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EXHIBIT 99.1
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.
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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
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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,
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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
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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
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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
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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
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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
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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.
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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.
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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
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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
