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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 13, 1999
TRIBUNE COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 1-8572 36-1880355
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
435 North Michigan Avenue, Chicago, Illinois 60611
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 222-9100
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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An exhibit is filed herewith in connection with the Registration Statement
on Form S-3 (File No. 333-74961) originally filed March 24, 1999 by Tribune
Company (the "Company").
On April 9, 1999, the Company filed a final prospectus supplement dated
April 7, 1999 pursuant to Rule 424(b) of the Securities Act of 1933, as amended,
relating to Exchangeable Subordinated Debentures due 2029 (the "PHONES").
On April 13, 1999, the Company executed the form of Debenture for the
PHONES and delivered such form to Bank of Montreal Trust Company, as trustee.
Such form of Debenture, which is an exhibit to the Registration Statement, is
being filed as an exhibit hereto.
Item 7. Financial Statements and Exhibits.
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The Company is filing herewith the following exhibit:
(c) Exhibit.
The exhibit accompanying this report is listed in the accompanying Exhibit
Index.
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SIGNATURE
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, thereto duly authorized.
TRIBUNE COMPANY
Date: April 14, 1999 By: /s/ David J. Granat
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Name: David J. Granat
Title: Vice President and Treasurer
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EXHIBIT INDEX
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The following exhibit is filed herewith and is an exhibit to the
Company's Registration Statement on Form S-3, Registration No. 333-74961, as
noted below.
Registration No.
333-74961
Exhibit No. Exhibit No. Exhibits
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4 4.4 Form of Exchangeable Subordinated
Debenture due 2029.
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Exhibit 4
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A
NOMINEE OF THE DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR THE INDIVIDUAL DEBT SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITORY" OR "DTC") (55 WATER STREET, NEW YORK,
NEW YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NO. 1 CUSIP NO. 896047 30 5
[Face of PHONES]
TRIBUNE COMPANY
8,000,000 PHONES/SM/
Exchangeable Subordinated Debenture Due 2029
(Exchangeable for Cash Based on Value of America Online, Inc. Common Stock)
Tribune Company, a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the Maturity Amount in any coin or currency of the
United States of America, which at the time of payment is legal tender for
public and private debts, upon presentation and surrender of this PHONES, on the
15th day of May, 2029 (the "Maturity Date"), and to pay interest ("Fixed
Interest") (computed on the basis of a 360-day year of twelve 30-day months) on
the Original Principal Amount from the date of original issuance or from the
most recent Interest Payment Date (as defined below) to which interest has been
paid or duly provided for at the rate of 2.0% per annum (the "Interest Rate"),
plus any applicable Variable Interest, if any, quarterly in arrears (Fixed
Interest and Variable Interest, collectively, "Quarterly Interest"), on (but not
including)
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February 15, May 15, August 15 and November 15 of each year (each, an "Interest
Payment Date" and, collectively, the "Interest Payment Dates"), commencing May
15, 1999, until payment of the Maturity Amount or if redeemed earlier, the
Redemption Amount or until earlier exchanged upon exercise of the Exchange Right
by the Holder hereof.
Payment of Quarterly Interest may be deferred, at the election of the
Company as specified on the reverse hereof. Quarterly Interest payable on any
Interest Payment Date shall (subject to exceptions provided in the Indenture
referred to on the reverse hereof) be paid to the person in whose name this
PHONES or the PHONES in exchange or substitution for which this PHONES shall
have been issued, shall have been registered at the close of business on
February 1, May 1, August 1 or November 1 (each a "Regular Record Date"), as the
case may be, immediately preceding such Interest Payment Date whether or not a
Business Day. Changes in the Contingent Principal Amount shall not affect the
amount of Quarterly Interest. Additional Interest, if any, shall be distributed
as specified on the reverse hereof. As of the date of original issuance hereof,
one Reference Share is attributable to each PHONES represented hereby, subject
to adjustment as provided on the reverse hereof.
Capitalized terms used on the face hereof without definition have the
meaning specified on the reverse hereof.
THE PROVISIONS OF THIS PHONES ARE CONTINUED ON THE REVERSE HEREOF AND
SUCH CONTINUED PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH
FULLY SET FORTH AT THIS PLACE.
This PHONES shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof or any indenture supplemental thereto, or
become valid or obligatory for any purpose until the Trustee under said
Indenture, or a successor trustee thereunder, shall have signed the form of
certificate of authentication appearing hereon.
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/SM/ Service Mark of Merrill Lynch & Co., Inc.
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* * *
IN WITNESS WHEREOF, TRIBUNE COMPANY has caused this instrument to be
duly executed under its corporate seal.
Dated: April 13, 1999
TRIBUNE COMPANY
By: /s/ Donald C. Grenesko
Name: Donald C. Grenesko
Title: Senior Vice President and
Chief Financail Officer
Attest: /s/ Mark W. Hianik
Name: Mark W. Hianik
Assistant Secretary
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated pursuant to the within-
mentioned Indenture.
Bank of Montreal Trust Company,
as Trustee,
By: /s/ Mary Ann Luisi
As Authorized Officer
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[Reverse of PHONES]
TRIBUNE COMPANY
Exchangeable Subordinated Debenture Due 2029
(Exchangeable for Cash Based on Value of America Online, Inc. Common Stock)
This PHONES is one of a duly authorized issue of unsecured,
subordinated debentures, notes or other evidences of indebtedness (hereinafter
called the "Securities") of the Company of the series hereinafter specified,
which PHONES are limited in aggregate number to 8,000,000 PHONES and in
aggregate original principal amount to $1,256,000,000, all such Securities
issued or to be issued under the Indenture dated as of April 1, 1999, (as may be
further supplemented from time to time, the "Indenture") between the Company and
Bank of Montreal Trust Company, as trustee (herein called the "Trustee", which
term includes any successor Trustee under the Indenture), pursuant to which the
Company has designated Bank of Montreal Trust Company as Trustee for the PHONES,
to which Indenture and all other indentures supplemental thereto reference is
hereby made for a statement of the rights and limitation of rights thereunder of
the Holders of the Securities and of the rights, obligations, duties and
immunities of the Trustee for each series of Securities and of the Company, and
the terms upon which the Securities are and are to be authenticated and
delivered. As provided in the Indenture, the Securities may be issued in one or
more series, which different series may be issued in various aggregate principal
amounts, may be denominated in currencies other than U.S. Dollars (including
composite currencies), may mature at different times, may bear interest, if any,
at different rates, may be subject to different redemption provisions, if any,
may be subject to different sinking fund or other purchase provisions, if any,
may be subject to different covenants and Events of Default and may otherwise
vary as in the Indenture provided or permitted. This PHONES is one of a series
of the Securities designated as Exchangeable Subordinated Debentures due 2029.
The PHONES evidenced by this PHONES is, to the extent provided in the
Indenture, subordinate and subject in right and payment to the prior payment in
full of all Senior Indebtedness (as defined in the Indenture), and each Holder
of this PHONES by accepting the same, agrees to and shall be bound by the
provisions of the Indenture.
The Maturity Amount, the Redemption Amount, Additional Interest, if
any, and Quarterly Interest on the PHONES shall be payable at the office or
agency the Company maintains for such purpose within The City and State of New
York or, at the Company's option, any such payments of cash may be made by check
mailed to the Holders of the PHONES at their respective addresses set forth in
the register of Holders of PHONES. Until otherwise designated by the Company,
the Company's office or agency in New York shall be the office of the Trustee
maintained for such purpose. The PHONES shall be issued in denominations of one
PHONES and integral multiples thereof.
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Interest
The Company shall pay Quarterly Interest to the Holder of this PHONES
in such amounts and at such times as specified on the face of this PHONES. At
least five (5) Business Days prior to each Interest Payment Date the Company
shall deliver an Officers' Certificate to the Trustee setting forth: (i) the
amount of Fixed Interest per PHONES for such quarterly period and the applicable
Variable Interest, and (ii) the total Quarterly Interest due for such quarterly
period on all PHONES outstanding. "Variable Interest" means, in respect of any
quarterly interest period, an amount per PHONES equal to the amount of any
quarterly cash dividends paid for such period on the Reference Shares
attributable to each PHONES.
The Company shall also distribute to the Holder of each PHONES, an
amount ("Additional Interest") equal to any property, including cash, (other
than an amount representing Variable Interest or publicly traded equity
securities) distributed on or with respect to the Reference Shares attributable
to each PHONES. If any Additional Interest consists of publicly traded
securities (other than equity securities) such securities shall be distributed
to the Holder of each PHONES, provided however, that no fractional units of such
securities shall be distributed, and the Company shall distribute cash
representing the fair market value of such fractional units of such securities
as determined in good faith by the Board of Directors. If any Additional
Interest is not publicly traded securities, cash representing the fair market
value of such property (as determined in good faith by the Board of Directors)
shall be distributed to the Holder of each PHONES.
Additional Interest shall be distributed to the Holder of each PHONES
on the twentieth (20th) Business Day (the "Additional Interest Distribution
Date") after the Reference Shares Distribution Date. "Reference Shares
Distribution Date" means the date on which any property, including cash,
distributed on or with respect to the Reference Shares shall be distributed to
the holders of Reference Shares. The record date for any distribution of
Additional Interest shall be the tenth (10th) Business Day after the Reference
Shares Distribution Date.
At least five (5) Business Days prior to any Additional Interest
Distribution Date, the Company shall deliver an Officers' Certificate to the
Trustee setting forth: (i) the amount of Additional Interest to be distributed
per PHONES; and (ii) the total amount of Additional Interest to be distributed
for all outstanding PHONES on such Additional Interest Distribution Date. If any
Additional Interest consists of any property that is not publicly traded, then
at least five (5) Business Days prior to such Reference Shares Distribution
Date, the Company shall deliver to the Trustee: (i) a certified copy of a Board
Resolution establishing the fair market value of such property; and (ii) an
Officers' Certificate setting forth (A) the amount of such property to be
distributed per PHONES, and (B) the total amount of such property to be
distributed for all outstanding PHONES. In each case described above, the
Company shall state in such Officers' Certificate whether it shall distribute
such Additional Interest in property or cash. The Trustee shall only be
responsible for distributing Additional Interest in the form of cash or global
book-entry securities which are DTC eligible. The Company shall be responsible
for acting as its own
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paying agent to make all other distributions of Additional Interest. The Company
shall prepare a press release relating to any such distribution of Additional
Interest to be provided to DTC for dissemination through the DTC broadcast
facility.
If Quarterly Interest or Additional Interest is payable on a date that
is not a Business Day, payment shall be made on the next Business Day (and
without any interest or other payment in respect of such delay); provided,
however, if the next Business Day is in the next calendar year, payment of such
interest shall be made on the preceding Business Day. A "Business Day" means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in the City of Chicago or The City of New York are
authorized or obligated by law or regulation to close.
The Company shall pay interest at a rate of 8.125% per annum on (i)
any overdue Maturity Amount; (ii) any overdue installments of Quarterly
Interest; and (iii) any overdue payments of Additional Interest based on the
fair market value of such Additional Interest, in each case, without regard to
any applicable grace period.
Deferral of Interest Payments
If no Event of Default has occurred and is continuing under the
PHONES, the Company may, on one or more occasions, defer payments of Quarterly
Interest ( "Deferred Quarterly Interest") for up to twenty (20) consecutive
quarterly periods. The Company shall not, however, be subject to the twenty (20)
consecutive quarterly period limitation on deferral if all Reference Shares
cease to be outstanding, and the Company subsequently elects to defer Quarterly
Interest. Any deferral of Quarterly Interest may not extend beyond the Maturity
Date, and the Company may not defer distributions of Additional Interest.
If the Company defers Quarterly Interest, the Contingent Principal
Amount shall increase by the amount of such Deferred Quarterly Interest, (plus
accrued interest thereon at the Interest Rate, compounded quarterly ("Accrued
Interest") ) and the Early Exchange Ratio shall be 100% for the quarter
following such deferral. Once the Company has paid all Deferred Quarterly
Interest (plus Accrued Interest), together with the Quarterly Interest for the
then current quarterly period, the Contingent Principal Amount shall decrease by
the amount of such Deferred Quarterly Interest (plus Accrued Interest), the
Early Exchange Ratio will decrease to 95% and the Company may again defer
Quarterly Interest as described above. The Company may only pay Deferred
Quarterly Interest (plus Accrued Interest) on an Interest Payment Date.
Instead of accruing cash interest on the PHONES during a quarterly
deferral period, so long as the then current market value of Reference Shares
attributable to each PHONES exceeds the Original Principal Amount per PHONES,
the Company may at its option, but is not obligated to, increase the number of
Reference Shares attributable to each PHONES by 0.5% with respect to any
Quarterly Interest. If the Company elects to make this increase, it shall be
deemed current on Quarterly Interest for such quarter, the Contingent Principal
Amount shall
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not increase, the Holders of the PHONES shall not be entitled to receive
Quarterly Interest for such quarter, and the Early Exchange Ratio shall be 100%
for the following quarter. At the time the Company gives notice that it intends
to defer Quarterly Interest, it must elect and give notice of such election to
either accrue cash interest on the PHONES for such quarterly period or increase
the number of Reference Shares attributable to the PHONES.
If the Company elects to defer Quarterly Interest for any quarterly
period, the Company shall provide the Trustee with notice of such election (a
"Deferral Notice") and shall prepare a press release relating to such deferral
to be provided to DTC for dissemination through the DTC broadcast facility. The
Deferral Notice with respect to any quarterly period shall be given to the
Trustee not later than one (1) Business Day before the earlier of: (i) the
Regular Record Date for the payment of Quarterly Interest for such quarterly
period; or (ii) the date that the Company is required to give notice to the New
York Stock Exchange ("NYSE") (or any other applicable self-regulatory
organization) or to the Holders of the PHONES as of such Regular Record Date or
the applicable Interest Payment Date.
The Deferral Notice shall be in the form of an Officers' Certificate
to the Trustee setting forth: (i) the period with respect to which the Company
is electing to defer Quarterly Interest; (ii) the amount of increase of
Contingent Principal Amount per PHONES; (iii) the total amount of increase of
the Contingent Principal Amount for all outstanding PHONES; (iv) a statement
that the Early Exchange Ratio will increase to 100% prospectively from such date
for the following quarter; (v) that no Event of Default has occurred and is
continuing under the PHONES; and (vi) if applicable, that the Company is not
subject to the twenty (20) consecutive period limitation on deferrals. The
Company shall deliver a Deferral Notice for each deferral of Quarterly Interest.
If the Company elects to increase the amount of Reference Shares payable for
each PHONES in lieu of accruing cash interest for such quarter, the Deferral
Notice shall in addition set forth: (A) the amount of such increase and the
total amount, after such increase, of Reference Shares applicable to each PHONES
and (B) the amount of such increase and the total amount, after such increase,
of Reference Shares applicable to all outstanding PHONES.
If and when the Company pays all of the Deferred Interest and Accrued
Interest, the Company shall deliver to the Trustee an Officers' Certificate
setting forth: (i) the calculation of Deferred Interest and Accrued Interest
owed per PHONES; (ii) the total amount of Deferred Interest and Accrued Interest
owed on all outstanding PHONES; (iii) a statement that the Early Exchange Ratio
will decrease to 95% prospectively from such date for the following quarter;
(iv) the amount of decrease of the Contingent Principal Amount per PHONES; and
(v) the total amount of decrease of the Contingent Principal Amount for all
outstanding PHONES.
Principal Amount
The "Original Principal Amount" per PHONES is equal to $157.00. The
minimum amount payable upon Redemption or maturity of each PHONES (the
"Contingent Principal Amount") shall be initially equal to the Original
Principal Amount. If any Variable Interest or any
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Additional Interest is paid, the Contingent Principal Amount for each PHONES
shall be reduced on a quarterly basis to the extent necessary such that the
yield to the date of computation (including all Quarterly Interest and the fair
market value of any Additional Interest) does not exceed a yield of 2.0% per
annum. In no event will the Contingent Principal Amount be less than zero.
At maturity, the Holder of each PHONES shall be entitled to receive
the Maturity Amount. The "Maturity Amount" per PHONES means the sum of: (i) the
higher of (A) the Contingent Principal Amount on the Maturity Date or (B) the
sum of (1) the Current Market Value of the Reference Shares attributable to each
PHONES on the Maturity Date and (2) any unpaid Deferred Quarterly Interest
(including any Accrued Interest); and (ii) the Final Period Distribution.
"Final Period Distribution" per PHONES means, in respect of (i) the
Maturity Date, a distribution determined in accordance with clauses (2), (3) and
(4) below and (ii) the Redemption Date, a distribution determined in accordance
with clauses (1), (2), (3) and (4) below. If the Redemption Date is in
connection with a Rollover Offering, the distribution determined in accordance
with clause (4) shall be a distribution equal to all dividends and distributions
on or in respect of the Reference Shares which a holder of Reference Shares on
the Pricing Date would be entitled to receive.
(1) Unless (i) the Redemption Date of the PHONES is also an Interest
Payment Date or (ii) Quarterly Interest has been deferred for the then
current quarterly period, an amount equal to the Interest Rate on the
Original Principal Amount from the most recent Interest Payment Date
to the Redemption Date, plus
(2) a distribution equal to the sum of all dividends and distributions on
or in respect of the Reference Shares declared by the applicable
Reference Company and for which the record date falls during the
period from the date of original issuance of the PHONES to the most
recent Interest Payment Date and which have not been distributed to
holders of Reference Shares prior to the most recent Interest Payment
Date, plus
(3) a distribution equal to the sum of all dividends and distributions on
or in respect of the Reference Shares which a holder of Reference
Shares during the period from the most recent Interest Payment Date to
the date immediately preceding the first Trading Day of the Averaging
Period is entitled to receive, plus
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(4) a distribution equal to the sum of, for each successive day in the
Averaging Period that is anticipated on the first day of the Averaging
Period to be a Trading Day, the amounts determined in accordance with
the following formula:
E x (1 - 0.05n)
where:
E = all dividends and distributions on or in respect of the
Reference Shares which a holder of Reference Shares on the
applicable day would be entitled to receive, provided that a
record date that occurs on a day that is not a scheduled
Trading Day shall be deemed to have occurred on the
immediately preceding scheduled Trading Day; and
n = the number of scheduled Trading Days that have elapsed in
the Averaging Period with the first Trading Day of the
Averaging Period being counted as zero.
The Holder of each PHONES is only entitled to receive distributions
determined in accordance with clauses (2), (3) or (4) to the extent actually
distributed by the applicable Reference Company. Distributions related to cash
amounts paid by the applicable Reference Company on Reference Shares as
described in clauses (2), (3) or (4) before the Redemption Date or the Maturity
Date, as the case may be, shall be paid on the Redemption Date or the Maturity
Date, as the case may be. Distributions related to all other property
distributed, or the cash value of such property, shall be distributed within
twenty (20) Business Days after the Reference Shares Distribution Date.
Upon maturity, the Company shall deliver to the Trustee an Officers'
Certificate (i) informing the Trustee of the applicable Maturity Amount per
PHONES and in the aggregate for all outstanding PHONES and the Company's
calculation thereof and (ii) directing the Trustee to adjust the Trustee's
records and to request DTC to adjust DTC's records.
Notwithstanding any other provision hereof, if the Contingent
Principal Amount is reduced to zero or if all of the Reference Shares cease to
be outstanding, the PHONES shall continue to remain outstanding until the
Maturity Date unless the Company shall elect to earlier redeem the PHON ES.
Exchange Option
The Holder of each PHONES shall have a right, at any time and from
time to time, to exchange (an "Exchange Right") each PHONES for an amount of
cash equal to a percentage of the Exchange Market Value of the Reference Shares
(the "Early Exchange Ratio") attributable to each PHONES. The Early Exchange
Ratio shall be equal to: (i) 95% of the Exchange Market
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Value of the Reference Shares attributable to each PHONES or (ii) during a
deferral of Quarterly Interest or, if the Company so elects, during the pendency
of any tender or exchange offer for any of the Reference Shares, 100% of the
Exchange Market Value of the Reference Shares attributable to each PHONES. The
Company shall pay the Holder of each PHONES the amount due upon exchange as soon
as reasonably practicable after such Holder delivers notice (an "Exchange
Notice") to the Trustee, but in no event earlier than three Trading Days after
the date of such Exchange Notice or later than ten (10) Trading Days after the
date of such Exchange Notice.
"Exchange Market Value" means the Closing Price on the Trading Day
following the date a Holder of PHONES delivers an Exchange Notice to the Trustee
(an "Exchange Date"); provided, however, if Exchange Notices relating to more
than 500,000 PHONES have been delivered on any Exchange Date, then the Exchange
Market Value shall be the average Closing Price on the five (5) Trading Days
following such Exchange Date. If Exchange Notices relating to more than 500,000
PHONES are delivered on any Exchange Date, the Trustee shall notify the Company
of such fact by 6:00 p.m. New York City time on the Exchange Date, and the
Company shall give notice of such fact by issuing a press release prior to 9:00
a.m. New York City time on the next Trading Day, to be provided to DTC for
dissemination through the DTC broadcast facility and by providing such notice to
the Trustee.
If the PHONES are held through DTC, the Holder of each PHONES may
exercise such Holder's Exchange Right through the relevant direct participant in
DTC through the DTC ATOP system by delivering an agent's message and delivering
the PHONES of such Holder to the Trustee's DTC participant account. If the
PHONES are held in certificated form, the Holder may exercise such Exchange
Right as follows: the Holder shall (i) complete and manually sign an Exchange
Notice in the form available from the Trustee and deliver such Exchange Notice
to the Trustee at the office maintained by the Trustee for such purpose, (ii)
surrender such PHONES to the Trustee, (iii) if required, furnish appropriate
endorsement and transfer documents, and (iv) if required, pay all transfer or
similar taxes.
By 12:00 noon New York City time on each Business Day following
receipt by the Trustee of notification from DTC that DTC has received an agent's
message from a DTC participant electing to exercise such participant's Exchange
Right and delivery of such PHONES into the Trustee's DTC participant account or
following receipt of a complete manually signed Exchange Notice and receipt of
the related PHONES from the Holder, the Trustee shall notify the Company of the
amount of such PHONES so tendered. The Company shall deliver an Officers'
Certificate to the Trustee no later than one (1) Business Day after the Trading
Day following the Exchange Date; provided however, if Exchange Notices relating
to more than 500,000 PHONES have been delivered on any Exchange Date, the
Company shall deliver such Officers' Certificate no later than one (1) Business
Day after the fifth (5th) Trading Day following such Exchange Date. Such
Officers' Certificate shall set forth the amount to be paid to such tendering
Holder and the date of payment of such amount (the "Exchange Payment Date"). The
Company shall deposit such amount with the Trustee on the Exchange Payment Date,
and upon receipt of such payment
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from the Company, the Trustee shall pay DTC, as soon as practicable or in the
case of PHONES that are held in certificated form, as directed by the tendering
Holder.
The date on which all of the foregoing requirements have been
satisfied shall be the Redemption Date with respect to the PHONES delivered for
exchange.
Redemption
The Company may redeem, at any time, the PHONES in whole but not in
part (a "Redemption") at a redemption price per PHONES (the "Redemption Amount")
equal to the sum of: (i) the higher of (A) the Contingent Principal Amount per
PHONES or (B) the sum of (1) the Current Market Value of the Reference Shares
attributable to each PHONES and (2) any Deferred Quarterly Interest per PHONES;
(ii) the Final Period Distribution; and (iii) $9.42 per PHONES if the Company
redeems the PHONES prior to May 15, 2000; $6.28 per PHONES if the Company
redeems the PHONES on or after May 15, 2000, but prior to May 15, 2001; $3.14
per PHONES if the Company redeems the PHONES on or after May 15, 2001, but prior
to May 15, 2002; or zero if the Company redeems the PHONES any time on or after
May 15, 2002.
The "Current Market Value" (other than in the case of a Rollover
Offering, as defined below) is defined in respect of: (i) the Maturity Date, as
the average Closing Price per Reference Share on the twenty (20) Trading Days
(the "Averaging Period") immediately prior to (but not including) the fifth
(5th) Business Day preceding the Maturity Date; and (ii) the Redemption Date, as
the average Closing Price per Reference Share during the Averaging Period
immediately prior to (but not including) the fifth (5th) Business Day preceding
the Redemption Date; provided, however, that for purposes of determining the
payment required upon Redemption in connection with a Rollover Offering,
"Current Market Value" means the Closing Price per Reference Share on the
Trading Day immediately preceding the date that the Rollover Offering is priced
(the "Pricing Date") or, if the Rollover Offering is priced after 4:00 p.m. New
York City Time, on the Pricing Date, the Closing Price per Reference Share on
the Pricing Date, except that if there is not a Trading Day immediately
preceding the Pricing Date or (where pricing occurs after 4:00 p.m., New York
City Time, on the Pricing Date) if the Pricing Date is not a Trading Day,
"Current Market Value" means the market value per Reference Share as of the
Redemption Date as determined by a nationally recognized independent investment
banking firm retained by the Company.
A "Rollover Offering" means a refinancing of the PHONES by way of
either (i) a sale of the Reference Shares or (ii) a sale of securities that are
priced by reference to the Reference Shares, in either case, by means of a
completed public offering or offerings by the Company and which is expected to
yield net proceeds which are sufficient to pay the Redemption Amount for all of
the PHONES. The Trustee will notify the Holders of the PHONES if the Company
elects to redeem the PHONES in connection with a Rollover Offering not less than
thirty (30) nor more than sixty (60) Business Days prior to the Redemption Date.
The Company will also issue a press release prior to 4:00 p.m., New York City
time, on the Business Day
R-8
<PAGE>
immediately prior to the day on which the Closing Price of the Reference Shares
is to be measured for the purpose of determining the Current Market Value in
connection with a Rollover Offering. Such notice shall state that the Company is
firmly committed to price the Rollover Offering, shall specify the date on which
the Rollover Offering is to be priced (including whether the Rollover Offering
shall be priced during trading on the Pricing Date or after the close of trading
on the Pricing Date) and consequently, whether the Closing Price for the
Reference Shares by which the Current Market Value shall be measured shall be
the Closing Price on the Trading Day immediately preceding the Pricing Date or
the Closing Price on the Pricing Date. The Company shall provide such press
release to DTC for dissemination through the DTC broadcast facility.
The "Closing Price" of any security on any date of determination means
the closing sale price (or, if no closing sale price is reported, the last
reported sale price) of such security (regular way) on the NYSE on such date or,
if such security is not listed for trading on the NYSE on that date, as reported
in the composite transactions for the principal United States securities
exchange on which such security is so listed, or if such security is not so
listed on a United States national or regional securities exchange, as reported
by the Nasdaq National Market, or if such security is not so reported, the last
quoted bid price for such security in the over-the-counter market as reported by
the National Quotation Bureau or similar organization. In the event that no such
quotation is available for any day, the Board of Directors shall be entitled to
determine the Closing Price on the basis of such quotations as it in good faith
considers appropriate.
A "Trading Day" is defined as a day on which the security, the Closing
Price of which is being determined, (i) is not suspended from trading on any
national or regional securities exchange or association or over-the-counter
market at the close of business and (ii) has traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of such security.
In case of any Redemption (other than a Redemption in connection with
a Rollover Offering), the Company shall give thirty (30) Business Days notice to
the Trustee and to the Holders of the PHONES of such Redemption and the
Redemption Date. On the fifth Business Day preceding the Redemption Date (or as
soon as practicable thereafter), the Company shall provide to the Trustee an
Officers' Certificate and prepare a press release to be provided to DTC for
dissemination through the DTC broadcast facility. Such Officers' Certificate and
press release shall set forth on a per PHONES and an aggregate basis, (i) the
Redemption Amount, (ii) the Contingent Principal Amount as of the Redemption
Date, (iii) the Current Market Value of the Reference Shares, and (iv) the
Deferred Quarterly Interest in respect of such Redemption. The Company shall
irrevocably deposit with the Trustee sufficient funds to pay the Redemption
Amount on the Redemption Date. Distributions to be paid on or before the
Redemption Date shall be payable to the Holders on the related dates of
distribution, except to the extent such distributions are payable as part of the
Final Period Distribution.
Once notice of Redemption is given and funds are irrevocably
deposited, interest on the PHONES shall cease to accrue on and after the
Redemption Date and all rights of the
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<PAGE>
Holders shall cease, except for the right of such Holders to receive the
Redemption Amount (but without interest on such Redemption Amount).
If the Redemption Date is not a Business Day, then the Redemption
Amount shall be payable on the next Business Day (and without any interest or
other payment in respect of any such delay). However, if the next Business Day
is in the next calendar year, the Redemption Amount shall be payable on the
preceding Business Day.
If the Company improperly holds or refuses to pay any Redemption
Amount, interest on the PHONES shall continue to accrue at a rate of 8.125% per
annum from the original Redemption Date (the "Original Redemption Date") to the
actual date of payment (the "Actual Redemption Date"). In such case, the Actual
Redemption Date shall be considered the Redemption Date for purposes of
calculating the Redemption Amount. The Final Period Distribution shall be deemed
paid on the Original Redemption Date to the extent paid as set forth in the
definition of Final Period Distribution above.
Reference Share Adjustments
- ---------------------------
For purposes hereof, "Reference Company" means America Online, Inc., a
Delaware corporation ("AOL"), and any other issuer of a Reference Share. A
"Reference Share" means, collectively (i) one share of Common Stock, par value
$0.01 per share of AOL (the "AOL Common Stock"); (ii) each share of publicly
traded equity securities received by a holder of one Reference Share in respect
of such share of the AOL Common Stock or other Reference Shares (either directly
or as the result of successive applications of this paragraph) upon any of the
following events: (A) the distribution on or in respect of a Reference Share in
Reference Shares; (B) the combination of Reference Shares into a smaller number
of shares or other units; (C) the subdivision of outstanding shares or other
units of Reference Shares; (D) the conversion or reclassification of Reference
Shares by issuance or exchange of other securities; (E) any consolidation or
merger of a Reference Company, or any surviving entity or subsequent surviving
entity of a Reference Company (a "Reference Company Successor"), with or into
another entity (other than a merger or consolidation in which the Reference
Company is the continuing corporation and in which the Reference Company common
stock outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of the Reference Company or
another corporation); (F) any statutory exchange of securities of the Reference
Company or any Reference Company Successor with another corporation (other than
in connection with a merger or acquisition and other than a statutory exchange
of securities in which the Reference Company is the continuing corporation and
in which the Reference Company common stock outstanding immediately prior to the
statutory exchange is not exchanged for cash, securities or other property of
the Reference Company or another corporation); or (G) any liquidation,
dissolution or winding up of the Reference Company or any Reference Company
Successor; and (iii) any Reference Share Offer Adjustment.
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<PAGE>
A "Reference Share Offer" means any tender offer or exchange offer
made for all or a portion of a class of Reference Shares of a Reference Company.
If a Reference Share Offer is made, the Company may, at its option, either: (i)
during the pendency of the Reference Share Offer, increase the Early Exchange
Ratio to 100%; or (ii) make a Reference Share Offer Adjustment.
A "Reference Share Offer Adjustment" means each share of publicly
traded equity securities, if any, deemed to be distributed on or in respect of a
Reference Share as Average Transaction Consideration less the Reference Share
Proportionate Reduction.
"Average Transaction Consideration" deemed to be received by a Holder
of one Reference Share in a Reference Share Offer shall be equal to (i) the
aggregate consideration actually paid or distributed to all Holders of Reference
Shares in the Reference Share Offer, divided by (ii) the total number of
Reference Shares outstanding immediately prior to the expiration of the
Reference Share Offer and entitled to participate in that Reference Share Offer.
A "Reference Share Proportionate Reduction" means a proportionate
reduction in the number of Reference Shares which are the subject of the
applicable Reference Share Offer and attributable to one PHONES calculated in
accordance with the following formula:
R = X
---
N
where:
R = the fraction by which the number of Reference Shares of the
class of Reference Shares subject to the Reference Share
Offer and attributable to one PHONES shall be reduced.
X = the aggregate number of Reference Shares of the class of
Reference Shares subject to the Reference Share Offer
accepted in the Reference Share Offer.
N = the aggregate number of Reference Shares of the class of
Reference Shares subject to the Reference Share Offer
outstanding immediately prior to the expiration of the
Reference Share Offer.
If the Company elects to make a Reference Share Offer Adjustment, the
Company will distribute as Additional Interest the Average Transaction
Consideration (other than Average Transaction Consideration that is publicly
traded equity securities) deemed to be received on the Reference Shares of the
class subject to the Reference Share Offer and attributable to each PHONES
immediately prior to giving effect to the Reference Share Proportionate
Reduction relating to such Reference Share Offer.
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<PAGE>
If the Company elects to make a Reference Share Offer Adjustment, and
during the pendency of the Reference Share Offer another Reference Share Offer
is commenced in relation to the Reference Shares the subject of the then
existing Reference Share Offer, the Company may change such original election by
electing to increase the Early Exchange Ratio to 100% during the pendency of the
new Reference Share Offer, or it can continue to elect to make a Reference Share
Offer Adjustment. The Company shall similarly be entitled to change such
election for each further Reference Share Offer made during the pendency of any
Reference Share Offer for the same class of Reference Shares. For the purposes
of these adjustments, a material change to the terms of an existing Reference
Share Offer will be deemed to be a new Reference Share Offer.
If the Company elects to increase the Early Exchange Ratio to 100% in
connection with a Reference Share Offer, no Reference Share Offer Adjustment
shall be made and the Company may not change such election if any further
Reference Share Offer is made.
The Company shall give the Trustee notice of the Company's election in
the event of a Reference Share Offer. The Company shall also prepare a press
release and provide such press release to DTC for dissemination through the DTC
broadcast facility. The Company shall give such notice no later than ten (10)
Business Days before the scheduled expiration of the Reference Share Offer.
Acceleration of PHONES
- ----------------------
If an Event of Default with respect to the PHONES shall occur and be
continuing, the Maturity Amount of all PHONES then outstanding may be declared,
or may become, due and payable upon the conditions and in the manner and with
the effect provided in the Indenture.
Amount Payable Upon Bankruptcy
- ------------------------------
Upon dissolution, winding-up, liquidation or reorganization, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
similar proceedings, in respect of the Company, Holders of the PHONES may be
entitled to a claim against the Company with respect to each PHONES in an amount
equal to: (i) the higher of (A) the then applicable Contingent Principal Amount
or (B) the sum of (1) the Current Market Value (without giving effect to the
provisions relating to any Rollover Offering) of the Reference Shares
attributable to each PHONES and (2) any unpaid Deferred Quarterly Interest
(including any Accrued Interest) per PHONES; and (ii) the Final Period
Distribution determined as if the date of such event was the Maturity Date of
the PHONES.
Calculations in Respect of the PHONES
- -------------------------------------
The Company shall be responsible for making all calculations required
under the PHONES including, without limitation, the determination of: (i) the
Contingent Principal
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<PAGE>
Amount; (ii) the Current Market Value of the Reference Shares; (iii) the
Exchange Market Value of the Reference Shares; (iv) the Final Period
Distribution on the PHONES; (v) the fair market value of any property
distributed on the Reference Shares; (vi) the Average Transaction Consideration;
(vii) the composition of one Reference Share; and (viii) the amount of Accrued
Interest payable upon Redemption or at Maturity of the PHONES.
The Company shall make all such calculations in good faith and, absent
manifest error, such calculations shall be final and binding on Holders of the
PHONES. The Company shall provide a schedule of such calculations to the Trustee
and the Trustee shall be entitled to rely upon the accuracy of such calculations
without independent verification.
Modifications
- -------------
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 the Securities at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority of the aggregate principal amount of all Securities of each series at
the time outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of not less than a majority of the aggregate
principal amount of the outstanding Securities of any series, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and the consequences with respect to such series. Any such consent or
waiver by the Holder of this PHONES shall be conclusive and binding upon such
Holder and upon all future Holders of this PHONES and of any PHONES issued upon
the transfer hereof or in exchange heretofore or in lieu hereof, whether or not
notation of such consent or waiver is made upon this PHONES.
Except with respect to the rights of the holders of Senior
Indebtedness set forth in this PHONES and in the Indenture, no reference herein
to the Indenture and no provision of this PHONES and of the Indenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, premium, if any, or interest on this
PHONES at the place, at the respective times, at the rate, and in the coin or
currency herein prescribed.
The Indenture contains provisions for defeasance of : (i) the entire
indebtedness of the Securities; and (ii) certain covenants and Events of Default
with respect to the Securities, in each case upon compliance with certain
conditions set forth therein, which provisions apply to the Securities.
As provided in the Indenture and subject to certain limitations
therein and herein set forth, the transfer of this PHONES is registrable in the
Security Register of the Company upon surrender of this PHONES for registration
of transfer at the office or agency of the Company in any place where the
principal hereof and any premium or interest hereon are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the
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<PAGE>
Company and the Security Registrar duly executed by, the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new PHONES, of
authorized denominations and for the same aggregate principal amount, shall be
issued to the designated transferee or transferees.
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 cover
any tax or other governmental charge payable in connection therewith.
As provided in the Indenture and subject to certain limitations
therein and herein set forth, this PHONES is exchangeable for a like aggregate
principal amount of PHONES of different authorized denominations but otherwise
having the same terms and conditions, as requested by the Holder hereof
surrendering the same.
Certain capitalized terms used in this PHONES but not defined herein
have the meanings set forth in the Indenture.
THIS PHONES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS EXCEPT AS MAY BE OTHERWISE REQUIRED BY MANDATORY
PROVISIONS OF LAW.
The Company, the Trustee for the PHONES and any agent of the Company
or such Trustee may treat the person in whose name this PHONES is registered as
the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this PHONES is overdue, and neither the
Company, such Trustee nor any such agent shall be affected by notice to the
contrary.
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------- ----------
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as -------------------------------
tenants in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
--------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
- --------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code of Assignee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within PHONES and all rights thereunder, hereby irrevocably constituting and
appointing
---------------------------------------------------------------------
attorney to transfer said
- ------------------------------------------------------
PHONES on the books of Tribune Company with full power of substitution in the
premises.
Dated:
--------------------------------
----------------------------------
Signature
----------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within PHONES in every
particular, without alteration or
enlargement or any change
whatsoever.
R-15
