of after the termination of
the Merger Agreement and prior to the date of such consummation
less (iii) the aggregate consideration that would have been
issuable or payable to such Shareholder in the Merger, valuing
each share of Parent Common Stock at the average of the closing
price per share of Parent Common Stock, as reported on the NYSE
Composite Tape, for the five trading days ending on the trading
day prior to the first public announcement by the Company of its
intention to terminate the Merger Agreement to pursue a takeover
proposal, if the Merger had been consummated on the date of such
public announcement. For the purpose of determining the "profit"
of the Principal Shareholder, there shall be included an amount
equal to the profit that would have been realized by the
Specified Holders had they both been Shareholders and been
subject to this Section 3.07.
(c) Any payment of profit under this Section 3.07 shall
(i) if paid in cash, be paid by wire transfer of same day funds
to an account designated by Parent and (ii) if paid through the
transfer of securities, be paid through the
delivery of such securities, suitably endorsed for transfer, to
Parent at its address set forth in Section 5.08.
ARTICLE IV
Representations, Warranties and Covenants
of Parent
Parent represents, warrants and covenants to each
Shareholder that:
SECTION 4.01. Corporate Power and Authority. Parent has
all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The
execution, delivery and performance by Parent of this Agreement
and the consummation by Parent of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action on the part of Parent.
SECTION 4.02. Binding Effect. This Agreement has been
duly executed and delivered by Parent and is a valid and binding
agreement of Parent, enforceable against Parent in accordance
with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights generally and by equitable principles to
which the remedies of specific performance and injunctive and
similar forms of relief are subject.
SECTION 4.03. Investors' Agreement. On or prior to the
Closing Date, Parent shall execute and deliver to each
Shareholder the Investors' Agreement in the form attached as
Exhibit C-1 to the Merger Agreement.
ARTICLE V
Miscellaneous
SECTION 5.01. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring
such cost or expense.
SECTION 5.02. Further Assurances. From time to time, at the
request of Parent, in the case of a Shareholder, or at the request of
a Shareholder, in the case of
Parent, and without further consideration, each party shall
execute and deliver or cause to be executed and delivered such
additional documents and instruments and take all such further
action as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
SECTION 5.03. Specific Performance. Each Shareholder
agrees that Parent would be irreparably damaged if for any reason
such Shareholder fails to perform any of such Shareholder's
obligations under this Agreement, and that Parent would not have
an adequate remedy at law for money damages in such event.
Accordingly, Parent shall be entitled to seek specific
performance and injunctive and other equitable relief to enforce
the performance of this Agreement by such Shareholder. This
provision is without prejudice to any other rights that Parent
may have against such Shareholder for any failure to perform its
obligations under this Agreement.
SECTION 5.04. Amendments; Termination. This Agreement
may not be modified, amended, altered or supplemented, except
upon the execution and delivery of a written agreement executed
by the parties hereto. The representations, warranties, covenants
and agreements set forth in Article II and Sections 3.01 and 3.06
and Article IV shall terminate, except with respect to liability
for prior breaches thereof, upon the termination of the Merger
Agreement in accordance with its terms or, if earlier, the
Effective Time of the Merger (the "Termination Date").
SECTION 5.05. Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective estates, heirs,
successors and permitted assigns; provided, however, that a party
may not assign, delegate or otherwise transfer any of such
party's rights or obligations under this Agreement without the
consent of the other parties hereto and any purported assignment,
delegation or transfer without such consent shall be null and
void.
SECTION 5.06. Certain Events. Each Shareholder agrees
that this Agreement and the obligations hereunder shall attach to
the Shareholder Shares beneficially owned by such Shareholder and
shall be binding upon any person to which legal or beneficial
ownership of such shares shall pass, whether by operation of law
or otherwise.
SECTION 5.07. Entire Agreement. This Agreement
constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
SECTION 5.08. Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing
and shall be deemed given (i) on the first business day following
the date received, if delivered personally or by telecopy (with
telephonic confirmation of receipt by the addressee), (ii) on the
business day following timely deposit with an overnight courier
service, if sent by overnight courier specifying next day
delivery and (iii) on the first business day that is at least
five days following deposit in the mails, if sent by first class
mail, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to Parent, to:
Time Warner Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to any Shareholder, to:
R.E. ▇▇▇▇▇▇, III
c/o Turner Broadcasting System, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For Courier delivery:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
SECTION 5.09. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of the
State of Delaware.
SECTION 5.10. Counterparts; Effectiveness. This
Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement, and, as to
any Shareholder, shall become effective when two or more
counterparts have been signed by each of such Shareholder and
Parent and delivered to the other.
SECTION 5.11. Descriptive Headings. The descriptive headings
used herein are inserted for convenience of reference only and are
not intended to be part of or to affect the meaning or interpretation
of this Agreement.
SECTION 5.12. Severability. Whenever possible, each
provision or portion of any provision of this Agreement will be
interpreted in such manner as to be effective and valid but if any
provision or portion of any provision of
this Agreement is held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability will
not affect any other provision or portion of any provision, and
this Agreement will be reformed, construed and enforced as if
such invalid, illegal or unenforceable provision or portion of
any provision had never been contained herein. The parties shall
endeavor in good faith negotiations to replace any invalid,
illegal or unenforceable provision with a valid provision the
effects of which come as close as possible to those of such
invalid, illegal or unenforceable provision.
SECTION 5.13. Attorneys' Fees. If any action at law or
in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements, in addition
to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, Parent and the Shareholders have
caused this Agreement to be duly executed as of the day and year
first above written.
TIME WARNER INC.,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and CEO
/s/ R. E. ▇▇▇▇▇▇
-------------------------
R. E. ▇▇▇▇▇▇, III
▇▇▇▇▇▇ OUTDOOR, INC.,
by /s/ R. E. ▇▇▇▇▇▇
--------------------------
Name: R. E. ▇▇▇▇▇▇, III
Title: Chairman, President
and CEO
SCHEDULE I
to Shareholders' Agreement
Ownership of Shareholder Shares
(As of 9/20/95)
Class A Class B
Common Stock Common Stock
R.E. ▇▇▇▇▇▇ 57,170,091 16,756,313
▇▇▇▇▇▇ Outdoor, Inc. 559,962 559,962
Share amount does not include shares of Class B
Common Stock held by the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Charitable
Remainder Unitrust No. 2.
