UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Young & Rubicam Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
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(Title of Class of Securities)
987425105
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(CUSIP Number)
Mark T. McEnroe, c/o Young & Rubicam Inc.,
285 Madison Avenue, New York, New York 10017, 212-210-3427
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 21, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that Section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
1. NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael J. Dolan
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
00
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER 0
OF ------------------------------------------------------
SHARES BENEFICIALLY
OWNED BY EACH REPORTING
PERSON
WITH
8. SHARED VOTING POWER
1,236,299
------------------------------------------------------
9. SOLE DISPOSITIVE POWER
332,699
------------------------------------------------------
10. SHARED DISPOSITIVE POWER
7,545,000
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,113,998
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
See Item 6 below
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.7%
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14. TYPE OF REPORTING PERSON
IN
<PAGE>
1. NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stephanie W. Abramson
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
00
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER 0
OF ------------------------------------------------------
SHARES BENEFICIALLY
OWNED
BY EACH REPORTING PERSON
WITH
8. SHARED VOTING POWER
1,236,299
------------------------------------------------------
9. SOLE DISPOSITIVE POWER
265,765
------------------------------------------------------
10. SHARED DISPOSITIVE POWER
7,642,830
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,144,894
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
See Item 6 below
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.7%
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14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE>
1. NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mark T. McEnroe
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
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4. SOURCE OF FUNDS
00
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER 0
OF ------------------------------------------------------
SHARES BENEFICIALLY
OWNED BY EACH REPORTING
PERSON
WITH
8. SHARED VOTING POWER
0
------------------------------------------------------
9. SOLE DISPOSITIVE POWER
0
------------------------------------------------------
10. SHARED DISPOSITIVE POWER
7,511,025
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,511,025
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
See Item 6 below
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.5%
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14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 1 (this "Amendment") amends and supplements the Schedule
13D filed on May 7, 1999 (the "Original Schedule 13D"), by Michael J. Dolan,
Stephanie W. Abramson and Mark T. McEnroe with respect to the common stock, par
value $0.01 per share ("Common Stock"), of Young & Rubicam Inc., a Delaware
corporation (the "Company"). All capitalized terms used in this Amendment and
not otherwise defined herein have the meanings ascribed to them in the Original
Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Original Schedule 13D is hereby amended to read in its
entirety as follows:
This statement on Schedule 13D relates to a power of attorney arrangement,
which arrangement is described in Item 4 of this Amendment. Because the
acquisition of beneficial ownership by the Reporting Persons reported herein did
not involve a purchase of securities, no monetary, or other type of,
consideration was paid or received by any Reporting Person in connection with
this arrangement. As described more fully in Items 4 and 5(d) below, each of the
director, officer, employee and former employee stockholders of the Company
listed on Schedule 1 hereto (the "Y&R Selling Stockholders"), and each of the
stockholders of the Company who received shares of Common Stock in connection
with the Company's acquisition of KnowledgeBase Marketing, Inc. ("KBM") listed
on Schedule 2 hereto (the "KBM Stockholders"), has the right to receive the
proceeds from the sale of the aggregate number of shares of Common Stock listed
next to each such Y&R Selling Stockholder's name on Schedule 1 and Schedule 3 or
each such KBM Stockholder's name on Schedule 2.
Item 4. Purpose of Transaction.
Item 4 of the Original Schedule 13D is hereby amended to read in its
entirety as follows:
The Company has filed a Registration Statement on Form S-1 (File No.
333-77235), which has been declared effective, and has filed a final prospectus
(the "Final Prospectus") dated May 24, 1999, pursuant to Rule 424(b) under the
Securities Act of 1933, as amended. The Final Prospectus disclosed that the Y&R
Selling Stockholders and those KBM Stockholders (the "KBM Selling Stockholders")
for whom a number of shares of Common Stock is listed next to each such KBM
Stockholder's name on Schedule 2 hereto under the column "Shares of Common Stock
Being Sold in the Secondary Public Offering", together with certain other
stockholders of the Company, are offering for sale an aggregate of 15,000,000
shares of Common Stock of the Company in a secondary public offering (the
"Secondary Public Offering") of Common Stock of the Company. The Y&R Selling
Stockholders are offering for sale the respective numbers of shares of Common
Stock listed next to each such Y&R Selling Stockholder's name on Schedule 1
hereto, and the KBM Selling Stockholders are offering for sale the respective
numbers of shares of Common Stock listed next to each such KBM Selling
Stockholder's name on Schedule 2 hereto under the column "Shares of Common Stock
Being Sold in the Secondary Public Offering". Of the aggregate number of shares
of Common Stock of the Company being sold in the Secondary Public Offering,
12,000,000 shares are being offered for sale in the United States and Canada
through certain underwriters (the "U.S. Underwriters") represented by Bear,
Stearns & Co. Inc., Donaldson, Lufkin & Jenrette Securities Corporation,
Goldman, Sachs & Co., ING Baring Furman Selz LLC, Morgan Stanley & Co.
Incorporated and Salomon Smith Barney Inc. (the "U.S. Representatives"), and
3,000,000 shares of Common Stock of the Company are being offered for sale in a
concurrent international offering outside the United States and Canada through
certain international managers (the "International Managers", and together with
the U.S. Underwriters, the "Underwriters") represented by Bear, Stearns
International Limited, Cazenove & Co., Donaldson, Lufkin & Jenrette
International, Goldman Sachs International, ING Barings Ltd. as agent for ING
Bank N.V., London Branch, Morgan Stanley & Co. International Limited and Salomon
Brothers International Limited (the "International Representatives", and
together with the U.S. Representatives, the "Representatives"). In addition,
certain Y&R Selling Stockholders named in Schedule 3 hereto, together with
certain other stockholders of the Company, have granted the U.S. Underwriters an
option to purchase an aggregate of up to 2,250,000 additional shares of Common
Stock, solely to cover over-allotments.
The Reporting Persons have obtained from each Y&R Selling Stockholder a
separate Selling Stockholders' Irrevocable Power of Attorney, Spousal Consent
and Payment Instructions (each a "Y&R Power of Attorney", and collectively, the
"Y&R Powers of Attorney"), a form of which was attached to the Original Schedule
13D as Exhibit 2 thereto and is incorporated by reference herein, and have
obtained from each KBM Selling Stockholder a separate Selling Stockholders'
Irrevocable Power of Attorney, Spousal Consent and Payment Instructions (each a
"KBM Power of Attorney", collectively the "KBM Powers of Attorney" and,
collectively with the Y&R Powers of Attorney, the "Powers of Attorney"), in
substantially the form attached to the Original Schedule 13D as Exhibit 2
thereto, which is incorporated by reference herein. Pursuant to the Powers of
Attorney, each Selling Stockholder has irrevocably constituted and appointed the
Reporting Persons, each with full power and authority to act alone and with full
power of substitution, as his or her attorney-in-fact with respect to all
matters arising in connection with the Secondary Public Offering, including the
power and the authority to: (i) sell, assign, transfer and deliver to the
Underwriters up to the aggregate number of shares of Common Stock listed next to
each Selling Stockholder's name on Schedule 1 hereto and Schedule 3 hereto, in
the case of the Y&R Selling Stockholders, or listed on Schedule 2 hereto under
the column "Shares of Common Stock Being Sold in the Secondary Public Offering",
in the case of the KBM Selling Stockholders, in each case at a purchase price
per share to be agreed with the Underwriters, (ii) determine the aggregate
number of shares of Common Stock to be sold by each Selling Stockholder to the
Underwriters, which number may not be greater but may be fewer than the
aggregate numbers listed next to each Selling Stockholder's name on Schedule 1
hereto and Schedule 3 hereto, in the case of the Y&R Selling Stockholders, or
listed on Schedule 2 hereto under the column "Shares of Common Stock Being Sold
in the Secondary Public Offering", in the case of the KBM Selling Stockholders,
and (iii) execute, deliver and perform an underwriting agreement.
The Y&R Powers of Attorney were executed and delivered from time to time on
and after April 27, 1999. The KBM Powers of Attorney were executed and delivered
on May 21, 1999. Stephanie W. Abramson is a Y&R Selling Stockholder who has
granted a Power of Attorney with respect to 45,400 shares of Common Stock.
Michael J. Dolan is a Y&R Selling Stockholder who has granted a Power of
Attorney with respect to 41,926 shares of Common Stock. As a result of the
arrangement created by the Powers of Attorney, the Reporting Persons may be
deemed to be a group within the meaning of Rule 13d-5 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
On May 24, 1999, Mark T. McEnroe, a Reporting Person, solely in his
capacity as attorney-in-fact for the Y&R Selling Stockholders, and Michael J.
Dolan, solely in his capacity as attorney-in-fact for the KBM Selling
Stockholders, executed and delivered the Underwriting Agreement (the
"Underwriting Agreement") dated May 24, 1999, among the Company, the Y&R Selling
Stockholders, acting severally, the KBM Selling Stockholders, acting severally,
the other selling stockholders of the Company named therein, the U.S.
Representatives of the several U.S. Underwriters named therein, and the
International Representatives of the several International Managers named
therein. The following is a brief description of the Underwriting Agreement and
is qualified in its entirety by reference to the Underwriting Agreement, a copy
of which is filed as Exhibit 1 hereto and incorporated by reference herein.
Pursuant to the Underwriting Agreement, the Y&R Selling Stockholders have agreed
to sell to the Underwriters, acting through the Representatives, an aggregate of
6,858,528 shares of Common Stock (including 1,996,486 shares of Common Stock
issuable upon exercise of options held by the Y&R Selling Stockholders), and the
KBM Selling Stockholders have agreed to sell to the Underwriters, acting through
the Representatives, an aggregate of 641,472 shares of Common Stock, in each
case for resale pursuant to the Company's Registration Statement on Form S-1 and
the Final Prospectus, at a price of $37.25 per share, less an underwriting
discount of $1.2665 per share, resulting in proceeds to the Y&R Selling
Stockholders and the KBM Selling Stockholders of $35.9835 per share of Common
Stock. In addition, other selling stockholders of the company named in the
Underwriting Agreement and the Final Prospectus have agreed to sell an aggregate
of 7,500,000 shares of Common Stock to the Underwriters, acting through the
Representatives. Of the total of 6,858,528 shares of Common Stock to be sold by
the Y&R Selling Stockholders, each Y&R Selling Stockholder has agreed to sell
that number of shares of Common Stock set forth opposite the name of such Y&R
Selling Stockholder on Schedule 1 hereto. Of the total of 641,472 shares of
Common Stock to be sold by the KBM Selling Stockholders, each KBM Selling
Stockholder has agreed to sell that number of shares of Common Stock set forth
opposite the name of such KBM Selling Stockholder on Schedule 2 hereto under the
column "Shares of Common Stock Being Sold in the Secondary Public Offering". The
closing of the sale of the shares to the Underwriters is expected to occur on
May 28, 1999, and is subject to the satisfaction or waiver of certain conditions
set forth in the Underwriting Agreement. The Underwriting Agreement provides
that, in connection with the Secondary Public Offering, those Y&R Selling
Stockholders listed on Schedule 3 hereto have granted the U.S. Underwriters an
option to purchase an aggregate of up to an additional 949,660 shares of Common
Stock, in the respective amounts listed on Schedule 3 hereto, solely to cover
over-allotments in connection with the sale of shares of Common Stock. In
addition, the Underwriting Agreement provides that, in connection with the
Secondary Public Offering, certain other stockholders have granted the U.S.
Underwriters an option to purchase an aggregate of up to an additional 1,300,340
shares of Common Stock, solely to cover over-allotments in connection with the
sale of shares of Common Stock.
In addition to the KBM Powers of Attorney, Stephanie W. Abramson and
Michael J. Dolan have obtained from those KBM Stockholders for whom a number of
shares of Common Stock is listed next to each such KBM Stockholder's name on
Schedule 2 hereto under the column "Shares of Common Stock Subject to KBM Voting
Agreement" (the "KBM Voting Proxy Granters"), and with respect to the number of
shares of Common Stock listed under that column for each KBM Voting Proxy
Granter, a lock-up and voting agreement (each a "KBM Voting Agreement" and
collectively the "KBM Voting Agreements"). The following is a brief description
of the KBM Voting Agreements and is qualified in its entirety by reference to
the forms of KBM Voting Agreement which are filed as Exhibit 3 hereto and
incorporated by reference herein. Pursuant to the KBM Voting Agreements, each
KBM Voting Proxy Granter has granted to Peter A. Georgescu, Stephanie W.
Abramson, Thomas D. Bell, Jr., Michael J. Dolan and Edward H. Vick, and each of
them, acting as attorney and proxy of such KBM Voting Proxy Granter, the power
to attend and vote at all meetings of the stockholders of the Company, or to
execute written consents in lieu of voting with respect to, any and all shares
of the Common Stock standing in the name of the KBM Voting Proxy Granter
(excluding any shares held in escrow pursuant to the merger agreement under
which the Company acquired KBM), which shares as of May 21, 1999 are listed on
Schedule 2 hereto under the column "Shares of Common Stock Subject to KBM Voting
Agreement".
Except as described above, no Reporting Person has any present plans or
proposals which relate to or would result in any of the actions or events
described in paragraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Item 5 of the Original Schedule 13D is hereby amended to read in its
entirety as follows:
(a) Michael J. Dolan beneficially owns 9,113,998 shares of Common Stock,
constituting approximately 12.7% of the shares outstanding, consisting of
7,013,172 outstanding shares of Common Stock (including 45,000 shares of Common
Stock held in a deferral trust) and 2,100,826 shares of Common Stock which are
issuable pursuant to currently exercisable options. Stephanie W. Abramson
beneficially owns 9,144,894 shares of Common Stock, constituting approximately
12.7% of the shares outstanding, consisting of 7,122,323 outstanding shares of
Common Stock (including 142,830 shares of Common Stock held in a deferral trust)
and 2,022,571 shares of Common Stock which are issuable pursuant to currently
exercisable options. Mark T. McEnroe beneficially owns 7,511,025 outstanding
shares of Common Stock, constituting approximately 10.5% of the shares
outstanding, consisting of 5,514,539 outstanding shares of Common Stock
(including 11,025 shares of Common Stock held in a deferral trust) and 1,996,486
shares of Common Stock which are issuable pursuant to currently exercisable
options. The number of shares of Common Stock beneficially owned by each
Reporting Person and the percentage of outstanding shares represented thereby
have been computed in accordance with Rule 13d-3 under the Exchange Act.
(b) As an attorney-in fact under the Powers of Attorney, each Reporting
Person shares the power to dispose of 7,500,000 shares of Common Stock, which
includes 1,996,486 shares of Common Stock which are issuable pursuant to
currently exercisable options, with each of the other Reporting Persons. In
addition, Michael J. Dolan has the sole power to dispose of 332,699 shares of
Common Stock, which includes 104,340 shares of Common Stock which are issuable
pursuant to currently exercisable options, held in an individual capacity; and
Stephanie W. Abramson has the sole power to dispose of 265,765 shares of Common
Stock, which includes 26,085 shares of Common Stock which are issuable pursuant
to currently exercisable options, held in an individual capacity.
As the holder of a voting proxy under the KBM Voting Agreements, each of
Stephanie W. Abramson and Michael J. Dolan share the power to dispose of
1,236,299 shares of Common Stock with Peter A. Georgescu, Thomas D. Bell, Jr.
and Edward H. Vick. The business address for each of Peter A. Georgescu, Thomas
D. Bell, Jr. and Edward H. Vick is c/o Young & Rubicam Inc., 285 Madison Avenue,
New York, New York 10017. Peter A. Georgescu is the Chief Executive Officer and
Chairman of the Board of Directors of the Company. Thomas D. Bell, Jr. is
Executive Vice President of the Company, Chairman and Chief Executive Officer of
Young & Rubicam Advertising and a Director of the Company. Edward H. Vick is the
Chief Operating Officer and a Director of the Company. During the last five
years, none of Messrs. Georgescu, Bell or Vick has been convicted in any
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws. Each of Messrs. Georgescu, Bell and Vick is
a United States citizen.
(c) Except as described herein, the Reporting Persons have effected no
transactions in shares of Common Stock since the filing of the Original Schedule
13D.
(d) Each Y&R Selling Stockholder listed on Schedule 1, Schedule 3 and each
KBM Stockholder listed on Schedule 2 hereto has the right to receive the
proceeds from the sale of the aggregate number of shares of Common Stock listed
next to each such Y&R Selling Stockholder's name on Schedule 1 and Schedule 3 or
such KBM Selling Stockholder's name on Schedule 2.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understanding or Relationships with Respect to
Securities of the Issuer.
Item 6 of the Original Schedule 13D is hereby amended by inserting the
following paragraphs immediately after the final paragraph thereof.
As set forth in Item 4, on May 24, 1999, Mark T. McEnroe, a Reporting
Person, solely in his capacity as attorney-in-fact for the Y&R Selling
Stockholders, and Michael J. Dolan, solely in his capacity as attorney-in-fact
for the KBM Selling Stockholders, executed and delivered the Underwriting
Agreement. The Underwriting Agreement is briefly described in Item 4 and a copy
of the Underwriting Agreement is attached as Exhibit 1 hereto and incorporated
by reference herein.
As set forth in Item 4, Stephanie W. Abramson and Michael J. Dolan have
obtained from the KBM Voting Proxy Granters the KBM Voting Agreements with
respect to the number of shares of Common Stock listed on Schedule 2 hereto
under the column "Shares of Common Stock Subject to KBM Voting Agreement".
Pursuant to the KBM Voting Agreements, each KBM Voting Proxy Granter has granted
to Peter A. Georgescu, Stephanie W. Abramson, Thomas D. Bell, Jr., Michael J.
Dolan and Edward H. Vick, and each of them, acting as attorney and proxy of such
KBM Voting Proxy Granter, the power to attend and vote at all meetings of the
stockholders of the Company, or to execute written consents in lieu of voting
with respect to, any and all shares of the Common Stock standing in the name of
the KBM Voting Proxy Granter (excluding any shares held in escrow pursuant to
the merger agreement under which the Company acquired KBM), which shares as of
May 21, 1999 are listed on Schedule 2 hereto under the column "Shares of Common
Stock Subject to KBM Voting Agreement". In addition, pursuant to the KBM Voting
Agreements, each KBM Voting Proxy Granter has agreed 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 (including, without limitation, shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
which may be deemed to be beneficially owned by the KBM Voting Proxy Granter in
accordance with the rules and regulations of the Securities and Exchange
Commission) 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), for a period of 120 days after the date of
the Final Prospectus relating to the Secondary Public Offering. The Final
Prospectus discloses that the Company has agreed with the Underwriters to
enforce the Company's rights under the KBM Voting Agreements to prohibit
transfers of Common Stock by KBM Stockholders. Each Reporting Person disclaims
beneficial ownership of all shares of Common Stock which might be deemed to
arise solely by virtue of the KBM Voting Agreements.
<PAGE>
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Underwriting Agreement
Exhibit 2 Joint Filing Agreement (incorporated by reference
to the Original Schedule 13D filed with the
Securities and Exchange Commission on May 7, 1999)
Exhibit 3 Forms of KBM Voting Agreement
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 25, 1999
By: /s/ Mark T. McEnroe,
Attorney-in-Fact on behalf of
Michael J. Dolan
---------------------------------
Name: Mark T. McEnroe
Title: Attorney-in-Fact
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 25, 1999
By: /s/ Mark T. McEnroe,
Attorney-in-Fact on behalf of
Stephanie W. Abramson
---------------------------------
Name: Mark T. McEnroe
Title: Attorney-in-Fact
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 25, 1999
By: /s/ Mark T. McEnroe
--------------------
Name: Mark T. McEnroe
Title: Senior Vice President,
Young & Rubicam Inc.
<PAGE>
Schedule 1
Y&R Selling Stockholders
Maximum Number of
Shares of Common Stock
(including shares of
Common Stock issuable
upon the exercise of
Name of Y&R Selling Stockholder options)
- ------------------------------- --------
Stephanie Abramson 45,400
Stuart Agres 40,000
Stephen S. Aiello 20,672
Stig Albinus 10,000
Jean-Marc Bara 35,588
Bernard Barnett 1,050
Stephen Baum 3,120
Kimberly Bealle 20,000
Martin Beck 33,915
Urs Beer 25,000
Jed Beitler 11,225
Theodore A. Bell 60,000
Thomas D. Bell, Jr. 130,891
Tom Benelli 7,000
Thomas Blach 19,050
June Blocklin 10,225
Rene Boender 24,312
Bonnie Bohne 30,000
Etienne Boisrond 33,750
William Borrelle 1,841
Tiemen Bosma 40,000
Heinz-Georg Brands 22,712
Craig Branigan 46,446
Howard Breen 3,090
Jane Brite 99,810
T. J. Broadbent 15,500
David Butter 24,465
Ignacio Cabezon 10,720
Patricia Cafferata 16,000
Roger Chiocchi 14,191
Ira Chynsky 13,750
Michael Claes 7,500
Neil Clark 23,481
Don Cogman 61,601
Thomas Coleman 2,300
Janet Coombs 16,428
David Coronna 6,000
Jose Maria Costa 12,000
Massimo Costa 11,110
Charles Courtier 10,000
Michael Cozens 20,000
Dominique Damato 15,000
Donald H. Davis 19,080
Ferdinand de Bakker 60,000
Pierre de Roualle 25,000
Jerome Dean 18,000
Joseph E. Dedeo 134,172
Lawrence Deutsch 19,660
Shelley Diamond 13,314
Michael J. Dolan 41,926
Terry Dukes 6,150
Daryl Elliott 20,885
Daisy Exposito 26,953
Michael Faems 20,440
Charles P. Farley 2,100
Peter Farnell-Watson 14,494
John Fenton 6,500
Ian Ferguson Brown 2,250
Patrick Ford 6,055
Richard Ford 7,500
Clark J. Frankel 30,000
Volker Franz 16,385
Eric Fredericks 80,000
John Frew 6,030
Enrico Gervasi 12,033
Christopher Grabenstein 10,188
William Green 10,000
David E. Greene 5,000
Victor Gutierrez 27,145
Cynthia Hampton 10,000
Tom Hansen 2,000
Peter Harleman 16,000
Fred Hawrysh 5,000
Jan Hedquist 36,522
Per Heggenes 17,451
Stefan Himpe 3,000
Toby Hoare 55,000
Barry Hoffman 6,800
Charles Hollenkamp 3,000
James W. Hood 45,000
Penny Hooper 14,000
Roseanne Horn 12,675
Peter Horovitz 32,828
Richard Hosp 30,000
Eric Garrison Hoyt 7,670
Brian Hubbard 5,000
Jeff Hunt 17,014
Gigliola Ibba 21,000
Robert Igiel 52,170
Barbara Jack 178,560
Paal Marius Jebsen 11,085
William Johnston 19,185
James Kaplove 4,000
Mary Ellen Kenny 14,796
Kevin King 25,000
Edna Kissmann 21,500
Jackie Koh 27,535
Christopher Komisarjevsky 22,557
Satish Korde 96,727
Philippe Krakowsky 7,375
Ingo Krauss 162,000
Kurt Krauss 3,120
Stephanie Kugelman 57,011
Mitchell Kurz 356,000
Jay Kushner 11,994
Marta La Rock 15,000
Jean-Paul Lafaye 64,400
Timothy Laing 25,000
Robert Lallamant 19,566
Kevin Lavan 9,000
Mark Levine 15,219
Marco Lombardi 16,680
Bennett R. Machtiger 6,450
Duncan Mackinnon 7,000
John F. Maltese 13,575
Helmut Matthies 174,503
Martin Maurice 16,000
Robert M. McDuffey 10,506
John P. McGarry, Jr. 309,706
Austin McGhie 22,875
David McLean 31,853
Gordon McLean 11,955
Bert Meerstadt 14,440
William C. Melzer 73,300
Diane Meskill-Spencer 27,195
Craig Middleton 34,700
David Minear 40,000
Dominique Missoffe 15,474
Fernan Montero 158,000
Fred Moolhuijsen 15,000
Frans Mootz 26,622
John Morris 11,519
Janice Muniz 17,400
Bruce S. Nelson 28,250
Charles G. Newton, Jr. 3,600
Lori Nicholson 10,000
Lars Nordstrom 13,050
Laurie Null 10,850
Hans Ohman 13,050
Steve Oroho 59,010
Stewart Owen 33,054
Santiago Alonso Paniagua 38,715
Manuel Perez 40,704
Diane Perlmutter 8,035
Graham Phillips 40,000
Dan Plouffe 3,300
Tim Pollak 264,000
Michael Porter 2,500
William A. Power 42,000
Tom Pratt 6,385
Joerg Puphal 9,745
John E. Putnam 9,172
Matthias Quadflieg 1,484
Serge Rancourt 121,895
Sheila Raviv 20,000
Courtney Reeser 10,017
Ken Rietz 31,000
Jorg Rindlisbacher 19,500
Jorge Rodriguez 1,755
Robert Rosiek 2,170
John J. Ross 10,000
Maggie Ross 4,000
James Rossman 38,580
Seith Rothstein 33,915
Alain Rousset 55,352
Amy Rubenstein 14,736
Nicholas Rudd 39,132
Cas Saeys 27,465
Michael Samet 77,136
John Sanders 112,435
Chris Savage 52,000
Matthew Schetlick 8,185
Angelika Schug 3,400
Gertrude Schutz 11,217
Tom Schwartz 3,500
James Scielzo 23,052
Steve Seyferth 17,300
Keith Sharp 14,194
Jessie Shaw 10,000
Alan Sheldon 116,310
Thomas Shortlidge 44,000
Richard Sinreich 7,695
Robert Sive 13,236
Barbara Smith 10,000
Sylvia Soler 5,000
Linda Srere 50,000
Christoph Stadeler 85,705
Stanley Stefanski 160,642
Peter Steigrad 8,000
Debra Stern-Marrone 10,000
Peter Stringham 7,672
John Swan 28,000
Jane Talcott 5,217
Charlee Taylor-Hines 7,500
Lars Thalen 16,000
Clay Timon 85,088
Alan Vandermolen 33,390
John Vanderzee 39,132
Edward Vick 130,567
Marvin Waldman 25,305
Paula Waters 10,000
Charles Webre 55,656
Gus Weill 13,560
Robert Wells 12,500
Anders Wester 22,965
Bruno Widmer 40,000
James Williams 16,000
Allan Winneker 44,487
Bob Wyatt 2,500
Kenneth Yagoda 13,116
Joanne Zaiac 27,629
Michael Zeigler 2,900
TOTAL 6,858,528
<PAGE>
Schedule 2
KBM Stockholders
<TABLE>
<CAPTION>
<S> <C> <C>
Shares of Common Stock Being Sold Shares ofCommon Stock
Name of KBM Stockholder in the Secondary Public Offering Subject to KBM Voting Agreement
- ----------------------- -------------------------------- -------------------------------
207 Ventures, LLC 14,652 0
Wand Affiliates Fund L.P. 567 0
Wand Equity Portfolio II L.P. 56,201 0
Wand/CMS Investments I 56,556 0
Wand/CMS Investments II 19,340 0
Wand/CMS Investments III 33,595 0
Wand/CMS Investments IV 62,883 0
Paulette Beacoat 0 37
Morgan Beard 0 884
Tom Benedict 46 0
Bert Billiot 164 0
Eric Black 0 725
Todd Board 790 790
Rich Bogart 0 461
Ret Boney 703 0
Joe Branch 164 0
Clifton J. Brayshaw 181 181
Joseph Brehm 0 876
Matthew Bronfman 0 4,526
Thomas V. Butta 6,550 0
Christopher Cahill 0 410
James Cain IV 0 6,801
Bern Campbell 0 37
Marti Campbell 46 0
Shawn Cheston 94 0
Robert Chipman 0 74
Harold Connor 0 94
Thomas A. Cook 697 174
Mike Coppotelli 0 13,077
Thomas Cope 0 566
Steve Cureton 74 0
Andrew Curtis 0 231
Gayle Davey 0 168
Cheri DeRosia 0 119
Dave Dietrich 37 0
Dave Dixon 0 262
Paula Easton 0 12,635
Donald Ewing 0 121,910
Rick Ezell 0 703
Beryle P. Faier 1,814 0
Susan D. Faulk 7,256 7,256
Gene Feruzza 0 29,774
Joseph Ficarra III 871 217
Rick Field 0 342
Kim Frankel 0 707
Wilfer Garcia 232 57
M. Peggy R. Garner 144 0
Eric Garrett 0 1,267
Wayne Gibbons 164 0
Debbie Green 0 953
Mark Greene 0 2,281
Claude Grizzard Sr. 0 289,598
Roger L. Hackman 80,586 80,585
Michael Hail 0 121,910
Deborah Hays 0 725
Joanne Hedegard 0 411
Doug Holladay 0 2,828
Billy R. Howard 907 907
E. Dean Jones 1,814 0
Mike Keheler 263 0
Carol King 37 0
David King 0 2,789
Tracy King 37 0
Amber Kirby 0 379
Jason Kodish 0 231
Melissa E. Legge (Edwards) 1,450 0
Lerner Family Irrevocable Trust 21,834 21,834
Steve Lerner 29,570 29572
Thomas Liles 0 136,342
Susan Mancuso 0 1,480
Julie Mathison 39 0
Michael McCoy 0 14,512
Jennifer McMillen 0 8
Guadalupe Mendoza 1,450 0
Breck Middleton 0 417
Neesha Mirchandani 47 47
Lynne F. Moneypenny 1,814 0
Geoffrey Monsees 88 0
Crystal Montgomery 0 379
William H. Moore 907 907
Richard Muller 0 4,836
Michael E. Patterson 1,361 453
Henry B. Ponder 90,498 90,499
Jim Protzman 51,546 2,712
Archie Purcell 84,825 0
Dana Raburn 164 0
John Roberson 0 14,512
Rob Sandefuer 65 0
Charles Sanders 65 0
Colleen Sharp 0 188
Robert Sher 5,788 0
Tammie Shotwell 0 46
Robert Singer 0 263
Christine Smiley 0 297
William Taylor 0 1,881
William A. Thornton 144 0
Timothy Toben 0 125,695
Scott Tomlinson 0 725
Deborah Vrana 0 362
Carter Wagner 870 580
Curtis Walston 0 383
Jerry Wasicek 0 14,512
Scott Watkins 125 0
Stuart Webber 0 1,450
Daniel Wells 0 1,814
Jim Wheaton 0 5,474
David Wilson 0 34,822
Craig Wood 0 5,193
Christian Wright 75 0
Michelle Wright 65 0
Conroy Zien 37 0
Andrew Ziegler 0 14,512
Gary J. Zupke 1,180 634
TOTAL 641,472 1,236,299
</TABLE>
<PAGE>
Schedule 3
Y&R Selling Stockholders Who Have Granted
an Over-allotment Option to the U.S. Underwriters
Number of
Shares of Common Stock Subject to the
Over-allotment Option Granted to the U.S.
Name of Y&R Selling Stockholder Underwriters
- ------------------------------- ------------
Barbara Jack 279,292
Mitchell Kurz 71,577
Helmut Matthies 192,497
John P. McGarry, Jr. 190,294
Tim Pollak 111,000
Michael Samet 105,000
TOTAL 949,660
<PAGE>
EXHIBIT INDEX
Exhibit 1 Underwriting Agreement
Exhibit 2 Joint Filing Agreement (incorporated by reference
to the Original Schedule 13D filed with the
Securities and Exchange Commission on May 7, 1999)
Exhibit 3 Forms of KBM Voting Agreement
<PAGE>
Exhibit 1
15,000,000 Shares
Young & Rubicam Inc.
Common Stock
UNDERWRITING AGREEMENT
May 24, 1999
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
ING BARING FURMAN SELZ LLC
MORGAN STANLEY & CO. INCORPORATED
SALOMON SMITH BARNEY INC.
As representatives of the
several U.S. Underwriters
named in Schedule I hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
BEAR, STEARNS INTERNATIONAL LIMITED
CAZENOVE & CO.
DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
ING BARINGS LTD. AS AGENT FOR ING
BANK N.V., LONDON BRANCH
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
As representatives of the
several International
Managers named in Schedule
II hereto
c/o Bear, Stearns International Limited
One Canada Square
London, E14 5AD England
Ladies and Gentlemen:
Certain stockholders of Young & Rubicam Inc., a Delaware corporation (the
"Company"), named in Schedule III(a) hereto (the "Y&R Selling Stockholders")
severally propose to sell to the several Underwriters (as defined below) an
aggregate of 6,858,528 shares of the Company's Common Stock, par value $.01 per
share ("Common Stock"), certain stockholders of the Company named in Schedule
III(b) hereto (the "KBM Selling Stockholders") severally propose to sell to the
several Underwriters an aggregate of 641,472 shares of Common Stock, certain
stockholders of the Company named in Schedule IV (a) hereto (the "H&F Selling
Stockholders") severally propose to sell to the several Underwriters an
aggregate of 7,435,498 shares of Common Stock and BearTel Corp. ("BearTel" and
together with the Y&R Selling Stockholders, the KBM Selling Stockholders and the
H&F Selling Stockholders, the "Selling Stockholders") proposes to sell to the
several Underwriters an aggregate of 64,502 shares of Common Stock. The shares
of Common Stock to be sold by the Y&R Selling Stockholders are hereinafter
called the "Y&R Selling Stockholder Shares," the shares of Common Stock to be
sold by the KBM Selling Stockholders are hereinafter called the "KBM Selling
Stockholder Shares" and, together with the Y&R Selling Stockholder Shares and
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,
12,000,000 Firm Shares (the "U.S. Firm Shares") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. Underwriters") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement Between U.S. Underwriters and International Managers of even date
herewith), and 3,000,000 Firm Shares (the "International Shares") will be sold
to the several International Managers named in Schedule II hereto (the
"International Managers") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Bear, Stearns & Co. Inc. ("Bear Stearns"),
Donaldson, Lufkin & Jenrette Securities Corporation, Goldman, Sachs & Co., ING
Baring Furman Selz LLC, Morgan Stanley & Co. Incorporated and Salomon Smith
Barney Inc. shall act as representatives (the "U.S. Representatives") of the
several U.S. Underwriters, and Bear, Stearns International Limited, Cazenove &
Co., Donaldson, Lufkin & Jenrette International, Goldman Sachs International,
ING Barings Ltd. as agent for ING Bank N.V., London Branch, Morgan Stanley & Co.
International Limited and Salomon Brothers International Limited shall act as
representatives (the "International Representatives") of the several
International Managers. The U.S. Underwriters and the International Managers are
hereinafter collectively referred to as the "Underwriters."
The individuals or entities listed on Schedule V hereto (the "Option
Selling Stockholders") also severally propose to issue and sell to the several
U.S. Underwriters not more than an additional 2,250,000 shares of Common Stock
(the "Additional Shares"), if requested by the U.S. 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 contains two forms of prospectuses to be
used in connection with the offering and sale of the Shares: the form of U.S.
prospectus, to be used in connection with the offering and sale of Shares in the
United States and Canada to United States and Canadian Persons, and the form of
international prospectus, to be used in connection with the offering and sale of
Shares outside the United States and Canada to persons other than United States
and Canadian Persons. The international prospectus is identical to the U.S.
prospectus except for the outside front and back cover pages. 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 U.S. prospectus and the international
prospectus in the respective forms first filed pursuant to Rule 424(b) under the
Act are hereinafter collectively 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 Shares
set forth opposite such Selling Stockholder's name in Schedule III or Schedule
IV 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
$35.9835 (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 Schedules I and II 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 U.S.
Underwriters shall have the right to purchase, severally and not jointly, up to
2,250,000 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
U.S. 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 U.S. Representatives shall give any such notice on behalf of
the U.S. 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 U.S.
Underwriters the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as the U.S. 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 V hereto and the denominator of which is the total number of
Additional Shares and (ii) each U.S. 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 U.S. 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 U.S. Firm Shares set forth opposite the name of
such U.S. Underwriter in Schedule I bears to the total number of U.S. Firm
Shares.
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, (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 and (v) the Company and any Y&R Selling Stockholder may enter into any
transaction or arrangement pursuant to which the Company withholds delivery of
shares of Common Stock (including shares of Common Stock (a) held in the
restricted stock trust under the Young & Rubicam Holdings Inc. Restricted Stock
Plan, as amended, (b) held in the deferral trust under the Young & Rubicam Inc.
Deferred Compensation Plan or (c) deliverable pursuant to the exercise of
options) to any Y&R Selling Stockholder or accepts delivery of shares of Common
Stock or options to purchase shares of Common Stock from any Y&R Selling
Stockholder to fund taxes due as a result of the exercise of options by such Y&R
Selling Stockholder or as a result of the receipt of shares from such trusts or
to pay the exercise price in respect of options exercised by such Y&R Selling
Stockholder. 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 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 VI 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 City time, on May 28, 1999 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.
(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 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 June
30, 2000 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), (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 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, the Management Lock-up and Voting Agreement and the Non-Management
Lock-up and Voting Agreement, 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 with respect to the
Standstill and Lock-up Agreements, as permitted by clause (v) of the second
sentence of the third paragraph of Section 2 hereof, or as would be permitted by
clause (v) of the second sentence of the third paragraph of Section 2 hereof if
any such party were a Selling Stockholder, or, 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, 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 U.S. and
international prospectus front cover pages and under the caption "Underwriting"
(other than in the fifth, sixth, seventh and seventeenth 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.
(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 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.
(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
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.
(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 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 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 III 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 III 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 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 and the KBM
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 applicable Attorneys, or any
one of them, to execute and deliver on such Selling Stockholder's behalf this
Agreement, in the case of both the Y&R Selling Stockholders and the KBM Selling
Stockholders, the Custody Agreement, and, in the case of all Selling
Stockholders, 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.
(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 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 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.
(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 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 and the KBM 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 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, 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, the 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 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 and each KBM 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 and each KBM 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
and such KBM 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 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, 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 Reboul, MacMurray, Hewitt, Maynard & Kristol, counsel for
Wand/CMS Investments I L.P., Wand/CMS Investments II L.P., Wand/CMS Investments
III L.P., Wand CMS Investments IV L.P., Wand Equity Portfolio II L.P. and Wand
Affiliates Fund L.P. (collectively, the "Wand Partnerships"), to the effect set
forth in Appendix E hereto.
(j) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Nelson Mullins Riley & Scarborough L.L.P., counsel for certain
KBM Selling Stockholders, to the effect set forth in Appendix F hereto.
(k) 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.
(l) 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.
(m) The Company and each entity listed on Schedule VI 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.
(n) The Shares shall have been duly listed, subject to official notice of
issuance, on the NYSE.
(o) 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, an opinion of Wachtell, Lipton, Rosen & Katz to the effect set forth
in paragraph 5 of Appendix C and an opinion of BearTel counsel to the effect set
forth in paragraph 5 of Appendix D.
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
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 and Schedule
II 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 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 or to the KBM Selling
Stockholders, to Michael J. Dolan, Stephanie W. Abramson or Mark T. McEnroe, 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 and the KBM 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 and each KBM Selling Stockholder's
liability for the breach of the representations and warranties of such Y&R
Selling Stockholder and such KBM 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 and any KBM Selling
Stockholder for the breach of any representations and warranties of such Y&R
Selling Stockholder or such KBM 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
Selling Stockholder's Selling Stockholder Proceeds or such KBM 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 or any KBM Selling Stockholder of any representations and
warranties of such Y&R Selling Stockholder or such KBM 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 or such KBM
Selling Stockholder, the Company agrees that it shall be wholly liable for such
excess amount. Solely with respect to each Y&R Selling Stockholder and each KBM
Selling Stockholder, the Company hereby makes to each Underwriter the
representations and warranties made by each such Y&R Selling Stockholder and
such KBM 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.
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:
Title:
THE Y&R SELLING STOCKHOLDERS NAMED IN SCHEDULE III(a)
HERETO, ACTING SEVERALLY
By:
Attorney-in-fact
THE KBM SELLING STOCKHOLDERS NAMED IN SCHEDULE III(b)
HERETO, ACTING SEVERALLY
By:
Attorney-in-fact
THE H&F SELLING STOCKHOLDERS NAMED IN SCHEDULE IV(a)
HERETO, ACTING SEVERALLY
By:
Attorney-in-fact
BEARTEL CORP
By:
Attorney-in-fact
<PAGE>
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
ING BARING FURMAN SELZ LLC
MORGAN STANLEY & CO. INCORPORATED
SALOMON SMITH BARNEY INC.
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto
By BEAR, STEARNS & CO. INC.
By:
Name:
Title:
BEAR, STEARNS INTERNATIONAL LIMITED
CAZENOVE & CO.
DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
ING BARINGS LTD. AS AGENT FOR ING
BANK N.V., LONDON BRANCH
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
Acting severally on behalf of
themselves and the several
International Managers named
in Schedule II hereto
By BEAR, STEARNS INTERNATIONAL LIMITED
By
Name:
Title:
<PAGE>
SCHEDULE I
Number of Firm
Underwriters Shares to be Purchased
------ ----------------------
Bear, Stearns & Co. Inc. 3,000,000
Donaldson, Lufkin & Jenrette Securities Corporation 3,000,000
Goldman, Sachs & Co. 1,500,000
ING Baring Furman Selz LLC 1,500,000
Morgan Stanley & Co. Incorporated 1,500,000
Salomon Smith Barney Inc. 1,500,000
Total 12,000,000
<PAGE>
SCHEDULE II
Number of Firm
Underwriters Shares to be Purchased
------------ ----------------------
Bear, Stearns International Limited 600,000
Cazenove & Co. 600,000
Donaldson, Lufkin & Jenrette International 600,000
Goldman Sachs International 300,000
ING Barings Ltd. as agent for ING Bank N.V., 300,000
London Branch
Morgan Stanley & Co. International Limited 300,000
Salomon Brothers International Limited 300,000
Total 3,000,000
<PAGE>
Schedule 1
Y&R SELLING STOCKHOLDERS
Number of Firm
Shares Being Sold
Number of Firm That Constitute
Name Shares Being Sold Option Shares
- ---- ----------------- -------------
Stephanie W. Abramson 45,400 0
Stuart Agres 40,000 0
Stephen S. Aiello 20,672 0
Stig Albinus 10,000 0
Jean-Marc Bara 35,588 0
Bernard Barnett 1,050 1,050
Stephen Baum 3,120 0
Kimberly Bealle 20,000 0
Martin Beck 33,915 33,915
Urs Beer 25,000 0
Jed Beitler 11,225 11,225
Theodore A. Bell 60,000 0
Thomas D. Bell, Jr. 130,891 0
Tom Benelli 7,000 7,000
Thomas Blach 19,050 19,050
June Blocklin 10,225 0
Rene Boender 24,312 14,400
Bonnie Bohne 30,000 0
Etienne Boisrond 33,750 0
William Borrelle 1,841 0
Tiemen Bosma 40,000 0
Heinz-Georg Brands 22,712 0
Craig Branigan 46,446 0
Howard Breen 3,090 3,090
Jane Brite 99,810 0
T. J. Broadbent 15,500 15,500
David Butter 24,465 24,465
Ignacio Cabezon 10,720 0
Patricia Cafferata 16,000 0
Roger Chiocchi 14,191 14,191
Ira Chynsky 13,750 0
Michael Claes 7,500 0
Neil Clark 23,481 0
Don Cogman 61,601 61,601
Thomas Coleman 2,300 0
Janet Coombs 16,428 11,262
David Coronna 6,000 6,000
Jose Maria Costa 12,000 0
Massimo Costa 11,110 0
Charles Courtier 10,000 10,000
Michael Cozens 20,000 20,000
Dominique Damato 15,000 15,000
Donald H. Davis 19,080 0
Ferdinand de Bakker 60,000 0
Pierre de Roualle 25,000 25,000
Jerome Dean 18,000 0
Joseph E. Dedeo 134,172 0
Lawrence Deutsch 19,660 17,245
Shelley Diamond 13,314 0
Michael J. Dolan 41,926 0
Terry Dukes 6,150 6,150
Daryl Elliott 20,885 20,885
Daisy Exposito 26,953 24,031
Michael Faems 20,440 0
Charles P. Farley 2,100 0
Peter Farnell-Watson 14,494 0
John Fenton 6,500 0
Ian Ferguson Brown 2,250 0
Patrick Ford 6,055 6,055
Richard Ford 7,500 7,500
Clark J. Frankel 30,000 0
Volker Franz 16,385 16,385
Eric Fredericks 80,000 0
John Frew 6,030 6,030
Enrico Gervasi 12,033 0
Christopher Grabenstein 10,188 10,188
William Green 10,000 0
David E. Greene 5,000 0
Victor Gutierrez 27,145 0
Cynthia Hampton 10,000 10,000
Tom Hansen 2,000 2,000
Peter Harleman 16,000 0
Fred Hawrysh 5,000 5,000
Jan Hedquist 36,522 36,522
Per Heggenes 17,451 17,451
Stefan Himpe 3,000 0
Toby Hoare 55,000 55,000
Barry Hoffman 6,800 0
Charles Hollenkamp 3,000 0
James W. Hood 45,000 0
Penny Hooper 14,000 0
Roseanne Horn 12,675 0
Peter Horovitz 32,828 32,828
Richard Hosp 30,000 0
Eric Garrison Hoyt 7,670 7,670
Brian Hubbard 5,000 0
Jeff Hunt 17,014 17,014
Gigliola Ibba 21,000 0
Robert Igiel 52,170 52,170
Barbara Jack 178,560 116,273
Paal Marius Jebsen 11,085 11,085
William Johnston 19,185 5,000
James Kaplove 4,000 4,000
Mary Ellen Kenny 14,796 0
Kevin King 25,000 25,000
Edna Kissmann 21,500 0
Jackie Koh 27,535 27,535
Christopher Komisarjevsky 22,557 22,557
Satish Korde 96,727 0
Philippe Krakowsky 7,375 0
Ingo Krauss 162,000 0
Kurt Krauss 3,120 0
Stephanie Kugelman 57,011 0
Mitchell Kurz 356,000 0
Jay Kushner 11,994 0
Marta La Rock 15,000 15,000
Jean-Paul Lafaye 64,400 45,000
Timothy Laing 25,000 25,000
Robert Lallamant 19,566 0
Kevin Lavan 9,000 0
Mark Levine 15,219 0
Marco Lombardi 16,680 0
Bennett R. Machtiger 6,450 0
Duncan Mackinnon 7,000 7,000
John F. Maltese 13,575 13,575
Helmut Matthies 174,503 0
Martin Maurice 16,000 0
Robert M. McDuffey 10,506 10,506
John P. McGarry, Jr. 309,706 0
Austin McGhie 22,875 22,875
David McLean 31,853 8,519
Gordon McLean 11,955 11,955
Bert Meerstadt 14,440 0
William C. Melzer 73,300 73,300
Diane Meskill-Spencer 27,195 0
Craig Middleton 34,700 0
David Minear 40,000 40,000
Dominique Missoffe 15,474 0
Fernan Montero 158,000 0
Fred Moolhuijsen 15,000 0
Frans Mootz 26,622 0
John Morris 11,519 11,519
Janice Muniz 17,400 17,400
Bruce S. Nelson 28,250 0
Charles G. Newton, Jr. 3,600 0
Lori Nicholson 10,000 0
Lars Nordstrom 13,050 13,050
Laurie Null 10,850 10,850
Hans Ohman 13,050 13,050
Steve Oroho 59,010 0
Stewart Owen 33,054 0
Santiago Alonso Paniagua 38,715 24,465
Manuel Perez 40,704 0
Diane Perlmutter 8,035 0
Graham Phillips 40,000 0
Dan Plouffe 3,300 0
Tim Pollak 264,000 0
Michael Porter 2,500 2,500
William A. Power 42,000 0
Tom Pratt 6,385 6,385
Joerg Puphal 9,745 6,960
John E. Putnam 9,172 9,172
Matthias Quadflieg 1,484 1,484
Serge Rancourt 121,895 0
Sheila Raviv 20,000 0
Courtney Reeser 10,017 10,017
Ken Rietz 31,000 31,000
Jorg Rindlisbacher 19,500 0
Jorge Rodriguez 1,755 0
Robert Rosiek 2,170 0
John J. Ross 10,000 10,000
Maggie Ross 4,000 0
James Rossman 38,580 0
Seith Rothstein 33,915 0
Alain Rousset 55,352 55,352
Amy Rubenstein 14,736 0
Nicholas Rudd 39,132 0
Cas Saeys 27,465 0
Michael Samet 77,136 0
John Sanders 112,435 112,435
Chris Savage 52,000 52,000
Matthew Schetlick 8,185 0
Angelika Schug 3,400 3,400
Gertrude Schutz 11,217 6,000
Tom Schwartz 3,500 0
James Scielzo 23,052 23,052
Steve Seyferth 17,300 17,300
Keith Sharp 14,194 8,352
Jessie Shaw 10,000 10,000
Alan Sheldon 116,310 0
Thomas Shortlidge 44,000 0
Richard Sinreich 7,695 0
Robert Sive 13,236 13,236
Barbara Smith 10,000 0
Sylvia Soler 5,000 0
Linda Srere 50,000 0
Christoph Stadeler 85,705 0
Stanley Stefanski 160,642 111,675
Peter Steigrad 8,000 8,000
Debra Stern-Marrone 10,000 0
Peter Stringham 7,672 0
John Swan 28,000 0
Jane Talcott 5,217 0
Charlee Taylor-Hines 7,500 7,500
Lars Thalen 16,000 10,440
Clay Timon 85,088 85,088
Alan Vandermolen 33,390 33,390
John Vanderzee 39,132 39,132
Edward H. Vick 130,567 0
Marvin Waldman 25,305 1,176
Paula Waters 10,000 10,000
Charles Webre 55,656 55,656
Gus Weill 13,560 13,560
Robert Wells 12,500 0
Anders Wester 22,965 0
Bruno Widmer 40,000 0
James Williams 16,000 16,000
Allan Winneker 44,487 5,937
Bob Wyatt 2,500 0
Kenneth Yagoda 13,116 0
Joanne Zaiac 27,629 0
Michael Zeigler 2,900 2,900
Total 6,858,528 1,996,486
<PAGE>
Schedule 2
KBM STOCKHOLDERS
Number of Firm
Shares Being Sold
Number of Firm That Constitute
Name Shares Being Sold Option Shares
- ---- ----------------- -------------
207 Ventures, LLC 14,652 0
Wand Affiliates Fund L.P. 567 0
Wand Equity Portfolio II L.P. 56,201 0
Wand/CMS Investments I 56,556 0
Wand/CMS Investments II 19,340 0
Wand/CMS Investments III 33,595 0
Wand/CMS Investments IV 62,883 0
Tom Benedict 46 0
Bertrand Billiot 164 0
Todd Board 790 0
Ret Boney 703 0
Joe Branch 164 0
Clifton J. Brayshaw 181 0
Thomas V. Butta 6,550 0
Marti Campbell 46 0
Shawn Cheston 94 0
Thomas A. Cook 697 0
Steve Cureton 74 0
Dave Dietrich 37 0
Beryle P. Faier 1,814 0
Susan D. Faulk 7,256 0
Joseph Ficarra III 871 0
Wilfer Garcia 232 0
M. Peggy R. Garner 144 0
Wayne Gibbons 164 0
Roger L. Hackman 80,586 0
Billy R. Howard 907 0
E. Dean Jones 1,814 0
Mike Keheler 263 0
Carol King 37 0
Tracy King 37 0
Melissa E. Legge 1,450 0
0
Lerner Family Irrevocable Trust 21,834
Steve Lerner 29,570 0
Julie Mathison 39 0
Guadalupe Mendoza 1,450 0
Neesha Mirchandani 47 0
Lynne F. Moneypenny 1,814 0
Geoffrey Monsees 88 0
William H. Moore 907 0
Michael E. Patterson 1,361 0
Henry B. Ponder 90,498 0
Jim Protzman 51,546 0
Archie Purcell 84,825 0
Dana Raburn 164 0
Rob Sandefuer 65 0
Charles Sanders 65 0
Robert Sher 5,788 0
William A. Thornton 144 0
Carter J. Wagner 870 0
Scott Watkins 125 0
Christian Wright 75 0
Michelle Wright 65 0
Conroy Zien 37 0
Gary J. Zupke 1,180 0
Total 641,472 0
<PAGE>
SCHEDULE IV
(a) H&F SELLING STOCKHOLDERS
Number of Firm
Name Shares Being Sold
- ---- -----------------
Hellman & Friedman Capital Partners III, L.P. 6,793,071
H&F Orchard Partners III, L.P. 494,461
H&F International Partners III, L.P. 147,966
-------
Total 7,435,498
64,502
<PAGE>
SCHEDULE V
OPTION SELLING STOCKHOLDERS
Number of Additional Shares
Subject to Additional Share
Name Option
- ---- ----------------------------
Hellman & Friedman Capital Partners III, L.P. 1,124,815
H&F Orchard Partners III, L.P. 81,874
H&F International Partners III, L.P. 24,501
BearTel Corp. 69,150
Barbara Jack 279,292
Mitchell Kurz 71,577
Helmut Matthies 192,497
John P. McGarry, Jr. 190,294
Tim Pollak 111,000
Michael Samet 105,000
Total Shares Subject to Additional Share Option: 2,250,000
<PAGE>
SCHEDULE VI
F. Warren Hellman
Philip U. Hammarskjold
Richard S. Bodman
John F. McGillicuddy
Sir Christopher Lewinton
<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) 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.
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.
<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. 1.
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, seventh
and eighth paragraphs 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 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
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, 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
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.
<PAGE>
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 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.
<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 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.
<PAGE>
Appendix E
FORM OF OPINION OF REBOUL, MacMURRAY, HEWITT, MAYNARD & KRISTOL
1. Each of the Wand Partnerships 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
Agreements, the Power of Attorneys, the Underwriting Agreement 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.
2. Each of the Wand Partnerships 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 each of the Wand Partnerships has been duly
authorized, executed and delivered on behalf of 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 Wand Partnerships has been duly
authorized, executed and delivered on behalf of 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 named therein, or
any one of them, to execute and deliver on such Selling Stockholder's behalf
this Agreement, the applicable Custody 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
Wand Partnership pursuant to the Underwriting Agreement, in the manner
contemplated thereby and by the applicable Power of Attorney and Custody
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, security interest 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 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
each of the Wand Partnerships 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 each of the Wand Partnerships 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 each of the Wand Partnerships
or any of their properties.
<PAGE>
Appendix F
FORM OF OPINION OF NELSON MULLINS RILEY & SCARBOROUGH L.L.P.
1. The Custody Agreement executed by or on behalf of each KBM Selling
Stockholder is a valid, binding and enforceable agreement of such KBM Selling
Stockholder.
2. The Power of Attorney executed by each KBM Selling Stockholder is a
valid, binding and enforceable instrument of such KBM Selling Stockholder.
3. Upon delivery to the Underwriters in the State of New York of
certificates evidencing the KBM 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 KBM 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 KBM Selling Stockholder Shares without notice of any adverse
claim (within the meaning of the UCC) and (ii) the signature on each indorsement
is genuine.
<PAGE>
Exhibit 3
MANAGEMENT
LOCK-UP AND VOTING AGREEMENT
THIS LOCK-UP AGREEMENT ("the Agreement") is made and entered into as of
_________, 1999, between Young & Rubicam Inc., a Delaware corporation ("the
Corporation"), and __________, a __________ resident ("Holder").
WITNESSETH:
WHEREAS, pursuant to the terms and conditions of that certain Agreement and
Plan of Merger, by and among KnowledgeBase Marketing, Inc., a Delaware
corporation ("KBM"), the Corporation, Knowhow Inc., a Delaware corporation, and
various shareholders of KBM, dated April 5, 1999 (the "Merger Agreement"),
Holder will receive a certain number of shares of the common stock, par value
$.01, of the Corporation (the "Shares");
WHEREAS, pursuant to Section 9.3(i) of the Merger Agreement, as a condition
to the Corporation consummating the Merger and the transactions contemplated
thereby, Holder is to execute this Agreement; and
WHEREAS, any capitalized term not defined herein shall have the definition
provided in the Merger Agreement.
NOW, THEREFORE, conditioned upon Closing, in consideration of the promises
contained herein, the issuance of the Shares by the Corporation, and the
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged by each of the parties hereto, the parties hereby agree as follows:
Section 1. Transfer Restriction. Holder hereby expressly covenants and
agrees as follows:
a. Holder shall not (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, par
value $.01, of the Corporation ("Common Stock") or any securities
convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock which may
be deemed to be beneficially owned by Holder in accordance with the rules
and regulations of the Securities and Exchange Commission) 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) (each action described herein is referred
to as a "Transfer").
b. Any attempt to Transfer in violation of this Section shall be null
and void and shall be deemed for purposes of this Agreement as a breach
hereof by Holder, and neither the Corporation nor the Corporation's
transfer agent shall give any effect in the share transfer records of the
Corporation to any such attempt to Transfer.
c. In addition to any other legends required by law or in the opinion
of counsel to the Corporation, the certificates evidencing the Shares will
bear a legend in substantially the following form:
THE TRANSFER OF THESE SECURITIES IS FURTHER RESTRICTED BY THE
PROVISIONS OF A CERTAIN LOCK-UP AGREEMENT, A COPY OF WHICH WILL BE
FURNISHED TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE, BY THE
CORPORATION UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL
PLACE OF BUSINESS.
d. A notation will be made in the share transfer records of the
Corporation and the "stop transfer" instructions will be issued with
respect to the Shares so as to restrict the resale, pledge, hypothecation,
or other transfer thereof, subject to the terms hereof.
Section 2. Term of Transfer Restrictions. The transfer restrictions in
Section 1 shall become effective at the Effective Time and shall continue
thereafter in full force and effect until the later of (i) July 1, 1999 or (ii)
the expiration of any underwriter's lock-up period (regardless of whether Holder
is contractually bound under such underwriter's agreement) required of any
holder of Common Stock pursuant to a registered public offering of Common Stock
under the Securities Act of 1933, as amended (or any successor or federal
statutes), declared effective prior to July 1, 1999; provided that such transfer
restrictions shall not apply to the extent that such underwriter's lock-up
exceeds 180 days.
Section 3. Voting Proxy.
a. Holder does hereby appoint Peter A. Georgescu, Stephanie W.
Abramson, Thomas D. Bell, Michael J. Dolan and Edward H. Vick, and each of
them, the true and lawful attorneys and proxies of Holder, with several
power of substitution, for and in the name, place, and stead of Holder to
attend and vote at all meetings of the shareholders of the Corporation, or
to execute written consents in lieu of voting with respect to, any and all
shares of the Common Stock at the time standing in the name of Holder
(excluding any Shares held in Escrow pursuant to the Merger Agreement but
including any such Shares upon their release from Escrow), at any and all
meetings of the shareholders or any adjournment. And Holder hereby affirms
that this proxy is coupled with an interest and is irrevocable, and Holder
hereby ratifies and confirms all that the proxy may lawfully do or cause to
be done by virtue hereof.
b. In addition to any other legends required by law or in the opinion
of counsel to the Corporation, the certificates evidencing the Shares
(excluding any Shares held in Escrow pursuant to the Merger Agreement but
including any such Shares upon their release from Escrow) will bear a
legend in substantially the following form:
NOTICE IS HEREBY GIVEN THAT ALL VOTING RIGHTS WITH RESPECT TO THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A PROXY
DATED __________, 1999 BY THE STOCKHOLDER IN FAVOR OF PETER A.
GEORGESCU, STEPHANIE W. ABRAMSON, THOMAS D. BELL, MICHAEL J. DOLAN AND
EDWARD H. VICK, UNTIL THE STOCKHOLDER HAS SOLD OR OTHERWISE
TRANSFERRED THE SECURITIES REPRESENTED BY THIS CERTIFICATE.
c. This proxy shall become effective at the Effective Time and
continue in full force and effect until the earliest of (i) May 15, 2000;
(ii) the dissolution of that certain Young & Rubicam Inc. Management Voting
Trust Agreement dated December 12, 1996 ("Management Voting Trust"); or
(iii) the time that the Holder has sold or otherwise transferred all Shares
subject to this proxy.
Section 4. Right of First Refusal. In the event that Holder shall propose
to Transfer any Shares to any Person who, as a result thereof, together with any
related Transfers by any other shareholders of the Corporation, would (together
with its Affiliates) own more than 20% of the Outstanding Shares, the
Corporation and the H&F Investors shall each have a right of first refusal with
respect to such a proposed Transfer, which rights shall be exercised in
accordance with the provisions of subsections (a) through (e) of this Section 4.
a. With respect to any such proposed Transfer, Holder shall first
offer to the Corporation (by written notice to the Corporation, with a copy
to the H&F Investors) the option to purchase the Shares proposed to be
transferred at the same price and on the same terms and conditions as are
specified in a bona fide written offer from the proposed transferee.
b. The offer by such Holder to the Corporation shall include a copy of
the written offer from such proposed transferee setting forth all the
details pertaining to any such proposed Transfer to a third party,
including the price, form of consideration and any other terms and
conditions, and the identity of the Person to whom such Holder is proposing
to Transfer such Shares, including the identity of any Person controlling
such proposed transferee, as well as such evidence of the arm's length
nature of the proposed Transfer, the proposed transferee's ability to
complete the transaction and such other information as is reasonably
requested by the Corporation or the H&F Investors. If the Corporation
exercises its right to purchase all or a portion of the Shares proposed to
be transferred, it shall give notice thereof to the Holder and the H&F
Investors within thirty (30) days after receipt of such offer. The
consideration for Shares held by a Holder shall be paid by the Corporation
to the Holder against delivery of his or her Shares. The closing of any
purchase hereunder shall take place at the offices of the Corporation (or
at any other place as may be designated by the Corporation) on a date
specified by the Corporation, which date shall be within ten (10) days
after the Corporation's notice of such election to such Holder and
specified in such notice (or, if the Corporation has elected to purchase
less than all of such Shares, within ten (10) days after the expiration of
the fifteen (15) day period for election by the H&F Investors, specified in
Section 4(d) hereof). If the terms of the proposed Transfer include the
Transfer of the Shares for consideration other than cash, the Corporation
will have the right to exercise its rights hereunder either (i) by
purchasing the Shares for a substantially equivalent form of consideration
of equal value in the reasonable opinion of the Corporation's Board of
Directors (the "Board"), or (ii) by purchasing such Shares for cash in an
amount equal to the fair market value of such proposed consideration in the
reasonable opinion of the Board.
c. If the Corporation does not elect to exercise its right to purchase
the Shares proposed to be transferred within the thirty (30) day period
provided therefor, or elects to purchase less than all of such Shares, the
H&F Investors shall have the option to purchase all (but not less than all)
of the Shares proposed to be transferred which the Corporation has elected
not to purchase, at the same price and upon the same terms and conditions
as the offer made by the Holder to the Corporation.
d. If the H&F Investors exercise their right to purchase the Shares
proposed to be transferred, they shall give notice thereof within fifteen
(15) days after the expiration of the thirty (30) day period referred to in
Section 4(b) above. The consideration for Shares held by a Holder shall be
paid by the H&F Investors to the Holder against delivery of his or her
Shares. The closing of any purchase hereunder shall take place at the
offices of the Corporation (or at any other place as may be designated by
the H&F Investors) on a date determined by the H&F Investors within ten
(10) days after the H&F Investors' notice of such election and specified in
such notice; provided that, if the Corporation has elected to purchase
Shares pursuant to Section 4(b) hereof, the closing under this Section 4(d)
shall be at the same time and place as the Corporation's closing as
specified in the Corporation's notice. If the terms of the proposed
Transfer include the Transfer of the Shares for consideration other than
cash, the H&F Investors shall have the right to exercise their rights
hereunder either (i) by purchasing the Shares for a substantially
equivalent form of consideration of equal value in the reasonable opinion
of the H&F Investors, or (ii) by purchasing such Shares for cash in an
amount equal to the fair market value of such proposed consideration in the
reasonable opinion of the H&F Investors; provided, however, that, if the
Corporation has elected to purchase Shares pursuant to Section 4(b), the
H&F Investors shall use the same form of consideration (if possible) or, if
the Corporation is using cash (or the H&F Investors cannot use the
alternative form of consideration), pay the amount of cash determined by
the Board to be the fair market value of the alternative compensation
pursuant to the last sentence of Section 4(b).
e. If the Corporation and the H&F Investors, collectively, elect to
purchase less than all of the Shares proposed to be Transferred by Holder
within the exercise periods provided therefor, then such elections shall
not be effective and Holder may sell all (but not less than all) of such
Shares to the Person specified in the notice delivered to the Corporation
and the H&F Investors in accordance with Section 4(a), provided that such
sale is made within ninety (90) days after the expiration of the H&F
Investors' fifteen (15) day exercise period, at a price and upon terms and
conditions not more favorable to such transferee than those that were
specified in such notice.
f. Definitions for purposes of this Section 4:
"Affiliate" has the meaning set forth in Rule 12b-2 under the Securities
Exchange Act of 1934.
"H&F Investors" means Hellman & Friedman Capital Partners III, L.P., a
California limited partnership, H&F Orchard Partners III, L.P., a California
limited partnership, H&F International Partners III, L.P., a California limited
partnership, together with any transferee of Common Stock for any of the
foregoing as permitted by that certain Stockholders Agreement, dated as of May
12, 1998, among them, Y&R and other Y&R stockholders.
"Outstanding Shares" means as of a given time the sum of (i) the number of
shares of Common Stock then issued and (ii) all options, warrants and rights to
acquire, and the conversion of any securities convertible into, shares of Common
Stock, to the extent such rights to acquire shares of Common Stock are then
exercisable. When calculating the percentage of the Outstanding Shares owned by
a specified Person, such Person shall be deemed to own all shares of Common
Stock beneficially owned by such Person assuming the exercise of all of such
Person's options, warrants and rights to acquire, and the conversion by such
Person of any securities convertible into, shares of Common Stock only to the
extent such rights to acquire shares of Common Stock are then exercisable by
such Person.
"Person" means any individual or corporation, company, incorporated or
unincorporated association or organization, limited liability company,
partnership, estate trust, joint venture or other entity of any kind, including
any pension, profit sharing or other benefit plan or trust, and any governmental
authority.
g. The right of first refusal in this Section 4 shall become effective at
the Effective Time and continue in full force and effect until the earliest of
(i) May 15, 2000; (ii) the termination of the Management Voting Trust; or (iii)
the time that Holder has sold or otherwise transferred all Shares received
pursuant to the Merger Agreement.
Section 5. Amendment; Termination; New Certificates. This Agreement may be
amended or terminated by the written consent of all parties hereto. After the
expiration of the transfer restrictions under Section 1 and the proxy under
Section 3, Holder shall be entitled to surrender the certificate or certificates
representing the Shares to the Corporation's transfer agent and receive a new
certificate or certificates without the restrictive legends referencing such
provisions. Upon any Transfer of the Shares not prohibited under this Agreement,
Holder's transferee shall be entitled to surrender the certificate or
certificates representing the transferred Shares and receive a new certificate
or certificates without such legends.
Section 6. Remedies. Holder acknowledges and agrees that in the event of
any violation of this Agreement or breach or attempted breach hereof, that it
will be difficult if not impossible for the Corporation to ascertain with any
certainty the amount and extent of the Corporation's damages, that the
Corporation would have no adequate remedy at law for damages, and that the
Corporation shall be entitled, in addition to all other rights and remedies
which the Corporation may have at law or in equity, to obtain, after notice and
hearing, injunctive relief, without the necessity of posting bond therefor,
enjoining and restraining Holder from any further breach or attempted breach or
violation of this Agreement.
Section 7. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original, and all of this taken
together shall constitute one and the same Agreement.
Section 8. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
Section 9. Choice of Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware (without
regard to the rules governing conflicts of laws).
Section 10. Acknowledgement. Holder acknowledges that the limitations
herein set forth are reasonable, bargained for, and necessary for the protection
of the Corporation's investment in the equity interest and assets acquired in
exchange for the Shares and Holder's ownership of and investment in the Shares.
Holder further represents and warrants that Holder has full power and authority
to enter into the agreements set forth herein, and that, upon request, Holder
will execute any additional documents necessary or desirable in connection with
the enforcement hereof.
(Signatures contained on the following page)
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE CORPORATION
Young & Rubicam Inc.
a Delaware corporation
------------------------------------
------------------------------------
HOLDER:
------------------------------------
------------------------------------
<PAGE>
NON-MANAGEMENT
LOCK-UP AND VOTING AGREEMENT
THIS LOCK-UP AGREEMENT ("the Agreement") is made and entered into as of
_________, 1999, between Young & Rubicam Inc., a Delaware corporation ("the
Corporation"), and __________, a __________ resident ("Holder").
WITNESSETH:
WHEREAS, pursuant to the terms and conditions of that certain Agreement and
Plan of Merger, by and among KnowledgeBase Marketing, Inc., a Delaware
corporation ("KBM"), the Corporation, Knowhow Inc., a Delaware corporation, and
various shareholders of KBM, dated April 5, 1999 (the "Merger Agreement"),
Holder will receive a certain number of shares of the common stock, par value
$.01, of the Corporation (the "Shares");
WHEREAS, pursuant to Section 9.3(i) of the Merger Agreement, as a condition
to the Corporation consummating the Merger and the transactions contemplated
thereby, Holder is to execute this Agreement; and
WHEREAS, any capitalized term not defined herein shall have the definition
provided in the Merger Agreement.
NOW, THEREFORE, conditioned upon Closing, in consideration of the promises
contained herein, the issuance of the Shares by the Corporation, and the
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged by each of the parties hereto, the parties hereby agree as follows:
Section 11. Transfer Restriction. Holder hereby expressly covenants and
agrees as follows:
a. Except as provided in Section 3 of this Agreement, Holder shall not
(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, par value $.01, of the Corporation
("Common Stock") or any securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, shares of
Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock which may be deemed to be beneficially owned by Holder in
accordance with the rules and regulations of the Securities and Exchange
Commission) 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) (each action
described herein is referred to as a "Transfer").
b. Any attempt to Transfer in violation of this Section shall be null
and void and shall be deemed for purposes of this Agreement as a breach
hereof by Holder, and neither the Corporation nor the Corporation's
transfer agent shall give any effect in the share transfer records of the
Corporation to any such attempt to Transfer.
c. In addition to any other legends required by law or in the opinion
of counsel to the Corporation, the certificates evidencing the Shares will
bear a legend in substantially the following form:
THE TRANSFER OF THESE SECURITIES IS FURTHER RESTRICTED BY THE
PROVISIONS OF A CERTAIN LOCK-UP AGREEMENT, A COPY OF WHICH WILL BE
FURNISHED TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE, BY THE
CORPORATION UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL
PLACE OF BUSINESS.
d. A notation will be made in the share transfer records of the
Corporation and the "stop transfer" instructions will be issued with
respect to the Shares so as to restrict the resale, pledge, hypothecation,
or other transfer thereof, subject to the terms hereof.
Section 12. Term of Transfer Restrictions. The transfer restrictions in
Section 1 shall become effective at the Effective Time and shall continue
thereafter in full force and effect until the later of (i) July 1, 1999 or (ii)
the expiration of any underwriter's lock-up period (regardless of whether Holder
is contractually bound under such underwriter's agreement) required of any
holder of Common Stock pursuant to a registered public offering of Common Stock
under the Securities Act of 1933, as amended (or any successor or federal
statutes), declared effective prior to July 1, 1999; provided that such transfer
restrictions shall not apply to the extent that Shares are sold pursuant to
Section 3 below or to the extent that such underwriter's lock-up exceeds 180
days.
Section 13. Registered Offering. Except for any Shares held by a Holder who
elects to receive more than fifty (50%) of such Holder's Merger Consideration in
the form of Common Stock and to the extent provided in Section 8.6(e) of the
Merger Agreement, Holder shall be entitled to offer and sell Shares in any
registered public offering of Common Stock under the Securities Act of 1933, as
amended (or any successor or federal statutes), the registration statement for
which is declared effective prior to July 1, 1999. Any Shares not included in
such offering shall continue to remain subject to the terms of this Agreement.
Section 14. Voting Proxy.
a. Holder does hereby appoint Peter A. Georgescu, Stephanie W.
Abramson, Thomas D. Bell, Michael J. Dolan and Edward H. Vick, and each of
them, the true and lawful attorneys and proxies of Holder, with several
power of substitution, for and in the name, place, and stead of Holder to
attend and vote at all meetings of the shareholders of the Corporation, or
to execute written consents in lieu of voting with respect to, any and all
shares of the Common Stock at the time standing in the name of Holder
(excluding any Shares held in Escrow pursuant to the Merger Agreement but
including any such Shares upon their release from Escrow), at any and all
meetings of the shareholders or any adjournment. And Holder hereby affirms
that this proxy is coupled with an interest and is irrevocable, and Holder
hereby ratifies and confirms all that the proxy may lawfully do or cause to
be done by virtue hereof.
b. In addition to any other legends required by law or in the opinion
of counsel to the Corporation, the certificates evidencing the Shares
(excluding any Shares held in Escrow pursuant to the Merger Agreement but
including any such Shares upon their release from Escrow) will bear a
legend in substantially the following form:
NOTICE IS HEREBY GIVEN THAT ALL VOTING RIGHTS WITH RESPECT TO THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A PROXY
DATED __________, 1999 BY THE STOCKHOLDER IN FAVOR OF PETER A.
GEORGESCU, STEPHANIE W. ABRAMSON, THOMAS D. BELL, MICHAEL J. DOLAN AND
EDWARD H. VICK, UNTIL THE STOCKHOLDER HAS SOLD OR OTHERWISE
TRANSFERRED THE SECURITIES REPRESENTED BY THIS CERTIFICATE.
c. This proxy shall become effective at the Effective Time and
continue in full force and effect until the earliest of (i) May 15, 2000;
(ii) the dissolution of that certain Young & Rubicam Inc. Management Voting
Trust Agreement dated December 12, 1996 ("Management Voting Trust"); or
(iii) the time that the Holder has sold or otherwise transferred all Shares
subject to this proxy.
Section 15. Right of First Refusal. In the event that Holder shall propose
to Transfer any Shares to any Person who, as a result thereof, together with any
related Transfers by any other shareholders of the Corporation, would (together
with its Affiliates) own more than 20% of the Outstanding Shares, the
Corporation and the H&F Investors shall each have a right of first refusal with
respect to such a proposed Transfer, which rights shall be exercised in
accordance with the provisions of subsections (a) through (e) of this Section 5.
a. With respect to any such proposed Transfer, Holder shall first
offer to the Corporation (by written notice to the Corporation, with a copy
to the H&F Investors) the option to purchase the Shares proposed to be
transferred at the same price and on the same terms and conditions as are
specified in a bona fide written offer from the proposed transferee.
b. The offer by such Holder to the Corporation shall include a copy of
the written offer from such proposed transferee setting forth all the
details pertaining to any such proposed Transfer to a third party,
including the price, form of consideration and any other terms and
conditions, and the identity of the Person to whom such Holder is proposing
to Transfer such Shares, including the identity of any Person controlling
such proposed transferee, as well as such evidence of the arm's length
nature of the proposed Transfer, the proposed transferee's ability to
complete the transaction and such other information as is reasonably
requested by the Corporation or the H&F Investors. If the Corporation
exercises its right to purchase all or a portion of the Shares proposed to
be transferred, it shall give notice thereof to the Holder and the H&F
Investors within thirty (30) days after receipt of such offer. The
consideration for Shares held by a Holder shall be paid by the Corporation
to the Holder against delivery of his or her Shares. The closing of any
purchase hereunder shall take place at the offices of the Corporation (or
at any other place as may be designated by the Corporation) on a date
specified by the Corporation, which date shall be within ten (10) days
after the Corporation's notice of such election to such Holder and
specified in such notice (or, if the Corporation has elected to purchase
less than all of such Shares, within ten (10) days after the expiration of
the fifteen (15) day period for election by the H&F Investors, specified in
Section 5(d) hereof). If the terms of the proposed Transfer include the
Transfer of the Shares for consideration other than cash, the Corporation
will have the right to exercise its rights hereunder either (i) by
purchasing the Shares for a substantially equivalent form of consideration
of equal value in the reasonable opinion of the Corporation's Board of
Directors (the "Board"), or (ii) by purchasing such Shares for cash in an
amount equal to the fair market value of such proposed consideration in the
reasonable opinion of the Board.
c. If the Corporation does not elect to exercise its right to purchase
the Shares proposed to be transferred within the thirty (30) day period
provided therefor, or elects to purchase less than all of such Shares, the
H&F Investors shall have the option to purchase all (but not less than all)
of the Shares proposed to be transferred which the Corporation has elected
not to purchase, at the same price and upon the same terms and conditions
as the offer made by the Holder to the Corporation.
d. If the H&F Investors exercise their right to purchase the Shares
proposed to be transferred, they shall give notice thereof within fifteen
(15) days after the expiration of the thirty (30) day period referred to in
Section 5(b) above. The consideration for Shares held by a Holder shall be
paid by the H&F Investors to the Holder against delivery of his or her
Shares. The closing of any purchase hereunder shall take place at the
offices of the Corporation (or at any other place as may be designated by
the H&F Investors) on a date determined by the H&F Investors within ten
(10) days after the H&F Investors' notice of such election and specified in
such notice; provided that, if the Corporation has elected to purchase
Shares pursuant to Section 5(b) hereof, the closing under this Section 5(d)
shall be at the same time and place as the Corporation's closing as
specified in the Corporation's notice. If the terms of the proposed
Transfer include the Transfer of the Shares for consideration other than
cash, the H&F Investors shall have the right to exercise their rights
hereunder either (i) by purchasing the Shares for a substantially
equivalent form of consideration of equal value in the reasonable opinion
of the H&F Investors, or (ii) by purchasing such Shares for cash in an
amount equal to the fair market value of such proposed consideration in the
reasonable opinion of the H&F Investors; provided, however, that, if the
Corporation has elected to purchase Shares pursuant to Section 5(b), the
H&F Investors shall use the same form of consideration (if possible) or, if
the Corporation is using cash (or the H&F Investors cannot use the
alternative form of consideration), pay the amount of cash determined by
the Board to be the fair market value of the alternative compensation
pursuant to the last sentence of Section 5(b).
e. If the Corporation and the H&F Investors, collectively, elect to
purchase less than all of the Shares proposed to be Transferred by Holder
within the exercise periods provided therefor, then such elections shall
not be effective and Holder may sell all (but not less than all) of such
Shares to the Person specified in the notice delivered to the Corporation
and the H&F Investors in accordance with Section 5(a), provided that such
sale is made within ninety (90) days after the expiration of the H&F
Investors' fifteen (15) day exercise period, at a price and upon terms and
conditions not more favorable to such transferee than those that were
specified in such notice.
f. Definitions for purposes of this Section 5:
"Affiliate" has the meaning set forth in Rule 12b-2 under the
Securities Exchange Act of 1934.
"H&F Investors" means Hellman & Friedman Capital Partners III,
L.P., a California limited partnership, H&F Orchard Partners III,
L.P., a California limited partnership, H&F International Partners
III, L.P., a California limited partnership, together with any
transferee of Common Stock for any of the foregoing as permitted by
that certain Stockholders Agreement, dated as of May 12, 1998, among
them, Y&R and other Y&R stockholders.
"Outstanding Shares" means as of a given time the sum of (i) the
number of shares of Common Stock then issued and (ii) all options,
warrants and rights to acquire, and the conversion of any securities
convertible into, shares of Common Stock, to the extent such rights to
acquire shares of Common Stock are then exercisable. When calculating
the percentage of the Outstanding Shares owned by a specified Person,
such Person shall be deemed to own all shares of Common Stock
beneficially owned by such Person assuming the exercise of all of such
Person's options, warrants and rights to acquire, and the conversion
by such Person of any securities convertible into, shares of Common
Stock only to the extent such rights to acquire shares of Common Stock
are then exercisable by such Person.
"Person" means any individual or corporation, company,
incorporated or unincorporated association or organization, limited
liability company, partnership, estate trust, joint venture or other
entity of any kind, including any pension, profit sharing or other
benefit plan or trust, and any governmental authority.
g. The right of first refusal in this Section 5 shall become effective
at the Effective Time and continue in full force and effect until the
earliest of (i) May 15, 2000; (ii) the termination of the Management Voting
Trust; or (iii) the time that Holder has sold or otherwise transferred all
Shares received pursuant to the Merger Agreement.
Section 16. Amendment; Termination; New Certificates. This Agreement may be
amended or terminated by the written consent of all parties hereto. After the
expiration of the transfer restrictions under Section 1 and the proxy under
Section 4, Holder shall be entitled to surrender the certificate or certificates
representing the Shares of the Corporation's transfer agent and receive a new
certificate or certificates without the restrictive legends referencing such
provisions. Upon any Transfer of the Shares not prohibited under this Agreement,
Holder's transferee shall be entitled to surrender the certificate or
certificates representing the transferred Shares and receive a new certificate
or certificates without such legends.
Section 17. Remedies. Holder acknowledges and agrees that in the event of
any violation of this Agreement or breach or attempted breach hereof, that it
will be difficult if not impossible for the Corporation to ascertain with any
certainty the amount and extent of the Corporation's damages, that the
Corporation would have no adequate remedy at law for damages, and that the
Corporation shall be entitled, in addition to all other rights and remedies
which the Corporation may have at law or in equity, to obtain, after notice and
hearing, injunctive relief, without the necessity of posting bond therefor,
enjoining and restraining Holder from any further breach or attempted breach or
violation of this Agreement.
Section 18. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original, and all of this taken
together shall constitute one and the same Agreement.
Section 19. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
Section 20. Choice of Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
(without regard to the rules governing conflicts of laws).
Section 21. Acknowledgement. Holder acknowledges that the limitations
herein set forth are reasonable, bargained for, and necessary for the protection
of the Corporation's investment in the equity interest and assets acquired in
exchange for the Shares and Holder's ownership of and investment in the Shares.
Holder further represents and warrants that Holder has full power and authority
to enter into the agreements set forth herein, and that, upon request, Holder
will execute any additional documents necessary or desirable in connection with
the enforcement hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE CORPORATION
Young & Rubicam Inc.
a Delaware corporation
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HOLDER:
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