Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 7311 13-1024020
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
----------------------
1271 Avenue of the Americas
New York, New York 10020
(212) 399-8000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
NICHOLAS J. CAMERA
SENIOR VICE PRESIDENT, GENERAL COUNSEL & SECRETARY
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1271 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
(212) 399-8000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
RICHARD S. BORISOFF, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
212-373-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
----------------------
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED SHARE PRICE (1) FEE (2)
- -------------------------------------------------------------------------------------------------------------------------------
7 1/4% Notes Due 2011 $500,000,000 100% $500,000,000 $119,500
- -------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f) of the Securities Act of 1933.
(2) The registration fee has been calculated pursuant to Rule 457(f) under the
Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This preliminary prospectus is
not an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED December 4, 2001
THE INTERPUBLIC GROUP OF COMPANIES, INC.
EXCHANGE OFFER FOR
$500,000,000
7 1/4 % NOTES DUE 2011
TERMS OF THE EXCHANGE OFFER
o It will expire at 5:00 p.m., New York City time, on December
, 2001, unless we extend it.
o If all the conditions to this exchange offer are satisfied, we
will exchange all of our 7 1/4% Notes due 2011 issued on
August 17, 2001, which we refer to as the initial notes, that
are validly tendered and not withdrawn for new notes, which we
refer to as the exchange notes.
o You may withdraw your tender of initial notes at any time
before the expiration of this exchange offer.
o The exchange notes that we will issue you in exchange for your
initial notes will be substantially identical to your initial
notes except that, unlike your initial notes, the exchange
notes will have no transfer restrictions or registration
rights.
o The exchange notes that we will issue you in exchange for your
initial notes are new securities with no established market
for trading. We do not intend to apply to have the exchange
notes listed on any securities exchange.
BEFORE MAKING A DECISION TO PARTICIPATE IN THIS EXCHANGE OFFER, PLEASE
REFER TO THE SECTION IN THIS PROSPECTUS ENTITLED "RISK FACTORS" COMMENCING ON
PAGE 9.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 2001.
TABLE OF CONTENTS
Page
Incorporation Of Certain Documents by Reference...............................2
Where You Can Find More Information...........................................4
Summary.......................................................................5
Risk Factors..................................................................9
Special Note Regarding Forward-Looking Statements And Other Factors...........10
Use Of Proceeds...............................................................12
Ratio Of Earnings To Fixed Charges............................................12
Capitalization................................................................12
Selected Consolidated Financial Data..........................................13
The Company...................................................................14
The Exchange Offer............................................................19
Description Of The Exchange Notes.............................................29
Book-Entry, Delivery And Form.................................................40
Certain U.S. Federal Income Tax Considerations................................44
Plan Of Distribution..........................................................48
Legal Matters.................................................................49
Experts.......................................................................49
----------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This prospectus incorporates by reference important business and
financial information about our company that is not included in or delivered
with this document. The information incorporated by reference is considered to
be part of this prospectus, and later information that we file with the
Commission will automatically update and supersede this information. Any
statement modified or superseded by subsequently filed materials shall not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus. We incorporate by reference the documents listed below and any other
filings made with the Commission under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 prior to termination of the exchange offer:
o Our Annual Report on Form 10-K for the year ended December 31,
2000.
o Our Current Report on Form 8-K filed on January 11, 2001.
o Our Current Report on Form 8-K filed on March 1, 2001.
o Our Current Report on Form 8-K filed on March 19, 2001.
o Our Quarterly Report on Form 10-Q for the quarter ended March
31, 2001.
o Our Current Report on Form 8-K filed on April 27, 2001.
2
o Our Current Report on Form 8-K filed on May 15, 2001.
o Our Current Report on Form 8-K filed on May 21, 2001.
o Our Current Report on Form 8-K filed on June 15, 2001.
o Our Current Report on Form 8-K filed on June 26, 2001.
o Our Quarterly Report on Form 10-Q for the quarter ended June
30, 2001.
o Our Current Report on Form 8-K filed on July 27, 2001.
o Our Current Report on Form 8-K filed on August 10, 2001.
o Our Amendment to Our Current report on Form 8-K/A filed on
August 23, 2001.
o Our Current Report on Form 8-K filed on September 18, 2001.
o Our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2001.
Our Current Report on Form 8-K filed on September 18, 2001 contains
financial statements and other information that restates and supersedes
corresponding information contained in our Annual Report on Form 10-K for the
year ended December 31, 2000 and our Current Report on Form 8-K filed on August
10, 2001 to give effect to our acquisition of True North Communications Inc. on
June 22, 2001 which has been accounted for as a pooling of interests.
You may request a copy of any of these documents, at no cost, by making
an oral or written request to Susan V. Watson, The Interpublic Group of
Companies, Inc., 1271 Avenue of the Americas, New York, New York 10020,
telephone: (212) 399-8000. TO OBTAIN TIMELY DELIVERY OF ANY COPIES OF FILINGS
REQUESTED, PLEASE WRITE OR TELEPHONE NO LATER THAN DECEMBER , 2001.
EXCEPT AS DESCRIBED ABOVE, NO OTHER INFORMATION IS INCORPORATED BY
REFERENCE IN THIS PROSPECTUS (INCLUDING, WITHOUT LIMITATION, INFORMATION ON OUR
WEBSITE).
3
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and file reports, proxy statements and other
information with the Commission. We have also filed with the Commission a
registration statement on Form S-4 to register the exchange notes. This
prospectus, which forms part of the registration statement, does not contain all
of the information included in that registration statement. For further
information about us and the exchange notes offered in this prospectus, you
should refer to the registration statement and its exhibits. You may read and
copy any document we file with the Commission at the Commission's Public
Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of these
reports, proxy statements and information may be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. In addition, the
Commission maintains a web site that contains reports, proxy statements and
other information regarding registrants, such as us, that file electronically
with the Commission. The address of this web site is http://www.sec.gov.
Anyone who receives a copy of this prospectus may obtain a copy of the
indenture and supplemental indenture relating to the exchange notes without
charge by writing to: Susan V. Watson, The Interpublic Group of Companies, Inc.,
1271 Avenue of the Americas, New York, New York 10020.
4
SUMMARY
IN THIS PROSPECTUS, "WE," "OUR," "US," THE "COMPANY" AND "INTERPUBLIC"
MEAN THE INTERPUBLIC GROUP OF COMPANIES, INC. INCLUDING, UNLESS THE CONTEXT
OTHERWISE REQUIRES OR AS OTHERWISE EXPRESSLY STATED, OUR SUBSIDIARIES. THE TERM
"INITIAL NOTES" REFERS TO THE 7 1/4% NOTES DUE 2011 THAT WERE ISSUED ON AUGUST
17, 2001 IN A PRIVATE OFFERING. THE TERM "EXCHANGE NOTES" REFERS TO THE 7 1/4%
NOTES DUE 2011 OFFERED WITH THIS PROSPECTUS. THE TERM "NOTES" REFERS TO THE
INITIAL NOTES AND THE EXCHANGE NOTES, COLLECTIVELY.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Interpublic is a group of advertising and specialized marketing and
communication services companies that together represent one of the largest
resources of marketing and advertising expertise in the world. With offices in
more than 130 countries, we realized worldwide revenue in 2000 of approximately
$7.2 billion, 59% of which represented domestic revenue and 41% of which
represented international revenue, after giving effect to our recent acquisition
of True North.
In the last five years, we have grown to become one of the world's
largest groups of global marketing services companies, providing our clients
with communications expertise in four broad areas:
o Advertising, which includes advertising and media management;
o Marketing Communications, which includes client relationship
management, public relations, sales promotion, event
marketing, on-line marketing, and specialized sectors such as
healthcare, diversity and corporate identity;
o Marketing Intelligence, which includes custom marketing
research, brand consultancy, and database management; and
o Marketing Services, which includes sports and entertainment
marketing, corporate meetings and events, retail marketing,
and other marketing and business services.
We seek to be the best in quality, broadest in scope and leader in size in all
of these areas.
We are organized into four global operating groups. Three of these
groups, the WorldGroup, the FCB Group and The Partnership, are global marketing
communications companies. Each offers a distinctive range of marketing solutions
for our clients. Our fourth global operating group is The Advanced Marketing
Services Group. This group is focused on growing our current marketing services
and marketing intelligence services.
We believe this organizational structure allows us to provide
comprehensive marketing communications solutions for clients, enables stronger
organic growth among all our operating companies and allows us to bring improved
operating efficiencies to our organization.
-------------------
Our principal executive offices are located at 1271 Avenue of the
Americas, New York, New York 10020. Our telephone number at that address is
(212) 399-8000.
5
THE EXCHANGE OFFER
Exchange Offer...................... We are offering to exchange $500,000,000
aggregate principal amount of our
exchange notes for a like aggregate
principal amount of our initial notes. In
order to exchange your initial notes, you
must properly tender them and we must
accept your tender. We will exchange all
outstanding initial notes that are
validly tendered and not validly
withdrawn.
Expiration Date..................... This exchange offer will expire at 5:00
p.m., New York City time, on December ,
2001, unless we decide to extend it.
Conditions to the Exchange
Offer............................ We will complete this exchange offer only
if:
o there is no change in the laws and
regulations which would impair our
ability to proceed with this exchange
offer,
o there is no change in the current
interpretation of the staff of the
Commission which permits resales of the
exchange notes,
o there is no stop order issued by the
Commission which would suspend the
effectiveness of the registration
statement which includes this
prospectus or the qualification of the
exchange notes under the Trust
Indenture Act of 1939,
o there is no litigation or threatened
litigation which would impair our
ability to proceed with this exchange
offer, and
o we obtain all the governmental
approvals we deem necessary to complete
this exchange offer.
Please refer to the section in this
prospectus entitled "The Exchange
Offer--Conditions to the Exchange Offer."
Procedures for Tendering Initial
Notes............................ To participate in this exchange offer,
you must complete, sign and date the
letter of transmittal or its facsimile
and transmit it, together with your
initial notes to be exchanged and all
other documents required by the letter of
transmittal, to The Bank of New York, as
exchange agent, at its address indicated
under "The Exchange Offer--Exchange
Agent." In the alternative, you can
tender your initial notes by book-entry
delivery following the procedures
described in this prospectus. If your
initial notes are registered in the name
of a broker, dealer, commercial bank,
trust company or other nominee, you
should contact that person promptly to
tender your initial notes in this
exchange offer. For more information on
tendering your notes, please refer to the
section in this prospectus entitled "The
Exchange Offer--Procedures for Tendering
Initial Notes."
Special Procedures for Beneficial
Owners........................... If you are a beneficial owner of initial
notes that are registered in the name of
a broker, dealer, commercial bank, trust
company or other nominee and you wish to
tender your initial notes in the exchange
offer, you should contact the registered
holder promptly and instruct that person
to tender on your behalf.
Guaranteed Delivery Procedures...... If you wish to tender your initial notes
and you cannot get the required documents
to the exchange agent on time, you may
tender your notes by using the guaranteed
delivery procedures described under the
section of this prospectus entitled "The
Exchange Offer--Procedures for Tendering
Initial Notes--Guaranteed Delivery
Procedure."
Withdrawal Rights................... You may withdraw the tender of your
initial notes at any time before 5:00
p.m., New York City time, on the
expiration date of the exchange
6
offer. To withdraw, you must send a
written or facsimile transmission notice
of withdrawal to the exchange agent at
its address indicated under "The Exchange
Offer--Exchange Agent" before 5:00 p.m.,
New York City time, on the expiration
date of the exchange offer.
Acceptance of Initial Notes and
Delivery of Exchange Notes....... If all the conditions to the completion
of this exchange offer are satisfied, we
will accept any and all initial notes
that are properly tendered in this
exchange offer on or before 5:00 p.m.,
New York City time, on the expiration
date. We will return any initial note
that we do not accept for exchange to you
without expense as promptly as
practicable after the expiration date. We
will deliver the exchange notes to you as
promptly as practicable after the
expiration date and acceptance of your
initial notes for exchange. Please refer
to the section in this prospectus
entitled "The Exchange Offer--Acceptance
of Initial Notes for Exchange and
Delivery of Exchange Notes."
Federal Income Tax
Considerations Relating
to the Exchange Offer............ Exchanging your initial notes for
exchange notes will not be a taxable
event to you for United States federal
income tax purposes. Please refer to the
section of this prospectus entitled
"Certain U.S. Federal Income Tax
Considerations."
Exchange Agent...................... The Bank of New York is serving as
exchange agent in the exchange offer.
Fees and Expenses................... We will pay all expenses related to this
exchange offer. Please refer to the
section of this prospectus entitled "The
Exchange Offer--Fees and Expenses."
Use of Proceeds..................... We will not receive any proceeds from the
issuance of the exchange notes. We are
making this exchange offer solely to
satisfy certain of our obligations under
our registration rights agreement entered
into in connection with the offering of
the initial notes.
Consequences to Holders
Who Do Not Participate in the
Exchange Offer................. If you do not participate in this
exchange offer:
o you will not necessarily be able to
require us to register your initial
notes under the Securities Act,
o you will not be able to resell, offer
to resell or otherwise transfer your
initial notes unless they are
registered under the Securities Act or
unless you resell, offer to resell or
otherwise transfer them under an
exemption from the registration
requirements of, or in a transaction
not subject to, the Securities Act, and
o the trading market for your initial
notes will become more limited to the
extent other holders of initial notes
participate in the exchange offer.
Please refer to the section of this
prospectus entitled "Risk Factors -- Your
failure to participate in the exchange
offer will have adverse consequences."
Resales............................. It may be possible for you to resell the
notes issued in the exchange offer
without compliance with the registration
and prospectus delivery provisions of the
Securities Act, subject to some
conditions. Please refer to the section
of this prospectus entitled "Risk
Factors--Some persons who participate in
the exchange offer must deliver a
prospectus in connection with resales of
the exchange notes" and "Plan of
Distribution."
7
THE EXCHANGE NOTES
Issuer.............................. The Interpublic Group of Companies, Inc.
Exchange Notes...................... $500,000,000 million aggregate principal
amount of 7 1/4% Notes due 2011. The
forms and terms of the exchange notes are
the same as the form and terms of the
initial notes except that the issuance of
the exchange notes is registered under
the Securities Act, will not bear legends
restricting their transfer and will not
be entitled to registration rights under
our registration rights agreement. The
exchange notes will evidence the same
debt as the initial notes, and both the
initial notes and the exchange notes will
be governed by the same indenture and
supplemental indenture.
Use of Proceeds..................... We will not receive any proceeds from the
issuance of the exchange notes in
exchange for the outstanding initial
notes. We are making this exchange solely
to satisfy our obligations under the
registration rights agreement entered
into in connection with the offering of
the initial notes.
Absence of a Public Market
for the Exchange Notes......... The exchange notes are new securities
with no established market for them. We
cannot assure you that a market for these
exchange notes will develop or that this
market will be liquid.
Form of the Exchange Notes.......... The exchange notes will be represented by
one or more permanent global securities
in registered form deposited on behalf of
The Depository Trust Company with The
Bank of New York, as custodian. You will
not receive exchange notes in
certificated form unless there occurs one
of the events described in the section of
this prospectus entitled "Book Entry;
Delivery and Form-- Exchange of Book
Entry Notes for Certificated Notes."
Instead, beneficial interests in the
exchange notes will be shown on, and
transfers of these exchange notes will be
effected only through, records maintained
in book-entry form by The Depository
Trust Company with respect to its
participants.
8
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS RELATING TO
THE EXCHANGE OFFER, THE INFORMATION UNDER THE CAPTION "SPECIAL NOTE REGARDING
FORWARD LOOKING STATEMENTS AND OTHER FACTORS" BELOW AND ALL OF THE OTHER
INFORMATION CONTAINED IN, OR INCORPORATED BY REFERENCE INTO, THIS PROSPECTUS
BEFORE MAKING A DECISION TO PARTICIPATE IN THE EXCHANGE OFFER.
THE ISSUANCE OF THE EXCHANGE NOTES MAY ADVERSELY AFFECT THE MARKET FOR THE
INITIAL NOTES.
If initial notes are tendered for exchange and accepted in the exchange
offer, the trading market for the untendered and tendered but unaccepted initial
notes could be adversely affected. Please refer to the following section
entitled "--Your failure to participate in the exchange offer will have adverse
consequences."
YOUR FAILURE TO PARTICIPATE IN THE EXCHANGE OFFER WILL HAVE ADVERSE
CONSEQUENCES.
The initial notes were not registered under the Securities Act or under
the securities laws of any state and you may not resell them, offer them for
resale or otherwise transfer them unless they are subsequently registered or
resold under an exemption from the registration requirements of the Securities
Act and applicable state securities laws. If you do not exchange your initial
notes for exchange notes pursuant to this exchange offer, or if you do not
properly tender your initial notes in this exchange offer, you will not be able
to resell, offer to resell or otherwise transfer the initial notes unless they
are registered under the Securities Act or unless you resell them, offer to
resell or otherwise transfer them under an exemption from the registration
requirements of, or in a transaction not subject to, the Securities Act. In
addition, you may no longer be able to obligate us to register the initial notes
under the Securities Act.
SOME PERSONS WHO PARTICIPATE IN THE EXCHANGE OFFER MUST DELIVER A PROSPECTUS IN
CONNECTION WITH RESALES OF THE EXCHANGE NOTES.
Based on certain no-action letters issued by the staff of the
Commission, we believe that you may offer for resale, resell or otherwise
transfer the exchange notes without compliance with the registration and
prospectus delivery requirements of the Securities Act. However, in some
instances described in this prospectus under "Plan of Distribution," you will
remain obligated to comply with the registration and prospectus delivery
requirements of the Securities Act to transfer your exchange notes. In these
cases, if you transfer any exchange note without delivering a prospectus meeting
the requirements of the Securities Act or without an exemption from registration
of your exchange notes under the Securities Act, you may incur liability under
the Securities Act. We do not and will not assume, or indemnify you against,
this liability.
9
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS AND OTHER FACTORS
This prospectus contains and incorporates by reference forward-looking
statements. Our representatives may also make forward-looking statements orally
from time to time. Statements in this prospectus and statements incorporated by
reference from our SEC reports that are not historical facts, including
statements about our beliefs and expectations, particularly regarding recent
business and economic trends, the integration of acquisitions and restructuring
costs, constitute forward-looking statements. These statements are based on
current plans, estimates and projections, and you should therefore not place
undue reliance on them. Forward-looking statements speak only as of the date
they are made, and we undertake no obligation to update publicly any of them in
light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. A
number of important factors could cause actual results to differ materially from
those contained in any forward-looking statement. Such factors include, but are
not limited to, those associated with the effect of national and regional
economic conditions, our ability to attract new clients and retain existing
clients, the financial success of our clients, developments from changes in the
regulatory and legal environment for advertising companies around the world, and
the successful completion and integration of acquisitions which complement and
expand our business capabilities.
One of our business strategies is to acquire businesses that complement
and expand our current business capabilities. Accordingly, we are usually
engaged in evaluating potential acquisition candidates. We are frequently
engaged in a number of preliminary discussions that may result in one or more
substantial acquisitions. These acquisition opportunities require
confidentiality and from time to time give rise to bidding scenarios that
require quick responses by us. Although there is uncertainty that any of these
discussions will result in definitive agreements or the completion of any
transactions, the announcement of any such transaction may lead to increased
volatility in the trading price of our securities.
Moreover, the success of recent or contemplated future acquisitions
will depend on the effective integration of newly-acquired businesses into our
current operations. Important factors for integration include realization of
anticipated synergies and cost savings and the ability to retain and attract new
personnel and clients.
With respect to our recently completed acquisition of True North in
particular, we may not be able to increase the scope of the services provided by
us and True North to our respective clients prior to the merger, and we may not
be able to achieve the cost savings and synergies we expect as a result of our
integration plan. The implementation of our integration plans will present
challenges involving the coordination of the operations and personnel of the two
companies and may give rise to the diversion of the attention of management and
unanticipated liabilities and costs. The geographically dispersed operations of
the two companies may compound these challenges.
The advertising agency and other marketing communications and marketing
services businesses are highly competitive. Our agencies and media services must
compete with other agencies and with other providers of creative or media
services which are not themselves advertising agencies, in order to maintain
existing client relationships and to obtain new clients. Competition in the
advertising agency business depends to a large extent on the client's perception
of the quality of an agency's "creative product." An agency's ability to serve
clients, particularly large international clients, on a broad geographic basis
is also an important competitive consideration. On the other hand, because an
agency's principal asset is its people, freedom of entry into the business is
almost unlimited and quite small agencies are, on occasion, able to take all or
some portion of a client's account from a much larger competitor.
10
Moreover, increasing size may limit an agency's potential for securing
new business, because many clients prefer not to be represented by an agency
that represents a competitor. Also, clients frequently wish to have different
products represented by different agencies. Our ability to retain existing
clients and to attract new clients may, in some cases, be limited by clients'
policies on conflicts of interest. These policies can in some cases prevent one
agency and, in limited circumstances, different agencies within the same holding
company, from performing similar services for competing products or companies.
Those conflicts could result in clients terminating their relationship with us
following the True North merger or other acquisitions or reducing the projects
for which they retain those agencies. As part of an effort to assure that these
clients would not leave as a result of our merger, we and True North may need to
agree to modify the terms of their existing agreements with clients in an
adverse manner. Moreover, because of the combined company's larger number of
clients, there could be a greater likelihood of conflicts with potential new
clients in the future. If the combined company fails to maintain existing
clients or attract new clients, its business may be materially and adversely
impacted.
Employees, including creative, research, media, account and practice
group specialists, and their skills and relationships with clients, are among
our most important assets. The inability to retain True North management and
employees after the merger may have a material adverse effect on the combined
company. Change of control provisions in the employment arrangements for many
key employees may compound the challenge of retaining True North employees.
Advertising and marketing communications businesses are subject to
government regulation, both domestic and foreign. There has been an increasing
tendency in the United States on the part of advertisers to resort to the
courts, industry and self-regulatory bodies to challenge comparative advertising
on the grounds that the advertising is false and deceptive. Through the years,
there has been a continuing expansion of specific rules, prohibitions, media
restrictions, labeling disclosures and warning requirements with respect to the
advertising for certain products. Representatives within certain government
bodies, both domestic and foreign, continue to initiate proposals to ban the
advertising of specific products and to impose taxes on or deny deductions for
advertising which, if successful, may have an adverse effect on advertising
expenditures and consequently our revenues.
Our international operations still remain exposed to certain risks
which affect foreign operations of all kinds, such as local legislation,
monetary devaluation, exchange control restrictions and unstable political
conditions. In addition, international advertising agencies are still subject to
ownership restrictions in certain countries because they are considered an
integral factor in the communications process.
Investors in the exchange notes should evaluate any forward-looking
statements and an investment in the exchange notes in light of these important
factors.
11
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the exchange
notes in exchange for the outstanding initial notes. We are making this exchange
offer solely to satisfy our obligations under the registration rights agreements
entered into in connection with the offering of the initial notes. In
consideration for issuing the exchange notes, we will receive initial notes in
like aggregate principal amount.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratios of earnings to fixed charges for
us and our consolidated subsidiaries for the periods indicated.
Nine Months
Years Ended December 31, Ended
------------------------------------------------ September 30,
2000 1999 1998 1997 1996 2001
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges.......... 4.05x 3.91x 4.96x 3.62x 4.41x
In calculating the ratio of earnings to fixed charges, earnings is the
sum of earnings before income taxes plus fixed charges. Fixed charges is the sum
of interest on indebtedness, amortization of debt discount and expense and that
portion of net rental expense deemed representative of the interest component.
For the nine months ended September 30, 2001, we had a deficiency of
earnings to fixed charges, primarily as a result of lower income from operations
as compared to the prior periods. Additional earnings of $736,315 were necessary
for the nine months ended September 30, 2001 to provide a one-to-one coverage
ratio.
CAPITALIZATION
The following table sets forth our short-term debt, long-term debt and
stockholders' equity as of September 30, 2001, which gives effect to the issue
of the initial notes. The data is derived from our unaudited financial
statements. You should read this table in conjunction with our selected
consolidated financial data presented elsewhere in this prospectus along with
our consolidated financial statements and related notes and the description of
our liquidity and capital resources as of September 30, 2001 incorporated by
reference in this prospectus.
SEPTEMBER 30, 2001
------------------
ACTUAL
(UNAUDITED)
(IN THOUSANDS)
SHORT-TERM DEBT:
Payable to banks................................................... $1,124,783
Floating Rate Notes................................................ 100,000
LONG-TERM DEBT:
Payable to financial institutions.................................. $ 356,253
Notes - 7.25% due 2011............................................. 500,000
Notes - 7.875%, due 2005........................................... 500,000
Convertible Subordinated Notes - 1.80%, due 2004................... 226,653
Convertible Subordinated Notes - 1.87%, due 2006................... 317,947
STOCKHOLDERS' EQUITY:
Total stockholders' equity......................................... $1,863,500
----------
Total capitalization........................................ $4,989,136
==========
12
SELECTED CONSOLIDATED FINANCIAL DATA
The following summary of historical financial data is derived from our
audited consolidated financial statements, except for the financial data related
to the financial position at December 31, 1998, 1997 and 1996, at September 30,
2001 and 2000 and for the years ended December 31, 1997 and 1996 and for the
nine month periods ended September 30, 2001 and 2000, which are derived from our
unaudited consolidated financial statements, in each case as restated to give
effect to our recent acquisition of True North.
NINE MONTHS ENDED
FISCAL YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------- ------------------------
2000 1999 1998 1997 1996 2001 2000
----------- ----------- ----------------------------------- ----------- -----------
(IN THOUSANDS, EXCEPT RATIOS)
OPERATING DATA:
Revenue......................... $7,182,688 $6,417,237 $5,492,941 $4,850,706 $4,066,826 $5,007,326 $5,140,823
Operating expenses.............. 6,155,873 5,608,310 4,817,187 4,396,277 3,661,846 4,375,285 4,337,661
Restructuring and merger
related costs................. 133,041 159,537 3,278 79,638 -- 645,620 115,541
Deutsch transaction costs....... 44,715 -- -- -- -- -- --
Goodwill impairment and other
related charges............... -- -- -- -- -- 303,100 --
Interest expense................ 126,322 99,469 86,538 79,998 69,327 125,800 87,000
Impairment of investments....... -- -- -- -- -- 208,300 --
Provision for (benefit of)
income taxes.................. 348,789 285,260 301,702 208,624 190,074 (135,900) 236,700
Net income (loss)............... 420,261 359,509 374,174 168,674 262,337 (616,323) 307,140
FINANCIAL POSITION:
Working capital................. $(325,940) $(3,801) $ (89,662) $(3,471) $33,361 $(550,479) $(19,566)
Total assets.................... 12,362,012 11,225,809 9,345,323 7,959,577 6,905,056 11,328,105 11,681,406
Total long-term debt............ 1,531,791 1,085,239 721,743 590,465 479,377 1,900,853 1,691,732
Stockholders' equity............ 2,482,471 2,126,323 1,743,270 1,438,017 1,253,177 1,863,500 2,335,362
OTHER DATA:
Depreciation and amortization
of fixed and intangible assets $ 336,851 $ 296,465 $ 227,206 $ 180,769 $ 153,833 $275,877 $ 245,304
Capital expenditures............ 259,489 249,725 200,857 159,340 129,788 194,700 186,700
Ratio of earnings to fixed
charges (1)................... 4.05x 3.91x 4.96x 3.62x 4.41x -- (1) 3.92x
- ------------------------
(1) In calculating the ratio of earnings to fixed charges, earnings is the sum
of earnings before income taxes plus fixed charges. Fixed charges is the
sum of interest on indebtedness, amortization of debt discount and expense
and that portion of net rental expense deemed representative of the
interest component. For the nine months ended September 30, 2001 earnings
were insufficient to cover fixed charges as evidenced by a less than
one-to-one coverage ratio as shown above. Additional earnings of $736,315
were necessary for the nine months ended September 30, 2001 to provide a
one-to-one coverage ratio. The decline in the ratio primarily relates to
lower income from operations as compared to prior periods.
13
THE COMPANY
Interpublic is a group of advertising and specialized marketing and
communication services companies that together represent one of the largest
resources of marketing and advertising expertise in the world. With offices in
more than 130 countries, we realized worldwide revenue in 2000 of approximately
$7.2 billion, 59% of which represented domestic revenue and 41% of which
represented international revenue, after giving effect to our recent acquisition
of True North.
ADVERTISING AND SPECIALIZED MARKETING AND COMMUNICATIONS SERVICES BUSINESSES
In the last five years, we have grown to become one of the world's
largest groups of global marketing services companies, providing our clients
with communications expertise in four broad areas:
o Advertising, which includes advertising and media management;
o Marketing Communications, which includes client relationship
management, public relations, sales promotion, event
marketing, on-line marketing and specialized sectors such as
healthcare, diversity and corporate identity;
o Marketing Intelligence, which includes custom marketing
research, brand consultancy and database management; and
o Marketing Services, which includes sports and entertainment
marketing, corporate meetings and events, retail marketing and
other marketing and business services.
We seek to be the best in quality, broadest in scope and leader in size in all
of these areas.
We are organized into four global operating groups. Three of these
groups, the WorldGroup, the FCB Group and The Partnership, are global marketing
communications companies. Each offers a distinctive range of marketing solutions
for our clients. Our fourth global operating group is The Advanced Marketing
Services Group. This group is focused on growing our current marketing services
and marketing intelligence services.
We believe this organizational structure allows us to provide
comprehensive marketing communications solutions for clients, enables stronger
organic growth among all our operating companies and allows us to bring improved
operating efficiencies to our organization.
A brief description of our four global operating groups follows:
THE WORLDGROUP was founded on the global strength and quality of
McCann-Erickson, one of the world's leading advertising agencies. It includes
marketing communications companies spanning media, relationship marketing,
events, sales promotion, public relations, brand equity, online marketing
communications and healthcare communications. Launched in late 1997, the
WorldGroup has expanded rapidly to become one of the world's leading networked
marketing communications groups, now working with more than 25 key worldwide
clients in three or more disciplines and with more than 40 U.S. clients in two
or more disciplines. The WorldGroup includes the following agencies and public
relations firms:
o McCann-Erickson Worldwide (advertising),
14
o MRM Partners Worldwide (direct marketing),
o Momentum Worldwide (entertainment, event and promotional
marketing),
o FutureBrand (brand consultancy),
o Torre Lazur McCann Healthcare Worldwide (healthcare
advertising and marketing),
o Universal McCann Worldwide (media planning and buying),
o Nationwide Advertising Services (recruitment advertising), and
o Aligned Agency Group, which includes the following
independently branded general advertising agencies: Amster
Yard (New York), Gotham (New York), Austin Kelly (Atlanta),
Temerlin McClain (Dallas), Hill, Holliday (Boston, New York
and San Francisco), Campbell Mithun (Minneapolis), and Avrett
Free & Ginsberg (New York).
Weber Shandwick Worldwide is aligned with the WorldGroup to provide its
clients with a global public relations capability and to enhance and broaden the
WorldGroup's offering to prospective clients.
THE FCB GROUP is a single global integrated marketing communications
network centered on Foote, Cone & Belding Worldwide and its advertising, direct
marketing and sales promotion capabilities. This group also includes the
following specialized services:
o ANALYTICI (database marketing),
o Marketing Drive Worldwide (integrated marketing),
o R/GA (web design and development),
o The Hacker Group (customer acquisition direct marketing),
o FCB Media Services (media planning), and
o FCB HealthCare (healthcare marketing).
Weber Shandwick Worldwide also is aligned with the FCB Group to provide
its clients with a global public relations capability and to enhance and broaden
the FCB Group's offering to prospective clients.
In addition, Campbell-Ewald, an independent marketing communications
company, is affiliated with this group through a global strategic alliance to
provide its clients with an international network for implementation of
marketing communications programs.
THE PARTNERSHIP, a global, client-driven creative leader, is anchored
on the quality advertising reputation of Lowe, Lintas & Partners Worldwide. The
Partnership provides collaboration across a global group of independent networks
with creative capabilities across all areas of marketing communications.
15
The partners seek to preserve their independence while creating the ability to
inter-connect seamlessly to better service clients. Senior Partners include:
o Lowe Lintas & Partners Worldwide (advertising),
o Draft Worldwide (direct and promotional marketing),
o Golin/Harris International (public relations), and
o Initiative Media (media planning and buying).
The Partnership also includes a group of Member Partners, which are
independent advertising agencies that will now have more direct access to both
global capabilities and increased marketing services. This group includes The
Martin Agency, Mullen and Suissa Miller, as well as the following new Member
Partners:
o Bozell,
o Carmichael Lynch,
o Deutsch,
o Howard Merrell & Partners,
o Tierney Communications,
o Delaney Lund (minority international partner), and
o Springer & Jacoby (minority international partner).
THE ADVANCED MARKETING SERVICES GROUP (AMS) is the management center
for our specialized and advanced marketing services including:
o NFO WorldGroup (marketing intelligence services),
o Jack Morton Worldwide (specialized marketing services
including corporate events, meetings and training/learning),
o New America Strategies Group (multi-cultural marketing and
communications), and
o ISO Healthcare Group (strategic healthcare consulting).
Each of the companies in AMS is linked to one or more of the other
three operating groups through affiliate relationships, ensuring access to the
best, most innovative ideas and solutions for client communications needs.
Additionally, our public relations networks, Weber Shandwick Worldwide,
Golin/Harris International and DeVries Public Relations, are based within
Advanced Marketing Services' Constituency Management Group, in order to maintain
their professional affiliation with our other
16
operating groups. AMS is also charged with expanding our business into new
marketing intelligence, services, and communications areas.
We provide services for clients whose businesses are international in
scope as well as for clients whose businesses are restricted to a single country
or a small number of countries. Revenue for 2000 and 1999 is presented below by
major geographic area:
YEAR ENDED DECEMBER 31,
-----------------------
2000 1999
---- ----
(IN THOUSANDS)
United States........................................... $4,244,160 $3,624,180
International
United Kingdom........................................ 605,630 595,971
All other Europe...................................... 1,233,227 1,278,719
Asia Pacific.......................................... 511,241 415,179
Latin America......................................... 335,074 280,033
Other................................................. 253,356 223,155
--------------- ---------------
Total International............................. 2,938,528 2,793,057
--------------- ---------------
Total Consolidated....................... $7,182,688 $6,417,237
=============== ===============
SOURCES OF REVENUE
We generate revenue from planning, creating and placing advertising in
various media and from planning and executing other communications or marketing
programs. Historically, the commission customary in the industry was 15% of the
gross charge ("billings") for advertising space or time; more recently, lower
commissions have been negotiated, but often with additional incentives paid for
better performance. For example, an incentive component is frequently included
in arrangements with clients based on improvements in an advertised brand's
awareness or image, or increases in a client's sales or market share of the
products or services being advertised. Under commission arrangements, media bill
us at their gross rates. We bill these amounts to our clients, remit the net
charges to the media and retain the balance as our commission. Some clients,
however, prefer to compensate us on a fee basis, under which we bill our client
for the net charges billed by the media plus an agreed-upon fee. These fees
usually are calculated to reflect our hourly rates and out-of-pocket expenses
incurred on the client's behalf, plus proportional overhead and a profit
mark-up.
Like other agencies, we are primarily responsible for paying the media
with respect to firm contracts for advertising time or space placed on our
clients' behalf. This is a problem only if the client is unable to pay us
because of insolvency or bankruptcy. We make serious efforts to reduce the risk
from a client's insolvency including carrying out credit clearances, requiring
in some cases payment of media in advance, or agreeing with the media that we
will be solely liable to pay the media only after the client has paid us for the
media charges.
We also receive commissions from clients for planning and supervising
work done by outside contractors in the physical preparation of finished print
advertisements and the production of television and radio commercials and other
forms of advertising. This commission is customarily 17.65% of the outside
contractor's net charge, which is the same as 15.0% of the outside contractor's
total charges including commission. With the expansion of negotiated fees, the
terms on which outstanding contractors'
17
charges are billed are subject to wide variations and even include in some
instances the elimination of commissions entirely, provided that there are
adequate negotiated fees.
We also derive revenue in many other ways, including the planning and
placement in media of advertising produced by unrelated advertising agencies;
the maintenance of specialized media placement facilities; the creation and
publication of brochures, billboards, point of sale materials and direct
marketing pieces for clients; the planning and carrying out of specialized
marketing research; public relations campaigns; creating and managing special
events at which clients' products are featured; and designing and carrying out
interactive programs for special uses.
CLIENTS
The five clients that made the largest revenue contribution in 2000
accounted individually for approximately 1.4% to 5.7% of our revenue and in the
aggregate accounted for approximately 13% of our revenue. Twenty of our clients
accounted for approximately 23% of our revenue. Based on revenue, our largest
clients currently include Coca-Cola, General Motors Corporation, Johnson &
Johnson, Nestle and Unilever. General Motors Corporation first became a client
of one of our agencies in 1916 in the United States. Predecessors of several of
the Lintas agencies have supplied advertising services to Unilever since 1893.
Our client relationship with Nestle began in 1940 in Argentina. While the loss
of the entire business of one of our largest clients could significantly harm
our business, we believe that it is very unlikely that the entire business of
any of these clients would be lost at the same time, because we represent
several different brands or divisions of each of these clients in a number of
geographical markets in each case through more than one of our agency systems.
Representation of a client rarely means that we handle advertising for
all brands or product lines of the client in all geographical locations. Any
client may transfer its business from an agency within our Company to a
competing agency, and a client may reduce its marketing budget at any time.
Our agencies in many instances have written contracts with their
clients. As is customary in the industry, these contracts provide for
termination by either party on relatively short notice, usually 90 days but
sometimes shorter or longer.
ACQUISITION STRATEGY
We pursue acquisitions to complement and enhance our service offerings.
In addition, we also seek to acquire businesses similar to our own that expand
our geographic scope to better serve new and existing clients. Our acquisitions
have historically been funded using stock, cash or a combination of both.
18
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER
We are offering to exchange our exchange notes for a like aggregate
principal amount of our initial notes.
The exchange notes that we propose to issue in this exchange offer will
be substantially identical to our initial notes except that, unlike our initial
notes, the exchange notes will have no transfer restrictions or registration
rights. You should read the description of the exchange notes in the section in
this prospectus entitled "Description of the Exchange Notes."
We reserve the right in our sole discretion to purchase or make offers
for any initial notes that remain outstanding following the expiration or
termination of this exchange offer and, to the extent permitted by applicable
law, to purchase initial notes in the open market or privately negotiated
transactions, one or more additional tender or exchange offers or otherwise. The
terms and prices of these purchases or offers could differ significantly from
the terms of this exchange offer. In addition, nothing in this exchange offer
will prevent us from exercising our right to discharge our obligations on the
initial notes by depositing certain securities with the trustee and otherwise.
EXPIRATION DATE, EXTENSIONS, AMENDMENTS AND TERMINATION
This exchange offer will expire at 5:00 p.m., New York City time, on
December , 2001, unless we extend it in our reasonable discretion. The
expiration date of this exchange offer will be at least 20 business days after
the commencement of the exchange offer in accordance with Rule 14e-1(a) under
the Securities Exchange Act of 1934.
We expressly reserve the right to delay acceptance of any initial
notes, extend or terminate this exchange offer and not accept any initial notes
that we have not previously accepted if any of the conditions described below
under "--Conditions to the Exchange Offer" have not been waived by us or
satisfied. We will notify the exchange agent of any extension by oral notice
promptly confirmed in writing or by written notice. We will also notify the
holders of the initial notes by mailing an announcement or by a press release or
other public announcement communicated before 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration date unless
applicable laws require us to do otherwise.
We also expressly reserve the right to amend the terms of this exchange
offer in any manner. If we make any material change, we will promptly disclose
this change in a manner reasonably calculated to inform the holders of our
initial notes of the change including providing public announcement or giving
oral or written notice to these holders. A material change in the terms of this
exchange offer could include a change in the timing of the exchange offer, a
change in the exchange agent and other similar changes in the terms of this
exchange offer. If we make any material change to this exchange offer, we will
disclose this change by means of a post-effective amendment to the registration
statement which includes this prospectus and will distribute an amended or
supplemented prospectus to each registered holder of initial notes. In addition,
we will extend this exchange offer for an additional five to ten business days
as required by the Exchange Act, depending on the significance of the amendment,
if the exchange offer would otherwise expire during that period. We will
promptly notify the exchange agent by oral notice, promptly
19
confirmed in writing, or written notice of any delay in acceptance, extension,
termination or amendment of this exchange offer.
PROCEDURES FOR TENDERING INITIAL NOTES
PROPER EXECUTION AND DELIVERY OF LETTERS OF TRANSMITTAL
To tender your initial notes in this exchange offer, you must use ONE
OF THE THREE alternative procedures described below:
o REGULAR DELIVERY PROCEDURE: Complete, sign and date the letter
of transmittal, or a facsimile of the letter of transmittal.
Have the signatures on the letter of transmittal guaranteed if
required by the letter of transmittal. Mail or otherwise
deliver the letter of transmittal or the facsimile together
with the certificates representing the initial notes being
tendered and any other required documents to the exchange
agent on or before 5:00 p.m., New York City time, on the
expiration date.
o BOOK-ENTRY DELIVERY PROCEDURE: Send a timely confirmation of a
book-entry transfer of your initial notes, if this procedure
is available, into the exchange agent's account at The
Depository Trust Company in accordance with the procedures for
book-entry transfer described under "--Book-Entry Delivery
Procedure" below, on or before 5:00 p.m., New York City time,
on the expiration date.
o GUARANTEED DELIVERY PROCEDURE: If time will not permit you to
complete your tender by using the procedures described in
either procedure above before the expiration date and this
procedure is available, comply with the guaranteed delivery
procedures described under "--Guaranteed Delivery Procedure"
below.
The method of delivery of the initial notes, the letter of transmittal
and all other required documents is at your election and risk. Instead of
delivery by mail, we recommend that you use an overnight or hand-delivery
service. If you choose the mail, we recommend that you use registered mail,
properly insured, with return receipt requested. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ASSURE TIMELY DELIVERY. You should not send any letters of
transmittal or initial notes to us. You must deliver all documents to the
exchange agent at its address provided below. You may also request your broker,
dealer, commercial bank, trust company or nominee to tender your initial notes
on your behalf.
Only a holder of initial notes may tender initial notes in this
exchange offer. A holder is any person in whose name initial notes are
registered on our books or any other person who has obtained a properly
completed bond power from the registered holder.
If you are the beneficial owner of initial notes that are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and you wish to tender your notes, you must contact that registered holder
promptly and instruct that registered holder to tender your notes on your
behalf. If you wish to tender your initial notes on your own behalf, you must,
before completing and executing the letter of transmittal and delivering your
initial notes, either make appropriate arrangements to register the ownership of
these notes in your name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
20
You must have any signatures on a letter of transmittal or a notice of
withdrawal guaranteed by:
o a member firm of a registered national securities exchange or
of the National Association of Securities Dealers, Inc.,
o a commercial bank or trust company having an office or
correspondent in the United States, or
o an eligible guarantor institution within the meaning of Rule
17Ad-15 under the Exchange Act,
UNLESS the initial notes are tendered:
o by a registered holder or by a participant in The Depository
Trust Company whose name appears on a security position
listing as the owner, who has not completed the box entitled
"Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal and only if the
exchange notes are being issued directly to this registered
holder or deposited into this participant's account at The
Depository Trust Company, or
o for the account of a member firm of a registered national
securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or an
eligible guarantor institution within the meaning of Rule
17Ad-15 under the Securities Exchange Act of 1934.
If the letter of transmittal or any bond powers are signed by:
o the recordholder(s) of the initial notes tendered, the
signature must correspond with the name(s) written on the face
of the initial notes without alteration, enlargement or any
change whatsoever.
o a participant in The Depository Trust Company, the signature
must correspond with the name as it appears on the security
position listing as the holder of the initial notes.
o a person other than the registered holder of any initial
notes, the initial notes must be endorsed or accompanied by
bond powers and a proxy that authorize this person to tender
the initial notes on behalf of the registered holder, in
satisfactory form to us as determined in our sole discretion,
in each case, as the name of the registered holder or holders
appears on the initial notes.
o trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting
in a fiduciary or representative capacity, the persons signing
should so indicate when signing. Unless waived by us, evidence
satisfactory to us of their authority to so act must also be
submitted with the letter of transmittal.
To effectively tender notes through The Depository Trust Company, the
financial institution that is a participant in The Depository Trust Company will
electronically transmit its acceptance through the Automatic Tender Offer
Program. The Depository Trust Company will then edit and verify the acceptance
and send an agent's message to the exchange agent for its acceptance. An agent's
message is a message
21
transmitted by The Depository Trust Company to the exchange agent stating that
The Depository Trust Company has received an express acknowledgment from the
participant in The Depository Trust Company tendering the notes that this
participant has received and agrees to be bound by the terms of the letter of
transmittal, and that we may enforce the agreements contained in the letter of
transmittal against this participant.
BOOK-ENTRY DELIVERY PROCEDURE
Any financial institution that is a participant in The Depository Trust
Company's systems may make book-entry deliveries of initial notes by causing The
Depository Trust Company to transfer these initial notes into the exchange
agent's account at The Depository Trust Company in accordance with The
Depository Trust Company's procedures for transfer. To effectively tender notes
through The Depository Trust Company, the financial institution that is a
participant in The Depository Trust Company will electronically transmit its
acceptance through the Automatic Tender Offer Program. The Depository Trust
Company will then edit and verify the acceptance and send an agent's message to
the exchange agent for its acceptance. An agent's message is a message
transmitted by The Depository Trust Company to the exchange agent stating that
The Depository Trust Company has received an express acknowledgment from the
participant in The Depository Trust Company tendering the notes that this
participant has received and agrees to be bound by the terms of the letter of
transmittal, and that we may enforce this agreement against this participant.
The exchange agent will make a request to establish an account for the initial
notes at The Depository Trust Company for purposes of the exchange offer within
two business days after the date of this prospectus.
A delivery of initial notes through a book-entry transfer into the
exchange agent's account at The Depository Trust Company will only be effective
if an agent's message or the letter of transmittal or a facsimile of the letter
of transmittal with any required signature guarantees and any other required
documents is transmitted to and received by the exchange agent at the address
indicated below under "--Exchange Agent" on or before the expiration date unless
the guaranteed delivery procedures described below are complied with. DELIVERY
OF DOCUMENTS TO THE DEPOSITORY TRUST COMPANY DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
GUARANTEED DELIVERY PROCEDURE
If you are a registered holder of initial notes and desire to tender
your notes, and (i) these notes are not immediately available, (ii) time will
not permit your notes or other required documents to reach the exchange agent
before the expiration date or (iii) the procedures for book-entry transfer
cannot be completed on a timely basis and an agent's message delivered, you may
still tender in this exchange offer if:
o you tender through a member firm of a registered national
securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States, or an
eligible guarantor institution within the meaning of Rule
17Ad-15 under the Exchange Act,
o on or before the expiration date, the exchange agent receives
a properly completed and duly executed letter of transmittal
or facsimile of the letter of transmittal, and a notice of
guaranteed delivery, substantially in the form provided by us,
with your name and address as holder of the initial notes and
the amount of notes tendered, stating that the tender is being
made by that letter and notice and guaranteeing that within
three New York Stock Exchange
22
trading days after the expiration date the certificates for
all the initial notes tendered, in proper form for transfer,
or a book-entry confirmation with an agent's message, as the
case may be, and any other documents required by the letter of
transmittal will be deposited by the eligible institution with
the exchange agent, and
o the certificates for all your tendered initial notes in proper
form for transfer or a book-entry confirmation as the case may
be, and all other documents required by the letter of
transmittal are received by the exchange agent within three
New York Stock Exchange trading days after the expiration
date.
ACCEPTANCE OF INITIAL NOTES FOR EXCHANGE AND DELIVERY OF EXCHANGE NOTES
Your tender of initial notes will constitute an agreement between you
and us governed by the terms and conditions provided in this prospectus and in
the related letter of transmittal.
We will be deemed to have received your tender as of the date when your
duly signed letter of transmittal accompanied by your initial notes tendered, or
a timely confirmation of a book-entry transfer of these notes into the exchange
agent's account at The Depository Trust Company with an agent's message, or a
notice of guaranteed delivery from an eligible institution is received by the
exchange agent.
All questions as to the validity, form, eligibility, including time of
receipt, acceptance and withdrawal of tenders will be determined by us in our
sole discretion. Our determination will be final and binding.
We reserve the absolute right to reject any and all initial notes not
properly tendered or any initial notes which, if accepted, would, in our opinion
or our counsel's opinion, be unlawful. We also reserve the absolute right to
waive any conditions of this exchange offer or irregularities or defects in
tender as to particular notes. Our interpretation of the terms and conditions of
this exchange offer, including the instructions in the letter of transmittal,
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of initial notes must be cured within
such time as we shall determine. We, the exchange agent or any other person will
be under no duty to give notification of defects or irregularities with respect
to tenders of initial notes. We and the exchange agent or any other person will
incur no liability for any failure to give notification of these defects or
irregularities. Tenders of initial notes will not be deemed to have been made
until such irregularities have been cured or waived. The exchange agent will
return without cost to their holders any initial notes that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived as promptly as practicable following the expiration date.
If all the conditions to the exchange offer are satisfied or waived on
the expiration date, we will accept all initial notes properly tendered and will
issue the exchange notes promptly thereafter. Please refer to the section of
this prospectus entitled "--Conditions to the Exchange Offer" below. For
purposes of this exchange offer, initial notes will be deemed to have been
accepted as validly tendered for exchange when, as and if we give oral or
written notice of acceptance to the exchange agent.
We will issue the exchange notes in exchange for the initial notes
tendered pursuant to a notice of guaranteed delivery by an eligible institution
only against delivery to the exchange agent of the letter of transmittal, the
tendered initial notes and any other required documents, or the receipt by the
exchange agent of a timely confirmation of a book-entry transfer of initial
notes into the exchange agent's account
23
at The Depository Trust Company with an agent's message, in each case, in form
satisfactory to us and the exchange agent.
If any tendered initial notes are not accepted for any reason provided
by the terms and conditions of this exchange offer or if initial notes are
submitted for a greater principal amount than the holder desires to exchange,
the unaccepted or non-exchanged initial notes will be returned without expense
to the tendering holder, or, in the case of initial notes tendered by book-entry
transfer procedures described above, will be credited to an account maintained
with the book-entry transfer facility, as promptly as practicable after
withdrawal, rejection of tender or the expiration or termination of the exchange
offer.
By tendering into this exchange offer, you will irrevocably appoint our
designees as your attorney-in-fact and proxy with full power of substitution and
resubstitution to the full extent of your rights on the notes tendered. This
proxy will be considered coupled with an interest in the tendered notes. This
appointment will be effective only when, and to the extent that we accept your
initial notes in this exchange offer. All prior proxies on these notes will then
be revoked and you will not be entitled to give any subsequent proxy. Any proxy
that you may give subsequently will not be deemed effective. Our designees will
be empowered to exercise all voting and other rights of the holders as they may
deem proper at any meeting of note holders or otherwise. The initial notes will
be validly tendered only if we are able to exercise full voting rights on the
notes, including voting at any meeting of the note holders, and full rights to
consent to any action taken by the note holders.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw
tenders of initial notes at any time before 5:00 p.m., New York City time, on
the expiration date.
For a withdrawal to be effective, you must send a written or facsimile
transmission notice of withdrawal to the exchange agent before 5:00 p.m., New
York City time, on the expiration date at the address provided below under
"-Exchange Agent" and before acceptance of your tendered notes for exchange by
us.
Any notice of withdrawal must:
o specify the name of the person having tendered the initial
notes to be withdrawn,
o identify the notes to be withdrawn, including, if applicable,
the registration number or numbers and total principal amount
of these notes,
o be signed by the person having tendered the initial notes to
be withdrawn in the same manner as the original signature on
the letter of transmittal by which these notes were tendered,
including any required signature guarantees, or be accompanied
by documents of transfer sufficient to permit the trustee for
the initial notes to register the transfer of these notes into
the name of the person having made the original tender and
withdrawing the tender,
o specify the name in which any of these initial notes are to be
registered, if this name is different from that of the person
having tendered the initial notes to be withdrawn, and
24
o if applicable because the initial notes have been tendered
through the book-entry procedure, specify the name and number
of the participant's account at The Depository Trust Company
to be credited, if different than that of the person having
tendered the initial notes to be withdrawn.
We will determine all questions as to the validity, form and
eligibility, including time of receipt, of all notices of withdrawal and our
determination will be final and binding on all parties. Initial notes that are
withdrawn will be deemed not to have been validly tendered for exchange in this
exchange offer.
The exchange agent will return without cost to their holders all
initial notes that have been tendered for exchange and are not exchanged for any
reason, as promptly as practicable after withdrawal, rejection of tender or
expiration or termination of this exchange offer.
You may retender properly withdrawn initial notes in this exchange
offer by following one of the procedures described under "--Procedures for
Tendering Initial Notes" above at any time on or before the expiration date.
CONDITIONS TO THE EXCHANGE OFFER
We will complete this exchange offer only if:
o there is no change in the laws and regulations which, in our
judgment, would reasonably be expected to impair our ability
to proceed with this exchange offer,
o there is no change in the current interpretation of the staff
of the Commission which permits resales of the exchange notes,
o there is no stop order issued by the Commission or any state
securities authority suspending the effectiveness of the
registration statement which includes this prospectus or the
qualification of the indenture for our exchange notes under
the Trust Indenture Act of 1939 and there are no proceedings
initiated or, to our knowledge, threatened for that purpose,
o there is no action or proceeding instituted or threatened in
any court or before any governmental agency or body that in
our judgment would reasonably be expected to prohibit, prevent
or otherwise impair our ability to proceed with this exchange
offer, and
o we obtain all governmental approvals that we deem in our sole
discretion necessary to complete this exchange offer.
These conditions are for our sole benefit. We may assert any one of
these conditions regardless of the circumstances giving rise to it and may also
waive any one of them, in whole or in part, at any time and from time to time,
if we determine in our reasonable discretion that it has not been satisfied,
subject to applicable law. We will not be deemed to have waived our rights to
assert or waive these conditions if we fail at any time to exercise any of them.
Each of these rights will be deemed an ongoing right which we may assert at any
time and from time to time.
25
If we determine that we may terminate this exchange offer because any
of these conditions is not satisfied, we may:
o refuse to accept and return to their holders any initial notes
that have been tendered,
o extend the exchange offer and retain all notes tendered before
the expiration date, subject to the rights of the holders of
these notes to withdraw their tenders, or
o waive any condition that has not been satisfied and accept all
properly tendered notes that have not been withdrawn or
otherwise amend the terms of this exchange offer in any
respect as provided under the section in this prospectus
entitled "--Expiration Date, Extensions, Amendments and
Termination."
ACCOUNTING TREATMENT
We will record the exchange notes at the same carrying value as the
initial notes as reflected in our accounting records on the date of the
exchange. Accordingly, we will not recognize any gain or loss for accounting
purposes. We will amortize the costs of the exchange offer and the unamortized
expenses related to the issuance of the exchange notes over the term of the
exchange notes.
EXCHANGE AGENT
We have appointed The Bank of New York as exchange agent for this
exchange offer. You should direct all questions and requests for assistance on
the procedures for tendering and all requests for additional copies of this
prospectus or the letter of transmittal to the exchange agent as follows:
By mail:
The Bank of New York
15 Broad Street
Lobby Level
New York, New York 10007
By hand/overnight delivery:
The Bank of New York
15 Broad Street
Lobby Level
New York, New York 10007
Facsimile Transmission:
Confirm by Telephone:
Attention:
26
FEES AND EXPENSES
We will bear the expenses of soliciting tenders in this exchange offer,
including fees and expenses of the exchange agent and trustee and accounting,
legal, printing and related fees and expenses.
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of this exchange offer. However, we will pay the exchange
agent reasonable and customary fees for its services and will reimburse the
exchange agent for its reasonable out-of-pocket expenses in connection with this
exchange offer. We will also pay brokerage houses and other custodians, nominees
and fiduciaries their reasonable out-of-pocket expenses for forwarding copies of
the prospectus, letters of transmittal and related documents to the beneficial
owners of the initial notes and for handling or forwarding tenders for exchange
to their customers.
We will pay all transfer taxes, if any, applicable to the exchange of
initial notes in accordance with this exchange offer. However, tendering holders
will pay the amount of any transfer taxes, whether imposed on the registered
holder or any other persons, if:
o certificates representing exchange notes or initial notes for
principal amounts not tendered or accepted for exchange are to
be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the notes
tendered,
o tendered initial notes are registered in the name of any
person other than the person signing the letter of
transmittal, or
o a transfer tax is payable for any reason other than the
exchange of the initial notes in this exchange offer.
If you do not submit satisfactory evidence of the payment of any of
these taxes or of any exemption from this payment with the letter of
transmittal, we may refuse to register such exchange notes or initial notes in
the name of any person other than the registered holder of the initial notes
tendered.
YOUR FAILURE TO PARTICIPATE IN THE EXCHANGE OFFER WILL HAVE ADVERSE CONSEQUENCES
The initial notes were not registered under the Securities Act or under
the securities laws of any state and you may not resell them, offer them for
resale or otherwise transfer them unless they are subsequently registered or
resold under an exemption from the registration requirements of the Securities
Act and applicable state securities laws. If you do not exchange your initial
notes for exchange notes in accordance with this exchange offer, or if you do
not properly tender your initial notes in this exchange offer, you will not be
able to resell, offer to resell or otherwise transfer the initial notes unless
they are registered under the Securities Act or unless you resell them, offer to
resell or otherwise transfer them under an exemption from the registration
requirements of, or in a transaction not subject to, the Securities Act. In
addition, you will not necessarily be able to obligate us to register the
initial notes under the Securities Act.
DELIVERY OF PROSPECTUS
Each broker-dealer that receives exchange notes for its own account in
exchange for initial notes, where such initial notes were acquired by such
broker-dealer as a result of market-making activities or
27
other trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such exchange notes. See "Plan of Distribution."
28
DESCRIPTION OF THE EXCHANGE NOTES
The exchange notes were issued under a supplemental indenture dated as
of August 22, 2001 to an indenture dated October 20, 2000 (together, the
"Indenture") between us and The Bank of New York, as trustee. The following
summary of certain provisions of the Indenture does not purport to be complete
and is qualified in its entirety by reference to the Indenture. Whenever a
defined term is indicated but not defined in this section, the relevant
definition is contained in the Indenture.
In this section, "we," "our," "us," the "Company" and "Interpublic"
mean The Interpublic Group of Companies, Inc. excluding, unless the context
otherwise requires or as otherwise expressly stated, our subsidiaries.
GENERAL
The exchange notes will mature on August 15, 2011 and will bear
interest at 7.25% PER ANNUM from August 22, 2001, or from the most recent date
to which interest has been paid or provided for, payable semiannually in arrears
to holders of record at the close of business on the January 31 or July 31
immediately preceding the interest payment date on February 15 and August 15 of
each year, commencing February 15, 2002, and on the maturity date.
If any interest payment date, date of redemption or the maturity date
of any of the exchange notes is not a business day, then payment of principal,
premium, if any, and interest will be made on the next succeeding business day.
No interest will accrue on the amount so payable for the period from such
interest payment date, redemption date or maturity date, as the case may be, to
the date payment is made. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The exchange notes do not contain any sinking fund provisions.
The exchange notes will be issued only in registered form without
coupons, in denominations of $1,000 or integral multiples thereof, except that
certificated exchange notes will be in denominations of $250,000 and any
integral multiples of $1,000 in excess thereof. No service charge will be made
for any registration of transfer or any exchange of exchange notes, but we may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith.
The exchange notes will be our unsecured and unsubordinated obligations
ranking equally with our other outstanding unsecured and unsubordinated
indebtedness. At September 30, 2001, we had outstanding approximately $2.6
billion of indebtedness that would have ranked equally with the exchange notes.
The Indenture contains no restrictions on the amount of additional indebtedness
that we may issue.
ADDITIONAL NOTES
We may, without the consent of the holders of the exchange notes,
create and issue additional exchange notes ranking equally with the exchange
notes in all respects, including having the same CUSIP number, so that such
additional exchange notes shall be consolidated and form a single series with
the exchange notes and shall have the same terms as to status or otherwise as
the exchange notes. No additional exchange notes may be issued if an Event of
Default has occurred and is continuing with respect to the exchange notes.
29
OPTIONAL REDEMPTION
The exchange notes are redeemable, in whole or in part, at any time, at
our option, at a redemption price equal to the greater of:
o 100% of the principal amount of the exchange notes being
redeemed, or
o the sum of the present values of the remaining scheduled
payments of principal and interest thereon (not including any
portion of such payments of interest accrued as of the
Redemption Date) discounted to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate, plus 30 basis
points, as calculated by an Independent Investment Banker.
plus, in either of the above cases, accrued and unpaid interest thereon
(including additional interest, if any) to the Redemption Date.
"Adjusted Treasury Rate" means, with respect to any Redemption Date:
o the yield, under the heading which represents the average for
the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within
three months before or after the Remaining Life, yields for
the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the adjusted
Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest
month); or
o if such release (or any successor release) is not published
during the week preceding the calculation date or does not
contain such yields, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such
Redemption Date.
The Adjusted Treasury Rate shall be calculated on the third business
day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the exchange notes to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of those notes ("Remaining Life").
"Comparable Treasury Price" means, with respect to any Redemption Date,
(1) the average of five Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest Reference Treasury Dealer
Quotations, or (2) if the Independent Investment Banker obtains fewer than five
such Reference Treasury Dealer Quotations, the average of all such quotations.
30
"Independent Investment Banker" means any Reference Treasury Dealer
appointed by the Trustee after consultation with us.
"Reference Treasury Dealer" means:
o each of J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated and Salomon Smith Barney Inc., and their
respective successors; provided that, if any of the foregoing
ceases to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), we will
substitute another Primary Treasury Dealer; and
o any other Primary Treasury Dealer selected by us.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 5:00
p.m., New York City time, on the third business day preceding such Redemption
Date.
We will mail a notice of redemption at least 30 days but not more than
60 days before the Redemption Date to each holder of exchange notes to be
redeemed. If we elect to redeem fewer than all of the exchange notes, the
trustee will select in a fair and appropriate manner the notes to be redeemed.
Unless we default in payment of the redemption price, on and after the
Redemption Date, interest will cease to accrue on the notes or portions thereof
called for redemption.
COVENANTS
The covenants summarized below will be applicable (unless waived or
amended) so long as any of the exchange notes are outstanding.
Except as described below, we are not restricted by the Indenture from
incurring, assuming or becoming liable for any type of debt or other
obligations, from paying dividends or making distributions on our capital stock
or purchasing or redeeming our capital stock. The Indenture does not require the
maintenance of any financial ratios or specified levels of net worth or
liquidity. In addition, the Indenture does not contain any provisions that would
require us to repurchase or redeem or otherwise modify the terms of the exchange
notes upon a change in control or other events that may adversely affect the
creditworthiness of the exchange notes, such as a highly leveraged transaction.
Terms used in the description of these covenants are defined under
"Definitions Applicable to Covenants" at the end of this section.
LIMITATIONS ON LIENS. If we or any of our Restricted Subsidiaries incur
any Indebtedness secured by an interest in or lien on any of our assets or those
of any Restricted Subsidiary, we are required to secure the exchange notes
equally and ratably with, or, at our option, prior to, the Indebtedness. The
preceding provisions will not require us to secure the exchange notes if the
liens consist of either Permitted Liens or liens securing excepted Indebtedness.
31
LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS. We and our Restricted
Subsidiaries will not sell or transfer any assets with the intention of entering
into a lease of the assets for a term of more than three years unless
o the assets have not been owned by us or any of our Restricted
Subsidiaries or have not been in full operation for more than
one year prior to the sale or transfer;
o we or such Restricted Subsidiary could incur Indebtedness
secured by a lien on the assets at least equal in amount to
the Attributable Debt with respect to the transaction without
equally and ratably securing the exchange notes under the
limitation on liens in the Indenture;
o we apply an amount equal to the value of such assets within
180 days of such sale
-- to the defeasance or retirement, other than any
mandatory retirement, mandatory prepayment or sinking
fund payment or by way of payment at maturity, of
debt securities or other Indebtedness incurred by us
or a Restricted Subsidiary that matures more than one
year after the creation of the Indebtedness, or
-- to the purchase, construction or development of other
property; or
o the transaction is between us and any of our Restricted
Subsidiaries.
EXCEPTED INDEBTEDNESS. Notwithstanding the foregoing limitations on
liens and sale and lease-back transactions, and without limiting our or any
Restricted Subsidiary's ability to issue, incur, create, assume or guarantee
Indebtedness secured by Permitted Liens, we or any Restricted Subsidiary will be
permitted to incur Indebtedness secured by a lien or may enter into a sale and
lease-back transaction, in either case, without regard to the restrictions
contained in the preceding two paragraphs, if at the time the Indebtedness is
incurred and after giving effect thereto, the sum of (a) the aggregate principal
amount of all Indebtedness secured by liens, other than Permitted Liens, or, if
less, the fair market value of the property subject to the lien, as determined
in good faith by our board of directors and (b) the Attributable Debt of all
such sale and lease-back transactions, in each case not otherwise permitted in
the preceding two paragraphs, does not exceed 15% of Consolidated Net Worth.
DEFINITIONS APPLICABLE TO COVENANTS. The term "Attributable Debt"
means, with respect to any sale and lease-back transaction, at the time of
determination, the lesser of
o the fair market value of the property subject to the
transaction, as determined in good faith by our board of
directors;
o the present value, discounted at the lease's identified or
implicit rate of interest, if determinable, of the total net
amount of rent (as described below) required to be paid under
the lease during the remaining term of the lease, including
any renewal term or period for which the lease has been
extended; and
o if the obligation with respect to the sale and lease-back
transaction constitutes an obligation that we must classify
and account for as a capitalized lease for financial reporting
purposes in accordance with GAAP, the amount equal to the
capitalized amount of the obligation determined in accordance
with GAAP and included in the financial statements of the
lessee.
32
The term "rent" does not include amounts required to be paid by the
lessee, whether or not designated as rent or additional rent, on account of or
contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease that is terminable by the
lessee upon the payment of a penalty, the net amount of rent will be the lesser
of (a) the net amount determined assuming termination upon the first date the
lease may be terminated, in which case the net amount will also include the
amount of the penalty, but no rent will be considered as required to be paid
under the lease subsequent to the first day upon which it may be so terminated
and (b) the net amount determined assuming no termination.
The term "Consolidated Net Worth" means, at any date of determination,
o our total assets and those of our Subsidiaries, including,
without limitation, all items that are treated as intangibles
in accordance with GAAP, at such date, less
o our total liabilities and those of our Subsidiaries,
including, without limitation, all deferred taxes, at such
date,
in each case determined on a consolidated basis and in accordance with GAAP;
provided, however, that the term "Consolidated Net Worth" will not give effect
to any cumulative translation adjustments, whether positive or negative, at any
such date.
The term "Indebtedness" means, with respect to any person, without
duplication for indebtedness or other obligations of the person, any
indebtedness of the person for money borrowed, whether incurred, assumed or
guaranteed, and including obligations under capitalized leases.
The term "Permitted Liens" means
o liens on property or assets acquired or held by us or any of
our Restricted Subsidiaries incurred to secure the payment of
all or any part of the purchase price of the property or
assets or to secure Indebtedness incurred prior to, at the
time of, or within 180 days after the acquisition for the
purpose of financing all or any part of the purchase price, or
liens existing on any property or assets at the time of its
acquisition, other than any liens created in contemplation of
the acquisition that were not incurred to finance all or any
part of the purchase price of the property or assets;
provided, however, that the lien does not extend to or cover
any property or assets of any character other than the
property or assets being acquired;
o liens on property or assets of a person, including any entity,
other than us or any of our Restricted Subsidiaries, existing
at the time we or our Restricted Subsidiaries purchase or
acquire the property or asset; provided, however, that the
liens were not created in contemplation of the purchase or
other acquisition and do not extend to any property or assets
other than those so purchased or otherwise acquired;
o liens affecting property or assets of a person, other than us
or any of our Restricted Subsidiaries, existing at the time
the person merges into or consolidates with us or a Restricted
Subsidiary or becomes a Restricted Subsidiary or at the time
of sale, lease or other disposition of the property or assets
as an entirety or substantially as an entirety to us or a
Restricted Subsidiary; provided, however, that the liens were
not created in
33
contemplation of the merger, consolidation or acquisition and
do not extend to any property or assets other than those of
the person so merged into or consolidated with, or acquired
by, us or such Restricted Subsidiary;
o liens to secure Indebtedness owing by a Restricted Subsidiary
to us or to a Restricted Subsidiary;
o liens existing on the date of issuance of the existing notes;
o liens in favor of the United States or any of its States,
territories or possessions, or the District of Columbia, or
any department, agency, instrumentality or political
subdivision of any of those political entities, to secure
partial, progress, advance or other payments;
o liens on any property to secure all or part of the cost of its
alteration, repair or improvement or Indebtedness incurred to
provide funds for this purpose in a principal amount not
exceeding the cost of the improvements or construction;
o purchase money liens on personal property;
o liens created in connection with capitalized lease
obligations, but only to the extent that such liens encumber
property financed by such capital lease obligation and the
principal component of such capitalized lease obligation is
not increased;
o liens on property arising in connection with a securities
repurchase transaction;
o liens, including judgment liens, arising in connection with
legal proceedings, taxes, fees, assessments or other
governmental charges, so long as such proceedings, taxes,
fees, assessments or other governmental charges are being
contested in good faith and, in the case of judgment liens,
execution on the liens is stayed and for which we have
established any reserves required in accordance with GAAP;
o carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar liens arising in
the ordinary course of business which are not overdue for a
period of more than 90 days or are being contested in good
faith by appropriate proceedings diligently pursued; PROVIDED,
HOWEVER, that any proceedings commenced for the enforcement of
the liens have been stayed or suspended within 30 days after
their commencement, and provision for the payment of the liens
has been made on our books to the extent required by GAAP;
-- any proceedings commenced for the enforcement of the
liens have been stayed or suspended within 30 days
after their commencement, and
-- provision for the payment of the liens has been made
on our books to the extent required by GAAP;
o easements, rights of way, zoning restrictions and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in
amount, and
34
which do not in any case materially detract from the value of
the underlying property or interfere with the ordinary conduct
of our business or that of any Restricted Subsidiary;
o pledges or deposits to secure obligations under workers'
compensation laws or other similar legislation, other than in
respect of employee benefit plans subject to the Employee
Retirement Income Security Act of 1974, or to secure public or
statutory obligations;
o liens securing the performance of, or payment in respect of,
bids, tenders, government contracts, other than for the
repayment of borrowed money, surety and appeal bonds and other
obligations of a similar nature incurred in the ordinary
course of business;
o any interest or title of a lessor or sublessor and any
restriction or encumbrance to which the interest or title of
the lessor or sublessor may be subject that is incurred in the
ordinary course of business; and
o extensions, renewals, refinancings or replacements of any lien
referred to in the above items; PROVIDED, HOWEVER, that any
liens permitted by any of the above items do not extend to or
cover any of our property or that of the Restricted
Subsidiary, as the case may be, other than the property
specified in these items and improvements to that property.
The term "Restricted Subsidiary" means any Subsidiary which meets any
of the following conditions:
o our and our other Subsidiaries' investments in and advances to
the Subsidiary exceed 10% of our total assets and those of our
subsidiaries consolidated as of the end of the most recently
completed fiscal year;
o our and our other Subsidiaries' proportionate share of the
total assets, after intercompany eliminations, of the
Subsidiary exceed 10% of our total assets and those of our
subsidiaries consolidated as of the end of the most recently
completed fiscal year; or
o our and our other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items
and cumulative effect of changes in accounting principles of
the Subsidiary exceeds 10% of our income and that of our
subsidiaries consolidated for the most recently completed
fiscal year.
The term "Subsidiary" means, with respect to any person, including any
entity, any corporation, partnership, joint venture, limited or unlimited
liability company, trust or estate of which, or in which, more than 50% of:
o the issued and outstanding shares of capital stock having
voting power, under ordinary circumstances, to elect directors
of the corporation, irrespective of whether at the time shares
of capital stock of any other class or classes of the
corporation have or might have voting power upon the
occurrence of any contingency;
o the interest in the capital or profits of the limited or
unlimited liability company, partnership or joint venture; or
35
o the beneficial interest in the trust or estate,
is at the time, directly or indirectly, owned by the person, by the person and
one or more of its other Subsidiaries or by one or more of the person's other
Subsidiaries.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate or merge with or into any other person,
including any other entity, or convey, transfer or lease all or substantially
all of our properties and assets to any person or group of affiliated persons
unless
o we are the continuing corporation or the person, if other than
us, formed by such consolidation or with which or into which
we are merged or the person to which all or substantially all
our properties and assets are conveyed, transferred or leased
is a corporation organized and existing under the laws of the
United States, any of its States or the District of Columbia
and expressly assumes our obligations under the exchange notes
and the Indenture; and
o immediately after giving effect to the transaction, there is
no default and no event of default under the Indenture.
If we consolidate with or merge into any other corporation or convey,
transfer or lease all or substantially all of our property and assets as
described in the preceding paragraph, the successor corporation shall succeed to
and be substituted for us, and may exercise our rights and powers under the
Indenture, and thereafter, except in the case of a lease, we will be relieved of
all obligations and covenants under the Indenture and the exchange notes.
EVENTS OF DEFAULT
The Indenture describes an event of default with respect to the
exchange notes to include:
o a default in the payment of interest on any exchange notes
when due that continues for a period of 30 days;
o default in the payment of principal of or premium on any
exchange notes when due;
o a failure to comply with any of our other agreements contained
in the Indenture for a period of 60 days after notice to us by
the Trustee or to us and the Trustee by the holders of at
least 25% in principal amount of the exchange notes;
o the occurrence of an event of default within the meaning of
another mortgage, indenture or debt, instrument under which
there may be issued any of our Indebtedness, other than the
exchange notes, in an amount in excess of $20,000,000 and
which results in the Indebtedness becoming or being declared
due and payable prior to the date on which it would otherwise
become due and payable, and we have not cured the default in
payment or the acceleration is not rescinded or annulled in
each case within 10 days after written notice to us from
Trustee or to us and to the Trustee from the holders of at
least 25% in principal amount of the exchange notes; PROVIDED,
HOWEVER, that if, prior to a declaration of acceleration of
the maturity of the exchange notes or the entry of judgment in
favor of
36
the Trustee in a suit pursuant to the Indenture, the default
has been remedied or cured by us or waived by the holders of
the Indebtedness, then the event of default will be deemed
likewise to have been remedied, cured or waived; and
o certain events of bankruptcy, insolvency or reorganization
with respect to us and our Restricted Subsidiaries.
No event of default with respect to a series of our debt securities
other than the exchange notes, except as to certain events involving bankruptcy,
insolvency or reorganization with respect to us, necessarily constitutes an
event of default with respect to the exchange notes.
In general, the Indenture obligates the Trustee to give notice of a
default with respect to the exchange notes to the holders of those exchange
notes. The Trustee may withhold notice of any default, except a default in
payment on any exchange notes, if the Trustee determines it is in the best
interest of the holders of the exchange notes to do so.
If there is a continuing event of default, the Trustee or the holders
of at least 25% in principal amount of the exchange notes may require us to
repay immediately the unpaid principal of and interest on all exchange notes. In
the case of an event of default resulting from events of bankruptcy, insolvency
or reorganization with respect to us (but not our subsidiaries), the principal,
or such specified amount, of and interest on all exchange notes will become
immediately payable without any act on the part of the Trustee or any holder of
exchange notes. Subject to certain conditions, the holders of a majority in
principal amount of the exchange notes may rescind our obligation to accelerate
repayment and may waive past defaults, except a default in payment of the
principal of and premium, if any, and interest on any exchange notes and some of
the covenant defaults under the terms of the exchange notes.
Under the terms of the Indenture, the Trustee may refuse to enforce the
Indenture or the exchange notes unless it first receives satisfactory security
or indemnity from the holders of exchange notes. Subject to limitations
specified in the Indenture, the holders of a majority in principal amount of the
exchange notes will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee.
No holder of any exchange notes will have any right to institute any
proceeding, judicial or otherwise, with respect to the Indenture or for the
appointment of a receiver or trustee, or for any other remedy under the
Indenture unless:
o the holder shall have previously given to the Trustee written
notice of a continuing event of default with respect to the
exchange notes, and
o the holders of at least 25% in principal amount of the
exchange notes have made written request, and offered
indemnity reasonably satisfactory to the Trustee to institute
such proceeding as Trustee, and the Trustee has not received
from the holders of a majority in principal amount of the
exchange notes a direction inconsistent with the request and
has failed to institute the proceeding within 60 days.
Notwithstanding the foregoing, the holder of any exchange notes will
have an absolute and unconditional right to receive payment of the principal of
and premium, if any, and interest on the
37
exchange notes on or after the due dates expressed in the exchange notes and to
institute suit for the enforcement of any such payment.
MODIFICATION OF THE INDENTURE
The Indenture permits us and the Trustee to amend the Indenture without
the consent of the holders of exchange notes
o to evidence the succession of another corporation and the
assumption of our covenants under such Indenture and the
exchange notes;
o to add to our covenants or to the events of default or to make
certain other changes which would not adversely affect in any
material respect the holder of any outstanding exchange notes;
o to cure any ambiguity, defect or inconsistency; and
o for other purposes as described in the Indenture.
The Indenture also permits us and the Trustee, with the consent of the
holders of a majority in principal amount of the exchange notes voting as a
class, to add any provisions to or change or eliminate any of the provisions of
the Indenture or to modify the rights of the holders of exchange notes,
PROVIDED, HOWEVER, that, without the consent of the holder of each of the
exchange notes so affected, no such amendment may
o change the maturity of the principal of or premium, if any, or
any installment of principal or interest on the exchange
notes;
o reduce the principal amount of the exchange notes, or the rate
of interest or any premium payable upon the redemption,
repurchase or repayment of the exchange notes, or change the
manner in which the amount of any of the foregoing is
determined;
o reduce the amount of principal payable upon acceleration of
maturity;
o change the place of payment where, or the currency or currency
unit in which, the exchange notes or any premium or interest
on the exchange notes is payable;
o reduce the percentage in principal amount of affected exchange
notes the consent of whose holders is required for amendment
of the Indenture or for waiver of compliance with some
provisions of the Indenture or for waiver of some defaults;
o change our obligation with respect to the redemption
provisions of the Indenture in a manner adverse to the holder;
or
o modify the provisions relating to waiver of some defaults or
any of the provisions relating to amendment of the Indenture
except to increase the percentage required for consent or to
provide that some other provisions of the Indenture may not be
modified or waived.
38
The holders of a majority in principal amount of the exchange notes
may, on behalf of the holders of all exchange notes, waive our compliance with
some restrictive provisions of the Indenture.
DEFEASANCE AND COVENANT DEFEASANCE
We may elect either
o to be discharged from all our obligations in respect of the
exchange notes, except for our obligations to register the
transfer or exchange of the exchange notes, to replace
temporary, destroyed, stolen, lost or mutilated exchange
notes; to maintain paying agencies and to hold monies for
payment in trust (we will refer to this discharge as
"defeasance"), or
o to be released from our obligations to comply with some of the
restrictive covenants applicable to the exchange notes (we
will refer to this release as "covenant defeasance");
in either case upon the deposit with the Trustee, or other qualifying Trustee,
in trust, of money and/or U.S. government obligations which will provide money
sufficient to pay all principal of and any premium and interest on the exchange
notes when due. We may establish such a trust only if, among other things, we
have given an opinion of counsel to the effect that the holders of exchange
notes (a) will not recognize income, gain or loss for federal income tax
purposes as a result of the deposit, defeasance or covenant defeasance and (b)
will be subject to federal income tax on the same amounts, and in the same
manner and at the same times, as would have been the case if the deposit,
defeasance or covenant defeasance had not occurred. The opinion, in the case of
defeasance, must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable federal income tax laws occurring after the
date of the indenture.
We may exercise the defeasance option with respect to exchange notes
notwithstanding our prior exercise of the covenant defeasance option. If we
exercise the defeasance option, payment of the exchange notes may not be
accelerated because of a default. If we exercise the covenant defeasance option,
payment of the exchange notes may not be accelerated by reason of a default with
respect to the covenants to which covenant defeasance is applicable. However, if
the acceleration were to occur by reason of another default, the realizable
value at the acceleration date of the money and U.S. government obligations in
the defeasance trust could be less than the principal and interest then due on
the exchange notes, in that the required deposit in the defeasance trust is
based upon scheduled cash flow rather than market value, which will vary
depending upon interest rates and other factors.
REGARDING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Bank of
New York currently serves as trustee under other of our debt instruments.
The Indenture contains limitations on the rights of the Trustee, should
the Trustee become our creditor, to obtain payment of claims in some cases, or,
to realize on specified property received in respect of these claims, as
security or otherwise. The Trustee and its affiliates may engage in, and will be
permitted to continue to engage in, other transactions with us and our
affiliates.
39
BOOK-ENTRY, DELIVERY AND FORM
Except as described below, we will initially issue the exchange notes
in the form of one or more registered exchange notes in global form without
coupons. We will deposit each global note on the date of the closing of this
exchange offer with, or on behalf of, The Depository Trust Company in New York,
New York, and register the exchange notes in the name of The Depository Trust
Company or its nominee, or will leave these notes in the custody of the trustee.
DEPOSITORY TRUST COMPANY PROCEDURES
For your convenience, we are providing you with a description of the
operations and procedures of The Depository Trust Company. These operations and
procedures are solely within the control of The Depository Trust Company and are
subject to changes by them. We are not responsible for these operations and
procedures and urge you to contact the system or its participants directly to
discuss these matters.
The Depository Trust Company has advised us that it is a
limited-purpose trust company created to hold securities for its participating
organizations and to facilitate the clearance and settlement of transactions in
those securities between its participants through electronic book entry changes
in the accounts of these participants. These direct participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and other organizations. Access to The Depository Trust Company's system is also
indirectly available to other entities that clear through or maintain a direct
or indirect custodial relationship with a direct participant. The Depository
Trust Company may hold securities beneficially owned by other persons only
through its participants and the ownership interests and transfers of ownership
interests of these other persons will be recorded only on the records of the
participants and not on the records of The Depository Trust Company.
The Depository Trust Company has also advised us that, in accordance
with its procedures,
(1) upon deposit of the global notes, it will credit the accounts of
the direct participants with an interest in the global notes, and
(2) it will maintain records of the ownership interests of these direct
participants in the global notes and the transfer of ownership interests by and
between direct participants.
The Depository Trust Company will not maintain records of the ownership
interests of, or the transfer of ownership interests by and between, indirect
participants or other owners of beneficial interests in the global notes. Both
direct and indirect participants must maintain their own records of ownership
interests of, and the transfer of ownership interests by and between, indirect
participants and other owners of beneficial interests in the global notes.
Investors in the global notes may hold their interests in the exchange
notes directly through The Depository Trust Company if they are direct
participants in The Depository Trust Company or indirectly through organizations
that are direct participants in The Depository Trust Company. All interests in a
global note may be subject to the procedures and requirements of The Depository
Trust Company. In the event that interests are held through Euroclear or
Clearstream, they may also be subject to the procedures and requirements of
those systems.
40
The laws of some states require that some persons take physical
delivery in definitive certificated form of the securities that they own. This
may limit or curtail the ability to transfer beneficial interests in a global
note to these persons. Because The Depository Trust Company can act only on
behalf of direct participants, which in turn act on behalf of indirect
participants and others, the ability of a person having a beneficial interest in
a global note to pledge its interest to persons or entities that are not direct
participants in The Depository Trust Company or to otherwise take actions in
respect of its interest may be affected by the lack of physical certificates
evidencing the interests.
Except as described below, owners of interests in the global notes will
not have notes registered in their names, will not receive physical delivery of
notes in certificated form and will not be considered the registered owners or
holders of these notes under the indenture for any purpose.
Payments with respect to the principal of and interest on any exchange
notes represented by a global note registered in the name of The Depository
Trust Company or its nominee on the applicable record date will be payable by
the trustee to or at the direction of The Depository Trust Company or its
nominee in its capacity as the registered holder of the global note representing
these notes under the indenture. Under the terms of the indenture, we and the
trustee will treat the person in whose names the exchange notes are registered,
including exchange notes represented by global notes, as the owners of the
exchange notes for the purpose of receiving payments and for any and all other
purposes whatsoever. Payments in respect of the principal and interest on global
notes registered in the name of The Depository Trust Company or its nominee will
be payable by the trustee to The Depository Trust Company or its nominee as the
registered holder under the indenture. Consequently, none of the trustee, any of
our agents, or the trustee's agents has or will have any responsibility or
liability for:
o any aspect of The Depository Trust Company's records or any
direct or indirect participant's records relating to, or
payments made on account of, beneficial ownership interests in
the global notes or for maintaining, supervising or reviewing
any of The Depository Trust Company's records or any direct or
indirect participant's records relating to the beneficial
ownership interests in any global note, or
o any other matter relating to the actions and practices of The
Depository Trust Company or any of its direct or indirect
participants.
The Depository Trust Company has advised us that its current practice,
upon receipt of any payment in respect of securities such as the exchange notes,
including principal and interest, is to credit the accounts of the relevant
participants with the payment on the payment date, in amounts proportionate to
their respective holdings in the principal amount of beneficial interest in the
security as shown on its records, unless it has reasons to believe that it will
not receive payment on the payment date. Payments by the direct and indirect
participants to the beneficial owners of interests in the global note will be
governed by standing instructions and customary practice and will be the
responsibility of the direct or indirect participants and will not be the
responsibility of The Depository Trust Company, the trustee or us.
Neither we nor the trustee will be liable for any delay by The
Depository Trust Company or any direct or indirect participant in identifying
the beneficial owners of the exchange notes and the trustee may conclusively
rely on, and will be protected in relying on, instructions from The Depository
Trust Company or its nominee for all purposes, including with respect to the
registration and delivery, and the respective principal amounts, of the exchange
notes.
41
Transfers between participants in The Depository Trust Company will be
effected in accordance with The Depository Trust Company's procedures, and will
be settled in same day funds.
The Depository Trust Company has advised us that it will take any
action permitted to be taken by a holder of exchange notes only at the direction
of one or more participants to whose account The Depository Trust Company has
credited the interests in the global notes and only in respect of the portion of
the aggregate principal amount of the notes as to which the participant or
participants has or have given that direction. However, if there is an event of
default with respect to the exchange notes, The Depository Trust Company
reserves the right to exchange the global notes for legended notes in
certificated form and to distribute them to its participants.
Although The Depository Trust Company has agreed to these procedures to
facilitate transfers of interests in the global notes among participants in The
Depository Trust Company, it is under no obligation to perform or to continue to
perform these procedures and may discontinue them at any time. Neither the
trustee nor any of our or the trustee's respective agents will have any
responsibility for the performance by The Depository Trust Company or its direct
or indirect participants of their respective obligations under the rules and
procedures governing their operations.
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
A global note will be exchangeable for definitive notes in registered
certificated form if:
o The Depository Trust Company notifies us that it is unwilling
or unable to continue as depository for the global notes and
we fail to appoint a successor depository within 90 days, or
o The Depository Trust Company ceases to be a clearing agency
registered under the Exchange Act and we fail to appoint a
successor within 90 days.
In all cases, certificated notes delivered in exchange for any global
note or beneficial interests in a global note will be registered in the name,
and issued in any approved denominations, requested by or on behalf of The
Depository Trust Company, in accordance with its customary procedures.
EXCHANGE OF CERTIFICATED NOTES FOR BOOK-ENTRY NOTES
Initial notes issued in certificated form may be exchanged for
beneficial interests in the global note.
SAME DAY SETTLEMENT
We expect that the interests in the global notes will be eligible to
trade in The Depository Trust Company's Same-Day Funds Settlement System. As a
result, secondary market trading activity in these interests will settle in
immediately available funds, subject in all cases to the rules and procedures of
The Depository Trust Company and its participants. We expect that secondary
trading in any certificated notes will also be settled in immediately available
funds.
42
PAYMENT
The indenture requires that payments in respect of the exchange notes
represented by global notes, including principal and interest, be made by wire
transfer of immediately available funds to the accounts specified by the holder
of the global notes. With respect to exchange notes in certificated form, we
will make all payments of principal and interest on the exchange notes at our
office or agency maintained for that purpose within the city and state of New
York. This office will initially be the office of the Paying Agent maintained
for that purpose. At our option however, we may make these installments of
interest by
o check mailed to the holders of exchange notes at their
respective addresses provided in the register of holder of
notes or
o transfer to an account maintained by the payee.
43
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
SCOPE OF THIS SUMMARY
The following summary describes certain United States federal income
tax consequences that may be relevant to the exchange of initial notes for
exchange notes pursuant to the exchange offer, and to the purchase, ownership
and disposition of exchange notes by U.S. and Non-U.S. Holders (as defined
below) who hold the exchange notes as capital assets within the meaning of
section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This
discussion does not purport to deal with all aspects of U.S. federal income
taxation that may be relevant to particular holders in light of their particular
circumstances, nor does it deal with persons that are subject to special tax
rules, such as dealers in securities or currencies, financial institutions,
insurance companies, tax-exempt organizations, persons holding notes as a part
of a straddle, hedge or conversion transaction or a synthetic security or other
integrated transaction, and U.S. Holders whose "functional currency" is not the
U.S. dollar. Furthermore, the discussion below is based upon the provisions of
Code, existing and proposed Treasury Regulations thereunder (the "Treasury
Regulations"), and administrative rulings and judicial decisions, each as of the
date hereof, and all of which may be repealed, revoked or modified (possibly
with retroactive effect) so as to result in U.S. federal income tax consequences
different from those discussed below. There can be no assurance that the
Internal Revenue Service (the "IRS") will take a similar view as to any of the
tax consequences described in this summary.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR CONCERNING THE U.S. FEDERAL
INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP OR DISPOSITION OF EXCHANGE
NOTES IN LIGHT OF YOUR PARTICULAR SITUATION, AS WELL AS ANY CONSEQUENCES ARISING
UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
We use the term "U.S. Holder" to mean a beneficial owner of a note who
is (i) a citizen or resident of the United States, (ii) a corporation or
partnership created or organized in or under the laws of the United States or
any political subdivision of the United States, (iii) an estate the income of
which is subject to U.S. federal income taxation regardless of its source, or
(iv) a trust (A) which is subject to the primary supervision of a court within
the United States and which has one or more United States persons who have the
authority to control all substantive decisions of the trust or (B) which has
elected to be treated as a U.S. person for U.S. federal income tax purposes
under applicable Treasury Regulations.
We use the term "Non-U.S. Holder" means a beneficial owner of an
exchange note who is not a U.S. Holder.
EXCHANGE OFFER
The exchange of the initial notes for exchange notes pursuant to the
exchange offer will not be treated as an exchange or otherwise as a taxable
event to holders described below under the heading "Sale, Exchange, or
Retirement of Notes." Consequently, no gain or loss will be realized by a holder
upon receipt of an exchange note, the holding period of the exchange note will
include the holding period of the initial note exchanged for such exchange note,
and the adjusted tax basis of the exchange note will be the same as the adjusted
tax basis, immediately before the exchange, of the initial note exchanged for
the exchange note.
44
INTEREST INCOME
A U.S. Holder generally will be required to include in gross income as
ordinary interest income the interest received on an exchange note at the time
that the interest accrues or is received, in accordance with the U.S. Holder's
regular method of accounting for U.S. federal income tax purposes. It is
anticipated that the exchange notes will not be issued with "original issue
discount" within the meaning of Section 1273 of the Code.
MARKET DISCOUNT
If a U.S. Holder purchases an exchange after original issuance for an
amount that is less than the exchange note's stated redemption price at
maturity, and a DE MINIMIS exception does not apply, the difference will be
treated as market discount. Unless the U.S. Holder makes an election to include
market discount in income as it accrues, any partial principal payment on the
note, gain realized on the sale, exchange, or retirement of the exchange note
and unrealized appreciation on some nontaxable dispositions of the exchange note
will be treated as ordinary income to the extent of the market discount that has
not been previously included in income and that is treated as having accrued on
the exchange note prior to the payment or disposition. A U.S. Holder also might
be required to defer all or a portion of the interest expense on any
indebtedness incurred or continued to purchase or carry the exchange note,
unless the U.S. Holder has made an election to include the market discount in
income as it accrues. Unless the U.S. Holder elects to treat market discount as
accruing on a constant yield method, market discount will be treated as accruing
on a straight-line basis over the term of the exchange note. An election made to
include market discount in income as it accrues will apply to all debt
instruments acquired by the U.S. Holder on or after the first day of the taxable
year to which the election applies and may be revoked only with the consent of
the IRS.
SALE, EXCHANGE OR RETIREMENT OF NOTES
Upon the sale, exchange or retirement or other taxable disposition of
an exchange note, a U.S. Holder generally will recognize taxable gain or loss
equal to the difference between the amount realized (less any accrued but unpaid
interest, which will be taxable as ordinary interest income if not previously
included in income) and the U.S. Holder's tax basis in the exchange note. A U.S.
Holder's tax basis in an exchange note generally will be its cost for the
exchange note. Subject to the discussion of market discount above, gain or loss
recognized on the sale, exchange, retirement, or other taxable disposition of an
exchange note, including amounts attributable to DE MINIMIS original issue
discount, generally will be capital gain or loss. In the case of a noncorporate
U.S. Holder, the U.S. federal income tax rate applicable to capital gains will
depend upon the U.S. Holder's holding period for the exchange notes, with a
preferential rate available for exchange notes held for more than one year, and
upon the U.S. Holder's marginal tax rate for ordinary income. The deductibility
of capital losses is subject to limitations.
TAX CONSIDERATIONS FOR NON-U.S. HOLDERS
Payments of principal or interest on the exchange notes by us or our
paying agent to a Non-U.S. Holder generally will not be subject to U.S. federal
income or income withholding tax if, in the case of interest:
45
o the Non-U.S. Holder does not actually or constructively own
10% or more of the total voting power of all of our voting
stock;
o the Non-U.S. Holder is not a "controlled foreign corporation"
with respect to which we are a "related person" within the
meaning of the Code;
o the Non-U.S. Holder is not a bank whose receipt of interest is
described in section 881(c)(3)(A) of the Code; and
o either (a) the Non-U.S. Holder provides us or our agent with
an IRS Form W-8BEN (or valid substitute form), signed under
the penalties of perjury, that includes its name and address
and certifies as to its non-U.S. status in compliance with
applicable law and Treasury Regulations, or (b) a securities
clearing organization, bank, or other financial institution
that holds customers' securities in the ordinary course of its
trade or business holds the exchange notes and provides a
statement to us or our agent, signed under the penalties of
perjury, in which the securities clearing organization, bank,
or other financial institution certifies that the properly
executed Form W-8BEN (or valid substitute form) has been
received by it from the Non-U.S. Holder or from another
financial institution acting on behalf of the Non-U.S. Holder
and furnishes us or our agent with a copy thereof.
In the case of exchange notes held by a Non-U.S. Holder that is treated
for U.S. federal income tax purposes as a partnership, this certification and
information must be provided by the partners as well as by the partnership.
If these requirements are not met and the requirements applicable to
treatment of the interest as effectively connected with the conduct of a U.S.
trade or business described below are not met, a Non-U.S. Holder will be subject
to U.S. federal income withholding tax at a rate of 30% with respect to payments
of interest on the exchange notes, unless the Non-U.S. Holder provides us with a
properly executed Form W-8BEN, prior to the payment of interest, claiming an
exemption from or reduction in withholding under an applicable tax treaty.
A Non-U.S. Holder generally will not be subject to U.S. federal income
or income withholding tax on gain realized on the sale, exchange, retirement, or
other disposition of a note, unless the Non-U.S. Holder is an individual who is
present in the United States for 183 days or more in the taxable year of the
disposition, and other applicable conditions are met.
Notwithstanding the above, if a Non-U.S. Holder is engaged in a trade
or business in the United States and if interest on the exchange note or gain
realized on the disposition of the exchange note is effectively connected with
the conduct of the trade or business, the Non-U.S. Holder usually will be
subject to regular U.S. federal income tax on the interest or gain in the same
manner as if it were a U.S. Holder, unless an applicable treaty provides
otherwise. In addition, if the Non-U.S. Holder is a foreign corporation, it may
be subject to a branch profits tax at a rate of 30%, or a lower rate provided by
an applicable treaty, on its effectively connected earnings and profits for the
taxable year, with specified adjustments. For this purpose, interest on an
exchange note will be included in the foreign corporation's earnings and
profits. Such effectively connected income generally is not subject to income
withholding if the Non-U.S. holder delivers a property executed IRS Form W-8ECI
to the payor.
46
BACKUP WITHHOLDING AND INFORMATION REPORTING (U.S. HOLDERS AND NON-U.S. HOLDERS)
In general, information reporting requirements will apply to certain
payments of principal and interest on an exchange note and to the proceeds of
the disposition of an exchange note made to U.S. Holders other than certain
exempt recipients (such as corporations). A U.S. Holder that is not an exempt
recipient will generally be subject to backup withholding on payments made on or
with respect to the exchange notes. In general, backup withholding will apply to
a U.S. Holder only if the U.S. Holder:
o fails to furnish its Taxpayer Identification Number ("TIN");
o furnishes an incorrect TIN;
o is notified by the IRS that it has failed to properly report
payments of interest or dividends; or
o under certain circumstances, fails to certify, under penalties
of perjury, that it has furnished a correct TIN and that has
not been notified by the IRS that it is subject to backup
withholding for failure to report interest and dividend
payments.
Backup withholding and information reporting generally will not apply
to payments made by us or our paying agent on an exchange note to a Non-U.S.
Holder if the certification described under "Tax Considerations for Non-U.S.
Holders" is provided or the Non-U.S. Holder otherwise establishes an exemption,
and the payor does not have actual knowledge that the holder is a U.S. Holder or
that the conditions of any other exemption are not, in fact, satisfied. The
payments of proceeds from the disposition of a note to or through a non-United
States office of a broker, as defined in applicable Treasury Regulations, that
is (a) a U.S. Person, (b) a controlled foreign corporation for U.S. federal
income tax purposes, (c) a foreign person 50% or more of whose gross income from
all sources for the 3 prior years is from activities effectively connected with
the conduct of U.S. trade or business, or (d) a foreign partnership, if at any
time during its tax year, either more than 50% of its income or capital
interests are owned by U.S. Holders or the partnership is engaged in the conduct
of U.S. trade or business, will be subject to information reporting requirements
unless the broker has documentary evidence in its files of the holder's Non-U.S.
Holder status and has no actual knowledge to the contrary or the Non-U.S. Holder
otherwise establishes an exemption. Backup withholding normally will not apply
to any payment of the proceeds from the sale of an exchange note made to or
through a foreign office of a broker. However, backup withholding might apply if
the broker has actual knowledge that the payee is a U.S. Holder. Payments of the
proceeds from the sale of an exchange note to or through the United States
office of a broker are subject to information reporting and possible backup
withholding unless the holder certifies, under penalties of perjury, that it is
not a U.S. Holder and that other conditions are met or the holder otherwise
establishes an exemption, provided that the broker does not have actual
knowledge that the holder is a U.S. Holder or that the conditions of any other
exemption are not, in fact, satisfied.
Holders of exchange notes should consult their tax advisors regarding
the application of backup withholding in their particular situation, the
availability of an exemption from backup withholding, and the procedure for
obtaining an exemption, if available.
The amount of any backup withholding will be allowed as a credit
against the holder's U.S. federal income tax liability and may entitle the
holder to a refund if the required information is furnished to the IRS.
47
THE U.S. FEDERAL INCOME TAX DISCUSSION PROVIDED ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY OR MAY NOT APPLY TO YOU DEPENDING UPON YOUR
PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO
THE TAX CONSEQUENCES TO YOU OF OWNING, HOLDING, AND DISPOSING OF AN EXCHANGE
NOTE, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND OTHER TAX
LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer in exchange for initial notes acquired by such
broker-dealer as a result of market making or other trading activities may be
deemed to be an "underwriter" within the meaning of the Securities Act and,
therefore, must deliver a prospectus meeting the requirements of the Securities
Act in connection with any resales, offers to resell or other transfers of the
exchange notes received by it in connection with the exchange offer.
Accordingly, each such broker-dealer must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such exchange notes. The letter of transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for initial notes where such
initial notes were acquired as a result of market-making activities or other
trading activities. We have agreed that, for a period of days after the
expiration of this exchange offer, we will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of exchange notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The letter of transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
48
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed
upon for us by Nicholas J. Camera, Esq., Senior Vice President, General Counsel
and Secretary of Interpublic and by Paul, Weiss, Rifkind, Wharton & Garrison,
New York, New York.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference to Interpublic's Current Report on Form 8-K dated September 18,
2001, except as they relate to NFO Worldwide, Inc. as of and for the two-year
period ended December 31, 1999, Deutsch, Inc. and Subsidiary and Affiliates as
of December 31, 2000 and 1999 and for the years then ended, and True North as of
December 31, 2000 and 1999 and for each of the three years in the period ended
December 31, 2000, have been audited by PricewaterhouseCoopers LLP, independent
accountants, and, insofar as they relate to NFO Worldwide, Inc., Deutsch, Inc.
and Subsidiary and Affiliates, and True North, by Arthur Andersen LLP, J.H. Cohn
LLP, and Arthur Andersen LLP, respectively, independent accountants, whose
reports thereon have been incorporated herein. Such financial statements have
been incorporated in reliance on the reports of such independent accountants
given on the authority of such firms as experts in auditing and accounting.
49
[BACK COVER]
No person has been authorized to give any information or to make any
representation other than those contained in this prospectus, and, if given or
made, any information or representations must not be relied upon as having been
authorized. This prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy
these securities in any circumstances in which this offer or solicitation is
unlawful. Neither the delivery of this prospectus nor any sale made under this
prospectus shall, under any circumstances, create any implication that there has
been no change in our affairs since the date of this prospectus or that the
information contained in this prospectus is correct as of any time subsequent to
its date.
Broker-dealers that effect transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the broker-dealers' obligation to deliver a prospectus
when acting as underwriters and with respect to their unsold allotments or
subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of Title 8 of the General Corporation Law of the State of
Delaware ("GCL") gives a corporation power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person 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, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding, provided
that such director, officer, employee or agent acted in good faith and in a
manner reasonably believed to be in or not opposed by the best interests of the
corporation, and, with respect to any criminal action or proceeding, provided
that such director, officer, employee or agent had no reasonable cause to
believe his or her conduct was unlawful. The same Section also gives a
corporation power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that such person 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, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if he acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation, unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper. Section 145 of the GCL further provides that, to the extent
that a director, officer, employee or agent of a corporation has been successful
on the merits or otherwise in defense of any such action, suit or 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 or her in connection therewith.
The Registrant's by-laws contain specific authority for indemnification
by the Registrant of current and former directors, officers, employees or agents
of the Registrant on terms that have been derived from Section 145 of Title 8 of
the GCL.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
EXHIBIT DESCRIPTION
NUMBER -----------
- ------
4.1 Indenture, dated October 20, 2000 between The Interpublic
Group of Companies, Inc. and The Bank of New York, as trustee,
incorporated by reference to Exhibit 99.1 to the Current
Report on Form 8-K filed on October 24, 2000.
4.2* First Supplemental Indenture, dated August 22, 2001 between
The Interpublic Group of Companies, Inc. and The Bank of New
York, as trustee.
4.3 Registration Rights Agreement, dated August 17, 2001 between
The Interpublic Group of Companies, Inc. and J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated and Salomon
Smith Barney, as placement agents, incorporated by reference
to Exhibit 4.3 to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2001.
5.1* Opinion of Nicholas J. Camera as to validity of the Exchange
Notes.
8.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison as to
certain tax matters.
12.1* Statement of Computation of Ratios of Earnings to Fixed
Charges.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of Arthur Andersen LLP (with respect to NFO Worldwide,
Inc.).
23.3* Consent of Arthur Andersen LLP (with respect to True North
Communications Inc.).
23.4* Consent of J.H. Cohn LLP.
23.5* Consent of Nicholas J. Camera (included in Exhibit 5.1)
23.6* Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included
in Exhibit 8.1).
24.1* Power of Attorney (included on signature pages of this Part
II).
25.1* Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture.
99.1* Form of Letter of Transmittal.
99.2* Form of Notice of Guaranteed Delivery.
- ------------------------
* Filed herewith
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act of 1934 (and where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(b) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning the registrant
and the exchange offer that was not the subject of and included in the
registration statement when it became effective.
(d) Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on December 4, 2001.
The Interpublic Group of Companies, Inc.
/s/ Nicholas J. Camera
-----------------------------------------------
By: Nicholas J. Camera
Title: Senior Vice President,
General Counsel and Secretary
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose
signature appears below hereby constitutes and appoints Nicholas J. Camera, John
J. Dooner, Jr. or Sean F. Orr or any of them his true and lawful agent, proxy
and attorney-in-fact, with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, to (i) act on,
sign and file with the Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration statement together
with all schedules and exhibits thereto and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, together with all schedules and exhibits thereto, (ii) act on, sign and
file such certificates, instruments, agreements and other documents as may be
necessary or appropriate in connection therewith, (iii) act on and file any
supplement to any prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended, and (iv) take any and all actions
which may be necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority to do and
perform each and every act and thing necessary or appropriate to be done, as
fully for all intents and purposes as he might or could do in person, hereby
approving, ratifying and confirming all that such agents, proxies and
attorneys-in-fact or any of their substitutes may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement and power of attorney has been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Sean F. Orr Executive Vice President, Chief December 4, 2001
- ----------------------------- Financial Officer (Principal
Sean F. Orr Financial Officer) and Director
/s/ John J. Dooner, Jr. Chairman of the Board, President December 4, 2001
- ----------------------------- and Chief Executive Officer
John J. Dooner, Jr. (Principal Executive Officer)
/s/ David Weatherseed Vice President and Controller December 4, 2001
- ----------------------------- (Principal Accounting Officer)
David Weatherseed
SIGNATURE TITLE DATE
--------- ----- ----
/s/ David Bell Director December 4, 2001
- -----------------------------
David Bell
Director December 4, 2001
- -----------------------------
Frank J. Borelli
/s/ Reginald K. Brack Director December 4, 2001
- -----------------------------
Reginald K. Brack
/s/ Jill M. Considine Director December 4, 2001
- -----------------------------
Jill M. Considine
/s/ Richard A. Goldstein Director December 4, 2001
- -----------------------------
Richard A. Goldstein
/s/ James R. Heekin III Director December 4, 2001
- -----------------------------
James R. Heekin III
/s/ Frank B. Lowe Director December 4, 2001
- -----------------------------
Frank B. Lowe
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. Brendan Ryan Director December 4, 2001
- -----------------------------
J. Brendan Ryan
/s/ J. Phillip Samper Director December 4, 2001
- -----------------------------
J. Phillip Samper
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
4.1 Indenture, dated October 20, 2000 between The Interpublic
Group of Companies, Inc. and The Bank of New York, as trustee,
incorporated by reference to Exhibit 99.1 to the Current
Report on Form 8-K filed on October 24, 2000.
4.2* First Supplemental Indenture, dated August 22, 2001 between
The Interpublic Group of Companies, Inc. and The Bank of New
York, as trustee.
4.3 Registration Rights Agreement, dated August 17, 2001 between
The Interpublic Group of Companies, Inc. and J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated and Salomon
Smith Barney, as placement agents, incorporated by reference
to Exhibit 4.3 to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2001.
5.1* Opinion of Nicholas J. Camera as to validity of the Exchange
Notes.
8.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison as to
certain tax matters.
12.1* Statement of Computation of Ratios of Earnings to Fixed
Charges.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of Arthur Andersen LLP (with respect to NFO Worldwide,
Inc.).
23.3* Consent of Arthur Andersen LLP (with respect to True North
Communications Inc.).
23.4* Consent of J.H. Cohn LLP.
23.5* Consent of Nicholas J. Camera (included in Exhibit 5.1)
23.6* Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included
in Exhibit 8.1 to this Registration Statement).
24.1* Power of Attorney (included on signature pages of this Part
II).
25.1* Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture.
99.1* Form of Letter of Transmittal.
99.2* Form of Notice of Guaranteed Delivery.
- ------------------------
* Filed herewith
EXHIBIT 4.2
================================================================================
THE INTERPUBLIC GROUP OF COMPANIES, INC.
AND
THE BANK OF NEW YORK
TRUSTEE
--------------------------
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF AUGUST 22, 2001
----------------------------
SUPPLEMENTAL TO INDENTURE
DATED AS OF OCTOBER 20, 2000
----------------------------
CREATING A SERIES OF SECURITIES DESIGNATED
7 1/4% NOTES DUE 2011
================================================================================
TABLE OF CONTENTS
-------------------
PAGE
----
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..............1
SECTION 1.01. DEFINITIONS...............................................1
ARTICLE 2 THE 2011 NOTES.......................................................4
SECTION 2.01. DESIGNATION OF 2011 NOTES; ESTABLISHMENT OF FORM..........4
SECTION 2.02. RESTRICTIVE LEGENDS.......................................5
SECTION 2.03. SECURITY REGISTRAR AND PAYING AGENT.......................8
SECTION 2.04. TRANSFER AND EXCHANGE.....................................8
SECTION 2.05. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES....................9
SECTION 2.06. SPECIAL TRANSFER PROVISIONS..............................11
SECTION 2.07. AMOUNT...................................................14
SECTION 2.08. INTEREST.................................................14
SECTION 2.09. LIQUIDATED DAMAGES.......................................14
SECTION 2.10. DENOMINATIONS............................................14
SECTION 2.11. PLACE OF PAYMENT.........................................14
SECTION 2.12. REDEMPTION...............................................14
SECTION 2.13. STATED MATURITY..........................................15
SECTION 2.14. DISCHARGE OF LIABILITY ON 2011 NOTES.....................15
SECTION 2.15. OTHER TERMS OF 2011 NOTES................................15
ARTICLE 3 AMENDMENTS TO THE INDENTURE.........................................15
SECTION 3.01. PROVISIONS APPLICABLE ONLY TO 2011 NOTES.................15
SECTION 3.02. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES...........15
SECTION 3.03. CROSS DEFAULT............................................15
SECTION 3.04. BANKRUPTCY PROCEEDING....................................16
ARTICLE 4 MISCELLANEOUS.......................................................16
SECTION 4.01. INTEGRAL PART............................................16
SECTION 4.02. ADOPTION, RATIFICATION AND CONFIRMATION..................16
SECTION 4.03. COUNTERPARTS.............................................16
SECTION 4.04. GOVERNING LAW............................................16
SECTION 4.05. CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT OF 1939 ...................................17
SECTION 4.06. EFFECT OF HEADINGS.......................................17
SECTION 4.07. SEVERABILITY OF PROVISIONS...............................17
SECTION 4.08. SUCCESSORS AND ASSIGNS...................................17
SECTION 4.09. BENEFIT OF INDENTURE.....................................17
SECTION 4.10. ACCEPTANCE BY TRUSTEE....................................17
SIGNATURES ...................................................................18
FIRST SUPPLEMENTAL INDENTURE, dated as of August 22, 2001,
between THE INTERPUBLIC GROUP OF COMPANIES, INC., a Delaware corporation (herein
called the "COMPANY"), and THE BANK OF NEW YORK, a New York banking corporation,
as trustee (herein called the "TRUSTEE").
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an Indenture, dated as of October 20, 2000 (the "BASE INDENTURE"),
providing for the issuance from time to time of its senior unsecured debentures,
notes or other evidences of indebtedness (herein called the "SECURITIES"), to be
issued in one or more series as provided in the Base Indenture;
WHEREAS, Section 9.01(7) of the Base Indenture provides that
the Company and the Trustee may from time to time enter into one or more
indentures supplemental thereto to establish the form or terms of Securities of
a new series;
WHEREAS, Section 3.01 of the Base Indenture provides that the
Company may enter into supplemental indentures to establish the terms and
provisions of a series of Securities issued pursuant to the Base Indenture;
WHEREAS, the Company, pursuant to the foregoing authority,
proposes in and by this First Supplemental Indenture (the "SUPPLEMENTAL
INDENTURE" and, together with the Base Indenture, the "INDENTURE") to supplement
the Base Indenture insofar as it will apply only to a series of 7 1/4%Notes due
2011 issued hereunder and offered pursuant to the Offering Memorandum (the "2011
NOTES") (and not to any other series); and
WHEREAS, all things necessary have been done to make the 2011
Notes, when executed by the Company and authenticated and delivered hereunder
and duly issued by the Company, the valid obligations of the Company, and to
make this Supplemental Indenture a valid agreement of the Company, in accordance
with their and its terms.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and ratable benefit of the Holders of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS. For all purposes of the Indenture
relating to the series of Securities (consisting of 2011 Notes) created hereby,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) each capitalized term that is used in this Supplemental
Indenture but not defined herein shall have the meaning specified in the
Indenture;
(3) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, or defined by Commission
rule and not otherwise defined herein, have the meanings assigned to them
therein;
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(5) the word "including" (and with correlative meaning "include")
means including, without limiting the generality of, any description preceding
such term; and
(6) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to the Indenture as a whole and not to any particular
Article, Section or other subdivision.
"AGENT" means an Security Registrar, co-Security Registrar or Paying
Agent.
"AGENT MEMBERS" has the meaning set forth in Section 2.05(a).
"BASE INDENTURE" has the meaning provided in the Recitals of the
Company.
"COMPANY" has the meaning provided in the Preamble.
"EXCHANGE NOTES" means any Securities of the Company containing terms
identical to the 2011 Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the 2011 Notes
pursuant to the Registration Rights Agreement and the Indenture.
"EXCHANGE OFFER" has the meaning set forth in the Registration Rights
Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in
the Registration Rights Agreement.
"GLOBAL NOTES" has the meaning provided in Section 2.01.
"INDENTURE" has the meaning provided in the Recitals of the Company.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"INTEREST PAYMENT DATE" means February 15 and August 15 of each year.
2
"LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant
to the Registration Rights Agreement.
"OFFERING MEMORANDUM" means the Offering Memorandum dated as of August
17, 2001, relating to the Company's 71/4% Notes due 2011.
"OFFSHORE GLOBAL NOTES" has the meaning provided in Section 2.01.
"OFFSHORE LEGEND" means the legend initially set forth on the 2011
Notes in the form set forth in Section 2.02.
"OFFSHORE PHYSICAL NOTES" has the meaning provided in Section 2.01.
"PERMANENT OFFSHORE GLOBAL NOTES" has the meaning provided in Section
2.01.
"PHYSICAL ACCREDITED INVESTOR NOTES" has the meaning provided in
Section 2.01.
"PHYSICAL NOTES" has the meaning provided in Section 2.01.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of August 17, 2001, by and among the Company and the other parties
named on the signature pages thereof, as such agreement may be amended, modified
or supplemented from time to time.
"REGISTRATION STATEMENT" means the Registration Statement as defined
and described in the Registration Rights Agreement.
"REGULATION S" means Regulation S under the Securities Act.
"REGULATION S DISTRIBUTION COMPLIANCE PERIOD" means the period between
the Closing date and the later of 41st day after the Closing date and receipt by
the Company and the Trustee of a certificate attached hereto as Annex A to
Exhibit A-3.
"RULE 144A" means Rule 144A under the Securities Act.
"SECURITIES" has the meaning provided in the Recitals of the Company.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
3
"SUPPLEMENTAL INDENTURE" has the meaning provided in the Recitals of
the Company.
"TEMPORARY OFFSHORE GLOBAL NOTE" has the meaning provided in Section
2.01.
"TRUSTEE" has the meaning provided in the Preamble.
"2011 NOTES" has the meaning provided in the Recitals of the Company.
For all purposes of the Indenture, the term "2011 Notes" shall include the 2011
Notes initially issued on the Closing Date and any Exchange Notes to be issued
and exchanged for any 2011 Notes pursuant to the Registration Rights Agreement.
For purposes of the Indenture, all 2011 Notes shall together constitute one
series of 2011 Notes under the Indenture.
"U.S. GLOBAL NOTES" has the meaning provided in Section 2.01.
"U.S. PHYSICAL NOTES" means the 2011 Notes issued in the form of
permanent certificated 2011 Notes in registered form in substantially the form
set forth in Exhibit A-2 to Institutional Accredited Investors which are not
QIBs (excluding Non-U.S. Persons) who purchased Notes pursuant to Regulation D
of the Securities Act.
ARTICLE 2
THE 2011 NOTES
SECTION 2.01. DESIGNATION OF 2011 NOTES; ESTABLISHMENT OF FORM.
There shall be a series of Securities designated "7 1/4 % Notes due 2011" of the
Company, and the form thereof shall be substantially in the forms as set forth
in Exhibits A-1 to A-5 hereto, which are incorporated into and shall be deemed a
part of the Indenture, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Base
Indenture or this Supplemental Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers of the Company executing
such 2011 Notes, as evidenced by their execution of the 2011 Notes. Each 2011
Note shall be dated its date of authentication. To the extent applicable, the
Company and the Trustee, by their execution and delivery of this Supplemental
Indenture, expressly agree to such terms and provisions and to be bound thereby.
2011 Notes offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global 2011 Notes in
registered form, substantially in the form set forth in Exhibit A-1 (the "U.S.
GLOBAL NOTES"), registered in the name of the nominee of the Depositary,
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as provided for in the Indenture.
The aggregate principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary, or its nominee, in accordance with the
instructions given by the Holder thereof, as hereinafter provided.
4
2011 Notes offered and sold in reliance on Regulation D of the
Securities Act shall be issued initially in the form of one or more permanent
certificated 2011 Notes in registered form, substantially in the form set forth
in Exhibit A-2 (each, a "PHYSICAL ACCREDITED INVESTOR NOTE"), duly executed by
the Company and authenticated by the Trustee as hereinafter provided.
2011 Notes offered and sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
temporary global 2011 Notes in registered form substantially in the form set
forth in Exhibit A-3 (the "TEMPORARY OFFSHORE GLOBAL NOTES"), registered in the
name of the nominee of the Depositary, deposited with the Trustee, as custodian
for the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. At any time on or after the end of the
Regulation S Distribution Compliance Period, upon receipt by the Trustee and the
Company of a certificate substantially in the form of Annex A to Exhibit A-3
hereof, one or more permanent global 2011 Notes in registered form substantially
in the form set forth in Exhibit A-4 (each, a "PERMANENT OFFSHORE GLOBAL NOTE",
and together with the Temporary Offshore Global Notes, the "OFFSHORE GLOBAL
NOTES") duly executed by the Company and authenticated by the Trustee as
hereinafter provided shall be deposited with the Trustee, as custodian for the
Depositary or its nominee, and the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the Temporary
Offshore Global Notes in an amount equal to the principal amount of the
beneficial interest in the Temporary Offshore Global Notes transferred.
2011 Notes issued pursuant to Section 2.06 in exchange for
interests in the Offshore Global Notes shall be in the form of permanent
certificated 2011 Notes in registered form substantially in the form set forth
in Exhibit A-5 hereto the ("OFFSHORE PHYSICAL NOTES").
The Offshore Physical Notes and Physical Accredited Investor
Notes are sometimes collectively herein referred to as the "PHYSICAL NOTES." The
U.S. Global Notes and the Offshore Global Notes are sometimes referred to herein
as the "GLOBAL Notes."
The definitive 2011 Notes shall be typed, printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the 2011 Notes may be listed, all as determined by the
Officers executing such 2011 Notes, as evidenced by their execution of such 2011
Notes.
SECTION 2.02. RESTRICTIVE LEGENDS. Unless and until a 2011 Note is
exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the U.S.
Global Notes and Physical Accredited Investor Notes (if any) shall bear the
legend set forth below on the face thereof (the "Private Placement Legend"):
5
PRIVATE PLACEMENT LEGEND
"THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), OR (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501 (a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR")), OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A)
TO THE INTERPUBLIC GROUP OF COMPANIES, INC., OR ANY OF ITS
SUBSIDIARIES, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE) (D) OUTSIDE THE
UNITED STATES TO PERSONS OTHER THAN U.S. PERSONS IN OFFSHORE
TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904 UNDER
REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. AS USED HEREIN THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT."
(ii) the Offshore Physical Notes (if any) and
Offshore Global Notes shall bear the legend set forth below ("OFFSHORE
LEGEND") on the face thereof until at least the 41st day after the
Closing Date and receipt by the Company and the Trustee of a
certificate substantially in the form of Annex A to Exhibit A-3
hereto.
6
OFFSHORE LEGEND
"THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT PRIOR TO THE
EXPIRATION OF THE REGULATION S DISTRIBUTION COMPLIANCE PERIOD
(AS DEFINED IN THE INDENTURE) RESELL OR OTHERWISE TRANSFER
THE SECURITY EVIDENCED HEREBY EXCEPT (A) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (B) TO A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT IN COMPLIANCE WITH RULE
144A AND (3) AGREES THAT NO EXCHANGE OF AN INTEREST IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY MAY BE MADE FOR AN
INTEREST IN THE PERMANENT REGULATION S GLOBAL SECURITY EXCEPT
ON OR AFTER THE TERMINATION OF THE REGULATION S DISTRIBUTION
COMPLIANCE PERIOD AND UPON DELIVERY OF THE OWNER AND
DEPOSITARY CERTIFICATIONS RELATING TO SUCH INTEREST IN
ACCORDANCE WITH THE INDENTURE. AS USED HEREIN THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES," AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT."
Each Global Note, whether or not an Exchange Note, shall also bear the following
legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE
INTERPUBLIC GROUP OF COMPANIES, INC. OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER ENTITY AS IS
7
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.06 OF THE FIRST SUPPLEMENTAL
INDENTURE."
SECTION 2.03. SECURITY REGISTRAR AND PAYING AGENT. The Company
initially appoints the Trustee as Security Registrar, Paying Agent and agent for
service of notices and demands with respect to the 2011 Notes. The Company may
have one or more co-Security Registrars and one or more additional Paying
Agents.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to the Indenture. The agreement shall implement the
provisions of the Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Security Registrar, Paying Agent and/or agent for service of notices and
demands, the Trustee shall act as such Security Registrar, Paying Agent or agent
for service of notices and demands. The Company may remove any Agent upon
written notice to such Agent and the Trustee; PROVIDED that no such removal
shall become effective until (i) the acceptance of an appointment by a successor
Agent to such Agent as evidenced by an appropriate agency agreement entered into
by the Company and such successor Agent and delivered to the Trustee or (ii)
notification to the Trustee that the Trustee shall serve as such Agent until the
appointment of a successor Agent in accordance with clause (i) of this proviso.
The Company, any Subsidiary of the Company, or any Affiliate of any of them may
act as Paying Agent, Security Registrar, co-Security Registrar and/or agent for
service of notices and demands.
SECTION 2.04. TRANSFER AND EXCHANGE. The 2011 Notes are issuable
only in registered form. A Holder may transfer a 2011 Note only by written
application to the Security Registrar stating the name of the proposed
transferee and otherwise complying with the terms of the Indenture. No such
transfer shall be effected until, and such transferee shall succeed to the
rights of a Holder only upon, final acceptance and registration of the transfer
by the Security Registrar in the Security Register. Prior to the registration of
any transfer by a Holder as provided herein, the Company, the Trustee, and any
agent of the Company shall treat the person in whose name the 2011 Note is
registered as the owner thereof for all purposes whether or not the 2011 Note
shall be overdue, and neither the Company, the Trustee, nor any such agent shall
be affected by notice to the contrary. Furthermore, any Holder of a Global Note
shall, by acceptance of such Global Note, agree that transfers of beneficial
interests in such Global Note may be
8
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent) and that ownership of a beneficial interest in the
2011 Note shall be required to be reflected in a book entry. When 2011 Notes are
presented to the Security Registrar or a co-Security Registrar with a request to
register the transfer or to exchange them for an equal principal amount of 2011
Notes of other authorized denominations (including an exchange of 2011 Notes for
Exchange Notes), the Security Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including that such 2011 Notes are duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and Security
Registrar duly executed by the Holder thereof or by an attorney who is
authorized in writing to act on behalf of the Holder); PROVIDED that no
exchanges of 2011 Notes for Exchange Notes shall occur until a Registration
Statement shall have been declared effective by the Commission and that any 2011
Notes that are exchanged for Exchange Notes shall be cancelled by the Trustee.
To permit registrations of transfers and exchanges, the Company shall execute
and the Trustee shall authenticate 2011 Notes at the Security Registrar's
request. No service charge shall be made for any registration of transfer or
exchange or redemption of the 2011 Notes, but the Company may require payment of
a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or other
similar governmental charge payable upon exchanges pursuant to Section 3.04 or
9.06 of the Base Indenture).
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any 2011 Note (including any transfers between or among Agent members or
beneficial owners of interest in any Global Note) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.
SECTION 2.05. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The U.S. Global Notes and Offshore Global Notes
initially shall (i) be registered in the name of the Depositary for such Global
Notes or the nominee of such Depositary, (ii) be delivered to the Trustee as
custodian for such Depositary and (iii) bear legends as set forth in Section
2.02.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under the Indenture with respect to any Global Note held on their
behalf by the Depositary, or the Trustee as its custodian, or under such Global
Note, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any 2011 Note.
9
(b) Transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in
Global Notes may be transferred in accordance with the rules and procedures of
the Depositary and the provisions of Section 2.06. In addition, Physical
Accredited Investor Notes and Offshore Physical Notes (if any) shall be
transferred to all beneficial owners in exchange for their beneficial interests
in the U.S. Global Notes or the Offshore Global Notes, as the case may be, if
(i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the U.S. Global Notes or the Offshore Global Notes,
as the case may be, and a successor depositary is not appointed by the Company
within 90 days of such notice, (ii) the Depositary ceases to be a clearing
agency registered under the Exchange Act or (iii) in accordance with the rules
and procedures of the Depositary and the provisions of Section 2.06.
(c) Any beneficial interest in one of the Global Notes
that is transferred to a person who takes delivery in the form of an interest in
another Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in such other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer of a portion of the
beneficial interests in a Global Note to beneficial owners pursuant to paragraph
(b) of this Section 2.05, the Security Registrar shall reflect on its books and
records the date and a decrease in the principal amount of such Global Note in
an amount equal to the principal amount of the beneficial interest in such
Global Note to be transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Physical Accredited Investor Notes
or Offshore Physical Notes, as the case may be, of like tenor and amount.
(e) In connection with the transfer of the U.S. Global
Notes or the Offshore Global Notes, in whole, to beneficial owners pursuant to
paragraph (b) of this Section 2.05, the U.S. Global Notes or Offshore Global
Notes, as the case may be, shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the U.S. Global Notes or Offshore Global Notes,
as the case may be, an equal aggregate principal amount of Physical Accredited
Investor Notes or Offshore Physical Notes, as the case may be, of authorized
denominations.
(f) Any Physical Accredited Investor Note delivered in
exchange for an interest in the U.S. Global Notes pursuant to paragraph (b), (d)
or (e) of this Section 2.05 shall, except as otherwise provided by paragraph (e)
of Section 2.06, bear the legend regarding transfer restrictions applicable to
the Physical Accredited Investor Note set forth in Section 2.02.
10
(g) Any Offshore Physical Note delivered in exchange for
an interest in the Offshore Global Notes pursuant to paragraph (b), (d) or (e)
of this Section 2.05 shall, except as otherwise provided by paragraph (e) of
Section 2.06, bear the legend regarding transfer restrictions applicable to the
Offshore Physical Note set forth in Section 2.02.
(h) The registered holder of a Global Note may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under the Indenture or the 2011 Notes.
SECTION 2.06. SPECIAL TRANSFER PROVISIONS. Unless and until a 2011
Note is exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED
INVESTORS. The following provisions shall apply with respect to the registration
of any proposed transfer of a 2011 Note to any Institutional Accredited Investor
which is not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any 2011
Note, whether or not such 2011 Note bears the Private Placement Legend,
if (x) the requested transfer is after the time period referred to in
Rule 144(k) under the Securities Act or (y) the proposed transferee has
delivered to the Registrar (A) a certificate substantially in the form
of Exhibit C hereto and (B) if the aggregate principal amount of the
2011 Notes being transferred is less than $250,000, an opinion of
counsel acceptable to the Company that such transfer is in compliance
with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding
a beneficial interest in the U.S. Global Notes, upon receipt by the
Security Registrar of (x) the documents, if any, required by paragraph
(i) above and (y) instructions given in accordance with the
Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the U.S. Global Notes in an amount
equal to the principal amount of the beneficial interest in the U.S.
Global Notes to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Accredited
Investor Notes of like tenor and amount.
(b) TRANSFERS TO QIBS. The following provisions shall
apply with respect to the registration of any proposed transfer of a 2011 Note
to a QIB (excluding Non-U.S. Persons):
(i) If the 2011 Note to be transferred consists of (x)
either Offshore Physical Notes prior to the removal of the Offshore
Legend or Physical Accredited Investor Notes, the Security Registrar
shall register the transfer if such
11
transfer is being made by a proposed transferor who has checked the box
provided for on the form of 2011 Note stating, or has otherwise advised
the Company and the Security Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
2011 Note stating, or has otherwise advised the Company and the
Security Registrar in writing, that it is purchasing the 2011 Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A and is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations
in order to claim the exemption from registration provided by Rule 144A
or (y) an interest in the U.S. Global Notes, the transfer of such
interest may be effected only through the book entry system maintained
by the Depositary.
(ii) If the proposed transferee is an Agent Member, and
the 2011 Note to be transferred consists of either Offshore Physical
Notes prior to removal of the Offshore Legend or Physical Accredited
Investor Notes, upon receipt by the Security Registrar of the documents
referred to in paragraph (i) above and instructions given in accordance
with the Depositary's and the Security Registrar's procedures, the
Security Registrar shall reflect on its books and records the date and
an increase in the principal amount of U.S. Global Notes in an amount
equal to the principal amount of the Offshore Physical Notes or
Physical Accredited Investor Notes to be transferred, and the Trustee
shall cancel the Offshore Physical Notes or Physical Accredited
Investor Notes so transferred.
(c) TRANSFERS OF INTERESTS IN THE OFFSHORE GLOBAL NOTES
OR OFFSHORE PHYSICAL NOTES. The following provisions shall apply with respect to
any transfer of interests in Offshore Global Notes or Offshore Physical Notes:
(i) prior to the removal of the Offshore Legend from the
Offshore Global Notes or Offshore Physical Notes pursuant to Section
2.02, the Security Registrar shall refuse to register such transfer
unless such transfer complies with Section 2.06(b) or Section 2.06(d),
as the case may be, and
(ii) after such removal, the Registrar shall register the
transfer of any such Note without requiring any additional
certification.
(d) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The
following provisions shall apply with respect to any transfer of a 2011 Note to
a Non-U.S. Person:
(i) The Security Registrar shall register any proposed
transfer to any Non-U.S. Person only upon receipt of a certificate
substantially in the form of Exhibit D hereto from the proposed
transferor.
12
(ii) If the proposed transferor is an Agent Member holding
a beneficial interest in the U.S. Global Notes, upon receipt by the
Security Registrar of (x) the document required by paragraph (i) and
(y) instructions in accordance with the Depositary's and the Security
Registrar's procedures, the Security Registrar shall reflect on its
books and records the date and a decrease in the principal amount of
the U.S. Global Notes in an amount equal to the principal amount of the
beneficial interest in the U.S. Global Notes to be transferred, and (b)
if the proposed transferee is an Agent Member, upon receipt by the
Security Registrar of instructions given in accordance with the
Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Offshore Global Notes in an
amount equal to the principal amount of the Physical Accredited
Investor Notes or the U.S. Global Notes, as the case may be, to be
transferred, and the Trustee shall cancel the Physical Note, if any, so
transferred or decrease the amount of the U.S. Global Notes.
(e) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange
or replacement of 2011 Notes not bearing the Private Placement Legend, the
Security Registrar shall deliver 2011 Notes that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of 2011 Notes
bearing the Private Placement Legend, the Security Registrar shall deliver only
2011 Notes that bear the Private Placement Legend unless (i) the Private
Placement Legend is no longer required by Section 2.02, (ii) the circumstances
contemplated by paragraph (a)(i)(x) of this Section 2.06 exist or (iii) there is
delivered to the Security Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(f) GENERAL. By its acceptance of any 2011 Note bearing
the Private Placement Legend, each Holder of such a 2011 Note acknowledges the
restrictions on transfer of such 2011 Note set forth in the Indenture and in the
Private Placement Legend and agrees that it will transfer such 2011 Note only as
provided in the Indenture. The Security Registrar shall not register a transfer
of any 2011 Note unless such transfer complies with the restrictions on transfer
of such 2011 Note set forth in this Supplemental Indenture. In connection with
any transfer of 2011 Notes, each Holder agrees by its acceptance of the 2011
Notes to furnish the Registrar or the Company such certifications, legal
opinions or other information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the Securities Act;
PROVIDED that the Registrar shall not be required to determine (but may
conclusively rely on a determination made by the Company with respect to) the
sufficiency of any such certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.05 or this Section
2.06. The Company shall have the right to inspect and make copies of all such
letters, notices or other written
13
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
SECTION 2.07. AMOUNT. The Trustee shall authenticate and deliver
2011 Notes for original issue in an aggregate principal amount of up to
$500,000,000 upon a Company Order for the authentication and delivery of 2011
Notes. The Company may, subject to Article 10 of the Base Indenture and
applicable law issue additional 2011 Notes. The 2011 Notes issued originally
issued hereunder, together with any additional 2011 Notes subsequently issued,
shall be treated as a single class for purposes of the Indenture.
SECTION 2.08. INTEREST. The principal of the 2011 Notes shall bear
interest at the rate of 7 1/4 % per annum from August 22, 2001 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, payable semiannually in arrears on February 15 and August 15 of each year,
commencing February 15, 2002, to the Persons in whose names the 2011 Notes are
registered at the close of business on January 31 or July 31 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Interest on the 2011 Notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
SECTION 2.09. LIQUIDATED DAMAGES. Liquidated Damages with respect
to the 2011 Notes shall be payable in accordance with the provisions and in the
amounts set forth in the Registration Rights Agreement.
SECTION 2.10. DENOMINATIONS. The 2011 Notes shall be in fully
registered form without coupons in denominations of $1,000 of principal amount
or any integral multiple thereof, except that certificated 2011 Notes will be in
denominations of $250,000 of principal amount and any integral multiples of
$1,000 in excess thereof.
SECTION 2.11. PLACE OF PAYMENT. The Place of Payment for the 2011
Notes and the place or places where the 2011 Notes may be surrendered for
registration of transfer, exchange, repurchase or redemption and where notices
may be given to the Company in respect of the 2011 Notes is at the office of the
Trustee in New York, New York and at the agency of the Trustee maintained for
that purpose at the office of the Trustee; PROVIDED, HOWEVER, that payment of
interest may be made at the option of the Company by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register.
SECTION 2.12. REDEMPTION. There shall be no sinking fund for the
retirement of the 2011 Notes.
(a) The Company, at its option, may redeem the 2011 Notes
at any time in accordance with the provisions and at the Redemption Price set
forth under the caption "Optional Redemption" in the 2011 Notes and in
accordance with the provisions of the Indenture.
14
SECTION 2.13. STATED MATURITY. The date on which the principal of
the 2011 Notes is due and payable, unless earlier accelerated, redeemed or
repurchased pursuant to the Indenture, shall be August 15, 2011.
SECTION 2.14. DISCHARGE OF LIABILITY ON 2011 NOTES. The 2011 Notes
may be discharged by the Company in accordance with the provisions of Article
Four of the Base Indenture.
SECTION 2.15. OTHER TERMS OF 2011 NOTES. Without limiting the
foregoing provisions of this article, the terms of the 2011 Notes shall be as
set forth in the form of the 2011 Notes set forth in Exhibits A1-A5 hereto and
as provided in the Indenture.
ARTICLE 3
AMENDMENTS TO THE INDENTURE
SECTION 3.01. PROVISIONS APPLICABLE ONLY TO 2011 NOTES. The
provisions contained in this Article Three shall apply to the 2011 Notes only
and not to any other series of Security issued under the Indenture and any
covenants provided herein are expressly being included solely for the benefit of
the 2011 Notes and not for the benefit of any other series of Security issued
under the Indenture. These amendments shall be effective for so long as there
remain any 2011 Notes Outstanding.
SECTION 3.02. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The
Indenture is hereby amended, subject to Section 3.01 hereof and with respect to
the 2011 notes only, by changing each reference to "Subsidiary" and
"Subsidiaries" in Section 10.03 and 10.05 of the Base Indenture to "Restricted
Subsidiary" and "Restricted Subsidiaries," respectively.
SECTION 3.03. CROSS DEFAULT. The Indenture is hereby amended,
subject to Section 3.01 hereof and with respect to the 2011 Notes only, by
replacing paragraph (5) of Section 5.01 with the following paragraph:
(5) an event of default, as defined in any mortgage,
indenture, or instrument under which there may be issued, or by which
there may be secured or evidenced, any Indebtedness of the Company
(whether such Indebtedness now exists or shall hereafter be created or
incurred, but excluding Indebtedness outstanding under the 2011 Notes)
shall occur and shall result in Indebtedness becoming or being declared
due and payable prior to the date on which it would otherwise become
due and payable, and such default in payment is not cured or such
acceleration shall not be rescinded or annulled in each case within 10
days after written notice to the Company from the Trustee or to the
Company and to the Trustee from the Holders of at least twenty-five
percent in aggregate principal amount of the Outstanding Notes
specifying such event of default and requiring the Company to cure such
default in payment or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default"
hereunder; PROVIDED, HOWEVER, that it shall not be an Event of
15
Default if the principal amount of Indebtedness which is not paid at
maturity or the maturity of which is accelerated is equal to or less
than $20,000,000; PROVIDED FURTHER that if, prior to a declaration of
acceleration of the maturity of the Notes or the entry of judgment in
favor of the Trustee in a suit pursuant to Section 5.03, such default
shall be remedied or cured by the Company or waived by the holders of
such Indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon remedied, cured
or waived without further action upon the part of either the Trustee or
any of the Holders of the Notes and PROVIDED FURTHER that, subject to
Sections 6.01 and 6.02, the Trustee shall not be charged with knowledge
of any such default unless written notice of such default shall have
been given to the Trustee by the Company, by a holder or an agent of a
holder of any such Indebtedness, by the trustee then acting under any
indenture or other instrument under which such default shall have
occurred, or by the Holders of at least five percent in aggregate
principal amount of the Notes at the time outstanding; or
SECTION 3.04. BANKRUPTCY PROCEEDING. The Indenture is hereby
amended, subject to Section 3.01 hereof and with respect to the 2011 Notes only,
by inserting the phrase "or stayed" after the word "dismissed" in clause (ii) of
paragraph (7) of Section 5.01.
ARTICLE 4
MISCELLANEOUS
SECTION 4.01. INTEGRAL PART. This Supplemental Indenture
constitutes an integral part of the Base Indenture with respect to the 2011
Notes only.
SECTION 4.02. ADOPTION, RATIFICATION AND CONFIRMATION. The Base
Indenture, as supplemented and amended by this Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed, and this Supplemental Indenture
shall be deemed part of the Base Indenture in the manner and to the extent
herein and therein provided. The provisions of this Supplemental Indenture
shall, subject to the terms hereof, supersede the provisions of the Base
Indenture to the extent the Base Indenture is inconsistent herewith.
SECTION 4.03. COUNTERPARTS. This Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
SECTION 4.04. GOVERNING LAW. THE INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAW RULES OF SAID STATE.
16
SECTION 4.05. CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT OF 1939. If and to the extend that any provision of the Indenture
limits, qualifies or conflicts with a provision required under the terms of the
Trust Indenture Act of 1939, as amended, such Trust Indenture Act provision
shall control.
SECTION 4.06. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
SECTION 4.07. SEVERABILITY OF PROVISIONS. In case any provision in
the Indenture or in the 2011 Notes shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 4.08. SUCCESSORS AND ASSIGNS. All covenants and agreements
in the Indenture by the parties hereto shall bind their respective successors
and assigns and inure to the benefit of their respective successors and assigns,
whether so expressed or not.
SECTION 4.09. BENEFIT OF INDENTURE. Nothing in the Indenture,
express or implied, shall give to any Person, other than the parties hereto, any
Security Registrar, any Paying Agent, and their successors hereunder, and the
Holders of the 2011 Notes, any benefit or any legal or equitable right, remedy
or claim under the Indenture.
SECTION 4.10. ACCEPTANCE BY TRUSTEE. The Trustee accepts the
amendments to the Base Indenture effected by this Supplemental Indenture and
agrees to execute the trusts created by the Base Indenture as hereby amended,
but only upon the terms and conditions set forth in this Supplemental Indenture
and the Base Indenture. Without limiting the generality of the foregoing, the
Trustee assumes no responsibility for the correctness of the recitals contained
herein, which shall be taken as the statements of the Company and except as
provided in the Indenture the Trustee shall not be responsible or accountable in
any way whatsoever for or with respect to the validity or execution or
sufficiency of this Supplemental Indenture and the Trustee makes no
representation with respect thereto.
17
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By /s/ Steven Berns
---------------------------------------
Name: Steven Berns
Title: Vice President and Treasurer
[SEAL]
Attest:
/s/ Nicholas J. Camera
-------------------------
Name: Nicholas J. Camera
Title: Senior Vice President, General
Counsel and Secretary
THE BANK OF NEW YORK
as Trustee
By: /s/ Michael C. Daly
---------------------------------------
Name: Michael C. Daly
---------------------------------------
Title: Assistant Vice President
---------------------------------------
18
EXHIBIT 5.1
[The Interpublic Group of Companies, Inc. Letterhead]
December 4, 2001
The Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, NY 10020
THE INTERPUBLIC GROUP OF COMPANIES, INC.
REGISTRATION STATEMENT ON FORM S-4
----------------------------------
Ladies and Gentlemen:
In my capacity as General Counsel to The Interpublic Group of
Companies, Inc., a Delaware corporation (the "Company"), I have been asked to
render this opinion as to the legality of the securities being registered under
a Registration Statement on Form S-4 (the "Registration Statement") being filed
by the Company with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations under the Securities Act. The Registration Statement
relates to the registration under the Securities Act of the Company's
$500,000,000 aggregate principal amount of 7 1/4% Notes due 2011 (the "Exchange
Notes").
The Exchange Notes are to be offered in exchange for the
Company's outstanding $500,000,000 aggregate principal amount of 7 1/4% Notes
due 2011 (the "Initial Notes") issued and sold by the Company on August 17, 2001
in an offering exempt from registration under the Securities Act. The Exchange
Notes will be issued by the Company in accordance with the terms of the
Indenture dated October 20, 2000 between the Company and The Bank of New York,
as trustee (the "Base Indenture"), as supplemented by the First Supplemental
Indenture dated August 22, 2001 between the Company and The Bank of New York, as
trustee (the "Supplemental Indenture" and, together with the Base Indenture, the
"Indenture").
In connection with this opinion, I have examined originals,
conformed copies or photocopies, certified or otherwise identified to my
satisfaction, of the following documents (collectively, the "Documents"):
(i) the Registration Statement (including its exhibits);
(ii) the Base Indenture, included as Exhibit 4.1 to the
Registration Statement; and
2
(iii) the Supplemental Indenture, including as an exhibit
thereto the form of Global Note, included as Exhibit 4.2 to the Registration
Statement.
In addition, I have examined such certificates, agreements and
documents as I deemed relevant and necessary as a basis for the opinion
expressed below.
In my examination of the Documents and in rendering my
opinion, I have assumed, without independent investigation, (i) the
enforceability of the Documents against each party to them (other than the
Company), (ii) that the Exchange Notes will be issued in accordance with the
Indenture as described in the Registration Statement, duly authenticated by The
Bank of New York, as trustee, in accordance with the Indenture and in the form
reviewed by me and that any information omitted from the form will be properly
added, (iii) the authenticity of all documents submitted to me as originals,
(iv) the conformity to the original documents of all documents submitted to me
as certified, photostatic, reproduced or conformed copies of validly existing
agreements or other documents, (v) the authenticity of all the latter documents
and (vi) that the statements regarding matters of fact in the certificates,
records, agreements, instruments and documents that I examined are accurate and
complete.
Based on the foregoing, and subject to the assumptions,
exceptions and qualifications set forth in this letter, I am of the opinion that
when duly issued, authenticated and delivered in accordance with the terms of
the Indenture, the Exchange Notes will be legal, valid and binding obligations
of the Company enforceable against the Company in accordance with their terms.
The foregoing opinion is subject to the qualification that the
enforceability of the Indenture and the Exchange Notes may be subject to: (i)
bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
moratorium and other similar laws affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether enforcement is considered in
a proceeding at law or in equity), including principles of commercial
reasonableness or conscionability and an implied covenant of good faith and fair
dealing.
The foregoing opinion is limited to the federal law of the
United States of America and the law of the State of New York, and, where
necessary, the corporate laws of the State of Delaware.
3
I hereby consent to the use of my opinion as herein set forth
as an exhibit to the Registration Statement and to the use of my name under the
caption "Legal Matters" in the Prospectus forming part of the Registration
Statement.
Very truly yours,
The Interpublic Group of Companies, Inc.
By: /s/ Nicholas J. Camera
---------------------------------------
Name: Nicholas J. Camera
Title: Senior Vice President,
General Counsel and Secretary
EXHIBIT 8.1
[PAUL, WEISS, RIFKIND, WHARTON & GARRISON LETTERHEAD]
November 30, 2001
The Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, New York 10020
Re: THE INTERPUBLIC GROUP OF COMPANIES, INC.
REGISTRATION STATEMENT ON FORM S-4
Ladies and Gentlemen:
We have acted as United States federal income tax counsel for
The Interpublic Group of Companies, Inc., a Delaware corporation, (the
"Company"), in connection with the offer to exchange $500,000,000 aggregate
principal amount of the Company's 7 1/4% Notes due 2011 (the "Exchange Notes)
for a like aggregate principal amount of the Company's outstanding 7 1/4% Notes
due 2011 issued on August 17, 2001 in an offering exempt from registration under
the Securities Act of 1933, as amended, (the "Securities Act").
We are giving this opinion in connection with the Registration
Statement on Form S-4 (the "Registration Statement"), relating to the
registration by the Company of the Exchange Notes, filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act, and the rules and regulations of the Commission promulgated thereunder.
In rendering our opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such
agreements and other documents, records, certificates or other instruments as we
have deemed relevant and necessary and we have made such investigations of law
as we have deemed appropriate as a basis for the opinion expressed in this
letter.
2
The opinion set forth herein is limited to the Internal
Revenue Code of 1986, as amended (the "Code"), administrative rulings, judicial
decisions, Treasury regulations, and other applicable authorities, all as in
effect on the date of this letter. The statutory provisions, regulations and
interpretations upon which our opinion is based are subject to change, and any
change could apply retroactively. Any change could affect the continuing
validity of the opinion described in this letter. We assume no responsibility to
advise you of any subsequent changes in existing law or facts, nor do we assume
any responsibility to update this opinion with respect to any matters expressly
described in this letter, and no opinions are to be implied or may be inferred
beyond the matters expressly so stated.
The opinion set forth herein has no binding effect on the
United States Internal Revenue Service or the courts of the United States. No
assurance can be given that, if the matter were contested, a court would agree
with the opinion set forth herein.
Based upon and subject to the foregoing, and subject to the
qualifications set forth herein, the discussion set forth in the Registration
Statement under the heading "CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS "
constitutes our opinion with respect to those matters. While such description
discusses the material anticipated United States federal income tax consequences
applicable to certain holders of the Exchange Notes, it does not purport to
discuss all United States Federal income tax considerations and our opinion is
specifically limited to those United States federal income tax considerations
discussed under that heading.
In giving the foregoing opinion, we express no opinion other
than as to the federal income tax laws of the United States of America.
We are furnishing this letter in our capacity as United States
federal income tax counsel to the Company. This letter is not to be used,
circulated, quoted or otherwise referred to for any other purpose, except as
described below.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. In giving this consent, we do not hereby admit
that we come within the category of persons whose consent is required by the Act
or the Rules.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton & Garrison
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
EXHIBIT 12.1
THE INTERPUBLIC GROUP OF COMPANIES, INC.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratios)
9 MONTHS 9 MONTHS
2000 1999 1998 1997 1996 2001 2000
---- ---- ---- ---- ---- ---- ----
EARNINGS
Pre-Tax Income from continuing
operations...................... $826,441 $671,953 $695,805 $390,235 $438,913 $(736,315) $564,582
FIXED CHARGES
Interest expensed............... $126,322 99,470 86,538 79,998 69,327 125,800 87,000
Rent interest factor............ 144,230 131,148 89,265 68,730 59,384 120,776 106,295
Total Fixed Charges............. 270,552 230,618 175,803 148,728 128,711 246,576 193,295
========= ======= ======= ======= ======= ======= =======
Adjusted Earnings............... 1,096,993 902,571 871,608 538,963 567,624 (489,739) 757,877
Ratio of Earnings to Fixed
Charges......................... 4.05 3.91 4.96 3.62 4.41 -- (1) 3.92
- ------------------------
(1) For the nine months ended September 30, 2001, the deficiency of earnings to
fixed charges was $736,315.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-4 of The Interpublic Group of Companies, Inc.
(the "Company") of our report dated February 26, 2001, except as to the pooling
of interests with True North Communications Inc., which is as of June 22, 2001,
relating to the financial statements and financial statement schedule, which
appears in the Company's Current Report on Form 8-K filed September 18, 2001. We
also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
New York, New York
November 28, 2001
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in the Registration Statement on Form S-4 of The
Interpublic Group of Companies, Inc. (the "Company") of our report dated
February 25, 2000, with respect to the consolidated financial statements of NFO
Worldwide, Inc. and subsidiaries as of December 31, 1999, and for each of the
years in the two-year period ended December 31, 1999, which appears in the
Current Report on Form 8-K of the Company filed on September 18, 2001. It should
be noted that we have not audited any financial statements of NFO Worldwide,
Inc. subsequent to December 31, 1999 or performed any audit procedures
subsequent to the date of our report.
/s/ Arthur Andersen LLP
New York, New York
November 28, 2001
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in the Registration Statement on Form S-4 of The
Interpublic Group of Companies, Inc. (the "Company") of our reports dated March
20, 2001, with respect to the consolidated financial statements of True North
Communications Inc. as of December 31, 2000, and for each of the years in the
three-year period ended December 31, 2000, which appears in the Company's
Current Report on Form 8-K filed on August 23, 2001. It should be noted that we
have not audited any financial statements of True North Communications Inc.
subsequent to December 31, 2000 or performed any audit procedures subsequent to
the date of our report.
/s/ Arthur Andersen LLP
Chicago, Illinois
November 28, 2001
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement on Form S-4 of The Interpublic Group of Companies, Inc. (the
"Company") of our report dated February 13, 2001, with respect to the financial
statements of Deutsch, Inc. and Subsidiary and Affiliates as of and for the
years ended December 31, 1999 and 2000, which appears in the Current Report on
Form 8-K of the Company filed on September 18, 2001. We also consent to the
reference to our firm under the caption "Experts" in this Registration
Statement. It should be noted that we have not audited any financial statements
of Deutsch, Inc. and Subsidiary and Affiliates subsequent to December 31, 2000
or performed any audit procedures subsequent to the date of our report.
/s/ J.H. Cohn LLP
Roseland, New Jersey
November 28, 2001
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [__]
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-1024020
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1271 Avenue of the Americas
New York, New York 10020
(Address of principal executive offices) (Zip code)
----------------------
7-1/4% Notes Due 2011
(Title of the indenture securities)
================================================================================
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 11th day of October, 2001.
THE BANK OF NEW YORK
By: /s/ Van K. Brown
---------------------------------------
Name: VAN K. BROWN
Title: VICE PRESIDENT
EXHIBIT 7
---------
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2001,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency
and coin .......................................... $ 2,811,275
Interest-bearing balances ........................... 3,133,222
Securities:
Held-to-maturity securities ......................... 147,185
Available-for-sale securities ....................... 5,403,923
Federal funds sold and Securities purchased
under agreements to resell .......................... 3,378,526
Loans and lease financing receivables:
Loans and leases held for sale ...................... 74,702
Loans and leases, net of unearned
income ............................................ 37,471,621
LESS: Allowance for loan and
lease losses ...................................... 599,061
Loans and leases, net of unearned
income and allowance .............................. 36,872,560
Trading Assets 11,757,036
Premises and fixed assets (including
capitalized leases) ................................. 768,795
Other real estate owned ................................ 1,078
Investments in unconsolidated subsidiaries
and associated companies ............................ 193,126
Customers' liability to this bank on
acceptances outstanding ............................. 592,118
Intangible assets ......................................
Goodwill ............................................ 1,300,295
Other intangible assets ............................. 122,143
Other assets ........................................... 3,676,375
------------
Total assets ........................................... $ 70,232,359
============
LIABILITIES
Deposits:
In domestic offices ................................. $ 25,962,242
Noninterest-bearing ................................. 10,586,346
Interest-bearing .................................... 15,395,896
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ............................ 24,862,377
Noninterest-bearing ................................. 373,085
Interest-bearing .................................... 24,489,292
Federal funds purchased and securities sold
under agreements to repurchase ...................... 1,446,874
Trading liabilities .................................... 2,373,361
Other borrowed money:
(includes mortgage indebtedness and
obligations under capitalized leases) ............... 1,381,512
Bank's liability on acceptances executed and
outstanding ......................................... 592,804
Subordinated notes and debentures ...................... 1,646,000
Other liabilities ...................................... 5,373,065
------------
Total liabilities ...................................... $ 63,658,235
============
EQUITY CAPITAL
Common stock ........................................... 1,135,284
Surplus ................................................ 1,008,773
Retained earnings ...................................... 4,426,033
Accumulated other comprehensive income ................. 4,034
Other equity capital components ........................ 0
- --------------------------------------------------------------------------------
Total equity capital ................................... 6,574,124
------------
Total liabilities and equity capital ................... $ 70,232,359
============
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi
Gerald L. Hassell Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
EXHIBIT 99.1
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
$500,000,000 AGGREGATE PRINCIPAL AMOUNT
7 1/4% NOTES DUE 2011
THE INTERPUBLIC GROUP OF COMPANIES, INC.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON DECEMBER __,
2001, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF INITIAL NOTES MAY BE
WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
DELIVERY TO: The Bank of New York, Exchange Agent
BY REGISTERED OR CERTIFIED MAIL: BY FACSIMILE IN NEW YORK:
THE BANK OF NEW YORK
15 BROAD STREET (for Eligible Institutions only)
LOBBY LEVEL
NEW YORK, NEW YORK 10007
Confirm by Telephone:
Attention: _______________
BY OVERNIGHT COURIER OR HAND:
THE BANK OF NEW YORK
15 BROAD STREET
LOBBY LEVEL
NEW YORK, NEW YORK 10007
Attention: ______________
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE
COMPLETING ANY BOX BELOW.
The undersigned acknowledges that he or she has received and reviewed
the prospectus, dated December __, 2001 (the "Prospectus"), of The Interpublic
Group of Companies, Inc., a Delaware company (the "Company"), and this Letter of
Transmittal (the "Letter"), which together constitute the Company's offer (the
"Exchange Offer") to exchange $500,000,000 in aggregate principal amount of its
7 1/4% Notes due 2011 (the "Exchange Notes"), for a like aggregate principal
amount of its outstanding 7 1/4% Notes due 2011 (the "Initial Notes") that were
issued and sold in reliance upon an exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act").
For each Initial Note accepted for exchange, the holder of such Initial
Note will receive an Exchange Note having an aggregate principal amount equal to
that of the surrendered Initial Note.
This Letter is to be completed by a holder of Initial Notes either if
certificates are to be forwarded herewith or if a tender of certificates for
Initial Notes, if available, is to be made by book-entry transfer to the account
maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in "The
Exchange Offer-Procedures for Tendering Initial Notes-Book-Entry Delivery
Procedure" section of the Prospectus and an Agent's Message (as defined herein)
is not delivered. Delivery of this Letter and any other required documents
should be made to the Exchange Agent. Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Exchange Agent.
Holders of Initial Notes whose certificates are not immediately
available, or who are unable to deliver their certificates (or cannot obtain a
confirmation of the book-entry tender of their Initial Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility (a "Book-Entry
Confirmation") on a timely basis) and all other documents required by this
Letter to the Exchange Agent on or prior to the Expiration Date, must tender
their Initial Notes according to the guaranteed delivery procedures set forth in
"The Exchange Offer-Procedures for Tendering Initial Notes-Guaranteed Delivery
Procedure" section of the Prospectus. See Instruction 1.
The undersigned has completed the appropriate boxes below and signed
this Letter to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to exchange their Initial Notes must
complete this Letter in its entirety.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER MUST BE FOLLOWED. QUESTIONS
AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS
LETTER MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Initial Notes to which this Letter relates. If the space
provided below is inadequate, the certificate numbers and principal amount of
Initial Notes should be listed on a separate signed schedule affixed to this
Letter.
- -----------------------------------------------------------------------------------------------
DESCRIPTION OF INITIAL NOTES
(SEE INSTRUCTION 2)
- -----------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE AGGREGATE PRINCIPAL
EXACTLY AS NAME(S) APPEAR(S) ON INITIAL NOTES NUMBER(S)* PRINCIPAL AMOUNT
(PLEASE FILL IN, IF BLANK) AMOUNT TENDERED (IF
REPRESENTED LESS THAN
BY CERTIFICATE ALL)**
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
TOTAL
- -----------------------------------------------------------------------------------------------
* Need not be completed if Initial Notes are being tendered by book-entry
transfer.
2
- --------------------------------------------------------------------------------
** Unless otherwise indicated in this column, the holder will be deemed to
have tendered the full aggregate principal amount represented by such
Initial Notes. See Instruction 2. Initial Notes tendered hereby must be in
integral multiples of $1,000. See Instruction 1.
- --------------------------------------------------------------------------------
[_] CHECK HERE IF TENDERED INITIAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _______________________________________
Account Number: ______________ Transaction Code Number: __________
By crediting Initial Notes to the Exchange Agent's Account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's Automated Tender Offer Program ("ATOP") and by complying with
applicable ATOP procedures with respect to the Exchange Offer, including
transmitting an Agent's Message to the Exchange Agent in which the holder of
Initial Notes acknowledges and agrees to be bound by the terms of this Letter,
the participant in ATOP confirms on behalf of itself and the beneficial owners
of such Initial Notes all provisions of this Letter applicable to it and such
beneficial owners as if it had completed the information required herein and
executed and transmitted this Letter to the Exchange Agent.
[_] CHECK HERE IF TENDERED INITIAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):______________________________________
Window Ticket Number (if any):________________________________________
Date of Execution of Notice of Guaranteed Delivery:___________________
Name of Eligible Institution that Guaranteed Delivery:________________
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number:___________________ Transaction Code Number:__________
[_] CHECK HERE IF YOU ARE A BROKER-DEALER.
[_] CHECK HERE IF YOU WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
INDICATE THE ADDRESS AND THE NAME OF THE PERSON TO WHOSE ATTENTION SUCH
PROSPECTUSES SHOULD BE DELIVERED.
Name:_________________________________________________________________
Address:______________________________________________________________
Attention:____________________________________________________________
3
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company for exchange the aggregate principal
amount of Initial Notes indicated above. Subject to, and effective upon, the
acceptance for exchange of the Initial Notes tendered hereby, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to such Initial Notes as are being tendered
hereby.
The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent as the agent and attorney-in-fact of the undersigned (with full
knowledge that the Exchange Agent also acts as the agent of the Company in
connection with the Exchange Offer) with respect to the tendered Initial Notes
with full power of substitution to (i) deliver such Initial Notes, or transfer
ownership of such Initial Notes on the account books maintained by the
Book-Entry Transfer Facility, to the Company and deliver all accompanying
evidences of transfer and authenticity, and (ii) present such Initial Notes for
transfer on the books of the Company and receive all benefits and otherwise
exercise all rights of beneficial ownership of such Initial Notes, all in
accordance with the terms of the Exchange Offer. The power of attorney granted
in this paragraph shall be deemed to be irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Initial Notes
tendered hereby and to acquire Exchange Notes issuable upon the exchange of such
tendered Initial Notes, and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim when the same are accepted by
the Company.
The undersigned acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in no-action letters issued to third
parties, that the Exchange Notes issued in exchange for the Initial Notes
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by holders thereof (other than (i) any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act or (ii) any broker-dealer that purchased Initial Notes from the Company to
resell pursuant to Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Exchange Notes are
acquired in the ordinary course of such holders' business and such holders have
no arrangement with any person to participate in the distribution of such
Exchange Notes and are not participating in, and do not intend to participate
in, the distribution of the Exchange Notes. The undersigned acknowledges that
the Company does not intend to request the SEC to consider, and the SEC has not
considered the Exchange Offer in the context of a no-action letter, and there
can be no assurance that the staff of the SEC would make a similar determination
with respect to the Exchange Offer as in other circumstances. The undersigned
acknowledges that any holder that is an affiliate of the Company, or is
participating in or intends to participate in or has any arrangement or
4
understanding with respect to the distribution of the Exchange Notes to be
acquired pursuant to the Exchange Offer, (i) cannot rely on the applicable
interpretations of the staff of the SEC and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
The undersigned hereby further represents that (i) any Exchange Notes
acquired pursuant to the Exchange Offer are being acquired in the ordinary
course of business of the person receiving such Exchange Notes, whether or not
such person is the holder; (ii) such holder or other person has no arrangement
or understanding with any person to participate in, a distribution of such
Exchange Notes within the meaning of the Securities Act and is not participating
in, and does not intend to participate in, the distribution of such Exchange
Notes within the meaning of the Securities Act and (iii) such holder or such
other person is not an "affiliate," as defined in Rule 405 under the Securities
Act, of the Company or, if such holder or such other person is an affiliate,
such holder or such other person will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaging in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Initial Notes, it represents that the
Initial Notes to be exchanged for the Exchange Notes were acquired by it as a
result of market-making or other trading activities and acknowledges that it
will deliver a prospectus in connection with any resale, offer to resell or
other transfer of such Exchange Notes; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
The undersigned also warrants that acceptance of any tendered Initial
Notes by the Company and the issuance of Exchange Notes in exchange therefor
shall constitute performance in full by the Company of certain of its
obligations under the Registration Rights Agreement relating to the Initial
Notes, which has been filed as an exhibit to the registration statement in
connection with the Exchange Offer.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Initial Notes tendered hereby. All
authority conferred or agreed to be conferred in this Letter and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned. This tender may be
withdrawn only in accordance with the procedures set forth in this Letter.
The undersigned understands that tenders of the Initial Notes pursuant
to any one of the procedures described under "The Exchange Offer-Procedures for
Tendering Initial Notes" in the Prospectus and in the instructions hereto will
constitute a binding agreement between the undersigned and the Company in
accordance with the terms and subject to the conditions of the Exchange Offer.
5
The undersigned recognizes that, under certain circumstances set forth
in the Prospectus under "The Exchange Offer-Conditions to the Exchange Offer"
the Company may not be required to accept for exchange any of the Initial Notes
tendered. Initial Notes not accepted for exchange or withdrawn will be returned
to the undersigned at the address set forth below unless otherwise indicated
under "Special Delivery Instructions" below.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes (and, if applicable,
substitute certificates representing Initial Notes for any Initial Notes not
exchanged) in the name of the undersigned or, in the case of a book-entry
delivery of Initial Notes, please credit the account indicated above maintained
at the Book Entry Transfer Facility. Similarly, unless otherwise indicated under
the box entitled "Special Delivery Instructions" below, please send the Exchange
Notes (and, if applicable, substitute certificates representing Initial Notes
for any Initial Notes not exchanged) to the undersigned at the address shown
below the undersigned's signature(s). In the event that both "Special Issuance
Instructions" and "Special Delivery Instructions" are completed, please issue
the Exchange Notes issued in exchange for the Initial Notes accepted for
exchange (and, if applicable, substitute certificates representing Initial Notes
for any Initial Notes not exchanged) in the names of the person(s) so indicated.
The undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" and "Special Delivery Instructions" to transfer
any Initial Notes from the name of the registered holder(s) thereof if the
Company does not accept for exchange any of the Initial Notes so tendered for
exchange.
THE BOOK-ENTRY TRANSFER FACILITY, AS THE HOLDER OF RECORD OF CERTAIN
INITIAL NOTES, HAS GRANTED AUTHORITY TO THE BOOK-ENTRY TRANSFER FACILITY
PARTICIPANTS WHOSE NAMES APPEAR ON A SECURITY POSITION LISTING WITH RESPECT TO
SUCH INITIAL NOTES AS OF THE DATE OF TENDER OF SUCH INITIAL NOTES TO EXECUTE AND
DELIVER THIS LETTER AS IF THEY WERE THE HOLDERS OF RECORD. ACCORDINGLY, FOR
PURPOSES OF THIS LETTER, THE TERM "HOLDER" SHALL BE DEEMED TO INCLUDE SUCH
BOOK-ENTRY TRANSFER FACILITY PARTICIPANTS.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF INITIAL
NOTES" ABOVE AND SIGNING THIS LETTER AND DELIVERING SUCH NOTES AND THIS LETTER
TO THE EXCHANGE AGENT, WILL BE DEEMED TO HAVE TENDERED THE INITIAL NOTES AS SET
FORTH IN SUCH BOX ABOVE.
6
- -------------------------------------------------------- -------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3, 4 AND 5) (SEE INSTRUCTIONS 3, 4 AND 5)
To be completed ONLY if certificates for To be completed ONLY if certificates for Initial
Initial Notes not tendered or not accepted for Notes not tendered or not accepted for exchange, or
exchange, or Exchange Notes issued in exchange for Exchange Notes issued in exchange for Initial Notes
Initial Notes accepted for exchange, are to be issued accepted for exchange, are to be sent to someone
in the name of and sent to someone other than the other than the undersigned or to the undersigned at
undersigned, or if Initial Notes delivered by an address other than shown in the box entitled
book-entry transfer which are not accepted for "Description of Initial Notes" above.
exchange are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other
than the account indicated above.
Mail to:
Issue (certificates) to:
Name(s):_________________________________________
Name(s):_______________________________________ (PLEASE TYPE OR PRINT)
(PLEASE TYPE OR PRINT)
_________________________________________________
_______________________________________________ (PLEASE TYPE OR PRINT)
(PLEASE TYPE OR PRINT)
Address: _______________________________________
Address: _______________________________________
_________________________________________________
_______________________________________________ (INCLUDE ZIP CODE)
(INCLUDE ZIP CODE)
_________________________________________________
_______________________________________________ TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(COMPLETE SUBSTITUTE FORM W-9)
(COMPLETE SUBSTITUTE FORM W-9)
[_] Credit unexchanged Initial Notes delivered by
book-entry transfer to the Book-Entry Transfer
Facility account set forth below.
___________________________________________
(BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER, IF APPLICABLE)
- -------------------------------------------------------- -------------------------------------------------------
IMPORTANT: UNLESS GUARANTEED DELIVERY PROCEDURES ARE COMPLIED WITH, THIS LETTER
OR A FACSIMILE HEREOF OR AN AGENT'S MESSAGE IN LIEU HEREOF (IN EACH CASE,
TOGETHER WITH THE CERTIFICATE(S) FOR INITIAL NOTES OR A CONFIRMATION OF
BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
7
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS WHETHER OR NOT
INITIAL NOTES ARE BEING PHYSICALLY TENDERED HEREBY)
(PLEASE ALSO COMPLETE AND RETURN THE ACCOMPANYING SUBSTITUTE FORM W-9)
X _____________________________________ ________________________________
X _____________________________________ ________________________________
SIGNATURE(S) OF OWNER(S) DATE
Area Code and Telephone Number:_______________________________________
THIS LETTER MUST BE SIGNED BY THE REGISTERED HOLDER(S) TENDERING ANY
INITIAL NOTES EXACTLY AS THE NAME(S) OF THE HOLDER(S) APPEAR(S) ON THE
CERTIFICATE(S) FOR THE INITIAL NOTES OR ON A SECURITY POSITION LISTING AS THE
OWNER OF INITIAL NOTES BY PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY
A PROPERLY COMPLETED BOND POWER FROM THE REGISTERED HOLDER(S), A COPY OF WHICH
MUST BE TRANSMITTED WITH THIS LETTER. IF INITIAL NOTES TO WHICH THIS LETTER
RELATES ARE HELD OF RECORD BY TWO OR MORE JOINT HOLDERS, THEN ALL SUCH HOLDERS
MUST SIGN THIS LETTER. IF SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR,
GUARDIAN, OFFICER OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE
CAPACITY, THEN SUCH PERSON MUST (I) SET FORTH HIS OR HER FULL TITLE BELOW AND
(II) UNLESS WAIVED BY THE COMPANY, SUBMIT EVIDENCE SATISFACTORY TO THE COMPANY
OF SUCH PERSON'S AUTHORITY TO SO ACT. SEE INSTRUCTION 3.
NAME(S):________________________________________________________________________
(PLEASE TYPE OR PRINT)
________________________________________________________________________________
(PLEASE TYPE OR PRINT)
CAPACITY: ______________________________________________________________________
ADDRESS: ______________________________________________________________________
________________________________________________________________________________
(INCLUDING ZIP CODE)
SIGNATURE GUARANTEE BY AN ELIGIBLE INSTITUTION
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: ______________________________________________________
(AUTHORIZED SIGNATURE)
________________________________________________________________________________
(TITLE)
________________________________________________________________________________
(NAME OF FIRM)
________________________________________________________________________________
(ADDRESS, INCLUDE ZIP CODE)
________________________________________________________________________________
(AREA CODE AND TELEPHONE NUMBER)
Dated:______________________________
- --------------------------------------------------------------------------------
8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER AND INITIAL NOTES; GUARANTEED DELIVERY
PROCEDURES.
This Letter is to be completed by noteholders either if certificates
are to be forwarded herewith or if tenders are to be made pursuant to the
procedures for delivery by book-entry transfer set forth in "The Exchange
Offer-Procedures for Tendering Initial Notes-Book-Entry Delivery Procedure"
section of the Prospectus and an Agent's Message is not delivered. Certificates
for all physically tendered Initial Notes, or Book-Entry Confirmation, as the
case may be, as well as a properly completed and duly executed Letter (or
manually signed facsimile hereof) and any other documents required by this
Letter, must be received by the Exchange Agent at the address set forth herein
on or prior to 5:00 p.m., New York City time, on the Expiration Date, or the
tendering holder must comply with the guaranteed delivery procedures set forth
below. Initial Notes tendered hereby must be in denominations of principal
amount that are integral multiples of $1,000. The term "Agent's Message" means a
message, transmitted by The Depository Trust Company and received by the
Exchange Agent and forming a part of the Book-Entry Confirmation, which states
that the Book-Entry Transfer Facility has received an express acknowledgment
from a participant tendering Initial Notes which are subject to the Book-Entry
Confirmation and that such participant has received and agrees to be bound by
this Letter and that the Company may enforce this Letter against such
participant.
Noteholders who wish to tender their Initial Notes and (a) whose
certificates for Initial Notes are not immediately available, or (b) who cannot
deliver their certificates and all other required documents to the Exchange
Agent on or prior to the Expiration Date, or (c) who cannot complete the
procedure for book-entry transfer on a timely basis, must tender their Initial
Notes pursuant to the guaranteed delivery procedures set forth in "The Exchange
Offer-Procedures for Tendering Initial Notes-Guaranteed Delivery Procedure"
section of the Prospectus. Pursuant to such procedures,
(i) such tender must be made through an Eligible Institution (as
defined in Instruction 3 below),
(ii) on or prior to the Expiration Date, the Exchange Agent must
receive from such Eligible Institution a properly completed and duly
executed Letter (or a facsimile thereof or an Agent's Message in lieu
hereof) and Notice of Guaranteed Delivery, substantially in the form
provided by the Company (by telegram, telex, facsimile transmission,
mail or hand delivery), setting forth the name and address of the
holder of Initial Notes and the amount of Initial Notes tendered,
stating that the tender is being made thereby and guaranteeing that
within three New York Stock Exchange ("NYSE") trading days after the
date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Initial Notes, or a Book-Entry
Confirmation, and any other documents required by the Letter will be
deposited by the Eligible Institution with the Exchange Agent, and
(iii) the certificates for all physically tendered Initial Notes, in
proper form for transfer, or Book-Entry Confirmation, as the case may
be, and all other documents
9
required by this Letter, are received by the Exchange Agent within
three NYSE trading days after the date of execution of the Notice of
Guaranteed Delivery.
The method of delivery of this Letter, the Initial Notes and all other
required documents is at the election and risk of the tendering holders, but the
delivery will be deemed made only when actually received or confirmed by the
Exchange Agent. If Initial Notes are sent by mail, it is suggested that the
mailing be made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date.
For more information, see "The Exchange Offer" section of the
Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO NOTEHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER).
Tenders of Initial Notes will be accepted only in integral multiples of
$1,000. If less than the entire principal amount of any Initial Notes is
tendered, the tendering holder(s) should fill in the principal amount of Initial
Notes to be tendered in the box above entitled "Description of Initial Notes."
The entire principal amount of the Initial Notes delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of Initial Notes is not tendered, then Initial Notes for the
principal amount of Initial Notes not tendered and Exchange Notes issued in
exchange for any Initial Notes accepted will be sent to the holder at his or her
registered address, unless otherwise provided in the appropriate box on this
Letter, promptly after the Initial Notes are accepted for exchange.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter is signed by the registered holder of the Initial Notes
tendered hereby, the signature must correspond with the name(s) as written on
the face of the certificates representing such Initial Notes without alteration,
enlargement or any change whatsoever.
If this Letter is signed by a participant in the Book-Entry Transfer
Facility, the signature must correspond with the name as it appears on the
security position listing as the holder of the Initial Notes.
If any tendered Initial Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter.
If any tendered Initial Notes are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter as there are different registrations of
certificates.
When this Letter is signed by the registered holder or holders of the
Initial Notes specified herein and tendered hereby, no endorsements of
certificates or separate bond powers are required. If, however, the Exchange
Notes are to be issued, or any untendered Initial Notes are to be reissued, to a
person other than the registered holder, then endorsements of any certificates
transmitted hereby or separate bond powers are required.
10
Signatures on such certificate(s) must be guaranteed by an Eligible Institution
(defined herein).
If this Letter is signed by a person other than the registered holder
or holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.
If this Letter or any certificates or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
evidence satisfactory to the Company of its authority to so act must be
submitted with the Letter.
Endorsements on certificates for Initial Notes or signatures on bond
powers required by this Instruction 3 must be guaranteed by a firm which is a
member of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc., or a commercial bank, a clearing
agency, insured credit union, a savings association or trust company having an
office or correspondent in the United States or an "eligible guarantor"
institution within the meaning of Rule 17Ad-15 under the Securities Exchange Act
of 1934, as amended (each an "Eligible Institution").
Signatures on this Letter need not be guaranteed by an Eligible
Institution if the Initial Notes are tendered: (i) by a registered holder of
Initial Notes (which term, for purposes of the Exchange Offer, includes any
participant in the Book-Entry Transfer Facility system whose name appears on a
security position listing as the holder of such Initial Notes) who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on this Letter, or (ii) for the account of an Eligible
Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Initial Notes should indicate, in the applicable
box or boxes, the name and address (or account at the Book-Entry Transfer
Facility) to which Exchange Notes issued pursuant to the Exchange Offer, or
substitute Initial Notes not tendered or accepted for exchange, are to be issued
or sent, if different from the name or address of the person signing this
Letter. In the case of issuance in a different name, the employer identification
or social security number of the person named must also be indicated. Holders
tendering Initial Notes by book-entry transfer may request that Initial Notes
not exchanged be credited to such account maintained at the Book-Entry Transfer
Facility as such noteholder may designate hereon. If no such instructions are
given, such Initial Notes not exchanged will be returned to the name or address
of the person signing this Letter.
5. TAX IDENTIFICATION NUMBER.
Under the federal income tax laws, payments that may be made by the
Company on account of Exchange Notes issued pursuant to the Exchange Offer may
be subject to backup withholding at the rate specified in Section 3406(a)(1) of
the Code (the "Specified Rate"). In order to avoid such backup withholding, each
tendering holder should complete and sign the
11
Substitute Form W-9 included in this Letter and provide the correct taxpayer
identification number ("TIN") and certify, under penalties of perjury, that (a)
the TIN provided is correct; (b) that (i) the holder has not been notified by
the Internal Revenue Service (the "IRS") that the holder is subject to backup
withholding as a result of failure to report all interest or dividends, (ii) the
IRS has notified the holder that the holder is no longer subject to backup
withholding, or (iii) the holder is exempt from backup withholding; and (c) the
holder is a U.S. person (including a U.S. resident alien). If the tendering
holder has not been issued a TIN and has applied for one, or intends to apply
for one in the near future, such holder should write "Applied For" in the space
provided for the TIN in Part I of the Substitute Form W-9, sign and date the
Substitute Form W-9, and sign the Certificate of Awaiting Taxpayer
Identification Number. If "Applied For" is written in Part I, the Company (or
the Paying Agent under the Indenture governing the Exchange Notes) shall retain
the Specified Rate of payments made to the tendering holder during the sixty
(60) day period following the date of the Substitute Form W-9. If the holder
furnishes the Exchange Agent or the Company with his or her TIN within sixty
(60) days after the date of the Substitute Form W-9, the Company (or the Paying
Agent) shall remit such amounts retained during the sixty (60) day period to the
holder and no further amounts shall be retained or withheld from payments made
to the holder thereafter. If, however, the holder has not provided the Exchange
Agent or the Company with his or her TIN within such sixty (60) day period, the
Company (or the Paying Agent) shall remit such previously retained amounts to
the IRS as backup withholding. In general, if a holder is an individual, the
taxpayer identification number is the Social Security number of such individual.
If the Exchange Agent or the Company is not provided with the correct taxpayer
identification number, the holder may be subject to a $50 penalty imposed by the
IRS. Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such holder must submit a statement (generally, IRS Form W-8BEN),
signed under penalties of perjury, attesting to that individual's exempt status.
Such statements can be obtained from the Exchange Agent. For further information
concerning backup withholding and instructions for completing the Substitute
Form W-9 (including how to obtain a taxpayer identification number if you do not
have one and how to complete the Substitute Form W-9 if Initial Notes are
registered in more than one name), consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9."
Failure to complete the Substitute Form W-9 will not, by itself, cause
Initial Notes to be deemed invalidly tendered, but may require the Company (or
the Paying Agent) to withhold the Specified Rate of the amount of any payments
made on account of the Exchange Notes. Backup withholding is not an additional
federal income tax. Rather, the federal income tax liability of a person subject
to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the
transfer of Initial Notes to it or its order pursuant to the Exchange Offer. If,
however, Exchange Notes or substitute Initial Notes not exchanged are to be
delivered to, or are to be registered or issued in the name of, any person other
than the registered holder of the Initial Notes tendered
12
hereby, or if tendered Initial Notes are registered in the name of any person
other than the person signing this Letter, or if a transfer tax is imposed for
any reason other than the transfer of Initial Notes to the Company or its order
pursuant to the Exchange Offer, the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with this Letter, the Company may refuse to register
such Exchange Notes or Initial Notes in the name of any person other than the
registered holder of the Initial Notes tendered.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Initial Notes specified in this Letter.
7. WAIVER OF CONDITIONS.
The Company reserves the absolute right to amend, waive or modify, in
whole or in part, any or all conditions to the Exchange Offer.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Initial Notes, by execution of this Letter,
shall waive any right to receive notice of the acceptance of their Initial Notes
for exchange.
Neither the Company, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of Initial Notes nor shall any of them incur any liability for failure to
give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED INITIAL NOTES.
Any holder whose Initial Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions. This Letter and related documents cannot be processed
until the Initial Notes have been replaced.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests
for additional copies of the Prospectus, this Letter and the Notice of
Guaranteed Delivery, may be directed to the Exchange Agent, at the address and
telephone number indicated above.
11. INCORPORATION OF LETTER OF TRANSMITTAL.
This Letter shall be deemed to be incorporated in and acknowledged and
accepted by any tender through the Book-Entry Transfer Facility's ATOP
procedures by any participant on behalf of itself and the beneficial owners of
any Initial Notes so tendered.
12. WITHDRAWALS.
Tenders of Initial Notes may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer-Withdrawal of Tenders" in the Prospectus.
13
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PLEASE CAREFULLY READ THE IMPORTANT TAX INFORMATION BELOW
- ------------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: __________________________
- ------------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I -- PLEASE PROVIDE YOUR TAXPAYER
IDENTIFICATION NUMBER IN THE BOX AT RIGHT ___________________________________
FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW. Social Security Number(s)
DEPARTMENT OF THE TREASURY See the enclosed "Guidelines for
INTERNAL REVENUE SERVICE Certification of Taxpayer Identification OR
Number on Substitute Form W-9" for
PAYER'S REQUEST FOR TAXPAYER instructions. _______________________________
IDENTIFICATION NUMBER (TIN) Employer Identification Number(s)
- ------------------------------------------------------------------------------------------------------------------------------------
PART II -- For Payees Exempt from Backup Withholding (see enclosed Guidelines)*
PLEASE FILL IN YOUR
NAME AND ADDRESS BELOW
PART III --
NAME:___________________________________
CERTIFICATION-- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
(1) The number shown on this form is my correct taxpayer identification number (or I
am waiting for a number to be issued to me), and
________________________________________
ADDRESS (NUMBER AND STREET) (2) I am not subject to backup withholding either because I
am exempt from backup withholding, I have not been notified by the Internal
________________________________________ Revenue Service ("IRS") that I am subject to backup withholding as a result of a
CITY, STATE AND ZIP CODE failure to report all interest or dividends, or the IRS has notified me that I am
no longer subject to backup withholding, and
(3) I am a U.S. person (including a U.S. resident alien).
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
CHECK APPROPRIATE BOX:
? INDIVIDUAL/SOLE ? CORPORATION
PROPRIETOR Signature: _______________________________ Date:
? PARTNERSHIP ? OTHER _______
- ---------------------------------------- -------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION GUIDELINES--You must cross out item (2) of the above certification
if you have been notified by the IRS that you are subject to backup withholding
because of under reporting of interest or dividends on your tax return. However,
if after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS stating that you are no longer
subject to backup withholding, do not cross out item (2).
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number to the payer, the Specified
Rate of all payments made to me on account of the Exchange Notes shall be
retained until I provide a taxpayer identification number to the payer and that,
if I do not provide my taxpayer identification number within sixty (60) days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and the Specified Rate of all reportable payments made to me
thereafter will be withheld and remitted to the Internal Revenue Service until I
provide a taxpayer identification number.
Signature:______________________________________________________ Date:________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF THE SPECIFIED RATE OF ANY PAYMENTS MADE TO YOU
UNDER THE EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
14
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--
Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL SECURITY NUMBER OF--
- ------------------------------------------------------ ----------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined
funds, the first individual on the account (l)
3. Custodian account of a minor (Uniform Gift The minor (2)
to Minors Act)
4. a. The usual revocable savings trust The grantor-trustee (l)
account (grantor is also trustee)
b. So-called trust account that is The actual owner(l)
not a legal or valid trust under
State law
5. Sole proprietorship account The owner (3)
6. A valid trust, estate, or pension trust The legal entity (4)
7. Corporate account The corporation
8. Religious, charitable, or educational The organization
organization account
9. Partnership account The partnership
10. Association, club or other tax-exempt The organization
organization
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture The public entity
in the name of a public entity (such as a State or local government,
school district, or prison) that receives agricultural program
payments.
- ------------------------------------------------------ ----------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
If only one person on a joint account has a Social Security number,
that person's number must be furnished.
(2) Circle the minor's name and furnish the minor's Social Security number.
(3) Show the name of the owner. You may also enter your business or "doing
business as" name. You may use either your Social Security number or
employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN of the personal representative or
trustee unless the legal entity itself is not designated in the account
title.)
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
15
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know
your number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number at the local office of
the Social Security Administration or the Internal Revenue Service and apply for
a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on all payments
include the following:
1. An organization exempt form tax under section 501(a), any IRA,
or a custodial account under section 403(b)(7) if the account
satisfies the requirements of section 401(f)(2).
2. The United States or any of its agencies or instrumentalities.
3. A state, the District of Columbia, a possession of the United
States, or any of their political subdivisions or
instrumentalities.
4. A foreign government or any of its political subdivisions,
agencies, or instrumentalities.
5. An international organization or any of its agencies or
instrumentalities.
Other payees that may be exempt from backup withholding include:
6. A corporation.
7. A foreign central bank of issue.
8. A dealer in securities or commodities required to register in
the United States, the District of Columbia, or a possession
of the United States.
9. A futures commission merchant registered with the Commodity
Futures Trading Commission.
10. A real estate investment trust.
11. An entity registered at all times during the tax year under
the Investment Company Act of 1940.
12. A common trust fund operated by a bank under section 584(a).
13. A financial institution.
14. A middleman known in the investment community as a nominee or
custodian.
15. A trust exempt form tax under section 664 or described in
section 4947.
16
The following types of payments are exempt form backup withholding as
indicated for items 1 through 15 above. INTEREST AND DIVIDEND PAYMENTS.
All listed payees are exempt except the payee in item 9. BROKER
TRANSACTIONS. All payees listed in items 1 through 13 are exempt. A
person registered under the Investment Advisors Act of 1940 who
regularly acts as a broker is also exempt. BARTER EXCHANGE TRANSACTIONS
AND PATRONAGE DIVIDENDS. Only payees listed in items 1 through 5 are
exempt. PAYMENTS REPORTABLE UNDER SECTIONS 6041 AND 6041A. Only payees
listed in items 1 through 7 are generally exempt.
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payments that are not subject to information reporting also are not
subject to backup withholding. For details, see sections 6041, 6041A, 6042,
6044, 6045, 6049, 6050A, and 6050N of the Code, and their regulations.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under
Section 1441 of the Code.
o Payments to partnerships not engaged in a trade or business in
the United States and that have at least one nonresident alien
partner.
o Payments of patronage dividends not paid in money.
o Payments made by certain foreign organizations.
o Section 404(k) distributions made by an ESOP.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. File this form with the Payer, furnish
your taxpayer identification number, check the box "EXEMPT" in the certification
of the Substitute Form W-9, sign and date the form and return it to the Payer.
IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO
BACKUP WITHHOLDING, FILE A COMPLETED INTERNAL REVENUE SERVICE FORM W-8BEN WITH
THE PAYER.
PRIVACY ACT NOTICE
Section 6109 of the Code requires you to give your correct TIN to
payers who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return. The
IRS may also provide this information to the Department of Justice for civil and
criminal litigation and to cities, states, and the District of Columbia
17
to carry out their tax laws. You must provide your TIN whether or not you are
required to file a tax return. Payers must generally withhold the Specified Rate
of taxable interest, dividend and certain other payments to a payee who does not
furnish a taxpayer identification number to a payer. Certain penalties may also
apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.
If you fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO
WITHHOLDING. If you make a false statement with no reasonable basis which
results in no imposition of backup withholding, you are subject to a penalty of
$500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Willfully
falsifying certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
THE INTERPUBLIC GROUP OF COMPANIES, INC.
OFFER TO EXCHANGE
$500,000,000 AGGREGATE PRINCIPAL AMOUNT OF ITS 7 1/4% NOTES DUE 2011,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
FOR A LIKE AGGREGATE PRINCIPAL AMOUNT OF ITS 7 1/4% NOTES DUE 2011
This form or one substantially equivalent hereto must be used to accept
the Exchange Offer of The Interpublic Group of Companies, Inc. (the "Company")
made pursuant to the prospectus dated December , 2001 (the "Prospectus"), if
certificates for the outstanding $500,000,000 aggregate principal amount of its
7 1/4% Notes due 2011 (the "Initial Notes") are not immediately available or if
the procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Exchange Agent prior to
5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer.
Such form may be delivered or transmitted by facsimile transmission, mail or
hand delivery to The Bank of New York (the "Exchange Agent") as set forth below.
In addition, in order to utilize the guaranteed delivery procedure to tender the
Initial Notes pursuant to the Exchange Offer, a completed, signed and dated
Letter of Transmittal (or facsimile thereof), must also be received by the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
Certificates for all tendered Initial Notes in proper form for transfer or a
book-entry confirmation, as the case may be, and all other documents required by
the Letter of Transmittal must be received by the Exchange Agent within three
New York Stock Exchange trading days after the Expiration Date. Capitalized
terms not defined herein are defined in the Prospectus.
DELIVERY TO:
The Bank of New York
EXCHANGE AGENT
Y REGISTERED OR CERTIFIED MAIL: BY FACSIMILE:
The Bank of New York (for eligible institutions only)
15 Broad Street
Lobby Level
New York, New York 10007 CONFIRM BY TELEPHONE:
Attention: _______________
BY OVERNIGHT COURIER OR HAND:
The Bank of New York
15 Broad Street
Lobby Level
New York, New York 10007
Attention: _______________
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
2
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Initial Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offer--Procedures for
Tendering Initial Notes" section of the Prospectus.
Principal Amount of Initial Notes
Tendered1
$________________________________
Certificate Nos. (if available):
_________________________________
If Initial Notes will be delivered by
Total Principal Amount Represented by book-entry transfer to The Depository
Initial Notes Certificate(s): Trust Company, provide account number.
$________________________________ Account Number
- --------------------------------------------------------------------------------
ANY AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE DEATH
OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
X________________________________ ________________________________
X________________________________ ________________________________
Signature(s) of Owner(s) or Authorized Signatory Date
Area Code and Telephone Number:_______________________________
Must be signed by the holder(s) of Initial Notes as their name(s)
appear(s) on certificate(s) for Initial Notes or on a security position listing,
or by person(s) authorized to become registered holder(s) by endorsement and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person must
set forth his or her full title below.
- ------------------------
1 Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
3
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): _____________________________________________________________
_____________________________________________________________
Capacity: _____________________________________________________________
Address(es): _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
4
GUARANTEE
The undersigned, a member of a registered national securities exchange,
or a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the United
States, hereby guarantees that the certificates representing the principal
amount of Initial Notes tendered hereby in proper form for transfer, or timely
confirmation of the book-entry transfer of such Initial Notes into the Exchange
Agent's account at The Depository Trust Company pursuant to the procedures set
forth in "The Exchange Offer--Procedures for Tendering Initial Notes" section of
the Prospectus, together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required signature
guarantee and any other documents required by the Letter of Transmittal, will be
received by the Exchange Agent at the address set forth above, no later than
three New York Stock Exchange trading days after the date of execution hereof.
__________________________________ __________________________________
Name of Firm Authorized Signature
__________________________________ __________________________________
Address Title
__________________________________ Name:_____________________________
Zip Code (Please Type or Print)
Area Code and Tel. No.____________ Dated:____________________________
NOTE: DO NOT SEND CERTIFICATES FOR INITIAL NOTES WITH THIS FORM. CERTIFICATES
FOR INITIAL NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.