EXHIBIT 10.4
BOARD REPRESENTATION AGREEMENT
This Board Representation Agreement, dated as
of May 25, 1998 (this "Agreement"), is by and among
Hearst-Argyle Television, Inc., a Delaware corporation
("Acquiror"), Hearst Broadcasting, Inc. (the "Acquiror
Stockholder") and Xxxxx Xxxx Pulitzer, Xxxxxxx X.
Xxxxxxxx and Xxxxx X. Xxxxx (collectively, the
"Pulitzer Class B Holders").
WHEREAS, the Acquiror Stockholder owns
41,298,648 shares of Acquiror's Series B Common Stock,
par value $.01 per share, and 774,027 shares of
Acquiror's Series A Common Stock, par value $.01 per
share (all shares of such stock now owned and which may
hereafter be acquired by the Acquiror Stockholder prior
to the termination of this Agreement are referred to
herein as the "Acquiror Shares");
WHEREAS, Pulitzer Publishing Company, a
Delaware corporation (the "Company"), Pulitzer Inc., a
Delaware corporation ("Newco") and wholly owned
subsidiary of the Company, and Acquiror have entered
into a Merger Agreement, dated May 25, 1998 (the
"Merger Agreement"), which provides, among other
things, that the Company will merge with and into
Acquiror (the "Merger") (this and other capitalized
terms used and not defined herein shall have the
meanings ascribed to such terms in the Merger
Agreement);
WHEREAS, in connection with the Merger, the
Pulitzer Class B Holders will be entitled to receive
beneficial ownership of shares of Series A Common Stock
of Acquiror in respect of 14,537,808 shares of Class B
Common Stock of the Company beneficially owned by the
Pulitzer Class B Holders prior to the Merger (all such
shares received by the Pulitzer Class B Holders in the
Merger, the "PCBH Shares"), and it is the desire of the
Pulitzer Class B Holders that they have the right to
designate for election one or two members of the board
of directors of Acquiror (the "Acquiror Board")
following the consummation of the Merger;
WHEREAS, pursuant to the Merger Agreement,
Acquiror has agreed to cause Xxxxxxx X. Xxxxxxxx and
Xxx X. Xxxxxx (together, the "Initial PCBH Designees")
to be elected to the Acquiror Board as set forth herein
following consummation of the Merger; and
WHEREAS, it is a condition to the Company's
and Newco's obligation to consummate the Merger that
the parties hereto enter into this Agreement;
NOW THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements
contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. REPRESENTATION ON ACQUIROR BOARD.
(a) Subject to Section 1(b), the Pulitzer
Class B Holders shall be entitled to representation on
the Acquiror Board through the Initial PCBH Designees.
These designees shall be proposed for election to the
Acquiror Board either: (i) if following the
consummation of the Merger there are one or more
vacancies on such Board or the members of such Board
have the power to create new directorships, at the
first meeting of the Acquiror Board following
consummation of the Merger at which meeting the Initial
PCBH Designees shall be elected or (ii) if there are no
such vacancies or power to create new directorships, at
the first meeting of stockholders of Acquiror held
after consummation of the Merger. Following such
election of the Initial PCBH Designees, in each
instance in which individuals are nominated for
election to the Acquiror Board, Acquiror shall cause to
be nominated for election to the Acquiror Board the
individuals designated by the Pulitzer Class B Holders
(the "PCBH Designees") as of the date of nomination, in
the manner and subject to the conditions set forth in
this Section 1. Acquiror shall cause such PCBH
Designees to be validly and timely nominated for
election to the Acquiror Board in the same manner as
other proposed directors who may be elected by the
Acquiror Stockholder are nominated, and the Acquiror
Stockholder shall vote its Acquiror Shares in favor of
the election of the PCBH Designees, and Acquiror shall
use its best efforts to take such other action as may
be reasonably necessary to cause such PCBH Designees to
be so elected. If any Initial PCBH Designee or PCBH
Designee who serves on the Acquiror Board ceases, for
any reason, to serve on the Acquiror Board (other than
pursuant to Section 1(b) or Section 2 or as a result of
the expiration of the specified term of such Initial
PCBH Designee or PCBH Designee), Acquiror shall use its
best efforts to take all actions reasonably necessary
to cause the vacancy to be filled, as soon as
practicable, by an individual designated by the
Pulitzer Class B Holders (a "Replacement PCBH
Designee"), but in any event no later than the first
meeting of the Acquiror Board following cessation of
service by such Initial PCBH Designee or PCBH Designee.
Each Initial PCBH Designee, PCBH Designee or
Replacement PCBH Designee shall be reasonably
acceptable to Acquiror and shall be eligible to serve
on the Acquiror Board under applicable law.
(b) Notwithstanding anything to the contrary
herein, in the event that, as a result of the
nomination and/or appointment of, or the Pulitzer Class
B Holders' right to designate, a proposed Initial PCBH
Designee, PCBH Designee or Replacement PCBH Designee,
the following (an "Ownership Conflict") shall occur and
be continuing: (i) Acquiror or any of its subsidiaries
is (or, as a result of any proposed acquisition of an
ownership interest in, or management or control of, or
other relationship with, a radio or television
broadcast station by Acquiror or any of its
subsidiaries, any of them would be) in violation of the
rules and regulations of the Federal Communications
Commission (the "FCC"), now in effect or as hereafter
amended, governing ownership of mass media facilities
by broadcast licensees including, but not limited to,
the FCC's rules and policies concerning attribution of
ownership, see 47 C.F.R. Sec. 73.3555 and Notes thereto
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(collectively, the "FCC Cross-Ownership Rules") or any
other rule, regulation or policy of the FCC, or (ii)
Acquiror or any of its subsidiaries is not (or, as a
result of any proposed acquisition of an ownership
interest in, or management or control of, or other
relationship with, a radio or television broadcast
station by Acquiror or any of its subsidiaries, any of
them would not be) entitled to maintain, renew or
obtain any license, approval or authorization granted
by the FCC; then all obligations on the part of
Acquiror and the Acquiror Stockholder under this
Agreement shall be suspended until the Ownership
Conflict shall cease to be continuing. If the Pulitzer
Class B Holders shall not be permitted by virtue of
this Section 1(b) to representation on the Acquiror
Board as described herein, or if the Pulitzer Class B
Holders should elect from time to time observer status
in lieu of a seat or seats on the Acquiror Board by
written notice to Acquiror and the Acquiror
Stockholder, then to the extent permitted by law,
including but not limited to the rules, regulations and
policies of the FCC, and except as would not cause any
loss of attorney-client privilege by Acquiror or any of
its subsidiaries, the Pulitzer Class B Holders shall
for the period of this Agreement be entitled to
designate a non-voting observer or observers who shall
be entitled to notice of and to attend all meetings of
the Acquiror Board and to receive or review, as the
case may be, copies of all documents provided to
members of the Acquiror Board. Such observer or
observers shall enter into customary confidentiality
arrangements with Acquiror. Subject to the provisions
of this Section 1(b), at any time and from time to
time, the Pulitzer Class B Holders may nominate for
election pursuant to Section 1(a) above a Replacement
PCBH Designee in lieu of such observer or observers.
2. TERMINATION OF RIGHTS. The rights of
the Pulitzer Class B Holders under Section 1 hereof
shall terminate upon the earliest of (i) the date on
which the Pulitzer Class B Holders or their respective
affiliates cease to beneficially own at least an
aggregate of 50% of the PCBH Shares (as equitably
adjusted for stock splits, combinations, dividends,
corporate reorganizations and similar events) or (ii)
the date on which the Pulitzer Class B Holders elect to
terminate Section 1 of this Agreement by notice to the
other parties hereto.
3. REPRESENTATIONS AND WARRANTIES OF
ACQUIROR. Acquiror represents and warrants to the
Pulitzer Class B Holders that:
(a) Acquiror has all necessary corporate
power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by
Acquiror and the performance of its obligations
hereunder have been duly and validly authorized by
Acquiror, and no other proceedings on the part of
Acquiror are necessary to authorize the execution and
delivery of this Agreement or to perform such
obligations except approval of Acquiror Board of a
resolution increasing the size of Acquiror Board as
provided herein and election of the PCBH Designees as
provided herein. This Agreement has been duly and
validly executed and delivered by Acquiror and,
assuming the due authorization, execution and delivery
hereof by each other party hereto, constitutes a legal,
valid and binding obligation of Acquiror enforceable
against Acquiror in accordance with its terms, subject
to (x) the Enforceability Exceptions and (y) as the
same may be limited under the FCC Cross-Ownership
Rules.
(b) The execution and delivery of this
Agreement by Acquiror do not, and the performance of
this Agreement by Acquiror will not, (i) conflict with
or violate the Certificate of Incorporation or By-laws
of Acquiror, (ii) except as described in Section 3(c),
conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Acquiror or by
which any of Acquiror's property may be bound or (iii)
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result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would
become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation
of, or result in the creation of a Lien on any of the
Acquiror's properties pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or
obligation to which Acquiror is a party or by which
Acquiror or Acquiror's properties are bound or
affected, except, in the case of clauses (ii) and
(iii), for any such conflicts, violations, breaches,
defaults or other occurrences which would not prevent
or materially delay the performance by Acquiror of its
obligations under this Agreement.
(c) The execution and delivery of this
Agreement by Acquiror do not, and the performance of
this Agreement by Acquiror will not, require any
consent, approval, authorization or permit of, or
filing with or notification to, any federal, state,
local or foreign regulatory body, except (i) where the
failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay
the performance by Acquiror of Acquiror's obligations
under this Agreement, (ii) filings with the SEC under
the Exchange Act and (iii) any waiver, consent or
declaratory ruling by, or any filing with, the FCC with
respect to the FCC Cross-Ownership Rules to the extent
that such Rules and Regulations may prohibit the
performance of the Acquiror's obligations hereunder, or
as may be otherwise required by the rules, regulations
and policies of the FCC.
4. REPRESENTATIONS AND WARRANTIES OF THE
ACQUIROR STOCKHOLDER. The Acquiror Stockholder
represents and warrants to the Pulitzer Class B Holders
as follows:
(a) The Acquiror Stockholder has all
necessary power and authority to execute and deliver
this Agreement and to perform its obligations
hereunder. The execution and delivery of this
Agreement by the Acquiror Stockholder and the
performance of the Acquiror Stockholder's obligations
hereunder have been duly and validly authorized by the
Acquiror Stockholder, and no other corporate
proceedings on the part of the Acquiror Stockholder are
necessary to authorize the execution and delivery of
this Agreement or to perform such obligations. This
Agreement has been duly and validly executed and
delivered by the Acquiror Stockholder and, assuming the
due authorization, execution and delivery hereof by
each other party hereto, constitutes a legal, valid and
binding obligation of the Acquiror Stockholder
enforceable against the Acquiror Stockholder in
accordance with its terms, subject to (x) the
Enforceability Exceptions and (y) as the same may be
limited under the FCC Cross-Ownership Rules.
(b) The execution and delivery of this
Agreement by the Acquiror Stockholder do not, and the
performance of this Agreement by the Acquiror
Stockholder will not, (i) conflict with or violate the
Certificate of Incorporation or By-laws of the Acquiror
Stockholder, (ii) except as described in Section 4(c)
below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to
such Acquiror Stockholder or by which the Acquiror
Shares are bound or affected or (iii) result in any
breach of or constitute a default (or an event that
with notice or lapse of time or both would become a
default) under, or give to others any rights of
termination, amendment, acceleration or cancellation
of, or result in the creation of a Lien on any Acquiror
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Shares pursuant to, any note, bond, mortgage, indenture
contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which the Acquiror
Stockholder is a party or by which the Acquiror Shares
are bound or affected, except, in the case of clauses
(ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which would not
prevent or materially delay the performance by the
Acquiror Stockholder of its obligations under this
Agreement.
(c) The execution and delivery of this
Agreement by the Acquiror Stockholder do not, and the
performance of this Agreement by such Acquiror
Stockholder will not, require any consent, approval,
authorization or permit of, or filing with or
notification to, any federal, state, local or foreign
regulatory body, except (i) where the failure to obtain
such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not
prevent or materially delay the performance by the
Acquiror Stockholder of its obligations under this
Agreement, (ii) filings with the SEC under the Exchange
Act and (iii) any waiver, consent or declaratory ruling
by, or any filing with, the FCC with respect to the FCC
Cross-Ownership Rules, to the extent that such FCC
Cross-Ownership Rules may prohibit the performance of
the Acquiror Stockholder's obligations hereunder, or as
may be otherwise required by the rules, regulations and
policies of the FCC.
(d) The Acquiror Stockholder is the owner of
the Acquiror Shares free and clear of all options,
rights of first refusal, agreements, limitations on
voting rights, and Liens. The Acquiror Stockholder has
sole voting power with respect to the Acquiror Shares
or has the power to direct the voting of the Acquiror
Shares. The Acquiror Stockholder has not appointed or
granted any proxy, which appointment or grant is still
effective, with respect to the Acquiror Shares, other
than pursuant to the Acquiror Voting Agreement, dated
May 25, 1998, among the Acquiror Stockholder and the
Company, or as otherwise disclosed in Schedule 5.05(a)
to the Merger Agreement. The Acquiror Stockholder has
sole voting power with respect to the Acquiror Shares,
and the person executing this Agreement on behalf of
the Acquiror Stockholder has the power to direct the
voting of such Acquiror Shares.
5. NO PROHIBITION ON TRANSFERS. Nothing in
this Agreement shall prevent the Acquiror Stockholder
from offering, selling, transferring, pledging or in
any other way disposing of or placing encumbrances upon
the Acquiror Shares.
6. COMPENSATION, EXPENSES, INSURANCE. The
Initial PCBH Designees, PCBH Designees and Replacement
PCBH Designees serving on the Acquiror Board shall be
entitled to fees and other compensation, participation
in option, stock or other benefit plans for which
directors are eligible, reimbursement of expenses, and
directors and officers liability insurance and
indemnities on an equal basis with other members of the
Acquiror Board.
7. PROVISIONS SPECIFICALLY ENFORCEABLE.
(a) The obligations of Acquiror and the
Acquiror Stockholder under this Agreement are unique.
Acquiror and the Acquiror Stockholder acknowledge that
it would be extremely difficult or impracticable to
measure the resulting damages caused by any breach of
this Agreement. Acquiror and the Acquiror Stockholder
agree that, in the event of a breach of this Agreement
by either Acquiror or the Acquiror Stockholder, the
Pulitzer Class B Holders, in addition to any other
available rights or remedies, shall be entitled to
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specific performance of the obligations of Acquiror and
the Acquiror Stockholder under this Agreement, and
Acquiror and the Acquiror Stockholder expressly agree
that a remedy in damages will not be adequate.
(b) The remedies provided in this Section 7
are cumulative and are in addition to any other
remedies in law or equity which may be available to the
Pulitzer Class B Holders. The election of one or more
remedies shall not bar the use of other remedies unless
circumstances make the remedies incompatible.
8. CHOICE OF 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 principles of conflicts of
law applicable hereto.
9. ATTORNEY'S FEE. In any action to
enforce the terms of this Agreement, the prevailing
party shall be entitled to recover its attorneys' fees
and court costs and other nonreimbursable litigation
expenses, such as expert witness fees and investigation
expenses.
10. MERGER AND MODIFICATION. This Agreement
sets forth the entire agreement between the parties
relating to the subject matter hereof, and supersedes
all other oral or written agreements. This Agreement
may be modified or terminated only in a writing signed
by all parties.
11. BINDING ON SUCCESSORS. This Agreement
shall be binding upon Acquiror, the Acquiror
Stockholder and their respective successors and
assigns.
12. RULES OF CONSTRUCTION. All section
captions are for convenience of reference only, and
shall not be considered in construing this Agreement.
13. NOTICES. All notices and other
communications hereunder shall be in writing and shall
be deemed to have been duly given when delivered in
person, by telecopy with answerback, by express or
overnight mail delivered by a nationally recognized air
courier (delivery charges prepaid) or by registered or
certified mail (postage prepaid, return receipt
requested) to the respective parties as follows: (a)
if to the Pulitzer Class B Holders, c/o Pulitzer
Publishing Company, 000 Xxxxx Xxxxxx Xxxxxxxxx, Xx.
Xxxxx, Xxxxxxxx 00000, (b) if to the Acquiror
Stockholder, Hearst Broadcasting, Inc., 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxxx X.
Xxxxx, with a copy to Xxxxxx & Xxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxxxx X.
Xxxxx, Esq., and (c) if to Acquiror, Hearst-Argyle
Television, Inc., 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention: Xxxx X. Xxxxxx, with a copy to
Xxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention: Xxxxxx X. Xxxxx, Esq., or to such
other address as the party to whom notice is given may
have previously furnished to the others in writing in
the manner set forth above. Any notice or
communication delivered in person shall be deemed
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effective on delivery. Any notice or communication
sent by telecopy or by air courier shall be deemed
effective on the first business day at the place at
which such notice or communication is received
following the day on which such notice or communication
was sent. Any notice or communication sent by
registered or certified mail shall be deemed effective
on the fifth business day at the place from which such
notice or communication was mailed following the day on
which such notice or communication was mailed.
14. COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which
shall be deemed to be an original as against any party
whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This
Agreement shall become binding when one or more
counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties
reflected hereon as the signatories.
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IN WITNESS WHEREOF, the parties have caused
this Agreement to be duly executed as of the date first
written above.
HEARST-ARGYLE TELEVISION, INC.
By:______________________
Name:
Title:
HEARST BROADCASTING, INC.
By:_______________________
Name:
Title:
_________________________
Xxxxx Xxxx Pulitzer
_________________________
Xxxxxxx X. Xxxxxxxx
_________________________
Xxxxx X. Xxxxx
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