As filed with the Securities and Exchange Commission on December 20, 1994
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
OUTLET COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
---------------------
DELAWARE 4833 05-0425681
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction Industrial Identification
Incorporation or Classification Code Number)
Organization)
---------------------
23 KENNEY DRIVE
CRANSTON, RI 02920
(401) 455-9200
(Address, including zip code, and telephone number, including area code,
of Registrant's principal offices)
---------------------
JAMES G. BABB
OUTLET COMMUNICATIONS, INC.
23 Kenney Drive
Cranston, RI 02920
(401) 455-9200
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
-----------------------
Copies to:
MARGARET D. FARRELL, ESQ. KENNETH M. SOCHA, ESQ.
1500 Fleet Center 1627 I Street, N.W.
Providence, RI 02903 Suite 610
(401) 274-2000 Washington, D.C. 20006
(202) 452-0101
----------------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes
effective.
-----------------------
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [x]
<PAGE>
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------
Proposed Proposed
Title of Each Maximum Maximum Amount
Class of Amount Offering Aggregate of
Securities to to be Price Offering Registration
be Registered Registered Per Unit (1) Price (1) Fee
- -----------------------------------------------------------------------------
Class A
Common Stock, 331,625 $14.50 $4,808,562.50 $1,658.13
par value $0.01
per share
- ------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the average of the high and low price of the
Class A Common Stock on December 14, 1994.
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 of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
------------------------------------------------------------------
PROSPECTUS
-------------------------------------------------------------------
331,625 Shares
OUTLET COMMUNICATIONS, INC.
Common Stock
(par value $.01 per share)
----------------
The shares (the "Shares") of Class A common stock, par value $.01 per
share (the "Common Stock"), of Outlet Communications, Inc. (the "Company")
offered hereby (the "Offering") are being sold by a selling stockholder (the
"Selling Stockholder"). See "Selling Stockholder." The Company will not
receive any of the proceeds from the sale of the Shares by the Selling
Stockholder.
------------------
The Shares may be offered by the Selling Stockholder from time to time in
open market transactions (which may include block transactions), through the
writing of options on the Shares, or otherwise in the over-the-counter market
through the NASDAQ National Market System, or in private transactions at
prices related to prevailing market prices or at negotiated prices. The
Selling Stockholder may effect such transactions by selling Shares to or
through broker-dealers, and such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the Selling Stockholder
and/or the purchasers of Shares for whom such broker-dealers may act as agent
or to whom they sell as principal or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
Selling Stockholder and any broker-dealer acting in connection with the sale
of the Shares offered hereby may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Act"), in which event
any discounts, concessions or commissions received by them, which are not
expected to exceed those customary in the types of transactions involved, or
any profit on resales of the Shares by them, may be deemed to be underwriting
commissions or discounts under the Act.
The costs, expenses and fees incurred in connection with the registration
of the Shares (including selling commissions, brokerage fees, and fees and
expenses of counsel or other out-of- pocket expenses) will be paid by the
Selling Stockholder. The expenses of the offering, other than selling
commissions and brokerage fees, are estimated to be approximately $15,000.
<PAGE>
The Common Stock is traded on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") National Market System under the symbol
"OCOMA". On December 14, 1994, the closing price as reported on NASDAQ was
$14.50 per share.
-------------------
See "Risk Factors" for a discussion of risk factors that should be
considered in connection with an investment in the Common Stock offered
hereby.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- -----------------------------------------------------------------------------
The date of this prospectus is ------------- --, 1994
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements, and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at its regional offices in
New York (26 Federal Plaza, New York, New York 10007) Chicago (Room 1204,
Everett McKinley Dirksen Building, 219 South Dearborn Street, Chicago,
Illinois 60604), and Los Angeles (Suite 500 East, 5757 Wilshire Boulevard, Los
Angeles, California 90036-3648). Copies of such material can also be obtained
from the Public Reference Section of the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates.
This prospectus constitutes a part of a Registration Statement filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This prospectus omits certain of the information
contained in the Registration Statement, and reference is hereby made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Common Stock offered hereby.
Any statements contained herein concerning the provisions of any document are
not necessarily complete, and, in each instance, reference is made to the copy
of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this prospectus and to
be a part hereof the following reports and documents filed with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"): (1) the Company's Annual Report, on Form 10-K, for the fiscal year
ended December 31, 1993 and the Company's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1994, June 30, 1994 and September 30, 1994; (2)
all reports and definitive proxy or information statements filed pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this prospectus and prior to the termination of the offering of the Shares;
and (3) the description of Company's Common Stock contained in the Company's
Form 8-A Registration Statement filed under Section 12 of the Exchange Act.
<PAGE>
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is incorporated
or deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
Any person, including any beneficial owner, receiving a copy of this
prospectus may obtain without charge, upon request, a copy of any of the
documents incorporated by reference herein, except for the exhibits to such
documents (unless such exhibits are specifically incorporated by reference
herein). Requests should be directed to: Vice President, Chief Financial
Officer, and Treasurer, Outlet Communications, Inc., 23 Kenney Drive,
Cranston, R.I. 02920.
THE COMPANY
Outlet Communications, Inc. ("Outlet" or the "Company") through its
wholly owned subsidiary, Outlet Broadcasting, Inc. ("Broadcasting"), operates
three owned television stations and one television station under a local
marketing agreement. The owned stations include two NBC network affiliated
VHF stations, WCMH, which serves the Columbus, Ohio area and WJAR, which
serves the Providence-New Bedford market. Both WCMH and WJAR are leading news
stations in their respective markets. The third owned television station is
WYED, an independent UHF station acquired in the third quarter of 1994, which
serves the Raleigh-Durham Goldsboro, North Carolina market area. On January
11, 1995, WYED will become an affiliate of the new WB Television Network. The
Company has reached an understanding with the National Broadcasting Company
Inc. for WYED to become an NBC network affiliate as of October 1, 1995.
The Company commenced operating independent UHF television station WWHO
in Chillicothe, Ohio in the second quarter of 1994. Pursuant to a local
marketing agreement entered into with the licensee of WWHO, the Company serves
as a broker for the sale of that station's advertising time and provides it
with certain programming and operating capabilities. In return, the Company
retains a substantial percentage of WWHO's net operating income to the extent
that it exceeds cumulative net operating losses. The Company has an option to
acquire WWHO at such time, if and when, permitted by regulatory policies. On
January 11, 1995, WWHO will become an affiliate of the WB Television Network.
<PAGE>
In August 1994, the Company acquired an option to purchase the assets and
operations of WKAY Channel 64, a television station which serves the
Kannapolis, North Carolina market area. In November 1994, the Company sought
to exercise its option, at which time a third party claiming a right of first
refusal attempted to exercise such right. The relative rights of the parties
are unclear. If the Company is successful in acquiring WKAY, it anticipates
that the station would be operated by an unaffiliated party under a local
marketing agreement, the terms of which would provide the funds for the
acquisition.
Outlet's strategy is to increase profitability through revenue growth and
improved cost-effectiveness in programming and operations. With local news
leadership as the cornerstone of station programming, both WCMH and WJAR have
developed strong audience shares while increasing advertising rates and
decreasing overall programming costs. During 1992 Outlet decreased operating
expenses by reducing its total number of employees and has realized further
savings from the April 1993 relocation of its corporate headquarters and WJAR
to a more efficient facility.
The Company, through Broadcasting, has been engaged in broadcasting since
1922. During the third quarter of 1993, Outlet substantially reduced its
interest costs and improved its financial flexibility through a successful
refinancing of its long-term debt. The refinancing was effected by a public
offering of $60,000,000 of l0-7/8% Senior Subordinated Notes due 2003 (the
"Senior Subordinated Notes") and a $30,000,000 senior bank financing (the
"Senior Loan").
RISK FACTORS
LEVERAGED FINANCIAL POSITION. The Company is highly leveraged.
Substantially all of the net proceeds to Broadcasting from the sale in 1993 of
the Senior Subordinated Notes and from the Senior Loan were used to retire
long-term debt. As of September 30, 1994, Broadcasting had total indebtedness
of approximately $80.375 million, including $20.375 million under the Credit
Agreement relating to the Senior Loan (the "Bank Credit Agreement"). The
Company expects that internally generated funds from operations and amounts
available under the Bank Credit Agreement will provide sufficient liquidity to
meet the Company's ongoing operating and capital expenditure needs. However,
the Company's high degree of leverage may limit its strategic operating
flexibility (including its ability to make capital improvements and purchase
syndicated programming) and its capacity to meet competitive pressures or
withstand adverse economic conditions.
<PAGE>
Based upon current levels of operations, the Company believes it will be
able to make interest payments on the Senior Subordinated Notes as they become
due, as well as make interest and principal payments due under the Bank Credit
Agreement in accordance with its terms, although there can be no assurance of
this. However, to repay the Senior Subordinated Notes at maturity the Company
will need to refinance all or a portion of the Senior Subordinated Notes.
Outlet's ability to refinance the Senior Subordinated Notes will depend upon
its operating performance as well as prevailing economic and market conditions
and other factors beyond the Company's control. There can be no assurance
that the Company will be able to refinance the Senior Subordinated Notes or
otherwise raise funds in a timely manner or that the proceeds therefrom will
be sufficient to effect such repayment.
ASSET ENCUMBRANCE; GUARANTY. The Senior Loan is secured by first
priority liens on all assets of the Company and Broadcasting. In addition,
the Company has guaranteed Broadcasting's obligations under the Bank Credit
Agreement and, as security for its guaranty, pledged to the lender all of the
outstanding capital stock of Broadcasting. In the event of a material default
which produces an acceleration under the Bank Credit Agreement, the lender
will have a first claim on the assets of the Company and Broadcasting and the
holders of the Senior Subordinated Notes will have a second claim on the
assets of Broadcasting. If these creditors should attempt to foreclose on
their collateral, the Company's financial condition and, thus, the value of
the Shares offered hereby would be materially adversely affected.
Additionally, the Indenture relating to the Senior Subordinated Notes permits
Broadcasting to incur additional senior indebtedness, provided certain
financial and other conditionS are met.
RESTRICTIVE LOAN COVENANTS; BANK FINANCIAL CONTINGENCY. The Bank Credit
Agreement contains terms that, among other things, limit the ability of the
Company to (i) incur additional indebtedness, (ii) create liens, (iii) sell
assets, (iv) engage in mergers or acquisitions, (v) make investments and
capital expenditures, (vi) pay dividends or make distributions and (vii)
engage in certain transactions with affiliates and subsidiaries. The Bank
Credit Agreement also requires the Company to comply with certain specified
financial ratios and tests, under which it is required to achieve certain
financial and operating results. Although these requirements have been met to
date, there can be no assurance that these requirements will be met in the
future. If they are not, the lender will be entitled to terminate its lending
commitments and to declare the indebtedness under the Bank Credit Agreement
immediately due and payable.
<PAGE>
DEPENDENCE ON KEY PERSONNEL. The Company is dependent on the services of
certain key personnel including James G. Babb (Chief Executive Officer), Felix
W. Oziemblewski (Chief Financial Officer), Douglas E. Gealy (General Manager
of WCMH) and Linda Sullivan (General Manager of WJAR). Mr. Babb has entered
into a five-year employment agreement with the Company for a term commencing
January 1, 1993. Mr. Gealy has entered into a three-year employment agreement
with the Company for a term commencing May 1, 1993. The loss of the services
of any of Messrs. Babb, Oziemblewski or Gealy or Ms. Sullivan could have an
adverse impact on the Company. Neither the Company nor Broadcasting maintains
key personnel life insurance on any of these individuals.
INCREASING COMPETITION IN THE BROADCASTING INDUSTRY. The broadcasting
industry has become increasingly competitive in recent years with the growth
of cable television, the Fox network and other emerging networks, satellite
dishes, pay-per-view programs and the proliferation of VCRs and VCR movie
rentals. These changes have fractionalized television viewing audiences and
this trend is likely to continue in the future. In addition, technological
developments such as "high definition television" may impose additional costs
and competitive pressures on the Company. To the extent that certain of its
competitors are or may become better capitalized, the Company's ability to
compete successfully in its broadcasting markets may be impeded. Also, the
Company has a higher percentage of employees under collective bargaining
agreements than its competitors, and the existence of such agreements may
adversely affect the Company's competitive position by, among other things,
increasing labor costs and reducing flexibility in employee assignments.
GOVERNMENT REGULATION. The Company's broadcasting operations are subject
to regulation by the Federal Communications Commission ("FCC") under the
Communications Act of 1934, as amended. Congress recently adopted a new cable
television law, to be implemented by the FCC, and other laws or regulations
may be adopted in the future that may adversely affect the Company's
operations by increasing competition, tightening the license renewal process
and increasing costs to keep pace with newly approved technology. The Company
is unable to predict the impact which such laws or regulations may have on its
operations.
SENSITIVITY TO GENERAL ECONOMIC CONDITIONS. The Company's operating
results are sensitive to general economic conditions in the United States as
well as the Columbus, Ohio, Providence, Rhode Island and Raleigh-Durham, North
Carolina areas and on generating revenues in an increasingly competitive
marketplace.
<PAGE>
DEPENDENCE ON RELATIONSHIP WITH NETWORK. WCMH and WJAR have both been
affiliates of the NBC network since going on the air in 1949. The Company has
reached an understanding with NBC for WYED, which serves the Raleigh-Durham-
Goldsboro, North Carolina market, to become an NBC affiliate as of October 1,
1995. The WCMH and WJAR network affiliations with NBC each expire on
September 1, 2000. Broadcasting and NBC each have the right to terminate an
affiliation under certain conditions. Since network programs account for more
than 50% of the programming at WCMH and WJAR, the termination or non-renewal
of affiliation with NBC could have a material adverse effect on the Company's
operations if affiliation with other networks of equal ranking could not be
obtained.
NBC's national ranking and the ratings of other commercial networks have
varied from year to year, but WCMH has ranked first or second in audience
share in its market since 1983 and WJAR has ranked first in audience share
since going on the air in 1949. Although the Company receives more than half
of its programming from NBC, the Company does not believe that its results of
operations or rank in audience share in either market is directly dependent on
NBC.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
offered hereby.
PLAN OF DISTRIBUTION
The Shares may be offered by the Selling Stockholder from time to time in
open market transactions (which may include block transactions), through the
writing of options on the Shares, or otherwise in the over-the-counter market
through the NASDAQ National Market System, or in private transactions at
prices relating to prevailing market prices or at negotiated prices. The
Selling Stockholder may effect such transactions by selling Shares to or
through broker-dealers, and such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the Selling Stockholder
and/or the purchasers of Shares for whom such broker-dealers may act as agent
or to whom they sell as principal or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
Selling Stockholder and any broker-dealer acting in connection with the sale
of the Shares offered hereby may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any discounts, concessions or
commissions received by them, which are not expected to exceed those customary
in the types of transactions involved, or any profit on resales of the Shares
by them, may be deemed to be underwriting commissions or discounts under the
Securities Act.
<PAGE>
The Shares offered hereby may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale, or at negotiated prices.
The Selling Stockholder has agreed with the Company that, commencing with
the date of this prospectus, the total sales of Shares by the Selling
Stockholder during any three-month period shall not exceed the greater of (i)
1% of the issued and outstanding shares of Common Stock as shown by the most
recent report or statement published by the Company or (ii) the average weekly
reported volume of trading in such securities on all national securities
exchanges and/or reported through the automated quotation system of a
registered securities association during the four calendar weeks preceding the
sale. As of the date of this prospectus, there are 6,578,631 shares of Common
Stock issued and outstanding.
The Selling Stockholder has agreed with the Company that sales of Shares
will only be made by the Selling Stockholder during a "window period"
established by the Company's Board of Directors. Currently, the "window
period" means the period beginning the third business day following the date
of release for publication of the Company's quarterly and annual summary
statements of revenues and earnings and ending on the 30th day following such
release date.
The Company has the right to restrict the sale of the Shares under the
registration statement covering the Shares offered hereby and/or to withdraw
or terminate such registration statement at any time the Company's Board of
Directors determines in its sole discretion, that it is in the best interest
of the Company to do so.
The costs, expenses, and fees incurred in connection with the
registration of the Shares (including selling commissions, brokerage fees,
fees and expenses of counsel of the Company and the Selling Stockholder and
the Company's accountants and other out-of-pocket expenses) will be paid by
the Selling Stockholder.
To comply with certain states' securities laws, if applicable, the Shares
will be sold in such jurisdictions only through registered or licensed brokers
or dealers. In addition, in certain states the Shares may not be sold unless
such Shares have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is complied
with.
<PAGE>
SELLING STOCKHOLDER
The following table sets forth the Shares owned by the Selling
Stockholder before and after the Offering (assuming all Shares offered hereby
are sold) and the amount of Shares offered. The Selling Stockholder has no
obligation to sell any of the Shares offered.
Shares
Shares Owned Being Shares Owned
Before the Offering Offered After the Offering
------------------- ------- -------------------
Name Number Percent Number Percent
- ---- ------ ------- ------- -------
The OCI Trust 331,625 5.0% 331,625 -0- -0-
The OCI Trust is a trust established for the benefit of the children of
Frank E. Walsh, Jr. Mr. Walsh is a director of the Company and The OCI Trust
is a party to a Stockholders Agreement, dated as of December 10, 1986, as
amended December 1, 1987 (the "Stockholders' Agreement"). As of March 18,
1994, an aggregate of 4,718,685 shares of the Common Stock of the Company was
beneficially owned by the parties to the Stockholders Agreement. The
Stockholders Agreement requires that the stockholders party to the
Stockholders Agreement vote their shares to fix the number of directors of the
Company at 14 and elect as directors five persons designated by certain
management stockholders (the "Management Stockholders") and nine persons
designated by the stockholders affiliated with Wesray Capital Corporation (the
"Wesray Stockholders").
The Stockholders Agreement provides that each stockholder may not agree
to sell any securities to a buyer who would as a result of such purchase own
more than 50% of the outstanding Common Stock of the Company unless prior to
such sale the buyer agrees to be bound by the Stockholders Agreement and
affords each stockholder the opportunity to sell a pro rata portion of his
shares on the same terms and conditions.
The Stockholders Agreement terminates on the earlier of (i) July 30,
1996; (ii) the date that the Wesray Stockholders, Management Stockholders and
Mutual Benefit Life Insurance Company own an aggregate of less than 50% of the
Company's issued and outstanding Common Stock; and (iii) the date of an event
of bankruptcy or insolvency of the Company or Broadcasting or foreclosure or
similar actions or proceedings by the Company's senior bank lender.
<PAGE>
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Hinckley, Allen & Snyder, 1500 Fleet Center, Providence, Rhode
Island 02903. Stephen J. Carlotti, a director of the Company, is a partner
of Hinckley, Allen & Snyder.
EXPERTS
The consolidated financial statements of Outlet Communications, Inc.
incorporated by reference in Outlet Communications, Inc.'s Annual Report (Form
10-K) for the year ended December 31, 1993, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
<PAGE>
============================ OUTLET COMMUNICATIONS, INC.
No person has been
authorized to give
information or to make any
representation not contained
in this Prospectus and, if
given or made, such
information or
representation must not be
relied upon as having been
authorized by the Company or 331,625 Shares
the Selling Stockholder. Class A Common Stock
This Prospectus does not (par value $.01 per share)
constitute an offer to sell
or solicitation of an offer =========================
to buy any securities
offered hereby in any
jurisdiction to any person
to whom it is unlawful to
make such offer in such
jurisdiction. Neither the
delivery of this Prospectus PROSPECTUS
nor any sale made hereunder
shall, under any -------------------------
circumstances, create any
implication that the
information herein is
correct as of any time
subsequent to the date
hereof or that there has
been no change in the
affairs of the Company since
such date.
- -----------------------------
TABLE OF CONTENTS
Page
-----
Available Information......5
Incorporation of Certain
Documents by Reference...5
The Company................6
Risk Factors...............7
Use of Proceeds...........10
Plan of Distribution......10
Selling Stockholder.......12 Outlet Communications, Inc.
Legal Matters.............13 23 Kenney Drive
Experts...................13 Cranston, RI 02920
=============================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering, all of which are to be paid by
the Selling Stockholder, are as follows:
Registration Fees:
Securities and Exchange Commission $ 1,658
Printing and engraving expenses 200
Legal fees and expenses 7,000
Accountants' fees and expenses 6,000
Miscellaneous 142
Total $15,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines, and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of an
action by judgment, order, settlement, conviction, or upon plea of nolo
contendere or its equivalent, does not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interest of the corporation and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
In the case of an action by or in the right of the corporation, Section
145 empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action<PAGE>
action in any of the capacities set forth above against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in and not opposed to the best
interests of the corporation, except that indemnification is not permitted in
respect of any claim, issue or matter as to which such person is adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
deems proper. Section 145 further provides: that a Delaware corporation is
required to indemnify a director, officer, employee or agent against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with any action, suit or proceeding or in defense of any claim,
issue or matter therein as to which such person has been successful on the
merits or otherwise; that indemnification provided for by Section 145 shall
not be deemed exclusive of any other rights to which the indemnified party may
be entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer against any such liability asserted against him in any such capacity
or arising out of his status as such whether or not the corporation would have
the power to indemnify him against liability under Section 145. A Delaware
corporation may provide indemnification only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct. Such determination is to be made (i) by the
board of directors by a majority vote of a quorum consisting of directors who
were not party to such action, suit or proceeding, or (ii) if such a quorum is
not obtainable or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders.
Subject to certain conditions and limitations set forth therein, Article
VII of the registrant's Bylaws requires the registrant to indemnify to the
fullest extent permitted by applicable law, any person who is or was a party
or is threatened to be made a party to any threatened, pending, or completed
civil, criminal, administrative or investigative action, claim, <PAGE>
litigation, suit or proceeding, by reason of his status as, or the fact that
he is or was, or has agreed to become, a director or officer of the Company or
of an affiliate.
The registrant has liability insurance for each director and officer for
certain losses arising from claims or charges made against them while acting
in their capacities as directors or officers of the registrant.
Additionally the registrant's Certificate of Incorporation eliminates the
personal liability of the directors of the corporation to the full extent
permitted by the provisions of Section 102 of the Delaware General Corporation
Act, as amended and supplemented.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
Exhibit Description
- ------- -----------
4.1 Specimen Certificate for Common Stock of
registrant, incorporated herein by reference to
Exhibit 4.1 to the registrant's Form S-1
Registration Statement (No. 33-9442)
4.2 Registration Agreement dated as of May 31, 1994 by
and among Outlet Communications, Inc., The OCI
Trust and Frank E. Walsh, Jr.
5.1 Opinion of Hinckley, Allen & Snyder regarding
legality of securities offered
24.1 Consent of Hinckley, Allen & Snyder (contained in
Exhibit 5.1)
24.2 Consent of Ernst & Young LLP
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act, and is, therefore, <PAGE>
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 against the
registrant 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 of whether such indemnification
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in 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; and
(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 (i) and (ii) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each 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.
<PAGE>
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Outlet
Communications, Inc. has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cranston and State of Rhode Island, on the ____
day of December, 1994.
OUTLET COMMUNICATIONS, INC.
By:
Chairman of the Board,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Principal Executive Officer:
Chairman of the Board,
President and
/s/ James G. Babb Chief Executive Officer December 19, 1994
- -----------------------
JAMES G. BABB
Principal Financial and
Accounting Officer:
Vice President, Chief
Financial Officer
/s/ Felix W. Oziemblewski and Treasurer December 19, 1994
- --------------------------
FELIX W. OZIEMBLEWSKI
<PAGE>
Directors:
/s/ Letitia Baldrige Director December 19, 1994
- --------------------------- -----------------
LETITIA BALDRIGE
/s/ Robert C. Butler Director December 19, 1994
- --------------------------- -----------------
ROBERT C. BUTLER
/s/ Stephen J. Carlotti Director December 19, 1994
- ---------------------------- -----------------
STEPHEN J. CARLOTTI
/s/ Frederick L. Griffiths Director December 19, 1994
- ---------------------------- -----------------
FREDERICK L. GRIFFITHS
/s/ Julius Koppelman Director December 19, 1994
- ---------------------------- -----------------
JULIUS KOPPELMAN
/s/ Leonard Lieberman Director December 19, 1994
- ---------------------------- -----------------
LEONARD LIEBERMAN
/s/ James K. Makrianes Director December 19, 1994
- ---------------------------- -----------------
JAMES K. MAKRIANES
/s/ Victor H. Palmieri Director December 19, 1994
- ---------------------------- -----------------
VICTOR H. PALMIERI
___________________________ Director ------------------
FRANK E. RICHARDSON
/s/ Frank E. Walsh, Jr. Director December 19, 1994
- ---------------------------- -----------------
FRANK E. WALSH, JR.
/s/ Solomon M. Yas Director December 19, 1994
- ---------------------------- -----------------
SOLOMON M. YAS
<PAGE>
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit Description Page
- ------- ------------ ------------
4.1 Specimen Certificate for Common Incorporated herein by
Stock of Registrant reference to Exhibit 4.1
to the Registrant's
Form S-1 Registration
Statement (No. 33-9442)
4.2 Registration Agreement dated as of
May 31, 1994 by and among Outlet
Communications, Inc., The OCI Trust
and Frank E. Walsh, Jr.
5.1 Opinion of Hinckley, Allen & Snyder
24.1 Consent of Hinckley, Allen & Snyder
(contained in Exhibit 5.1)
24.2 Consent of Ernst & Young LLP
EXHIBIT 4.2 REGISTRATION AGREEMENT
REGISTRATION AGREEMENT
This Registration Agreement (the "Agreement") is made as of May 31, 1994
by and among Outlet Communications, Inc., a Delaware corporation (the
"Company"), The OCI Trust (the "Trust") and Frank E. Walsh, Jr. ("Walsh").
RECITALS
---------
In 1993, Walsh, a director of the Company, sold 331,625 shares of the
Company's Class A Common Stock, $.01 par value per share, (the "Shares") to
the Trust. The Shares were "restricted securities" under the federal
securities laws and Walsh is deemed to be an "affiliate" of the Company under
the federal securities laws. The Trust paid for the Shares primarily by
delivery of a promissory note. Because the transaction was structured as a
sale rather than a donation, under the federal securities laws the Trust must
hold the Shares for two years from the date the consideration therefor is paid
in full before the Shares may be sold under Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). Because the Trust
does not have sufficient assets to pay the note, the two-year holding period
may never begin to run in respect of the Shares and these Shares may remain
restricted indefinitely. The Trust has requested that the Company file a
registration statement on Form S-3 covering the Shares to permit the Trust to
sell the Shares subject to the same restrictions as to timing and volume that
would have been applicable if Walsh had retained the Shares, and the Company
has agreed to file such registration statement subject to the terms and
conditions of this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. Registration of Shares
-----------------------
The Company shall file a registration statement on Form S-3 covering the
Shares (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") and shall use its best efforts to cause the
Registration Statement covering the Shares to become effective under the
Securities Act, subject to the terms and conditions of this Agreement. The
Company shall have no obligation to file the Registration Statement and this
Agreement shall be of no further force and effect, if any stockholder of the
Company who is a party to the Stockholders' Agreement dated as of December 10,
1986, as amended on December 1, 1987, among the Company, Outlet Broadcasting,
Inc. and the persons and entities signatory thereto (the "Stockholders'
Agreement") requests that any shares of the Company's Class A Common Stock
held by any such stockholder be included in the Registration Statement and
does not withdraw such request or otherwise waive the right to make such
request.
<PAGE>
2. Volume and Timing Restrictions.
--------------------------------
Sales may be made by the Trust pursuant to the Registration Statement
subject to the volume limitation of Rule 144(c) under the Securities Act only
during the "window period" set forth in the Company's Policy on Transactions
in Company Securities (the "Policy"), a copy of which is attached hereto as
Exhibit A, as the Policy may be modified or amended from time to time by the
Company's Board of Directors. In addition, no sales may be made by the Trust
during the "window period" if the Company notifies Walsh that material
information regarding the Company has not yet been publicly disclosed.
3. Registration Procedures.
-------------------------
(a) The Trust shall furnish to the Company such information regarding
the distribution of the Shares as the Company may, from time to time, request
in writing and which is required to be included in the Registration Statement.
The Trust shall promptly notify the Company if any such information so
provided by the Trust ceases to be true and correct and will promptly
thereafter furnish the Company with corrected information.
(b) The Company agrees to notify the Trust promptly after the Company
becomes aware thereof, and confirm such notice in writing, (i) when a
prospectus included in the Registration Statement (a "Prospectus") or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective amendment, when
the same has become effective, (ii) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or
for additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus or
Prospectus or the initiation of any proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of the Registration
Statement or any of the Shares for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
existence of any fact known to the Company which results in such Registration
Statement or related Prospectus or any document incorporated therein by
reference containing any untrue statement of a material fact or omitting to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and (vi) if the Company reasonably
determines that the filing of a post-effective amendment to such Registration
Statement would be appropriate.
<PAGE>
(c) The Trust agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section (b)(ii),
(b)(iii), (b)(iv) or (b)(v), the Trust shall forthwith discontinue disposition
of the Shares covered by the Registration Statement or Prospectus until the
Trust's receipt of the copies of the supplemented or amended Prospectus or
until it is advised in writing by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any amendments or
supplements thereto.
4. Registration Expenses.
-----------------------
All fees and expenses incident to the performance of or compliance with
this Agreement by the parties hereto, including without limitation, fees and
expenses incurred by the Company in connection with the preparation, filing,
amending and supplementing of the Registration Statement (whether or not the
Registration Statement is filed or becomes effective), including the fees and
expenses of the Company's legal counsel and accountants related thereto,
registration and filing fees and fees and expenses of compliance with state
securities or blue sky laws, will be borne by and paid by Walsh or the Trust
and Walsh and the Trust shall be jointly and severally liable therefor. Such
fees and expenses shall be paid promptly upon request by the Company. Any
expenses of collection of such amounts shall be borne by the Trust and Walsh.
5. Right to Terminate.
--------------------
The Company shall have no obligation to keep the Registration Statement
effective for any minimum period of time and expressly reserves the right to
restrict further the sale of Shares by the Trust under the Registration
Statement and/or to withdraw or terminate the Registration Statement at any
time the Board of Directors of the Company determines that it is in the best
interest of the Company to do so.
6. Indemnification.
-----------------
The provisions of Section 8(e) of the Stockholders' Agreement are hereby
incorporated herein by this reference.
7. Miscellaneous.
---------------
(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may be amended, qualified,
supplemented, waived or terminated only by written instrument signed by the
Company, the Trust and Walsh.
<PAGE>
(b) Notices. All notices and other communications provided from or
permitted hereunder shall be made in writing and delivered by hand delivery,
registered first-class mail, next-day air courier or telecopier:
(i) if to the Trust or Walsh, to Frank E. Walsh, Jr., c/o Wesray
Corp., 330 South Street, CN-1975, Morristown, New Jersey, 07960
with a copy to Kenneth M. Socha, Esq., 1627 I Street, N.W.,
Suite 610, Washington, DC 20006; and
(ii) if to the Company, to Outlet Communications, Inc., 23 Kenney
Drive, Cranston, Rhode Island 02920, Attention: Chief Financial
Officer, with a copy to Hinckley, Allen & Snyder, 1500 Fleet Center,
Providence, Rhode Island 02903, Attention: Stephen J. Carlotti,
Esq.
(c) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(d) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(e) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
(f) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and
of the remaining provisions hereof shall not be in any way impaired or
affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
<PAGE>
(g) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter other than the
Stockholders' Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OUTLET COMMUNICATIONS, INC.
BY_________________________
James G. Babb, President
THE OCI TRUST
BY__________________________
_________________,Trustee
___________________________
FRANK E. WALSH, JR.
<PAGE>
Exhibit A
----------
OUTLET COMMUNICATIONS, INC.
STATEMENT OF CORPORATE POLICY
REGARDING TRANSACTIONS
IN OUTLET COMMUNICATIONS, INC. SECURITIES
This Statement of Corporate Policy applies to all officers, directors,
employees and agents of Outlet Communications, Inc. (the "Company").
1. It is the policy of the Company to comply with all applicable
securities laws and regulations.
2. No person covered by this Policy Statement shall purchase or sell
any security issued by the Company while such person is in possession of
material information about the Company that has not been disclosed to the
public. No person covered by this Policy Statement may use any material
information relating to the Company that has not been disclosed to the public
as the basis for purchasing or selling any security issued by any other
entity.
3. No officer or director of the Company may purchase or sell any
security issued by the Company except (a) during a Window Period (as defined
below) or (b) with the prior written approval of an officer or employee
designated by the Board of Directors for this purpose.
(i) Unless otherwise determined in a specific instance by the Board of
Directors, the term "Window Period" shall mean the period beginning on the
third business day following the date of release for publication of the
Company's quarterly and annual summary statements of sales and earnings and
ending on the 30th day following such release date.
(ii) The designated officer or employee referred to above shall not
approve any purchase or sale outside a Window Period unless (A) the
transaction has been reviewed without objection by either the Chairman or the
President and (B) the transaction has been reviewed without objection by legal
counsel.
4. No officer or director of the Company shall purchase and sell, or
sell and purchase, any equity security of the Company within any period of
less than six months.
<PAGE>
5. No officer or director of the Company shall sell any equity
security of the Company if such person either (a) does not own the security
sold or (b) does not deliver the security against such sale within twenty days
thereafter or does not within five days after such sale deposit the security
in the mails or other usual channels of transportation.
6. Each officer and director of the Company shall comply with the
filing requirements of Section 16(a) of the Securities Exchange Act of 1934
and, if applicable, of Rule 144 promulgated under the Securities Act of 1933.
The designated officer or employee referred to above shall implement a system
to assist officers and directors int he timely filing of all required reports
under the foregoing provisions.
7. Each officer and director of the Company shall, and any other
person covered by this Policy Statement may be required to, execute and
deliver an annual statement to the designated officer or employee referred to
above, certifying that such person has complied with this Policy Statement at
all times from the date hereof (or such lesser time as such person has been
covered hereby).
8. The designated officer or employee referred to above may adopt such
reasonable procedures as he or she shall deem necessary or desirable in order
to implement this Policy Statement.
A copy of this statement, in addition to being incorporated in the
Employee Handbook, will be provided to each employee and each new arrival will
be asked to read it upon joining the Company. This statement, and appropriate
updated versions, will be distributed as a reminder to everyone in the Company
periodically each year.
EXHIBIT 5.1
OPINION OF HINCKLEY, ALLEN & SNYDER
<PAGE>
FINAL ON HAS LETTERHEAD
December 20, 1994
Outlet Communications, Inc.
23 Kenney Drive
Cranston, Rhode Island 02920-4489
Re: Outlet Communications, Inc. (the "Company")
Form S-3 Registration Statement
--------------------------------------------
Gentlemen:
We have acted as counsel to the Company in connection with the
preparation of a Registration Statement on Form S-3 (the "Registration
Statement") to be filed by the Company with the Securities and Exchange
Commission (the "Commission") relating to 331,625 shares of the Company's
Class A common stock, par value $.01 per share.
In connection therewith, we have examined the original or copies,
certified or otherwise identified to our satisfaction, of the Certificate of
Incorporation, as amended to date, the By-laws, as amended, the corporate
minutes of the Company, the Registration Statement to be filed with the
Commission, and such other documents as we deemed necessary to the opinion
hereinafter expressed.
In making such examinations of documents, instruments and other papers,
we have assumed the genuineness of all signatures on original and certified
documents, the conformity to original and certified documents of all copies
submitted to us as conformed, photostat or other copies, the legal capacity of
all natural persons executing such documents, instruments and other papers,
the due authorization, execution and delivery of such documents, instrument
and other papers by each of the entities, other than the Company, which has
executed the same and that each of such entities, other than the Company, has
the power to enter into and perform all of its obligations thereunder. As to
matters of facts which have not been independently established by us, we have
relied upon certificates or the representations of officers of the Company.
Based on the foregoing, it is our opinion that the Shares are validly
authorized and issued, fully paid, and nonassessable.
<PAGE>
We are members of the bar of the State of Rhode Island and the
Commonwealth of Massachusetts and do not hold ourselves out as experts on, or
as generally familiar with, or qualified to express opinions under law other
than the law of the State of Rhode Island, the Commonwealth of Massachusetts,
the corporate law of the State of Delaware, and the law of the United States
and the opinion given herein is limited thereto.
We hereby consent to the reference to our firm under the heading "Legal
Matters" in the prospectus constituting a part of the Form S-3 Registration
Statement of Outlet Communications, Inc. and to the filing of this opinion as
an exhibit to such Registration Statement. However, the foregoing consent
shall not be deemed to constitute a consent under Section 7 of the Securities
Act of 1933, since we have not certified any part of the Registration
Statement and do not otherwise come within the categories of persons whose
consent is required under Section 7 or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
HINCKLEY, ALLEN & SNYDER
EXHIBIT 24.2
CONSENT OF ERNST & YOUNG LLP
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related prospectus of Outlet
Communications, Inc. for the registration of 331,625 shares of its common
stock and to the incorporation by reference therein of our reports dated
February 11, 1994, with respect to the consolidated financial statements of
Outlet Communications, Inc. incorporated by reference in its Annual Report
(Form 10-K) for the year ended December 31, 1993, and the related financial
statement schedules included therein, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Providence, Rhode Island
December 15, 1994
