FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ x ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: March 31, 2000
--------------
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________.
Commission File Number: 1-10551
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OMNICOM GROUP INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 13-1514814
- ------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
437 Madison Avenue, New York, New York 10022
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(212) 415-3600
- ----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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. 177,644,800 (as of April 30,
2000)
<PAGE>
PART I. FINANCIAL INFORMATION
Page No.
--------
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
March 31, 2000 and December 31, 1999 1
Consolidated Condensed Statements of Income -
Three Months Ended March 31, 2000 and 1999 2
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 2000 and 1999 3
Notes to Consolidated Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
<PAGE>
OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
(unaudited)
March 31, December 31,
2000 1999
---- ----
Assets
------
<S> <C> <C>
Current assets:
Cash and cash equivalents ................................... $ 353,462 $ 576,427
Short-term investments at market, which approximates cost ... 39,421 24,522
Accounts receivable, less allowance for doubtful accounts
of $50,435 and $53,720 ................................... 3,163,812 3,358,304
Billable production orders in process, at cost .............. 398,510 299,209
Prepaid expenses and other current assets ................... 565,031 453,862
---------- ----------
Total Current Assets ................................. 4,520,236 4,712,324
Furniture, equipment and leasehold improvements at cost, less
accumulated depreciation and amortization of $542,911,
and $522,254 ............................................. 448,573 444,722
Investments in affiliates ................................... 360,711 369,311
Intangibles, less amortization of $363,377 and $352,081 ..... 2,491,103 2,428,385
Deferred tax benefits ....................................... 81,934 120,346
Long-term investments, at market............................. 669,521 802,644
Deferred charges and other assets ........................... 231,168 139,905
---------- ----------
Total Assets ......................................... $8,803,246 $9,017,637
========== ==========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable ............................................ $3,182,275 $4,112,777
Advance billings ............................................ 431,180 417,044
Bank loans .................................................. 261,685 130,369
Accrued taxes and other liabilities.......................... 1,176,020 1,317,732
Dividends payable ........................................... 31,103 31,141
---------- ----------
Total Current Liabilities .............................. 5,082,263 6,009,063
---------- ----------
Long-term debt .................................................. 1,101,728 263,149
Convertible subordinated debentures ............................. 448,419 448,483
Deferred compensation and other liabilities ..................... 311,121 300,746
Deferred income taxes on unrealized gains ....................... 237,294 320,176
Minority interests .............................................. 121,357 123,122
Shareholders' equity:
Common stock ................................................ 93,543 93,543
Additional paid-in capital .................................. 807,776 808,154
Retained earnings ........................................... 995,084 882,051
Unamortized restricted stock ................................ (78,103) (85,919)
Accumulated other comprehensive income ...................... 181,737 285,234
Treasury stock .............................................. (498,973) (430,165)
---------- ----------
Total Shareholders' Equity ............................. 1,501,064 1,552,898
---------- ----------
Total Liabilities and Shareholders' Equity ............. $8,803,246 $9,017,637
========== ==========
</TABLE>
The accompanying notes to consolidated condensed financial statements
are an integral part of these statements.
1
<PAGE>
OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Data)
(unaudited)
Three Months Ended March 31,
2000 1999
---- ----
Commissions and fees ........................ $1,379,015 $1,146,877
Operating expenses:
Salaries and related costs .............. 838,867 688,301
Office and general expenses ............. 376,461 324,006
---------- ----------
1,215,328 1,012,307
---------- ----------
Operating profit ............................ 163,687 134,570
Gain on sale of Razorfish shares ............ 110,044 --
Net interest expense:
Interest and dividend income ............ (7,274) (7,225)
Interest paid or accrued ................ 18,595 18,472
---------- ----------
11,321 11,247
---------- ----------
Income before income taxes .................. 262,410 123,323
Income taxes ................................ 108,469 50,515
---------- ----------
Income after income taxes ................... 153,941 72,808
Equity in affiliates ........................ 876 929
Minority interests .......................... (11,279) (8,175)
---------- ----------
Net income ............................ $ 143,538 $ 65,562
========== ==========
Net Income Per Common Share:
Net income:
Basic ................................... $0.82 $0.37
Diluted ................................. $0.78 $0.37
Dividends declared per common share ......... $0.175 $0.15
The accompanying notes to consolidated condensed financial statements
are an integral part of these statements.
2
<PAGE>
OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income ............................................................... $ 143,538 $ 65,562
Adjustments to reconcile net income to net cash
used for operating activities:
Gain on sale of long-term investments .................................... (110,044) --
Depreciation and amortization of tangible assets ......................... 25,339 22,889
Amortization of intangible assets ........................................ 19,832 16,849
Minority interests ....................................................... 11,279 8,175
Earnings of affiliates less than dividends received ...................... 794 945
Decrease in deferred tax benefits ........................................ 1,759 1,065
Provision for losses on accounts receivable .............................. 2,341 2,344
Amortization of restricted stock ......................................... 7,465 5,273
Decrease (increase) in accounts receivable ............................... 171,051 (140,594)
Increase in billable production orders in process ........................ (102,949) (20,605)
Increase in prepaid expenses and other current assets .................... (113,490) (39,394)
Decrease in accounts payable ............................................. (882,291) (465,440)
Decrease in other accrued liabilities .................................... (159,401) (114,084)
Increase in accrued taxes on income ...................................... 36,943 10,211
Decrease in advances to affiliates ....................................... 40,916 21,019
Other increases (decreases)............................................... 4,671 (19,300)
--------- ---------
Net cash used for operating activities ................................ (902,247) (645,085)
--------- ---------
Cash flows from investing activities:
Capital expenditures ..................................................... (33,089) (27,163)
Payments for purchases of equity interests in subsidiaries and affiliates,
net of cash acquired .................................................. (129,065) (108,409)
Proceeds from sales of equity interests in subsidiaries and affiliates ... 6,017 634
Payments for purchases of long-term investments and other assets ......... (132,602) (21,278)
Proceeds from sales of long-term investments and other assets ............ 145,628 37,518
--------- ---------
Net cash used for investing activities ................................ (143,111) (118,698)
--------- ---------
Cash flows from financing activities:
Net borrowings under lines of credit ..................................... 192,527 109,117
Share transactions under employee stock plans ............................ 17,328 13,484
Proceeds from issuance of debt obligations ............................... 934,336 476,778
Repayments of principal of debt obligations .............................. (146,019) (59,345)
Dividends and loans to affiliates and minority shareholders .............. (55,112) (16,473)
Dividends paid ........................................................... (30,677) (25,069)
Purchase of treasury shares .............................................. (86,270) (72,524)
--------- ---------
Net cash provided by financing activities ............................. 826,113 425,968
--------- ---------
Effect of exchange rate changes on cash and cash equivalents ................. (3,720) (293)
--------- ---------
Net decrease in cash and cash equivalents ............................. (222,965) (338,108)
Cash and cash equivalents at beginning of period ............................. 576,427 648,781
--------- ---------
Cash and cash equivalents at end of period ................................... $ 353,462 $ 310,673
========= =========
Supplemental Disclosures:
Income taxes paid ......................................................... $ 65,622 $ 35,205
========= =========
Interest paid ............................................................. $ 18,092 $ 19,191
========= =========
</TABLE>
The accompanying notes to consolidated condensed financial statements
are an integral part of these statements.
3
<PAGE>
OMNICOM GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The consolidated condensed interim financial statements included
herein have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations.
2. These statements reflect all adjustments, consisting of normally
recurring accruals, which in the opinion of management, are necessary for
a fair presentation of the information contained therein. Certain
reclassifications have been made to the March 31, 1999 and December 31,
1999 reported amounts to conform them with the March 31, 2000
presentation. These consolidated condensed financial statements should be
read in conjunction with the consolidated financial statements and notes
thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 1999.
3. Results of operations for interim periods are not necessarily
indicative of annual results.
4. Basic earnings per share is based upon the weighted average number
of common shares outstanding during the period. Diluted earnings per share
is based on the above, plus, if dilutive, common share equivalents which
include outstanding options and restricted shares, and if dilutive,
adjusted for the assumed conversion of the Company's 2.25% and 4.25%
Convertible Subordinated Debentures (the "Debentures") and the assumed
increase in net income for the after tax interest cost of the Debentures.
In determining if the Debentures were dilutive at March 31, 2000 and 1999,
the Debentures were assumed to be converted for the entire quarter. For
purposes of computing diluted earnings per share for the three months
ended March 31, 2000 and 1999, respectively, 177,484,000 and 178,357,000
common share equivalents were assumed to have been outstanding.
Additionally, 11,552,000 and 6,936,000 shares, respectively were assumed
to have been converted related to the Debentures and the assumed increase
in net income used in the computation was $4,441,000 and $2,385,000,
respectively. The number of shares used in the computations of basic and
diluted earnings per share were as follows:
Three Months
Ended March 31,
--------------
2000 1999
---- ----
Basic EPS 174,669,000 175,329,000
Diluted EPS 189,036,000 185,293,000
For purposes of computing diluted earnings per share for the three
months ended March 31, 1999, the Company's 2.25% Convertible Subordinated
Debentures were not reflected in the computation, as their inclusion would
have been antidilutive.
4
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. Total comprehensive income and its components were as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
($ in 000's)
--------------------------
2000 1999
---- ----
<S> <C> <C>
Net income for the period $143,538 $ 65,562
Unrealized loss on Long-Term
Investments, net of income taxes of $8,910 (12,910) --
Reclassification to realized gain on sale of
Razorfish shares, net of income taxes of $46,218 (63,826) --
Foreign currency translation adjustment,
net of income taxes of $18,596 and
$16,937 in 2000 and 1999, respectively (26,761) (24,373)
-------- --------
Comprehensive income for the period $ 40,041 $ 41,189
======== ========
</TABLE>
During the three month period ended March 31, 2000, the Company sold
a portion of its ownership interest in Razorfish Inc. and realized a
pre-tax gain of approximately $110 million. Included in net income for the
period is $63,826,000 related to this transaction and comprehensive income
for the period has been adjusted to reflect the reclassification of the
gain from unrealized to realized.
During the period certain interactive marketing agencies, in which
the Company holds an ownership interest in, filed initial public offerings
of their equity securities. Accordingly, the Company adjusted the carrying
value of these holdings to reflect market value as of March 31, 2000 and
recorded an unrealized pre-tax gain of $284 million in comprehensive
income. These investments are included in Long-Term Investments on the
accompanying March 31, 2000 balance sheet.
6. In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("SFAS No. 133") which
the Company is required to adopt effective January 1, 2001. SFAS No. 133
cannot be applied retroactively. SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in
the balance sheet as either an asset or liability measured at its fair
value. SFAS No. 133 requires that changes in the derivative's fair value
be recognized currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a
derivative's gains and losses to offset related results on the hedged item
in the income statement, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that
receive hedge accounting.
5
<PAGE>
OMNICOM GROUP INC. AND SUBSISIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
The Company intends to adopt SFAS No. 133 for its fiscal year ending
December 31, 2001. The impact of SFAS No. 133 on the Company's financial
statements will depend on a variety of factors, including future
interpretative guidance from the FASB, the future level of forecasted and
actual foreign currency transactions, the extent of the Company's hedging
activities, the types of hedging instruments used and the effectiveness of
such instruments. However, the Company does not believe the effect of
adopting SFAS No. 133 will be material to its financial position.
7. The Company's wholly-owned and partially-owned businesses operate
within the corporate communications services operating segment. These
businesses provide a variety of communications services to clients through
several worldwide, national and regional independent agency brands. The
businesses exhibit similar economic characteristics driven from their
consistent efforts to create customer driven marketing communications and
services that build their clients businesses. A summary of the Company's
operations by geographic area as of March 31, 2000 and 1999, and for the
three months then ended is presented below:
<TABLE>
<CAPTION>
Dollars in Thousands
-----------------------------------------------------------------------------------
United United Other Other
States Kingdom Germany France Europe International Consolidated
<S> <C> <C> <C> <C> <C> <C> <C>
2000
Commissions and Fees $717,378 $188,902 $100,677 $89,037 $130,688 $152,333 $1,379,015
Long-Lived Assets 225,809 102,393 10,259 16,599 34,447 59,066 444,464
1999
Commissions and Fees $587,212 $164,751 $91,621 $83,895 $116,195 $103,203 $1,146,877
Long-Lived Assets 162,619 99,698 11,441 15,648 25,179 59,439 374,024
</TABLE>
8. On April 27, 2000, the Company extended its $750 million
revolving credit facility ("the Facility"). The Facility was renewed under
the same terms with an additional provision which allows the Company to
convert all amounts outstanding under the Facility to a one-year term
loan. The Facility, which allows for the issuance of commercial paper
expires on April 26, 2001. In addition to the $750 million credit facility
the Company has a $500 million 5-year revolving credit facility available
which also allows for the issuance of commercial paper and expires on
June 30, 2003.
Amounts borrowed or issued under the Facilities at March 31, 2000
include commercial paper, which amounted to $622.7 million, and bank loans
of $200 million, were classified as long-term debt. Amounts available
under both credit facilities at March 31, 2000 were $427.3 million.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
First Quarter 2000 Compared to First Quarter 1999
Consolidated worldwide revenues from commission and fee income increased
20.2% in the first quarter of 2000 to $1,379.0 million compared to $1,146.9
million in the first quarter of 1999. Consolidated domestic revenues increased
22.2% in the first quarter of 2000 to $717.4 million compared to $587.2 million
in the first quarter of 1999. Consolidated international revenues increased
18.2% in the first quarter of 2000 to $661.6 million compared to $559.7 million
in the first quarter of 1999. The effect of acquisitions, net of divestitures
increased worldwide revenues by 9.2% and changes in the foreign exchange value
of the U.S. dollar decreased worldwide revenues by 3.8%. The remaining 14.8%
increase in consolidated worldwide revenues was due to the growth of existing
businesses, including net new business wins.
Worldwide operating expenses, including net interest expense increased
19.8% in the first quarter of 2000 compared to in the first quarter of 1999. The
effect of acquisitions, net of divestitures, increased worldwide operating
expenses by 9.2% and changes in the foreign exchange value of the U.S. dollar
decreased worldwide operating expenses by 3.7%. The remaining increase of 14.3%
reflects normal salary increases and growth in client services expenditures to
support the increased revenue base.
Net interest expense increased slightly in the first quarter of 2000 to
$11.3 million as compared to $11.2 million in the same period in 1999. This
reflected higher average interest rates during the period, substantially offset
by the effect of higher average amounts of cash and marketable securities
invested during the period.
Excluding the gain on sale of Razorfish shares, pretax profit margin was
11.0% in the first quarter of 2000 as compared to 10.8% in the same period in
1999 and operating margin, which excludes interest and dividend income and
interest expense, was 11.9% in the first quarter of 2000 as compared to 11.7% in
the same period in 1999.
The effective income tax rate was 41.3% in the first quarter of 2000 as
compared to 41.0% in the first quarter of 1999. This increase is due principally
to the impact of the gain on sale of Razorfish shares which resulted in a higher
marginal tax rate.
The decrease in equity in affiliates is the result of the acquisition of
additional ownership interests in certain affiliates that resulted in their
consolidation in the March 31, 2000 financial statements and lower profits
earned by certain companies in which the Company owns less than a 50% equity
interest.
The increase in minority interest expense is primarily due to acquisitions
and greater earnings by companies where minority interests exist.
Including the gain on sale of Razorfish shares, net income increased
118.9% to $143.5 million and diluted earnings per share increased 110.8% to
$0.78 in the first quarter of 2000. Excluding this gain, net income increased
21.6% to $79.7 million in the first quarter of 2000 as
7
<PAGE>
compared to $65.6 million in the same period in 1999 and diluted earnings per
share increased 21.6% to $0.45 in the current quarter compared to $0.37 in the
prior year period.
Capital Resources and Liquidity
Cash and cash equivalents at March 31, 2000 decreased to $353.5 million
from $576.4 million at December 31, 1999. The relationship between payables to
the media and suppliers and receivables from clients, at March 31, 2000, is
consistent with industry norms.
On April 27, 2000 the Company renewed its $750 million revolving credit
facility (the "Facility"). The Facility, which allows for the issuance of
commercial paper, was renewed under the same terms, with an additional provision
that allows the Company to convert all amounts outstanding at expiration of the
Facility on April 26, 2001, into a one-year term loan.
The Company maintains relationships with a number of banks worldwide,
which have extended unsecured committed lines of credit in amounts sufficient to
meet the Company's cash needs. At March 31, 2000, the Company had $1,705 million
in such unsecured committed lines of credit, including the $750 million
revolving credit facility renewed April 27, 2000, of which $564 million was
available.
Management believes the aggregate lines of credit available to the Company
and cash flow from operations provide the Company with sufficient liquidity and
are adequate to support foreseeable operating requirements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
The Company's market risks primarily consist of the impact of changes in
currency exchange rates on assets and liabilities of non-U.S. operations and the
impact of changes in interest rates on debt.
The Company's 1999 Form 10-K provides a more detailed discussion of the
market risks affecting its operations. As of March 31, 2000, no material change
had occurred in the Company's market risks, as compared to the disclosure in its
Form 10-K for the year ending December 31, 1999.
Forward-Looking Statements
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and "Quantitative and Qualitative Disclosures About Market Risk"
set forth in this report contain disclosures which are forward-looking
statements. Forward-looking statements include all statements that do no relate
solely to historical or current facts, and can be identified by the use of words
such as "may," "will," "expect," "project," "estimate," "anticipate,"
"envisage," "plan" or "continue." These forward-looking statements are based
upon the Company's current plans or expectations and are subject to a number of
uncertainties and risks that could significantly affect current plans and
anticipated actions and the company's future financial condition and results.
The uncertainties and risks include, but are not limited to, general economic
and business conditions; loss of significant customers; changes in levels of
client advertising; the impact of competition; risks relating to acquisition
activities; and the complexity of integrated computer systems. As a consequence,
current plans, anticipated actions and future financial condition and results
may differ from those expressed in any forward-looking statements made by or on
behalf of the Company.
8
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibit and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description of Exhibit
- -------------- ----------------------
10.1 364-Day Credit Agreement, dated as of April 30, 1999,
amended and restated April 27, 2000, among Omnicom
Finance Inc., Omnicom Finance PLC, Omnicom Capital
Inc., the financial institutions party thereto,
Citibank, N.A., as Administrative Agent, The Bank of
Nova Scotia, as Documentation Agent, and San Paolo IMI
SPA, as Syndication Agent.
27. Financial Data Schedule (filed in electronic format only)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the first quarter of 2000.
9
<PAGE>
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.
Omnicom Group Inc.
(Registrant)
------------------
Date May 15, 2000 /s/ Randall J. Weisenburger
------------ ----------------------------------
Randall J. Weisenburger
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date May 15, 2000 /s/ Philip J. Angelastro
------------ ----------------------------------
Philip J. Angelastro
Controller
(Chief Accounting Officer)
10
Exhibit 10.1
===========================================================================
OMNICOM FINANCE INC., OMNICOM FINANCE PLC, and
OMNICOM CAPITAL INC.
as Borrowers
AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT
Dated as of April 30, 1999
Amended and Restated as of April 27, 2000
-------------------
$750,000,000
-------------------
CITIBANK, N.A.,
as Administrative Agent
THE BANK OF NOVA SCOTIA,
as Documentation Agent
and
SAN PAOLO IMI SPA,
as Syndication Agent
===========================================================================
<PAGE>
AMENDMENT AND RESTATEMENT (this "Amendment and Restatement") dated
as of April 27, 2000 of the 364-Day Credit Agreement referred to below, among
OMNICOM FINANCE INC., a corporation organized and existing under the laws of
Delaware ("OFI"); OMNICOM FINANCE PLC (formerly, Omnicom Finance Limited), a
corporation organized and existing under the laws of England and Wales ("OFL")
and OMNICOM CAPITAL INC., a corporation organized and existing under the laws of
Connecticut ("OCI" and, together with OFI and OFL, each a "Borrower", and
collectively, the "Borrowers" ); OMNICOM GROUP, INC. (the "Guarantor"); each of
the financial institutions listed in Schedule I hereto (each a "Bank", and
collectively the "Banks"); CITIBANK, N.A., as administrative agent for the Banks
(in such capacity, together with its successors in such capacity, the
"Administrative Agent"); THE BANK OF NOVA SCOTIA, as documentation agent (the
"Documentation Agent"); and SAN PAOLO IMI SPA, as syndication agent (the
"Syndication Agent", and collectively, together with the Administrative Agent
and the Documentation Agent, the "Agents").
OFI, OFL, certain of the Banks and the Agents are parties to a
364-Day Credit Agreement dated as of April 30, 1999 (as in effect immediately
prior to the effectiveness of this Amendment and Restatement pursuant to Section
4 hereof, the "Existing Credit Agreement"), providing, subject to the terms and
conditions thereof, for extensions of credit (by the making of loans) by the
Banks to the Borrowers in an aggregate principal amount not exceeding
$750,000,000 at any one time outstanding. The Borrowers, the Banks signatory
hereto and the Agents wish to amend and restate the Existing Credit Agreement
and to add OCI as a new Borrower thereunder; and accordingly, the parties hereto
hereby agree to amend the Existing Credit Agreement as set forth herein and to
restate the Existing Credit Agreement as so amended (the Existing Credit
Agreement as so amended and restated, the "Amended and Restated Credit
Agreement"):
Section 1. Definitions. Except as otherwise defined herein, terms
defined in the Existing Credit Agreement are used herein as defined therein.
Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 4 of this Amendment and Restatement, but
effective on the Effective Date (as defined below), (i) the Existing Credit
Agreement is hereby amended as set forth below, and (ii) the Existing Credit
Agreement is restated to read in its entirety as set forth in the Existing
Credit Agreement, which is hereby incorporated herein by reference, with the
amendments set forth below:
A. References in the Existing Credit Agreement to "this Agreement"
(and indirect references such as "hereunder", "hereby", "herein" and
"hereof") shall be deemed to be references to the Amended and Restated
Credit Agreement.
B. Section 1.01 of the Existing Credit Agreement shall be amended by
adding the following new definitions (to the extent not already included
in said Section 1.01) and inserting the same in the appropriate
alphabetical locations and amending the following definitions (to the
extent already included in said Section 1.01) to read in their entirety as
follows:
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 2 -
"Amendment and Restatement" shall mean the Amendment and
Restatement, dated as of April 27, 2000, among the Borrowers, the
Guarantor, the Banks, the Administrative Agent, the Documentation
Agent and the Syndication Agent."
"Applicable Margin" for Eurocurrency Rate Loans and
"Applicable Facility Fee Rate" at any time shall mean the respective
rates per annum set forth in the table below opposite the applicable
Rating Level at such time:
<TABLE>
<CAPTION>
Applicable Margin Applicable Margin
for for
Eurocurrency Term Loans
Rate Loans that are Applicable
(other than Eurocurrency Facility
Rating Level Term Loans) Rate Loans Fee Rate
------------ ----------- ---------- --------
<S> <C> <C> <C>
Rating Level 1 0.190% 0.450% 0.085%
Rating Level 2 0.200% 0.500% 0.100%
Rating Level 3 0.240% 0.600% 0.110%
Rating Level 4 0.275% 0.750% 0.125%
Rating Level 5 0.375% 1.000% 0.275%
</TABLE>
provided that, if the aggregate principal amount outstanding of the
Eurocurrency Rate Loans (other than Term Loans) on any day exceeds
66-2/3% of the Total Commitment on such day, the Applicable Margin
for Eurocurrency Rate Loans (other than Term Loans) for that day
shall be 0.050% higher than the rate set forth above, when the
applicable Rating Level is Rating Level 1, Rating Level 2 or Rating
Level 3, and 0.100% higher than the rate set forth above when the
applicable Rating Level is Rating Level 4 or Rating Level 5, and
provided, further, that, if the Moody's Rating or the S&P Rating
relates to the Guarantor Subordinated Debt, then the respective
rates set forth above shall be determined by reference to the Rating
Level which is one level higher than the Rating Level which would
otherwise apply to such Guarantor Subordinated Debt (for the purpose
of which determination, Rating Level 1 shall be the highest rating).
"Base Rate Loan" shall mean any Loan that bears interest based
upon the Base Rate.
"Borrower" and "Borrowers" shall mean, individually or
collectively, as the case may be, each of Omnicom Finance Inc., a
corporation organized and existing under the laws of Delaware;
Omnicom Finance plc (formerly, Omnicom Finance Limited), a
corporation organized and existing under the laws of England and
Wales,
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 3 -
and Omnicom Capital Inc., a corporation organized and existing under
the laws of Connecticut.
"Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I to the Amendment and
Restatement, as the same may be (x) reduced from time to time
pursuant to Section 4.02 and/or Section 10, (y) increased pursuant
to Section 4.04 and/or (z) adjusted from time to time as a result of
assignments to or from such Bank pursuant to Section 12.04(b).
"ERISA Affiliate" shall mean any person (as defined in Section
3(9) of ERISA) which together with OFI or any of its Subsidiaries or
together with OCI or any of its Subsidiaries would be member of the
same "controlled group" within the meaning of Section 414 (b), (c),
(m) and (o) of the Code.
"Eurocurrency Rate Loan" shall mean any Loan that bears
interest at a rate based on the rates referred to in the definition
of "Eurodollar Base Rate" in this Section 1.01.
"Final Maturity Date" shall have the meaning provided in
Section 4.05.
"Notice of Election of Term Option" shall have the meaning
provided in Section 4.05.
"OCI" shall mean Omnicom Capital Inc., a corporation organized
and existing under the laws of Connecticut.
"Term Loan" shall have the meaning provided in Section 4.05.
C. OCI shall become a party to the Amended and Restated Credit
Agreement as a Borrower thereunder. Accordingly, the Existing Credit
Agreement shall be amended to provide that each reference therein to the
term "Borrower" or "Borrowers" shall be deemed to refer, individually or
collectively, as the case may be, to OFI, OFL and to OCI, and OCI shall be
entitled to borrow Loans thereunder on the same terms and conditions as
OFI and OFL (and shall be subject to the same terms and conditions
thereunder with respect to Loans made to it as each of OFI and OFL is with
respect to Loans made to it). The covenants and agreements specified in
Sections 8 and 9 of the Amended and Restated Credit Agreement shall be
applicable to each of OFI, OFL and OCI (it being understood that any
dollar limitation specified in such provisions shall be applicable to OFI,
OFL and OCI collectively), provided, however, that the introductory
paragraph of Section 8 shall be amended by deleting the word "OFI" therein
and replacing it with the words "OFI and OCI" and provided, further, that
Section 8.05 shall be amended as provided in Section 2. G of this
Amendment and Restatement.
D. Section 2.09 of the Existing Credit Agreement is amended by
adding after the words "nine month period," in the first sentence thereof
the words "or, (subject to
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 4 -
availability as determined by 100% of the Banks) if such Eurocurrency Rate
Loan is a Term Loan made pursuant to Section 4.05 hereof, twelve month
period,"
E. Section 4.03 of the Existing Credit Agreement is amended by
deleting paragraph (a) in its entirety and inserting a new paragraph (a)
as follows:
"(a) The "Commitment Termination Date" shall be April 26, 2001
or such later date to which the Commitment Termination Date has been
extended pursuant to this Section 4.03.
F. A new Section 4.05 shall be inserted into the Existing Credit
Agreement to read as follows:
"4.05 Term Loan Election. (a) The Guarantor may, by delivering
to the Administrative Agent a notice (a "Notice of Election of Term
Option") substantially in the form of Exhibit A to the Amendment and
Restatement, not more than 30 nor less than 5 Business Days before
the Existing Commitment Termination Date, elect that all of the
Loans of each Bank to a Borrower outstanding as at the close of
business New York time on such Existing Commitment Termination Date
be converted, effective at such time, to a term loan (a "Term Loan")
payable by such Borrower to such Bank, which Term Loan shall (i) be
in a principal amount equal to the aggregate outstanding principal
amount of such Loans, (ii) mature on the date (the "Final Maturity
Date") that is the earlier of (x) the date one year after such
Existing Commitment Termination Date or (y) the date specified by
the Guarantor in such Notice of Election of Term Option (and each
outstanding Note shall automatically be deemed amended accordingly),
(iii) bear interest, until the payment in full thereof, at the rates
provided for in Section 2.08 and otherwise constitute a "Loan" for
all purposes of this Agreement and a "Guaranteed Obligation" for all
purposes of the Guaranty and (iv) at the option of the Guarantor be
Base Rate Loans or Eurocurrency Rate Loans; provided that the
election provided for in this Section 4.05 shall not take effect if,
on the date of the Notice of Election of Term Option or on the
Existing Commitment Termination Date, a Default or Event of Default
has occurred and is continuing. Upon the effectiveness of the
conversion provided for in this Section 4.05, Section 2.01(a)(ii)
shall cease to be in effect, and each Borrower agrees that it will,
forthwith upon the request of any Bank through the Administrative
Agent, issue a new promissory note (a "Term Note") in favor of such
Bank in substantially the form of Exhibit B to the Amendment and
Restatement in the amount of the Term Loan of such Bank to such
Borrower provided herein, in exchange for the Note or Notes held by
such Bank (which shall be promptly returned to the Guarantor,
through the Administrative Agent, marked "Cancelled"), or, upon
presentation of evidence to the reasonable satisfaction of the
Administrative Agent (in the Administrative Agent's sole discretion)
of the loss, destruction or theft of the Note or Notes held by such
Bank, and upon
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 5 -
delivery to the Administrative Agent, for the benefit of the
Borrower or Borrowers having issued such Note or Notes, an
indemnity, in form and substance satisfactory to such Borrower or
Borrowers, made by such Bank and holding such Borrower or Borrowers
harmless, in lieu of any such lost, destroyed or stolen Note or
Notes, which Term Note shall be deemed to be a "Note" for all
purposes of this Agreement and of the Guaranty.
(b) The Guarantor shall, in the case of any Eurocurrency Rate
Loan made pursuant to a Notice of Election of Term Option as
provided in this Section 4.05 or pursuant to the conversion of a
Term Loan which is a Base Rate Loan as provided in Section 2.06 or
in the case of the continuation of any Eurocurrency Rate Loan which
is a Term Loan, give notice to the Administrative Agent at its
Notice Office by noon (New York time) on that date three Business
Days prior to the making, conversion or continuation of such
Eurocurrency Rate Loan, as the case may be, stating its election of
the Interest Period to be applied to such Eurocurrency Rate Loan,
provided, however, that: (i) the Interest Period for any
Eurocurrency Rate Loan which is a Term Loan shall commence on the
date such Eurocurrency Rate Loan is made, converted or continued,
(ii) if the Interest Period relating to a Eurocurrency Rate Loan
which is a Term Loan begins on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month, (iii) if any Interest Period
relating to a Eurocurrency Rate Loan which is a Term Loan would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day, provided,
however, that if the Interest Period relating to a Eurocurrency Rate
Loan which is a Term Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day and (iv) no Interest Period
relating to a Eurocurrency Rate Loan which is a Term Loan may be
elected or deemed elected by the Guarantor if it would extend beyond
the Final Maturity Date. If any such Interest Period would extend
beyond the Final Maturity Date, then such Interest Period shall end
on the Final Maturity Date. If the Guarantor fails to timely give
such notice of Interest Period respecting any Term Loan to the
Administrative Agent then the Guarantor shall be deemed to have
elected that the Term Loan shall be a Base Rate Loan, provided that,
notwithstanding Section 2.06(i) hereof, any such Base Rate Loan so
deemed elected may be converted into a Eurocurrency Rate Loan upon
delivery by the Borrower of a Notice of Conversion respecting such
Base Rate Loan to the Administrative Agent at its Notice Office
prior to noon (New York time) at least three Business Days' prior to
the effectiveness of such conversion pursuant to Section 2.06."
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 6 -
G. Sections 8.05 of the Existing Credit Agreement shall be deleted
in its entirety and replaced with the following:
"8.05. ERISA. As soon as possible and, in any event, within 10
days after OFI or any of its Subsidiaries or ERISA Affiliates or OCI
or any of its Subsidiaries or ERISA Affiliates knows or has reason
to know of any of the following, OFI or OCI, as the case may be,
will deliver to each of the Banks a certificate of the chief
financial officer of OFI or OCI, as the case may be, setting forth
details as to such occurrence and such action, if any, which OFI,
OCI, such Subsidiary or such ERISA Affiliate is required or proposes
to take, together with any notices required or proposed to be given
to or filed with or by OFI, OCI, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator
with respect thereto: that a Reportable Event has occurred, that an
accumulated funding deficiency has been incurred or an application
may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including
any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a
Plan, that a Plan has been or may be terminated via a "distress
termination" as referred to in section 4041(c) of ERISA,
reorganized, partitioned or declared insolvent under Title IV of
ERISA, that a Plan has an Unfunded Current Liability giving rise to
a Lien under ERISA, that proceedings may be or have been instituted
by the PBGC to terminate a Plan, that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan, or that OFI or any of its Subsidiaries or
ERISA Affiliates or OCI or any of its Subsidiaries or ERISA
Affiliates will or may incur any liability (including any contingent
or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or 4204
of ERISA. In addition to any certificates or notices delivered to
the Banks pursuant to the first sentence hereof, copies of notices
received by OFI or any of its Subsidiaries or ERISA Affiliates or
OCI or any of its Subsidiaries or ERISA Affiliates required to be
delivered to the Banks hereunder shall be delivered to the Banks no
later than 10 days after the later of the date such notice has been
filed with the Internal Revenue Service or the PBGC, given to Plan
participants or received by OFI or any of its Subsidiaries or ERISA
Affiliates or OCI or any of its Subsidiaries or ERISA Affiliates.
H. Sections 12.04(b)(ii) of the Existing Credit Agreement shall be
deleted in its entirety and replaced with the following:
"(ii) upon surrender of the old Notes, or, upon presentation
of evidence to the reasonable satisfaction of the Administrative
Agent (in the Administrative Agent's sole discretion) of the loss,
destruction or theft of the old Notes, and upon delivery to the
Administrative Agent, for the benefit of the Borrower that issued
the old Notes, of an indemnity, in form and substance satisfactory
to such Borrower, made by such assigning Bank and holding such
Borrower harmless, in lieu of any such lost, destroyed or stolen
Notes, new Notes will be issued, at the
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 7 -
expense of the Borrower that issued the old Notes, to such new Bank
and to the assigning Bank, such new Notes to be in conformity with
the requirements of Section 2.05 (with appropriate modifications) to
the extent needed to reflect the revised Commitments and"
I. Schedule I of the Existing Credit Agreement is deleted in its
entirety and replaced with the schedule set forth in Schedule I to this
Amendment and Restatement.
Section 3. Representations and Warranties. Each Borrower (but only
OFI and OCI with respect to Section 7.09) represents and warrants to the Banks
as of the Effective Date that: (i) the representations and warranties set forth
in Section 7 of the Existing Credit Agreement are true and correct as to itself
on and as of the Effective Date as though made on and as of the Effective Date
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date) and as if each reference
in said Section 7 to "this Agreement" included reference to the Amended and
Restated Credit Agreement and as if each reference in Section 7.09 to "OFI"
included reference to "OFI or OCI" and (ii) no event has occurred and is
continuing that constitutes a Default or Event of Default (and the parties agree
that breach of any of the representations and warranties in this Section 3 shall
constitute an Event of Default under Section 10.02 of the Amended and Restated
Credit Agreement).
Section 4. Conditions to Effectiveness. The amendment and
restatement set forth in Section 2 of this Amendment and Restatement shall
become effective on the date (the "Effective Date") on which the Administrative
Agent shall notify the Guarantor that the following conditions precedent have
been satisfied (and the Administrative Agent shall promptly notify the Banks of
the occurrence of the Effective Date):
(a) Documents. The Agent shall have received the following documents
(with sufficient copies for each Bank), each of which shall be
satisfactory to the Administrative Agent in form and substance:
(1) Execution by All Parties. Counterparts of this Amendment
and Restatement, duly executed and delivered by each Borrower, the
Guarantor, the Administrative Agent and the Banks.
(2) Authority and Approvals. Certified copies of resolutions
of the Board of Directors of each Borrower and of the Guarantor (or
equivalent documents) authorizing and approving this Amendment and
Restatement and the Notes (if any), authorizing Borrowings under the
Amended and Restated Credit Agreement in an aggregate principal
amount up to $750,000,000 at any one time outstanding, and certified
copies of all documents evidencing other necessary action
(corporate, partnership or otherwise) and governmental approvals, if
any, with respect to this Amendment and Restatement and the Notes
(if any).
(3) Notes. There shall have been executed by OCI and delivered
to the Administrative Agent, pursuant to Section 2.05 of the Amended
and Restated
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 8 -
Credit Agreement, a Note, substantially in form of Exhibit B to the
Amended and Restated Credit Agreement, for each Bank which is to
evidence each such Bank's Loans to OCI.
(4) Secretary's or Assistant Secretary's Certificate. A
certificate of the Secretary or an Assistant Secretary of each
Borrower and of the Guarantor, dated the Effective Date, certifying
the names and true signatures of the officers of the Borrowers and
of the Guarantor authorized to execute and deliver this Amendment
and Restatement and the Notes (if any) and the other documents to be
delivered hereunder and attaching corporate documentation respecting
the organization, existence and good standing of each Borrower and
the Guarantor.
(5) Other Documents. Such other documents as the
Administrative Agent may reasonably request, including certificates
of officers or opinions of counsel, relating to the organization,
existence and good standing of each Borrower and the Guarantor, the
authorization of the Amended and Restated Credit Agreement, the
enforceability of the Amended and Restated Credit Agreement or other
legal matters relating to the Amended and Restated Credit Agreement
or the transactions contemplated thereby, all in form and substance
satisfactory to the Administrative Agent.
(b) Guaranty. The Guaranty shall be in full force and effect on the
Effective Date, and the Guarantor shall have confirmed its Guaranty under
Section 5 of this Amendment and Restatement by executing and delivering
this Amendment and Restatement.
(c) Extension. The Existing Commitment Termination Date of April 27,
2000, of the Existing Credit Agreement shall have been extended for an
additional 364 days, pursuant to Section 4.03 thereof. If any Bank has
become, in connection with such extension, a Non-Extending Bank under and
as defined in Section 4.03(b) of the Existing Credit Agreement, each such
Non-Extending Bank shall have confirmed, in a manner satisfactory to the
Administrative Agent, that such Non-Extending Bank has been paid in full
all amounts owing to it pursuant to Section 4.03(e) of the Existing Credit
Agreement, that the Commitment of such Non-Extending Bank has terminated
and that such Non-Extending Bank is no longer be party to the Existing
Credit Agreement.
(d) Fees and Expenses. The Administrative Agent shall have received
evidence satisfactory to it that (i) the Borrowers and the Guarantor shall
have paid in full all accrued fees, expenses and interest due and payable
to the Administrative Agent and the Banks (including the Non-Extending
Banks) under the Existing Credit Agreement, (ii) the Guarantor shall have
paid all accrued fees and expenses of the Administrative Agent (including
the reasonable fees and expenses of counsel to the Administrative Agent)
in connection with this Amendment and Restatement and (iii) the Guarantor
shall have paid to the Administrative Agent for account of the Banks such
up-front or other fees in connection with the execution of this Amendment
and Restatement as the Guarantor and the Administrative Agent shall have
agreed upon.
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 9 -
Section 5. Confirmation of Guaranty. The Guarantor hereby agrees
that the Guaranty shall be amended to provide that each reference to the term
"Borrower" or "Borrowers" therein shall be deemed to refer, individually or
collectively, as the case may be, to OFI, OFL and to OCI, and that all
obligations of OCI under the Amended and Restated Credit Agreement shall
constitute "Guaranteed Obligations", as defined under, and for all purposes of,
the Guaranty made by the Guarantor in favor of the Administrative Agent and the
Banks and dated as of April 30, 1999. The Guarantor hereby confirms and agrees
that the obligations of the Borrowers, or any of them, under the Amended and
Restated Credit Agreement are entitled to all the benefits of the Guaranty, and
that all obligations of the Borrowers, or any of them, under the Amended and
Restated Credit Agreement shall constitute "Guaranteed Obligations", as defined
under, and for all purposes of, the Guaranty and that all references in the
Guaranty to the "Credit Agreement" (including indirect references) shall be
deemed to be references to the Amended and Restated Credit Agreement.
Section 6. Miscellaneous. Except as herein provided, the Existing
Credit Agreement shall remain unchanged and in full force and effect. This
Amendment and Restatement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same agreement and any of the
parties hereto may execute this Amendment and Restatement by signing any such
counterpart. This Amendment and Restatement shall be governed by, and construed
in accordance with, the law of the State of New York.
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 10 -
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment and Restatement as of
the day and year first above written.
BORROWERS:
OMNICOM FINANCE INC.
By: /s/ Dennis E. Hewitt
-------------------------------
Name: Dennis E. Hewitt
Title: Treasurer
OMNICOM FINANCE PLC
By: /s/ Dennis E. Hewitt
-------------------------------
Name: Dennis E. Hewitt
Title: Director
By: /s/ Barry J. Wagner
-------------------------------
Name: Barry J. Wagner
Title: Director
OMNICOM CAPITAL INC.
By: /s/ Dennis E. Hewitt
-------------------------------
Name: Dennis E. Hewitt
Title: President
GUARANTOR:
OMNICOM GROUP INC.,
as Guarantor
By: /s/ Dennis E. Hewitt
-------------------------------
Name: Dennis E. Hewitt
Title: Treasurer
BANKS:
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 11 -
CITIBANK, N.A.,
as Administrative Agent and as Bank
By: /s/ Julio Ojea-Quintana
-------------------------------
Name: Julio Ojea-Quintana
Title: ATTORNEY-IN-FACT
THE BANK OF NOVA SCOTIA,
as Documentation Agent and as Bank
By: /s/ John W. Campbell
-------------------------------
Name: John W. Campbell
Title: Unit Head
SAN PAOLO IMI SPA,
as Syndication Agent and as Bank
By: /s/ Carlo Persico
-------------------------------
Name: Carlo Persico
Title: Deputy General Manager
By: /s/ Robert Worster
-------------------------------
Name: Robert Worster
Title: First Vice President
THE BANK OF NEW YORK
By: /s/ Kenneth P. Sneider, Jr.
-------------------------------
Name: Kenneth P. Sneider, Jr.
Title: Vice President
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 12 -
DRESDNER BANK AG,
NEW YORK & GRAND CAYMAN BRANCHES
By: /s/ Laura G. Fazio
-------------------------------
Name: Laura G. Fazio
Title: First Vice President
By: /s/ Helen Ng, P.E.
-------------------------------
Name: Helen Ng, P.E.
Title: Assistant Vice President
FLEET BANK, N.A.
By: /s/ Thomas J. Levy
-------------------------------
Name: Thomas J. Levy
Title: Vice President
HSBC BANK USA
By: /s/ Diane M. Zieske
-------------------------------
Name: Diane M. Zieske
Title: Vice President
MELLON BANK, N.A.
By: /s/ Maria Sisto
-------------------------------
Name: Maria Sisto
Title: Vice President
PNC BANK, N.A.
By: /s/ Donald V. Davis
-------------------------------
Name: Donald V. Davis
Title: Vice President
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 13 -
SCOTIABANC, INC.
By: /s/ W. J. Brown
-------------------------------
Name: W. J. Brown
Title: Managing Director
SVENSKA HANDELSBANKEN AB (PUBL)
By: /s/ Paul Breakspear
-------------------------------
Name: Paul Breakspear
Title: Account Manager
By: /s/ Simon Silvester
-------------------------------
Name: Simon Silvester
Title: Head of London Corporate
Banking
THE CHASE MANHATTAN BANK
By: /s/ Bruce E. Langencamp
-------------------------------
Name: Bruce E. Langencamp
Title: Vice President
BANK ONE, NA (MAIN OFFICE CHICAGO)
By: /s/ Jeffrey Lubatkin
-------------------------------
Name: Jeffrey Lubatkin
Title: Vice President
THE SUMITOMO BANK, LTD.
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
- 14 -
By: /s/ C. Michael Garido
-------------------------------
Name: C. Michael Garido
Title: Senior Vice President
U.S. BANK, NATIONAL ASSOCIATION
By: /s/ Thomas W. Cherry
-------------------------------
Name: Thomas W. Cherry
Title: Vice President
WACHOVIA BANK, N.A.
By: /s/ William C. Christie
-------------------------------
Name: William C. Christie
Title: Senior Vice President
AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
SCHEDULE I
Schedule of Commitments
-----------------------
Lenders Commitment
- ------- ----------
CITIBANK, N.A. $100,000,000.00
THE BANK OF NOVA SCOTIA/ SCOTIABANC, INC. $ 75,000,000.00
SAN PAOLO IMI S.p.A. $ 70,000,000.00
HSBC BANK USA $ 65,000,000.00
THE CHASE MANHATTAN BANK $ 60,000,000.00
DRESDNER BANK AG, NEW YORK $ 60,000,000.00
& GRAND CAYMAN BRANCHES
WACHOVIA BANK, N.A. $ 60,000,000.00
FLEET BANK, N.A. $ 50,000,000.00
THE SUMITOMO BANK, LTD. $ 50,000,000.00
BANK ONE, NA (MAIN OFFICE CHICAGO) $ 30,000,000.00
MELLON BANK, N.A. $ 30,000,000.00
PNC BANK, N.A. $ 30,000,000.00
SVENSKA HANDELSBANKEN $ 30,000,000.00
THE BANK OF NEW YORK $ 20,000,000.00
U.S. BANK, NATIONAL ASSOCIATION $ 20,000,000.00
===============
TOTAL $750,000,000.00
<PAGE>
EXHIBIT A
FORM OF NOTICE OF ELECTION OF TERM OPTION
[Date]
Citibank, N.A., as Agent
399 Park Avenue
New York, New York 10043
Attention: ___________
Ladies and Gentlemen:
The undersigned, Omnicom Group, Inc. (the "Guarantor"), refers to the
Amended and Restated Credit Agreement dated as of April 27, 2000 (said
agreement, as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"; capitalized terms defined therein being used herein as
therein defined), among the undersigned, Omnicom Finance Inc., Omnicom Finance
plc and Omnicom Capital Inc., each as a Borrower, Citibank, N.A., in its
capacity as Administrative Agent, and the Banks parties thereto.
In accordance with Section 4.05 of the Credit Agreement, the Guarantor
hereby notifies you that it elects to convert the Loans outstanding as of the
Commitment Termination Date (___________ __, 200_ ) to Term Loans payable on [
___________ __, 200_ (the Final Maturity Date)] [___________ __, 200_ (a date
prior to the Final Maturity Date)]. The Term Loans will be [Base Rate
Loans][Eurocurrency Rate Loans with an initial Interest Period of ____
month[s]]. The Company hereby certifies that, on and as of the date hereof, no
Default or Event of Default has occurred and is continuing.
Very truly yours,
OMNICOM GROUP, INC.
By
---------------------------------
Name:
Title:
FORM OF NOTICE OF ELECTION OF TERM OPTION
<PAGE>
EXHIBIT B
[FORM OF TERM NOTE]
PROMISSORY NOTE
U.S. $_________________ Dated _________ __, 200_
FOR VALUE RECEIVED, the undersigned, [OMNICOM FINANCE INC., a corporation
organized and existing under the laws of Delaware][OMNICOM FINANCE PLC, a
corporation organized and existing under the laws of England and Wales][OMNICOM
CAPITAL INC., a corporation organized and existing under the laws of
Connecticut] (the "Borrower"), hereby unconditionally promises to pay to the
order of ______________ (the "Bank") for the account of its Applicable Lending
Office the principal sum of _______________________ U.S. DOLLARS (U.S.
$_________________), on __________, ______ (or, if such date is not a Business
Day as defined in the Credit Agreement referred to below, the immediately
preceding Business Day), for the account of its Applicable Lending Offices
provided for by the Credit Agreement referred to below, at the Payment Office of
the Administrative Agent, in Dollars and in immediately available funds, free
and clear of and without deduction for Taxes or other offsets, to the extent
provided in the Credit Agreement.
The Borrower further promises to pay interest on the unpaid principal
amount of this Note, at such account, in like money and funds, from the date
hereof until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement referred to
below.
This Note is one of the Term Notes referred to in, and is entitled to the
benefits and is subject to the terms, conditions and limitations of, the 364-Day
Credit Agreement (as the same may be amended, modified and supplemented and in
effect from time to time, the "Credit Agreement") dated as of April 30, 1999 and
as amended and restated as of April 27, 2000, among the Borrowers referred to
therein, the Bank, the other Banks referred to therein, Citibank, N.A., as
Administrative Agent for the Banks (the "Administrative Agent"), The Bank of
Nova Scotia, as Documentation Agent and San Paolo IMI S.p.A. as Syndication
Agent. Capitalized terms used but not defined in this Note shall have the
respective meanings assigned to them in the Credit Agreement.
This Note is guaranteed pursuant to the Guaranty. The Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for optional and mandatory
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
FORM OF TERM NOTE
<PAGE>
- 2 -
This Note shall be governed by, and construed in accordance with, the law
of the State of New York.
[OMNICOM FINANCE INC.]
[OMNICOM FINANCE PLC]
[OMNICOM CAPITAL INC.]
By
-------------------------------
Name:
Title:
FORM OF TERM NOTE
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF OMNICOM GROUP INC. AND
SUBSIDIARIES AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2000 AS IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 353,462
<SECURITIES> 39,421
<RECEIVABLES> 3,214,247
<ALLOWANCES> 50,435
<INVENTORY> 0
<CURRENT-ASSETS> 4,520,236
<PP&E> 991,484
<DEPRECIATION> 542,911
<TOTAL-ASSETS> 8,803,246
<CURRENT-LIABILITIES> 5,082,263
<BONDS> 1,550,147
0
0
<COMMON> 93,543
<OTHER-SE> 1,407,520
<TOTAL-LIABILITY-AND-EQUITY> 8,803,246
<SALES> 0
<TOTAL-REVENUES> 1,379,015
<CGS> 0
<TOTAL-COSTS> 838,867
<OTHER-EXPENSES> 411,743
<LOSS-PROVISION> 2,342
<INTEREST-EXPENSE> 18,595
<INCOME-PRETAX> 262,410
<INCOME-TAX> 108,469
<INCOME-CONTINUING> 143,538
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 143,538
<EPS-BASIC> 0.82
<EPS-DILUTED> 0.78
</TABLE>
