<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 1999
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from
Commission file number 0-20833
LAMAR ADVERTISING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 72-1205791
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
5551 Corporate Blvd.,
Baton Rouge, LA 70808
(Address of principal (Zip Code)
executive officers)
Registrant's telephone number, including area code (225) 926-1000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Outstanding as of
Class August 6, 1999
----- -----------------
<S> <C>
Class A Common Stock,$ .001 par value 43,568,340
Class B Common Stock,$ .001 par value 17,699,997
</TABLE>
<PAGE> 2
CONTENTS
<TABLE>
<S> <C>
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of
June 30, 1999 and December 31, 1998................................................1-2
Condensed Consolidated Statements of Operations for the three
months ended June 30, 1999 and June 30, 1998 and six months
ended June 30, 1999 and June 30, 1998................................................3
Condensed Consolidated Statements of Comprehensive Income for
the three months ended June 30, 1999 and June 30, 1998 and
six months ended June 30, 1999 and June 30, 1998.....................................4
Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 1999 and
June 30, 1998......................................................................5-6
Notes to Condensed Consolidated Financial
Statements........................................................................7-11
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations....................................12-15
ITEM 3. Quantitative and Qualitative Disclosures About
Market Risks........................................................................15
ITEM 4. Submission of matters to a vote of security holders.................................16
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.................................................16-17
Signatures..........................................................................18
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1.- FINANCIAL STATEMENTS
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---------- ----------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 4,249 $ 128,597
Receivables
Trade accounts, net 45,534 39,681
Affiliates, related parties
and employees 564 378
Other 495 321
---------- ----------
Net receivables 46,593 40,380
Prepaid expenses 13,321 12,346
Other current assets 2,327 1,736
---------- ----------
Total current assets 66,490 183,059
---------- ----------
Property, plant and equipment 723,828 661,324
Less accumulated depreciation
and amortization (177,700) (153,972)
---------- ----------
Net property, plant and equipment 546,128 507,352
---------- ----------
Intangible assets 781,217 705,934
Receivables - noncurrent 3,632 1,972
Other assets 13,467 15,060
---------- ----------
Total assets 1,410,934 1,413,377
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 4,325 4,258
Accrued expenses 25,870 25,912
Current maturities of long-term
debt 4,078 49,079
Deferred income 8,261 9,589
---------- ----------
Total current liabilities 42,534 88,838
Long-term debt 885,306 827,453
Deferred tax liability 21,848 25,613
Deferred income 1,283 1,293
Other liabilities 4,833 3,401
---------- ----------
Total liabilities 955,804 946,598
---------- ----------
(continued)
</TABLE>
-1-
<PAGE> 4
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- -----------
<S> <C> <C>
STOCKHOLDERS' EQUITY
Class A preferred stock, par value $638, $63.80 cumulative dividends,
authorized 10,000 shares; 5,719.49 shares issued and outstanding at June
30, 1999, and December 31, 1998, respectively 3,649 3,649
Class A common stock, $.001 par value, authorized 125,000,000 shares; issued
and outstanding 43,568,340 shares and 43,392,876 shares at June 30, 1999,
and December 31, 1998, respectively 44 43
Class B common stock, $.001 par value, authorized 37,500,000 shares; issued and
outstanding 17,699,997 shares at June 30, 1999, and December 31, 1998 18 18
Additional paid in capital 509,952 505,644
Accumulated deficit (58,533) (42,575)
----------- -----------
Stockholders' equity 455,130 466,779
----------- -----------
Total liabilities and
stockholders' equity $ 1,410,934 1,413,377
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
-2-
<PAGE> 5
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net revenues $ 97,809 $ 69,675 $ 183,575 $ 128,072
- ------------ ------------ ------------ ------------ ------------
Operating expenses
Direct advertising expenses 30,481 21,609 60,245 42,439
Selling, general and administrative expenses 20,754 15,008 40,853 28,224
Depreciation and amortization 32,652 19,491 64,213 37,096
------------ ------------ ------------ ------------
83,887 56,108 165,311 107,759
------------ ------------ ------------ ------------
Operating income 13,922 13,567 18,264 20,313
------------ ------------ ------------ ------------
Other expense (income)
Interest income (269) (129) (955) (236)
Interest expense 18,234 13,915 36,379 27,241
(Gain) loss on disposition of assets (141) 709 (477) 392
------------ ------------ ------------ ------------
17,824 14,495 34,947 27,397
------------ ------------ ------------ ------------
Loss before income taxes and cumulative effect
of a change in accounting principle (3,902) (928) (16,683) (7,084)
Income tax expense (benefit) 1,076 142 (1,766) (1,423)
------------ ------------ ------------ ------------
Loss before cumulative effect of a change
in accounting principle (4,978) (1,070) (14,917) (5,661)
------------ ------------ ------------ ------------
Cumulative effect of a change in accounting
principle -- -- (767) --
------------ ------------ ------------ ------------
Net loss (4,978) (1,070) (15,684) (5,661)
Preferred stock dividends 183 183 274 274
------------ ------------ ------------ ------------
Net loss applicable to common stock (5,161) (1,253) (15,958) (5,935)
------------ ============ ============ ============
Loss before cumulative effect of a change in
accounting principle per common share -
basic and diluted $ (.08) $ (.02) $ (.25) $ (.12)
============ ============ ============ ============
Cumulative effect of a change in accounting
principle, net of tax, per common share -
basic and diluted $(--) $(--) $ (.01) $(--)
============ ============ ============ ============
Net loss per common share - basic $ (.08) $ (.02) $ (.26) $ (.12)
============ ============ ============ ============
Net loss per common share - diluted $ (.08) $ (.02) $ (.26) $ (.12)
============ ============ ============ ============
Weighted average common shares outstanding 61,227,406 48,802,640 61,185,610 48,080,862
Incremental common shares from dilutive stock
options -- -- -- --
------------ ------------ ------------ ------------
Weighted average common shares assuming dilution 61,227,406 48,802,640 61,185,610 48,080,862
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements
-3-
<PAGE> 6
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net loss applicable to common
stock $ (5,161) $ (1,253) $(15,958) $ (5,935)
Other comprehensive income (loss) unrealized
loss on investment securities (net
of deferred tax benefit of $0 and $84
for the three months ended June 30,
1999 and 1998, respectively and $0 and
$217 for the six months ended June 30, 1999
and 1998, respectively.) -- (137) -- 354
-------- -------- -------- --------
Comprehensive Income (loss) $ (5,161) $ (1,390) $(15,958) $ (5,581)
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements
-4-
<PAGE> 7
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (15,684) $ (5,661)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 64,213 37,096
(Gain) loss on disposition of assets (477) 392
Deferred taxes (4,469) (654)
Provision for doubtful accounts 500 703
Changes in operating assets and liabilities:
Decrease (Increase) in:
Receivables (6,945) (1,042)
Prepaid expenses (150) (295)
Income taxes refundable 1,086 (1,854)
Other assets (63) (1,214)
Increase (Decrease) in:
Trade accounts payable 67 200
Accrued expenses (4,441) (1,420)
Other liabilities 36 (167)
Deferred income (1,373) (853)
--------- ---------
Net cash provided by operating
activities 32,300 25,231
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable (1,590) (280)
Acquisition of new markets (138,297) (187,175)
Capital expenditures (30,274) (24,260)
Proceeds from disposition of assets 1,602 1,289
--------- ---------
Net cash used in investing activities (168,559) (210,426)
(continued)
</TABLE>
-5-
<PAGE> 8
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 2,194 179,929
Principal payments on long-term debt (47,009) (2,341)
Proceeds from issuance of notes payable -- 70
Net borrowings under credit agreements 57,000 7,000
Dividends (274) (274)
--------- ---------
Net cash provided by financing activities 11,911 184,384
Net decrease in cash and cash equivalents (124,348) (811)
Cash and cash equivalents at beginning
of period 128,597 7,246
--------- ---------
Cash and cash equivalents at end of
period 4,249 6,435
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 36,196 $ 27,100
========= =========
Cash paid for state and
federal income taxes $ 1,485 $ 872
========= =========
</TABLE>
See accompanying notes to consolidated financial statements
-6-
<PAGE> 9
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
1. Significant Accounting Policies
The information included in the foregoing interim financial statements is
unaudited. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of the Company's
financial position and results of operations for the interim periods presented
have been reflected herein. The results of operations for interim periods are
not necessarily indicative of the results to be expected for the entire year.
These condensed consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K.
Earnings per share are computed in accordance with SFAS No. 128, "Earnings Per
Share." The calculations of basic earnings per share exclude any dilutive effect
of stock options, while diluted earnings per share includes the dilutive effect
of stock options. Antidilutive shares of 555,558, 611,296, 579,170 and 623,742
for the three month periods ended June 30, 1999 and 1998 and six month periods
ended June 30, 1999 and 1998 respectively have been excluded from the
calculations of diluted earnings per share.
Certain amounts in the prior year's consolidated financial statements have been
reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported net earnings.
New Accounting Pronouncements
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-5, Reporting on the Costs of Start-Up
Activities. SOP 98-5 is effective for financial statements for fiscal years
beginning after December 15, 1998, and requires that the costs of start-up
activities, including organizational costs, be expensed as incurred. The effect
of SOP 98-5 is recorded as a cumulative effect of a change in accounting
principle as described in Accounting Principles Board Opinion No. 20
"Accounting Changes".
-7-
<PAGE> 10
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
2. Acquisitions
On January 5, 1999, the Company purchased all of the outdoor advertising assets
of American Displays, Inc. for a cash purchase price of approximately $14,500.
On February 1, 1999, the company purchased all of the outdoor advertising
assets of KJS, LLC for a cash purchase price of $40,500.
On April 1, 1999, the Company purchased all of the assets of Frank Hardie, Inc.
for a cash purchase price of approximately $20,300.
On June 1, 1999, the Company purchased the assets of Vivid, Inc. for a cash
purchase price of approximately $22,100.
During the six months ended June 30, 1999, the company completed 30 additional
acquisitions of outdoor advertising and transit assets for an aggregate cash
purchase price of approximately $42,100 and the issuance of 13,023 shares of
Class A common stock valued at approximately $500.
Each of these acquisitions were accounted for under the purchase method of
accounting, and, accordingly, the accompanying financial statements include the
results of operations of each acquired entity from the date of acquisition. The
purchase price has been allocated to assets acquired and liabilities assumed
based on fair market value at the dates of acquisition. The following is a
summary of the allocation of the purchase price in the above transactions.
<TABLE>
<CAPTION>
Property
Current Plant & Customer Other Current Long-term
Assets Equipment Goodwill Lists Assets Liabilities Liabilities
-------- --------- -------- -------- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
American Displays 87 899 10,532 3,227 50 (284) --
KJS, LLC 46 9,468 30,543 4,479 10 (2,079) (1,921)
Frank Hardie 187 6,595 10,451 3,620 10 (525) --
Vivid, Inc. 357 8,402 9,830 4,055 30 (593)
Other 189 11,301 28,713 4,810 165 (1,103) (1,549)
------ ------ ------ ------ ------ ------- ------
866 36,665 90,069 20,191 265 (4,584) (3,470)
====== ====== ====== ====== ====== ====== ======
</TABLE>
-8-
<PAGE> 11
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
Summarized below are certain unaudited pro forma statements of operations data
for the six months ended June 30, 1999 and June 30, 1998 as if each of the
above acquisitions and the acquisitions occurring in 1998, which were fully
described in the Company's December 31, 1998 Annual Report on Form 10-K, had
been consummated as of January 1, 1998. This pro forma information does not
purport to represent what the Company's results of operations actually would
have been had such transactions occurred on the date specified or to project
the Company's results of operations for any future periods.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues, net $ 98,541 $ 91,047 $ 188,072 $ 173,915
Net loss applicable to
common stock (5,450) (7,173) (17,034) (18,630)
Net loss per common share - basic (.09) (.15) (.28) (.39)
Net loss per common share - diluted (.09) (.15) (.28) (.39)
</TABLE>
In addition, on June 1, 1999, the Company agreed to purchase the outdoor
advertising business of Chancellor Media Outdoor Corporation for $700,000 in
cash and 26,227,273 shares of the Company's Class A Common Stock. The
acquisition is subject to antitrust review by the Department of Justice and the
Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976. The completion of the acquisition is also subject to approval by the
Company's stockholders of the issuance of the shares of Class A common stock as
proposed in the acquisition, lender approvals, and the satisfaction of other
customary closing conditions. Accordingly, the Company cannot be sure whether
or when the Chancellor Outdoor acquisition will be completed. The Reilly Family
Limited Partnership, which is controlled by Kevin P. Reilly, Jr., Chief
Executive Officer of the Company and holds more than 80% of the Company
stockholder voting power, has agreed to vote in favor of the transaction. Lamar
expects to fund the cash portion of the purchase price with bank loans under a
new credit facility which it expects to put in place prior to closing.
3. New Bank Credit Facility
On June 15, 1999, the Company received a commitment from The Chase Manhattan
Bank to replace its existing bank credit facility with a new bank credit
facility under which The Chase Manhattan Bank will serve as administrative
agent. The new $1,000,000 bank credit facility consists of (1) a $350,000
revolving bank credit facility and (2) a $650,000 term facility with two
tranches, a $450,000 Term A facility and a $200,000 Term facility. As a result
of the holding company reorganization completed on July 20, 1999 and explained
in footnote 5, the existing bank credit facility and the new bank credit
facility will be obligations of Lamar Media Corp. and not Lamar Advertising
Company.
-9-
<PAGE> 12
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
4. Summarized Financial Information of Subsidiaries
Separate financial statements of each of the Company's direct or indirect
wholly-owned subsidiaries that have guaranteed the Company's obligations with
respect to its publicly issued notes (collectively, the "Guarantors") are not
included herein because the Guarantors are jointly and severally liable under
the guarantees, and the aggregate assets, liabilities, earnings and equity of
the Guarantors are substantially equivalent to the assets, liabilities,
earnings and equity of the Company on a consolidated basis. Summarized
financial information for Missouri Logos, a Partnership, a 66 2/3% owned
subsidiary of the Company and the only subsidiary of the Company that is not a
Guarantor, is set forth below:
<TABLE>
<CAPTION>
Balance Sheet Information: June 30, 1999 December 31, 1998
------------- -----------------
(Unaudited)
<S> <C> <C>
Current assets 391 248
Total assets 439 297
Total liabilities 10 7
Venturers' equity 429 290
</TABLE>
<TABLE>
<CAPTION>
Income Statement Information: Three months ended Six months ended
June 30 June 30
1999 1998 1999 1998
---- ---- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues 258 237 532 501
Net income 106 137 320 299
</TABLE>
5. Subsequent Events
On July 16, 1999, the Board of Directors amended the Preferred Stock of the
Corporation by establishing 5,720 shares of the 1,000,000 shares of previously
undesignated Preferred Stock, par value .001 to be designated "Series AA
Preferred Stock". The previously issued Class A Preferred Stock par value $638
was exchanged for the new Series AA Preferred Stock.
On July 20, 1999, the Company reorganized into a new holding company structure.
As a result of this reorganization (1) the former Lamar Advertising Company
became a wholly owned subsidiary of a newly formed holding company, (2) the
name of the former Lamar Advertising Company was changed to Lamar Media Corp.,
(3) the name of the new holding company became Lamar Advertising Company, (4)
the outstanding shares of capital stock of the former Lamar Advertising
Company, including the Class A common stock, were automatically converted, on a
share for share basis, into identical shares of capital stock of the new
holding company and (5) the Class A common stock of the new holding company
commenced trading on the Nasdaq National Market under the symbol "LAMR" instead
of the Class A common stock of the former Lamar Advertising Company. In
addition, following the holding company reorganization, substantially all of
the former Lamar Advertising Company's debt obligations, including the bank
credit facility and other long-term debt remained the
-10-
<PAGE> 13
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
obligations of Lamar Media Corp. Under Delaware law, the reorganization did not
require the approval of the stockholders of the former Lamar Advertising
Company. The purpose of the reorganization was to provide Lamar Advertising
Company with a more flexible capital structure and to enhance its financing
options. The business operations of the former Lamar Advertising Company and its
subsidiaries will not change as a result of the reorganization. Stockholders do
not need to take any action since their existing stock certificates represent
shares of the new holding company.
On August 10, 1999, the Company completed an offering of $250,000 5 1/4%
convertible notes. The proceeds of approximately $243,000 of the convertible
notes were used to pay down existing bank debt. The convertible notes were
issued by the new holding company, Lamar Advertising Company.
-11-
<PAGE> 14
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the consolidated financial condition and
results of operations of the Company for the six month and three month periods
ended June 30, 1999 and 1998. This discussion should be read in conjunction
with the consolidated financial statements of the Company and the related
notes.
The following discussion is a summary of the key factors management considers
necessary in reviewing the Company's results of operations, liquidity and
capital resources. The future operating results of the Company may differ
materially from the results described below. For a discussion of certain
factors which may affect the Company's future operating performance, please
refer to Exhibit 99.1 hereto entitled "Factors Affecting Future Operating
Results".
RESULTS OF OPERATIONS
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998
Net revenues increased $55.5 million or 43.3% to $183.6 million for the six
months ended June 30, 1999 as compared to the same period in 1998. This
increase was attributable to the Company's acquisitions during 1998 and 1999
and internal growth within the Company's existing markets.
Operating expenses, exclusive of depreciation and amortization, increased $30.4
million or 43.1% for the six months ended June 30, 1999 as compared to the same
period in 1998. This was primarily the result of the additional operating
expenses related to acquired outdoor advertising assets and the newly developed
logo sign contracts.
Depreciation and amortization expense increased $27.1 million or 73.1% from
$37.1 million for the six months ended June 30, 1998 to $64.2 million for the
six months ended June 30, 1999 as a result of an increase in capitalized assets
resulting from the Company's recent acquisition activity.
Due to the above factors, operating income decreased $2.0 million or 10.1% to
$18.3 million for six months ended June 30, 1999 from $20.3 million for the
same period in 1998.
Interest income increased $.7 million as a result of earnings on excess cash
investments made during the six months ended June 30, 1999 as compared to the
same period in 1998 due to proceeds from a public offering of the Company's
securities in December 1998. Interest expense increased $9.2 million from $27.2
million for the six months ended June 30, 1998 to $36.4 million for the same
period in 1999 as a result of additional borrowings under the Company's bank
credit facility.
Income tax benefit increased $.4 million creating a tax benefit of $1.8 million
for the six months ended June 30, 1999 as compared to $1.4 million for the same
period in 1998. The effective tax rate for the six months ended June 30, 1999 is
10.6 % which is less than the statutory rate due to permanent differences
resulting from non-deductible amortization of goodwill.
Due to the adoption of SOP 98-5 "Reporting on the Costs of Start-Up Activities"
which requires costs of start-up activities and organization costs to be
expensed as incurred, the Company recognized an expense of $.8 million as a
cumulative effect of a change in accounting principle. This expense is a one
time adjustment to recognize start-up activities and organization costs that
were capitalized in prior periods.
-12-
<PAGE> 15
As a result of the above factors, the Company recognized a net loss for the six
months ended June 30, 1999 of $15.7 million, as compared to a net loss of $5.7
million for the same period in 1998.
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998
Revenues for the three months ended June 30, 1999 increased $28.1 million or
40.4% to $97.8 million from $69.7 million for the same period in 1998.
Operating expenses, exclusive of depreciation and amortization, for the three
months ended June 30, 1999 increased $14.6 million or 39.9% over the same
period in 1998.
Depreciation and amortization expense increased $13.2 million or 67.5% from
$19.5 million for three months ended June 30, 1998 to $32.7 million for the
three months ended June 30, 1999.
Operating income increased $.3 million or 2.6% to $13.9 million for the three
months ended June 30, 1999 as compared to $13.6 million for the same period in
1998.
Interest expense increased $4.3 million from $13.9 million for the three months
ended June 30, 1998 to $18.2 million for the same period in 1999.
The Company recognized a net loss for the three months ended June 30, 1999 of
$5.0 million.
The results for the three months ended June 30, 1999 were affected by the same
factors as the six months ended June 30, 1999. Reference is made to the
discussion of the six month results.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically satisfied its working capital requirements with
cash from operations and revolving credit borrowings. Its acquisitions have
been financed primarily with borrowed funds and the issuance of debt and equity
securities.
During the six months ended June 30, 1999, the Company financed its acquisition
activity of approximately $138.3 million with remaining proceeds from the
December, 1998 equity offering and borrowings under the Company's revolving
bank credit facility. At June 30, 1999, following these acquisitions, the
Company had $192 million available under the revolving bank credit facility. In
July 1999, the Company financed the Action Outdoor acquisition with a draw of
$9 million under the revolving bank credit facility.
The Company's net cash provided by operating activities increased $7.1 million
from $25.2 million for the six months ended June 30, 1998 to $32.3 million for
the six months ended June 30, 1999 due primarily to an increase in noncash
items of $22.2 million, which includes an increase in depreciation and
amortization of $27.1 million offset by a decrease in deferred taxes of $3.8
million and a decrease in gain or loss on disposition of assets of $.9 million.
The increase in noncash items was offset by a decrease in net earnings of $10.0
million, a decrease in accrued expenses of $3.0 million and an increase in
receivables of $5.9 million. Net cash used in investing activities decreased
$41.8 million from $210.4 million for the six months ended June 30, 1998 to
$168.6 million for the same period in 1999. This decrease was due to a $48.9
million decrease in acquisition of outdoor advertising assets offset by a $6.0
million increase in capital expenditures and a $1.3 million increase in notes
receivable. Net cash used
-13-
<PAGE> 16
in financing activities for the six months ended June 30, 1999 is $11.9 million
due to $47.0 million in principal payments on long-term debt which primarily
consists of the payment of approximately $45.0 million in notes to the three
principal shareholders of OCI which was purchased by the Company in October,
1998. The principal payments were offset by $57.0 million in net borrowings
under credit agreements which was used primarily to finance acquisitions and
$2.2 million in net proceeds from issuance of common stock under the Company's
1996 Equity Incentive Plan.
On June 15, 1999, the Company received a commitment from The Chase Manhattan
Bank to replace its existing bank credit facility with a new bank credit
facility for which The Chase Manhattan Bank would serve as administrative
agent. The new $1 billion bank credit facility would consist of (1) a $350
million revolving bank credit facility, (2) a $650 million term facility with
two tranches, a $450 million Term A facility and a $200 million Term B
facility. In addition, the new bank credit facility will provide for an
uncommitted $400 million incremental facility available at the discretion of
the lenders. As a result of the holding company reorganization completed on
July 20, 1999 and explained in footnote 5, the existing bank credit facility
and the new bank credit facility will be obligations of Lamar Media Corporation
and not Lamar Advertising Company.
On August 10, 1999 the Company completed an offering of $250 million of 5 1/4%
convertible notes. The proceeds of approximately $243 million of the
convertible notes were used to pay existing bank debt. The convertible notes
are convertible into Lamar Advertising Company Class A Common Stock at an
initial conversion price of $46.25 per share.
Elimination of Tobacco Advertising
By the end of April, 1999, the Company had removed all of its outdoor
advertising of tobacco products in connection with settlements the states had
reached with the U.S. tobacco companies. Because of these settlements, the
Company's tobacco revenues as a percentage of consolidated net revenue have
declined from 7% for the 12 months ended December 31, 1998 to 4% for the six
months ended June 30, 1999. When displays formerly occupied by tobacco
advertisers have become available in the recent past, the Company has been able
to attract substitute advertising for the unoccupied space on comparable or more
favorable terms. While both of these trends are positive, the Company cannot
guarantee that it will be able to attract substitute advertising to occupy the
displays which will become unoccupied, or that substitute advertisers will pay
rates as favorable to the Company as those paid by tobacco advertisers. If the
Company is unable to continue to replace tobacco advertising, the resulting
increase in available inventory could cause the Company to reduce its rates or
limit the Company's ability to raise rates. In addition, the Company cannot
guarantee that substitute advertisers will pay rates as favorable to the Company
as those paid by tobacco advertisers.
Impact of Year 2000
The year 2000 issue is the result of the development of computer programs and
systems using two digits rather than four digits to define the applicable year.
Computer programs and equipment with time-sensitive software may recognize the
date using "00" as the year 1900 rather than the year 2000.
The year 2000 date recognition problem could cause the Company's computer
systems to fail, resulting in miscalculations and incorrect data. Computer
systems which may be affected by this year 2000 problem include computer systems
embedded in production equipment; displays containing computer systems; business
data processing systems;
-14-
<PAGE> 17
production, management and planning systems; and personal computers.
Consequently, the year 2000 problem could disrupt the Company's daily commercial
activities if the Company does not take the steps necessary to address it
effectively. In addition, the Company cannot assure you that the Company's
customers, suppliers and other third parties that the Company deals with are or
will be year 2000 compliant in a timely manner. Interruptions in services
provided to the Company or in the purchases made by these third parties could
also disrupt the Company's operations. Parties affected by a disruption in the
Company's operations and services could make claims or bring lawsuits against
the Company. Depending upon the extent and duration of any disruptions caused by
the year 2000 problem and the specific services affected, these disruptions
could have an adverse affect on the Company's business.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company is exposed to interest rate risk in connection with variable rate
debt instruments issued by the Company. The Company does not enter into market
risk sensitive instruments for trading purposes. The information below
summarizes the Company's interest rate risk associated with its principal
variable rate debt instruments outstanding at June 30, 1999.
Loans under the Company's bank credit facility bear interest at variable rates
equal to the Chase Prime Rate or LIBOR plus the applicable margin. Because the
Chase Prime Rate or LIBOR may increase or decrease at any time, the Company is
exposed to market risk as a result of the impact that changes in these base
rates may have on the interest rate applicable to borrowings under the bank
credit facility. Increases in the interest rates applicable to borrowings under
the bank credit facility would result in increased interest expense and a
reduction in the Company's net income and after tax cash flow.
At June 30, 1999, there was approximately $307 million of aggregate
indebtedness outstanding under the bank credit facility, or approximately 34.7%
of the Company's outstanding long-term debt on that date, bearing interest at
variable rates. The aggregate interest expense for the six months ended June
30, 1999 with respect to borrowings under the bank credit facility was $9.1
million, and the weighted average interest rate applicable to borrowings under
these credit facilities during the six months ended June 30, 1999 was 6.8%.
Assuming that the weighted average interest rate was 200-basis points higher
(that is 8.8% rather than 6.8%), then the Company's 1999 interest expense would
have been approximately $2.7 million higher resulting in a $1.6 million
decrease in the Company's six months ended June 30, 1999 net income and after
tax cash flow.
The Company attempts to mitigate the interest rate risk resulting from its
variable interest rate long-term debt instruments by also issuing fixed rate
long-term debt instruments and maintaining a balance over time between the
amount of the Company's variable rate and fixed rate indebtedness. In addition,
the Company has the capability under the bank credit facility to fix the
interest rates applicable to its borrowings at an amount equal to LIBOR plus
the applicable margin for periods of up to twelve months, which would allow the
Company to mitigate the impact of short-term fluctuations in market interest
rates. In the event of an increase in interest rates, the Company may take
further actions to mitigate its exposure. The Company cannot guarantee,
however, that the actions that it may take to mitigate this risk will be
feasible or that, if these actions are taken, that they will be effective.
-15-
<PAGE> 18
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its annual meeting of stockholders on Thursday, May 27, 1999.
The following represents the results of the proposals submitted to a vote of
security holders:
Proposal to Elect Directors
The following persons were elected to the Company's Board of Directors for a
term of office expiring at the Company's 2000 Annual Meeting of Stockholders:
<TABLE>
<CAPTION>
Votes Cast For Votes Withheld
-------------- --------------
<S> <C> <C>
Kevin P. Reilly, Jr 217,684,867 145,991
Sean E. Reilly 217,684,867 145,991
Keith A. Istre 217,684,117 146,741
Charles W. Lamar, III 217,684,867 145,991
Gerald H. Marchand 217,684,867 145,991
Jack S. Rome, Jr 217,684,867 145,991
T. Everett Stewart Jr 217,684,867 145,991
Stephen P. Mumblow 217,679,717 151,141
</TABLE>
There were no abstentions or broker non-votes.
Approval of Amendment to the Company's 1996 Equity Incentive Plan
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
177,000,000 -- --
27,170,524 13,611,562 13,972
34,800 -- --
------------
204,205,324
</TABLE>
Approval of Amendment to the Company's Restated Certificate of Incorporation
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
177,000,000 -- --
40,266,145 517,919 11,994
34,800 -- --
------------
217,300,945
</TABLE>
The Company's 2000 annual meeting of stockholders has been scheduled for May
25, 2000.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 3.1 Certificate of Incorporation of Lamar New Holding Co.
Filed herewith.
Exhibit 3.2 Certificate of Amendment of Certificate of Incorporation of
Lamar New Holding Co. (whereby the name of Lamar New
Holding Co. was changed to Lamar Advertising Company.)
Filed herewith.
Exhibit 3.3 Amended and Restated Bylaws. Filed herewith.
-16-
<PAGE> 19
Exhibit 4.1 Indenture dated as of August 10, 1999 between the Company
and State Street Bank and Trust Company, as Trustee. Filed
herewith.
Exhibit 4.2 First Supplemental Indenture dated as of August 10, 1999
between the Company and State Street Bank and Trust
Company, as Trustee. Filed herewith.
Exhibit 10.1 Second Amended and Restated Stock Purchase Agreement
dated as of August 11, 1999 among the Company, Lamar Media
Corp., Chancellor Media Corporation of Los Angeles and
Chancellor Mezzanine Holdings Corporation. Previously
filed as Appendix A to the Company's Schedule 14C
Information Statement filed on August 13, 1999 and
incorporated herein by reference. Pursuant to Item
601(b)(2) of Regulation 5-K, the Schedules and Annexes A
and B referred to in the Second Amended and Restated Stock
Purchase Agreement are omitted. The Company hereby
undertakes to furnish supplementary a copy of any omitted
Schedule or Annex to the Commission upon request.
Exhibit 27.1 Financial Data Schedule.
Exhibit 99.1 Factors Affecting Future Operating Results.
(b) Reports on Form 8-K
Reports on Form 8-K were filed with the Commission during the
second quarter of 1999 to report the following items as of the
dates indicated:
On May 7, 1999, the Company filed an 8-K in order to
furnish an exhibit for incorporation by reference
into the Registration Statements on Form S-3 of Lamar
Advertising Company previously filed with Securities
and Exchange Commission (File Nos. 333- 50559 and
333-71929), which Registration Statements were
declared effective by the Commission on April 28,
1998 and February 12, 1999, respectively, the Company
filed as Exhibit 1.1 to such Registration Statements
a form of Underwriting Agreement for use in
connection with underwritten sales of securities
pursuant to such Registration Statements.
On June 8, 1999, the Company filed an 8-K/A amending
the previously filed 8-K on October 15, 1998 and
8-K/A on October 19, 1998 in order to provide updated
historical financial statements and related notes for
Outdoor Communications, Inc., which the Company
acquired as of October 1, 1998, as well as to include
updated pro forma financial information of the
Company giving effect to the acquisition. The Company
filed as exhibits the unaudited condensed
consolidated balance sheets of OCI as of September
30, 1998 and June 30, 1998 and unaudited condensed
consolidated statements of operations, and cash flow
for the three-month periods ended September 30, 1998
and 1997, and the unaudited pro forma condensed
consolidated balance sheet as of September 30, 1998
and statements of loss of the Company giving effect
to the OCI acquisition for the year ended December
31, 1998 and the nine months ended September 30,
1998.
On June 10, 1999, the Company filed an 8-K announcing
that the Company entered into a definitive agreement
pursuant to which Lamar Media Corporation will
acquire Chancellor's outdoor advertising business for
approximately $1.6 billion in stock and cash. Filed
as Exhibit 99.1 was a copy of the press release
issued on June 1, 1999.
-17-
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LAMAR ADVERTISING COMPANY
DATED: August 13, 1999 BY: /s/ Keith Istre
------------------------------
Keith A. Istre
Chief Financial and Accounting
Officer and Director
-18-
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
Exhibit 3.1 Certificate of Incorporation of Lamar New Holding Co.
Filed herewith.
Exhibit 3.2 Certificate of Amendment of Certificate of Incorporation
of Lamar New Holding Co. (whereby the name of Lamar New
Holding Co. was changed to Lamar Advertising Company).
Filed herewith.
Exhibit 3.3 Amended and Restated Bylaws. Filed herewith.
Exhibit 4.1 Indenture dated as of August 10, 1999 between the Company
and State Street Bank and Trust Company, as Trustee. Filed
herewith.
Exhibit 4.2 First Supplemental Indenture dated as of August 10, 1999
between the Company and State Street Bank and Trust
Company, as Trustee. Filed herewith.
Exhibit 10.1 Second Amended and Restated Stock Purchase Agreement
dated as of August 11, 1999 among the Company, Lamar Media
Corp., Chancellor Media Corporation of Los Angeles and
Chancellor Mezzanine Holdings Corporation. Previously
filed an Appendix A to the Company's Schedule 14C
Information Statement filed on August 13, 1999 and
incorporated herein by reference. Pursuant to Item
601(b)(2) of Regulation 5-K, the Schedules and Annexes A
and B referred to in the Second Amended and Restated Stock
Purchase Agreement are omitted. The Company hereby
undertakes to furnish supplementary a copy of any omitted
Schedule or Annex to the Commission upon request.
Exhibit 27.1 Financial Data Schedule.
Exhibit 99.1 Factors Affecting Future Operating Results.
</TABLE>
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
LAMAR NEW HOLDING CO.
The undersigned, for the purpose of forming a corporation under the
laws of the State of Delaware, hereby certifies as follows::
FIRST. The name of the Corporation is Lamar New Holding Co.
SECOND. The address of the Corporation's registered office in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, County
of New Castle, Delaware 19801. The name of its registered agent at such address
is The Corporation Trust Company.
THIRD. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is one hundred sixty three million
five hundred ten thousand (163,510,000) shares, and shall consist of:
(1) One hundred twenty five million (125,000,000) shares
of Class A Common Stock, $0.001 par value per share;
(2) Thirty-seven million five hundred thousand
(37,500,000) shares of Class B Common Stock, $0.001
par value per share;
(3) Ten thousand (10,000) shares of Class A Preferred
Stock, $638 par value per share; and
(4) One million (1,000,000) shares of Preferred Stock,
$0.001 par value per share, of which 5,720 shares
shall be designated Series AA Preferred Stock.
The Class A Common Stock and the Class B Common Stock are hereinafter
collectively referred to as "Common Stock."
4.1 Common Stock
The powers, preferences, rights, qualifications, limitations and
restrictions relating to the Common Stock are as follows:
4.1.1. Rank
The Common Stock is junior to the Series AA Preferred Stock
and the Class A Preferred Stock and is subject to all the powers, preferences,
rights and priorities of Preferred
<PAGE> 2
Stock designated herein or in any resolution or resolutions adopted by the Board
of Directors pursuant to authority expressly vested in it by the provisions of
Section 4.3 of this Article FOURTH (the "Designated Preferred Stock").
4.1.2. Voting
Holders of Class A Common Stock are entitled to one (1) vote
for each share of such stock held, and holders of Class B Common Stock are
entitled to ten (10) votes for each share of such stock held, with respect to
all matters properly submitted for the vote of holders of Common Stock. Except
as otherwise provided by law, the holders of Common Stock will vote together as
a single class on all matters properly submitted for their vote, including
without limitation any amendment to this Certificate of Incorporation which
would increase or decrease the number of authorized shares of Class A Common
Stock or Class B Common Stock.
4.1.3. Dividends and Other Distributions
(a) Except as provided herein, each share of Common
Stock issued and outstanding shall be identical in all respects, and no dividend
shall be paid on any share of Common Stock unless the same dividend is paid on
all shares of Common Stock outstanding at the time of such payment. Except for
and subject to those special voting rights expressly granted herein to the
holders of the Class B Common Stock and subject to the powers, rights,
privileges, preferences and priorities of the Series AA Preferred Stock, the
Class A Preferred Stock and any Designated Preferred Stock, the holders of
Common Stock shall have exclusively all other rights of stockholders, including
without limitation (i) the right to receive dividends, when, as and if declared
by the Board of Directors out of funds legally available therefor, and (ii) in
the event of any distribution of assets upon liquidation, dissolution or winding
up of the Corporation or otherwise, the right to receive ratably all of the
assets and funds of the Corporation remaining after the payment to the creditors
of the Corporation.
(b) Dividends and distributions payable in shares of
Class A Common Stock may not be made on or to shares of Class B Common Stock and
dividends and distributions payable in shares of Class B Common Stock may not be
made on or to shares of any class of the Corporation's capital stock other than
the Class B Common Stock. If a dividend or distribution payable in shares of
Class A Common Stock shall be made on the shares of Class A Common Stock, a
dividend or distribution payable in shares of Class B Common Stock shall be made
simultaneously on the shares of Class B Common Stock, and the number of shares
of Class B Common Stock payable on each share of Class B Common Stock pursuant
to such dividend or distribution shall be equal to the number of shares of Class
A Common Stock payable on each share of Class A Common Stock pursuant to such
dividend or distribution. If a dividend or distribution payable in shares of
Class B Common Stock shall be made on the shares of Class B Common Stock, a
dividend or distribution payable in shares of Class A Common Stock shall be made
simultaneously on the shares of Class A Common Stock, and the number of shares
of Class A Common stock pursuant to such dividend or distribution shall be equal
to the number of shares of Class B Common Stock payable on each share of Class B
Common Stock pursuant to such dividend or distribution.
2
<PAGE> 3
(c) If the Corporation shall in any manner subdivide
(by stock split, reclassification, stock dividend, recapitalization, or
otherwise) or combine (by reverse stock split or otherwise) the outstanding
shares of Class A Common Stock or Class B Common Stock, then the outstanding
shares of each other class of Common Stock shall be subdivided or combined, as
the case may be, to the same extent, on an equal share basis.
4.1.4. Conversion of Class B Common Stock
(a) In the event that the number of outstanding
shares of Class B Common Stock falls below ten percent (10%) of the total number
of shares of Common Stock outstanding, each share of Class B Common Stock shall
at that time be converted automatically to one (1) fully paid and non-assessable
share of Class A Common Stock.
(b) Upon the sale or other transfer by a holder of
Class B Common Stock to a person or entity other than a Permitted Transferee (as
such term is defined below), such shares of Class B Common Stock shall be
converted automatically into an equal number of shares of Class A Common Stock.
Promptly upon such sale or other transfer, the holder of Class B Common Stock
shall surrender the certificate or certificates therefor, duly endorsed in blank
or accompanied by proper instruments of transfer, at the office of the
Corporation or of any transfer agent for the Class A Common Stock, and shall
give written notice to the Corporation at such office: (i) stating that the
shares are being converted pursuant to this paragraph, (ii) identifying the
number of shares of Class B Common Stock being converted and (iii) setting forth
the name or names (with addresses) and denominations in which the certificate or
certificates for Class A Common Stock shall be issued and shall include
instructions for delivery thereof. Delivery of such notice together with the
certificates representing the Class B Common Stock shall obligate the
Corporation or its transfer agent to issue and deliver at such stated address to
such stated transferee a certificates or certificates for the number of shares
of Class A Common Stock to which such transferee is entitled, registered in the
name of such transferee. In the event of a sale or other transfer of less than
all of the Class B Common Stock evidenced by a certificate surrendered to the
Corporation in accordance with the above procedures, subject to paragraph (a)
above, the Corporation shall execute and deliver to the transferor, without
charge, a new certificate evidencing the number of shares of Class B Common
Stock not sold or otherwise transferred.
For the purpose of paragraph (b) above, a "Permitted Transferee" is
defined as :
(i) (A) any Controlling Stockholder (which
shall mean the Reilly Family Limited Partnership or any successor entity
thereto, Kevin P. Reilly, Sr., Kevin P. Reilly, Jr., Wendell S. Reilly, Sean E.
Reilly, and Anna R. Cullinan; (B) the estate of a Controlling Stockholder; (C)
the spouse or former spouse of a Controlling Stockholder; (D) any lineal
descendent of a Controlling Stockholder, any spouse of such lineal descendent, a
Controlling Stockholder's grandparent, parent, brother or sister or a
Controlling Stockholder's spouse's brother or sister; (E) any guardian or
custodian (including a custodian for purposes of the Uniform Gift to Minors Act
or Uniform Transfers to Minors Act) for, or any conservator or other legal
representative of, one or more Permitted Transferees; or (F) any trust or
savings or retirement account, including an individual retirement account for
purposes of federal income tax laws, whether or not involving a trust,
principally for the benefit of one or more Permitted
3
<PAGE> 4
Transferees, including any trust in respect of which a Permitted Transferee has
any general or special testamentary power of appointment which is limited to any
other Permitted Transferee;
(ii) the Corporation;
(iii) any employee benefit plan or trust
thereunder sponsored by the Corporation or any of its subsidiaries;
(iv) any trust principally for the benefit
of one or more of the individuals, persons, firms or entities ("Persons")
referred to in (i) through (iii) above;
(v) any corporation, partnership, or other
entity if all of the beneficial ownership is held solely by one or more of the
Persons referred to in (i) through (iv) above;
(vi) any voting trust for the benefit of one
or more of the Persons referred to in (i) through (v) above; and
(vii) any broker or dealer in securities,
clearing house, bank, trust company, savings and loan association or other
financial institution which holds the Class B Common Stock as nominee for the
benefit of a Permitted Transferee thereof.
(c) Notwithstanding anything to the contrary set
forth herein, any holder of Class B Common Stock may pledge his shares of Class
B Common Stock to a pledgee pursuant to a bona fide pledge of such shares as
collateral security for indebtedness due to the pledgee without causing an
automatic conversion of such shares into Class A Common Stock, provided,
however, that such shares may not be transferred to or registered in the name of
the pledgee unless such pledgee is a Permitted Transferee. In the event of
foreclosure or other similar action by a pledgee who is not a Permitted
Transferee, such pledged shares of Class B Common Stock shall be converted
automatically, without any act or deed on the part of the Corporation or any
other person, into shares of Class A Common Stock as provided above.
(d) Each share of Class B Common Stock shall be
convertible, at the option of its holder, into one fully paid and non-assessable
share of Class A Common Stock at any time. In the event of such voluntary
conversion, the procedures set forth in paragraph (b) above shall be followed.
(e) The Corporation hereby reserves and shall at all
times reserve and keep available, out of its authorized and unissued Class A
Common Stock, for the purpose of effecting the conversions provided for herein,
a sufficient number of shares of Class A Common Stock to effect the conversion
of all outstanding Class B Common Stock. All of the Class A Common Stock so
issuable shall, when issued, be duly and validly issued, fully paid and
non-assessable, and free from liens and charges with respect to the issue. The
Corporation will take such action as may be necessary to ensure that all such
Class A Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirements of any stock exchange or market on which any
shares of the Class A Common Stock are listed or quoted.
4
<PAGE> 5
(f) In any merger, consolidation or business
combination, the consideration to be received per share by the holders of Class
A Common Stock and Class B Common Stock must be identical for each class of
stock, except that in any such transaction in which shares of Common Stock are
to be distributed, such shares may differ as to voting rights to the extent that
voting rights differ among Class A Common Stock and Class B Common Stock as
provided herein.
4.1.5. Preemptive Rights
No holder of shares of Common Stock shall be entitled
to preemptive or subscription rights.
4.2 Series AA and Class A Preferred Stock
The powers, preferences, rights, qualifications, limitations
and restrictions relating to the Series AA Preferred Stock and the Class A
Preferred Stock are as follows:
4.2.1. Rank
The Series AA Preferred Stock and the Class A
Preferred Stock, with respect to dividends and upon liquidation, rank senior to
the Common Stock and are subject to all the powers, preferences, rights and
priorities of any Designated Preferred Stock.
4.2.2. Dividends
Holders of Series AA Preferred Stock and Class A
Preferred Stock, on a pari passu basis, in priority to the Common Stock, shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available therefor, dividends at the rate of fifteen and 95/100
dollars ($15.95) per share per quarter, payable to the stockholders of record at
the close of business on such date before the payment thereof as is fixed by the
Board of Directors on declaring any such dividend. Dividends shall be cumulative
and the holders of Series AA Preferred Stock or Class A Preferred Stock shall
have no right to such dividend even though the Corporation has funds available
for the payment therefor, unless payment has been declared by the Board of
Directors. Dividends on the Series AA Preferred Stock and Class A Preferred
Stock shall be paid or declared and set apart for payment before dividends are
declared and paid on the Common Stock.
4.2.3. Dissolution or Liquidation
In the case of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders of the
Series AA Preferred Stock and Class A Preferred Stock, on a pari passu basis,
shall be entitled to receive out of the assets of the Corporation, whether such
assets are capital or surplus, the sum of $638 plus a further amount equal to
any dividend thereon accrued and unpaid to the date of such distribution before
any payment shall be made or any assets distributed to the Common Stock. Upon
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, if the assets distributed among the holders of the Series AA
Preferred Stock and Class A Preferred Stock are insufficient to permit the
payment to such holders of the full preferential amounts to which they are
entitled,
5
<PAGE> 6
the entire assets of the Corporation to be distributed shall be distributed
among the holders of the Series AA Preferred Stock and Class A Preferred Stock
on a pari passu basis. After payment to the holders of the Series AA Preferred
Stock and Class A Preferred Stock of the full preferential amounts to which they
are entitled, the holders of the Common Stock shall be entitled to receive
ratably all the remaining assets. A merger or consolidation of the Corporation
with or into any other corporation or entity, shall not be deemed to be a
dissolution or liquidation within the meaning of this provision.
4.2.4. Voting
Holders of Series AA Preferred Stock are entitled to
one (1) vote for each shares of such stock held with respect to all matters
properly submitted for the vote of holders of Series AA Preferred Stock. Except
as otherwise provided by law, the holders of Series AA Preferred Stock and of
Common Stock shall be entitled to vote together as a class on all matters.
Except as otherwise provided by law, the holders of the Class A Preferred Stock
shall not be entitled to vote.
4.2.5. Preemptive Rights
No holder of shares of Series AA Preferred Stock or
Class A Preferred Stock shall be entitled to preemptive or subscription rights.
4.3. Designated Preferred Stock
The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of this Article FOURTH, to provide by
resolution for the issuance of the shares of undesignated Preferred Stock in one
or more series, and by filing a certificate pursuant to the applicable law of
the State of Delaware, to establish from time to time the number of shares to be
included in each such series, and to fix the designations, powers, preferences
and rights of the shares of each such series and qualifications, limitations or
restrictions thereof.
The authority of the Board with respect to each series, which
shall be Designated Preferred Stock, shall include, but shall not be limited to,
determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate, if any, on the shares of that series,
whether dividends shall be cumulative, and if so, from which date or dates, and
the relative rights of priority, if any, of payment of dividends on shares of
the series;
(c) Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such voting
rights;
(d) Whether that series shall have conversion privileges, and,
if so, the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of Directors shall
determine;
6
<PAGE> 7
(e) Whether or not the shares of that series shall be
redeemable, and if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and if so, the terms and amount
of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment of shares
of that series; and
(h) Any other relative rights, preferences and limitations of
that series.
FIFTH. The Corporation is to have perpetual existence.
SIXTH. Election of directors need not be by written ballot unless the
by-laws of the Corporation shall so provide.
SEVENTH. The Board of Directors of the Corporation is expressly
authorized to exercise all powers granted to it by law except insofar as such
powers are limited or denied herein or by the by-laws of the Corporation. In
furtherance of such powers, the Board of Directors shall have the right to
adopt, amend or repeal the by-laws of the Corporation.
EIGHTH. No director shall be personally liable to the Corporation or
its stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to authorize a further limitation or elimination of the liability of
directors or officers, then the liability of a director or officer of the
Corporation shall, in addition to the limitation on personal liability provided
herein, be limited or eliminated to the fullest extent permitted by the Delaware
General Corporation Law, as from time to time amended. No amendment to or repeal
of this Article Ninth shall apply to or have any effect on the liability or
alleged liability of any director or officer of the Corporation for or with
respect to any acts or omissions of such director or officer occurring prior to
such amendment or repeal.
NINTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
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Signed this 16th day of July, 1999.
/s/ KEVIN P. REILLY, JR.
---------------------------------------------
Kevin P. Reilly, Jr., Incorporator
8
<PAGE> 1
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAMAR NEW HOLDING CO.
Pursuant to Section 242
of the General Corporation Law of
the State of Delaware
* EFFECTIVE FROM AND AFTER 4:00 P.M. ON JULY 20, 1999.
Lamar New Holding Co. (hereinafter called the "Corporation"), organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
By unanimous written consent of the Board of Directors of the
Corporation, a resolution was duly adopted, pursuant to Section 242 of the
General Corporation Law of the State of Delaware, setting forth an amendment to
the Certificate of Incorporation of the Corporation and declaring said amendment
to be advisable. The sole stockholder of the Corporation duly approved said
proposed amendment pursuant to a written consent in accordance with Sections 228
and 242 of the General Corporation Law of the State of Delaware. The resolution
setting forth the amendment is as follows:
RESOLVED: That the name of the Corporation be changed from
"Lamar New Holding Co." to "Lamar Advertising
Company"; said name change to be effective from and
after 4:00 P.M. on July 20, 1999.
RESOLVED: To authorize the proper officers of the Corporation,
and each of them, on behalf of the Corporation, to
file a Certificate of Amendment of the Corporation's
Certificate of Incorporation with the Secretary of
State of the State of Delaware and to execute and
deliver all such other agreements, instruments,
certificates and other documents and to take all such
further action as any of them may deem necessary or
desirable to carry out the full intention of the
foregoing resolution.
The Corporation's Certificate of Incorporation shall be amended by
amending Article FIRST so as to change the name of the Corporation from "Lamar
New Holding Co." to "Lamar
<PAGE> 2
Advertising Company", such that Article FIRST of the Certificate of
Incorporation, as so amended, shall read as follows:
FIRST. THE NAME OF THE CORPORATION IS LAMAR ADVERTISING COMPANY.
Such amendment shall be effective from and after 4:00 P.M. on July 20,
1999.
[The remainder of this page intentionally left blank.]
<PAGE> 3
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by its President and Chief Executive Officer this 20th
day of July 1999.
LAMAR NEW HOLDING CO.
By: /s/ KEVIN P. REILLY, JR.
-------------------------------------
Kevin P. Reilly, Jr.
President and Chief Executive Officer
<PAGE> 1
EXHIBIT 3.3
BYLAWS
OF
LAMAR ADVERTISING COMPANY
ARTICLE I
STOCKHOLDERS
SECTION 1. Place of Meetings. All meetings of stockholders
shall be held at the principal office of the corporation or at such other place
as may be named in the notice.
SECTION 2. Annual Meeting. The annual meeting of stockholders
for the election of directors and the transaction of such other business as may
properly come before the meeting shall be held on such date and at such hour and
place as the directors or an officer designated by the directors may determine.
If the annual meeting is not held on the date designated therefor, the directors
shall cause the meeting to be held as soon thereafter as convenient.
SECTION 3. Special Meetings. Special meetings of the
stockholders may be called at any time by the chief executive officer or a
majority of the Board of Directors.
SECTION 4. Notice of Meetings. Except where some other notice
is required by law, written notice of each meeting of stockholders, stating the
place, date and hour thereof and the purposes for which the meeting is called,
shall be given by the Secretary under the direction of the Board of Directors or
the chief executive officer, not less than ten nor more than sixty days before
the date fixed for such meeting, to each stockholder of record entitled to vote
at such meeting. Notice shall be given personally to each stockholder or left at
his or her residence or usual place of business or mailed postage prepaid and
addressed to the stockholder at his or her address as it appears upon the
records of the corporation. In case of the death, absence, incapacity or refusal
of the Secretary, such notice may be given by a person designated either by the
Secretary or by the person or persons calling the meeting or by the Board of
Directors. A waiver of such notice in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent to such notice. Attendance of a person at a meeting of
stockholders shall constitute a waiver of notice of such meeting, except when
the stockholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice. Except as required by statute, notice
of any adjourned meeting of the stockholders shall not be required.
SECTION 5. Record Date. The Board of Directors may fix in
advance a record date for the determination of the stockholders entitled to
notice of or to vote at any meeting of stockholders, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purpose of any other lawful action. Such record date shall
not be more than 60 nor less than 10 days before the date of such meeting, nor
more than 60 days before any other action to which such record date relates. If
no record date is fixed, the record date for
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determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day before the day on
which notice is given, or, if notice is waived, at the close of business on the
day before the day on which the meeting is held, and the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating to
such purpose. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
SECTION 6. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors at any annual or special meeting of stockholders.
Nominations of persons for election as directors may be made only by or at the
direction of the Board of Directors, or by any stockholder entitled to vote for
the election of directors at the meeting in compliance with the notice
procedures set forth in this Section 6. Such nominations, other than those made
by or at the direction of the Board of Directors, shall be made pursuant to
timely notice in writing to the Chairman of the Board, if any, the President or
the Secretary. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the corporation the
earlier of: (a) in the case of an annual meeting only, not less than 75 days
before the anniversary of the prior year's meeting; provided, however, that this
subsection (a) shall not apply if (i) there was no annual meeting in the prior
year or (ii) the date of the current year's annual meeting is more than 30 days
from the date of the prior year's annual meeting; or (b) 45 days prior to the
current year's annual meeting or a special meeting; provided, however, that if
less than 60 days' notice or prior public disclosure of the date of the annual
meeting or the special meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the 15th day following the day on which such notice of the date of
the annual meeting or the special meeting was mailed or such public disclosure
was made. Such stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate for election or re-election as a director,
(i) the name, age, business address and residence address of the person, (ii)
the principal occupation or employment of the person, (iii) the class and number
of shares of capital stock of the corporation that are beneficially owned by the
person and (iv) any other information relating to the person that is required to
be disclosed in solicitations for proxies for election of directors pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended, or any
successor provision thereto; and (b) as to the stockholder giving the notice,
(i) the name and record address of such stockholder and (ii) the class and
number of shares of capital stock of the corporation that are beneficially owned
by such stockholder.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if the chairman should so determine, he or she shall so
declare to the meeting and the defective nomination shall be disregarded.
SECTION 7. Advance Notice of Business at Annual Meetings and
Special Meetings. At any annual meeting or special meeting of the stockholders,
only such business shall be conducted as shall have been properly brought before
the meeting. To be brought properly before an annual meeting or a special
meeting, business must be either (a) specified in
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the notice of meeting (or any supplement thereto) given by or at the direction
of the chief executive officer or the Board of Directors, (b) otherwise properly
brought before the meeting by or at the direction of the Board of Directors, or
(c) properly brought before the meeting by a stockholder. In addition to any
other applicable requirements, for business to be brought properly before an
annual meeting or a special meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Chairman of the Board, if any, the
President or the Secretary. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation the earlier of: (a) in the case of an annual meeting only, not less
than 75 days before the anniversary of the prior year's meeting; provided,
however, that this subsection (a) shall not apply if (i) there was no annual
meeting in the prior year or (ii) the date of the current year's annual meeting
is more than 30 days from the date of the prior year's annual meeting; or (b) 45
days prior to the current year's annual meeting or a special meeting; provided,
however, that if less than 60 days' notice or prior public disclosure of the
date of the annual meeting or the special meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 15th day following the day on which such
notice of the date of the annual meeting or the special meeting was mailed or
such public disclosure was made.
A stockholder's notice shall set forth as to each matter the
stockholder proposes to bring before the annual meeting or the special meeting
(a) a brief description of the business desired to be brought before the annual
meeting or the special meeting and the reasons for conducting such business at
the annual meeting or the special meeting, (b) the name and record address of
the stockholder proposing such business, (c) the class and number of shares of
the corporation that are beneficially owned by the stockholder and (d) any
material interest of the stockholder in such business.
Notwithstanding anything in these by-laws to the contrary, no business
shall be conducted at the annual meeting or a special meeting except in
accordance with the procedures set forth in this Section 7, provided, however,
that nothing in this Section 7 shall be deemed to preclude discussion by any
stockholder of any business properly brought before the annual meeting or a
special meeting in accordance with said procedure.
The chairman of an annual meeting or a special meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the foregoing procedure,
and if the chairman should so determine, he or she shall so declare to the
meeting and any such business not properly brought before the meeting shall not
be transacted.
SECTION 8. Voting List. The officer who has charge of the
stock ledger of the corporation shall make or have made, at least 10 days before
every meeting of stockholders, a complete list of the stockholders, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days before the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may
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be inspected by any stockholder who is present. The stock ledger shall be the
only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by this section or the books of the corporation, or to
vote at any meeting of stockholders.
SECTION 9. Quorum of Stockholders. At any meeting of the
stockholders, the holders of one-third of all issued and outstanding shares of
stock entitled to vote at any meeting of stockholders, present in person or
represented by proxy, shall constitute a quorum for the transaction of any
business at such meeting, but in the absence of a quorum a smaller group may
adjourn any meeting from time to time. When a quorum is present at any meeting,
a majority of the votes properly cast shall, except where a different vote is
required by law, by the Certificate of Incorporation or by these by-laws, decide
any question brought before such meeting. Any election by stockholders shall be
determined by a plurality of the vote cast by the stockholders entitled to vote
at the election.
SECTION 10. Proxies and Voting. Unless otherwise provided in
the Certificate of Incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock held of record by such stockholder, but no proxy shall be voted or
acted upon after three years from its date, unless said proxy provides for a
longer period. Persons holding stock in a fiduciary capacity shall be entitled
to vote the shares so held, and persons whose stock is pledged shall be entitled
to vote unless in the transfer by the pledgor on the books of the corporation
the pledgee shall have been expressly empowered to vote thereon, in which case
only the pledgee or the pledgee's proxy may represent said stock and vote
thereon. Shares of the capital stock of the corporation belonging to the
corporation or to another corporation, a majority of whose shares entitled to
vote in the election of directors is owned by the corporation, shall neither be
entitled to vote nor be counted for quorum purposes.
SECTION 11. Conduct of Meeting. Meetings of the stockholders
shall be presided over by one of the following officers in the order specified
and if present and acting: the Chairman of the Board, if any, the Vice-Chairman
of the Board, if any, the President, a Vice-President (and, in the event there
be more than one person in any such office, in the order of their seniority),
or, if none of the foregoing is in office and present and acting, a chairman
designated by the Board of Directors or, in the absence of such designation, a
chairman chosen by the stockholders at the meeting. The Secretary of the
corporation, if present, or an Assistant Secretary, shall act as secretary of
every meeting, but if neither the Secretary nor an Assistant Secretary is
present the chairman of the meeting shall appoint a secretary of the meeting.
The Board of Directors may adopt such rules, regulations and procedures
for the conduct of the meeting of stockholders as it shall deem appropriate.
Except to the extent inconsistent with such rules and regulations as adopted by
the Board of Directors, the chairman of the meeting shall have the right and
authority to prescribe such rules, regulations and procedures and to do all such
acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, (i) the establishment of an agenda or order of
business for the meeting, (ii) rules and procedures for maintaining order at the
meeting and the safety of those present, (iii) limitations on attendance at or
participation in the meeting to stockholders of record of the corporation, their
duly authorized and constituted
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proxies or such other persons as the chairman of the meeting shall determine,
(iv) restrictions on entry to the meeting after the time fixed for the
commencement thereof, and (v) limitations on the time allotted to questions or
comments by participants. Unless and to the extent determined by the Board of
Directors or the chairman of the meeting, meetings of stockholders shall not be
required to be held in accordance with the rules of parliamentary procedure.
SECTION 12. Action Without Meeting. Unless otherwise provided
in the Certificate of Incorporation, any action required or permitted to be
taken at any annual or special meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, is signed by the holders or by proxy for the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote on such action were present and voted. Prompt notice
of the taking of corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented in
writing.
ARTICLE II
DIRECTORS
SECTION 1. General Powers. The business and affairs of the
corporation shall be managed by or under the direction of a Board of Directors,
who may exercise all of the powers of the corporation that are not by law
required to be exercised by the stockholders. In the event of a vacancy in the
Board of Directors, the remaining directors, except as otherwise provided by
law, may exercise the powers of the full Board until the vacancy is filled.
SECTION 2. Number; Election; Tenure and Qualification. Subject
to any restrictions contained in the Certificate of Incorporation, the number of
directors that shall constitute the whole Board shall be fixed by resolution of
the Board of Directors but in no event shall be less than one. The directors
shall be elected in the manner provided in the Certificate of Incorporation, by
such stockholders as have the right to vote thereon. The number of directors may
be increased or decreased by action of the Board of Directors. Directors need
not be stockholders of the corporation.
SECTION 3. Enlargement of the Board. Subject to any
restrictions contained in the Certificate of Incorporation, the number of the
Board of Directors may be increased at any time, such increase to be effective
immediately unless otherwise specified in the resolution, by vote of a majority
of the directors then in office.
SECTION 4. Vacancies. Unless and until filled by the
stockholders and except as otherwise determined by the Board of Directors in
establishing a series of Preferred Stock as to directors elected by the holders
of such series, any vacancy in the Board of Directors, however occurring,
including a vacancy resulting from an enlargement of the Board and an unfilled
vacancy resulting from the removal of any director, may be filled by vote of a
majority of the directors then in office although less than a quorum, or by the
sole remaining director. Each director so chosen to fill a vacancy shall serve
for a term determined in the manner provided in the Certificate of
Incorporation. When one or more directors shall resign from the Board,
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effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have the power to fill such vacancy
or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective. If at any time there are no directors in
office, then an election of directors may be held in accordance with the General
Corporation Law of the State of Delaware.
SECTION 5. Resignation. Any director may resign at any time
upon written notice to the corporation. Such resignation shall take effect at
the time specified therein, or if no time is specified, at the time of its
receipt by the Chairman of the Board, if any, the President or the Secretary.
SECTION 6. Removal. Directors may be removed from office only
as provided in the Certificate of Incorporation. The vacancy or vacancies
created by the removal of a director may be filled by the stockholders at the
meeting held for the purpose of removal or, if not so filled, by the directors
in the manner provided in Section 4 of this Article II.
SECTION 7. Committees. The Board of Directors may designate
one or more committees, each committee to consist of one or more directors of
the corporation. The Board of Directors may designate one or more directors as
alternate members of any committee to replace any absent or disqualified member
at any meeting of the committee. In the absence or disqualification of any
member of any such committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not such member or members
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of such absent or disqualified
member. The Board of Directors shall have the power to change the members of any
such committee at any time, to fill vacancies therein and to discharge any such
committee, either with or without cause, at any time.
Any such committee, to the extent permitted by law and to the extent
provided in the resolution of the Board of Directors or in these by-laws, shall
have and may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers that may require it.
A majority of all the members of any such committee may fix its rules
of procedure, determine its action and fix the time and place, whether within or
without the State of Delaware, of its meetings and specify what notice thereof,
if any, shall be given, unless the Board of Directors shall otherwise by
resolution provide. Each committee shall keep regular minutes of its meetings
and make such reports as the Board of Directors may from time to time request.
SECTION 8. Meetings of the Board of Directors. Regular
meetings of the Board of Directors may be held without call or formal notice at
such places either within or without the State of Delaware and at such times as
the Board may by vote from time to time determine. A regular meeting of the
Board of Directors may be held without call or formal notice immediately after
and at the same place as the annual meeting of the stockholders, or any special
meeting of the stockholders at which a Board of Directors is elected.
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Special meetings of the Board of Directors may be held at any place
either within or without the State of Delaware at any time when called by the
Chairman of the Board, if any, the President, the Secretary or two or more
directors. Reasonable notice of the time and place of a special meeting shall be
given to each director unless such notice is waived by attendance or by written
waiver in the manner provided in these by-laws for waiver of notice by
stockholders. Notice may be given by, or by a person designated by, the
Secretary, the person or persons calling the meeting, or the Board of Directors.
No notice of any adjourned meeting of the Board of Directors shall be required.
In any case it shall be deemed sufficient notice to a director to send notice by
mail at least seventy-two hours, or by telegram or fax at least forty-eight
hours, before the meeting, addressed to such director at his or her usual or
last known business or home address.
Directors or members of any committee may participate in a meeting of
the Board of Directors or of such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation by such means shall
constitute presence in person at such meeting.
SECTION 9. Quorum and Voting. A majority of the total number
of directors shall constitute a quorum, except that when a vacancy or vacancies
exist in the Board, a majority of the directors then in office (but not less
than one-third of the total number of the directors) shall constitute a quorum.
A majority of the directors present, whether or not a quorum is present, may
adjourn any meeting from time to time. The vote of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors, except where a different vote is required by law, by the
Certificate of Incorporation or by these by-laws.
SECTION 10. Compensation. The Board of Directors may fix fees
for their services and for their membership on committees, and expenses of
attendance may be allowed for attendance at each meeting. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity, as an officer, agent or otherwise, and
receiving compensation therefor.
SECTION 11. Action Without Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting and without notice if a written
consent thereto is signed by all members of the Board of Directors or of such
committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board of Directors or of such committee.
ARTICLE III
OFFICERS
SECTION 1. Titles. The officers of the corporation shall
consist of a President, a Secretary, a Treasurer and such other officers with
such other titles as the Board of Directors shall determine, who may include
without limitation a Chairman of the Board, a Vice-Chairman of the Board and one
or more Vice-Presidents, Assistant Treasurers or Assistant Secretaries.
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SECTION 2. Election and Term of Office. The officers of the
corporation shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of the stockholders. Each officer shall
hold office until his or her successor is elected and qualified, unless a
different term is specified in the vote electing such officer, or until his or
her earlier death, resignation or removal.
SECTION 3. Qualification. Unless otherwise provided by
resolution of the Board of Directors, no officer, other than the Chairman or
Vice-Chairman of the Board, need be a director. No officer need be a
stockholder. Any number of offices may be held by the same person, as the
directors shall determine.
SECTION 4. Removal. Any officer may be removed, with or
without cause, at any time, by resolution adopted by the Board of Directors.
SECTION 5. Resignation. Any officer may resign by delivering a
written resignation to the corporation at its principal office or to the
Chairman of the Board, if any, the President or the Secretary. Such resignation
shall be effective upon receipt or at such later time as may be specified
therein.
SECTION 6. Vacancies. The Board of Directors may at any time
fill any vacancy occurring in any office for the unexpired portion of the term
and may leave unfilled for such period as it may determine any office other than
those of President, Treasurer and Secretary.
SECTION 7. Powers and Duties. The officers of the corporation
shall have such powers and perform such duties as are specified herein and as
may be conferred upon or assigned to them by the Board of Directors and shall
have such additional powers and duties as are incident to their office except to
the extent that resolutions of the Board of Directors are inconsistent
therewith.
SECTION 8. President and Vice-Presidents. Except to the extent
that such duties are assigned by the Board of Directors to the Chairman of the
Board, or in the absence of the Chairman or in the event of his or her inability
or refusal to act, the President shall be the chief executive officer of the
corporation and shall have general and active management of the business of the
corporation and general supervision of its officers, agents and employees, and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. The President shall preside at each meeting of the stockholders and
the Board of Directors unless a Chairman or Vice-Chairman of the Board is
elected by the Board and is present at such meeting.
The Board of Directors may assign to any Vice-President the title of
Executive Vice-President, Senior Vice-President or any other title selected by
the Board of Directors. In the absence of the President or in the event of his
or her inability or refusal to act, the duties of the President shall be
performed by the Executive Vice-President, if any, Senior Vice President, if
any, or Vice President, if any, in that order (and, in the event there be more
than one person in any such office, in the order of their seniority), and when
so acting, such officer shall have all the powers of and be subject to all the
restrictions upon the President.
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SECTION 9. Secretary and Assistant Secretaries. The Secretary
shall attend all meetings of the Board of Directors and of the stockholders and
record all the proceedings of such meetings in a book to be kept for that
purpose, shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, shall maintain a
stock ledger and prepare lists of stockholders and their addresses as required
and shall have custody of the corporate seal, which the Secretary or any
Assistant Secretary shall have authority to affix to any instrument requiring it
and attest by any of their signatures. The Board of Directors may give general
authority to any other officer to affix and attest the seal of the corporation.
Any Assistant Secretary may, in the absence of the Secretary or in the
event of the Secretary's inability or refusal to act, perform the duties and
exercise the powers of the Secretary.
SECTION 10. Treasurer and Assistant Treasurers. The Treasurer
shall have the custody of the corporate funds and securities, shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in the name
and to the credit of the corporation in such depositories as may be designated
by or pursuant to resolution of the Board of Directors. The Treasurer shall
disburse the funds of the corporation as may be ordered by the Board of
Directors, the Chairman of the Board, if any, or the President, taking proper
vouchers for such disbursements, and shall render to the Chairman of the Board,
the President and the Board of Directors, at its regular meetings or whenever
they may require it, an account of all transactions and of the financial
condition of the corporation.
Any Assistant Treasurer may, in the absence of the Treasurer or in the
event of his or her inability or refusal to act, perform the duties and exercise
the powers of the Treasurer.
SECTION 11. Bonded Officers. The Board of Directors may
require any officer to give the corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors upon such
terms and conditions as the Board of Directors may specify, including without
limitation a bond for the faithful performance of the duties of such officer and
for the restoration to the corporation of all property in his or her possession
or control belonging to the corporation.
SECTION 12. Salaries. Officers of the corporation shall be
entitled to such salaries, compensation or reimbursement as shall be fixed or
allowed from time to time by the Board of Directors or any committee thereof
appointed for the purpose.
ARTICLE IV
STOCK
SECTION 1. Certificates of Stock. One or more stock
certificates, signed by the Chairman or Vice-Chairman of the Board of Directors
or by the President or a Vice-President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary, shall be issued to each
stockholder certifying the number of shares owned by the stockholder in the
9
<PAGE> 10
corporation. Any or all signatures on any such certificate may be facsimiles. In
case any officer, transfer agent or registrar who shall have signed or whose
facsimile signature shall have been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he or she
were such officer, transfer agent or registrar at the date of issue.
Each certificate for shares of stock that are subject to any
restriction on transfer pursuant to the Certificate of Incorporation, the
by-laws, applicable securities laws, or any agreement among any number of
stockholders or among such holders and the corporation shall have conspicuously
noted on the face or back of the certificate either the full text of the
restriction or a statement of the existence of such restriction.
SECTION 2. Transfers of Shares of Stock. Subject to the
restrictions, if any, stated or noted on the stock certificates, shares of stock
may be transferred on the books of the corporation by the surrender to the
corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney
properly executed, and with such proof of authority or the authenticity of
signature as the corporation or its transfer agent may reasonably require. The
corporation shall be entitled to treat the record holder of stock as shown on
its books as the owner of such stock for all purposes, including the payment of
dividends and the right to vote with respect to that stock, regardless of any
transfer, pledge or other disposition of that stock, until the shares have been
transferred on the books of the corporation in accordance with the requirements
of these by-laws.
SECTION 3. Lost Certificates. A new stock certificate may be
issued in the place of any certificate theretofore issued by the corporation and
alleged to have been lost, stolen, destroyed or mutilated, upon such terms in
conformity with law as the Board of Directors shall prescribe. The directors
may, in their discretion, require the owner of the lost, stolen, destroyed or
mutilated certificate, or the owner's legal representatives, to give the
corporation a bond, in such sum as they may direct, to indemnify the corporation
against any claim that may be made against it on account of the alleged loss,
theft, destruction or mutilation of any such certificate, or the issuance of any
such new certificate.
SECTION 4. Fractional Share Interests. The corporation may,
but shall not be required to, issue fractions of a share. If the corporation
does not issue fractions of a share, it shall (i) arrange for the disposition of
fractional interests by those entitled thereto, (ii) pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined, or (iii) issue scrip or warrants in registered or
bearer form, which shall entitle the holder to receive a certificate for a full
share upon the surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional share shall, but scrip or warrants shall not unless
otherwise provided therein, entitle the holder to exercise voting rights, to
receive dividends thereon, and to participate in any of the assets of the
corporation in the event of liquidation. The Board of Directors may cause scrip
or warrants to be issued subject to the conditions that they shall become void
if not exchanged for certificates representing full shares before a specified
date, or subject to the conditions that the shares for which scrip or warrants
are exchangeable may be sold by the corporation and the proceeds thereof
distributed to the holders of scrip or warrants, or subject to any other
conditions that the Board of Directors may impose.
10
<PAGE> 11
SECTION 5. Dividends. Subject to the provisions of the
Certificate of Incorporation, the Board of Directors may, out of funds legally
available therefor, at any regular or special meeting, declare dividends upon
the capital stock of the corporation as and when they deem expedient.
ARTICLE V
INDEMNIFICATION AND INSURANCE
SECTION 1. Indemnification. The corporation shall, to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify each person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was, or has agreed to
become, a director or officer of the corporation, or is or was serving, or has
agreed to serve, at the request of the corporation, as a director, officer,
trustee, employee or agent of, or in a similar capacity with, another
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person or on
his or her behalf in connection with such action, suit or proceeding and any
appeal therefrom, provided that in the case of a settlement the payment and
indemnification thereof have been approved by the corporation, which approval
shall not unreasonably be withheld, or by a court of competent jurisdiction.
Such indemnification shall, subject to the conditions imposed by law, include
payment by the corporation of expenses in defending an action or proceeding in
advance of the final disposition of such action or proceeding upon receipt of
any undertaking by the person indemnified to repay such payment if it is
ultimately determined that such person is not entitled to indemnification under
this Section, which undertaking may be accepted without reference to the
financial ability of such person to make such repayments.
The corporation shall not indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person unless the initiation thereof was approved by the Board of Directors
of the corporation.
The indemnification rights provided in this Section (i) shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any law, agreement or vote of stockholders or disinterested directors or
otherwise, (ii) shall be a contract right inuring to the benefit of the
directors, officers and other persons entitled to be indemnified hereunder and
no amendment or repeal of this Section shall adversely affect any right of such
director, officer or other person existing at the time of such amendment or
repeal, and (iii) shall inure to the benefit of the heirs, executors and
administrators of such persons. Nothing contained in this Section shall affect
any rights to indemnification to which corporation employees or agents other
than directors and officers and other persons entitled to indemnification
hereunder may be entitled by contract or otherwise under law.
SECTION 2. Insurance. The corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent
11
<PAGE> 12
of the corporation or is or was serving at the request of the corporation as a
director, officer, trustee, employee or agent of another corporation,
partnership, joint venture, trust, other enterprise or employee benefit plan
against any liability asserted against such person and incurred by such person
in any such capacity or arising out of such person's status as such, whether or
not the corporation would have the power to indemnify such person against such
liability under the provisions of the General Corporation Law of the State of
Delaware.
12
<PAGE> 13
ARTICLE VI
GENERAL PROVISIONS
SECTION 1. Fiscal Year. Except as otherwise designated from
time to time by the Board of Directors, the fiscal year of the corporation shall
begin on the first day of January and end on the last day of December.
SECTION 2. Corporate Seal. The corporate seal shall be in such
form as shall be approved by the Board of Directors. The Secretary shall be the
custodian of the seal, and a duplicate seal may be kept and used by each
Assistant Secretary and by any other officer the Board of Directors may
authorize.
SECTION 3. Certificate of Incorporation. All references in
these by-laws to the Certificate of Incorporation shall be deemed to refer to
the Certificate of Incorporation of the corporation, as in effect from time to
time.
SECTION 4. Execution of Instruments. The Chairman and
Vice-Chairman of the Board of Directors, if any, the President and the Treasurer
shall have power to execute and deliver on behalf and in the name of the
corporation any instrument requiring the signature of an officer of the
corporation, including deeds, contracts, mortgages, bonds, notes, debentures,
checks, drafts and other orders for the payment of money. In addition, the Board
of Directors, the Chairman and Vice Chairman of the Board of Directors, if any,
the President and the Treasurer may expressly delegate such powers to any other
officer or agent of the corporation.
SECTION 5. Voting of Securities. The Chairman and
Vice-Chairman of the Board of Directors, if any, the President, the Treasurer,
and each other person authorized by the Board of Directors, each acting singly,
may waive notice of, and act as, or appoint any person or persons to act as,
proxy or attorney-in-fact for this corporation (with or without power of
substitution) at any meeting of stockholders or owners of other interests of any
other corporation or organization the securities of which may be held by this
corporation. In addition, the Board of Directors, the Chairman and Vice Chairman
of the Board of Directors, if any, the President and the Treasurer may expressly
delegate such powers to any other officer or agent of the corporation.
SECTION 6. Evidence of Authority. A certificate by the
Secretary, an Assistant Secretary or a temporary secretary as to any action
taken by the stockholders, directors, a committee or any officer or
representative of the corporation shall, as to all persons who rely on the
certificate in good faith, be conclusive evidence of that action.
SECTION 7. Transactions with Interested Parties. No contract
or transaction between the corporation and one or more of the directors or
officers, or between the corporation and any other corporation, partnership,
association or other organization in which one or more of the directors or
officers are directors or officers or have a financial interest, shall be void
or voidable solely for that reason or solely because the director or officer is
present at or participates in the meeting of the Board of Directors or a
committee of the Board of Directors that authorizes the contract or transaction
or solely because the vote of any such director is counted for such purpose, if:
13
<PAGE> 14
(1) The material facts as to the relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of Directors or
such committee, and the Board or committee in good faith authorizes the contract
or transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(2) The material facts as to the relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or
(3) The contract or transaction is fair to the corporation as of the
time it is authorized, approved or ratified by the Board of Directors, a
committee of the Board of Directors or the stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
that authorizes the contract or transaction.
SECTION 8. Books and Records. The books and records of the
corporation shall be kept at such places within or without the State of Delaware
as the Board of Directors may from time to time determine.
ARTICLE VII
AMENDMENTS
SECTION 1. By the Board of Directors. These by-laws may be
altered, amended or repealed or new by-laws may be adopted by the affirmative
vote of a majority of the directors present at any regular or special meeting of
the Board of Directors at which a quorum is present.
SECTION 2. By the Stockholders. These by-laws may be altered,
amended or repealed or new by-laws may be adopted by vote of the stockholders,
at any regular meeting of stockholders, or at any special meeting of
stockholders, provided notice of such alteration, amendment, repeal or adoption
of new by-laws shall have been stated in the notice of such special meeting.
14
<PAGE> 1
EXHIBIT 4.1
- -------------------------------------------------------------------------------
LAMAR ADVERTISING COMPANY
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
-------------
INDENTURE
Dated as of August 10, 1999
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE......................................................1
1.1 Definitions.....................................................................................1
1.2 Other Definitions...............................................................................5
1.3 Incorporation by Reference of Trust Indenture Act...............................................6
1.4 Rules of Construction...........................................................................7
ARTICLE 2 THE SECURITIES..................................................................................7
2.1 Issuable in Series..............................................................................7
2.2 Establishment of Terms of Series of Securities..................................................8
2.3 Execution and Authentication...................................................................10
2.4 Registrar and Paying Agent.....................................................................12
2.5 Paying Agent to Hold Assets in Trust...........................................................13
2.6 Securityholder Lists...........................................................................13
2.7 Transfer and Exchange..........................................................................13
2.8 Replacement Securities.........................................................................14
2.9 Outstanding Securities.........................................................................14
2.10 When Treasury Securities Disregarded; Determination of Holders' Action ........................15
2.11 Temporary Securities...........................................................................15
2.12 Cancellation...................................................................................16
2.13 Payment of Interest; Defaulted Interest; Computation of Interest...............................16
2.14 CUSIP Number...................................................................................17
2.15 Provisions for Global Securities...............................................................17
2.16 Persons Deemed Owners..........................................................................18
ARTICLE 3 REDEMPTION.....................................................................................19
3.1 Notices to Trustee.............................................................................19
3.2 Selection by Trustee of Securities to Be Redeemed..............................................19
3.3 Notice of Redemption...........................................................................19
3.4 Effect of Notice of Redemption.................................................................21
3.5 Deposit of Redemption Price....................................................................21
3.6 Securities Redeemed in Part....................................................................21
ARTICLE 4 COVENANTS......................................................................................22
4.1 Payment of Securities..........................................................................22
4.2 SEC Reports....................................................................................22
4.3 Waiver of Stay, Extension or Usury Laws........................................................22
4.4 Compliance Certificate.........................................................................23
4.5 Payment of Taxes and Other Claims..............................................................23
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
4.6 Corporate Existence........................................23
4.7 Maintenance of Properties..................................24
ARTICLE 5 SUCCESSOR CORPORATION......................................24
5.1 Limitation on Consolidation, Merger and Sale of Assets.....24
5.2 Successor Person Substituted...............................25
ARTICLE 6 DEFAULTS AND REMEDIES......................................25
6.1 Events of Default..........................................25
6.2 Acceleration...............................................27
6.3 Other Remedies.............................................28
6.4 Waiver of Past Defaults and Events of Default..............28
6.5 Control by Majority........................................28
6.6 Limitation on Suits........................................29
6.7 Rights of Holders To Receive Payment.......................29
6.8 Collection Suit by Trustee.................................29
6.9 Trustee May File Proofs of Claim...........................30
6.10 Priorities.................................................30
6.11 Undertaking for Costs......................................31
ARTICLE 7 TRUSTEE....................................................31
7.1 Duties of Trustee..........................................31
7.2 Rights of Trustee..........................................32
7.3 Individual Rights of Trustee...............................34
7.4 Trustee's Disclaimer.......................................34
7.5 Notice of Default..........................................34
7.6 Reports by Trustee to Holders..............................34
7.7 Compensation and Indemnity.................................35
7.8 Replacement of Trustee.....................................35
7.9 Successor Trustee by Consolidation, Merger or Conversion...36
7.10 Eligibility; Disqualification..............................36
7.11 Preferential Collection of Claims Against Company..........37
7.12 Paying Agents..............................................37
ARTICLE 8 AMENDMENTS, SUPPLEMENTS AND WAIVERS........................38
8.1 Without Consent of Holders.................................38
8.2 With Consent of Holders....................................38
8.3 Compliance with Trust Indenture Act........................40
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
8.4 Revocation and Effect of Consents...........................40
8.5 Notation on or Exchange of Securities.......................41
8.6 Trustee to Sign Amendments, Etc.............................41
ARTICLE 9 DISCHARGE OF INDENTURE; DEFEASANCE..........................41
9.1 Discharge of Indenture......................................41
9.2 Legal Defeasance............................................42
9.3 Covenant Defeasance.........................................42
9.4 Conditions to Legal Defeasance or Covenant Defeasance.......42
9.5 Deposited Money and U.S. and Foreign Government Obligations
to be Held in Trust; Other Miscellaneous Provisions.........44
9.6 Reinstatement...............................................45
9.7 Moneys Held by Paying Agent.................................45
9.8 Moneys Held by Trustee......................................46
ARTICLE 10 MISCELLANEOUS...............................................46
10.1 Trust Indenture Act Controls................................46
10.2 Notices.....................................................46
10.3 Communications by Holders with Other Holders................48
10.4 Certificate and Opinion as to Conditions Precedent..........48
10.5 Statement Required in Certificate and Opinion...............49
10.6 [Reserved]..................................................49
10.7 Rules by Trustee and Agents.................................49
10.8 Business Days; Legal Holidays; Place of Payment.............49
10.9 Governing Law...............................................50
10.10 No Adverse Interpretation of Other Agreements...............50
10.11 No Recourse Against Others..................................50
10.12 Successors and Assigns......................................50
10.13 Multiple Counterparts.......................................50
10.14 Table of Contents, Headings, Etc............................50
10.15 Separability................................................51
10.16 Securities in a Foreign Currency or in Euro.................51
10.17 Judgment Currency...........................................52
</TABLE>
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<PAGE> 5
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA SECTION INDENTURE SECTION
- ----------- -----------------
<S> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N/A
(a)(4) N/A
(a)(5) 7.10
(b) 7.8; 7.10; 10.2
(b)(1) 7.10
(b)(9) 7.10
(c) N/A
311(a) 7.11
(b) 7.11
(c) N/A
312(a) 2.6
(b) 10.3
(c) 10.3
313(a) 7.6
(b)(1) 7.6
(b)(2) 7.6
(c) 7.6; 10.2
(d) 7.6
314(a) 4.2; 4.4; 10.2
(b) N/A
(c)(1) 10.4; 10.5
(c)(2) 10.4; 10.5
(c)(3) N/A
(d) N/A
(e) 10.5
(f) N/A
315(a) 7.1, 7.2
(b) 7.5; 10.2
(c) 7.1
(d) 6.5; 7.1; 7.2
(e) 6.11
316(a)(last sentence) 2.10
(a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) 8.2
(b) 6.7
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
(c) 8.4
317(a)(1) 6.8
(a)(2) 6.9
(b) 2.5; 7.12
318(a) 10.1
</TABLE>
- ---------------------------
N/A means not applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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<PAGE> 7
INDENTURE, dated as of August 10, 1999, by and between LAMAR
ADVERTISING COMPANY, a Delaware corporation, as Issuer (the "Company"), and
STATE STREET BANK AND TRUST COMPANY, a trust company organized under the laws
of the Commonwealth of Massachusetts, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes or other evidences of indebtedness to be issued in one or more series
(the "Securities"), as herein provided, up to such principal amount as may from
time to time be authorized in or pursuant to one or more resolutions of the
Board of Directors or by supplemental indenture.
All things necessary to make this Indenture a valid agreement of the
Company in accordance with its terms have been done, and the execution and
delivery thereof have been in all respects duly authorized by the parties
hereto.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities of a Series thereof, as
follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 DEFINITIONS.
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by," and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement
or otherwise.
"Agent" means any Registrar, Paying Agent, co-registrar or agent for
service of notices and demands.
"Board of Directors" means the Board of Directors of the Company or
any committee duly authorized to act therefor.
<PAGE> 8
"Board Resolution" means a copy of a resolution certified pursuant to
an Officers' Certificate to have been duly adopted by the Board of Directors of
the Company and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Capital Stock" means, with respect to any Person, any and all shares
or other equivalents (however designated) of capital stock, partnership
interests or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces such party pursuant to Article 5 of this
Indenture, and thereafter means the successor and any other primary obligor on
the Securities.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be its Chief Executive Officer or its
Chief Financial Officer.
"Company Request" means any written request signed in the name of the
Company by its Chief Executive Officer, its President, any Vice President, its
Chief Financial Officer or its Treasurer and attested to by the Secretary or
any Assistant Secretary of the Company.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered.
"Default" means any event that is, or with the passing of time or
giving of notice or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary for such Series by the Company,
which Depositary shall be a clearing agency registered under the Exchange Act,
until a successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean each
Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, such Persons.
"Dollars" means the currency of the United States of America.
"Euro" means the single currency to be introduced at the start of the
third stage of economic and monetary union pursuant to the treaty establishing
the European Economic Community, as amended by the Treaty on European Union
signed at Maastricht on February 7, 1992.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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<PAGE> 9
"Foreign Currency" means any currency or currency unit issued by a
government other than the government of the United States of America.
"Foreign Government Obligations" means with respect to Securities of
any Series that are denominated in a Foreign Currency, (i) direct obligations
of the government that issued or caused to be issued such currency for the
payment of which obligations its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by or acting as an agency or
instrumentality of such government the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case under clauses (i) or (ii), are not callable
or redeemable at the option of the issuer thereof.
"GAAP" means generally accepted accounting principles consistently
applied as in effect in the United States from time to time.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section
2.2, evidencing all or part of a Series of Securities issued to the Depositary
for such Series or its nominee, registered in the name of such Depositary or
nominee, and bearing the legend set forth in Section 2.15(c) (or such legend as
may be specified as contemplated by Section 2.2 for such Securities).
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Indebtedness" means (without duplication), with respect to any
Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to
a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding any balances that constitute accounts payable
or trade payables, and other accrued liabilities arising in the ordinary course
of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP.
"Indenture" means this Indenture as amended, restated or supplemented
from time to time.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Lien" means, with respect to any property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance,
preference, priority, or other security agreement or preferential arrangement
of any kind or nature whatsoever on or with respect to such property or assets
-3-
<PAGE> 10
(including, without limitation, any capitalized lease obligation, conditional
sales, or other title retention agreement having substantially the same
economic effect as any of the foregoing).
"Maturity" when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, notice of option to elect
payment or otherwise.
"Officer" means the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer or the Secretary of the
Company or any other officer designated by the Board of Directors, as the case
may be.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or any Vice
President, and the Chief Financial Officer or any Treasurer of such Person that
shall comply with applicable provisions of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel which
counsel is reasonably acceptable to the Trustee.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government (including any agency or political subdivision thereof).
"Redemption Date," when used with respect to any Security of a Series
to be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust division of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"SEC" means the United States Securities and Exchange Commission as
constituted from time to time or any successor performing substantially the
same functions.
"Securities" means the securities that are issued under this
Indenture, as amended or supplemented from time to time pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
-4-
<PAGE> 11
"Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.1
or 2.2 hereof.
"Significant Subsidiary" means (i) any direct or indirect Subsidiary
of the Company that would be a "significant subsidiary" as defined in Article
1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as
such regulation is in effect on the date hereof, or (ii) any group of direct or
indirect Subsidiaries of the Company that, taken together as a group, would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such regulation is in
effect on the date hereof.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable and, when used
with respect to any other Indebtedness, means the date specified in the
instrument governing such Indebtedness as the fixed date on which the principal
of such Indebtedness, or any installment of interest thereon, is due and
payable.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors thereof is held, directly or indirectly by such Person or any of
its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such Person or any
of its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with such Person for financial
statement purposes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section
77aaa-77bbbb) as in effect on the date of this Indenture (except as provided in
Section 8.3 hereof).
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor, and if at any time there is more than one such Person, "Trustee" as
used with respect to the Securities of any Series shall mean the Trustee with
respect to Securities of that Series.
"U.S. Government Obligations" means direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
1.2 OTHER DEFINITIONS.
The definitions of the following terms may be found in the sections
indicated as follows:
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<TABLE>
<CAPTION>
Defined
Term in Section
---- ----------
<S> <C>
"Bankruptcy Law" 6.1
"Business Day" 10.8
"Covenant Defeasance" 9.3
"Custodian" 6.1
"Event of Default" 6.1
"Journal" 10.16
"Judgment Currency" 10.17
"Legal Defeasance" 9.2
"Legal Holiday" 10.8
"Market Exchange Rate" 10.16
"New York Banking Day" 10.17
"New York Paying Agent" 2.4
"Paying Agent" 2.4
"Place of Payment" 10.8
"Registrar" 2.4
"Required Currency" 10.17
"Service Agent" 2.4
</TABLE>
1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the portion
of such provision required to be incorporated herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and
made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company.
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All other terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by SEC rule have
the meanings therein assigned to them.
1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein,
whether defined expressly or by reference;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in
the plural include the singular;
(5) words used herein implying any gender shall apply
to each gender; and
(6) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
ARTICLE 2
THE SECURITIES
2.1 ISSUABLE IN SERIES.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued
in one or more Series. All Securities of a Series shall be identical except as
may be set forth in a Board Resolution, a supplemental indenture or an
Officers' Certificate detailing the adoption of the terms thereof pursuant to
the authority granted under a Board Resolution. In the case of Securities of a
Series to be issued from time to time, the Board Resolution, Officers'
Certificate or supplemental indenture may provide for the method by which
specified terms (such as interest rate, Stated Maturity, record date or date
from which interest shall accrue) are to be determined. Securities may differ
between Series in respect of any matters, provided that all Series of
Securities shall be equally and ratably entitled to the benefits of the
Indenture.
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2.2 ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES.
At or prior to the issuance of any Securities within a Series, the
following shall be established (as to the Series generally, in the case of
Subsection 2.2(1) and either as to such Securities within the Series or as to
the Series generally in the case of Subsections 2.2(2) through 2.2(24)) by a
Board Resolution, a supplemental indenture or an Officers' Certificate, in each
case, pursuant to authority granted under a Board Resolution:
(1) the title of the Series (which shall distinguish
the Securities of that particular Series from the
Securities of any other Series);
(2) the price or prices (expressed as a percentage of
the principal amount thereof) at which the Securities of
the Series will be issued;
(3) any limit upon the aggregate principal amount of
the Securities of the Series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 8.5);
(4) the date or dates on which the principal of the
Securities of the Series is payable;
(5) the rate or rates (which may be fixed or variable)
per annum or, if applicable, the method used to determine
such rate or rates (including, but not limited to, any
commodity, commodity index, stock exchange index or
financial index) at which the Securities of the Series
shall bear interest, if any, the date or dates from which
such interest, if any, shall accrue, the date or dates on
which such interest, if any, shall commence and be payable
and any regular record date for the interest payable on any
Interest Payment Date;
(6) the place or places where the principal of and
interest and premium, if any, on the Securities of the
Series shall be payable, or the method of such payment, if
by wire transfer, mail or other means;
(7) if applicable, the period or periods within which,
the price or prices at which and the terms and conditions
upon which the Securities of the Series may be redeemed, in
whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem
or purchase the Securities of the Series pursuant to any
sinking fund or analogous provisions or at the option of a
Holder thereof and the period or periods within which, the
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<PAGE> 15
price or prices at which and the terms and conditions upon
which Securities of the Series shall be redeemed or
purchased, in whole or in part, pursuant to such
obligation;
(9) the dates, if any, on which and the price or
prices at which the Securities of the Series will be
repurchased by the Company at the option of the Holders
thereof and other detailed terms and provisions of such
repurchase obligations;
(10) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which the
Securities of the Series shall be issuable;
(11) the forms of the Securities of the Series in
bearer (if to be issued outside of the United States) or
fully registered form (and, if in fully registered form,
whether the Securities will be issuable as Global
Securities);
(12) if other than the principal amount thereof, the
portion of the principal amount of the Securities of the
Series that shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section
6.2;
(13) the currency of denomination of the Securities
of the Series, which may be Dollars or any Foreign
Currency, including, but not limited to, the Euro, and if
such currency of denomination is a composite currency other
than the Euro, the agency or organization, if any,
responsible for overseeing such composite currency;
(14) the designation of the currency, currencies or
currency units in which payment of the principal of and
interest and premium, if any, on the Securities of the
Series will be made;
(15) if payments of principal of or interest or
premium, if any, on the Securities of the Series are to be
made in one or more currencies or currency units other than
that or those in which such Securities are denominated, the
manner in which the exchange rate with respect to such
payments will be determined;
(16) the manner in which the amounts of payment of
principal of and interest and premium, if any, on the
Securities of the Series will be determined, if such
amounts may be determined by reference to an index based on
a currency or currencies or by reference to a commodity,
commodity index, stock exchange index or financial index;
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<PAGE> 16
(17) the provisions, if any, relating to any security
provided for the Securities of the Series;
(18) any addition to or change in the Events of
Default which applies to any Securities of the Series and
any change in the right of the Trustee or the requisite
Holders of such Securities to declare the principal amount
thereof due and payable pursuant to Section 6.2;
(19) any addition to or change in the covenants set
forth in Articles 4 or 5 which applies to Securities of the
Series;
(20) any depositories, interest rate calculation
agents, exchange rate calculation agents or other agents
with respect to Securities of such Series if other than
those appointed herein;
(21) the terms and conditions, if any, upon which
the Securities and any guarantees thereof shall be
subordinated in right of payment to other indebtedness of
the Company or any guarantor;
(22) the form and terms of any guarantee of the
Securities;
(23) if applicable, that the Securities of the
Series, in whole or any specified part, shall be defeasible
pursuant to Article 9; and
(24) any other terms of the Securities of the Series
(which terms shall not be inconsistent with the provisions
of this Indenture, except as permitted by Section 8.1, but
which may modify or delete any provision of this Indenture
insofar as it applies to such Series).
All Securities of any one Series need not be issued at the same time and may be
issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to the Board Resolution, supplemental indenture or
Officers' Certificate referred to above, and the authorized principal amount of
any Series may not be increased to provide for issuances of additional
Securities of such Series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers' Certificate.
2.3 EXECUTION AND AUTHENTICATION.
The Securities shall be executed on behalf of the Company by two
Officers of the Company or an Officer and an Assistant Secretary of the
Company. Each such signature may be either manual or facsimile. The Company's
seal may be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.
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<PAGE> 17
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid. A Security shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent. The signature shall
be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate, upon
receipt by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from
the Company or its duly authorized agent or agents, which oral instructions
shall be promptly confirmed in writing. Each Security shall be dated the date
of its authentication.
The aggregate principal amount of Securities of any Series outstanding
at any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture hereto or
Officers' Certificate delivered pursuant to Section 2.2, except as provided in
Section 2.8.
Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.2) shall be fully protected in relying
on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers' Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised in
writing by outside counsel, determines that such action may not lawfully be
taken; or (b) if the Trustee in good faith by its board of directors or
trustees, executive committee or a trust committee of directors and/or
vice-presidents shall reasonably determine that such action would expose the
Trustee to personal liability, or cause it to have a conflict of interest with
respect to Holders of any then outstanding Series of Securities.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Trustee may do so. Any appointment shall
be evidenced by instrument signed by an authorized officer of the Trustee, a
copy of which shall be furnished to the Company. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
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2.4 REGISTRAR AND PAYING AGENT.
The Company shall maintain in each Place of Payment for any Series of
Securities (i) an office or agency where such Securities may be presented for
registration of transfer or for exchange ("Registrar"), (ii) an office or
agency where such Securities may be presented for payment ("Paying Agent")
(provided that the Company shall at all times maintain a Paying Agent in the
Borough of Manhattan, The City of New York, State of New York (the "New York
Paying Agent"), and provided, further, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the register for the Notes
maintained by the Registrar, and (iii) an office or agency where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served ("Service Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-registrars and one or more additional paying agents. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee as set forth in Section 10.2. Neither the
Company nor any Affiliate of the Company may act as Paying Agent. The Company
may change any Paying Agent, Registrar or co-registrar without notice to any
Securityholder.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
shall give prompt written notice to the Trustee of such designation or
rescission and of any change in the location of any such other office or
agency.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any such Agent. If
the Company fails to maintain a Registrar or Paying Agent, or agent for service
of notices and demands, or fails to give the foregoing notice, the Trustee
shall act as such. The Company hereby appoints the Trustee as the initial
Registrar, Paying Agent and Service Agent for each Series unless another
Registrar, Paying Agent or Service Agent, as the case may be, is appointed
prior to the time Securities of that Series are first issued. The Company
hereby initially designates the Corporate Trust Office of the Trustee as such
office of the Company. The Company further designates State Street Bank and
Trust Company, NA, as the New York Paying Agent, with offices at 61 Broadway,
Corporate Trust-Window/Concourse Level, New York, New York 10006.
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<PAGE> 19
2.5 PAYING AGENT TO HOLD ASSETS IN TRUST.
The Trustee as Paying Agent shall, and the Company shall require each
Paying Agent other than the Trustee to agree in writing that each Paying Agent
shall hold in trust for the benefit of the Holders of any Series of Securities
or the Trustee all assets held by the Paying Agent for the payment of principal
of, or interest or premium (if any) on, such Series of Securities (whether such
assets have been distributed to it by the Company or any other obligor on such
Series of Securities), and the Company and the Paying Agent shall notify the
Trustee in writing of any Default by the Company (or any other obligor on such
Series of Securities) in making any such payment. The Company at any time may
require a Paying Agent to distribute all assets held by it to the Trustee and
account for any assets disbursed and the Trustee may at any time during the
continuance of any payment default with respect to any Series of Securities,
upon written request to a Paying Agent, require such Paying Agent to distribute
all assets held by it to the Trustee and to account for any assets distributed.
Upon distribution to the Trustee of all assets that shall have been delivered
by the Company to the Paying Agent, the Paying Agent shall have no further
liability for such assets.
2.6 SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee as of each regular record
date for the payment of interest on the Securities of a Series and before each
related Interest Payment Date, and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders of each Series
of Securities.
2.7 TRANSFER AND EXCHANGE.
When Securities of a Series are presented to the Registrar with a
request to register the transfer thereof, the Registrar shall register the
transfer as requested, and when such Securities of a Series are presented to
the Registrar with a request to exchange them for an equal principal amount of
other authorized denominations of Securities of the same Series, the Registrar
shall make the exchange as requested. To permit transfers and exchanges, upon
surrender of any Security for registration of transfer at the office or agency
maintained pursuant to Section 2.4 hereof, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's request.
If Securities are issued as Global Securities, the provisions of
Section 2.15 shall apply.
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All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration or transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Registrar or a
co-Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar or a
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing.
Any exchange or transfer shall be without charge, except that the
Company may require payment by the Holder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation to a transfer or
exchange, but this provision shall not apply to any exchange pursuant to
Section 2.11, 3.6 or 8.5 hereof. The Trustee shall not be required to register
transfers of Securities of any Series or to exchange Securities of any Series
for a period of 15 days before selection for redemption of such Securities. The
Trustee shall not be required to exchange or register transfers of Securities
of any Series called or being called for redemption in whole or in part, except
the unredeemed portion of such Security being redeemed in part.
2.8 REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security presents evidence to the satisfaction of the Company and the
Trustee that the Security has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Security
of the same Series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding. An indemnity bond may be required by the
Company or the Trustee that is sufficient in the reasonable judgment of the
Company or the Trustee, as the case may be, to protect the Company, the Trustee
or any Agent from any loss which any of them may suffer if a Security is
replaced. The Company may charge such Holder for its reasonable, out-of-pocket
expenses in replacing a Security, including the fees and expenses of the
Trustee. Every replacement Security shall constitute an original additional
obligation of the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Securities of that Series duly issued hereunder.
2.9 OUTSTANDING SECURITIES.
Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this Section 2.9 as not outstanding.
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If a Security is replaced pursuant to Section 2.8 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
until the Company and the Trustee receive proof satisfactory to each of them
that the replaced Security is held by a bona fide purchaser. A mutilated
Security ceases to be outstanding upon surrender of such Security and
replacement thereof pursuant to Section 2.8.
If a Paying Agent holds on a Redemption Date or the Stated Maturity
money sufficient to pay the principal of, premium, if any, and accrued interest
on Securities payable on that date and is not prohibited from paying such money
to the Holders thereof pursuant to the terms of this Indenture (provided that,
if such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made), then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
Subject to Section 2.10, a Security does not cease to be outstanding
solely because the Company or an Affiliate holds the Security.
2.10 WHEN TREASURY SECURITIES DISREGARDED; DETERMINATION OF
HOLDERS' ACTION.
In determining whether the Holders of the required aggregate principal
amount of the Securities of any Series have concurred in any direction, waiver
or consent, the Securities of any Series owned by the Company or any other
obligor on such Securities or by any Affiliate of any of them shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities of such Series which the Trustee actually knows are so owned shall
be so disregarded. Securities of such Series so owned which have been pledged
in good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to the
Securities of such Series and that the pledgee is not the Company or any other
obligor upon the Securities of such Series or any Affiliate of any of them.
2.11 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form, and shall carry all rights, of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities presented to it, without charge to the
Holder.
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2.12 CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
for cancellation. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver
to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the
Company has not issued and sold. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange or payment. The Trustee or, at the direction of the Trustee, the
Registrar or the Paying Agent, and no one else, shall cancel and at the written
request of the Company, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and
until the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.12. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section 2.12, except as
expressly permitted by this Indenture.
2.13 PAYMENT OF INTEREST; DEFAULTED INTEREST; COMPUTATION OF
INTEREST.
Except as otherwise provided as contemplated by Section 2.2 with
respect to any Series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security is registered at the close of
business on the regular record date for such interest, as provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate establishing
the terms of such Series.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted amounts, plus any interest payable on defaulted amounts
pursuant to Section 4.1 hereof, to the persons who are Securityholders on a
subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest
or the next succeeding Business Day if such date is not a Business Day. At
least 15 days before the special record date, the Company shall mail or cause
to be mailed to each Securityholder, with a copy to the Trustee, a notice that
states the special record date, the payment date, and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Except as otherwise specified as contemplated by Section 2.2 for
Securities of any Series, interest on the Securities of each Series shall be
computed on the basis of a 360-day year of twelve 30-day months.
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2.14 CUSIP NUMBER.
The Company in issuing the Securities may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP number(s) in notices of
redemption or exchange as a convenience to Holders, provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number(s) printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities.
2.15 PROVISIONS FOR GLOBAL SECURITIES.
(a) A Board Resolution, a supplemental indenture hereto or
an Officers' Certificate shall establish whether the Securities of a Series
shall be issued in whole or in part in the form of one or more Global
Securities and the Depositary for such Global Securities or Securities.
(b) Notwithstanding any provisions to the contrary
contained in Section 2.7 of the Indenture and in addition thereto, if, and only
if (A) the Depositary (i) at any time is unwilling or unable to continue as
Depositary for such Global Security or ceases to be a clearing agency
registered under the Exchange Act and (ii) a successor Depositary is not
appointed by the Company within 90 days of the date the Company is so informed
in writing or becomes aware of the same, or (B) a Default or an Event of
Default has occurred and is continuing with respect to the Securities
represented by such Global Security, the Company promptly will execute and
deliver to the Trustee definitive Securities, and the Trustee, upon receipt of
a Company Request for the authentication and delivery of such definitive
Securities (which the Company will promptly execute and deliver to the Trustee)
and an Officers' Certificate to the effect that such Global Security shall be
so exchangeable, will authenticate and deliver definitive Securities, without
charge, registered in such names and in such authorized denominations as the
Depositary shall direct in writing (pursuant to instructions from its direct
and indirect participants or otherwise) in an aggregate principal amount equal
to the principal amount of the Global Security with like tenor and terms. Upon
the exchange of a Global Security for definitive Securities, such Global
Security shall be canceled by the Trustee. Unless and until it is exchanged in
whole or in part for definitive Securities, as provided in this Section
2.15(b), a Global Security may not be transferred except as a whole by the
Depositary with respect to such Global Security to a nominee of such
Depositary, by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such a successor Depositary.
(c) Any Global Security issued hereunder shall bear a
legend in substantially the following form:
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UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(d) The Depositary, as a Holder, may appoint agents and
otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
Holder is entitled to give or take under the Indenture.
(e) Notwithstanding the other provisions of this Indenture,
unless otherwise specified as contemplated by Section 2.2, payment of the
principal of and interest and premium, if any, on any Global Security shall be
made to the Depositary or its nominee in its capacity as the Holder thereof.
(f) Except as provided in Section 2.15(e), the Company, the
Trustee and any Agent shall treat a person as the Holder of such principal
amount of outstanding Securities of any Series represented by a Global Security
as shall be specified in a written statement of the Depositary (which may be in
the form of a participants' list for such Series) with respect to such Global
Security, for purposes of obtaining any consents, declarations, waivers or
directions required to be given by the Holders pursuant to this Indenture,
provided that until the Trustee is so provided with a written statement, it may
treat the Depositary or any other Person in whose name a Global Security is
registered as the owner of such Global Security for the purpose of receiving
payment of principal of and any premium and (subject to Section 2.13) any
interest on such Global Security and for all other purposes whatsoever, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
2.16 PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee, the Registrar and any agent of the Company, the
Registrar or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment
of principal of and any premium and (subject to Section 2.13) any interest on
such Security and for all other purposes whatsoever, and neither the Company,
the Trustee, the Registrar nor any agent of the Company, the Registrar or the
Trustee shall be affected by notice to the contrary.
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ARTICLE 3
REDEMPTION
3.1 NOTICES TO TRUSTEE.
The Company may, with respect to any Series of Securities, reserve the
right to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof prior to the Stated Maturity
thereof at such time and on such terms as provided for in such Securities or
the related Board Resolution, supplemental indenture or Officers' Certificate.
If a Series of Securities is redeemable and the Company elects to redeem such
Securities of a Series, it shall notify the Trustee of the Redemption Date and
the principal amount of Securities to be redeemed at least 45 days (unless a
shorter notice shall be satisfactory to the Trustee) but not more than 60 days
before the Redemption Date. Any such notice may be canceled at any time prior
to notice of such redemption being mailed to any Holder and shall thereby be
void and of no effect.
3.2 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
Unless otherwise indicated for a particular Series of Securities by a
Board Resolution, a supplemental indenture or an Officers' Certificate, if
fewer than all of the Securities of a Series are to be redeemed, the Trustee
shall select the Securities of a Series to be redeemed pro rata, by lot or by
any other method that the Trustee considers fair and appropriate and, if such
Securities are listed on any securities exchange, by a method that complies
with the requirements of such exchange.
The Trustee shall make the selection from Securities of a Series
outstanding and not previously called for redemption and shall promptly notify
the Company in writing of the Securities selected for redemption and, in the
case of any Security selected for partial redemption, the principal amount
thereof to be redeemed. Securities of a Series in denominations of $1,000 may
be redeemed only in whole. The Trustee may select for redemption portions of
the principal of Securities of a Series that have denominations larger than
$1,000. Securities of a Series and portions of them it selects shall be in
amounts of $1,000 or, with respect to Securities of any Series issuable in
other denominations pursuant to Section 2.2(10), the minimum principal
denomination for each Series and integral multiples thereof. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
3.3 NOTICE OF REDEMPTION.
Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days, and no more than 60 days, before a Redemption Date, the Company
shall mail, or cause to be mailed, a notice of redemption by first-
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class mail to each Holder of Securities to be redeemed at his or her last
address as the same appears on the registry books maintained by the Registrar.
The notice shall identify the Securities to be redeemed (including the
CUSIP number(s) thereof, if any) and shall state:
(1) the Redemption Date;
(2) the redemption price, and that such redemption
price shall become due and payable on the Redemption Date;
(3) if any Security of a Series is being redeemed in
part, the portion of the principal amount of such Security
of a Series to be redeemed and that, after the Redemption
Date and upon surrender of such Security of a Series, a new
Security or Securities in principal amount equal to the
unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Securities of a Series called for redemption
must be surrendered to the Paying Agent to collect the
redemption price, and the place or places where each such
Security is to be surrendered for such payment;
(6) that, unless the Company defaults in making the
redemption payment, interest on the Securities of a Series
called for redemption ceases to accrue on the Redemption
Date, and the only remaining right of the Holders of such
Securities is to receive payment of the redemption price
upon surrender to the Paying Agent of the Securities
redeemed; and
(7) if fewer than all the Securities of a Series are
to be redeemed, the identification of the particular
Securities of a Series (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Securities of
a Series to be redeemed and the aggregate principal amount
of Securities of a Series to be outstanding after such
partial redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's sole expense, and such
notice shall be irrevocable.
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3.4 EFFECT OF NOTICE OF REDEMPTION.
Once the notice of redemption described in Section 3.3 is mailed,
Securities of a Series called for redemption become due and payable on the
Redemption Date and at the redemption price, plus interest, if any, accrued to
the Redemption Date. Upon surrender to the Trustee or Paying Agent, such
Securities of a Series shall be paid at the redemption price, plus accrued
interest, if any, to the Redemption Date, provided that if the Redemption Date
is after a regular interest payment record date and on or prior to the next
Interest Payment Date, the accrued interest shall be payable to the Holder of
the redeemed Securities registered on the relevant record date, as specified by
the Company in the notice to the Trustee pursuant to Section 3.1 hereof.
3.5 DEPOSIT OF REDEMPTION PRICE.
On or prior to the Redemption Date (but no later than 10:00 A.M. EST
on such date), the Company shall deposit with the Paying Agent money sufficient
to pay the redemption price of and accrued interest, if any, on all Securities
to be redeemed on that date other than Securities or portions thereof called
for redemption on that date which have been delivered by the Company to the
Trustee for cancellation.
On and after any Redemption Date, if money sufficient to pay the
redemption price of and accrued interest on Securities called for redemption
shall have been made available in accordance with the preceding paragraph and
the Company and the Paying Agent are not prohibited from paying such moneys to
Holders, the Securities called for redemption will cease to accrue interest and
the only right of the Holders of such Securities will be to receive payment of
the redemption price of and, subject to the proviso in Section 3.4, accrued and
unpaid interest on such Securities to the Redemption Date. If any Security
called for redemption shall not be so paid, interest will be paid, from the
Redemption Date until such redemption payment is made, on the unpaid principal
of the Security and any interest or premium (if any) not paid on such unpaid
principal, in each case, at the rate and in the manner provided in the
Securities.
3.6 SECURITIES REDEEMED IN PART.
Upon surrender of a Security of a Series that is redeemed in part, the
Company shall execute and the Trustee shall authenticate for a Holder a new
Security of the same Series equal in principal amount to the unredeemed portion
of the Security surrendered.
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ARTICLE 4
COVENANTS
4.1 PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest and premium, if
any, on each Series of Securities on the dates and in the manner provided in
such Securities and this Indenture.
An installment of principal or interest shall be considered paid on
the date it is due if the Trustee or Paying Agent holds on that date money
designated for and sufficient to pay such installment and is not prohibited
from paying such money to the Holders pursuant to the terms of this Indenture
or otherwise.
The Company shall pay interest on overdue principal, and overdue
interest, to the extent lawful, at the rate specified in the Series of
Securities.
4.2 SEC REPORTS.
The Company will deliver to the Trustee within 15 days after the
filing of the same with the SEC, copies of the quarterly and annual report and
of the information documents and other reports, if any, which the Company is
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act. Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will file
with the SEC, to the extent permitted, and provide the Trustee with such
quarterly and annual reports and such information, documents and other reports
specified in Section 13 and 15(d) of the Exchange Act. The Company will also
comply with the other provisions of TIA Section 314(a).
4.3 WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
they will not at any time insist upon, or plead (as a defense or otherwise) or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension, usury or other law which would prohibit or forgive the Company from
paying all or any portion of the principal of, premium, if any, and/or interest
on the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that they may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
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4.4 COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90
days after the end of each fiscal year of the Company (ending December 31), an
Officers' Certificate which complies with TIA Section 314(a)(4) stating that a
review of the activities of the Company and its Subsidiaries during such fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether each has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge each has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action each is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest or premium, if any, on the
Securities is prohibited or if such event has occurred, a description of the
event and what action each is taking or proposes to take with respect thereto.
(b) (i) If any Default or Event of Default has occurred and
is continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Securities, the
Company shall deliver to the Trustee an Officers' Certificate specifying such
event, notice or other action within five Business Days of its becoming aware
of such occurrence and what action the Company is taking or proposes to take
with respect thereto.
4.5 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Significant
Subsidiaries or properties of it or any of its Significant Subsidiaries and
(ii) all lawful claims for labor, materials and supplies that, if unpaid, might
by law become a Lien upon the property of it or any of its Significant
Subsidiaries; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim if the amount, applicability or validity thereof is being contested in
good faith by appropriate proceedings and an adequate reserve has been
established therefor to the extent required by GAAP.
4.6 CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence, and the corporate, partnership or other existence of each
Significant Subsidiary, in accordance with the respective organizational
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documents (as the same may be amended from time to time) of the Company and of
each Significant Subsidiary, and the rights (charter and statutory), licenses
and franchises of the Company and its Significant Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any
of its Significant Subsidiaries, if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and its Significant Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders.
4.7 MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 4.7 shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
ARTICLE 5
SUCCESSOR CORPORATION
5.1 LIMITATION ON CONSOLIDATION, MERGER AND SALE OF ASSETS.
(a) The Company will not, in any transaction or series of
transactions, merge or consolidate with or into, or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets (as an entirety or substantially as an entirety in one
transaction or a series of related transactions), to any Person or Persons,
unless at the time of and after giving effect thereto (i) either (A) if the
transaction or series of transactions is a merger or consolidation, the Company
shall be the surviving Person of such merger or consolidation, or (B) the
Person formed by such consolidation or into which the Company is merged or to
which the properties and assets of the Company are transferred (any such
surviving person or transferee Person being the "Surviving Entity") shall be a
corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall expressly
assume by a supplemental indenture executed and delivered to the Trustee, in
form reasonably satisfactory to the Trustee, all the obligations of the Company
(including, without limitation, the obligation to pay the principal of, and
premium and interest, if any, on the Securities and the performance of the
other covenants) under the Securities of each Series and this Indenture, and in
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each case, this Indenture shall remain in full force and effect; and (ii)
immediately before and immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no Default or Event of
Default shall have occurred and be continuing
(b) In connection with any consolidation, merger or
transfer of assets contemplated by this Section 5.1, the Company shall deliver,
or cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and the
supplemental indenture in respect thereto comply with this Section 5.1 and that
all conditions precedent herein provided for relating to such transaction or
transactions have been complied with.
5.2 SUCCESSOR PERSON SUBSTITUTED.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
above, the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein, and thereafter (except with respect to any such
transfer which is a lease) the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
6.1 EVENTS OF DEFAULT.
"Events of Default," wherever used herein with respect to Securities
of any Series, means any one of the following events, unless in the
establishing Board Resolution, supplemental indenture or Officers' Certificate,
it is provided that such Series shall not have the benefit of said Event of
Default:
(1) there is a default in the payment of any
principal of, or premium, if any, on the Securities when
the same becomes due and payable at Maturity, upon
acceleration, redemption or otherwise;
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(2) there is a default in the payment of any
interest on any Security of a Series when the same becomes
due and payable and the Default continues for a period of
30 days;
(3) the Company defaults in the observance or
performance of any other covenant in the Securities of a
Series or this Indenture for 45 days after written notice
from the Trustee or the Holders of not less than 25% in the
aggregate principal amount of the Securities of such Series
then outstanding;
(4) there is a default or are defaults under one or
more agreements, instruments, mortgages, bonds, debentures
or other evidences of Indebtedness under which the Company
or any Significant Subsidiary of the Company then has
outstanding Indebtedness in excess of $10 million,
individually or in the aggregate, and either (a) such
Indebtedness is already due and payable in full or (b) such
default or defaults have resulted in the acceleration of
the Maturity of such Indebtedness;
(5) a court of competent jurisdiction enters a final
judgment or judgments which can no longer be appealed for
the payment of money in excess of $10 million (not covered
by insurance) against the Company or any Significant
Subsidiary and such judgment remains undischarged for a
period of 60 consecutive days during which a stay of
enforcement of such judgment shall not be in effect;
(6) the Company or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for
relief against it in an involuntary case,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of
its property,
(D) makes a general assignment for the
benefit of its creditors, or
(E) generally is not paying its debts as
they become due;
(7) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
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(A) is for relief against the Company or
any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or
any Significant Subsidiary or for all or
substantially all of the property of the Company or
any Significant Subsidiary; or
(C) orders the liquidation of the Company
or any Significant Subsidiary, and the order or
decree remains unstayed and in effect for 60 days;
or
(8) any other Event of Default provided with respect
to Securities of that Series, which is specified in a Board
Resolution, a supplemental indenture hereto or an Officers'
Certificate, in accordance with Section 2.2(18).
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
The Trustee may withhold notice of any Default (except in payment of
principal or premium, if any, or interest on the Securities) to the Holders of
the Securities of any Series in accordance with Section 7.5.
6.2 ACCELERATION.
If an Event of Default with respect to Securities of any Series at the
time outstanding (other than an Event of Default arising under Section 6.1(6)
or (7)) occurs and is continuing, the Trustee by written notice to the Company,
or the Holders of not less than 25% in aggregate principal amount of the
Securities of that Series then outstanding may by written notice to the Company
and the Trustee declare that the entire principal amount of all the Securities
of that Series then outstanding plus accrued and unpaid interest to the date of
acceleration are immediately due and payable, in which case such amounts shall
become immediately due and payable; provided, however, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal
amount of the outstanding Securities of that Series may rescind and annul such
acceleration and its consequences if (i) all existing Events of Default, other
than the nonpayment of accelerated principal, premium, if any, or interest that
has become due solely because of the acceleration, have been cured or waived,
(ii) to the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid and (iii) if the
rescission would not conflict with any judgment or decree. No such rescission
shall affect any subsequent Default or impair any right consequent thereto. In
case an Event of Default specified in Section 6.1(6) or (7) with respect to
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the Company occurs, such principal, premium, if any, and interest amount with
respect to all of the Securities of that Series shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders of the Securities of that Series.
6.3 REMEDIES.
If an Event of Default with respect to Securities of any Series at the
time outstanding occurs and is continuing, the Trustee may pursue any available
remedy by proceeding at law or in equity to collect the payment of principal
of, or premium, if any, and interest on the Securities of that Series or to
enforce the performance of any provision of the Securities of that Series or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities of that Series or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
6.4 WAIVER OF PAST DEFAULTS AND EVENTS OF DEFAULT.
Subject to Sections 6.2, 6.7 and 8.2 hereof, the Holders of a majority
in principal amount of the Securities of any Series then outstanding have the
right to waive any existing Default or Event of Default with respect to such
Series or compliance with any provision of this Indenture (with respect to such
Series) or the Securities of such Series. Upon any such waiver, such Default
with respect to such Series shall cease to exist, and any Event of Default with
respect to such Series arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
6.5 CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the Securities of any
Series then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee by this Indenture with respect to such Series.
The Trustee, however, may refuse to follow any direction that conflicts with
law or this Indenture or that the Trustee determines may be unduly prejudicial
to the rights of another Securityholder or that may involve the Trustee in
personal liability; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
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6.6 LIMITATION ON SUITS.
Subject to Section 6.7 below, a Securityholder may not institute any
proceeding or pursue any remedy with respect to this Indenture or the
Securities of a Series unless:
(1) the Holder gives to the Trustee written notice
of a continuing Event of Default with respect to the
Securities of that Series;
(2) the Holders of at least 25% in aggregate
principal amount of the Securities of such Series then
outstanding make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity reasonably satisfactory to the Trustee against
any loss, liability or expense to be incurred in compliance
with such request;
(4) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer
of indemnity; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in aggregate principal
amount of the Securities of such Series then outstanding.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security of a Series to receive payment of principal of, or
premium, if any, and interest of the Security of such Series on or after the
respective due dates expressed in the Security of such Series, or to bring suit
for the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal, premium or interest
specified in Section 6.1(1) or (2) hereof with respect to Securities of any
Series at the time outstanding occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company (or any other obligor on the Securities of that Series) for the whole
amount of unpaid principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate then borne by the Securities of that Series, and
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such further amounts as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, as set forth in Section 7.7.
6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents, and take other actions (including sitting on a committee of
creditors) as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Securities), any of their respective creditors or
any of their respective property and shall be entitled and empowered to collect
and receive any monies or other property payable or deliverable on any such
claims and to distribute the same after deduction of its charges and expenses
to the extent that any such charges and expenses are not paid out of the estate
in any such proceedings and any custodian in any such judicial proceeding is
hereby authorized by each Securityholder to make such payments to the Trustee,
and in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan or reorganization, arrangement, adjustment or composition affecting the
Securities of a Series or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Securityholder in any such
proceedings.
6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.7 hereof;
SECOND: to Securityholders for amounts then due and unpaid for
principal, premium, if any, and interest on the Securities in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and any premium and interest, respectively; and
THIRD: to the Company.
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The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder a notice that states
the record date, the payment date and amount to be paid.
6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7 hereof or a suit by Holders of more than 10% in
principal amount of the Securities of a Series then outstanding.
ARTICLE 7
TRUSTEE
7.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the same circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that
are specifically set forth in this Indenture and no
covenants or obligations shall be implied in this Indenture
against the Trustee.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture but, in the case of any such certificates or
opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.1.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Sections 6.2 and 6.5 hereof.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.
(e) Whether or not therein expressly so provided,
paragraphs (a), (b), (c) and (d) of this Section 7.1 shall govern every
provision of this Indenture that in any way relates to the Trustee.
(f) The Trustee and Paying Agent shall not be liable for
interest on any money received by it except as the Trustee and Paying Agent may
agree in writing with the Company. Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by the law.
(g) The Paying Agent, the Registrar and any authenticating
agent shall be entitled to the protections, immunities and standard of care set
forth in paragraphs (a), (b), (c), (d) and (f) of this Section 7.1 and in
Section 7.2 with respect to the Trustee.
7.2 RIGHTS OF TRUSTEE.
(a) Subject to Section 7.1 hereof:
(1) The Trustee may rely on and shall be protected
in acting or refraining from acting upon any document
reasonably believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
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(2) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate or an Opinion of
Counsel, or both, which shall conform to the provisions of
Section 10.5 hereof. The Trustee shall be protected and
shall not be liable for any action it takes or omits to
take in good faith in reliance on such certificate or
opinion.
(3) The Trustee may act through agents and attorneys
and shall not be responsible for the misconduct or
negligence of any agent appointed by it with due care.
(4) The Trustee shall not be liable for any action
it takes or omits to take in good faith which it reasonably
believes to be authorized or within its rights or powers.
(5) The Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization and
protection from liability in respect of any action taken,
omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(6) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the
Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby.
(7) The Trustee shall not be deemed to have
knowledge of any fact or matter (including, without
limitation, a Default or Event of Default) unless such fact
or matter is known to a Responsible Officer of the Trustee.
(8) Unless otherwise expressly provided herein or in
the Securities of a Series or the related Board Resolution,
supplemental indenture or Officers' Certificate, the
Trustee shall not have any responsibility with respect to
reports, notices, certificates or other documents filed
with it hereunder, except to make them available for
inspection, at reasonable times, by Securityholders, it
being understood that delivery of such reports, information
and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or
determinable from information contained therein, including
the Company's compliance with any of its covenants
hereunder (except as set forth in Section 4.4).
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7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may make loans to, accept deposits from,
perform services for or otherwise deal with the Company, or any Affiliate
thereof, with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, shall be subject to
Sections 7.10 and 7.11 hereof.
7.4 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities (except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture and authenticate the
Securities and perform its obligations hereunder), it shall not be accountable
for the Company's use of the proceeds from the sale of Securities or any money
paid to the Company pursuant to the terms of this Indenture and it shall not be
responsible for any statement in the Securities other than its certificates of
authentication.
7.5 NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing with
respect to the Securities of any Series and if it is known to the Trustee, the
Trustee shall mail to each Securityholder of the Securities of that Series
notice of the Default or the Event of Default, as the case may be, within 30
days after it occurs or, if later, after a Responsible Officer of the Trustee
has knowledge of such Default or Event of Default (except if such Default or
Event of Default has been validly cured or waived before the giving of such
notice). Except in the case of a Default or an Event of Default in payment of
the principal of, or premium, if any, or interest on any Security of any
Series, the Trustee may withhold the notice if and so long as the Board of
Directors of the Trustee, the executive committee or any trust committee of
such board and/or its Responsible Officers in good faith determine(s) that
withholding the notice is in the interests of the Securityholders of that
Series.
7.6 REPORTS BY TRUSTEE TO HOLDERS.
If and to the extent required by the TIA, within 60 days after May 15
of each year, commencing the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May
15 that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and any stock exchange on which the Securities of
that Series are listed. The Company shall promptly notify the Trustee when the
Securities of any Series are listed on any stock exchange, and the Trustee
shall comply with TIA Section 313(d).
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7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any provision of law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in connection with
its duties under this Indenture, including the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any and all loss or liability incurred by it in connection with the
acceptance or performance of its duties under this Indenture including the
reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. However, the
failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations. Notwithstanding the foregoing, the Company need not
reimburse the Trustee for any expense or indemnify it against any loss or
liability incurred by the Trustee through its negligence or bad faith.
To secure the payment obligations of the Company in this Section 7.7,
the Trustee shall have a lien prior to the Securities of any Series on all
money or property held or collected by the Trustee, except such money or
property held in trust to pay principal of and interest and premium (if any) on
particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(6) or (7) hereof occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
For purposes of this Section 7.7, the term "Trustee" shall include any
trustee appointed pursuant to Article 9.
7.8 REPLACEMENT OF TRUSTEE.
The Trustee may resign with respect to the Securities of one or more
Series by so notifying the Company in writing at least 90 days in advance of
such resignation.
The Holders of a majority in principal amount of the outstanding
Securities of any Series may remove the Trustee with respect to that Series by
notifying the removed Trustee in writing and may appoint a successor Trustee
with respect to that Series with the consent of the Company, which consent
shall not be unreasonably withheld. The Company may remove the Trustee with
respect to that Series at its election if:
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(1) the Trustee fails to comply with, or ceases to be
eligible under, Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent
or an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;
(3) a Custodian or other public officer takes charge
of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee with respect to any Series of Securities for any reason, the
Company shall promptly notify each Holder of such event and shall promptly
appoint, by Board Resolution, a successor Trustee.
If a successor Trustee with respect to the Securities of one or more
Series does not take office within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company or the Holders of at least 10%
in principal amount of the outstanding Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee with respect to the Securities of one or more Series
fails to comply with Section 7.10 hereof, any Securityholder of the applicable
Series may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately following
such delivery (i) the retiring Trustee with respect to one or more Series
shall, subject to its rights under Section 7.7 hereof, transfer all property
held by it as Trustee with respect to such Series to the successor Trustee,
(ii) the resignation or removal of the retiring Trustee shall become effective,
and (iii) the successor Trustee with respect to such Series shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee with respect to the Securities of one or more Series shall mail notice
of its succession to each Securityholder of such Series.
7.9 SUCCESSOR TRUSTEE BY CONSOLIDATION, MERGER OR CONVERSION.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, subject to Section 7.10 hereof, the successor corporation without
any further act shall be the successor Trustee.
7.10 ELIGIBILITY; DISQUALIFICATION.
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This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), (2) and (5) in every respect. The
Trustee shall have a combined capital and surplus of at least $100,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b), including the provision in Section
310(b)(1). If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 7.10, it shall resign immediately in the
manner and with the effect specified in this Article 7.
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
7.12 PAYING AGENTS.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to it and the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 7.12:
(1) that it will hold all sums held by it as agent
for the payment of principal of, or premium, if any, or
interest on, the Securities (whether such sums have been
paid to it by the Company or by any obligor on the
Securities) in trust for the benefit of Holders of the
Securities or the Trustee;
(2) that it will at any time during the continuance
of any Event of Default, upon written request from the
Trustee, deliver to the Trustee all sums so held in trust
by it together with a full accounting thereof; and
(3) that it will give the Trustee written notice
within three (3) Business Days of any failure of the
Company (or by any obligor on the Securities) in the
payment of any installment of the principal of, premium, if
any, or interest on, the Securities when the same shall be
due and payable.
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ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
8.1 WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by a Board Resolution, and the Trustee
may amend or supplement this Indenture or the Securities of one or more Series
without notice to or consent of any Securityholder:
(1) to comply with Section 5.1 hereof;
(2) to provide for uncertificated Securities in
addition to certificated Securities;
(3) to comply with any requirements of the SEC under
the TIA;
(4) to cure any ambiguity, defect or inconsistency, or
to make any other change that does not adversely affect the
rights of any Securityholder;
(5) to provide for the issuance of and establish the
form and terms and conditions of Securities of any Series
as permitted by this Indenture; or
(6) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect
to the Securities of one or more Series and to add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee.
The Trustee is hereby authorized to join with the Company in the
execution of any supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
which may be therein contained, but the Trustee shall not be obligated to enter
into any such supplemental indenture which adversely affects its own rights,
duties or immunities under this Indenture.
8.2 WITH CONSENT OF HOLDERS.
(a) The Company, when authorized by a Board Resolution, and
the Trustee may amend or supplement this Indenture or the Securities of one or
more Series with the written consent of the Holders of not less than a majority
in aggregate principal amount of the outstanding Securities of such Series
affected by such amendment or supplement without notice to any Securityholder.
The Holders of not less than a majority in aggregate principal amount of the
outstanding Securities of each such Series affected by such amendment or
supplement may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities of such Series without notice
to any Securityholder. Subject to Section 8.4, without the consent of each
Securityholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 6.4, may not:
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(1) reduce the amount of Securities whose Holders must
consent to an amendment, supplement or waiver to this
Indenture or the Securities;
(2) reduce the rate of or change the time for payment
of interest on any Security;
(3) reduce the principal or change the Stated Maturity
of any Security or reduce the amount of, or postpone the
date fixed for, the payment of any sinking fund or
analogous obligation;
(4) make any Security payable in money other than that
stated in the Security;
(5) change the amount or time of any payment required
by the Securities or reduce the premium payable upon any
redemption of the Securities, or change the time before
which no such redemption may be made;
(6) waive a Default or Event of Default in the payment
of the principal of or interest or premium, if any, on any
Security (except a rescission of acceleration of the
Securities of any Series by the Holders of at least a
majority in principal amount of the outstanding Securities
of such Series and a waiver of the payment default that
resulted from such acceleration);
(7) waive a redemption payment with respect to any
Security or change any of the provisions with respect to
the redemption of any Securities;
(8) make any changes in Sections 6.4 or 6.7 hereof or
this Section 8.2, except to increase any percentage of
Securities the Holders of which must consent to any matter;
or
(9) take any other action otherwise prohibited by this
Indenture to be taken without the consent of each holder
affected thereby.
(b) Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the receipt by the Trustee of evidence reasonably satisfactory to the
Trustee of the consent of the Securityholders as aforesaid and upon receipt by
the Trustee of the documents described in Section 8.6 hereof, the Trustee shall
join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
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(c) It shall not be necessary for the consent of the
Holders under this section to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
8.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
8.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement, waiver or other action becomes
effective, a consent to it by a Holder of a Security is a continuing consent
conclusive and binding upon such Holder and every subsequent Holder of the same
Security or portion thereof, and of any Security issued upon the transfer
thereof or in exchange therefor or in place thereof, even if notation of the
consent is not made on any such Security. Any such Holder or subsequent Holder,
however, may revoke the consent as to his Security or portion of a Security, if
the Trustee receives the notice of revocation before the date the amendment,
supplement, waiver or other action becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement, or waiver which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only such Persons, shall be
entitled to consent to such amendment, supplement, or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date without the applicable amendment,
supplement or waiver becoming effective.
After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Securityholder, unless it makes a change
described in any of clauses (1) through (9) of Section 8.2 hereof. In that case
the amendment, supplement, waiver or other action shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security; provided that any such waiver shall not impair or affect the right of
any Holder to receive payment of principal of and interest and premium (if any)
on a Security, on or after the respective due dates expressed in such Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.
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8.5 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement, or waiver changes the terms of a Security
of any Series, the Trustee may request the Holder of such Security to deliver
it to the Trustee. In such case, the Trustee shall place an appropriate
notation on such Security about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for such Security shall issue and the Trustee shall authenticate a new
security that reflects the changed terms. Failure to make the appropriate
notation or issue a new Security shall not affect the validity and effect of
such amendment, supplement or waiver.
8.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article 8 if the amendment, supplement or waiver does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign it. In signing or refusing to
sign such amendment, supplement or waiver the Trustee shall be entitled to
receive and, subject to Section 7.1 hereof, shall be fully protected in relying
upon an Officers' Certificate and an Opinion of Counsel stating that such
amendment, supplement or waiver is authorized or permitted by this Indenture.
The Company may not sign an amendment or supplement until the Board of
Directors of the Company approves it.
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
9.1 DISCHARGE OF INDENTURE.
The Company may terminate its obligations under the Securities of any
Series and this Indenture with respect to such Series, except the obligations
referred to in the last paragraph of this Section 9.1, if there shall have been
canceled by the Trustee or delivered to the Trustee for cancellation all
Securities of such Series theretofore authenticated and delivered (other than
any Securities of such Series that are asserted to have been destroyed, lost or
stolen and that shall have been replaced as provided in Section 2.8 hereof) and
the Company has paid all sums payable by it hereunder or deposited all required
sums with the Trustee.
After such delivery the Trustee upon request shall acknowledge in a
writing prepared by or on behalf of the Company the discharge of the Company's
obligations under the Securities of such Series and this Indenture except for
those surviving obligations specified below.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company in Sections 7.7, 9.5 and 9.6 hereof shall survive.
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9.2 LEGAL DEFEASANCE.
The Company may at its option, by Board Resolution, be discharged from
its obligations with respect to the Securities of any Series on the date the
conditions set forth in Section 9.4 below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the Securities of such Series and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall, subject
to Section 9.6 hereof, execute proper instruments acknowledging the same, as
are delivered to it by the Company), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of outstanding Securities of such Series to receive solely from the
trust funds described in Section 9.4 hereof and as more fully set forth in such
section, payments in respect of the principal of, premium, if any, and interest
on the Securities of such Series when such payments are due, (B) the Company's
obligations with respect to the Securities of such Series under Sections 2.4,
2.5, 2.6, 2.7, 2.8 and 2.9 hereof, (C) the rights, powers, trusts, duties, and
immunities of the Trustee hereunder (including claims of, or payments to, the
Trustee under or pursuant to Section 7.7 hereof) and (D) this Article 9.
Subject to compliance with this Article 9, the Company may exercise its option
under this Section 9.2 with respect to the Securities of any Series
notwithstanding the prior exercise of its option under Section 9.3 below with
respect to the Securities of such Series.
9.3 COVENANT DEFEASANCE.
At the option of the Company, pursuant to a Board Resolution, the
Company shall be released from its obligations with respect to the outstanding
Securities of any Series under Sections 4.2 through 4.7 hereof, inclusive, and
Section 5.1 hereof, with respect to the outstanding Securities of such Series,
on and after the date the conditions set forth in Section 9.4 hereof are
satisfied (hereinafter, "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified section or portion thereof, whether directly or indirectly by reason
of any reference elsewhere herein to any such specified Section or portion
thereof or by reason of any reference in any such specified section or portion
thereof to any other provision herein or in any other document, but the
remainder of this Indenture and the Securities of any Series shall be
unaffected thereby.
9.4 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of Section 9.2 or
Section 9.3 hereof to the outstanding Securities of a Series:
(1) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof who
shall agree to comply with the provisions of this Article
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9 applicable to it) as funds in trust for the purpose of
making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the
Holders of the Securities, (A) money in an amount, or (B)
U.S. Government Obligations or Foreign Government
Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance
with their terms will provide, not later than the due date
of any payment, money in an amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed
in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied
by the Trustee (or other qualifying trustee) to pay and
discharge, the principal of, premium, if any, and accrued
interest on the outstanding Securities of such Series at
the Stated Maturity of such principal, premium, if any, or
interest, or on dates for payment and redemption of such
principal, premium, if any, and interest selected in
accordance with the terms of this Indenture and of the
Securities of such Series;
(2) no Event of Default or Default with respect to
the Securities of such Series shall have occurred and be
continuing on the date of such deposit, or shall have
occurred and be continuing at any time during the period
ending on the 91st day after the date of such deposit or,
if longer, ending on the day following the expiration of
the longest preference period under any Bankruptcy Law
applicable to the Company in respect of such deposit as
specified in the Opinion of Counsel identified in paragraph
(8) below (it being understood that this condition shall
not be deemed satisfied until the expiration of such
period);
(3) such Legal Defeasance or Covenant Defeasance
shall not cause the Trustee to have a conflicting interest
for purposes of the TIA with respect to any securities of
the Company;
(4) such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute
default under any other agreement or instrument to which
the Company is a party or by which it is bound;
(5) the Company shall have delivered to the Trustee
an Opinion of Counsel stating that, as a result of such
Legal Defeasance or Covenant Defeasance, neither the trust
nor the Trustee will be required to register as an
investment company under the Investment Company Act of
1940, as amended;
(6) in the case of an election under Section 9.2
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (i) the Company has
received from, or there has been published by, the Internal
Revenue Service a ruling to the effect that or (ii) there
has been a change in any
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applicable Federal income tax law with the effect that, and
such opinion shall confirm that, the Holders of the
outstanding Securities of such Series or persons in their
positions will not recognize income, gain or loss for
Federal income tax purposes solely as a result of such
Legal Defeasance and will be subject to Federal income tax
on the same amounts, in the same manner, including as a
result of prepayment, and at the same times as would have
been the case if such Legal Defeasance had not occurred;
(7) in the case of an election under Section 9.3
hereof, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
outstanding Securities of such Series will not recognize
income, gain or loss for Federal income tax purposes as a
result of such Covenant Defeasance and will be subject to
Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(8) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for in this
Article 9 relating to either the Legal Defeasance under
Section 9.2 above or the Covenant Defeasance under Section
9.3 hereof (as the case may be) have been complied with;
(9) the Company shall have delivered to the Trustee
an Officers' Certificate stating that the deposit under
clause (1) was not made by the Company with the intent of
defeating, hindering, delaying or defrauding any creditors
of the Company or others; and
(10) the Company shall have paid or duly provided
for payment under terms mutually satisfactory to the
Company and the Trustee all amounts then due to the Trustee
pursuant to Section 7.7 hereof.
9.5 DEPOSITED MONEY AND U.S. AND FOREIGN GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
All money, U.S. Government Obligations and Foreign Government
Obligations (including the proceeds thereof) deposited with the Trustee
pursuant to Section 9.4 hereof in respect of the outstanding Securities shall
be held in trust and applied by the Trustee, in accordance with the provisions
of such Securities and this Indenture, to the payment, either directly or
through any Paying Agent as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal,
premium, if any, and accrued interest, but such money need not be segregated
from other funds except to the extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
and Foreign Government Obligations deposited pursuant to Section 9.4 hereof or
the principal, premium, if any, and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of the outstanding Securities.
Anything in this Article 9 to the contrary notwithstanding, but
subject to payment of any of its outstanding fees and expenses, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money, U.S. Government Obligations or Foreign Government Obligations held by it
as provided in Section 9.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
9.6 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money, U.S.
Government Obligations or Foreign Government Obligations in accordance with
Section 9.1, 9.2, 9.3 or 9.4 hereof by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 9 until
such time as the Trustee or Paying Agent is permitted to apply all such money,
U.S. Government Obligations or Foreign Government Obligations, as the case may
be, in accordance with Section 9.1, 9.2, 9.3 or 9.4 hereof; provided, however,
that if the Company has made any payment of principal of, premium, if any, or
accrued interest on any Securities because of the reinstatement of their
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money, U.S. Government
Obligations or Foreign Government Obligations held by the Trustee or Paying
Agent.
9.7 MONEYS HELD BY PAYING AGENT.
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee, or if sufficient
moneys have been deposited pursuant to Section 9.1 hereof, to the Company, and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
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9.8 MONEYS HELD BY TRUSTEE.
Any moneys deposited with the Trustee or any Paying Agent or then held
by the Company in trust for the payment of the principal of, or premium, if
any, or interest on any Security that are not applied but remain unclaimed by
the Holder of such Security for two years after the date upon which the
principal of, or premium, if any, or interest on such Security shall have
respectively become due and payable shall be repaid to the Company upon Company
Request, or if such moneys are then held by the Company in trust, such moneys
shall be released from such trust; and the Holder of such Security entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Trustee or any such Paying Agent, before being
required to make any such repayment, may, at the expense of the Company, either
mail to each Securityholder affected, at the address shown in the register of
the Securities maintained by the Registrar or cause to be published once a week
for two successive weeks, in a newspaper published in the English language,
customarily published each Business Day and of general circulation in the City
of New York, New York, a notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such mailing or publication, any unclaimed balance of such moneys then
remaining will be repaid to the Company. After payment to the Company or the
release of any money held in trust by the Company, Securityholders entitled to
the money must look only to the Company for payment as general creditors unless
applicable abandoned property law designates another person.
ARTICLE 10
MISCELLANEOUS
10.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the
TIA, the required provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA which may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
10.2 NOTICES.
Any notice or communication shall be given in writing and delivered in
person, sent by facsimile, delivered by commercial courier service or mailed by
first-class mail, postage prepaid, addressed as follows:
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If to the Company:
Lamar Advertising Company
5551 Corporate Boulevard
Baton Rouge, Louisiana 70808
Attention: Chief Financial Officer
Copy to:
Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: George Ticknor, Esq.
If to the Trustee:
General Mailing Address:
State Street Bank and Trust Company
Global Investor Services Group
P.O. Box 778
Boston, Massachusetts 02102-0778
Attention: Corporate Trust Office/Lamar Advertising
Overnight Courier Address:
State Street Bank and Trust Company
Global Investor Services Group
2 Avenue de Lafayette - 6th Floor
Boston, Massachusetts 02111-1724
Attention: Corporate Trust Office/Lamar Advertising
The Company or the Trustee by written notice to the other may
designate additional or different addresses for subsequent notices or
communications. Any notice or communication to the Company or the Trustee shall
be deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is confirmed, if
telecopied; and three (3) Business Days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).
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Any notice or communication mailed to a Securityholder shall be mailed
to such Securityholder by first-class mail, postage prepaid, at such
Securityholder's address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication to a Securityholder is mailed in
the manner provided above, it shall be deemed duly given three Business Days
after such mailing, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
In the case of Global Securities, notices or communications to be
given to Securityholders shall be given to the Depositary, in accordance with
its applicable policies as in effect from time to time.
In addition to the manner provided for in the foregoing provisions,
notices or communications to Securityholders shall be given by the Company by
release made to Reuters Economic Services and Bloomberg Business News.
10.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders of any Series may communicate pursuant to TIA Section
312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series
or any other Series. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
10.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include
the statements set forth in Section 10.5 below) stating
that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the
statements set forth in Section 10.5 below) stating that,
in the opinion of such counsel, all such conditions
precedent have been complied with.
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10.5 STATEMENT REQUIRED IN CERTIFICATE AND OPINION.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such Person,
it or he has made such examination or investigation as is
necessary to enable it or him to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion
of such Person, such covenant or condition has been
complied with.
10.6 [Reserved].
10.7 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at meetings of
Securityholders. The Registrar and Paying Agent may make reasonable rules for
their functions.
10.8 BUSINESS DAYS; LEGAL HOLIDAYS; PLACE OF PAYMENT.
A "Business Day" is a day that is not a Legal Holiday. A "Legal
Holiday" is a Saturday, a Sunday, a federally recognized holiday or a day on
which banking institutions are not authorized or required by law or executive
order to be open in the State of New York or the Commonwealth of Massachusetts.
If a payment date is a Legal Holiday at a Place of Payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. "Place of
Payment" means the place or places where the principal of and any premium and
interest on the Securities of a Series are payable as specified as contemplated
by Section 2.2.
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<PAGE> 56
10.9 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES.
10.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan,
security or debt agreement of the Company or any Subsidiary thereof. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
10.11 NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such,
of the Company shall not have any liability for any obligations of the Company
under the Securities or the Indenture. Each Securityholder by accepting a
Security waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of the Securities.
10.12 SUCCESSORS AND ASSIGNS.
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns, whether so expressed or not.
All agreements of the Trustee, any additional trustee and any Paying Agents in
this Indenture shall bind their respective successors and assigns.
10.13 MULTIPLE COUNTERPARTS.
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
10.14 TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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<PAGE> 57
10.15 SEPARABILITY.
Each provision of this Indenture shall be considered separable and if
for any reason any provision which is not essential to the effectuation of the
basic purpose of this Indenture or the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
10.16 SECURITIES IN A FOREIGN CURRENCY OR IN EURO.
Unless otherwise specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2
of this Indenture with respect to a particular Series of Securities, whenever
for purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series
or all Series affected by a particular action at the time outstanding and, at
such time, there are outstanding Securities of any Series which are denominated
in a coin or currency other than Dollars (including Euro), then the principal
amount of Securities of such Series which shall be deemed to be outstanding for
the purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate at such time. For purposes
of this Section 10.16, "Market Exchange Rate" shall mean the noon Dollar buying
rate in New York City for cable transfers of that currency as published by the
Federal Reserve Bank of New York; provided, however, in the case of Euros,
Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Union (or any successor thereto) as published in the
Official Journal of the European Union (such publication or any successor
publication, the "Journal"). If such Market Exchange Rate is not available for
any reason with respect to such currency, the Trustee shall use, in its sole
discretion and without liability on its part, such quotation of the Federal
Reserve Bank of New York or, in the case of Euros, the rate of exchange as
published in the Journal, as of the most recent available date, or quotations
or, in the case of Euros, rates of exchange from one or more major banks in The
City of New York or in the country of issue of the currency in question or, in
the case of Euros, in Luxembourg or such other quotations or, in the case of
Euros, rates of exchange as the Trustee, upon consultation with the Company,
shall deem appropriate. The provisions of this paragraph shall apply in
determining the equivalent principal amount in respect of Securities of a
Series denominated in currency other than Dollars in connection with any action
taken by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Company and all Holders.
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<PAGE> 58
10.17 JUDGMENT CURRENCY.
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due in respect of the principal of
or interest or premium (if any) or other amount on the Securities of any Series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the New
York Banking Day preceding the day on which final unappealable judgment is
entered and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, any
recovery pursuant to any judgment (whether or not entered in accordance with
subsection (a)), in any currency other than the Required Currency, except to
the extent that such tender or recovery shall result in the actual receipt, by
the payee, of the full amount of the Required Currency expressed to be payable
in respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable, and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York on
which banking institutions are authorized or required by law, regulation or
executive order to close.
-------------------------------
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<PAGE> 59
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
LAMAR ADVERTISING COMPANY
By: /s/ Kevin P. Reilly, Jr.
---------------------------------------
Name: Kevin P. Reilly, Jr.
Title: CEO
LAMAR ADVERTISING COMPANY
By: /s/ Keith A. Istre
---------------------------------------
Name: Keith A. Istre
Title: CFO
STATE STREET BANK AND TRUST
COMPANY
By: /s/ Jacqueline Bonhomme
---------------------------------------
Name: Jacqueline A. Bonhomme
Title: Assistant Vice President
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<PAGE> 60
STATE OF LOUISIANA )
) ss.:
PARISH OF EAST BATON ROUGE )
On the 10th day of August, 1999, before me personally came Kevin P.
Reilly, Jr., to me known, who, being by me duly sworn, did depose and say that
he is CEO of Lamar Advertising Company, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
/s/ Jodie A. Moscana
-----------------------------
Jodie A. Moscana, Notary
My Commission expires at
Death
STATE OF LOUISIANA )
) ss.:
PARISH OF EAST BATON ROUGE )
On the 10th day of August, 1999, before me personally came Keith A.
Istre, to me known, who, being by me duly sworn, did depose and say that he is
CFO of Lamar Advertising Company, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and that he
signed his name thereto by like authority.
/s/ Jodie A. Moscana
-----------------------------
Jodie A. Moscana, Notary
My Commission expires at
Death
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<PAGE> 61
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 10th day of August, 1999, before me personally came Jacqueline
Bonhomme to me known, who, being by me duly sworn, did depose and say that he is
an Assistant Vice President of State Street, one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
/s/ KARA KROWLIKOWSKI
-----------------------------
Kara Krowlikowski
Notary Public, State of New York
No. 01KR601311
Qualified in New York County
Commission Expires Sept. 8, 2000
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<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
LAMAR ADVERTISING COMPANY
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
---------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of August 10, 1999
---------------------------
Supplement to Indenture dated as of August 10, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
CREATION OF THE NOTES
1.1 Designation of Series...............................................2
1.2 Form of Notes.......................................................2
1.3 Limit on Amount of Series...........................................2
1.4 Interest............................................................2
1.5 Certificate of Authentication.......................................2
1.6 No Sinking Fund.....................................................2
1.7 Issuance in Global Form.............................................3
1.8 Discharge of Indenture; Defeasance..................................3
1.9 Other Terms of Notes................................................3
ARTICLE 2
CONVERSION OF NOTES
2.1 Conversion Privilege................................................3
2.2 Conversion Rate.....................................................4
2.3 Exercise of Conversion Privilege....................................4
2.4 Fractions of Common Stock Shares....................................5
2.5 Adjustment of Conversion Rate.......................................5
2.6 Notice of Adjustments of Conversion Rate...........................11
2.7 Notice of Certain Corporate Action.................................12
2.8 Company to Reserve Common Stock....................................13
2.9 Taxes on Conversions...............................................13
2.10 Covenant as to Common Stock........................................13
2.11 Cancellation of Converted Securities...............................13
2.12 Provisions in Case of Consolidation, Merger or Sale of Assets......13
2.13 Right of Holders to Convert........................................14
ARTICLE 3
REDEMPTION OF NOTES
3.1 Optional Redemption by the Company.................................15
3.2 Applicability of Article...........................................15
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
ARTICLE 4
REPURCHASE OF NOTES AT THE OPTION OF THE HOLDERS
UPON A CHANGE OF CONTROL
4.1 Repurchase at Option of Holders upon Change of Control.............15
4.2 Certain Definitions................................................18
ARTICLE 5
EVENTS OF DEFAULT
5.1 Additional Events of Default.......................................20
ARTICLE 6
AMENDMENTS, SUPPLEMENTS AND WAIVERS
6.1 With Consent of Holders............................................20
ARTICLE 7
MISCELLANEOUS
7.1 Application of First Supplemental Indenture........................21
7.2 Effective Date.....................................................21
7.3 Counterparts.......................................................21
</TABLE>
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<PAGE> 4
FIRST SUPPLEMENTAL INDENTURE, dated as of August 10, 1999 by and
between LAMAR ADVERTISING COMPANY, a Delaware corporation, as issuer (the
"Company"), and STATE STREET BANK AND TRUST COMPANY, a trust company organized
under the laws of the Commonwealth of Massachusetts, as Trustee under the
Indenture (as hereinafter defined) (the "Trustee").
RECITALS
WHEREAS, the Company and the Trustee have as of August 10, 1999 entered
into an Indenture (the "Indenture", all capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the Indenture) providing for
the issuance by the Company of Securities from time to time;
WHEREAS, no Securities have been issued under the Indenture and there
do not currently exist any Holders;
WHEREAS, the Company desires to issue one Series of Securities under
the Indenture, and has duly authorized the creation and issuance of such
securities and the execution and delivery of this First Supplemental Indenture
to modify the Indenture and provide certain additional provisions as hereinafter
described;
WHEREAS, the Company and the Trustee deem it advisable to enter into
this First Supplemental Indenture for the purposes of establishing the terms of
such Series of Securities;
WHEREAS, the execution and delivery of this First Supplemental
Indenture has been authorized by a Board Resolution;
WHEREAS, concurrent with the execution hereof, the Company has
delivered a Board Resolution and an Officers' Certificate and has caused its
counsel to deliver to the Trustee an Opinion of Counsel or a reliance letter
upon an Opinion of Counsel; and
WHEREAS, all things necessary to make this First Supplemental Indenture
a valid agreement of the Company in accordance with its terms have been done,
and the execution and delivery thereof have been in all respects duly authorized
by the parties hereto.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Notes (as hereinafter defined), as
follows:
<PAGE> 5
ARTICLE 1
CREATION OF THE NOTES
1.1 DESIGNATION OF SERIES.
Pursuant to the terms hereof and Sections 2.1 and 2.2 of the Indenture,
the Company hereby creates a Series of Securities designated as the "5.25%
Convertible Notes due 2006" (the "Notes"), which Notes shall be deemed
"Securities" for all purposes under the Indenture.
1.2 FORM OF NOTES.
The definitive form of the Notes shall be substantially in the form set
forth in Exhibit A attached hereto, which is incorporated herein and made part
hereof. The Stated Maturity of the Notes shall be September 15, 2006.
1.3 LIMIT ON AMOUNT OF SERIES.
The Notes shall not exceed U.S.$287,500,000 in aggregate principal
amount, and may, upon the execution and delivery of this First Supplemental
Indenture or from time to time thereafter, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes upon a Company Order and delivery of an
Officers' Certificate and Opinion of Counsel as contemplated by Section 2.3 of
the Indenture.
1.4 INTEREST.
The Notes shall bear interest at a rate of 5.25% per annum, payable
semi-annually. The Interest Payment Dates for the Notes shall be March 15 and
September 15 of each year, commencing September 15, 1999, with interest payable
in Dollars to Holders in whose names the Notes are registered at the close of
business on March 1 or September 1 of each year (each, a "Record Date"), or, if
such Record Date is not a Business Day, at the close of business of the
immediately succeeding Business Day.
1.5 CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication to be borne on the Notes
shall be substantially as provided in the Form of Note attached hereto as
Exhibit A.
1.6 NO SINKING FUND.
No sinking fund will be provided with respect to the Notes.
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<PAGE> 6
1.7 ISSUANCE IN GLOBAL FORM.
The Notes shall be issued as one or more Global Securities,
representing the aggregate principal amount of the Notes, and shall be deposited
with the Trustee as custodian for the Depositary. The Notes shall be registered
in the name of Cede & Co., or other nominee of the Depositary.
1.8 DISCHARGE OF INDENTURE; DEFEASANCE.
The Notes shall not be subject to the provisions of Article 9 of the
Indenture.
1.9 OTHER TERMS OF NOTES.
The other terms of the Notes shall be as expressly set forth in
Articles 2, 3, 4, 5, 6 and 7 hereof and Exhibit A hereto.
The words "herein", "hereof" and "hereunder" and other words of similar
import refer to this First Supplemental Indenture as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE 2
CONVERSION OF NOTES
2.1 CONVERSION PRIVILEGE.
Subject to and upon compliance with the provisions of this Article 2,
at the option of the Holder thereof, any Note or any portion of the principal
amount thereof which is $1,000 or an integral multiple of $1,000, and which has
not previously been redeemed pursuant to Article 3 hereof or repurchased
pursuant to Article 4 hereof, may be converted into fully paid and nonassessable
shares of Class A common stock of the Company, $0.001 par value per share (the
"Common Stock"), at the Conversion Rate, determined as hereinafter provided, in
effect at the time of conversion. Such conversion right shall commence on the
date of original issuance of the Notes, and shall expire at the close of
business on the Business Day immediately preceding the Stated Maturity. In case
a Note or portion thereof is called for redemption, such conversion right in
respect of the Note or portion so called shall expire at the close of business
on the Business Day immediately preceding the Redemption Date, unless the
Company defaults in making the payment due upon redemption. A Note in respect of
which a Holder has delivered a Repurchase Notice pursuant to Section 4.1 hereof
may be converted only if such notice is withdrawn in accordance with the terms
of such section, unless the Company defaults in the payment of the Change of
Control Repurchase Price.
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2.2 CONVERSION RATE.
The rate at which shares of Common Stock shall be delivered upon
conversion (the "Conversion Rate") shall be initially 21.6216 shares of Common
Stock for each $1,000 principal amount of Notes. The Conversion Rate shall be
adjusted in certain instances as provided in Section 2.5 hereof. All
calculations under this Article 2 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be.
2.3 EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise the conversion privilege, the Holder of any Note
to be converted shall surrender such Note, duly endorsed or assigned to the
Company or in blank, at the Corporate Trust Office of the Trustee, located at
225 Franklin St., Boston, MA 02110, Attn: Corporate Trust/Global Investors
Services, or the offices of an Affiliate of the Trustee located at 61 Broadway,
New York, NY 10005, Attn: Corporate Trust Window/Concourse Level, in the Borough
of Manhattan, The City of New York, accompanied by a duly signed and completed
written notice to the Company that the Holder elects to convert such Note (each
a "Conversion Notice"). Notes surrendered for conversion during the period from
the close of business on any Record Date immediately preceding any Interest
Payment Date to the opening of business on such Interest Payment Date shall
(except in the case of Notes or portions thereof which have been called for
redemption or in respect of which a Repurchase Notice delivered by the Holder
has not been withdrawn, the conversion rights of which would terminate during
the period between such Record Date and the close of business on such Interest
Payment Date) be accompanied by payment in immediately available funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Notes being surrendered
for conversion. No payment or adjustment shall be made upon any conversion on
account of any interest accrued on the Notes surrendered for conversion from the
Interest Payment Date preceding the day of conversion, or on account of any
dividends on the Common Stock issued upon conversion. In addition, Holders shall
not be entitled to receive any dividends payable to holders of Common Stock as
of any record date before the close of business on the conversion date. Notes
shall be deemed to have been converted immediately prior to the close of
business on the day of surrender of such Notes for conversion in accordance with
the foregoing provisions, and at such time the rights of the Holders of such
Notes as Holders shall cease, and the Person or Persons entitled to receive the
Common Stock issuable upon conversion shall be treated for all purposes as the
record holder or holders of such Common Stock at such time. As promptly as
practicable on or after the conversion date, the Company shall issue and shall
deliver to the Trustee at its Corporate Trust Office a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share thereof, as
provided in Section 2.4 hereof, and the Trustee shall forward such certificate
or certificates at the addresses set forth in the applicable Conversion Notice.
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2.4 FRACTIONS OF COMMON STOCK SHARES.
No fractional shares of Common Stock shall be issued upon conversion of
the Notes. If more than one Note shall be surrendered for conversion at one time
by the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the principal amount of the
Notes so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of any Note or Notes, the Company
shall pay a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the Market Price (determined by the Company in accordance
with the following paragraph) per share of Common Stock.
For purposes of this Section 2.4, "Market Price" means the Sale Price
(as defined below) of the Common Stock on the date of conversion of the Notes
or, if such date is not a Trading Day (as defined below), then on the last
Trading Day prior to such date. The "Sale Price" of the Common Stock on any date
means the closing per share sale price (or if no closing sale price is reported,
the average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices) on such date as reported in
the composite transactions for the principal United States securities exchange
on which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional stock exchange, as reported by the Nasdaq
National Market. "Trading Day" means, in respect of any securities exchange or
securities market, each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any day on which securities are not traded on the applicable securities
exchange or in the applicable securities market.
2.5 ADJUSTMENT OF CONVERSION RATE.
(1) In case at any time after the date of the issuance of the Notes,
the Company shall pay or make a dividend or other distribution to the Common
Stock payable in shares of its Common Stock, the Conversion Rate in effect at
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Conversion Rate by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.
(2) Subject to paragraph 9 of this Section 2.5, in case at any time
after the date of the issuance of the Notes, the Company shall issue rights,
options or warrants to all holders of its
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<PAGE> 9
Common Stock (other than any rights, options or warrants that by their terms
will also be issued to any Holder upon conversion of a Note into Common Stock
without any action required by the Company or any other person) entitling them
to subscribe for or purchase shares of Common Stock at a price per share less
than the then current market price per share (determined as provided in
paragraph (9) of this Section 2.5) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan), the Conversion
Rate in effect at the opening of business on the day following the date fixed
for such determination shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such current market price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (2), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not issue any rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case at any time after the date of the issuance of the Notes,
outstanding shares of Common Stock shall be subdivided into a greater number of
shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such subdivision becomes effective shall
be proportionately increased, and, conversely, in case outstanding shares of
Common Stock shall be combined into a smaller number of shares of Common Stock,
the Conversion Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be proportionately
reduced, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(4) In case at any time after the date of the issuance of the Notes,
the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock, shares of any class of its capital stock, evidences of its
indebtedness or other assets (including securities, but excluding any rights,
options or warrants referred to in paragraph (2) of this Section 2.5, any
dividend or distribution paid exclusively in cash, any dividend or distribution
referred to in paragraph (1) of this Section 2.5 and distributions upon a merger
or consolidation to which Section 2.12 applies), the Conversion Rate shall be
adjusted so that the same shall equal the price determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in
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<PAGE> 10
paragraph (9) of this Section 2.5) of the Common Stock on the date fixed for
such determination less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Trustee) of the portion of the assets, shares of
capital stock or evidences of indebtedness so distributed applicable to one
share of Common Stock and the denominator shall be such current market price per
share of the Common Stock, such adjustment to become effective immediately prior
to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. If the
Board of Directors determines the fair market value of any distribution for
purposes of this paragraph (4) by reference to the actual or when issued trading
market for any securities comprising such distribution, it must in doing so
consider the prices in such market over the same period used in computing the
current market price per share pursuant to paragraph (9) of this Section 2.5.
(5) In case at any time after the date of the issuance of the Notes,
the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock cash (excluding any cash that is distributed upon a merger or
consolidation to which Section 2.12 applies or as part of a distribution
referred to in paragraph (4) of this Section 2.5) in an aggregate amount that,
combined together with:
(A) the aggregate amount of any other distributions to all
holders of its Common Stock made exclusively in cash within the 12
months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to this paragraph (5) has been
made, and
(B) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee)
of consideration payable in respect of any tender offer by the Company
or any of its subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to
paragraph (6) of this Section 2.5 has been made,
(the amount of such cash distribution together with the amounts described in
clauses (A) and (B) above being referred to herein as the "Aggregate Cash
Distribution Amount") exceeds 10% of the product of (I) the current market price
per share (determined as provided in paragraph (9) of this Section 2.5) of the
Common Stock on the date for the determination of holders of shares of Common
Stock entitled to receive such distribution, times (II) the number of shares of
Common Stock outstanding on such date (the amount by which the Aggregate Cash
Distribution Amount exceeds 10% of the product of the amounts described in
clauses (I) and (II) above being referred to herein as the "Excess Amount"),
then, and in each such case, immediately after the close of business on such
date for determination, the Conversion Rate shall be increased in accordance
with the following formula:
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M - (EA/O)
AC = CR / ----------
M
Where:
AC = the adjusted Conversion Rate.
CR = the Conversion Rate in effect immediately prior to the close of business on
the date fixed for determination of the stockholders entitled to receive the
distribution.
M = the current market price per share (determined as provided in paragraph (9)
of this Section 2.5) of the Common Stock on the date fixed for determination of
the stockholders entitled to receive the distribution.
EA = the Excess Amount.
O = the number of shares of Common Stock outstanding on the date fixed for
determination of the stockholders entitled to receive the distribution.
(6) In case at any time after the date of the issuance of the Notes, a
tender offer made by the Company or any Subsidiary for all or any portion of the
Common Stock shall expire and such tender offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender offer) of Purchased Shares
(as defined below)) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) that combined
together with:
(A) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee),
as of the expiration of such tender offer, of consideration payable in
respect of any other tender offer, by the Company or any Subsidiary for
all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to this paragraph (6) has been made, and
(B) the aggregate amount of any distributions to all holders
of the Company's Common Stock made exclusively in cash within 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to paragraph (5) of this Section 2.5 has been
made,
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<PAGE> 12
exceeds 10% of the product of (I) the current market price per share of the
Common Stock (determined as provided in paragraph (9) of this Section 2.5) as of
the last time (the "Expiration Time") tenders could have been made pursuant to
such tender offer (as it may be amended), times (II) the number of shares of
Common Stock outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of business on the
day after the date of the Expiration Time, the Conversion Rate shall be reduced
in accordance with the following formula:
AC = CR / (M x O) - C
-----------
M x (O - TS)
Where:
AC = the adjusted Conversion Rate.
CR = the Conversion Rate immediately prior to close of business on the date of
the Expiration Time.
M = the current market price per share of the Common Stock (determined as
provided in paragraph (9) of this Section 2.5) on the date of the Expiration
Time.
O = the number of shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time.
C = the amount of cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Trustee) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below).
TS = the number of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum, being
referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger to
which Section 2.12 applies) shall be deemed to involve (a) a distribution of
such securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraph (4) of
this Section 2.5), and (b) a subdivision or combination, as the case may be, of
the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision becomes effective"
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<PAGE> 13
or "the day upon which such combination becomes effective", as the case may be,
and "the day upon which such subdivision or combination becomes effective"
within the meaning of paragraph (3) of this Section 2.5).
(8) In case at any time after the date of the issuance of the Notes,
the Company shall issue rights or warrants to all holders of the Common Stock
entitling the holders thereof to subscribe for or purchase shares of Common
Stock (either initially or under certain circumstances), which rights or
warrants (i) are deemed to be transferred with such shares of Common Stock, (ii)
are not exercisable and (iii) are also issued in respect of future issuances of
Common Stock, in each case in clauses (i) through (iii) until the occurrence of
a specified event or events ("Trigger Event"), such rights or warrants shall for
purposes of this Section 2.5 not be deemed issued or distributed until the
occurrence of the earliest Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment (if any
is required) to the Conversion Rate shall be made under this Section 2.5. If any
such rights or warrants, including any such existing rights or warrants
distributed prior to the date of this Indenture are subject to subsequent
events, upon the occurrence of each of which such rights or warrants shall
become exercisable to purchase different securities, evidences of indebtedness
or other assets, then the occurrence of each such event shall be deemed to be
such date of issuance and record date with respect to new rights or warrants
(and a termination or expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the event of any distribution
(or deemed distribution) of rights or warrants, or any Trigger Event with
respect thereto, that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under this Section 2.5 was
made, (1) in the case of any such rights or warrant which shall all have been
redeemed or repurchased without exercise by any holders thereof, the Conversion
Rate shall be readjusted upon such final redemption or repurchase to give effect
to such distribution or Trigger Event, as the case may be, as though it were a
cash distribution, equal to the per share redemption or repurchase price
received by a holder or holders of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights or warrants which shall have expired or been
terminated without exercise by any holders thereof, the Conversion Rate shall be
readjusted as if such rights and warrants had not been issued.
(9) For the purpose of any computation under paragraphs (2), (4), (5)
or (6) of this Section 2.5, the current market price per share of Common Stock
on any date shall be deemed to be the average of the daily Sale Prices (as
defined in Section 2.4 hereof) of the Common Stock for the five consecutive
Trading Days (as defined in Section 2.4 hereof) selected by the Company
commencing not more than ten Trading Days before, and ending not later than the
earlier of, the day in question and the day before the "ex" date with respect to
the issuance or distribution requiring such computation. For purposes of this
paragraph, the term "ex" date, when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.
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<PAGE> 14
(10) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(10)) would require an increase or decrease of at least 1.0% in such rate;
provided, however, that any adjustments which by reason of this paragraph (10)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment.
(11) The Company may make such increases in the Conversion Rate, in
addition to those required by this Section 2.5, as it considers to be advisable
in order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reasons. The Company shall have the
power to resolve any ambiguity or correct any error in this paragraph (11) and
its actions in so doing shall be final and conclusive.
(12) To the extent permitted by applicable law, the Company from time
to time may increase the Conversion Rate by any amount for any period of time if
the period is at least 20 days, the increase is irrevocable during such period,
and the Board of Directors shall have made a determination that such increase
would be in the best interests of the Company, which determination shall be
conclusive. Whenever the Conversion Rate is increased pursuant to the preceding
sentence, the Company shall give notice of the increase to the Holders in the
manner provided for in Section 10.2 of the Indenture at least 15 days prior to
the date the increased Conversion Rate takes effect, and such notice shall state
the increased Conversion Rate and the period during which it will be in effect.
(13) In the event that this Article 2 requires adjustments to the
Conversion Rate under more than one of Sections 2.5(1), 2.5(2), 2.5(4) or 2.5(5)
hereof, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 2.5(4), second, the provisions of
Section 2.5(5), third, the provisions of Section 2.5(1) and, fourth, the
provisions of Section 2.5(2). After an adjustment to the Conversion Rate under
this Article 2, any subsequent event requiring an adjustment under this Article
2 shall cause an adjustment to the Conversion Rate as so adjusted. Whenever
successive adjustments to the Conversion Rate are called for pursuant to this
Article 2, such adjustments shall be made to the provisions of Section 2.5(9)
hereof as may be necessary or appropriate to effectuate the intent of this
Article 2 and to avoid unjust or inequitable results as determined in good faith
by the Board of Directors.
2.6 NOTICE OF ADJUSTMENTS OF CONVERSION RATE.
Whenever the Conversion Rate is adjusted as herein provided: (a) the
Company shall compute the adjusted Conversion Rate in accordance with Section
2.5 hereof and shall prepare an Officers' Certificate, one of the signatories of
which shall be the Treasurer or Chief Financial Officer of the Company, setting
forth the adjusted Conversion Rate (certified by the Company's
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<PAGE> 15
independent public accountants or other certified public accountant) and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Trustee at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section 2.3
hereof; and (b) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be required, and as
soon as practicable after it is required, such notice shall be given by the
Company to the Trustee and all Holders in the manner provided for in Section
10.2 of the Indenture. The Trustee shall not be deemed to have notice of any
change in the Conversion Rate unless and until it receives the Officers'
Certificate provided for in the foregoing clause (a) setting forth such change.
2.7 NOTICE OF CERTAIN CORPORATE ACTION.
In case: (a) the Company shall declare a dividend or make any other
distribution that would require any adjustment pursuant to Section 2.5 hereof;
or (b) the Company shall authorize the granting to the holders of its Common
Stock of rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any other rights; or (c) of any reclassification of the
Common Stock of the Company, or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required or that is otherwise subject to Section 2.12 hereof, or of the
conveyance, lease, sale or transfer of all or substantially all of the assets of
the Company; or (d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; then the Company shall cause to be filed at each
office or agency maintained for the purpose of conversion of Securities pursuant
to Section 2.4 hereof, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the register for the Securities, at least 20
days prior to the applicable record or effective date hereinafter specified, a
notice (which notice shall also be sent by release to Reuters Economic Services
and Bloomberg Business News as set forth in Section 10.2 of the Indenture)
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined, or (y) the
date on which such reclassification, consolidation, merger, share exchange,
conveyance, lease, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, conveyance, lease,
sale, transfer, dissolution, liquidation or winding up. Neither the failure to
give such notice nor any defect therein shall affect the legality or validity of
the proceedings described in clauses (a) through (d) of this Section 2.7. If at
the time the Trustee shall not be the conversion agent, a copy of such notice
shall also forthwith be filed by the Company with the Trustee. The Company shall
cause to be filed at the Corporate Trust Office and each office or agency
maintained for the purpose of conversion of Notes pursuant to Section 2.4 of the
Indenture, and shall cause to be provided to all Holders in accordance with
Section 10.2 of the Indenture, notice of any tender offer by the Company or any
Subsidiary for all or any portion of the Common Stock at or about the time that
such notice of tender offer is provided to the public generally.
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<PAGE> 16
2.8 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Notes, the full number of shares of
Common Stock then issuable upon the conversion of all outstanding Notes.
2.9 TAXES ON CONVERSIONS.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Notes
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Note or Notes to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the Company the
amount of any such tax, or has established to the satisfaction of the Company
that such tax has been paid.
2.10 COVENANT AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and nonassessable
and, except as provided in Section 2.9 hereof, the Company will pay all taxes,
liens and charges with respect to the issue thereof.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the issuance and delivery of shares of Common Stock
upon conversion of Notes, if any, and will use its best efforts to list or cause
to have quoted all such shares of Common Stock on each United States national
securities exchange or over-the-counter or other domestic market on which the
Common Stock is then listed or quoted.
2.11 CANCELLATION OF CONVERTED SECURITIES.
All Notes delivered for conversion shall be delivered to the Trustee to
be canceled by or at the direction of the Trustee, which shall dispose of the
same as provided in Section 2.12 of the Indenture.
2.12 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.
In case of any merger, amalgamation, arrangement or consolidation of
the Company with or into any other Person, any merger of another Person into the
Company (other than a merger, amalgamation, arrangement or consolidation which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock of the Company) or any conveyance, lease,
sale or transfer of all or substantially all of the assets of the Company,
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<PAGE> 17
the Person formed by or resulting from such merger, amalgamation, arrangement or
consolidation or which acquires such assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture providing (in addition to
matters, if any, required by Section 5.1 of the Indenture) that the Holder of
each Note then outstanding shall have the right thereafter, during the period
such Note shall be convertible as specified in Section 2.1 hereof, to convert
such Note only into the kind and amount of securities, cash and other property
receivable upon such merger, amalgamation, arrangement, consolidation,
conveyance, lease, sale or transfer by a holder of the number of shares of
Common Stock of the Company into which such Note might have been converted
immediately prior to such merger, amalgamation, arrangement, consolidation,
conveyance, lease, sale or transfer, assuming such holder of Common Stock of the
Company (i) is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("Constituent Person"), or an Affiliate of
a Constituent Person and (ii) failed to exercise its rights of election, if any,
as to the kind or amount of securities, cash and other property receivable upon
such merger, amalgamation, arrangement, consolidation, conveyance, lease, sale
or transfer (provided that if the kind or amount of securities, cash and other
property receivable upon such merger, amalgamation, arrangement, consolidation,
conveyance, lease, sale or transfer is not the same for each share of Common
Stock of the Company held immediately prior to such merger, amalgamation,
arrangement, consolidation, conveyance, lease, sale or transfer by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-Electing Share"), then for the
purpose of this Section 2.12 the kind and amount of securities, cash and other
property receivable upon such merger, amalgamation, arrangement, consolidation,
conveyance, lease, sale or transfer by each non-electing share shall be deemed
to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2. The foregoing provisions of this
Section 2.12 shall similarly apply to successive mergers, amalgamations,
arrangements, consolidations, conveyances, leases, sales or transfers. The
Company shall cause notice of the execution of such supplemental indenture to be
given to each Holder in the manner provided for in Section 10.2 of the
Indenture.
2.13 RIGHT OF HOLDERS TO CONVERT.
The limitations set forth in Section 6.6 of the Indenture shall not
apply to the right of a Holder to bring a suit for the enforcement of such
Holder's right to convert Notes pursuant to this Article 2.
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<PAGE> 18
ARTICLE 3
REDEMPTION OF NOTES
Pursuant to Section 2.2(7) of the Indenture, so long as any of the
Notes are outstanding, the following provisions shall be applicable to the
Notes:
3.1 OPTIONAL REDEMPTION BY THE COMPANY.
At any time on or after September 18, 2002, and prior to the Stated
Maturity, the Notes may be redeemed at the option of the Company, in whole or in
part, upon notice as set forth in Section 3.3 of the Indenture, at the
redemption prices set forth in the Form of Note attached hereto as Exhibit A, in
each case, together with accrued interest to the Redemption Date.
3.2 APPLICABILITY OF ARTICLE.
Redemption of the Notes at the election of the Company or otherwise, as
permitted or required by any provision of the Notes or this First Supplemental
Indenture, shall be made in accordance with such provision, Article 3 of the
Indenture and this Article 3.
ARTICLE 4
REPURCHASE OF NOTES AT THE OPTION
OF THE HOLDERS UPON A CHANGE OF CONTROL
Pursuant to Section 2.2(8) of the Indenture, so long as any of the
Notes are outstanding, the following provisions shall be applicable to the
Notes:
4.1 REPURCHASE AT OPTION OF HOLDERS UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control (the date of
such occurrence, the "Change of Control Date"), the Company shall notify the
Holders of the Notes in writing of such occurrence in accordance with paragraph
(b) below, and shall make an offer to purchase (a "Change of Control Offer"),
and shall purchase, on a Business Day (a "Change of Control Purchase Date") not
more than 60 nor less than 30 days following the Change of Control Date all of
the then outstanding Notes validly tendered at a purchase price in cash equal to
100% of the principal amount thereof plus accrued interest, if any, to the
Change of Control Purchase Date (the "Change of Control Purchase Price").
(b) Notice of a Change of Control Offer (a "Change of Control
Notice") shall be sent, by first-class mail, postage prepaid, by the Company not
later than the 30th day after the Change of Control Date to the Holders of the
Notes at their last registered addresses with a copy
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<PAGE> 19
to the Trustee and the Paying Agent (and shall also be given by release made to
Reuters Economic Services and Bloomberg Business News as provided in Section
10.2 of the Indenture). The Change of Control Offer shall remain open from the
time of delivery of the Change of Control Notice for at least 20 Business Days
and until 5:00 p.m., New York City time, on the Business Day prior to the Change
of Control Purchase Date. The Change of Control Notice, which shall govern the
terms of the Change of Control Offer, shall include such disclosures as are
required by law and shall state:
(i) that the Change of Control Offer is being made
pursuant to this Section 4.1 and that any portion of the
principal amount of Notes that is equal to $1,000 or an
integral multiple thereof, validly tendered into the Change of
Control Offer and not withdrawn, will be accepted for payment;
(ii) the cash purchase price (including the amount of
accrued interest, if any) for each Note, the Change of Control
Purchase Date and the date on which the Change of Control
Offer expires;
(iii) that any Note not tendered for payment will
continue to accrue interest in accordance with the terms
thereof;
(iv) that, unless the Company shall default in the
payment of the Change of Control Purchase Price, any Note
accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control
Purchase Date;
(v) that Holders electing to have Notes purchased
pursuant to a Change of Control Offer will be required to
surrender their Notes to the Paying Agent at the address (in
the Borough of Manhattan, The City of New York) specified in
the Change of Control Notice prior to 5:00 p.m., New York City
time, on the Business Day prior to the Change of Control
Purchase Date and must complete any form of letter of
transmittal proposed by the Company and reasonably acceptable
to the Trustee and the Paying Agent;
(vi) that Holders of Notes will be entitled to
withdraw their election if the Paying Agent receives, not
later than 5:00 p.m., New York City time, on the Business Day
prior to the Change of Control Purchase Date, a facsimile
transmission or letter setting forth the name of the Holder,
the principal amount of Notes the Holder delivered for
purchase, the Note certificate number (if any) and a statement
that such Holder is withdrawing its election to have such
Notes purchased;
-16-
<PAGE> 20
(vii) that Holders whose Notes are purchased only in
part will be issued Notes equal in principal amount to the
unpurchased portion of the Notes surrendered;
(viii) the instructions that Holders must follow in
order to tender their Notes; and
(ix) information concerning the business of the
Company, the most recent annual and quarterly reports of the
Company filed with the SEC pursuant to the Exchange Act (or,
if the Company is not then permitted to file any such reports
with the SEC, the comparable reports prepared pursuant to
Section 4.2 of the Indenture), a description of material
developments in the Company's business, information with
respect to pro forma historical financial information after
giving effect to such Change of Control and such other
information concerning the circumstances and relevant facts
regarding such Change of Control Offer as would be material to
a Holder of Notes in connection with the decision of such
Holder as to whether or not it should tender Notes pursuant to
the Change of Control Offer.
(c) To exercise a repurchase right pursuant to this Section
4.1, a Holder shall deliver to the Trustee a written notice (a "Repurchase
Notice") of such Holder's exercise of such right, in accordance with the terms
and conditions set forth in the Change of Control Notice. Upon receipt by the
Trustee of a Repurchase Notice, the Holder of the Note in respect of which such
Repurchase Notice was given shall (unless such Repurchase Notice is withdrawn)
thereafter be entitled to receive solely the Change of Control Purchase Price
with respect to such Note. Notes in respect of which a Repurchase Notice has
been given by the Holder thereof may not be converted into shares of Common
Stock on or after the date of the delivery of such Repurchase Notice, unless
such Repurchase Notice has first been validly withdrawn as set forth in the
foregoing paragraph (b)(vi), unless the Company has defaulted in the payment of
the Change of Control Purchase Price.
(d) On the Change of Control Purchase Date, the Company shall
(i) accept for payment Notes or portions thereof validly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent (no later than
10:00 A.M. EST on the Change of Control Purchase Date) money, in immediately
available funds, sufficient to pay the purchase price of all Notes or portions
thereof so tendered and accepted and (iii) deliver to the Trustee the Notes so
accepted together with an Officers' Certificate setting forth the Notes or
portions thereof tendered to and accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to the Holders of Notes so accepted payment
in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in principal
amount to any unpurchased portion to the Notes surrendered; provided that each
such new Note shall be issued in an original principal amount in denominations
of $1,000 and integral multiples thereof. Any Notes not validly tendered and not
accepted by the Company shall be promptly mailed or delivered by the Company to
the Holder thereof. The Company will publicly announce
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<PAGE> 21
the results of the Change of Control Offer not later than the first Business Day
following the Change of Control Purchase Date.
(e) In the event that a Change of Control occurs and the
holders of Notes exercise their right to require the Company to purchase Notes,
if such purchase constitutes a "tender offer" for purposes of Rule 14e-1 under
the Exchange Act at that time, the Company will comply with the requirements of
Rule 14e-1 as then in effect with respect to such repurchase.
4.2 CERTAIN DEFINITIONS.
For purposes of this Article 4:
(1) the term "Change of Control" means the occurrence of any of the
following events:
(a) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), excluding Permitted
Holders, is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person or group
shall be deemed to have "beneficial ownership" of all securities that
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon the
happening of an event or otherwise), directly or indirectly, of more
than 35% of the total voting power of all Voting Stock of the Company;
provided, however, that the Permitted Holders (i) "beneficially own"
(as so defined) a lower percentage of such total voting power with
respect to the Voting Stock than such other person or "group" and (ii)
do not have the right or ability by voting power, contract or otherwise
to elect or designate for election a majority of the board of directors
of the Company;
(b) the Company consolidates with, or merges with or
into, another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any
person, or any person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is converted into or exchanged
for cash, securities or other property, other than any such transaction
where (i) the outstanding Voting Stock of the Company is converted into
or exchanged for Voting Stock (other than Disqualified Capital Stock)
of the surviving or transferee corporation, and (ii) immediately after
such transaction no "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), excluding Permitted
Holders, is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a person or group shall be deemed
to have "beneficial ownership" of all securities that such person or
group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening of an
event or
-18-
<PAGE> 22
otherwise), directly or indirectly, of more than 50% of the total
voting power of all Voting Stock of the surviving or transferee
corporation;
(c) at any time during any consecutive two-year
period, individuals who at the beginning of such period constituted the
board of directors of the Company (together with any new directors
whose election by such board of directors or whose nomination for
election by the stockholders of the Company was approved by a vote of
at least 66-2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of the
Company then in office; or
(d) the Company is liquidated or dissolved or adopts
a plan of liquidation;
(2) the term "Permitted Holders" means:
(a) any of Charles Switzer, Charles W. Lamar, III,
Kevin P. Reilly, Sr., members of their immediate families or
any lineal descendant of any of those persons and the
immediate families of any lineal descendant of those persons;
(b) any trust, to the extent it is for the benefit of
any of the persons listed under (a) above; or
(c) any person, entity or group of persons controlled
by any of the persons listed under (a) or (b) above; and
(3) the term "Voting Stock" means, with respect to any Person,
securities of any class or classes of Capital Stock in such Person entitling the
holders thereof to vote under ordinary circumstances in the election of members
of the board of directors or other governing body of such Person.
(4) the term "Disqualified Capital Stock" means any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the Stated Maturity of the
Notes, for cash or securities constituting Indebtedness.
-19-
<PAGE> 23
ARTICLE 5
EVENTS OF DEFAULT
5.1 ADDITIONAL EVENTS OF DEFAULT.
Pursuant to Sections 2.2 (18) and 6.1(8) of the Indenture, so long as
any of the Notes are outstanding, the following shall be an Event of Default
with respect to the Notes, in addition to the Events of Default contained in
Section 6.1 of the Indenture:
(1) The Company fails to give a Change of Control Notice in accordance
with Section 4.1(b) hereof, or defaults in the payment of the Change of Control
Purchase Price.
(2) The Company fails to convert any portion of the principal amount of
a Note following the exercise by the Holder of such Note of the right to convert
such Note into Common Stock pursuant to and in accordance with Article 2 hereof.
ARTICLE 6
AMENDMENTS, SUPPLEMENTS AND WAIVERS
6.1 WITH CONSENT OF HOLDERS
Pursuant to Sections 2.2 (and subject to Section 8.4) of the Indenture,
so long as any of the Notes are outstanding, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.4 of the Indenture, may not (in addition to the events
described in paragraphs (1) through (9) of Section 8.2(a) of the Indenture):
(1) make any change that impairs or adversely affects the right to
convert any Security into Common Stock;
(2) impair or adversely affect the right of a Holder to institute suit
for the enforcement of any payment with respect to, or conversion of, the Notes;
(3) make any change that adversely affects the right to require the
Company to repurchase the Notes upon a Change of Control pursuant to and in
accordance with Article 4 hereof; or
(4) reduce or impair or adversely affect the right of a Holder to
receive the redemption prices set forth in Section 3.1 hereof or the Change of
Control Purchase Price.
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<PAGE> 24
ARTICLE 7
MISCELLANEOUS
7.1 APPLICATION OF FIRST SUPPLEMENTAL INDENTURE.
Each and every term and condition contained in the First Supplemental
Indenture that modifies, amends or supplements the terms and conditions of the
Indenture shall apply only to the Notes created hereby and not to any future
series of Notes established under the Indenture. Except as specifically amended
and supplemented by, or to the extent inconsistent with, this First Supplemental
Indenture, the Indenture shall remain in full force and effect and is hereby
ratified and confirmed.
7.2 EFFECTIVE DATE.
This First Supplemental Indenture shall be effective as of the date
first above written and upon the execution and delivery hereof by each of the
parties hereto.
7.3 COUNTERPARTS.
This First Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
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<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers hereunto
duly authorized, all as of the day and year first above written.
LAMAR ADVERTISING COMPANY
By: /s/ Kevin P. Reilly
-----------------------------------
Name: Kevin P. Reilly
Title: CEO
LAMAR ADVERTISING COMPANY
By: /s/ KEITH A. ISTRE
-----------------------------------
Name: Keith A. Istre
Title: CFO
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ JACQUELINE BONHOMME
-----------------------------------
Name: Jacqueline A. Bonhomme
Title: Assistant Vice President
-22-
<PAGE> 26
STATE OF LOUISIANA )
) ss:
PARISH OF EAST BATON )
ROUGE
On the 10th day of August, 1999, before me personally came
Kevin P. Reilly, Jr., to me known, who, being by me duly sworn, did
depose and say that he is the CEO of Lamar Advertising Company,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name thereto
by authority of the Board of Directors.
/s/ Jodie A. Moscana
---------------------------------
JODIE A. MOSCANA, Notary
My Commission Expires at Death
STATE OF LOUISIANA )
) ss:
PARISH OF EAST BATON )
ROUGE
On the 10th day of August, 1999, before me personally came Keith A.
Istre, to me known, who, being by me duly sworn, did depose and say that he is
the CFO of Lamar Advertising Company, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by authority of the Board of
Directors.
/s/ Jodie A. Moscana
---------------------------------
JODIE A. MOSCANA, Notary
My Commission Expires at Death
-23-
<PAGE> 27
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 10th day of August, 1999, before me personally came Jacqueline
A. Bonhomme, to me known, who, being by me duly sworn, did depose and say that
he is the Assistant Vice President of State Street, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by authority of the Board of
Directors.
/s/ Kara Krowlikowski
---------------------------------
Kara A. Krowlikowski
Notary Public, State of New York
No. 01KR6013111
Qualified in New York County
Commission Expires Sept. 8, 2000
-24-
<PAGE> 28
Exhibit A
[FORM OF FACE OF NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
LAMAR ADVERTISING COMPANY
5 1/4% Convertible Note due 2006
No. $
---------- -------------
CUSIP No.
------------------
LAMAR ADVERTISING COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter defined), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of $__________ (________________ Dollars) on September 15, 2006,
and to pay interest thereon from August 10, 1999 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on March 15 and September 15 in each year, commencing September
15, 1999, at the rate of 5 1/4% per annum, until the principal hereof is paid or
made available for payment.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note is registered at the close of business on the
regular record date for such interest, which shall be the 1st of March or 1st of
September, as the case may be, next preceding such Interest Payment Date or, if
such record date is not a Business Day, at the close of business of the
immediately succeeding Business Day. A "Business Day" shall mean any day other
than a Saturday, Sunday, a federally recognized holiday or a day on which
banking institutions are not authorized or required
<PAGE> 29
by law or executive order to be open in the State of New York or the
Commonwealth of Massachusetts. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such regular
record date and shall be paid to the Person in whose name this Note is
registered at the close of business on a subsequent special record date, which
date shall be the fifteenth day next preceding the date fixed by the Company for
the payment of defaulted interest or the next succeeding Business Day if such
date is not a Business Day. At least 15 days before the special record date, the
Company shall mail or cause to be mailed to each Securityholder, with a copy to
the Trustee, a notice that states the special record date, the payment date, and
the amount of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
Payments of principal of and interest on this Note and any additional
payments due hereunder shall be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
State of New York, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the register for the Notes maintained by the Registrar.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or an authenticating agent
appointed by the Company, by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
-2-
<PAGE> 30
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and delivered under its corporate seal.
Dated:
LAMAR ADVERTISING COMPANY
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
This is one of the Securities of the Series designated therein referred
to in the within-mentioned Indenture.
Dated:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:
--------------------------------
Authorized Signatory
-3-
<PAGE> 31
[FORM OF REVERSE OF NOTE]
This Note is one of a duly authorized issue of securities of the
Company (herein called the "Notes"), issued and to be issued in one or more
series under an Indenture, dated as of August 10, 1999 (as supplemented by a
First Supplemental Indenture, dated as of August 10, 1999, the "Indenture"),
between the Company and State Street Bank and Trust Company, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof as "5 1/4% Convertible Notes due
2006", limited in aggregate principal amount to $287,500,000. All terms used in
this Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
The Notes are subject to redemption, at the election of the Company, at
any time on or after September 18, 2002, as a whole or in part, upon not less
than 30 nor more than 60 days' notice to the Holders (in the manner provided for
in the Indenture) prior to the Redemption Date at the following redemption
prices (expressed as percentages of the principal amount):
<TABLE>
<CAPTION>
Redemption Date: Redemption Price:
---------------- -----------------
<S> <C>
from 9/18/02 until 9/14/03 103.00%
from 9/15/03 until 9/14/04 102.25%
from 9/15/04 until 9/14/05 101.50%
from 9/15/05 until 9/14/06 100.75%
on September 15, 2006 100.00%
</TABLE>
together in each case of any such redemption with accrued interest to the
Redemption Date; provided, however, that interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Notes, of record at the close of business on the relevant record dates
referred to on the face hereof, all as provided in the Indenture.
No sinking fund is provided for the Notes.
Subject to and upon compliance with the provisions of the Indenture,
any Note (or any portion of the principal amount thereof which is $1,000 or an
integral multiple of $1,000) which has not previously been redeemed or
repurchased, is convertible at the option of the Holder thereof, at any time
following the original issue date of the Notes and on or before the close of
business on the Business Day immediately preceding the Stated Maturity into
fully paid and nonassessable shares of Class A common stock of the Company,
$0.001 par value per share (the "Common Stock"), at an initial conversion rate
(calculated to the nearest 1/100 of a share) of _______ shares of Common Stock
for each $1,000 principal amount of Note, or at the current
-4-
<PAGE> 32
adjusted conversion rate if an adjustment has been made as provided in the
Indenture. In case the Notes or a portion thereof are called for redemption,
such conversion right in respect of the Notes or portion so called shall expire
at the close of business on the Business Day immediately preceding the
Redemption Date, unless the Company defaults in making the payment due upon
redemption. A Note or portion thereof in respect of which the Holder has
delivered a Repurchase Notice may be converted only if such notice is withdrawn
in accordance with the terms of the Indenture, unless the Company has defaulted
in the payment of the Change of Control Purchase Price. To convert this Note the
Holder must (1) surrender this Note, duly endorsed or assigned to the Company or
in blank, provided that if such surrender shall be made during the period from
the close of business on any regular record date immediately preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
(except in the case of Notes or portion thereof which have been called for
redemption or in respect of which a Repurchase Notice delivered by the Holder
has not been withdrawn, the conversion rights with respect to which would
terminate during the period between such record date and the close of business
on such Interest Payment Date), it shall also be accompanied by payment in
immediately available funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of the Note being surrendered for conversion, and (2) complete
and manually sign the conversion notice. No payment or adjustment shall be made
upon any conversion on account of any interest accrued hereon from the Interest
Payment Date immediately preceding the day of conversion, or on account of any
dividends on the Common Stock issued on conversion hereof. In addition, the
Holders shall not be entitled to receive any dividends payable to holders of
Common Stock as of any record date before the close of business on the
conversion date. No fractional shares will be issued on conversion, but instead
of any fractional interest (calculated to the nearest 1/100th of a share) the
Company shall pay a cash adjustment as provided in the Indenture.
The Indenture provides that in the event of any merger, amalgamation,
arrangement or consolidation to which the Company is a party (other than one
that does not result in any reclassification, conversion, exchange or
cancellation of the Common Stock) or any conveyance, lease, sale or transfer of
all or substantially all of the assets of the Company, the Indenture shall be
amended, without the consent of any Holders of Notes, so that this Note, if then
outstanding, will be convertible thereafter, during the period this Note shall
be convertible as specified above, only into the kind and amount of securities,
cash and other property receivable upon such merger, amalgamation, arrangement,
consolidation, conveyance, lease, sale or transfer by a holder of the number of
shares of Common Stock of the Company into which this Note could have been
converted immediately prior to such merger, amalgamation, arrangement,
consolidation, conveyance, lease, sale or transfer (assuming such holder of
Common Stock is not a Constituent Person or an Affiliate of a Constituent
Person, failed to exercise any rights of election and received per share the
kind and amount received per share by a plurality of Non-Electing Shares). No
adjustment in the Conversion Rate shall be made until such adjustment would
require an increase or decrease of at least one percent of such rate, provided
that any adjustment that would otherwise be made will be carried forward and
taken into account in the computation of any subsequent adjustment.
-5-
<PAGE> 33
Subject to and upon compliance with the provisions of the Indenture,
upon the occurrence of a Change of Control, the Company shall notify the Holders
of the Notes of such occurrence by delivering a Change of Control Notice, shall
make a Change of Control Offer and shall purchase, on a Business Day not more
than 60 nor less than 30 days following the Change of Control Date (a "Change of
Control Purchase Date") all of the then outstanding Notes validly tendered at a
purchase price in cash equal to 100% of the principal amount thereof plus
accrued interest, if any, to the Change of Control Purchase Date (the "Change of
Control Purchase Price"). The Change of Control Offer shall remain open from the
time of delivery of the Change of Control Notice for at least 20 Business Days
and until 5:00 p.m., New York City time, on the Business Day prior to the Change
of Control Purchase Date. To exercise its repurchase right, a Holder shall
deliver to the Trustee a Repurchase Notice, in accordance with the terms and
conditions set forth in the Change of Control Notice. Upon receipt by the
Trustee of a Repurchase Notice, the Holder of the Note in respect of which such
Repurchase Notice was given shall (unless such Repurchase Notice is withdrawn)
thereafter be entitled to receive solely the Change of Control Purchase Price
with respect to such Note and, unless the Company has defaulted in the payment
of the Change of Control Purchase Price, any Note accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest after the Change
of Control Purchase Date. Holders of Notes will be entitled to withdraw their
election if the Paying Agent receives notice of such withdrawal not later than
5:00 p.m., New York City time, on the Business Day prior to the Change of
Control Purchase Date. Notes in respect of which a Repurchase Notice has been
given by the Holder thereof may not be converted into shares of Common Stock on
or after the date of the delivery of such Repurchase Notice, unless such
Repurchase Notice has first been validly withdrawn in the manner provided for in
the Indenture, unless the Company has defaulted in the payment of the Change of
Control Purchase Price. Holders electing to have Notes purchased pursuant to a
Change of Control Offer will be required to surrender their Notes to the Paying
Agent at the address (in the Borough of Manhattan, The City of New York)
specified in the Change of Control Notice prior to 5:00 p.m., New York City
time, on the Business Day prior to the Change of Control Purchase Date and must
complete any form of letter of transmittal proposed by the Company and
reasonably acceptable to the Trustee and the Paying Agent. Any portion of the
principal amount of Notes that is equal to $1,000 or an integral multiple
thereof, validly tendered into the Change of Control Offer and not withdrawn,
will be accepted for payment.
In the event of redemption, repurchase or conversion of this Note in
part only, a new Note or Notes for the unredeemed, unrepurchased or unconverted
portion hereof will be issued in the name of the Holder hereof upon the
cancellation thereof.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of all the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of
-6-
<PAGE> 34
the Notes under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than a majority in principal amount of
the Notes at the time outstanding. The Indenture also contains provisions
permitting the Holders of no less than a majority in principal amount of the
Notes at the time outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
in exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note or such other Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default, the Holders of not less
than 25% in principal amount of the outstanding Notes shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
the outstanding Notes a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or interest hereon on or after the respective due dates
expressed herein or for the enforcement of the right to convert this Note as
provided in the Indenture.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, places and rate, and in the coin or currency, herein prescribed or to
convert this Note as provided in the Indenture.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable on the security register
maintained by the Registrar, upon surrender of this Note for registration of
transfer at the office or agency of the Company in any place where the principal
of and any interest on this Note are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing, and thereupon one or more new Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees by the Registrar.
-7-
<PAGE> 35
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to recover
any tax or other governmental charge payable in connection therewith.
Prior to due presentation of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name Note is registered, as the owner thereof for all
purposes, whether or not such Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
A director, officer, employee, stockholder or incorporator, as such, of
the Company shall not have any liability for any obligations of the Company
under the Notes or the Indenture. Each Holder by accepting a Note waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
-8-
<PAGE> 36
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties (Cust)
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - Uniform Gifts to Minors Act
</TABLE>
Additional abbreviations may also be used though not in the above list.
-9-
<PAGE> 37
ELECTION OF HOLDER TO REQUIRE REPURCHASE
UPON A CHANGE OF CONTROL
(1) Pursuant to Article 4 of the First Supplemental Indenture dated
August ___, 1999 to the Indenture, the undersigned hereby acknowledges receipt
of a notice from the Company of a Change of Control Offer and requests and
instructs the Company to repurchase this Note, or the portion hereof (which is
$1,000 in principal amount or an integral multiple of $1,000) below designated,
as of the Change of Control Purchase Date pursuant to the terms and conditions
specified in such Article 4.
(2) The undersigned hereby directs the Trustee or the Company to pay to
the undersigned an amount in cash equal to 100% of the principal amount to be
repurchased (as set forth below), plus interest accrued to the Change of Control
Purchase Date, as provided in the Indenture.
(3) The undersigned elects (check one):
( ) to withdraw this notice with respect to the following Notes:
Principal amount:
Certificate numbers:
( ) to receive cash in respect of the entire Change of Control
Purchase Price with respect to the Notes that are subject to
this notice.
Notice: If the Holder fails to make an election, the Holder shall be deemed to
have elected to receive cash in respect of the entire Change of Control Purchase
Price for all Notes subject to this notice.
Dated
--------------- --------------------------------
--------------------------------
Signature(s)
Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an
approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange
Act of 1934.
---------------------------------
Signature Guaranteed
Security certificate number:
-10-
<PAGE> 38
Principal amount to be repurchased
(if less than all): $
------------
Remaining principal amount
after repurchase:
$
--------------
----------------------------------
Social Security or Other Taxpayer
Identification Number
-11-
<PAGE> 39
CONVERSION NOTICE
The undersigned Holder of this Note hereby irrevocably exercises the
option to convert this Note, or any portion of the principal amount hereof
(which is $1,000 in principal amount or an integral multiple of $1,000), below
designated, into shares of Class A common stock of Lamar Advertising Company,
$0.001 par value per share (the "Common Stock"), in accordance with the terms of
the Indenture referred to in this Note, and directs that such shares, together
with a check in payment for any fractional share and any Notes representing any
unconverted principal amount hereof, be issued and delivered to and be
registered in the name of the undersigned unless a different name has been
indicated below. If shares of Common Stock or any portion of this Note not
converted are to be registered in the name of a Person other than the
undersigned, (a) the undersigned will pay all transfer taxes payable with
respect thereto and (b) signature(s) must be guaranteed by an Eligible Guarantor
Institution with membership in an approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange Act of 1934.
Dated
--------------- --------------------------------
--------------------------------
Signature(s)
If shares or Notes are to be registered in the name of a Person other than the
Holder, please print such Person's name and address:
- ----------------------------------
Name
- ----------------------------------
Address
- ----------------------------------
Social Security or Other Taxpayer
Identification Number
- ----------------------------------
[Signature Guaranteed]
-12-
<PAGE> 40
If only a portion of the Notes is to be converted, please indicate:
1. Principal amount to be converted:
$ ------------
2. Principal amount and denomination of Notes representing unconverted
principal amount to be issued:
$ ------------
-13-
<PAGE> 41
FORM OF ASSIGNMENT
For value received ________________ hereby sell(s), assign(s) and
transfer(s) unto ________________ [also insert social security or other
identifying number of assignee] the within Note, and hereby irrevocably
constitutes and appoints ____________________ as attorney to transfer the said
Note on the books of the Company, with full power of substitution in the
premises.
Dated:
----------------------------
-----------------------------------
-----------------------------------
Signature(s)
Signature(s) must be guaranteed by
an Eligible Guarantor Institution
with membership in an approved
signature guarantee program
pursuant to Rule 17Ad-15 under the
Securities Exchange Act of 1934.
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 4,249
<SECURITIES> 0
<RECEIVABLES> 49,815
<ALLOWANCES> 3,222
<INVENTORY> 0
<CURRENT-ASSETS> 66,490
<PP&E> 723,828
<DEPRECIATION> 177,700
<TOTAL-ASSETS> 1,410,934
<CURRENT-LIABILITIES> 42,534
<BONDS> 885,306
0
3,649
<COMMON> 62
<OTHER-SE> 451,419
<TOTAL-LIABILITY-AND-EQUITY> 1,410,934
<SALES> 183,286
<TOTAL-REVENUES> 183,575
<CGS> 0
<TOTAL-COSTS> 60,245
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 500
<INTEREST-EXPENSE> 36,379
<INCOME-PRETAX> (16,683)
<INCOME-TAX> (1,766)
<INCOME-CONTINUING> (14,917)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (767)
<NET-INCOME> (15,684)
<EPS-BASIC> (.26)
<EPS-DILUTED> (.26)
</TABLE>
<PAGE> 1
EXHIBIT 99.1
FACTORS AFFECTING FUTURE OPERATING RESULTS
LAMAR MEDIA CORP.'S DEBT AGREEMENTS CONTAIN COVENANTS AND RESTRICTIONS THAT
CREATE THE POTENTIAL FOR DEFAULTS
The terms of Lamar Media's bank credit facility and the indentures
relating to Lamar Media's outstanding notes restrict, among other things, Lamar
Media's ability to:
o make distributions to Lamar Advertising Company;
o dispose of assets;
o incur or repay debt;
o create liens; and
o make investments.
Under Lamar Media's bank credit facility we must maintain specified
financial ratios and levels including:
o interest coverage;
o fixed charge coverage;
o senior debt ratios; and
o total debt ratios.
If we fail to comply with these tests, the lenders have the right to cause
all amounts outstanding under the bank credit facility to become immediately
due. If this were to occur and the lenders decide to exercise their right to
accelerate the indebtedness, it would create serious financial problems for us.
Our ability to comply with these restrictions, and any similar restrictions in
future agreements, depends on our operating performance. Because our
performance is subject to prevailing economic, financial and business
conditions and other factors that are beyond our control, we may be unable to
comply with these restrictions in the future.
BECAUSE LAMAR ADVERTISING AND ITS SUBSIDIARIES HAVE SIGNIFICANT FIXED PAYMENTS
ON THEIR DEBT, WE MAY LACK SUFFICIENT CASH FLOW TO OPERATE OUR BUSINESS AS WE
HAVE IN THE PAST AND MAY NEED TO BORROW MONEY IN THE FUTURE TO MAKE THESE
PAYMENTS AND OPERATE OUR BUSINESS
Lamar Advertising and its subsidiaries have borrowed substantial amounts
of money in the past and may borrow more money in the future. Lamar Advertising
recently completed an offering of $250 million of convertible notes. At
June 30, 1999, Lamar Media had approximately $894 million of debt outstanding
consisting of approximately $307 million in bank debt, $558 million in various
series of senior subordinated notes and $29 million in various other short-term
and long-term debt of Lamar Media.
If we complete the pending Chancellor Outdoor acquisition, we will incur
additional debt. Assuming that the Chancellor Outdoor acquisition had taken
place prior to June 30, 1999, at that time Lamar Media would have had
approximately $1.6 billion of debt outstanding, consisting of approximately $1
billion in bank debt, $558 million in various series of senior subordinated
notes and $29 million in various other short-term and long-term debt of Lamar
Media. This debt would have represented approximately 55% of our total
capitalization after giving effect to the pending Chancellor Outdoor
acquisition, the Lamar Advertising convertible notes offering and the
application of the net proceeds from the convertible notes offering.
A large part of our cash flow from operations must be used to make
principal and interest payments on our debt. If our operations make less money
in the future, we may need to borrow to make these payments. In addition, we
finance most of our acquisitions through borrowings under Lamar Media's
existing bank credit facility which presently has a total committed amount of
$500 million in term and revolving credit loans. As of June 30, 1999, we only
had approximately $192 million available to borrow under this bank credit
facility. Since our borrowing capacity under Lamar Media's bank credit facility
is limited, we may not be able to continue to finance future acquisitions at
our historical rate with borrowings under this bank credit facility. Lamar
Media has obtained a commitment from its lenders to replace its existing bank
credit facility with a new bank credit facility with a maximum borrowing
<PAGE> 2
capacity of up to $1 billion. We cannot guarantee that Lamar Media will enter
into the new bank credit facility for the full commitment amount or at all. We
may need to borrow additional amounts or seek other sources of financing to
fund future acquisitions. We cannot guarantee that such additional financing
will be available or available on favorable terms. We also may need the consent
of the banks under Lamar Media's bank credit facility, or the holders of other
indebtedness, to borrow additional money.
THE BUSINESS OF LAMAR ADVERTISING AND ITS SUBSIDIARIES COULD BE HURT BY CHANGES
IN ECONOMIC AND ADVERTISING TRENDS
We sell advertising space to generate revenues. A decrease in demand for
advertising space could adversely affect our business. General economic
conditions and trends in the advertising industry affect the amount of
advertising space purchased. A reduction in money spent on our displays could
result from:
o a general decline in economic conditions;
o a decline in economic conditions in particular markets where we
conduct business;
o a reallocation of advertising expenditures to other available media by
significant users of our displays; or
o a decline in the amount spent on advertising in general.
THE OPERATIONS OF LAMAR ADVERTISING AND ITS SUBSIDIARIES ARE IMPACTED BY THE
REGULATION OF OUTDOOR ADVERTISING
Our operations are significantly impacted by federal, state and local
government regulation of the outdoor advertising business.
The federal government conditions federal highway assistance on states
imposing location restrictions on the placement of billboards on primary and
interstate highways. Federal laws also impose size, spacing and other
limitations on billboards. Some states have adopted standards more restrictive
than the federal requirements. Local governments generally control billboards
as part of their zoning regulations. Some local governments have enacted
ordinances which require removal of billboards by a future date. Others
prohibit the construction of new billboards and the reconstruction of
significantly damaged billboards, or allow new construction only to replace
existing structures.
Local laws which mandate removal of billboards at a future date often do
not provide for payment to the owner for the loss of structures that are
required to be removed. Certain federal and state laws require payment of
compensation in such circumstances. Local laws that require the removal of a
billboard without compensation have been challenged in state and federal courts
with conflicting results. Accordingly, we may not be successful in negotiating
acceptable arrangements when our displays have been subject to removal under
these types of local laws.
Additional regulations may be imposed on outdoor advertising in the
future. Legislation regulating the content of billboard advertisements has been
introduced in Congress from time to time in the past. Additional regulations or
changes in the current laws regulating and affecting outdoor advertising at the
federal, state or local level may have a material adverse effect on our results
of operations.
THE CONTINUED GROWTH OF LAMAR ADVERTISING AND ITS SUBSIDIARIES THROUGH
ACQUISITIONS MAY BECOME MORE DIFFICULT AND INVOLVES COSTS AND UNCERTAINTIES
We have substantially increased our inventory of advertising displays
through acquisitions. Our operating strategy involves making purchases in
markets where we currently compete as well as in new markets. However, the
following factors may affect our ability to continue to pursue this strategy
effectively.
o The outdoor advertising market has been consolidating, and this may
adversely affect our ability to find suitable candidates for purchase.
o We are also likely to face increased competition from other outdoor
advertising companies for the companies or assets we wish to purchase.
Increased competition may lead to higher prices for outdoor
advertising companies and assets and decrease those we are able to
purchase.
o We do not know if we will have sufficient capital resources to make
purchases, obtain any required consents from our lenders, or
find acquisition opportunities with acceptable terms.
2
<PAGE> 3
o From January 1, 1997 to July 22, 1999, we completed 96 transactions
involving the purchase of complementary outdoor advertising assets,
the most significant of which was the acquisition on October 1, 1998
of Outdoor Communications, Inc. for $385 million. We currently have
pending an acquisition of Chancellor Outdoor for a purchase price
consisting of $700 million in cash and a fixed amount of 26,227,273
shares of Class A common stock of Lamar Advertising, which if
completed, will be by far our largest acquisition to date. We must
integrate these acquired assets and businesses into our existing
operations. This process of integration may result in unforeseen
difficulties and could require significant time and attention from our
management that would otherwise be directed at developing our existing
business. Further, we cannot be certain that the benefits and cost
savings that we anticipate from these purchases will develop.
IF WE COMPLETE THE CHANCELLOR OUTDOOR ACQUISITION, WE WILL SIGNIFICANTLY EXPAND
OUR OPERATIONS IN MAJOR MARKETS WHERE WE CANNOT BE SURE OUR BUSINESS STRATEGY
WILL CONTINUE TO BE SUCCESSFUL
If we complete our acquisition of Chancellor Outdoor, we will
significantly expand our operations in major markets. Because we have
historically focused on middle markets and have not had substantial operations
in major markets to date, we cannot guarantee that we will be able to replicate
the success that we have achieved with our business strategy in middle markets.
Achieving our goals in major markets will depend to a great extent on our
ability to attract and retain national advertising customers. Our success to
date has been built in large measure on our ability to attract and retain local
advertising customers. Approximately 81% of our net advertising revenues for
calendar 1998 derived from local advertising. We cannot be sure that the
strategies that have worked well with local advertising customers will work
with national advertisers.
In addition, expanding our operations in major markets will put us in
increased competition with larger competitors with more diversified media
operations who may have a more established market presence and greater
financial resources then we do. We may also face more intense competition from
other forms of outdoor advertising and other media in major markets than we do
in middle markets.
IF WE DO NOT COMPLETE THE CHANCELLOR OUTDOOR ACQUISITION, WE MAY NOT BE ABLE TO
ACHIEVE THE GROWTH THAT WE ANTICIPATE IF THE ACQUISITION IS COMPLETED
For the Chancellor Outdoor acquisition to be completed, numerous closing
conditions must be satisfied. Many of these closing conditions, including
clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and
financing contingencies, are beyond our control. Accordingly, we may not be
able to complete the acquisition. Even if we complete the Chancellor Outdoor
acquisition, the projected growth we anticipate could be reduced if we were
required to divest significant assets to obtain clearance under the HSR Act.
The Chancellor Outdoor acquisition offers projected benefits that we may
not be able to achieve through other means. As consolidation continues to
accelerate in the outdoor advertising industry, there are fewer opportunities
to acquire outdoor advertising assets on the scale of the Chancellor Outdoor
acquisition. Consequently, we may not be able to acquire the quantity or
quality of outdoor advertising assets afforded by the Chancellor Outdoor
acquisition in a series of smaller acquisitions.
THE BAN ON TOBACCO ADVERTISING HAS ELIMINATED A TRADITIONALLY SIGNIFICANT
SOURCE OF OUR REVENUES AND WE MAY NOT BE ABLE TO CONTINUE TO REPLACE THESE LOST
REVENUES THROUGH OTHER SOURCES
We have removed all of our outdoor advertising of tobacco products in
connection with settlements the states reached with the U.S. tobacco companies.
The revenues from tobacco advertising as a percentage of billboard advertising
net revenues was 9% in 1997 and 8% in 1998.
The ban on outdoor advertising of tobacco products in the settlement
increased our available inventory. To date, we have been successful in
replacing the tobacco advertising removed with substitute advertising at
comparable rates. We cannot be sure, however, that we will continue to be able
to do so in the future. If we are unable to continue to replace tobacco
advertising, the resulting increase in available inventory could cause us to
reduce our rates or limit our ability to raise rates. In addition, we cannot
guarantee that substitute
3
<PAGE> 4
advertisers will pay rates as favorable to us as those paid by tobacco
advertisers.
WE FACE COMPETITION FROM LARGER AND MORE DIVERSIFIED OUTDOOR ADVERTISERS AND
OTHER FORMS OF ADVERTISING THAT COULD HURT OUR PERFORMANCE
We cannot be sure that in the future we will compete successfully against
the current and future sources of outdoor advertising competition and
competition from other media. The competitive pressure that we face could
adversely affect our profitability or financial performance. Even though we
would be the largest company focusing exclusively on outdoor advertising if we
complete our pending acquisition of Chancellor Outdoor, we face competition
from larger companies with more diversified operations which also include radio
and other broadcast media. We also face competition from other forms of media,
including television, radio, newspapers and direct mail advertising. We must
also compete with an increasing variety of other out-of-home advertising media
that include advertising displays in shopping centers, malls, airports,
stadiums, movie theaters and supermarkets, and on taxis, trains and buses.
In our logo sign business, we currently face competition for state-awarded
service contracts from two other logo sign providers as well as local
companies. Initially, we compete for state-awarded service contracts as they
are privatized. Because these contracts expire after a limited time, we must
compete to keep our existing contracts each time they are up for renewal.
IF OUR CONTINGENCY PLANS RELATING TO HURRICANES FAIL, THE RESULTING LOSSES
COULD HURT OUR BUSINESS
Although we have developed contingency plans designed to deal with the
threat posed to our advertising structures by hurricanes, we cannot guarantee
that these plans will work. If these plans fail, significant losses could
result.
A significant portion of our structures is located in the Mid-Atlantic and
Gulf Coast regions of the United States. These areas are highly susceptible to
hurricanes during the late summer and early fall. In the past, we have incurred
significant losses due to severe storms. These losses resulted from structural
damage, overtime compensation, loss of billboards that could not be replaced
under applicable laws and reduced occupancy because billboards were out of
service.
We have determined that it is not economical to obtain insurance against
losses from hurricanes and other storms. Instead, we have developed contingency
plans to deal with the threat of hurricanes. For example, we attempt to remove
the advertising faces on billboards at the onset of a storm, when possible,
which permits the structures to better withstand high winds during a storm. We
then replace these advertising faces after the storm has passed. However, these
plans may not be effective in the future and, if they are not, significant
losses may result.
OUR LOGO SIGN CONTRACTS ARE SUBJECT TO STATE AWARD AND RENEWAL
A growing portion of our revenues and operating income come from our
state-awarded service contracts for logo signs. We cannot predict what
remaining states, if any, will start logo sign programs or convert state-run
logo sign programs to privately operated programs. We compete with many other
parties for new state-awarded service contracts for logo signs. Even when we
are awarded a contract, the award may be challenged under state contract
bidding requirements. If an award is challenged, we may incur delays and
litigation costs.
Generally, state-awarded logo sign contracts have a term, including
renewal options, of ten to twenty years. States may terminate a contract early,
but in most cases must pay compensation to the logo sign provider for early
termination. Typically, at the end of the term of the contract, ownership of
the structures is transferred to the state without compensation to the logo
sign provider. Of our current logo sign contracts, one is due to terminate in
September 1999 and three are subject to renewal in May, June and October 2000.
We cannot guarantee that we will be able to obtain new logo sign contracts or
renew our existing contracts. In addition, after we receive a new state-awarded
logo contract, we generally incur significant start-up costs. We cannot
guarantee that we will continue to have access to the capital necessary to
finance those costs.
OUR OPERATIONS COULD BE AFFECTED BY THE LOSS OF KEY EXECUTIVES
Our success depends to a significant extent upon the continued services of
our executive officers and other key management and sales personnel. Kevin P.
Reilly, Jr., Lamar Advertising's Chief Executive Officer, our six regional
managers and the manager of our logo sign business, in particular, are
essential to our continued success. Although we have designed
4
<PAGE> 5
our incentive and compensation programs to retain key employees, we have no
employment contracts with any of our employees and none of our executive
officers have signed non-compete agreements. We do not maintain key man
insurance on our executives. If any of our executive officers or other key
management and sales personnel stopped working with us in the future, it could
have an adverse effect on our business.
WE COULD EXPERIENCE SYSTEM FAILURES AND DISRUPTIONS OF OUR OPERATIONS AS A
RESULT OF THE YEAR 2000 DATE RECOGNITION PROBLEM
The year 2000 date recognition problem could cause our computer systems to
fail, resulting in miscalculations and incorrect data. Computer systems which
may be affected by this year 2000 problem include computer systems embedded in
production equipment; displays containing computer systems; business data
processing systems; production, management and planning systems; and personal
computers. Consequently, the year 2000 problem could disrupt our daily
commercial activities if we do not take the steps necessary to address it
effectively. In addition, we cannot assure you that our customers, suppliers
and other third parties that we deal with are or will be year 2000 compliant in
a timely manner. Interruptions in the services provided to us or in the
purchases made by these third parties could also disrupt our operations.
Parties affected by a disruption in our operations and services could make
claims or bring lawsuits against us. Depending upon the extent and duration of
any disruptions caused by the year 2000 problem and the specific services
affected, these disruptions could have an adverse affect on our business.
5
