<PAGE>
As filed with the Securities and Exchange Commission on October 11, 2000
Registration No. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------
Radio One, Inc.
(Exact name of Registrant as specified in its charter)
--------------
<TABLE>
<S> <C> <C>
Delaware 52-1166660 4832
(State or other jurisdiction of (I.R.S. Employer (Primary Standard Industry
incorporation or organization) Identification No.) Classification Number)
</TABLE>
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20706
Telephone: (301) 306-1111
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
ALFRED C. LIGGINS, III
Chief Executive Officer and President
Radio One, Inc.
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20706
Telephone: (301) 306-1111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copies to:
<TABLE>
<S> <C>
TERRANCE L. BESSEY, ESQ. STEPHEN W. HAMILTON, ESQ.
Kirkland & Ellis Skadden, Arps, Slate, Meagher & Flom LLP
655 Fifteenth Street, N.W. 1440 New York Avenue, N.W.
Washington, D.C. 20005 Washington, D.C. 20005
Telephone: (202) 879-5000 Telephone: (202) 371-7000
</TABLE>
--------------
Approximate date of commencement of the proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Securities to Aggregate Amount of
Title of Each Class of be Offering Offering Registration
Securities to be Registered Registered Price(/1/) Price(/1/) Fee
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 1/2% Convertible Preferred Securities
(HIGH TIDES)(/2/)........................ 310,000 $1,000 $310,000,000 $81,840
------------------------------------------------------------------------------------------------------
Class D Common Stock, par value $0.001 per
share.................................... (/3/) (/3/) (/3/) (/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
(1) Estimated solely for the purposes of determining the registration fee
pursuant to Rule 457(c) under the Securities Act and exclusive of
dividends and distributions, if any.
(2) 310,000 HIGH TIDES were issued by Radio One on July 14, 2000, in offerings
exempt from registration under Rule 144A of the Securities Act. Pursuant
to a Registration Rights Agreement dated July 14, 2000, among Radio One
and Credit Suisse First Boston Corporation, Deutsche Bank Securities Inc.,
Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and
First Union Securities, Inc., Radio One is obligated to file this
Registration Statement to permit registered resales of the HIGH TIDES and
class D common stock issuable upon conversion of the HIGH TIDES by holders
thereof.
(3) The HIGH TIDES are convertible into Radio One's class D common stock, par
value $.001 per share (the "Class D Common Stock"), at an initial
conversion rate of 53.3832 shares of Class D Common Stock for each of the
HIGH TIDES (or a total of 16,548,792 shares of Class D Common Stock for
all of the HIGH TIDES), subject to adjustment under certain circumstances.
Pursuant to Rule 457(i) of the Securities Act, no registration fee is
payable with respect to the Class D Common Stock registered hereby.
--------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act or until this Registration Statement shall
become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. The selling holders may not sell these securities until the +
+registration statement covering them has been declared effective by the SEC. +
+This preliminary prospectus is not an offer to sell these securities and +
+neither Radio One nor the selling holders are soliciting offers to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 11, 2000
PROSPECTUS
310,000 HIGH TIDES /SM/
6 1/2% Convertible Preferred Securities
Remarketable Term Income Deferrable Equity Securities
(HIGH TIDES)/SM/*
(liquidation amount $1,000 per each HIGH TIDES/SM/)
convertible into the class D common stock of Radio One.
------------
On July 14, 2000, we issued 310,000 6 1/2% Convertible Preferred Securities,
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)/SM/ or HIGH
TIDES/SM/ that are convertible into shares of our class D common stock. Specific
terms of the HIGH TIDES, including their payment, conversion, redemption,
remarketing and subordination features, are described in this prospectus. This
prospectus also describes specific terms of the class D common stock of Radio
One that is issuable upon conversion of the HIGH TIDES.
The HIGH TIDES and the class D common stock referred to in the preceding
sentence may be offered and sold from time to time pursuant to this prospectus
by the holders of those securities or by their transferees, pledgees, donees or
successors, all of which we refer to as selling holders. The securities may be
sold by the selling holders directly to purchasers or through agents,
underwriters or dealers. If required, the names of any agents, underwriters or
dealers involved in the sale of the securities, and the agent's commission,
dealer's purchase price or underwriter's discount, if any, will be provided in
supplements to this prospectus. The selling holders will receive all of the net
proceeds from the sale of the securities and will pay all underwriting
discounts and selling commissions, if any, applicable to any sale. We are
responsible for the payment of all other expenses incident to the offer and
sale of the securities. The selling holders and any broker-dealers, agents or
underwriters that participate in the distribution of the securities may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933,
and any commission received by them and any profit on the resale of the
securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933.
The HIGH TIDES are eligible for trading in The Portal/SM/ Market ("PORTAL"), a
subsidiary of The Nasdaq Stock Market, Inc. Our class D common stock is traded
on The Nasdaq Stock Market's National Market under the symbol "ROIAK."
Investing in the HIGH TIDES involves risks. See "Risk Factors" on page 7.
------
* The terms Remarketable Term Income Deferrable Equity Securities (HIGH
TIDES)/SM/ or HIGH TIDES/SM/ are registered service marks of Credit Suisse
First Boston Corporation.
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is October 11, 2000.
<PAGE>
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Cautionary Note Regarding Forward-
Looking Statements................. i
Where You Can Find Additional
Information........................ i
Incorporation by Reference.......... ii
Summary............................. 1
Risk Factors........................ 7
Use of Proceeds..................... 13
Ratio of earnings to Combined Fixed
Charges and Preferred Stock
Dividends ......................... 13
The Remarketing..................... 14
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Remarketing Agent................. 18
Description of High Tides............. 19
Registration Rights................... 31
Certain United States Federal Income
Tax Consequences..................... 32
Certain ERISA Considerations.......... 38
Description of Capital Stock.......... 39
Description of Indebtedness........... 40
Selling Holders....................... 42
Plan of Distribution.................. 45
Legal Matters......................... 46
Experts............................... 46
</TABLE>
----------------
You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements are not historical facts, but
rather are based on our current expectations, estimates and projections about
Radio One's industry, our beliefs and assumptions. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates" and similar
expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and other factors, some of which are beyond our control,
are difficult to predict and could cause actual results to differ materially
from those expressed or forecasted in the forward-looking statements. These
risks and uncertainties are described in "Risk Factors" and elsewhere in this
prospectus. We caution you not to place undue reliance on these forward-looking
statements, which reflect our management's view only as of the date of this
prospectus. We are not obligated to update these statements or publicly release
the result of any revisions to them to reflect events or circumstances after
the date of this prospectus or to reflect the occurrence of unanticipated
events.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, and, in accordance therewith, file reports, proxy
statements and other information with the SEC. Such reports, proxy statements
and other information may be inspected and copied at the public reference
facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such material can be obtained from the Public Reference
Section of the SEC upon payment of certain fees prescribed by the SEC. The
SEC's Web site contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of that site on the world wide web is sec.gov. The information on the
SEC's web site is not part of this prospectus, and any references to this web
site or any other web site are inactive textual references only.
i
<PAGE>
INCORPORATION BY REFERENCE
The SEC permits us to "incorporate by reference" the information in
documents we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and
information that we file with the SEC after the initial filing date of the
registration statement of which this prospectus is a part, and prior to the
effectiveness of that registration statement, will automatically update and
supersede this information. We have filed the following documents with the SEC
and incorporate in this prospectus by reference:
. our Annual Report on Form 10-K for the year ended December 31, 1999;
. our Quarterly Report on Form 10-Q for the period ended June 30, 2000 and
our Quarterly Report on Form 10-Q for the period ended March 31, 2000;
. our Definitive Proxy Statement on Form DEF14A filed August 18, 2000;
. our Current Report on Form 8-K dated September 7, 2000 and our Current
Report on Form 8-K/A1 dated October 6, 2000; and
. our Registration Statement on Form 8-A dated May 17, 2000.
We also incorporate by reference any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act. Statements
contained in documents incorporated or deemed to be incorporated by reference
after the initial filing date of the registration statement of which this
prospectus is a part will modify statements in any other subsequently filed
documents to the extent the new information differs from the old information.
Any statements modified or superseded will no longer constitute a part of this
prospectus in their original form.
If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents. You should direct
requests for such copies to Investor Relations, Radio One, Inc., 5900 Princess
Garden Parkway, 8th Floor, Lanham, MD 20706, or to our e-mail address:
[email protected]. Our telephone number is (301) 306-1111.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, or Securities Act, covering the securities described in
this prospectus. This prospectus does not contain all of the information
included in the registration statement, some of which is contained in exhibits
to the registration statement. The registration statement, including the
exhibits, can be read at the SEC web site or at the SEC offices referred to
above. Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual contract,
agreement or other document. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the document or matter involved.
Each statement regarding a contract, agreement or other document is qualified
in its entirety by reference to the actual document.
ii
<PAGE>
SUMMARY
This summary highlights information contained elsewhere or incorporated by
reference in this prospectus. This summary is not complete and does not contain
all of the information that you should consider before investing in the HIGH
TIDES. You should carefully read this entire prospectus, including the "Risk
Factors" section, and the documents we have referred you to, including the
documents incorporated herein by reference, before making an investment in the
HIGH TIDES.
RADIO ONE, INC.
Our principal executive offices are located at 5900 Princess Garden Parkway,
8th Floor, Lanham, Maryland 20706 and our telephone number is (301) 306-1111.
For a description of our business, please see our Form 10-K for the year
ended December 31, 1999, our Forms 10-Q for the quarters ended March 31, 2000
and June 30, 2000, and our Current Reports on Form 8-K dated September 7, 2000
and on Form 8-K/A1 dated October 6, 2000, all of which are incorporated by
reference in this prospectus. The description of our business contained in our
Form 10-K for the year ended December 31, 1999, our Forms 10-Q for the periods
ending March 31, 2000 and June 30, 2000, and our Current Reports on Form 8-K
and Form 8-K/A1 referred to above will be updated and superseded by later
filings we make with the SEC that are incorporated by reference in this
prospectus. You should carefully read this entire prospectus and the documents
incorporated by reference in this prospectus before making a decision to invest
in the HIGH TIDES or the class D common stock.
1
<PAGE>
Securities to be Registered
The HIGH TIDES were originally issued and sold to the initial purchasers,
Credit Suisse First Boston Corporation, Deutsche Bank Securities Inc., Morgan
Stanley & Co. Incorporated, Banc of America Securities LLC and First Union
Securities, Inc. The initial purchasers simultaneously sold the HIGH TIDES in
transactions exempt from the registration requirements of the Securities Act to
persons reasonably believed by them to be qualified institutional buyers as
defined in Rule 144A under the Securities Act.
Issuer.................... Radio One, Inc.
Securities Offered........ 310,000 HIGH TIDES and 16,548,792 shares of class D
common stock issuable upon conversion of the HIGH
TIDES (subject to adjustment under certain
circumstances described in this prospectus).
Dividends................. Dividends accrue on the HIGH TIDES from the date of
original issuance (July 14, 2000) at the applicable
rate applied to the stated liquidation amount of
$1,000 per HIGH TIDES. The applicable rate is 6
1/2% per annum from the date of original issuance
to, but excluding, the reset date. The reset date
is any date (1) not later than July 15, 2005, the
final reset date, or, if that day is not a business
day, the next succeeding business day, and (2) not
earlier than 80 business days prior to July 15,
2005, as may be determined by the remarketing
agent, in its sole discretion, for settlement of a
successful remarketing. On or after the reset date,
the applicable rate will be the term rate
established by the remarketing agent based on the
outcome of the remarketing. We will pay dividends
quarterly in arrears on each January 15, April 15,
July 15, and October 15, commencing October 15,
2000.
Conversion Into Class D
Common Stock............. On or prior to the tender notification date, you
may convert each HIGH TIDES into shares of our
class D common stock at the initial rate of 53.3832
shares of class D common stock for each HIGH TIDES
(equivalent to a conversion price of $18.7325 per
share of class D common stock), subject to
adjustment in certain circumstances. The last
reported sale price of our class D common stock on
the Nasdaq Stock Market's National Market on
October 10, 2000 was $6.53 per share. On and after
the reset date, each HIGH TIDES may, at our option
and subject to the results of remarketing, become
nonconvertible or convertible into a different
number of shares of class D common stock. The
conversion price and conversion ratio in effect at
any time shall hereafter be referred to as the
applicable conversion price and the applicable
conversion ratio, respectively, each of which will
be subject to adjustment in certain circumstances.
We will not issue any fractional shares of class D
common stock as a result of the conversion.
Instead, we will pay the fractional interest in
cash based on the then current market value of our
class D common stock. Also, we will not issue any
additional shares of our class D common stock upon
conversion of the HIGH TIDES to pay for any
2
<PAGE>
accrued but unpaid dividends on the HIGH TIDES at
the time of conversion.
The class D common stock has no voting or
conversion rights, but otherwise has the same
rights, privileges and benefits as our class A
common stock, class B common stock and class C
common stock.
Maturity.................. The HIGH TIDES do not have a stated maturity.
Remarketing............... The remarketing agent has agreed to use its best
efforts to remarket all HIGH TIDES tendered for
remarketing. The remarketing agent will establish
the following, all of which will be effective as of
the reset date:
. the term rate per annum at which dividends will
accrue on the HIGH TIDES,
. the number of shares of class D common stock, if
any, into which HIGH TIDES may be converted, and
. the price, manner and time, if any, at which the
HIGH TIDES may be redeemed at our option.
The reset date is any date (1) not later than July
15, 2005, or if that day is not a business day, the
next succeeding business day, and (2) not earlier
than 80 business days prior to July 15, 2005, as
may be determined by the remarketing agent, in its
sole discretion, for settlement of a successful
remarketing.
The remarketing agent will use its best efforts to
establish the term rate, term conversion price and
ratio and term call provisions most favorable to us
consistent with the remarketing of all HIGH TIDES
tendered at a reset price equal to 101% of the
liquidation amount of the HIGH TIDES.
At least 30 business days but not more than 90
business days prior to the final reset date, we
will send a remarketing notice to you stating
whether we intend to remarket the HIGH TIDES as
securities that either will be convertible into
class D common stock or nonconvertible. All HIGH
TIDES you own will be deemed tendered for
remarketing unless you deliver an irrevocable
notice to the contrary to the tender agent prior to
the tender notification date. The tender agent will
promptly remit the irrevocable notice to the
remarketing agent prior to the tender notification
date. The tender notification date is a date no
earlier than 10 business days following the
remarketing notice date, or a shorter period as
shall be agreed to by the remarketing agent.
If no HIGH TIDES are tendered for remarketing, the
remarketing will not take place, and the
remarketing agent will set the term rate, term
conversion price and ratio and term call provisions
in a manner consistent with the remarketing notice
in the manner that it believes,
3
<PAGE>
in its sole discretion, would result in a price per
HIGH TIDES equal to 101% of the liquidation amount
of the HIGH TIDES were a remarketing actually to
occur.
If any HIGH TIDES are tendered for remarketing, the
remarketing agent will commence a convertible
remarketing or a nonconvertible remarketing. In
either case, an initial remarketing will proceed
according to instructions set forth in the
remarketing notice. The initial remarketing will
fail if:
. despite using its best efforts, the remarketing
agent is unable to establish a term rate less
than or equal to the maximum rate, which is a
rate equal to the 30-year treasury rate plus 6%
per annum, during the initial remarketing period;
. the remarketing agent is excused from its
obligations because of the failure by us to
satisfy certain conditions or the occurrence of
certain market events specified in the
remarketing agreement;
. there is no remarketing agent on the first day of
the initial remarketing period; or
. prior to the initial remarketing termination
date, term provisions are established by the
remarketing agent, but the remarketing agent is
unable to sell one or more HIGH TIDES tendered
for remarketing because of the occurrence of
certain market events specified in the
remarketing agreement.
In the event of a failed initial remarketing
because the remarketing agent (i) was unable to
establish the specified term rate or, (ii) having
set term provisions prior to the reset date, was
unable to sell one or more HIGH TIDES tendered for
remarketing because of the occurrence of certain
market events specified in the remarketing
agreement, the remarketing agent will commence a
final remarketing. This final remarketing will be a
convertible remarketing if the initial remarketing
was a nonconvertible remarketing and vice versa.
The final remarketing will fail if:
. despite using its best efforts, the remarketing
agent is unable to establish a term rate less
than or equal to the maximum rate prior to the
expiration of the final remarketing period;
. the remarketing agent is excused from remarketing
the securities because of the failure by us to
satisfy a condition in the remarketing agreement
or the occurrence of certain market events; or
. term provisions are established by the
remarketing agent, but the remarketing agent is
unable to sell one or more HIGH TIDES tendered
for remarketing because of the occurrence of
certain market events specified in the
remarketing agreement.
In the event of a failed final remarketing, the
HIGH TIDES will remain outstanding as convertible
securities at a term rate equal to the
4
<PAGE>
maximum rate and with a term conversion price equal
to 105% of the average closing price of our class D
common stock for the five consecutive trading days
after the final failed remarketing termination
date. In the event of a failed final remarketing,
all outstanding HIGH TIDES will be redeemable by
us, in whole or in part, at any time on or after
the third anniversary of the reset date at a
redemption price equal to 100% of the aggregate
liquidation amount thereof, plus accrued and unpaid
dividends thereon.
If the remarketing agent is able to establish a
term rate less than or equal to the maximum rate
during the initial remarketing period or the final
remarketing period, as the case may be, new holders
will deliver the reset price for the remarketed
HIGH TIDES, and the term provisions will become
effective on the reset date.
If for any reason term provisions are established
by the remarketing agent but on the reset date the
remarketing agent is unable to sell one or more
HIGH TIDES tendered for remarketing, the
remarketing agent will be obligated, subject to
some conditions, to purchase the HIGH TIDES for the
reset price on the reset date.
Remarketing Agent......... Credit Suisse First Boston Corporation has agreed
to act as the initial remarketing agent, but may
resign or be replaced by us prior to the
remarketing in accordance with the remarketing
agreement. The remarketing will be done without
charge to the holders of HIGH TIDES, but we will
pay the remarketing agent a fee equal to 1.0% of
the aggregate liquidation amount of the HIGH TIDES
outstanding on the reset date upon settlement of
the transactions contemplated by the remarketing.
Optional Redemption....... We may redeem the HIGH TIDES:
. in whole or in part, at any time on or after July
20, 2003 until but excluding the tender
notification date, at a redemption price of
$1,016.25 per HIGH TIDE, declining ratably
annually to par on or after July 20, 2004, plus
any accrued and unpaid dividends; and
. after the reset date, in accordance with the term
call protections established in the remarketing
or upon a failed final remarketing.
Voting Rights............. The HIGH TIDES are non-voting except that holders
will, subject to any restrictions imposed by the
Communications Act or FCC rules and policies, be
entitled to vote as a separate class to elect two
directors if the equivalent of six or more
quarterly dividends (whether consecutive or not) on
the HIGH TIDES is in arrears. Such voting rights
will continue until such time as the dividend
arrearage on the HIGH TIDES has been paid in full.
Ranking................... The HIGH TIDES rank senior to all classes of our
common stock and pari passu with other series of
preferred stock with respect to the payment of
dividends and amounts payable upon liquidation,
dissolution or winding up of Radio One.
5
<PAGE>
Form of HIGH TIDES........ The HIGH TIDES are represented by one or more
global certificates registered in the name of Cede
& Co., as nominee for The Depository Trust Company.
Use of Proceeds........... The selling holders will receive all of the net
proceeds from the resale of the securities. We will
not receive any proceeds.
Registration Rights....... Under a registration rights agreement entered into
in connection with the initial offering and sale of
the HIGH TIDES to the initial purchasers, we have
agreed to use our best efforts to keep the shelf
registration statement of which this prospectus is
a part effective and useable (subject to certain
exceptions) for two years or such other period as
shall be required under Rule 144(k) of the
Securities Act or such shorter period ending when
all the securities covered by the registration
statement have been sold. Special dividends will
accrue on the HIGH TIDES if we are not in
compliance with these requirements.
Absence of Market for the
HIGH TIDES................ The HIGH TIDES are a privately placed security for
which there is currently no public trading market.
Although the initial purchasers informed us in
connection with the initial offering and sale of
the HIGH TIDES that they intend to make a market in
the HIGH TIDES, the initial purchasers are not
obligated to do so, and they may discontinue any
such market making at any time without notice.
Accordingly, we cannot assure you as to the
development or liquidity of any market for the HIGH
TIDES.
Trading................... The HIGH TIDES are eligible for trading in The
PortalSM Market, a subsidiary of The Nasdaq Stock
Market Inc. Our class D common stock is listed on
The Nasdaq Stock Market's National Market under the
symbol "ROIAK."
6
<PAGE>
RISK FACTORS
Investing in the HIGH TIDES involves risk. You should consider carefully the
risk factors described below, as well as the other information contained or
incorporated by reference in this prospectus, before purchasing the HIGH TIDES.
The risks and uncertainties described below and incorporated by reference are
not the only risks we face. Additional risks and uncertainties not currently
known to us or that we currently deem immaterial may impair our business
operations. If any of the risks described below or incorporated by reference in
this prospectus actually occur, our business, results of operations and
financial condition could be materially and adversely affected, the trading
prices of the HIGH TIDES and our class D common stock could decline and you
might lose all or part of your investment.
Risks Relating to Radio One
Integration of Acquisitions--We may have difficulty integrating the operations,
systems and management of the stations that we have recently acquired or agreed
to acquire.
From January 1, 1999 through October 10, 2000, we have acquired or agreed to
acquire 37 radio stations, including 12 radio stations acquired from Clear
Channel Communications, Inc. and AMFM, Inc. on August 25, 2000, and we expect
to make acquisitions of other stations and station groups in the future. The
integration of acquisitions involves numerous risks, including:
. difficulties in the integration of operations and systems and the
management of a large and geographically diverse group of stations;
. the diversion of management's attention from other business concerns; and
. the potential loss of key employees of acquired stations.
We cannot assure you that we will be able to integrate successfully the
operations, systems or management acquired in the Clear Channel/AMFM
acquisitions, or any operations, systems or management that might be acquired
in the future. Consummation of the Clear Channel/AMFM acquisitions requires us
to manage a significantly larger and geographically more diverse radio station
portfolio than historically has been the case. Our failure to integrate and
manage newly acquired stations successfully could have a material adverse
effect on our business and operating results. In addition, in the event that
the operations of a new business do not meet expectations, we may restructure
or write-off the value of some or all of the assets of the new business.
Risks of Acquisition Strategy--Our growth depends on successfully executing our
acquisition strategy.
We intend to grow by acquiring radio stations primarily in top 50 African-
American markets. We cannot assure you that our acquisition strategy will be
successful. Our acquisition strategy is subject to a number of risks,
including:
. We may not successfully identify and consummate future acquisitions;
. Acquired stations may not increase our broadcast cash flow or yield other
anticipated benefits;
. Required regulatory approvals may result in unanticipated delays in
completing acquisitions; and
. We may be required to raise additional financing and our ability to do so
is limited by the terms of our debt instruments.
Dependence on Key Personnel--The loss of key personnel could disrupt the
management of our business.
Our business depends upon the continued efforts, abilities and expertise of
our executive officers and other key employees. We believe that the unique
combination of skills and experience possessed by these individuals
7
<PAGE>
would be difficult to replace, and that the loss of any one of them could have
a material adverse effect on us. These adverse effects could include the
impairment of our ability to execute our acquisition and operating strategies
and a decline in our standing in the radio broadcast industry.
Competition--We compete for advertising revenue against radio stations and
other media, many of which have greater resources than we do.
Our stations compete for audiences and advertising revenue with other radio
stations and with other media such as cable and broadcast television,
newspapers, direct mail, outdoor advertising and the Internet. Audience ratings
and advertising revenue are subject to change and any adverse change in a
market could adversely affect our net broadcast revenue in that market. If a
competing station converts to a format similar to that of one of our stations,
or if one of our competitors strengthens its operations, our stations could
suffer a reduction in ratings and advertising revenue. Other radio companies
which are larger and have more resources may also enter markets in which we
operate. Although we believe our stations are well positioned to compete, we
cannot assure you that our stations will maintain or increase their current
ratings or advertising revenue.
Restrictions Imposed by Our Debt--The terms of our debt restrict us from
engaging in many activities and require us to satisfy various financial tests.
Our bank credit facility and the agreements governing our other outstanding
debt contain covenants that restrict, among other things, our ability to incur
additional debt, pay cash dividends, purchase our capital stock, make capital
expenditures, make investments or other restricted payments, swap or sell
assets, engage in transactions with related parties, secure non-senior debt
with our assets, or merge, consolidate or sell all or substantially all of our
assets.
Our bank credit facility requires that we obtain our banks' consent for
acquisitions that do not meet specific criteria. These restrictions may make it
more difficult to pursue our acquisition strategy. Our bank credit facility
also requires that we maintain specific financial ratios. Events beyond our
control could affect our ability to meet those financial ratios, and we cannot
assure you that we will meet them.
A portion of the loans under our bank credit facility in the amount of
$150.0 million will be due in February 2002, and the remainder of the loans
under our bank credit facility will be due in August 2007. A breach of any of
the covenants contained in our bank credit facility could allow our lenders to
declare all amounts outstanding under our bank credit facility to be
immediately due and payable. In addition, our banks could proceed against the
collateral granted to them to secure that indebtedness. If the amounts
outstanding under our bank credit facility are accelerated, we cannot assure
you that our assets will be sufficient to repay in full the money owed to the
banks or to our other debt holders.
Substantial Debt--Our substantial level of debt could limit our ability to grow
and compete.
We have a substantial amount of debt, a significant portion of which bears
interest at variable rates. The amount and nature of our debt is described in
greater detail in our reports filed with the SEC. Our substantial level of
indebtedness could adversely affect us for various reasons, including limiting
our ability to:
. obtain additional financing for working capital, capital expenditures,
acquisitions, debt payments or other corporate purposes;
. have sufficient funds available for operations, future business
opportunities or other purposes;
. compete with competitors that have less debt than we do; and
. react to changing market conditions, changes in our industry and economic
downturns.
See "Description of Indebtedness" for a more detailed discussion of the terms
of certain of our indebtedness.
8
<PAGE>
Controlling Stockholders--Two common stockholders have a majority voting
interest in Radio One and have the power to control matters on which Radio
One's common stockholders may vote.
Catherine L. Hughes and her son, Alfred C. Liggins, III, collectively hold
approximately 55.6% of the outstanding voting power of Radio One's common
stock. As a result, Ms. Hughes and Mr. Liggins will control most decisions
involving Radio One, including transactions involving a change of control of
Radio One, such as a sale or merger. In addition, certain covenants in Radio
One's debt instruments require that Ms. Hughes and Mr. Liggins maintain
specified ownership and voting interests in Radio One, and prohibit other
parties' voting interests from exceeding specified amounts. Ms. Hughes and Mr.
Liggins have agreed to vote their shares together in elections to the board of
directors.
Technology Changes, New Services and Evolving Standards--We must respond to the
rapid changes in technology, services and standards which characterize our
industry in order to remain competitive.
The radio broadcasting industry is subject to rapid technological change,
evolving industry standards and the emergence of new media technologies. We
cannot assure you that we will have the resources to acquire new technologies
or to introduce new services that could compete with these new technologies.
Several new media technologies are being developed, including the following:
. Audio programming by cable television systems, direct broadcast satellite
systems, Internet content providers and other digital audio broadcast
formats;
. Satellite digital audio radio service, which could result in the
introduction of several new satellite radio services with sound quality
equivalent to that of compact discs; and
. In-band on-channel digital radio, which could provide multi-channel,
multi-format digital radio services in the same bandwidth currently
occupied by traditional AM and FM radio services.
We have entered into a programming agreement with a satellite digital audio
radio service, and have also invested in a developer of digital audio broadcast
technology and two Internet content providers. However, we cannot assure you
that these arrangements will be successful or enable us to adapt effectively to
these new media technologies.
Government Regulation--Our business depends on maintaining our licenses with
the FCC. We cannot assure you that we will be able to maintain these licenses.
Radio broadcasters depend upon maintaining radio broadcasting licenses
issued by the FCC. These licenses are ordinarily issued for a maximum term of
eight years and may be renewed. Our radio broadcasting licenses expire at
various times from October 1, 2003 to August 1, 2006. Although we may apply to
renew our FCC licenses, interested third parties may challenge our renewal
applications. In addition, if Radio One or any of our stockholders, officers,
or directors violates the FCC's rules and regulations or the Communications Act
of 1934, as amended, or is convicted of a felony, the FCC may commence a
proceeding to impose sanctions upon us. Examples of possible sanctions include
the imposition of fines; the revocation of our broadcast licenses; or the
renewal of one or more of our broadcasting licenses for a term of fewer than
eight years. If the FCC were to issue an order denying a license renewal
application or revoking a license, we would be required to cease operating the
radio station covered by the license only after we had exhausted administrative
and judicial review without success.
The radio broadcasting industry is subject to extensive and changing federal
regulation. Among other things, the Communications Act and FCC rules and
policies limit the number of broadcasting properties that any person or entity
may own (directly or by attribution) in any market and require FCC approval for
transfers of control and assignments of licenses. The filing of petitions or
complaints against Radio One or any FCC licensee from which we are acquiring a
station could result in the FCC delaying the grant of, or refusing to grant or
imposing conditions on its consent to the assignment or transfer of control of
licenses. The Communications Act and FCC rules and policies also impose
limitations on non-U.S. ownership and voting of the capital stock of Radio One.
9
<PAGE>
Antitrust Matters--We may have difficulty obtaining regulatory approval for
acquisitions in our existing markets and, potentially, new markets.
An important part of our growth strategy is the acquisition of additional
radio stations. After the passage of the Telecommunications Act of 1996, the
U.S. Department of Justice has become more aggressive in reviewing proposed
acquisitions of radio stations and radio station networks. The Justice
Department is particularly aggressive when the proposed buyer already owns one
or more radio stations in the market of the station it is seeking to buy. The
Justice Department has challenged a number of radio broadcasting transactions.
Some of those challenges ultimately resulted in consent decrees requiring,
among other things, divestitures of certain stations. In general, the Justice
Department has more closely scrutinized radio broadcasting acquisitions that
result in local market shares in excess of 40% of radio advertising revenue.
Similarly, the FCC has adopted procedures to review proposed radio broadcasting
transactions even if the proposed acquisition otherwise complies with the FCC's
ownership limitations. In particular, the FCC may invite public comment on
proposed radio transactions that the FCC believes, based on its initial
analysis, may present ownership concentration concerns in a particular local
radio market.
Risks Relating Specifically to the HIGH TIDES
The HIGH TIDES are Subordinate to Debt--We may not be able to pay dividends on
the HIGH TIDES if we default on our debt.
Because our obligations to pay dividends on the HIGH TIDES are subordinated
to our payment obligations under our debt, we will not be permitted to pay any
dividends if we default on our debt. We will also be required to pay all our
debt before we pay dividends on the HIGH TIDES if we become bankrupt, liquidate
or dissolve. Additionally, the HIGH TIDES do not limit our ability or the
ability of our subsidiaries to incur additional indebtedness.
The HIGH TIDES are Junior to All of our Liabilities--We must pay all
indebtedness and other liabilities before we pay our obligation under HIGH
TIDES upon bankruptcy, liquidation or winding-up.
In the event of our bankruptcy, liquidation or winding-up, our assets will
be available to pay our obligations on the HIGH TIDES only after all
indebtedness and other liabilities have been paid. Any additional HIGH TIDES we
may issue in the future and all other subsequent series of preferred stock
designated as equal to the HIGH TIDES will rank equally in the right of payment
with the HIGH TIDES. As a result, there may not be sufficient assets remaining
to pay amounts due on any or all of the HIGH TIDES then outstanding. The amount
of our liabilities is described in the reports we file with the SEC.
Election Not to Keep the HIGH TIDES upon a Remarketing Notice--If you do not
elect to keep your HIGH TIDES upon a remarketing notice, your HIGH TIDES will
no longer be outstanding after a successful remarketing.
If you do not notify the remarketing agent, your HIGH TIDES will no longer
be outstanding after the successful remarketing, and you will have no further
rights thereunder except to receive an amount equal to:
. from the proceeds of the remarketing, 101% of the aggregate liquidation
amount of the HIGH TIDES, plus
. from us, accrued and unpaid dividends on the HIGH TIDES up until, but
excluding, the reset date.
The remarketing agent agrees to use its best efforts to remarket all HIGH
TIDES tendered for remarketing. All HIGH TIDES will be considered tendered
unless the holder of HIGH TIDES gives irrevocable notice to the contrary to the
tender agent, which the tender agent will promptly remit to the remarketing
agent, before the tender notification date.
10
<PAGE>
Remarketing Failure--The remarketing of the HIGH TIDES may not be successful
and the terms of the HIGH TIDES after any remarketing are subject to change.
The remarketing will have failed if:
. despite using its best efforts, the remarketing agent cannot establish a
term rate less than or equal to the maximum rate;
. the remarketing agent is excused from remarketing the HIGH TIDES because
of (i) the failure by us to satisfy a condition in the remarketing
agreement or (ii) the occurrence of certain market events specified in
the remarketing agreement; or
. there is no remarketing agent on the first day of the initial remarketing
period.
If the initial remarketing fails, the remarketing agent will commence a
final remarketing during the final remarketing period. If the final remarketing
fails, then the HIGH TIDES will remain outstanding at a term rate equal to the
maximum rate and with a term conversion price equal to 105% of the average
closing price of our class D common stock for the five consecutive trading days
after the final failed remarketing termination date. In the event of a failed
final remarketing, all outstanding HIGH TIDES will be redeemable by us, in
whole or in part, at any time on or after the third anniversary of the reset
date at a redemption price equal to 100% of the aggregate liquidation amount
thereof, plus accrued and unpaid dividends thereon. If no HIGH TIDES are
tendered for remarketing, the remarketing will not take place, although the
remarketing will not be deemed to have failed. The remarketing agent will set
the term provisions according to the instructions contained in the remarketing
notice in the manner that it believes, in its sole discretion, would result in
a price per HIGH TIDES equal to 101% of the liquidation amount if a remarketing
were actually to occur.
Loss of or Change to Convertibility Feature--After the reset date, the HIGH
TIDES may no longer be convertible or may be convertible into a fewer number of
shares of our class D common stock.
Each HIGH TIDES is initially convertible, at the option of the holder, into
53.3832 shares of our class D common stock, which may be adjusted in certain
circumstances. See "Description of HIGH TIDES --Conversion Rights." We may
choose to remarket the HIGH TIDES so that after the reset date the HIGH TIDES
will not be convertible into shares of class D common stock or each HIGH TIDES
will be convertible into a different number of shares of class D common stock.
See "The Remarketing."
Redemption--We may cause the HIGH TIDES to be redeemed on or after July 20,
2003 without your consent.
We may redeem all or some of the HIGH TIDES at our option at any time on or
after July 20, 2003 without your consent. The redemption price initially
includes a premium declining over time to 100% of the principal amount to be
redeemed plus any accrued and unpaid dividends. You should assume that we will
exercise our redemption option if we conclude it is in our interest to redeem
the HIGH TIDES.
Limited Voting Rights--Your voting rights as a holder of the HIGH TIDES will be
limited.
The HIGH TIDES will be nonvoting, except that holders will be entitled to
vote as a separate class to elect two directors if the equivalent of six or
more quarterly dividends (whether consecutive or not) on the HIGH TIDES is in
arrears. Such voting rights will continue until such time as the dividend
arrearage on the HIGH TIDES has been paid in full.
No Established Market--The HIGH TIDES do not have an established market and we
cannot guarantee that a trading market will develop.
There has been no market for the HIGH TIDES. In connection with the initial
offering and sale of the HIGH TIDES, the initial purchasers informed us that
they intended to make a market in the HIGH TIDES, but
11
<PAGE>
we cannot assure you that an active trading market for the HIGH TIDES will
develop or be sustained. If a market were to develop, the HIGH TIDES could
trade at prices that may be higher or lower than their offering price depending
upon many factors, including prevailing interest rates, our operating results
and the market for similar securities.
12
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the securities by
the selling holders.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our consolidated ratio of earnings to
combined fixed charges and preferred stock dividends for the periods indicated.
<TABLE>
<CAPTION>
Six Months
Fiscal Year Ended December 31, Ended June 30,
------------------------------- ----------------
Pro Pro
forma Forma
1995 1996 1997 1998 1999 1999 1999 2000 2000
---- ---- ---- ---- ---- ----- ---- ---- -----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Consolidated Ratio of Earnings
to Combined Fixed Charges and
Preferred Stock Dividends *.. -- -- -- -- 1.08x -- -- 2.79x --
</TABLE>
--------
* Earnings were insufficient to cover combined fixed charges and preferred
stock dividends for the fiscal years ended December 31, 1995, 1996, 1997 and
1998 by approximately $1.4 million, $3.6 million, $5.0 million, and $4.5
million, respectively, and for the six months ended June 30, 1999 by
approximately $4.7 million. Earnings were insufficient to cover combined
fixed charges and preferred stock dividends on a pro forma basis for the
year ended December 31, 1999 and for the six months ended June 30, 2000 by
approximately $104.7 and $47.5 million, respectively.
13
<PAGE>
THE REMARKETING
Notice of remarketing; tender for sale by remarketing; retention of HIGH TIDES
At least 30 business days, but not more than 90 business days, prior to July
15, 2005, Radio One will send to you a remarketing notice stating whether it
intends to remarket the HIGH TIDES as securities that either will be
convertible into class D common stock or nonconvertible. So that no holder of
HIGH TIDES, through inadvertence or otherwise, may fail to tender any HIGH
TIDES for sale in the remarketing, each outstanding HIGH TIDES you own will be
deemed to have been tendered for remarketing unless you have given irrevocable
notice to the contrary to the tender agent. The tender agent will promptly
remit the notice to the remarketing agent. The irrevocable notice, which may be
telephonic or written, must be delivered prior to 5:00 p.m., New York City
time, on the tender notification date. The tender notification date is a
business day no earlier than 10 business days following the remarketing notice
date, or a shorter period as shall be agreed to by the remarketing agent. If
you elect to retain HIGH TIDES, your notice must state:
. the number of HIGH TIDES to be retained (which must be all of the HIGH
TIDES represented by the applicable certificate, unless such certificate
is a global HIGH TIDES certificate);
. the number of the certificate representing the HIGH TIDES not being
tendered (unless such certificate is a global HIGH TIDES certificate);
and
. the number of HIGH TIDES represented by such certificate (unless such
certificate is a global HIGH TIDES certificate).
Any transferee of a HIGH TIDES is bound to the terms of any such notice
which has been given relating to the transferred HIGH TIDES.
Any failure by you to give timely notice of an election to retain all or any
part of your HIGH TIDES will constitute an irrevocable tender for sale in the
remarketing of all the HIGH TIDES you hold. On and after the reset date, the
terms of all HIGH TIDES, whether or not tendered for remarketing, will be
modified by the term provisions, as the same shall be established by the
remarketing agent.
If the HIGH TIDES are not held by DTC or its nominee in the form of one or
more global HIGH TIDES, certificates representing remarketed HIGH TIDES will be
issued to the purchasers of the HIGH TIDES, irrespective of whether the
certificates formerly representing such HIGH TIDES have been delivered to the
tender agent. If you do not duly give notice that you will retain your HIGH
TIDES, your rights with respect to the HIGH TIDES will cease upon the
successful remarketing of the HIGH TIDES, except your right to receive an
amount equal to:
. from the proceeds of the remarketing, 101% of the aggregate liquidation
amount of the HIGH TIDES; plus
. from us, any accrued and unpaid dividends on the HIGH TIDES to, but
excluding, the reset date, which shall be payable upon surrender by you
of the certificate representing the HIGH TIDES to the tender agent
properly endorsed for transfer, in the case of a holder other than DTC,
which has taken physical delivery of a HIGH TIDES certificate, and the
certificate will cease to represent outstanding HIGH TIDES.
If no HIGH TIDES are tendered for remarketing, the remarketing will not take
place, although the remarketing will not be deemed to have failed. Under these
circumstances, the remarketing agent will set the term provisions in a manner
consistent with the remarketing notice that it believes, in its sole
discretion, would result in a price per HIGH TIDES equal to 101% of the
liquidation amount thereof were a remarketing actually to occur.
14
<PAGE>
The Remarketing Process
The remarketing agent has agreed to use its best efforts to remarket all
HIGH TIDES tendered for remarketing in accordance with the remarketing
agreement. The remarketing agent will establish, effective beginning on the
reset date:
. the term rate per annum at which dividends will accrue on the HIGH TIDES;
. the term conversion ratio and price, which determine the number of shares
of class D common stock, if any, into which each HIGH TIDES may be
converted; and
. the term call protections, which are the price, manner and time, if any,
at which the HIGH TIDES may be redeemed.
In this prospectus, we refer to the term rate, the term conversion ratio and
price and the term call protections as the term provisions.
The remarketing agent will use its best efforts to establish the term
provisions most favorable to us consistent with the successful remarketing of
all HIGH TIDES tendered at a price equal to 101% of the liquidation amount. The
remarketing agent may purchase HIGH TIDES tendered for remarketing, but it
shall not be obligated to purchase any HIGH TIDES except to the extent
expressly provided under the remarketing agreement.
The remarketing will be done without charge to the holders of the HIGH
TIDES, but we shall be obligated to pay the remarketing agent fees for its
services. Neither we nor any of our affiliates will be permitted to submit
orders for or purchase tendered HIGH TIDES in the remarketing.
In establishing the term provisions during the remarketing, the remarketing
agent will take into account the following remarketing conditions:
. short-term and long-term market interest rates and indices of the short-
term and long-term interest rates;
. market supply and demand for short-term and long-term securities;
. yield curves for short-term and long-term securities comparable to the
HIGH TIDES;
. industry and financial conditions which may affect the HIGH TIDES;
. the number of HIGH TIDES to be remarketed;
. the number of potential purchasers;
. the number of shares of class D common stock, if any, into which the HIGH
TIDES will be convertible;
. the current ratings by nationally recognized statistical rating
organizations of our debt; and
. the length and type of call protections, if any.
We currently have no intention of causing the applicable conversion price on
the reset date to be less than 100% of the fair market value of the class D
common stock on the reset date.
If any HIGH TIDES are tendered for remarketing, on the business day
following the tender notification date, the remarketing agent will commence a
convertible remarketing or a nonconvertible remarketing, as the case may be, in
accordance with the remarketing agreement and pursuant to the instructions set
forth in the remarketing notice. The remarketing agent will determine, and upon
request make available to interested persons, non-binding indications of the
term provisions based upon then-current remarketing conditions. The remarketing
agent will solicit and receive orders from prospective investors to purchase
tendered HIGH TIDES.
15
<PAGE>
The remarketing agent will continue using its best efforts to remarket the HIGH
TIDES as described above, adjusting the non-binding indications of the term
provisions as necessary to establish the term conditions most favorable to us
consistent with remarketing all HIGH TIDES tendered at 101% of the aggregate
liquidation amount until the remarketing is completed or is deemed to have
failed for any of the reasons set forth under "--Effect of a Failed
Remarketing."
If the remarketing agent determines that the remarketing has not failed, the
remarketing agent will promptly communicate the term provisions to the tender
agent. The initial remarketing termination date is the tenth business day
following the tender notification date, or a shorter period as shall be agreed
to by the remarketing agent. The tender agent will communicate the term
provisions to the paying agent, us and each holder, if any, which timely
elected not to tender all of its HIGH TIDES for remarketing, by written notice
or by telephone promptly confirmed by telecopy or other writing. On the reset
date, new holders will tender the reset price for the tendered HIGH TIDES as
set forth below under "--Settlement" and the term provisions will become
effective.
Effect of Failed Remarketing
The initial remarketing will fail if:
. despite using its best efforts the remarketing agent is unable to
establish, prior to the initial remarketing termination date, a term rate
that is less than or equal to the 30-year treasury rate plus 6% per
annum, which we refer to in this prospectus as the "maximum rate";
. the remarketing agent is excused from remarketing the HIGH TIDES because
of the failure by us to satisfy a condition in the remarketing agreement
or the occurrence of certain market events specified in the remarketing
agreement;
. there is no remarketing agent on the first day of the initial remarketing
period; or
. prior to the initial remarketing termination date, term provisions are
established by the remarketing agent, but the remarketing agent is unable
to sell one or more HIGH TIDES tendered for remarketing because of the
occurrence of certain market events specified in the remarketing
agreement.
If the initial remarketing fails because the remarketing agent (i) was not
able to establish a term rate less than or equal to the maximum rate, or (ii)
having set term provisions prior to the reset date, was unable to sell one or
more HIGH TIDES tendered for remarketing because of the occurrence of certain
market events specified in the remarketing agreement, the remarketing agent
will commence a final remarketing during the period beginning on the business
day following the initial remarketing termination date and ending on the date
which is 10 business days later, or a shorter period as shall be agreed to by
the remarketing agent. The final remarketing will be a convertible remarketing
if the initial remarketing was a nonconvertible remarketing and vice versa.
If the remarketing agent is able to establish a term rate less than or equal
to the maximum rate during the final remarketing period, it shall promptly
communicate the term provisions to the tender agent, who will communicate the
term provisions to the paying agent, us and each holder, if any, which timely
elected not to tender all of its HIGH TIDES for remarketing, by written notice
or by telephone promptly confirmed by telecopy or other writing. On the reset
date, new holders will tender the reset price for the tendered HIGH TIDES as
set forth below under "--Settlement" and the term provisions will become
effective.
The final remarketing will fail if:
. despite its best efforts, the remarketing agent is unable to establish a
term rate less than or equal to the maximum rate prior to the expiration
of final remarketing period;
. the remarketing agent is excused from remarketing the securities because
of the failure by us to satisfy a condition in the remarketing agreement
or the occurrence of certain market events; or
16
<PAGE>
. term provisions are established by the remarketing agent, but the
remarketing agent is unable to sell one or more HIGH TIDES tendered for
remarketing because of the occurrence of certain market events specified
in the remarketing agreement.
In the event of a failed final remarketing, the HIGH TIDES will remain
outstanding as convertible securities at a term rate equal to the maximum rate
and with a term conversion price equal to 105% of the average closing price of
our class D common stock for the five consecutive trading days after the final
failed remarketing termination date. In the event of a failed final
remarketing, all outstanding HIGH TIDES will be redeemable by us, in whole or
in part, at any time on or after the third anniversary of the reset date at a
redemption price equal to 100% of the aggregate liquidation amount thereof,
plus accrued and unpaid dividends thereon. There can be no assurance that all
of the HIGH TIDES tendered will be remarketed.
The term "30-year treasury rate" means (i) the yield, under the heading
which represents the average for the week immediately prior to the date of
calculation, appearing in the most recently published statistical release
designated H.15(519) or any successor publication which is published weekly by
the Federal Reserve and which establishes yields on actively traded United
States Treasury securities for 30 year treasury bonds (or if 30 year treasury
bonds are no longer issued, the longest maturity treasury bond then being
issued) or (ii) if such release, or any successor release, is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
comparable treasury issue, calculated using a price for the comparable treasury
issue (expressed as a percentage of its principal amount) equal to the
comparable treasury price for the reset date. The 30-year treasury rate shall
be calculated on the third business day preceding the reset date.
The term "comparable treasury issue" means the United States Treasury
security selected by the quotation agent that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities.
The term "comparable treasury price" means (i) the arithmetic mean of five
reference treasury dealer quotations for the reset date, after excluding the
highest and lowest such reference treasury dealer quotations, or (ii) if the
quotation agent obtains fewer than five reference treasury dealer quotations,
the arithmetic mean of all the reference treasury dealer quotations.
The term "quotation agent" means Credit Suisse First Boston Corporation and
its successor, provided, however, that if the foregoing shall cease to be a
primary United States Government securities dealer in The City of New York we
shall substitute therefor another primary treasury dealer.
The term "reference treasury dealer" means (i) the quotation agent and (ii)
any other primary treasury dealer selected by the remarketing agent after
consultation with us.
The term "reference treasury dealer quotations" means, with respect to each
reference treasury dealer and the reset date, the arithmetic mean, as
determined by the remarketing agent, of the bid and asked prices for the
comparable treasury issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the remarketing agent by such reference
treasury dealer at 5:00 p.m., New York City time, on the third business day
preceding the reset date.
Settlement
Settlement of transactions in connection with the remarketing will take
place on the reset date, or such date as the remarketing agent may, in its sole
discretion, determine, or as otherwise required by applicable law. Payments in
respect of the tendered HIGH TIDES in an amount equal to the reset price will
be made by the tender agent (but only to the extent in fact received by the
tender agent) on the date and in the manner described under "Description of
HIGH TIDES--Form, Book-Entry Procedures and Transfer," but, in the case of a
holder (other than DTC) which has taken physical delivery of a certificate
representing its HIGH TIDES, the payment shall be made only upon surrender to
the tender agent by 2:30 p.m. New York City time on the reset date (or any
succeeding date) of the certificate representing the HIGH TIDES, properly
endorsed for transfer.
17
<PAGE>
Neither we, the tender agent nor (except to the extent expressly provided
under "The Remarketing" and "The Remarketing Agent") the remarketing agent will
be obligated to provide or advance funds to make payment to the holders of HIGH
TIDES tendered in the remarketing.
Purchases by Us and Our Affiliates
While we, or an affiliate, may from time to time purchase, hold, or sell
HIGH TIDES, neither we nor any of our affiliates may purchase any HIGH TIDES on
the reset date or submit orders in the remarketing, and the remarketing agent
has agreed that it will not knowingly remarket any HIGH TIDES to us or any of
our affiliates.
Tender Agent
Tenders of HIGH TIDES in the remarketing will be made to the tender agent,
and the tender agent will pay to the prior holders thereof the reset price,
provided the tender agent receives the amount from the remarketing agent.
THE REMARKETING AGENT
We will use our reasonable best efforts to assure that, at all times prior
to and including the reset date, an investment bank, broker, dealer or other
organization which, in our judgment, is qualified to remarket HIGH TIDES and to
establish the term rate is acting as remarketing agent, provided that if we
fail to appoint a successor upon the resignation or removal of the remarketing
agent reasonably promptly, a successor having such qualifications may be
appointed by the holders of at least 25% in aggregate liquidation amount of the
outstanding HIGH TIDES. Credit Suisse First Boston Corporation has agreed to
act as the initial remarketing agent but may resign or be replaced by us, in
accordance with the terms of the remarketing agreement. The remarketing agent
may authorize any broker-dealer to assist in the remarketing.
The remarketing agreement among us, the remarketing agent and the tender
agent provides that the remarketing agent will receive fees from us for the
remarketing equal to 1.0% of the aggregate liquidation amount of outstanding
HIGH TIDES on the reset date upon settlement of the transactions contemplated
by the remarketing. In addition to these fees we will reimburse the remarketing
agent for all out-of-pocket expenses reasonably incurred in connection with the
performance of its duties. In the event that both the initial remarketing and
the final remarketing fail, we shall not be required to pay any fees to, or
reimburse any out-of-pocket expense of, the remarketing agent. The remarketing
will be done without charge to the holders of the HIGH TIDES.
We have agreed in the remarketing agreement to indemnify the remarketing
agent against some liabilities arising out of or in connection with its duties,
or to contribute to payments which the remarketing agent may be required to
make in respect thereof.
The remarketing agent may resign and be relieved from its duties under the
remarketing agreement under limited circumstances on a date specified in a
notice in writing delivered to us. The remarketing agent's resignation will not
become effective until at least 30 days after delivery of the notice. The
successor remarketing agent must be an investment bank, broker, dealer or other
organization which, in our judgment, is qualified to remarket the HIGH TIDES
and establish the term provisions and which has entered into a remarketing
agreement with us in which it has agreed to conduct the remarketing in
accordance with the terms and conditions described in this prospectus and
provided in the remarketing agreement. The holders of a majority in aggregate
liquidation amount of the outstanding HIGH TIDES may remove the remarketing
agent for cause. The tender agent will send notice to you of the resignation or
removal of the remarketing agent and the appointment of a successor remarketing
agent. If there is no remarketing agent on the first day of the initial
remarketing period, the remarketing will fail and the HIGH TIDES will remain
outstanding on the terms described in this prospectus under "The Remarketing--
Effect of Failed Remarketing."
18
<PAGE>
The remarketing agreement provides that the remarketing agent will not be
obligated to remarket HIGH TIDES if:
. there is a material misstatement or omission in any (i) disclosure
document approved by us in connection with the remarketing or (ii)
document publicly disclosed (including in a filing pursuant to the
Securities Exchange Act) by or on behalf of us, unless in each case the
remarketing agent is satisfied that such misstatement or omission has
been properly corrected; or
. we fail to satisfy conditions customary in an offering.
Broker-dealers, if any, which obtain purchasers for the HIGH TIDES will be
paid a commission or fee by the remarketing agent based upon the remarketing
fee described above and the number of HIGH TIDES sold. Broker-dealers will
enter into broker-dealer agreements with the remarketing agent, which will
provide for their participation in the remarketing and will require them to
follow certain private placement procedures. The identity of the broker-
dealers, if any, which will participate in the remarketing has not yet been
determined. The remarketing agent will have the right to select broker-dealers
at any time prior to the reset date. No broker-dealer will be obligated to
purchase the HIGH TIDES.
If for any reason term provisions are established by the remarketing agent
but on the reset date the remarketing agent is unable to sell one or more HIGH
TIDES tendered for remarketing, the remarketing agent will be obligated, except
upon the occurrence of certain market events specified in the remarketing
agreement, to purchase the HIGH TIDES for the reset price on the reset date.
DESCRIPTION OF HIGH TIDES
The following is a summary of certain provisions of the HIGH TIDES and the
Certificate of Designations setting forth the rights and preferences of the
HIGH TIDES. A copy of the Certificate of Designations and the form of HIGH
TIDES share certificate is available upon request to us at the address set
forth under "Where You Can Find More Information." The following summary of
certain provisions of the Certificate of Designations does not purport to be
complete and is subject to, and is qualified in its entirety by reference to
all the provisions of the Certificate of Designations. The definitions of
capitalized terms used in the following summary that are not defined in this
prospectus are defined in the Certificate of Designations.
General
On July 14, 2000, we issued 310,000 HIGH TIDES. The HIGH TIDES are validly
issued, fully paid and nonassessable. The holders of the HIGH TIDES will have
no preemptive or preferential right to purchase or subscribe to our stock,
obligations, warrants or other securities of any class. The HIGH TIDES are
eligible for trading in the PORTAL Market.
Credit Suisse First Boston Corporation has agreed to act as initial
remarketing agent with respect to the HIGH TIDES and is referred to herein as
the remarketing agent. The remarketing agent will be paid fees for its services
and may resign or be replaced by us under certain circumstances. The
remarketing agent may also be removed at any time for cause by the holders of a
majority of the aggregate liquidation amount of HIGH TIDES outstanding. See
"The Remarketing Agent."
Ranking
The HIGH TIDES, with respect to dividend rights and rights on liquidation,
winding-up and dissolution, rank (i) senior to all classes of common stock and
to each other class of capital stock or series of preferred stock established
hereafter by the Board of Directors the terms of which do not expressly provide
that it ranks senior to, or on a parity with, the HIGH TIDES as to dividend
rights and rights on liquidation, winding-up and dissolution (collectively
referred to, together with all of our classes of common stock, as "Junior
Stock"); (ii) on a parity with each class of capital stock or series of
preferred stock established hereafter by the Board of
19
<PAGE>
Directors, the terms of which expressly provide that such class or series will
rank on a parity with the HIGH TIDES as to dividend rights and rights on
liquidation, winding-up and dissolution (collectively referred to as "Parity
Stock"); and (iii) junior to each class of capital stock or series of preferred
stock established hereafter by the Board of Directors, the terms of which
expressly provide that such class or series will rank senior to the HIGH TIDES
as to dividend rights and rights on liquidation, winding-up and dissolution
(collectively referred to as "Senior Stock").
While any shares of HIGH TIDES are outstanding, we may not authorize, create
or increase the authorized amount of any class or series of stock that ranks
senior to the HIGH TIDES with respect to the payment of dividends or amounts
upon liquidation, dissolution or winding-up without the consent of the holders
of at least 66 2/3% of the outstanding shares of HIGH TIDES. However, without
the consent of any holder of HIGH TIDES, we may create additional classes of
stock, increase the authorized number of shares of preferred stock or issue
series of a stock that ranks on parity with, or junior to, the HIGH TIDES with
respect, in each case, to the payment of dividends and amounts upon
liquidation, dissolution and winding up. See "--Voting Rights."
Dividends
Subject to the prior rights of holders of any Senior Stock, holders of
shares of HIGH TIDES are entitled to receive, when, as and if declared by our
Board of Directors out of our funds legally available for payment, cumulative
dividends at the rate of 6 1/2% per annum based on the liquidation preference
of the shares. Currently, the liquidation preference is $1,000 per share. This
is equivalent to an annual dividend of $65.00 per share. Dividends on the HIGH
TIDES are payable quarterly on January 15, April 15, July 15 and October 15,
each referred to as a dividend date, commencing October 15, 2000. These
dividends are cumulative and accrue from the most recent date on which
dividends were paid. If no dividends have yet been paid, these dividends accrue
from the date of the original issuance of the HIGH TIDES.
Dividends are payable to holders of record as they appear on our stock
records at the close of business on the applicable record date. The record date
is the 15th day of the month immediately preceding the dividend date. Dividends
are payable on our HIGH TIDES on the basis of a 360-day year comprised of
twelve 30-day months. If any dividend date is not a business day, we will pay
dividends payable on that date on the next succeeding day that is a business
day, and without any additional dividends or other payments in respect of any
such delay, with the same force and effect as if made on the date the payment
was originally payable. Dividends that we do not pay on the applicable dividend
date will accrue additional dividends on the amount of the accrued dividends,
to the extent permitted by law, compounded quarterly from the relevant dividend
date. As used in this prospectus, the term "dividend" includes quarterly
dividends and additional dividends on quarterly dividends not paid on the
applicable dividend date, as applicable. As used in this prospectus, a
"business day" means any day other than a Saturday or a Sunday, or a day on
which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed, or a day on which the paying agent
is closed for business.
The reset date is any date (1) not later than July 15, 2005, or, if the day
is not a business day, the next succeeding business day, and (2) not earlier
than 80 business days prior to July 15, 2005, as may be determined by the
remarketing agent, in its sole discretion, for settlement of a successful
remarketing. The 15th day of the month immediately preceding each dividend date
is the record date for determining which holders of HIGH TIDES shall be paid
the dividends and additional amounts, if any, payable on such dividend date. If
the reset date is prior to the record date for the immediately following
dividend date, then dividends and additional amounts, if any, accrued from and
after the reset date to but excluding the immediately following dividend date
shall be paid on such dividend date to the person in whose name each HIGH TIDES
is registered on the relevant record date. If the reset date is on or after the
record date for the immediately following dividend date, then (1) dividends and
additional amounts, if any, accrued from and after the record date to but
excluding the reset date shall be paid on the immediately following dividend
date to the person in whose name each HIGH TIDES is registered on the relevant
record date and (2) dividends and additional amounts, if any, accrued from and
after the reset date to but excluding the immediately following dividend date
shall be paid on the second
20
<PAGE>
dividend date immediately following the reset date to the person in whose name
each HIGH TIDES is registered on the relevant record date for such second
dividend date. The applicable rate will be the initial rate of 6 1/2% per annum
from the date of original issuance of the HIGH TIDES to, but excluding, the
reset date. From the reset date, the applicable rate will be the term rate
established by the remarketing agent to be effective on the reset date. On the
reset date, the remarketing agent will notify us and the holders, if any, which
elected not to tender all their HIGH TIDES for remarketing of the term
provisions, including the term rate. The notification must be made by written
notice or by telephone promptly confirmed by telecopy or other writing. See
"The Remarketing." In the event of a registration default under the
registration rights agreement, the applicable rate will be increased by 0.50%
per annum until the registration default is cured.
Conversion Rights
General. You may convert your HIGH TIDES at any time prior to 5:00 p.m., New
York City time, on or prior to the tender notification date and, in the event
of a convertible remarketing or a failed final remarketing, from and after the
reset date (except that you may convert HIGH TIDES called for redemption by us
at any time prior to 5:00 p.m., New York City time, on the relevant redemption
date), at your option and in the manner described below, into shares of our
class D common stock. On or prior to the tender notification date, you may
convert each HIGH TIDES, pursuant to the initial conversion ratio, into 53.3832
shares of our class D common stock (equivalent to an initial conversion price
of $18.7325 per share of our class D common stock). On and after the reset
date, we have the option to make each HIGH TIDES, subject to the results of the
remarketing, become convertible into a different number of shares of our class
D common stock or nonconvertible. See "The Remarketing." The conversion ratio
and the equivalent conversion price in effect at any given time are referred to
in this prospectus as the applicable conversion ratio and the applicable
conversion price, respectively, and will be subject to adjustment as described
under "Conversion Price Adjustments" below.
If you wish to exercise your conversion right, you must deliver an
irrevocable conversion notice, together, if the HIGH TIDES are in certificated
form, with the certificated security, to the conversion agent who will, on your
behalf, convert the HIGH TIDES into shares of our class D common stock. You may
obtain copies of the required form of the conversion notice from the conversion
agent.
If you are the record holder of HIGH TIDES at the close of business on a
dividend record date, you will be entitled to receive the dividend payable on
your HIGH TIDES on the corresponding dividend date even if you convert your
HIGH TIDES after the dividend record date but prior to the dividend date.
Except as provided in the immediately preceding sentence, we will not make, or
be required to make, any payment, allowance or adjustment for accrued and
unpaid dividends, whether or not in arrears, on converted HIGH TIDES. We will
make no payment or allowance for dividends on our shares of class D common
stock issued upon conversion, except to the extent that those shares of class D
common stock are held of record on the record date for any dividends. We will
deem each conversion to have been effected immediately prior to the close of
business on the day on which we received the related conversion notice.
We will not issue any fractional shares of our class D common stock as a
result of conversion. Instead, we will pay fractional interest in cash based on
the closing price of our class D common stock at the time of conversion.
Conversion Price Adjustments--General. The applicable conversion price of
the HIGH TIDES will be adjusted, without duplication, upon the happening of the
following events:
. the payment of dividends and other distributions payable exclusively in
our class D common stock on our class D common stock;
. the issuance to all holders of our class D common stock of rights or
warrants;
. subdivisions and combinations of our class D common stock,
21
<PAGE>
. the payment of dividends and other distributions to all holders of our
class D common stock consisting of evidences of our indebtedness,
securities or capital stock, cash or assets, except for those rights or
warrants referred to in the second bullet clause above and dividend and
distributions paid exclusively in cash;
. the payment to holders of our class D common stock in respect of a tender
or exchange offer, other than an odd-lot offer, by us or any of our
subsidiaries for our class D common stock at a price in excess of 110% of
the current market price of our class D common stock as of the trading
day next succeeding the last date tenders or exchanges may be made
pursuant to the tender or exchange offer; and
. the payment of dividends and other distributions on our class D common
stock paid exclusively in cash, excluding:
-- cash dividends that do not exceed the per share amount of the
smallest of the immediately four preceding quarterly cash dividends,
as adjusted to reflect any of the events described above; and
-- cash dividends the per share amount of which, together with the
aggregate per share amount of any other cash dividends paid within
the 12 months preceding the date of payment of such cash dividends,
does not exceed 12 1/2% of the current market price of our class D
common stock as of the trading day immediately preceding the date of
declaration of the dividend.
We may, at our option, make reductions in the applicable conversion price as
our board of directors deems advisable to avoid or diminish any income tax to
our class D common stockholders resulting from any dividend or distribution of
stock, or rights to acquire stock, or from any event treated similarly for
federal income tax purposes. See "Certain United States Federal Income Tax
Consequences--Adjustment of Conversion Price."
The applicable conversion price will not be adjusted:
. upon the issuance of any shares of our class D common stock pursuant to
any present or future plan providing for the reinvestment of dividends or
interest payable on our securities and the investment of additional
optional amounts in shares of our class D common stock under any plan;
. upon the issuance of any shares of our class D common stock or options or
rights to purchase those shares pursuant to any present or future
employee, director or consultant benefit plan or program of Radio One; or
. upon the issuance of any shares of our class D common stock pursuant to
any option, warrant, right, or exercisable, exchangeable or convertible
security outstanding as of the date the HIGH TIDES were first issued.
No adjustment in the applicable conversion price will be required unless the
adjustment would require an increase or decrease of at least 1% of the
applicable conversion price. If the adjustment is not made because the
adjustment does not change the applicable conversion price by more than 1%,
then the adjustment that is not made will be carried forward and taken into
account in any future adjustment. Except as specifically described above, the
applicable conversion price will not be subject to adjustment in the case of
the issuance of any of our class D common stock, or securities convertible into
or exchangeable for our class D common stock.
Conversion Price Adjustments--Merger, Consolidation or Sale of Assets of
Radio One. If we are a party to a transaction which results in our class D
common shares being converted into the right to receive, or being exchanged
for, securities, cash or other property of a third party, the conversion price
may be adjusted as described below. The following are examples of company
transactions which may result in an adjustment to the conversion price:
. merger;
. consolidation;
. sale of all or substantially all of our assets;
22
<PAGE>
. recapitalization or reclassification of our class D common shares; or
. any compulsory share exchange.
If we are a party to any company transaction, in each case, as a result of
which shares of our class D common stock will be converted into the right to
receive other securities, cash or other property, we will ensure that lawful
provision is made as part of the terms of the company transaction so that the
holder of each HIGH TIDES then outstanding will have the right thereafter to
convert the HIGH TIDES only into:
. in the case of any company transaction other than a company transaction
involving a Common Stock Fundamental Change, the kind and amount of
securities, cash and other property receivable upon the consummation of
the company transaction by a holder of that number of shares of our class
D common stock into which a HIGH TIDES was convertible immediately prior
to the company transaction; or
. in the case of a company transaction involving a Common Stock Fundamental
Change, common stock of the kind received by holders of our class D
common stock;
but in each case after giving effect to any adjustment discussed below relating
to a Fundamental Change if the company transaction constitutes a Fundamental
Change.
The holders of HIGH TIDES will have no voting rights with respect to any
company transaction.
In the case of any company transaction involving a Fundamental Change, the
applicable conversion price will be adjusted immediately before the Fundamental
Change as follows:
. in the case of a Non-Stock Fundamental Change, the applicable conversion
price of the HIGH TIDES will become the lower of:
-- the applicable conversion price immediately prior to the Non-Stock
Fundamental Change, but after giving effect to any other prior
adjustments; and
-- the result obtained by multiplying the greater of the relevant price
or the then applicable reference market price by the optional
redemption ratio (the product is referred to as the "adjusted
relevant price" or the "adjusted reference market price," as the
case may be); and
. in the case of a Common Stock Fundamental Change, the applicable
conversion price of the HIGH TIDES immediately prior to the Common Stock
Fundamental Change, but after giving effect to any other prior
adjustments, will be adjusted by multiplying the applicable conversion
price by a fraction of which the numerator will be the Purchaser Stock
Price and the denominator will be the relevant price.
However, in the event of a Common Stock Fundamental Change in which:
. 100% of the value of the consideration received by a holder of our class
D common stock is common stock of the successor, acquirer or other third
party (and cash, if any, is paid only with respect to any fractional
interests in the common stock resulting from the Common Stock Fundamental
Change); and
. all our class D common stock will have been exchanged for, converted
into, or acquired for common stock (and cash with respect to fractional
interests) of the successor, acquirer or other third party;
the applicable conversion price of the HIGH TIDES immediately prior to the
Common Stock Fundamental Change will be adjusted by multiplying the applicable
conversion price by a fraction of which the numerator will be one and the
denominator will be the number of shares of common stock of the successor,
acquirer or other third party received by a holder of one share of our class D
common stock as a result of the Common Stock Fundamental Change.
In the absence of the adjustments to the applicable conversion price in the
event of a company transaction involving a Fundamental Change, in the case of a
company transaction each HIGH TIDES would become convertible into the
securities, cash, or other property receivable by a holder of the number of
shares of our class D common stock into which each HIGH TIDES was convertible
immediately prior to the company
23
<PAGE>
transaction. Thus, in the absence of the Fundamental Change provisions, a
company transaction could substantially lessen or eliminate the value of the
conversion privilege associated with the HIGH TIDES. For example, if a company
were to acquire us in a cash merger, each HIGH TIDES would become convertible
solely into cash and would no longer be convertible into securities whose value
would vary depending on our future prospects and other factors.
In Non-Stock Fundamental Change transactions, the foregoing conversion price
adjustments are designed to increase the amount of securities, cash or other
property into which you may convert each HIGH TIDES. In a Non-Stock Fundamental
Change transaction in which the initial value received per share of our class D
common stock (measured as described in the definition of relevant price) is
lower than the then applicable conversion price of a HIGH TIDES but greater
than or equal to the reference market price, the applicable conversion price
will be adjusted with the effect that you will be able to convert each HIGH
TIDES into securities, cash or other property of the same type received by the
holders of our class D common stock in the transaction with the applicable
conversion price adjusted as though the initial value had been the adjusted
relevant price. In a Non-Stock Fundamental Change transaction in which the
initial value received per share of our class D common stock (measured as
described in the definition of relevant price) is lower than both the
applicable conversion price of a HIGH TIDES and the reference market price, the
applicable conversion price will be adjusted as described above but calculated
as though the initial value had been the adjusted reference market price.
In Common Stock Fundamental Change transactions, the foregoing adjustments
are designed to provide in effect that:
. where our class D common stock is converted partly into common stock and
partly into other securities, cash or property, you will be able to
convert each HIGH TIDES solely into a number of shares of common stock
determined so that the initial value of those shares (measured as
described in the definition of Purchaser Stock Price) equals the value of
the shares of our class D common stock into which each HIGH TIDES was
convertible immediately before the transaction (measured as aforesaid);
and
. where our class D common stock is converted solely into common stock, you
will be able to convert each HIGH TIDES into the same number of shares of
class D common stock receivable by a holder of the number of shares of
our class D common stock into which each HIGH TIDES was convertible
immediately before the transaction.
The term "closing price" of any security on any day means the last reported
sale price of the security on that day, or in case no sale takes place on that
day, the average of the closing bid and asked prices in each case on the
principal national securities exchange on which the securities are listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Market System of the National Association
of Securities Dealers, Inc. or any successor national automated interdealer
quotation system (the "NNM") or, if the securities are not listed or admitted
to trading on any national securities exchange or quoted on the NNM, the
average of the closing bid and asked prices of the security in the over-the-
counter market as furnished by any New York Stock Exchange member firm selected
by us for that purpose.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value, as determined in good faith by our board of
directors, of the consideration received by holders of our class D common stock
consists of common stock that for each of the ten consecutive trading days
immediately prior to and including the entitlement date has been admitted for
listing or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the NNM; provided, however, that a Fundamental
Change will not be a Common Stock Fundamental Change unless either:
. we continue to exist after the occurrence of the Fundamental Change and
the outstanding HIGH TIDES continue to exist as outstanding HIGH TIDES;
or
24
<PAGE>
. not later than the occurrence of the Fundamental Change, the outstanding
HIGH TIDES are converted into or exchanged for HIGH TIDES of a
corporation succeeding to our business, which HIGH TIDES have terms
substantially similar to those of our HIGH TIDES.
The term "company transaction" means:
. any recapitalization or reclassification of the class D common stock
(other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination of the common stock);
. any consolidation of Radio One with, or merger of Radio One into, any
other person, any merger of another person into Radio One (other than a
merger which does not result in a reclassification, conversion, exchange
or cancellation of outstanding shares of our class D common stock);
. any sale or transfer of all or substantially all of the assets of Radio
One; or
. any compulsory share exchange.
The term "entitlement date" means the record date for determination of the
holders of our class D common stock entitled to receive securities, cash or
other property in connection with a Non-Stock Fundamental Change or a Common
Stock Fundamental Change or, if there is no record date, the date upon which
holders of our common class D stock will have the right to receive those
securities, cash or other property.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with a company transaction pursuant to which all or
substantially all of our class D common stock will be exchanged for, converted
into, acquired for or constitute solely the right to receive securities, cash
or other property (whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification, recapitalization
or otherwise). However, in the case of a company transaction involving more
than one transaction or event, for purposes of adjustment of the applicable
conversion price, the Fundamental Change will be deemed to have occurred when
substantially all of our class D common stock is exchanged for, converted into,
or acquired for or constitute solely the right to receive securities, cash, or
other property, but the adjustment will be based upon the highest weighted
average per share consideration that a holder of our class D common stock could
have received in the transactions or events as a result of which more than 50%
of all outstanding shares of our class D common stock will have been exchanged
for, converted into, or acquired for or constitute solely the right to receive
securities, cash or other property.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "optional redemption ratio" means a fraction of which the numerator
will be $1,000 and the denominator will be the then current optional redemption
price or, on or prior to the reset date and at any time after the reset date at
which the HIGH TIDES are not redeemable at our option, an amount per HIGH TIDES
determined by us in our sole discretion, after consultation with a nationally
recognized investment banking firm, to be the equivalent of the hypothetical
redemption price that would have been applicable if the HIGH TIDES had been
redeemable during that period.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the closing prices for the common stock
received in the Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the entitlement date, multiplied by the number of
shares of such common stock received by a holder of one share of our class D
common stock as a result of such Common Stock Fundamental Change, as adjusted
in good faith by us to appropriately reflect any of the events referred to in
the six bullet clauses of the first paragraph under "Conversion Price
Adjustments--General."
The term "reference market price" means on the date we originally issued the
HIGH TIDES, $10.5832 (which is an amount derived from the product of 66 2/3%
and the last reported sale price for our class D common stock on The Nasdaq
Stock Market's National Market on July 10, 2000, rounded to nearest sixteenth).
25
<PAGE>
In the event of any adjustment to the applicable conversion price from such
date to, but excluding the reset date, other than as a result of a Non-Stock
Fundamental Change, we will also adjust the reference market price so that the
ratio of the reference market price to the applicable conversion price after
giving effect to any adjustment will be the same as the ratio of $10.5832 to
the initial conversion price. If the HIGH TIDES are convertible into class D
common stock on and after the reset date, the reference market price on the
reset date will be an amount derived from the product of 66 2/3% and the
closing price of the class D common stock on the reset date, rounded to the
nearest sixteenth, and, in the event of any adjustment to the applicable
conversion price from the reset date and thereafter, other than as a result of
a Non-Stock Fundamental Change, the reference market price shall also be
adjusted so that the ratio of the reference market price to the applicable
conversion price after giving effect to any such adjustment shall always be the
same as the ratio of the closing price of the class D common stock on the reset
date to the term conversion price.
The term "relevant price" means:
. in the case of a Non-Stock Fundamental Change in which the holder of our
class D common stock receives only cash, the amount of cash received by
the holder of one share of our class D common stock; and
. in the event of any other Non-Stock Fundamental Change or any Common
Stock Fundamental Change, the average of the daily closing prices for our
class D common stock during the ten consecutive trading days prior to and
including the entitlement date, in each case as adjusted in good faith by
us to appropriately reflect any of the events referred to in the six
bullet clauses of the first paragraph under "Conversion Price
Adjustments--General."
Optional Redemption
We have the right to redeem the HIGH TIDES (1) in whole or in part, at any
time or from time to time, on or after July 20, 2003 until, but excluding, the
tender notification date, upon not less than 15 nor more than 60 days' notice,
at a redemption price as set forth below, equal to the following prices per
$1,000 liquidation value plus any accrued but unpaid dividends on the portion
being redeemed, if redeemed during the 12-month period ending on July 20:
<TABLE>
<CAPTION>
Price Per $1,000
Year Principal Amount
---- ----------------
<S> <C>
2004..................................................... $1,016.25
2005..................................................... $1,000.00
</TABLE>
(2) after the reset date (except in the event of a failed final remarketing),
in accordance with the term call protections, if any, established in the
remarketing; and (3) in whole or in part, at any time on or after the third
anniversary of the reset date following a failed final remarketing at a
redemption price equal to 100% of the then outstanding aggregate liquidation
value of the HIGH TIDES to be redeemed, plus any accrued and unpaid dividends
on the portion being redeemed. The term "term redemption price" means any
redemption price established in the remarketing or as a result of a failed
final remarketing. The initial redemption price and the term redemption price
are each referred to as an optional redemption price. The remarketing agent
will establish term call protections, if any, in the remarketing that when
taken together with the term rate and the term conversion ratio, if any, result
in a price per HIGH TIDES equal to 101% of the liquidation amount thereof.
However, we may not, at any time, redeem the HIGH TIDES for a price less than
the aggregate principal amount thereof plus any accrued and unpaid dividends
thereon.
In the event of any redemption in part, we will not be required to:
. issue, register the transfer of or exchange any HIGH TIDES during a
period beginning at the opening of business 15 days before any selection
for redemption of HIGH TIDES and ending at the close of business on the
earliest date on which the relevant notice of redemption is deemed to
have been given to all holders of HIGH TIDES to be so redeemed, or
26
<PAGE>
. register the transfer of or exchange any HIGH TIDES so selected for
redemption, in whole or in part, except the unredeemed portion of any
HIGH TIDES being redeemed in part.
Prior to optionally redeeming the HIGH TIDES, all dividends accrued and
unpaid to the dividend payment date immediately preceding the optional
redemption date will be paid in full.
Redemption Procedures
We will redeem the HIGH TIDES and will pay the applicable redemption price
on each redemption date only to the extent that we have funds on hand available
for the payment of the redemption price. See "--Ranking."
If we give a notice of redemption in respect of the HIGH TIDES, then, by
11:00 a.m., New York City time, on the redemption date, to the extent funds are
available, with respect to the HIGH TIDES held in global form, we will deposit
irrevocably with DTC funds sufficient to pay the applicable redemption price
and will give DTC irrevocable instructions and authority to pay the applicable
redemption price to you. See "--Form, Book-Entry Procedures and Transfer."
If the HIGH TIDES are no longer in book-entry form, we will, to the extent
funds are available, irrevocably deposit with the paying agent for the HIGH
TIDES funds sufficient to pay the applicable redemption price and will give the
paying agent irrevocable instructions and authority to pay the redemption price
to the holders of the HIGH TIDES upon surrender of their certificates
evidencing the HIGH TIDES. See "--Payment and Paying Agency."
Dividends payable on or prior to the redemption date for any HIGH TIDES
called for redemption will be paid to holders of HIGH TIDES as of the relevant
record dates for the related dividend. If we have given notice of redemption
and deposited funds as required, then upon the date of the deposit, all of your
rights will cease, except your right to receive the applicable redemption
price, but without interest on the redemption price, and the HIGH TIDES will
cease to be outstanding.
If any redemption date is not a business day, then payment of the applicable
redemption price payable on that date will be made on the next succeeding day
which is a business day, and without any interest or other payment in respect
of any delay. However, if that business day falls in the next calendar year,
the payment will be made on the immediately preceding business day. In the
event that we improperly withhold or refuse to make payment of the applicable
redemption price, then dividends on HIGH TIDES will continue to accrue at the
then applicable rate, from the redemption date originally established by us to
the date the redemption price is actually paid. Under these circumstances, the
actual payment date will be the date fixed for redemption for purposes of
calculating the redemption price.
Subject to applicable law, we or our subsidiaries may at any time and from
time to time purchase outstanding HIGH TIDES by tender, in the open market or
by private agreement except as provided under "The Remarketing--Purchases by Us
and Our Affiliates."
If we desire to consummate an optional redemption, we must send a notice to
each holder of HIGH TIDES at its registered address in accordance with the
notice procedures set forth under "Description of HIGH TIDES--Redemption--
Optional Redemption."
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding-up of
us, each holder of HIGH TIDES will be entitled to be paid, out of our assets
available for distribution to stockholders, an amount equal to the liquidation
preference of $1,000 per share of HIGH TIDE held by such holder, plus
accumulated and unpaid dividends thereon to the date fixed for liquidation,
dissolution or winding-up before any distribution is made on any Junior Stock,
including any class of our common stock. If, upon our voluntary or involuntary
liquidation, dissolution or winding-up, the amounts payable with respect to the
HIGH TIDES and all other
27
<PAGE>
Parity Stock are not paid in full, the holders of the HIGH TIDES and the Parity
Stock will share equally and ratably in any distribution of our assets in
proportion to the full liquidation preference and accumulated and unpaid
dividends to which they are entitled, and the holders of HIGH TIDES will not be
entitled to any further participation in any distribution of our assets.
However, neither the sale, conveyance, exchange or transfer (for cash, shares
of stock, securities or other consideration) of all or substantially all of our
property or assets nor our consolidation or merger with one or more entities
shall be deemed to be a liquidation, dissolution or winding-up of us.
The Certificate of Designations does not contain any provision requiring
funds to be set aside to protect the liquidation preference of the HIGH TIDES
even though it is substantially in excess of the par value thereof.
Voting Rights
The holders of HIGH TIDES, except as otherwise required under Delaware law
or as provided in the Certificate of Designations governing the HIGH TIDES, are
not entitled or permitted to vote on any matter required or permitted to be
voted upon by our stockholders.
The Certificate of Designations provides that if dividends on the HIGH TIDES
are in arrears and unpaid for six or more dividend periods (whether or not
consecutive) then the holders of the outstanding HIGH TIDES, voting together as
a class with the holder of any other series of preferred stock upon which like
rights have been conferred and are exercisable, will, subject to any
restrictions imposed by the Communications Act or FCC rules and policies, be
entitled to elect two additional members to serve on our Board of Directors,
and the number of members of the Board of Directors will be immediately and
automatically increased by such number. Such voting rights of the HIGH TIDES
will continue until such time as all dividends in arrears on the HIGH TIDES are
paid in full at which time the term of any directors elected pursuant to the
provisions of this paragraph (subject to the right of holders of any other
preferred stock to elect such directors) shall terminate.
The Certificate of Designation also provides that, except as expressly set
forth above under "--Ranking," (a) the creation, authorization or issuance of
any shares of Junior Stock, Parity Stock or Senior Stock, including the
designation of a series thereof within the existing class of HIGH TIDES, or (b)
the increase or decrease in the amount of authorized capital stock of any
class, including any preferred stock, shall not require the consent of the
holders of shares of HIGH TIDES and shall not be deemed to affect adversely the
rights, preferences, privileges or voting rights of shares of HIGH TIDES.
Form, Book-Entry Procedures and Transfer
The HIGH TIDES were issued in the form of one or more fully registered
global HIGH TIDES certificates. The global HIGH TIDES certificate was deposited
with, or on behalf of, DTC, in New York, New York, and registered in the name
of DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.
Except as set forth below, the global HIGH TIDES certificate may be
transferred, in whole but not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the global HIGH TIDES
certificate may not be exchanged for HIGH TIDES in certificated form except in
the limited circumstances described below. See "--Certificated HIGH TIDES." In
addition, a transfer of beneficial interests in the global HIGH TIDES
certificate will be subject to the applicable rules and procedures of DTC and
its direct or indirect participants which may change from time to time.
Depositary Procedures
DTC has advised us that it is a limited purpose trust company organized
under the laws of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act. DTC was created to hold securities for its
participating organizations and to facilitate the clearance and settlement of
transactions in those securities between its participants through
28
<PAGE>
electronic book-entry changes to accounts of its participants, thereby
eliminating the need for physical movement of certificates. DTC's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system
is also available to other indirect participants such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by or on behalf of DTC
only through the participants or the indirect participants. The ownership
interest and transfer of ownership interest of each actual purchaser of each
securities held by or on behalf of DTC are recorded on the records of the
participants and indirect participants.
DTC has also advised us that, pursuant to procedures established by it:
. upon deposit of the global HIGH TIDES certificate, DTC credited the
accounts of participants designated by Credit Suisse First Boston
Corporation with portions of the principal amount of the global HIGH
TIDES certificate; and
. ownership of such interests in the global HIGH TIDES certificate will be
shown on, and the transfer of such ownership interests will be effected
only through, records maintained by DTC, with respect to the
participants, or by the participants and the indirect participants, with
respect to other owners of beneficial interests in the global HIGH TIDES
certificate.
Investors in the global HIGH TIDES certificate may hold their interests in
the global HIGH TIDES certificate directly through DTC, if they are
participants in DTC, or indirectly through organizations which are participants
in DTC's system. All interests in the global HIGH TIDES certificate will be
subject to the procedures and requirements of DTC. The laws of some states
require that certain persons take physical delivery in certificated form of
certain securities, such as the HIGH TIDES, that they own. Consequently, the
ability to transfer beneficial interests in the global HIGH TIDES certificate
to those persons will be limited to that extent. Because DTC can act only on
behalf of participants, which in turn act on behalf of indirect participants
and certain banks, the ability of a person having beneficial interests in a
global HIGH TIDES certificate to pledge those interests to persons or entities
that do not participate in the DTC system, or otherwise take actions in respect
of those interests, may be affected by the lack of a physical certificate
evidencing those interests. For certain other restrictions on the
transferability of the HIGH TIDES, see "--Certificated HIGH TIDES."
Except as described below, owners of beneficial interests in the global HIGH
TIDES certificate will not be entitled to have HIGH TIDES registered in their
names, and they will not receive or be entitled to receive physical delivery of
HIGH TIDES in certificated form and will not be considered the registered
owners or holders thereof for any purpose.
Payments in respect of the global HIGH TIDES certificate registered in the
name of DTC or its nominee will be payable by us to DTC or its nominee as the
registered holder by wire transfer in immediately available funds on each
dividend date. We will treat the persons in whose names the HIGH TIDES,
including the global HIGH TIDES certificate, are registered as the owners of
the global HIGH TIDES certificate for the purpose of receiving payments and for
any and all other purposes. Consequently, we do not and will not have any
responsibility or liability for:
. any aspect of DTC's records or any participant's or indirect
participant's records relating to, or payments made on account of,
beneficial ownership interests in the global HIGH TIDES certificate, or
for maintaining, supervising or reviewing any of DTC's records or any
participant's or indirect participant's records relating to the
beneficial ownership interests in the global HIGH TIDES certificate; or
. any other matter relating to the actions and practices of DTC or any of
its participants or indirect participants.
29
<PAGE>
DTC has advised us that its current practice, upon receipt of any payment in
respect of securities such as the HIGH TIDES, is to credit the accounts of the
relevant participants with the payment on the payment date, in amounts
proportionate to their respective holdings in liquidation amount of beneficial
interests in the global HIGH TIDES certificate, as shown on the records of DTC,
unless DTC has reason to believe it will not receive payment on the payment
date. Payments by the participants and the indirect participants to the
beneficial owners of HIGH TIDES represented by global HIGH TIDES certificate
held through the participants will be governed by standing instructions and
customary practices and will be the responsibility of the participants or the
indirect participants and will not be the responsibility of the participants or
the indirect participants and will not be the responsibility of DTC or us. We
will not be liable for any delay by DTC or any of its participants in
identifying the beneficial owners of the HIGH TIDES, and we may conclusively
rely on and will be protected in relying on instructions for DTC or its nominee
for all purposes.
Interests in the global HIGH TIDES certificate will trade and settle
according to the rules and procedures of DTC and its participants. Transfers
and settlements between participants in DTC will be effected in accordance with
DTC's procedures.
DTC has advised us that it will take any action permitted to be taken by
you, including the presentation of HIGH TIDES for exchange as described below,
only at the direction of one or more participants to whose account with DTC
interests in the global HIGH TIDES certificate are credited and only in respect
of the portion of the aggregate liquidation amount of the HIGH TIDES
represented by the global HIGH TIDES certificates as to which the participant
or participants has or have given such direction.
So long as DTC or its nominee is the registered owner of the global HIGH
TIDES certificate, DTC or the nominee, as the case may be, will be considered
the sole owner or holder of the HIGH TIDES represented by the global HIGH TIDES
certificate for all purposes.
Neither DTC nor its nominee will consent or vote with respect to the HIGH
TIDES. Under its usual procedures, DTC would mail an omnibus proxy to us as
soon as possible after the record date. The omnibus proxy assigns the
consenting or voting rights of DTC or its nominee to those participants to
whose accounts the HIGH TIDES are credited on the record date (identified in a
listing attached to the omnibus proxy).
The information in this section concerning DTC and its book-entry system has
been obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy of the information.
Although DTC has agreed to the foregoing procedures to facilitate transfer
of interest in the global HIGH TIDES certificate among participants in DTC, it
is under no obligation to perform or to continue to perform those procedures,
and those procedures may be discontinued at any time. We will not have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
Certificated HIGH TIDES
The HIGH TIDES represented by the global HIGH TIDES certificate will be
exchangeable for certificated HIGH TIDES in definitive form of like tenor as
the HIGH TIDES in denominations of $1,000 and integral multiples of $1,000 if:
. DTC notifies us that it is unwilling or unable to continue as depositary
for the global HIGH TIDES certificate, or if at any time DTC ceases to be
a clearing agency registered under the Securities Exchange Act; or
. we in our discretion at any time determine not to have all of the HIGH
TIDES evidenced by the a global HIGH TIDES certificate.
Any of the HIGH TIDES that are exchangeable pursuant to the preceding
sentence are exchangeable for certificated HIGH TIDES issuable in authorized
denominations and registered in the names as DTC directs.
30
<PAGE>
Subject to the foregoing, the global HIGH TIDES certificate are not
exchangeable, except for a global HIGH TIDES certificate of the same aggregate
denomination to be registered in the name of DTC or its nominee.
Payment and Paying Agency
Payments in respect of the HIGH TIDES held in global form will be made to
DTC. DTC will make payments on the HIGH TIDES by crediting the relevant account
at DTC on the applicable dividend dates. If any HIGH TIDES are not held by DTC,
then the paying agent will mail checks to the registered holders at the
addresses as shown on its register. The paying agent will initially be American
Stock Transfer & Trust Company. The paying agent may resign as paying agent
upon 30 days' written notice to us. If American Stock Transfer & Trust Company
resigns as paying agent, we will appoint a bank or trust company to act as
paying agent.
Registrar, Conversion Agent, Tender Agent and Transfer Agent
The paying agent will act as registrar, conversion agent, tender agent and
transfer agent for the HIGH TIDES.
Governing Law
The HIGH TIDES will be governed by and construed in accordance with the laws
of the State of Delaware.
REGISTRATION RIGHTS
In connection with the original offering of the HIGH TIDES, we entered into
a registration rights agreement with the initial purchasers of the HIGH TIDES
for the benefit of the holders of the HIGH TIDES providing that we, at our sole
expense, would:
. file, and use our best efforts to have declared effective within 150 days
of the initial purchase of the HIGH TIDES, the shelf registration
statement of which this prospectus is a part covering resales of the HIGH
TIDES and the related class D common stock issuable upon conversion of
the HIGH TIDES, which are the "registrable securities"; and
. use our best efforts to keep the shelf registration statement effective
and usable for two years or such other period as shall be required under
Rule 144(k) of the Securities Act or any successor rule thereto or, if
earlier, such time as all of the applicable registrable securities have
been sold thereunder.
However, we are permitted to suspend the use of the shelf registration
statement during certain periods under certain circumstances.
We will provide to each holder for whom the shelf registration statement was
filed copies of the prospectus, will notify each such holder when the shelf
registration statement has become effective and take certain other actions as
are required to permit unrestricted resales of the securities. A holder that
sells securities pursuant to the shelf registration statement will, under
current SEC rules and regulations, be required to be named as a selling
securityholder in a supplemental prospectus and to deliver the prospectus,
together with the supplemental prospectus, to purchasers. Selling
securityholders also will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the registration rights agreement that are
applicable to such a holder (including certain indemnification rights and
obligations).
We may require each holder of the HIGH TIDES to furnish information
regarding the holder and the distribution of the securities as we may
reasonably require for inclusion in the shelf registration statement.
31
<PAGE>
A registration default will occur if:
. within 150 days of the date of the initial purchase of the HIGH TIDES the
shelf registration statement has not been declared effective by the SEC;
or
. in the event that a shelf registration statement is declared effective by
the SEC, we fail to keep such shelf registration statement continuously
effective and usable (subject to certain exceptions) for the period
required by the registration rights agreement.
If a registration default occurs, then the applicable rate at which
dividends will accrue on the HIGH TIDES, from and including the day following
such registration default to but excluding the day on which such registration
default has been cured or has been deemed to have been cured, will be increased
by 0.50% per annum of the liquidation amount, as applicable, subject to certain
exceptions. Following the cure of a registration default, the applicable rate
will become the rate in effect immediately prior to such registration default.
Each security will contain a legend to the effect that the holder thereof,
by its acceptance thereof, will be deemed to have agreed to be bound by the
provisions of the registration rights agreement.
The registration rights agreement is governed by, and construed in
accordance with, the laws of the State of New York. The summary herein of
certain provisions of the registration rights agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the registration rights agreement, a copy of which is
available as described in "Where You Can Find Additional Information."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of certain United States federal income tax
consequences of the purchase, ownership, disposition and, if applicable,
conversion of HIGH TIDES and our class D common stock. This summary deals only
with HIGH TIDES and class D common stock held as capital assets. There can be
no assurance that the United States Internal Revenue Service (the "IRS") will
take a similar view of the tax consequences described herein.
A U.S. Holder is a holder that is, for United States federal income tax
purposes, (1) a citizen or resident of the United States, (2) a corporation or
other entity taxable as a corporation created or organized in or under the laws
of the United States, any state thereof or the District of Columbia, (3) an
estate, the income of which is includable in gross income for United States
federal income tax purposes regardless of its source, (4) a trust if (A) a
court within the United States is able to exercise primary supervision over the
administration of the trust and (B) one or more United States persons have the
authority to control all substantial decisions of the trust, or (5) a trust
that qualified as a trust under the law in effect before 1997 and that has
filed or will file a valid election to continue to be treated as a United
States trust. Non-U.S. Holders are holders that are neither U.S. Holders nor
entities taxed as partnerships for United States federal income tax purposes.
An entity taxed as a partnership for United States federal income tax
purposes (a "partnership") is not subject to the United States federal income
tax on income derived from holding HIGH TIDES or class D common stock. A
partner of a partnership that is a holder will generally be subject to tax on
such income in such partner's individual capacity pursuant to rules similar to
the applicable rules below. This summary does not further discuss the United
States federal income tax consequences of the acquisition, ownership,
disposition or, if applicable, conversion, of HIGH TIDES or class D common
stock by holders who are taxed as partnerships, and such holders and their
partners are urged to consult their tax advisors regarding such consequences.
This summary does not address all aspects of United States federal income
tax consequences of the purchase, ownership, disposition and, if applicable,
conversion of HIGH TIDES and class D common stock that may be relevant to a
particular holder of HIGH TIDES or class D common stock based on such holder's
32
<PAGE>
particular circumstances. For example, it does not deal with special classes of
holders such as banks, thrifts, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
or tax-exempt investors and does not discuss HIGH TIDES or our class D common
stock held as part of a hedge, straddle, "synthetic security" or other
integrated transaction. This summary also does not address the tax consequences
to persons that have a functional currency other than the U.S. dollar or the
tax consequences to shareholders, partners or beneficiaries of a holder of HIGH
TIDES or our class D common stock. Further, it does not include any description
of any alternative minimum tax consequences or the tax laws of any state or
local government or of any non-United States government that may be applicable
to the HIGH TIDES or our class D common stock. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury
regulations promulgated thereunder and administrative and judicial
interpretations thereof, all as of the date hereof, and all of which are
subject to change, possibly on a retroactive basis.
Prospective investors are urged to consult their own tax advisers concerning
the United States federal, state, local, estate and non-United States tax
consequences of the purchase, ownership, disposition and, if applicable,
conversion of HIGH TIDES and class D common stock. No representations are made
hereby with respect to the tax consequences to any particular holder of HIGH
TIDES or class D common stock.
STOCK CHARACTERIZATION
Although the characterization of an instrument as debt or equity is a facts
and circumstances determination that cannot be predicted with certainty, we
intend to treat the HIGH TIDES as stock for United States federal income tax
purposes, and the remainder of the discussion assumes that such treatment will
be respected.
U.S. HOLDERS
Subject to the foregoing, if you are a U.S. Holder, your tax consequences
will be as follows:
Dividends on HIGH TIDES or Class D Common Stock
The amount of any distribution we make in respect of the HIGH TIDES or our
class D common stock will be equal to the amount of cash and the fair market
value, on the date of distribution, of any property distributed. Generally,
distributions will be treated as a dividend, subject to tax as ordinary income,
to the extent of our current or accumulated earnings and profits, then as a
tax-free return of capital to the extent of a holder's tax basis in the HIGH
TIDES or the class D common stock, as the case may be, and thereafter as gain
from the sale or exchange of the HIGH TIDES or such stock, as discussed below
under "--Sale or Exchange of HIGH TIDE" and "--Sale or Exchange of Class D
Common Stock." There can be no assurance that we will have sufficient earnings
and profits (as determined for United States federal income tax purposes) to
cause distributions on the HIGH TIDES or class D common stock to be treated as
dividends.
Dividends received by a corporate holder who owns less than 20 percent of
our stock (by vote or value) will be eligible for the 70% dividends-received
deduction, subject to the limitations generally applicable to the dividends-
received deduction, including those contained in Sections 246 and 246A of the
Code. Under Section 246(c) of the Code, a corporate holder will not be entitled
to claim any dividends-received deduction with respect to a dividend on HIGH
TIDES or class D common stock which such holder holds for 45 days or less
during the 90-day period beginning 45 days before the HIGH TIDES or class D
common stock, respectively, becomes ex-dividend with respect to such dividend.
In addition, if the dividend is attributable to a period aggregating more than
366 days, then the corporate holder will not be entitled to any dividends-
received deduction if it has held the HIGH TIDES for 90 days or less during the
180-day period beginning 90 days before the HIGH TIDES becomes ex-dividend with
respect to such dividend. The length of time that a corporate holder is deemed
to have held stock for these purposes is reduced for periods during which that
holder's risk of loss with respect to the stock is diminished by reason of
certain options, contracts to sell, short sales, or other similar transactions.
Section 246(c) of the Code also denies the dividends-received deduction to the
extent that the corporate holder is under an obligation to make payments with
respect to substantially
33
<PAGE>
similar or related property corresponding to the dividend received. Section
246A of the Code provides that any dividends received deduction may be reduced
if the corporate holder's shares of HIGH TIDES or class D common stock are debt
financed.
Under Section 1059 of the Code, if a corporate holder receives an
"extraordinary dividend" with respect to HIGH TIDES or class D common stock
that the holder has held for two years or less (ending on the date on which we
declare, announce or agree to, the amount of payment of such dividend,
whichever is the earliest), the tax basis of the HIGH TIDES or class D common
stock, respectively, must be reduced (but not below zero) by the non-taxed
portion of the dividend. To the extent that the holder's tax basis would have
been reduced below zero but for the above limitation, such excess will be
treated as capital gain taxable in the year in which the extraordinary dividend
was received. Generally, an "extraordinary dividend" is a dividend that (i)
equals or exceeds 5% in the case of HIGH TIDES, or 10% in the case of class D
common stock, of the holder's basis in the HIGH TIDES or class D common stock,
as applicable, (treating all dividends having ex-dividend dates within an 85-
day period as a single dividend), or (ii) exceeds 20% of the holder's adjusted
basis in the HIGH TIDES or class D common stock, where all dividends having ex-
dividend dates within a 365-day period are treated as a single dividend.
Furthermore, certain redemptions (i.e., non-pro rata redemptions and
redemptions in partial liquidation of us) of HIGH TIDES or class D common stock
will be treated as extraordinary dividends without regard to the period the
holder held such stock. Special rules apply to "qualified preferred dividends,"
which are any fixed dividends payable with respect to any share of stock that
(i) provides for fixed preferred dividends payable not less frequently than
annually and (ii) is not in arrears as to dividends at the time the holder
acquires such stock. The term qualified preferred dividend does not include any
dividend payable with respect to any share if the actual rate of return for the
period the stock has been held by the holder receiving the dividend exceeds
15%.
Sale or Exchange of HIGH TIDES
A holder that sells or exchanges its HIGH TIDES will recognize capital gain
or loss equal to the difference between the amount realized on the sale or
exchange, respectively, of the HIGH TIDES and the holder's adjusted tax basis
in such HIGH TIDES. A holder's adjusted tax basis in its HIGH TIDES generally
should be the initial purchase price paid by such holder subject to any
adjustments described under "--Dividends on HIGH TIDES or Class D Common
Stock." The capital gain or loss will be long-term capital gain or loss if the
holder has held the HIGH TIDES for more than one year. An individual holder may
be subject to the maximum tax rate on such long-term capital gain, which may be
less than the holder's maximum tax rate on ordinary income.
To the extent the selling price is less than the holder's adjusted tax
basis, the holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
Conversion of HIGH TIDES into Class D Common Stock
A holder of HIGH TIDES will not recognize income, gain or loss upon the
conversion of HIGH TIDES into our class D common stock. The holder will
recognize gain upon the receipt of cash in lieu of a fractional share of class
D common stock equal to the amount of cash received less the holder's adjusted
tax basis in such fractional share, as such holder will be treated for United
States federal income tax purposes as if such holder had received the
fractional share that was then immediately redeemed for cash. A holder's tax
basis in the class D common stock received upon conversion generally will be
equal to the holder's tax basis in the HIGH TIDES delivered to the conversion
agent for exchange less the tax basis allocated to any fractional share for
which cash is received, and a holder's holding period in the class D common
stock received upon conversion generally will include the period during which
the HIGH TIDES were held by such holder.
34
<PAGE>
Redemption of HIGH TIDES or Class D Common Stock
A redemption of HIGH TIDES or class D common stock for cash will be treated
under Section 302 of the Code as a distribution that is taxable as a dividend
to the extent of our current and accumulated earnings and profits unless the
redemption (i) results in a "complete redemption" of the holder's stock
interest in us under Section 302(b)(3) of the Code, (ii) is "substantially
disproportionate" with respect to the holder under Section 302(b)(2) of the
Code or (iii) is "not essentially equivalent to a dividend" with respect to the
holder under Section 302(b)(1) of the Code. In determining whether any of these
tests has been met, shares considered to be owned by the holder by reason of
certain constructive ownership rules applicable under Section 302(c) of the
Code, as well as shares actually owned, must generally be taken into account.
If any of these tests were met, the redemption of the HIGH TIDES or class D
common stock for cash would result in taxable capital gain or loss (taxed as
described above under "--Sale or Exchange of HIGH TIDES" or as described below
under "--Sale or Exchange of Class D Common Stock") equal to the difference
between the amount of cash received and the holder's tax basis in the HIGH
TIDES or class D common stock redeemed.
If a redemption of HIGH TIDES or class D common stock is treated as a
distribution taxable as a dividend, then the holder's tax basis in the redeemed
HIGH TIDES or class D common stock will be transferred to any remaining stock
in us held by such holder. If the holder does not directly retain any stock
ownership in us, then the holder may lose such basis completely.
Sale or Exchange of Class D Common Stock
Upon the sale or exchange of class D common stock by a holder, such holder
generally will recognize capital gain or loss (taxed as described above under
"--Sale or Exchange of HIGH TIDES") equal to the difference between (1) the
amount of cash and the fair market value of any property received upon the sale
or exchange, respectively, and (2) such holder's adjusted tax basis in the
class D common stock. A holder's basis and holding period in class D common
stock received upon conversion of HIGH TIDES are determined as discussed above
under "--Conversion of HIGH TIDES into Class D Common Stock."
Adjustment of Conversion Price
Treasury regulations promulgated under Section 305 of the Code would treat
holders of HIGH TIDES as having received a constructive distribution from us in
the event the applicable conversion ratio of the HIGH TIDES were adjusted if
(1) as a result of such adjustment, the proportionate interest (measured by the
amount of class D common stock into which the HIGH TIDES are convertible) of
the holders of the HIGH TIDES in our assets or our earnings and profits were
increased, and (2) the adjustment was not made pursuant to a bona fide,
reasonable antidilution formula. An adjustment in the applicable conversion
ratio would not be considered made pursuant to such a formula if the adjustment
was made to compensate for certain taxable distributions with respect to our
common stock. Thus, under certain circumstances, a reduction in the conversion
price for the holders may result in deemed dividend income to holders to the
extent of our current or accumulated earnings and profits. Holders of the HIGH
TIDES would be required to include their allocable share of such deemed
dividend income in gross income but will not receive any cash related thereto.
We intend to take the position that the adjustment to the initial conversion
ratio in connection with the remarketing will constitute an isolated
recapitalization for United States federal income tax purposes and, therefore,
will not be deemed a constructive dividend under Section 305 of the Code.
However, the IRS might contend that any increase in such initial conversion
ratio on the reset date is a constructive dividend to holders of the HIGH TIDES
who hold the HIGH TIDES immediately before the reset date and that any decrease
in such initial conversion ratio on the reset date (or elimination of the
conversion feature on the reset date) is a constructive dividend to all holders
of our common stock at that time. In each case, the amount of the constructive
dividend would be the fair market value on the reset date of the number of
shares of the applicable class of common stock which, if actually distributed
to holders of HIGH TIDES (in the case of an increase in the initial conversion
ratio) or to holders of our common stock (in the case of a decrease in the
initial
35
<PAGE>
conversion ratio or elimination of convertibility of HIGH TIDES), would produce
the same increase in the proportionate interests of such holders in our assets
or our earnings and profits as that produced by the adjustment. The aggregate
deemed dividend would be limited to our current or accumulated earnings and
profits. Holders of HIGH TIDES or class D common stock would be required to
include any such constructive dividend to them in gross income but would not
receive any cash related thereto.
The HIGH TIDES are redeemable, either in whole or in part, at our option at
times at certain premiums declining to par on or after July 20, 2004. Although
the presence of an optional redemption feature may result in constructive
distributions to a holder under certain circumstances, we believe that the
presence of the optional redemption feature of the HIGH TIDES would not result
in such constructive distributions.
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of
dividends on HIGH TIDES, payments of dividends on class D common stock,
payments of the proceeds of the sale of HIGH TIDES and payments of the proceeds
of the sale of class D common stock, and a 31% backup withholding tax may apply
to such payments if the applicable holder (1) fails to furnish or certify such
holder's correct taxpayer identification number to the payor in the manner
required, (2) is notified by the IRS that such holder has failed to report
payments of interest and dividends properly, or (3) under certain
circumstances, fails to certify that such holder has not been notified by the
IRS that such holder is subject to backup withholding for failure to report
interest and dividend payments. Any amounts withheld under the backup
withholding rules from a payment to a holder will be allowed as a credit
against such holder's United States federal income tax and may entitle the
holder to a refund, provided that the required information is furnished to the
IRS.
NON-U.S. HOLDERS
The rules governing United States federal income taxation of a Non-U.S.
holder are complex and are summarized below. Non-U.S. holders should consult
with their own tax advisors to determine the effect of federal, state, local,
estate and non-United States income tax laws, as well as treaties, with regard
to an investment in the HIGH TIDES and class D common stock, including any
reporting requirements.
Dividends on HIGH TIDES or Class D Common Stock
Distributions by us with respect to the HIGH TIDES or the class D common
stock that are treated as dividends paid (or deemed paid), to a non-U.S. holder
(excluding dividends that are effectively connected with the conduct of a
United States trade or business by such holder and are taxable as described
below), will be subject to United States federal withholding tax at a 30% rate
(or a lower rate provided under any applicable income tax treaty). Except to
the extent that an applicable tax treaty otherwise provides, a non-U.S. holder
will be taxed in the same manner as a U.S. Holder on dividends paid (or deemed
paid) that are effectively connected with the conduct of a United States trade
or business by the non-U.S. holder. If such non-U.S. holder is a non-United
States corporation, it may also be subject to a United States branch profits
tax on such effectively connected income at a 30% rate (or such lower rate as
may be specified by an applicable tax treaty). Even though such effectively
connected dividends are subject to income tax, and may be subject to the branch
profits tax, they will not be subject to U.S. withholding tax if the holder
delivers a properly executed IRS Form W-8ECI (or successor form) to the payor.
Under current Treasury regulations, dividends paid to an address in a non-
United States country are presumed to be paid to a resident of that country
(unless the payor has knowledge to the contrary) for purposes of the 30%
withholding discussed above and for purposes of determining the applicability
of a tax treaty. Under final Treasury regulations effective with respect to
payments made after December 31, 2000, however, non-U.S. holders of HIGH TIDES
or class D common stock who wish to claim the benefit of an applicable treaty
would be required to satisfy certain certification requirements. Investors
should consult their own tax advisors as to the effect, if any, of the final
Treasury regulations on their purchase, ownership, disposition and, if
applicable, conversion of the HIGH TIDES and class D common stock.
36
<PAGE>
Sale, Exchange, Redemption or Conversion of HIGH TIDES
A non-U.S. holder of HIGH TIDES generally will not be subject to United
States federal income tax or withholding tax on any gain realized on the sale,
exchange or redemption (other than gain on a redemption treated as a dividend,
as discussed above under "--U.S. Holders -- Redemption of HIGH TIDES or Class D
Common Stock") of the HIGH TIDES unless (1) the gain is effectively connected
with a United States trade or business of the non-U.S. holder, (2) in the case
of a non-U.S. holder who is an individual, such holder is present in the United
States for a period or periods aggregating 183 days or more during the taxable
year of the disposition, and either such holder has a "tax home" in the United
States or the disposition is attributable to an office or other fixed place of
business maintained by such holder in the United States, (3) the non-U.S.
holder is subject to tax pursuant to the provisions of the Code applicable to
certain United States expatriates or (4) in the event that we are characterized
as a United States real property holding corporation (see discussion below
under "--Foreign Investment in Real Property Tax Act"), the non-U.S. holder's
beneficial and/or constructive ownership of HIGH TIDES or class D common stock
exceeds 5% of the total fair market value of the HIGH TIDES or the class D
common stock.
A non-U.S. holder of HIGH TIDES generally will not recognize any gain or
loss for United States federal income tax or withholding tax purposes upon
conversion of HIGH TIDES into our class D common stock, except with respect to
the receipt of cash in lieu of fractional shares, which would be taxed as
described in the prior paragraph.
Sale or Exchange of Class D Common Stock
Subject to the discussion below regarding "--Foreign Investment in Real
Property Tax Act," a non-U.S. holder generally will not be subject to United
States federal income tax or withholding tax on the sale or exchange of class D
common stock unless one of the conditions described above under "--Sale,
Exchange, Redemption or Conversion of HIGH TIDES" is satisfied.
Information Reporting and Backup Withholding Tax
United States information reporting requirements and backup withholding tax
will not apply to payments on HIGH TIDES or the class D common stock to a non-
U.S. holder if the non-U.S. holder duly provides an appropriate Form W-8 to the
payor claiming exempt status as a non-United States person, provided that payor
does not have actual knowledge that the holder is a non-exempt United States
person.
Information reporting requirements and backup withholding tax will not apply
to any payment of the proceeds of the sale of HIGH TIDES or class D common
stock effected outside the United States by a non-United States office of a
"broker" as defined in applicable Treasury regulations, unless such broker (1)
is a United States person as defined in the Code, (2) is a non-United States
person that derives 50% or more of its gross income for certain periods from
the conduct of a trade or business in the United States or (3) is a controlled
foreign corporation for United States federal income tax purposes. Payment of
the proceeds of any such sale effected outside the United States by a non-
United States office of any broker that is described in (1), (2) or (3) of the
preceding sentence will not be subject to backup withholding tax, but will be
subject to information reporting requirements, unless such broker has
documentary evidence in its records that the beneficial owner is a non-U.S.
holder and certain other conditions are met, or the beneficial owner otherwise
establishes an exemption. Payment of the proceeds of any such sale to or
through the United States office of a broker is subject to information
reporting and backup withholding requirements unless the beneficial owner of
the HIGH TIDES or class D common stock provides an appropriate Form W-8 or
otherwise establishes an exemption.
If paid to an address outside the United States, dividends on HIGH TIDES or
class D common stock held by a non-U.S. holder generally will not be subject to
the information reporting and backup withholding requirements described in this
section. However, under final Treasury regulations, dividend payments made
after December 31, 2000 will be subject to information reporting and backup
withholding unless certain
37
<PAGE>
certification requirements are satisfied. Investors should consult their own
tax advisors as to the effect, if any, of the final Treasury regulations on
their purchase, ownership, disposition and, if applicable, conversion of the
HIGH TIDES and class D common stock.
Foreign Investment in Real Property Tax Act
Under the Foreign Investment in Real Property Tax Act, any person who
acquires a "United States real property interest" (as described below) from a
non-U.S. holder must deduct and withhold a tax equal to 10% of the amount
realized by the non-United States transferor. In addition, a non-U.S. holder
who disposes of a United States real property interest generally is required to
recognize gain or loss that is subject to United States federal income tax. A
"United States real property interest" generally includes any interest (other
than an interest solely as a creditor) in a United States corporation unless it
is established under specific procedures that the corporation is not (and was
not for the prior five-year period) a "United States real property holding
corporation." We do not believe we are, or have been in the past five years, a
United States real property holding corporation. If it is determined that we
are, have been in the past five years or in the future become, a United States
real property holding corporation, a non-U.S. holder may qualify for an
exception available for classes of stock that are regularly traded on an
established securities market, if such holder beneficially and/or
constructively owns 5% or less of the stock of the relevant class.
Any investor that may approach or exceed the 5% ownership threshold
discussed above, either alone or in conjunction with related persons, should
consult its own tax advisor concerning the United States tax consequences that
may result. A non-U.S. holder who sells or otherwise disposes of HIGH TIDES or
class D common stock may be required to inform its transferee whether such HIGH
TIDES or class D common stock constitute a United States real property
interest.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP, DISPOSITION
AND, IF APPLICABLE, CONVERSION OF THE HIGH TIDES AND CLASS D COMMON STOCK,
INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, NON-UNITED STATES AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER
TAX LAWS.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") should consider the fiduciary standards of ERISA in the context of
the plan's particular circumstances before authorizing an investment in the
HIGH TIDES. Accordingly, among other factors, the fiduciary should consider
whether the investment would satisfy the prudence and diversification
requirements of ERISA, whether the investment could result in an improper
delegation of fiduciary authority and whether the investment would be
consistent with the documents and instruments governing the plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit
plans, as well as individual retirement accounts and Keogh plans subject to
Section 4975 of the Internal Revenue Code, from engaging in certain
transactions involving "plan assets" with persons who are "parties in interest"
under ERISA or "disqualified persons" under the Internal Revenue Code with
respect to such plans. A violation of these "prohibited transaction" rules may
result in an excise tax or other liabilities under ERISA and/or Section 4975 of
the Internal Revenue Code for such persons, unless exemptive relief is
available under an applicable statutory or administrative exemption. Employee
benefit plans that are governmental plans (as defined in Section 3(32) of
ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign
plans (as described in Section 4(b)(4) of ERISA) not subject to Section 401 of
the Internal Revenue Code are not subject to the requirements of ERISA or
Section 4975 of the Internal Revenue Code.
38
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Our capital stock consists of (1) 480,000,000 authorized shares of common
stock, $0.001 par value per share, which consists of (a) 30,000,000 shares of
class A common stock, of which 22,788,933 shares are outstanding, (b)
150,000,000 shares of class B common stock, of which 2,867,463 shares are
outstanding, (c) 150,000,000 shares of class C common stock, of which 3,132,458
shares are outstanding, and (d) 150,000,000 shares of class D common stock, of
which 56,689,176 shares are outstanding, and (2) 1,000,000 shares of Preferred
Stock, par value $0.001 per share, 310,000 shares of which have been designated
as HIGH TIDES and are outstanding. We have no shares of Preferred Stock other
than the HIGH TIDES designated or outstanding. The following is a summary of
the material provisions of our certificate of incorporation.
Class A Common Stock
The holders of class A common stock are entitled to one vote for each share
held on all matters voted upon by stockholders, including the election of
directors and any proposed amendment to the certificate of incorporation. The
holders of class A common stock are entitled to vote as a class to elect two
independent directors to the board of directors. The holders of class A common
stock will be entitled to such dividends as may be declared at the discretion
of the board of directors out of funds legally available for that purpose. The
holders of class A common stock will be entitled to share ratably with all
other classes of common stock in the net assets of Radio One upon liquidation
after payment or provision for all liabilities. All shares of class A common
stock may be converted at any time into a like number of shares of class C
common stock or class D common stock at the option of the holder of such
shares.
Class B Common Stock
The holders of class B common stock are entitled to the same rights,
privileges, benefits and notices as the holders of class A common stock, except
that the holders of class B common stock will be entitled to ten votes per
share. All shares of class B common stock may be converted at any time into a
like number of shares of class A common stock at the option of the holder of
such shares. Catherine L. Hughes and Alfred C. Liggins, III may transfer shares
of class B common stock held by them only to "Class B Permitted Transferees,"
and Class B Permitted Transferees may transfer shares of class B common stock
only to other Class B Permitted Transferees. If any shares of class B common
stock are transferred to any person or entity other than a Class B Permitted
Transferee, such shares will automatically be converted into a like number of
shares of class A common stock. "Class B Permitted Transferees" include Ms.
Hughes, Mr. Liggins, their respective estates, spouses, former spouses, parents
or grandparents or lineal descendants thereof, and certain trusts and other
entities for the benefit of, or beneficially owned by, such persons. Ms. Hughes
and Mr. Liggins have agreed to vote their shares of common stock to elect each
other and other mutually agreeable nominees to the board of directors. See
"Risk Factors--Controlling Stockholders."
Class C Common Stock
The holders of class C common stock are entitled to the same rights,
privileges, benefits and notices as the holders of class A common stock and
class B common stock, except that the holders of class C common stock, unless
otherwise required by law, will be entitled to no votes per share. All shares
of class C common stock may be converted at any time into a like number of
shares of class A common stock at the option of the holder of such shares,
except that Class B Permitted Transferees may convert shares of class C common
stock into shares of class A common stock, or otherwise acquire shares of class
A common stock, only in connection with:
. a merger or consolidation of Radio One with or into, or other acquisition
of, another entity pursuant to which the Class B Permitted Transferees
are to receive shares of class A common stock in exchange for their
interest in such entity;
. the transfer of such shares of class A common stock to a person or entity
other than a Class B Permitted Transferee; or
. a registered public offering of such shares of class A common stock.
39
<PAGE>
Class D Common Stock
The holders of class D common stock are entitled to the same rights,
privileges, benefits and notices as the holders of class A common stock, class
B common stock, and class C common stock except that the holders of class D
common stock, unless otherwise required by law, will be entitled to no votes
per share. The class D common stock is not convertible into shares of any other
class of common stock.
Foreign Ownership
Radio One's certificate of incorporation restricts the ownership, voting and
transfer of our capital stock, in accordance with the Communications Act and
the rules of the FCC, which prohibit the issuance of more than 25% of our
outstanding capital stock (or more than 25% of the voting rights such stock
represents) to or for the account of aliens (as defined by the FCC) or
corporations otherwise subject to domination or control by aliens. Our
certificate of incorporation prohibits any transfer of our capital stock that
would cause a violation of this prohibition. In addition, the certificate of
incorporation authorizes the board of directors to take action to enforce these
prohibitions, including restricting the transfer of shares of capital stock to
aliens and placing a legend restricting foreign ownership on the certificates
representing the class A common stock.
DESCRIPTION OF INDEBTEDNESS
Bank Credit Facility
In connection with the consummation of the Clear Channel/AMFM acquisitions,
we amended and restated our prior credit agreement. This credit agreement
provides for a bank credit facility under which we may borrow up to $750.0
million from a group of banking institutions. The credit facility consists of
Term A Loans in an amount of up to $350.0 million, Term B Loans in an amount of
up to $150.0 million, and Revolving Credit Loans in an amount of up to $250.0
million that may be borrowed on a revolving basis. We borrowed approximately
$570.0 million of the $750.0 million available under the bank credit facility
at the closing of the Clear Channel/AMFM acquisitions to pay a portion of the
purchase price and related fees and expenses. Subsequent draw downs of
Revolving Credit Loans under the bank credit facility will be subject to
compliance with provisions of the credit agreement, including but not limited
to the financial covenants. Borrowings under the bank credit facility may be
entirely of Eurodollar Loans, Alternate Base Rate ("ABR") Loans or a
combination thereof.
The Term A Loans have scheduled quarterly amortization payments payable on
the last day of each fiscal quarter beginning March 31, 2003, with 15% of the
Term A Loans payable in each of 2003 and 2004, 20% payable in 2005, and 25%
payable in each of 2006 and 2007, with the final payment due on June 30, 2007.
In addition, we are required to prepay the Term A Loans with 100% of the net
cash proceeds of certain asset sales and insurance awards (subject to a $10
million exclusion and the right to reinvest such proceeds within specified time
periods), 50% of the net cash proceeds of certain equity issuances (but only if
the Leverage Ratio as of the end of the immediately preceding fiscal quarter
exceeds 6.0 to 1.0, and then only to the extent necessary to reduce the
Leverage Ratio to 6.0 to 1.0), and, if the Leverage Ratio exceeds 6.0 to 1.0 as
of the end of any fiscal year after December 31, 2002, 50% of excess cash flow
for such fiscal year.
The Term B Loans have no scheduled amortization payments until February
2002, at which time the Term B Loans will be due and payable in full.
Our ability to borrow Revolving Credit Loans under the new bank credit
facility will terminate on June 30, 2007, at which time any outstanding
principal together with all accrued and unpaid interest thereon would become
due and payable.
All amounts under the bank credit facility are guaranteed by each of Radio
One's direct and indirect subsidiaries. The bank credit facility is secured by
a perfected first priority secured interest in: (1) substantially all of the
tangible and intangible assets of Radio One and our direct and indirect
subsidiaries including, without
40
<PAGE>
limitation, any and all FCC licenses to the maximum extent permitted by law,
but excluding real estate assets, and (2) all of the common stock of our direct
and indirect restricted subsidiaries, including all warrants or options and
other similar securities to purchase such securities. Radio One will also grant
a security interest in all money (including interest), instruments and
securities at any time held or acquired in connection with a cash collateral
account established pursuant to the credit agreement, together with all
proceeds thereof.
The interest rates on the borrowings under the bank credit facility are
based on the ratio of total debt to EBITDA and whether Radio One has effected a
Qualifying Issuance, with a maximum margin above ABR of 1.250% with respect to
ABR Loans, and a maximum margin above Eurodollar rate 2.250% with respect to
Eurodollar Loans. A "Qualifying Issuance" is an issuance of subordinated debt
by Radio One the proceeds of which are used to repay the Term B Loans prior to
their maturity date. Interest on Eurodollar Loans is based on a 360-day period
for actual days elapsed, and interest on ABR Loans is based on a 365-day period
for actual days elapsed. In addition, Radio One will pay a commitment fee based
on the average daily amount of the available Revolving Credit Loans commitment
computed at a rate per year tied to a leverage ratio in effect for the fiscal
quarter preceding the date of payment of such fee. The commitment fee is fully
earned and non-refundable and is payable quarterly in arrears on the last
business day of each March, June, September and December and on the maturity
date of the Revolving Credit Loans.
The credit agreement contains customary and appropriate affirmative and
negative covenants including, but not limited to, financial covenants and other
covenants including limitations on other indebtedness, liens, investments,
guarantees, restricted payments (dividends, redemptions and payments on
subordinated debt), prepayment or repurchase of other indebtedness, mergers and
acquisitions, sales of assets, transactions with affiliates and other
provisions customary and appropriate for financing of this type, including
mutually agreed upon exceptions and baskets. The financial covenants include:
. a maximum ratio of total debt to EBITDA of 7.0x;
. after a Qualifying Issuance, a maximum ratio of senior debt to EBITDA of
5.5x;
. a minimum interest coverage ratio; and
. a minimum fixed charge coverage ratio.
The credit agreement contains the following customary events of default:
. failure to make payments when due;
. defaults under any other agreements or instruments of indebtedness;
. noncompliance with covenants;
. breaches of representations and warranties;
. voluntary or involuntary bankruptcy or liquidation proceedings;
. entrance of judgments;
. impairment of security interests in collateral; and
. changes of control.
12% Notes Due 2004
On May 15, 1997, we entered into an approximate $85.0 million aggregate
principal amount offering (the "12% notes offering") of our 12% Senior
Subordinated Notes (the "12% notes due 2004"). The 12% notes offering has an
aggregate initial accreted value of approximately $75.0 million, as of Maturity
Date May 15, 2004.
The 12% notes due 2004 were issued pursuant to an indenture, dated as of May
15, 1997 among Radio One, Radio One Licenses, Inc. and United States Trust
Company of New York (the "12% notes indenture"). The 12% notes due 2004 are
generally unsecured obligations of Radio One and are subordinated in rights of
payment to all Senior Indebtedness (as defined in the 12% notes indenture). All
of our Restricted Subsidiaries are Subsidiary Guarantors of the 12% notes due
2004.
41
<PAGE>
The 12% notes due 2004 were issued at a substantial discount from their
principal amount. The issue price to investors per note was $877.42, which
represents a yield to maturity on the 12% notes due 2004 of 12.0% calculated
from May 19, 1997 (computed on a semi-annual bond equivalent basis).
Cash interest on the 12% notes due 2004 accrues at a rate of 7.0% per annum
on the principal amount of the 12% notes due 2004 through and including May 15,
2000, and at a rate of 12.0% per annum on the principal amount of the 12% notes
due 2004 after such date. Cash interest on the 12% notes due 2004 is currently
payable semi-annually on May 15 and November 15 of each year.
The 12% notes due 2004 are redeemable at any time and from time to time at
the option of Radio One, in whole or in part, on or after May 15, 2001 at the
redemption prices set forth in the 12% notes due 2004, plus accrued and unpaid
interest to the date of redemption. Upon a Change of Control (as defined in the
12% notes indenture), we must commence an offer to repurchase the 12% notes due
2004 at 101% of the Accreted Value thereof, plus accrued and unpaid interest,
if any, to the date of repurchase.
The 12% notes indenture contains certain restrictive covenants with respect
to Radio One and our Restricted Subsidiaries, including limitations on: (a) the
sale of assets, including the equity interests of our Restricted Subsidiaries,
(b) asset swaps, (c) the payment of Restricted Payments (as defined in the 12%
notes indenture), (d) the incurrence of indebtedness and issuance of preferred
stock by us or our Restricted Subsidiaries, (e) the issuance of Equity
Interests (as defined in the 12% notes indenture) by a Restricted Subsidiary,
(f) the payment of dividends on our capital stock and the purchase, redemption
or retirement of our capital stock or subordinated indebtedness, (g) certain
transactions with affiliates, (h) the incurrence of senior subordinated debt
and (i) certain consolidations and mergers. The 12% notes indenture also
prohibits certain restrictions on dividends from Restricted Subsidiaries. All
of these limitations and prohibitions, however, are subject to a number of
important qualifications.
The 12% notes indenture includes various events of default customary for
such type of agreements, such as failure to pay principal and interest when due
on the 12% notes due 2004, cross defaults on other indebtedness and certain
events of bankruptcy, insolvency and reorganization.
SELLING HOLDERS
The HIGH TIDES were originally issued and sold to the initial purchasers,
Credit Suisse First Boston Corporation, Deutsche Bank Securities Inc., Morgan
Stanley & Co. Incorporated, Banc of America Securities LLC and First Union
Securities, Inc. The initial purchasers simultaneously sold the HIGH TIDES in
transactions exempt from the registration requirements of the Securities Act to
persons reasonably believed by them to be qualified institutional buyers as
defined in Rule 144A under the Securities Act.
The selling holders may from time to time offer and sell pursuant to this
prospectus any or all of the HIGH TIDES and the class D common stock issuable
upon conversion of the HIGH TIDES. The term "selling holder" includes the
holders listed below and the beneficial owners of the HIGH TIDES and their
transferees, pledgees, donees or other successors.
42
<PAGE>
The following table sets forth information with respect to the selling
holders of the HIGH TIDES and the respective number of HIGH TIDES beneficially
owned by each selling holder that may be offered for such selling holder's
account pursuant to this prospectus. Such information has been obtained from
the selling holders.
<TABLE>
<CAPTION>
Number of
Selling Holder HIGH TIDES
-------------- ----------
<S> <C>
AFG Industries, Inc............................................... 410
Allstate Insurance Company........................................ 1,500
American High-Income Trust........................................ 18,705
American Variable Insurance Series--Asset Allocation Fund......... 750
American Variable Insurance Series--Bond Fund..................... 1,000
American Variable Insurance Series--High Yield Bond Fund.......... 4,600
Aquinas Balanced Fund............................................. 45
Aquinas Equity Growth Fund........................................ 270
Argent Classic Convertible Arbitrage Fund (Bermuda) L.P........... 12,500
Argent Convertible Arbitrage Fund Ltd............................. 2,000
Bancroft Convertible Fund, Inc.................................... 1,000
BankAmerica Pension Plan.......................................... 1,900
Bear, Stearns & Co. Inc........................................... 2,000
BNP Arbitrage SNC................................................. 1,266
BNP Cooper Neff Convertible Strategies Fund, L.P.................. 84
BNY Hamilton Equity Income Fund................................... 4,000
Boston Museum of Fine Arts........................................ 40
Brazos Mid Cap Growth Portfolio................................... 500
Brazos Multi Cap Growth Portfolio................................. 520
Capital International Global High Yield Fund...................... 375
Capital Guardian U. S. High-Yield Fixed-Income Master Fund........ 2,595
Capital World Growth and Income Fund, Inc......................... 15,500
Capital Guardian Global High-Yield Fixed-Income Fund.............. 375
Century National Insurance Company................................ 470
CFFX, LLC......................................................... 2,345
City of Orlando................................................... 150
Deeprock & Co..................................................... 2,500
Deutsche Bank Securities Inc...................................... 9,000
Duckbill & Co..................................................... 1,000
Ellsworth Convertible Growth and Income Fund, Inc................. 1,000
Fiduciary Trust Company International............................. 750
First Mercury Insurance Company--Total Return..................... 30
General Motors Welfare Benefit Trust (ST-Veba).................... 1,500
Great Lakes Protection Fund....................................... 270
Hamilton Partners Limited......................................... 2,500
Highbridge International LLC...................................... 2,500
Ithaca College.................................................... 150
J. F. Maddox Foundation........................................... 250
JMG Capital Partners, L.P......................................... 10,250
Julius Baer Securities Inc........................................ 800
Kaleida Health--Master Investment Trust........................... 50
Kaleida Health--Self-Insurance Trust.............................. 40
Kaleida Health--Retirement Trust.................................. 110
Lipper & Company.................................................. 9,000
Lord Abbett Bond Debenture Fund................................... 3,000
Luciano, Robert P................................................. 25
McMahan Securities Co. L.P........................................ 2,000
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
Number of
Selling Holder HIGH TIDES
-------------- ----------
<S> <C>
Morgan Stanley & Co.............................................. 5,000
Morgan Stanley Dean Witter Convertible Securities Trust.......... 750
New York Life Insurance and Annuity Corporation.................. 1,100
New York Life Insurance Company.................................. 9,900
Opportunity Capital Fund, L.P.................................... 575
Parker-Hannifin Corporation...................................... 70
Pell Rudman Trust Company........................................ 2,100
Peoples Benefit Life Insurance Company........................... 3,300
Peoples Benefit Life Insurance Company (Teamsters Separate
Account)........................................................ 3,700
ProMutual........................................................ 150
Putnam Asset Allocation Funds--Conservative Portfolio............ 180
Putnam Convertible Income-Growth Trust........................... 1,110
Putnam Convertible Opportunities and Income Trust................ 110
Putnam Asset Allocation Funds--Balanced Portfolio................ 300
R2 Investments, LDC.............................................. 42,500
RAM Trading Ltd.................................................. 5,000
Retail Clerks Pension Trust...................................... 1,100
Retail Clerks Pension Trust Acc't 2.............................. 2,000
SAM Investments LDC.............................................. 10,000
San Diego County Employees Retirement Association................ 2,000
Scientific-Atlanta, Inc.......................................... 120
Shirley Acheson Shirock Trust.................................... 70
St. Albans Partners Ltd.......................................... 5,000
TCW Group, Inc................................................... 12,530
The Bond Fund of America, Inc.................................... 9,100
The Northwestern Mutual Life Insurance Company................... 8,000
Transamerica Premier High Yield Bond Fund........................ 1,000
University of Rochester.......................................... 40
University of Nebraska #2........................................ 80
University of Nebraska........................................... 430
Van Kampen Harbor Fund........................................... 7,000
White River Securities, L.L.C.................................... 2,000
Unnamed holders of HIGH TIDES or any future transferees,
pledgees, donees or successors of or from the named or unnamed
holders(1)...................................................... 52,060
-------
310,000
</TABLE>
--------
(1) No such holder may offer or sell HIGH TIDES pursuant to this prospectus
until such holder is included as a selling holder in a supplement to this
prospectus in accordance with the registration rights agreement.
None of the selling holders has, or within the past three years has had, any
position, office or other material relationship with Radio One or any of its
predecessors or affiliates. Because the selling holders may, pursuant to this
prospectus, offer all or some portion of the HIGH TIDES and the class D common
stock issuable upon conversion of the HIGH TIDES, no estimate can be given as
to the amount of those securities that will be held by the selling holders upon
termination of any such sales. In addition, the selling holders identified
above may have sold, transferred or otherwise disposed of all or a portion of
their HIGH TIDES since the date on which they provided the information
regarding their HIGH TIDES included herein in transactions exempt from the
registration requirements of the Securities Act.
44
<PAGE>
PLAN OF DISTRIBUTION
The HIGH TIDES and the class D common stock issuable upon conversion of the
HIGH TIDES may be offered and sold from time to time to purchasers directly by
the selling holders. Alternatively, the selling holders may from time to time
offer those securities to or through underwriters, broker-dealers or agents,
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the selling holders or the purchasers of the securities for
whom they act as agents. The selling holders and any underwriters, broker-
dealers or agents that participate in the distribution of the securities may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
profit on the sale of such securities and any discounts, commissions,
concessions or other compensation received by any such underwriter, broker-
dealer or agent may be deemed to be underwriting discounts and commissions
under the Securities Act.
The securities may be sold from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale or at negotiated prices. The sale of the
securities may be effected in transactions, which may involve crosses or block
transactions:
. on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
. the over-the-counter market;
. transactions otherwise than on such exchanges or services or in the over-
the-counter market; or
. through the writing and exercise of options.
In connection with sales of the securities or otherwise, the selling holders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the securities in the course of hedging the positions
they assume. The selling holders may also sell the securities short and deliver
securities to close out such short positions, or loan or pledge securities to
broker-dealers that in turn may sell such securities.
At the time a particular offering of the securities is made, a prospectus
supplement, if required in addition to this prospectus, will be distributed,
which will set forth the aggregate amount and type of securities being offered
and the terms of the offering, including the name or names of any underwriters,
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling holders and any discounts,
commissions or concessions allowed or reallowed to paid broker-dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the securities will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain
jurisdictions the securities may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or any exemption from
registration or qualification is available and is complied with.
The selling holders will be subject to applicable provisions of the Exchange
Act and rules and regulations under the Exchange Act, which provisions may
limit the timing of purchases and sales of any of the securities by the selling
holders. This may affect the marketability of those securities.
Pursuant to the registration rights agreement, we shall bear all fees and
expenses incurred in connection with the registration of the securities, except
that selling holders will pay all broker's commissions and, in connection with
any underwritten offering, all expenses customarily borne by selling holders in
an underwritten offering, including underwriting discounts and commissions. The
selling holders will be indemnified by us and the trust, jointly and severally,
against certain civil liabilities, including certain liabilities under the
Securities Act or the Exchange Act or otherwise, or alternatively will be
entitled to contribution in connection with those liabilities.
45
<PAGE>
LEGAL MATTERS
Kirkland & Ellis, Washington, D.C. (a partnership that includes professional
corporations) will pass upon legal matters regarding the HIGH TIDES offered by
this prospectus and the validity of the class D common stock issuable upon
conversion of the HIGH TIDES.
EXPERTS
The financial statements incorporated in this prospectus by reference for
each of the years in the three year period ended December 31, 1999 have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and are incorporated by reference in
reliance upon the authority of said firm as experts in giving said report.
46
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
----------------
PROSPECTUS
----------------
6 1/2% Convertible Preferred Securities
Remarketable Term Income Deferrable Equity Securities
(HIGH TIDES)
OCTOBER 11, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses of the Registrant in connection
with the registration of the securities being registered, other than
underwriting discounts and commissions. All such amounts are estimates, other
than the fees payable to the Commission.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee................................................ $ 81,840
Legal fees and expenses............................................. $ 50,000
Accounting fees and expenses........................................ $ 20,000
Printing............................................................ $ 10,000
Miscellaneous....................................................... $ 10,000
--------
Total............................................................. $171,840*
========
</TABLE>
--------
* All expenses except the SEC registration fee are estimated.
Item 15. Indemnification of Directors and Officers.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
permits a Delaware corporation to limit the personal liability of its directors
in accordance with the provisions set forth therein. The Restated Certificate
of Incorporation of the Registrant provides that the personal liability of its
directors shall be limited to the fullest extent permitted by applicable law.
Section 145 of the General Corporation Law of the State of Delaware contains
provisions permitting corporations organized thereunder to indemnify directors,
officers, employees or agents against expenses, judgments and fines reasonably
incurred and against certain other liabilities in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person was or is a director, officer, employee or agent of the corporation. The
Amended and Restated Certificate of Incorporation of the Registrant provides
for indemnification of its directors and officers to the fullest extent
permitted by applicable law.
Item 16. Exhibits
The following exhibits are filed pursuant to Item 601 of Regulation S-K.
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
3.3 Certificate of Designations -- Rights and Preferences of the HIGH
TIDES.*
4.10 Registration Rights Agreement, dated July 14, 2000, among the
Registrant and certain other parties thereto.*
4.11 Remarketing Agreement, dated July 14, 2000, among the Registrant and
certain other parties thereto.*
5.1 Opinion of Kirkland & Ellis regarding legality of securities being
registered.
8.1 Opinion of Kirkland & Ellis as to certain tax matters.
12.1 Statement Regarding Computation of Ratios.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kirkland & Ellis (included in Exhibits 5.1 and 8.1).
24.1 Powers of Attorney (included on signature pages hereto).
</TABLE>
--------
* Previously filed as an exhibit to the Registrant's Quarterly Report on Form
10-Q for the period ended June 30, 2000 (File No. 000-25969; Film No.
698190).
II-1
<PAGE>
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that clauses (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(5) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the
II-2
<PAGE>
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Lanham, Maryland on October 11, 2000.
Radio One, Inc.
By: /s/ Alfred C. Liggins, III
-----------------------------
Name:Alfred C. Liggins, III
Title:President and Chief
Executive Officer
POWER OF ATTORNEY AND SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons on the date
indicated. We, the undersigned officers and directors of Radio One, Inc.,
hereby severally constitute and appoint Alfred C. Liggins, III and Linda J.
Eckard, and each of them singly, our true and lawful attorneys, with full power
to them and each of them singly, to sign for us in our names in the capacities
indicated below, all pre-effective and post-effective amendments to this
Registration Statement (or any other registration statement for the same
offering that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act), and generally to do all things in our names and on our behalf
in such capacities to enable Radio One, Inc. to comply with the provisions of
the Securities Act, as amended, and all requirements of the SEC.
Radio One, Inc.
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- -------- ----
<S> <C> <C>
/s/ Catherine L. Hughes Chairperson of the Board October 11, 2000
___________________________________ of Directors
Catherine L. Hughes
/s/ Terry L. Jones Director October 11, 2000
___________________________________
Terry L. Jones
/s/ Brian W. McNeill Director October 11, 2000
___________________________________
Brian W. McNeill
/s/ Larry D. Marcus Director October 11, 2000
___________________________________
Larry D. Marcus
/s/ Alfred C. Liggins, III President and Chief October 11, 2000
___________________________________ Executive Officer
Alfred C. Liggins, III (Principal Executive
Officer) and Director
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- -------- ----
<S> <C> <C>
/s/ Scott R. Royster Executive Vice President October 11, 2000
______________________________________ and Chief Financial
Scott R. Royster Officer (Principal
Financial and Accounting
Officer)
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
3.3 Certificate of Designations--Rights and Preferences of the HIGH
TIDES.*
4.10 Registration Rights Agreement, dated July 14, 2000, among the
Registrant and certain other parties thereto.*
4.11 Remarketing Agreement, dated July 14, 2000, among the Registrant and
certain other parties thereto.*
5.1 Opinion of Kirkland & Ellis regarding legality of securities being
registered.
8.1 Opinion of Kirkland & Ellis as to certain tax matters.
12.1 Statement Regarding Computation of Ratios.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kirkland & Ellis (included in Exhibits 5.1 and 8.1).
24.1 Powers of Attorney (included on signature pages hereto).
</TABLE>
--------
* Previously filed as an exhibit to the Registrant's Quarterly Report on Form
10-Q for the period ended June 30, 2000 (File No. 000-25969; Film No.
698190).
II-6
