<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-33371
THE INFORMATION SET FORTH HEREIN IS SUBJECT TO COMPLETION AND AMENDMENT.
SUBJECT TO COMPLETION DATED OCTOBER 3, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED SEPTEMBER 9, 1997
<TABLE>
<S> <C>
[CLEAR CHANNEL $
LOGO] CLEAR CHANNEL COMMUNICATIONS, INC.
$ % DEBENTURES DUE OCTOBER 15,
2027
Interest payable April 15 and October 15
</TABLE>
------------------
The $ % Debentures due October 15, 2027 (the "Debentures") are
being offered by Clear Channel Communications, Inc. (the "Company"). Interest on
the Debentures is payable semiannually on each April 15 and October 15,
beginning April 15, 1998. The Debentures will mature on October 15, 2027. The
Company, at its option, may at any time redeem all or any portion of the
Debentures at a redemption price equal to the greater of (i) 100% of their
principal amount and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the date of
redemption on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the applicable Treasury Yield (as defined herein) plus basis
points, plus accrued interest to the date of redemption.
The Debentures will be represented by one or more Global Securities (as defined
herein) registered in the name of the nominee of The Depository Trust Company
(the "Depositary"). Except as provided herein and in the accompanying
Prospectus, Debentures in definitive form will not be issued. See "Description
of Debentures -- Book-Entry System" herein.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO THE
PUBLIC(1) COMMISSIONS COMPANY(1)(2)
------------ ------------- ---------------
<S> <C> <C> <C>
Per Debenture.................................. % % %
Total.......................................... $ $ $
</TABLE>
(1) Plus accrued interest, if any, from October , 1997.
(2) Before deduction of expenses payable by the Company, estimated at $ .
The Debentures are offered by the Underwriters when, as and if issued by
the Company, delivered to and accepted by the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that delivery of the
Debentures in book-entry form will be made through the facilities of the
Depositary on or about October , 1997, against payment in immediately
available funds.
CREDIT SUISSE FIRST BOSTON SALOMON BROTHERS INC
BT ALEX. BROWN
GOLDMAN, SACHS & CO.
NATIONSBANC MONTGOMERY SECURITIES, INC.
Prospectus Supplement dated October , 1997.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
The following information is qualified in its entirety by the more detailed
information and financial statements, including notes thereto, appearing in this
Prospectus Supplement, the accompanying Prospectus and the documents
incorporated by reference into this Prospectus Supplement and the accompanying
Prospectus. All information set forth herein has been adjusted to reflect
five-for-four stock splits effected in February 1992, February 1993, and
February 1994, and two-for-one stock splits effected in November 1995 and
December 1996. Unless the context otherwise requires, references herein to the
"Company" are to Clear Channel Communications, Inc. and its consolidated
subsidiaries.
THE COMPANY
The Company, which began operations in 1972, is a diversified media company
that owns or programs radio and television stations and is one of the largest
domestic outdoor advertising companies based on its total advertising display
inventory. In addition, the Company owns a 50% equity interest in the Australian
Radio Network Pty. Ltd., which operates radio stations in Australia, a one-third
equity interest in the New Zealand Radio Network, which operates radio stations
throughout New Zealand, and a 32.3% non-voting equity interest in Heftel
Broadcasting Corporation (Nasdaq: HBCCA) ("Heftel"), a leading domestic
Spanish-language radio broadcaster.
The radio stations currently owned or programmed by the Company are
principally located in the South, Southeast, Southwest, Northeast and Midwest.
These radio stations employ a wide variety of programming formats, such as
News/Talk/Sports, Country, Adult Contemporary, Urban and Album Rock. The
television stations currently owned or programmed by the Company are located in
the South, Southeast, Northeast and Midwest. Additionally, the Company operates
eleven radio networks serving Oklahoma, Texas, Iowa, Kentucky, Virginia,
Alabama, Tennessee, Florida and Pennsylvania. In 1996, the Company derived
approximately 62% of its net broadcasting revenue from radio operations and
approximately 38% from television operations.
The Company, through its acquisition of Eller Media Corporation ("Eller
Media") on April 10, 1997, is one of the largest domestic outdoor advertising
companies, serving 15 major domestic markets. For the three months ended June
30, 1997, the Company derived approximately 50% of its net revenue from radio
operations, approximately 27% from television operations, and approximately 23%
from outdoor advertising operations.
The Company has its principal executive offices at 200 Concord Plaza, Suite
600, San Antonio, Texas 78216 (telephone: 210-822-2828).
S-2
<PAGE> 3
RECENT DEVELOPMENTS
PROPOSED ACQUISITION OF PAXSON COMMUNICATIONS CORP. RADIO STATIONS
On August 25, 1997, the Company and Paxson Communications Corp. ("Paxson")
entered into definitive agreements which, subject to the terms and conditions
thereof, provides for the acquisition by the Company of 43 of Paxson's radio
stations (three of which are subject to Paxson's acquisition thereof), six radio
news and sports networks, and approximately 350 outdoor advertising display
faces for approximately $629 million in cash, and the grant to the Company of
options to purchase two additional radio stations for approximately $3 million
in cash (the "Paxson Acquisition"). All of the radio stations and display faces
referred to above are located in Florida except for four radio stations located
in Tennessee.
The consummation of the Paxson Acquisition is subject to numerous
conditions, including regulatory approval of the Federal Communications
Commission ("FCC"). Waiver of the FCC's multiple ownership rules will be
required to permit the Company to acquire Paxson radio stations in Jacksonville,
Florida and Mobile, Alabama/Pensacola, Florida where the Company owns television
stations. There can be no assurance that the FCC will grant such waivers to
allow for the acquisition of such radio stations. Additionally, some
divestitures of radio stations will likely be required to obtain FCC approval if
the Company exercises its option to purchase the two additional radio stations
referred to above.
Subject to the terms and conditions of the definitive agreements, on
October 1, 1997 (i) Paxson sold and transferred to L. Paxson, Inc. ("LPI") 24 of
its radio stations (with LPI becoming the seller with respect to such stations
under the definitive agreement with the Company), (ii) the Company made a
$369,415,100 loan to LPI, secured by a lien upon certain of LPI's assets and the
stock of LPI and guaranteed by Lowell W. Paxson, and (iii) the Company entered
into Time Brokerage Agreements with Paxson and LPI with respect to 38 radio
stations and Commercial Time Sales Agreements with respect to certain other
radio stations.
If Paxson acquires the three radio stations not yet owned by it that are
referred to above and the acquisition of such stations by the Company is not yet
consummated, then, subject to the terms and conditions set forth in the
definitive agreements, on the date of the acquisition of such stations by
Paxson, (i) Paxson may elect to transfer such stations to LWP Radio, Inc.
("LWP") (with LWP becoming the seller with respect to such stations under the
definitive agreement with the Company), (ii) the Company will make an
approximately $28,650,000 loan (subject to a further extension of credit of up
to an additional $750,000) to Paxson or LWP, secured by a lien on certain assets
of LWP and pledge of stock substantially similar to those in connection with the
loan to LPI referred to above and guaranteed by Lowell W. Paxson and (iii) the
Company will enter into Time Brokerage Agreements with Paxson or LWP with
respect to such radio stations.
The Paxson Acquisition is being consummated in multiple closings. Subject
to the terms and conditions set forth in the definitive agreements, the first
closing, with respect to Paxson's radio networks and display faces, occurred on
October 1, 1997.
The Paxson Acquisition involves the integration of numerous radio stations.
There can be no assurance that the Company will successfully integrate the
operations of the Paxson radio stations with those of the Company or that all of
the benefits expected from such integration will be realized. Any delays or
unexpected costs incurred in connection with such integration could have an
adverse effect on the Company's business, operating results or financial
position. There can be no assurance that such integration will not adversely
affect the operations of the Company.
ACQUISITION OF ELLER MEDIA CORPORATION
On April 10, 1997, the Company acquired approximately 93% of the then
outstanding stock of Eller Media for a total consideration of approximately $623
million, consisting of approximately $325 million in cash and 6,643,636 shares
of Common Stock (approximately $298 million in Common Stock based on a price per
share of $44.8625 per share) (the "Eller Media Acquisition"). Immediately
following the consummation of the Eller Media Acquisition, the Company retired
approximately $417 million of Eller Media's outstanding bank debt through
borrowings under the Company's credit facility (the "Credit Facility"). In
addition, the Company issued options (with an estimated fair value of
approximately $51 million) to purchase 1,468,182 shares of the
S-3
<PAGE> 4
Company's Common Stock in connection with the assumption of Eller Media's
outstanding stock options. The Company also agreed to issue 147,858 shares of
Common Stock pursuant to certain phantom stock plan obligations assumed by the
Company as part of the Eller Media Acquisition. The holders of the approximately
7% of the then outstanding capital stock of Eller Media not purchased by the
Company have the right to require the Company to acquire such stock for
1,081,469 shares of the Company's Common Stock until April 10, 2002. From and
after April 10, 2004 (or before such date upon the occurrence of certain
events), the Company will have the right to acquire this minority interest stake
in Eller Media for 1,081,469 shares of its Common Stock. For the twelve month
period ended December 31, 1996, Eller Media had net revenues, operating cash
flow and an operating cash flow margin of $237 million, $91 million and 38.5%,
respectively. On April 29, 1997, Karl Eller, the Chief Executive Officer of
Eller Media, was appointed to the Board of Directors of the Company. Mr. Eller
currently is employed by the Company to run Eller Media as a subsidiary of the
Company pursuant to an employment contract which is due to expire in
approximately two years. In addition, Mr. Eller and other members of the Eller
Media management team have a significant stake in the Company's stock options
through the conversion of existing Eller Media stock options into options to
purchase the Company's Common Stock.
The Eller Media Acquisition involves the integration of two companies that
have previously operated independently. There can be no assurance that the
Company will successfully integrate the operations of Eller Media with those of
the Company or that all of the benefits expected from such integration will be
realized. Any delays or unexpected costs incurred in connection with such
integration could have an adverse effect on the Company's business, operating
results or financial position. Additionally, there can be no assurance that the
operations, management and personnel of the two companies will be compatible or
that the Company will not experience the loss of key personnel. There can be no
assurance that such integration will not adversely affect the operations of the
Company.
COMPLETED AND PENDING ACQUISITIONS
Since June 30, 1997, the Company completed the acquisition of ten
additional radio stations for approximately $50 million in four markets and
completed the acquisition of or obtained the rights to lease 5,368 display faces
for approximately $150 million in nine markets.
Since June 30, 1997, in addition to the Paxson Acquisition, the Company has
entered into definitive agreements that have not been consummated to purchase
six additional radio stations for approximately $21 million in one market and
4,062 display faces for approximately $44 million in four markets. In addition,
acquisitions to purchase 12 additional radio stations for approximately $49
million in three markets are pending pursuant to definitive agreements executed
prior to June 30, 1997. All of these acquisitions of broadcast properties are
subject to the approval of the FCC and, in some cases, the Federal Trade
Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice (the "Antitrust Division"), as well as certain other
closing conditions. There can be no assurance that such acquisitions will be
consummated or, if consummated, the terms thereof.
The Company frequently evaluates strategic opportunities both within and
outside its existing lines of business and from time to time enters into letters
of intent. Although the Company has no definitive agreements with respect to
significant acquisitions not set forth in this Prospectus Supplement, the
Company expects from time to time to pursue additional acquisitions and may
decide to dispose of certain businesses. Such acquisitions or dispositions could
be material.
S-4
<PAGE> 5
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Debentures offered
hereby are estimated to be $ . All of such net proceeds received
by the Company will be used to repay borrowings outstanding under the Credit
Facility. As of October 1, 1997, a total of approximately $1,319,910,000 in
borrowings was outstanding under the Credit Facility and the effective interest
rate thereon was approximately 6.1%. Borrowings under the Credit Facility, which
must be paid in full by September 2003, bear interest as of October 1, 1997 at a
floating rate based on the LIBOR plus 0.40%. Upon repayment of such borrowings,
the amount repaid will become immediately available to the Company for
re-borrowing under the Credit Facility, subject to the satisfaction of certain
conditions. The Company expects that amounts available for re-borrowing under
the Credit Facility as a result of the application of the net proceeds of the
Offering, together with additional amounts that become available for borrowing
under the Credit Facility, will be used to finance the pending acquisitions
discussed in this Prospectus Supplement. Future acquisitions of radio and
television stations and other media-related properties effected in connection
with the implementation of the Company's acquisition strategy are expected to be
financed from increased borrowings under the Credit Facility, other debt or
equity financings and cash flow from operations.
CAPITALIZATION
The following table sets forth the current portion of long-term debt and
capitalization of the Company as of June 30, 1997, and as adjusted to give
effect to (i) the issuance of 8,000,000 shares of Common Stock on September 18,
1997 for approximately $504 million, and (ii) the issuance of $ million of
% Debentures Due October 15, 2027 offered hereby ($ million net of
underwriting discount).
<TABLE>
<CAPTION>
JUNE 30, 1997
----------------------------
ACTUAL AS ADJUSTED
---------- --------------
(IN THOUSANDS)
<S> <C> <C>
Current portion of long-term debt........................ $ 3,169 $ 3,169
========== ==========
Credit Facility(1)....................................... $1,253,150 $
% Debentures due October 15, 2027................... --
Other long-term debt..................................... 22,799 22,799
Shareholders' equity:
Preferred Stock, $1.00 par value, 2,000,000 shares
authorized, no shares issued or outstanding......... -- --
Common Stock, $.10 par value, 150,000,000 shares
authorized, 90,070,859 shares issued and outstanding
(98,070,859 shares as adjusted)..................... 9,007 9,807
Additional paid-in capital............................. 1,037,071 1,539,771
Retained earnings...................................... 128,747 128,747
Other equity........................................... 1,226 1,226
Cost of shares (36,940) held in treasury............... (587) (587)
---------- ----------
Total shareholders' equity.......................... 1,175,464 1,678,964
---------- ----------
Total capitalization........................... $2,451,413 $
========== ==========
</TABLE>
- ---------------
(1) The Company has and may incur additional indebtedness of up to
approximately $922 million in connection with various pending acquisitions,
including approximately $369 million loaned to LPI in connection with the
first closing of the Paxson Acquisition. See "Recent Developments."
S-5
<PAGE> 6
SELECTED FINANCIAL INFORMATION
The selected financial information presented below for the five years ended
December 31, 1996 has been derived from the consolidated financial statements of
the Company, which have been audited by Ernst & Young LLP, independent auditors.
The selected financial information as of June 30, 1997 and for the six months
ended June 30, 1997 and 1996 has been derived from unaudited consolidated
financial statements of the Company. In the opinion of management of the
Company, the unaudited financial statements from which such information is
derived contain all adjustments (consisting only of normal recurring
adjustments) necessary for the fair presentation of the results that may be
expected for the full fiscal year. The following selected financial information
should be read in conjunction with the consolidated financial statements and
notes thereto of the Company, which are incorporated herein by reference.
<TABLE>
<CAPTION>
PRO FORMA
ELLER
MEDIA
ACQUISITION
SIX MONTHS ENDED SIX MONTHS
YEAR ENDED DECEMBER 31, JUNE 30, ENDED
------------------------------------------------------ ------------------------ JUNE 30,
1992 1993 1994 1995 1996 1996 1997 1997(1)
-------- -------- -------- -------- ---------- ---------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(2):
Net revenue..................... $ 84,485 $121,118 $178,053 $250,059 $ 351,739 $ 143,577 $ 285,068 $341,710
Operating expenses.............. 55,812 78,925 105,380 137,504 198,332 81,992 166,733 200,537
Depreciation and amortization... 12,253 17,447 24,669 33,769 45,790 19,343 48,670 65,191
-------- -------- -------- -------- ---------- ---------- ----------- --------
Operating income................ 16,420 24,746 48,004 78,786 107,617 42,242 69,665 75,982
Corporate expenses.............. 2,890 3,464 5,100 7,414 8,527 3,478 7,871 10,189
-------- -------- -------- -------- ---------- ---------- ----------- --------
Operating income................ 13,530 21,282 42,904 71,372 99,090 38,764 61,794 65,793
Interest expense................ (4,739) (5,390) (7,669) (20,752) (30,080) (11,745) (32,314) (43,397)
Other income (expense).......... (1,217) (196) 1,161 (803) 2,230 186 5,199 1,117
-------- -------- -------- -------- ---------- ---------- ----------- --------
Income before income taxes...... 7,574 15,696 36,396 49,817 71,240 27,205 34,679 23,513
Income taxes.................... 3,281 6,573 14,387 20,292 28,386 10,166 17,307 15,995
-------- -------- -------- -------- ---------- ---------- ----------- --------
Income before equity in net
income (loss) of, and other
income from nonconsolidated
affiliates.................... 4,293 9,123 22,009 29,525 42,854 17,039 17,372 7,518
Equity in net income (loss) of,
and other income from,
nonconsolidated affiliates.... -- -- -- 2,489 (5,158) 1,747 5,321 5,321
-------- -------- -------- -------- ---------- ---------- ----------- --------
Net income...................... $ 4,293 $ 9,123 $ 22,009 $ 32,014 $ 37,696 $ 18,786 $ 22,693 $ 12,839
======== ======== ======== ======== ========== ========== =========== ========
Net income per common share..... $ .07 $ .15 $ .32 $ .46 $ .50 $ .26 $ .27 $ .15
======== ======== ======== ======== ========== ========== =========== ========
Weighted average common shares
and common share equivalents
outstanding................... 59,320 62,202 69,326 70,201 74,649 71,180 84,509 87,813
======== ======== ======== ======== ========== ========== =========== ========
After-tax cash flow(3).......... $ 17,147 $ 26,638 $ 46,866 $ 71,140 $ 107,318 $ 40,329 $ 82,146 $ 88,813
======== ======== ======== ======== ========== ========== =========== ========
After-tax cash flow per
share(4)...................... $ .29 $ .43 $ .68 $ 1.01 $ 1.44 $ .57 $ .97 $ 1.01
======== ======== ======== ======== ========== ========== =========== ========
OTHER DATA:
EBITDA(5)....................... $ 24,566 $ 38,533 $ 68,734 $106,827 $ 141,952 $ 60,040 $ 120,984
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997
DECEMBER 31, -------------------------
------------------------------------------------------ AS
1992 1993 1994 1995 1996 ACTUAL ADJUSTED(6)
-------- -------- -------- -------- ---------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents....... $ 2,790 $ 5,517 $ 6,818 $ 5,391 $ 16,701 $ 29,120 $ 29,120
Total assets.................... 146,993 227,577 411,594 563,011 1,324,711 2,623,129 2,623,129
Long-term debt, net of
current(7).................... 97,000 87,815 238,204 334,164 725,132 1,275,949
Shareholders' equity............ 31,055 98,343 130,533 163,713 513,431 1,175,464 1,678,964
</TABLE>
- ---------------
(1) As adjusted to give effect to the Eller Media Acquisition as if such
acquisition had been consummated on January 1, 1997.
(2) The comparability of results of operations is affected by acquisitions
consummated in each of the periods presented.
(3) Defined as net income before unusual items plus depreciation, amortization
of intangibles (including non-consolidated affiliates) and deferred taxes.
After-tax cash flow is not presented as a measure of operating results and
does not purport to represent cash provided by operating activities.
After-tax cash flow should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with generally accepted
accounting principles.
(4) Defined as after-tax cash flow divided by weighted average common shares and
common share equivalents outstanding.
(5) Defined as income from continuing operations before interest expense, income
taxes and depreciation and amortization. EBITDA is not a calculation based
upon generally accepted accounting principles; however, the amounts included
in the EBITDA calculation are derived from amounts included in the Statement
of Operations. In addition, EBITDA should not be considered as an
alternative to net income or operating income, as an indicator of operating
performance, or as an alternative to operating cash flows as a measure of
liquidity.
(6) As adjusted to give effect to the (i) the issuance of 8,000,000 shares of
Common Stock on September 18, 1997 for approximately $504 million and (ii)
the issuance of $ million of % Debentures due October 15, 2027 offered
hereby ($ million net of underwriting discount).
(7) The Company has and may incur additional indebtedness of up to approximately
$922 million in connection with various pending acquisitions, including
approximately $369 million loaned to LPI in connection with the first
closing of the Paxson Acquisition. See "Recent Developments."
S-6
<PAGE> 7
BUSINESS
The Company consists of three principal business segments -- radio
broadcasting, television broadcasting and outdoor advertising. The radio segment
includes both stations for which the Company is the licensee and stations for
which the Company programs and/or sells air time under Local Marketing
Agreements ("LMA") or Joint Sales Agreements ("JSA"). The radio segment also
operates five networks. The television segment includes both television stations
for which the Company is the licensee and stations programmed under LMAs. The
outdoor advertising segment has advertising display faces in 15 major domestic
markets.
INDUSTRY SEGMENTS
For the three months ended June 30, 1997, the Company derived approximately
50% of its net revenue from radio operations, approximately 27% from television
operations, and approximately 23% from outdoor advertising operations.
Selected information relating to radio and television broadcasting for
1994, 1995 and 1996 is presented in the following table:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
RADIO
Net broadcasting revenue................... $ 95,862,834 $144,244,066 $217,189,250
Station operating expenses................. 64,148,412 87,530,942 126,627,982
Depreciation............................... 5,664,700 6,973,801 8,916,495
Amortization of intangibles................ 6,659,726 13,007,026 18,839,820
------------ ------------ ------------
Station operating income................... $ 19,389,996 $ 36,732,297 $ 62,804,953
============ ============ ============
TELEVISION
Net broadcasting revenue................... $ 82,189,748 $105,815,314 $134,549,604
Station operating expenses................. 41,231,654 49,973,531 71,703,668
Depreciation............................... 6,974,404 8,406,025 10,419,895
Amortization of intangibles................ 5,369,710 5,382,030 7,613,554
------------ ------------ ------------
Station operating income................... $ 28,613,980 $ 42,053,728 $ 44,812,487
============ ============ ============
CONSOLIDATED
Net broadcasting revenue................... $178,052,582 $250,059,380 $351,738,854
Station operating expenses................. 105,380,066 137,504,473 198,331,650
Depreciation............................... 12,639,104 15,379,826 19,336,390
Amortization of intangibles................ 12,029,436 18,389,056 26,453,374
------------ ------------ ------------
Station operating income................... $ 48,003,976 $ 78,786,025 $107,617,440
============ ============ ============
</TABLE>
Selected information related to the outdoor advertising segment for Eller
Media for 1996 is presented in the following table:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996*
------------
<S> <C>
Net Revenue................................................. $237,032,000
Operating Expenses.......................................... 145,743,000
Depreciation and amortization and other noncash expenses.... 46,569,000
------------
Operating Income............................................ $ 44,720,000
============
</TABLE>
- ---------------
* Eller Media was formed on August 17, 1995, through the combination of Patrick
Media Group, Inc. and Eller Investment Company and was purchased by the
Company in April 1997.
S-7
<PAGE> 8
RADIO BROADCASTING
The following table sets forth certain selected information with regard to
each of the Company's 37 AM and 72 FM radio stations which it owned or
programmed, or for which it sold airtime, as of June 30, 1997, excluding the 43
stations for which the Company programs or sells air time under an LMA or a JSA
pursuant to the first closing of the Paxson Acquisition.
<TABLE>
<CAPTION>
AM FM
MARKET STATIONS STATIONS TOTAL
------ ----------- ----------- -----
<S> <C> <C> <C>
ARKANSAS
Little Rock................................................. -- 2 2
CONNECTICUT
New Haven................................................... 2 1 3
FLORIDA
Ft. Myers/Naples............................................ 1 4 5
Miami/Ft. Lauderdale........................................ -- 2 2
Tampa/St. Petersburg........................................ 2 2 4
KENTUCKY
Louisville.................................................. 3 4 7
LOUISIANA
New Orleans................................................. 2 5 7
MASSACHUSETTS
Springfield................................................. 1 1 2
MICHIGAN
Grand Rapids................................................ 2 4 6
NEW YORK
Albany...................................................... 1(a) 3(a) 4
NORTH CAROLINA
Winston-Salem............................................... 1 2 3
Raleigh..................................................... -- 2 2
OHIO
Cleveland................................................... 1 2 3
OKLAHOMA
Oklahoma City............................................... 3(b) 4 7
Tulsa....................................................... 2(b) 3(b)(c) 5
PENNSYLVANIA
Lancaster................................................... 1(b) 1(b) 2
Reading..................................................... 1 1 2
RHODE ISLAND
Providence.................................................. -- 2 2
SOUTH CAROLINA
Columbia.................................................... -- 2 2
TENNESSEE
Memphis..................................................... 3 4 7
TEXAS
Austin...................................................... 1 3 4
El Paso..................................................... 1 2 3
Houston..................................................... 3(d) 4(d) 7
San Antonio................................................. 2 3(c) 5
VIRGINIA
Norfolk..................................................... -- 4 4
Richmond.................................................... 3 3 6
WISCONSIN
Milwaukee................................................... 1 2 3
-- -- ---
Total............................................... 37 72 109
== == ===
</TABLE>
- ---------------
(a) Stations owned by Radio Enterprises, Inc., in which the Company owns an 80%
interest.
(b) Includes one station programmed and operated under an LMA (FCC license not
owned by the Company).
(c) Includes one station operated under a JSA (FCC license not owned by the
Company).
(d) Includes two stations which are owned by CCC-Houston AM, Ltd., in which the
Company owns an 80% interest.
S-8
<PAGE> 9
The Company also owns the Kentucky News Network based in Louisville,
Kentucky, the Virginia News Network based in Richmond, Virginia, the Oklahoma
News Network based in Oklahoma City, Oklahoma, the Voice of Southwest
Agriculture Network based in San Angelo, Texas, the Clear Channel Sports Network
based both in College Station, Texas, and Des Moines, Iowa, the Alabama Radio
Network based in Birmingham, Alabama, the Tennessee Radio Network based in
Nashville, Tennessee, the University of Miami Sports Network based in Miami,
Florida, the Florida Radio Network based in Maitland, Florida, the University of
Florida Sports Network based in Gainesville, Florida and Orlando, Florida, and
the Penn State Sports Network based in West Palm Beach, Florida.
TELEVISION BROADCASTING
The following table sets forth certain selected information with regard to
each of the Company's 18 television stations and one satellite station which it
owned or programmed as of June 30, 1997.
<TABLE>
<CAPTION>
NETWORK
MARKET AFFILIATION
------ -----------
<S> <C>
ALBANY/SCHENECTADY/TROY, NEW YORK
WXXA-TV..................................................... FOX
HARRISBURG/LEBANON/LANCASTER/YORK, PENNSYLVANIA
WHP-TV...................................................... CBS
WLYH-TV(a).................................................. UPN
JACKSONVILLE, FLORIDA
WAWS-TV..................................................... FOX
WTEV-TV(a).................................................. UPN
LITTLE ROCK, ARKANSAS
KLRT-TV..................................................... FOX
KASN-TV(a).................................................. UPN
MEMPHIS, TENNESSEE
WPTY-TV..................................................... ABC
WLMT-TV(a).................................................. UPN
MINNEAPOLIS, MINNESOTA
WFTC-TV..................................................... FOX
MOBILE, ALABAMA/PENSACOLA, FLORIDA
WPMI-TV..................................................... NBC
WJTC-TV(a).................................................. UPN
PROVIDENCE/NEW BEDFORD, RHODE ISLAND
WPRI-TV..................................................... CBS
WNAC-TV(a).................................................. FOX
TUCSON, ARIZONA
KTTU-TV(b).................................................. UPN
TULSA, OKLAHOMA
KOKI-TV..................................................... FOX
KTFO-TV(a).................................................. UPN
WICHITA, KANSAS
KSAS-TV..................................................... FOX
SALINA, KANSAS
KAAS-TV(c).................................................. FOX
</TABLE>
- ---------------
(a) LMA (FCC license not owned by the Company).
(b) Station programmed by another party pursuant to an LMA.
(c) Satellite station of KSAS-TV in Wichita, Kansas.
S-9
<PAGE> 10
OUTDOOR ADVERTISING
The following table sets forth certain selected information with regard to
each of the Company's outdoor advertising display faces as of August 18, 1997:
<TABLE>
<CAPTION>
TOTAL
DISPLAY
MARKET FACES(A)
------ --------
<S> <C>
ARIZONA:
Phoenix..................................................... 365
CALIFORNIA:
Los Angeles(b).............................................. 7,127
San Diego................................................... 812
San Francisco/Oakland(c).................................... 9,506
Sacramento.................................................. 703
MIDWEST:
Chicago..................................................... 6,430
Cleveland(d)................................................ 2,274
Milwaukee................................................... 1,158
SOUTHEAST:
Atlanta..................................................... 1,525
Miami....................................................... 2,088
Tampa(e).................................................... 2,038
TEXAS:
Dallas/Fort Worth........................................... 3,048
El Paso..................................................... 1,384
Houston..................................................... 5,359
San Antonio................................................. 3,460
------
Total............................................. 47,277
======
</TABLE>
- ---------------
(a) Display faces include 14'x48' bulletins, 12'x25' Premier Panels(TM),
25'x25' Premier Plus Panels(TM) 12'x25' 30-sheet posters, 6'x12' 8-sheet
posters, and various transit displays.
(b) Includes Los Angeles, Orange, Riverside, San Bernardino and Ventura
counties.
(c) Includes San Francisco, Oakland, San Jose, Santa Cruz and Solano counties.
(d) Includes Akron and Canton.
(e) Includes Sarasota and Bradenton.
GOVERNMENT REGULATION
Broadcasting. The domestic broadcasting industry is subject to extensive
federal regulation which, among other things, requires approval by the FCC for
the issuance, renewal, transfer and assignment of broadcasting station operating
licenses and limits the number of broadcasting properties the Company may own.
The Telecommunications Act of 1996 (the "1996 Act"), which became law on
February 8, 1996, creates significant new opportunities for broadcasting
companies but also creates uncertainties as to how the FCC and the courts will
enforce and interpret the 1996 Act.
The Company's business will continue to be dependent upon acquiring and
maintaining broadcasting licenses issued by the FCC, which are issued for a
maximum term of eight years. Although it is rare for the FCC to deny a renewal
application, there can be no assurance that future renewal applications will be
approved, or that renewals will not include conditions or qualifications that
could adversely affect the Company's operations. Moreover, governmental
regulations and policies may change over time and there can be no assurance that
such changes would not have a material adverse impact upon the Company's
business, financial condition and results of operations. For example, the FCC
currently is considering whether to revise its policy with regard to television
S-10
<PAGE> 11
LMAs and there can be no guarantee that the Company will be able to program
stations under existing LMAs for the remainder of their current terms, extend
existing LMAs beyond their current terms, or to enter into LMAs in other markets
in which the Company owns and operates television stations.
Outdoor Advertising. Outdoor advertising displays are subject to
governmental regulation at the federal, state and local levels. These
regulations, in some cases, limit the height, size, location and operation of
billboards and, in limited circumstances, regulate the content of the
advertising copy displayed on the billboards. Some governmental regulations
prohibit the construction of new billboards or the replacement, relocation,
enlargement or upgrading of existing structures. Some local jurisdictions,
including jurisdictions within the Company's existing markets (Tampa, Houston
and San Francisco), have adopted amortization ordinances under which, after the
expiration of a specified period of time, billboards must be removed at the
owner's expense and without payment of compensation. Ordinances requiring the
removal of billboards without compensation, whether through amortization or
otherwise, are being challenged in various state and federal courts with
conflicting results. The Houston ordinance has been the subject of litigation
for over five years and is currently not being enforced. An ordinance in the
Tampa market is also currently the subject of litigation. The Company believes
that its operations will not be materially affected by either of these
ordinances even if they are enforced. The Company's operations have not been
materially affected by the San Francisco amortization ordinances since its signs
conform to effective ordinances and state law currently prevents effectiveness
of other ordinances which require removal of signs without compensation. There
can be no assurance that the Company will be successful in negotiating
acceptable arrangements in circumstances in which its displays are subject to
removal or amortization, and what effect, if any, such regulations may have on
the Company's operations. In addition, the Company is unable to predict what
additional regulations may be imposed on outdoor advertising in the future.
Legislation regulating the content of billboard advertisements has been
introduced in Congress from time to time in the past. Changes in laws and
regulations affecting outdoor advertising at any level of government could have
a material adverse effect on the Company.
Tobacco Advertising. On a pro forma basis, less than 5% of the Company's
1996 net revenues were derived from tobacco advertising. In August 1996, the
U.S. Food and Drug Administration ("FDA") issued final regulations governing
certain marketing practices in the tobacco industry, including a prohibition of
tobacco product billboard advertisements within 1,000 feet of schools and
playgrounds and a requirement that all tobacco product advertisements on
billboards be in black and white and contain only text. These regulations were
challenged recently by members of the tobacco and advertising industry in a
lawsuit brought in North Carolina federal district court. In that case, the
court upheld the authority of the FDA to regulate tobacco products by limiting
access of such products to persons under 18 years of age and by requiring
tobacco manufacturers to label such products in accordance with FDA regulations.
Nevertheless, the court struck down the FDA restrictions on the promotion and
advertising of tobacco products. Both industry and the FDA have appealed this
decision. Arguments before the Fourth Circuit were heard on August 11, 1997, and
it is unclear what action an appellate court will take in this matter.
Regardless of whether the FDA is found to have jurisdiction over tobacco
promotion and advertising, and thus have the ability to place limits on
billboard advertising, it appears that the FTC has begun to take regulatory
action in this area. The FTC has wide-ranging authority over advertising
practices, and it is within its regulatory authority to investigate unfair and
deceptive trade practices, including advertising, pertaining to FDA-regulated
products. In May 1997, the FTC charged the R.J. Reynolds Company ("R.J.
Reynolds") with unfair trade practices regarding the promotion of tobacco
products to children through the use of the "Joe Camel" advertising campaign.
The FTC sought an order that would, among other things, prohibit R.J. Reynolds
from using the "Joe Camel" campaign to advertise to children and require R.J.
Reynolds to institute corrective advertising to discourage persons under age 18
from smoking. In July 1997, it was reported that R.J. Reynolds decided to
terminate the "Joe Camel" campaign. The remaining issues in the litigation are
still pending. While the action against R.J. Reynolds was not focused directly
on billboard advertising, because of increasing regulatory and political
pressure it is possible that the FTC may take further action to limit the
content and placement of outdoor advertising, including, without limitation, the
content and placement of outdoor advertising relating to the sale of tobacco
products to children.
S-11
<PAGE> 12
Outdoor advertising of tobacco products also may be affected by state law
or city regulations. For example, it has been reported that California and Texas
have passed legislation to restrict tobacco billboard advertising near locations
frequented by children. Texas has also proposed levying a tax on tobacco
billboards to raise money for tobacco education programs for children. Part of
the recent settlement agreement between the State of Florida and certain members
of the tobacco industry includes the discontinuation of all billboard
advertising for tobacco products in the State of Florida. Other states are
considering state-wide bans on tobacco billboard advertising or may do so in the
future.
With regard to city governments, in 1995, the Court of Appeals for the
Fourth Circuit upheld the validity of a Baltimore city ordinance prohibiting the
placement of outdoor advertisements of cigarettes in publicly visible locations,
such as billboards, signboards and sides of buildings. Subsequently, the United
States Supreme Court declined to review an appeal of this case. Following the
Baltimore ordinance, several city governments have introduced legislation to ban
outdoor tobacco advertising near schools and other locations where children are
likely to assemble or to ban tobacco billboard advertising citywide.
County governments also have taken action in this area. A local council in
Anne Arundel County, Maryland voted to ban most tobacco billboard advertising in
the county. Similarly, King County, Washington and a company that owns almost
all of the billboard display faces in the county have entered into an agreement
whereby the company will voluntarily discontinue all tobacco advertising on
billboards throughout the county. It is likely that other state, city, or local
governments have or will pass similar ordinances to limit outdoor advertising of
tobacco products in the future.
In addition to the decisions mentioned above, certain cigarette
manufacturers who are defendants in numerous class action suits throughout the
U.S. have proposed an out of court settlement with respect to such suits that
includes restrictions on billboard advertising by these and other cigarette
manufacturers. It has been reported that, as a part of the proposed settlement,
the tobacco industry will agree to a complete ban on all outdoor advertising,
such as on billboards, in stadiums, and in store window displays. The proposed
settlement agreement is pending before Congress. Recent press reports suggest
that Congress may not act on the proposed settlement this year.
There can be no assurance as to the effect of these regulations, potential
legislation or settlement discussions on the Company's business and on its net
revenues and financial position. A reduction in billboard advertising by the
tobacco industry would cause an immediate reduction in the Company's direct
revenue from such advertisers and would simultaneously increase the available
space on the existing inventory of billboards in the outdoor advertising
industry. This could in turn result in a lowering of outdoor advertising rates
in each of the Company's outdoor advertising markets or limit the ability of
industry participants to increase rates for some period of time.
Any regulatory change or settlement agreement restricting the Company's or
the tobacco industry's ability to utilize outdoor advertising for tobacco
products could have a material adverse effect on the Company.
Antitrust. An important element of the Company's growth strategy involves
the acquisition of additional radio stations and other media-related and outdoor
advertising properties, many of which are likely to require antitrust review by
the FTC and the Antitrust Division prior to such acquisition. Following passage
of the 1996 Act, the Antitrust Division has become more aggressive in reviewing
proposed acquisitions of radio stations and radio station networks, particularly
in instances where the proposed acquiror already owns one or more radio stations
in a particular market and the acquisition involves another radio station in the
same market. Recently, the Antitrust Division has obtained consent decrees
requiring radio station divestitures in a particular market based on allegations
that acquisitions would lead to unacceptable concentration levels. There can be
no assurance that the Antitrust Division or the FTC will not seek to bar the
Company from acquiring additional radio or television stations or other
media-related and outdoor advertising properties in any market where the Company
already has a significant position.
Environmental. As the owner, lessee or operator of various real properties
and facilities, the Company is subject to various federal, state and local
environmental laws and regulations. Historically, compliance with such laws and
regulations has not had a material adverse effect on the Company's business.
There can be no assurance, however, that compliance with existing or new
environmental laws and regulations will not require the Company to make
significant expenditures in the future.
S-12
<PAGE> 13
DESCRIPTION OF DEBENTURES
The Debentures offered hereby are a series of "Senior Debt Securities" as
defined and described in the accompanying Prospectus dated September 9, 1997
(the "Prospectus"), and the following description of terms of the Debentures
supplements the description of the general terms and provisions of the Senior
Debt Securities set forth in the Prospectus.
The Debentures are to be issued pursuant to the provisions of an Indenture
dated as of October 1, 1997, between the Company and The Bank of New York, as
Trustee (the "Trustee"), as supplemented by supplemental indentures (such
Indentures as supplemented and amended from time to time in accordance with the
terms thereof being hereinafter referred to as the "Indenture"). At October 1,
1997, no indebtedness was outstanding under the Indenture.
The Debentures will mature on October 15, 2027. The Debentures are to bear
interest from October , 1997 (at the rate per annum referred to on the cover
of this Prospectus Supplement) payable on April 15 and October 15 of each year
beginning April 15, 1998 at the office of the Trustee in the City of New York.
Subject to certain exceptions therein set forth, the Indenture provides for the
payment of interest on any interest payment date only to holders of the
Debentures in whose names the Debentures are registered on the interest record
date, which is the April 1 or October 1, as the case may be, next preceding such
interest payment date if such record date is a business day or the business day
immediately preceding such record date if such date is not a business day.
OPTIONAL REDEMPTION
The Company, at its option, may at any time redeem all or any portion of
the Debentures, at a redemption price equal to the greater of (i) 100% of their
principal amount and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the date of
redemption on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the applicable Treasury Yield plus basis points, plus
accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption date applicable to
the Debentures, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
applicable Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means, with respect to the Debentures, the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Debentures that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Debentures. "Independent Investment
Banker" means, with respect to the Debentures offered hereby, Credit Suisse
First Boston Corporation or, if such firm is unwilling or unable to select the
applicable Comparable Treasury Issue, an independent investment banking
institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date
applicable to the Debentures, (i) the average of the applicable Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest such applicable Reference Treasury Dealer Quotations, or (ii) if the
Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Quotations. "Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer and any redemption date for the
Debentures, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue for the Debentures (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
S-13
<PAGE> 14
"Reference Treasury Dealer" means, with respect to the Debentures offered
hereby, each of Credit Suisse First Boston Corporation, Salomon Brothers Inc, BT
Alex. Brown Incorporated, Goldman Sachs & Co. and NationsBanc Montgomery
Securities, Inc.; provided however, that if any of the foregoing shall cease to
be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer.
Holders of the Debentures to be redeemed will receive notice thereof by
first-class mail at least 30 and not more than 60 days prior to the date fixed
for redemption.
GLOBAL SECURITIES
The Debentures will be issued in the form of one or more global securities
("Global Securities") that will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depositary"). Interests in
the Global Securities will be issued only in denominations of $1,000 or integral
multiples thereof. Unless and until it is exchanged in whole or in part for
Debentures in definitive form, a Global Security may not be transferred except
as a whole to a nominee of the Depositary for such Global Security, or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
BOOK-ENTRY SYSTEM
Initially, the debentures will be registered in the name of Cede & Co., the
nominee of the Depositary. Accordingly, beneficial interests in the Debentures
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants.
The Depositary has advised the Company and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
United States Securities Exchange Act of 1934, as amended. The Depositary holds
securities that its participants ("Direct Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in such
Direct Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations, and certain other organizations. The Depositary is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the Depositary's book-entry system is also available to
others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable to
the Depositary and its Direct and Indirect Participants are on file with the
United States Securities and Exchange Commission.
The Depositary advises that its established procedures provide that (i)
upon issuance of the Debentures by the Company, the Depositary will credit the
accounts of Direct and Indirect Participants designated by the Underwriters with
the principal amounts of the Debentures purchased by the Underwriters and (ii)
ownership of interest in the Global Securities will be shown on, and the
transfer of the ownership will be effected only through, records maintained by
the Depositary, the Direct Participants and the Indirect Participants. The laws
of some States require that certain persons take physical delivery in definitive
form of securities which they own. Consequently, the ability to transfer
beneficial interest in the Global Securities is limited to such extent.
So long as a nominee of the Depositary is the registered owner of the
Global Securities, such nominee for all purposes will be considered the sole
owner or holder of such Global Securities under the Indenture. Except as
provided below, owners of beneficial interests in the Global Securities will not
be entitled to have Debentures registered in their names, will not receive or be
entitled to receive physical delivery of Debentures in definitive form and will
not be considered the owners or holders thereof under the Indenture.
Neither the Company, the Trustee, any paying agent nor the registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the
S-14
<PAGE> 15
Global Securities, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Principal and interest payments on the Debentures registered in the name of
the Depositary's nominee will be made in immediately available funds to the
Depositary's nominee as the registered owner of the Global Securities. Under the
terms of the Debentures, the Company and the Trustee will treat the persons in
whose names the Debentures are registered as the owners of such Debentures for
the purpose of receiving payment of principal and interest on such Debentures
and for all other purposes whatsoever. Therefore, neither the Company, the
Trustee nor any paying agent has any direct responsibility or liability for the
payment of principal or interest on the Debentures to owners of beneficial
interests in the Global Securities. The Depositary has advised the Company and
the Trustee that its current practice is upon receipt of any payment of
principal or interest, to credit Direct Participants' accounts on the payment
date in accordance with their respective holdings of beneficial interests in the
Global Securities as shown on the Depositary's records, unless the Depositary
has reason to believe that it will not receive payment on the payment date.
Payments by Direct and Indirect Participants to owners of beneficial interests
in the Global Securities will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name", and will be the responsibility of
such Direct and Indirect Participants and not of the Depositary, the Trustee or
the Company, subject to any statutory requirements that may be in effect from
time to time. Payment of principal and interest to the Depositary is the
responsibility of the Company or the Trustee, disbursement of such payments to
the owners of beneficial interests in the Global Securities shall be the
responsibility of the Depositary and Direct and Indirect Participants.
Debentures represented by a Global Security will be exchangeable for
Debentures in definitive form of like tenor as such Global Security in
denominations of $1,000 and in any greater amount that is an integral multiple
if the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time the Depositary
ceases to be a clearing agency registered under applicable law and successor
depositary is not appointed by the Company within 90 days or the Company in its
discretion at any time determines not to require all of the Debentures to be
represented by a Global Security and notifies the Trustee thereof. Any
Debentures that are exchangeable pursuant to the preceding sentence are
exchangeable for Debentures issuable in authorized denominations and registered
in such names as the Depositary shall direct. Subject to the foregoing, a Global
Security is not exchangeable, except for a Global Security or Global Securities
of the same aggregate denominations to be registered in the name of the
Depositary or its nominee.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. So long as the Depositary continues to make its
Same-Day Funds Settlement System available to the Company, all payments of
principal and interest on the Debentures will be made by the Company in
immediately available funds.
Secondary trading in long-term notes and debentures of corporate issues is
generally settled in clearing-house or next-day funds. In contrast, the
Debentures will trade in the Depositary's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Debentures will therefore
be required by the Depositary to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Debentures.
S-15
<PAGE> 16
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated October , 1997 (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters") have severally but not jointly
agreed to purchase from the Company the following respective principal amounts
of the Debentures:
<TABLE>
<CAPTION>
Principal
Amount
of
Underwriter Debentures
----------- -------------
<S> <C>
Credit Suisse First Boston Corporation...................... $
Salomon Brothers Inc........................................
BT Alex. Brown Incorporated.................................
Goldman, Sachs & Co.........................................
NationsBanc Montgomery Securities, Inc......................
------------
Total............................................. $
============
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all the Debentures, if any are
purchased. The Underwriting Agreement provides that in the event of default by
an Underwriter, in certain circumstances the purchase commitments of the
non-defaulting Underwriters may be increased or the Underwriting Agreement may
be terminated.
The Company has been advised by the Underwriters that the Underwriters
propose to offer the Debentures to the public initially at the public offering
price set forth on the cover page of this Prospectus Supplement and to certain
dealers at such price less a concession of % of such principal amount per
Debenture, and the Underwriters and such dealers may allow a discount of % of
such principal amount per Debenture on sales to certain other dealers. After the
initial public offering, the public offering price and concession and discount
to dealers may be changed by the Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Debentures will not be listed on any securities exchange. The
Underwriters have advised the Company that they intend to act as market makers
for the Debentures. However, the Underwriters are not obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, or
contribute to payments which the Underwriters may be required to make in respect
thereof.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short
position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve the purchase of the Debentures in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim a
selling concession from a syndicate member when the Debentures originally sold
by such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Debentures to
be higher than it would otherwise be in the absence of such transactions.
The Underwriters and their respective affiliates may be customers of,
lenders to, engage in transactions with, and perform services for the Company
and its subsidiaries in the ordinary course of business.
S-16
<PAGE> 17
LEGAL OPINIONS
The validity of the Common Stock offered hereby will be passed upon for the
Company by its special counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P. (a
partnership including professional corporations), San Antonio, Texas, and for
the Underwriters by Cravath, Swaine & Moore, New York, New York. Alan D. Feld,
the sole shareholder of a professional corporation which is a partner of Akin,
Gump, Strauss, Hauer & Feld, L.L.P., is a director of the Company and owns
approximately 48,000 shares of Common Stock (including presently exercisable
nonqualified options to acquire approximately 40,000 shares).
CERTAIN FORWARD-LOOKING STATEMENTS
This Prospectus Supplement and the Prospectus, including the documents
incorporated by reference, contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended. Discussions containing
such forward-looking statements may be found in the material set forth under
"The Company," as well as within the Prospectus Supplement and the Prospectus
generally. In addition, when used in this Prospectus Supplement or the
Prospectus, the words "believes," "anticipates," "expects" and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to a number of risks and uncertainties. Actual results in the future
could differ materially from those described in the forward-looking statements
as a result of the risk factors set forth herein and the matters set forth in
the Prospectus Supplement or the Prospectus generally. The Company undertakes no
obligation to publicly release the results of any revisions to these
forward-looking statements that may be made to reflect any future events or
circumstances.
S-17
<PAGE> 18
PROSPECTUS
$1,500,000,000
CLEAR CHANNEL COMMUNICATIONS, INC.
DEBT SECURITIES, JUNIOR SUBORDINATED DEBT SECURITIES,
PREFERRED STOCK, COMMON STOCK, WARRANTS,
STOCK PURCHASE CONTRACTS, AND STOCK PURCHASE UNITS
CCCI CAPITAL TRUST I
CCCI CAPITAL TRUST II
CCCI CAPITAL TRUST III
PREFERRED SECURITIES, GUARANTEED TO THE EXTENT SET FORTH HEREIN
BY CLEAR CHANNEL COMMUNICATIONS, INC.
Clear Channel Communications, Inc., a Texas corporation (the "Company"), may
issue from time to time, together or separately, (i) unsecured senior debt
securities (the "Senior Debt Securities"), (ii) unsecured subordinated debt
securities (the "Subordinated Debt Securities" and, together with the Senior
Debt Securities, the "Debt Securities"), (iii) unsecured junior subordinated
debt securities ("Junior Subordinated Debt Securities"); (iv) warrants to
purchase Debt Securities or Junior Subordinated Debt Securities (the "Debt
Warrants"), (v) shares of preferred stock, par value $1.00 per share, of the
Company (the "Preferred Stock"), (vi) warrants to purchase shares of Preferred
Stock (the "Preferred Stock Warrants"), (vii) shares of common stock, par value
$.10 per share, of the Company (the "Common Stock"), (viii) warrants to purchase
shares of Common Stock (the "Common Stock Warrants"), (ix) stock purchase
contracts ("Stock Purchase Contracts") to purchase Common Stock or Preferred
Stock and (x) stock purchase units ("Stock Purchase Units"), each representing
ownership of a Stock Purchase Contract and Debt Securities, Junior Subordinated
Debt Securities, debt obligations of the United States of America or agencies or
instrumentalities thereof ("U.S. Obligations"), or Preferred Securities (as
defined below), securing the holder's obligation to purchase Common Stock or
Preferred Stock under the Stock Purchase Contract, or any combination of the
foregoing, either individually or as units consisting of one or more of the
foregoing in amounts, at prices and on terms to be determined by market
conditions at the time of offering. The Debt Warrants, Preferred Stock Warrants
and Common Stock Warrants are referred to herein collectively as the "Warrants",
and the Debt Securities, the Junior Subordinated Debt Securities, Preferred
Stock, Common Stock, the Warrants, Stock Purchase Contracts and Stock Purchase
Units are referred to herein collectively as the "Company Securities".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ADDITIONAL INFORMATION REGARDING THE SECURITIES IS SET FORTH ON THE INSIDE FRONT
COVER.
FOR A DISCUSSION OF CERTAIN RISKS ASSOCIATED WITH AN INVESTMENT IN THE
SECURITIES, SEE "GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS" ON PAGE 6.
CCCI Capital Trust I, CCCI Capital Trust II and CCCI Capital Trust III
(each, a "CCCI Trust" and collectively, the "CCCI Trusts"), each a statutory
business trust formed under Delaware law, may offer, from time to time,
preferred securities (the "Preferred Securities") with the payment of
distributions and payments on liquidation or redemption of the Preferred
Securities issued by each such CCCI Trust guaranteed on a subordinated basis by
the Company to the extent described herein and in an accompanying prospectus
supplement (the "Guarantees"). The Company will be the owner of the trust
interests represented by common securities (the "Common Securities") to be
issued by each CCCI Trust. Unless indicated otherwise in a prospectus
supplement, each CCCI Trust exists for the sole purpose of issuing its trust
interests and investing the proceeds thereof in Junior Subordinated Debt
Securities. The Company Securities and the Preferred Securities are referred to
herein collectively as the "Offered Securities".
The Offered Securities may be issued in one or more series or issuances and
will be limited to $1,500,000,000 in aggregate public offering price (or its
equivalent, based on the applicable exchange rate, to the extent Debt Securities
or Junior Subordinated Debt Securities are issued for one or more foreign
currencies or currency units). The Offered Securities may be sold for U.S.
dollars, or any foreign currency or currencies or currency units, and the
principal of, any premium on, and any interest on, the Debt Securities or Junior
Subordinated Debt Securities may be payable in U.S. dollars, or any foreign
currency or currencies or currency units.
The Offered Securities may be offered separately or as units with other
Offered Securities, in separate series, in amounts, at prices and on terms to be
determined at or prior to the time of sale. The sale of other securities under
the Registration Statement of which this Prospectus forms a part or under a
Registration Statement to which this Prospectus relates will reduce the amount
of Offered Securities which may be sold hereunder.
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement (the "Prospectus Supplement"), including, where applicable, (i) in
the case of Debt Securities or Junior Subordinated Debt Securities, the specific
designation, aggregate principal amount, ranking as senior or subordinated debt,
authorized denomination, initial offering price, maturity (which may be fixed or
extendible), premium (if any), interest rate (which may be fixed or floating),
time of and method of calculating the payment of interest, if any, the currency
in which principal, premium, if any, and interest, if any, are payable, any
exchangeability, conversion, redemption or sinking fund terms, the right of the
Company, if any, to defer payment or interest on the Junior Subordinated Debt
Securities and the maximum length of such deferral period, put options, if any,
public offering price, and other specific terms; (ii) in the case of Preferred
Stock or Preferred Securities, the designation, number of shares, liquidation
preference per share, initial public offering price, dividend or distribution
rate (or method of calculation thereof), dates on which dividends or
distributions shall be payable and dates from which dividends or distributions
shall accrue, any redemption or sinking fund provisions, any voting rights, any
conversion or exchange provisions, and any other rights, preferences,
privileges, limitations or restrictions relating to the Preferred Stock or
Preferred Securities of a specific series and the terms upon which the proceeds
of the sale of the Preferred Securities will be used to purchase a specific
series of Junior Subordinated Debt Securities of the Company; (iii) in the case
of Common Stock, the number of shares, public offering price and the terms of
the offering and sale thereof; (iv) in the case of Warrants, the number and
terms thereof, the designation and description of the Common Stock, Preferred
Stock, Debt Securities, Junior Subordinated Debt Securities, or Preferred
Securities issuable thereunder, the number of securities issuable upon exercise,
the exercise price, the terms of the offering and sale thereof and, where
applicable, the duration and detachability thereof; (v) in the case of Stock
Purchase Contracts, the designation and number of shares of Common Stock or
Preferred Stock issuable thereunder, the purchase price of the Common Stock or
Preferred Stock, the date or dates on which the Common Stock or Preferred Stock
is required to be purchased by the holders of the Stock Purchase Contracts, any
periodic payments required to be made by the Company to the holders of the Stock
Purchase Contracts or vice versa, and the terms of the offering and sale
thereof; (vi) in the case of Stock Purchase Units, the specific terms of the
Stock Purchase Contracts and any Preferred Stock, Debt Securities, Junior
Subordinated Debt Securities, U.S. Obligations or Preferred Securities securing
the holder's obligation to purchase the Preferred Stock or Common Stock under
the Stock Purchase Contracts, and the terms of the offering and sale thereof;
and (vii) in the case of all Offered Securities, whether such Offered Securities
will be offered separately or as a unit with other Offered Securities. The
Prospectus Supplement will also contain information, where applicable, about
certain federal income tax considerations relating to, and any listing on a
securities exchange of, the Offered Securities covered by the Prospectus
Supplement.
The Offered Securities will be sold directly, through agents, dealers or
underwriters as designated from time to time, or through a combination of such
methods. If any agents of the Company or the CCCI Trusts or any dealers or
underwriters are involved in the sale of the Offered Securities in respect of
which this Prospectus is being delivered, the names of such agents, dealers or
underwriters and any applicable agent's commission, dealer's purchase price or
underwriter's discount will be set forth in or may be calculated from the
Prospectus Supplement. The net proceeds to the Company or the CCCI Trusts from
such sale will be the purchase price less such commission in the case of an
agent, the purchase price in the case of a dealer, or the public offering price
less such discount in the case of an underwriter and less, in each case, other
applicable issuance expenses. See "Plan of Distribution".
---------------------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER 9, 1997.
<PAGE> 19
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBT SECURITIES,
INCLUDING STABILIZING AND SYNDICATE COVERING TRANSACTIONS. THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES. SEE "PLAN OF
DISTRIBUTION".
2
<PAGE> 20
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements filed by the Company with the Commission pursuant to the
information requirements of the Exchange Act may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549; and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, 13th Floor, New
York, New York 10048; and Chicago Regional Office, Citicorp Center, 500 West
Madison Street, 14th Floor, Chicago, Illinois 60661. Copies of such material may
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also
maintains a site on the World Wide Web at http://www.sec.gov that contains
reports, proxies and information statements and other information regarding
registrants (including the Company) that file electronically. In addition,
reports, proxy statements and other information concerning the Company can be
inspected and copied at the offices of the New York Stock Exchange, Inc.
("NYSE"), 20 Broad Street, New York, New York 10005, on which the Common Stock
of the Company (symbol: "CCU") is listed.
No separate financial statements of the CCCI Trusts have been included or
incorporated by reference herein. Neither the CCCI Trusts nor the Company
considers such financial statements material to holders of Preferred Securities
because (i) all of the voting securities of each CCCI Trust will be owned,
directly or indirectly, by the Company, a reporting company under the Exchange
Act, (ii) no CCCI Trust has independent operations but rather each exists for
the purpose of issuing securities representing undivided beneficial interests in
the assets of such CCCI Trust and investing the proceeds thereof in Junior
Subordinated Debt Securities, and (iii) the obligations of the CCCI Trusts under
the Preferred Securities are fully and unconditionally guaranteed on a
subordinated basis by the Company to the extent set forth herein. See "The CCCI
Trusts" and "Description of Guarantees." Upon the granting of relief by the
Commission pursuant to SAB 53, the Company intends to provide only abbreviated
information concerning the CCCI Trusts in the Company's Exchange Act reports.
The Company and the CCCI Trusts have filed with the Commission a joint
registration statement (the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the securities
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. Reference is made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company, the CCCI Trusts and the securities
offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
into this Prospectus and made a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997.
4. The Company's Current Report on Form 8-K dated April 17, 1997.
5. The Company's Current Report on Form 8-K dated May 24, 1996.
6. The Company's Current Report on Form 8-K dated June 5, 1996.
Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering of the Offered Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents.
3
<PAGE> 21
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus. To the extent that any
proxy statement is incorporated by reference herein, such incorporation shall
not include any information contained in such proxy statement which is not,
pursuant to the Commission's rules, deemed to be "filed" with the Commission or
subject to the liabilities of Section 18 of the Exchange Act.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document described
above (other than exhibits, unless such exhibits are specifically incorporated
by reference). Requests for such copies should be directed to Houston Lane,
Clear Channel Communications, Inc., 200 Concord Plaza, Suite 600, San Antonio,
Texas 78216 (telephone: (210) 822-2828).
THE COMPANY
The Company, which began operations in 1974, is a diversified media company
in three primary lines of business: radio, television, and outdoor advertising.
In addition, the Company owns a 50% equity interest in the Australian Radio
Network Pty. Ltd., which operates radio stations in Australia, a one-third
equity interest in New Zealand Radio Network which operates radio stations in
New Zealand, and a 32.3% non-voting equity interest in Heftel Broadcasting
Corporation (Nasdaq: HBCCA), a Spanish-language broadcaster which operates radio
stations in domestic markets.
The radio stations currently owned or programmed by the Company are located
principally in the South, Southeast, Northeast and Midwest. These radio stations
employ a wide variety of programming formats, such as News/Talk/Sports, Country,
Adult Contemporary, Urban and Album Rock. The television stations currently
owned or programmed by the Company are located in the South, Southeast,
Northeast and Midwest. These television stations are typically affiliated with
one of the television networks, including the FOX television network, the UPN
television network, the ABC television network, the NBC television network, or
the CBS television network. Additionally, the Company operates radio networks
serving Oklahoma, Texas, Iowa, Kentucky and Virginia. The Company's outdoor
advertising properties are located primarily in the South, Southeast, Midwest,
and West.
The Company has its principal executive offices at 200 Concord Plaza, Suite
600, San Antonio, Texas 78216 (telephone: 210-822-2828).
THE CCCI TRUSTS
Each of CCCI Capital Trust I, CCCI Capital Trust II and CCCI Capital Trust
III is a statutory business trust formed under Delaware law pursuant to (i) a
separate Declaration of Trust executed by the Company, as depositor for such
CCCI Trust, and the Trustees (as defined herein) of such trust and (ii) the
filing of a certificate of trust with the Delaware Secretary of State. The
declarations will be amended and restated in their entirety (each as so amended
and restated, a "Declaration") substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus is a part and will be
qualified as Indentures under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Unless an accompanying Prospectus Supplement provides
otherwise, each CCCI Trust exists for the sole purposes of (i) issuing the
Preferred Securities, (ii) investing the gross proceeds of the sale of the
Preferred Securities in a specific series of Junior Subordinated Debt
Securities, and (iii) engaging in only those other activities necessary or
incidental thereto. All of the Common Securities will be owned by the Company.
The Common Securities will rank pari passu, and payments will be made thereon
pro rata, with the Preferred Securities, except that upon the occurrence and
continuance of an event of default under the applicable Declaration, the rights
of the holders of the applicable Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the applicable Preferred
4
<PAGE> 22
Securities. The Company will acquire Common Securities having an aggregate
liquidation amount equal to a minimum of 1% of the total capital of each CCCI
Trust. Each CCCI Trust will have a term of at least 20 but not more than 50
years, but may terminate earlier as provided in the applicable Declaration. Each
CCCI Trust's business and affairs will be conducted by the Trustees. The holder
of the Common Securities will be entitled to appoint, remove or replace any of,
or increase or reduce the number of, the Trustees of each CCCI Trust. The duties
and obligations of the Trustees shall be governed by the Declaration of such
CCCI Trust. At least one of the Trustees of each CCCI Trust will be a person who
is an employee or officer of or who is affiliated with the Company (a "Regular
Trustee"). One Trustee of each CCCI Trust will be a financial institution that
is not affiliated with the Company, which shall act as property trustee and as
indenture trustee for the purposes of the Trust Indenture Act, pursuant to the
terms set forth in a Prospectus Supplement (the "Property Trustee"). In
addition, unless the Property Trustee maintains a principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
one Trustee of each CCCI Trust will be a legal entity having a principal place
of business in, or an individual resident of, the State of Delaware (the
"Delaware Trustee"). The Company will pay all fees and expenses related to each
CCCI Trust and the offering of the Preferred Securities. Unless otherwise set
forth in the Prospectus Supplement, the Property Trustee will be The Bank of New
York, and the Delaware Trustee will be The Bank of New York (Delaware). The
office of the Delaware Trustee in the State of Delaware is 100 White Clay
Center, Newark, Delaware 19711. The principal place of business of each CCCI
Trust is c/o Clear Channel Communications, Inc., 200 Concord Plaza, Suite 600,
San Antonio, Texas 78216 (telephone: (210) 822-2828).
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
- ---------------- ---- ---- ---- ---- ----
<C> <C> <C> <C> <C> <C>
2.10 3.63 3.32 5.54 3.81 2.55
</TABLE>
The ratio of earnings to combined fixed charges and preferred stock
dividends has been computed on a total enterprise basis. Earnings represent
income from continuing operations before income taxes less equity in
undistributed net income (loss) of unconsolidated affiliates plus fixed charges.
Fixed charges represent interest, amortization of debt discount and expense, and
the estimated interest portion of rental charges. The Company had no Preferred
Stock outstanding and paid no dividends thereon for any period presented.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds
from the sale of the Company Securities offered hereby will be used for general
corporate purposes, including repayment of borrowings, working capital, capital
expenditures, stock repurchase programs and acquisitions. Unless otherwise
specified in the Prospectus Supplement, each CCCI Trust will use all proceeds
received from the sale of Preferred Securities to purchase Junior Subordinated
Debt Securities of the Company. Additional information on the use of net
proceeds from the sale of the Offered Securities offered hereby may be set forth
in the Prospectus Supplement relating to such Offered Securities.
HOLDING COMPANY STRUCTURE
The Company is a holding company and its assets consist primarily of
investments in its subsidiaries and majority-owned partnerships. The Company's
rights and the rights of its creditors, including holders of Debt Securities or
Junior Subordinated Debt Securities, to participate in the distribution of
assets of any person in which the Company owns an equity interest (including any
subsidiary and majority-owned partnerships) upon such person's liquidation or
reorganization will be subject to prior claims of such person's creditors,
including trade creditors, except to the extent that the Company may itself be a
creditor with recognized claims against such person (in which case the claims of
the Company would still be subject to the prior claims of any secured creditor
or such person and of any holder of indebtedness of such person that is senior
to that held by the
5
<PAGE> 23
Company). Accordingly, the holder of Debt Securities or Junior Subordinated Debt
Securities may be deemed to be effectively subordinated to such claims.
GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS
The Company may offer shares of Common Stock, Preferred Stock, Debt
Securities, Junior Subordinated Debt Securities, Warrants, Stock Purchase
Contracts, Stock Purchase Units, or any combination of the foregoing either
individually or as units consisting of one or more Securities under this
Prospectus. Each CCCI Trust may offer Preferred Securities under this
Prospectus.
CERTAIN OF THE SECURITIES TO BE OFFERED HEREBY THEMSELVES MAY INVOLVE A
HIGH DEGREE OF RISK. SUCH RISKS WILL BE SET FORTH IN THE PROSPECTUS SUPPLEMENT
RELATING TO SUCH SECURITY. IN ADDITION, CERTAIN RISK FACTORS, IF ANY, RELATING
TO THE COMPANY'S BUSINESS WILL BE SET FORTH IN A PROSPECTUS SUPPLEMENT.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities summarizes
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
and the extent, if any, to which such general provisions may apply to any series
of Debt Securities will be described in the Prospectus Supplement relating to
such series.
Senior Debt Securities may be issued, from time to time, in one or more
series under an Indenture (the "Senior Indenture"), between the Company and The
Bank of New York, as trustee, or such other trustee as shall be named in a
Prospectus Supplement (the "Senior Trustee"). The form of Senior Indenture is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. Subordinated Debt Securities may be issued, from time to time, in one or
more series under an indenture (the "Subordinated Indenture") between the
Company and The Bank of New York or such other trustee as shall be named in a
Prospectus Supplement (the "Subordinated Trustee"). The form of Subordinated
Indenture is filed as an Exhibit to the Registration Statement of which this
Prospectus is a part. The Senior Indenture and the Subordinated Indenture are
sometimes referred to collectively as the "Indentures," and the Senior Trustee
and the Subordinated Trustee are sometimes referred to collectively as the "Debt
Trustees." None of the Indentures will limit the amount of Debt Securities that
may be issued hereunder, and each Indenture will provide that Debt Securities
may be issued thereunder up to an aggregate principal amount authorized from
time to time by the Company and may be payable in any currency or currency unit
designated by the Company or in amounts determined by reference to an index. The
following statements are subject to the detailed provisions of the Indentures.
Wherever any particular provisions of the Indentures or terms defined therein
are referred to, such provisions and terms are incorporated by reference as a
part of the statements made herein and such statements are qualified in their
entirety by such references, including the definitions therein of certain terms.
Capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Indentures.
GENERAL
The Senior Debt Securities will be unsecured and will rank equally and
ratably with other unsecured and unsubordinated debt of the Company, unless the
Company shall be required to secure the Senior Debt Securities as described
below under " -- Senior Debt Securities." The obligations of the Company
pursuant to any Subordinated Debt Securities will be subordinate in right of
payment to all Senior Indebtedness of the Company with respect to such
Subordinated Debt Securities, and will be described in an accompanying
Prospectus Supplement. Debt Securities will be issued from time to time and
offered on terms determined by market conditions at the time of sale.
The Debt Securities may be issued in one or more series with the same or
various maturities, at par, at a premium, or at a discount. Any Debt Securities
bearing no interest or interest at a rate which at the time of
6
<PAGE> 24
issuance is below market rates will be sold at a discount (which may be
substantial) from their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such substantially discounted
Debt Securities will be described in the Prospectus Supplement relating thereto.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities offered hereby: (i) the designation, aggregate principal
amount and authorized denominations of such Debt Securities; (ii) the percentage
of their principal amount at which such Debt Securities will be issued; (iii)
the date or dates on which the Debt Securities will mature (which may be fixed
or extendible); (iv) the rate or rates (which may be fixed or floating) per
annum at which the Debt Securities will bear interest, if any, or the method of
determining such rate or rates; (v) the date or dates on which any such interest
will be payable, the date or dates on which payment of any such interest will
commence and the Regular Record Dates for such Interest Payment Dates; (vi) the
terms of any mandatory or optional redemption (including any provisions for any
sinking, purchase or other analogous fund) or repayment option; (vii) the
currency, currencies or currency units for which the Debt Securities may be
purchased and the currency, currencies or currency units in which the principal
thereof, any premium thereon and any interest thereon may be payable; (viii) if
the currency, currencies or currency units for which the Debt Securities may be
purchased or in which the principal thereof, any premium thereon and any
interest thereon may be payable is at the election of the Company or the
purchaser, the manner in which such election may be made; (ix) if the amount of
payments on the Debt Securities is determined with reference to an index based
on one or more currencies or currency units, changes in the price of one or more
securities or changes in the price of one or more commodities, the manner in
which such amounts may be determined; (x) the extent to which any of the Debt
Securities will be issuable in temporary or permanent global form, or the manner
in which any interest payable on a temporary or permanent Global Security will
be paid; (xi) the terms and conditions upon which the Debt Securities may be
convertible into or exchanged for Common Stock, Preferred Stock, or indebtedness
or other securities of any kind of the Company; (xii) information with respect
to book-entry procedures, if any; (xiii) a discussion of certain federal income
tax, accounting and other special considerations, procedures and limitations
with respect to the Debt Securities; and (xiv) any other specific terms of the
Debt Securities not inconsistent with the applicable Indenture.
If any of the Debt Securities are sold for one or more foreign currencies
or foreign currency units or if the principal of, premium, if any, or any
interest on any series of Debt Securities is payable in one or more foreign
currencies or foreign currency units, the restrictions, elections, federal
income tax consequences, specific terms and other information with respect to
such issue of Debt Securities and such currencies or currency units will be set
forth in the Prospectus Supplement relating thereto.
Unless otherwise specified in the Prospectus Supplement, the principal of,
any premium on, and any interest on the Debt Securities will be payable, and the
Debt Securities will be transferable, at the Corporate Trust Office of the
applicable Debt Trustee in New York, New York, provided that payment of
interest, if any, may be made at the option of the Company by check mailed on or
before the payment date, first class mail, to the address of the person entitled
thereto as it appears on the registry books of the Company or its agent.
Unless otherwise specified in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof. No service charge will be made for any
transfer or exchange of any Debt Securities, but the Company may, except in
certain specified cases not involving any transfer, require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Unless otherwise set forth in the Prospectus Supplement, interest on
outstanding Debt Securities will be paid to holders of record on the date which
is 15 days immediately prior to the date such interest is to be paid.
The Company's rights and the rights of its creditors (including holders of
Debt Securities) to participate in any distribution of assets of any subsidiary
of the Company upon its liquidation or reorganization or otherwise is
necessarily subject to the prior claims of creditors of the subsidiary, except
to the extent that claims of the Company itself as a creditor of the subsidiary
may be recognized. The operations of the Company are conducted through its
subsidiaries and, therefore, the Company is dependent upon the earnings
7
<PAGE> 25
and cash flow of its subsidiaries to meet its obligations, including obligations
under the Debt Securities. The Debt Securities will be effectively subordinated
to all indebtedness of the Company's subsidiaries.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee of such Depositary to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of any such
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the applicable Indenture governing such Debt
Securities.
Payments of principal of, any premium on, and any interest on, individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. Neither the Company, the applicable Debt Trustee for such Debt
Securities, any Paying Agent, nor the Security Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be
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governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name". Such payments will be the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities of such series in exchange for the Global Security representing such
series of Debt Securities. In addition, the Company may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of a series represented by one or more Global Securities and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Security or Securities representing such series of Debt Securities.
Further, if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company, the
applicable Debt Trustee and the Depositary for such Global Security, receive
individual Debt Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery of
individual Debt Securities of the series represented by such Global Security
equal in principal amount to such beneficial interest and to have such Debt
Securities registered in its name. Individual Debt Securities of such series so
issued will be issued in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
Each Indenture provides that the Company may not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any person, unless (i) the successor corporation
shall be a corporation organized and existing under the laws of the United
States or any State thereof or the District of Columbia, and shall expressly
assume by a supplemental indenture the due and punctual payment of the principal
of, any premium on, and any interest on, all the outstanding Debt Securities and
the performance of every covenant in the applicable Indenture on the part of the
Company to be performed or observed; (ii) immediately after giving effect to
such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company shall have delivered to the applicable Debt
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance or transfer and such supplemental
indenture comply with the foregoing provisions relating to such transaction. In
case of any such consolidation, merger, conveyance or transfer, such successor
corporation will succeed to and be substituted for the Company as obligor on the
Debt Securities, with the same effect as if it had been named in the applicable
Indenture as the Company. Other than the restrictions on Mortgages described
below, the Indentures and the Debt Securities do not contain any covenants or
other provisions designed to protect holders of Debt Securities in the event of
a highly leveraged transaction involving the Company or any Subsidiary.
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; DEBT SECURITIES IN FOREIGN
CURRENCIES
As to any series of Debt Securities, an Event of Default is defined in each
Indenture as (i) default for 30 days in payment of any interest on the Debt
Securities of such series, or, in the case of the Subordinated Debt Indenture,
for a period of 90 days; (ii) default in payment of principal of or any premium
on the Debt Securities of such series at maturity; (iii) default in payment of
any sinking or purchase fund or analogous obligation, if any, on the Debt
Securities of such series; (iv) default by the Company in the performance of any
other covenant or warranty contained in the applicable Indenture for the benefit
of such series which shall not have been remedied for a period of 90 days after
notice is given as specified in the applicable Indenture; and (v) certain events
of bankruptcy, insolvency and reorganization of the Company.
A default under other indebtedness of the Company will not be a default
under the Indentures and a default under one series of Debt Securities will not
necessarily be a default under another series.
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Each Indenture provides that (i) if an Event of Default described in clause
(i), (ii), (iii) or (iv) above (if the Event of Default under clause (iv) is
with respect to less than all series of Debt Securities then outstanding) shall
have occurred and be continuing with respect to any series, either the
applicable Debt Trustee or the holders of not less than 25% in aggregate
principal amount of the Debt Securities of such series then outstanding (each
such series acting as a separate class) may declare the principal (or, in the
case of Original Issue Discount Securities, the portion thereof specified in the
terms thereof) of all outstanding Debt Securities of such series and the
interest accrued thereon, if any, to be due and payable immediately and (ii) if
an Event of Default described in clause (iv) or (v) above (if the Event of
Default under clause (iv) is with respect to all series of Debt Securities then
outstanding) shall have occurred and be continuing, either the applicable Debt
Trustee or the holders of at least 25% in aggregate principal amount of all Debt
Securities then outstanding (treated as one class) may declare the principal
(or, in the case of Original Issue Discount Securities, the portion thereof
specified in the terms thereof) of all Debt Securities then outstanding and the
interest accrued thereon, if any, to be due and payable immediately, but upon
certain conditions such declarations may be annulled and past defaults (except
for defaults in the payment of principal of, any premium on, or any interest on,
such Debt Securities and in compliance with certain covenants) may be waived by
the holders of a majority in aggregate principal amount of the Debt Securities
of such series then outstanding.
Under each Indenture the applicable Debt Trustee must give to the holders
of each series of Debt Securities notice of all uncured defaults known to it
with respect to such series within 90 days after such a default occurs (the term
"default" to include the events specified above without notice or grace periods,
except that in the case of any default of the type described in clause (iv)
above, no such notice shall be given until at least 90 days after the occurrence
thereof); provided that, except in the case of default in the payment of
principal of, any premium on, or any interest on, any of the Debt Securities, or
default in the payment of any sinking or purchase fund installment or analogous
obligations, the applicable Debt Trustee shall be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interests of the holders of the Debt Securities of such series.
No holder of any Debt Securities of any series may institute any action
under either Indenture unless (i) such holder shall have given the Debt Trustee
thereunder written notice of a continuing Event of Default with respect to such
series, (ii) the holders of not less than 25% in aggregate principal amount of
the Debt Securities of such series then outstanding shall have requested the
Debt Trustee thereunder to institute proceedings in respect of such Event of
Default, (iii) such holder or holders shall have offered the Debt Trustee
thereunder such reasonable indemnity as such Debt Trustee may require, (iv) the
Debt Trustee thereunder shall have failed to institute an action for 60 days
thereafter and (v) no inconsistent direction shall have been given to the Debt
Trustee thereunder during such 60-day period by the holders of a majority in
aggregate principal amount of Debt Securities of such series then outstanding.
The holders of a majority in aggregate principal amount of the Debt
Securities of any series affected and then outstanding will have the right,
subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Debt
Trustee or exercising any trust or power conferred on such Debt Trustee with
respect to such series of Debt Securities. Each Indenture provides that, in case
an Event of Default shall occur and be continuing, the Debt Trustee thereunder,
in exercising its rights and powers under such Indenture, will be required to
use the degree of care of a prudent person in the conduct of such person's own
affairs. Each Indenture further provides that the Debt Trustee thereunder shall
not be required to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties under such Indenture unless it
has reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is reasonably assured to it.
The Company must furnish to the Debt Trustees within 120 days after the end
of each fiscal year a statement signed by one of certain officers of the Company
to the effect that a review of the activities of the Company during such year
and of its performance under the applicable Indenture and the terms of the Debt
Securities has been made, and, to the best of the knowledge of the signatories
based on such review, the Company has complied with all conditions and covenants
of such Indenture through such year or, if the Company is in default, specifying
such default.
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If any Debt Securities are denominated in a coin or currency other than
that of the United States, then for the purposes of determining whether the
holders of the requisite principal amount of Debt Securities have taken any
action as herein described, the principal amount of such Debt Securities shall
be deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Debt Securities are denominated
(as evidenced to the applicable Debt Trustee by an Officers' Certificate) as of
the date the taking of such action by the holders of such requisite principal
amount is evidenced to the applicable Debt Trustee as provided in the respective
Indenture.
If any Debt Securities are Original Issue Discount Securities, then for the
purposes of determining whether the holders of the requisite principal amount of
Debt Securities have taken any action herein described, the principal amount of
such Debt Securities shall be deemed to be the portion of such principal amount
that would be due and payable at the time of the taking of such action upon a
declaration of acceleration of maturity thereof.
MODIFICATION OF THE INDENTURES
The Indentures provide that the Company and the applicable Debt Trustee
may, without the consent of any holders of Debt Securities, enter into
supplemental indentures for the purposes, among other things, of adding to the
Company's covenants, adding additional Events of Default, establishing the form
or terms of any series of Debt Securities or curing ambiguities or
inconsistencies in such Indenture or making other provisions.
With certain exceptions, the applicable Indenture or the rights of the
holders of the Debt Securities may be modified by the Company and the applicable
Debt Trustee with the consent of the holders of a majority in aggregate
principal amount of the Debt Securities of each series affected by such
modification then outstanding, but no such modification may be made without the
consent of the holder of each outstanding Debt Security affected thereby which
would (i) change the maturity of any payment of principal of, or any premium on,
or any installment of interest on any Debt Security, or reduce the principal
amount thereof or the interest or any premium thereon, or change the method of
computing the amount of principal thereof or interest thereon on any date or
change any place of payment where, or the coin or currency in which, any Debt
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the maturity
thereof (or, in the case of redemption or repayment, on or after the redemption
date or the repayment date, as the case may be), (ii) reduce the percentage in
principal amount of the outstanding Debt Securities of any series, the consent
of whose holders is required for any such modification, or the consent of whose
holders is required for any waiver of compliance with certain provisions of the
applicable Indenture or certain defaults thereunder and their consequences
provided for in such Indenture, or (iii) modify any of the provisions of certain
Sections of the applicable Indenture, including the provisions summarized in
this paragraph, except to increase any such percentage or to provide that
certain other provisions of such Indenture cannot be modified or waived without
the consent of the holder of each outstanding Debt Security affected thereby.
SATISFACTION AND DISCHARGE OF THE INDENTURES; DEFEASANCE
The Indentures shall generally cease to be of any further effect with
respect to a series of Debt Securities if (i) the Company has delivered to the
applicable Debt Trustee for cancellation all Debt Securities of such series
(with certain limited exceptions) or (ii) all Debt Securities of such series not
theretofore delivered to the applicable Debt Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year, and the Company
shall have deposited with the applicable Debt Trustee as trust funds the entire
amount sufficient (in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
applicable Debt Trustee) without consideration of any reinvestment and after
payment of all taxes or other charges and assessments in respect thereof payable
by the applicable Debt Trustee to pay at maturity or upon redemption all such
Debt Securities, no default with respect to the Debt Securities has occurred and
is continuing on the date of such deposit, such deposit does not result in a
breach or violation of, or constitute a default under, the applicable Indenture
or any other agreement or instrument to which the
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Company is a party and the Company delivered an officers' certificate and an
opinion of counsel each stating that such conditions have been complied with
(and if, in either case, the Company shall also pay or cause to be paid all
other sums payable under the applicable Indenture by the Company).
In addition, the Company shall have a "legal defeasance option" (pursuant
to which it may terminate, with respect to the Debt Securities of a particular
series, all of its obligations under such Debt Securities and the applicable
Indenture with respect to such Debt Securities) and a "covenant defeasance
option" (pursuant to which it may terminate, with respect to the Debt Securities
of a particular series, its obligations with respect to such Debt Securities
under certain specified covenants contained in the applicable Indenture). If the
Company exercises its legal defeasance option with respect to a series of Debt
Securities, payment of such Debt Securities may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option with
respect to a series of Debt Securities, payment of such Debt Securities may not
be accelerated because of an Event of Default related to the specified
covenants.
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Debt Securities of a series only if (i)
the Company irrevocably deposits in trust with the applicable Debt Trustee cash
or U.S. Government Obligations (as defined in the applicable Indenture) for the
payment of principal, premium, if any, and interest with respect to such Debt
Securities to maturity or redemption, as the case may be, (ii) the Company
delivers to the applicable Debt Trustee a certificate from a nationally
recognized firm of independent public accountants expressing their opinion that
the payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay the principal, premium, if any, and interest when due with
respect to all the Debt Securities of such series to maturity or redemption, as
the case may be, (iii) 91 days pass after the deposit is made and during the
91-day period no default described in clause (v) under "-- Events of Default,
Waiver and Notice Thereof; Debt Securities in Foreign Currencies" above with
respect to the Company occurs that is continuing at the end of such period, (iv)
no Default has occurred and is continuing on the date of such deposit and after
giving effect thereto, (v) the deposit does not constitute a default under any
other agreement binding on the Company, (vi) the Company delivers to the
applicable Debt Trustee an opinion of counsel to the effect that the trust
resulting from the deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940, (vii) the Company
shall have delivered to the applicable Debt Trustee an opinion of counsel
addressing certain federal income tax matters relating to the defeasance, and
(viii) the Company delivers to the applicable Debt Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent to the defeasance and discharge of the Debt Securities of such series
as contemplated by the applicable Indenture have been complied with.
The applicable Debt Trustee shall hold in trust cash or U.S. Government
Obligations deposited with it as described above and shall apply the deposited
cash and the proceeds from deposited U.S. Government Obligations to the payment
of principal, premium, if any, and interest with respect to the Debt Securities
of the defeased series.
CONCERNING THE DEBT TRUSTEES
The Debt Trustee for the Senior Debt Securities and the Debt Trustee for
the Subordinated Debt Securities will be identified in the relevant Prospectus
Supplement. In certain instances, the Company or the holders of a majority of
the then outstanding principal amount of the Debt Securities issued under an
indenture may remove the Debt Trustee and appoint a successor Debt Trustee. The
Debt Trustee may become the owner or pledgee of any of the Debt Securities with
the same rights, subject to certain conflict of interest restrictions, it would
have if it were not the Debt Trustee. The Debt Trustee and any successor trustee
must be a corporation organized and doing business as a commercial bank or trust
company under the laws of the United States or of any state thereof, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to examination by federal or
state authority. From time to time and subject to applicable law relating to
conflicts of interest, the Debt Trustee may also serve as trustee under other
indentures relating to Debt Securities issued by the Company or affiliated
companies and may engage in commercial transactions with the Company and
affiliated companies. The
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initial Debt Trustee under each Indenture is The Bank of New York, who currently
serves as the transfer agent and registrar for the Common Stock and is a lender
to the Company under the Company's Amended and Restated Credit Agreement dated
April 10, 1997.
SENIOR DEBT SECURITIES
In addition to the provisions previously described herein and applicable to
all Debt Securities, the following description of the Senior Debt Securities
summarizes certain general terms and provisions of the Senior Debt Securities to
which any Prospectus Supplement may relate. The particular terms of the Senior
Debt Securities offered by any Prospectus Supplement and the extent, if any, to
which such general provisions may apply to any series of Senior Debt Securities
will be described in the Prospectus Supplement relating thereto.
Ranking of Senior Debt Securities
Unless otherwise specified in a Prospectus Supplement for a particular
series of Debt Securities, all series of Senior Debt Securities will be senior
indebtedness of the Company and will be direct, unsecured obligations of the
Company, ranking on a parity with all other unsecured and unsubordinated
indebtedness of the Company. The Company is a holding company and the Debt
Securities will be effectively subordinated to all existing and future
liabilities, including indebtedness, of the Company's subsidiaries. See "Holding
Company Structure."
Covenants of the Company
The Senior Indenture contains the covenants summarized below, which will be
applicable (unless waived or amended) so long as any of the Senior Debt
Securities are outstanding, unless stated otherwise in the Prospectus
Supplement.
Limitation on Mortgages. The Company will not, nor will it permit any
Restricted Subsidiary to, create, assume, incur or suffer to exist (i) any
Mortgage upon any stock or indebtedness of any Restricted Subsidiary,
whether owned on the date of the Senior Indenture or thereafter acquired,
to secure any Debt of the Company or any other person (other than the
Senior Debt Securities), or (ii) any Mortgage upon any Principal Property,
whether owned or leased on the date of the Senior Indenture, or thereafter
acquired, to secure any Debt of the Company or any other person (other than
the Senior Debt Securities), without in any such case making effective
provision whereby all the outstanding Senior Debt Securities shall be
directly secured equally and ratably with such Debt. There will be excluded
from this restriction any Mortgage upon stock or indebtedness of a
corporation existing at the time such corporation becomes a Subsidiary or
at the time stock or indebtedness of a Subsidiary is acquired and any
extension, renewal or replacement of any such Mortgage; provided, however,
that the principal amount of Debt secured thereby shall not exceed the
principal amount of Debt so secured at the time of such extension, renewal
or replacement; and provided further, that such Mortgage shall be limited
to all or such part of the stock or indebtedness which secured the Mortgage
so extended, renewed or replaced.
There will be excluded from the restriction referred to in the next
preceding paragraph the following Mortgages (the Mortgages set forth in the
following clauses (i) through (viii) the "Permitted Mortgages"): (i) any
Mortgage upon property owned or leased by a corporation existing at the
time such corporation becomes a Restricted Subsidiary, (ii) any Mortgage
upon property existing at the time of the acquisition thereof or to secure
payment of any part of the purchase price thereof or any Debt incurred to
finance the purchase thereof, (iii) any Mortgage upon property to secure
any part of the cost of development, construction, alteration, repair or
improvement of such property, or Debt incurred to finance such cost, (iv)
any Mortgage securing Debt of a Restricted Subsidiary owing to the Company
or to another Restricted Subsidiary, (v) any Mortgage existing on the date
of the Senior Indenture, (vi) any Mortgage on property of the Company or a
Restricted Subsidiary in favor of the United States of America or any State
or political subdivision thereof, or in favor of any other country or any
political subdivision thereof, to secure payment pursuant to any contract
or statute or to secure any indebtedness
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incurred for the purpose of financing all or part of the purchase price or
the cost of construction or improvement of the property subject to such
Mortgage, (vii) any Mortgage on any property subsequently acquired by the
Company or any Restricted Subsidiary, contemporaneously with such
acquisition or within 120 days thereafter, to secure or provide for the
payment of any part of the purchase price of such property, or any Mortgage
assumed by the Company or any Restricted Subsidiary upon any property
subsequently acquired by the Company or any Restricted Subsidiary which
were existing at the time of such acquisition, provided that the amount of
any Indebtedness secured by any such Mortgage created or assumed does not
exceed the cost to the Company or Restricted Subsidiary, as the case may
be, of the property covered by such Mortgage, and (viii) any extension,
renewal or replacement, in whole or in part, of any Mortgage referred to in
the foregoing clauses (i) through (vii); provided, however, that the
principal amount of Debt secured thereby shall not exceed the principal
amount of Debt so secured at the time of such extension, renewal or
replacement; and provided, further, that such Mortgage shall be limited to
all or such part of the property which secured the Mortgage so extended,
renewed or replaced.
Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, create, assume, incur or suffer to exist any
Mortgage upon any Principal Property without equally and ratably securing
the Senior Debt Securities if the aggregate amount of all Debt then
outstanding secured by such Mortgage and all similar Mortgages does not
exceed 15% of the total consolidated shareholders' equity (including
Preferred Stock) of the Company as shown on the audited consolidated
balance sheet contained in the latest annual report to shareholders of the
Company; provided that Debt secured by Permitted Mortgages shall not be
included in the amount of such secured Debt.
Sale and Leaseback Transactions. The Company will not, nor will it
permit any Restricted Subsidiary to, enter into any arrangement with any
person providing for the leasing by the Company or a Restricted Subsidiary
as lessee of any Principal Property (except for temporary leases for a
term, including renewals, of not more than three years), which property has
been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such person (herein referred to as a "Sale-Leaseback
Transaction"), unless (i) such Sale-Leaseback Transaction occurs within 120
days from the date of acquisition of such Principal Property or the date of
the completion of construction or commencement of full operations on such
Principal Property, whichever is later, or (ii) the Company, within 120
days after such Sale-Leaseback Transaction, applies or causes to be applied
to the retirement of Funded Debt of the Company or any Subsidiary (other
than Funded Debt of the Company which by its terms or the terms of the
instrument pursuant to which it was issued is subordinate in right of
payment to the Senior Debt Securities) an amount not less than the net
proceeds of the sale of such Principal Property. Notwithstanding the
foregoing provisions, the Company may, and may permit any Restricted
Subsidiary to, effect any Sale-Leaseback Transaction involving any
Principal Property, provided that the net sale proceeds from such
Sale-Leaseback Transaction, together with all Debt secured by Mortgages
other than Permitted Mortgages, does not exceed 15% of the total
consolidated shareholders' equity of the Company as shown on the audited
consolidated balance sheet contained in the latest annual report to
shareholders of the Company.
Definitions
For the purposes of the description of the Senior Debt Securities:
"Debt" means indebtedness for money borrowed.
"Funded Debt" of any person means all indebtedness for borrowed money
created, incurred, assumed or guaranteed in any manner by such person, and all
indebtedness, contingent or otherwise, incurred or assumed by such person in
connection with the acquisition of any business, property or asset, which in
each case matures more than one year after, or which by its terms is renewable
or extendible or payable out of the proceeds of similar indebtedness incurred
pursuant to the terms of any revolving credit agreement or any similar agreement
at the option of such person for a period ending more than one year after the
date as of which Funded Debt is being determined; provided, however, that Funded
Debt shall not include (i) any indebtedness for the payment, redemption or
satisfaction of which money (or evidences of indebtedness, if
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permitted under the instrument creating or evidencing such indebtedness) in the
necessary amount shall have been irrevocably deposited in trust with a trustee
or proper depository either on or before the maturity or redemption date thereof
or (ii) any indebtedness of such person to any of its Subsidiaries or of any
Subsidiary to such person or any other Subsidiary or (iii) any indebtedness
incurred in connection with the financing of operating, construction or
acquisition projects, provided that the recourse for such indebtedness is
limited to the assets of such projects.
"Mortgage" means any mortgage, pledge, lien, encumbrance, charge or
security interest of any kind.
"Principal Property" means any radio broadcasting, television broadcasting
or outdoor advertising property located in the United States owned or leased by
the Company or any subsidiary, unless, in the opinion of the Board of Directors
of the Company, any of such properties are not in the aggregate of material
importance to the total business conducted by the Company and its Subsidiaries
as an entirety.
"Restricted Subsidiary" means each Subsidiary as of the date of the
Indenture and each Subsidiary thereafter created or acquired, unless expressly
excluded by resolution of the Board of Directors of the Company before, or
within 120 days following, such creation or acquisition.
"Subsidiary", when used with respect to the Company, means any corporation
of which a majority of the outstanding voting stock is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or both.
SUBORDINATED DEBT SECURITIES
In addition to the provisions previously described herein and applicable to
all Debt Securities, the following description of the Subordinated Debt
Securities summarizes certain general terms and provisions of the Subordinated
Debt Securities to which any Prospectus Supplement may relate. The particular
terms of the Subordinated Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to any series
of Subordinated Debt Securities will be described in the Prospectus Supplement
relating thereto.
Ranking of Subordinated Debt Securities
The Subordinated Debt Securities will be subordinated in right of payment
to certain other indebtedness of the Company to the extent set forth in the
applicable Prospectus Supplement.
The payment of the principal of, premium, if any, and interest on the
Subordinated Debt Securities will be subordinated in right of payment to the
prior payment in full of all Senior Indebtedness of the Company and pari passu
with the Company's trade creditors. No payment on account of principal of,
premium, if any, or interest on the Subordinated Debt Securities and no
acquisition of, or payment on account of any sinking fund for, the Subordinated
Debt Securities may be made unless full payment of amounts then due for
principal, premium, if any, and interest then due on all Senior Indebtedness by
reason of the maturity thereof (by lapse of time, acceleration or otherwise) has
been made or duly provided for in cash or in a manner satisfactory to the
holders of such Senior Indebtedness. In addition, the Subordinated Indenture
provides that if a default has occurred giving the holders of such Senior
Indebtedness the right to accelerate the maturity thereof, or an event has
occurred which, with the giving of notice, or lapse of time, or both, would
constitute such an event of
default, then unless and until such event shall have been cured or waived or
shall have ceased to exist, no payment on account of principal, premium, if any,
or interest on the Subordinated Debt Securities and no acquisition of, or
payment on account of a sinking fund for, the Subordinated Debt Securities may
be made. The Company shall give prompt written notice to the Subordinated
Trustee of any default under any Senior Indebtedness or under any agreement
pursuant to which Senior Indebtedness may have been issued. The Subordinated
Indenture provisions described in this paragraph, however, do not prevent the
Company from making a sinking fund payment with Subordinated Debt Securities
acquired prior to the maturity of Senior Indebtedness or, in the case of
default, prior to such default and notice thereof. Upon any distribution of its
assets in connection with any dissolution, liquidation or reorganization of the
Company, all Senior Indebtedness must be paid in full before the holders of the
Subordinated Debt Securities are entitled to any payments
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whatsoever. As a result of these subordination provisions, in the event of the
Company's insolvency, holders of the Subordinated Debt Securities may recover
ratably less than senior creditors of the Company.
For purposes of the description of the Subordinated Debt Securities, the
term "Senior Indebtedness" means the principal of and premium, if any, and
interest on the following, whether outstanding on the date of execution of the
Subordinated Indenture or thereafter incurred or created (i) indebtedness of the
Company for money borrowed by the Company (including purchase money obligations
with an original maturity in excess of one year) or evidenced by securities
(other than the Subordinated Debt Securities or Junior Subordinated Debt
Securities), notes, bankers' acceptances or other corporate debt securities or
similar instruments issued by the Company; (ii) obligations with respect to
letters of credit; (iii) indebtedness of the Company constituting a guarantee of
indebtedness of others of the type referred to in the preceding clauses (i) and
(ii); or (iv) renewals, extensions or refundings of any of the indebtedness
referred to in the preceding clauses (i), (ii) and (iii) unless, in the case of
any particular indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same, or pursuant to
which the same is outstanding, such indebtedness or such renewal, extension or
refunding thereof is not superior in right of payment to the Subordinated Debt
Securities.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The following description of the terms of the Junior Subordinated Debt
Securities summarizes certain general terms and provisions of the Junior
Subordinated Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Junior Subordinated Debt Securities offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
may apply to any series of Junior Subordinated Debt Securities will be described
in the Prospectus Supplement relating thereto.
Junior Subordinated Debt Securities may be issued from time to time in one
or more series under an Indenture (the "Junior Subordinated Indenture") between
the Company and The Bank of New York or such other trustee as may be named in a
Prospectus Supplement (the "Junior Subordinated Indenture Trustee"). The form of
Junior Subordinated Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The following description
summarizes the material terms of the Junior Subordinated Indenture and is
qualified in its entirety by reference to the Junior Subordinated Indenture and
the Trust Indenture Act. Whenever particular provisions or defined terms in the
Junior Subordinated Indenture are referred to herein, such provisions or defined
terms are incorporated by reference herein.
GENERAL
The Junior Subordinated Debt Securities will be unsecured, junior
subordinated obligations of the Company. The Junior Subordinated Indenture does
not limit the amount of additional indebtedness the Company or any of its
subsidiaries may incur. Since the Company is a holding company, the Company's
rights and the rights of its creditors, including the holders of Junior
Subordinated Debt Securities, to participate in the assets of any subsidiary
upon the latter's liquidation or recapitalization will be subject to the prior
claims of the subsidiary's creditors, except to the extent that the Company may
itself be a creditor with recognized claims against the subsidiary.
The Junior Subordinated Indenture does not limit the aggregate principal
amount of indebtedness which may be issued thereunder and provides that Junior
Subordinated Debt Securities may be issued thereunder from time to time in one
or more series. The Junior Subordinated Debt Securities are issuable in one or
more series pursuant to a board resolution or an indenture supplemental to the
Junior Subordinated Indenture.
In the event Junior Subordinated Debt Securities are issued to a CCCI Trust
or a Trustee of such CCCI Trust in connection with the issuance of Preferred
Securities by such CCCI Trust, such Junior Subordinated Debt Securities
subsequently may be distributed pro rata to the holders of such Preferred
Securities in connection with the dissolution of such CCCI Trust upon the
occurrence of certain events described in the applicable Prospectus Supplement.
Only one series of Junior Subordinated Debt Securities will be issued to a
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CCCI Trust or a Trustee of such CCCI Trust in connection with the issuance of
Preferred Securities by such CCCI Trust.
Reference is made to the Prospectus Supplement for the following terms of
the series of Junior Subordinated Debt Securities being offered hereby (to the
extent such terms are applicable to the Junior Subordinated Debt Securities):
(i) the specific designation of such Junior Subordinated Debt Securities,
aggregate principal amount and purchase price; (ii) any limit on the aggregate
principal amount of such Junior Subordinated Debt Securities; (iii) the date or
dates on which the principal of such Junior Subordinated Debt Securities is
payable and the right, if any, to extend such date or dates; (iv) the rate or
rates at which such Junior Subordinated Debt Securities will bear interest or
the method of calculating such rate or rates, if any; (v) the date or dates from
which such interest shall accrue, the interest payment dates on which such
interest will be payable or the manner of determination of such interest payment
dates and the record dates for the determination of holders to whom interest is
payable on any such interest payment dates; (vi) the right, if any, to extend
the interest payment periods and the duration of such extension; (vii) the
period or periods within which, the price or prices at which, and the terms and
conditions upon which, such Junior Subordinated Debt Securities may be redeemed,
in whole or in part, at the option of the Company; (viii) the obligation, if
any, of the Company to redeem or purchase such Junior Subordinated Debt
Securities pursuant to any sinking fund or analogous provisions or at the option
of the holder thereof and the period or periods within which, the price or
prices at which, and the terms and conditions upon which, such Junior
Subordinated Debt Securities shall be redeemed or purchased, in whole or part,
pursuant to such obligation; (ix) any applicable federal income tax
consequences, including whether and under what circumstances the Company will
pay additional amounts on the Junior Subordinated Debt Securities held by a
person who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the Company will
have the option to redeem such Junior Subordinated Debt Securities rather than
pay such additional amounts; (x) the form of such Junior Subordinated Debt
Securities; (xi) if other than denominations of $25 or any integral multiple
thereof, the denominations in which such Junior Subordinated Debt Securities
shall be issuable; (xii) any and all other terms with respect to such series,
including any modification of or additions to the events of default or covenants
provided for with respect to the Junior Subordinated Debt Securities, and any
terms which may be required by or advisable under applicable laws or regulations
not inconsistent with the Junior Subordinated Indenture; (xiii) the terms and
conditions upon which the Junior Subordinated Debt Securities may be convertible
into or exchanged for Common Stock, Preferred Stock, Preferred Securities, or
indebtedness or other securities of any kind of the Company; and (xiv) whether
such Junior Subordinated Debt Securities are issuable as a global security, and
in such case, the identity of the depositary.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issued in United States dollars in fully
registered form without coupons in denominations of $25 or integral multiples
thereof. No service charge will be made for any transfer or exchange of any
Junior Subordinated Debt Securities, but the Company may, except in certain
specified cases not involving any transfer, require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Unless otherwise set forth in the Prospectus Supplement, interest on outstanding
Junior Subordinated Debt Securities will be paid to holders of record on the
date which is 15 days immediately prior to the date such interest is to be paid.
Junior Subordinated Debt Securities may bear interest at a fixed rate or a
floating rate. Junior Subordinated Debt Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
federal income tax considerations applicable to any such discounted Junior
Subordinated Debt Securities or to certain Junior Subordinated Debt Securities
issued at par which are treated as having been issued at a discount for federal
income tax purposes will be described in the applicable Prospectus Supplement.
GLOBAL SECURITIES
If any Junior Subordinated Debt Securities of a series are represented by
one or more Global Securities, the applicable Prospectus Supplement will
describe the circumstances, if any, under which beneficial owners
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of interests in any such Global Security may exchange such interests for Junior
Subordinated Debt Securities of such series and of like tenor and principal
amount in any authorized form and denomination. Principal of, and any premium
and interest on, a Global Security will be payable in the manner described in
the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debt Securities to be represented by
a Global Security will be described in the applicable Prospectus Supplement.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
The Junior Subordinated Indenture provides that the Company may not
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any person, unless (i) the
successor corporation shall be a corporation organized and existing under the
laws of the United States or any State thereof or the District of Columbia, and
shall expressly assume by a supplemental indenture the due and punctual payment
of the principal of, any premium on, and any interest on, all the outstanding
Junior Subordinated Debt Securities and the performance of every covenant in the
Junior Subordinated Indenture on the part of the Company to be performed or
observed; (ii) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and (iii) the
Company shall have delivered to the applicable Junior Subordinated Indenture
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance or transfer and such supplemental
indenture comply with the foregoing provisions relating to such transaction. In
case of any such consolidation, merger, conveyance or transfer, such successor
corporation will succeed to and be substituted for the Company as obligor on the
Junior Subordinated Debt Securities, with the same effect as if it had been
named in the Junior Subordinated Indenture as the Company. The Junior
Subordinated Indentures and the Junior Subordinated Debt Securities do not
contain any covenants or other provisions designed to protect holders of Junior
Subordinated Debt Securities in the event of a highly leveraged transaction
involving the Company or any Subsidiary.
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; JUNIOR SUBORDINATED DEBT
SECURITIES IN FOREIGN CURRENCIES
As to any series of Junior Subordinated Debt Securities, an Event of
Default is defined in each Junior Subordinated Indenture as (i) default for 90
days in payment of any interest on the Junior Subordinated Debt Securities of
such series (subject to the deferral of any due date in the case of an Extension
Period); (ii) default in payment of principal of or any premium on the Junior
Subordinated Debt Securities of such series at maturity; (iii) default in
payment of any sinking or purchase fund or analogous obligation, if any, on the
Junior Subordinated Debt Securities of such series; (iv) default by the Company
in the performance, or breach, of any other covenant or warranty contained in
the Junior Subordinated Indenture for the benefit of such series which shall not
have been remedied for a period of 90 days after notice is given as specified in
the Junior Subordinated Indenture; and (v) certain events of bankruptcy,
insolvency and reorganization of the Company.
A default under other indebtedness of the Company will not be a default
under the Junior Subordinated Indentures and a default under one series of Debt
Securities or Junior Subordinated Debt Securities will not necessarily be a
default under another series.
The Junior Subordinated Indenture provides that (i) if an Event of Default
described in clause (i), (ii), (iii) or (iv) above (if the Event of Default
under clause (iv) above is with respect to less than all series of Junior
Subordinated Debt Securities outstanding) shall have occurred and be continuing
with respect to any series, either the Junior Subordinated Indenture Trustee or
the holders of not less than 25% in aggregate principal amount of the Junior
Subordinated Debt Securities of such series then outstanding (each such series
acting as a separate class) may declare the principal (or, in the case of
Original Issue Discount Securities, the portion thereof specified in the terms
thereof) of all outstanding Junior Subordinated Debt Securities of such series
and the interest accrued thereon, if any, to be due and payable immediately, and
(ii) if an Event of
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Default described in clause (iv) or (v) above (if the Event of Default under
clause (iv) above is with respect to all series of Junior Subordinated Debt
Securities then outstanding) shall have occurred and be continuing, either the
Junior Subordinated Indenture Trustee or the holders of at least 25% in
aggregate principal amount of all Junior Subordinated Debt Securities then
outstanding (treated as one class) may declare the principal (or, in the case of
Original Issue Discount Securities, the portion thereof specified in the terms
thereof) of all Junior Subordinated Debt Securities then outstanding and the
interest accrued thereon, if any, to be due and payable immediately, but upon
certain conditions such declarations may be annulled and past defaults (except
for defaults in the payment of principal of, any premium on, or any interest on,
such Junior Subordinated Debt Securities and in compliance with certain
covenants) may be waived by the holders of a majority in aggregate principal
amount of the Junior Subordinated Debt Securities of such series then
outstanding (subject to, in the case of any series of Junior Subordinated Debt
Securities held as trust assets of a CCCI Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of the holders of
the Preferred Securities and the Common Securities of such CCCI Trust as may be
required under the Declaration of Trust of such CCCI Trust).
"Security Exchange" when used with respect to the Securities of any series
which are held as trust assets of a CCCI Trust pursuant to the Declaration of
Trust of such CCCI Trust means the distribution of the Securities of such series
by such CCCI Trust in exchange for the Preferred Securities and the Common
Securities of such CCCI Trust in dissolution of such CCCI Trust pursuant to the
Declaration of Trust of such CCCI Trust.
Under the Junior Subordinated Indenture the Junior Subordinated Indenture
Trustee must give to the holders of each series of Junior Subordinated Debt
Securities notice of all uncured defaults known to it with respect to such
series within 90 days after such a default occurs (the term "default" to include
the events specified above without notice or grace periods, except that in the
case of any default of the type described in clause (d) above, no such notice
shall be given until at least 90 days after the occurrence thereof); provided
that, except in the case of default in the payment of principal of, any premium
on, or any interest on, any of the Junior Subordinated Debt Securities, or
default in the payment of any sinking or purchase fund installment or analogous
obligations, the applicable Junior Subordinated Indenture Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the holders of the Junior
Subordinated Debt Securities of such series.
No holder of any Junior Subordinated Debt Securities of any series may
institute any action under the Junior Subordinated Indenture unless (i) such
holder shall have given the Junior Subordinated Indenture Trustee thereunder
written notice of a continuing Event of Default with respect to such series,
(ii) the holders of not less than 25% in aggregate principal amount of the
Junior Subordinated Debt Securities of such series then outstanding shall have
requested the Junior Subordinated Indenture Trustee thereunder to institute
proceedings in respect of such Event of Default, (iii) such holder or holders
shall have offered the Junior Subordinated Indenture Trustee thereunder such
reasonable indemnity as such Junior Subordinated Indenture Trustee may require,
(iv) the Junior Subordinated Indenture Trustee thereunder shall have failed to
institute an action for 60 days thereafter and (v) no inconsistent direction
shall have been given to the Junior Subordinated Indenture Trustee thereunder
during such 60-day period by the holders of a majority in aggregate principal
amount of Junior Subordinated Debt Securities of such series then outstanding
(subject to, in the case of any series of Junior Subordinated Debt Securities
held as trust assets of a CCCI Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of the holders of the
Preferred Securities and the Common Securities of such CCCI Trust as may be
required under the Declaration of Trust of such CCCI Trust).
The holders of a majority in aggregate principal amount of the Junior
Subordinated Debt Securities of any series affected and then outstanding
(subject to, in the case of any series of Junior Subordinated Debt Securities
held as trust assets of a CCCI Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of the holders of the
Preferred Securities and the Common Securities of such CCCI Trust as may be
required under the Declaration of Trust of such CCCI Trust) will have the right,
subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Junior
Subordinated Indenture Trustee or exercising any trust or power
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conferred on such Junior Subordinated Indenture Trustee with respect to such
series of Junior Subordinated Debt Securities. The Junior Subordinated Indenture
provides that, in case an Event of Default shall occur and be continuing, the
Junior Subordinated Indenture Trustee thereunder, in exercising its rights and
powers under such Junior Subordinated Indenture, will be required to use the
degree of care of a prudent person in the conduct of such person's own affairs.
Each Junior Subordinated Indenture further provides that the Junior Subordinated
Indenture Trustee thereunder shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties under such Junior Subordinated Indenture unless it has reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is reasonably assured to it.
The Company must furnish to the Junior Subordinated Indenture Trustee
within 120 days after the end of each fiscal year a statement signed by one of
certain officers of the Company to the effect that a review of the activities of
the Company during such year and of its performance under the Junior
Subordinated Indenture and the terms of the Junior Subordinated Debt Securities
has been made, and, to the best of the knowledge of the signatories based on
such review, the Company has complied with all conditions and covenants of such
Junior Subordinated Indenture through such year or, if the Company is in
default, specifying such default.
If any Junior Subordinated Debt Securities are denominated in a coin or
currency other than that of the United States, then for the purposes of
determining whether the holders of the requisite principal amount of Junior
Subordinated Debt Securities have taken any action as herein described, the
principal amount of such Junior Subordinated Debt Securities shall be deemed to
be that amount of United States dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange into United States
dollars for the currency in which such Junior Subordinated Debt Securities are
denominated (as evidenced to the applicable Junior Subordinated Indenture by an
Officers' Certificate) as of the date the taking of such action by the holders
of such requisite principal amount is evidenced to the applicable Junior
Subordinated Indenture as provided in the respective Junior Subordinated
Indenture.
If any Junior Subordinated Debt Securities are Original Issue Discount
Securities, then for the purposes of determining whether the holders of the
requisite principal amount of Junior Subordinated Debt Securities have taken any
action herein described, the principal amount of such Junior Subordinated Debt
Securities shall be deemed to be the portion of such principal amount that would
be due and payable at the time of the taking of such action upon a declaration
of acceleration of maturity thereof.
MODIFICATION OF THE JUNIOR SUBORDINATED INDENTURE
The Junior Subordinated Indenture provides that the Company and the Junior
Subordinated Indenture Trustee may, without the consent of any holders of Junior
Subordinated Debt Securities, enter into supplemental indentures for the
purposes, among other things, of adding to the Company's covenants, adding
additional Junior Subordinated Indenture Events of Default, establishing the
form or terms of any series of Junior Subordinated Debt Securities or curing
ambiguities or inconsistencies in the Junior Subordinated Indenture or making
other provisions.
With certain exceptions, the Junior Subordinated Indenture or the rights of
the holders of the Junior Subordinated Debt Securities may be modified by the
Company and the Junior Subordinated Indenture Trustee with the consent of the
holders of a majority in aggregate principal amount of the Junior Subordinated
Debt Securities of each series affected by such modification then outstanding
(subject to, in the case of any series of Junior Subordinated Debt Securities
held as trust assets of a CCCI Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of the holders of the
Preferred Securities and the Common Securities of such CCCI Trust as may be
required under the Declaration of Trust of such CCCI Trust), but no such
modification may be made without the consent of the holder of each outstanding
Junior Subordinated Debt Security affected thereby (subject to, in the case of
any series of Junior Subordinated Debt Securities held as trust assets of a CCCI
Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of the holders of the Preferred Securities and the Common
Securities of such CCCI Trust as may be required under the Declaration of Trust
of such CCCI Trust) which would
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(i) change the maturity of any payment of principal of, or any premium on, or
any installment of interest on any Junior Subordinated Debt Security, or reduce
the principal amount thereof or the interest or any premium thereon, or change
the method of computing the amount of principal thereof or interest thereon on
any date or change any place of payment where, or the coin or currency in which,
any Junior Subordinated Debt Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the maturity thereof (or, in the case of redemption or
repayment, on or after the redemption date or the repayment date, as the case
may be), (ii) reduce the percentage in principal amount of the outstanding
Junior Subordinated Debt Securities of any series, the consent of whose holders
is required for any such modification, or the consent of whose holders is
required for any waiver of compliance with certain provisions of the Junior
Subordinated Indenture or certain defaults thereunder and their consequences
provided for in such Indenture, or (iii) modify any of the provisions of certain
Sections of the Junior Subordinated Indenture, including the provisions
summarized in this paragraph, except to increase any such percentage or to
provide that certain other provisions of the Junior Subordinated Indenture
cannot be modified or waived without the consent of the holder of each
outstanding Junior Subordinated Debt Security affected thereby.
SATISFACTION AND DISCHARGE OF THE JUNIOR SUBORDINATED INDENTURE; DEFEASANCE
The Junior Subordinated Indenture shall generally cease to be of any
further effect with respect to a series of Junior Subordinated Debt Securities
if (i) the Company has delivered to the Junior Subordinated Indenture Trustee
for cancellation all Junior Subordinated Debt Securities of such series (with
certain limited exceptions) or (ii) all Junior Subordinated Debt Securities of
such series not theretofore delivered to the Junior Subordinated Indenture
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year, and the Company shall have deposited with the Junior
Subordinated Indenture Trustee as trust funds the entire amount sufficient (in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Junior
Subordinated Indenture Trustee) without consideration of any reinvestment and
after payment of all taxes or other charges and assessments in respect thereof
payable by the Junior Subordinated Indenture Trustee to pay at maturity or upon
redemption all such Junior Subordinated Debt Securities, no default with respect
to the Junior Subordinated Debt Securities has occurred and is continuing on the
date of such deposit, such deposit does not result in a breach or violation of,
or constitute a default under, the Junior Subordinated Indenture or any other
agreement or instrument to which the Company is a party and the Company
delivered an officers' certificate and an opinion of counsel each stating that
such conditions have been complied with (and if, in either case, the Company
shall also pay or cause to be paid all other sums payable under the Junior
Subordinated Indenture by the Company).
In addition, the Company shall have a "legal defeasance option" (pursuant
to which it may terminate, with respect to the Junior Subordinated Debt
Securities of a particular series, all of its obligations under such Junior
Subordinated Debt Securities and the Junior Subordinated Indenture with respect
to such Junior Subordinated Debt Securities) and a "covenant defeasance option"
(pursuant to which it may terminate, with respect to the Junior Subordinated
Debt Securities of a particular series, its obligations with respect to such
Junior Subordinated Debt Securities under certain specified covenants contained
in the Junior Subordinated Indenture). If the Company exercises its legal
defeasance option with respect to a series of Junior Subordinated Debt
Securities, payment of such Junior Subordinated Debt Securities may not be
accelerated because of an Event of Default. If the Company exercises its
covenant defeasance option with respect to a series of Junior Subordinated Debt
Securities, payment of such Junior Subordinated Debt Securities may not be
accelerated because of an Event of Default related to the specified covenants.
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Junior Subordinated Debt Securities of a
series only if (i) the Company irrevocably deposits in trust with the Junior
Subordinated Indenture Trustee cash or U.S. Government Obligations (as defined
in the Junior Subordinated Indenture) for the payment of principal, premium, if
any, and interest with respect to such Junior Subordinated Debt Securities to
maturity or redemption, as the case may be, (ii) the Company delivers to the
Junior Subordinated Indenture Trustee a certificate from a nationally recognized
firm of independent
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public accountants expressing their opinion that the payments of principal and
interest when due and without reinvestment on the deposited U.S. Government
Obligations plus any deposited money without investment will provide cash at
such times and in such amounts as will be sufficient to pay the principal,
premium, if any, and interest when due with respect to all the Junior
Subordinated Debt Securities of such series to maturity or redemption, as the
case may be, (iii) 91 days pass after the deposit is made and during the 91-day
period no default described in clause (v) under "-- Events of Default, Waiver
and Notice Thereof; Junior Subordinated Debt Securities in Foreign Currencies"
above with respect to the Company occurs that is continuing at the end of such
period, (iv) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto, (v) the deposit does not constitute a
default under any other agreement binding on the Company, (vi) the Company
delivers to the Junior Subordinated Indenture Trustee an opinion of counsel to
the effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940, (vii) the Company shall have delivered to the Junior Subordinated
Indenture Trustee an opinion of counsel addressing certain federal income tax
matters relating to the defeasance, and (viii) the Company delivers to the
Junior Subordinated Indenture Trustee an officers' certificate and an opinion of
counsel, each stating that all conditions precedent to the defeasance and
discharge of the Junior Subordinated Debt Securities of such series as
contemplated by the Junior Subordinated Indenture have been complied with.
The Junior Subordinated Indenture Trustee shall hold in trust cash or U.S.
Government Obligations deposited with it as described above and shall apply the
deposited cash and the proceeds from deposited U.S. Government Obligations to
the payment of principal, premium, if any, and interest with respect to the
Junior Subordinated Debt Securities of the defeased series.
CONCERNING THE JUNIOR SUBORDINATED INDENTURE TRUSTEE
The Junior Subordinated Indenture Trustee for the Junior Subordinated Debt
Securities will be identified in the relevant Prospectus Supplement. In certain
instances, the Company or the holders of a majority of the then outstanding
principal amount of the Junior Subordinated Debt Securities issued under an
Junior Subordinated Indenture may remove the Junior Subordinated Indenture
Trustee and appoint a successor Junior Subordinated Indenture Trustee. The
Junior Subordinated Indenture Trustee may become the owner or pledgee of any of
the Junior Subordinated Debt Securities with the same rights, subject to certain
conflict of interest restrictions, it would have if it were not the Junior
Subordinated Indenture Trustee. The Junior Subordinated Indenture Trustee and
any successor trustee must be a corporation organized and doing business as a
commercial bank or trust company under the laws of the United States or of any
state thereof, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject to
examination by federal or state authority. From time to time and subject to
applicable law relating to conflicts of interest, the Junior Subordinated
Indenture Trustee may also serve as trustee under other indentures relating to
Debt Securities or Junior Subordinated Debt Securities issued by the Company or
affiliated companies and may engage in commercial transactions with the Company
and affiliated companies. Initially, the Junior Subordinated Indenture Trustee
is The Bank of New York, who currently serves as the transfer agent and
registrar for the Common Stock and is a lender to the Company under the
Company's Amended and Restated Credit Agreement dated April 10, 1997.
CERTAIN COVENANTS OF THE COMPANY APPLICABLE TO THE JUNIOR SUBORDINATED DEBT
SECURITIES
If Junior Subordinated Debt Securities are issued to a CCCI Trust in
connection with the issuance of Preferred Securities by such CCCI Trust, the
Company covenants in the Junior Subordinated Indenture that, so long as the
Preferred Securities of such CCCI Trust remain outstanding, the Company will not
declare or pay any dividends on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any Common Stock or
Preferred Stock or make any guarantee payments with respect thereto if at such
time (i) the Company shall be in default with respect to its Guarantee Payments
(as defined herein) or other payment obligations under the related Guarantee,
(ii) there shall have occurred any Junior Subordinated Indenture Event of
Default with respect to such Junior Subordinated Debt Securities, or (iii) in
the event that Junior Subordinated Debt Securities are issued to the applicable
CCCI Trust in connection with the issuance
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of Preferred Securities by such CCCI Trust, the Company shall have given notice
of its election to defer payments of interest on such Junior Subordinated Debt
Securities by extending the interest payment period as provided in the terms of
the Junior Subordinated Debt Securities and such period, or any extension
thereof, is continuing; provided, however, that the foregoing restrictions shall
not apply to (a) dividends, redemptions, purchases, acquisitions, distributions
or payments made by the Company by way of issuance of shares of its capital
stock, (b) any declaration of a dividend under a shareholder rights plan or in
connection with the implementation of a shareholder rights plan, the issuance of
capital stock of the Company under a shareholder rights plan or the redemption
or repurchase of any such right distributed pursuant to a shareholder rights
plan, (c) payments of accrued dividends by the Company upon the redemption,
exchange or conversion of any Preferred Stock as may be outstanding from time to
time in accordance with the terms of such Preferred Stock, (d) cash payments
made by the Company in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any Preferred Stock as may be outstanding from time to
time in accordance with the terms of such Preferred Stock, (e) payments under
the Guarantees, or (f) purchases of Common Stock related to the issuance of
Common Stock or rights under any of the Company's benefit plans for its
directors, officers or employees, or related to the issuance of Common Stock or
rights under a dividend reinvestment and stock purchase plan. In addition, if
Junior Subordinated Debt Securities are issued to a CCCI Trust in connection
with the issuance of Preferred Securities by such CCCI Trust, for so long as the
Preferred Securities of such CCCI Trust remain outstanding, the Company has
agreed (1) to remain the sole direct or indirect owner of all the outstanding
Common Securities issued by such CCCI Trust and not to cause or permit such
Common Securities to be transferred except to the extent permitted by the
Declaration of such CCCI Trust; provided that any permitted successor of the
Company under the Junior Subordinated Indenture may succeed to the Company's
ownership of such Common Securities, (2) to comply fully with all its
obligations and agreements under such Declaration and (3) not to take any action
which would cause such CCCI Trust to cease to be treated as a grantor trust for
federal income tax purposes, except in connection with a distribution of Junior
Subordinated Debt Securities.
SUBORDINATION
The Junior Subordinated Debt Securities will be subordinated and junior in
right of payment to certain other indebtedness of the Company to the extent set
forth in the applicable Prospectus Supplement.
The payment of the principal of, premium, if any, and interest on the
Junior Subordinated Debt Securities will be subordinated in right of payment to
the prior payment in full of all Senior Indebtedness of the Company and pari
passu with the Company's trade creditors. No payment on account of principal of,
premium, if any, or interest on the Junior Subordinated Debt Securities and no
acquisition of, or payment on account of any sinking fund for, the Junior
Subordinated Debt Securities may be made unless full payment of amounts then due
for principal, premium, if any, and interest then due on all Senior Indebtedness
by reason of the maturity thereof (by lapse of time, acceleration or otherwise)
has been made or duly provided for in cash or in a manner satisfactory to the
holders of such Senior Indebtedness. In addition, the Junior Subordinated
Indenture provides that if a default has occurred giving the holders of such
Senior Indebtedness the right to accelerate the maturity thereof, or an event
has occurred which, with the giving of notice, or lapse of time, or both, would
constitute such an event of default, then unless and until such event shall have
been cured or waived or shall have ceased to exist, no payment on account of
principal, premium, if any, or interest on the Junior Subordinated Debt
Securities and no acquisition of, or payment on account of a sinking fund for,
the Junior Subordinated Debt Securities may be made. The Company shall give
prompt written notice to the Junior Subordinated Indenture Trustee of any
default under any Senior Indebtedness or under any agreement pursuant to which
Senior Indebtedness may have been issued. The Junior Subordinated Indenture
provisions described in this paragraph, however, do not prevent the Company from
making a sinking fund payment with Junior Subordinated Debt Securities acquired
prior to the maturity of Senior Indebtedness or, in the case of default, prior
to such default and notice thereof. Upon any distribution of its assets in
connection with any dissolution, liquidation or reorganization of the Company,
all Senior Indebtedness must be paid in full before the holders of the Junior
Subordinated Debt Securities are entitled to any payments whatsoever. As a
result of these subordination provisions, in the event of the Company's
insolvency, holders of the Junior Subordinated Debt Securities may recover
ratably less than senior creditors of the Company.
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For purposes of the description of the Junior Subordinated Debt Securities,
the term "Senior Indebtedness" means the principal of and premium, if any, and
interest on the following, whether outstanding on the date of execution of the
Junior Subordinated Indenture or thereafter incurred or created, (i)
indebtedness of the Company for money borrowed by the Company (including
purchase money obligations with an original maturity in excess of one year) or
evidenced by securities (other than the Junior Subordinated Debt Securities),
notes, bankers' acceptances or other corporate debt securities or similar
instruments issued by the Company; (ii) obligations with respect to letters of
credit; (iii) indebtedness of the Company constituting a guarantee of
indebtedness of others of the type referred to in the preceding clauses (i) and
(ii); or (iv) renewals, extensions or refundings of any of the indebtedness
referred to in the preceding clauses (i), (ii) and (iii) unless, in the case of
any particular indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same, or pursuant to
which the same is outstanding, such indebtedness or such renewal, extension or
refunding thereof is not superior in right of payment to the Junior Subordinated
Debt Securities.
DESCRIPTION OF PREFERRED STOCK
The Board of Directors has the authority to issue up to 2,000,000 shares of
Preferred Stock, in one or more series, and to fix the rights, preferences,
privileges and qualifications thereof without any further vote or action by the
shareholders. The issuance of Preferred Stock could decrease the amount of
earnings and assets available for distribution to holders of Common Stock, and
adversely affect the rights and powers, including voting rights, of such holders
and may have the effect of delaying, deferring or preventing a change in control
of the Company. No shares of Preferred Stock have ever been issued. The
particular terms of any series of Preferred Stock will be described in the
applicable Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all matters
submitted to a vote of shareholders of the Company and to ratably receive
dividends, if any, as may be declared from time to time by the Board of
Directors from funds legally available therefor, subject to the payment of any
preferential dividends declared with respect to any Preferred Stock that from
time to time may be outstanding. Upon liquidation, dissolution or winding up of
the Company, holders of Common Stock are entitled to share ratably in any assets
available for distribution to shareholders after payment of all obligations of
the Company, subject to the rights to receive preferential distributions of the
holders of any shares of Preferred Stock then outstanding.
Shareholders do not have cumulative voting rights or preemptive or other
rights to acquire or subscribe to additional, unissued or treasury shares. The
shares of Common Stock currently outstanding are, and the shares of Common Stock
offered hereby will be, upon issuance thereof, validly issued, fully paid and
nonassessable.
REPURCHASE AGREEMENT
In May 1977, the Company and its then shareholders, including L. Lowry Mays
and B.J. McCombs, entered into a Buy-Sell Agreement (the "Repurchase Agreement")
restricting the disposition of the outstanding shares of Common Stock owned by
L. Lowry Mays and B.J. McCombs and their heirs, legal representatives,
successors and assigns (collectively, the "Restricted Parties"). The Repurchase
Agreement provides that in the event that a Restricted Party desires to dispose
of his shares, other than by disposition by will or intestacy or through gifts
to such Restricted Party's spouse or children, such shares must be offered for a
period of 30 days to the Company. Any shares not purchased by the Company must
then be offered for a period of 30 days to the other Restricted Parties. If all
of the offered shares are not purchased by the Company or the other Restricted
Parties, the Restricted Party offering his shares may sell them to a Third Party
during a period of 90 days thereafter at a price and on terms not more favorable
than those offered to the Company and the other Restricted Parties. In addition,
a Restricted Party may not individually or in concert with others sell any
shares so as to deliver voting control to a Third Party without providing in any
such sale that all Restricted
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Parties will be offered the same price and terms for their shares. The
Repurchase Agreement will continue in effect following the Offering and may
preserve the control of the present principal shareholders.
TEXAS BUSINESS COMBINATION LAW
The Company will be governed by the provisions of the Texas Business
Combination Law, Part 13 of the Texas Business Corporation Act, which takes
effect on September 1, 1997. In general, the law prohibits a Texas "issuing
public corporation" from engaging in a "business combination" with an
"affiliated shareholder," or an affiliate or associate thereof, for a period of
three years after the date of the transaction in which the person became an
affiliate shareholder, unless the business combination is approved in a
prescribed manner. "Business combinations" include mergers, asset sales and
other transactions resulting in a financial benefit to the affiliated
shareholder. An "affiliated shareholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 20% or more of
the corporation's voting stock. The applicability of the Texas Business
Combination Law to the Company may have an anti-takeover effect.
FOREIGN OWNERSHIP
As a consequence of the restrictions imposed by the Communications Act of
1934 on ownership of Common Stock by aliens, the Company's bylaws were amended
effective December 31, 1983 to provide that (i) not more than one-fifth of the
shares outstanding shall at any time be owned of record, or voted, by or for the
account of aliens, their representatives, a foreign government or a corporation
organized under the laws of a foreign country, (ii) the Company shall not be
owned or controlled directly or indirectly by any other corporation of which any
officer or more than one-fourth of the directors are aliens or of which more
than one-fourth of the shares are owned of record or voted by aliens, (iii) no
person who is an alien may be elected or serve as an officer or director of the
Company, and (iv) if the stock records of the Company shall at any time reflect
one-fifth ownership, no transfers of additional shares to aliens shall be made
and, if it shall thereafter be found that any such additional shares are in fact
held by or for the account of an alien, such shares shall not be entitled to
vote, to receive dividends or to have any other rights. The holder of such
shares will be required to transfer them to a United States citizen or to the
Company. This restriction will be applicable to the shares of Common Stock
offered hereby and to the issuance or transfer of such shares after the date of
this Prospectus. The Company's stock certificates may bear a legend setting
forth this restriction. Since the bylaws were amended, the Communications Act of
1934 has been revised to remove the limitations on alien officers and directors.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities or
Junior Subordinated Debt Securities, or shares of Preferred Stock or Common
Stock. Warrants may be issued independently or together with any Debt
Securities, Junior Subordinated Debt Securities, or shares of Preferred Stock or
Common Stock offered by any Prospectus Supplement and may be attached to or
separate from such Debt Securities, Junior Subordinated Debt Securities, or
shares of Preferred Stock or Common Stock. The Warrants are to be issued under
Warrant Agreements to be entered into between the Company and The Bank of New
York, as Warrant Agent, or such other bank or trust company as is named in the
Prospectus Supplement relating to the particular issue of Warrants (the "Warrant
Agent"). The Warrant Agent will act solely as an agent of the Company in
connection with the Warrants and will not assume any obligation or relationship
of agency or trust for or with any holders of Warrants or beneficial owners of
Warrants. The following summaries of certain provisions of the form of Warrant
Agreement and Warrants do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
applicable Warrant Agreement and the Warrants.
GENERAL
If Warrants are offered, the Prospectus Supplement will describe the terms
of the Warrants, including the following: (i) the offering price; (ii) the
currency, currencies or currency units for which Warrants may be
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purchased; (iii) the designation, aggregate principal amount, currency,
currencies or currency units and terms of the Debt Securities or Junior
Subordinated Debt Securities purchasable upon exercise of the Debt Warrants and
the price at which such Debt Securities or Junior Subordinated Debt Securities
may be purchased upon such exercise; (iv) the designation, number of shares and
terms of the Preferred Stock purchasable upon exercise of the Preferred Stock
Warrants and the price at which such shares of Preferred Stock may be purchased
upon such exercise; (v) the designation, number of shares and terms of the
Common Stock purchasable upon exercise of the Common Stock Warrants and the
price at which such shares of Common Stock may be purchased upon such exercise;
(vi) if applicable, the designation and terms of the Debt Securities, Junior
Subordinated Debt Securities, Preferred Stock or Common Stock with which the
Warrants are issued and the number of Warrants issued with each such Debt
Security, Junior Subordinated Debt Security or share of Preferred Stock or
Common Stock; (vii) if applicable, the date on and after which the Warrants and
the related Debt Securities, Junior Subordinated Debt Securities, Preferred
Stock or Common Stock will be separately transferable; (viii) the date on which
the right to exercise the Warrants shall commence and the date (the "Expiration
Date") on which such right shall expire; (ix) whether the Warrants will be
issued in registered or bearer form; (x) a discussion of certain federal income
tax, accounting and other special considerations, procedures and limitations
relating to the Warrants; and (xi) any other terms of the Warrants.
Warrants may be exchanged for new Warrants of different denominations, may
(if in registered form) be presented for registration of transfer, and may be
exercised at the corporate trust office of the Warrant Agent or any other office
indicated in the Prospectus Supplement. Before the exercise of their Warrants,
holders of Warrants will not have any of the rights of holders of the Debt
Securities, Junior Subordinated Debt Securities or shares of Preferred Stock or
Common Stock purchasable upon such exercise, including the right to receive
payments of principal of, any premium on, or any interest on, the Debt
Securities or Junior Subordinated Debt Securities purchasable upon such exercise
or to enforce the covenants in the Indenture or to receive payments of
dividends, if any, on the Preferred Stock or Common Stock purchasable upon such
exercise or to exercise any applicable right to vote. If the Company maintains
the ability to reduce the exercise price of any Stock Warrant and such right is
triggered, the Company will comply with the federal securities laws, including
Rule 13e-4 under the Exchange Act, to the extent applicable.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Debt Securities or Junior Subordinated Debt Securities or such number of shares
of Preferred Stock or Common Stock at such exercise price as shall in each case
be set forth in, or calculable from, the Prospectus Supplement relating to the
Warrant. Warrants may be exercised at such times as are set forth in the
Prospectus Supplement relating to such Warrants. After the close of business on
the Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Warrants will become void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement relating thereto, Warrants may be exercised
by delivery to the Warrant Agent of the certificate evidencing such Warrants
properly completed and duly executed and of payment as provided in the
Prospectus Supplement of the amount required to purchase the Debt Securities,
Junior Subordinated Debt Securities or shares of Preferred Stock or Common Stock
purchasable upon such exercise. The exercise price will be the price applicable
on the date of payment in full, as set forth in the Prospectus Supplement
relating to the Warrants. Upon receipt of such payment and the certificate
representing the Warrants to be exercised, properly completed and duly executed
at the corporate trust office of the Warrant Agent or any other office indicated
in the Prospectus Supplement, the Company will, as soon as practicable, issue
and deliver the Debt Securities, Junior Subordinated Debt Securities or shares
of Preferred Stock or Common Stock purchasable upon such exercise. If fewer than
all of the Warrants represented by such certificate are exercised, a new
certificate will be issued for the remaining amount of Warrants.
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ADDITIONAL PROVISIONS
The exercise price payable and the number of shares of Common or Preferred
Stock purchasable upon the exercise of each Stock Warrant will be subject to
adjustment in certain events, including the issuance of a stock dividend to
holders of Common or Preferred Stock, respectively, or a combination,
subdivision or reclassification of Common or Preferred Stock, respectively. In
lieu of adjusting the number of shares of Common or Preferred Stock purchasable
upon exercise of each Stock Warrant, the Company may elect to adjust the number
of Stock Warrants. No adjustment in the number of shares purchasable upon
exercise of the Stock Warrants will be required until cumulative adjustments
require an adjustment of at least 1% thereof. The Company may, at its option,
reduce the exercise price at any time. No fractional shares will be issued upon
exercise of Stock Warrants, but the Company will pay the cash value of any
fractional shares otherwise issuable. Notwithstanding the foregoing, in case of
any consolidation, merger, or sale or conveyance of the property of the Company
as an entirety or substantially as an entirety, the holder of each outstanding
Stock Warrant shall have the right upon the exercise thereof to the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common Stock or Preferred
Stock into which such Stock Warrants were exercisable immediately prior thereto.
NO RIGHTS AS SHAREHOLDERS
Holders of Stock Warrants will not be entitled, by virtue of being such
holders, to vote, to consent, to receive dividends, to receive notice as
shareholders with respect to any meeting of shareholders for the election of
directors of the Company or any other matter, or to exercise any rights
whatsoever as shareholders of the Company.
DESCRIPTION OF STOCK PURCHASE
CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, which are contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock or Preferred Stock at a
future date or dates. The price per share of Common Stock or Preferred Stock may
be fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the Stock Purchase
Contracts. Any such formula may include anti-dilution provisions to adjust the
number of shares issuable pursuant to Stock Purchase Contracts upon certain
events. The Stock Purchase Contracts may be issued separately or as a part of
Stock Purchase Units each representing ownership of a Stock Purchase Contract
and Debt Securities, U.S. Obligations or Preferred Securities securing the
holders' obligations to purchase the Common Stock or the Preferred Stock under
the Purchase Contracts.
Except as otherwise described in the applicable Prospectus Supplement, in
the case of Stock Purchase Units that include U.S. Obligations, unless a holder
of Stock Purchase Units settles its obligations under the Stock Purchase
Contracts early through the delivery of consideration to the Company or its
agent in the manner discussed below, the principal of such U.S. Obligations,
when paid at maturity, will automatically be applied to satisfy the holder's
obligation to purchase Common Stock or Preferred Stock under the Stock Purchase
Contracts.
Except as otherwise described in the applicable Prospectus Supplement, in
the case of Stock Purchase Units that include Debt Securities or Preferred
Securities, in the absence of any such early settlement or the election by a
holder to pay the consideration specified in the Stock Purchase Contracts, the
Debt Securities or Preferred Securities will automatically be presented to the
applicable CCCI Trust for redemption at 100% of face or liquidation value and
the CCCI Trust will present Junior Subordinated Debt Securities in an equal
principal amount to the Company for redemption at 100% of principal amount.
Amounts received in respect of such redemption will automatically be transferred
to the Company and applied to satisfy in full the holder's obligation to
purchase Common Stock or Preferred Stock under the Stock Purchase Contracts. The
Stock Purchase Contracts may require the Company to make periodic payments to
the holders of the Stock Purchase Units or vice versa, and such payments may be
unsecured or refunded on some basis. The Stock Purchase Contracts may require
holders to secure their obligations thereunder in a specified manner.
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Except as otherwise described in the applicable Prospectus Supplement,
holders of Stock Purchase Units may be entitled to settle the underlying Stock
Purchase Contracts prior to the stated settlement date by surrendering the
certificate evidencing the Stock Purchase Units, accompanied by the payment due,
in such form and calculated pursuant to such formula as may be prescribed in the
Stock Purchase Contracts and described in the applicable Prospectus Supplement.
Upon early settlement, the holder would receive the number of shares of Common
Stock or Preferred Stock deliverable under such Stock Purchase Contracts,
subject to adjustment in certain cases. Holders of Stock Purchase Units may be
entitled to exchange their Stock Purchase Units together with appropriate
collateral, for separate Stock Purchase Contracts and Preferred Securities, Debt
Securities, Junior Subordinated Debt Securities or U.S. Obligations. In the
event of either such early settlement or exchange, the Preferred Securities,
Debt Securities, Junior Subordinated Debt Securities or debt obligations that
were pledged as security for the obligation of the holder to perform under the
Stock Purchase Contracts would be transferred to the holder free and clear of
the Company's security interest therein.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units including differences, if any, from
the term described above.
DESCRIPTION OF PREFERRED SECURITIES
PREFERRED SECURITIES
Each CCCI Trust may issue, from time to time, only one series of Preferred
Securities having terms described in the Prospectus Supplement relating thereto.
The Declaration of each CCCI Trust authorizes the Regular Trustees of such CCCI
Trust to issue on behalf of such CCCI Trust one series of Preferred Securities.
Each Declaration will be qualified as an indenture under the Trust Indenture
Act. The Preferred Securities will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred, deferred or
other special rights or such restrictions as shall be set forth in the related
Declaration or made part of such Declaration by the Trust Indenture Act.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of a CCCI Trust for specific terms, including (i) the specific
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such CCCI Trust, (iii) the annual distribution rate (or
method of calculation thereof) for Preferred Securities issued by such CCCI
Trust, the date or dates upon which such distributions shall be payable and the
record date or dates for the payment of such distributions, (iv) whether
distributions on Preferred Securities issued by such CCCI Trust shall be
cumulative, and, in the case of Preferred Securities having such cumulative
distribution rights, the date or dates or method of determining the date or
dates from which distributions on Preferred Securities issued by such CCCI Trust
shall be cumulative, (v) the amount or amounts which shall be paid out of the
assets of such CCCI Trust to the holders of Preferred Securities of such CCCI
Trust upon voluntary or involuntary liquidation, dissolution, winding-up or
termination of such CCCI Trust, (vi) the obligation or right, if any, of such
CCCI Trust to purchase or redeem Preferred Securities issued by such CCCI Trust
and the price or prices at which, the period or periods within which and the
terms and conditions upon which Preferred Securities issued by such CCCI Trust
shall or may be purchased or redeemed, in whole or in part, pursuant to such
obligation or right, (vii) the voting rights, if any, of Preferred Securities
issued by such CCCI Trust in addition to those required by law, including the
number of votes per Preferred Security and any requirement for the approval by
the holders of Preferred Securities, or of Preferred Securities issued by one or
more CCCI Trusts, or of both, as a condition to specified actions or amendments
to the Declaration of such CCCI Trust, (viii) the terms and conditions upon
which the Preferred Securities may be convertible into or exchanged for Common
Stock, Preferred Stock, Debt Securities, Junior Subordinated Debt Securities, or
indebtedness or other securities of any kind of the Company; and (ix) any other
relevant rights, preferences, privileges, limitations or restrictions of
Preferred Securities issued by such CCCI Trust consistent with the Declaration
of such CCCI Trust or with applicable law. All Preferred Securities offered
hereby will be guaranteed by the Company as and to the extent set forth below
under "Description of the Guarantees." Certain federal income tax considerations
applicable to any offering of Preferred Securities will be described in the
Prospectus Supplement relating thereto.
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In connection with the issuance of Preferred Securities, each CCCI Trust
will issue one series of Common Securities. The Declaration of each CCCI Trust
authorizes the Regular Trustees of such CCCI Trust to issue on behalf of such
CCCI Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities issued by a CCCI
Trust will be substantially identical to the terms of the Preferred Securities
issued by such CCCI Trust and the Common Securities will rank pari passu and
payments will be made thereon on a pro rata basis with the Preferred Securities
except that, if a Declaration Event of Default occurs and is continuing, the
rights of the holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and maturity will be
subordinated to the rights of the holders of such Preferred Securities. Except
in certain limited circumstances, the Common Securities issued by a CCCI Trust
will also carry the right to vote and to appoint, remove or replace any of the
Trustees of such CCCI Trust. All the Common Securities of a CCCI Trust will be
directly or indirectly owned by the Company.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debt Securities, such payments will be sufficient to cover
distributions and other payments due on the Preferred Securities primarily
because (i) the aggregate principal amount of Junior Subordinated Debt
Securities held as trust assets will be equal to the sum of the aggregate stated
liquidation amount of the Preferred Securities; and (ii) the interest rate and
interest and other payment dates on the Junior Subordinated Debt Securities will
match the distribution rate and distribution and other payment dates for the
Preferred Securities.
If an Event of Default with respect to the Declaration of any CCCI Trust
occurs and is continuing, then the holders of Preferred Securities of such CCCI
Trust would rely on the enforcement by the Property Trustee of its rights as a
holder of the Junior Subordinated Debt Securities deposited in such CCCI Trust
against the Company. In addition, the holders of a majority in liquidation
amount of such Preferred Securities will have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee or to direct the exercise of any trust or power conferred upon
the Property Trustee under such Declaration, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of such
Junior Subordinated Debt Securities. If the Property Trustee fails to enforce
its rights under such Junior Subordinated Debt Securities deposited in such CCCI
Trust, any holder of such Preferred Securities may, to the extent permitted by
applicable law, after a period of 60 days has elapsed from such holder's written
request, institute a legal proceeding against the Company to enforce the
Property Trustee's rights under such Junior Subordinated Debt Securities without
first instituting any legal proceeding against the Property Trustee or any other
person or entity. If an Event of Default with respect to the Declaration of any
CCCI Trust occurs and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Junior Subordinated
Debt Securities on the date such interest or principal is otherwise payable (or
in the case of redemption, on the redemption date), then a holder of Preferred
Securities of such CCCI Trust may also directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on such
Junior Subordinated Debt Securities having a principal amount equal to the
aggregate liquidation amount of such Preferred Securities held by such holder (a
"Direct Action") on or after the respective due date specified in such Junior
Subordinated Debt Securities without first (i) directing the Property Trustee to
enforce the terms of such Junior Subordinated Debt Securities or (ii)
instituting a legal proceeding against the Company to enforce the Property
Trustee's rights under such Junior Subordinated Debt Securities. In connection
with such Direct Action, the Company will be subrogated to the rights of such
holder of such Preferred Securities under such Declaration to the extent of any
payment made by the Company to such holder of such Preferred Securities in such
Direct Action. The holders of Preferred Securities of a CCCI Trust will not be
able to exercise directly any other remedy available to the holders of the
Junior Subordinated Debt Securities unless the Property Trustee first fails to
do so.
Certain federal income tax considerations applicable to an investment in
Preferred Securities will be described in the Prospectus Supplement relating
thereto.
The Property Trustee and its affiliates provide customary commercial
banking services to the Company and certain of its subsidiaries and participate
in various financing agreements of the Company in the ordinary course of their
business. Initially, the Property Trustee is The Bank of New York, who currently
serves as the
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transfer agent and registrar for the Common Stock and is a lender to the Company
under the Company's Amended and Restated Credit Agreement dated April 10, 1997.
DESCRIPTION OF GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by the Company for the benefit of the holders
from time to time of Preferred Securities of a CCCI Trust. Each Preferred
Security Guarantee will be separately qualified under the Trust Indenture Act
and will be held by The Bank of New York, acting in its capacity as indenture
trustee with respect thereto (the "Guarantee Trustee"), for the benefit of
holders of the Preferred Securities of the applicable CCCI Trust. The terms of
each Guarantee will be those set forth in such Guarantee and those made part of
such Guarantee by the Trust Indenture Act. This description summarizes the
material terms of the Guarantees and is qualified in its entirety by reference
to the form of Guarantee, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Trust Indenture Act.
GENERAL
Pursuant to each Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the Preferred Securities issued by the applicable CCCI Trust, the
Guarantee Payments (as defined herein), to the extent not paid by such CCCI
Trust, regardless of any defense, right of set-off or counterclaim that such
CCCI Trust may have or assert. The following distributions and other payments
with respect to Preferred Securities issued by a CCCI Trust to the extent not
made or paid by such CCCI Trust (the "Guarantee Payments"), will be subject to
the Guarantee (without duplication): (i) any accrued and unpaid distributions on
such Preferred Securities, but only if and to the extent that in each case the
Company has made a payment to the Property Trustee of interest on the Junior
Subordinated Debt Securities, (ii) the redemption price, including all accrued
and unpaid distributions to the date of redemption, with respect to any
Preferred Securities called for redemption by such CCCI Trust, but only if and
to the extent that in each case the Company has made a payment to the Property
Trustee of interest or principal on the Junior Subordinated Debt Securities
deposited in such CCCI Trust as trust assets, and (iii) upon a voluntary or
involuntary liquidation, dissolution, winding-up or termination of such CCCI
Trust (other than in connection with the distribution of such Junior
Subordinated Debt Securities to the holders of such Preferred Securities or the
redemption of all such Preferred Securities upon the maturity or redemption of
such Junior Subordinated Debt Securities) the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on such Preferred
Securities to the date of payment, to the extent such CCCI Trust has funds
available therefor, and (b) the amount of assets of such CCCI Trust remaining
available for distribution to holders of such Preferred Securities upon
liquidation of such CCCI Trust. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of the applicable Preferred Securities or by causing the
applicable CCCI Trust to pay such amounts to such holders.
The Guarantee is a full and unconditional guarantee from the time of
issuance of the applicable Preferred Securities, but the Guarantee covers
distributions and other payments on such Preferred Securities only if and to the
extent that the Company has made a payment to the Property Trustee of interest
or principal on the Junior Subordinated Debt Securities deposited in the
applicable CCCI Trust as trust assets. If the Company does not make interest or
principal payments on the Junior Subordinated Debt Securities deposited in the
applicable CCCI Trust as trust assets, the Property Trust will not make
distributions on the Preferred Securities of such CCCI Trust and the CCCI Trust
will not have funds available therefor.
The Company's obligations under the Declaration for each CCCI Trust, the
Guarantee issued with respect to Preferred Securities issued by such CCCI Trust,
the Junior Subordinated Debt Securities purchased by such CCCI Trust and the
Junior Subordinated Indenture in the aggregate will provide a full and
unconditional guarantee on a subordinated basis by the Company of payments due
on the Preferred Securities issued by such CCCI Trust.
30
<PAGE> 48
CERTAIN COVENANTS OF THE COMPANY
In each Guarantee, the Company will covenant that, so long as any Preferred
Securities issued by the applicable CCCI Trust remain outstanding, the Company
will not declare or pay any dividends on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any Common Stock or
Preferred Stock or make any guarantee payment with respect thereto, if at such
time (i) the Company shall be in default with respect to its Guarantee Payments
or other payment obligations under such Guarantee, (ii) there shall have
occurred any Event of Default under the related Declaration or (iii) in the
event that Junior Subordinated Debt Securities are issued to the applicable CCCI
Trust in connection with the issuance of Preferred Securities by such CCCI
Trust, the Company shall have given notice of its election to defer payments of
interest on such Junior Subordinated Debt Securities by extending the interest
payment period as provided in the terms of the Junior Subordinated Debt
Securities and such period, or any extension thereof, is continuing; provided,
however, that the foregoing restrictions shall not apply to (a) dividends,
redemptions, purchases, acquisitions, distributions or payments made by the
Company by way of issuance of shares of its capital stock, (b) any declaration
of a dividend under a shareholder rights plan or in connection with the
implementation of a shareholder rights plan, the issuance of capital stock of
the Company under a shareholder rights plan or the redemption or repurchase of
any such right distributed pursuant to a shareholder rights plan, (c) payments
of accrued dividends by the Company upon the redemption, exchange or conversion
of any Preferred Stock as may be outstanding from time to time in accordance
with the terms of such Preferred Stock, (d) cash payments made by the Company in
lieu of delivering fractional shares upon the redemption, exchange or conversion
of any Preferred Stock as may be outstanding from time to time in accordance
with the terms of such Preferred Stock, (e) payments under the Guarantees, or
(f) purchases of Common Stock related to the issuance of Common Stock or rights
under any of the Company's benefit plans for its directors, officers or
employees, or related to the issuance of Common Stock or rights under a dividend
reinvestment and stock purchase plan. In addition, so long as any Preferred
Securities of a CCCI Trust remain outstanding, the Company has agreed (1) to
remain the sole direct or indirect owner of all the outstanding Common
Securities issued by such CCCI Trust and not to cause or permit such Common
Securities to be transferred except to the extent permitted by the Declaration
of such CCCI Trust, provided that any permitted successor of the Company under
the Junior Subordinated Indenture may succeed to the Company's ownership of such
Common Securities, and (2) to use reasonable efforts to cause such CCCI Trust to
continue to be treated as a grantor trust for federal income tax purposes,
except in connection with a distribution of Junior Subordinated Debt Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of the applicable Preferred Securities (in which case no consent will
be required), each Guarantee may be amended only with the prior approval of the
holders of not less than 66 2/3% in liquidation amount of the outstanding
Preferred Securities issued by the applicable CCCI Trust. The manner of
obtaining any such approval of holders of such Preferred Securities will be set
forth in an accompanying Prospectus Supplement. All guarantees and agreements
contained in a Guarantee shall bind the successors, assignees, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Preferred Securities of the applicable CCCI Trust then
outstanding. Except in connection with a consolidation, merger, conveyance, or
transfer of assets involving the Company that is permitted under the Junior
Subordinated Indenture, the Company may not assign its obligations under any
Guarantee.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect as to
the Preferred Securities issued by the applicable CCCI Trust upon full payment
of the redemption price of all Preferred Securities of such CCCI Trust, or upon
distribution of the Junior Subordinated Debt Securities to the holders of the
Preferred Securities of such CCCI Trust in exchange for all the Preferred
Securities issued by such CCCI Trust, or upon full payment of the amounts
payable upon liquidation of such CCCI Trust. Notwithstanding the foregoing, each
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time
31
<PAGE> 49
any holder of Preferred Securities issued by the applicable CCCI Trust must
restore payment of any sums paid under such Preferred Securities or such
Guarantee.
STATUS OF THE GUARANTEES
The Company's obligations under each Guarantee to make the Guarantee
Payments will constitute an unsecured obligation of the Company and will rank
(i) subordinate and junior in right of payment to all other indebtedness,
liabilities and obligations of the Company and any guarantees, endorsements or
other contingent obligations of the Company in respect of such indebtedness,
liabilities or obligations, including the Junior Subordinated Debt Securities,
except those made pari passu or subordinate by their terms, and (ii) senior to
all capital stock now or hereafter issued by the Company and to any guarantee
now or hereafter entered into by the Company in respect of any of its capital
stock. The Company's obligations under each Guarantee will rank pari passu with
each other Guarantee. Because the Company is a holding company, the Company's
obligations under each Guarantee are also effectively subordinated to all
existing and future liabilities, including trade payables, of the Company's
subsidiaries, except to the extent that the Company is a creditor of the
subsidiaries recognized as such. Each Declaration provides that each holder of
Preferred Securities issued by the applicable CCCI Trust, by acceptance thereof,
agrees to the subordination provisions and other terms of the related Guarantee.
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under such Guarantee without first instituting
a legal proceeding against any other person or entity). Each Guarantee will be
deposited with the Guarantee Trustee, to be held for the benefit of the holders
of the Preferred Securities issued by the applicable CCCI Trust. The Guarantee
Trustee shall enforce such Guarantee on behalf of the holders of such Preferred
Securities. The holders of not less than a majority in aggregate liquidation
amount of the Preferred Securities issued by the applicable CCCI Trust have the
right to direct the time, method and place of conducting any proceeding for any
remedy available in respect of the related Guarantee, including the giving of
directions to the Guarantee Trustee. If the Guarantee Trustee fails to enforce a
Guarantee as above provided, any holder of Preferred Securities issued by the
applicable CCCI Trust may institute a legal proceeding directly against the
Company to enforce its rights under such Guarantee, without first instituting a
legal proceeding against the applicable CCCI Trust, or any other person or
entity. Notwithstanding the foregoing, if the Company has failed to make a
Guarantee Payment, a holder of Preferred Securities may directly institute a
proceeding against the Company for enforcement of such holder's right to receive
payment under the Guarantee. The Company waives any right or remedy to require
that any action be brought first against a CCCI Trust or any other person or
entity before proceeding directly against the Company.
MISCELLANEOUS
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under each Guarantee and as to any default in such performance. The Company is
required to file annually with the Guarantee Trustee an officer's certificate as
to the Company's compliance with all conditions to be complied with by it under
each Guarantee.
The Guarantee Trustee, prior to the occurrence of a default, undertakes to
perform only such duties as are specifically set forth in the applicable
Guarantee and, after default with respect to a Guarantee, shall exercise the
same degree of care as a prudent individual would exercise under the
circumstances in the conduct of his or her own affairs. Subject to such
provision, the Guarantee Trustee is under no obligation to exercise any of the
powers vested in it by a Preferred Securities Guarantee at the request of any
holder of Preferred Securities unless it is offered reasonable security and
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
32
<PAGE> 50
ERISA MATTERS
The Company and its affiliates may each be considered a "party in interest"
(within the meaning of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) or a "disqualified person" (within the meaning of Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code")) with respect
to many employee benefit plans ("Plans") that are subject to ERISA. The purchase
of Offered Securities by a Plan that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of Section 4975 of
the Code (including individual retirement arrangements and other plans described
in Section 4975(e)(1) of the Code) and with respect to which the Company or any
affiliate of the Company is a service provider (or otherwise is a party in
interest or a disqualified person) may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Offered
Securities are acquired pursuant to and in accordance with an applicable
exemption. Any pension or other employee benefit plan proposing to acquire any
Offered Securities should consult with its counsel.
PLAN OF DISTRIBUTION
The Company or the CCCI Trusts may sell the Offered Securities offered
hereby (i) through underwriters or dealers, (ii) through agents, (iii) directly
to purchasers, or (iv) through a combination of any such methods of sale. Any
such underwriter, dealer or agent may be deemed to be an underwriter within the
meaning of the Securities Act. The Prospectus Supplement relating to the Offered
Securities will set forth their offering terms, including the name or names of
any underwriters, dealers or agents, the purchase price of the Offered
Securities and the proceeds to the Company or the CCCI Trusts from such sale,
any underwriting discounts, commissions and other items constituting
compensation to underwriters, dealers or agents, any initial public offering
price, any discounts or concessions allowed or reallowed or paid by underwriters
or dealers to other dealers, and any securities exchanges on which the Offered
Securities may be listed.
If underwriters or dealers are used in the sale, the Offered Securities
will be acquired by the underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, or at prices related to such prevailing market prices, or at negotiated
prices. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in the
Prospectus Supplement, the obligations of underwriters or dealers to purchase
the Offered Securities will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the Offered Securities
if any are purchased. Any public offering price and any discounts or concessions
allowed or reallowed or paid by underwriters or dealers to other dealers may be
changed from time to time.
Offered Securities may be sold directly by the Company or the CCCI Trusts
or through agents designated by the Company or the CCCI Trusts from time to
time. Any agent involved in the offer or sale of the Offered Securities in
respect of which this Prospectus is delivered will be named, and any commissions
payable by the Company or the CCCI Trusts to such agent will be set forth, in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
If so indicated in the Prospectus Supplement, the Company or the CCCI
Trusts will authorize underwriters, dealers or agents to solicit offers by
certain specified institutions to purchase Offered Securities from the Company
or the CCCI Trusts at the public offering price set forth in the Prospectus
Supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject to
any conditions set forth in the Prospectus Supplement and the Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts. The underwriters and other persons soliciting such contracts will
have no responsibility for the validity or performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company or the CCCI Trusts to indemnification by the Company or
the CCCI Trusts against certain civil liabilities, including
33
<PAGE> 51
liabilities under the Securities Act, or to contribution by the Company or the
CCCI Trusts to payments they may be required to make in respect thereof. The
terms and conditions of such indemnification will be described in an applicable
Prospectus Supplement. Underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for, the Company or the CCCI
Trusts in the ordinary course of business.
Each series of Offered Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Offered Securities are sold
by the Company or the CCCI Trusts for public offering and sale may make a market
in such Offered Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any Offered
Securities.
Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule 104
permits stabilizing bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. The underwriters may
over-allot shares of the Common Stock in connection an offering of Common Stock,
thereby creating a short position in the underwriters' account. Syndicate
covering transactions involve purchases of the Debt Securities or Junior
Subordinated Debt Securities in the open market after the distribution has been
completed in order to cover syndicate short positions. Stabilizing and syndicate
covering transactions may cause the price of the Debt Securities or Junior
Subordinated Debt Securities to be higher than it would otherwise be in the
absence of such transactions. These transactions, if commenced, may be
discontinued at any time.
LEGAL OPINIONS
The validity of the Company Securities will be passed upon for the Company
by its special counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P. (a partnership
including professional corporations), San Antonio, Texas. Certain matters
relating to the validity of the Preferred Securities will be passed upon for the
Company and the CCCI Trusts by Morris, Nichols, Arsht & Tunnell, Wilmington,
Delaware, special Delaware counsel to the Company and the CCCI Trusts. The
validity of the Offered Securities will be passed upon for the underwriters,
dealers or agents, if any, by Cravath, Swaine & Moore, New York, New York. Alan
D. Feld, the sole shareholder of a professional corporation which is a partner
of Akin, Gump, Strauss, Hauer & Feld, L.L.P., is a director of the Company and
owns approximately 48,000 shares of Common Stock (including presently
exercisable nonqualified options to acquire approximately 40,000 shares).
EXPERTS
The consolidated financial statements (and schedules) of the Company
included or incorporated by reference in the Company's Annual Report on Form
10-K for the year ended December 31, 1996, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon included or
incorporated by reference therein and incorporated herein by reference which, as
to the years 1995 and 1996, are based in part on the report of KPMG, independent
auditors. The financial statements and schedules referred to above are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
The consolidated financial statements of Australian Radio Network Pty Ltd
not separately presented in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996, have been audited by KPMG, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such report referred to above is incorporated herein by reference in
reliance upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Eller Media Corporation as of
December 31, 1996 and 1995 and for the year ended December 31, 1996 and for the
period from August 18, 1995 through December 31, 1995, together with the
consolidated financial statements of PMG Holdings, Inc. and subsidiaries and the
combined financial statements of Eller Investment Company, Inc. for the period
from January 1, 1995 to August 17, 1995, incorporated by reference in this
Prospectus and elsewhere in the registration statement are included in
34
<PAGE> 52
the Company's current report on Form 8-K, filed on April 17, 1997, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
The combined financial statements of Eller Investment Company, Inc. as of
and for the period ended December 31, 1994, incorporated by reference in this
prospectus and elsewhere in the registration statement are included in the
Company's current report on Form 8-K, filed April 17, 1997, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto and are incorporated by reference herein in reliance
upon the authority of said firm as experts in accounting and auditing in giving
said reports.
The consolidated financial statements of PMG Holdings, Inc. and
Subsidiaries as of December 31, 1994 and for the year then ended included in the
Company's current report on Form 8-K dated April 17, 1997, have been
incorporated herein by reference in reliance on the report of KPMG Peat Marwick
LLP, independent accountants, incorporated by reference herein, and upon the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of US Radio, Inc. for the years ended
December 31, 1995 and 1994, included in the Company's current report on Form 8-K
dated May 24, 1996, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
The combined financial statements of Ragan Henry Communications Group,
L.P., US Radio, L.P. and US Radio Stations, L.P. for the year ended December 31,
1994, included in the Company's current report on Form 8-K dated May 24, 1996
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon incorporated herein by reference. Such combined financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Radio Equity Partners, L.P. and
its subsidiary as of December 31, 1995 and 1994, and for the years then ended
have been incorporated herein by reference in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, appearing in the
Company's current report on Form 8-K dated June 5, 1996, and upon the authority
of said firm as experts in accounting and auditing.
35
<PAGE> 53
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
SUCH DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company............................... S-2
Recent Developments....................... S-3
Use of Proceeds........................... S-5
Capitalization............................ S-5
Selected Financial Information............ S-6
Business.................................. S-7
Description of Debentures................. S-13
Underwriting.............................. S-16
Legal Opinions............................ S-17
Certain Forward-Looking Statements........ S-17
PROSPECTUS
Available Information..................... 3
Incorporation of Certain Documents by
Reference............................... 3
The Company............................... 4
The CCCI Trusts........................... 4
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends... 5
Use of Proceeds........................... 5
Holding Company Structure................. 5
General Description of Securities and Risk
Factors................................. 6
Description of Debt Securities............ 6
Description of Junior Subordinated Debt
Securities.............................. 16
Description of Preferred Stock............ 24
Description of Common Stock............... 24
Description of Warrants................... 25
Description of Stock Purchase Contracts
and Stock Purchase Units................ 27
Description of Preferred Securities....... 28
Description of Guarantees................. 30
ERISA Matters............................. 33
Plan of Distribution...................... 33
Legal Opinions............................ 34
Experts................................... 34
</TABLE>
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[CLEAR CHANNEL LOGO]
CLEAR CHANNEL
COMMUNICATIONS, INC.
$
% DEBENTURES
DUE OCTOBER 15, 2027
PROSPECTUS SUPPLEMENT
CREDIT SUISSE FIRST BOSTON
SALOMON BROTHERS INC
BT ALEX. BROWN
GOLDMAN, SACHS & CO.
NATIONSBANC MONTGOMERY
SECURITIES, INC.
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