<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 19, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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CLEAR CHANNEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 74-1787539
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
200 EAST BASSE ROAD
SAN ANTONIO, TEXAS 78209
(210) 822-2828
(Address, including zip code, and telephone number,
Including area code, of registrant's principal executive offices)
L. LOWRY MAYS
CLEAR CHANNEL COMMUNICATIONS, INC.
200 EAST BASSE ROAD
SAN ANTONIO, TEXAS 78209
(210) 822-2828
(Name, address, including zip code, and telephone number
Including area code, of agent for service)
---------------------
Copies to:
<TABLE>
<S> <C>
STEPHEN C. MOUNT, ESQ. JOHN WHITE, ESQ.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. CRAVATH, SWAINE & MOORE
1500 NATIONSBANK PLAZA WORLDWIDE PLAZA
300 CONVENT STREET 825 EIGHTH AVENUE
SAN ANTONIO, TEXAS 78205 NEW YORK, NEW YORK 10019
(210) 281-7000 (212) 474-1000
(210) 224-2035 (FAX) (212) 474-3700 (FAX)
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As promptly as practicable after expiration of the exchange offer
described herein.
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If the securities being registered on this Form are offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
------------------
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
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PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER NOTE OFFERING PRICE REGISTRATION FEE
----------------------------------------------------------------------------------------------------------------------------
6.50% Notes Due 2005........................ E650,000,000 99.75% E648,375,000 $143,630
($544,051,463)
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</TABLE>
(1) Determined pursuant to Rule 457(f) under the Securities Act of 1933, solely
for the purpose of calculating the registration fee, on the basis of the
average of the bid and asked price for the securities on October 18, 2000,
converted into U.S. dollars as of noon New York City time on October 18,
2000.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer
to buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION DATED OCTOBER 19, 2000
PROSPECTUS
CLEAR CHANNEL LOGO
CLEAR CHANNEL COMMUNICATIONS, INC.
---------------------
E650,000,000
6.50% NOTES DUE 2005
---------------------
OFFER TO EXCHANGE
UP TO E650,000,000 6.50% NOTES DUE 2005
FOR ANY AND ALL OUTSTANDING 6.50% NOTES DUE 2005
SUMMARY OF THE EXCHANGE OFFER
This document and accompanying Letter of Transmittal relate to the proposed
offer by Clear Channel Communications, Inc. ("Clear Channel") to exchange up to
E650,000,000 aggregate principal amount of new 6.50% notes due 2005 for any and
all of its outstanding 6.50% notes due 2005. The new notes, which are referred
to as the "exchange notes," will be freely transferable. The outstanding notes,
which are referred to as the "restricted notes," have certain transfer
restrictions.
The restricted notes are, and the exchange notes will be, unsecured and
unsubordinated obligations of Clear Channel.
- The exchange offer expires at 5:00 p.m. New York City time on
, 2000, unless extended.
- There should be no United States federal income tax consequences to
holders of restricted notes who exchange restricted notes for exchange
notes pursuant to the exchange offer.
- Holders of restricted notes do not have any appraisal or dissenters'
rights in connection with the exchange offer.
- Restricted notes not exchanged in the exchange offer will remain
outstanding and be entitled to the benefits of the indenture under which
they were issued, but except under certain circumstances will not have
further exchange or registration rights.
- The exchange notes will be listed on the Luxembourg Stock Exchange.
Each holder of restricted notes wishing to accept the exchange offer must
deliver the restricted notes to be exchanged, together with the Letter of
Transmittal that accompanies this document and any other required documentation,
to the exchange agent identified in this document. Alternatively, you may effect
a tender of restricted notes by book-entry transfer into the exchange agent's
account at Morgan Guaranty Trust Company of New York, Brussels Office, as
operator of the Euroclear System ("Euroclear"), Clearstream Banking, societe
anonyme, Luxembourg ("Clearstream, Luxembourg") or the Depository Trust Company
("DTC"). All deliveries are at the risk of the holder. You can find detailed
instructions concerning delivery in the "Exchange Offer" section of this
document and in the accompanying Letter of Transmittal.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE EXCHANGE NOTES OR DETERMINED IF
THIS DOCUMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
YOU SHOULD READ THIS ENTIRE DOCUMENT AND THE ACCOMPANYING LETTER OF
TRANSMITTAL AND RELATED DOCUMENTS AND ANY AMENDMENTS OR SUPPLEMENTS CAREFULLY
BEFORE MAKING YOUR DECISION TO PARTICIPATE IN THE EXCHANGE OFFER.
<PAGE> 3
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY
REFERENCE IN THIS DOCUMENT. CLEAR CHANNEL HAS NOT AUTHORIZED ANYONE ELSE TO
PROVIDE YOU WITH DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS DOCUMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THIS DOCUMENT. NEITHER THE DELIVERY OF THIS DOCUMENT NOR THE
ACCOMPANYING LETTER OF TRANSMITTAL, NOR ANY EXCHANGE MADE PURSUANT TO THIS
DOCUMENT SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THE
INFORMATION CONTAINED IN THIS DOCUMENT IS CORRECT AS OF ANY SUBSEQUENT DATE.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS OF RESTRICTED
NOTES BE ACCEPTED FROM, HOLDERS OF RESTRICTED NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR ITS ACCEPTANCE IS UNLAWFUL.
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Where You Can Find More Information......................... 1
Cautionary Statement Regarding Forward-Looking Statements... 2
Summary..................................................... 3
The Exchange Offer.......................................... 3
Business.................................................... 5
Ratios of Earnings to Fixed Charges......................... 8
Holding Company Structure................................... 8
Risk Factors................................................ 9
Exchange Offer.............................................. 15
Description of the Notes.................................... 25
United States Taxation...................................... 40
Tax Consequences to U.S. Holders............................ 40
Tax Consequences to Non-U.S. Holders........................ 43
Currency Conversions and Foreign Exchange Risks Affecting
the Notes................................................. 45
Plan of Distribution........................................ 46
Experts..................................................... 47
Legal Opinions.............................................. 47
Listing and General Information............................. 48
</TABLE>
References herein to "$" and "dollars" are to the currency of the United
States. References to "euro" and "E" are to the currency introduced in the
member states of the European Communities which adopted such single currency at
the start of the third stage of the European Economic Monetary Union, pursuant
to the Treaty establishing the European Communities, as amended by the Treaty on
European Union. The financial information presented herein has been prepared in
accordance with generally accepted accounting principles of the United States.
On October 18, 2000, the Noon Buying Rate for euros was E1.00 =
U.S.$0.8391.
i
<PAGE> 4
WHERE YOU CAN FIND MORE INFORMATION
Clear Channel files annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission. You may read
and copy any reports, statements, or other information Clear Channel files with
the SEC at its public reference rooms at 450 Fifth Street, N.W., Washington,
D.C. 20549, 7 World Trade Center, Suite 1300, New York, New York 10048; and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Clear
Channel's filings are also available to the public on the internet, through a
database maintained by the SEC at http://www.sec.gov. In addition, you can
inspect and copy Clear Channel's reports, proxy statements and other information
at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005, on which the common stock is listed.
We filed a registration statement on Form S-4 to register with the SEC the
securities described in this prospectus. This prospectus is part of that
registration statement. As permitted by SEC rules, this prospectus does not
contain all the information contained in the registration statement or the
exhibits to the registration statement. You may refer to the registration
statement and accompanying exhibits for more information about us and our
securities.
The SEC allows us to "incorporate by reference" into this document the
information Clear Channel filed with it. This means that we can disclose
important business, financial and other information to you by referring you to
other documents separately filed with the SEC. All information incorporated by
reference is part of this document, unless and until that information is updated
and superseded by the information contained in this document or any information
incorporated later.
We incorporate by reference the documents listed below:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1999.
2. Quarterly Report on Form 10-Q for the quarter ended March 31,
2000, as amended by Form 10-Q/A filed May 16, 2000.
3. Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
4. Current Report on Form 8-K filed September 6, 2000.
5. Current Report on Form 8-K filed August 4, 2000.
6. Current Report on Form 8-K filed June 14, 2000.
7. Current Report on Form 8-K filed May 11, 2000.
8. Current Report on Form 8-K filed February 29, 2000.
9. Portions of the Current Report on Form 8-K filed November 19, 1999
relating to the consolidated financial statements of Capstar Broadcasting
Corporation and Subsidiaries and the report of PricewaterhouseCoopers LLP
dated February 26, 1999, except as to Note 3, which is as of March 15, 1999
(pgs. 56-104 of said Form 8-K).
10. Current Report on Form 8-K filed May 7, 1999.
11. Current Report on Form 8-K filed December 10, 1998, as amended by
Form 8-K/A filed February 23, 1999 and Form 8-K/A filed April 12, 1999.
We also incorporate by reference all future filings we make with the SEC
between the date of this document and the date upon which we sell all the
securities we offer with this document.
You may obtain copies of filings referred to above at no cost by contacting
us at the following address: Corporate Secretary, Clear Channel Communications,
Inc., 200 East Basse Road, San Antonio, Texas 78209, telephone: (210) 822-2828.
1
<PAGE> 5
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about us, including, among other things:
- the impact of general economic conditions in the U.S. and in other
countries in which we currently do business, such as the United Kingdom,
Australia, New Zealand, Mexico and certain other European and Asian
countries;
- competition and general conditions in our broadcasting and outdoor
advertising industries;
- fluctuations in exchange rates and currency values;
- capital expenditure requirements;
- legislative or regulatory requirements, including the policies of the
Federal Communications Commission, the U.S. Department of Justice and the
Federal Trade Commission with respect to the conduct of our business, the
consummation of future or pending acquisitions, including the pending
mergers with AMFM and SFX, and the extent of the asset divestitures
required to obtain regulatory approval for the AMFM merger;
- interest rates;
- taxes;
- access to capital markets;
- additional risks referenced in our filings with the Securities and
Exchange Commission;
- the integration of our business with those of our recently acquired
companies; and
- the effect of leverage on our financial position and earnings.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or other
factors. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this document might not occur as currently
contemplated.
2
<PAGE> 6
SUMMARY
The following summary contains basic information about this exchange offer.
It may not contain all the information that is important to you in making your
investment decision. More detailed information appears elsewhere in this
prospectus and in our consolidated financial statements and accompanying notes
that we incorporate by reference. "The Exchange Offer" and the "Description of
the Notes "sections of this prospectus contain more detailed information
regarding the terms and conditions of the exchange offer and the exchange notes.
Certain capitalized terms used in this prospectus summary are defined elsewhere
in this prospectus.
THE EXCHANGE OFFER
Exchange Notes............. E650,000,000 in principal amount of our 6.50%
exchange notes due July 7, 2005. On October 18,
2000, the Noon Buying Rate for euros was E1.00 =
U.S.$0.8391. For more details see "Terms of the
Exchange Offer."
The Exchange Offer......... We are offering to issue the exchange notes in
exchange for a like principal amount of outstanding
notes that we issued on July 7, 2000. We are
offering to issue the exchange notes to satisfy our
obligations contained in the registration rights
agreement we entered into when we sold the
outstanding notes in transactions pursuant to Rule
144A and Regulation S under the Securities Act. The
outstanding notes were subject to transfer
restrictions that will not apply to the exchange
notes so long as you are acquiring the exchange
notes in the ordinary course of your business, you
are not participating in a distribution of the
exchange notes and you are not an affiliate of
ours.
Maturity Date.............. Each exchange note will mature on July 7, 2005.
Interest Payment Dates..... The exchange notes will pay interest on July 7 of
each year commencing July 7, 2001.
Ranking.................... The exchange notes are direct, unsecured and
unsubordinated obligations Clear Channel and will
rank equally with other unsecured and
unsubordinated obligations of Clear Channel for
money borrowed. The exchange notes will be
effectively subordinated to all existing and future
indebtedness and other liabilities of Clear
Channel's subsidiaries.
Certain Covenants.......... The Indenture governing the exchange notes contains
covenants that, among other things, limit our
ability to:
- create liens;
- engage in certain sale/leaseback transactions;
- merge or consolidate with another company; or
- transfer substantially all of our assets.
For more details, see the section under the heading
"Description of the -- Covenants" in the
prospectus.
Use of Proceeds............ We will not receive any proceeds from the issuance
of the exchange notes.
3
<PAGE> 7
Denominations and Issuance
of exchange notes.......... The exchange notes will be issued only in
registered form without coupons, in minimum
denominations of E1,000 and multiples of E1,000.
Tenders, Expiration Date,
Withdrawal............... The exchange offer will expire at 5:00 p.m., New
York City time, on , 2000, unless it is
extended. To tender your outstanding notes you must
follow the detailed procedures described under the
heading "The Exchange Offer -- Procedures for
Tendering" including special procedures for certain
beneficial owners and broker-dealers. If you decide
to exchange your outstanding notes for exchange
notes, you must acknowledge that you do not intend
to engage in and have no arrangement with any
person to participate in a distribution of the
exchange notes. If you decide to tender your
outstanding notes pursuant to the exchange offer,
you may withdraw them at any time prior to 5:00
p.m., New York City time, on the expiration date.
Federal Income Tax
Consequences............. Your exchange of outstanding notes for exchange
notes pursuant to the exchange offer will not
result in a gain or loss to you.
Exchange Agent............. The Bank of New York is the exchange agent for the
exchange offer.
Failure to Exchange Your
outstanding Rule 144A
notes and Trading
Market................... If you fail to exchange your outstanding Rule 144A
notes for exchange notes in the exchange offer,
your outstanding notes will continue to be subject
to transfer restrictions and you will not have any
further rights under the registration rights
agreement, including any right to require us to
register your outstanding notes or to pay any
additional interest. To the extent that outstanding
notes are tendered and accepted in the exchange
offer, your ability to sell untendered, and
tendered but unaccepted, outstanding notes could be
adversely affected. There may be no trading market
for the outstanding notes.
There can be no assurance that an active public
market for the exchange notes will develop or as to
the liquidity of any market that may develop for
the exchange notes, the ability of holders to sell
the exchange notes, or the price at which holders
would be able to sell the exchange notes. For more
details, see the sections "Clearing of the Notes"
and "Absence of a Public Market" under the heading
"Exchange Offer".
4
<PAGE> 8
BUSINESS
We are a global leader in the out-of-home advertising industry reaching
local, national and international consumers through a complementary portfolio of
radio stations, radio broadcast networks, outdoor advertising displays,
television stations, a media representation business and a growing presence on
the Internet. We are comprised of three business segments: broadcasting, outdoor
advertising and entertainment. Following the completion of our merger with AMFM
Inc., as of August 31, 2000, we owned, programmed or sold airtime for
approximately 930 domestic radio stations and two radio stations in Denmark. In
addition, we owned or programmed 24 domestic television stations. We are one of
the world's largest outdoor advertising companies based on our total domestic
and international advertising display inventory. Through our recent acquisition
of SFX Entertainment, Inc., we are also now one of the world's largest
diversified promoters, producers and venue operators for live entertainment
events. We were incorporated in Texas in 1974. Our principal executive offices
are located at 200 East Basse Road, San Antonio, Texas 78209 (telephone:
210-822-2828).
Our broadcasting segment includes both radio and television stations for
which we are the licensee and radio and television stations which we program or
for which we sell air time under local marketing agreements or joint sales
agreements. Our broadcasting segment also operates radio networks and produces
syndicated programming. Our outdoor advertising segment includes advertising
display faces which we own or operate under lease management agreements. Our
entertainment segment includes the promotion and production of live
entertainment events and operation of live entertainment venues. Our
entertainment segment also includes a sports marketing and management company.
A brief description of each of our primary lines of business and the
recently completed mergers with AMFM and SFX follows.
BROADCASTING
As of August 31, 2000, we owned, programmed, or sold airtime for
approximately 930 domestic radio stations, two international radio stations, 20
domestic television stations and four satellite television stations. Our radio
stations employ a wide variety of programming formats, such as News/Talk/Sports,
Country, Adult Contemporary, Urban and Rock. We own two international radio
stations located in Denmark that broadcast Adult Contemporary and Oldies formats
to the Copenhagen market and one cable audio channel that reaches most of
Denmark. We also provide programming to and sell airtime under exclusive sales
agency agreements for three radio stations in Mexico. In addition, we also
operate several radio networks and produce more than 50 syndicated programs and
services for more than 4,000 radio stations. Our syndicated programs include
Rush Limbaugh, The Dr. Laura Schlessinger Show, Dr. Dean Edell, American Top 40
with Casey Kasem and Rockline. In addition, we currently own the following
interests in radio broadcasting or music distribution companies:
- a 50% equity interest in the Australian Radio Network Pty., Ltd., which
operates radio stations in Australia;
- a 33% equity interest in New Zealand Radio Network, which operates radio
stations in New Zealand;
- a 26% non-voting equity interest in Hispanic Broadcasting Corporation, a
leading domestic Spanish-language radio broadcaster;
- a 22.9% equity interest in Muzak Holdings, LLC, a music distribution
company;
- a 40% equity interest in Grupo Acir Communicaciones, S.A. de C.V., one of
the largest radio broadcasters in Mexico;
- a 50% equity interest in Radio 1, which owns seven radio stations in
Norway;
- a 50% equity interest in Radio Bonton, a.s., which owns an FM radio
station in the Czech Republic; and
- a 32% equity interest in JAZZ FM plc, which owns two radio stations in
England.
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<PAGE> 9
Our television stations are affiliated with various television networks,
including FOX, UPN, ABC, NBC and CBS. The primary sources of programming for our
ABC, NBC and CBS affiliated television stations are their respective networks,
which produce and distribute programming in exchange for each station's
commitment to air the programming at specified times and for commercial
announcement time during the programming. We supply the majority of programming
to our FOX and UPN affiliates by selecting and purchasing syndicated television
programs.
OUTDOOR ADVERTISING
As of August 31, 2000, we owned approximately 750,000 advertising display
faces, and operated approximately 5,900 display faces under license management
agreements. We currently provide outdoor advertising services in over 50
domestic markets and over 35 international markets. Domestic display faces
include billboards of various sizes and various small display faces on the
interior and exterior of various public transportation vehicles and taxi cabs.
International display faces include street furniture, transit displays and
billboards of various sizes. Additionally, we currently own the following
interests in outdoor advertising companies:
- a 50% equity interest in Hainan White Horse Advertising Media Investment
Co. Ltd., which operates street furniture displays in China;
- a 50% equity interest in Sirocco International SA, which is developing a
new 8 square meter format network and obtaining concessions for 2 square
meter format panels in France;
- a 50% equity interest in Adshel Street Furniture Pty., Limited, which
operates street furniture displays in Australia and New Zealand;
- a 30% equity interest in Capital City Posters Pty., Ltd, which operates
street furniture and billboard displays in Singapore;
- a 50% equity interest in Buspak, which operates bus and tram displays in
Hong Kong; and
- a 31.9% equity interest in Master & More Co., Ltd, which operates
billboard displays in Thailand.
ENTERTAINMENT
As a result of our recent merger with SFX, we are one of the world's
largest diversified promoters, producers and venue operators for live
entertainment events. In addition, we are a leading fully integrated sports
marketing and management company specializing in the representation of sports
athletes and broadcasters, integrated event management, and television
programming, production and marketing consulting services. We operate one of the
largest network of venues used principally for music concerts and other live
entertainment events in the United States, with 92 venues in 31 of the top 50
markets and nine venues principally used for theatrical presentations, primarily
in the United Kingdom. Through our large number of venues and our presence in
each of the markets that we serve, we are able to provide integrated promotion,
production and venue operation and event management services for a broad variety
of live entertainment events.
AMFM MERGER
On August 30, 2000, we closed our merger with AMFM Inc. Pursuant to the
terms of the merger agreement, each share of AMFM common stock was exchanged for
0.94 shares of our common stock. Approximately 205.4 million shares of our
common stock were issued in the AMFM merger. We also indirectly assumed or
refinanced AMFM's outstanding debt. At June 30, 2000, AMFM had a total
outstanding indebtedness of approximately $5.7 billion, a portion of which has
since been repaid with the proceeds of radio station divestitures required to
gain regulatory approval for the merger. Additionally, all options and warrants
to purchase AMFM common stock outstanding at the effective time of the merger
became exercisable, subject to applicable vesting, for approximately 25.5
million shares of our common stock.
6
<PAGE> 10
At the time of the AMFM merger, AMFM owned, programmed or sold airtime for
414 radio stations. AMFM also owned Katz Media, a full-service media
representation firm. In addition, AMFM owned an approximate 30% equity interest
in Lamar Advertising Company.
To obtain clearance from the United States Department of Justice, Clear
Channel and AMFM agreed to sell 99 radio stations in 27 markets. Before
consummating our merger with AMFM, Clear Channel and AMFM completed the sale of
85 of these stations. The remaining 14 stations, which are located in five
markets, will be sold pursuant to a consent decree filed by the DOJ on August
29, 2000. Under the terms of the consent decree, we have 150 days from August
29th to complete the sales of these 14 stations. In addition to the requirement
that we sell the remaining 14 stations, for the next ten years, the consent
decree requires that we provide the DOJ with advance notice of certain
transactions in the five markets and refrain from reacquiring any of the
stations (24 in total) we sold in the five markets to obtain DOJ clearance.
In addition, we agreed in the consent decree to sell AMFM's approximately
30% equity stake in Lamar by December 31, 2002. Furthermore, the consent decree
requires that our investment must be passive while we continue to hold any part
of this stake in Lamar. The consent decree requires, among other things, that we
shall not (i) elect, nominate or appoint directors of Lamar, (ii) participate as
a board member or otherwise in any Lamar board meeting or on any committees,
(iii) exercise any veto rights with respect to the business of Lamar, or (iv)
obtain non-public financial or business information with respect to Lamar. The
consent decree also prohibits our acquiring additional shares of Lamar, except
in a transaction that requires a filing under the federal antitrust laws.
In connection with the AMFM merger agreement, we entered into a
registration rights agreement with certain shareholders of AMFM. As a result of
the registration rights agreement, we may be required to file registration
statements with the SEC to register for resale our common stock received by such
AMFM shareholders in the AMFM merger.
SFX MERGER
On August 1, 2000, we closed our merger with SFX Entertainment, Inc.
Pursuant to the terms of the merger agreement, each share of SFX Class A common
stock was exchanged for 0.6 shares of our common stock and each share of SFX
Class B common stock was exchanged for one share of our common stock.
Approximately 39.1 million shares of our common stock were issued in the SFX
merger. We also indirectly assumed or refinanced SFX's outstanding debt. At June
30, 2000, SFX had total outstanding indebtedness of approximately $1.4 billion.
Additionally, all options and warrants to purchase SFX common stock outstanding
at the effective time of the merger became exercisable for approximately 6.5
million shares of our common stock.
A number of lawsuits were filed by holders of SFX Class A common stock
alleging, among other things, that the difference in consideration for the Class
A and Class B shares constituted unfair consideration to the Class B holders and
that the SFX board breached its fiduciary duties and that we aided and abetted
the actions of the SFX board. On August 29, 2000, a settlement that resulted in
a modification of the consideration payable to SFX shareholders in the merger
was approved by the court. Under the settlement, the defendants will pay to the
holders of the SFX Class A common stock an aggregate of $34.5 million, payable
in either cash or our common stock, at the option of the defendants, less the
amount of $5.175 million awarded to plaintiffs' counsel by the court.
At the time of the SFX merger, SFX was one of the world's largest
diversified promoters, producers and venue operators for live entertainment
events. In addition, SFX was a leading fully integrated sports marketing and
management company specializing in the representation of sports athletes and
broadcasters, integrated event management, television programming and production
and marketing consulting services. SFX also operated the largest network of
venues used principally for music concerts and other live entertainment events
in the United States, with 92 venues in 31 of the top 50 markets. These venues
include 17 amphitheaters in the top 10 markets and nine venues principally used
for theatrical
7
<PAGE> 11
presentations. In addition, SFX owned or operated 28 international venues used
primarily for theatrical presentations, principally in the United Kingdom.
In connection with the SFX merger agreement, we entered into a registration
rights agreement with Mr. Robert F. X. Sillerman, the Executive Chairman of the
Board and a shareholder of SFX, granting Mr. Sillerman and his transferees
certain piggyback registration rights with respect to any or all of the shares
of our common stock issued to Mr. Sillerman in the SFX merger.
RATIOS OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes (which excludes the cumulative and transition
effects of accounting changes) and fixed charges by fixed charges. "Fixed
charges" consist of interest on debt and that portion of rental expense deemed
to be representative of interest.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
--------------------------------- ------------
1999 1998 1997 1996 1995 2000 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.................. 2.04 1.83 2.32 3.63 3.32 1.25 3.06
</TABLE>
HOLDING COMPANY STRUCTURE
We are a holding company and our assets consist primarily of investments in
our subsidiaries and majority-owned partnerships. Our rights and the rights of
our creditors, including holders of debt securities or junior subordinated debt
securities, to participate in the distribution of assets of any person in which
we own an equity interest will be subject to prior claims of the person's
creditors upon the person's liquidation or reorganization. However, we may
ourself be a creditor with recognized claims against this person, but our claims
would still be subject to the prior claims of any secured creditor of this
person and of any holder of indebtedness of this person that is senior to that
held by us. Accordingly, the holder of notes may be deemed to be effectively
subordinated to those claims.
8
<PAGE> 12
RISK FACTORS
Investing in our securities involves a high degree of risk. You should
carefully consider the risks and uncertainties described below and the other
information in this prospectus supplement and the prospectus and in the
documents incorporated by reference before deciding whether to purchase our
securities.
WE HAVE LOSSES AND PRO FORMA LOSSES
On a pro forma basis, after giving effect to the acquisitions we completed
in 1999, we had a loss of $0.15 per share for the year ended December 31, 1999.
In addition, if the mergers with AMFM and SFX had been completed at the
beginning of this period, the pro forma losses during the period would have been
substantially greater at $1.09 per share. Because of the substantial
amortization of goodwill related to the merger and prior acquisitions, we expect
these losses to continue. See "Unaudited Pro Forma Combined Condensed
Consolidated Financial Statements."
WE MAY EXPERIENCE DIFFICULTIES IN COMBINING CLEAR CHANNEL, AMFM AND SFX
Our mergers with AMFM and SFX combine companies that previously operated
independently. We intend to integrate some AMFM and SFX operations into our own
operations. However, we may not successfully combine their operations with our
own operations. Any unexpected delays or costs of combining these companies
could adversely affect us. In particular, SFX is engaged in a line of business
that is new to us, and we may encounter difficulties or obstacles to integrating
our businesses. Moreover, the outstanding debt of AMFM and SFX, to the extent it
remains outstanding, contains restrictive covenants which may limit our ability
to integrate the separate operations of AMFM or SFX, as the case may be.
Additionally, the operations, management and personnel of these companies may
not be compatible. Following either of these mergers, we may experience the loss
of key personnel.
WE HAVE INCREASED OUR DEBT DUE TO THE AMFM AND SFX MERGERS
Following the AMFM and SFX mergers, our debt obligations significantly
increased. At June 30, 2000, we had borrowings under our credit facilities and
other long term debt outstanding of approximately $5.4 billion. At June 30,
2000, we had shareholder's equity of $10.1 billion. At June 30, 2000, AMFM had
total outstanding indebtedness of approximately $5.7 billion, a portion of which
has since been repaid with the proceeds of radio station divestitures required
to gain regulatory approval for the merger. At June 30, 2000, SFX had total
outstanding indebtedness of approximately $1.4 billion. At August 31, 2000,
Clear Channel, including AMFM and SFX, had approximately $10.1 billion of
combined total outstanding indebtedness. We expect to continue to borrow funds
to finance acquisitions of broadcasting, outdoor advertising and entertainment
properties, as well as for other purposes. Our debt obligations could increase
substantially because of the debt levels of companies that we may acquire in the
future. Effective upon the August 30, 2000 merger with AMFM, AMFM's $3.2 billion
credit facility was repaid in its entirety and terminated. Concurrently, we
repaid and replaced our $1.0 billion 364-day multi-currency facility with a $3.0
billion five-year multi-currency facility. Borrowings under our $3.0 billion
credit facility are at a floating rate, which at August 31, 2000 was equal to
dollar LIBOR or an appropriate offshore currency rate, plus a margin of 0.625%.
Borrowings under our existing $2.0 billion domestic credit facility are at a
floating rate, which at August 31, 2000 was equal to dollar LIBOR plus 0.40%. As
of August 31, 2000 we had borrowed approximately $236.8 million, of which $186.8
million or L129.1 million was denominated in British pounds, under our $3.0
billion multi-currency credit facility and $2.0 billion under our $2.0 billion
domestic credit facility.
Such a large amount of indebtedness could have negative consequences for
us, including without limitation the following:
- limitations on our ability to obtain financing in the future;
- much of our cash flow will be dedicated to interest obligations and
unavailable for other purposes;
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<PAGE> 13
- the high level of indebtedness limits our flexibility to deal with
changing economic, business and competitive conditions; and
- the high level of indebtedness could make us more vulnerable to an
increase in interest rates, a downturn in our operating performance or a
decline in general economic conditions.
The failure to comply with the covenants in the agreements governing the
terms of us or SFX or AMFM could be an event of default and could accelerate the
payment obligations and, in some cases, could affect other obligations with
cross-default and cross-acceleration provisions.
OUR OPERATIONS MAY BE RESTRICTED BY AMFM INDEBTEDNESS AND SFX INDEBTEDNESS
If all or part of AMFM's or SFX's indebtedness remains outstanding because
either the AMFM or SFX debtholders do not accept our mandatory offers to
purchase such indebtedness or we do not otherwise purchase such indebtedness,
the terms of such indebtedness may restrict the ability of AMFM and its
subsidiaries or SFX and its subsidiaries to make funds available to us in the
form of dividends, loans, advances or otherwise. Much of AMFM's and SFX's
indebtedness is high-yield indebtedness and restricts them from incurring
additional indebtedness, repaying other debt, repurchasing or redeeming capital
stock, selling assets or stock, making certain investments or acquisitions,
engaging in asset swaps, mergers or consolidations and entering into
transactions with affiliates. The covenants for this type of indebtedness are
more restrictive than those contained in our public indebtedness. Accordingly,
the AMFM and SFX indebtedness which remains outstanding following the two
mergers may continue to:
- cause us to incur substantial consolidated interest expense and principal
repayment obligations;
- limit our ability to obtain additional debt financing;
- make it more difficult for us to combine our operations with AMFM and
SFX; and
- place more restrictions on our ability to manage AMFM and SFX than we
currently face in the management of the rest of its business.
DEPENDENCE ON KEY PERSONNEL
Our business is dependent upon the performance of key employees, including
L. Lowry Mays, our chief executive officer, and other executive officers. We
employ or independently contract with several on-air personalities and hosts of
syndicated radio programs with significant loyal audiences in their respective
markets. Although we have entered into long-term agreements with some of our
executive officers, key on-air talent and program hosts to protect their
interests in those relationships, we can give no assurance that all of these key
employees will remain with us or will retain their audiences.
EXTENSIVE GOVERNMENT REGULATION MAY LIMIT OUR OPERATIONS
BROADCASTING. The federal government extensively regulates the domestic
broadcasting industry, and any changes in the current regulatory scheme could
significantly affect us. Our broadcasting business depends upon maintaining
broadcasting licenses issued by the FCC for maximum terms of eight years.
Renewals of broadcasting licenses can be attained only through the FCC's grant
of appropriate applications. Although the FCC rarely denies a renewal
application, the FCC could deny future renewal applications. Such a denial could
adversely affect our operations.
The federal communications laws limit the number of broadcasting properties
we may own in a particular area. While the Telecommunications Act of 1996
relaxed the FCC's multiple ownership limits, any subsequent modifications that
tighten those limits could adversely affect us by making it impossible for us to
complete potential acquisitions or requiring us to divest stations we have
already acquired. For instance, the FCC has recently adopted modified rules that
in some cases permit a company to own fewer radio stations than allowed by the
Telecommunications Act of 1996 in markets or geographical areas where the
company also owns television stations. These modified rules could eventually
require us to divest
10
<PAGE> 14
radio stations we currently own in markets or areas where we also own television
stations. Additionally, the FCC is considering adopting new or revised rules
that may further limit the number of radio stations a company may own in local
markets. Such rules, if adopted, could limit our ability to make future radio
acquisitions.
Moreover, changes in governmental regulations and policies may have a
material impact upon us. For example, we currently provide programming to
several television stations we do not own and receive programming from other
parties for certain television stations we do own. These programming
arrangements are made through contracts known as local marketing agreements. The
FCC has recently revised its rules and policies regarding television local
marketing agreements. These revisions will restrict our ability to enter into
television local marketing agreements in the future, and may eventually require
us to terminate our programming arrangements under existing local marketing
agreements. Additionally, the FCC has recently adopted rules which under certain
circumstances will subject previously nonattributable debt and equity interests
in communications media to the FCC's multiple ownership restrictions. These new
rules may limit our ability to expand our media holdings.
ANTITRUST. Additional acquisitions by us of radio and television stations
and outdoor advertising properties as well as live entertainment operations or
entities may require review by foreign antitrust agencies under the antitrust
laws of foreign jurisdictions and will require antitrust review by the federal
antitrust agencies, and we can give no assurances that the DOJ or the Federal
Trade Commission or foreign antitrust agencies will not seek to bar us from
acquiring additional radio or television stations, outdoor advertising or
entertainment properties in any market where we already have a significant
position. Following the passage of the Telecommunications Act of 1996, the DOJ
has become more aggressive in reviewing proposed acquisitions of radio stations,
particularly in instances where the proposed acquirer already owns one or more
radio station properties in a particular market and seeks to acquire another
radio station in the same market. The DOJ has, in some cases, obtained consent
decrees requiring radio station divestitures in a particular market based on
allegations that acquisitions would lead to unacceptable concentration levels.
The DOJ also actively reviews proposed acquisitions of outdoor advertising
properties. In addition, the antitrust laws of foreign jurisdictions will apply
if we acquire international broadcasting properties.
ENVIRONMENTAL. As the owner or operator of various real properties and
facilities, especially in our outdoor advertising operations and SFX's venue
operations, we must comply with various federal, state and local environmental
laws and regulations. Such laws and regulations impose operating requirements
and potential property cleanup liabilities in connection with fuel storage for
our outdoor advertising operations. In addition, zoning and noise level
restrictions may affect, among other things, the hours of operations of SFX's
venue operations. Our broadcasting operations, as well as those of AMFM, also
are subject to operating requirements and potential personal injury and property
damage claims relating to radio frequency emissions from our transmission
towers. Although we have not incurred significant expenditures to comply with
these laws and regulations, additional environmental laws or requirements which
may come into effect in the future, or a violation of existing laws, could
require the combined company to incur significant costs.
OUR OPERATIONS ARE IMPACTED BY THE REGULATION OF OUTDOOR ADVERTISING
Our outdoor advertising operations are significantly impacted by federal,
state and local government regulation of the outdoor advertising business.
The federal government conditions federal highway assistance on states
imposing location restrictions on the placement of billboards on primary and
interstate highways. Federal laws also impose size, spacing and other
limitations on billboards. Some states have adopted standards more restrictive
than the federal requirements. Local governments generally control billboards as
part of their zoning regulations. Some local governments have enacted ordinances
which require removal of billboards by a future date. Others prohibit the
construction of new billboards and the reconstruction of significantly damaged
billboards, or allow new construction only to replace existing structures.
11
<PAGE> 15
Local laws which mandate removal of billboards at a future date often do
not provide for payment to the owner for the loss of structures that are
required to be removed. Some federal and state laws require payment of
compensation in such circumstances. Local laws that require the removal of a
billboard without compensation have been challenged in state and federal courts
with conflicting results. Accordingly, we may not be successful in negotiating
acceptable arrangements when our displays have been subject to removal under
these types of local laws.
Additional regulations may be imposed on outdoor advertising in the future.
Legislation regulating the content of billboard advertisements has been
introduced in Congress from time to time in the past. Additional regulations or
changes in the current laws regulating and affecting outdoor advertising at the
federal, state or local level may have a material adverse effect on our results
of operations.
CHANGES IN RESTRICTIONS ON OUTDOOR TOBACCO ADVERTISING AND ALCOHOL ADVERTISING
MAY POSE RISKS
Regulations, legislation and recent settlement agreements related to
outdoor tobacco advertising could have a material adverse effect on us. The
major U.S. tobacco companies that are defendants in numerous class action suits
throughout the country recently reached an out-of-court settlement with 46
states that includes a ban on outdoor advertising of tobacco products. The
settlement agreement was finalized on November 23, 1998, but must be ratified by
the courts in each of the 46 states participating in the settlement. In addition
to the mass settlement, the tobacco industry previously had come to terms with
the remaining four states individually. The terms of such individual settlements
also included bans on outdoor advertising of tobacco products.
In addition to the settlement agreements, state and local governments are
also regulating the outdoor advertising of alcohol and tobacco products. For
example, several states and cities have laws restricting tobacco billboard
advertising near schools and other locations frequented by children. Some cities
have proposed even broader restrictions, including complete bans on outdoor
tobacco advertising on billboards, kiosks, and private business window displays.
In a few jurisdictions, restrictions on tobacco billboard advertising have
prompted Constitutional challenges with mixed results in court. It is possible
that state and local governments may propose or pass similar ordinances to limit
outdoor advertising of alcohol, tobacco and other products or services in the
future, and that there may be court challenges to such restrictions. Legislation
regulating tobacco and alcohol advertising has also been introduced in a number
of European countries in which we conduct business, and could have a similar
impact.
The elimination of billboard advertising by the tobacco industry will cause
a reduction in our direct revenues from such advertisers and may simultaneously
increase the available space on the existing inventory of billboards in the
outdoor advertising industry. This industry-wide increase in space may in turn
result in a lowering of outdoor advertising rates or limit the ability of
industry participants to increase rates for some period of time. For the year
ended December 31, 1999, approximately 1.5% of our revenues came from the
outdoor advertising of tobacco products.
OUR INTERNATIONAL OPERATIONS HAVE ADDED RISKS
Doing business in foreign countries carries with it risks that are not
found in doing business in the United States. We currently derive a portion of
our revenues from international radio and outdoor operations in Europe, Asia,
Mexico, Australia and New Zealand. Following the SFX merger, we have
significantly expanded our international operations. The risks of doing business
in foreign countries which could result in losses against which we are not
insured include:
- exposure to local economic conditions;
- potential adverse changes in the diplomatic relations of foreign
countries with the United States;
- hostility from local populations;
- the adverse effect of currency exchange controls;
- restrictions on the withdrawal of foreign investment and earnings;
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<PAGE> 16
- government policies against businesses owned by foreigners;
- expropriations of property;
- the potential instability of foreign governments;
- the risk of insurrections;
- risks of renegotiation or modification of existing agreements with
governmental authorities;
- foreign exchange restrictions;
- withholding and other taxes on remittance and other payments by
subsidiaries; and
- changes in taxation structure.
EXCHANGE RATES MAY CAUSE FUTURE LOSSES IN OUR INTERNATIONAL OPERATIONS
Because we own assets overseas and derive revenues from our international
operations, we may incur currency translation losses due to changes in the
values of foreign currencies and in the value of the U.S. dollar. We cannot
predict the effect of exchange rate fluctuations upon future operating results.
To reduce our exposure to the risk of international currency fluctuations, we
maintain a natural hedge by incurring amounts of debt in each currency
approximately equivalent to our net assets in each such currency. We review this
hedge position monthly. We currently maintain no derivative instruments to
reduce the exposure to translation and/or transaction risk but may adopt other
hedging strategies in the future.
OUR ACQUISITION STRATEGY COULD POSE RISKS
OPERATIONAL RISKS. We intend to grow through the acquisition of
broadcasting companies and assets, outdoor advertising companies, individual
outdoor advertising display faces, live entertainment assets and other assets
that we believe will assist our customers in marketing their products and
services. Our acquisition strategy involves numerous risks, including:
- certain of such acquisitions may prove unprofitable and fail to generate
anticipated cash flows;
- to successfully manage a rapidly expanding and significantly larger
portfolio of broadcasting and outdoor advertising properties, as well as
the live entertainment business, we may need to recruit additional senior
management and expand corporate infrastructure;
- entry into markets and geographic areas where we have limited or no
experience;
- we may encounter difficulties in the integration of operations and
systems;
- management's attention may be diverted from other business concerns; and
- we may lose key employees of acquired companies or stations.
We frequently evaluate strategic opportunities both within and outside our
existing lines of business. We expect from time to time to pursue additional
acquisitions and may decide to dispose of certain businesses. These acquisitions
or dispositions could be material.
CAPITAL REQUIREMENTS NECESSARY FOR ADDITIONAL ACQUISITIONS. We will face
stiff competition from other broadcasting, outdoor advertising and live
entertainment companies for acquisition opportunities. If the prices sought by
sellers of these companies continue to rise, we may find fewer acceptable
acquisition opportunities. In addition, the purchase price of possible
acquisitions could require additional debt or equity financing on our part. We
can give no assurance that we will obtain the needed financing or that we will
obtain such financing on attractive terms. Additional indebtedness could
increase our leverage and make us more vulnerable to economic downturns and may
limit our ability to withstand competitive pressures. Additional equity
financing could result in dilution to our shareholders.
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<PAGE> 17
WE FACE INTENSE COMPETITION IN OUR BROADCASTING, OUTDOOR ADVERTISING AND LIVE
ENTERTAINMENT BUSINESSES
Our three existing business segments are in highly competitive industries,
and we may not be able to maintain or increase our current audience ratings and
advertising revenues. Our radio and television stations and outdoor advertising
properties compete for audiences and advertising revenues with other radio and
television stations and outdoor advertising companies, as well as with other
media, such as newspapers, magazines, cable television, direct mail and the
Internet within their respective markets. Audience ratings and market shares are
subject to change, which could have an adverse effect on our revenues in that
market. Other variables that could affect our financial performance include:
- economic conditions, both general and relative to the broadcasting
industry;
- shifts in population and other demographics;
- the level of competition for advertising dollars;
- fluctuations in operating costs;
- technological changes and innovations;
- changes in labor conditions; and
- changes in governmental regulations and policies and actions of federal
regulatory bodies.
As a participant in the live entertainment industry, our ability to
generate revenues will be highly sensitive to rapidly changing public tastes and
will be dependent on the availability of popular performers and events. Since
SFX relies on unrelated parties to create and perform live entertainment
content, any lack of availability of popular musical artists, touring Broadway
shows, specialized motor sports talent and other performers could limit the
combined company's ability to generate revenues. In addition, SFX requires
access to venues to generate revenues from live entertainment events. SFX
operates a number of its live entertainment venues under leasing or booking
agreements. Our long-term success will depend in part on our ability to renew
these agreements when they expire or end. We may be unable to renew these
agreements on acceptable terms or at all, and may be unable to obtain favorable
agreements with new venues.
NEW TECHNOLOGIES MAY AFFECT OUR BROADCASTING OPERATIONS
The FCC has approved and is considering ways to introduce new technologies
to the radio broadcast industry, including satellite and terrestrial delivery of
digital audio broadcasting and the standardization of available technologies
which significantly enhance the sound quality of radio broadcasts. We are unable
to predict the effect that these technologies will have on our broadcasting
operations, but the capital expenditures necessary to implement these
technologies could be substantial. Additionally, the FCC has established a low
power FM broadcast service. Low power FM stations may serve as additional
competition to our radio operations in some or all of our markets, and could
cause interference to the signals of one or more of our stations. In addition,
Internet "streaming" of audio and video programming may serve as more
competition to our broadcasting operations in some or all of our markets.
We also face risks in implementing the conversion of our television
stations to digital television, which the FCC has ordered and for which it has
established a timetable. We will incur considerable expense in the conversion to
digital television and are unable to predict the extent or timing of consumer
demand for any such digital television services. Moreover, the FCC may impose
additional public service obligations on television broadcasters in return for
their use of digital television spectrum. This could add to our operational
costs. The most contentious issue yet to be resolved is the extent to which
cable systems will be required to carry broadcasters' new digital channels. Our
television stations are highly dependent on their carriage by cable systems in
the areas they serve. Thus, FCC rules that impose no or limited obligations on
cable systems to carry the digital television signals of television broadcast
stations in their local markets could adversely affect our television
operations.
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<PAGE> 18
EXCHANGE OFFER
REASON FOR THE EXCHANGE OFFER
We initially sold the restricted notes on July 7, 2000 to ABN AMRO Bank
N.V., Deutsche Bank AG London, Barclays Bank PLC, Credit Suisse First Boston
(Europe) Limited, Merrill Lynch International, Salomon Brothers International
Limited and Westdeutsche Landesbank Girozentrale, and collectively referred to
as the "Managers," pursuant to a Subscription Agreement dated July 3, 2000 among
Clear Channel and the Managers. The Managers subsequently resold or were
permitted to resell the restricted notes:
- outside the United States in accordance with the provisions of Regulation
S under the Securities Act; and
- to qualified institutional buyers in accordance with the provisions of
Rule 144A under the Securities Act.
In connection with the offering of the restricted notes, Clear Channel and
the Managers entered into a Registration Rights Agreement dated July 7, 2000, in
which we agreed, among other things:
- to file with the SEC on or before December 4, 2000, a registration
statement relating to an exchange offer for the restricted notes;
- to use our reasonable best efforts to cause the exchange offer
registration statement to be declared effective under the Securities Act
on or before January 3, 2001;
- upon the effectiveness of the exchange offer registration statement, to
offer the holders of the restricted notes the opportunity to exchange
their restricted notes in the exchange offer for a like principal amount
of exchange notes;
- to keep the exchange offer open for not less than 30 days, or longer, if
required by applicable law, after notice of the exchange offer is mailed
to holders of restricted notes; and
- to use our reasonable best efforts to consummate the exchange offer on or
before February 2, 2001.
We also agreed, under certain circumstances:
- to use our reasonable best efforts to file a shelf registration statement
relating to the offer and sale of the restricted notes by the holders of
the restricted notes;
- to use our reasonable best efforts to cause such shelf registration
statement to be declared effective; and
- to use our reasonable best efforts to keep such shelf registration
statement effective for two years after the shelf registration statement
becomes effective or until the restricted notes covered by the shelf
registration statement have been sold or cease to be outstanding.
The exchange offer being made by this document is intended to satisfy our
exchange and registration obligations under the Registration Rights Agreement.
If we fail to fulfill such obligations, holders of outstanding restricted notes
are entitled to receive additional interest at the rate of 0.25% per annum for
each violation of the obligations. The rate will increase by an additional 0.25%
each 90-day period during which the additional interest continues to accrue. The
maximum aggregate increase to the interest rate under all circumstances is 0.5%
per annum. After we have cured all defaults of our registration and exchange
obligations, the accrual of additional interest on the restricted notes will
cease, and the interest rate for each series of restricted notes will revert to
its original rate.
For a more complete understanding of your exchange and registration rights,
please refer to the Registration Rights Agreement, which is included as Exhibit
4.11 to the registration statement relating to the exchange notes.
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<PAGE> 19
TRANSFERABILITY OF THE EXCHANGE NOTES
Based on certain no-action letters issued by the staff of the SEC to others
in unrelated transactions, we believe that a noteholder may offer for resale,
resell or otherwise transfer any exchange notes without compliance with the
registration and prospectus delivery requirements of the Securities Act, unless
the noteholder is
- acquiring the exchange notes other than in the ordinary course of
business;
- participating, intends to participate or has an arrangement or
understanding with any person to participate, in a distribution of the
exchange notes;
- an "affiliate" of Clear Channel, as defined in Rule 405 under the
Securities Act; or
- a Manager who acquired restricted notes directly from Clear Channel in
the initial offering to resell pursuant to Regulation S, Rule 144A or any
other available exemption under the Securities Act.
In any of the foregoing circumstances, a noteholder
- will not be able to rely on the interpretations of the staff of the SEC,
in connection with any offer for resale, resale or other transfer of
exchange notes; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act, or have an exemption available, in connection with
any offer for resale, resale or other transfer of the exchange notes.
We are not making this exchange offer to, nor will we accept surrenders of
restricted notes from, holders of restricted notes in any state in which this
exchange offer would not comply with the applicable securities laws or "blue
sky" laws of such state.
Each broker-dealer that receives exchange notes for its own account in
exchange for restricted notes, where such restricted notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such exchange notes. See "Plan of Distribution" on page 47.
CLEARING OF THE NOTES
Upon consummation of the Exchange Offer, the exchange notes will have a
different CUSIP number, a different Euroclear and Clearstream, Luxembourg Common
Code and a different ISIN from those under which the Rule 144A notes have traded
(and, to the extent not tendered, will continue to trade).
Regulation S notes not tendered for exchange will continue to clear through
Euroclear and Clearstream, Luxembourg under their original Common Code
(11378668) and their ISIN will remain the same (XS0113786684). Regulation S
notes (unless acquired by a Manager as part of their original distribution) may
now be sold in the United States or to U.S. persons and, upon any such transfer,
a beneficial interest in the Regulation S global note will be able to be
exchanged for an interest in the exchange global note in accordance with
procedures established by Euroclear or Clearstream, Luxembourg and DTC.
Beneficial interests in the restricted Regulation S global note may be
transferred to a person who takes delivery in the form of an interest in the
Regulation S global note upon receipt by the trustee of a written certification
from the transferor, in the form provided in the indenture, to the effect that
the transfer is being made in accordance with Rule 903 or 904 of Regulation S.
We cannot predict the extent to which beneficial owners of an interest in
the Regulation S global note will participate in the exchange offer. Beneficial
owners should consult their own financial advisors as to the benefits to be
obtained from exchange.
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<PAGE> 20
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the exchange
notes. As consideration for the exchange notes, we will receive in exchange an
equivalent principal amount of outstanding restricted notes, the terms of which
are substantially identical to the terms of the exchange notes, except that the
exchange notes will be freely transferable and issued free of any covenants
regarding exchange and registration rights.
We will retire and cancel the restricted notes surrendered in exchange for
the exchange notes. Accordingly, the issuance of the exchange notes under the
exchange offer will not result in any change in our outstanding aggregate
indebtedness.
TERMS OF THE EXCHANGE OFFER
The restricted notes were issued in a single series of 6.50% notes due
2005. As of the date of this document, E650,000,000 aggregate principal amount
of the 6.50% notes are outstanding.
The rates set forth below are provided solely for the convenience of the
reader. No representation is made that euros could have been, or could be,
converted in U.S. dollars at that rate or at any other rate.
On October 18, 2000, the Noon Buying Rate for euros was (Euro)1.00=U.S.
$0.8391.
The table below sets forth for the periods indicated the Noon Buying Rates
expressed in U.S. dollars per euro:
<TABLE>
<CAPTION>
PERIOD RATE AT END OF PERIOD AVERAGE HIGH LOW
------ --------------------- ------- ------ ------
<S> <C> <C> <C> <C>
Year Ended December 31, 1999.......................... 1.0070 1.0588 1.1812 1.0016
Period Ended September 30, 2000....................... 0.8837
</TABLE>
Upon the terms and subject to the conditions set forth in this document and
in the accompanying Letters of Transmittal, we will accept all restricted notes
validly tendered and not withdrawn prior to 5:00 p.m. New York City time on
, 2000, the date that the exchange offer expires. This date and time
may be extended. See "Expiration Date; Extensions; Amendments" below. After
authentication of the exchange notes by the trustee under the indenture
governing the notes or an authenticating agent, we will issue and deliver E1,000
principal amount of exchange notes in exchange for each E1,000 principal amount
of outstanding restricted notes accepted in the exchange offer. Holders may
tender some or all of their restricted notes pursuant to the exchange offer in
denominations of E1,000 and integral multiples thereof.
The form and terms of the exchange notes are identical in all material
respects to the form and terms of the outstanding restricted notes, except that:
- the offering of the exchange notes has been registered under the
Securities Act;
- the exchange notes will not be subject to transfer restrictions; and
- the exchange notes will be issued free of any covenants regarding
exchange and registration rights.
The exchange notes will be issued under and entitled to the benefits of the
indenture that governs the restricted notes.
In connection with the issuance of the restricted notes, we arranged for
the restricted notes to be issued and transferable in book-entry form through
the facilities of Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System ("Euroclear"), Clearstream Banking, societe
anonyme, Luxembourg ("Clearstream, Luxembourg") and The Depository Trust
Company, acting as a depositary. The exchange notes will also be issuable and
transferable in book-entry form through Euroclear, Clearstream, Luxembourg and
DTC.
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<PAGE> 21
This document, together with the accompanying Letter of Transmittal, is
initially being sent to all registered holders of restricted notes as of the
close of business on , 2000. The exchange offer for restricted notes
is not conditioned upon any minimum aggregate principal amount being tendered.
However, the exchange offer is subject to certain customary conditions which we
may waive, and to the terms and provisions of the Registration Rights Agreement.
See "Conditions to the Exchange Offer" below.
The exchange agent is The Bank of New York, which also serves as trustee
under the indenture that governs the notes. We will be deemed to have accepted
validly tendered restricted notes when, as and if we have given oral or written
notice thereof to the exchange agent. The exchange agent will act as agent of
the tendering holders for the purpose of receiving exchange notes from us and as
our agent for the purpose of delivering exchange notes to such holders. See
"Exchange Agent" below.
If any tendered restricted notes are not accepted for exchange because of
an invalid tender or the occurrence of certain other events set forth herein,
certificates for any such unaccepted restricted notes will be returned (if in
certificated form) or credited to an account maintained with Euroclear,
Clearstream, Luxembourg or DTC, as the case may be, at our cost, to the
tendering holder as promptly as practicable after the expiration of the exchange
offer.
Holders who tender restricted notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letters of Transmittal, transfer taxes with respect to the exchange of
restricted notes pursuant to the exchange offer. We will pay all charges and
expenses, other than certain applicable taxes, in connection with the exchange
offer. See "Solicitation of Tenders, Fees and Expenses" below.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The exchange offer will expire at 5:00 p.m. New York City time on
, 2000 unless we, in our sole discretion, extend the exchange offer.
We may extend the exchange offer at any time and from time to time by giving
oral or written notice to the exchange agent and by timely public announcement.
We reserve the right, in our sole discretion, to amend the terms of the
exchange offer in any manner. If any of the conditions set forth below under
"Conditions to the Exchange Offer" has occurred and has not been waived by Clear
Channel, Clear Channel expressly reserves the right, in its sole discretion, by
giving oral or written notice to the exchange agent, to:
- delay acceptance of, or refuse to accept, any restricted notes not
previously accepted;
- extend the exchange offer; or
- terminate the exchange offer.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof by Clear
Channel to the registered holders of the restricted notes. If the exchange offer
is amended in a manner determined by Clear Channel to constitute a material
change, we will promptly disclose such amendment in a manner reasonably
calculated to inform the holders of such amendment, and we will extend the
exchange offer to the extent required by law. If the exchange offer is
terminated, federal law requires we promptly either exchange or return all
restricted notes that have been tendered.
We will have no obligation to publish, advise, or otherwise communicate any
delay in acceptance, extension, termination or amendment of the exchange offer
other than by making a timely press release. We may also publicly communicate
these matters in any other appropriate manner of our choosing.
INTEREST ON THE EXCHANGE NOTES
Interest on the exchange notes will accrue from July 7, 2000 (or, if
interest has been paid on the restricted notes, then from the last interest
payment date on which interest was paid on the restricted notes
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surrendered in exchange therefor). The exchange notes will bear interest at a
rate of 6.50% per annum. Interest on the exchange notes will be payable on July
7th of each year. Assuming that the exchange offer is consummated prior to July
7, 2001, as anticipated, interest on the exchange notes will first become
payable beginning on July 7, 2001.
PROCEDURES FOR TENDERING
Only a Euroclear participant, Clearstream, Luxembourg participant or a DTC
participant listed on a DTC securities position listing with respect to the
restricted notes may tender its restricted notes in the exchange offer. To
tender restricted notes in the exchange offer:
- holders of restricted notes that are DTC participants may follow the
procedures for book-entry transfer as provided for below under
"Book-Entry Transfer" and in the Letter of Transmittal.
- Euroclear participants and Clearstream, Luxembourg participants on behalf
of the beneficial owners of notes are required to use book-entry transfer
pursuant to the standard operating procedures of Euroclear or
Clearstream, Luxembourg, as the case may be, which include transmission
of a computer-generated message to Euroclear or Clearstream, Luxembourg,
as the case may be, in lieu of a Letter of Transmittal. See the term
"Agent's Message" under "Book-entry Transfer".
To be effective, a tender must be made prior to the expiration of the
exchange offer.
Any beneficial owner whose restricted notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender restricted notes in the exchange offer should contact such registered
holder promptly and instruct such registered holder to tender on such beneficial
owner's behalf. Delivery of documents to Euroclear, Clearstream, Luxembourg or
DTC in accordance with their respective procedures will NOT constitute delivery
to the exchange agent.
The tender by a holder of restricted notes will constitute an agreement
between such holder, Clear Channel and the exchange agent in accordance with the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal. If less than all the restricted notes held by a holder of
restricted notes are tendered, a tendering holder should fill in the amount of
restricted notes being tendered in the specified box on the Letter of
Transmittal. The entire amount of restricted notes delivered to the exchange
agent will be deemed to have been tendered unless otherwise indicated.
The Letter of Transmittal includes representations by the tendering holder
to Clear Channel that, among other things:
- any exchange notes received by the tendering holder will be acquired in
the ordinary course of its business;
- the tendering holder has no arrangement or understanding with any person
to participate in the distribution of the exchange notes; and
- the tendering holder is not an "affiliate," as defined in Rule 405 under
the Securities Act, of Clear Channel, or, if it is an affiliate, that it
will comply with the registration and prospectus delivery requirements of
the Securities Act to the extent applicable.
A Letter of Transmittal of a broker-dealer that receives exchange notes for
its own account in exchange for restricted notes that were acquired by it as a
result of market-making or other trading activities must also include an
acknowledgment that the broker-dealer will deliver a copy of this document in
connection with the resale of such exchange notes. By so acknowledging and by
delivering a prospectus, such broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
The method of delivery of restricted notes and Letters of Transmittal and
all other required documents or transmittal of an Agent's Message, as described
below under "Book-Entry Transfer," to the exchange agent is at the election and
risk of the holders of restricted notes. Instead of delivery by mail, it
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is recommended that holders of restricted notes use an overnight or hand
delivery service. In all cases, sufficient time should be allowed to ensure
delivery to the exchange agent prior to the expiration of the exchange offer. No
Letters of Transmittal should be sent to Clear Channel.
Signatures on a Letter of Transmittal or a notice of withdrawal described
in "Withdrawal of Tenders" below must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Exchange Act (each, an "Eligible
Institution"), unless the corresponding restricted notes are tendered
- by a registered holder who has not completed the box entitled "Special
Registration Instructions" or the box entitled "Special Delivery
Instructions" in the Letter of Transmittal; or
- for the account of an Eligible Institution.
If a Letter of Transmittal is signed by a person other than the registered
holder, the corresponding restricted notes must be endorsed or accompanied by
appropriate bond powers which authorize such person to tender the restricted
notes on behalf of the registered holder, in either case signed as the name of
the registered holder or holders appears on the restricted notes. If a Letter of
Transmittal or any restricted notes or bond powers are signed or endorsed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers or
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by Clear Channel,
submit evidence satisfactory to Clear Channel of their authority to so act with
such Letter of Transmittal.
All questions as to the validity, form, eligibility, acceptance and
withdrawal of the tendered restricted notes will be determined by Clear Channel
in its sole discretion, which determination will be final and binding. Clear
Channel reserves the absolute right to reject restricted notes not properly
tendered or any restricted notes Clear Channel's acceptance of which would, in
the opinion of counsel for Clear Channel, be unlawful. Clear Channel also
reserves the absolute right to waive any irregularities or conditions of tender
as to particular restricted notes. Clear Channel's interpretation of the terms
and conditions of the Exchange Offer, including the instructions in the Letters
of Transmittal, will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of restricted notes must be
cured within such time as Clear Channel shall determine.
Although Clear Channel intends to notify tendering holders of defects or
irregularities with respect to tenders of restricted notes, neither Clear
Channel, the exchange agent nor any other person will be under any duty or
obligation to do so, and no person will incur any liability for failure to give
such notification. Restricted notes will not be validly tendered until such
irregularities have been cured or waived. Any restricted notes received by the
exchange agent that Clear Channel determines are not properly tendered or the
tender of which is otherwise rejected by Clear Channel will be returned by the
exchange agent to the tendering holder or other person specified in the
appropriate Letter of Transmittal as soon as practicable following the
expiration of the exchange offer.
Clear Channel reserves the right in its sole discretion:
- to purchase or make offers for any restricted notes that remain
outstanding subsequent to the expiration of the exchange offer;
- to terminate the exchange offer, as set forth in "Conditions to the
Exchange Offer" below; and
- to the extent permitted by applicable law, to purchase restricted notes
during the pendency of the exchange offer in the open market, in
privately negotiated transactions or otherwise.
The terms of any such purchases or offers may differ from the terms of the
exchange offer.
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BOOK-ENTRY TRANSFER
Clear Channel understands that the exchange agent will make a request
promptly after the date of this document to establish accounts with respect to
the restricted notes at Euroclear, Clearstream, Luxembourg and DTC for the
purpose of facilitating the exchange offer. Any financial institution that is a
participant in DTC's system may make book-entry delivery of restricted notes by
causing DTC to transfer such restricted notes into the Exchange Agent's DTC
account in accordance with DTC's Automated Tender Offer Program procedures for
such transfer. Any participant in Euroclear or Clearstream, Luxembourg may make
book-entry delivery of Regulation S restricted notes by causing Euroclear or
Clearstream, Luxembourg to transfer such notes into the exchange agent's account
in accordance with established Euroclear or Clearstream, Luxembourg procedures
for transfer. The exchange for tendered restricted notes will only be made after
a timely confirmation of a book-entry transfer of the restricted notes into the
exchange agent's account, and timely receipt by the exchange agent of an Agent's
Message.
The term "Agent's Message" means a message, transmitted by Euroclear,
Clearstream, Luxembourg or DTC, as the case may be, and received by the exchange
agent and forming part of the confirmation of a book-entry transfer, which
states that Euroclear, Clearstream, Luxembourg or DTC, as the case may be, has
received an express acknowledgment from a participant tendering restricted notes
and that such participant has received an appropriate Letter of Transmittal and
agrees to be bound by the terms of the Letter of Transmittal, and Clear Channel
may enforce such agreement against the participant. Delivery of an Agent's
Message will also constitute an acknowledgment from the tendering Euroclear,
Clearstream, Luxembourg or DTC participant, as the case may be, that the
representations contained in the appropriate Letter of Transmittal and described
on page 20 above are true and correct.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their restricted notes and:
- whose restricted notes are not immediately available,
- who cannot deliver their restricted notes, the Letter of Transmittal or
any other required documents to the exchange agent prior to the
expiration of the exchange offer, or
- who cannot complete the procedure for book-entry transfer on a timely
basis, may effect a tender if:
1. the tender is made through an Eligible Institution;
2. prior to the expiration of the exchange offer the exchange agent
receives from such Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery by facsimile transmittal, mail or
hand delivery; and
3. certificate(s) representing all tendered restricted notes in proper
form for transfer, together with a properly completed and executed Letter
of Transmittal, or a facsimile thereof and all other documents required by
the Letter of Transmittal, or confirmation of a book-entry transfer into
the exchange agent's account at Euroclear, Clearstream, Luxembourg or DTC,
as the case may be, of restricted notes delivered electronically, are
received by the exchange agent within three business days after the
expiration of the exchange offer.
A Notice of Guaranteed Delivery must state:
- the name and address of the holder;
- if the restricted notes will be tendered by their registered holder, the
certificate number or numbers of such restricted notes;
- the principal amount of such restricted notes tendered;
- that the tender is being made thereby; and
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- that the holder guarantees that, within three business days after the
expiration of the exchange offer, a Letter of Transmittal or facsimile
thereof, together with the certificate(s) representing the restricted
notes to be tendered in proper form for transfer and any other documents
required by the Letter of Transmittal, or confirmation of a book-entry
transfer into the exchange agent's account at Euroclear, Clearstream,
Luxembourg or DTC, as the case may be, of restricted notes delivered
electronically, will be deposited by the Eligible Institution with the
exchange agent.
Forms of the Notice of Guaranteed Delivery will be available from the
exchange agent upon request.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of restricted notes may be
withdrawn at any time prior to the expiration of the exchange offer by delivery
of a written or facsimile transmission notice of withdrawal to the exchange
agent at its address set forth in this document.
Any such notice of withdrawal must:
- specify the name of the person having deposited the restricted notes to
be withdrawn;
- identify the restricted notes to be withdrawn, including the certificate
number or number and principal amount of such restricted notes or, in the
case of restricted notes transferred by book-entry transfer, the name and
number of the account at Euroclear, Clearstream, Luxembourg or DTC, as
the case may be, to be credited;
- be signed by the depositor of the restricted notes in the same manner as
the original signature on the Letter of Transmittal by which such
restricted notes were tendered, including any required signature
guarantee, or be accompanied by documents of transfer sufficient to
permit the registrar to register the transfer of such restricted notes
into the name of the party withdrawing the tender or, in the case of
restricted notes transferred by book-entry transfer, be transmitted by
Euroclear, Clearstream, Luxembourg or DTC, as the case may be, and
received by the exchange agent in the same manner as the Agent's Message
transferring the notes; and
- specify the name in which any such restricted notes are to be registered,
if different from that of the depositor of the restricted notes.
All questions as to the validity, form and eligibility of such withdrawal
notices will be determined by Clear Channel, whose determination shall be final
and binding on all parties. Any restricted notes so withdrawn will be deemed not
to have been validly tendered for purposes of the exchange offer, and no
exchange notes will be issued with respect thereto unless the restricted notes
so withdrawn are validly retendered. Any restricted notes that have been
tendered but are not accepted for exchange will be returned to the holder
thereof without cost to such holder as soon as practicable after withdrawal,
rejection of tender or termination of the exchange offer. Properly withdrawn
restricted notes may be retendered by following one of the procedures described
above under "Procedures for Tendering" at any time prior to the expiration of
the exchange offer.
CONDITIONS TO THE EXCHANGE OFFER
Clear Channel will not be required to accept for exchange, or to exchange
notes for, any restricted notes, and may terminate or amend the exchange offer
before the acceptance of such restricted notes if, in Clear Channel's judgment,
any of the following conditions has occurred:
- the exchange offer, or the making of any exchange by a holder of
restricted notes, violates applicable law or the applicable
interpretations of the SEC staff;
- any action or proceeding shall have been instituted or threatened in any
court or by or before any governmental agency or body with respect to the
exchange offer; or
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- there has been adopted or enacted any law, statute, rule or regulation
that can reasonably be expected to impair the ability of Clear Channel to
proceed with the exchange offer.
See "Expiration Date; Extensions; Amendments" above for a discussion of
possible Clear Channel actions if any of the foregoing conditions occur.
The foregoing conditions are for the sole benefit of Clear Channel. They
may be asserted by Clear Channel regardless of the circumstances giving rise to
any such condition or may be waived by Clear Channel in whole or in part at any
time and from time to time in its sole discretion. The failure by Clear Channel
at any time to exercise any of the foregoing rights will not be deemed a waiver
of any such right, and each such right will be deemed an ongoing right which may
be asserted at any time and from time to time.
EXCHANGE AGENT
The Bank of New York has been appointed as exchange agent for the exchange
offer. Requests for assistance and requests for additional copies of this
document or of the Letter of Transmittal should be directed to the exchange
agent addressed as follows:
<TABLE>
<S> <C>
By Registered Mail or Overnight Carrier By Hand Delivery
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Ground Level
New York, New York 10286
Attention:
</TABLE>
Facsimile Transmission:
(212) 815-6339
Information or Confirmation by Telephone:
(212) 815-6331
SOLICITATION OF TENDERS; FEES AND EXPENSES
The principal solicitation pursuant to the exchange offer is being made by
Clear Channel by mail and through the facilities of DTC, Euroclear and
Clearstream, Luxembourg. Additional solicitations may be made by officers and
regular employees of Clear Channel and its affiliates in person or by telegraph,
telephone, facsimile transmission, electronic communication or similar methods.
Clear Channel has not retained any dealer-manager in connection with the
exchange offer and will not make any payments to brokers, dealers or other
persons soliciting acceptances of the exchange offer. Clear Channel will,
however, pay the exchange agent reasonable and customary fees for its services
and will reimburse the exchange agent for its reasonable out-of-pocket costs and
expenses incurred in connection with the exchange offer and will indemnify the
exchange agent for all losses and claims incurred by it as a result of the
exchange offer. Clear Channel may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this document, the Letter of
Transmittal and related documents to the beneficial owners of the restricted
notes and in handling or forwarding tenders for exchange.
Clear Channel will pay all expenses incurred in connection with the
exchange offer, including fees and expenses of the trustee, accounting and legal
fees, including the expense of one counsel for the holders of the restricted
notes, and printing costs.
Clear Channel will pay any transfer taxes applicable to the exchange of
restricted notes pursuant to the exchange offer. If, however, a transfer tax is
imposed for any reason other than the exchange of restricted notes pursuant to
the exchange offer, then the amount of any such transfer taxes, whether imposed
on the registered holder thereof or any other person, will be payable by the
tendering holder.
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ACCOUNTING TREATMENT
The exchange notes will be recorded at the same carrying value as the
restricted notes, as reflected in Clear Channel's accounting records on the date
of the exchange. Accordingly, no gain or loss for accounting purposes will be
recognized by Clear Channel as a result of the consummation of the exchange
offer. The expense of the exchange offer will be amortized by Clear Channel over
the term of the exchange notes.
CONSEQUENCES OF A FAILURE TO EXCHANGE RESTRICTED NOTES
Following consummation of the exchange offer, assuming Clear Channel has
accepted for exchange all validly tendered restricted notes, Clear Channel will
have fulfilled its exchange and registration obligations under the Registration
Rights Agreement. All untendered restricted notes outstanding after consummation
of the exchange offer will continue to be valid and enforceable debt obligations
of Clear Channel subject to the restrictions on transfer set forth in the
indenture governing the notes. Holders of Rule 144A restricted notes will only
be able to offer for sale, sell or otherwise transfer untendered Rule 144A notes
as follows:
- to Clear Channel, although Clear Channel has no obligation to purchase
untendered restricted notes except if they are called for redemption in
accordance with the provisions of the indenture governing the notes;
- pursuant to a registration statement that has been declared effective
under the Securities Act, although Clear Channel will have no obligation,
and does not intend, to file any such registration statement;
- for so long as the restricted notes are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person reasonably believed to be
a qualified institutional buyer, or QIB, within the meaning of Rule 144A,
that purchases for its own account or for the account of a QIB to whom
notice is given that the transfer is being made in reliance on the
exemption from the registration requirements of the Securities Act
provided by Rule 144A;
- pursuant to offers and sales that occur outside the United States to
non-U.S. persons in transactions complying with the provisions of
Regulation S under the Securities Act; or
- pursuant to any other available exemption from the registration
requirements of the Securities Act. To the extent that restricted notes
are tendered and accepted in the exchange offer, the liquidity of the
trading market for untendered restricted notes could be adversely
affected. See also "Clearing of the Notes".
ABSENCE OF A PUBLIC MARKET
Although holders of exchange notes who are not "affiliates" of Clear
Channel within the meaning of the Securities Act may resell or otherwise
transfer their exchange notes without compliance with the registration
requirements of the Securities Act, there is no existing market for the exchange
notes, and there can be no assurance as to the liquidity of any markets that may
develop for the exchange notes, the ability of holders of exchange notes to sell
their exchange notes or the prices at which holders would be able to sell their
exchange notes. Future trading prices of the exchange notes will depend on many
factors, including, among other things, prevailing interest rates, Clear
Channel's operating results and the market for similar securities.
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DESCRIPTION OF THE NOTES
GENERAL
The restricted notes were issued and the exchange notes will be issued as a
separate series of securities under an indenture, dated as of October 1, 1997,
as supplemented by supplemental indentures from time to time (collectively, the
"Indenture"), between us and The Bank of New York, as debt trustee. The term
"notes" refers to and includes the restricted and the exchange notes. The terms
of the restricted notes and the exchange notes are identical, except that the
exchange notes are not subject to restrictions on transfer. The Indenture is
subject to, and governed by, the United States Trust Indenture Act of 1939. The
Indenture contains:
- provisions limiting our ability to consolidate with or merge into any
other corporation or convey or transfer substantially all of our
properties and assets;
- limitations on Mortgages (defined below); and
- limitations on sale and leaseback transactions.
All capitalized terms used and not defined in this Description of the Notes
have the meaning specified in the Indenture. In this description, references to
"Clear Channel" mean only Clear Channel Communications, Inc. and not its
subsidiaries. The following description is subject to the detailed provisions of
the Indenture, a copy of which can be obtained upon request from us.
The notes were issued in an aggregate principal amount of E650,000,000. The
notes are direct, unsecured obligations and will have the same rank as all of
our other unsecured and unsubordinated debt. Because we are a holding company,
the notes will be effectively subordinated to all existing and future
liabilities, including indebtedness, of our subsidiaries. See "Holding Company
Structure."
The notes bear interest from July 7, 2000, at the rate of interest stated
on the cover page of this document. Interest on the notes is payable annually on
July 7, commencing July 7, 2001 and, with respect to payments in U.S. dollars,
to the person in whose name such notes are registered at the close of business
on the June 23 preceding such payment date. Interest on the notes that is
required to be calculated for a period of less than one year will be calculated
on the basis of the actual number of days elapsed divided by the actual number
of days in the period from and including the immediately preceding annual
interest payment to but excluding the next annual interest payment date. Unless
previously redeemed, repurchased or cancelled as provided below, the notes will
mature at par on July 7, 2005.
Payments in respect of the principal of, and premium, if any, and interest
on a global note registered in the name of DTC or its nominee or in the name of
the common depositary for Euroclear and Clearstream, Luxembourg are payable to
the depositaries in their capacities as the registered holder under the
Indenture.
The Indenture requires Clear Channel to make payments in respect of notes
(including principal, premium and interest) by wire transfer of immediately
available funds to accounts specified by the holders thereof or, if no such
account is specified, by mailing a check to each such holder's registered
address.
Except as described under "Covenants" below, the Indenture does not limit
other indebtedness or securities which may be incurred or issued by us or any of
our respective subsidiaries or contain financial or similar restrictions on us
or any of our respective subsidiaries.
The Indenture does not limit the aggregate principal amount of debt
securities which may be issued thereunder. As of the date of this offering
memorandum $3.2 billion of debt securities have been issued by us and are
outstanding under the Indenture.
Under New York's statute of limitations, any legal action upon the notes
must be commenced within six years after the payment thereof is due. Thereafter,
notes will become generally unenforceable.
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The notes are not subject to redemption prior to maturity unless certain
events occur involving United States taxation. If any of these special tax
events do occur, the notes will be redeemed at a redemption price of 100% of
their principal amount plus accrued and unpaid interest to the date of
redemption. See "-- Redemption for Tax Reasons."
The notes are issued in denominations of E1,000 and integral multiples of
E1,000.
We may, without the consent of the holders of notes, issue additional notes
having the same ranking and the same interest rate, maturity and other terms as
the applicable notes. No additional notes may be issued if an event of default
has occurred with respect to the applicable series of notes.
The debt trustee will act as paying agent, transfer agent, exchange agent
and registrar for the notes. We have appointed Banque Internationale a
Luxembourg S.A., as paying agent and transfer agent in Luxembourg with respect
to the notes in definitive form. As long as the notes are listed on the
Luxembourg Stock Exchange, we will maintain a paying and transfer agent in
Luxembourg, and any change in the Luxembourg paying agent and transfer agent
will be published in Luxembourg. See "-- Notices" below.
Payments in respect of the principal of, and premium, if any, and interest
on a global note registered in the name of DTC or its nominee or in the name of
the common depositary for Euroclear and Clearstream, Luxembourg will be payable
to the depositaries in their capacities as the registered holder under the
Indenture.
The currency of payment for the notes is the euro. A holder of notes
through DTC (other than participants in Euroclear or Clearstream, Luxembourg)
will receive all payments in U.S. dollars, unless that holder makes an election
as described in "Currency Conversions and Foreign Exchange Risks Affecting the
Notes." The amount payable in euro (the "euro conversion amount") shall be
converted by the registrar into U.S. dollars and paid by wire transfer of same
day funds to the registered holder of the restricted global note for payment
through DTC's settlement system to the relevant DTC Participants (defined
below). All costs of any such conversion shall be deducted from such payments.
Any such conversion shall be based on the registrar's bid quotation, at or prior
to 11:00 a.m. New York time, on the second New York Business Day (as used
herein, New York Business Day refers to any day which is not a Saturday or
Sunday or a day on which banking institutions are authorized or required by law
or regulation to be closed in The City of New York) preceding the relevant
payment date, for the purchase by the registrar of U.S. dollars with euro in an
amount equal to the euro conversion amount for settlement on such payment date.
If such bid quotation is not available, the registrar shall obtain a bid
quotation from a leading foreign exchange bank in The City of New York selected
by the registrar for such purpose after consultation with us. If no bid
quotation from a leading foreign exchange bank is available, payment of the euro
conversion amount will be in euro to the account or accounts specified by DTC to
the registrar. Until such account or accounts are so specified, the funds still
held by the registrar shall bear interest at the rate of interest quoted by the
registrar for deposits with it on an overnight basis to the extent that the
registrar is reasonably able to reinvest such funds.
If an annual interest payment date or the maturity date is not a Business
Day, the requisite payment shall be made on the next succeeding Business Day. No
additional interest will accrue as a result of such delay.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET) System is not operating.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
The Indenture prohibits Clear Channel's consolidation with or merger into
any other corporation or the transfer of our properties and assets to any
person, unless:
- the successor corporation is organized and existing under the laws of the
United States, any State thereof or the District of Columbia, and
expressly assumes by a supplemental indenture the
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punctual payment of the principal of, premium on and interest on, all the
outstanding debt securities and the performance of every covenant in the
applicable indenture to be performed or observed on its part;
- immediately after giving effect to the transaction, no event of default
has happened and is continuing; and
- Clear Channel shall have delivered to the applicable debt trustee an
officers' certificate and an opinion of counsel, each stating that the
consolidation, merger, conveyance or transfer and the supplemental
indenture comply with the foregoing provisions relating to the
transaction.
In case of any consolidation, merger, conveyance or transfer, the successor
corporation will succeed to and be substituted for us as obligor on the debt
securities, with the same effect as if we had been named in the Indenture.
Unless otherwise specified, other than the restrictions on Mortgages described
below, the Indenture and the notes do not contain any covenants or other
provisions designed to protect holders of notes in the event of a highly
leveraged transaction involving us or any Subsidiary (defined below).
EVENTS OF DEFAULT; WAIVER AND NOTICE OF DEFAULT; DEBT SECURITIES IN FOREIGN
CURRENCIES
An event of default when used in the Indenture will mean any of the
following as to the notes:
- default for 30 days in payment of any interest;
- default in payment of principal of or any premium at maturity;
- default in payment of any sinking or purchase fund or similar obligation;
- default by Clear Channel in the performance of any other covenant or
warranty contained in the Indenture for the benefit of that series which
has not been remedied for a period of 90 days after notice is given; or
- events of bankruptcy, insolvency and reorganization of Clear Channel.
A default under our other indebtedness will not be a default under the
Indenture and a default under one series of debt securities will not necessarily
be a default under another series.
The Indenture provides that if an event of default described in the first
four bullet points above (if the event of default under the fourth bullet point
is with respect to less than all series of debt securities then outstanding) has
occurred and is 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 the series then outstanding (each series acting as a
separate class) may declare the principal or, in the case of original issue
discount securities, the portion specified in the terms thereof, of all
outstanding debt securities of the series and the accrued interest to be due and
payable immediately. The Indenture further provides that if an event of default
described in the fourth or fifth bullet points above, if the event of default
under the fourth bullet point is with respect to all series of debt securities
then outstanding, has occurred and is 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 specified in the
terms thereof, of all debt securities then outstanding and the accrued interest
to be due and payable immediately. However, upon certain conditions the
declarations may be annulled and past defaults, except for defaults in the
payment of principal of, premium on, or interest on, the 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 the series then
outstanding.
Under the Indenture the applicable debt trustee must give notice to the
holders of the affected series of debt securities of all uncured defaults known
to it with respect to that series within 90 days after a default occurs. The
term "default" includes the events specified above without notice or grace
periods. However, in the case of any default of the type described in the fourth
bullet point above, no notice may be given until at least 90 days after the
occurrence of the event. The debt trustee will be protected in
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withholding notice if it in good faith determines that the withholding of notice
is in the interests of the holders of the debt securities, except in the case of
default in the payment of principal of, premium on, or interest on, any of the
debt securities, or default in the payment of any sinking or purchase fund
installment or analogous obligations.
No holder of any debt securities of any series may institute any action
under the Indenture unless:
- the holder has given the debt trustee written notice of a continuing
event of default with respect to that series;
- the holders of not less than 25% in aggregate principal amount of the
debt securities of the affected series then outstanding have requested
the debt trustee to institute proceedings in respect of the event of
default;
- the holder or holders have offered the debt trustee reasonable indemnity
as the debt trustee may require;
- the debt trustee has failed to institute an action for 60 days; and
- no inconsistent direction has been given to the debt trustee during the
60-day period by the holders of a majority in aggregate principal amount
of debt securities of the affected 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 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 the debt trustee with respect to a series of
debt securities. The Indenture provides that if an event of default occurs and
is continuing, the debt trustee will be required to use the degree of care of a
prudent person in the conduct of that person's own affairs in exercising its
rights and powers under the Indenture. The Indenture further provides that the
debt trustee will not be required to expend or risk its own funds in the
performance of any of its duties under the Indenture unless it has reasonable
grounds for believing that repayment of the funds or adequate indemnity against
the risk or liability is reasonably assured to it.
We must furnish to the debt trustee within 120 days after the end of each
fiscal year a statement signed by one of our officers to the effect that a
review of our activities during the year and of our performance under the
Indenture and the terms of the debt securities has been made, and, to the best
of the knowledge of the signatories based on the review, we have complied with
all conditions and covenants of the Indenture through the year or, if we are in
default, specifying the default.
To determine whether the holders of the requisite principal amount of debt
securities have taken action as described above when the debt securities are
denominated in a foreign currency, the principal amount of the debt securities
will be deemed to be that amount of U.S. dollars that could be obtained for the
principal amount based on the applicable spot rate of exchange as of the date
the action is taken as evidenced to the debt trustee as provided in the
Indenture.
To determine whether the holders of the requisite principal amount of debt
securities have taken action as described above when the debt securities are
original issue discount securities, the principal amount of the debt securities
will be deemed to be the portion of the principal amount that would be due and
payable at the time the action is taken upon a declaration of acceleration of
maturity.
MODIFICATION OF THE INDENTURE
The Indenture provides that we and the 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 our covenants;
- adding additional events of default;
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- establishing the form or terms of any series of debt securities; or
- curing ambiguities or inconsistencies in the Indenture or making other
provisions.
With specific exceptions, the Indenture or the rights of the holders of the
debt securities may be modified by us and the debt trustee with the consent of
the holders of a majority in aggregate principal amount of the debt securities
of each series affected by the modification then outstanding, but no
modification may be made without the consent of the holder of each outstanding
debt security affected which would:
- change the maturity of any payment of principal of, or any premium on, or
any installment of interest on any debt security;
- reduce the principal amount of or the interest or any premium on any debt
security;
- change the method of computing the amount of principal of or interest on
any date;
- change any place of payment where, or the currency in which, any debt
security or any premium or interest is payable;
- impair the right to sue for the enforcement of any 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;
- reduce the percentage in principal amount of the outstanding debt
securities of any series where the consent of the holders is required for
any modification, or the consent of the holders is required for any
waiver of compliance with provisions of the Indenture or specific
defaults and their consequences provided for in the Indenture; or
- modify any of the provisions of specific sections of the Indenture,
including the provisions summarized in this section, except to increase
any percentage or to provide that other provisions of the Indenture
cannot be modified or waived without the consent of the holder of each
outstanding debt security affected thereby.
COVENANTS
The Indenture contains the covenants summarized below, which will be
applicable, unless waived or amended, so long as any of the notes are
outstanding.
Limitation on Mortgages. Clear Channel will not, nor will we permit any
Restricted Subsidiary (defined below) to create, assume or incur
- any Mortgage on any stock or indebtedness of any Restricted Subsidiary to
secure any of Clear Channel's Debt (defined below) or any Debt of any
other person, other than the notes only issued under the Indenture; or
- any Mortgage on any Principal Property (defined below) to secure any Debt
of us or any other person, other than the notes only issued under the
Indenture,
without making provision for all the outstanding notes only issued under the
Indenture to be secured equally with the Debt.
Any Mortgage on stock or indebtedness of a corporation existing at the time
a corporation becomes a Subsidiary or at the time stock or indebtedness of a
Subsidiary is acquired, and, with specific exceptions, any extension, renewal or
replacement of any Mortgage, will generally be excluded from this restriction.
The following permitted mortgages will be excluded from the restriction
referred to in the preceding paragraph:
- any Mortgage on property owned or leased by a corporation existing at the
time the corporation becomes a Restricted Subsidiary;
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- any Mortgage on property existing at the time of its acquisition or to
secure payment of any part of the purchase price thereof or any Debt
incurred to finance the purchase thereof;
- any Mortgage on property to secure any part of the cost of development,
construction, alteration, repair or improvement of the property, or Debt
incurred to finance the cost;
- any Mortgage securing Debt of a Restricted Subsidiary owing to us or to
another Restricted Subsidiary;
- any Mortgage existing on the date of the Indenture;
- any Mortgage on our property or property of 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 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 the Mortgage;
- any Mortgage on any property subsequently acquired by Clear Channel or
any Restricted Subsidiary, concurrently with the acquisition or within
120 days, to secure or provide for the payment of any part of the
purchase price of the property, or any Mortgage assumed by Clear Channel
or any Restricted Subsidiary on any property subsequently acquired by
Clear Channel or any Restricted Subsidiary which was existing at the time
of the acquisition, provided that the amount of any Indebtedness secured
by any Mortgage created or assumed does not exceed the cost to Clear
Channel or any Restricted Subsidiary of the property covered by the
Mortgage; and
- any extension, renewal or replacement of any Mortgage referred to in the
previous seven bullet points, provided that the principal amount of Debt
secured thereby may not exceed the principal amount of Debt so secured at
the time of the extension, renewal or replacement, and provided that the
Mortgage must be limited to all or part of the property which secured the
Mortgage so extended, renewed or replaced.
Notwithstanding the above, we may, and may permit any Restricted Subsidiary
to, create, assume or incur any Mortgage on any Principal Property without
equally securing the notes if the aggregate amount of all Debt then outstanding
secured by the Mortgage and all similar Mortgages does not exceed 15% of our
total consolidated shareholders' equity, including preferred stock, as shown on
the audited consolidated balance sheet contained in our latest annual report to
shareholders. However, Debt secured by permitted mortgages will not be included
in the amount of the secured Debt.
Sale and Leaseback Transactions. Clear Channel will not, nor will we
permit any Restricted Subsidiary to, enter into any sale-leaseback transaction
providing for the leasing by Clear Channel or a Restricted Subsidiary of any
Principal Property, except for temporary leases for a term of not more than
three years, which has been or is to be sold or transferred by us or the
Restricted Subsidiary to such person, unless:
- the sale-leaseback transaction occurs within the later of 120 days from
the date of acquisition of the Principal Property or the date of the
completion of construction or commencement of full operations on the
Principal Property, or
- within 120 days after the sale-leaseback transaction, Clear Channel
applies or causes to be applied to the retirement of our Funded Debt or
the Funded Debt of any Subsidiary, other than our Funded Debt which is
subordinate in right of payment to the notes, an amount not less than the
net proceeds of the sale of the Principal Property.
Notwithstanding the above provisions, Clear Channel may, and may permit any
Restricted Subsidiary to, effect any sale-leaseback transaction involving any
Principal Property, provided that the net sale proceeds from the sale-leaseback
transaction, together with all Debt secured by Mortgages other than permitted
mortgages, does not exceed 15% of our total consolidated shareholders' equity as
shown on the audited consolidated balance sheet contained in our latest annual
report to shareholders.
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Definitions
For the purposes of the description of the notes:
"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 the person, and all
indebtedness incurred or assumed by the person in connection with the
acquisition of any business, property or asset, which in each case matures more
than one year after, or which 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 the person for a
period ending more than one year after the date as of which Funded Debt is being
determined. However, Funded Debt does not include:
- any indebtedness for the payment, redemption or satisfaction of which
money, or evidences of indebtedness, if permitted under the instrument
creating or evidencing the indebtedness, in the necessary amount has been
irrevocably deposited in trust with a trustee or proper depository either
on or before the maturity or redemption date thereof;
- any indebtedness of the person to any of its Subsidiaries or of any
Subsidiary to the person or any other Subsidiary; or
- any indebtedness incurred in connection with the financing of operating,
construction or acquisition projects, provided that the recourse for the
indebtedness is limited to the assets of the projects.
"Mortgage" means any mortgage, pledge, lien, encumbrance, charge or
security interest of any kind.
"Principal Property" means any radio broadcasting, television broadcasting,
outdoor advertising property or live entertainment property located in the
United States owned or leased by us or any of our subsidiaries, unless, in the
opinion of our Board of Directors, any of the properties are not in the
aggregate of material importance to the total business conducted by us and our
Subsidiaries as an entirety.
"Restricted Subsidiary" means each Subsidiary as of the date of the
Indenture and each Subsidiary created or acquired after the date of the
Indenture, unless expressly excluded by resolution of our Board of Directors
before, or within 120 days following, the creation or acquisition.
"Subsidiary", when used with respect to Clear Channel, means any
corporation of which a majority of the outstanding voting stock is owned,
directly or indirectly, by Clear Channel or by one or more other Subsidiaries,
or both.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture will generally cease to be of any further effect with respect
to a series of debt securities if we deliver all debt securities of that series,
with limited exceptions, for cancellation to the applicable debt trustee or all
debt securities of that series not previously delivered for cancellation to the
applicable debt trustee have become due and payable or will become due and
payable or called for redemption within one year, and we have deposited with the
applicable debt trustee as trust funds the entire amount sufficient to pay at
maturity or upon redemption all the debt securities, no default with respect to
the debt securities has occurred and is continuing on the date of the deposit,
and the deposit does not result in a breach or violation of, or default under,
the Indenture or any other agreement or instrument to which we are a party.
Clear Channel has a "legal defeasance option" under which Clear Channel may
terminate, with respect to the debt securities of a particular series, all of
Clear Channel's obligations under the debt securities and the Indenture. In
addition, Clear Channel has a "covenant defeasance option" under which Clear
Channel may terminate, with respect to the debt securities of a particular
series, Clear Channel's obligations with respect to the debt securities under
specified covenants contained in the Indenture. If Clear Channel exercises its
legal defeasance option with respect to a series of debt securities, payment of
the debt securities may not be accelerated because of an event of default. If
Clear Channel exercises its
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covenant defeasance option with respect to a series of debt securities, payment
of the debt securities may not be accelerated because of an event of default
related to the specified covenants.
Clear Channel may exercise its legal defeasance option or its covenant
defeasance option with respect to the debt securities of a series only if:
- Clear Channel deposits in trust with the debt trustee cash or debt
obligations of the United States of America or our agencies or
instrumentalities for the payment of principal, premium and interest with
respect to the debt securities to maturity or redemption;
- Clear Channel delivers to the 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 will
provide cash sufficient to pay the principal, premium, and interest when
due with respect to all the debt securities of that series to maturity or
redemption;
- 91 days pass after the deposit is made and during the 91-day period no
default described in the fifth bullet point under "-- Events of Default,
Waiver and Notice Of Default; Debt Securities in Foreign Currencies"
above with respect to Clear Channel occurs that is continuing at the end
of the period;
- no default has occurred and is continuing on the date of the deposit;
- the deposit does not constitute a default under any other agreement
binding on us;
- Clear Channel delivers to the debt trustee an opinion of counsel to the
effect that the trust resulting from the deposit does not constitute a
regulated investment company under the Investment Company Act of 1940;
- Clear Channel has delivered to the debt trustee an opinion of counsel
addressing specific federal income tax matters relating to the
defeasance; and
- Clear Channel delivers to the debt trustee an officers' certificate and
an opinion of counsel stating that all conditions to the defeasance and
discharge of the debt securities of that series have been complied with.
The debt trustee will hold in trust cash or debt obligations of the United
States of America or its agencies or instrumentalities deposited with it as
described above and will apply the deposited cash and the proceeds from
deposited debt obligations of the United States of America or its agencies or
instrumentalities to the payment of principal, premium, and interest with
respect to the debt securities of the defeased series.
NOTICES
Notices to holders of the notes will be sent by mail to the registered
holders and will be published, whether the notes are in global or definitive
form, and so long as the notes are listed on the Luxembourg Stock Exchange, in a
daily newspaper of general circulation in Luxembourg. It is expected that
publication will be made in Luxembourg in the LUXEMBURGER WORT. Any such notice
shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication. So long as
the notes are listed on the Luxembourg Stock Exchange, any appointment of or
change in the Luxembourg paying agent and transfer agent will be published in
Luxembourg in the manner set forth above.
REPLACEMENT NOTES
In case of mutilation, destruction, loss or theft of any definitive note,
application for replacement is to be made at the office of the debt trustee. Any
such definitive note will be replaced by the debt trustee in compliance with
such procedures, and on such terms as to evidence any indemnity, as Clear
Channel and the debt trustee may require and subject to applicable laws and
regulations of the Luxembourg Stock Exchange. All costs incurred in connection
with the replacement of any definitive note will be borne by
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the holder of the note. Mutilated or defaced definitive notes must be
surrendered before new ones will be issued.
FOREIGN CURRENCY JUDGMENTS; GOVERNING LAW
The notes are governed by and construed in accordance with the internal
laws of the State of New York. Courts in the United States customarily have not
rendered judgments for money damages denominated in any currency other than the
U.S. dollar.
PAYMENTS OF ADDITIONAL AMOUNTS
Clear Channel will, subject to the exceptions and limitations set forth
below, pay as additional interest on the notes such additional amounts as are
necessary in order that the net payment by Clear Channel or a paying agent of
the principal of and interest on the notes to a holder who is not a United
States person (as defined below), after deduction for any present or future tax,
assessment or other governmental charge of the United States or a political
subdivision or taxing authority of or in the United States, imposed by
withholding with respect to the payment, will not be less than the amount
provided in the notes to be then due and payable; provided, however, that the
foregoing obligation to pay additional amounts shall not apply:
(1) to any tax, assessment or other governmental charge that is
imposed or withheld solely by reason of the holder, or a fiduciary,
settlor, beneficiary, member or shareholder of the holder if the holder is
an estate, trust, partnership or corporation, or a person holding a power
over an estate or trust administered by a fiduciary holder, being
considered as:
(a) being or having been present or engaged in a trade or business
in the United States or having had a permanent establishment in the
United States;
(b) having a current or former relationship with the United States,
including a relationship as a citizen or resident of the United States;
(c) being or having been a foreign or domestic personal holding
company, a passive foreign investment company or a controlled foreign
corporation with respect to the United States or a corporation that has
accumulated earnings to avoid United States federal income tax;
(d) being or having been a "10-percent shareholder" of us as
defined in section 871(h)(3) of the United States Internal Revenue Code
or any successor provision; or
(e) being a bank receiving payments on an extension of credit made
pursuant to a loan agreement entered into the ordinary course of its
trade or business;
(2) to any holder that is not the sole beneficial owner of the notes,
or a portion of the notes, or that is a fiduciary or partnership, but only
to the extent that a beneficiary or settlor with respect to the fiduciary,
a beneficial owner or member of the partnership would not have been
entitled to the payment of an additional amount had the beneficiary,
settlor, beneficial owner or member received directly its beneficial or
distributive share of the payment;
(3) to any tax, assessment or other governmental charge that is
imposed otherwise or withheld solely by reason of a failure of the holder
or any other person to comply with certification, identification or
information reporting requirements concerning the nationality, residence,
identity or connection with the United States of the holder or beneficial
owner of the notes, if compliance is required by statute, by regulation of
the United States Treasury Department or by an applicable income tax treaty
to which the United States is a party as a precondition to exemption from
such tax, assessment or other governmental charge;
(4) to any tax, assessment or other governmental charge that is
imposed otherwise than by withholding by us or a paying agent from the
payment;
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(5) to any tax, assessment or other governmental charge that is
imposed or withheld solely by reason of a change in law, regulation, or
administrative or judicial interpretation that becomes effective more than
15 days after the payment becomes due or is duly provided for, whichever
occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth
or personal property tax or similar tax, assessment or other governmental
charge;
(7) to any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest
on any notes, if such payment can be made without such withholding by any
other paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5),
(6) and (7).
The notes are subject in all cases to any tax, fiscal or other law or
regulation or administrative or judicial interpretation applicable to the notes.
Except as specifically provided under this heading "-- Payments of Additional
Amounts" and under the heading "-- Redemption for Tax Reasons," Clear Channel
will not be required to make any payment with respect to any tax, assessment or
other governmental charge imposed by any government or a political subdivision
or taxing authority of or in any government or political subdivision.
As used under this heading "-- Payments of Additional Amounts" and under
the heading "-- Redemption for Tax Reasons", the term "United States" means the
United States of America (including the states and the District of Columbia) and
its territories, possessions and other areas subject to its jurisdiction,
"United States person" means any individual who is a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States, any state of the United States or the
District of Columbia (other than a partnership that is not treated as a United
States person under any applicable Treasury regulations), or any estate or trust
the income of which is subject to United States federal income taxation
regardless of its source.
REDEMPTION FOR TAX REASONS
If, as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated under the laws) of the United States (or any
political subdivision or taxing authority of or in the United States), or any
change in, or amendments to, an official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
is announced or becomes effective on or after the date of this offering
memorandum, Clear Channel becomes or, based upon a written opinion of
independent counsel selected by Clear Channel, will become obligated to pay
additional amounts as described herein under the heading "-- Payments of
Additional Amounts" with respect to the notes, then we may at our option redeem,
in whole, but not in part, the notes on not less than 30 nor more than 60 days
prior notice, at a redemption price equal to 100% of their principal amount,
together with interest accrued but unpaid on those notes to the date fixed for
redemption.
BOOK-ENTRY, DELIVERY AND FORM
The notes are issued in registered, global form in minimum denominations of
E1,000 and integral multiples of E1,000.
Rule 144A and Regulation S Notes
Rule 144A notes will be initially represented by a global note, in
definitive, fully registered form without interest coupons (the "restricted
global note") and will be deposited with a custodian for, and registered in the
name of, a nominee of DTC. The restricted global note (and any notes issued in
exchange therefor), including beneficial interests in the restricted global
note, will be subject to certain restrictions on transfer set forth therein and
in the Indenture and will bear the legend regarding such restrictions set forth
under "Notice to Investors" elsewhere herein.
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Regulation S notes will be represented by a global note, in fully
registered form without interest coupons (the "Regulation S global note")
registered in the name of a nominee of Euroclear or Clearstream, Luxembourg or
both and deposited with the common depositary, for credit to the securities
accounts on the books of the depositories of Euroclear and Clearstream,
Luxembourg.
Until the 40th day after the latest of the commencement of the offering and
the original issue date of the notes (such period, the "Restricted Period"),
beneficial interests in the Regulation S global note may be held only through
Euroclear or Clearstream, Luxembourg, unless delivery is made through the
restricted global note in accordance with the certification requirements
described below.
Beneficial interests in the global notes may not be exchanged for notes in
certificated form except in the limited circumstances described below. See
"-- Exchanges of Book-Entry Notes for Certificated Notes". In addition,
beneficial interests in the restricted global note may not be exchanged for
beneficial interests in the Regulation S global note or vice versa except in
accordance with the transfer and certification requirements described below
under "-- Exchanges Between the Restricted Global Note and the Regulation S
Global Note."
Exchanges Between the Restricted Global Note and the Regulation S Global Note
Beneficial interests in the restricted global note may be exchanged for
beneficial interests in the Regulation S global note and vice versa only in
connection with a transfer of such interest. Such transfers are subject to
compliance with the certification requirements described below.
Prior to the expiration of the Restricted Period, a beneficial interest in
the Regulation S global note may be transferred to a person who takes delivery
in the form of an interest in the restricted global note only upon receipt by
the debt trustee of a written certification from the transferor, in the form
provided in the Indenture, to the effect that the transfer is being made to a
person who the transferor reasonably believes is purchasing for its own account
or accounts as to which it exercises sole investment discretion and that such
person and each such account is a qualified institutional buyer, in each case in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
Beneficial interests in the restricted global note may be transferred to a
person who takes delivery in the form of an interest in the Regulation S global
note, only upon receipt by the trustee of a written certification from the
transferor, in the form provided in the Indenture, to the effect that the
transfer is being made in accordance with Rule 903 or 904 of Regulation S, or,
if available, Rule 144, and that, if the transfer occurs prior to the expiration
of the Restricted Period, the interest transferred will be held immediately
thereafter through Euroclear or Clearstream, Luxembourg.
Any beneficial interest in one of the global notes that is transferred to a
person who takes delivery in the form of an interest in the other global note
will, upon transfer, cease to be an interest in the original global note and
will become an interest in the other global note and, accordingly, will
thereafter be subject to all transfer restrictions and other procedures
applicable to beneficial interests in the other global note for as long as it
remains such an interest. In addition, transfers of beneficial interests in the
global notes will be subject to the applicable rules and procedures of
Euroclear, Clearstream, Luxembourg, and DTC which may change from time to time.
Transfers of interests in the notes will be recorded in accordance with the
book-entry system maintained by either the DTC, pursuant to customary procedures
established by DTC and its participants, or Euroclear or Clearstream, Luxembourg
and their participants.
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Exchanges of Book-Entry Notes for Certificated Notes
A beneficial interest in a global note may not be exchanged for a note in
certificated form unless:
- Euroclear, Clearstream, Luxembourg or DTC are unwilling or unable to
continue as depositary for the global note and we fail to appoint a
successor depositary, or Euroclear, Clearstream, Luxembourg, or DTC, as
the case may be,
-- is closed for business for a continuous period of 14 days (other than
by reasons of statutory or other holidays) or
-- announces an intention permanently to cease business or does in fact
do so;
- Clear Channel at its option, notifies the debt trustee in writing that
Clear Channel elects to cause the issuance of the certificated notes; or
- there shall have occurred and be continuing an event of default with
respect to the notes.
In addition, beneficial interests in the global notes may be exchanged for
certificated notes upon request by or on behalf of Euroclear, Clearstream,
Luxembourg or DTC in accordance with the Indenture but only upon prior written
notice given to the debt trustee. In all cases, certificated notes delivered in
exchange for the global notes or beneficial interests in the global notes will
be registered in the names, and issued in any approved denominations, requested
by or on behalf of Euroclear, Clearstream, Luxembourg or DTC (in accordance with
their customary procedures) and will bear the applicable restricted legend,
unless we determine otherwise in compliance with applicable law. Any such
exchange will be effected through the facilities of DTC in the case of
restricted global notes or Euroclear or Clearstream, Luxembourg in the case of
Regulation S notes and an appropriate adjustment will be made in the records of
the registrar to reflect a decrease in the principal amount of the relevant
global note. The notes may not be issued in bearer form.
If individual certificates are issued, an owner of a beneficial interest in
the global notes will be entitled to physical delivery in definitive form of
notes represented by the global notes equal in principal amount to its
beneficial interest and to have those notes registered in its name. Notes issued
in definitive form will be issued as registered notes in denominations of E1,000
and integral multiples of E1,000. You may transfer the definitive notes by
presenting them for registration to the registrar at its New York office or to
the Luxembourg paying and transfer agent, at its office. Notes presented for
registration must be duly endorsed by you or your attorney duly authorized in
writing, or accompanied by a written instrument or instruments of transfer in
form satisfactory to Clear Channel or the debt trustee duly executed by you or
your attorney duly authorized in writing. Clear Channel may require you to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any exchange or registration of transfer of definitive notes.
In the case of a transfer of part of a holding of notes represented by one
certificate, a new certificate shall be issued to the transferee in respect of
the part transferred and a further new certificate in respect of the balance of
the holding not transferred shall be issued to the transferor. Any new
certificates shall be obtained at the specified office of the registrar or the
Luxembourg paying and transfer agent within three business days of receipt by
the registrar or Luxembourg paying and transfer agent. For the purposes of this
paragraph, "business day" means a day, other than a Saturday or Sunday, on which
banks are open for business in the place of the specified office of the
registrar or the Luxembourg paying and transfer agent.
If we issue definitive notes, we will do so at the office of The Bank of
New York, the paying agent and registrar for the notes, including any successor
paying agent and registrar for the notes, currently located at 101 Barclay
Street, New York, New York 10286.
We may pay interest on definitive notes, other than interest at maturity or
upon redemption, by mailing a check to the address of the person entitled to the
interest as it appears on the security register at the close of business on the
record date corresponding to the relevant interest payment date.
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Notwithstanding the foregoing, DTC, as holder of the notes, may require the
paying agent to make payments of interest, other than interest due at maturity
or upon redemption, by wire transfer of immediately available funds into an
account maintained by DTC in the United States, by sending appropriate wire
transfer instructions. The paying agent must receive these instructions not less
than ten days prior to the applicable interest payment date.
The paying agent or the Luxembourg paying and transfer agent, as the case
may be, will pay the principal and interest payable at maturity or upon
redemption by wire transfer of immediately available funds against presentation
of a note at the office of the paying agent or the Luxembourg paying and
transfer agent.
Title to book-entry interests in the notes will pass by book-entry
registration of the transfer within the records of Euroclear, Clearstream,
Luxembourg or DTC, as the case may be, in accordance with their respective
procedures. Book-entry interests in the notes may be transferred within
Euroclear and within Clearstream, Luxembourg and between Euroclear and
Clearstream, Luxembourg in accordance with procedures established for these
purposes by Euroclear and Clearstream, Luxembourg. Book-entry interests in the
notes may be transferred within DTC in accordance with procedures established
for this purpose by DTC. Transfers of book-entry interests in the notes between
Euroclear and Clearstream, Luxembourg and DTC may be effected in accordance with
procedures established for this purpose by Euroclear, Clearstream, Luxembourg
and DTC.
Depositary Procedures
The following description of the operations and procedures of Euroclear,
Clearstream, Luxembourg and DTC is provided solely as a matter of convenience.
These operations and procedures are solely within the control of the respective
settlement systems and are subject to changes by them from time to time. We take
no responsibility for these operations and procedures and urge investors to
contact the system or their participants directly to discuss these matters.
Euroclear and Clearstream, Luxembourg
Euroclear and Clearstream, Luxembourg each holds securities for their
account holders and facilitates the clearance and settlement of securities
transactions by electronic book entry transfer between the respective account
holders, thereby eliminating the need for physical movements of certificates and
any risk from lack of simultaneous transfers of securities.
Euroclear and Clearstream, Luxembourg each provides various services
including safekeeping, administration, clearance and settlement of
internationally traded securities, and securities lending and borrowing.
Euroclear and Clearstream, Luxembourg also deal with domestic securities markets
in several countries through established depositary and custodial relationships.
Euroclear and Clearstream, Luxembourg have established an electronic bridge
between their two systems across which account holders may settle trades with
each other.
Account holders in Euroclear and Clearstream, Luxembourg are worldwide
financial institutions including underwriters, securities brokers and dealers,
banks, trust companies and clearing corporations. Indirect access to Euroclear
and Clearstream, Luxembourg is available to other institutions that clear
through or maintain a custodial relationship with an account holder of either
system.
Account holders' overall contractual relations with Euroclear and
Clearstream, Luxembourg are governed by the rules and operating procedures of
Euroclear and Clearstream, Luxembourg and any applicable laws. Euroclear and
Clearstream, Luxembourg act under these rules and operating procedures only on
behalf of their account holders, and have no record of or relationship with
persons holding through their account holders.
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DTC
DTC has advised us that DTC is a limited-purpose trust company created to
hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's system is also available to other entities such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
(collectively, the "Indirect Participants"). Persons who are not Participants
may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interests in, and
transfers of ownership interests in, each security held by or on behalf of DTC
are recorded on the records of the Participants and Indirect Participants.
DTC has also advised us that, pursuant to procedures established by it:
- upon deposit of the restricted global note, DTC will credit the accounts
of Participants designated by the Managers with portions of the principal
amount of the restricted global note; and
- ownership of such interest will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by
DTC, with respect to the Participants, or by the Participants and the
Indirect Participants, with respect to other owners of beneficial
interest in the restricted global note.
Investors may hold their interests in the restricted global note directly
through DTC, if they are Participants, or indirectly through organizations,
including Euroclear and Clearstream, Luxembourg, which are Participants.
General
We understand that, under existing industry practices, if either we or the
debt trustee requests any action of owners of book-entry interests or if an
owner of a book-entry interest desires to give or take any action that a holder
is entitled to give or take under the Indenture, the depositories would
authorize their participants owning the relevant book-entry interests to give or
take the action, and the participants would authorize indirect participants to
give or take the action or would otherwise act upon the instructions of the
indirect participants.
Although Euroclear, Clearstream, Luxembourg and DTC have agreed to certain
procedures to facilitate transfers of interests in the global notes among their
account holders, they are under no obligation to perform or to continue to
perform those procedures, and the procedures may be discontinued at any time.
Neither we, nor the debt trustee, nor any agent of any of them will have any
responsibility for the nonperformance or misperformance (as a result of
insolvency, mistake, misconduct or otherwise) by Euroclear, Clearstream,
Luxembourg or DTC or their respective account holders or intermediaries of their
obligations under the rules and procedures governing their operations.
Except as described in this offering memorandum and the Indenture, owners
of interests in the global notes will not have notes registered in their names,
will not receive physical delivery of notes in certificated form and will not be
considered the registered owners or holders of the notes. So long as a nominee
for DTC or Euroclear and Clearstream, Luxembourg or any of them is the
registered holder of the global notes, such registered holder will be considered
the sole owner or holder of the notes represented by such global notes for all
purposes under the Indenture and the notes. Accordingly, each person owning a
beneficial interest in the global notes must rely on the procedures of
Euroclear, Clearstream, Luxembourg, or DTC, as the case may be, and their
account holders to exercise any rights and remedies of a holder of notes under
the Indenture. Payments of principal and interest on the global notes will be
made to the
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nominee of DTC or the common depositary on behalf of Euroclear or Clearstream,
Luxembourg, as the case may be, as the registered owners of the global notes.
The laws of some jurisdictions require that certain persons take physical
delivery in definitive form of securities which they own. Accordingly, the
ability to transfer beneficial interests in the global notes to those persons
may be limited to that extent. Because DTC, Euroclear and Clearstream,
Luxembourg can act only on behalf of their respective account holders, the
ability of a person having beneficial interests in the global notes to pledge
those interests to persons or entities that do not participate in the relevant
clearing system, or otherwise take actions in respect of those interests, may be
affected by the lack of a physical certificate evidencing those interests.
PAYING AGENTS, TRANSFER AGENT, REGISTRAR AND EXCHANGE AGENT
Clear Channel has initially appointed the debt trustee at its corporate
trust office as a paying agent, transfer agent, registrar and exchange agent for
the notes. In these capacities, the debt trustee will be responsible for, among
other things, (1) maintaining a record of the aggregate holdings of notes
represented by the Regulation S global note and the restricted global notes and
accepting notes for exchange and registration of transfer, (2) ensuring that
payments of principal and premium, if any, and interest in respect of the notes
received by the debt trustee from Clear Channel are duly paid to DTC, Euroclear
or Clearstream, Luxembourg or their nominees, and (3) transmitting to us any
notices from the noteholders. The Company has also appointed Banque
Internationale a Luxembourg S.A. to serve as a paying agent and transfer agent
in Luxembourg.
We will cause to be kept at the office of each transfer agent a register in
which, subject to such reasonable regulations as we may prescribe, Clear Channel
will provide for the registration of the notes and registration of transfers of
the notes. Clear Channel may vary or terminate the appointment of any paying
agent or transfer agent, or appoint additional or other such agents or approve
any change in the office through which any such agent acts, provided that there
shall at all times be a paying agent and a transfer agent in the Borough of
Manhattan, The City of New York, New York and, as long as the notes are listed
on the Luxembourg Stock Exchange, in Luxembourg. Clear Channel will provide
notice of any resignation, termination or appointment of the debt trustee or the
registrar or any paying agent or transfer agent, and of any change in the office
through which any such agent will act. So long as the notes are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require, notice of a change of paying agent or transfer agent or registrar will
be published in a newspaper of general circulation in Luxembourg.
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UNITED STATES TAXATION
GENERAL
This section summarizes the material U.S. tax consequences to holders of
notes. It represents the views of our tax counsel, Akin, Gump, Strauss, Hauer &
Feld L.L.P. However, the discussion is limited in the following ways:
- The discussion only covers you if you buy your notes in the initial
offering at the initial offering price to the public.
- The discussion only covers you if your functional currency is the U.S.
dollar and you hold your notes as a capital asset (that is, for
investment purposes), and if you do not have a special tax status.
- The discussion does not cover tax consequences that depend upon your
particular tax situation in addition to your ownership of notes. We
suggest that you consult your tax advisor about the consequences of
holding notes in your particular situation.
- The discussion is based on current law. Changes in the law may change the
tax treatment of the notes.
- The discussion does not cover state, local or foreign law.
- The discussion does not apply to you if you are a Non-U.S. Holder of
notes (as defined below) and if you (a) own 10% or more of the voting
stock of Clear Channel, (b) are a "controlled foreign corporation" with
respect to Clear Channel, or (c) are a bank making a loan in the ordinary
course of its business.
- We have not requested a ruling from the IRS on the tax consequences of
owning the notes. As a result, the IRS could disagree with portions of
this discussion.
IF YOU ARE CONSIDERING BUYING NOTES, WE SUGGEST THAT YOU CONSULT YOUR TAX
ADVISOR ABOUT THE TAX CONSEQUENCES OF HOLDING THE NOTES IN YOUR PARTICULAR
SITUATION.
THE EXCHANGE OFFER
An exchange of restricted notes for exchange notes pursuant to the exchange
offer will not be treated as an exchange or other taxable event for U.S. federal
income tax purposes. Accordingly, there will be no U.S. federal income tax
consequences to holders of restricted notes who exchange restricted notes for
exchange notes pursuant to the exchange offer, and an exchanging holder will
have the same adjusted tax basis and holding period in the exchange notes as it
had in the restricted notes immediately before the exchange.
TAX CONSEQUENCES TO U.S. HOLDERS
This section applies to you if you are a "U.S. Holder". A "U.S. Holder" is:
- an individual U.S. citizen or resident alien;
- a corporation, or entity taxable as a corporation, that was created under
U.S. law (federal or state); or
- an estate or trust whose world-wide income is subject to U.S. federal
income tax.
If a partnership holds notes, the tax treatment of a partner will generally
depend upon the status of the partner and upon the activities of the
partnership. If you are a partner of a partnership holding notes, we suggest
that you consult your tax advisor.
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INTEREST
- All holders of notes will be taxable on the U.S. dollar value of euros
payable as interest on the notes, whether or not they elect to receive
payments in euros. If you receive interest in the form of U.S. dollars,
you will be considered to have received interest in the form of euros and
to have sold those euros for U.S. dollars. For purposes of this
discussion, "spot rate" generally means a currency exchange rate that
reflects a market exchange rate available to the public for the euro.
- If you are a cash method taxpayer (including most individual holders),
you will be taxed on the value of the euro when it is received by you (if
you receive euros) or when it is deemed received by you (if you receive
U.S. dollars). The value of the euro will be determined using the "spot
rate" in effect at such time.
- If you are an accrual method taxpayer, you will be taxed on the value of
the euro payable as interest as the interest accrues on the notes. In
determining the value of the euro for this purpose, you may use the
average foreign currency exchange rate during the relevant interest
accrual period (or, if that period spans two taxable years, during the
portion of the interest accrual period in the relevant taxable year). The
average rate for an accrual period (or partial period) is the simple
average of the spot rates for each business day of such period, or other
average exchange rate for the period reasonably derived and consistently
applied by you. When interest is actually paid, you will generally also
recognize exchange gain or loss, taxable as ordinary income or loss,
equal to the difference between (a) the value of the euro received as
interest, as translated into U.S. dollars using the spot rate on the date
of receipt, and (b) the U.S. dollar amount previously included in income
with respect to such payment. If you receive interest in the form of U.S.
dollars, clause (a) will be calculated on the basis of the value of the
euro you would have received instead of U.S. dollars. If you do not wish
to accrue interest income using the average exchange rate, certain
alternative elections may be available.
- Your tax basis in the euros you receive (or are considered to receive) as
interest will be the aggregate amount reported by you as income with
respect to the receipt of the euros. If you receive interest in the form
of euros and subsequently sell those euros, or if you are considered to
receive euros and those euros are considered to be sold for U.S. dollars
on your behalf, additional tax consequences will apply as described in
"Sale of Euros".
ADDITIONAL INTEREST
If you receive additional interest on your note as a result of a
registration default:
- We believe it should be treated in the same manner as regular interest on
the note.
- However, you might instead be required to report it as income when it
accrues or becomes fixed, even if you are a cash method taxpayer.
SALE OR RETIREMENT OF NOTES
On the sale or retirement of your note:
- If you receive the principal payment on your note in the form of U.S.
dollars, you will be considered to have received the principal in the
form of euros and to have sold those euros for U.S. dollars.
- You will have taxable gain or loss equal to the difference between the
amount received or deemed received by you and your tax basis in the note.
If you receive (or are considered to receive) euros, those euros are
valued for this purpose at the spot rate of the euro. Your tax basis in
the note is the U.S. dollar value of the euro amount paid for the note,
determined on the date of purchase.
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- Any such gain or loss (except to the extent attributable to foreign
currency gain or loss) will be capital gain or loss, and will be long
term capital gain or loss if you held the note for more than one year.
- You will realize foreign currency gain or loss to the extent the U.S.
dollar value of the euro paid for the note, based on the spot rate at the
time you dispose of the note, is greater or less than the U.S. dollar
value of the euro paid for the note, based on the spot rate at the time
you acquired the note. Any resulting foreign currency gain or loss will
be ordinary income or loss. You will only recognize such foreign currency
gain or loss to the extent you have gain or loss, respectively, on the
overall sale or retirement of the note.
- If you sell a note between interest payment dates, a portion of the
amount you receive reflects interest that has accrued on the note but has
not yet been paid by the sale date. That amount is treated as ordinary
interest income and not as sale proceeds.
- Your tax basis in the euros you receive (or are considered to receive) on
sale or retirement of the note will be the value of euros reported by you
as received on the sale or retirement of the note. If you receive euros
on retirement of the note and subsequently sell those euros, or if you
are considered to receive euros on retirement of the note and those euros
are considered to be sold for U.S. dollars on your behalf, or if you sell
the note for euros and subsequently sell those euros, additional tax
consequences will apply as described in "Sale of Euros."
- You will not have taxable gain or loss on the exchange of your note for
an exchange note.
SALE OF EURO
- If you receive (or are considered to receive) euros as principal or
interest on a note, and you later sell (or are considered to sell) those
euros for U.S. dollars, you will have taxable gain or loss equal to the
difference between the amount of U.S. dollars received and your tax basis
in the euros. In addition, when you purchase a note in euros, you will
have taxable gain or loss if your tax basis in the euros is different
from the U.S. dollar value of the euros on the date of purchase. Any such
gain or loss is foreign currency gain or loss taxable as ordinary income
or loss.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under the tax rules concerning information reporting to the IRS:
- Assuming you hold your notes through a broker or other securities
intermediary, the intermediary must provide information to the IRS
concerning interest and retirement proceeds on your notes, unless an
exemption applies.
- Similarly, unless an exemption applies, you must provide the intermediary
with your Taxpayer Identification Number for its use in reporting
information to the IRS. If you are an individual, this is your social
security number. You are also required to comply with other IRS
requirements concerning information reporting.
- If you are subject to these requirements but do not comply, the
intermediary must withhold 31% of all amounts payable to you on the notes
(including principal payments). If the intermediary withholds payments,
you may use the withheld amount as a credit against your federal income
tax liability.
- All individuals are subject to these requirements. Some holders,
including all corporations, tax-exempt organizations and individual
retirement accounts, are exempt from these requirements.
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TAX CONSEQUENCES TO NON-U.S. HOLDERS
This section applies to you if you are a "Non-U.S. Holder." A "Non-U.S.
Holder" is:
- an individual that is a nonresident alien;
- a corporation organized or created under non-U.S. law; or
- an estate or trust that is not taxable in the U.S. on its worldwide
income.
WITHHOLDING TAXES
Generally, payments of principal and interest on the notes will not be
subject to U.S. withholding taxes.
However, for the exemption from withholding taxes to apply to you, you must
meet one of the following requirements:
- You provide your name, address, and a signed statement that you are the
beneficial owner of the note and are not a U.S. Holder. This statement is
generally made on Form W-8 or Form W-8BEN.
- You or your agent claim an exemption from withholding tax under an
applicable tax treaty. This claim is generally made on Form 1001 or Form
W-8BEN.
- You or your agent claim an exemption from withholding tax on the ground
that the income is effectively connected with the conduct of a trade or
business in the U.S. This claim is generally made on Form 4224 or Form
W-8ECI.
We suggest that you consult your tax advisor about the specific methods for
satisfying these requirements. These procedures will change on January 1, 2001.
In addition, a claim for exemption will not be valid if the person receiving the
applicable form has actual knowledge that the statements on the form are false.
SALE OR RETIREMENT OF NOTES
If you sell a note or it is redeemed, you will not be subject to federal
income tax on any gain unless one of the following applies:
- The gain is connected with a trade or business that you conduct in the
U.S.
- You are an individual, you are present in the U.S. for at least 183 days
during the year in which you dispose of the note, and certain other
conditions are satisfied.
- The gain represents accrued interest, in which case the rules for
interest would apply.
U.S. TRADE OR BUSINESS
If you hold your note in connection with a trade or business that you are
conducting in the U.S.:
- Any interest on the note, and any gain from disposing of the note,
generally will be subject to income tax as if you were a U.S. Holder.
- If you are a corporation, you may be subject to an additional "branch
profits tax" on your earnings that are connected with your U.S. trade or
business, including earnings from the note. This tax is 30%, but may be
reduced or eliminated by an applicable income tax treaty.
ESTATE TAXES
If you are an individual, your notes will not be subject to U.S. estate tax
when you die. However, this rule only applies if, at your death, payments on the
notes were not connected to a trade or business that you were conducting in the
U.S.
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INFORMATION REPORTING AND BACKUP WITHHOLDING
U.S. rules concerning information reporting and backup withholding are
described above. These rules apply to Non-U.S. Holders as follows:
- Principal and interest payments you receive will be automatically exempt
from the usual rules if you provide the tax certifications needed to
avoid withholding tax on interest, as described above. The exemption does
not apply if the recipient of the applicable form knows that the form is
false. In addition, interest payments made to you will be reported to the
IRS on Form 1042-S.
- Sale proceeds you receive on a sale of your notes through a broker may be
subject to information reporting and/or backup withholding if you are not
eligible for an exemption. In particular, information reporting and
backup reporting may apply if you use the U.S. office of a broker, and
information reporting (but not generally backup withholding) may apply if
you use the foreign office of a broker that has certain connections to
the U.S. We suggest that you consult your tax advisor concerning
information reporting and backup withholding on a sale.
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CURRENCY CONVERSIONS AND FOREIGN
EXCHANGE RISKS AFFECTING THE NOTES
CURRENCY CONVERSIONS
Initial investors are required to pay for the notes in euro. See
"-- Foreign Exchange Risks."
We are required to make payments of principal and interest and premium, if
any, in respect of the notes in euro. However, holders of notes holding through
DTC (but excluding Euroclear or Clearstream, Luxembourg and investors who hold
beneficial interests in the notes, directly or indirectly, through Euroclear or
Clearstream, Luxembourg), will be paid in U.S. dollars converted from such euro
payments by the trustee unless the holder elects to receive payments in euro as
described below.
Payments of principal and interest and premium, if any, on notes held
through DTC will be converted to U.S. dollars in accordance with procedures
established from time to time by the debt trustee and DTC and paid to Cede & Co.
for payment to owners of beneficial interests in the restricted global notes
(except for holders through Euroclear or Clearstream, Luxembourg or holders
electing to receive euros). All costs of such conversion will be borne by those
owners receiving U.S. dollars by deduction from such payments. If the debt
trustee is not able to exchange euro into U.S. dollars, payments of the
aggregate amount due to all such owners on the payment date will be made in euro
outside of DTC. An owner of a beneficial interest in the restricted global note
may elect to receive payment in respect of the principal of or premium, if any,
or interest on the notes in euro by notifying the Participant through which its
global note is held at least fifteen days prior to the payment of (1) such
owner's election to receive all or a portion of such payment in euro and (2)
wire transfer instructions to an account denominated in euro with respect to any
payment to be made in euro. Such Participant must notify DTC of such election
and wire transfer instructions and on or prior to the twelfth day prior to the
payment. DTC will notify the debt trustee of such election and wire transfer
instructions on or prior to the tenth day prior to the payment. If complete
instructions are received by the Participant and forwarded by the Participant to
DTC and by DTC to the debt trustee, on or prior to such dates, the owner of the
beneficial interest in the global note will receive payment in euro outside of
DTC; otherwise, only U.S. dollar payments will be made through DTC.
Holders of notes will be subject to foreign exchange risks as to payments
of principal and interest and premium, if any, that may have important economic
and tax consequences to them. For further information as to such consequences,
see "-- Foreign Exchange Risks" and "United States Taxation."
FOREIGN EXCHANGE RISKS
An investment in notes which are denominated in, and the payment of such is
to be made in, a currency other than the currency of the country in which the
purchaser is resident or the currency in which the purchaser conducts its
business or activities (the "home currency") entails significant risks that are
not associated with a similar investment in a security denominated in the home
currency. Such risks include, without limitation, the possibility of significant
changes in rates of exchange between the home currency and the euro and the
possibility of the imposition or modification of foreign exchange controls with
respect to the euro. Such risks generally depend on economic and political
events over which we have no control. In recent years, rates of exchange for
certain currencies, including the euro, have been highly volatile and such
volatility may be expected to continue in the future. Fluctuations in any
particular exchange rate that have occurred in the past are not necessarily
indicative however, of fluctuations in such rate that may occur during the term
of the notes. Depreciation of the euro against the relevant home currency could
result in a decrease in the effective yield of such note below its coupon rate
and, in certain circumstances, could result in a loss to the investor on a home
currency basis.
This description of foreign currency risks does not describe all the risks
of an investment in securities denominated in a currency other than the home
currency. Prospective investors should consult with their own financial and
legal advisors as to such risks entailed by an investment in the notes.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This document,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of exchange notes or market-making
activities or other trading activities.
Clear Channel will not receive any proceeds from any sale of exchange notes
by broker-dealers. Exchange notes received by broker-dealers for their own
account pursuant to the exchange offer may be sold from time to time in one or
more transaction in the over-the-counter market, in negotiated transactions,
through the writing of options on the exchange notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form commissions or concessions from any
such broker-dealer or the purchasers of any such exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act, and any profit on any
such resale of exchange notes and any commission or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period starting on the date of this prospectus and ending on the
close of business on the earlier to occur of:
- the date on which all exchange notes held by broker-dealers eligible to
use the prospectus to satisfy their prospectus delivery obligations under
the Securities Act have been sold and
- the date 180 days after the consummation of the exchange offer,
Clear Channel will make this document, as amended or supplemented, available to
any broker-dealer in connection with any such resale and will send additional
copies of this document and any amendment or supplement to this prospectus to
any broker-dealer that requests such documents.
Clear Channel has agreed to pay all expenses incident to the exchange
offer, including the expense of one counsel for the holders of the restricted
notes, other than commissions or concession of any broker-dealers and will
indemnify the holders of the restricted notes, including any broker-dealers,
against certain liabilities, including liabilities under the Securities Act.
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EXPERTS
The consolidated financial statements of Clear Channel at December 31, 1999
and 1998, and for each of the three years in the period ended December 31, 1999,
and the financial statement schedule appearing in Clear Channel's Annual Report
on Form 10-K for the year ended December 31, 1999, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports thereon included
therein and incorporated herein by reference which are based in part on the
reports of KPMG LLP, independent auditors, as to each of the three years in the
period ended December 31, 1999. Such consolidated financial statements and
schedule referred to above are incorporated herein by reference in reliance upon
such reports given on the authority of such firms as experts in accounting and
auditing.
The consolidated financial statements of SFX at December 31, 1999 and 1998,
and for each of the three years in the period ended December 31, 1999 and the
related financial statement schedule appearing in SFX's Annual Report on Form
10-K/A for the year ended December 31, 1999, 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 and
schedule referred to above are incorporated herein by reference in reliance upon
the report of such firm given on the authority of such firm as experts in
accounting and auditing.
The consolidated financial statements of Jacor Communications, Inc. and its
subsidiaries as of December 31, 1998 and 1997 and for each of the three years in
the period ended December 31, 1998 incorporated into this document by reference
to Clear Channel's Current Report on Form 8-K dated December 9, 1998, as amended
by Form 8-K/A filed on February 23, 1999 and Form 8-K/A dated April 12, 1999,
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of Jacor Communications, Inc. and its
subsidiaries as of December 31, 1997 and 1996 and for each of the three years in
the period ended December 31, 1997 incorporated into this document by reference
to Clear Channel's Current Report on Form 8-K dated December 9, 1998, as amended
by Form 8-K/A filed on February 23, 1999 and Form 8-K/A dated April 12, 1999,
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of AMFM Inc. and Subsidiaries
(formerly Chancellor Media Corporation) as of December 31, 1999 and 1998 and for
each of the three years in the period ended December 31, 1999 incorporated into
this document by reference to the Current Report on Form 8-K of Clear Channel
Communications, Inc., dated June 14, 2000, have been so incorporated in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Capstar Broadcasting Corporation
and Subsidiaries as of December 31, 1998 and 1997 and for each of the three
years in the period ended December 31, 1998 incorporated into this document by
reference to the Current Report on Form 8-K of Clear Channel Communications,
Inc., dated November 18, 1999, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
LEGAL OPINIONS
The validity of the exchange notes offered hereby will be passed upon for
Clear Channel by our special counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(a partnership including professional corporations), San Antonio, Texas. 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 Clear Channel and as
of September 30, 2000, owns approximately 139,500 shares of common stock
(including presently exercisable nonqualified options to acquire approximately
123,500 shares). Vernon E. Jordan, Jr., of counsel to Akin,
47
<PAGE> 51
Gump, Strauss, Hauer & Feld, L.L.P., is also a director of Clear Channel and as
of September 30, 2000, holds options exercisable to acquire 89,300 shares of
common stock.
LISTING AND GENERAL INFORMATION
In connection with the application to list the exchange notes on the
Luxembourg Stock Exchange, a legal notice relating to the issue of the exchange
notes and copies of the Articles of Incorporation of Clear Channel was deposited
with the Chief Registrar of the District Court of Luxembourg ("Greffier en Chef
du Tribunal d'Arrondissement de et a Luxembourg") where such documents may be
examined and copies obtained.
Copies of the indenture, the registration rights agreement, the documents
listed above and the financial statements are available, and copies of Clear
Channel's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K may be obtained free of charge, at the specified
office of the paying agent in Luxembourg, if and so long as the exchange notes
are listed on the Luxembourg Stock Exchange. Clear Channel does not publish
non-consolidated financial statements.
The issue of the exchange notes was duly authorized by Clear Channel
pursuant to an authorization of its Board of Directors on June 2, 2000.
The most recently available financial statements of Clear Channel have been
filed at the Company Registry in Luxembourg (Registre de Commerce et des
Societes) at the District Court of Luxembourg and such documents are publicly
available at such Registry and copies can be obtained at the Registry.
The exchange notes have been accepted for clearance through DTC (CUSIP
Number: ) and the Euroclear System and Clearstream Luxembourg (Common
Code ). The ISIN for the exchange notes is . The Regulation
S notes have been accepted for clearance through the Euroclear and Clearstream,
Luxembourg systems (Common Code 11378668). The ISIN for the Regulation S notes
is XS0113786684.
48
<PAGE> 52
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the TBCA provides for indemnification of directors and
officers in certain circumstances. In addition, the Texas Miscellaneous
Corporation Law provides that a corporation may amend its articles of
incorporation to provide that no director shall be liable to the corporation or
its stockholders for monetary damages for an act or omission in the director's
capacity as a director, provided that the liability of a director is not
eliminated or limited (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or knowing violation of law, (iii)
any transaction from which such director derived an improper personal benefit,
or (iv) an act or omission for which the liability of a director is expressly
provided by an applicable statute. Clear Channel has amended its Charter and
added Article Eleven adopting such limitations on a director's liability. The
Clear Channel Charter also provides in Article Nine for indemnification of
directors or officers in connection with the defense or settlement of suits
brought against them in their capacities as directors or officers of Clear
Channel, except in respect of liabilities arising from gross negligence or
willful misconduct in the performance of their duties.
Article IX(8) of the Clear Channel Bylaws provides for indemnification of
any person made a party to a proceeding by reason of such person's status as a
director, officer, employee, partner or trustee of Clear Channel, except in
respect of liabilities arising from negligence or misconduct in the performance
of their duties.
An insurance policy obtained by Clear Channel provides for indemnification
of officers and directors of Clear Channel and certain other persons against
liabilities and expenses incurred by any of them in certain stated proceedings
and under certain stated conditions.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
1.1* Subscription Agreement, dated July 3, 2000, among the Company, ABN
AMRO Bank N.V., Deutsche Bank AG London, Barclays Bank PLC, Credit
Suisse First Boston (Europe) Limited, Merrill Lynch International,
Salomon Brothers International Limited, and Westdeutsche Landesbank
Girozentrale.
4.1 Buy-Sell Agreement by and between Clear Channel Communications,
Inc., L. Lowry Mays, B.J. McCombs, John M. Schaefer, and John W.
Barger, dated May 31, 1977 (incorporated by reference to the
exhibits of Clear Channel's registration statement on Form S-1
(Reg. No. 33-289161) dated April 19, 1984).
4.2 Fourth Amended and Restated Credit Agreement by and among Clear
Channel Communications, Inc., Bank of America, N.A., as
administrative agent, Fleet National Bank, as documentation agent,
the Bank of Montreal and Toronto Dominion (Texas), Inc., as
co-syndication agents, and certain other lenders dated June 15,
2000 (incorporated by reference to the exhibits of Clear Channel's
registration statement on Form S-3 (Reg. No. 333-42028) dated July
21, 2000).
4.3 Senior Indenture dated October 1, 1997, by and between Clear
Channel Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1997).
4.4 First Supplemental Indenture dated March 30, 1998, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York,
</TABLE>
II-1
<PAGE> 53
<TABLE>
<S> <C>
as Trustee (incorporated by reference to the exhibits of Clear
Channel's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998).
4.5 Second Supplemental Indenture dated June 16, 1998, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Current Report on Form 8-K dated August 27, 1998).
4.6 Third Supplemental Indenture dated June 16, 1998, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Current Report on Form 8-K dated August 27, 1998).
4.7 Fourth Supplemental Indenture dated November 24, 1999, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Annual Report on Form 10-K filed March 14, 2000).
4.8 Fifth Supplemental Indenture dated June 21, 2000, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
registration statement on Form S-3 (Reg. No. 333-42028) dated July
21, 2000).
4.9 Sixth Supplemental Indenture dated June 21, 2000, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
registration statement on Form S-3 (Reg. No. 333-42028) dated July
21, 2000).
4.10 Seventh Supplemental Indenture dated July 7, 2000, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
registration statement on Form S-3 (Reg. No. 333-42028) dated July
21, 2000).
4.11* Registration Rights Agreement, dated as of July 7, 2000, among the
Company, ABN AMRO Bank N.V., Deutsche Bank A.G. London, Barclays
Bank PLC, Credit Suisse First Boston (Europe) Limited, Merrill
Lynch International, Salomon Brothers International Limited, and
Westdeutsche Landesbank Girozentrale.
4.12 Form of 6.50% Note due 2005 (included in Seventh Supplemental
Indenture filed as Exhibit 4.10).
5* Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
12* Computation of Ratio of Earnings to Fixed Charges.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of KPMG LLP.
23.3* Consent of Ernst & Young LLP.
23.4* Consent of PricewaterhouseCoopers LLP.
23.5* Consent of PricewaterhouseCoopers LLP.
23.6* Consent of PricewaterhouseCoopers LLP.
</TABLE>
II-2
<PAGE> 54
<TABLE>
<S> <C>
23.7 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in
opinion filed as Exhibit 5).
24 Power of Attorney (included on signature page of this Registration
Statement).
25 Statement on Form T-1 of the eligibility of The Bank of New York,
as trustee under the Indenture (incorporated by reference to the
exhibits to Clear Channel's Registration Statement on Form S-3
dated July 21, 2000).
99.1* Form of Letter of Transmittal
</TABLE>
*Filed herewith.
Clear Channel agrees to furnish supplementally a copy of any omitted
schedules or exhibits to the SEC upon request.
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE> 55
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 herein, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the Registration Statement through the date
of responding to the request.
(e) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-4
<PAGE> 56
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-4 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Antonio, State of Texas, on October 19,
2000.
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ L. LOWRY MAYS
---------------------------------------
L. Lowry Mays
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and officers of Clear Channel Communications, Inc., hereby constitute and
appoint L. Lowry Mays, Mark P. Mays, Randall T. Mays and Herbert W. Hill, Jr.,
and each of them, his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and his name place and stead,
in any and all capacities, to execute any and all amendments (including
post-effective amendments) to this registration statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated below.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ L. LOWRY MAYS Chief Executive October 19, 2000
------------------------------------ Officer and Director
L. Lowry Mays
/s/ THOMAS O. HICKS Vice Chairman and Director October 19, 2000
------------------------------------
Thomas O. Hicks
/s/ RANDALL T. MAYS Executive Vice President/Chief October 19, 2000
------------------------------------ Financial Officer (Principal Financial
Randall T. Mays Officer) and Director
/s/ HERBERT W. HILL, JR. Senior Vice President/Chief Accounting October 19, 2000
------------------------------------ Officer (Principal Accounting Officer)
Herbert W. Hill, Jr.
/s/ MARK P. MAYS President, Chief Operating Officer and October 19, 2000
------------------------------------ Director
Mark P. Mays
/s/ B.J. McCOMBS Director October 19, 2000
------------------------------------
B.J. McCombs
</TABLE>
II-5
<PAGE> 57
<TABLE>
<S> <C> <C>
Director
------------------------------------
Alan D. Feld
/s/ THEODORE H. STRAUSS Director October 19, 2000
------------------------------------
Theodore H. Strauss
Director
------------------------------------
John H. Williams
/s/ KARL ELLER Director October 19, 2000
------------------------------------
Karl Eller
/s/ ROBERT L. CRANDALL Director October 19, 2000
------------------------------------
Robert L. Crandall
/s/ VERNON E. JORDAN, JR. Director October 19, 2000
------------------------------------
Vernon E. Jordan, Jr.
/s/ MICHAEL J. LEVITT Director October 19, 2000
------------------------------------
Michael J. Levitt
/s/ PERRY J. LEWIS Director October 19, 2000
------------------------------------
Perry J. Lewis
</TABLE>
II-6
<PAGE> 58
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
1.1* Subscription Agreement, dated July 3, 2000, among the Company,
ABN AMRO Bank N.V., Deutsche Bank AG London, Barclays Bank PLC,
Credit Suisse First Boston (Europe) Limited, Merrill Lynch
International, Salomon Brothers International Limited, and
Westdeutsche Landesbank Girozentrale.
4.1 Buy-Sell Agreement by and between Clear Channel Communications,
Inc., L. Lowry Mays, B.J. McCombs, John M. Schaefer, and John W.
Barger, dated May 31, 1977 (incorporated by reference to the
exhibits of Clear Channel's registration statement on Form S-1
(Reg. No. 33-289161) dated April 19, 1984).
4.2 Fourth Amended and Restated Credit Agreement by and among Clear
Channel Communications, Inc., Bank of America, N.A., as
administrative agent, Fleet National Bank, as documentation agent,
the Bank of Montreal and Toronto Dominion (Texas), Inc., as
co-syndication agents, and certain other lenders dated June 15,
2000 (incorporated by reference to the exhibits of Clear Channel's
registration statement on Form S-3 (Reg. No. 333-42028) dated July
21, 2000).
4.3 Senior Indenture dated October 1, 1997, by and between Clear
Channel Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1997).
4.4 First Supplemental Indenture dated March 30, 1998, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1998).
4.5 Second Supplemental Indenture dated June 16, 1998, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Current Report on Form 8-K dated August 27, 1998).
4.6 Third Supplemental Indenture dated June 16, 1998, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Current Report on Form 8-K dated August 27, 1998).
4.7 Fourth Supplemental Indenture dated November 24, 1999, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
Annual Report on Form 10-K filed March 14, 2000).
4.8 Fifth Supplemental Indenture dated June 21, 2000, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
registration statement on Form S-3 (Reg. No. 333-42028) dated July
21, 2000).
4.9 Sixth Supplemental Indenture dated June 21, 2000, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
registration statement on Form S-3 (Reg. No. 333-42028) dated July
21, 2000).
</TABLE>
<PAGE> 59
<TABLE>
<S> <C>
4.10 Seventh Supplemental Indenture dated July 7, 2000, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits of Clear Channel's
registration statement on Form S-3 (Reg. No. 333-42028) dated July
21, 2000).
4.11* Registration Rights Agreement, dated as of July 7, 2000, among the
Company, ABN AMRO Bank N.V., Deutsche Bank AG London, Barclays Bank
PLC, Credit Suisse First Boston (Europe) Limited, Merrill Lynch
International, Salomon Brothers International Limited, and
Westdeutsche Landesbank Girozentrale.
4.12 Form of 6.50% Note due 2005 (included in Seventh Supplemental
Indenture filed as Exhibit 4.10).
5* Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
12* Computation of Ratio of Earnings to Fixed Charges.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of KPMG LLP.
23.3* Consent of Ernst & Young LLP.
23.4* Consent of PricewaterhouseCoopers LLP.
23.5* Consent of PricewaterhouseCoopers LLP.
23.6* Consent of PricewaterhouseCoopers LLP.
23.7 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in
opinion filed as Exhibit 5).
24 Power of Attorney (included on signature page of this Registration
Statement).
25 Statement on Form T-1 of the eligibility of The Bank of New York,
as trustee under the Indenture (incorporated by reference to the
exhibits to Clear Channel's Registration Statement on Form S-3
dated July 21, 2000).
99.1* Form of Letter of Transmittal
</TABLE>
*Filed herewith.
