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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 24, 1998
REGISTRATION NO. 333-66883
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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YOUNG & RUBICAM INC.
(Exact name of Registrant as specified in its charter)
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DELAWARE 7311 13-1493710
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(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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285 MADISON AVENUE
NEW YORK, NEW YORK 10017
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
STEPHANIE W. ABRAMSON, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL
YOUNG & RUBICAM INC.
285 MADISON AVENUE
NEW YORK, NEW YORK 10017
(212) 210-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
PETER H. DARROW, ESQ. MARK C. SMITH, ESQ.
CLEARY, GOTTLIEB, STEEN & HAMILTON SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE LIBERTY PLAZA 919 THIRD AVENUE
NEW YORK, NEW YORK 10006 NEW YORK, NEW YORK 10022
(212) 225-2000 (212) 735-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please 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(c)
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: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
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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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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EXPLANATORY NOTE
Young & Rubicam Inc. has prepared this Amendment No. 2 to its Registration
Statement on Form S-1 (File No. 333-66883) for the purpose of filing with the
Securities and Exchange Commission certain exhibits to the Registration
Statement. Amendment No. 2 does not modify any provision of the Prospectus
included in the Registration Statement; accordingly, such Prospectus has not
been included herein.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the Common Stock being registered, other than
underwriting discounts and commissions.
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Securities and Exchange Commission registration fee ................. $ 84,945
National Association of Securities Dealers, Inc. filing fee ......... 30,500
Legal fees and expenses ............................................. 250,000
Accounting fees and expenses ........................................ 125,000
Printing and engraving expenses ..................................... 250,000
Registrar and transfer agent's fee .................................. 25,000
Miscellaneous ....................................................... 34,555
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Total ............................................................. $800,000
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ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XI of Young & Rubicam Inc.'s Amended and Restated Certificate of
Incorporation provides substantially as follows:
Section 1. Elimination of Certain Liability of Directors. A director of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit.
Section 2. Indemnification and Insurance.
(a) Right to indemnification. Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Company to the fullest extent authorized by
the General Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended but, in the case of any such amendment, to the fullest
extent permitted by law, only to the extent that such amendment permits the
Company to provide broader indemnification rights than said law permitted the
Company to provide prior to such amendment), against all expense, liability and
loss (including, without limitation, attorneys' fees, judgments, fines, amounts
paid or to be paid in settlement, and excise taxes or penalties arising under
the Employee Retirement Income Security Act of 1974) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in paragraph (b)
hereof, the Company shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the Company. The right to indemnification conferred in this Section shall be a
contract right and shall include the right to be paid by the Company the
expenses incurred in
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defending any such proceeding in advance of its final disposition; provided,
however, that, if the General Corporation Law of the State of Delaware requires,
the payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Company of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Section or
otherwise. The Company may, by action of the Board of Directors, provide
indemnification to employees and agents of the Company with the same scope and
effect as the foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of this
Section is not paid in full by the Company within thirty days after a written
claim has been received by the Company, the claimant may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Company) that the
claimant has not met the standards of conduct which make it permissible under
the General Corporation Law of the State of Delaware for the Company to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Company. Neither the failure of the Company (including
its Board of Directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the General Corporation
Law of the State of Delaware, nor an actual determination by the Company
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
(c) Non-Exclusivity of Rights. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, By-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Company would
have the power to indemnify such person against such expense, liability or loss
under the General Corporation Law of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware
provides as follows:
(a) A corporation shall have 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 the 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 the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the
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person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person's conduct was unlawful.
(b) A corporation shall have 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 the 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
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and 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.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made, with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that such person is not entitled to be indemnified by the
corporation as authorized in this section. Such expenses (including attorneys'
fees) incurred by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the corporation deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
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(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as such person would have respect to such constituent corporation if
its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "servicing at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expense proved by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).
Section 5 of the Management Voting Trust Agreement provides substantially
as follows:
The Company hereby agrees to assume liability for and does hereby
indemnify, protect, save and hold harmless the Voting Trustees and their
successors, assigns, agents and servants to the full extent lawful from and
against any and all liabilities, obligations, losses, damages, penalties, taxes,
claims, actions, suits, costs, expenses or disbursements (including legal fees
and expenses) of any kind and nature whatsoever ("Losses") that may be imposed,
incurred by or asserted against the Voting Trustees or any of them individually
in any way relating to or arising under the Management Voting Trust Agreement or
the enforcement of any of the terms thereof or in any way relating to or arising
out of the administration of the trusts created thereby or the action or
inaction of the Management Voting Trust thereunder, unless the Company shall
sustain the burden of proving by clear and convincing evidence that such Losses
were proximately caused by an act or omission on the part of such Voting Trustee
or Voting Trustees that was not taken in good faith or that was not reasonably
believed to be in or not opposed to the best interests of the Company and the
Management Investors as a group. The Company shall advance to any Voting Trustee
all reasonable expenses in connection with litigation arising under the
Management Voting Trust Agreement or the enforcement of any of the terms thereof
or in any way relating to or arising out of the administration of the trusts
created thereby or the action or inaction of the Management Voting Trust
thereunder, including, but not limited to, expenses in connection with
litigation in which such Voting Trustee purports to seek to enforce any portion
of the Management Voting Trust Agreement. A Voting Trustee shall be required to
execute an undertaking agreeing to repay the Company the amount so advanced in
the event it is ultimately determined that such Voting Trustee is not entitled
to indemnification with respect to such Losses, but the Voting Trustee shall not
be required to give a bond or any security for the advancement of such expenses.
To the extent insurance is available on commercially reasonable terms, the
Company will procure and maintain (for the benefit of the Company and the Voting
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Trustees) insurance covering the Voting Trustees at least to the extent their
conduct would give rise to indemnification under the Management Voting Trust
Agreement. The provisions contained in this indemnification section shall
survive the termination of the Management Voting Trust Agreement.
The Restricted Stock Plan and the Management Stock Option Plan each provide
that no member of the Compensation Committee of the Board or of the Board shall
be liable for any action or determination made in good faith with respect to
such plan or any grant under such plan. The Restricted Stock Plan and the
Management Stock Plan each provide that to the fullest extent permitted by law,
the Company shall indemnify and save harmless each person made or threatened to
be made a party to any civil or criminal action or proceeding by reason of the
fact that such person, or such person's testator or intestate, is or was a
member of the Compensation Committee of the Board. The 1997 ICP provides that no
member of the Compensation Committee or any officer or employee of the
Registrant or an affiliate acting at the direction or on behalf of the
Compensation Committee shall be personally liable for any action or
determination taken or made in good faith with respect to the 1997 ICP, and
shall, to the extent permitted by law, be fully indemnified and protected by the
Registrant with respect to any such action or determination.
Young & Rubicam Inc. also carries liability insurance covering officers
and directors.
Pursuant to the proposed form of Underwriting Agreement, the Underwriters
have agreed to indemnify the directors and officers of Young & Rubicam Inc. in
certain circumstances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
In December 1996, in connection with the Recapitalization, Y&R (i) issued
and sold 30,228,195 shares of Common Stock to the Recapitalization Investors and
one entity affiliated with an independent member of the Board for cash
consideration of $231,749,495, (ii) issued and sold 17,154,135 shares of Common
Stock to 182 employees in exchange for a combination of cash, notes, shares of
common stock, $.25 par value, of Young & Rubicam Inc., a New York corporation,
and limited partnership units of Young & Rubicam L.P., a Delaware limited
partnership, (iii) granted 16,823,565 Rollover Options to its employees in
consideration of the surrender for cancellation of all or a portion of their
outstanding employee options, and (iv) granted 5,200,590 Executive Options to
its employees without consideration pursuant to the Management Stock Option
Plan.
In August 1997, two members of management of the Company purchased an
aggregate of 12,900 shares of Common Stock for an aggregate purchase price of
$98,900. In October 1997, four members of management of the Company purchased an
aggregate of 36,000 shares of Common Stock for an aggregate purchase price of
$276,000. In November 1997, the Company purchased additional equity interests in
two of its Argentine subsidiaries using an aggregate of 91,320 shares of Common
Stock as part of the consideration therefor.
During 1997, management investors whose employment with the Company was
terminated exercised Rollover Options to purchase an aggregate of 463,065 shares
of Common Stock at $1.92 per share, or an aggregate of $887,541. All of such
shares of Common Stock were repurchased by the Company pursuant to the call
provisions of the Stockholders Agreement at a price equal to $7.67 per share.
In December 1997, the Company issued and sold 4,250,790 shares of Common
Stock to its employees for an aggregate amount of $9,314,483 pursuant to the
exercise of Rollover Options and Executive Options. In March 1998, the Company
issued and sold 135,885 shares of Common Stock to its employees for an aggregate
amount of $864,196 pursuant to the exercise of Rollover Options and Executive
Options.
All of the sales of Y&R securities described above were deemed to be exempt
from the registration requirements under the Securities Act pursuant to Section
4(2) thereof, and in reliance on Rule 701 promulgated under Section 3(b) thereof
and Regulation D and Regulation S thereunder.
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Each recipient of such securities represented in each transaction such
recipient's intention to acquire the securities for investment only and not with
a view to or for sale in connection with any distribution thereof and
appropriate legends were affixed to the share certificates issued in such
transactions.
ITEM 16. EXHIBITS.
(a) Exhibits
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1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Certificate of Incorporation of Registrant
(incorporated by reference from Exhibit 4.4 to the Registration
Statement on Form S-8 (File No. 333-57605) filed by the Company).
3.2 Amended and Restated Bylaws of Registrant (incorporated by reference
from Exhibit 4.5 to the Registration Statement on Form S-8 (File No.
333-57605) filed by the Company).
4.1 Specimen Certificate of Common Stock of Registrant (incorporated by
reference from Exhibit 4.1 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
4.2 Rights Agreement, dated as of May 1, 1998 (incorporated by reference
from Exhibit 4.9 to the Registration Statement on Form S-8 (File No.
333-57605) filed by the Company).
4.3 Certificate of Designation for Registrant's Cumulative Participating
Junior Preferred Stock.**
5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton, counsel to the
Registrant, as to the legality of the shares of Common Stock being
registered.
9.1 Management Voting Trust Agreement, dated as of December 12, 1998
(incorporated by reference from Exhibit 9.1 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
9.2 Young & Rubicam Inc. Restricted Stock Trust Agreement, dated as of
December 12, 1996 (incorporated by reference from Exhibit 9.2 to the
Registration Statement on Form S-1 (File No. 333-46929) filed by the
Company).
10.1 Stockholders' Agreement, dated as of May 8, 1998 (incorporated by
reference from Exhibit 4.8 to the Registration Statement on Form S-8
(File No. 333-57605) filed by the Company).
10.2 Contribution Agreement dated October 30, 1996 (incorporated by
reference from Exhibit 10.3 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
10.3 Young & Rubicam Holdings Inc. Restricted Stock Plan (incorporated by
reference from Exhibit 10.4 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
10.4 Young & Rubicam Holdings Inc. Management Stock Option Plan
(incorporated by reference from Exhibit 10.5 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
10.5 Young & Rubicam Inc. 1997 Incentive Compensation Plan (incorporated
by reference from Exhibit 10.6 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.6 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 19, 1997, with Peter Georgescu (incorporated by
reference from Exhibit 10.7 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
10.7 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1995, with Peter Georgescu (incorporated by
reference from Exhibit 10.8 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
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10.8 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1986, with Peter Georgescu (incorporated by
reference from Exhibit 10.9 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.9 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 19, 1997, with John McGarry (incorporated by
reference from Exhibit 10.10 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.10 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1986, with John McGarry (incorporated by reference
from Exhibit 10.11 to the Registration Statement on Form S-1 (File
No. 333-46929) filed by the Company).
10.11 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 31, 1994, with John McGarry (incorporated by
reference from Exhibit 10.12 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.12 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 19, 1997, with Edward Vick (incorporated by reference
from Exhibit 10.13 to the Registration Statement on Form S-1 (File
No. 333-46929) filed by the Company).
10.13 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1995, with Edward Vick (incorporated by reference
from Exhibit 10.14 to the Registration Statement on Form S-1 (File
No. 333-46929) filed by the Company).
10.14 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 19, 1997, with Alan J. Sheldon (incorporated by
reference from Exhibit 10.15 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.15 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1995, with Alan J. Sheldon (incorporated by
reference from Exhibit 10.16 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.16 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1988, with Alan J. Sheldon (incorporated by
reference from Exhibit 10.17 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.17 Registration Rights Agreement, dated as of December 12, 1996
(incorporated by reference from Exhibit 10.18 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
10.18 Letter Agreement dated as of October 16, 1997 by and between Young &
Rubicam Inc. and Michael J. Dolan (incorporated by reference from
Exhibit 10.19 to the Registration Statement on Form S-1 (File No.
333-46929) filed by the Company).
10.19 Letter Agreement dated June 28, 1996 by and between Young & Rubicam
Inc. and Michael J. Dolan (incorporated by reference from Exhibit
10.20 to the Registration Statement on Form S-1 (File No. 333-46929)
filed by the Company).
10.20 Lease agreement for 230 Park Avenue South (incorporated by reference
from Exhibit 10.21 to the Registration Statement on Form S-1 (File
No. 333-46929) filed by the Company).
10.21 H&F Option Agreement, dated as of December 12, 1996, among Young &
Rubicam Holdings Inc., a New York corporation ("Holdings"), Young &
Rubicam Inc., a New York corporation, Young & Rubicam Inc., a
Delaware corporation and a wholly-owned subsidiary of Holdings, and
Hellman & Friedman Capital Partners III, L.P. (incorporated by
reference from Exhibit 10.22 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.22 H&F Option Agreement, dated as of December 12, 1996, among Young &
Rubicam Holdings Inc., a New York corporation ("Holdings"), Young &
Rubicam Inc., a New York corporation, Young & Rubicam Inc., a
Delaware corporation and a wholly-owned subsidiary of Holdings, and
H&F Orchard Partners III, L.P. (incorporated by reference from
Exhibit 10.23 to the Registration Statement on Form S-1 (File No.
333-46929) filed by the Company).
</TABLE>
II-7
<PAGE>
<TABLE>
<S> <C>
10.23 Form of Young & Rubicam Inc. Key Corporation Managers Bonus Plan
(incorporated by reference from Exhibit 10.24 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
10.24 Amendment No. 1 to Restricted Stock Trust Agreement dated as of
March 13, 1998 (incorporated by reference from Exhibit 10.25 to the
Registration Statement on Form S-1 (File No. 333-46929) filed by the
Company).
10.25 Young & Rubicam Inc. Deferred Compensation Plan (incorporated by
reference from Exhibit 10.26 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.26 Young & Rubicam Inc. Grantor Trust Agreement (incorporated by
reference from Exhibit 10.27 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.27 Amendment to Young & Rubicam Inc. 1997 Incentive Compensation Plan
(incorporated by reference from Exhibit 10.28 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
10.28 Credit Agreement for the New Credit Facility.**
21.1 List of Subsidiaries.**
23.1 Consent of PricewaterhouseCoopers LLP.**
23.2 Consent of Cleary, Gottlieb, Steen & Hamilton (included in opinion
filed as Exhibit 5.1).
24.1 Powers of Attorney (included on signature pages).**
</TABLE>
- ----------
** Previously filed.
(b) Financial Statement Schedules
II-8
<PAGE>
Schedule II -- Valuation and Qualifying Accounts and Reserves
<TABLE>
<CAPTION>
YOUNG AND RUBICAM INC. AND SUBSIDIARY COMPANIES SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN THOUSANDS)
ADDITIONS
-----------------------------------
BALANCE AT CHARGED TO COSTS CHARGED TO BALANCE
DESCRIPTION BEGINNING AND EXPENSES OTHER ACCOUNTS DEDUCTIONS AT END
- ------------------------------------------ ------------ ------------------ ---------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Year ended December 31, 1994
Allowance for Doubtful Accounts ......... $ 7,844 $ 4,947 -- $ 4,507 $ 8,284
------- -------- ------ ------- -------
Year ended December 31, 1995
Allowance for Doubtful Accounts ......... $ 8,284 $ 8,352 -- $ 5,110 $11,526
------- -------- ------ ------- -------
Year ended December 31, 1996
Allowance for Doubtful Accounts ......... $11,526 $ 11,411 -- $13,088 $ 9,849
------- -------- ------ ------- -------
VALUATION ALLOWANCE
Year ended December 31, 1994
SFAS 109 Valuation Allowance ............ $15,221 $ (1,746) -- -- $13,475
------- -------- ------ ------- -------
Year ended December 31, 1995
SFAS 109 Valuation Allowance ............ $13,475 $ 912 -- -- $14,387
------- -------- ------ ------- -------
Year ended December 31, 1996
SFAS 109 Valuation Allowance ............ $14,387 $ 14,667 $4,483 -- $33,537
------- -------- ------ ------- -------
</TABLE>
II-9
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant 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 of whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
(b) (1) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this Registration Statement as of the time it was declared
effective.
(2) That for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused this Amendment No. 2 to
the 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
November 23, 1998.
YOUNG & RUBICAM INC.
By: /s/ Stephanie W. Abramson
------------------------------------
Name: Stephanie W. Abramson
Title: Executive Vice President
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and Chief November 23, 1998
- ------------------------- Executive Officer (principal
Peter A. Georgescu executive officer)
* Vice Chairman, Chief Financial November 23, 1998
- ------------------------- Officer and Director (principal
Michael J. Dolan financial officer)
* Vice President, Controller November 23, 1998
- ------------------------- (principal accounting officer)
John A. Wozniak
* Chief Operating Officer and Director November 23, 1998
- -------------------------
Edward H. Vick
* Executive Vice President and Director November 23, 1998
- -------------------------
Thomas D. Bell, Jr.
* Director November 23, 1998
- -------------------------
F. Warren Hellman
* Director November 23, 1998
- -------------------------
Richard S. Bodman
* Director November 23, 1998
- -------------------------
Philip U. Hammarskjold
</TABLE>
II-11
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director November 23, 1998
- -------------------------
Alan D. Schwartz
* Director November 23, 1998
- -------------------------
John F. McGillicuddy
</TABLE>
*By: /s/ Stephanie W. Abramson November 23, 1998
- --------------------------------------------------------------------------------
Name: Stephanie W. Abramson
Title: Attorney-in-Fact
II-12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
<S> <C> <C>
Exhibit Page
Number Description of Exhibits Number
- ------ ----------------------- ------
1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Certificate of Incorporation of Registrant
(incorporated by reference from Exhibit 4.4 to the Registration
Statement on Form S-8 (File No. 333-57605) filed by the Company).
3.2 Amended and Restated Bylaws of Registrant (incorporated by reference
from Exhibit 4.5 to the Registration Statement on Form S-8 (File No.
333-57605) filed by the Company).
4.1 Specimen Certificate of Common Stock of Registrant (incorporated by
reference from Exhibit 4.1 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
4.2 Rights Agreement, dated as of May 1, 1998 (incorporated by reference
from Exhibit 4.9 to the Registration Statement on Form S-8 (File No.
333-57605) filed by the Company).
4.3 Certificate of Designation for Registrant's Cumulative Participating
Junior Preferred Stock.**
5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton, counsel to the
Registrant, as to the legality of the shares of Common Stock being
registered.
9.1 Management Voting Trust Agreement, dated as of December 12, 1998
(incorporated by reference from Exhibit 9.1 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
9.2 Young & Rubicam Inc. Restricted Stock Trust Agreement, dated as of
December 12, 1996 (incorporated by reference from Exhibit 9.2 to the
Registration Statement on Form S-1 (File No. 333-46929) filed by the
Company).
10.1 Stockholders' Agreement, dated as of May 8, 1998 (incorporated by
reference from Exhibit 4.8 to the Registration Statement on Form S-8
(File No. 333-57605) filed by the Company).
10.2 Contribution Agreement dated October 30, 1996 (incorporated by
reference from Exhibit 10.3 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
10.3 Young & Rubicam Holdings Inc. Restricted Stock Plan (incorporated by
reference from Exhibit 10.4 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
10.4 Young & Rubicam Holdings Inc. Management Stock Option Plan
(incorporated by reference from Exhibit 10.5 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
10.5 Young & Rubicam Inc. 1997 Incentive Compensation Plan (incorporated
by reference from Exhibit 10.6 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.6 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 19, 1997, with Peter Georgescu (incorporated by
reference from Exhibit 10.7 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
10.7 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1995, with Peter Georgescu (incorporated by
reference from Exhibit 10.8 to the Registration Statement on Form S-1
(File No. 333-46929) filed by the Company).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit Page
Number Description of Exhibits Number
- ------ ----------------------- ------
10.8 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1986, with Peter Georgescu (incorporated by
reference from Exhibit 10.9 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.9 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 19, 1997, with John McGarry (incorporated by
reference from Exhibit 10.10 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.10 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1986, with John McGarry (incorporated by reference
from Exhibit 10.11 to the Registration Statement on Form S-1 (File
No. 333-46929) filed by the Company).
10.11 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 31, 1994, with John McGarry (incorporated by
reference from Exhibit 10.12 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.12 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 19, 1997, with Edward Vick (incorporated by reference
from Exhibit 10.13 to the Registration Statement on Form S-1 (File
No. 333-46929) filed by the Company).
10.13 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1995, with Edward Vick (incorporated by reference
from Exhibit 10.14 to the Registration Statement on Form S-1 (File
No. 333-46929) filed by the Company).
10.14 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of December 19, 1997, with Alan J. Sheldon (incorporated by
reference from Exhibit 10.15 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.15 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1995, with Alan J. Sheldon (incorporated by
reference from Exhibit 10.16 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.16 Young & Rubicam Inc. Select Executive Retirement Income Plan, dated
as of January 1, 1988, with Alan J. Sheldon (incorporated by
reference from Exhibit 10.17 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.17 Registration Rights Agreement, dated as of December 12, 1996
(incorporated by reference from Exhibit 10.18 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
10.18 Letter Agreement dated as of October 16, 1997 by and between Young &
Rubicam Inc. and Michael J. Dolan (incorporated by reference from
Exhibit 10.19 to the Registration Statement on Form S-1 (File No.
333-46929) filed by the Company).
10.19 Letter Agreement dated June 28, 1996 by and between Young & Rubicam
Inc. and Michael J. Dolan (incorporated by reference from Exhibit
10.20 to the Registration Statement on Form S-1 (File No. 333-46929)
filed by the Company).
10.20 Lease agreement for 230 Park Avenue South (incorporated by reference
from Exhibit 10.21 to the Registration Statement on Form S-1 (File
No. 333-46929) filed by the Company).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit Page
Number Description of Exhibits Number
- ------ ----------------------- ------
10.21 H&F Option Agreement, dated as of December 12, 1996, among Young &
Rubicam Holdings Inc., a New York corporation ("Holdings"), Young &
Rubicam Inc., a New York corporation, Young & Rubicam Inc., a
Delaware corporation and a wholly-owned subsidiary of Holdings, and
Hellman & Friedman Capital Partners III, L.P. (incorporated by
reference from Exhibit 10.22 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.22 H&F Option Agreement, dated as of December 12, 1996, among Young &
Rubicam Holdings Inc., a New York corporation ("Holdings"), Young &
Rubicam Inc., a New York corporation, Young & Rubicam Inc., a
Delaware corporation and a wholly-owned subsidiary of Holdings, and
H&F Orchard Partners III, L.P. (incorporated by reference from
Exhibit 10.23 to the Registration Statement on Form S-1 (File No.
333-46929) filed by the Company).
10.23 Form of Young & Rubicam Inc. Key Corporation Managers Bonus Plan
(incorporated by reference from Exhibit 10.24 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
10.24 Amendment No. 1 to Restricted Stock Trust Agreement dated as of
March 13, 1998 (incorporated by reference from Exhibit 10.25 to the
Registration Statement on Form S-1 (File No. 333-46929) filed by the
Company).
10.25 Young & Rubicam Inc. Deferred Compensation Plan (incorporated by
reference from Exhibit 10.26 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.26 Young & Rubicam Inc. Grantor Trust Agreement (incorporated by
reference from Exhibit 10.27 to the Registration Statement on Form
S-1 (File No. 333-46929) filed by the Company).
10.27 Amendment to Young & Rubicam Inc. 1997 Incentive Compensation Plan
(incorporated by reference from Exhibit 10.28 to the Registration
Statement on Form S-1 (File No. 333-46929) filed by the Company).
10.28 Credit Agreement for the New Credit Facility.**
21.1 List of Subsidiaries.**
23.1 Consent of PricewaterhouseCoopers LLP.**
23.2 Consent of Cleary, Gottlieb, Steen & Hamilton (included in opinion
filed as Exhibit 5.1).
24.1 Powers of Attorney (included on signature pages).**
</TABLE>
- ----------
** Previously filed.
EXHIBIT 1.1
[10,000,000 Shares]
Young & Rubicam Inc.
Common Stock
UNDERWRITING AGREEMENT
November __, 1998
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
ING BARING FURMAN SELZ LLC
SALOMON SMITH BARNEY INC.
As representatives of the
several Underwriters
named in Schedule I hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
Certain stockholders of Young & Rubicam Inc., a Delaware corporation
(the "COMPANY"), named in Schedule II hereto (the "Y&R SELLING STOCKHOLDERS")
severally propose to sell to the several Underwriters (as defined below) an
aggregate of [5,180,647] shares of the Company's Common Stock, par value $.01
per share ("COMMON STOCK"), certain stockholders of the Company named in
Schedule III (a) hereto (the "H&F SELLING STOCKHOLDERS") severally propose to
sell to the several Underwriters an aggregate of [4,770,493] shares of Common
Stock and BearTel Corp. ("BEARTEL" and together with the Y&R Selling
Stockholders and the H&F Selling Stockholders, the "SELLING STOCKHOLDERS")
proposes to sell to the several Underwriters an aggregate of [48,860] shares of
Common Stock. The shares of Common Stock to be sold by the Y&R Selling
<PAGE>
Stockholders are hereinafter called the "Y&R SELLING STOCKHOLDER SHARES," and,
together with the shares of Common Stock to be sold by BearTel and the H&F
Selling Stockholders, the "FIRM SHARES."
It is understood that, subject to the conditions hereinafter stated,
[10,000,000] Firm Shares (the "FIRM SHARES") will be sold to the several
Underwriters named in Schedule I hereto (the "UNDERWRITERS") in connection with
the offering and sale of such Firm Shares. Bear, Stearns & Co. Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Goldman, Sachs & Co., ING Baring
Furman Selz LLC and Salomon Smith Barney Inc. shall act as representatives (the
"REPRESENTATIVES") of the several Underwriters.
The individuals or entities listed on Schedule IV hereto (the "OPTION
SELLING STOCKHOLDERS") also severally propose to issue and sell to the several
Underwriters not more than an additional [1,500,000] shares of Common Stock (the
"ADDITIONAL SHARES"), if requested by the Underwriters as provided in Section 2
hereof. The Firm Shares and the Additional Shares are herein collectively called
the "SHARES."
SECTION 1. Registration Statement and Prospectus. The Company has filed
with the Securities and Exchange Commission (the "COMMISSION") in accordance
with the provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "ACT"), a
registration statement on Form S-1, including a form of prospectus, relating to
the Shares. The registration statement, as amended at the time it became
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "REGISTRATION STATEMENT;" and the
prospectus in the form first filed pursuant to Rule 424(b) under the Act is
hereinafter referred to as the "PROSPECTUS." If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"RULE 462(B) REGISTRATION STATEMENT"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up Agreements. On the
basis of the representations and warranties contained in this Agreement (the
"Agreement"), and subject to its terms and conditions, (i) each Selling
Stockholder agrees, severally and not jointly, to sell the number of Firm
2
<PAGE>
Shares set forth opposite such Selling Stockholder's name in Schedule II or
Schedule III hereto, as the case may be, and (ii) each Underwriter agrees,
severally and not jointly, to purchase from each Selling Stockholder at a price
per Share of $_____ (the "PURCHASE PRICE") the number of Firm Shares (subject to
such adjustments to eliminate fractional shares as you may determine) that bears
the same proportion to the total number of Firm Shares to be sold by such
Selling Stockholder as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Option Selling
Stockholders severally agree to sell the Additional Shares and the Underwriters
shall have the right to purchase, severally and not jointly, up to [1,500,000]
Additional Shares from the Option Selling Stockholders at the Purchase Price.
Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
Underwriters may exercise their right to purchase Additional Shares in whole or
in part from time to time by giving written notice thereof to the Option Selling
Stockholders and the Company within 30 days after the date of this Agreement.
The Representatives shall give any such notice on behalf of the Underwriters and
such notice shall specify the aggregate number of Additional Shares to be
purchased pursuant to such exercise and the date for payment and delivery
thereof, which date shall be a business day (i) no earlier than two business
days after such notice has been given (and, in any event, no earlier than the
Closing Date (as hereinafter defined)) and (ii) no later than ten business days
after such notice has been given. If any Additional Shares are to be purchased,
(i) each Option Selling Stockholder agrees to sell to the Underwriters the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as the . Representatives may determine) specified in such notice
multiplied by a fraction the numerator of which is the number of Additional
Shares set forth opposite each such Option Selling Stockholder's name on
Schedule IV hereto and the denominator of which is the total number of
Additional Shares and (ii) each Underwriter, severally and not jointly, agrees
to purchase from the Option Selling Stockholders, the number of Additional
Shares (subject to such adjustments to eliminate fractional shares as the
Representatives may determine) which bears the same proportion to the total
number of Additional Shares to be purchased from the Option Selling
Stockholders, as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
3
<PAGE>
The Company and each Selling Stockholder hereby agree not to (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers all or a portion of the economic consequences associated with the
ownership of any Common Stock (regardless of whether any of the transactions
described in clause (i) or (ii) is to be settled by the delivery of Common
Stock, or such other securities, in cash or otherwise), except to the
Underwriters pursuant to this Agreement, for a period of 120 days after the date
of the Prospectus without the prior written consent of Bear, Stearns & Co. Inc.
and Donaldson, Lufkin & Jenrette Securities Corporation (and in the case of any
Management Investor (as defined in the Prospectus), the Company).
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options or stock awards pursuant to any of the Company's existing stock
option plans, (ii) the Company may issue shares of Common Stock upon the
exercise of an option, a warrant or the Rights (as defined in the Prospectus) or
the conversion of a security outstanding on the date hereof, (iii) each H&F
Selling Stockholder may transfer shares of Common Stock to a partner or an
affiliate of such H&F Selling Stockholder in a transaction not involving a
public sale, distribution or other disposition of such Common Stock provided
that the transferee agrees in writing to be bound by the same restrictions and
(iv) the Company may issue, offer and sell shares of Common Stock or securities
convertible, exercisable or exchangeable therefor in transactions not involving
a public offering as consideration for the acquisition (pursuant to merger or
otherwise) of one or more entities provided that each recipient of such
securities agrees in writing to be bound by the restrictions set forth in this
paragraph. The Company also agrees not to file any registration statement with
respect to any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock for a period of 120 days after the
date of the Prospectus without the prior written consent of Bear, Stearns & Co.
Inc. and Donaldson, Lufkin & Jenrette Securities Corporation. In addition, each
Selling Stockholder agrees that, for a period of 120 days after the date of the
Prospectus without the prior written consent of Bear, Stearns & Co. Inc. and
Donaldson, Lufkin & Jenrette Securities Corporation, it will not make any demand
for, or exercise any right with respect to, the registration of any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock. The Company shall, prior to or concurrently with the execution
of this Agreement, deliver an agreement executed by the trustees of the
Management Voting Trust (as defined in the Prospectus) to the effect that such
trustees will not permit the
4
<PAGE>
Management Voting Trust to, during the period commencing on the date the
trustees of the Management Voting Trust sign such agreement and ending 120 days
after the date of the Prospectus, without the prior written consent of Bear,
Stearns & Co. Inc. and Donaldson, Lufkin & Jenrette Securities Corporation, (A)
engage in any of the transactions described in the first sentence of this
paragraph or (B) make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock. Each entity listed on Schedule V
hereto shall, prior to or concurrently with the execution of this Agreement,
execute and deliver an agreement to the effect that such entity shall not,
during the period commencing on the date such entity signs such agreement and
ending 120 days after the date of the Prospectus, without the prior written
consent of Bear, Stearns & Co. Inc. and Donaldson, Lufkin & Jenrette Securities
Corporation, (A) engage in any of the transactions described in the first
sentence of this paragraph or (B) make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
SECTION 3. Terms of Public Offering. The Company and the Selling
Stockholders are advised by you that the Underwriters propose (i) to make a
public offering of their respective portions of the Shares as soon after the
execution and delivery of this Agreement as in your judgment is advisable and
(ii) initially to offer the Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Bear, Stearns & Co. Inc. shall request no later than
two business days prior to the Closing Date or the applicable Option Closing
Date (as defined below), as the case may be. The Shares shall be delivered by or
on behalf of the Selling Stockholders, with any transfer taxes thereon duly paid
by the respective Selling Stockholders, to Bear, Stearns & Co. Inc. through the
facilities of The Depository Trust Company ("DTC"), for the respective accounts
of the several Underwriters, against payment to the Selling Stockholders of the
Purchase Price therefor by wire transfer of Federal or other funds immediately
available in New York City. The certificates representing the Shares shall be
made available for inspection not later than 9:30 A.M., New York City time, on
the business day prior to the Closing Date or the applicable Option Closing
Date, as the case may be, at the office of DTC or its designated custodian (the
"DESIGNATED OFFICE"). The time and date of delivery and payment for the Firm
Shares shall be 10:00 A.M., New York
5
<PAGE>
City time, on [November __, 1998] or such other time on the same or such other
date as Bear, Stearns & Co. Inc. and the Company shall agree in writing. The
time and date of delivery and payment for the Firm Shares are hereinafter
referred to as the "CLOSING DATE." The time and date of delivery and payment for
any Additional Shares to be purchased by the Underwriters shall be 10:00 A.M.,
New York City time, on the date specified in the applicable exercise notice
given by the Representatives pursuant to Section 2 or such other time on the
same or such other date as Bear, Stearns & Co. Inc. and the Company shall agree
in writing. The time and date of delivery and payment for any Additional Shares
are hereinafter referred to as an "OPTION CLOSING DATE."
The documents to be delivered on the Closing Date or an Option Closing Date
on behalf of the parties hereto pursuant to Section 9 of this Agreement shall be
delivered at the offices of Cleary, Gottlieb, Steen & Hamilton, One Liberty
Plaza, New York, New York 10006, and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as the
case may be.
SECTION 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such advice
in writing, of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for additional
information, of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, when any amendment to the
Registration Statement becomes effective, if the Company is required to file a
Rule 462(b) Registration Statement after the effectiveness of this Agreement,
when the Rule 462(b) Registration Statement has become effective and of the
happening of any event during the period referred to in Section 5(d) below, as a
result of which it is necessary to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein in light of the circumstances under which they
were made, not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the Company
will use its best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time.
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(b) To furnish to you three signed copies of the Registration Statement as
first filed with the Commission and of each amendment to it, including all
exhibits, and to furnish to you and each other Underwriter such number of
conformed copies of the Registration Statement as so filed and of each amendment
to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall be
reasonably satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
and as to which you shall not have had an opportunity to comment; and, during
such period, to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or amendment or
supplement to the Prospectus which may be necessary or advisable in connection
with the distribution of the Shares by you, and to use its best efforts to cause
any such amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the reasonable opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall occur
or condition shall exist as a result of which, in the reasonable opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statement of
a material fact or omit to state a material fact, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the reasonable opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, include any untrue statement of a material fact or omit to state a
material fact, or so that the Prospectus will comply with
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applicable law, and to furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.
(f) To make generally available to you and to its stockholders as soon as
practicable an earnings statement covering the twelve-month period ending
December 31, 1999 that shall satisfy the provisions of Section 11(a) of the Act.
(g) During the period ending three years after the date of this Agreement,
to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock (for so long as
the Common Stock is registered under Section 12 of the Exchange Act (as defined
herein)) or furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed and such
other publicly available information concerning the Company and its subsidiaries
as you may reasonably request.
(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
reasonable expenses incident to the performance of the Company's obligations
under this Agreement, including: (i) the reasonable fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Act and all other
reasonable fees and expenses in connection with the preparation, printing,
filing and distribution of the Registration Statement (including financial
statements and exhibits), any preliminary prospectus, the Prospectus and all
amendments and supplements to any of the foregoing, including the mailing and
delivering of copies thereof to the Underwriters and dealers in the quantities
specified herein, (ii) all costs of printing or producing this Agreement and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Shares, (iii) all expenses in connection with the preparation of
the Preliminary and Supplemental Blue Sky Memoranda (including the filing fees
and the fees and disbursements of counsel for the Underwriters in connection
with such memoranda relating thereto), (iv) the filing fees in connection with
the review and clearance of the offering of the Shares by the National
Association of Securities Dealers, Inc., (v) the cost of printing certificates
representing the Shares, (vi) the costs and charges of any transfer agent,
registrar and/or depositary, and (vii) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section, but in each of cases (i) through (vii)
excluding all underwriting discounts and commissions and all stock transfer
taxes applicable to the sale of any
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Shares. The provisions of this Section shall not supersede or otherwise affect
any separate agreement that the Company and any Selling Stockholders may have
for allocation of such expenses among themselves.
(i) To use its best efforts to list, subject to notice of issuance, the
Shares on the NYSE.
(j) If the Registration Statement at the time of the effectiveness of this
Agreement does not cover all of the Shares, to file a Rule 462(b) Registration
Statement with the Commission registering the Shares not so covered in
compliance with Rule 462(b), such that the Rule 462(b) Registration Statement
will be effective by 10:00 P.M., New York City time, on the date of this
Agreement (or by 9:30 A.M., New York City time on the day following the date of
this Agreement) and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
(l) For a period of 120 days after the date of the Prospectus, the Company
agrees to enforce all of the Company's rights under the Standstill and Lock-up
Agreements and Selling Stockholders' Irrevocable Powers of Attorney, and will
not give to any party to any such agreement, a waiver of any of his, her or its
obligations under such agreements, or excuse any breach of any such obligations,
except in each case, with the prior written consent of Bear, Stearns & Co. Inc.
and Donaldson, Lufkin & Jenrette Securities Corporation.
SECTION 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter and the H&F Selling Stockholders
that:
(a) The Registration Statement has become effective (other than any Rule
462(b) Registration Statement to be filed by the Company after the effectiveness
of this Agreement); and no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the knowledge of the Company, threatened by the
Commission.
(b) (i) The Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Company after the effectiveness of this Agreement),
when it became effective, did not contain and, as amended by any post-effective
amendment, if applicable, will not, as of the applicable effective date,
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contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement) and the Prospectus comply, and any amendments to the
Registration Statement when they become effective and any amendments or
supplements to the Prospectus as of the applicable filing date will comply in
all material respects with the Act; (iii) if the Company is required to file a
Rule 462(b) Registration Statement after the effectiveness of this Agreement,
such Rule 462(b) Registration Statement and any post-effective amendments
thereto, when they become effective (A) will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and (B) will comply
in all material respects with the Act; and (iv) the Prospectus does not contain
and, as amended or supplemented, if applicable, as of the Closing Date will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing through you expressly for
use therein.
(c) Each preliminary prospectus filed as part of Amendment No. 1 or
Amendment No. 2 to the registration statement as originally filed, or filed
pursuant to Rule 424 under the Act, when so filed, complied in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus filed as part of the registration statement as originally
filed, or filed pursuant to Rule 424 under the Act, based upon information
relating to any Underwriter furnished to the Company in writing through you
expressly for use therein. The Company acknowledges for all purposes under this
Agreement that the statements set forth in the last paragraph of the prospectus
front cover page and under the caption "Underwriting" (other than in the fifth,
sixth, seventh and eighth paragraphs of such section) constitute the only
written information furnished to the Company by any Underwriter expressly for
use in the Registration Statement, any preliminary prospectus and the
Prospectus.
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(d) Each of the Company and each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties, and each of the Company and its subsidiaries
is duly qualified and is in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except in each
case where the failure to be in good standing or to be so qualified would not
have a Material Adverse Effect (as defined herein). As used herein, the term
"SUBSIDIARY" has the meaning set forth in Rule 1-02(x) of Regulation S-X. Young
& Rubicam L.P. ("YRLP") has been duly organized, is validly existing and in good
standing as a limited partnership under the laws of the State of Delaware and
has the partnership power and authority to carry on its business as it is
currently conducted and to own, lease and operate its properties, and YRLP is
duly qualified and is in good standing as a foreign partnership authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be in good standing or to be so qualified would not have a Material
Adverse Effect. For United States federal income tax purposes, YRLP has been and
is currently classified as a partnership, and not as an association taxable as a
corporation.
(e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued by
the Company or YRLP relating to or entitling any person to purchase or otherwise
to acquire any shares of the capital stock of the Company or any partnership
interest in YRLP, except as otherwise disclosed in the Registration Statement.
(f) (i) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders, other than the
Option Shares (as defined below)) have been duly authorized and validly issued
and are fully paid, non-assessable and not subject to any preemptive or similar
rights; and (ii) the Option Shares have been duly authorized and on the Closing
Date will be validly issued, fully paid and nonassessable and not subject to any
preemptive or similar rights.
(g) All of the outstanding partnership interests in YRLP have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any
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nature (each, a "Lien") other than Liens securing indebtedness incurred pursuant
to the New Credit Facility (as defined in the Prospectus).
(h) The authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof contained in the
Prospectus.
(i) Neither the Company nor any of its subsidiaries is (i) in violation of
its respective charter, by-laws or partnership agreement, as the case may be, or
(ii) in default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or their respective
property is bound, which default in clause (ii) would have a material adverse
effect on the business, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
(j) The execution and delivery of this Agreement by the Company, the
compliance by the Company with all the provisions hereof and the performance by
the Company of its obligations hereunder will not (i) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as have been obtained or may be
required under the Act or the securities or Blue Sky laws of the various
states), (ii) (x) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company, (y)
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, the organizational documents of YRLP or (z) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
any indenture, loan agreement, mortgage, lease or other agreement or instrument
to which the Company or YRLP is a party or by which the Company or YRLP or their
respective property is bound, which conflict, breach or default would have a
Material Adverse Effect, (iii) violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Company, YRLP or their respective
property, which violation or conflict would have a Material Adverse Effect or
(iv) result in the suspension, termination or revocation of any Authorization
(as defined below) of the Company or YRLP or any other impairment of the rights
of the holder of any such Authorization, which suspension, termination,
revocation or impairment would have a Material Adverse Effect.
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(k) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or YRLP is a party or
to which any of their respective property is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described; nor are there any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
so described or filed as required.
(l) Neither the Company nor any of its subsidiaries has violated any
applicable foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
(m) Each of the Company and YRLP has such permits, licenses, consents,
exemptions, franchises, authorizations and other approvals (each, an
"AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
YRLP is in compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries; in
each case except as would not have a Material Adverse Effect.
(n) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
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for clean-up, closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
Material Adverse Effect.
(o) This Agreement has been duly authorized, executed and delivered by the
Company.
(p) PricewaterhouseCoopers LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the Act.
(q) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with the related schedule and notes, present fairly in all material respects the
consolidated financial position, results of operations and cash flows of the
Company and its subsidiaries on the basis stated therein at the respective dates
or for the respective periods to which they apply; such statements and the
related schedule and notes have been prepared in accordance with United States
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in accordance with United
States generally accepted accounting principles the information required to be
stated therein; and the other financial and statistical information and data set
forth under the captions "Prospectus Summary - Summary Consolidated Financial
Data," "Capitalization" and "Selected Consolidated Financial Data" in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) have been accurately derived from such financial statements and the
books and records of the Company.
(r) The Company is not and, after giving effect to the offering and sale of
the Shares as described in the Prospectus, will not be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended.
(s) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Act with respect to any securities of the Company or to require the Company
to include such securities with the Shares registered pursuant to the
Registration Statement.
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(t) Since the respective dates as of which information is given in the
Prospectus, other than as set forth in the Prospectus, (i) there has not
occurred any material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent.
(u) Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters hereunder shall be deemed to be
a representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
(v) The Company and YRLP own or possess, or can acquire on reasonable
terms, all patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names ("INTELLECTUAL PROPERTY") referenced or described in the Prospectus
as being owned by or licensed to them (it being understood that the Company and
its subsidiaries do not own or possess, and do not have the right to acquire,
any intellectual property of clients, customers or other third parties that is
employed by the Company and its subsidiaries in connection with the business now
operated by them) except where the failure to own or possess or otherwise be
able to acquire such intellectual property would not, singly or in the
aggregate, have a Material Adverse Effect; and neither the Company nor YRLP has
received any written notice of infringement of or conflict with asserted rights
of others with respect to any of such intellectual property which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
(w) The Company and YRLP are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; and neither the
Company nor YRLP (i) has received written notice from any insurer or agent of
such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance or (ii)
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage
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expires or to obtain similar coverage from similar insurers at a cost that would
not have a Material Adverse Effect.
(x) The Company and YRLP have good and marketable title in fee simple to
all real property and good and marketable title to all personal property owned
by them which is material to the business of the Company and YRLP, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as would not result in a Material Adverse
Effect; and any real property and buildings held under lease by the Company and
YRLP are held by them under valid, subsisting and enforceable leases with such
exceptions as would not result in a Material Adverse Effect.
(y) There is no (i) significant unfair labor practice complaint, grievance
or arbitration proceeding pending or threatened against the Company or YRLP
before the National Labor Relations Board or any state or local labor relations
board, (ii) strike, labor dispute, slowdown or stoppage pending or, to the
knowledge of the Company, threatened against the Company or YRLP or (iii) union
representation question existing with respect to the employees of the Company
and YRLP, except for such actions specified in clause (i), (ii) or (iii) above,
which, singly or in the aggregate, would not have a Material Adverse Effect. To
the Company's knowledge, no collective bargaining organizing activities are
taking place with respect to the Company or YRLP, which would, singly or in the
aggregate, have a Material Adverse Effect.
(z) The Company and YRLP maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with United States generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(aa) All material tax returns required to be filed by the Company and each
of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its
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subsidiaries have been paid, other than those being contested in good faith and
for which adequate reserves have been provided, if required by United States
generally accepted accounting principles.
(bb) No subsidiary of the Company (excluding YRLP), is a "significant
subsidiary" within the meaning of Rule 1-02(w) of Regulation S-X.
SECTION 7. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter, solely in such Selling Stockholder's capacity as a Selling
Stockholder, that:
(a) Such Selling Stockholder (i) is, and on the Closing Date will be, the
lawful owner of the Shares (other than that number of Shares, if any, listed
opposite the name of such Selling Stockholder under the heading "Option Shares"
in Schedule II hereto (with respect to each Selling Stockholder, such number of
Shares is hereinafter referred to as the "Option Shares")) to be sold by such
Selling Stockholder pursuant to this Agreement and (ii) owns, and on the Closing
Date will own such Shares (other than the Option Shares), free of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever, other than pursuant to the Custody Agreement (as defined
below), if any, the Power of Attorney (as defined below), this Agreement and the
restrictions on transfer set forth in the Management Voting Trust Agreement and
the Stockholders' Agreement, with which such Selling Stockholder is, and on the
Closing Date will be, in compliance, and other than any such restriction on
transfer, lien, encumbrance, security interest, equity or claim created by an
Underwriter or resulting from any actions taken by an Underwriter. If any Shares
are listed opposite the name of a Selling Stockholder under the heading "Option
Shares" in Schedule II hereto, such Selling Stockholder (i) is the holder of an
Award Granted to such Selling Stockholder under the Young & Rubicam Holdings
Inc. Management Stock Option Plan, as amended (the "PLAN") (as such terms are
defined therein), with respect to the Option Shares and (ii) pursuant to the
Plan and such Selling Stockholder's Stock Option Agreement (as defined in the
Plan), on the Closing Date such Selling Stockholder (A) will be the lawful owner
of the Option Shares to be sold by such Selling Stockholder pursuant to this
Agreement and (B) will own such Option Shares, in each case subject to the terms
of this Agreement, the Custody Agreement and the Power of Attorney, free of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever, other than the restrictions on transfer set forth in the
Management Voting Trust Agreement and the Stockholders' Agreement, with which
such Selling
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Stockholder is, and on the Closing Date will be, in compliance, and other than
any such restriction on transfer, lien, encumbrance, security interest, equity
or claim created by an Underwriter or resulting from any actions taken by an
Underwriter.
(b) Such Selling Stockholder has, and on the Closing Date will have, full
legal right, power and authority, and all authorization and approval required by
law, (i) to enter into this Agreement, the Letter of Transmittal and Custody
Agreement, if any, signed by or on behalf of such Selling Stockholder and The
Bank of New York, as Custodian (the "CUSTODY AGREEMENT"), relating to the
deposit of the Shares (other than the Option Shares) to be sold by such Selling
Stockholder and the Power of Attorney of such Selling Stockholder (the "POWER OF
ATTORNEY") appointing certain individuals as such Selling Stockholder's
attorneys-in-fact (with respect to the Y&R Selling Stockholders, the "Y&R
ATTORNEYS," with respect to the H&F Selling Stockholders, the "H&F ATTORNEYS,"
with respect to BearTel, the "BEARTEL ATTORNEYS" and collectively the
"ATTORNEYS") to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement and the Custody Agreement,
if any, and (ii) to sell, assign, transfer and deliver on the Closing Date the
Shares to be sold by such Selling Stockholder in the manner provided herein and
therein.
(c) This Agreement has been duly authorized, executed, and delivered by or
on behalf of such Selling Stockholder.
(d) The Custody Agreement, if any, of such Selling Stockholder has been
duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms.
(e) The Power of Attorney of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a valid
and binding instrument of such Selling Stockholder, enforceable in accordance
with its terms, and pursuant to the applicable Power of Attorney, such Selling
Stockholder has, among other things, authorized the Attorneys, or any one of
them, to execute and deliver on such Selling Stockholder's behalf this
Agreement, on the Y&R Selling Stockholder's behalf the Custody Agreement and any
other document that they, or any one of them, may deem necessary or desirable in
connection with the transactions contemplated hereby and thereby and to deliver
the Shares to be sold by such Selling Stockholder pursuant to this Agreement.
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(f) Upon sale and delivery of and payment for the Shares to be sold by such
Selling Stockholder pursuant to this Agreement, the Underwriters will own such
Shares, free and clear of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever, other than any such
restriction on transfer, lien, encumbrance, security interest, equity or claim
created by an Underwriter or resulting from any actions taken by an Underwriter.
(g) Assuming that the representations and warranties of the Company in
Section 6 hereof are true and accurate in all material respects, the execution
and delivery of this Agreement and the Custody Agreement, if any, and Power of
Attorney of such Selling Stockholder by or on behalf of such Selling
Stockholder, the compliance by such Selling Stockholder with all the provisions
hereof and thereof and the performance by such Selling Stockholder of its
obligations hereunder and thereunder will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental agency or body (except such as have been obtained or may be
required under the Act or the securities or Blue Sky laws of the various
states), (ii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the organizational documents of such Selling
Stockholder, if such Selling Stockholder is not an individual, or any indenture,
loan agreement, mortgage, lease or other agreement or instrument to which such
Selling Stockholder or any spouse of such Selling Stockholder is a party or by
which such Selling Stockholder or any spouse or property of such Selling
Stockholder is bound or (iii) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over such Selling Stockholder or any spouse
or property of such Selling Stockholder.
(h) The information in the Prospectus under the caption "Selling
Stockholders" which specifically relates to such Selling Stockholder (consisting
of such Selling Stockholder's name and number of shares of Common Stock
beneficially owned by such Selling Stockholder both before and after the
offering contemplated hereby) will not on the date of the execution of this
Agreement or on the Closing Date, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(i) At any time during the period commencing on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the reasonable opinion of counsel for the Underwriters a prospectus
is required
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by law to be delivered in connection with sales by an Underwriter or dealer, if
there is any change in the information referred to in Section 7(h) above, such
Selling Stockholder will promptly notify you and the Company of such change.
(j) Each certificate signed by or on behalf of such Selling Stockholder and
delivered to the Underwriters or counsel for the Underwriters pursuant to
Section 9(e) shall be deemed to be a representation and warranty by such Selling
Stockholder, in its capacity as such, to the Underwriters as to the matters
covered thereby.
SECTION 8. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter, its directors, its officers and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages, liabilities and
judgments (including, without limitation, any reasonable legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus filed as part of the registration statement as originally
filed or as part of any amendment thereto or filed pursuant to Rule 424 under
the Act ("PRELIMINARY PROSPECTUS"), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Company
through you expressly for use therein, provided, however, that the foregoing
indemnity agreement with respect to any Preliminary Prospectus shall not inure
to the benefit of any Underwriter, any director or officer of any Underwriter or
any person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act to the extent such Underwriter
failed to deliver a Prospectus (as then amended or supplemented, provided by the
Company to the several Underwriters in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the Closing Date) to the person
asserting any losses, claims, damages, liabilities and judgments caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, or
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caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if such material misstatement or omission or alleged material
misstatement or omission was cured in such Prospectus.
(b) The Company agrees to indemnify and hold harmless each Selling
Stockholder, its directors, its officers and each person, if any, who controls
any Selling Stockholder within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any reasonable legal
or other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement thereto)
or any Preliminary Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Selling Stockholder furnished in writing to the Company by such Selling
Stockholder expressly for use therein.
(c) Each of the Selling Stockholders, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter, its directors, its officers and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and judgments (including, without
limitation, any reasonable legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any Preliminary Prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only with respect to losses, claims, damages, liabilities and judgments caused
by an untrue statement or omission or alleged untrue statement or omission based
on information relating to such Selling Stockholder furnished in writing by or
on behalf of such Selling Stockholder expressly for use in the Prospectus.
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(d) Each of the Selling Stockholders, severally and not jointly, agrees to
indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), the Prospectus (or any amendment or
supplement thereto) or any Preliminary Prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only with
respect to losses, claims, damages, liabilities and judgments caused by an
untrue statement or omission or alleged untrue statement or omission based on
information relating to such Selling Stockholder furnished in writing by or on
behalf of such Selling Stockholder expressly for use in the Prospectus.
(e) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers, each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, each Selling Stockholder and each person, if any, who
controls such Selling Stockholder within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Underwriter but only with reference to information
relating to such Underwriter furnished in writing to the Company through you
expressly for use in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) or any Preliminary
Prospectus.
(f) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Sections 8(a), 8(b), 8(c), 8(d) or
8(e) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all reasonable fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to Sections 8(a), 8(b), 8(c), 8(d) and 8(e), the
Underwriter shall not be
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required to assume the defense of such action pursuant to this Section 8(f), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for (i) the reasonable fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) for all Underwriters, their
officers and directors and all persons, if any, who control any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act, (ii) the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for (x) the Company, its directors,
its officers and all persons, if any, who control the Company within the meaning
of either such Section and (y) the Y&R Selling Stockholders (iii) the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for BearTel and all persons, if any, who control BearTel
within the meaning of either such Section, and (iv) the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for any H&F Selling Stockholders and all persons, if any, who control
any H&F Selling Stockholder within the meaning of either such Section, and all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Underwriters, their officers and directors and
such control persons of any Underwriters, such firm shall be designated in
writing by Bear, Stearns & Co. Inc. In the case of any such separate firm for
the Company and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any such
separate firm for the H&F Selling Stockholders and such control persons of any
H&F Selling Stockholders, such firm shall be designated in writing by the
Attorneys. The indemnifying party shall indemnify and
23
<PAGE>
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a written request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(g) To the extent the indemnification provided for in this Section 8 is
unavailable (other than in accordance with the terms hereof) to an indemnified
party or insufficient in respect of any losses, claims, damages, liabilities or
judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party or parties on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause 8(g)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(g)(i) above but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other hand shall be deemed to be in the same respective proportion as the total
net proceeds from the offering (after deducting underwriting discounts and
commissions, but before deducting expenses) received by all Selling Stockholders
and the total underwriting discounts and commissions received by the
Underwriters,
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<PAGE>
bear to the total price to the public of the Shares, in each case as set forth
on the cover page of the Prospectus. The relative benefits received by each
Selling Stockholder on the one hand and the Underwriters on the other hand shall
be deemed to be in the same respective proportion as the total net proceeds from
the offering (after deducting underwriting discounts and commissions, but before
deducting expenses) received by such Selling Stockholder, and the total
underwriting discounts and commissions received by the Underwriters, bear to the
total price to the public of the Shares, in each case as set forth on the cover
page of the Prospectus. The relative fault of the Company, the Selling
Stockholders and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the respective Selling Stockholders on
the one hand or the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8(g) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses incurred by
such indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8(g) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint. The respective obligations of the Selling Stockholders to contribute
pursuant to this
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Section 8(g) are several in proportion to the respective number of Shares sold
by each Selling Stockholder hereunder and not joint.
(h) Notwithstanding anything in this Agreement to the contrary, the maximum
aggregate liability of any Selling Stockholder pursuant to this Section 8 shall
be limited to an amount equal to the gross proceeds (after deducting
underwriting discounts and commissions but before deducting expenses) received
by such Selling Stockholder from the Underwriters for the sale of the Shares
sold by such Selling Stockholder hereunder (with respect to each Selling
Stockholder, such amount is referred to as the "SELLING STOCKHOLDER PROCEEDS").
(i) The remedies provided for in this Section 8 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity. The provisions of this Section 8 shall
supersede the provisions of Article 5 of the Registration Rights Agreement (as
defined in the Prospectus) with respect to the offer and sale of the Shares by
the Selling Stockholders provided that the remaining provisions of the
Registration Rights Agreement shall remain in full force and effect.
(j) Each Y&R Selling Stockholder hereby designates Young & Rubicam Inc.,
285 Madison Avenue, New York, New York 10017, as its authorized agent, upon
which process may be served in any action which may be instituted in any state
or federal court in the State of New York by any Underwriter, any director or
officer of any Underwriter or any person controlling any Underwriter asserting a
claim for indemnification or contribution under or pursuant to this Section 8,
and each Y&R Selling Stockholder will accept the jurisdiction of such court in
such action, and waives, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue. A copy of any such
process shall be sent or given to such Y&R Selling Stockholder, at the address
for notices specified in Section 13 hereof. Each H&F Selling Stockholder hereby
designates H&F Investors III, Inc., One Maritime Plaza, San Francisco,
California 94111 , as its authorized agent, upon which process may be served in
any action which may be instituted in any state or federal court in the State of
New York by any Underwriter, any director or officer of any Underwriter or any
person controlling any Underwriter asserting a claim for indemnification or
contribution under or pursuant to this Section 8, and each H&F Selling
Stockholder will accept the jurisdiction of such court in such action, and
waives, to the fullest extent permitted by applicable law, any defense based
upon lack of personal jurisdiction or venue. A copy of any such process shall be
sent or given to such H&F Selling Stockholder, at the address for
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notices specified in Section 13 hereof. BearTel hereby designates Bear, Stearns
& Co. Inc., 245 Park Ave., New York, New York 10167, as its authorized agent,
upon which process may be served in any action which may be instituted in any
state or federal court in the State of New York by any Underwriter, any director
or officer of any Underwriter or any person controlling any Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and BearTel will accept the jurisdiction of such court in such
action, and waives, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue. A copy of any such
process shall be sent or given to BearTel, at the address for notices specified
in Section 13 hereof.
SECTION 9. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in this
Agreement shall be true and correct on the Closing Date with the same force and
effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., New York City time, on the
date of this Agreement (or by 9:30 A.M., New York City time on the day following
the date of this Agreement); and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before the Commission.
(c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Peter A. Georgescu and Michael J. Dolan, in their
capacities as the Chairman of the Board and Chief Executive Officer and Vice
Chairman and Chief Financial Officer of the Company, respectively, confirming
the matters set forth in Sections 6(t) and 9(a) and that the Company has
complied with all of the agreements and satisfied all of the conditions herein
contained and required to be complied with or satisfied by the Company on or
prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus, other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change in the condition, financial or
otherwise, or the earnings,
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business, management or operations of the Company and its subsidiaries, taken as
a whole, and (ii) there shall not have been any change in the capital stock or
in the long-term debt of the Company and its subsidiaries, taken as a whole, and
(iii) neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any such
case described in clause 9(d)(i), 9(d)(ii) or 9(d)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
(e) All the representations and warranties of each Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received on the Closing Date a certificate dated the Closing Date executed
by an Attorney pursuant to the Power of Attorney on behalf of each Selling
Stockholder to such effect and to the effect that such Selling Stockholder has
complied with all of the agreements and satisfied all of the conditions herein
contained and required to be complied with or satisfied by such Selling
Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date (i) an opinion, dated the
Closing Date, of Cleary, Gottlieb, Steen & Hamilton, counsel for the Company, to
the effect set forth in Appendix A hereto and (ii) an opinion, dated the Closing
Date, of the General Counsel or Senior Vice President, Legal Counsel, for the
Company, to the effect set forth in Appendix B hereto.
(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Wachtell, Lipton, Rosen & Katz, counsel for the H&F Selling
Stockholders, to the effect set forth in Appendix C hereto.
(h) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Mark E. Lehman, counsel for BearTel, to the effect set forth in
Appendix D hereto.
(i) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the
Underwriters, substantially to the effect set forth in Sections 6(b)(i),
6(b)(ii), 6(b)(iii), 6(b)(iv), and 6(o) herein.
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(j) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from PricewaterhouseCoopers LLP,
independent public accountants, containing the information and statements of the
type ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(k) The Company and each entity listed on Schedule V hereto shall have
delivered to you the agreements of the trustees of the Management Voting Trust
and such entities, respectively, specified in Section 2 hereof which agreements
shall be in full force and effect on the Closing Date.
(l) The Shares shall have been duly listed, subject to official notice of
issuance, on the NYSE.
(m) You shall have received on the Closing Date, a certificate of each
Selling Stockholder who is not a U.S. Person (as defined under applicable U.S.
federal tax legislation) to the effect that such Selling Stockholder is not a
U.S. Person, which certificate may be in the form of a properly completed and
executed United States Treasury Department Form W-8 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to the Representatives on the
applicable Option Closing Date of such documents as they may reasonably request
with respect to the good standing of the Company, a certificate to the effect
set forth in Section 9(c) dated the applicable Option Closing Date, an opinion
of Cleary, Gottlieb, Steen & Hamilton to the effect set forth in paragraph 3 of
Appendix A and an opinion of Wachtell, Lipton, Rosen & Katz to the effect set
forth in paragraph 5 of Appendix C.
SECTION 10. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
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international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, or (v) the declaration of a banking moratorium
by either federal or New York State authorities or the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Shares which any Underwriter
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such number of Shares
without the written consent of such Underwriter. If on the Closing Date any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the
aggregate number of Firm Shares with respect to which such default occurs
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is more than one-tenth of the aggregate number of Firm Shares to be purchased by
all Underwriters and arrangements satisfactory to you, the Company and the H&F
Selling Stockholders for purchase of such Firm Shares are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter, the Company or the Selling Stockholders.
In any such case which does not result in termination of this Agreement, either
you or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such date, the non-defaulting Underwriters shall have the option to
(i) terminate their obligation hereunder to purchase such Additional Shares or
(ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase on such date
in the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
SECTION 11. Agreements of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, agrees with you and the Company, whether
or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, to pay or cause to be paid all reasonable expenses
incident to the performance of the Selling Stockholders' obligations under this
Agreement, including: (i) the fees, disbursements and expenses of any Selling
Stockholder's counsel in connection with the registration and delivery of the
Shares under the Act, (ii) all costs and expenses related to the transfer and
delivery of the Firm Shares to the Underwriters, including any transfer or other
taxes payable thereon, and (iii) all other costs and expenses incident to the
performance of the obligations of the Selling Stockholders hereunder for which
provision is not otherwise made in this Section. The provisions of this Section
shall not supersede or otherwise affect any separate agreement that the Company
and any Selling Stockholders may have for allocation of such expenses among
themselves.
SECTION 12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to Young &
Rubicam Inc., 285 Madison Avenue, New York, New York 10017, Attention: General
Counsel, (ii) if to the Y&R Selling Stockholders, to Michael J.
31
<PAGE>
Dolan, Stephanie W. Abramson or Kevin Lavan, as Y&R Attorneys, c/o Young &
Rubicam Inc., 285 Madison Avenue, New York, New York 10017, (iii) if to the H&F
Selling Stockholders, to Philip U. Hammarskjold and Matthew R. Barger, as H&F
Attorneys, c/o H&F Investors III, Inc., One Maritime Plaza, San Francisco,
California 94111, (iv) if to BearTel, to Stephen M. Parish, Scott P. Scharfman,
and Davies B. Beller, as BearTel Attorneys, c/o Bear, Stearns & Co. Inc., 245
Park Ave., New York, New York 10167, and (v) if to any Underwriter or to you, to
you c/o Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, any Selling Stockholder or any person controlling such Selling
Stockholder, acceptance of the Shares and payment for them hereunder and
termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Selling Stockholders as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10 or breach of this Agreement
by any Underwriter), the Company, the H&F Selling Stockholders and BearTel agree
severally and not jointly, to reimburse the several Underwriters for all
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) incurred by them in proportion to the number of shares to be sold by
(i) the Y&R Selling Stockholders, (ii) the H&F Selling Stockholders and (iii)
BearTel, respectively. Notwithstanding any termination of this Agreement, the
Company shall be liable for all expenses which it has agreed to pay pursuant to
Section 5(h) hereof.
Each Y&R Selling Stockholder's liability for the breach of the
representations and warranties of such Y&R Selling Stockholder in or pursuant to
Section 7(a) is not limited under this Agreement. Notwithstanding the foregoing,
the aggregate liability of any Y&R Selling Stockholder for the breach of any
representations and warranties of such Y&R Selling Stockholder in or pursuant to
Sections 7(b), (c), (d), (e), (f), (g), (h), (i) and (j) shall be limited to
such Y&R
32
<PAGE>
Selling Stockholder's Selling Stockholder Proceeds. In the event that the
losses, claims, damages, liabilities or judgments relating to the breach by any
Y&R Selling Stockholder of any representations and warranties of such Y&R
Selling Stockholder in or pursuant to Sections 7(b), (c), (d), (e), (f), (g),
(h), (i) and (j) exceeds the Selling Stockholder Proceeds for such Y&R Selling
Stockholder, the Company agrees that it shall be wholly liable for such excess
amount. Solely with respect to each Y&R Selling Stockholder, the Company hereby
makes to each Underwriter the representations and warranties made by each such
Y&R Selling Stockholder in Sections 7(b), (c), (d), (e), (f), (g), (h), (i) and
(j), inclusive.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
33
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
YOUNG & RUBICAM INC.
By:
---------------------------------------
Name: Peter A. Georgescu
Title: Chief Executive Officer
and Chairman
THE Y&R SELLING
STOCKHOLDERS NAMED IN
SCHEDULE II HERETO,
ACTING SEVERALLY
By:
---------------------------------------
Attorney-in-fact
THE H&F SELLING
STOCKHOLDERS NAMED IN
SCHEDULE III(a) HERETO,
ACTING SEVERALLY
By:
---------------------------------------
Attorney-in-fact
BEARTEL CORP
By:
---------------------------------------
Attorney-in-fact
34
<PAGE>
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
ING BARING FURMAN SELZ LLC
SALOMON SMITH BARNEY INC.
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto
By BEAR, STEARNS & CO. INC.
By:
---------------------------------------
Name:
Title:
35
<PAGE>
SCHEDULE I
----------
- --------------------------------------------------------------------------------
Underwriters Number of Firm
Shares to be Purchased
- --------------------------------------------------------------------------------
Bear, Stearns & Co. Inc.
- --------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette Securities
Corporation
- --------------------------------------------------------------------------------
Goldman, Sachs & Co.
- --------------------------------------------------------------------------------
ING Baring Furman Selz LLC
- --------------------------------------------------------------------------------
Salomon Smith Barney Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total 10,000,000
- --------------------------------------------------------------------------------
1
<PAGE>
SCHEDULE II
------------
Y&R SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
Number of Firm
Number of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- -------------------------------------------------------------- ------------------ -----------------------
<S> <C> <C>
Aiello, Stephen 20,105 9,100
Albinus, Stig 16,140 16,140
Anastos, Patricia 2,000 0
Bara, Jean-Marc 35,588 0
Baum, Stephen 2,000 0
Bealle, Kimberly 10,000 0
Beijen, Karel 3,510 0
Bell, Ted 40,000 0
Bergerus-Hobinger, Leena 45,570 25,575
Bjorkman, Lincoln 15,615 15,615
Blocklin, June 29,520 29,520
Boender, Rene 12,078 3,600
Bohne, Bonnie 2,430 0
Boisrond, Etienne 33,750 0
Bosma, Tiemen 55,000 0
Brands, Heinz Georg 9,733 0
Branigan, Craig 28,000 0
Braun, Jurgen 71,970 0
Brite, Jane 40,000 0
Chiocchi, Roger 14,000 0
Chynsky, Ira 16,000 0
Claes, Michael 5,000 0
Cogman, Don 61,600 61,600
Coombs, Janet 19,327 0
Coronna, David 700 700
Costa, Jose Maria 15,000 0
Costa, Massimo 7,406 0
Cozens, Mike 5,220 5,220
Curran, Brian 15,651 15,651
Davis, Donald 19,080 0
De Bakker, Ferdinand 15,000 0
Dedeo, Joseph 201,258 0
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Number of Firm
Number of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- -------------------------------------------------------------- ------------------ -----------------------
<S> <C> <C>
Deutsch, Lawrence 1,400 1,400
Diamond, Shelley 10,875 10,875
DuBose, Pamela 20,000 0
Dukes, Terry 6,250 6,250
Elliot, Daryl 5,200 5,200
Exposito, Daisy 31,709 31,709
Fahey, Kevin 4,500 4,500
Farley, Charles 5,000 0
Farnell-Watson, Peter 20,355 0
Ford, Patrick 9,000 0
Ford, Richard 18,000 18,000
Frankel, Clark 26,088 0
Franz, Volker 1,000 1,000
Fredericks, Eric 39,000 0
Frederiksen, Peter 9,000 9,000
Gamza, Leon 10,000 0
Gervasi, Enrico 9,000 0
Gomezese, Oscar 2,000 2,000
Gonzales, Eduardo 40,000 0
Green, William 10,000 0
Greene, David 10,000 0
Gutierrez, Victor 6,000 0
Halley-Wright, Andrew 37,125 27,060
Hansen, Tom 750 750
Harleman, Peter 16,000 0
Hawrysh, Fred 17,400 17,400
Himpe, Stefaan 5,000 0
Hood, James 35,000 0
Horn, Roseanne 10,350 0
Horovitz, Peter 6,957 6,957
Hosp, Richard 20,000 0
Hoyt, Eric Garrison 11,900 11,900
Hughes, Alex 34,785 34,785
Hunt, Jeff 15,279 15,279
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Number of Firm
Number of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- -------------------------------------------------------------- ------------------ -----------------------
<S> <C> <C>
Ibba, Gigliola 15,000 0
Igiel, Robert 52,175 52,175
Jack, Barbara 89,370 0
Jebsen, Pal Marius 28,000 15,000
Johnston, William 6,000 0
Kaplove, James 8,000 8,000
Kenny, Mary Ellen 6,522 0
Kissmann, Edna 13,000 0
Klein, Arthur 30,000 0
Koh, Jackie 15,500 15,500
Kowalewska, Nina 12,000 12,000
Krakowsky, Philippe 6,000 0
Krauss, Ingo 150,000 0
Kugelman, Stephanie 72,794 0
Kurz, Mitchell 356,000 0
Kushner, Jay 11,000 5,000
La Rock, Marta 10,000 10,000
Laing, Timothy 4,135 4,135
Leo, Denise 675 675
Loes, Renato Arantes 39,135 39,135
Lombardi, Marco 20,000 0
Machtiger, Bennett 7,000 0
Mackinnon, Duncan 5,000 5,000
Maltese, John 16,983 0
Manson, Anthony 16,305 0
Matthies, Helmut 125,000 0
Maurice, Martin 15,000 0
McDuffey, Robert 12,000 12,000
McGarry Jr., John 309,706 0
McKenna, Steven 92,000 50,000
McLean, Gordon 11,955 11,955
McQueeney, Thomas 34,765 0
Meerstadt, Bert 8,000 0
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Number of Firm
Number of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- -------------------------------------------------------------- ------------------ -----------------------
<S> <C> <C>
Melzer, William 73,300 32,911
Meskill-Spencer, Diane 22,767 0
Middleton, Craig 31,467 0
Minear, David 12,000 0
Montero, Fernan 282,000 0
Mootz, Frans 18,792 0
Morris, John 12,432 12,432
Nelson, Bruce 6,500 0
Newton Jr., Charles 7,560 0
Newton, Keith 26,250 0
Nicholson, Lori 11,379 0
O' Malley, James 13,560 13,560
Oroho, Steve 64,988 0
O' Rourke, Raymond 10,000 0
Owen, Stewart 20,000 0
Parry, Vincent 10,000 10,000
Pastrick, Robert S. 17,220 3,480
Perez, Manuel 32,000 0
Perez, Ricardo 49,575 49,575
Perlmutter, Diane 7,500 0
Peters, John 28,710 28,710
Phillips, Graham 4,960 0
Pollak, Tim 264,000 0
Porter, Michael 15,610 15,610
Power, William 50,000 0
Pratt, Tom 10,000 10,000
Procter, Brian 6,450 0
Puphal, Joerg 32,000 0
Putnam, John E. 9,173 9,173
Quadflieg, Matthias 5,475 0
Rancourt, Serge 40,000 9,810
Raviv, Sheila 15,000 0
Reeser, Courtney 12,522 12,522
Rentschler, Peter 6,087 6,087
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Number of Firm
Number of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- -------------------------------------------------------------- ------------------ -----------------------
<S> <C> <C>
Rindlisbacher, Jorg 8,000 0
Rodriguez, Jorge 1,755 0
Rodway, Edward 6,450 0
Rosenthal, Ilene 10,000 0
Ross, John 5,000 5,000
Rothstein, Seith 33,915 0
Rousset, Alain 55,352 0
Samet, Michael 38,568 0
Sanders, John 20,000 20,000
Savage, Chris 13,050 0
Schetlick, Matthew 7,000 0
Schou, Nico 13,755 0
Schug, Angelika 20,000 20,000
Scielzo, James 23,733 23,733
Scruggs, John 26,085 26,085
Seyferth, Steve 10,000 10,000
Sharp, Keith 17,742 2,088
Shaw, Jessie 3,500 3,500
Sheldon, Alan 250,000 0
Sinreich, Richard 11,000 0
Sive, Robert 12,590 1,280
Slone, Peter 10,650 10,650
Smith, Tim 6,000 0
Srere, Linda 15,000 15,000
Stadeler, Christoph 23,000 0
Stefanski, Stanley 80,321 0
Steigrad, Peter 1,000 1,000
Stern Marrone, Debra 8,000 0
Stout, Kathryn 7,000 7,000
Thalen, Lars 14,000 0
Timon, Clay 36,511 0
Traub, Wayne 5,500 0
Vijn, Pieter 10,000 0
Waldman, Marvin 24,100 0
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Number of Firm
Number of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- -------------------------------------------------------------- ------------------ -----------------------
<S> <C> <C>
Walsh, Mary 2,000 2,000
Webre, Charles 13,914 13,914
Widmer, Bruno 65,000 0
Williams, Donald 18,000 0
Williams, James 22,500 21,500
Yagoda, Kenneth 6,000 0
Zeigler, Mike 23,185 23,185
TOTAL 5,180,647 1,047,166
</TABLE>
7
<PAGE>
SCHEDULE III
------------
(a) H&F SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
Number of Firm
Name Shares Being Sold
- -------------------------------------------------------------- -----------------------------
<S> <C>
Hellman & Friedman Capital Partners III, L.P. 4,300,347
H&F Orchard Partners III, L.P. 313,185
H&F International Partners III, L.P. 93,816
American Media Management, Inc. 21,049
H. Irving Grousbeck 42,096
-------------------------
Total 4,770,493
- ------------------------------------------------------------------------------------------
(b)
BearTel Corp. 48,860
</TABLE>
8
<PAGE>
SCHEDULE IV
-----------
OPTION SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
Number of Additional
Shares Subject to
Name Additional Share Option
- -------------------------------------------------------------- -------------------------------
<S> <C>
Hellman & Friedman Capital Partners III, L.P.
H&F Orchard Partners III, L.P. H&F International Partners III, L.P.
American Media Management, Inc.
H. Irving Grousbeck
BearTel Corp.
---------------------
Total Shares Subject to Additional Share Option: 1,500,000
</TABLE>
9
<PAGE>
SCHEDULE V
----------
LOCK-UPS**
- -----
**To come.
10
<PAGE>
Appendix A
----------
FORM OF OPINION OF CLEARY, GOTTLIEB, STEEN & HAMILTON:
1. The Company is validly existing as a corporation in good standing under
the laws of the State of Delaware.
2. The Company has corporate power to own its properties and conduct its
business as described in the Prospectus, and the Company has corporate power to
enter into the Underwriting Agreement and to perform its obligations thereunder.
3. The Shares have been duly authorized by all necessary corporate action
of the Company, have been validly issued by the Company and are fully paid and
nonassessable; and the holders of outstanding shares of capital stock of the
Company are not entitled to any preemptive rights to subscribe for the Shares
under the Amended and Restated Certificate of Incorporation or the Amended and
Restated By-Laws of the Company, or the General Corporation Law of the State of
Delaware.
4. The statements set forth under the heading "Description of Capital Stock
- -- Common Stock" in the Prospectus, insofar as such statements purport to
summarize certain provisions of the Securities and the Amended and Restated
Certificate of Incorporation of the Company, provide a fair summary of such
provisions, and the statements made in the Prospectus under the heading "Certain
U.S. Tax Consequences to Non-United States Holders", insofar as such statements
purport to summarize certain federal income tax laws of the United States,
constitute a fair summary of the principal U.S. federal income tax consequences
of an investment in the Securities by a non-U.S. holder (as defined in the
Prospectus).
5. The execution and delivery of the Underwriting Agreement have been duly
authorized by all necessary corporate action of the Company, and the
Underwriting Agreement has been duly executed and delivered by the Company.
6. The execution and delivery of the Underwriting Agreement and the
performance by the Company of its obligations in the Underwriting Agreement (a)
do not require any consent, approval, authorization, registration or
qualification of or with any governmental authority of the United States of
America or the State of New York or pursuant to the Delaware General Corporation
Law, except such as have been obtained or effected under the Securities Act and
the Securities Exchange Act of 1934, as amended (but such counsel expresses no
opinion as to any consent, approval, authorization, registration or
qualification that may be required under state securities or Blue Sky laws), and
(b) do not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any of the agreements of the Company filed
(including by incorporation by reference)
11
<PAGE>
as exhibits to the Registration Statement, the Amended and Restated Certificate
of Incorporation of the Company or the Amended and Restated By-laws of the
Company.
7. The Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
8. The Registration Statement (except the financial statements and
schedules and other financial and statistical data included therein, as to which
such counsel expresses no view), at the time it became effective, and the
Prospectus (except as aforesaid), as of the date thereof, appeared on their face
to be appropriately responsive in all material respects to the requirements of
the Securities Act and the rules and regulations thereunder other than
Regulation S-T under the Securities Act. In addition, such counsel does not know
of any contracts or other documents of a character required to be filed as
exhibits to the Registration Statement or required to be described in the
Registration Statement or the Prospectus that are not filed or described as
required.
9. No information has come to such counsel's attention that causes such
counsel to believe that the Registration Statement (except the financial
statements and schedules and other financial and statistical data included
therein, as to which such counsel expresses no view), at the time it became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading.
10. No information has come to such counsel's attention that causes such
counsel to believe that the Prospectus (except the financial statements and
schedules and other financial and statistical data included therein, as to which
such counsel expresses no view), as of the date thereof or as of the Closing
Date, contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
11. Such counsel shall confirm that (based solely upon a telephonic
confirmation from a representative of the Commission) the Registration Statement
is effective under the Securities Act and, to the best of such counsel's
knowledge, no stop order with respect thereto has been issued, and no proceeding
for that purpose has been instituted or threatened by the Commission.
13. The Custody Agreement executed by or on behalf of each Y&R Selling
Stockholder is a valid, binding and enforceable agreement of such Y&R Selling
Stockholder.
12
<PAGE>
14. The Power of Attorney executed by each Y&R Selling Stockholder is a
valid, binding and enforceable instrument of such Y&R Selling Stockholder
15. Upon delivery to the Underwriters in the State of New York of
certificates evidencing the Y&R Selling Stockholder Shares indorsed to such
Underwriters or in blank and payment therefore by the Underwriters pursuant to
the Underwriting Agreement, the Underwriters will own the Y&R Selling
Stockholder Shares free of any adverse claim (within the meaning of the Uniform
Commercial Code as in effect in the State of New York (the "UCC")). In rendering
the foregoing opinion such counsel may assume that (i) each Underwriter takes
delivery of the Y&R Selling Stockholder Shares without notice of any adverse
claim (within the meaning of the UCC) and (ii) the signature on each indorsement
is genuine.
13
<PAGE>
Appendix B
----------
FORM OF OPINION OF GENERAL COUNSEL OR SENIOR VICE PRESIDENT, LEGAL COUNSEL
FOR THE COMPANY:
1. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware and has the
corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties.
2. YRLP has been duly organized, is validly existing and in good standing
as a limited partnership under the laws of the State of Delaware and has the
partnership power and authority to carry on its business as it is currently
conducted and to own, lease and operate its properties.
3. The Company is duly qualified to transact business and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect.
4. YRLP is duly qualified and is in good standing as a foreign partnership
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification,
except where the failure to be in good standing or to be so qualified would not
have a Material Adverse Effect.
5. All of the issued and outstanding shares of Common Stock of the Company,
including the Shares, have been duly authorized by all necessary corporate
action of the Company, have been validly issued by the Company and are fully
paid and nonassessable; and the holders of outstanding shares of capital stock
of the Company are not entitled to any preemptive rights to subscribe for the
Shares under the Amended and Restated Certificate of Incorporation, the Amended
and Restated By-Laws of the Company, the General Corporation Law of the State of
Delaware or any contracts to which the Company is a party.
6. All of the outstanding partnership interests in YRLP have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature.
7. The execution and delivery of the Underwriting Agreement have been duly
authorized by all necessary corporate action of the Company, and the
Underwriting Agreement has been duly executed and delivered by the Company.
14
<PAGE>
8. The authorized capital stock of the Company conforms as to legal matters
to the description thereof contained in the Prospectus.
9. The statements set forth under the heading "Description of Capital
Stock" and "Shares Eligible for Future Sale" and in the [fifth, sixth, eighth
and fourteenth paragraphs and the first sentence of the seventh paragraph under
the heading "Underwriting"] in the Prospectus and Items 14 and 15 of Part II of
the Registration Statement, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, fairly
summarize the matters, documents or proceedings referred to therein.
10. The Company is not in violation of its Amended and Restated Certificate
of Incorporation or Amended and Restated By-laws, YRLP is not in violation of
its partnership agreement or other organizational documents, and, to such
counsel's knowledge, neither the Company nor YRLP is in default in the
performance of any obligation, agreement, covenant or condition contained in any
of the agreements of the Company or YRLP filed as exhibits to the Registration
Statement except for defaults which would not have a Material Adverse Effect.
11. The execution and delivery by the Company of the Underwriting Agreement
and the performance by the Company of its obligations therein (a) do not require
any consent, approval, authorization, registration or qualification of or with
any governmental authority of the United States or the State of New York, except
such as have been obtained or effected under the Securities Act and the
Securities Exchange Act of 1934, as amended (but such counsel expresses no
opinion as to any consent, approval, authorization, registration or
qualification that may be required under state securities or Blue Sky laws of
the United States or the securities laws of any non-U.S. jurisdiction), (b) do
not result in a breach or violation of any of the terms or provisions of, or a
default under (i) any of the agreements of the Company or YRLP filed (including
by incorporation by reference) as exhibits to the Registration Statement, (ii)
the Amended and Restated Certificate of Incorporation or the Amended and
Restated By-laws of the Company, (iii) the partnership agreement or other
organizational documents of YRLP or (iv) any judgment, decree or order
applicable to the Company of any United States federal or New York State court
or other governmental authority, except (in the case of (i) and (iv)) for such
breaches or violations as would not result in a Material Adverse Effect, and (c)
do not result in the suspension, termination or revocation of any Authorization
of the Company or YRLP or any other impairment of the rights of the holder of
any such Authorization, except as would not result in a Material Adverse Effect.
12. To such counsel's knowledge after due inquiry, there are no legal or
governmental proceedings pending or threatened to which the Company or YRLP is a
party or to which any of the properties of the Company or YRLP is subject that
are required to be described in the Registration Statement or the Prospectus
that are not so described, and there
15
<PAGE>
are no contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required.
13. To such counsel's knowledge, neither the Company nor any of its
subsidiaries has violated any Environmental Law, any provisions of the Employee
Retirement Income Security Act of 1974, as amended, or any provisions of the
Foreign Corrupt Practices Act, or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
14. The Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
15. To such counsel's knowledge, except as described in the Prospectus,
there are no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
16. Each of the Company and YRLP has such Authorizations of, and has made
all filings with and notices to, all United States federal and New York State
govern mental or regulatory authorities and self-regulatory organizations and
all courts and other tribunals, including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its busi ness, except where the
failure to have any such Authorization or to make any such filing or notice
would not, in the aggregate, have a Material Adverse Effect; each such
Authorization is valid and in full force and effect and each of the Company and
YRLP is in compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company; in each case except as would
not have a Material Adverse Effect.
17. The Registration Statement (except the financial statements and
schedules and other financial and statistical data included therein, as to which
such counsel expresses no view), at the time it became effective, and the
Prospectus (except as aforesaid), as of the date thereof, appeared on their face
to be appropriately responsive in all material respects to the requirements of
the Securities Act and the rules and regulations thereunder other than
Regulation S-T under the Securities Act. In addition, I do not know of any
16
<PAGE>
statutes, regulations, contracts or other documents of a character required to
be filed as exhibits to the Registration Statement or required to be described
in the Registration Statement or the Prospectus that are not filed or described
as required.
18. No information has come to my attention that causes me to believe that
(i) the Registration Statement (except the financial statements and schedules
and other financial and statistical data included therein, as to which I express
no view) at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or (ii) the
Prospectus (except the financial statements and schedules and other financial
and statistical data included therein, as to which I express no view), as of the
date thereof or as of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
17
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Appendix C
----------
FORM OF OPINION OF WACHTELL, LIPTON, ROSEN & KATZ:
1. Each of the H&F Selling Stockholders is the lawful owner of the Shares
to be sold by such Selling Stockholder pursuant to the Underwriting Agreement
and owns such Shares, free of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever other than pursuant to the
Custody Agreement, the Power of Attorney, the Underwriting Agreement and other
than any such restriction on transfer, lien, encumbrance, equity or claim
created by an Underwriter or resulting from any actions taken by an Underwriter.
2. Each of the H&F Selling Stockholders has full legal right, power and
authority, and all authorization and approval required by law, to enter into the
Underwriting Agreement and the Custody Agreement and the Power of Attorney of
such Selling Stockholder and to sell, assign, transfer and deliver the Shares to
be sold by such Selling Stockholder in the manner provided herein and therein.
3. The Custody Agreement of each of the H&F Selling Stockholders been duly
authorized, executed and delivered by such Selling Stockholder and is a valid
and binding agreement of such Selling Stockholder, enforceable in accordance
with its terms.
4. The Power of Attorney of each of the H&F Selling Stockholders has been
duly authorized, executed and delivered by such Selling Stockholder and is a
valid and binding instrument of such Selling Stockholder, enforceable in
accordance with its terms, and, pursuant to such Power of Attorney, such Selling
Stockholder has, among other things, authorized the Attorneys, or any one of
them, to execute and deliver on such Selling Stockholder's behalf this Agreement
and any other document they, or any one of them, may deem necessary or desirable
in connection with the transactions contemplated hereby and thereby and to
deliver the Shares to be sold by such Selling Stockholder pursuant to this
Agreement.
5. Upon sale and delivery of and payment for the Shares to be sold by each
of the H&F Selling Stockholders pursuant to the Underwriting Agreement, and
assuming the Underwriters purchase such Shares for value and in good faith
without notice of any adverse claim, the Underwriters will own such Shares, free
and clear of all restrictions on transfer, liens, encumbrances, security
interests, equities and claims whatsoever other than any such restriction on
transfer, lien, encumbrance, equity or claim created by an Underwriter or
resulting from any actions taken by an Underwriter.
6. Assuming that the representations and warranties of the Company in
Section 6 of the Underwriting Agreement are true and accurate in all material
respects, the execution and delivery of the Underwriting Agreement and the
Custody Agreement and
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<PAGE>
Power of Attorney of each of the H&F Selling Stockholders by such Selling
Stockholder, the compliance by such Selling Stockholder with all the provisions
hereof and thereof and the performance by such Selling Stockholder of its
obligations thereunder will not require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky laws of the
various states), conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the organizational documents of such Selling
Stockholder, if such Selling Stockholder is not an individual, or any indenture,
loan agreement, mortgage, lease or other agreement or instrument to which such
Selling Stockholder is a party or by which any property of such Selling
Stockholder is bound or violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over such Selling Stockholder or any property of such
Selling Stockholder.
19
<PAGE>
Appendix D
----------
FORM OF OPINION OF BEARTEL COUNSEL:
1. BearTel Corp. is the lawful owner of the Shares to be sold by such
Selling Stockholder pursuant to the Underwriting Agreement and owns such Shares,
free of all restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever other than pursuant to the Custody Agreement, the
Power of Attorney, the Underwriting Agreement and other than any such
restriction on transfer, lien, encumbrance, equity or claim created by an
Underwriter or resulting from any actions taken by an Underwriter.
2. BearTel Corp. has full corporate power and authority, and all
authorization and approval required by law, to enter into the Underwriting
Agreement and the Custody Agreement and the Power of Attorney of such Selling
Stockholder and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder in the manner provided herein and therein.
3. The Custody Agreement of BearTel Corp. has been duly authorized,
executed and delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with its terms.
4. The Power of Attorney of BearTel Corp. has been duly authorized,
executed and delivered by such Selling Stockholder and is a valid and binding
instrument of such Selling Stockholder, enforceable in accordance with its
terms, and, pursuant to such Power of Attorney, such Selling Stockholder has,
among other things, authorized the Attorneys, or any one of them, to execute and
deliver on such Selling Stockholder's behalf this Agreement and any other
document they, or any one of them, may deem necessary or desirable in connection
with the transactions contemplated hereby and thereby and to deliver the Shares
to be sold by such Selling Stockholder pursuant to this Agreement.
5. Upon sale and delivery of and payment for the Shares to be sold by
BearTel Corp. pursuant to the Underwriting Agreement, in the manner contemplated
thereby and by the Power of Attorney and Custody Agreement of BearTel Corp., and
assuming the Underwriters purchase such Shares for value and in good faith
without notice of any adverse claim, the Underwriters will own such Shares, free
and clear of all restrictions on transfer, liens, encumbrances, security
interests, equities and claims whatsoever other than any such restriction on
transfer, lien, encumbrance, equity or claim created by an Underwriter or
resulting from any actions taken by an Underwriter.
6. Assuming that the representations and warranties of the Company in
Section 6 of the Underwriting Agreement are true and accurate in all material
respects, effectiveness
20
<PAGE>
of the Registration Statement and closing of the Offering as contemplated by the
Underwriting Agreement and the Prospectus, (a) no authorization, consent,
approval or other action by, and no notice to or filing with, any U.S. federal
or New York State court, governmental body or regulatory agency is required for
the due execution, delivery and performance by BearTel Corp. of the Underwriting
Agreement, the Power of Attorney and the Custody Agreement (except such as may
be required under the securities or Blue Sky laws of the State of New York), and
(b) the execution, delivery, and performance by BearTel Corp. of the
Underwriting Agreement, the Power of Attorney and the Custody Agreement do not
and will not (i) breach any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which it is a party or by which
any of its properties is bound or (ii) violate or conflict with any provision of
any law or any rule, regulation, judgment, order or decree of any court or any
governmental body or regulatory agency having jurisdiction over BearTel Corp. or
any of its properties.
21
[Letterhead of Cleary, Gottlieb, Steen & Hamilton]
Writer's Direct Dial: (212) 225-2270
November 23, 1998
Young & Rubicam Inc.
285 Madison Avenue
New York, New York 10017-6486
Re: Young & Rubicam Inc.
Registration Statement on Form S-1 (No. 333-66883)
--------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Young & Rubicam Inc., a Delaware
corporation (the "Company"), in connection with the registration statement on
Form S-1 (No. 333-66883) (the "Registration Statement") filed with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Act"), for the registration of 10,452,834
outstanding shares (the "Issued Shares") of Common Stock, par value $.01 per
share, of the Company ("Common Stock") and 1,047,166 shares (the "Option
Shares") of Common Stock issuable upon the exercise of options under the Young &
Rubicam Holdings Inc. Management Stock Option Plan (the "Plan"), and the related
preferred share purchase rights (the "Rights") issued pursuant to the Rights
Agreement between the Company and The Bank of New York, as Rights Agent (the
"Rights Agent").
We have participated in the preparation of the Registration Statement and
have reviewed the originals or copies certified or otherwise identified to our
satisfaction of all such corporate records of the Company and such other
instruments and other certificates of public officials, officers and
representatives of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below.
In rendering the opinions expressed below, we have assumed the authenticity
of all documents submitted to us as originals and the conformity to the
originals of all documents submitted to us as copies. In addition, we have
assumed and have not verified the accuracy as to factual matters of each
document we have reviewed.
<PAGE>
Young & Rubicam Inc., p.2
Based on the foregoing, and subject to the further qualification set forth
below, it is our opinion that:
1. The Issued Shares have been duly authorized by all necessary corporate
action of the Company, have been validly issued by the Company and are fully
paid and nonassessable.
2. The Option Shares have been duly authorized by all necessary corporate
action of the Company and, when issued in accordance with the terms of the Plan,
at prices in excess of the par value thereof, will be validly issued, fully paid
and nonassessable.
3. Assuming the due authorization, execution and delivery of the Rights
Agreement by the Rights Agent, the Rights associated with the Issued Shares have
been validly issued and, upon issuance of the Option Shares in accordance with
the terms of the Plan, at prices in excess of the par value thereof, the Rights
associated with the Option Shares will be validly issued.
The foregoing opinions are limited to the General Corporation Law of the
State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the prospectus included in the Registration Statement. In
giving such consent, we do not thereby admit that we are "experts" within the
meaning of the Act or the rules and regulations of the Commission issued
thereunder with respect to any part of the Registration Statement, including
this exhibit.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By /s/ Peter H. Darrow
-------------------------------------
Peter H. Darrow, a Partner
