EXHIBIT 2.29
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
CHANCELLOR BROADCASTING COMPANY,
CHANCELLOR RADIO BROADCASTING COMPANY
AND
EVERGREEN MEDIA CORPORATION
Dated as of February 19, 1997
TABLE OF CONTENTS
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ARTICLE I
THE MERGER.................................. 2
1.1 THE MERGER............................................................ 2
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1.2 CLOSING............................................................... 2
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1.3 EFFECTIVE TIME........................................................ 2
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1.4 CERTIFICATE OF INCORPORATION.......................................... 2
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1.5 CERTIFICATE OF DESIGNATION............................................ 3
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1.6 BYLAWS................................................................ 3
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1.7 DIRECTORS............................................................. 3
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1.8 OFFICERS.............................................................. 4
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1.9 EFFECT ON EVERGREEN CAPITAL STOCK..................................... 4
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(a) Outstanding Evergreen Common Stock................................ 4
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(b) Exchange of Certificates.......................................... 5
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1.10 EFFECT ON COMPANY CAPITAL STOCK....................................... 5
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(a) Outstanding Shares................................................ 5
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(b) Treasury Shares................................................... 5
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(c) Outstanding Company Convertible Preferred Stock................... 5
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(d) Impact of Stock Splits, etc....................................... 5
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1.11 EFFECT ON RADIO BROADCASTING CAPITAL STOCK............................ 6
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(a) Outstanding Common Stock of Radio Broadcasting.................... 6
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(b) Outstanding 12 1/4% Series A Senior
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Cumulative Exchangeable Preferred Stock........................... 6
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(c) Outstanding 12% Exchangeable Preferred Stock...................... 6
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1.12 EXCHANGE OF CERTIFICATES.............................................. 6
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(a) Paying Agent...................................................... 6
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(b) Exchange Procedures............................................... 6
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(c) Letter of Transmittal............................................. 8
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(d) Distributions with Respect to Unexchanged Shares.................. 8
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(e) No Further Ownership Rights in Shares Company
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Convertible Preferred Stock and Radio Broadcasting
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Preferred Stock................................................... 8
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(f) No Fractional Shares.............................................. 9
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(g) Termination of Payment Fund....................................... 9
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(h) No Liability......................................................10
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1.13 DISSENTING SHARES.....................................................10
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EVERGREEN..........................11
2.1 ORGANIZATION, STANDING AND CORPORATE POWER............................11
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2.2 CAPITAL STRUCTURE...................................................... 12
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2.3 AUTHORITY; NONCONTRAVENTION............................................ 13
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2.4 SEC DOCUMENTS.......................................................... 15
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2.5 ABSENCE OR CERTAIN CHANGES OR EVENTS................................... 16
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2.6 NO EXTRAORDINARY PAYMENTS OR CHANGE IN BENEFITS........................ 17
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2.7 VOTING REQUIREMENTS.................................................... 17
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2.8 STATE TAKEOVER STATUTES................................................ 17
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2.9 EVERGREEN FCC LICENSES; OPERATIONS OF EVERGREEN
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LICENSED FACILITIES.................................................... 18
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2.10 BROKERS................................................................ 19
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2.11 OPINION OF FINANCIAL ADVISOR........................................... 19
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2.12 FCC QUALIFICATION ..................................................... 19
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2.13 COMPLIANCE WITH APPLICABLE LAWS........................................ 19
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2.14 ABSENCE OF UNDISCLOSED LIABILITIES..................................... 20
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2.15 LITIGATION............................................................. 20
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2.16 TRANSACTIONS WITH AFFILIATES........................................... 20
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND RADIO BROADCASTING.......................... 21
3.1 ORGANIZATION, STANDING AND CORPORATE POWER............................. 21
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3.2 COMPANY AND RADIO BROADCASTING CAPITAL STRUCTURE....................... 21
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3.3 AUTHORITY; NONCONTRAVENTION............................................ 23
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3.4 SEC DOCUMENTS.......................................................... 25
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3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS................................... 26
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3.6 NO EXTRAORDINARY PAYMENTS OR CHANGE IN BENEFITS........................ 27
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3.7 VOTING REQUIREMENTS.................................................... 27
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3.8 STATE TAKEOVER STATUTES................................................ 27
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3.9 COMPANY FCC LICENSES; OPERATIONS OF COMPANY
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LICENSED FACILITIES.................................................... 27
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3.10 BROKERS................................................................ 28
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3.11 OPINION OF FINANCIAL ADVISOR........................................... 29
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3.12 FCC QUALIFICATION...................................................... 29
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3.13 COMPLIANCE WITH APPLICABLE LAWS........................................ 29
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3.14 ABSENCE OF UNDISCLOSED LIABILITIES..................................... 30
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3.15 LITIGATION............................................................. 30
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3.16 TRANSACTIONS WITH AFFILIATES........................................... 30
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ARTICLE IV
ADDITIONAL AGREEMENTS.......................... 31
4.1 PREPARATION OF FORM S-4 AND THE JOINT PROXY
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STATEMENT; INFORMATION SUPPLIED........................................ 31
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4.2 MEETINGS OF COMPANY STOCKHOLDERS AND EVERGREEN
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STOCKHOLDERS........................................................... 32
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4.3 ACCESS TO INFORMATION; CONFIDENTIALITY................................. 33
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4.4 PUBLIC ANNOUNCEMENTS................................................... 34
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4.5 ACQUISITION PROPOSALS.......................................... 34
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4.6 CONSENTS, APPROVALS AND FILINGS................................ 35
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4.7 AFFILIATES LETTERS............................................. 36
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4.8 NASDAQ LISTING................................................. 36
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4.9 STOCKHOLDER LITIGATION......................................... 36
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4 10 INDEMNIFICATION................................................ 36
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4.11 LETTER OF THE COMPANY'S ACCOUNTANTS............................ 37
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4.12 LETTER OF EVERGREEN'S ACCOUNTANTS.............................. 37
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ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER................ 38
5.1 CONDUCT OF BUSINESS............................................ 38
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5.2 COMPANY STOCK OPTIONS.......................................... 41
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5.3 OTHER ACTIONS.................................................. 42
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ARTICLE VI
CONDITIONS PRECEDENT........................ 42
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
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THE MERGER..................................................... 42
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(a) Stockholder Approval...................................... 42
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(b) FCC Order................................................. 42
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(c) Governmental and Regulatory Consents...................... 43
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(d) HSR Act................................................... 43
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(e) No Injunctions or Restraints.............................. 43
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(f) Nasdaq Listing............................................ 43
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(g) Form S-4.................................................. 43
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6.2 CONDITIONS TO OBLIGATIONS OF EVERGREEN......................... 43
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(a) Representations and Warranties............................ 43
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(b) Performance of Obligations of the Company and
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Radio Broadcasting........................................ 44
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(c) Tax Opinion............................................... 44
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6.3 CONDITIONS TO OBLIGATION OF THE COMPANY AND RADIO
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BROADCASTING................................................... 44
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(a) Representations and Warranties............................ 44
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(b) Performance of Obligations of Evergreen................... 45
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(c) Tax Opinion............................................... 45
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER................. 45
7.1 TERMINATION.................................................... 45
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7.2 EFFECT OF TERMINATION.......................................... 46
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7.3 AMENDMENT...................................................... 46
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7.4 EXTENSION; WAIVER.............................................. 47
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7.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
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WAIVER......................................................... 47
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ARTICLE VIII
SURVIVAL OF PROVISIONS................. 47
8.1 SURVIVAL.......................................... 47
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ARTICLE IX
NOTICES........................ 47
9.1 NOTICES........................................... 47
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ARTICLE X
MISCELLANEOUS ................. 49
10.1 ENTIRE AGREEMENT................................. 49
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10.2 EXPENSES......................................... 49
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10.3 COUNTERPARTS..................................... 49
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10.4 NO THIRD PARTY BENEFICIARY....................... 50
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10.5 GOVERNING LAW.................................... 50
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10.6 ASSIGNMENT; BINDING EFFECT....................... 50
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10.7 HEADINGS, GENDER, ETC. .......................... 50
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10.8 INVALID PROVISIONS .............................. 50
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10.9 VIACOM TRANSACTION............................... 51
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Annex I Form of Amended and Restated Certificate of
Incorporation
Annex II Form of Bylaws
Exhibit A Form of Affiliate Letter
Exhibit B Form of Certificate of Chancellor Broadcasting
Company
Exhibit C Form of Certificate Chancellor Radio
Broadcasting Company
Exhibit D Form of Certificate of 5% Stockholder of
Chancellor Broadcasting Company
Exhibit E Form of Certificate of 5% Stockholder of
Chancellor Radio Broadcasting Company
Exhibit F Form of Certificate of Evergreen Media Corporation
Exhibit G Form of Tax Opinion of Xxxxxx & Xxxxxxx
Exhibit H Form of Tax Opinion of Weil, Gotshal, & Xxxxxx LLP
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of February 19, 1997, by and among CHANCELLOR BROADCASTING COMPANY, a
Delaware corporation (the "Company"), CHANCELLOR RADIO BROADCASTING COMPANY, a
Delaware corporation and a subsidiary of the Company ("Radio Broadcasting"), and
EVERGREEN MEDIA CORPORATION, a Delaware corporation ("Evergreen").
RECITALS
WHEREAS, the respective Boards of Directors of Evergreen, the Company and
Radio Broadcasting have each approved the merger of the Company and Radio
Broadcasting with and into Evergreen, upon the terms and subject to the
conditions set forth herein;
WHEREAS, as a condition of the willingness of each of Evergreen, Radio
Broadcasting and the Company to enter into this Agreement and effect the
transactions contemplated hereby, contemporaneously with the execution and
delivery of this Agreement (i) certain beneficial and record holders (the
"Principal Company Stockholders") of the Class A Common Stock, $0.01 par value
("Company Class A Common Stock") and Class B Common Stock, $0.01 par value
("Company Class B Common Stock" and collectively with the Company Class A Common
Stock, the "Shares"), of the Company, and (ii) Xxxxx X. Xxxxxxxx, the beneficial
and record holder (the "Principal Evergreen Stockholder") of substantially all
the outstanding Class B Common Stock, $0.01 par value ("Evergreen Class B Common
Stock"), of Evergreen shall enter into an agreement (the "Stockholders
Agreement") providing for certain matters with respect to their respective
Shares and Evergreen Class B Common Stock, including among other things, voting
such Shares and Evergreen Class B Common Stock in favor of the adoption of this
Agreement; and
WHEREAS, Evergreen, Radio Broadcasting and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
such merger and also to prescribe various conditions to such merger;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this
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Agreement, at the Effective Time (as defined in Section 1.3), the Company and
Radio Broadcasting shall be merged with and into Evergreen (the "Merger"), in a
transaction intended to qualify as a tax-free reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), in
accordance with the Delaware General Corporation Law (the "Delaware Code"), and
the separate corporate existences of the Company and Radio Broadcasting shall
cease and Evergreen shall continue as the surviving corporation under the laws
of the State of Delaware (the "Surviving Corporation") with all the rights,
privileges, immunities and powers, and subject to all the duties and
liabilities, of a corporation organized under the Delaware Code. The Merger
shall have the effects set forth in the Delaware Code.
1.2 CLOSING. Unless this Agreement shall have been terminated and
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the transactions herein contemplated shall have been abandoned pursuant to
Section 7.1, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Merger (the "Closing") will take place
at 10:00 a.m., Dallas, Texas time, on the second business day following the
date on which the last to be fulfilled or waived of the conditions set forth in
Article VI shall be fulfilled or waived in accordance with this Agreement (the
"Closing Date"), at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, unless another date, time or place is
agreed to in writing by the parties hereto.
1.3 EFFECTIVE TIME. The parties hereto will file with the Secretary
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of State of the State of Delaware (the "Delaware Secretary of State") on the
date of the Closing (or on such other date as Evergreen, the Company and Radio
Broadcasting may agree) a certificate of merger or other appropriate documents,
executed in accordance with the relevant provisions of the Delaware Code, and
make all other filings or recordings required under the Delaware Code in
connection with the Merger. The Merger shall become effective upon the filing of
the certificate of merger with the Delaware Secretary of State, or at such later
time specified in the certificate of merger (the "Effective Time").
1.4 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation
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of Evergreen shall be amended and restated in its entirety as set forth in Annex
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I hereto, and as so amended and
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restated shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter amended in accordance with its terms and as provided by
applicable law. From and after the Effective Time, the name of the Surviving
Corporation shall be Chancellor Media Corporation.
1.5 CERTIFICATES OF DESIGNATION. At the Effective Time, the Board of
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Directors of the Surviving Corporation shall authorize the designation of three
series of preferred stock, $0.01 par value (collectively, the "Merger Preferred
Stock"), of the Surviving Corporation so as to permit the Surviving Corporation
to issue the shares of Merger Preferred Stock pursuant to Sections 1.10 and 1.11
hereof, and the Surviving Corporation shall file with the Delaware Secretary of
State immediately following the Effective Time a certificate of designations
(the "Certificates of Designation") with respect to each series of Merger
Preferred Stock pursuant to the Delaware Code.
1.6 BYLAWS. The Bylaws of the Surviving Corporation shall be in the
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form of Annex II hereto until thereafter amended in accordance with their terms
and as provided by applicable law.
1.7 DIRECTORS. The directors of the Surviving Corporation at the
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Effective Time shall be as set forth below:
Class I Directors
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Xxxx X. Xxxxxx
Xxxxx X. Xxxxx
Xxxxxxx Xxxxx-Xxxx
Class II Directors
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Xxxxxxxx X. Xxxxxx, Xx.
Xxxxxx Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. xx Xxxxxx
Class III Directors
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Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Each Class I director, Class II director and Class III director identified
as such above will hold office from the
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Effective Time until the 1998, 1999 and 2000 annual meetings of the Surviving
Corporation, respectively, and in all cases, until his or her respective
successor is duly elected or appointed and qualified in the manner provided in
the Certificate of Incorporation or Bylaws of the Surviving Corporation, or as
otherwise provided by applicable law.
1.8 OFFICERS. The initial senior executive officers of the Surviving
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Corporation at the Effective Time shall be as set forth below:
Xxxxxx X. Xxxxx Chairman of the Board
Xxxxx X. Xxxxxxxx President and Chief
Executive Officer
Xxxxxx Xxxxxx Co-Chief Operating
Officer
Xxxxx X. xx Xxxxxx Co-Chief Operating
Officer
Xxxxxxx X. Xxxxxx Chief Financial Officer
Each such officer will hold office from the Effective Time until his
respective successor is duly elected or appointed and qualified in the manner
provided in the Certificate of Incorporation or Bylaws of the Surviving
Corporation, or as otherwise provided by applicable law. The names, titles and
responsibilities of the other individuals who initially will hold officerships
with the Surviving Corporation shall be determined by Evergreen and the Company
prior to the Effective Time, and the election of these persons shall be
considered by the Board of Directors of the Surviving Corporation immediately
following the Effective Time.
1.9 EFFECT ON EVERGREEN CAPITAL STOCK. (a) Outstanding Evergreen
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Common Stock. Each of the shares of Evergreen Class B Common Stock and Class A
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Common Stock, $0.01 par value, of Evergreen ("Evergreen Class A Common Stock"
and collectively with the Evergreen Class B Common Stock, the "Evergreen Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than shares of Evergreen Common Stock held as treasury shares by Evergreen)
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into a right to receive one validly issued, fully paid and
nonassessable share of the common stock, $0.01 par value ("Surviving Corporation
Common Stock"), of the Surviving Corporation.
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(b) Exchange of Certificates. Evergreen shall instruct its transfer
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agent that from and after the Effective Time, upon the presentation for transfer
of any shares of Evergreen Common Stock or at the request of any holder thereof,
the transfer agent shall issue to the transferee or holder thereof certificates
representing that number of shares of Surviving Corporation Common Stock into
which such shares of Evergreen Common Stock were converted pursuant to this
Agreement.
1.10 EFFECT ON COMPANY CAPITAL STOCK. (a) Outstanding Shares. Each of
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the Shares of the Company issued and outstanding immediately prior to the
Effective Time (other than Shares held as treasury shares by the Company) shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into a right to receive 0.9091 validly issued, fully paid
and nonassessable shares of Surviving Corporation Common Stock (the "Exchange
Ratio"). The shares of Surviving Corporation Common Stock to be issued to
holders of Shares in accordance with this Section 1.10(a), any cash to be paid
in accordance with Section 1.12(f) in lieu of fractional shares of Surviving
Corporation Common Stock, and the shares of Merger Preferred Stock to be issued
to holders of Company Convertible Preferred Stock (as hereinafter defined) and
Radio Broadcasting Preferred Stock (as hereinafter defined) are referred to
collectively as the "Merger Consideration."
(b) Treasury Shares. Each Share issued and outstanding immediately
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prior to the Effective Time which is then held as a treasury share by the
Company shall, by virtue of the Merger and without any action on the part of the
Company, be cancelled and retired and cease to exist, without any conversion
thereof.
(c) Outstanding Company Convertible Preferred Stock. Each share
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(other than a Dissenting Share, as defined in Section 1.14 below) of 7%
Convertible Preferred Stock, par value $0.01 per share ("Company Convertible
Preferred Stock"), of the Company outstanding immediately prior to the Effective
Time shall be converted into one share of preferred stock of the Surviving
Corporation having substantially identical powers, preferences and relative
rights as the Company Convertible Preferred Stock.
(d) Impact of Stock Splits, etc. In the event of any change in
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Evergreen Common Stock and/or Shares between the date of this Agreement and the
Effective Time of the Merger by reason of any stock split, stock dividend,
subdivision, reclassification, recapitalization, combination, exchange of shares
or the like, the number and class of shares of Surviving
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Corporation Common Stock to be issued and delivered in the Merger in exchange
for each outstanding Share as provided in this Agreement shall be
proportionately adjusted.
1.11 EFFECT ON RADIO BROADCASTING CAPITAL STOCK. (a) Outstanding Common
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Stock of Radio Broadcasting. Each of the shares of common stock, $0.01 par
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value, of Radio Broadcasting issued and outstanding immediately prior to the
Merger shall, by virtue of the Merger, be cancelled, and no consideration shall
be delivered in exchange therefor.
(b) Outstanding 12 1/4% Series A Senior Cumulative Exchangeable
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Preferred Stock. Each share (other than a Dissenting Share) of 12 1/4% Series A
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Senior Cumulative Exchangeable Preferred Stock, par value $0.01 per share
("Radio Broadcasting 12 1/4% Preferred Stock"), of Radio Broadcasting
outstanding immediately prior to the Effective Time shall be converted into one
share of preferred stock of the Surviving Corporation having substantially
identical powers, preferences and relative rights as the Radio Broadcasting 12
1/4% Preferred Stock.
(c) Outstanding 12% Exchangeable Preferred Stock. Each share (other
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than a Dissenting Share) of 12% Exchangeable Preferred Stock, par value $0.01
per share ("Radio Broadcasting 12% Preferred Stock" and collectively with Radio
Broadcasting 12 1/4% Preferred Stock, the "Radio Broadcasting Preferred Stock"),
of Radio Broadcasting outstanding immediately prior to the Effective Time shall
be converted into one share of preferred stock of the Surviving Corporation
having substantially identical powers, preferences and relative rights as the
Radio Broadcasting 12% Preferred Stock.
1.12 EXCHANGE OF CERTIFICATES. (a) Paying Agent. As of the Effective Time,
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the Surviving Corporation shall deposit with its transfer agent and registrar
(the "Paying Agent"), for the benefit of the holders of Shares, Company
Convertible Preferred Stock and Radio Broadcasting Preferred Stock, other than
holders of Dissenting Shares, certificates representing the shares of Surviving
Corporation Common Stock and Merger Preferred Stock to be issued to such holders
pursuant to Sections 1.10 and 1.11 (such certificates, together with any
dividends or distributions with respect to such certificates and any cash paid
in lieu of fractional shares pursuant to Section 1.12(f), being hereinafter
referred to as the "Payment Fund").
(b) Exchange Procedures. As soon as practicable after the Effective
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Time, each holder of an outstanding
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certificate or certificates which prior thereto represented Shares, shares of
Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred
Stock shall, upon surrender to the Paying Agent of such certificate or
certificates and acceptance thereof by the Paying Agent, be entitled to a
certificate representing that number of whole shares of Surviving Corporation
Common Stock or Merger Preferred Stock which the aggregate number of Shares,
shares of Company Convertible Preferred Stock or shares of Radio Broadcasting
Preferred Stock previously represented by such certificate or certificates
surrendered shall have been converted into the right to receive pursuant to
Sections 1.10 and 1.11 of this Agreement (with respect to the Surviving
Corporation Common Stock, including any cash to be received in lieu of
fractional shares, as provided in Section 1.12(f) below). The Paying Agent shall
accept such certificates upon compliance with such reasonable terms and
conditions as the Paying Agent may impose to effect an orderly exchange thereof
in accordance with its normal exchange practices. If the Merger Consideration
(or any portion thereof) is to be delivered to any person other than the person
in whose name the certificate or certificates representing Shares, shares of
Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred
Stock surrendered in exchange therefor is registered, it shall be a condition to
such exchange that the certificate or certificates so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and that the
person requesting such exchange shall pay to the Paying Agent any transfer or
other taxes required by reason of the payment of such consideration to a person
other than the registered holder of the certificate(s) surrendered, or shall
establish to the satisfaction of the Paying Agent that such tax has been paid or
is not applicable. After the Effective Time, there shall be no further transfer
on the records of the Company, Radio Broadcasting or their respective transfer
agents of certificates representing Shares, shares of Company Convertible
Preferred Stock or shares of Radio Broadcasting Preferred Stock and if such
certificates are presented to the Company or Radio Broadcasting for transfer,
they shall be cancelled against delivery of the Merger Consideration as
hereinabove provided. Until surrendered as contemplated by this Section 1.12(b),
each certificate representing Shares, shares of Company Convertible Preferred
Stock and shares of Radio Broadcasting Preferred Stock (other than certificates
representing treasury Shares to be cancelled in accordance with Section
1.10(b)), shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the Merger Consideration, without any
interest thereon, as contemplated by Sections 1.10 and 1.11.
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(c) Letter of Transmittal. Promptly after the Effective Time (but in
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no event more than five business days thereafter), the Surviving Corporation
shall require the Paying Agent to mail to each record holder of certificates
that immediately prior to the Effective Time represented Shares, shares of
Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred
Stock which have been converted pursuant to Sections 1.10 and 1.11, a form of
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title shall pass, only upon proper delivery of certificates
representing Shares, shares of Company Convertible Preferred Stock or Shares of
Radio Broadcasting Preferred Stock to the Paying Agent, and which shall be in
such form and have such provisions as the Surviving Corporation reasonably may
specify) and instructions for use in surrendering such certificates and
receiving the consideration to which such holder shall be entitled therefor
pursuant to Sections 1.10 and 1.11.
(d) Distributions with Respect to Unexchanged Shares. No dividends or
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other distributions with respect to Surviving Corporation Common Stock or Merger
Preferred Stock with a record date after the Effective Time shall be paid to the
holder of any certificate that immediately prior to the Effective Time
represented Shares, shares of Company Convertible Preferred Stock or shares of
Radio Broadcasting Preferred Stock which have been converted pursuant to
Sections 1.10 or 1.11, until the surrender for exchange of such certificate in
accordance with this Article I. Following surrender for exchange of any such
certificate, there shall be paid to the holder of such certificate, without
interest, (i) at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to the number of whole shares of Surviving Corporation Common Stock or
Merger Preferred Stock into which the Shares, shares of Company Convertible
Preferred Stock or shares of Radio Broadcasting Preferred Stock represented by
such certificate immediately prior to the Effective Time were converted pursuant
to Sections 1.10 or 1.11, 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 such surrender, and with a payment date subsequent to such
surrender, payable with respect to such whole shares of Surviving Corporation
Common Stock or Merger Preferred Stock.
(e) No Further Ownership Rights in Shares, Company Convertible
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Preferred Stock and Radio Broadcasting Preferred Stock. The Merger Consideration
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(or, in respect of Dissenting Shares, the cash payment therefor) paid upon the
surrender for
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exchange of certificates representing Shares, shares of Company Convertible
Preferred Stock or shares of Radio Broadcasting Preferred Stock in accordance
with the terms of this Article I shall be deemed to have been issued and paid in
full satisfaction of all rights pertaining to the Shares, shares of Company
Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock
theretofore represented by such certificates, subject, however, to the Surviving
Corporation's obligation (if any) to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have been
declared by the Company or Radio Broadcasting, as appropriate, on the Shares,
shares of Company Convertible Preferred Stock, or shares of Radio Broadcasting
Preferred Stock in accordance with the terms of this Agreement (or, with respect
to the Company Convertible Preferred Stock and Radio Broadcasting Preferred
Stock, in accordance with their respective terms) or prior to the date of this
Agreement and which remain unpaid at the Effective Time.
(f) No Fractional Shares. No certificates or scrip representing
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fractional shares of Surviving Corporation Common Stock shall be issued upon the
surrender for exchange of certificates that immediately prior to the Effective
Time represented Shares which have been converted pursuant to Section 1.10, and
each holder of Shares who would otherwise have been entitled to receive a
fraction of a share of Surviving Corporation Common Stock (after taking into
account all certificates delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Surviving Corporation Common Stock multiplied by the closing price per
share of Evergreen Class A Common Stock on the Nasdaq National Market on the
trading day immediately prior to the Effective Time.
(g) Termination of Payment Fund. Any portion of the Payment Fund
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which remains undistributed to the holders of the certificates representing
Shares, shares of Company Convertible Preferred Stock or shares of Radio
Broadcasting Preferred Stock for 120 days after the Effective Time shall be
delivered to the Surviving Corporation, upon demand, and any holders of Shares,
shares of Company Convertible Preferred Stock or shares of Radio Broadcasting
Preferred Stock who have not theretofore complied with this Article I shall
thereafter look only to the Surviving Corporation and only as general creditors
thereof for payment of their claims for any Merger Consideration and any
dividends or distributions with respect to Surviving Corporation Common Stock or
Merger Preferred Stock.
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(h) No Liability. None of Evergreen, the Company, Radio Broadcasting,
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the Surviving Corporation or the Paying Agent shall be liable to any person in
respect of any cash, shares, dividends or distributions payable from the Payment
Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any certificates representing Shares,
shares of Company Convertible Preferred Stock or shares of Radio Broadcasting
Preferred Stock shall not have been surrendered prior to five years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration in respect of such certificate would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section 2.3)),
any such cash, shares, dividends or distributions payable in respect of such
certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
1.13 DISSENTING SHARES. Notwithstanding anything herein to the contrary in
-----------------
this Agreement, shares of Company Convertible Preferred Stock or Radio
Broadcasting Preferred Stock, as applicable, outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto and who properly demands in writing appraisal of such
shares of Company Convertible Preferred Stock or Radio Broadcasting Preferred
Stock in accordance with Section 262 of the Delaware Code and who shall not have
withdrawn such demand or otherwise have forfeited appraisal rights, shall not be
converted into or represent the right to receive the Merger Consideration
therefor ("Dissenting Shares"). Such stockholders shall be entitled to receive
payment of the appraised value of such shares of Company Convertible Preferred
Stock or Radio Broadcasting Preferred Stock, as the case may be, held by them in
accordance with the provisions of Section 262 of the Delaware Code, except that
all Dissenting Shares held by stockholders who shall have failed to perfect or
who effectively shall have withdrawn or lost their rights to appraisal of such
securities under Section 262 shall thereupon be deemed to have been converted
into, as of the Effective Time, the right to receive, without any interest
thereon, the applicable Merger Consideration, upon surrender, in the manner
provided in this Article I, of the certificate or certificates that formerly
represented such securities. The Company shall take all actions required to be
taken by it in accordance with Section 262 (d) (1) of the Delaware Code with
respect to the holders of Company Convertible Preferred Stock as of the record
date for the Stockholders Meeting (as defined in Section 4.2 (a)) and shall
otherwise comply with the provisions of Section 262 of the Delaware Code. The
Surviving Corporation
10
shall, within ten days after the Effective Time, take all actions required to be
taken by it pursuant to Section 262(d) (2) of the Delaware Code with respect to
all holders of record, as of the Effective Time, of the Radio Broadcasting
Preferred Stock. The Company shall give Evergreen prompt written notice of any
demands for appraisal received by the Company with respect to the Company
Convertible Preferred Stock, withdrawals of such demands, and any other
instruments served pursuant to Delaware law and received by the Company, and
Evergreen shall have the right to participate in all negotiations and
proceedings with respect to such demands. Prior to the Effective Time, the
Company shall not, except with the prior written consent of Evergreen, make any
payments with respect to any demands for appraisal, or settle or offer to
settle, any such demands.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EVERGREEN
Evergreen hereby represents and warrants to the Company and Radio
Broadcasting as follows:
2.1 ORGANIZATION, STANDING AND CORPORATE POWER. Evergreen and each of its
------------------------------------------
Significant Subsidiaries (as defined below) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is incorporated and has the requisite corporate power and authority to
carry on its business as now being conducted. Evergreen and each of its
Significant Subsidiaries is duly qualified to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary,
except where the failure to be so qualified could not reasonably be expected to
have a material adverse effect on the business, properties, results of
operations, or condition (financial or otherwise) of Evergreen and its
subsidiaries, considered as a whole (an "Evergreen Material Adverse Effect");
provided, however, that for purposes of Sections 2.13, 2.14, 2.15 and 2.16, no
-------- -------
fact, event or circumstance shall be deemed to constitute an Evergreen
Material Adverse Effect unless, in addition to otherwise satisfying the elements
of the definition given above, the relevant fact, event or circumstance not
disclosed pursuant to such representations would be material facts or
circumstances, the omission of which in a document filed with the SEC (as
hereinafter defined) pursuant to the Exchange Act would be such as to cause the
statements contained in such filings to be misleading within the meaning of Rule
10b-5 under the Exchange Act. Evergreen has delivered to the Company and Radio
Broadcasting complete and
11
correct copies of its Certificate of Incorporation and Bylaws, as amended to the
date of this Agreement. For purposes of this Agreement, a "Significant
Subsidiary" of any person means any subsidiary of such person that would
constitute a "significant subsidiary" within the meaning of Rule 1-02 of
Regulation S-X of the Securities and Exchange Commission (the "SEC").
2.2 CAPITAL STRUCTURE. The authorized capital stock of Evergreen consists
-----------------
of (i) 75,000,000 shares of Evergreen Class A Common Stock, (ii) 4,500,000
shares of Evergreen Class B Common Stock and (iii) 6,000,000 shares of preferred
stock, $0.01 par value (the "Preferred Stock"). At the close of business on
February 18, 1997: (i) 39,100,750 shares of Evergreen Class A Common Stock were
issued and outstanding, 1,720,091 shares of Evergreen Class A Common Stock were
reserved for issuance pursuant to outstanding options or warrants to purchase
Evergreen Class A Common Stock which have been granted to directors, officers or
employees of Evergreen or others ("Evergreen Stock Options"); (ii) 3,114,066
shares of Evergreen Class B Common Stock were issued and outstanding and no
shares of Evergreen Class B Common Stock were reserved for issuance for any
purpose; and (iii) no shares of Preferred Stock were issued and outstanding.
Except as set forth above, at the close of business on February 18, 1997, no
shares of capital stock or other equity securities of Evergreen were authorized,
issued, reserved for issuance or outstanding. All outstanding shares of capital
stock of Evergreen are, and all shares which may be issued pursuant to
Evergreen's stock option plans, as amended to the date hereof (the "Evergreen
Stock Option Plans"), or any outstanding Evergreen Stock Options will be, when
issued, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. No bonds, debentures, notes or other indebtedness
of Evergreen or any subsidiary of Evergreen having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which the stockholders of Evergreen or any subsidiary of
Evergreen may vote are issued or outstanding. All the outstanding shares of
capital stock of each subsidiary of Evergreen have been validly issued and are
fully paid and nonassessable and are owned by Evergreen, by one or more wholly-
owned subsidiaries of Evergreen or by Evergreen and one or more such wholly-
owned subsidiaries, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"), except for Liens arising out of Evergreen Media
Corporation of Los Angeles' ("EMCLA") senior credit facility and senior notes
and those that, individually or in the aggregate, could not reasonably be
expected to have an Evergreen Material Adverse Effect. Except as set forth above
and
12
except for certain provisions of the Certificate of Incorporation of Evergreen
relating to transfers of Evergreen Class B Common Stock and to "alien
ownership", neither Evergreen nor any subsidiary of Evergreen has any
outstanding option, warrant, subscription or other right, agreement or
commitment that either (i) obligates Evergreen or any subsidiary of Evergreen to
issue, sell or transfer, repurchase, redeem or otherwise acquire or vote any
shares of the capital stock of Evergreen or any Significant Subsidiary of
Evergreen or (ii) restricts the transfer of Evergreen Common Stock. No shares of
capital stock of Evergreen are owned of record or beneficially by any subsidiary
of Evergreen. Since the close of business on February 18, 1997 to the date
hereof, neither Evergreen nor any subsidiary of Evergreen has issued any capital
stock or securities or other rights convertible into or exercisable or
exchangeable for shares of such capital stock other than securities issued upon
the exercise of Evergreen Stock Options outstanding on February 18, 1997 or
other convertible securities outstanding on February 18, 1997.
2.3 AUTHORITY; NONCONTRAVENTION. Evergreen has the requisite corporate
---------------------------
power and authority to enter into this Agreement and, subject to the approval of
its stockholders as set forth in Section 6.1(a) with respect to the consummation
of the Merger (the "Evergreen Stockholder Approval"), to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by Evergreen and the consummation by Evergreen of the transactions
contemplated hereby have been duly authorized by the necessary corporate action
on the part of Evergreen, subject, in the case of the Merger and issuance of
Evergreen Common Stock in the Merger, to the Evergreen Stockholder Approval.
This Agreement has been duly executed and delivered by Evergreen and, assuming
this Agreement constitutes the valid and binding agreement of the Company and
Radio Broadcasting, constitutes a valid and binding obligation of Evergreen,
enforceable against Evergreen in accordance with its terms except that the
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditor's rights generally and (b) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in equity).
The execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
hereof will not, (i) conflict with any of the provisions of the Certificate of
Incorporation or Bylaws of Evergreen or the comparable documents of any
subsidiary of Evergreen, (ii) subject to the governmental filings and other
matters referred to in the following sentence,
13
conflict with, result in a breach of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or require
the consent of any person under, any indenture or other agreement, permit,
concession, franchise, license or similar instrument or undertaking to which
Evergreen or any of its subsidiaries is a party or by which Evergreen or any of
its subsidiaries or any of their assets is bound or affected, (iii) result in an
obligation by Evergreen, the Surviving Corporation or any of their respective
subsidiaries to redeem, repurchase or retire (or offer to redeem, repurchase or
retire) any outstanding debt (other than EMCLA's senior credit facility and
senior notes) or equity security of Evergreen, the Surviving Corporation or any
of their respective subsidiaries, or (iv) subject to the governmental filings
and other matters referred to in the following sentence, contravene any law,
rule or regulation of any state or of the United States or any political
subdivision thereof or therein, or any order, writ, judgment, injunction,
decree, determination or award currently in effect, except for (x) conflicts,
breaches, defaults or other consequences (collectively, "breaches") referred to
above with respect to EMCLA's senior credit facility and senior notes, (y)
breaches resulting from the Surviving Corporation's ownership of radio stations
in certain markets where such ownership may be in excess of the numerical limits
imposed on local multiple radio station ownership under the Telecommunications
Act of 1996, together with the rules and regulations thereunder (collectively,
the "1996 Telecom Act") or where such ownership otherwise may be subject to
challenge by any Governmental Entity under any antitrust or similar law, rule or
regulation, or (z) breaches that, individually or in the aggregate, could not
reasonably be expected to have an Evergreen Material Adverse Effect or to
materially hinder Evergreen's ability to consummate the transactions
contemplated by this Agreement. No consent, approval or authorization of, or
declaration or filing with, or notice to, any governmental agency or regulatory
authority (a "Governmental Entity") which has not been received or made, is
required by or with respect to Evergreen or any of its subsidiaries in
connection with the execution and delivery of this Agreement by Evergreen or the
consummation by Evergreen of the transactions contemplated hereby, except for
(i) the filing of premerger notification and report forms under the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), with
respect to the Merger and the termination or earlier expiration of the
applicable waiting periods thereunder, (ii) such filings with and approvals
required by the Federal Communications Commission or any successor entity (the
"FCC") under the Communications Act of
14
1934, as amended, and the rules, regulations and policies of the FCC promulgated
thereunder (collectively, the "Communications Act") including those required in
connection with the transfer of control of FCC Licenses (as defined in Section
3.9) for the operation of the Company Licensed Facilities (as defined in Section
3.9) and the transfer of control of the Evergreen FCC Licenses (as defined in
Section 2.9), (iii) the filing of (x) the registration statement on Form S-4 to
be filed with the SEC by Evergreen in connection with the issuance of Surviving
Corporation Common Stock and, if required to be registered under the Securities
Act, the Merger Preferred Stock in the Merger (the "Form S-4") and the
declaration of effectiveness of the Form S-4 by the SEC, (y) a proxy statement
to be filed with the SEC by Evergreen relating to the Evergreen Stockholder
Approval (such proxy statement, together with the proxy statement relating to
the approval of this Agreement and the Merger by the holders of Shares (the
"Company Stockholder Approval"), in each case as amended or supplemented from
time to time, (the "Joint Proxy Statement"), and (z) such reports under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be
required in connection with this Agreement and the transactions contemplated by
this Agreement, and (iv) the filing of the certificate of merger with the
Delaware Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company and Radio Broadcasting is
qualified to do business.
2.4 SEC DOCUMENTS. (i) Evergreen has filed all required reports,
-------------
schedules, forms, statements and other documents with the SEC since January 1,
1995 (such reports, schedules, forms, statements and other documents are
hereinafter referred to as the "SEC Documents"); (ii) as of their respective
dates, the SEC Documents complied with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such SEC Documents, and none of the SEC Documents as of such dates contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and (iii) the consolidated financial statements of Evergreen
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited
15
statements, as permitted by Rule 10-01 of Regulation S-X) and fairly present, in
all material respects, the consolidated financial position of Evergreen and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (on the basis
stated therein and subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments).
2.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
------------------------------------
SEC Documents filed and publicly available prior to the date of this Agreement
(the "Filed SEC Documents") and except as disclosed in writing by Evergreen to
the Company prior to the execution and delivery of the Agreement, or as it
relates to the Viacom Transaction (as defined in Section 10.9) or as otherwise
agreed to in writing after the date hereof by the Company and Evergreen, since
the date of the most recent audited financial statements included in the Filed
SEC Documents, Evergreen and its subsidiaries have conducted their business only
in the ordinary course, and there has not been (i) any change which could
reasonably be expected to have an Evergreen Material Adverse Effect (including
as a result of the consummation of the transactions contemplated by this
Agreement), (ii) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any Of
Evergreen's currently outstanding capital stock, (iii) any split, combination or
reclassification of any of its outstanding capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of its outstanding capital stock, (iv) (x) any
granting by Evergreen or any of its subsidiaries to any director, officer or
other employee or independent contractor of Evergreen or any of its subsidiaries
of any increase in compensation or acceleration of benefits, except in the
ordinary course of business consistent with prior practice or as was required
under employment agreements in effect as of the date of the most recent audited
financial statements included in the Filed SEC Documents, (y) any granting by
Evergreen or any of its subsidiaries to any director, officer or other employee
or independent contractor of any increase in, or acceleration of benefits in
respect of, severance or termination pay, or pay in connection with any change
of control of Evergreen, except in the ordinary course of business consistent
with prior practice or as was required under any employment, severance or
termination agreements in effect as of the date of the most recent audited
financial statements included in the Filed SEC Documents or (z) any entry by
Evergreen or any of its subsidiaries into any employment, severance, change of
control, or termination or similar agreement with any director, executive
officer or other
16
employee or independent contractor, or (v) any change in accounting methods,
principles or practices by Evergreen or any of its subsidiaries materially
affecting its assets, liability or business, except insofar as may have been
required by a change in generally accepted accounting principles.
2.6 NO EXTRAORDINARY PAYMENTS OR CHANGE IN BENEFITS. Except as disclosed
-----------------------------------------------
in writing by Evergreen to the Company prior to the execution and delivery of
the Agreement, no current or former director, officer, employee or independent
contractor of Evergreen or any of its subsidiaries is entitled to receive any
payment under any agreement, arrangement or policy (written or oral) relating to
employment, severance, change of control, termination, stock options, stock
purchases, compensation, deferred compensation, fringe benefits or other
employee benefits currently in effect (collectively, the "Evergreen Benefit
Plans"), nor will any benefit received or to be received by any current or
former director, officer, employee or independent contractor of Evergreen or any
of its subsidiaries under any Evergreen Benefit Plan be accelerated or modified,
as a result of or in connection with the execution and delivery of, or the
consummation of the transactions contemplated by, this Agreement.
2.7 VOTING REQUIREMENTS. The affirmative vote of the holders of at least a
-------------------
majority of the votes entitled to be cast by the holders of the outstanding
Evergreen Common Stock, voting as a single class, entitled to vote thereon at
the Evergreen Stockholders Meeting (as hereinafter defined) with respect to the
approval of this Agreement, the Merger and the issuance of shares of Evergreen
Common Stock in the Merger is the only vote of the holders of any class or
series of Evergreen's capital stock necessary to approve this Agreement and the
transactions contemplated by this Agreement.
2.8 STAKE TAKEOVER STATUTES. The Board of Directors of Evergreen has
-----------------------
approved the terms of this Agreement and the Stockholders Agreement and the
consummation of the transactions contemplated by this Agreement and by the
Stockholders Agreement, and such approval is sufficient to render inapplicable
to the Merger and the other transactions contemplated by this Agreement and by
the Stockholders Agreement the provisions of Section 203 of the Delaware Code.
To Evergreen's knowledge, no other state takeover statute or similar statute or
regulation applies or purports to apply to the Merger, this Agreement, the
Stockholders Agreement or any of the transactions contemplated by this Agreement
or the Stockholders Agreement and no provision of the Certificate of
Incorporation, Bylaws or other governing instrument of Evergreen or any of its
subsidiaries would,
17
directly or indirectly, restrict or impair the ability of Evergreen or Evergreen
to consummate the transactions contemplated by this Agreement or the
Stockholders Agreement.
2.9 EVERGREEN FCC LICENSES; OPERATIONS OR EVERGREEN LICENSED FACILITIES.
-------------------------------------------------------------------
Evergreen and its subsidiaries have operated the radio stations for which
Evergreen and any of its subsidiaries holds licenses from the FCC, in each case
which are owned or operated by Evergreen and its subsidiaries (the "Evergreen
Licensed Facilities",) in material compliance with the terms of the licenses
issued by the FCC to Evergreen and its subsidiaries (the "Evergreen FCC
Licenses") (complete and correct copies of each of which have been made
available to the Company and Radio Broadcasting), and in material compliance
with the Communications Act, except where the failure to do so could not,
individually or in the aggregate, reasonably be expected to have an Evergreen
Material Adverse Effect. Evergreen and its subsidiaries have, since acquired by
Evergreen, timely filed or made all applications, reports and other disclosures
required by the FCC to be made with respect to the Evergreen Licensed Facilities
and have timely paid all FCC regulatory fees with respect thereto, except where
the failure to do so could not, individually or in the aggregate, reasonably be
expected to have an Evergreen Material Adverse Effect. Evergreen and each of its
subsidiaries have, and are the authorized legal holders of, all the Evergreen
FCC Licenses necessary or used in the operation of the businesses of the
Evergreen Licensed Facilities as presently operated. All such Evergreen FCC
Licenses are validly held and are in full force and effect, unimpaired by any
act or omission of Evergreen, each of its subsidiaries (or, to Evergreen's
knowledge, their respective predecessors) or their respective officers,
employees or agents, except where such impairments could not, individually or in
the aggregate, reasonably be expected to have an Evergreen Material Adverse
Effect. As of the date hereof, except as disclosed in writing by Evergreen to
the Company prior to the execution and delivery of this Agreement, no
application, action or proceeding is pending for the renewal or material
modification of any of the Evergreen FCC Licenses and, to Evergreen's knowledge,
there is not now before the FCC any material investigation, proceeding, notice
of violation, order of forfeiture or complaint relating to any Evergreen
Licensed Facility that, if adversely determined, could reasonably be expected to
have an Evergreen Material Adverse Effect, and Evergreen is not aware of any
basis that would cause the FCC not to renew any of the Evergreen FCC Licenses.
There is not now pending and, to Evergreen's knowledge, there is not threatened,
any action by or before the FCC to revoke, suspend, cancel, rescind or modify in
any material respect any of the Evergreen
18
FCC Licenses that, if adversely determined, could reasonably be expected to have
an Evergreen Material Adverse Effect (other than proceedings to amend FCC rules
or the Communications Act of general applicability to the radio industry).
2.10 BROKERS. Except with respect to Wasserstein, Perella & Co.
-------
("Xxxxxxxxxxx"), all negotiations relating to this Agreement and the
transactions contemplated hereby have been carried out by Evergreen directly
with the Company and Radio Broadcasting, without the intervention of any person
on behalf of Evergreen in such a manner as to give rise to any valid claim by
any person against Evergreen, the Company, the Surviving Corporation or any
subsidiary of any of them for a finder's fee, brokerage commission, or similar
payment. Evergreen has provided the Company with a written summary of the terms
of its agreement with Xxxxxxxxxxx, and Evergreen has no other agreements or
understandings (written or oral) with respect to such services.
2.11 OPINION OF FINANCIAL ADVISOR. Evergreen has received the opinion of
----------------------------
Xxxxxxxxxxx, dated the date hereof, to the effect that, as of such date, the
Exchange Ratio is fair, from a financial point of view, to Evergreen.
2.12 FCC QUALIFICATION. Evergreen and its subsidiaries are fully qualified
-----------------
under the Communication Act to be the transferees of control of the Company FCC
Licenses (as hereinafter defined); provided, however, that the parties
-------- -------
recognize that the consummation of the Merger could cause the Surviving
Corporation to exceed in certain cases the numerical limits on local multiple
radio station ownership imposed by Section 202(b) of the 1996 Telecom Act and
that a waiver of these limits may be required prior to the grant of such
transfer of control of the Evergreen FCC Licenses and Company FCC Licenses. Each
individual or entity that is an officer, director or attributable stockholder of
Evergreen that is proposed to be an officer, director or attributable
stockholder of the Surviving Corporation is fully qualified under the
Communications Act to be an officer, director or attributable stockholder of the
Surviving Corporation.
2.13 COMPLIANCE WITH APPLICABLE LAWS. Each of Evergreen and its
-------------------------------
subsidiaries has in effect all Federal, state, local and foreign governmental
approvals, authorizations, certificates, filings, franchises, licenses, notices,
permits and rights ("Permits") necessary for it to own, lease or operate its
properties and assets and to carry on its business as now conducted other than
such Permits the absence of which would not, individually or in the aggregate,
have an Evergreen Material
19
Adverse Effect, and there has occurred no default under any such Permit other
than such defaults which, individually or in the aggregate, would not have an
Evergreen Material Adverse Effect. Except as disclosed in the Filed Evergreen
SEC Documents, Evergreen and its subsidiaries are in compliance with all
applicable statutes, laws, ordinances, rules orders and regulations of any
Governmental Entity, except for such noncompliance which individually or in the
aggregate would not have a Evergreen Material Adverse Effect.
2.14 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the Filed
----------------------------------
Evergreen SEC Documents, and except for (A) liabilities contemplated by this
Agreement or disclosed in writing by Evergreen to the Company prior to the
execution and delivery of this Agreement, and (B) EMCLA's obligations with
respect to the Viacom Transaction, Evergreen and its subsidiaries do not have
any material indebtedness, obligations or liabilities of any kind (whether
accrued, absolute, contingent or otherwise) (i) required by GAAP to be reflected
on a consolidated balance sheet of Evergreen and its consolidated subsidiaries
or in the notes, exhibits or schedules thereto or (ii) which reasonably could be
expected to have an Evergreen Material Adverse Effect.
2.15 LITIGATION. Expect as disclosed in the Filed Evergreen SEC
----------
Documents, there is no litigation, administrative action, arbitration or other
proceeding pending against Evergreen or any of its subsidiaries or, to the
knowledge of Evergreen, threatened that, individually or in the aggregate, could
reasonably be expected to (i) have an Evergreen Material Adverse Effect or (ii)
prevent, or significantly delay the consummation of the transactions
contemplated by this Agreement. Except as set forth in the Filed Evergreen SEC
Documents, there is no judgment, order, injunction or decree of any Governmental
Entity outstanding against Evergreen or any of its subsidiaries that,
individually or in the aggregate, could reasonably be expected to have any
effect referred to in the foregoing clauses (i) and (ii) of this Section 2.14.
2.16 TRANSACTIONS WITH AFFILIATES. Other than the transactions
----------------------------
contemplated by this Agreement, the Viacom Transaction and except to the extent
disclosed in the Field Evergreen SEC Documents or disclosed in writing to the
Company by Evergreen prior to the execution and delivery of this Agreement,
there have been no transactions, agreements, arrangements or understandings
between Evergreen or its subsidiaries, on the one hand, and Evergreen's
affiliates (other than subsidiaries of Evergreen) or any other person, on the
other hand, that would be
20
required to be disclosed under Item 404 of Regulation S-K under the Securities
Act.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND RADIO BROADCASTING
The Company and Radio Broadcasting hereby, jointly and severally, represent
and warrant to Evergreen as follows:
3.1 ORGANIZATION, STANDING AND CORPORATE POWER. The Company and each of
------------------------------------------
its Significant Subsidiaries (including Radio Broadcasting) is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authority to carry on its business as now being conducted. The Company and
each of its Significant Subsidiaries is duly qualified to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary,
except where the failure to be so qualified could not reasonably be expected to
have a material adverse effect on the business, properties, results of
operations or condition (financial or otherwise) of the Company and its
subsidiaries, considered as a whole (a "Company Material Adverse Effect");
provided, however, that for purposes of Sections 3.13, 3.14, 3.15, and 3.16, no
-------- -------
fact, event or circumstances shall be deemed to constitute a Company Material
Adverse Effect unless in addition to otherwise specifying the elements of the
definition given above, the relevant event, fact or circumstance not disclosed
pursuant to such representations would be a material fact, event or
circumstance, the omission of which in a document filed with the SEC pursuant
to the Exchange Act would be such as to cause the statements contained in such
filing to be misleading within the meaning of Rule 10b-5 under the Exchange Act.
Each of the Company and Radio Broadcasting have delivered to Evergreen complete
and correct copies of its Certificate of Incorporation and Bylaws, as amended to
the date of this Agreement.
3.2 COMPANY AND RADIO BROADCASTING CAPITAL STRUCTURE. The authorized
------------------------------------------------
capital stock of the Company consists of (i) 40,000,000 shares of Company Class
A Common Stock, (ii) 10,000,000 shares of Company Class B Common Stock, (iii)
10,000,000 shares of Class C Common Stock, $0.01 par value ("Company Class C
Common Stock"), of the Company, and (iv) 10,000,000 shares of preferred stock,
$0.01 par value, of which 2,300,000 have been designated as Company Convertible
Preferred
21
Stock. The authorized capital stock of Radio Broadcasting consists of 1,000
shares of common stock, $0.01 par value ("Radio Broadcasting Common Stock"), and
10,000,000 shares of preferred stock, $0.01 par value, of which 1,000,000 have
been designated as Radio Broadcasting 12 1/4% Preferred Stock and 3,600,000 have
been designated as Radio Broadcasting 12% Preferred Stock. At the close of
business on February 18, 1997: (i) 10,437,212 shares of Company Class A Common
Stock were issued and outstanding, 1,926,152 shares of Company Class A Common
Stock were reserved for issuance pursuant to outstanding options or warrants to
purchase shares of Company Class A Common Stock which have been granted to
directors, officers or employees of the Company or others ("Company Stock
Options"), 3,343,465 shares of Company Class A Common Stock were reserved for
issuance upon conversion of the Company Convertible Preferred Stock, and
8,547,910 shares of Company Class A Common Stock were reserved for issuance upon
the conversion of the Company Class B Common Stock; (ii) 8,547,910 shares of
Company Class B Common Stock were issued and outstanding and no shares of
Company Class B Common Stock were reserved for issuance for any purpose; (iii)
no shares of Company Class C Common Stock were issued and outstanding and none
may be issued in the future, and (iv) 2,200,000 shares of Company Convertible
Preferred Stock were issued and outstanding, no shares of Company Convertible
Preferred Stock were held in the treasury of the Company and no shares of
Company Convertible Preferred Stock were reserved for issuance for any purpose.
At the close of business on February 18, 1997: (i) 1,000 shares of Radio
Broadcasting Common Stock were issued and outstanding and no shares of Radio
Broadcasting Common Stock were reserved for issuance for any purpose; (ii)
1,000,000 shares of Radio Broadcasting 12 1/4% Preferred Stock were issued and
outstanding, no shares of Radio Broadcasting 12 1/4% Preferred Stock were held
in treasury by Radio Broadcasting and no shares of Radio Broadcasting 12 1/4%
Preferred Stock were reserved for issuance for any purpose; and (iii) 2,000,000
shares of Radio Broadcasting 12% Preferred Stock were issued and outstanding, no
shares of Radio Broadcasting 12% preferred Stock were held in treasury by Radio
Broadcasting and 1,600,000 shares of Radio Broadcasting 12% Preferred Stock were
reserved for issuance in lieu of cash dividends. Except as set forth above, at
the close of business on February 18, 1997, no shares of capital stock or other
equity securities of the Company and Radio Broadcasting were authorized, issued,
reserved for issuance or outstanding. All outstanding shares of capital stock of
the Company and Radio Broadcasting, and all shares which may be issued pursuant
to the Company's stock option plans, as amended to the date hereof (the"Company
Stock Option Plans")or any outstanding Company Stock Options will be, when
issued, duly authorized, validly issued,fully paid
22
and nonassessable and not subject to preemptive rights. No bonds, debentures,
notes or other indebtedness of the Company or any subsidiary 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 the stockholders of the
Company or any subsidiary of the Company may vote are issued or outstanding. All
the outstanding shares of capital stock of each subsidiary of the Company have
been validly issued and are fully paid and nonassessable and, except for the
Radio Broadcasting Preferred Stock, are owned by the Company or its
subsidiaries, free and clear of all Liens, except for Liens arising out of the
Radio Broadcasting's senior credit facility and those that, individually or in
the aggregate, could not reasonably be expected to have a Company Material
Adverse Effect. Except as set forth above and except (i) for certain provisions
of the Certificate of Incorporation and Bylaws of the Company relating to
transfers of the Company Class B Common Stock and "alien ownership", and (ii) as
provided in the Exchange and Registration Rights Agreement entered into by Radio
Broadcasting in connection with the sale of the Radio Broadcasting 12% Preferred
Stock, neither the Company nor any subsidiary of the Company has any outstanding
option, warrant, subscription or other right, agreement or commitment that
either (i) obligates the Company or any subsidiary of the Company to issue, sell
or transfer, repurchase, redeem or otherwise acquire or vote any shares of the
capital stock of the Company or any Significant Subsidiary of the Company or
(ii) restricts the transfer or Shares. No shares of capital stock of the Company
are owned of record or beneficially by any subsidiary of the Company. Since the
close of business on February 18, 1997 to the date hereof, neither the Company
nor any subsidiary of the Company has issued any capital stock or securities or
other rights convertible into or exercisable or exchangeable for capital stock
other than securities issued upon the exercise of Company Stock Options
outstanding on February 18, 1997 or other convertible securities outstanding on
February 18, 1997.
3.3 AUTHORITY; NONCONTRAVENTION. Each of the Company and Radio
---------------------------
Broadcasting has all requisite corporate power and authority to enter into this
Agreement and, subject to the Company Stockholder Approval, to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by each of the Company and Radio Broadcasting and the consummation by
each of them of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of the Company and
Radio Broadcasting, subject, in the case of the consummation of the Merger, to
the Company Stockholder Approval. The Company has
23
executed a written consent as stockholder of Radio Broadcasting approving the
Merger and this Agreement, and such written consent is the only vote of any
stockholders of Radio Broadcasting required in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company and
Radio Broadcasting and, assuming this Agreement constitutes the valid and
binding agreement of Evergreen, constitutes a valid and binding obligation of
each of the Company and Radio Broadcasting, enforceable against each of them in
accordance with its terms except that the enforcement thereof may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditor's rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity). The execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not (i) conflict with any
of the provisions of the Certificate of Incorporation or Bylaws of the Company
or the comparable documents of any subsidiary of the Company, (ii) subject to
the governmental filings and other matters referred to in the following
sentence, conflict with, result in a breach of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a material benefit
under, or require the consent of any person under, any indenture, or other
agreement, permit, concession, franchise, license or similar instrument or
undertaking to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their assets is bound or
affected, (iii) except as may be the case with respect to Dissenting Shares,
result in an obligation by the Company, the Surviving Corporation or any of
their respective subsidiaries to redeem, repurchase or retire (or offer to
redeem, repurchase or retire) any outstanding debt (other than Radio
Broadcasting's senior credit facility) or equity security of the Company, the
Surviving Corporation or any of their respective subsidiaries, or (iv) subject
to the governmental filings and other matters referred to in the following
sentence, contravene any law, rule or regulation of any state or of the United
States or any political subdivision thereof or therein, or any order, writ,
judgment, injunction, decree, determination or award currently in effect, except
for (x) breaches with respect to the Radio Broadcasting's senior credit
facility, (y) breaches resulting from the Surviving Corporation's ownership of
radio stations in certain markets where such ownership may be in excess of the
numerical limits imposed on local multiple radio station
24
ownership under the 1996 Telecom Act or where such ownership otherwise may be
subject to challenge by any Governmental Entity under any antitrust or similar
law, rule or regulation, or (z) breaches that, individually or in the aggregate,
could not reasonably be expected to have a Company Material Adverse Effect or to
materially hinder the Company's and Radio Broadcasting's ability to consummate
the transactions contemplated by this Agreement. No consent, approval or
authorization of, or declaration or filing with, or notice to, any Governmental
Entity which has not been received or made is required by or with respect to the
Company or Radio Broadcasting in connection with the execution and delivery of
this Agreement by the Company and Radio Broadcasting or the consummation by the
Company and Radio Broadcasting of any of the transactions contemplated by this
Agreement, except for (i) the filing of premerger notification and report forms
under the HSR Act with respect to the Merger, (ii) such filing with and
approvals required by the FCC under the Communications Act including those
required in connection with the transfer of the Company FCC Licenses (as defined
in Section 3.9) for the operation of the Company Licensed Facilities (as defined
in Section 3.9), (iii) the Joint Proxy Statement relating to the Company
Stockholder Approval and such reports under the Exchange Act as may be required
in connection with this Agreement and the transactions contemplated by this
Agreement, and (iv) the filing of the certificate of merger with the
Delaware Secretary of State, and appropriate documents with the relevant
authorities of the other states in which the Company and Radio Broadcasting are
qualified to do business.
3.4 SEC DOCUMENTS. The Company and its subsidiaries have filed all
-------------
required reports, schedules, forms, statements and other documents with the SEC
since January 1, 1995 (the "Company SEC Documents"). As of their respective
dates, the Company SEC Documents complied with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Company SEC
Documents, and none of the Company SEC Documents as of such dates contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the Company SEC Documents comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of
25
unaudited statements, as permitted by Rule 10-01 of Regulation S-X) and fairly
present, in all material respects, the consolidated or combined financial
position of the Company and its subsidiaries as of the dates thereof and the
consolidated or combined results of their operations and cash flows for the
periods then ended (on the basis stated therein and subject, in the case of
unaudited statements, to normal year-end audit adjustments).
3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
------------------------------------
Company SEC Documents filed and publicly available prior to the date of this
Agreement (the "Filed Company SEC Documents") and except as set forth on
Schedule 3.5 hereto or as it relates to the Viacom Transaction or as otherwise
------------
disclosed in writing by the Company to Evergreen prior to the execution and
delivery of this Agreement, since the date of the most recent audited financial
statements included in the Filed Company SEC Documents, the Company and its
subsidiaries have conducted their business only in the ordinary course, and
there has not been (i) any change which could reasonably be expected to have a
Company Material Adverse Effect (including as a result of the consummation of
the transactions contemplated by this Agreement), (ii) any declaration, setting
aside or payment of any dividend or distribution (whether in cash, stock or
property) with respect to any of the Company's outstanding capital stock (other
than the payment of regular cash dividends on the Company Convertible Preferred
Stock in accordance with usual record and payment dates), (iii) any split,
combination or reclassification of any of its outstanding capital stock or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, (iv) (x) any
granting by the Company or any of its subsidiaries to any director, officer or
other employee or independent contractor of the Company or any of its
subsidiaries of any increase in compensation or acceleration of benefits, except
in the ordinary course of business consistent with prior practice or as was
required under employment agreements in effect as of the date of the most recent
audited financial statements included in the Filed Company SEC Documents, (y)
any granting by the Company or any of its subsidiaries to any director, officer
or other employee or independent contractor of any increases in, or acceleration
of benefits in respect of, severance or termination pay, or pay in connection
with any change of control of the Company, except in the ordinary course of
business consistent with prior practice or as was required under any employment,
severance or termination agreements in effect as of the date of the most recent
audited financial statements included in the Filed Company SEC Documents or (z)
any entry by the
26
Company or any of its subsidiaries into any employment, severance, change of
control, or termination or similar agreement with any such director, officer or
other employee or independent contractor, or (v) any exchange in accounting
methods, principles or practices by the Company or any of its subsidiaries
materially affecting its assets, liability or business, except insofar as may
have been required by a change in generally accepted accounting principles.
3.6 NO EXTRAORDINARY PAYMENTS OR CHANGE IN BENEFITS. No current or former
-----------------------------------------------
director, officer, employee or independent contractor of the Company or any of
its subsidiaries is entitled to receive any payment under any agreement,
arrangement or policy (written or oral) relating to employment, severance,
change of control, termination, stock options, stock purchases, compensation,
fringe benefits or other employee benefits currently in effect (collectively,
the "Company Benefits Plans"), nor will any benefit received or to be received
by any current or former director, officer, employee or independent contractor
of the Company or any of its subsidiaries under any Company Benefit Plan be
accelerated or modified, as a result of or in connection with the execution and
delivery of, or the consummation of the transactions contemplated by, this
Agreement.
3.7 VOTING REQUIREMENTS. The affirmative vote of the Principal Company
-------------------
Stockholders with respect to the approval of this Agreement and the Merger are
the only votes of the holders of any class or series of the Company's capital
stock necessary to approve this Agreement and the transactions contemplated by
this Agreement.
3.8 STATE TAKEOVER STATUTES. The Board of Directors of the Company has
-----------------------
approved the terms of this Agreement and the Stockholders Agreement and the
consummation of the transactions contemplated by this Agreement and by the
Stockholders Agreement, and such approval is sufficient to render inapplicable
to the Merger and the other transactions contemplated by this Agreement and by
the Stockholders Agreement the provisions of Section 203 of the Delaware Code.
To the Company's knowledge, no other state takeover statue or similar statute or
regulation applies or purports to apply to the Merger, this Agreement, the
Stockholders Agreement or any of the transactions contemplated by this Agreement
or the Stockholders Agreement and no provision of the Certificate of
Incorporation, Bylaws or other governing instrument of the Company or any of its
subsidiaries would, directly or indirectly, restrict or impair the ability of
the Company or Evergreen to consummate the transactions contemplated by this
Agreement or the Stockholders Agreement.
27
3.9 COMPANY FCC LICENSES; OPERATIONS OF COMPANY LICENSED FACILITIES. The
---------------------------------------------------------------
Company and its subsidiaries have operated the radio stations for which the
Company and any of its subsidiaries holds licenses from the FCC, in each case
which are owned or operated by the Company and its subsidiaries (the "Company
Licensed Facilities") in material compliance with the terms of the licenses
issued by the FCC to the Company and its subsidiaries (the "Company FCC
Licenses") (complete and correct copies of each of which have been made
available to Evergreen), and in material compliance with the Communications Act,
except where the failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. The Company
and its subsidiaries have, since acquired by the Company, timely filed or made
all applications, reports and other disclosures required by the FCC to be made
with respect to the Company Licensed Facilities and have timely paid all FCC
regulatory fees with respect thereto, except where the failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The Company and each of its subsidiaries have, and are
the authorized legal holders of, all the Company FCC Licenses necessary or used
in the operation of the businesses of the Company Licensed Facilities as
presently operated. All such Company FCC Licenses are validly held and are in
full force and effect, unimpaired by any act or omission of the Company, each of
its subsidiaries (or to the Company's and Radio Broadcasting's knowledge, their
respective predecessors) or their respective officers, employees or agents,
except where such impairments could not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. As of the date
hereof, except as disclosed in writing by the Company to Evergreen prior to the
execution and delivery of this Agreement, no application, action or proceeding
is pending for the renewal or material modification of any of the Company FCC
Licenses and, to the best of the Company's knowledge, there is not now before
the FCC any material investigation, proceeding, notice of violation, order of
forfeiture or complaint against the Company or any of its subsidiaries relating
to the Company Licensed Facilities that, if adversely determined, would have a
Company Material Adverse Effect, and the Company is not aware of any basis that
would cause the FCC not to renew any of the Company FCC Licenses. There is not
now pending and, to the Company's knowledge, there is not threatened, any action
by or before the FCC to revoke, suspend, cancel rescind or modify in any
material respect any of the Company FCC Licenses that, if adversely determined,
would have a Company Material Adverse Effect (other than proceedings to amend
FCC rules or the Communications Act of general applicability to the radio
industry).
28
3.10 BROKERS. Except with respect to HM2/Management Partners, L.P. ("Xxxxx
-------
Muse") Star Media, Inc. ("Star Media"), Xxxxxxxxx & Co., LLC ("Greenhill") and
Xxxxxxx Xxxxx & Co. ("Xxxxxxx Sachs"), all negotiations relating to this
Agreement, the transactions contemplated hereby and by the Viacom Transaction
have been carried out by the Company directly with Evergreen, without the
intervention of any person on behalf of the Company in such a manner as to give
rise to any valid claim by any person against the Company, Evergreen, the
Surviving Corporation or any subsidiary of any of them for a finder's fee,
brokerage commission, or similar payment. The Company has provided Evergreen
with a written summary of the terms of its agreements with Xxxxx Muse, Star
Media, Greenhill and Xxxxxxx Xxxxx, and the Company has no other agreements or
understandings (written or oral) with respect to such services.
3.11 OPINION OF FINANCIAL ADVISOR. The Company has received the opinions of
----------------------------
Greenhill and Xxxxxxx Xxxxx, dated the date hereof, to the effect that, as of
such date, the Exchange Ratio is fair, from a financial point of view, to the
Company's stockholders.
3.12 FCC QUALIFICATION. The Company and its subsidiaries are fully
-----------------
qualified under the Communications Act to be the transferors of control of the
Company FCC Licenses; provided, however, that the parties recognize that the
--------- --------
consummation of the Merger could cause the Surviving Corporation and Xxxxxx X.
Xxxxx to exceed in certain cases the numerical limits on local multiple radio
station ownership imposed by Section 202(b) of the 1996 Telecom Act and that a
waiver of these limits may be required prior to the grant of such transfer of
control of the Evergreen FCC Licenses and Company FCC Licenses. Each individual
or entity that is an officer, director or attributable stockholder of the
Company that is proposed to be an officer, director or attributable stockholder
of the Surviving Corporation is fully qualified under the Communications Act to
be an officer, director or attributable stockholder of the Surviving Corporation
other than with respect to the numerical limits on multiple ownership described
in the preceding sentence.
3.13 COMPLIANCE WITH APPLICABLE LAWS. Each of the Company and its
-------------------------------
subsidiaries has in effect all Federal, state, local and foreign governmental
Permits necessary for it to own, lease or operate its properties and assets and
to carry on its business as now conducted other than such Permits the absence of
which would not, individually or in the aggregate, have a Company Material
Adverse Effect, and there has occurred no default under any such Permit other
than such defaults which, individually or in the
29
aggregate, would not have a Company Material Adverse Effect. Except as
disclosed in the Filed Company SEC Documents, the Company and its subsidiaries
are in compliance with all applicable statutes, laws, ordinances, rules orders
and regulations of any Governmental Entity, expect for such noncompliance which
individually or in the aggregate would not have a Company Material Adverse
Effect.
3.14 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the
----------------------------------
Filed Company SEC Documents, and except for (A) liabilities contemplated by this
Agreement or disclosed in writing by the Company to Evergreen prior to the
execution and delivery of this Agreement, and (B) the Company's and Radio
Broadcasting's obligations with respect to the Viacom Transaction, the Company
and its subsidiaries do not have any material indebtedness, obligations or
liabilities of any kind (whether accrued, absolute, contingent or otherwise) (i)
required by GAAP to be reflected on a consolidated balance sheet of the Company
and its consolidated subsidiaries or in the notes, exhibits or schedules thereto
or (ii) which reasonably could be expected to have a Company Material Adverse
Effect.
3.15 LITIGATION. Except as disclosed in the Filed Company SEC
----------
Documents, there is no litigation, administrative action, arbitration or other
proceeding pending against the Company or any of its subsidiaries or, to the
knowledge of the Company, threatened that, individually or in the aggregate,
could reasonably be expected to (i) have a Company Material Adverse Effect or
(ii) prevent, or significantly delay the consummation of the transactions
contemplated by this Agreement. Except as set forth in the Filed Company SEC
Documents, there is no judgment, order injunction or decree of any Governmental
Entity outstanding against the Company or any of its subsidiaries that,
individually or in the aggregate, could reasonably be expected to have any
effect referred to in the foregoing clauses (i) and (ii) of this Section 3.15.
3.16 TRANSACTION WITH AFFILIATES. Other than the transactions
---------------------------
contemplated by this Agreement, the Viacom Transaction and except to the extent
disclosed in the Filed Company SEC Documents or disclosed in writing by
Chancellor to Evergreen prior to the execution and delivery of this Agreement,
there have been no transactions, agreements, arrangements or understandings
between the Company or its subsidiaries, on the one hand, and the Company's
affiliates (other than subsidiaries of the Company) or any other person, on the
other hand, that would be required to be disclosed under Item 404 of Regulation
S-K under the Securities Act.
30
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 PREPARATION OF FORM S-4 AND THE JOINT PROXY STATEMENT; INFORMATION
------------------------------------------------------------------
SUPPLIED. (a) As soon as practicable following the date of this Agreement, the
--------
Company and Evergreen shall prepare and file with the SEC the Joint Proxy
Statement and Evergreen shall prepare and file with the SEC the Form S-4, in
which the Joint Proxy Statement will be included as a prospectus. Each of the
Company and Evergreen shall use its best efforts to have the Form S-4 declared
effective under the Securities Act as promptly as practicable after such filing.
The Company will use its best efforts to cause the Joint Proxy Statement to be
mailed to the Company's stockholders, and Evergreen will use its best efforts to
cause the Joint Proxy Statement to be mailed to Evergreen's stockholders, in
each case as promptly as practicable after the Form S-4 is declared effective
under the Securities Act. Evergreen shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or take any action that would subject it to the service of process in
suits, other than as to matters and transactions relating to the Form S-4, in
any jurisdiction where it is not so subject) required to be taken under any
applicable state securities laws in connection with the issuance of Evergreen
Common Stock in the Merger and the Company shall furnish all information
concerning the Company and the holders of the Shares as may be reasonably
requested in connection with any such action.
(b) the Company agrees that none of the information supplied or to
be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Form S-4 will not, at the time the Form S-4 is filed with
the SEC, at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, 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, in light of the circumstances
under which they are made, not misleading, or (ii) the Joint Proxy Statement
will not, at the date it is first mailed to the Company's stockholders or at the
time of the Stockholders Meeting (as defined in Section 4.2), contain any
statement which, at the time and in light of the circumstances under which it is
made, is false or misleading with respect to any material fact, or omits to
state any material fact necessary in order to make the statements therein not
false or misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of a proxy for the
31
same meeting or subject matter thereof which has become false or misleading. The
Company agrees that the Joint Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except with respect to statements made or incorporated
by reference therein based on information supplied by Evergreen specifically for
inclusion or incorporated by reference in the Joint Proxy Statement.
(c) Evergreen agrees that none of the information supplied or to be
supplied by Evergreen specifically for inclusion or incorporation by reference
in (i) the Form S-4 will not, at the time the Form S-4 is filed with the SEC, at
any time it is amended or supplemented or at the time it becomes effective under
the Securities Act, 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 therin, in light of the circumstances under which they are
made, not misleading, or (ii) the Joint Proxy Statement will not, at the date
the Joint Proxy Statement is first mailed to Evergreen's stockholders, contain
any statement which, at the time and in light of the circumstances under which
it is made, is false or misleading with respect to any material fact, or omits
to state any material fact necessary in order to make the statements therein not
false or misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of a proxy for the same meeting
or subject matter thereof which has become false or misleading. Evergreen agrees
that the Form S-4 will comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations promulgated
thereunder and the Joint Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except with respect to statements made or incorporated
by reference in either the Form S-4 or the Joint Proxy Statement based on
information supplied by the Company specifically for inclusion or incorporation
by reference therein.
4.2 MEETINGS OF COMPANY STOCKHOLDERS AND EVERGREEN STOCKHOLDERS. (a) The
----------------------------------------------------------
Company will take all action necessary in accordance with applicable law and its
Certificate of Incorporation and Bylaws to convene a meeting of its stockholders
(the "Stockholders Meeting") to submit this Agreement, together with the
affirmative recommendation of the Company's Board of Directors, to the Company's
stockholders so that they may consider and vote upon the approval of this
Agreement. The Company will use its best efforts to hold the Stockholders
Meeting as soon as practicable after the date hereof and to
32
obtain the favorable votes of its stockholders. Pursuant to the Stockholders
Agreement, the Principal Company Stockholders have agreed to vote all Shares
owned by them or for which they have the right to vote in favor of the approval
of this Agreement and the Merger, which vote the Company represents and warrants
shall be sufficient to obtain the Company Stockholder Approval.
(b) Evergreen will take all action necessary in accordance with applicable
law and its Certificate of Incorporation and Bylaws to convene a meeting of its
stockholders (the "Evergreen Stockholders Meeting") to submit this Agreement,
together with the affirmative recommendation of Evergreen's Board of Directors,
to Evergreen's stockholders so that they may consider and vote upon the approval
of this Agreement. Evergreen will use its best efforts to hold the Evergreen
Stockholders Meeting as soon as practicable after the date hereof and to obtain
the favorable votes of its stockholders. Pursuant to the Stockholders Agreement,
the Principal Evergreen Stockholder has agreed to vote all shares of Evergreen
Common Stock owned by him or for which he has the right to vote in favor of the
approval of this Agreement and the Merger.
(c) Each of Evergreen and the Company agrees to cooperate and use its
respective best efforts to hold the Evergreen Stockholders Meeting and the
Stockholders Meeting on the same day.
4.3 ACCESS TO INFORMATION; CONFIDENTIALITY. Upon reasonable notice, each
--------------------------------------
of the Company and Evergreen shall, and shall cause each of its respective
subsidiaries to, afford to the other party and to the officers, employees,
counsel, financial advisors and other representatives of such other party
reasonable access during normal business hours during the period prior to the
Effective Time to all its properties, books, contracts, commitments, personnel
and records and, during such period, each of the Company and Evergreen shall,
and shall cause each of its respective subsidiaries to, furnish as promptly as
practicable to the other party such information concerning its business,
properties, financial condition, operations and personnel as such other party
may from time to time reasonably request. Except as required by law, each of the
Company and Evergreen will hold, and will cause its respective directors,
officers, partners, employees, accountants, counsel, financial advisors and
other representatives and affiliates to hold, any nonpublic information obtained
from Evergreen or the Company, respectively, in confidence to the extent
required by and in accordance with the provisions of the letters dated January
27, 1997, each between Evergreen and the Company (collectively, the
"Confidentiality
33
Agreements"), and each of the Company and Evergreen agrees that prior to the
Effective Time neither party will use any of such nonpublic information to
directly or indirectly divert or attempt to divert any business, customer or
employee of the other.
4.4 PUBLIC ANNOUNCEMENTS. Evergreen, on the one hand, and the Company, on
--------------------
the other hand, will consult with each other before issuing, and provide each
other the opportunity to review and comment upon, any press release or other
public statements with respect to the transactions contemplated by this
Agreement, including the Merger, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable law, court process or by obligations pursuant to rules of
The Nasdaq Stock Market.
4.5 ACQUISITION PROPOSALS. (a) The Company shall not, nor shall it permit
---------------------
any of its subsidiaries to, nor shall it authorize or permit any officer,
director or employee of, or any investment banker, attorney or other advisor or
representative of, the Company or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage the submission of any Acquisition
Proposal (as hereinafter defined) or (ii) 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 may reasonably be expected to lead to, any
Acquisition Proposal. The Company will notify Evergreen immediately of any
inquiries or proposals with respect to any Acquisition Proposal that is received
by, or any such negotiations or discussions that are sought to be initiated
with, the Company. For purposes of this Agreement, "Acquisition Proposal" means
any proposal with respect to a merger, consolidation, share exchange or similar
transaction involving the Company or Evergreen or any Significant Subsidiary of
the Company or Evergreen, or any purchase of all or any significant portion of
the assets of the Company or Evergreen or any Significant Subsidiary of the
Company or Evergreen, or any equity interest in the Company or Evergreen or any
Significant Subsidiary of the Company or Evergreen, other than the transactions
contemplated hereby; provided, however, that an Acquisition Proposal shall not
-------- -------
include a currently planned acquisition or disposition of broadcast properties
disclosed in writing prior to execution and delivery of this Agreement by either
the Company or Evergreen to the other.
(b) Evergreen shall not, nor shall it permit any of its subsidiaries
to, nor shall it authorize or permit any officer, director or employee of, or
any investment banker,
34
attorney or other advisor or representative of, Evergreen or any of its
subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage the
submission of any Acquisition Proposal or (ii) 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 may be reasonably be expected to lead to, any
Acquisition Proposal. Evergreen will notify the Company immediately of any
inquiries or proposals with respect to any Acquisition Proposal that is received
by, or any negotiations or discussions that are sought to be initiated with,
Evergreen.
(c) Nothing contained in this Section 4.5 shall prohibit the
respective Board of Directors of the Company or Evergreen from taking and
disclosing to its stockholders a position in accordance with Rules 14d-9 and
14e-2 under the Exchange Act with respect to a tender offer or any exchange
offer commenced by a third party.
4.6 CONSENTS, APPROVALS AND FILINGS. The Company and Evergreen will make
-------------------------------
and cause their respective subsidiaries and, to the extent necessary, their
other affiliates to make all necessary filings, as soon as practicable,
including, without limitation, those required under the HSR Act, the Securities
Act, the Exchange Act, and the Communications Act (including filing an
application with the FCC for the transfer of control of the Company FCC Licenses
and the Evergreen FCC Licenses, which the parties shall file as soon as
practicable (and in any event not more than 30 days) after the date of this
Agreement), in order to facilitate prompt consummation of the Merger and the
other transactions contemplated by this Agreement. In addition, the Company and
Evergreen will each use its best efforts, and will cooperate fully and in good
faith with each other, (i) to comply as promptly as practicable with all
governmental requirements applicable to the Merger and the other transactions
contemplated by this Agreement and the Viacom Transaction, and (ii) to obtain as
promptly as practicable all necessary permits, orders or other consents of
Governmental Entities and consents of all third parties necessary for the
consummation of the Merger and the other transactions contemplated by this
Agreement and the Viacom Transaction, including without limitation, the consent
of the FCC to the transfer of control of the Company FCC Licenses and the
Evergreen FCC Licenses, and the transfer of any FCC licenses in connection with
the Viacom Transaction. Each of the Company and Evergreen shall use its best
efforts to promptly provide such information and communications to Governmental
Entities as such Governmental Entities may reasonably request. Each of the
parties shall provide to the other party copies of all applications in
35
advance of filing or submission of such applications to Governmental Entities in
connection with this Agreement and shall make such revisions thereto as
reasonably requested by such other party. Each party shall provide to the other
party the opportunity to participate in all meetings and material conversations
with Governmental Entities.
4.7 AFFILIATES LETTERS. Prior to the Closing Date, the Company shall
------------------
deliver to Evergreen a letter identifying all persons who may be, at the time
the Merger is submitted for approval to the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act.
The Company shall use its best efforts to cause each such person to deliver to
Evergreen on or prior to the Closing Date a written agreement substantially in
the form attached as Exhibit A hereto.
---------
4.8 NASDAQ LISTING. Evergreen shall use its best efforts to cause the
--------------
shares of Surviving Corporation Common Stock to be issued in the Merger to be
approved for quotation on the Nasdaq National Market, subject to official notice
of issuance, prior to the Closing Date.
4.9 STOCKHOLDER LITIGATION. Each of the Company and Evergreen shall give
----------------------
the other party the opportunity to participate in the defense or settlement of
any stockholder litigation against it and its directors relating to the
transactions contemplated by this Agreement; provided, however, that no such
settlement shall be agreed to by the Company or Evergreen without the other
party's consent, which consent shall not be unreasonably withheld.
4.10 INDEMNIFICATION. The Certificate of Incorporation and Bylaws of the
---------------
Surviving Corporation and each of its subsidiaries shall contain, respectively,
the provisions with respect to indemnification set forth in the Amended and
Restated Certificate of Incorporation of the Surviving Corporation attached
hereto as Annex I and the Bylaws of the Surviving Corporation attached hereto
-------
as Annex II, and such provisions shall not be amended, repealed or otherwise
--------
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were directors or officers of the Company or
Evergreen or any of their respective subsidiaries (the "Indemnified Parties") in
respect of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by this
Agreement), unless such modification is required by law. Evergreen will cause to
be maintained for a period of not less than six years
36
from the Effective Time the Company's current directors' and officers' insurance
and indemnification policies to the extent that they provide coverage for events
occurring prior to the Effective Time (the "D&O Insurance") for all persons who
are directors and executive officers of the Company or Evergreen on the date of
this Agreement, so long as the annual premium therefor would not be in excess of
250% of the last annual premium paid prior to the date of this Agreement;
provided, however, that the Surviving Corporation may, in lieu of maintaining
-------- -------
such existing D&O Insurance as provided above, cause coverage to be provided
under any policy maintained for the benefit of Evergreen or any of its
subsidiaries so long as the terms thereof are not less advantageous to the
beneficiaries thereof than the existing D&O Insurance. The provisions of this
Section 4.10 are intended to be for the benefit of, and shall be enforceable by,
each Indemnified Party, his heirs and his personal representatives and shall be
binding on all successors and assigns of Evergreen, the Company and the
Surviving Corporation.
4.11 LETTER OF THE COMPANY'S ACCOUNTANTS. The Company shall use its
-----------------------------------
reasonable best efforts to cause to be delivered to Evergreen a letter of
Coopers & Xxxxxxx LLP, the Company's independent public accountants, and any
other independent public accountants whose report would be required to be
included in the Form S-4 pursuant to the rules and regulations under the
Securities Act, each dated a date within two business days before the date on
which the Form S-4 shall become effective and an additional letter from each of
them dated a date within two business days before the Closing Date, each
addressed to Evergreen, in form and substance reasonably satisfactory to
Evergreen and customary in scope and substance for letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
4.12 LETTER OF EVERGREEN'S ACCOUNTANTS. Evergreen shall use its reasonable
---------------------------------
best efforts to cause to be delivered to the Company a letter of KPMG Peat
Marwick LLP, Evergreen's independent public accountants, and any other
independent public accountants whose report would be required to be included in
the Form S-4 pursuant to the rules and regulations under the Securities Act,
each dated a date within two business days before the date on which the Form S-4
shall become effective and an additional letter from each of them dated a date
within two business days before the Closing Date, each addressed to the Company,
in form and substance reasonably satisfactory to the Company and customary in
scope and substance for letters
37
delivered by independent public accountants in connection with registration
statements similar to the Form S-4
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER
5.1 CONDUCT OF BUSINESS. Except as contemplated by this Agreement, during
-------------------
the period from the date of this Agreement to the Effective Time, the Company
and Evergreen shall, and shall cause their respective subsidiaries to, act and
carry on their respective businesses in the ordinary course of business and, to
the extent consistent therewith, use reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve the goodwill of those engaged in material
business relationships with them. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the Effective
Time and except as set forth in the Filed Company SEC Documents or the Filed
Evergreen SEC Documents (including any pending station acquisitions,
dispositions and/or swaps and the financing thereof described therein), as
applicable, or in connection with the Viacom Transaction or as otherwise
disclosed in writing by one party hereto to the other parties hereto prior to
the execution and delivery of this Agreement, the Company and Evergreen shall
not, and shall not permit any of their respective subsidiaries to, without the
prior consent of the other party hereto:
(i) (w) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, stock or property) in respect of, any
of the Company's or Evergreen's or any of their respective subsidiaries'
outstanding capital stock (other than, with respect to the Company and its
subsidiaries, the payment of regular cash dividends by the Company on the
Company Convertible Preferred Stock and the payment by Radio Broadcasting of
dividends on the Radio Broadcasting 12% Preferred Stock in additional shares of
such preferred stock, in each case in accordance with usual record and payment
dates), (x) split, combine or reclassify any of its outstanding capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its outstanding capital stock, (y) purchase,
redeem or otherwise acquire any shares of outstanding capital stock or any
rights, warrants or options to acquire any such shares (other than, with respect
to the Company and its subsidiaries, in connection with Radio Broadcasting's
offer to exchange its 12% Series A Exchangeable Preferred Stock for the Radio
Broadcasting 12%
38
Preferred Stock (the "Exchange Offer")), or (z) issue, sell, grant, pledge or
otherwise encumber any shares of its capital stock, any other equity securities
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, equity securities or convertible securities other than
(1) upon the exercise of Company Stock Options and Evergreen Stock Options
outstanding on the date of this Agreement, (2) pursuant to employment agreements
or other contractual arrangements in effect on the date of this Agreement, or
(3) with respect to the Company and its subsidiaries, in connection with the
Exchange Offer or upon the conversion of the Company Convertible Preferred
Stock;
(ii) amend its Certificate of Incorporation, Bylaws or other
comparable charter or organizational documents (other than, in the case of Radio
Broadcasting, as necessary to consummate the Exchange Offer);
(iii) acquire any business (including the assets thereof) or any
corporation, partnership, joint venture, association or other business
organization or division thereof;
(iv) sell, mortgage or otherwise encumber or subject to any
Lien or otherwise dispose of any of its properties or assets that are material
to the Company or Evergreen and their respective subsidiaries taken as a whole;
(v) (x) other than working capital borrowings in the ordinary
course of business and consistent with past practices incur any indebtedness for
borrowed money or guarantee any such indebtedness of another person, other than
indebtedness owning to or guarantees of indebtedness owing to the Company or
Evergreen or any of their respective direct or indirect wholly-owned
subsidiaries or (y) make any material loans or advances to any other person,
other than to the Company or Evergreen, or to any of their respective direct or
indirect wholly-owned subsidiaries and other than routine advances to employees;
(vi) make any tax election or settle or compromise any income
tax liability that could reasonably be expected to be material to the Company or
Evergreen and their respective subsidiaries taken as a whole;
(vii) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction, in
the ordinary course of
39
business consistent with past practice or in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated by, the most
recent consolidated financial statements (or the notes thereto) of the Company
or Evergreen included in the Filed Company SEC Documents or the Filed Evergreen
SEC Documents, respectively, or incurred since the date of such financial
statements in the ordinary course of business consistent with past practice;
(viii) make any material commitments or agreements for capital
expenditures or capital additions or betterments except as materially consistent
with the budget for capital expenditures as of the date of this Agreement and
consistent with past practices;
(ix) except as may be required by law,
(1) other than in the ordinary course of business and
consistent with past practices, make any representation or promise, oral or
written, to any employee or former director, officer or employee of the
Company or Evergreen or any of their respective subsidiaries which is
inconsistent with the terms of any Company Benefit Plan or Evergreen
Benefit Plan, respectively;
(2) other than in the ordinary course of business and
consistent with past practices, make any change to, or amend in any way,
the contracts, salaries, wages, or other compensation of any director,
employee or any agent or consultant of the Company or Evergreen or any of
their amendments that are required under existing contracts;
(3) adopt, enter into, amend, alter or terminate,
partially or completely, any Company Benefit Plan or Evergreen Benefit
Plan or any election made pursuant to the provisions of any Company
Benefit Plan or Evergreen Benefit Plan, to accelerate any payments,
obligations or vesting schedules under any Company Benefit Plan or
Evergreen Benefit Plan; or
(4) other than in the ordinary course of business
consistent with past practices, approve any general or company-wide pay
increases for employees;
(x) except in the ordinary course of business modify, amend or
terminate any material agreement, permit, concession, franchise, license or
similar instrument to which the
40
Company or Evergreen or any of their respective subsidiaries is a party or
waive, release or assign any material rights or claims thereunder; or
(xi) authorize any of, or commit or agree to take any of, the
foregoing actions.
Notwithstanding the foregoing, nothing herein shall prevent Evergreen or
the Company from selling or acquiring (or agreeing to sell or acquire) all or
substantially all of the assets (by purchase, stock purchase, merger or
otherwise) of one or more radio broadcast stations and entering into financing
transactions in connection therewith, provided that the value of the
consideration (as determined in good faith by the Board of Directors of the
Company or Evergreen, as the case may be) to be paid or received (as
appropriate) in such transactions does not exceed $100,000,000 in the aggregate
for all such radio stations.
5.2 COMPANY STOCK OPTIONS. At the Effective Time, each Company Stock
---------------------
Option shall be deemed to have been assumed by Evergreen, without further action
by Evergreen, and shall thereafter be deemed an option to acquire, on the same
terms and conditions as were applicable under such Company Stock Option, that
number of shares of Surviving Corporation Common Stock that would have been
received in respect of such Company Stock Option if it had been exercised
immediately prior to the Effective Time (such Company Stock Options assumed by
Evergreen, the "Assumed Chancellor Stock Options"); provided, however, that, for
-------- -------
each optionholder, (i) the aggregate fair market value of Surviving Corporation
Common Stock subject to Assumed Chancellor Stock Options immediately after the
Effective Time shall not exceed the aggregate exercise price thereof by more
than the excess of the aggregate fair market value of Company Common Stock
subject to Company Stock Options immediately before the Effective Time over the
aggregate exercise price thereof and (ii) on a share-by-share comparison, the
ratio of the exercise price of the Assumed Chancellor Stock Option to the fair
market value of the Surviving Corporation Common Stock immediately after the
Effective Time is no more favorable to the optionholder than the ratio of the
exercise price of the Company Stock Option to the fair market value of the
Company Common Stock immediately before the Effective Time; and provided,
--------
further, that no fractional shares shall be issued on the exercise of such
-------
Assumed Chancellor Stock Option and, in lieu thereof, the holder of such Assumed
Chancellor Stock Option shall only be entitled to a cash payment in the amount
of such fraction multiplied by the closing price per share of Surviving
Corporation Common Stock on the Nasdaq
41
National Market on the business day immediately prior to the date of such
exercise.
5.3 OTHER ACTIONS. The Company and Evergreen shall not, and shall not
-------------
permit any of their respective subsidiaries to, take any action that would, or
that could reasonably be expected to, result in any of the conditions of the
Merger set forth in Article VI not being satisfied.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
----------------------------------------------------------
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. The Company Stockholder Approval and the
--------------------
Evergreen Stockholder Approval shall have been obtained.
(b) FCC Order. The FCC shall have issued an order (the "FCC Order")
---------
approving the transfer of the Company FCC Licenses for the operation of the
Company Licensed Facilities pursuant to the Merger without the imposition
of any conditions or restrictions that would have a material adverse effect
on the business, properties, results of operations, or condition (financial
or otherwise) of the Surviving Corporation and its subsidiaries, considered
as a whole (a "Surviving Corporation Material Adverse Effect"), and which
FCC Order has not been reversed, stayed, enjoined, set aside or suspended
and with respect to which no timely request for stay, petition for
reconsideration or appeal has been filed and as to which the time period
for filing of any such appeal or request for reconsideration or for any sua
---
sponte action by the FCC with respect to the FCC Order has expired, or, in
------
the event that such a filing or review sua sponte has occurred, as to which
--- ------
such filing or review shall have been disposed of favorably to the grant of
the FCC Order and the time period for seeking further relief with respect
thereto shall have expired without any request for such further relief
having been filed or review initiated; provided, however, that
-------- -------
notwithstanding anything in this Agreement to the contrary, that reasonable
conditions of divestiture of certain Company Licensed Facilities or
Evergreen Licensed Facilities to comply with the multiple
42
ownership requirements under the Telecom Act shall not be deemed to result
in a Surviving Corporation Material Adverse Effect.
(c) Governmental and Regulatory Consents. All required consents,
------------------------------------
approvals, permits and authorizations to the consummation of the
transactions contemplated hereby by the Company, Radio Broadcasting and
Evergreen shall be obtained from any Governmental Entity (other than the
FCC) whose consent, approval, permission or authorization is required by
reason of a change in law after the date of this Agreement, unless the
failure to obtain such consent, approval, permission or authorization could
not reasonably be expected to have a Surviving Corporation Material Adverse
Effect, or to materially and adversely affect the validity or
enforceability of this Agreement or the Merger.
(d) HSR Act. The waiting period (and any extension thereof)
-------
applicable to the Merger under the HSR Act shall have been terminated or
shall have otherwise expired.
(e) No Injunctions or Restraints. No temporary restraining order,
----------------------------
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger shall be in effect; provided, however, that
-------- -------
the party invoking this condition shall use best reasonable efforts to have
any such order or injunction vacated.
(f) Nasdaq Listing. The shares of Surviving Corporation Common Stock
--------------
issuable to the Company's stockholders pursuant to this Agreement shall
have been approved for quotation on the Nasdaq National Market, subject to
official notice of issuance.
(g) Form S-4. The Form S-4 shall have become effective under the
--------
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.
6.2 CONDITIONS TO OBLIGATIONS OF EVERGREEN. The obligation of Evergreen to
--------------------------------------
effect the Merger are further subject to the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company and Radio Broadcasting contained in this
Agreement shall have been
43
true and correct on the date of this Agreement (except to the extent that
they expressly relate only to an earlier time, in which case they shall
have been true and correct as of such earlier time), other than such
breaches of representations and warranties which in the aggregate could not
reasonably be expected to have a Company Material Adverse Effect. The
Company and Radio Broadcasting shall have delivered to Evergreen a
certificate dated as of the Closing Date, signed by a senior executive
officer of the Company and Radio Broadcasting, to the effect set forth in
this Section 6.2(a).
(b) Performance of Obligations of the Company and Radio Broadcasting.
----------------------------------------------------------------
The Company and Radio Broadcasting shall have performed in all material
respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Evergreen shall have
received a certificate signed on behalf of the Company and Radio
Broadcasting by a senior executive officer of the Company and Radio
Broadcasting to such effect.
(c) Tax Opinion. Evergreen shall have received an opinion of Xxxxxx &
-----------
Xxxxxxx, dated the Closing Date, substantially in the form of Exhibit G, to
the effect that (i) the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the
Code; (ii) each of Evergreen, the Company and Radio Broadcasting will be a
party to the reorganization within the meaning of Section 368(b) of the
Code; (iii) no gain or loss will be recognized by the Company, Radio
Broadcasting or Evergreen as a result of the Merger; and (iv) no gain or
loss will be recognized by any holder of Evergreen Class A Common Stock or
Evergreen Class B Common Stock on the exchange of such stock for shares of
Surviving Corporation Common Stock pursuant to the Merger. In rendering
such opinion, Xxxxxx & Xxxxxxx shall receive and may rely upon
representations contained in certificates of Evergreen, the Company, Radio
Broadcasting, and certain stockholders of the Company and Radio
Broadcasting, substantially in the form of Exhibits B through F.
6.3 CONDITIONS TO OBLIGATION OF THE COMPANY, AND RADIO BROADCASTING. The
---------------------------------------------------------------
obligation of the Company and Radio Broadcasting to effect the Merger is further
subject to the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Evergreen contained in
44
this Agreement shall have been true and correct on the date of this
Agreement (except to the extent that they expressly relate only to an
earlier time, in which case they shall have been true and correct as of
such earlier time), other than such breaches of representations and
warranties which in the aggregate could not reasonably be expected to have
an Evergreen Material Adverse Effect. Evergreen shall have delivered to the
Company and Radio Broadcasting a certificate dated as of the Closing Date,
signed by a senior executive officer of Evergreen, to the effect set forth
in this Section 6.3(a).
(b) Performance of Obligations of Evergreen. Evergreen shall have
---------------------------------------
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate signed on behalf of Evergreen by a senior
executive officer of Evergreen to such effect.
(c) Tax Opinion. The Company shall have received an opinion of Weil,
-----------
Gotshal & Xxxxxx LLP, dated as of the Closing Date and substantially in the
form of Exhibit H, to the effect that the Merger will be treated as a
---------
reorganization under Section 368(a) of the Code and that no gain or loss
will be recognized by the stockholders of the Company and of Radio
Broadcasting on the receipt pursuant to the Merger of shares of Surviving
Corporation Common Stock or Merger Preferred Stock in exchange for Shares,
shares of Company Convertible Preferred Stock and/or shares of Radio
Broadcasting Preferred Stock, except with respect to cash received by
dissenters or in lieu of fractional shares of Surviving Corporation Common
Stock. In rendering such opinion, Weil, Gotshal & Xxxxxx LLP shall receive
and may rely upon representations contained in certificates of Evergreen,
the Company, Radio Broadcasting, and certain stockholders of the Company
and Radio Broadcasting, substantially in the form of Exhibits B through F.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated and abandoned at any
-----------
time prior to the Effective Time, whether before or after approval of matters
presented in connection with the Merger by the stockholders of the Company or
Evergreen:
45
(a) by mutual written consent of Evergreen and the Company;
(b) by either Evergreen or the Company:
(i) if, upon a vote at a duly held Stockholders Meeting or
Evergreen Stockholders Meeting or any adjournment thereof, any
required approval of the stockholders of the Company or Evergreen, as
the case may be, shall not have been obtained;
(ii) if the Merger shall not have been consummated on or before
February 19, 1998, unless the failure to consummate the Merger is the
result of a willful and material breach of this Agreement by the party
seeking to terminate this Agreement;
(iii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become final and
nonappealable; or
(iv) if the other party hereto shall have breached the
requirements of Sections 4.2 or 4.5 hereof, unless the party seeking
to invoke this clause (iv) shall at such time be in material breach of
this Agreement.
7.2 EFFECT OF TERMINATION. In the event of termination of this Agreement
---------------------
by either the Company or Evergreen as provided in Section 7.1, this Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of Evergreen or the Company, other than the last sentence
of Section 4.3 and Sections 2.10, 3.10, 7.2 and 10.2. Nothing contained in this
Section 7.2 shall relieve any party from any liability resulting from any
material breach of the representations, warranties, covenants or agreements set
forth in this Agreement.
7.3 AMENDMENT. Subject to the applicable provisions of the Delaware Code,
---------
at any time prior to the Effective Time, the parties hereto may modify or amend
this Agreement, by written agreement executed and delivered by duly authorized
officers of the respective parties; provided, however, that after the Company
-------- -------
Stockholder Approval and Evergreen Stockholder Approval has been
46
obtained, no amendment shall be made which reduces the consideration payable in
the Merger or adversely affects the rights of the Company's or Evergreen's
stockholders hereunder without the approval of their respective stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
7.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the
-----------------
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties of the other parties contained in this Agreement
or in any document delivered pursuant to this Agreement or (c) subject to
Section 7.3, waive compliance with any of the agreements or conditions of the
other parties contained in this Agreement. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing 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 such rights.
7.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER. A
---------------------------------------------------------
termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.3 or an extension or waiver pursuant to Section
7.4 shall, in order to be effective, require in the case of Evergreen or the
Company, action by its Board of Directors or the duly authorized designee of its
Board of Directors.
ARTICLE VIII
SURVIVAL OF PROVISIONS
8.1 SURVIVAL. The representations and warranties respectively required to
--------
be made by the Company and Evergreen in this Agreement, or in any certificate,
respectively, delivered by the Company or Evergreen pursuant to Section 6.2 or
Section 6.3 hereof will not survive the Closing.
47
ARTICLE IX
NOTICES
9.1 NOTICES. All notices and other communications under this
-------
Agreement must be in writing and will be deemed to have been duly given if
delivered, telecopied or mailed, by certified mail, return receipt requested,
first-class postage prepaid, to the parties at the following addresses:
If to Evergreen, to:
Evergreen Media Corporation
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with copies to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxx., X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Company or Radio Broadcasting, to:
Chancellor Broadcasting Company
00000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
48
With copies to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
All notices and other communications required or permitted under this Agreement
that are addressed as provided in this Article IX will, if delivered personally,
be deemed given upon delivery, will, if delivered by telecopy, be deemed
delivered when confirmed and will, if delivered by mail in the manner described
above, be deemed given on the third business day after the day it is deposited
in a regular depository of the United States mail. Any party from time to time
may change its address for the purpose of notices to that party by giving a
similar notice specifying a new address, but no such notice will be deemed to
have been given until it is actually received by the party sought to be charged
with the contents thereof.
ARTICLE X
MISCELLANEOUS
10.1 ENTIRE AGREEMENT. Except for documents executed by the Company
----------------
and Evergreen pursuant hereto, this Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter of this
Agreement, and this Agreement (including the exhibits hereto and other documents
delivered in connection herewith), the Stockholders Agreement and the
Confidentiality Agreements contain the sole and entire agreement between the
parties hereto with respect to the subject matter hereof.
49
10.2 EXPENSES. Whether or not the Merger is consummated, each of the
--------
Company and Evergreen will pay its own costs and expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of the
transactions contemplated hereby; provided that the fees and expenses incurred
--------
in connection with (i) the filings and registrations with the Department of
Justice and Federal Trade Commission pursuant to the HSR Act, (ii) the filings
with the FCC under the Communications Act, and (iii) the printing, mailing and
distribution of the Joint Proxy Statement and the preparation and filing of the
Form S-4, shall be borne equally by Evergreen and the Company.
10.3 COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed an original but all of which will
constitute one and the same instrument and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties.
10.4 NO THIRD PARTY BENEFICIARY. Except as otherwise provided herein,
--------------------------
the terms and provisions of this Agreement are intended solely for the benefit
of the parties hereto, and their respective successors or assigns, and it is not
the intention of the parties to confer third-party beneficiary rights upon any
other person.
10.5 GOVERNING LAW. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.
10.6 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of
--------------------------
the rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, and any such assignment that is
not consented to shall be null and void. 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.
10.7 HEADINGS, GENDER, ETC. The headings used in this Agreement have
---------------------
been inserted for convenience and do not constitute matter to be construed or
interpreted in connection with this Agreement. Unless the context of this
Agreement otherwise requires, (a) words of any gender are deemed to include each
other gender; (b) words using the singular or plural number also include the
plural or singular number, respectively; (c) the
50
terms "hereof," "herein," "hereby," "hereto," and derivative or similar words
refer to this entire Agreement; (d) the terms "Article" or "Section" refer to
the specified Article or Section of this Agreement; (e) all references to
"dollars" or "$" refer to currency of the United States of America; and (f) the
term "person" shall include any natural person, corporation, limited liability
company, general partnership, limited partnership, or other entity, enterprise,
authority or business organization.
10.8 INVALID PROVISIONS. If any provision of this Agreement is held to be
------------------
illegal, invalid, or unenforceable under any present or future law, and if the
rights or obligations of the Company or Evergreen under this Agreement will not
be materially and adversely affected thereby, (a) such provision will be fully
severable; (b) this Agreement will be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part hereof; and (c)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid, or unenforceable provision or
by its severance herefrom.
10.9 VIACOM TRANSACTION. On February 16, 1997, EMCLA and Viacom
------------------
International Inc. ("Viacom") entered into a Stock Purchase Agreement (the
"Viacom Purchase Agreement") whereby EMCLA agreed to purchase all the
outstanding shares of stock of certain subsidiaries of Viacom that own and
operate the radio broadcast stations described in the Viacom Purchase Agreement.
Concurrently with the execution and delivery of this Agreement, Evergreen,
EMCLA, the Company and Radio Broadcasting have entered into an agreement (the
"Joint Purchase Agreement") whereby, as between Evergreen and the Company, the
Company has agreed to assume certain obligations under the Viacom Purchase
Agreement and Evergreen has agreed to grant to the Company certain rights under
the Viacom Purchase Agreement. Notwithstanding any provision hereof to the
contrary, no provision of this Agreement shall be deemed to prohibit any
transaction contemplated by the Joint Purchase Agreement or the Viacom Purchase
Agreement. The transactions contemplated by the Viacom Purchase Agreement and
the Joint Purchase Agreement are referred to collectively as the "Viacom
Transaction."
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
51
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the Company, Radio Broadcasting and Evergreen
effective as of the date first written above.
CHANCELLOR BROADCASTING COMPANY
By: _______________________________
Name:
Title:
CHANCELLOR RADIO BROADCASTING
COMPANY
By: _______________________________
Name:
Title:
EVERGREEN MEDIA CORPORATION
By: ______________________________
Name:
Title:
ANNEX I
-------
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CHANCELLOR MEDIA CORPORATION
-------------------------------------------------------------------------------
FIRST: The name of the corporation is Chancellor Media Corporation (the
"Corporation").
SECOND: The registered office of the Corporation in the State of
Delaware is located at Corporation Trust Center, 0000 Xxxxxx Xxxxxx, xx xxx Xxxx
xx Xxxxxxxxxx, Xxxxxx of New Castle. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.
THIRD: The purpose for which the Corporation is organized is to engage
in any and all lawful acts and activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is 250,000,000 shares
consisting of (a) 50,000,000 shares of preferred stock, par value $.01 per share
(the "Preferred Stock") and (b) 200,000,000 shares of Common Stock, par value
$.01 per share (the "Common Stock").
The designations, powers, preferences, rights, qualifications,
limitations, and restrictions of the Preferred Stock and the Common Stock are as
follows:
1. Provisions Relating to the Preferred Stock.
-------------------------------------------
(a) The Preferred Stock may be issued from time to time in one
or more classes or series, the shares of each class or series to have such
designations, powers, preferences and rights and such qualifications,
limitations and restrictions thereof as are stated and expressed herein and in
the resolution or resolutions
providing for the issue of such class or series adopted by the Board of
Directors of the Corporation (the "Board of Directors") as hereafter prescribed.
(b) Authority is hereby expressly granted to and vested in
the Board of Directors to authorize the issuance of the Preferred Stock from
time to time in one or more classes or series, and with respect to each class or
series of the Preferred Stock, to fix and state by the resolution or resolutions
from time to time adopted providing for the issuance thereof the following:
(i) whether or not the class or series is to have
voting rights, full, special or limited, or is to be without voting
rights, and whether or not such class or series is to be entitled to
vote as a separate class either alone or together with the holders of
one or more other classes or series of stock;
(ii) the number of shares to constitute the class or
series and the designations thereof;
(iii) the preferences and relative, participating,
optional or other special rights, if any, and the qualifications,
limitations or restrictions thereof, if any, with respect to any class
or series;
(iv) whether or not the shares of any class or series
shall be redeemable at the option of the Corporation or the holders
thereof or upon the happening of any specified event, and, if
redeemable, the redemption price or prices (which may be payable in
the form of cash, notes, securities or other property) and the time or
times at which, and the terms and conditions upon which, such shares
shall be redeemable and the manner of redemption;
(v) whether or not the shares of a class or series
shall be subject to the operation of retirement or sinking funds to be
applied to the purchase or redemption of such shares for retirement,
and, if such retirement or sinking fund or funds are to be
established, the annual amount thereof and the terms and provisions
relative to the operation thereof;
(vi) the dividend rate, whether dividends are payable
in cash, securities of the Corporation or other property, the
conditions upon which and the times when such dividends are payable,
the preference to or the relation to the payment of dividends payable
on any other class or classes or series of
2
stock, whether or not such dividends shall be cumulative or
noncumulative and, if cumulative, the date or dates from which such
dividends shall accumulate;
(vii) the preferences, if any, and the amounts thereof
which the holders of any class or series thereof shall be entitled to
receive upon the voluntary or involuntary dissolution of, or upon any
distribution of the assets of, the Corporation;
(viii) whether or not the shares of any class or
series, at the option of the Corporation or the holder thereof or upon
the happening of any specified event, shall be convertible into or
exchangeable for the shares of any other class or classes or of any
other series of the same or any other class or classes of stock,
securities, or other property of the Corporation and the conversion
price or prices or ratio or ratios or the rate or rates at which such
exchange may be made, with such adjustments, if any, as shall be
stated and expressed or provided for in such resolution or
resolutions; and
(ix) such other special rights and protective
provisions with respect to any class or series as may to the Board of
Directors seem advisable.
(c) The shares of each class or series of the Preferred
Stock may vary from the shares of any other class or series thereof in any or
all of the foregoing respects. The Board of Directors may increase the number of
shares of the Preferred Stock designated for any existing class or series by a
resolution adding to such class or series authorized and unissued shares of the
Preferred Stock not designated for any other class or series. The Board of
Directors may decrease the number of shares of the Preferred Stock designated
for any existing class or series by a resolution subtracting from such class or
series authorized and unissued shares of the Preferred Stock designated for such
existing class or series, and the shares so subtracted shall become authorized,
unissued and undesignated shares of the Preferred Stock.
2. Provisions Relating to the Common Stock.
----------------------------------------
(a) Each share of Common Stock of the Corporation shall have
identical rights and privileges in every respect. The holders of shares of
Common Stock shall be entitled to vote upon all matters submitted to a vote of
the stockholders of the Corporation and shall be entitled to one vote for each
share of Common Stock held.
3
(b) Subject to the prior rights and preferences, if any,
applicable to shares of the Preferred Stock or any series thereof, the holders
of shares of the Common Stock shall be entitled to receive such dividends
(payable in cash, stock, or otherwise) as may be declared thereon by the board
of directors at any time and from time to time out of any funds of the
Corporation legally available therefor.
(c) In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Corporation, after distribution in full of the
preferential amounts, if any, to be distributed to the holders of shares of the
Preferred Stock or any series thereof, the holders of shares of the Common Stock
shall be entitled to receive all of the remaining assets of the Corporation
available for distribution to its stockholders, ratably in proportion to the
number of shares of the Common Stock held by them. A liquidation, dissolution,
or winding-up of the Corporation, as such terms are used in this Paragraph (c),
shall not be deemed to be occasioned by or to include any consolidation or
merger of the Corporation with or into any other corporation or corporations or
other entity or a sale, lease, exchange, or conveyance of all or a part of the
assets of the Corporation.
3. General.
-------
(a) Subject to the foregoing provisions of this Certificate of
Incorporation, the Corporation may issue shares of its Common Stock from time to
time for such consideration (not less than the par value thereof) as may be
fixed by the Board of Directors, which is expressly authorized to fix the same
in its absolute and uncontrolled discretion subject to the foregoing conditions.
Shares so issued for which the consideration shall have been paid or delivered
to the Corporation shall be deemed fully paid stock and shall not be liable to
any further call or assessment thereon, and the holders of such shares shall not
be liable for any further payments in respect of such shares.
(b) The Corporation shall have authority to create and issue
rights and options entitling their holders to purchase shares of the
Corporation's capital stock of any class or series or other securities of the
Corporation, and such rights and options shall be evidenced by instrument(s)
approved by the Board of Directors. The Board of Directors shall be empowered to
set the exercise price, duration, times for exercise, and other terms of such
options or rights; provided, however, that the consideration to be received for
any shares of capital stock subject thereto shall not be less than the par value
thereof.
4
FIFTH: The number of directors constituting the Board of Directors
shall be no less than five and no more than thirteen, plus such number of
directors as may be elected from time to time by the holders of any class or
series of Preferred Stock. Commencing on the date on which this Amended and
Restated Certificate of Incorporation shall become effective pursuant to the
General Corporation Law of the State of Delaware, the directors of the
Corporation shall be divided into three classes (the "Classified Directors")
with the first class ("Class I"), second class ("Class II") and the third class
("Class III") each to consist as nearly as practicable of an equal number of
directors. The term of office of the Class I directors shall expire at the 1998
annual meeting of stockholders, the term of office of the Class II directors
shall expire at the 1999 annual meeting of stockholders and the term of office
of the Class III directors shall expire at the 2000 annual meeting of
stockholders, with each director to hold office until his or her successor shall
have been duly elected and qualified. At each annual meeting of stockholders,
commencing with the 1998 annual meeting, Classified Directors elected to succeed
those Classified Directors whose terms then expire shall be elected for a term
of office to expire at the third succeeding annual meeting of stockholders after
their election.
SIXTH: The directors of the Corporation need not be elected by written
ballot unless the bylaws of the Corporation otherwise provide.
SEVENTH: The following provisions are included for the purpose of
ensuring that control and management of the Corporation complies with the
Communications Act of 1934, and the rules and regulations of the Federal
Communication Commission, as the same may be amended from time to time
(collectively, the "Communications Act"):
(a) The Corporation shall not issue in excess of 25% of its
capital stock outstanding at any time to or for the account of any of the
following: (i) a person who is a citizen of a country other than the United
States; (ii) any entity organized under the laws of a government other than the
government of the United States or any state, territory, or possession of the
United States; (iii) a government other than the government of the United States
or of any state, territory, or possession of the United States; or (iv) a
representative of, or an individual or entity controlled by, any of the
foregoing (individually, an "Alien"; collectively, "Aliens"), if to do so would
violate the Communications Act. The Corporation shall not permit the transfer on
the books of the Corporation of any capital stock to any Alien if, after giving
effect to such transfer, the capital stock held by or for the account of any
Alien or
5
Aliens would exceed 25% of the Corporation's capital stock outstanding at any
time, and if exceeding such 25% limit would violate the Communications Act.
(b) No Alien or Aliens, individually or collectively, shall be
entitled to vote or direct or control the vote of more than 25% of (i) the total
number of all shares of capital stock of the Corporation outstanding at any time
and from time to time or (ii) the total voting power of all shares of capital
stock of the Corporation outstanding and entitled to vote at any time and from
time to time, if to do so would violate the Communications Act.
(c) The Board of Directors shall have all powers necessary to
implement the provisions of this Article Seventh and to ensure compliance with
the alien ownership restrictions (the "Alien Ownership Restrictions") of the
Communications Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as the same may be amended from time to time
(collectively, the "Communications Act"), including, without limitation, the
power to prohibit the transfer of any shares of capital stock of the Corporation
to any Alien and to take or cause to be taken such action as it deems
appropriate to implement such prohibition, including placing a legend regarding
restrictions on foreign ownership of the capital stock on certificates
representing such stock.
(d) Without limiting the generality of the foregoing and
notwithstanding any other provision of this Amended and Restated Certificate of
Incorporation to the contrary, any shares of capital stock of the Corporation
determined by the Board of Directors to be owned beneficially by an Alien or
Aliens shall always be subject to redemption by the Corporation by action of the
Board of Directors, pursuant to Section 151 of the General Corporation Law of
the State of Delaware, or any other applicable provision of law, to the extent
necessary in the judgment of the Board of Directors to comply with the Alien
Ownership Restrictions. The terms and conditions of such redemption shall be as
follows:
(i) the redemption price of the shares to be redeemed
pursuant to this Article Seventh shall be equal to the lower of (A) the
fair market value of the shares to be redeemed, as determined by the
Board of Directors in good faith, and (B) such Alien's purchase price
for such shares;
(ii) the redemption price of such shares may be paid in
cash, securities or any combination thereof;
6
(iii) if less than all the shares held by Aliens are to
be redeemed, the shares to be redeemed shall be selected in any manner
determined by the Board of Directors to be fair and equitable;
(iv) at least 10 days' written notice of the redemption
date shall be given to the holders of record of the shares selected to
be redeemed (unless waived in writing by any such holder), provided
that the redemption date may be the date on which written notice shall
be given to holders if the cash or securities necessary to effect the
redemption shall have been deposited in trust for the benefit of such
holders and subject to immediate withdrawal by them upon surrender of
the stock certificates for their shares to be redeemed duly endorsed in
blank or accompanied by duly executed proper instruments of transfer;
(v) from and after the redemption date, the shares to
be redeemed shall cease to be regarded as outstanding and any and all
rights of the holders in respect of the shares to be redeemed or
attaching to such shares of whatever nature (including without
limitation any rights to vote or participate in dividends declared on
stock of the same class or series as such shares) shall cease and
terminate, and the holders thereof thereafter shall be entitled only to
receive the cash or securities payable upon redemption; and
(vi) such other terms and conditions as the Board of
Directors shall determine.
For purposes of this Article Seventh, the determination of beneficial ownership
of shares of capital stock of the Corporation shall be made pursuant to Rule
13d-3 under the Securities Exchange Act of 1934, as amended.
EIGHTH: No contract or transaction between the Corporation and one or
more of its directors, officers, or stockholders or between the Corporation and
any Person (as hereinafter defined) in which one or more of its directors,
officers, or stockholders are directors, officers, or stockholders, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or committee which authorizes the contract or transaction, or solely
because his, her, or their votes are counted for such purpose, if: (i) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or committee in good faith authorizes the
7
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved, or ratified by the board of directors, a committee thereof, or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction. "Person" as used herein means any
corporation, partnership, association, firm, trust, joint venture, political
subdivision or instrumentality.
NINTH: The Corporation shall indemnify any Person who was, is, or is
threatened to be made a party to a proceeding (as hereinafter defined) by reason
of the fact that he or she (i) is or was a director, officer, employee or agent
of the Corporation, or (ii) is or was serving at the request of the Corporation
as a director, officer, partner, venturer, proprietor, trustee, employee, agent,
or similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or other
enterprise, to the fullest extent permitted under the General Corporation Law of
the State of Delaware, as the same exists or may hereafter be amended. Such
right shall be a contract right and as such shall run to the benefit of any
director or officer who is elected and accepts the position of director or
officer of the Corporation or elects to continue to serve as a director or
officer of the Corporation while this Article Ninth is in effect. Any repeal or
amendment of this Article Ninth shall be prospective only and shall not limit
the rights of any such director or officer or the obligations of the Corporation
with respect to any claim arising from or related to the services of such
director or officer in any of the foregoing capacities prior to any such repeal
or amendment to this Article Ninth. Such right shall include the right to be
paid by the Corporation expenses incurred in investigating or defending any such
proceeding in advance of its final disposition to the maximum extent permitted
under the General Corporation Law of the State of Delaware, as the same exists
or may hereafter be amended. To the extent that a director, officer, employee or
agent of the corporation shall be successful on the merits or otherwise in
defense of any proceeding, or in defense of any claim, issue, or matter therein,
he or she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the
8
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense is not permitted under the
General Corporation Law of the State of Delaware, but the burden of proving such
defense shall be on the Corporation. None of (i) the failure of the Corporation
(including its board of directors or any committee thereof, independent legal
counsel, or stockholders) to have made its determination prior to the
commencement of such action that indemnification of, or advancement of costs of
defense to, the claimant is permissible in the circumstances, (ii) an actual
determination by the Corporation (including its board of directors or any
committee thereof, independent legal counsel, or stockholders) that such
indemnification or advancement is not permissible, or (iii) the termination of
any proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall be a defense to the action or create a
presumption that such indemnification or advancement is not permissible. In the
event of the death of any Person having a right of indemnification under the
foregoing provisions, such right shall inure to the benefit of his or her heirs,
executors, administrators, and personal representatives. The rights conferred
above shall not be exclusive of any other right which any Person may have or
hereafter acquire under any statute, bylaw, resolution of stockholders or
directors, agreement, or otherwise.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
Without limiting the generality of the foregoing, to the extent
permitted by then applicable law, the grant of mandatory indemnification
pursuant to this Article Ninth shall extend to proceedings involving the
negligence of such Person.
The Board of Directors may authorize, by a vote of a majority of a
quorum of the Board of Directors, the Corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, partner, venturer, proprietor, trustee, employee, agent
or similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or other
enterprise against any liability asserted against him or her and incurred by him
or her in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have
9
the power to indemnify him or her against such liability under the provisions of
this Article Ninth.
As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
TENTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware, or (iv) for any transaction from which the director derived
an improper personal benefit. Any repeal or amendment of this Article Tenth by
the stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation arising from an act or omission occurring prior to the time of such
repeal or amendment. In addition to the circumstances in which a director of the
Corporation is not personally liable as set forth in the foregoing provisions of
this Article Tenth, a director shall not be liable to the Corporation or its
stockholders to such further extent as permitted by any law hereafter enacted,
including without limitation any subsequent amendment to the General Corporation
Law of the State of Delaware.
10
ANNEX II
BYLAWS
OF
CHANCELLOR MEDIA CORPORATION
A Delaware Corporation
ARTICLE ONE: OFFICES
1.1 Registered Office and Agent............................................... 1
1.2 Other Offices............................................................. 1
ARTICLE TWO: MEETINGS OF STOCKHOLDERS
2.1 Annual Meeting............................................................ 1
2.2 Special Meeting........................................................... 2
2.3 Place of Meetings......................................................... 2
2.4 Notice.................................................................... 2
2.5 Voting List............................................................... 2
2.6 Quorum.................................................................... 3
2.7 Required Vote; Withdrawal of Quorum....................................... 3
2.8 Method of Voting; Proxies................................................. 3
2.9 Record Date............................................................... 4
2.10 Conduct of Meeting........................................................ 5
2.11 Inspectors................................................................ 5
ARTICLE THREE: DIRECTORS
3.1 Management................................................................ 6
3.2 Number; Qualification; Election; Term..................................... 6
3.3 Change in Number.......................................................... 7
3.4 Removal................................................................... 7
3.5 Vacancies................................................................. 7
3.6 Meetings of Directors..................................................... 7
3.7 First Meeting............................................................. 8
3.8 Election of Officers...................................................... 8
3.9 Regular Meetings.......................................................... 8
3.10 Special Meetings.......................................................... 8
3.11 Notice.................................................................... 8
3.12 Quorum; Majority Vote..................................................... 8
3.13 Procedure................................................................. 9
3.14 Presumption of Assent..................................................... 9
3.15 Compensation.............................................................. 9
ARTICLE FOUR: COMMITTEES
i
4.1 Designation............................................................... 9
4.2 Number; Qualification; Term............................................... 9
4.3 Authority................................................................. 10
4.4 Committee Changes......................................................... 10
4.5 Alternate Members of Committees........................................... 10
4.6 Regular Meetings.......................................................... 10
4.7 Special Meetings.......................................................... 10
4.8 Quorum; Majority Vote..................................................... 10
4.9 Minutes................................................................... 11
4.10 Compensation.............................................................. 11
4.11 Responsibility............................................................ 11
ARTICLE FIVE: NOTICE
5.1 Method.................................................................... 11
5.2 Waiver.................................................................... 12
ARTICLE SIX: OFFICERS
6.1 Number; Titles; Term of Office............................................ 12
6.2 Removal................................................................... 12
6.3 Vacancies................................................................. 12
6.4 Authority................................................................. 12
6.5 Compensation.............................................................. 12
6.6 Chairman of the Board..................................................... 13
6.7 President................................................................. 13
6.8 Chief Operating Officer................................................... 13
6.9 Vice Presidents........................................................... 13
6.10 Treasurer................................................................. 13
6.11 Assistant Treasurers...................................................... 14
6.12 Secretary................................................................. 14
6.13 Assistant Secretaries..................................................... 14
ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS
7.1 Certificates for Shares................................................... 14
7.2 Replacement of Lost or Destroyed Certificates............................. 15
7.3 Transfer of Shares........................................................ 15
7.4 Registered Stockholders................................................... 15
ii
7.5 Regulations............................................................... 16
7.6 Legends................................................................... 16
ARTICLE EIGHT: MISCELLANEOUS PROVISIONS
8.1 Dividends................................................................. 16
8.2 Reserves.................................................................. 16
8.3 Books and Records......................................................... 16
8.4 Fiscal Year............................................................... 16
8.5 Seal...................................................................... 17
8.6 Resignations.............................................................. 17
8.7 Securities of Other Corporations.......................................... 17
8.8 Telephone Meetings........................................................ 17
8.9 Action Without a Meeting.................................................. 17
8.10 Invalid Provisions........................................................ 18
8.11 Mortgages, etc............................................................ 18
8.12 Headings.................................................................. 19
8.13 References................................................................ 19
8.14 Amendments................................................................ 19
iii
BYLAWS
OF
CHANCELLOR MEDIA CORPORATION
A Delaware Corporation
PREAMBLE
These bylaws are subject to, and governed by, the General Corporation
Law of the State of Delaware (the "Delaware General Corporation Law") and the
certificate of incorporation of Chancellor Media Corporation, a Delaware
corporation (the "Corporation"). In the event of a direct conflict between the
provisions of these bylaws and the mandatory provisions of the Delaware General
Corporation Law or the provisions of the certificate of incorporation of the
Corporation, such provisions of the Delaware General Corporation Law or the
certificate of incorporation of the Corporation, as the case may be, will be
controlling.
ARTICLE ONE: OFFICES
1.1 Registered Office and Agent. The registered office and registered
---------------------------
agent of the Corporation shall be as designated from time to time by the
appropriate filing by the Corporation in the office of the Secretary of State of
the State of Delaware.
1.2 Other Offices. The Corporation may also have offices at such other
-------------
places, both within and without the State of Delaware, as the board of directors
may from time to time determine or as the business of the Corporation may
require.
ARTICLE TWO: MEETINGS OF STOCKHOLDERS
2.1 Annual Meeting. An annual meeting of stockholders of the
--------------
Corporation shall be held each calendar year on such date and at such time as
shall be designated from time to time by the board of directors and stated in
the notice of the meeting or in a duly executed waiver of notice of such
meeting. At such meeting, the stockholders shall elect directors and transact
such other business as may properly be brought before the meeting.
2.2 Special Meeting. A special meeting of the stockholders may be
---------------
called at any time by the Chairman of the Board, the President, the board of
directors, and shall be called by the President or the Secretary at the request
in writing of the stockholders of record of not less than ten percent of all
shares entitled to vote at such meeting or as otherwise provided by the
certificate of incorporation of the Corporation. A special meeting shall be held
on such date and at such time as shall be designated by the person(s) calling
the meeting and stated in the notice of the meeting or in a duly executed waiver
of notice of such meeting. Only such business shall be transacted at a special
meeting as may be stated or indicated in the notice of such meeting or in a duly
executed waiver of notice of such meeting.
2.3 Place of Meetings. An annual meeting of stockholders may be held at
-----------------
any place within or without the State of Delaware designated by the board of
directors. A special meeting of stockholders may be held at any place within or
without the State of Delaware designated in the notice of the meeting or a duly
executed waiver of notice of such meeting. Meetings of stockholders shall be
held at the principal executive office of the Corporation unless another place
is designated for meetings in the manner provided herein.
2.4 Notice. Written or printed notice stating the place, day, and time
------
of each meeting of the stockholders and, in case of a special meeting, the
purpose or purposes for which the meeting is called shall be delivered not less
than ten nor more than 60 days before the date of the meeting, either personally
or by mail, by or at the direction of the President, the Secretary, or the
officer or person(s) calling the meeting, to each stockholder of record entitled
to vote at such meeting. If such notice is to be sent by mail, it shall be
directed to such stockholder at his address as it appears on the records of the
Corporation, unless he shall have filed with the Secretary of the Corporation a
written request that notices to him be mailed to some other address, in which
case it shall be directed to him at such other address. Notice of any meeting of
stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy and shall not, at the beginning of
such meeting, object to the transaction of any business because the meeting is
not lawfully called or convened, or who shall, either before or after the
meeting, submit a signed waiver of notice, in person or by proxy.
2.5 Voting List. At least ten days before each meeting of stockholders,
-----------
the Secretary or other officer of the Corporation who has charge of the
Corporation's stock ledger, either directly or through another officer appointed
by him or through a transfer agent appointed by the board of directors, shall
prepare a complete list of stockholders
2
entitled to vote thereat, arranged in alphabetical order and showing the address
of each stockholder and number of shares registered in the name of each
stockholder. For a period of ten days prior to such meeting, such list shall be
kept on file at a place within the city where the meeting is to be held, which
place shall be specified in the notice of meeting or a duly executed waiver of
notice of such meeting or, if not so specified, at the place where the meeting
is to be held and shall be open to examination by any stockholder during
ordinary business hours. Such list shall be produced at such meeting and kept at
the meeting at all times during such meeting and may be inspected by any
stockholder who is present.
2.6 Quorum. The holders of a majority of the outstanding shares
------
entitled to vote on a matter, present in person or by proxy, shall constitute a
quorum at any meeting of stockholders, except as otherwise provided by law, the
certificate of incorporation of the Corporation, or these by-laws. If a quorum
shall not be present, in person or by proxy, at any meeting of stockholders, the
stockholders entitled to vote thereat who are present, in person or by proxy,
or, if no stockholder entitled to vote is present, any officer of the
Corporation may adjourn the meeting from time to time, without notice other than
announcement at the meeting (unless the board of directors, after such
adjournment, fixes a new record date for the adjourned meeting), until a quorum
shall be present, in person or by proxy. At any adjourned meeting at which a
quorum shall be present, in person or by proxy, any business may be transacted
which may have been transacted at the original meeting had a quorum been
present; provided that, if the adjournment is for more than 30 days or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the adjourned meeting.
2.7 Required Vote; Withdrawal of Quorum. When a quorum is present at
-----------------------------------
any meeting, the vote of the holders of at least a majority of the outstanding
shares entitled to vote who are present, in person or by proxy, shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of statute, the certificate of incorporation of the
Corporation, or these bylaws, a different vote is required, in which case such
express provision shall govern and control the decision of such question. The
stockholders present at a duly constituted meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
2.8 Method of Voting; Proxies. Except as otherwise provided in the
-------------------------
certificate of incorporation of the Corporation or by law, each outstanding
share, regardless of class, shall be entitled to one vote on each matter
submitted to a vote at a
3
meeting of stockholders. Elections of directors need not be by written ballot.
At any meeting of stockholders, every stockholder having the right to vote may
vote either in person or by a proxy executed in writing by the stockholder or by
his duly authorized attorney-in-fact. Each such proxy shall be filed with the
Secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after three years from the date of its execution, unless
otherwise provided in the proxy. If no date is stated in a proxy, such proxy
shall be presumed to have been executed on the date of the meeting at which it
is to be voted. Each proxy shall be revocable unless expressly provided therein
to be irrevocable and coupled with an interest sufficient in law to support an
irrevocable power or unless otherwise made irrevocable by law.
2.9 Record Date. (a) For the purpose of determining stockholders
------------
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion, or exchange of stock or for the purpose of
any other lawful action, the board of directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors, for any such determination of
stockholders, such date in any case to be not more than 60 days and not less
than ten days prior to such meeting nor more than 60 days prior to any other
action. If no record date is fixed:
(i) The record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the day next preceding the
day on which the meeting is held.
(ii) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
(iii) A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the board of directors may fix a new
record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the board of
directors may fix
4
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
law or these bylaws, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office in the State of
Delaware, principal place of business, or such officer or agent shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the board of directors and prior action by the board of
directors is required by law or these bylaws, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the board of
directors adopts the resolution taking such prior action.
2.10 Conduct of Meeting. The Chairman of the Board, if such office has
------------------
been filled, and, if not or if the Chairman of the Board is absent or otherwise
unable to act, the President shall preside at all meetings of stockholders. The
Secretary shall keep the records of each meeting of stockholders. In the absence
or inability to act of any such officer, such officer's duties shall be
performed by the officer given the authority to act for such absent or
non-acting officer under these bylaws or by some person appointed by the
meeting.
2.11 Inspectors. The board of directors may, in advance of any meeting
----------
of stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. If any of the inspectors so appointed shall fail to appear
or act, the chairman of the meeting shall, or if inspectors shall not have been
appointed, the chairman of the meeting may, appoint one or more inspectors. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors
shall determine the number of shares of capital stock of the Corporation
outstanding and the voting power of each, the number of shares represented at
the meeting, the existence of a quorum, and the validity and effect of proxies
and shall receive votes, ballots, or consents, hear and determine all challenges
and questions arising in connection with the right to vote, count and tabulate
all votes, ballots, or
5
consents, determine the results, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the chairman
of the meeting, the inspectors shall make a report in writing of any challenge,
request, or matter determined by them and shall execute a certificate of any
fact found by them. No director or candidate for the office of director shall
act as an inspector of an election of directors. Inspectors need not be
stockholders.
ARTICLE THREE: DIRECTORS
3.1 Management. The business and property of the Corporation shall be
----------
managed by the board of directors. Subject to the restrictions imposed by law,
the certificate of incorporation of the Corporation, or these bylaws, the board
of directors may exercise all the powers of the Corporation.
3.2 Number; Qualification; Election; Term. The number of directors
-------------------------------------
which shall constitute the entire board of directors shall be not less than five
nor more than thirteen, plus such number of directors as may be elected from
time to time by the holders of any class or series of preferred stock of the
Corporation. The first board of directors shall consist of the number of
directors named in the certificate of incorporation of the Corporation or, if no
directors are so named, shall consist of the number of directors elected by the
incorporator(s) at an organizational meeting or by unanimous written consent in
lieu thereof. Thereafter, within the limits above specified, the number of
directors which shall constitute the entire board of directors shall be
determined by resolution of the board of directors or by resolution of the
stockholders at the annual meeting thereof or at a special meeting thereof
called for that purpose. Except as otherwise required by law, the certificate of
incorporation of the Corporation, or these bylaws, the directors shall be
elected at an annual meeting of stockholders at which a quorum is present.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy and entitled to vote on the election of
directors. Except as otherwise required by law, the certificate of incorporation
of the Corporation, or these bylaws, each director so chosen shall hold office
until the first annual meeting of stockholders held after his election and until
his successor is elected and qualified or, if earlier, until his death,
resignation, or removal from office. None of the directors need be a stockholder
of the Corporation or a resident of the State of Delaware. Each director must
have attained the age of majority.
6
3.3 Change in Number. No decrease in the number of directors
----------------
constituting the entire board of directors shall have the effect of shortening
the term of any incumbent director.
3.4 Removal. Except as otherwise provided by law or in the certificate
-------
of incorporation of the Corporation or these by-laws, at any meeting of
stockholders called expressly for that purpose, any director or the entire board
of directors may be removed, with or without cause, by a vote of the holders of
a majority of the shares then entitled to vote on the election of directors.
3.5 Vacancies. Vacancies and newly-created directorships resulting from
---------
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, though less than a quorum, or by the sole
remaining director, provided, however, that if pursuant to a provision of the
certificate of incorporation a class of capital stock of the Corporation shall
have the right to vote as a class to elect a director, then the vacancy as to a
director so elected shall be filled by a vote of the holders of such class. Each
director so chosen shall hold office until the first annual meeting of
stockholders held after his election and until his successor is elected and
qualified or, if earlier, until his death, resignation, or removal from office.
If there are no directors in office, an election of directors may be held in the
manner provided by statute. If, at the time of filling any vacancy or any
newly-created directorship, the directors then in office shall constitute less
than a majority of the whole board of directors (as constituted immediately
prior to any such increase), the Court of Chancery may, upon application of any
stockholder or stockholders holding at least 10% of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or
newly-created directorships or to replace the directors chosen by the directors
then in office. Except as otherwise provided in these bylaws, when one or more
directors shall resign from the board of directors, effective at a future date,
a majority of the directors then in office, including those who have so
resigned, shall have the power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in these
bylaws with respect to the filling of other vacancies.
3.6 Meetings of Directors. The directors may hold their meetings and
---------------------
may have an office and keep the books of the Corporation, except as otherwise
provided by statute, in such place or places within or without the State of
Delaware as the board of directors may from time to time determine or as shall
be specified in the notice of such meeting or duly executed waiver of notice of
such meeting.
7
3.7 First Meeting. Each newly elected board of directors may hold its
-------------
first meeting for the purpose of organization and the transaction of business,
if a quorum is present, immediately after and at the same place as the annual
meeting of stockholders, and no notice of such meeting shall be necessary.
3.8 Election of Officers. At the first meeting of the board of
--------------------
directors after each annual meeting of stockholders at which a quorum shall be
present, the board of directors shall elect the officers of the Corporation.
3.9 Regular Meetings. Regular meetings of the board of directors shall be
----------------
held at such times and places as shall be designated from time to time by
resolution of the board of directors. Notice of such regular meetings shall not
be required.
3.10 Special Meetings. Special meetings of the board of directors shall be
----------------
held whenever called by the Chairman of the Board, the President, or any
director.
3.11 Notice. The Secretary shall give notice of each special meeting to
------
each director at least 24 hours before the meeting. Notice of any such meeting
need not be given to any director who shall, either before or after the meeting,
submit a signed waiver of notice or who shall attend such meeting without
protesting, prior to or at its commencement, the lack of notice to him. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting.
3.12 Quorum; Majority Vote. At all meetings of the board of directors,
---------------------
a majority of the directors fixed in the manner provided in these bylaws shall
constitute a quorum for the transaction of business. If at any meeting of the
board of directors there be less than a quorum present, a majority of those
present or any director solely present may adjourn the meeting from time to time
without further notice. Unless the act of a greater number is required by law,
the certificate of incorporation of the Corporation, or these bylaws, the act of
a majority of the directors present at a meeting at which a quorum is in
attendance shall be the act of the board of directors. At any time that the
certificate of incorporation of the Corporation provides that directors elected
by the holders of a class or series of stock shall have more or less than one
vote per director on any matter, every reference in these bylaws to a majority
or other proportion of directors shall refer to a majority or other proportion
of the votes of such directors.
8
3.13 Procedure. At meetings of the board of directors, business shall
---------
be transacted in such order as from time to time the board of directors may
determine. The Chairman of the Board, if such office has been filled, and, if
not or if the Chairman of the Board is absent or otherwise unable to act, the
President shall preside at all meetings of the board of directors. In the
absence or inability to act of either such officer, a chairman shall be chosen
by the board of directors from among the directors present. The Secretary of the
Corporation shall act as the secretary of each meeting of the board of directors
unless the board of directors appoints another person to act as secretary of the
meeting. The board of directors shall keep regular minutes of its proceedings
which shall be placed in the minute book of the Corporation.
3.14 Presumption of Assent. A director of the Corporation who is
---------------------
present at the meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as
secretary of the meeting before the adjournment thereof or shall forward any
dissent by certified or registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
3.15 Compensation. The board of directors shall have the authority to
------------
fix the compensation, including fees and reimbursement of expenses, paid to
directors for attendance at regular or special meetings of the board of
directors or any committee thereof; provided, that nothing contained herein
shall be construed to preclude any director from serving the Corporation in any
other capacity or receiving compensation therefor.
ARTICLE FOUR: COMMITTEES
4.1 Designation. The board of directors may, by resolution adopted by a
-----------
majority of the entire board of directors, designate one or more committees.
4.2 Number; Qualification; Term. Each committee shall consist of one or
---------------------------
more directors appointed by resolution adopted by a majority of the entire board
of directors. The number of committee members may be increased or decreased from
time to time by resolution adopted by a majority of the entire board of
directors. Each committee member shall serve as such until the earliest of (i)
the expiration of his term
9
as director, (ii) his resignation as a committee member or as a director, or
(iii) his removal as a committee member or as a director.
4.3 Authority. Each committee, to the extent expressly provided in the
---------
resolution establishing such committee, shall have and may exercise all of the
authority of the board of directors in the management of the business and
property of the Corporation except to the extent expressly restricted by law,
the certificate of incorporation of the Corporation, or these bylaws.
4.4 Committee Changes. The board of directors shall have the power at
-----------------
any time to fill vacancies in, to change the membership of, and to discharge any
committee.
4.5 Alternate Members of Committees. The board of directors may
-------------------------------
designate one or more directors as alternate members of any committee. Any such
alternate member may replace any absent or disqualified member at any meeting of
the committee. If no alternate committee members have been so appointed to a
committee or each such alternate committee member is absent or disqualified, the
member or members of such committee present at any meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the board of directors to act at the meeting in the
place of any such absent or disqualified member.
4.6 Regular Meetings. Regular meetings of any committee may be held
----------------
without notice at such time and place as may be designated from time to time by
the committee and communicated to all members thereof.
4.7 Special Meetings. Special meetings of any committee may be held
----------------
whenever called by any committee member. The committee member calling any
special meeting shall cause notice of such special meeting, including therein
the time and place of such special meeting, to be given to each committee member
at least two days before such special meeting. Neither the business to be
transacted at, nor the purpose of, any special meeting of any committee need be
specified in the notice or waiver of notice of any special meeting.
4.8 Quorum; Majority Vote. At meetings of any committee, a majority of
---------------------
the number of members designated by the board of directors shall constitute a
quorum for the transaction of business. If a quorum is not present at a meeting
of any committee, a majority of the members present may adjourn the meeting from
time to
10
time, without notice other than an announcement at the meeting, until a quorum
is present. The act of a majority of the members present at any meeting at which
a quorum is in attendance shall be the act of a committee, unless the act of a
greater number is required by law, the certificate of incorporation of the
Corporation, or these bylaws.
4.9 Minutes. Each committee shall cause minutes of its proceedings to be
-------
prepared and shall report the same to the board of directors upon the request of
the board of directors. The minutes of the proceedings of each committee shall
be delivered to the Secretary of the Corporation for placement in the minute
books of the Corporation.
4.10 Compensation. Committee members may, by resolution of the board of
------------
directors, be allowed a fixed sum and expenses of attendance, if any, for
attending any committee meetings or a stated salary.
4.11 Responsibility. The designation of any committee and the delegation
--------------
of authority to it shall not operate to relieve the board of directors or any
director of any responsibility imposed upon it or such director by law.
ARTICLE FIVE: NOTICE
5.1 Method. Whenever by statute, the certificate of incorporation of
------
the Corporation, or these bylaws, notice is required to be given to any
committee member, director, or stockholder and no provision is made as to how
such notice shall be given, personal notice shall not be required and any such
notice may be given (a) in writing, by mail, postage prepaid, addressed to such
committee member, director, or stockholder at his address as it appears on the
books or (in the case of a stockholder) the stock transfer records of the
Corporation, or (b) by any other method permitted by law (including but not
limited to overnight courier service, telegram, telex, or telefax). Any notice
required or permitted to be given by mail shall be deemed to be delivered and
given at the time when the same is deposited in the United States mail as
aforesaid. Any notice required or permitted to be given by overnight courier
service shall be deemed to be delivered and given at the time delivered to such
service with all charges prepaid and addressed as aforesaid. Any notice required
or permitted to be given by telegram, telex, or telefax shall be deemed to be
delivered and given at the time transmitted with all charges prepaid and
addressed as aforesaid.
11
5.2 Waiver. Whenever any notice is required to be given to any
------
stockholder, director, or committee member of the Corporation by statute, the
certificate of incorporation of the Corporation, or these bylaws, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be equivalent to the
giving of such notice. Attendance of a stockholder, director, or committee
member at a meeting shall constitute a waiver of notice of such meeting, except
where such person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE SIX: OFFICERS
6.1 Number; Titles; Term of Office. The officers of the Corporation
------------------------------
shall be a President, one or more Chief Operating Officers, a Secretary, and
such other officers as the board of directors may from time to time elect or
appoint, including a Chairman of the Board, one or more Vice Presidents (with
each Vice President to have such descriptive title, if any, as the board of
directors shall determine), and a Treasurer. Each officer shall hold office
until his successor shall have been duly elected and shall have qualified, until
his death, or until he shall resign or shall have been removed in the manner
hereinafter provided. Any two or more offices may be held by the same person.
None of the officers need be a stockholder or a director of the Corporation or a
resident of the State of Delaware.
6.2 Removal. Any officer or agent elected or appointed by the board of
-------
directors may be removed by the board of directors whenever in its judgment the
best interest of the Corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
6.3 Vacancies. Any vacancy occurring in any office of the Corporation (by
---------
death, resignation, removal, or otherwise) may be filled by the board of
directors.
6.4 Authority. Officers shall have such authority and perform such
---------
duties in the management of the Corporation as are provided in these bylaws or
as may be determined by resolution of the board of directors not inconsistent
with these bylaws.
6.5 Compensation. The compensation, if any, of officers and agents shall
------------
be fixed from time to time by the board of directors; provided, however, that
the board
12
of directors may delegate the power to determine the compensation of any officer
and agent (other than the officer to whom such power is delegated) to the
Chairman of the Board or the President.
6.6 Chairman of the Board. The Chairman of the Board, if elected by the
---------------------
board of directors, shall have such powers and duties as may be prescribed by
the board of directors. Such officer shall preside at all meetings of the
stockholders and of the board of directors. Such officer may sign all
certificates for shares of stock of the Corporation.
6.7 President. The President shall be the chief executive officer of
---------
the Corporation and, subject to the board of directors, he shall have general
executive charge, management, and control of the properties and operations of
the Corporation in the ordinary course of its business, with all such powers
with respect to such properties and operations as may be reasonably incident to
such responsibilities. If the board of directors has not elected a Chairman of
the Board or in the absence or inability to act of the Chairman of the Board,
the President shall exercise all of the powers and discharge all of the duties
of the Chairman of the Board. As between the Corporation and third parties, any
action taken by the President in the performance of the duties of the Chairman
of the Board shall be conclusive evidence that there is no Chairman of the Board
or that the Chairman of the Board is absent or unable to act.
6.8 Chief Operating Officer. The Chief Operating Officer(s) shall have
-----------------------
the day to day responsibility for the business operations of the Corporation,
reporting to the President and subject to the control of the board of directors.
6.9 Vice Presidents. Each Vice President shall have such powers and
---------------
duties as may be assigned to him by the board of directors, the Chairman of the
Board, or the President, and (in order of their seniority as determined by the
board of directors or, in the absence of such determination, as determined by
the length of time they have held the office of Vice President) shall exercise
the powers of the President during that officer's absence or inability to act.
As between the Corporation and third parties, any action taken by a Vice
President in the performance of the duties of the President shall be conclusive
evidence of the absence or inability to act of the President at the time such
action was taken.
6.10 Treasurer. The Treasurer shall have custody of the Corporation's
---------
funds and securities, shall keep full and accurate account of receipts and
disbursements, shall deposit all monies and valuable effects in the name and to
the credit of the Corporation
13
in such depository or depositories as may be designated by the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors, the Chairman of the Board, or the President.
6.11 Assistant Treasurers. Each Assistant Treasurer shall have such
--------------------
powers and duties as may be assigned to him by the board of directors, the
Chairman of the Board, or the President. The Assistant Treasurers (in the order
of their seniority as determined by the board of directors or, in the absence of
such a determination, as determined by the length of time they have held the
office of Assistant Treasurer) shall exercise the powers of the Treasurer during
that officer's absence or inability to act.
6.12 Secretary. Except as otherwise provided in these bylaws, the
---------
Secretary shall keep the minutes of all meetings of the board of directors and
of the stockholders in books provided for that purpose, and he shall attend to
the giving and service of all notices. He may sign with the Chairman of the
Board or the President, in the name of the Corporation, all contracts of the
Corporation and affix the seal of the Corporation thereto. He may sign with the
Chairman of the Board or the President all certificates for shares of stock of
the Corporation, and he shall have charge of the certificate books, transfer
books, and stock papers as the board of directors may direct, all of which shall
at all reasonable times be open to inspection by any director upon application
at the office of the Corporation during business hours. He shall in general
perform all duties incident to the office of the Secretary, subject to the
control of the board of directors, the Chairman of the Board, and the President.
6.13 Assistant Secretaries. Each Assistant Secretary shall have such
---------------------
powers and duties as may be assigned to him by the board of directors, the
Chairman of the Board, or the President. The Assistant Secretaries (in the order
of their seniority as determined by the board of directors or, in the absence of
such a determination, as determined by the length of time they have held the
office of Assistant Secretary) shall exercise the powers of the Secretary during
that officer's absence or inability to act.
ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS
7.1 Certificates for Shares. Certificates for shares of stock of the
-----------------------
Corporation shall be in such form as shall be approved by the board of
directors. The certificates shall be signed by the Chairman of the Board or the
President or a Vice President and also by the Secretary or an Assistant
Secretary or by the Treasurer or an Assistant Treasurer. Any and all signatures
on the certificate may be a facsimile and
14
may be sealed with the seal of the Corporation or a facsimile thereof. If any
officer, transfer agent, or registrar who has signed, or whose facsimile
signature has been placed upon, a certificate has ceased to be such officer,
transfer agent, or registrar before such certificate is issued, such certificate
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent, or registrar at the date of issue. The certificates
shall be consecutively numbered and shall be entered in the books of the
Corporation as they are issued and shall exhibit the holder's name and the
number of shares.
7.2 Replacement of Lost or Destroyed Certificates. The board of directors
---------------------------------------------
may direct a new certificate or certificates to be issued in place of a
certificate or certificates theretofore issued by the Corporation and alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate or certificates representing shares to be lost
or destroyed. When authorizing such issue of a new certificate or certificates
the board of directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond with a surety or
sureties satisfactory to the Corporation in such sum as it may direct as
indemnity against any claim, or expense resulting from a claim, that may be made
against the Corporation with respect to the certificate or certificates alleged
to have been lost or destroyed.
7.3 Transfer of Shares. Shares of stock of the Corporation shall be
------------------
transferable only on the books of the Corporation by the holders thereof in
person or by their duly authorized attorneys or legal representatives. Upon
surrender to the Corporation or the transfer agent of the Corporation of a
certificate representing shares duly endorsed or accompanied by proper evidence
of succession, assignment, or authority to transfer, the Corporation or its
transfer agent shall issue a new certificate to the person entitled thereto,
cancel the old certificate, and record the transaction upon its books.
7.4 Registered Stockholders. The Corporation shall be entitled to treat
-----------------------
the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
15
7.5 Regulations. The board of directors shall have the power and
-----------
authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer, and registration or the replacement of
certificates for shares of stock of the Corporation.
7.6 Legends. The board of directors shall have the power and authority
-------
to provide that certificates representing shares of stock bear such legends as
the board of directors deems appropriate to assure that the Corporation does not
become liable for violations of federal or state securities laws or other
applicable law.
ARTICLE EIGHT: MISCELLANEOUS PROVISIONS
8.1 Dividends. Subject to provisions of law and the certificate of
---------
incorporation of the Corporation, dividends may be declared by the board of
directors at any regular or special meeting and may be paid in cash, in
property, or in shares of stock of the Corporation. Such declaration and payment
shall be at the discretion of the board of directors.
8.2 Reserves. There may be created by the board of directors out of
--------
funds of the Corporation legally available therefor such reserve or reserves as
the directors from time to time, in their discretion, consider proper to provide
for contingencies, to equalize dividends, or to repair or maintain any property
of the Corporation, or for such other purpose as the board of directors shall
consider beneficial to the Corporation, and the board of directors may modify or
abolish any such reserve in the manner in which it was created.
8.3 Books and Records. The Corporation shall keep correct and complete
-----------------
books and records of account, shall keep minutes of the proceedings of its
stockholders and board of directors and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.
8.4 Fiscal Year. The fiscal year of the Corporation shall be fixed by
-----------
the board of directors; provided, that if such fiscal year is not fixed by the
board of directors and the selection of the fiscal year is not expressly
deferred by the board of directors, the fiscal year shall be the calendar year.
16
8.5 Seal. The seal of the Corporation shall be such as from time to time
----
may be approved by the board of directors.
8.6 Resignations. Any director, committee member, or officer may resign
------------
by so stating at any meeting of the board of directors or by giving written
notice to the board of directors, the Chairman of the Board, the President, or
the Secretary. Such resignation shall take effect at the time specified therein
or, if no time is specified therein, immediately upon its receipt. Unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
8.7 Securities of Other Corporations. The Chairman of the Board, the
--------------------------------
President, or any Vice President of the Corporation shall have the power and
authority to transfer, endorse for transfer, vote, consent, or take any other
action with respect to any securities of another issuer which may be held or
owned by the Corporation and to make, execute, and deliver any waiver, proxy, or
consent with respect to any such securities.
8.8 Telephone Meetings. Stockholders (acting for themselves or through
------------------
a proxy), members of the board of directors, and members of a committee of the
board of directors may participate in and hold a meeting of such stockholders,
board of directors, or committee by means of a conference telephone or similar
communications equipment by means of which persons participating in the meeting
can hear each other, and participation in a meeting pursuant to this section
shall constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
8.9 Action Without a Meeting. (a) Unless otherwise provided in the
------------------------
certificate of incorporation of the Corporation, any action required by the
Delaware General Corporation Law to be taken at any annual or special meeting of
the stockholders, or any action which may be taken at any annual or special
meeting of the stockholders, may be taken without a meeting, without prior
notice, and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders (acting for themselves or
through a proxy) of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which the holders of all shares entitled to vote thereon were present and voted
and shall be delivered to the Corporation by delivery to its registered office
in the State of Delaware, its principal place of business, or an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of
17
stockholders are recorded. Every written consent of stockholders shall bear the
date of signature of each stockholder who signs the consent and no written
consent shall be effective to take the corporate action referred to therein
unless, within sixty days of the earliest dated consent delivered in the manner
required by this Section 8.9(a) to the Corporation, written consents signed by a
sufficient number of holders to take action are delivered to the Corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the Corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the Corporation's registered office, principal place of business, or
such officer or agent shall be by hand or by certified or registered mail,
return receipt requested.
(b) Unless otherwise restricted by the certificate of incorporation of
the Corporation or by these bylaws, any action required or permitted to be taken
at a meeting of the board of directors, or of any committee of the board of
directors, may be taken without a meeting if a consent or consents in writing,
setting forth the action so taken, shall be signed by all the directors or all
the committee members, as the case may be, entitled to vote with respect to the
subject matter thereof, and such consent shall have the same force and effect as
a vote of such directors or committee members, as the case may be, and may be
stated as such in any certificate or document filed with the Secretary of State
of the State of Delaware or in any certificate delivered to any person. Such
consent or consents shall be filed with the minutes of proceedings of the board
or committee, as the case may be.
8.10 Invalid Provisions. If any part of these bylaws shall be held invalid
------------------
or inoperative for any reason, the remaining parts, so far as it is possible and
reasonable, shall remain valid and operative.
8.11 Mortgages, etc. With respect to any deed, deed of trust, mortgage,
--------------
or other instrument executed by the Corporation through its duly authorized
officer or officers, the attestation to such execution by the Secretary of the
Corporation shall not be necessary to constitute such deed, deed of trust,
mortgage, or other instrument a valid and binding obligation against the
Corporation unless the resolutions, if any, of the board of directors
authorizing such execution expressly state that such attestation is necessary.
18
8.12 Headings. The headings used in these bylaws have been inserted for
--------
administrative convenience only and do not constitute matter to be construed in
interpretation.
8.13 References. Whenever herein the singular number is used, the same
----------
shall include the plural where appropriate, and words of any gender should
include each other gender where appropriate.
8.14 Amendments. These bylaws may be altered, amended, or repealed or
----------
new bylaws may be adopted by the stockholders or by the board of directors at
any regular meeting of the stockholders or the board of directors or at any
special meeting of the stockholders or the board of directors if notice of such
alteration, amendment, repeal, or adoption of new bylaws be contained in the
notice of such special meeting.
19
EXHIBIT A
---------
_________, 1997
Evergreen Media Corporation
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
I have been advised that I have been identified as a possible
"affiliate" of Chancellor Broadcasting Company, a Delaware corporation (the
"Company"), as that term is defined for purposes of paragraphs (c) and (d) of
Rule 145 of the General Rules and Regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933 (the "Securities Act"), although nothing contained herein should be
construed as an admission of such fact.
Pursuant to the terms of an Agreement and Plan of Merger dated as of
February __, 1997 (the "Merger Agreement"), by and among the Company, Chancellor
Radio Broadcasting Company, a Delaware corporation ("Radio Broadcasting") and
Evergreen Media Corporation, a Delaware corporation ("Evergreen"), the Company
and Radio Broadcasting will be merged with and into Evergreen (the "Merger"),
with Evergreen continuing as the surviving corporation in the Merger (the
"Surviving Corporation"). As a result of the Merger, I will receive Merger
Consideration (as defined in the Merger Agreement), including shares of Common
Stock, $0.01 par value, of the Surviving Corporation ("Surviving Corporation
Common Stock") in exchange for shares of Class A Common Stock, $.01 par value,
and/or shares of Class B Common Stock, $0.01 par value, of the Company
(collectively, the "Shares") owned by me at the effective time of the Merger as
determined pursuant to the Merger Agreement.
A. In connection therewith, I represent, warrant and agree
that:
1. I shall not make any sale, transfer or other disposition of
the Surviving Corporation Common Stock I receive as a result of the
Merger in violation of the Securities Act or the Rules and Regulations.
2. I have been advised that the issuance of Surviving
Corporation Common Stock to me as a result of the Merger has been
registered with the Commission under the Securities Act on a
Registration Statement on Form S-4. However, I have also been advised
that, if at the time the Merger was submitted for a vote of the
stockholders of the Company I am determined to have been an "affiliate"
of the Company, any sale by me of the shares of Surviving Corporation
Common Stock I receive as a result of the Merger must be (i) registered
under the Securities Act, (ii) made in conformity with the provisions
of Rule 145 promulgated by the Commission under the Securities Act or
(iii) made pursuant to a transaction which, in the opinion of counsel
reasonably satisfactory to the Surviving Corporation or as described in
a "no action" or interpretive letter from the staff of the Commission,
is not required to be registered under the Securities Act.
3. I have carefully read this letter and the Merger Agreement
and have discussed the requirements of the Merger Agreement and other
limitations upon the sale, transfer or other disposition of the shares
of Surviving Corporation Common Stock to be received by me, to the
extent I have felt necessary, with my counsel or with counsel for the
Company.
B. Furthermore, in connection with the matters set forth
herein, I understand and agree that:
1. I understand that the Surviving Corporation will give stop
transfer instructions to its transfer agents with respect to the
Surviving Corporation Common Stock and that the certificates for the
Surviving Corporation Common Stock issued to the undersigned, or any
substitutions therefor, will bear a legend substantially to the
following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN
A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY APPLY. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT, DATED _____________
1997, BETWEEN THE REGISTERED HOLDER HEREOF AND CHANCELLOR
MEDIA CORPORATION (FORMERLY KNOWN AS EVERGREEN MEDIA
CORPORATION), A COPY OF WHICH AGREEMENT
IS ON FILE AT THE PRINCIPAL OFFICES OF
CHANCELLOR MEDIA CORPORATION."
2. I also understand that unless the transfer by the
undersigned of any Surviving Corporation Common Stock has been
registered under the Securities Act or is a sale made in conformity
with the provisions of Rule 145, the Surviving Corporation reserves the
right to place the following legend on the certificates issued to any
transferee:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SECURITIES IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, MAY APPLY. THE SECURITIES HAVE NOT BEEN ACQUIRED
BY THE HOLDER WITH A VIEW TO, OR FOR RESALE IN CONNECTION
WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF SUCH ACT
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT.
It is understood and agreed that the legends set forth in paragraphs
(B) 1 and 2 above shall be removed by delivery of new certificates without such
legend if the Surviving Corporation receives an opinion of counsel reasonably
satisfactory to the Surviving Corporation to the effect that such legend is not
required for purposes of the Securities Act. It is understood and agreed that
such legends and the stop orders referred to above will be removed if (i) two
years shall have elapsed from the date the undersigned acquired Surviving
Corporation Common Stock received in the Merger and the provisions of Rule
145(d)(2) under the Securities Act are then available to the undersigned, (ii)
three years shall have elapsed from the date the undersigned acquired Surviving
Corporation Common Stock received in the Merger and the provisions of Rule
145(d)(3) under the Securities Act are then available to the undersigned, or
(iii) the Surviving Corporation has received under the Securities Act an opinion
of counsel, which opinion and counsel shall be reasonably satisfactory to the
Surviving Corporation, to the effect that the restrictions imposed by Rule 145
under the Securities Act no longer apply to the undersigned.
The Surviving Corporation shall be under no further obligation
to register the sale, transfer or other disposition of the shares of
Surviving Corporation Common Stock received by me as a result of the
Merger or to take any other action necessary in order to make
compliance with an exemption from registration available.
Very truly yours,
Exhibit B
EXECUTION COPY
CHANCELLOR BROADCASTING COMPANY
CERTIFICATE
In connection with your tax opinion dated _________________ ___, 1997
regarding certain federal income tax consequences of the merger (the "Merger")
of Chancellor Broadcasting Company, a Delaware corporation ("the Company"), with
and into Evergreen Media Corporation, a Delaware corporation ("Evergreen"),
pursuant to the Agreement and Plan of Merger dated as of February _____, 1997,
as amended (the "Merger Agreement"), and recognizing that you will rely on this
Certificate in delivering said opinion, the Company hereby represents that the
facts relating to the Merger, as such facts are described in the Registration
Statement of Evergreen filed with the Securities and Exchange Commission (the
"Commission") on ____________ ___, 1997 (and all amendments thereto) are,
insofar as such facts pertain to the Company, true, correct, and complete in all
material respects in accordance with applicable rules of the Commission.
The Company further represents the following:
1. The fair market value of the Evergreen stock, cash (if any) and
any cash in lieu of fractional shares to be received by each
Company shareholder will be approximately equal to the fair
market value of the Company stock surrendered in the
exchange.
2. There is no plan or intention by the shareholders of the Company
who own 5 percent or more of the Company stock as of the
date hereof, and to the best of the knowledge of the management
of the Company, there is no plan or intention on the part of the
remaining shareholders of the Company, to sell, exchange, or
otherwise dispose of a number of shares of Evergreen stock
received in the transaction that would reduce the Company
shareholders' ownership of Evergreen stock to a number of shares
having a value on the date of the Merger of less than 50 percent
of the value of all of the formerly outstanding stock of the
Company as of the same date. For purposes of this representation,
shares of the Company stock surrendered by dissenters or
exchanged for cash in
EXECUTION COPY
lieu of fractional shares of Evergreen stock will be treated as
outstanding the Company stock on the date of the Merger. Moreover,
shares of the Company stock and shares of Evergreen stock held by the
Company shareholders and otherwise sold, redeemed, or disposed of
prior or subsequent to the Merger will be considered in making this
representation.
3. The liabilities of the Company to be assumed by Evergreen and the
liabilities to which the transferred assets of the Company are subject
were incurred by the Company in the ordinary course of its business.
4. The fair market value of the assets of the Company to be transferred
to Evergreen in the Merger will equal or exceed the sum of the
liabilities to be assumed by Evergreen plus the amount of liabilities,
if any, to which the transferred assets are subject.
5. Evergreen, the Company and the shareholders of the Company will pay
their respective expenses, if any, incurred in connection with the
Merger.
6. There is no intercorporate indebtedness existing between the Company
and Evergreen that was issued, acquired, or will be settled at a
discount.
7. The Company is not an investment company as defined in Section 368(a)
(2) (F) (iii) and (iv) of the Internal Revenue Code of 1986, as
amended (the "Code").
8. The Company is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a) (3) (A) of the Code.
9. None of the compensation to be received by any shareholder-employee of
the Company will be separate consideration for, or allocable to, any
of their shares of the Company stock; none of the shares of Evergreen
stock to be received by any shareholder-employee will be separate
consideration for, or allocable to, any employment agreement; and the
compensation to be paid to any
EXECUTION COPY
shareholder-employee will be for services actually rendered and
will be commensurate with amounts paid to third parties
bargaining at arm's-length for similar services.
10. The Merger Agreement represents the full and complete agreement
between Evergreen and the Company regarding the Merger, and there
are no other written or oral agreements regarding the Merger
other than those expressly referred to in the Merger Agreement.
IN WITNESS WHEREOF, the Company has executed this Certificate on this
_____ day of _________, 1997.
Chancellor Broadcasting Company
By:_______________________
Exhibit C
EXECUTION COPY
CHANCELLOR RADIO BROADCASTING COMPANY
CERTIFICATE
In connection with your tax opinion dated ____________ __, 1997
regarding certain federal income tax consequences of the merger (the "Merger")
of Chancellor Radio Broadcasting Company, a Delaware corporation ("Radio
Broadcasting"), with and into Evergreen Media Corporation, a Delaware
corporation ("Evergreen"), pursuant to the Agreement and Plan of Merger dated as
of February ____, 1997, as amended (the "Merger Agreement"), and recognizing
that you will rely on this Certificate in delivering said opinion, Radio
Broadcasting hereby represents that the facts relating to the Merger, as such
facts are described in the Registration Statement of Evergreen filed with the
Securities and Exchange Commission (the "Commission") on ______________ ___,
1997 (and all amendments thereto) are, insofar as such facts pertain to Radio
Broadcasting, true, correct, and complete in all material respects in accordance
with applicable rules of the Commission.
Radio Broadcasting further represents the following:
1. The fair market value of the Evergreen stock, cash (if any) and
any cash in lieu of fractional shares to be received by each
Radio Broadcasting shareholder will be approximately equal to the
fair market value of the Radio Broadcasting stock surrendered in
the exchange.
2. There is no plan or intention by the shareholders of Radio
Broadcasting who own 5 percent or more of the Radio Broadcasting
stock on the date hereof, and to the best of the knowledge of the
management of Radio Broadcasting, there is no plan or intention
on the part of the remaining shareholders of Radio Broadcasting,
to sell, exchange, or otherwise dispose of a number of shares of
Evergreen stock received in the transaction that would reduce the
Radio Broadcasting shareholders' ownership of Evergreen stock to
a number of shares having a value on the date of the Merger of
less than 50 percent of the value of all of the formerly
outstanding stock of Radio Broadcasting as of the same date. For
purposes of this representation, shares of Radio Broadcasting
stock surrendered by dissenters will be treated as outstanding
Radio Broadcasting stock on the date of the Merger. Moreover,
shares of Radio Broadcasting stock and shares of Evergreen stock
held by Radio Broadcasting shareholders and
EXECUTION COPY
otherwise sold, redeemed, or disposed of prior or subsequent to
the Merger will be considered in making this representation.
3. The liabilities of Radio Broadcasting to be assumed by Evergreen
and the liabilities to which the transferred assets of Radio
Broadcasting are subject were incurred by Radio Broadcasting in
the ordinary course of its business.
4. The fair market value of the assets of Radio Broadcasting to be
transferred to Evergreen in the Merger will equal or exceed the
sum of the liabilities to be assumed by Evergreen plus the amount
of liabilities, if any, to which the transferred assets are
subject.
5. Evergreen, Radio Broadcasting and the shareholders of Radio
Broadcasting will pay their respective expenses, if any, incurred
in connection with the Merger.
6. There is no intercorporate indebtedness existing between Radio
Broadcasting and Evergreen that was issued, acquired, or will be
settled at a discount.
7. Radio Broadcasting is not an investment company as defined in
Section 368 (a) (2) (F) (iii) and (iv) of the Internal Revenue
Code of 1986, as amended (the "Code").
8. Radio Broadcasting is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368 (a)
(3) (A) of the Code.
9. None of the compensation to be received by any shareholder-
employee of Radio Broadcasting will be separate consideration
for, or allocable to, any of their shares of Radio Broadcasting
stock; none of the shares of Evergreen stock to be received by
any shareholder-employee will be separate consideration for, or
allocable to, any employment agreement; and the compensation to
be paid to any shareholder-employees will be for services
actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar service.
EXECUTION COPY
10. The Merger Agreement represents the full and complete agreement
between Evergreen and Radio Broadcasting regarding the Merger,
and there are no other written or oral agreements regarding the
Merger other than those expressly referred to in the Merger
Agreement.
IN WITNESS WHEREOF, Radio Broadcasting has executed this Certificate
on this ______ day of ____________, 1997.
Chancellor Radio Broadcasting
Company
By:_____________________________
Exhibit D
EXECUTION COPY
CERTIFICATE
In connection with the merger (the "Merger") of Chancellor
Broadcasting Company, a Delaware corporation, with and into Evergreen Media
Corporation, a Delaware corporation, pursuant to the Agreement and Plan of
Merger dated as of February ___, 1997, the undersigned hereby represents that he
(it) has no plan or intention to sell, exchange, or otherwise dispose of, reduce
the risk of loss by short sale or otherwise, enter into any contract or
arrangement with respect to, or consent to the sale, exchange or other
disposition of any interest in any stock received in the Merger by him (it).
IN WITNESS WHEREOF, I have signed this Certificate on this ___ day of
_________________, 1997.
[Name of 5% shareholder of
Chancellor Broadcasting Company]
__________________________________
Exhibit E
CERTIFICATE
In connection with the merger (the "Merger") of Chancellor Radio
Broadcasting Company, a Delaware corporation, with and into Evergreen Media
Corporation, a Delaware corporation, pursuant to the Agreement and Plan of
Merger dated as of February ____, 1997, the undersigned hereby represents that
he (it) has no plan or intention to sell, exchange, or otherwise dispose of,
reduce the risk of loss by short sale or otherwise, enter into any contract or
arrangement with respect to, or consent to the sale, exchange or other
disposition of any interest in any stock received in the Merger by him (it).
IN WITNESS WHEREOF, I have signed this Certificate on this _____ day
of _______________, 1997.
[Name of 5% shareholder of
Chancellor Radio Broadcasting Company]
_______________________________________
Exhibit F
EVERGREEN MEDIA CORPORATION
CERTIFICATE
In connection with your tax opinion dated ________________, 1997,
regarding certain federal income tax consequences of the merger (the "Merger")
of Chancellor Broadcasting Company, a Delaware corporation ("the Company"), and
Chancellor Radio Broadcasting Company, a Delaware corporation ("Radio
Broadcasting"), with and into Evergreen Media Corporation, a Delaware
corporation ("Evergreen"), pursuant to the Agreement and Plan of Merger dated as
of February ___, 1997 (the "Merger Agreement"), and recognizing that you will
rely on this Certificate in delivering said opinion, Evergreen hereby represents
that the facts relating to the Merger, as such facts are described in the
Registration Statement of Evergreen filed with the Securities and Exchange
Commission (the "Commission") on _____________________ ___, 1997 (and all
amendments thereto) are, insofar as such facts pertain to Evergreen, true,
correct, and complete in all material respects in accordance with applicable
rules of the Commission.
Evergreen further represents the following:
1. The fair market value of the Evergreen stock, cash (if any) and
any cash in lieu of fractional shares to be received by each the
Company and Radio Broadcasting shareholder will be approximately
equal to the fair market value of the Company and Radio
Broadcasting stock surrendered in the exchange.
2. Evergreen has no plan or intention to redeem or otherwise
reacquire any Evergreen stock issued in the Merger.
3. Evergreen has no plan or intention to sell or otherwise dispose
of any of the assets of the Company or of Radio Broadcasting to
be acquired in the Merger, except for dispositions made in the
ordinary course of business or transfers to a direct wholly-owned
subsidiary of Evergreen./1/
_________________
/1/ May be modified on delivery of certificate to exclude any asset disposition
not in the ordinary course, provided, however, that any such disposition
-------- -------
does not prevent counsel for Evergreen and the Company and Radio
Broadcasting from
4. Following the Merger, Evergreen will continue the historic
business of each of the Company and Radio Broadcasting or use a
significant portion of the Company's and Radio Broadcasting's
historic business assets in Evergreen's business.
5. Evergreen, the Company and Radio Broadcasting and the
shareholders of the Company and of Radio Broadcasting will pay
their respective expenses, if any, incurred in connection with
the Merger.
6. There is no intercorporate indebtedness existing between the
Company or Radio Broadcasting and Evergreen that was issued,
acquired, or will be settled at a discount.
7. None of the compensation to be received by any shareholder-
employee of the Company and Radio Broadcasting will be separate
consideration for, or allocable to, any of their shares of the
Company and Radio Broadcasting stock; none of the shares of
Evergreen stock to be received by any shareholder-employee will
be separate consideration for, or allocable to, any
employment agreement; and the compensation to be paid to any
shareholder-employee will be for services actually rendered and
will be commensurate with amounts paid to third parties
bargaining at arm's-length for similar services.
8. Evergreen does not own, nor has Evergreen owned during the past
five years, more than a de minimis number of shares of stock of
-- -------
either the Company or Radio Broadcasting.
9. Evergreen is not an investment company as defined in Section 368
(a)(2)(F)(iii) and (iv) of the Internal Revenue Code of 1986, as
amended.
10. The fair market value of the assets of the Company and of Radio
Broadcasting to be transferred to Evergreen will equal or exceed
the sum of the liabilities assumed by Evergreen plus the amount
of liabilities, if any, to which the transferred assets are
subject.
___________________
delivering the opinions required by Sections 6.2(c) and 6.3(c) of the
Merger Agreement.
xv
11. The payment of cash in lieu of fractional shares of Evergreen
stock merely represents a mechanical rounding-off of fractional
share interests as a result of the Merger and does not represent
separately bargained for consideration. The total cash
consideration that will be paid in the Merger in lieu of
fractional shares of Evergreen stock to the Company stockholders
and to the Radio Broadcasting stockholders, respectively, will
not exceed one percent of the total consideration that will be
issued in the Merger to the Company stockholders and to the Radio
Broadcasting stockholders, respectively.
12. The Merger Agreement represents the full and complete agreement
among Evergreen, the Company and Radio Broadcasting regarding the
Merger, and there are no other written or oral agreements
regarding the Merger other than those expressly referred to in
the Merger Agreement.
IN WITNESS WHEREOF, Evergreen has executed this Certificate on this
_________ day of _________________, 1997.
Evergreen Media Corporation
By:_______________________
xvi
Exhibit G
____________ _____, 1997
Evergreen Media Corporation
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Ladies & Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the merger (the "Merger") of Chancellor Broadcasting Company
(the "Company"), a Delaware corporation, and Chancellor Radio Broadcasting
Company ("Radio Broadcasting"), a Delaware corporation with and into Evergreen
Media Corporation ("Evergreen"), a Delaware corporation.
In formulating our opinion, we examined such documents as we deemed
appropriate, including the Agreement and Plan of Merger among the Company,
Radio Broadcasting and Evergreen dated as of February ____, 1997 (the "Merger
Agreement"), the Joint Proxy Statement/Prospectus filed by the Company, Radio
Broadcasting and Evergreen on __________ ___, 1997 (the "Joint Proxy
Statement"), and the Registration Statement on Form S-4, as filed by Evergreen
with the SEC on ____________ ___, 1997, in which the Joint Proxy
Statement/Prospectus is included as a prospectus (with all amendments thereto,
the "Registration Statement"). In addition, we have obtained such additional
information as we deemed relevant and necessary through consultation with
various officers and representatives of the Company, Radio Broadcasting and
Evergreen.
Our opinion set forth below assumes (1) the accuracy of the statements
and facts concerning the Merger set forth in the Merger Agreement, the Joint
Proxy Statement, and the Registration Statement, (2) the consummation of the
Merger in the manner contemplated by, and in accordance with the terms set forth
in, the Merger Agreement, the Joint Proxy Statement and the Registration
Statement and (3) the accuracy of (i) the representations made by the Company
and by Radio Broadcasting, which are set forth in the Certificates delivered to
us by the Company and Radio Broadcasting, dated the date hereof, (ii) the
representations made by Evergreen, which are set forth in the Certificate
delivered to us by Evergreen, dated the date hereof and (iii) the
representations made by certain shareholders of the Company and of Radio
Broadcasting in Certificates delivered to us by such persons, dated the date
hereof.
Based upon the facts and statements set forth above, our examination
and review of the documents referred to above and
Evergreen Media Corporation
Page xviii
subject to the assumptions set forth herein, we are of the opinion that for
federal income tax purposes:
1. The Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code").
2. Each of the Company, Radio Broadcasting and Evergreen will be a
party to the reorganization within the meaning of Section 368(b)
of the Code.
3. No gain or loss will be recognized by the Company, Radio
Broadcasting or Evergreen as a result of the Merger.
4. No gain or loss will be recognized by holders of Evergreen Class
A Common Stock or holders of Evergreen Class B Common Stock on
the exchange of such shares for shares of Evergreen Common Stock
pursuant to the Merger, except with respect to cash received by
dissenters or in lieu of fractional shares of Evergreen
Corporation Common Stock.
We express no opinion concerning any tax consequences of the Merger other than
those specifically set forth herein.
Our opinion is based on current provisions of the Code, the Treasury
Regulations promulgated thereunder, published pronouncements of the Internal
Revenue Service and case law, any of which may be changed at any time with
retroactive effect. Any change in applicable laws or facts and circumstances
surrounding the Merger, or any inaccuracy in the statements, facts, assumptions
and representations on which we have relied, may affect the continuing validity
of the opinions set forth herein. We assume no responsibility to inform you of
any such change or inaccuracy that may occur or come to our attention.
Very truly yours,
Exhibit H
__________, 1997
Chancellor Broadcasting Company
00000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Ladies & Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the merger (the "Merger") of Chancellor Broadcasting Company
(the "Company"), a Delaware corporation, and Chancellor Radio Broadcasting
Company ("Radio Broadcasting"), a Delaware corporation and a subsidiary of the
Company, with and into Evergreen Media Corporation ("Evergreen"), a Delaware
corporation.
In formulating our opinion, we examined such documents as we deemed
appropriate, including the Agreement and Plan of Merger among the Company, Radio
Broadcasting and Evergreen dated as of February __, 1997 (the "Merger
Agreement"), the Joint Proxy Statement and Prospectus (the "Joint Proxy
Statement") included in the Registration Statement on Form S-4, as filed by
Evergreen with the Securities and Exchange Commission on March __, 1997, in
which the Joint Proxy Statement is included as a prospectus (with all amendments
thereto, the "Registration Statement"). In addition, we have obtained such
additional information as we have deemed relevant and necessary through
consultation with various officers and representatives of the Company, Radio
Broadcasting and Evergreen.
Our opinion set forth below assumes (1) the accuracy of the statements
and facts concerning the Merger set forth in the Merger Agreement, the Joint
Proxy Statement, and the Registration Statement, (2) the consummation of the
Merger in the manner contemplated by, and in accordance with the terms set forth
in, the Merger Agreement, the Joint Proxy Statement and the Registration
Statement and (3) the accuracy of (i) the representations made by the Company
and by Radio Broadcasting, which are set forth in the Certificates delivered to
us by the Company and Radio Broadcasting, dated the date hereof, (ii) the
representations made by Evergreen, which are set forth in the Certificate
delivered to us by Evergreen, dated the date hereof, and (iii) the
representations made by certain shareholders of the Company and of Radio
Broadcasting in Certificates delivered to us by such persons, dated the date
hereof.
Chancellor Broadcasting company
_______________, 1997
Page xx
Based on the facts and statements set forth above, our examination and
review of the documents referred to above and subject to the assumptions set
forth above, we are of the opinion that for federal income tax purposes:
1. The Merger will constitute a reorganization within the meaning of
Section 368 (a) of the Internal Revenue Code of 1986, as amended
(the "Code").
2. No gain or loss will be recognized by stockholders of the Company
with respect to shares of common stock of Evergreen received in
the Merger in exchange for shares of common stock of the Company,
or with respect to shares of Evergreen convertible preferred
stock received in the Merger in exchanges for shares of Company
convertible preferred stock, except with respect to cash received
by dissenters or in lieu of fractional shares of Evergreen common
stock.
3. No gain or loss will be recognized by stockholders of Radio
Broadcasting with respect to shares of Evergreen preferred stock
received in the Merger in exchange for shares of Radio
Broadcasting preferred stock, except with respect to cash
received by dissenters.
We express no opinion concerning any tax consequences of the Merger other than
those specifically set forth herein.
Our opinion is based on current provisions of the Code, the Treasury
Regulations promulgated thereunder, published pronouncements of the Internal
Revenue Service and case law, any of which may be changed at any time with
retroactive effect. Any change in applicable laws or in the facts and
circumstances surrounding the Merger, or any inaccuracy in the statements,
facts, assumptions and representations on which we have relied, may affect the
continuing validity of the opinions set forth herein. We assume no
responsibility to inform you of any such change or inaccuracy that may occur or
come to our attention.
Very truly yours,
