As filed with the Securities and Exchange Commission on February 13, 2004
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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OMNICOM GROUP INC.
(Exact name of registrant as specified in its charter)
New York 13-1514814
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
437 Madison Avenue
New York, NY 10022
(212) 415-3600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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For Co-Registrants, please see the "Table of Co-Registrants" on
the following page.
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MICHAEL J. O'BRIEN, ESQ.
Senior Vice President, General Counsel and Secretary
Omnicom Group Inc.
437 Madison Avenue
New York, New York l0022
(212) 415-3600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
MEREDITH BERKOWITZ, ESQ.
Jones Day
222 East 41st Street
New York, New York 10017
(212) 326-3939
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Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
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, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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(c)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Offering Aggregate Registration
to be Registered Registered Price Per Security(1) Offering Price(1) Fee
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Liquid Yield Option(TM)Notes due 2031 $847,031,000 $1,002.50 $849,148,577.50 --(2)
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Common stock, par value $.15 per share(3) -- -- -- --
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Guarantee of Liquid Yield Option(TM)
Notes due 2031(4) (4) (4) (4) (4)
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(TM) Trademark of Merrill Lynch & Co., Inc.
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act, based on the average of
the bid and asked prices of the LYONs on the Portal System on February
5, 2004 of $1,002.50 per $1,000 issue price of LYONs.
(2) The $847,031,000 of Liquid Yield Option Notes due 2031 were previously
registered by Omnicom Group Inc. under Registration Statement No.
333-55386 and are being carried over and consolidated into this
Registration Statement pursuant to Rule 429 under the Securities Act of
1933. A registration fee in the amount of $214,094 was previously paid by
Omnicom Group Inc. under the foregoing Registration Statement.
(3) Also being registered are an indeterminate number of shares of common
stock issuable upon conversion and/or redemption of the LYONs registered
hereby or in connection with a stock split, stock dividend,
recapitalization or similar event for which no additional registration fee
is payable pursuant to Rule 457(i) under the Securities Act.
(4) The guarantee registered hereby related to Omnicom Capital Inc.'s and
Omnicom Finance Inc.'s obligations as co-obligor of the $847,031,000
Liquid Yield Option Notes due 2031 also being registered hereby. No
separate consideration will be received for the guarantee. Pursuant to
Rule 457(n), no separate registration fee is required with respect to the
guarantee.
The registrants hereby amend this registration statement on such date or dates
as may be necessary to delay its effective date until the registrants 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 the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Table of Co-Registrants
IRS Employer
Name State of Incorporation Identification Number
---- ---------------------- ---------------------
Omnicom Capital Inc. Connecticut 06-1582649
Omnicom Finance Inc. Delaware 13-3468626
The information in this prospectus is not complete and may be changed. The
selling securityholders 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 jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION DATED FEBRUARY 13, 2004
PRELIMINARY PROSPECTUS
$847,031,000
OMNICOM GROUP INC.
OMNICOM CAPITAL INC.
OMNICOM FINANCE INC.
Liquid Yield Option(TM) Notes due 2031
Omnicom Group Inc. sold the LYONs in private transactions on February 7,
2001 and February 16, 2001, with no original issue discount at an issue price of
$1,000 per LYON. On February 13, 2004, pursuant to a supplemental indenture to
the indenture under which the notes were issued, each of Omnicom Capital Inc.,
or Omnicom Capital and Omnicom Finance Inc., or Omnicom Finance, both
wholly-owned financed subsidiaries of Omnicom Group Inc., became a co-obligor on
the notes jointly and severally with Omnicom Group Inc. Omnicom Group Inc.,
Omnicom Capital and Omnicom Finance are collectively referred to as "the
issuers" in this prospectus. Selling securityholders may use this prospectus to
resell their LYONs and the shares of common stock issuable upon conversion or
redemption of the LYONs.
On February 7, 2031, the maturity date of the LYONs, a holder will receive
the principal amount at maturity of the LYONs, which will be $1,000 per LYON
unless that amount is increased at February 7, 2021 as described in this
prospectus. The issuers may also elect to voluntarily pay cash interest on the
LYONs at any time but they are not obligated to do so.
The LYONs are zero coupon debt securities. However, under some
circumstances, contingent cash interest will be payable as described in this
prospectus. The issuers may also elect to voluntarily pay contingent cash
interest on the LYONs at any time, but they are not obligated to do so.
Holders may convert each of their LYONs into 9.09 shares of common stock
of Omnicom Group Inc. if the conditions for conversion specified in this
prospectus are satisfied. The conversion rate may be adjusted under limited
substances. Omnicom Group Inc.'s common stock currently trades on the New York
Stock Exchange under the symbol "OMC." The last reported sale price of Omnicom
Group Inc.'s common stock on the New York Stock Exchange was $83.72 per share on
February 12, 2004.
Under the indenture, the issuers may not redeem the LYONs before February
7, 2006. On February 4, 2004, Omnicom Group Inc. announced that it extended the
commencement of the period during which the notes can be redeemed to February 7,
2009. Additionally, holders may require the issuers to purchase all or a portion
of their LYONs each February 7, at the prices set forth in this prospectus. In
addition, upon a change in control of Omnicom Group Inc. occurring on or before
February 7, 2006, holders may require the issuers to purchase all or a portion
of their LYONs for cash at a purchase price of $1,000 per LYON. If 90% or more
of the outstanding LYONs are purchased in any such event, the issuers may redeem
all of the remaining LYONs for cash at a redemption price of $1,000 per LYON.
The LYONs are the joint and several senior unsecured obligations of the
issuers and rank equal in right of payment to all of their respective existing
and future unsecured indebtedness.
Omnicom Capital's and Omnicom Finance's obligations in respect of the
notes are guaranteed by Omnicom Group Inc. The guarantee is a senior unsecured
obligation of Omnicom Group Inc. and ranks equal in right of payment to all
existing and future senior unsecured indebtedness of Omnicom Group Inc. For
United States federal income tax purposes, the LYONs will constitute contingent
payment debt instruments. You should read the discussion of selected United
States federal income tax consequences relevant to the LYONs beginning on page
28.
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Investing in the LYONs involves risks that are described in the "Risk
Factors Relating to the LYONs" beginning on page 8 of this prospectus.
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The LYONs issued in the initial private placement are eligible for trading
in the PORTAL system. LYONs sold using this prospectus, however, will no longer
be eligible for trading in the PORTAL system. The issuers do not intend to list
the LYONs on any other national securities exchange or automated quotation
system.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is , 2004.
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(TM) Trademark of Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
Page
----
Summary .................................................................. 3
Risk Factors Relating to the LYONs ....................................... 8
Forward-Looking Information .............................................. 10
Selected Consolidated Historical Financial Information ................... 11
Ratio of Earnings to Fixed Charges ....................................... 12
Use of Proceeds .......................................................... 12
Price Range of Common Stock and Dividend History ......................... 12
Capitalization ........................................................... 13
Description of LYONs ..................................................... 14
Description of Omnicom Group Inc.'s Capital Stock ........................ 28
Federal Income Tax Considerations ........................................ 28
Selling Securityholders .................................................. 32
Plan of Distribution ..................................................... 37
Legal Matters ............................................................ 38
Experts .................................................................. 38
Where You Can Find More Information ...................................... 39
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This prospectus is part of a registration statement on form S-3 that the issuers
filed with the SEC using a shelf registration process. Under this shelf process,
the selling securityholders named in this prospectus or any prospectus
supplement may, from time to time, sell up to $847,031,000 initial principal
amount of LYONs, including the related guarantee, or the 7,699,511 shares of
Omnicom Group Inc.'s common stock issuable upon conversion thereof, directly to
purchasers in one or more public offerings, or in any of the other ways
described under the heading "Plan of Distribution."
This prospectus provides you with a general description of the LYONs, the
guarantee and common stock of Omnicom Group Inc. which the selling
securityholders may sell. Each time a selling securityholder offers to sell any
of the LYONs or shares of Omnicom Group Inc.'s common stock, such holder will
provide a prospectus supplement that will contain specific information about the
terms of that offering, including a description of the risks relating to the
offering, to the extent those terms are not described in this prospectus.
Prospectus supplements may also add, update or change information contained in
this prospectus. If there is any inconsistency between the information in this
prospectus and any accompanying prospectus supplement, you should rely on the
information in the prospectus supplement. You should read both this prospectus
and any prospectus supplement together with the additional information described
under the heading "Where You Can Find More Information" before investing in the
offered securities.
The issuers have not, and the selling securityholders have not, authorized
any other person to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. The
selling securityholders are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus or any documents incorporated by
reference is accurate only as of the date on the front cover of the applicable
document. The business, financial condition, results of operations and prospects
of each of the issuers may have changed since that date.
2
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere in or incorporated by reference into this
prospectus. Because this is a summary, it may not contain all the information
that may be important to you. You should read the entire prospectus, as well as
the information incorporated by reference, before making an investment decision.
When used in this prospectus, the term "Omnicom Group" refers to Omnicom Group
Inc. together with its consolidated subsidiaries, the term "Omnicom Group Inc."
refers to only Omnicom Group Inc. and not its subsidiaries, the term "Omnicom
Capital" refers only to Omnicom Capital Inc., the term "Omnicom Finance" refers
only to Omnicom Finance Inc. and the term "issuers" refers collectively to
Omnicom Group Inc., Omnicom Capital and Omnicom Finance, in each case, unless
otherwise specified, as in the section captioned "Description of the LYONs"
beginning on page 14, or the context otherwise requires.
Omnicom Group Inc.
Omnicom Group is one of the largest marketing and corporate communications
companies in the world. Marketing and corporate communications services are
provided to clients through global, pan-regional and national independent agency
brands. Omnicom Group provides services to over 5,000 clients in more than 100
countries.
Omnicom Group Inc. is incorporated in New York and is a holding company.
Its principal office is located at 437 Madison Avenue, New York, NY 10022, and
its telephone number is (212) 415-3600.
Omnicom Group Inc.'s common stock is traded on the New York Stock Exchange
under the symbol "OMC." For additional information regarding Omnicom Group's
business, see the reports on Forms 10-K and 10-Q and other SEC filings made by
Omnicom Group Inc., which are incorporated by reference into this prospectus.
Copies of these filings may be obtained as described under "Where You Can Find
More Information" on page 39.
Omnicom Capital Inc. and Omnicom Finance Inc.
Omnicom Capital and Omnicom Finance are each a wholly-owned subsidiary of
Omnicom Group Inc. Neither Omnicom Capital nor Omnicom Finance has any
independent operations or subsidiaries. The sole function of both Omnicom
Capital and Omnicom Finance is to provide funding for the operations of Omnicom
Group Inc. and its operating subsidiaries by incurring debt and lending the
proceeds to the operating subsidiaries. Their respective assets consist of the
intercompany loans they make or have made to Omnicom Group Inc.'s operating
subsidiaries and the related interest receivables.
Omnicom Capital is incorporated in Connecticut. Its principal office is
located at One East Weaver Street, Greenwich, CT 06831 and its telephone number
is (203) 625-3000. Omnicom Finance is incorporated in Delaware. Its principal
office is located at 437 Madison Avenue, New York, New York 10022 and its
telephone number is (212) 415-3600.
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The Offering
The Issuers .......................... Omnicom Group Inc., Omnicom Capital and
Omnicom Finance.
LYONs ................................ $847,031,000 aggregate initial principal
amount at maturity of LYONs due February
7, 2031.
Maturity of LYONs .................... February 7, 2031.
Principal Amount at Maturity
of LYONs ............................. Before February 7, 2021, the principal
amount at maturity of a LYON will be
equal to the issue price of the LYON. On
or after February 7, 2021, the principal
amount at maturity of the LYONs may be
increased as described in this
prospectus.
If the principal amount at maturity is
increased, then contingent additional
principal, which is the difference
between the issue price and the
principal amount at maturity, will
accrue from February 7, 2021 until
maturity.
Cash Interest ........................ The issuers will not pay any cash
interest on the LYONs prior to maturity,
unless contingent cash interest becomes
payable or the issuers elect to do so in
their sole discretion.
Yield to Maturity of LYONs ........... The yield to maturity of the LYONs,
calculated on the basis of the principal
amount at maturity and therefore
excluding any contingent additional
principal or contingent cash interest
that may become payable, will be zero.
If contingent cash interest and/or
contingent additional principal becomes
payable the yield to maturity of the
LYONs may increase.
Contingent Cash Interest ............. Contingent cash interest will be payable
to the holders of LYONs during any
six-month period from February 8 to
August 7, and from August 8 to February
7, commencing February 8, 2006, if the
average market price of a LYON for a
five trading day measurement period
preceding the applicable six-month
period equals 120% or more of the issue
price of the LYON.
For any six-month period, the amount of
contingent cash interest payable per
LYON will be equal to amount of the
regular cash dividends paid by Omnicom
Group Inc. per share on its common stock
in that period multiplied by the number
of shares issuable upon conversion of a
LYON.
Contingent cash interest, if any, will
accrue and be payable to holders of
LYONs as of the record date for the
related common stock dividend during the
relevant six-month period and will be
made on the payment date for the related
common stock dividend. If Omnicom Group
Inc. does not pay regular cash
dividends, holders will not be entitled
to any contingent cash interest.
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4
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Tax Original Issue Discount .......... For United States federal income tax
purposes the LYONs constitute contingent
payment debt instruments As a result the
LYONs are deemed to be issued with
original issue discount for United
States federal income tax purposes,
referred to as tax original issue
discount. You should read the discussion
of selected United States federal income
tax considerations relevant to the LYONs
beginning on page 28.
Conversion Rights .................... The LYONs are convertible into common
stock of Omnicom Group Inc. if:
o the average conversion value for
the LYONs, which is calculated
based on the price of Omnicom
Group Inc's common stock on the
relevant date of determination,
meets specified thresholds;
o the credit rating assigned to the
LYONs is reduced to Baa3 or lower
by Moody's Investors Service, Inc.
or BBB or lower by Standard &
Poor's Ratings Services;
o the LYONs are called for
redemption; or
o Omnicom Group Inc. enters into
specified corporate transactions.
For each LYON surrendered for
conversion, if the conditions for
conversion are satisfied, a holder will
receive 9.09 shares of Omnicom Group
Inc. common stock. The conversion rate
will be adjusted for reasons specified
in the indenture but will not be
adjusted for accrued contingent
additional principal that may become
payable.
The ability to surrender LYONs for
conversion will expire at the close of
business on February 7, 2031.
Ranking .............................. The LYONs are the joint and several
senior unsecured obligations of each of
the issuers and rank equal in right of
payment to all of their respective
existing and future senior unsecured
indebtedness. The LYONs are effectively
subordinated to all existing and future
obligations of Omnicom Group Inc.'s
operating subsidiaries, including trade
payables and to any and all secured
obligations of the issuers, to the
extent of the security.
As of September 30, 2003, Omnicom Group
Inc. had $2,589.0 million of
indebtedness outstanding, all of which
is unsecured. Of this amount, $2,517.0
million represents direct obligations of
the issuers and $72.0 million represents
indebtedness of Omnicom Group Inc.'s
operating subsidiaries, $34.1 million of
which is guaranteed by Omnicom Group
Inc.
Guarantee ............................ Omnicom Group Inc. has fully and
unconditionally guaranteed Omnicom
Capital's and Omnicom Finance's
obligations with respect to the LYONs.
The guarantee is the senior unsecured
obligation of Omnicom Group Inc.
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5
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Sinking Fund ......................... None.
Redemption of LYONs at
the Option of the Issuers ............ Under the indenture, the LYONs may not
be redeemed before February 7, 2006,
except as set forth under "Description
of LYONs -- Purchase at Option of Holder
upon Change of Control of Omnicom Group
Inc." beginning on page 22. On or after
February 7, 2006 and before February 7,
2021, all or any portion of the LYONs
may be redeemed at any time by the
issuers at the issue price of the LYONs.
On or after February 7, 2021, the
issuers may redeem the LYONs at any time
in whole or in part at the issue price
plus accrued contingent additional
principal, if any. On February 4, 2004,
Omnicom Group, Inc. announced that it
extended the commencement of the period
during which the LYONs may be redeemed
from February 7, 2006 to February 7,
2009.
Purchase of the LYONs at the
Option of the Holder ................. At each February 7 through February 7,
2030, holders may require the issuers to
purchase all or a portion of their LYONs
on each February 7 at the following
prices:
(1) through February 7, 2021 at
the issue price of the LYON;
and
(2) February 7, 2022 through
February 7, 2030 at the
issue price of the LYON plus
accrued contingent
additional principal, if
any.
The issuers may choose to pay the
purchase price in cash, shares of common
stock of Omnicom Group Inc. or a
combination of cash and common stock of
Omnicom Group Inc. The issuers may also
elect, at their option, to offer a cash
payment to the holders as an incentive
not to exercise their right to require
the issuers to purchase their LYONs. See
"Description of LYONs -- Purchase of
LYONs at the Option of the Holder" on
page 19.
Change in Control of
Omnicom Group Inc. ................... Upon a change in control of Omnicom
Group Inc. occurring on or before
February 7, 2006, holders may require
the issuers to purchase for cash all or
a portion of their LYONs at a price
equal to $1,000 per LYON. In addition,
if at least 90% of the LYONs outstanding
immediately prior to the change in
control of Omnicom Group Inc. are
purchased, the issuers may, within 90
days after the change in control
purchase date, at their option, redeem
for cash all of the remaining LYONs at a
redemption price equal to $1,000 per
LYON. See "Description of LYONs--
Purchase at Option of Holders upon
Change in Control of Omnicom Group Inc."
beginning on page 22.
DTC Eligibility ...................... The LYONs were issued only in the form
of global securities held in book-entry
form. The Depository Trust Company, or
DTC, or its nominee is the sole
registered holder of the LYONs
represented by a global security for
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6
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all purposes under the indenture.
Beneficial interests in any such
securities will be shown on, and
transfers will be effected only through,
records maintained by DTC and its direct
and indirect participants and any such
interest may not be exchanged for
certificated securities, except in
limited circumstances. See "Description
of LYONs-- Book-Entry System" on page
15.
Use of Proceeds ...................... The issuers will not receive any of the
proceeds from the sale by any selling
securityholder of the LYONs or the
common stock issuable upon conversion
and/or redemption of the LYONs.
Trading .............................. The LYONs issued in the initial private
placement are eligible for trading in
the PORTAL system. LYONs sold using this
prospectus, however, will no longer be
eligible for trading in the PORTAL
system. The issuers do not intend to
list the LYONs on any other national
securities exchange or automated
quotation system. Omnicom Group Inc.'s
common stock is traded on the New York
Stock Exchange under the symbol "OMC."
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7
RISK FACTORS RELATING TO THE LYONS
You should carefully consider the following information with the other
information contained in or incorporated by reference into this prospectus
before purchasing the LYONs or the common stock of Omnicom Group Inc. issuable
upon conversion of the LYONs.
The Lack of Covenants Applicable to the LYONs May Not Afford Protection Under
Some Circumstances
The holders of LYONs may require the issuers to purchase the LYONs upon
the occurrence of certain change in control events described under "Description
of LYONs -- Purchase at Option of Holders upon Change in Control of Omnicom
Group Inc." beginning on page 22. However, Omnicom Group Inc. could engage in
certain transactions, including certain recapitalizations, that would not
constitute a change in control of Omnicom Group Inc. with respect to the change
in control purchase feature of the LYONs, even though such transactions may
increase the amount of Omnicom Group's outstanding indebtedness. This purchase
right would also not restrict Omnicom Group from incurring indebtedness or
effecting extraordinary dividends. Further, the LYONs do not afford a holder
protection under maintenance or other covenants relating to Omnicom Group Inc.'s
consolidated financial position or results of operations.
An Active Trading Market for LYONs May Not Develop
The LYONs comprise a new issue of securities for the issuers for which
there is currently no public market. The LYONs issued in the private placement
are eligible for trading in the PORTAL system. LYONs resold using this
prospectus, however, will no longer be eligible for trading in the PORTAL
system. The issuers do not intend to list the LYONs on any other national
securities exchange or automated quotation system. If the LYONs are traded, they
may trade at a discount from their initial offering price, depending on
prevailing interest rates, the market for similar securities, the price of
Omnicom Group Inc.'s common stock, Omnicom Group's performance and other
factors. The issuers do not know whether an active trading market will develop
for the LYONs. To the extent that an active trading market does not develop, the
price at which you may be able to sell the LYONs, if at all, may be less than
the price you pay for them. In addition, the LYONs have a number of features,
including conditions to conversion, which, if not met, could result in a holder
receiving less than the value of the common stock of Omnicom Group Inc. into
which a LYON is otherwise convertible. These features could adversely affect the
value and the trading prices for the LYONs.
Omnicom Group Inc.'s Holding Company Structure Results in Structural
Subordination and May Affect The Issuers' Ability to Make Payments on LYONs
The LYONs are the joint and several obligations exclusively of the
issuers. Omnicom Group Inc. is a holding company and, accordingly, substantially
all of its operations are conducted through its operating subsidiaries. Omnicom
Capital and Omnicom Finance are wholly-owned subsidiaries of Omnicom Group Inc.
Their respective assets consist of the intercompany loans they make or have made
to Omnicom Group Inc.'s operating subsidiaries and the related interest
receivables. As a result, the issuers' cash flow and their ability to make
payments on their respective debt, including the LYONs, is dependent upon the
earnings of these operating subsidiaries. In addition, Omnicom Group Inc. is
dependent on the distribution of earnings, loans or other payments by the
operating subsidiaries to it to service its obligations in respect of the LYONs
and its other debt. In addition, as a finance subsidiary, to service debt, each
of Omnicom Capital and Omnicom Finance is also dependent on the earnings of the
operating subsidiaries, the sale of certain assets of the operating
subsidiaries, and ability of the operating subsidiaries to repay principal and
interest on the intercompany loans.
Omnicom Group Inc.'s operating subsidiaries are separate and distinct
legal entities. These subsidiaries have no obligation to pay any amounts due on
the LYONs or to provide the issuers with funds for their respective payment
obligations, whether by dividends, distributions, repayment or making of loans
or other payments. In addition, any payment or repayment of dividends,
distributions, loans or advances by these operating subsidiaries to the issuers
could be subject to statutory or contractual restrictions. Payments to the
issuers by the operating subsidiaries will also be contingent upon the operating
subsidiaries' earnings and business considerations.
8
Because of this structure, the claims of creditors of Omnicom Group Inc.'s
operating subsidiaries will have a priority over the equity rights of Omnicom
Group Inc. and the rights of its creditors, including the holders of LYONs, to
participate in the assets of the subsidiary upon the subsidiary's liquidation or
reorganization. Although Omnicom Capital's and Omnicom Finance's respective
loans to the operating subsidiaries are secured by the assets of those
subsidiaries, the rights of Omnicom Capital and Omnicom Finance and their
respective creditors, including holders of the LYONs, to participate in the
assets of the operating subsidiaries will depend upon the amount of loans, and
security for those loans, on the relevant date of determination. The amount of
loans outstanding from Omnicom Capital and Omnicom Finance to these operating
subsidiaries, and the value of the collateral securing the loans, may not be
sufficient to assure repayment in full to all of Omnicom Capital's or Omnicom
Finance's respective creditors. The loans or the security for such loans could
also be invalidated in whole or in part in any liquidation or reorganization.
You Should Consider the United States Federal Income Tax Consequences of Owning
LYONs
The LYONs constitute contingent payment debt instruments and will accrue
tax original issue discount. As a result, you will be required to include
amounts in income, as ordinary income, in advance of the receipt of the cash, or
other property, attributable thereto. The issuers intend to compute and report
accruals of the tax original issue discount based upon a yield of 6.71% per
year, computed on a semiannual bond equivalent basis, which the issuers have
determined represents the yield the issuers would pay on a noncontingent,
nonconvertible, fixed rate debt with terms otherwise similar to the LYONs.
Pursuant to the issuers determination of the tax original issue discount on the
LYONs, you will recognize gain or loss on the sale, purchase by the issuers at
your option, conversion or redemption of a LYON in an amount equal to the
difference between the amount realized on such a transaction, including the fair
market value of any common stock received upon conversion or otherwise, and your
adjusted tax basis in the LYON. Any gain so recognized by you generally will be
ordinary interest income; any loss will be ordinary loss to the extent of the
interest previously included in income and, thereafter, capital loss. However,
it is possible that holders may be precluded by certain rules regarding
recapitalizations from recognizing any capital loss with respect to a conversion
or redemption of the LYONs in exchange for shares of Omnicom Group Inc. common
stock. Holders should consult their tax advisors regarding the deductibility of
any such capital loss. A summary of the federal income tax consequences of
ownership of the LYONs is described in this prospectus under the heading
"Federal Income Tax Considerations" beginning on page 28.
The Issuers May Not Have the Ability to Raise the Funds Necessary to Finance the
Purchase of LYONs at the Option of the Holder or the Change in Control of
Omnicom Group Inc.
At each February 7, through February 7, 2030 and upon a change in control
of Omnicom Group Inc. occurring on or before February 7, 2006, holders of LYONs
have the right to require the issuers to purchase their LYONs. The issuers may
not have sufficient funds at those times to make any required purchase of LYONs.
In addition, corporate events involving fundamental changes to Omnicom Group
Inc.'s capital structure, such as leveraged recapitalizations that would
increase the level of Omnicom Group's indebtedness, would not necessarily
constitute a change in control for these purposes. See "Description of LYONs --
Purchase of LYONs at Option of Holder" on page 19, and "-- Purchase at Option of
Holders Upon Change in Control of Omnicom Group Inc." beginning on page 22.
The Markets in Which Omnicom Group Participates are Highly Competitive and If
Omnicom Group Is Not Able to Compete Effectively Its Business and Financial
Results Could Be Adversely Affected
Omnicom Group faces the risks normally associated with global services
businesses. The operational and financial performance of its businesses is
generally tied to overall economic and regional market conditions, competition
for client assignments and talented staff, new business wins and losses and the
risks associated with extensive international operations. While Omnicom Group
has no reason to believe that its international operations as a whole present
any material risk to its overall business, there are some risks of doing
business, including those of currency fluctuations, political instability and
exchange controls, which do not affect domestic-focused firms.
9
The particular business in which Omnicom Group participates are highly
competitive. In general, the financial and technological barriers to entry are
low, with the key competitive considerations for keeping existing business and
winning new business being the quality and effectiveness of the services
offered, including Omnicom Group's ability to efficiently serve clients,
particularly large international clients, on a broad geographic basis. While
many of Omnicom Group's client relationships are long-standing, companies often
put their advertising, marketing services and public and corporate
communications business up for competitive review from time to time. To the
extent that Omnicom Group is not able to remain competitive or to keep key
clients, its business and financial results could be adversely affected.
Omnicom Group's ability to retain existing clients and to attract new
clients may, in some cases, be limited by clients' policies on or perceptions of
conflicts of interest arising out of other client relationships. In addition, an
important aspect of Omnicom Group's competitiveness is its ability to retain key
employee and management personnel. Omnicom Group's continuing ability to attract
and retain these employees may have a material effect on its business and
financial results.
FORWARD-LOOKING INFORMATION
Some of the statements in this prospectus and any documents incorporated
by reference constitute forward-looking statements. These statements relate to
future events or future financial performance and involve known and unknown
risks, uncertainties and other factors that may cause Omnicom Group's or its
industry's actual results, levels of activity, performance or achievements to be
materially different from those expressed or implied by any forward-looking
statements. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "could," "would," "should," "expect," "plan,"
"anticipate," "intend," "believe," "estimate," "predict," "potential" or
"continue" or the negative of those terms or other comparable terminology. These
statements are only present expectations. Actual events or results may differ
materially. Moreover, the issuers do not, nor does any other person, assume
responsibility for the accuracy and completeness of those statements.
10
SELECTED CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
The following table sets forth selected consolidated financial data for
Omnicom Group Inc. and its consolidated subsidiaries and should be read in
conjunction with the consolidated financial statements of Omnicom Group Inc.
incorporated into this prospectus by reference. The information for the nine
months ended September 30, 2003 and 2002 was derived from the unaudited
financial data included in Omnicom Group Inc.'s Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 2003 which, in the opinion of
management, includes all adjustments, consisting of normal recurring
adjustments, which Omnicom Group Inc. considers necessary for a fair
presentation, in all material respects, of its financial position and results of
operations for these periods. The results for the nine months ended September
30, 2003 are not necessarily indicative of the results to be expected for the
fiscal year ended December 31, 2003. The information for the years ended
December 31, 2002, 2001, 2000, 1999 and 1998 was derived from Omnicom Group
Inc.'s audited financial statements. Omnicom Group Inc.'s financial statements
for the year ended December 31, 2002 were audited by KPMG LLP, whom Omnicom
Group Inc. appointed as its independent auditors as of June 13, 2002. Omnicom
Group Inc.'s financial statements for the years ended December 31, 2001, 2000,
1999 and 1998 were audited by Omnicom Group Inc.'s former independent auditors,
Arthur Andersen LLP. Arthur Andersen has ceased auditing public companies in the
United States.
Nine months ended
September 30, Year ended December 31,
------------------------- -------------------------------------------------------------------
2003 2002 2002 2001 2000 1999 1998
----------- ----------- ----------- ----------- ----------- ----------- -----------
(Dollars in thousands except for per share amounts)
For the period:
Revenue ........................ $ 6,115,356 $ 5,417,454 $ 7,536,299 $ 6,889,406 $ 6,154,230 $ 5,130,545 $ 4,290,946
Operating profit ............... 794,411 770,740 1,104,115 968,184 878,090 724,130 562,207
Income after income taxes ...... 500,381 476,343 697,987 543,257 542,477 400,461 302,705
Net income ..................... 454,601 441,985 643,459 503,142 498,795 362,882 278,845
Earnings per common share
Basic ........................ 2.43 2.37 3.46 2.75 2.85 2.07 1.61
Diluted ...................... 2.42 2.36 3.44 2.70 2.73 2.01 1.57
Dividends declared per
common share ................... 0.60 0.60 0.80 0.775 0.70 0.625 0.525
At period end:
Cash and short-term
investments .................. 587,712 392,643 695,881 516,999 576,539 600,949 717,391
Total assets ................... $12,680,697 $11,222,307 $11,819,802 $10,617,414 $ 9,853,707 $ 9,017,637 $ 7,121,968
Long-term obligations:
Long-term debt ............... 185,014 758,709 197,861 490,105 1,015,419 263,149 268,913
Convertible notes ............ 2,339,310 1,750,000 1,747,037 850,000 229,968 448,483 448,497
Deferred compensation and
other liabilities .......... 328,525 306,876 293,638 296,980 296,921 300,746 269,966
As discussed in footnote 13 of the notes to Omnicom Group Inc.'s
consolidated financial statements for the year ended December 31, 2002, and as
required by Statement of Financial Accounting Standards (SFAS) No.
142--"Goodwill and Other Intangibles," beginning with Omnicom Group Inc.'s 2002
results, goodwill and other intangible assets that have indefinite lives are no
longer amortized. In the table that follows, Omnicom Group Inc.'s historical
results for periods prior to 2002 have been adjusted to eliminate goodwill
amortization for all periods, as well as a non-recurring gain on the sale of
Razorfish shares in 2000, and the related tax impacts. As a result of these
exclusions, this presentation is a non-GAAP financial measure. Omnicom Group
Inc. believes that by excluding these items, its financial results are more
comparable year to year and thus more meaningful for purposes of this analysis.
Omnicom Group Inc.'s consolidated results of operations with these adjustments
were as follows:
Nine months ended
September 30, Year ended December 31,
------------------------- ------------------------------------------------------------
2003 2002 2002 2001 2000 1999 1998
----------- ----------- ----------- --------- --------- --------- ---------
(Dollars in thousands except for per share amounts)
As adjusted:
Net income, GAAP ...................... $ 454,601 $ 441,985 $ 643,459 $ 503,142 $ 498,795 $ 362,882 $ 278,845
Add-back goodwill amortization
net of income taxes ................. -- -- -- 83,066 76,518 66,490 54,112
Less: gain on sale of Razorfish
shares, net of income taxes ......... -- -- -- -- (63,826) -- --
Net income, excluding goodwill
amortization and Razorfish
gain ................................ $ 454,601 $ 441,985 $ 643,459 $ 586,208 $ 511,487 $ 429,372 $ 332,957
Earnings per common share,
excluding goodwill
amortization and Razorfish
gain
Basic ............................... 2.43 2.37 3.46 3.21 2.93 2.45 1.92
Diluted ............................. 2.42 2.36 3.44 3.13 2.80 2.36 1.87
11
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges for
Omnicom Group Inc. and its consolidated subsidiaries for the nine months ended
September 30, 2003 and 2002 and each of the five most recent fiscal years.
Nine months ended
September 30, Year ended December 31,
----------------- ---------------------------------------------
2003 2002 2002 2001 2000 1999 1998
----- ----- ----- ----- ----- ----- -----
5.62x 5.80x 6.45x 4.82x 4.83x 4.44x 4.03x
The ratio of earnings to fixed charges is computed by dividing fixed
charges into earnings before income taxes plus fixed charges. Fixed charges
consist of interest expense and that portion of net rental expense deemed
representative of interest. Effective January 1, 2002 Omnicom Group Inc. stopped
recording goodwill amortization expense as required by SFAS No. 142.
The ratios shown for years ended December 31, 1998 through 2001, include
goodwill amortization expense.
USE OF PROCEEDS
The issuers will not receive any proceeds from the sale by any
securityholder of the LYONs or the Omnicom Group Inc. common stock issuable upon
conversion and/or redemption of the LYONs. See "Selling Securityholders"
beginning on page 32.
PRICE RANGE OF COMMON STOCK AND DIVIDEND HISTORY
Omnicom Group Inc.'s common stock is traded on the New York Stock Exchange
under the symbol "OMC." The table below shows the range of quarterly high and
low closing sale prices per share reported on the New York Stock Exchange
Composite Tape for Omnicom Group Inc.'s common stock for the periods indicated
and the average closing sale price per share and the dividends paid per share on
Omnicom Group Inc.'s common stock for such periods. The last reported sale price
per share on February 12, 2004 was $83.72.
Omnicom Common Stock
-------------------- Average Last Dividends
High Low Sale Price Per Share
------ ------ ------------ ---------
2002:
First Quarter ............................ $97.21 $85.10 $90.10 $0.200
Second Quarter ........................... 94.80 44.30 81.43 0.200
Third Quarter ............................ 64.89 40.74 55.35 0.200
Fourth Quarter ........................... 69.16 50.67 62.19 0.200
2003:
First Quarter ............................ $67.72 $48.50 $57.56 $0.200
Second Quarter ........................... 75.25 54.65 66.27 0.200
Third Quarter ............................ 80.97 71.05 75.01 0.200
Fourth Quarter ........................... 87.48 72.49 79.74 0.200
2004:
First Quarter (through February 12, 2004) $88.44 $81.05 $85.09 $ --
----------
The payment of dividends by Omnicom Group Inc. in the future will be
determined by its board of directors and will depend on business conditions,
Omnicom Group's financial condition and earnings and other factors.
Omnicom Group Inc. is not aware of any restrictions on its present or
future ability to pay dividends. However, under the terms of some of its
borrowing facilities, certain financial tests must be satisfied in order to pay
dividends.
Omnicom Group Inc. has 1.0 billion authorized shares of common stock, par
value $0.15 per share, of which 190.5 million shares were outstanding on January
30, 2004.
12
CAPITALIZATION
The following table sets forth Omnicom Group Inc.'s consolidated
capitalization as of September 30, 2003. You should read this table in
conjunction with Omnicom Group Inc.'s financial statements and related notes and
other financial and operating data included elsewhere in or incorporated by
reference into this prospectus.
September 30, 2003
------------------
(in thousands)
Current liabilities:
Accounts payable ...................................... $ 4,468,728
Advance billings ...................................... 707,374
Current portion of long-term debt ..................... 11,810
Bank loans ............................................ 52,873
Accrued taxes and other liabilities ................... 1,280,590
------------
Total current liabilities ............................. 6,521,375
------------
Long-term debt ............................................ 185,014
Convertible Notes ......................................... 2,339,310
Deferred compensation and other liabilities ............... 328,525
Minority interests ........................................ 189,056
------------
Total long-term indebtedness .......................... 3,041,905
------------
Shareholders' equity:
Common stock, 198,624,279 shares issued,
189,978,523 shares outstanding(1) ................. 29,790
Additional paid-in capital ............................ 1,382,025
Retained earnings ..................................... 2,456,938
Unamortized restricted stock .......................... (139,868)
Accumulated other comprehensive loss .................. (10,089)
Treasury stock ........................................ (601,379)
------------
Total shareholders' equity ........................ 3,117,417
------------
Total liabilities and shareholders' equity ............ $ 12,680,697
============
----------
(1) Outstanding common stock of Omnicom Group Inc. as of January 30, 2004 of
190.5 million shares excludes 5.8 million shares reserved for issuance
upon conversion of the $600.0 million Zero Coupon Zero Yield Convertible
Notes due 2033, 7.7 million shares reserved for issuance upon conversion
of the LYONS, 8.1 million shares reserved for issuance upon conversion of
the issuers' $892.0 million Zero Coupon Zero Yield Convertible Notes due
2032 and shares reserved for issuance under Omnicom Group Inc.'s
outstanding option grants.
13
DESCRIPTION OF LYONS
Omnicom Group, Inc. issued the LYONs under a senior indenture dated as of
February 7, 2001 between it and JPMorgan Chase Bank, formerly known as The Chase
Manhattan Bank, as trustee. On February 13, 2004, Omnicom Capital and Omnicom
Finance, wholly-owned finance subsidiaries of Omnicom Group Inc., each became a
co-issuer and co-obligor, jointly and severally, with Omnicom Group Inc., of the
LYONs pursuant to a supplemental indenture between JPMorgan Chase Bank, as
trustee, Omnicom Group Inc., Omnicom Capital and Omnicom Finance. The following
summarizes the material provisions of the LYONs and the indenture as amended by
the supplemental indenture. The following summary is not complete and is subject
to, and qualified by reference to, all of the provisions of the LYONs and the
indenture as so amended.
The indenture does not contain any financial covenants or any restrictions
on the payment of dividends or the issuance or purchase of the issuers'
securities. The indenture contains no covenants or other provisions to give
protection to the holders of the LYONs in the event of a highly leveraged
transaction or a change in control, except to the extent described under "--
Purchase at Option of Holders upon Change in Control of Omnicom Group Inc."
beginning on page 22.
General
Under the indenture, the LYONS are limited to $850,000,000 aggregate
inital principal amount at maturity. There are currently $847,031,000 aggregate
initial principal amounts at maturity of LYONs outstanding. The LYONs will
mature on February 7, 2031. Before February 7, 2021, the principal amount at
maturity of a LYON will be equal to $1,000, the initial principal amount at
maturity. On or after February 7, 2021, if, for the last 20 trading days
preceding February 7, 2021, the average conversion value of a LYON is greater
than the issue price but less than or equal to $2,200, then the principal amount
at maturity of a LYON will be equal to the conversion value of the LYON on
February 7, 2021, but in no event greater than $2,000. If that average
conversion value exceeds $2,200 of the issue price then the principal amount at
maturity will equal $1,000.
Contingent additional principal is the difference between the $1,000
initial principal amount at maturity and the principal amount at maturity, as
determined in accordance with the prior paragraph, if any. Contingent additional
principal will be calculated on a semi-annual bond equivalent basis, using a
360-day year composed of twelve 30-day months.
The conversion value of a LYON as of any date of determination will equal
the sale price per share of Omnicom Group Inc. common stock on such
determination date multiplied by the number of shares of common stock then
issuable upon conversion of a LYON.
Principal on the LYONs will be payable at the office of the paying agent,
which initially will be an office or agency of the trustee, or an office or
agency maintained by the issuers for such purpose, in the Borough of Manhattan,
The City of New York.
The issuers will not pay any cash interest on the LYONs prior to maturity
unless contingent cash interest becomes payable as described under "--
Contingent Cash Interest" below. Each LYON was issued at an issue price of
$1,000 per LYON. Although the LYONs were not offered at a discount from their
issue price, they are contingent payment debt instruments.
Maturity, conversion, purchase by the issuers at the option of the holder
or redemption of a LYON will cause any and all contingent additional principal,
if any, and contingent cash interest, if any, to cease to accrue on such LYON.
The issuers may not reissue a LYON that has matured or been converted, purchased
by the issuers at your option, redeemed or otherwise cancelled.
LYONs may be presented for conversion at the office of the conversion
agent and for exchange or registration of transfer at the office of the
registrar. The conversion agent and the registrar will initially be the trustee.
The issuers will not charge a service fee for any exchange or registration of
transfer of LYONs. However, the issuers may require the holder to pay any tax,
assessment or other governmental charge payable as a result of such transfer or
exchange.
Ranking of the LYONs
The LYONs are the joint and several senior unsecured obligations of
Omnicom Group Inc., Omnicom Capital and Omnicom Finance. The LYONs rank equal in
right of payment to all of the issuers respective
14
existing and future senior unsecured indebtedness. However, Omnicom Group Inc.
is a holding company and Omnicom Capital and Omnicom Finance are finance
subsidiaries. As finance subsidiaries, their respective assets consist of the
intercompany loans they make or have made to Omnicom Group's operating
subsidiaries and the related interest receivables. As a result the LYONs are
effectively subordinated to all existing and future obligations of Omnicom Group
Inc.'s operating subsidiaries, including trade payables, and to the issuers'
respective obligations that are secured, to the extent of the security. See
"Risk Factors -- Omnicom Group Inc.'s Holding Company Structure Results in
Structural Subordination and May Affect the Issuers' Ability to Make Payments on
LYONs" beginning on page 8.
As of September 30, 2003, Omnicom Group had $2,589.0 million of
indebtedness outstanding, all of which is unsecured. Of this amount $2,517.0
million represents direct obligations of the issuers and $72.0 million
represents indebtedness of Omnicom Group Inc.'s operating subsidiaries, of which
$34.1 million is guaranteed by Omnicom Group Inc.
Guarantee
The obligations of Omnicom Capital and Omnicom Finance under the LYONs are
fully and unconditionally guaranteed on a senior unsecured basis by Omnicom
Group Inc. The guarantee is senior in right of payment to all subordinated debt
of Omnicom Group Inc. and its subsidiaries and equal in right of payment to all
of Omnicom Group Inc.'s other senior unsecured indebtedness, including the
LYONs.
Book-Entry System
The LYONs were issued only in the form of global securities held in
book-entry form. DTC or its nominee is the sole registered holder of the LYONs
for all purposes under the indenture. Owners of beneficial interests in the
LYONs represented by the global securities hold their interests pursuant to the
procedures and practices of DTC. As a result, beneficial interests in these
securities are shown on, and may only be transferred through, records maintained
by DTC and its direct and indirect participants and any such interest may not be
exchanged for certificated securities, except in limited circumstances. Owners
of beneficial interests must exercise any rights in respect of their interests,
including any right to convert or require purchase of their interests in the
LYONs, in accordance with the procedures and practices of DTC. Beneficial owners
are not holders and are not entitled to any rights provided to the holder of
LYONs under the global securities or the indenture. The issuers and the trustee,
and any of their respective agents, may treat DTC as the sole holder and
registered owner of the global securities.
Exchange of Global Securities
LYONs represented by a global security are exchangeable for certificated
securities with the same terms only if:
o DTC is unwilling or unable to continue as depositary or if DTC
ceases to be a clearing agency registered under the Exchange Act and
a successor depositary is not appointed by the issuers within 90
days,
o the issuers decide to discontinue use of the system of book-entry
transfer through DTC (or any successor depositary), or
o a default under the indenture occurs and is continuing.
DTC has advised the issuers that it is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
facilitates the settlement of transactions among its participants through
electronic computerized book-entry changes in participants' accounts,
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and other organizations, some of whom and/or their
representatives own DTC. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
15
Conversion Rights
Holders may surrender LYONs for conversion into shares of common stock of
Omnicom Group Inc. only if at least one of the conditions described below is
satisfied. In addition, a LYON for which a holder has delivered a purchase
notice or a change in control purchase notice requiring the issuers to purchase
the LYON may be surrendered for conversion only if such notice is withdrawn in
accordance with the indenture.
The initial conversion rate is 9.09 shares per LYON, subject to adjustment
upon the occurrence of the events described below. A holder of a LYON otherwise
entitled to a fractional share will receive cash in an amount equal to the value
of such fractional share based on the sale price, as defined below under "--
Purchase of LYONs at the Option of the Holder," beginning on page 19, on the
trading day immediately preceding the conversion date.
If contingent cash interest is payable to holders of LYONs during any
particular six-month period, and any LYONs are converted after the applicable
record date, those LYONs upon surrender must be accompanied by funds equal to
the amount of contingent cash interest payable on the principal amount of LYONs
so converted, unless those LYONs have been called for redemption, in which case
no such payment shall be required.
The ability to surrender LYONs for conversion will expire at the close of
business on February 7, 2031.
To convert a LYON into shares of common stock, a holder must:
o complete and manually sign the conversion notice on the back of the
LYON or complete and manually sign a facsimile of the conversion
notice and deliver the conversion notice to the conversion agent;
o surrender the LYON to the conversion agent;
o if required by the conversion agent, furnish appropriate
endorsements and transfer documents; and
o if required, pay all transfer or similar taxes.
Pursuant to the indenture, the date on which all of the foregoing requirements
have been satisfied is the conversion date.
If one or more of the conditions to the conversion of the LYONs has been
satisfied, the issuers will promptly notify the holders of LYONs thereof and use
their reasonable best effort to post this information on the Omnicom Group Inc.
web site or, at their option, otherwise publicly disclose this information.
The ability to surrender notes for conversion will expire at the close of
business February 7, 2031.
Conversion Based on Omnicom Group Inc.'s Common Stock Price
Before February 7, 2021, holders may surrender a LYON for conversion
during any calendar quarter, if for the last 20 trading days in the preceding
calendar quarter, the average conversion value of the LYONs, calculated as
described above under "-- General" on page 14, is greater than or equal to the
following amount for the quarter indicated:
Quarter Ended Amount
------------- ------
March 31, 2004 ............................ $1,600
June 30, 2004 ............................. $1,650
September 30, 2004 ........................ $1,700
December 31, 2004 ......................... $1,750
March 31, 2005 ............................ $1,800
June 30, 2005 ............................. $1,850
September 30, 2005 ........................ $1,900
December 31, 2005 ......................... $1,950
March 31, 2006 ............................ $2,000
June 30, 2006 ............................. $2,050
September 30, 2006 ........................ $2,100
December 31, 2006 ......................... $2,150
March 31, 2007 and thereafter ............. $2,200
16
If the foregoing condition is satisfied at any time before February 7,
2021, then the LYONs will be convertible at any time at the option of the
holder, through maturity. If the foregoing condition is satisfied at any time
after February 7, 2021, then the LYONs will be convertible at any time at the
option of the holder, through maturity.
On February 7, 2021, if the average conversion value of a LYON is greater
than or equal to $2,200, then the LYONs will be convertible at any time
thereafter at the option of the holder, through maturity.
Conversion Based on Credit Ratings
Holders may surrender a LYON for conversion at any time after the credit
rating assigned to the LYONs is reduced to Baa3 or lower by Moody's Investors
Service, Inc. or BBB or lower by Standard & Poor's Ratings Services.
Conversion upon Notice of Redemption
A holder may surrender for conversion a LYON called for redemption at any
time prior to the close of business on the second business day prior to the
redemption date, even if it is not otherwise convertible at that time. A LYON
for which a holder has delivered a purchase notice or a change in control
purchase notice as described below requiring us to purchase the LYON may be
surrendered for conversion only if such notice is withdrawn in accordance with
the indenture.
Conversion upon Occurrence of Specified Corporate Transactions
If Omnicom Group Inc. elects to
o distribute to all holders of its common stock certain rights
entitling them to purchase, for a period expiring within 60 days,
common stock at less than the sale price, as defined below under
"--Purchase of LYONs at Option of the Holder" beginning on page 19,
at the time, or
o distribute to all holders of its common stock assets, debt
securities or certain rights to purchase its securities, which
distribution has a per share value as determined by its board of
directors exceeding 15% of the closing price of the common stock on
the day preceding the declaration date for such distribution,
Omnicom Group Inc. must notify the holders of LYONs at least 20 days prior to
the ex-dividend date for such distribution. Once Omnicom Group Inc. has given
such notice, holders may surrender their LYONs for conversion at any time until
the earlier of the close of business on the business day prior to the
ex-dividend date or Omnicom Group Inc.'s announcement that such distribution
will not take place.
In addition, if Omnicom Group Inc. is party to a consolidation, merger or
binding share exchange pursuant to which its common stock would be converted
into cash, securities or other property, a holder may surrender LYONs for
conversion at any time from and after the date which is 15 days prior to the
anticipated effective date for the transaction until 15 days after the actual
effective date of such transaction.
Conversion Rate Adjustments and Delivery of Omnicom Group Inc. Common Stock
The initial conversion rate is 9.09 of common stock of Omnicom Group Inc.
The conversion rate will not be adjusted for accrued contingent additional
principal, if any, or contingent cash interest, if any. As soon as practicable
following the conversion date, Omnicom Group Inc. will deliver through the
conversion agent a certificate for the number of full shares of common stock of
Omnicom Group Inc. into which any LYON is converted, together with any cash
payment for fractional shares. Delivery to the holder of the full number of
shares of common stock of Omnicom Group Inc. into which the LYON is convertible,
together with any cash payment for such holder's fractional shares, will be
deemed to satisfy the issuers' obligation to pay the principal amount at
maturity of the LYON. For a discussion of the tax treatment of a holder
receiving common stock upon conversion, see "Federal Income Tax Considerations
-- Disposition or Conversion" on page 31.
The conversion rate is required to be adjusted for:
o dividends or distributions on Omnicom Group Inc.'s common stock
payable in common stock or other capital stock of Omnicom Group
Inc.,
17
o subdivisions, combinations or certain reclassifications of Omnicom
Group Inc.'s common stock,
o distributions to all holders of Omnicom Group Inc.'s common stock of
certain rights to purchase common stock of Omnicom Group Inc. for a
period expiring within 60 days at less than the sale price at the
time, and
o distributions to those holders of Omnicom Group Inc.'s assets or
debt securities or certain rights to purchase its securities
(excluding cash dividends or other cash distributions from current
or retained earnings unless the annualized amount thereof per share
exceeds 5% of the sale price of Omnicom Group Inc.'s common stock on
the day preceding the date of declaration of such dividend or other
distribution).
However, no adjustment need be made if holders may participate in the
transaction without conversion or in certain other cases.
The indenture permits the issuers to increase the conversion rate from
time to time.
If Omnicom Group Inc. is party to a consolidation, merger or binding share
exchange pursuant to which its common stock is converted into cash, securities
or other property, at the effective time of the transaction, the right to
convert a LYON into shares of its common stock will be changed into a right to
convert it into the kind and amount of securities, cash or other property of
Omnicom Group Inc. or another person which the holder would have received if the
holder had converted the holder's LYON immediately prior to the transaction. If
the transaction also constitutes a "change in control," as defined below, the
holder will be able to require the issuers to purchase all or a portion of its
LYONs as described under "-- Purchase at Option of Holders upon Change in
Control of Omnicom Group Inc." beginning on page 22.
In the event of:
o a taxable distribution to holders of common stock of Omnicom Group
Inc. which results in an adjustment of the conversion rate, or
o an increase in the conversion rate at the issuers discretion,
the holders of the LYONs may, in certain circumstances, be deemed to have
received a distribution subject to United States federal income tax as a
dividend. See "Federal Income Tax Considerations -- Constructive Dividend" on
page 31.
Contingent Cash Interest
The issuers will pay contingent cash interest to the holders of LYONs
during any six-month period from February 8 to August 7, and from August 8 to
February 7, commencing February 8, 2006 if the average market price of a LYON
for a five trading day measurement period preceding the applicable six-month
period equals or exceeds $1,200. For any six-month period, the amount of
contingent cash interest per LYON will be equal to the regular cash dividends
paid by Omnicom Group Inc. per share of its common stock multiplied by the
number of shares then issuable upon conversion of a LYON. Regular cash dividends
are quarterly or other periodic cash dividends on Omnicom Group Inc. common
stock as declared by Omnicom Group Inc.'s board of directors as part of its cash
dividend payment practices and that are not designated by them as extraordinary
or special or other nonrecurring dividends. As a result, Omnicom Group Inc. does
not pay regular cash dividends, holders will not be entitled to any contingent
cash interest.
The payment of contingent cash interest is designed to enable holders of
the notes to receive the same current cash yield on the notes that they would
have received had they converted the notes into the common stock of Omnicom
Group Inc. in the event that Omnicom Group Inc. pays dividends on its common
stock. Contingent cash interest, if any, will accrue and be payable to holders
of LYONs as of the record date for the related Omnicom Group Inc. common stock
dividend during the relevant six-month period. Such payments will be made on the
payment date of the related common stock dividend.
Each five trading day measurement period will end on the second trading
day immediately preceding the applicable six-month period; provided, however,
that if the issuers declare a dividend for which the record date will occur
prior to the applicable six-month period but for which the payment date will
occur during the applicable six-month period, the five trading day measurement
period will instead end on the second trading day immediately preceding that
record date.
18
For purposes of determining whether contingent cash interest is payable,
the market price of a LYON on any date of determination means the average of the
secondary market bid quotations per LYON obtained by the bid solicitation agent
for $10.0 million principal amount at maturity of LYONs at approximately 4:00
p.m., New York City time, on such determination date from three independent
nationally recognized securities dealers the issuers select, provided that if
o at least three such bids are not obtained by the bid solicitation
agent, or
o in the issuers' reasonable judgment, the bid quotations are not
indicative of the secondary market value of the LYONs,
then the market price of the LYON will equal (1) the then applicable conversion
rate of the LYONs multiplied by (2) the average sale price of Omnicom Group Inc.
common stock on the five trading days ending on such determination date,
appropriately adjusted.
The bid solicitation agent will initially be J.P. Morgan Chase Bank,
formerly known as The Chase Manhattan Bank. The issuers may change the bid
solicitation agent, but the bid solicitation agent will not be their affiliate.
The bid solicitation agent will solicit bids from securities dealers that are
believed by the issuers to be willing to bid for the LYONs.
The issuers will determine every six months, commencing February 8, 2006,
whether the conditions to the payment of contingent cash interest have been
satisfied and, if so, the issuers will promptly notify the holders of LYONs
thereof and use their reasonable best efforts to post this information on the
Omnicom Group Inc. web site or, at their option, otherwise publicly disclose
this information.
The issuers may unilaterally increase the amount of contingent cash
interest they pay, but they will have no obligation to do so.
Redemption of LYONs at the Option of the Issuers
No sinking fund is provided for the LYONs. Under the indenture, the
issuers cannot redeem the LYONs on or before February 7, 2006, except as set
forth under "-- Purchase of the LYONs at Option of Holders upon Change in
Control of Omnicom Group Inc." beginning on page 22. After February 7, 2006, and
before February 7, 2021 the issuers may, at their option, redeem the LYONs for
cash at any time in whole or from time to time in part at the issue price of the
LYONs. On or after February 7, 2021, the issuers may redeem the LYONs at any
time in whole or in part at the issue price plus any contingent additional
principal that has accrued to the date of redemption. On February 4, 2004,
Omnicom Group Inc. announced that it extended the commencement of the period
during which the LYONs may be redeemed from February 7, 2006 to February 7,
2009. The issuers will give not less than 30 days nor more than 60 days notice
of redemption by mail to holders of LYONs. LYONs called for redemption will be
convertible by the holder, even if the other conditions described under "--
Conversion Rights," beginning on page 16, have not occurred, until the close of
business on the second business day prior to the redemption date.
The LYONs will be redeemable in integral multiples of $1,000.
If less than all of the outstanding LYONs are to be redeemed, the trustee
will select the LYONs to be redeemed. In this case, the trustee may select the
LYONs by lot, pro rata or by any other method the trustee considers fair and
appropriate. If a portion of a holder's LYONs is selected for partial redemption
and the holder converts a portion of the LYONs, the converted portion will be
deemed to be the portion selected for redemption.
Purchase of LYONs at the Option of the Holder
At each February 7, through February 7, 2030, holders may require the
issuers to purchase any outstanding LYON for which the holder has properly
delivered and not withdrawn a written purchase notice, subject to certain
additional conditions. Holders may require the issuers to purchase all or a
portion of their LYONs on each February 7 at the following prices:
(1) through February 7, 2021 at the issue price of the LYON; and
(2) February 7, 2022 through February 7, 2030 at the issue price of the
LYON plus any contingent additional principal that has accrued to
the purchase date.
19
Holders may submit their LYONs for purchase to the paying agent at any
time from the opening of business on the date that is 20 business days prior to
the purchase date until the close of business on the third business day prior to
the purchase date.
The purchase price will be payable, at the issuers' option, in cash,
shares of Omnicom Group Inc.'s common stock or any combination thereof. However,
the issuers may also elect, at their option, to offer a cash payment to the
holders as an incentive not to exercise their right to require the issuers to
purchase their LYONs. Omnicom Group Inc. has made one such offer as of the date
of this prospectus. Additionally, on February 4, 2004, Omnicom Group Inc.
announced that it would extend the commencement of the period during which the
LYONs can be redeemed from February 7, 2006 to February 7, 2009 for those
holders who elected not to exercise such rights.
The issuers will be required to give notice on a date not less than 20
business days prior to the purchase date to all holders at their addresses shown
in the register of the registrar, and to beneficial owners as required by
applicable law, stating among other things:
o whether the issuers will pay the purchase price of LYONs in cash or
common stock of Omnicom Capital Inc. or any combination thereof,
specifying the percentage of each,
o if the issuers elect to pay in common stock of Omnicom Capital Inc.,
the method of calculating the market price of such common stock, and
o the procedures that holders must follow to require the issuers to
purchase their LYONs.
The purchase notice given by each holder electing to require the issuers
to purchase LYONs shall be given so as to be received by the paying agent no
later than the close of business on the third business day prior to the purchase
date and must state:
o the certificate numbers of the holder's LYONs to be delivered for
purchase,
o the portion of the principal amount at maturity of LYONs to be
purchased, which must be $1,000 or an integral multiple of $1,000,
and
o that the LYONs are to be purchased by the issuers pursuant to the
applicable provisions of the LYONs.
A holder may withdraw any purchase notice by delivering a written notice
of withdrawal to the paying agent prior to the close of business on the purchase
date. The notice of withdrawal shall state:
o the principal amount at maturity of the LYONs being withdrawn,
o the certificate numbers of the LYONs being withdrawn, and
o the principal amount at maturity, if any, of the LYONs that remain
subject to the purchase notice.
If the issuers elect to pay the purchase price, in whole or in part, in
shares of common stock of Omnicom Group Inc., the number of shares of common
stock to be delivered by Omnicom Group Inc. shall be equal to the portion of the
purchase price to be paid in common stock divided by the market price of a share
of such common stock.
The issuers will pay cash based on the market price for all fractional
shares of Omnicom Group Inc.'s common stock in the event they elect to deliver
common stock of Omnicom Group Inc. in payment, in whole or in part, of the
purchase price. See "Federal Income Tax Considerations" beginning on page 28.
The "market price" of the common stock of Omnicom Group Inc. means the
average of the sale prices of the common stock for the five trading days ending
on (if the third business day prior to the applicable purchase date is a trading
day or, if not, then on the last trading day prior to) the third business day
prior to the applicable purchase date, appropriately adjusted to take into
account the occurrence, during the period commencing on the first of the trading
days during the relevant five trading day period and ending on the purchase
date, of certain events that would result in an adjustment of the conversion
rate with respect to the common stock.
The "sale price" of the common stock of Omnicom Group Inc. on any date
means the closing per share sale price (or if no closing sale price is reported,
the average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on such date as reported
in composite
20
transactions for the principal United States securities exchange on which the
common stock is then traded or, if the common stock is not listed on a United
States national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated or otherwise as provided in the indenture.
Because the market price of Omnicom Group Inc.'s common stock is
determined prior to the applicable purchase date, holders of LYONs bear the
market risk with respect to the value of such common stock to be received from
the date such market price is determined to such purchase date. The issuers may
pay the purchase price or any portion of the purchase price in common stock only
if the information necessary to calculate the market price is published in a
daily newspaper of national circulation.
Upon determination of the actual number of shares of common stock of
Omnicom Group Inc. to be issued for each $1,000 principal amount at maturity of
LYONs in accordance with the foregoing provisions, the issuers will promptly
notify the holders of LYONs thereof and use their respective reasonable best
efforts to post this information on Omnicom Group Inc.'s web site or, at their
option, otherwise publicly disclose this information.
In addition to the above conditions, the right of the issuers to purchase
LYONs, in whole or in part, with common stock of Omnicom Group Inc. is subject
to Omnicom Group Inc. satisfying various conditions, including:
o listing of such common stock on the principal United States
securities exchange on which Omnicom Group Inc.'s common stock is
then listed or, if not so listed, on Nasdaq,
o the registration of the common stock under the Securities Act and
the Exchange Act, if required, and
o any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such
qualification and registration.
If these conditions are not satisfied with respect to a holder prior to
the close of business on the purchase date, the issuers will be required to pay
the purchase price of the LYONs to the holder entirely in cash. See "Federal
Income Tax Considerations -- Disposition or Conversion" on page 31. The issuers
may not change the form or components or percentages of components of
consideration to be paid for the LYONs once they have given the notice that they
are required to give to holders of LYONs, except as described in the first
sentence of this paragraph.
In connection with any purchase offer, the issuers will
o comply with the provisions of any tender offer rules under the
Exchange Act which may then be applicable, and
o file Schedule TO or any other required schedule under the Exchange
Act, if required.
The issuers obligation to pay the purchase price for a LYON for which a
purchase notice has been delivered and not validly withdrawn is conditioned upon
the holder delivering the LYON, together with necessary endorsements, to the
paying agent at any time after delivery of the purchase notice. Payment of the
purchase price for the LYON will be made promptly following the later of the
purchase date or the time of delivery of the LYON.
If the paying agent holds money or securities sufficient to pay the
purchase price of the LYON on the business day following the purchase date in
accordance with the terms of the indenture, then, immediately after the purchase
date, the LYON will cease to be outstanding and any contingent additional
principal that has accrued will cease to accrue, whether or not the LYON is
delivered to the paying agent. Thereafter, all other rights of the holder shall
terminate, other than the right to receive the purchase price upon delivery of
the LYON.
The issuers ability to purchase LYONs may be limited by the terms of their
then-existing borrowing agreements.
The issuers may not purchase any LYONs for cash at the option of holders
if an event of default with respect to the LYONs has occurred and is continuing,
other than a default in the payment of the purchase price with respect to such
LYONs.
21
Purchase at Option of Holders upon Change in Control of Omnicom Group Inc.
In the event of a change in control of Omnicom Group Inc. occurring on or
prior to February 7, 2006, each holder will have the right, at the holder's
option, subject to the terms and conditions of the indenture, to require the
issuers to purchase for cash all or any portion of the holder's LYONs, at a
price equal to $1,000 per LYON. The issuers will be required to purchase the
LYONs as of the date that is 35 business days after the occurrence of such
change in control. This date is referred to refer to as the "change in control
purchase date."
In addition, if at least 90% in aggregate principal amount of the LYONs
outstanding immediately prior to the change of control of Omnicom Group Inc. are
purchased on the change in control purchase date, the issuers may, within 90
days following the change in control purchase date, at their option, redeem all
of the remaining LYONs at a redemption price equal to $1,000 per LYON.
Within 15 days after the occurrence of a change in control of Omnicom
Group Inc., the issuers must mail to the trustee and to all holders of LYONs at
their addresses shown in the register of the registrar and to beneficial owners
as required by applicable law a notice regarding the change in control, which
notice must state:
o the events causing the change in control of Omnicom Group Inc.
o the date of the change in control,
o the last date on which a holder may exercise the purchase right,
o the change in control purchase price,
o the change in control purchase date,
o the name and address of the paying agent and the conversion agent,
o the conversion rate and any adjustments to the conversion rate,
o that LYONs with respect to which a change in control purchase notice
is given by the holder may be converted, if otherwise convertible,
only if the change in control purchase notice has been withdrawn in
accordance with the terms of the indenture, and
o the procedures that holders must follow to exercise these rights.
To exercise this right, the holder must deliver a written notice so as to
be received by the paying agent no later than the close of business on the third
business day prior to the purchase date. The required purchase notice upon a
change in control must state:
o the certificate numbers of the LYONs to be delivered by the holder,
o the principal amount at maturity of LYONs to be purchased, which
will be $1,000 or an integral multiple of $1,000, and
o that the issuers are to purchase such LYONs pursuant to the
applicable provisions of the LYONs.
A holder may withdraw any change in control purchase notice by delivering
to the paying agent a written notice of withdrawal prior to the close of
business on the change in control purchase date. The notice of withdrawal must
state:
o the principal amount at maturity of the LYONs being withdrawn,
o the certificate numbers of the LYONs being withdrawn, and
o the principal amount at maturity, if any, of the LYONs that remain
subject to a change in control purchase notice.
The issuers' obligation to pay the change in control purchase price for a
LYON for which a change in control purchase notice has been delivered and not
validly withdrawn is conditioned upon delivery of the LYON, together with
necessary endorsements, to the paying agent at any time after the delivery of
such change in control purchase notice. Payment of the change in control
purchase price for such LYON will be made promptly following the later of the
change in control purchase date or the time of delivery of such LYON.
22
If the paying agent holds money sufficient to pay the change in control
purchase price of the LYON on the change in control purchase date in accordance
with the terms of the indenture, then, immediately after the change in control
purchase date, whether or not the LYON is delivered to the paying agent, all
rights of the holder shall terminate, other than the right to receive the change
in control purchase price upon delivery of the LYON.
Under the indenture, a "change in control" of Omnicom Group Inc. is deemed
to have occurred at such time as:
o any person, including its affiliates and associates, other than
Omnicom Group Inc., its subsidiaries or their employee benefit
plans, files a Schedule 13D or TO (or any successor schedules, forms
or reports under the Exchange Act) disclosing that such person has
become the beneficial owner of 50% or more of the voting power of
Omnicom Group Inc.'s common stock or other capital stock into which
Omnicom Group Inc.'s common stock is reclassified or changed, with
limited exceptions, or
o any consolidation, merger or share exchange of Omnicom Group Inc.
shall have been consummated pursuant to which the common stock would
be converted into cash, securities or other property, in each case
other than a consolidation, merger or share exchange of Omnicom
Group Inc. in which the holders of its common stock immediately
prior to the consolidation, merger or share exchange have, directly
or indirectly, at least a majority of the total voting power in the
aggregate of all classes of ordinary voting stock of the continuing
or surviving corporation immediately after the consolidation, merger
or share exchange.
The indenture does not permit the issuers' respective boards of directors
to waive their respective obligations to purchase LYONs at the option of holders
in the event of a change in control.
In connection with any purchase offer in the event of a change in control
of Omnicom Group Inc., the issuers will:
o comply with the provisions of any tender offer rules under the
Exchange Act which may then be applicable, and
o file a Schedule TO or any other required schedule under the Exchange
Act, if required.
The change in control purchase feature of the LYONs may in certain
circumstances make more difficult or discourage a takeover of Omnicom Group Inc.
The change in control purchase feature, however, is not the result of the
issuers' knowledge of any specific effort:
o to accumulate shares of common stock of Omnicom Group Inc.,
o to obtain control of Omnicom Group Inc. by means of a merger, tender
offer, solicitation or otherwise, or
o part of a plan by management to adopt a series of anti-takeover
provisions.
Instead, the change in control purchase feature is a standard term
contained in other LYONs offerings that have been marketed by Merrill Lynch. The
terms of the change in control purchase feature resulted from negotiations
between Merrill Lynch and Omnicom Group Inc.
Omnicom Group Inc. could, in the future, enter into certain transactions,
including certain recapitalizations, that would not constitute a change in
control with respect to the change in control purchase feature of the LYONs but
that would increase the amount of its (or its subsidiaries') outstanding
indebtedness. See "Risk Factors Relating to the LYONs -- The Lack of Covenants
Applicable to the LYONs May Not Afford Protection Under Some Circumstances" on
page 8.
The issuers' may not purchase LYONs at the option of holders upon a change
in control of Omnicom Group Inc. if there has occurred and is continuing an
event of default with respect to the LYONs, other than a default in the payment
of the change in control purchase price with respect to the LYONs.
23
Events of Default
The following will be events of default for the LYONs
(1) default in payment of the principal amount at maturity, contingent
additional principal, redemption price, purchase price or change in
control purchase price with respect to any LYON when such becomes
due and payable,
(2) default in payment of any contingent cash interest, which default
continues for 30 days,
(3) the issuers' failure to comply with any of their respective other
agreements in the LYONs or the indenture upon receipt by them of
notice of such default by the trustee or by holders of not less than
25% in aggregate principal amount at maturity of the LYONs then
outstanding and their failure to cure (or obtain a waiver of) such
default within 60 days after receipt of such notice,
(4) (A) the issuers' failure to make any payment by the end of any
applicable grace period after maturity of their respective
indebtedness, which term as used in the indenture means obligations
(other than nonrecourse obligations) of the issuers for borrowed
money or evidenced by bonds, debentures, notes or similar
instruments in an amount (taken together with amounts in (B)) in
excess of $100 million and continuance of such failure, or (B) the
acceleration of their respective indebtedness in an amount (taken
together with the amounts in (A)) in excess of $100 million because
of a default with respect to such indebtedness without such
indebtedness having been discharged or such acceleration having been
cured, waived, rescinded or annulled in case of (A) or (B) above,
for a period of 30 days after written notice to the issuers by the
trustee or to the issuers and the trustee by the holders of not less
than 25% in aggregate principal amount at maturity of the LYONs then
outstanding; however, if any such failure or acceleration referred
to in (A) or (B) above shall cease or be cured, waived, rescinded or
annulled, then the event of default by reason thereof shall be
deemed not to have occurred, or
(5) certain events of bankruptcy or insolvency affecting Omnicom Group
Inc., Omnicom Capital or certain of Omnicom Group Inc.'s
subsidiaries.
If an event of default shall have happened and be continuing, either the
trustee or the holders of not less than 25% in aggregate principal amount at
maturity of the LYONs then outstanding may declare the issue price of the LYONs,
plus any accrued and unpaid contingent cash interest and contingent additional
principal through the date of such declaration, to be immediately due and
payable. In the case of certain events of bankruptcy or insolvency of Omnicom
Group Inc., the issue price of the LYONs plus accrued and unpaid contingent cash
interest and contingent additional principal shall automatically become
immediately due and payable. The holders of a majority in aggregate principal
amount at maturity of the LYONs then outstanding, by notice to the trustee, and
without notice to any other holder, may rescind an acceleration and its
consequences if:
o the rescission would not conflict with any judgment or decree;
o all existing events of default have been cured or waived, except any
nonpayment of the initial principal amount at maturity plus accrued
and unpaid contingent cash interest and contingent additional
principal that have become due solely as a result of acceleration;
and
o all amounts due to the trustee have been paid.
No rescission shall affect any subsequent default or impair any right
consequent to the rescission.
In some circumstances the holders of a majority in aggregate principal
amount at maturity of the LYONs then outstanding, by notice to the trustee, and
without notice to any other holder, may waive an existing default and its
consequences. When a default is waived, it is deemed cured, but no waiver will
extend to any subsequent or other default or impair any consequent right.
The holders of a majority in aggregate principal amount at maturity of the
LYONs then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or of exercising any trust or
power conferred on the trustee. However, the trustee may refuse to follow any
direction that conflicts with law or the indenture or that the trustee
determines in good faith is unduly prejudicial to the rights of other holders or
would involve the trustee in personal liability unless the trustee is offered
indemnity satisfactory to it against loss, liability or expense.
24
A holder may not pursue any remedy with respect to the indenture or the
notes unless:
o the holder gives the trustee written notice stating that an event of
default is continuing;
o the holders of at least 25% in aggregate principal amount at
maturity of the LYONs then outstanding make a written request to the
trustee to pursue the remedy;
o the holder or holders offer to the trustee reasonable security or
indemnity satisfactory to the trustee against any loss, liability or
expense;
o the trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity;
and
o the holders of a majority in aggregate principal amount at maturity
of the LYONs then outstanding do not give the trustee a direction
inconsistent with the request during such 60-day period.
A holder may not use the indenture to prejudice the rights of any other
holder or to obtain a preference or priority over any other holder.
Under the indenture, the issuers are required to deliver to the trustee,
within five business days of becoming aware of the occurrence of an event of
default, written notice of the event of default. In addition, the issuers are
required to deliver to the trustee written notice of any event which with the
giving of notice or the lapse of time, or both, would become an event of default
as a result of their failure to comply with any of their other agreements in the
LYONs or the indenture upon receipt of notice of such default or the issuers'
failure to make any payment by the end of the applicable grace period after
maturity of indebtedness, the status of any such event and what action the
issuers are taking or propose to take with respect thereto.
If the trustee collects any money as a result of an event of default, it
shall pay out the money in the following order:
first: to the trustee for amounts due as compensation, reimbursement
or indemnification;
second: to holders for amounts due and unpaid on the LYONs for the
principal amount at maturity, initial principal amount at maturity plus
contingent additional principal, redemption price, purchase price, change
in control purchase price or contingent cash interest, if any, as the case
may be, and ratably, without preference or priority of any kind, according
to such amounts due and payable on the LYONs; and
third: pro rata to the issuers, if any balance remains.
The trustee may fix a record date and payment date for any payment to
holders. At least 15 days before such record date, the trustee is required to
mail to each holder and to the issuers a notice that states the record date, the
payment date and the amount to be paid.
Mergers and Sales of Assets
The indenture provides that the issuers may not consolidate with or merge
into any person or convey, transfer or lease their respective properties and
assets substantially as an entirety to another person, unless, among other
things:
o the resulting, surviving or transferee person is a corporation
organized under the laws of the United States, any state thereof or
the District of Columbia and such entity assumes all such issuer's
obligations under the LYONs and the indenture, and
o such issuer or successor entity shall not immediately thereafter be
in default under the indenture.
Upon the assumption of such issuer's obligations by such corporation in
such circumstances, subject to certain exceptions, the issuers shall be
discharged from all obligations under the LYONs and the indenture. Although such
transactions are permitted under the indenture, certain of the foregoing
transactions occurring on or prior to February 7, 2006 could constitute a change
in control of Omnicom Group Inc., permitting holders to require the issuers to
purchase their LYONs as described above.
25
Modification
The issuers and the trustee may modify or amend the indenture or the LYONs
with the consent of the holders of not less than a majority in aggregate
principal amount at maturity of the LYONs then outstanding. However, the consent
of the holders of each outstanding LYON would be required to:
o alter the obligation of the issuers to pay contingent cash interest
(except that the issuers may increase the amount thereof without the
consent of the trustee or the holders),
o make any LYON payable in money or securities other than that stated
in the LYON,
o alter the stated maturity of any LYON,
o reduce the principal amount at maturity, contingent additional
principal, redemption price, purchase price or change in control
purchase price with respect to any LYON,
o make any change that adversely affects the right of a holder to
receive shares of common stock of Omnicom Group Inc. upon
surrendering a LYON for conversion,
o make any change that adversely affects the right to require the
issuers to purchase a LYON,
o impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the LYONs, and
o change the provisions in the indenture that relate to modifying or
amending the indenture.
Without the consent of any holder of LYONs, the issuers and the trustee
may enter into supplemental indentures for any of the following purposes:
o to evidence a successor to either of the issuers and the assumption
by that successor of such issuer's obligations under the indenture
and the LYONs,
o to add covenants for the benefit of the holders of the LYONs or to
surrender any right or power conferred upon the issuers,
o to secure the issuers' obligations in respect of the LYONs,
o to make any changes or modifications to the indenture necessary in
connection with the registration of the LYONs under the Securities
Act and the qualification of the LYONs under the Trust Indenture Act
as contemplated by the indenture,
o to cure any ambiguity or inconsistency in the indenture, or
o to make any change that does not adversely affect the rights of any
holder of the LYONs.
The holders of a majority in aggregate principal amount at maturity of the
LYONs then outstanding may, on behalf of the holders of all LYONs:
o waive compliance by the issuers with restrictive provisions of the
indenture, as detailed in the indenture; and
o waive any past default under the indenture and its consequences,
except a default in the payment of the principal amount at maturity,
contingent additional principal, redemption price, purchase price,
change in control purchase price or obligation to deliver common
stock of Omnicom Group Inc. upon conversion with respect to any LYON
or in respect of any provision which under the indenture cannot be
modified or amended without the consent of the holder of each
outstanding LYON affected.
Calculations in Respect of LYONs
The issuers are responsible for making all calculations called for under
the LYONs. See "-- Conversion Rights," beginning on page 16. These calculations
include, but are not limited to, determination of the market prices of the LYONs
and of Omnicom Group Inc.'s common stock, amounts of tax original issue
discount, and amounts of contingent cash interest and contingent additional
principal, if any, payable on the LYONs. The
26
issuers will make all these calculations in good faith and, absent manifest
error, these calculations will be final and binding on holders of LYONs. The
issuers will provide a schedule of their calculations to the trustee, and the
trustee is entitled to rely upon the accuracy of their calculations without
independent verification.
Information Concerning the Trustee
JPMorgan Chase Bank is the trustee, registrar, paying agent and conversion
agent.
The indenture provides that, except during the continuance of an event of
default, the trustee will perform only those duties as are specifically set
forth in the indenture. During the existence of an event of default, the trustee
is required to exercise the rights and powers vested in it by the indenture, and
to use the same degree of care and skill in its exercise of those rights and
powers as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
The indenture and the provisions of the Trust Indenture Act contain
limitations on the rights of the trustee, should it become a creditor of either
of the issuers, to obtain payments of claims in certain cases or to realize on
certain property received in respect of any such claim as security or otherwise.
Subject to the Trust Indenture Act, the trustee will be permitted to engage in
other transactions, provided that if the trustee acquires any conflicting
interests, as described in the Trust Indenture Act, the trustee must eliminate
the conflict or resign.
The trustee is required to deliver notice of all defaults to the holders
within 90 days after the occurrence, unless the defaults shall have been cured
before the giving of the notice. However, in the case of a default in the
payment of principal of, or interest on, or other similar obligation with
respect to, the notes, the trustee may withhold the notice if and so long as the
board of directors, the executive committee or a trust committee of directors or
trustees and/or responsible officers of the trustee in good faith determines
that the withholding of the notice is in the interest of holders of the notes.
A trustee may at any time resign by giving written notice of resignation
to the issuers and to the holders. Upon receiving a notice of resignation, the
issuers will be required to promptly appoint a successor trustee. If no
successor trustee is appointed within 30 days after the mailing of the notice of
resignation, the resigning trustee or any holder who has been a bona fide holder
of a note for at least six months may, subject to the provisions of the
indenture, petition any court of competent jurisdiction for the appoint of a
successor trustee.
The issuers may remove a trustee and appoint a successor trustee if:
o the trustee fails to comply with the provisions relating to any
conflict of interest after written request made by the issuers or by
any holder who has been a bona fide holder of notes for at least six
months;
o the trustee ceases to be eligible in accordance with the provisions
contained in the indenture and the trustee fails to resign after
requested to by the issuers or any holder;
o the trustee becomes incapable of acting or is adjudged a bankrupt or
insolvent, or a receiver or liquidator for the trustee or its
property is appointed, or any public officer takes charge or control
of the trustee or its property or affairs for the purpose of
rehabilitation, conservation or liquidation; or
o the issuers determine that the trustee has failed to perform its
obligations under the indenture in any material respect.
If the issuers fail to remove the trustee, any holder who has been a bona
fide holder of a note for at least six months may petition a court of competent
jurisdiction for the removal of the trustee and the appointment of a successor
trustee. In addition, the holders of a majority in aggregate principal amount at
maturity of the notes outstanding may at any time remove a trustee and appoint a
successor trustee by delivering notice to the trustee to be removed, the
successor trustee and the issuers. Any resignation or removal of the trustee and
any appointment of a successor trustee will become effective upon acceptance of
appointment by the successor trustee.
Governing Law
The indenture and the LYONs are governed by, and construed in accordance
with, the law of the State of New York.
27
Miscellaneous
The issuers or their affiliates may from time to time purchase the
securities offered in this prospectus which are then outstanding by tender, in
the open market or by private agreement.
DESCRIPTION OF OMNICOM GROUP INC.'S CAPITAL STOCK
The following briefly summarizes the material terms of Omnicom Group
Inc.'s capital stock. You should read its certificate of incorporation, a copy
of which may be obtained as described under "Where You Can Find More
Information," on page 39, for more detailed information that may be important to
you.
Omnicom Group Inc. is authorized to issue 1.0 billion shares of common
stock, par value $0.15 per share, of which 190.5 million shares were outstanding
on January 30, 2004, and 7.5 million shares of preferred stock at $1.00 per
share, none of which is outstanding.
Each share of common stock of Omnicom Group Inc. entitles the holder to
one vote for the election of directors and for all other matters to be voted on
by holders of Omnicom Group Inc.'s common stock. Holders of Omnicom Group Inc.'s
common stock may not cumulate their votes in the election of directors. All
shares of Omnicom Group Inc.'s common stock have equal rights and are entitled
to such dividends as may be declared by the board of directors out of funds
legally available therefor, but only after payment of dividends required to be
paid on any outstanding shares of preferred stock. All shares of Omnicom Group
Inc.'s stock share ratably upon liquidation in the assets available for
distribution to shareholders after payments to creditors and provision for the
preference of any preferred stock. Omnicom Group Inc. is not aware of any
restrictions on its present or future ability to pay dividends. However, in
connection with certain borrowing facilities entered into by Omnicom Capital and
Omnicom Finance, Omnicom Group Inc. is subject to certain covenants requiring
that it satisfy certain financial tests in order to pay dividends. The shares of
Omnicom Group Inc.'s common stock are not subject to call or assessment, have no
preemptive or other subscription rights or conversion rights and cannot be
redeemed. Omnicom Group Inc. has have a classified board of directors and its
shareholders can remove a director only by an affirmative two-thirds vote of all
outstanding voting shares. A two-thirds vote of all outstanding voting shares is
also required to amend its by-laws or some of the provisions of its certificate
of incorporation and to change the number of directors comprising the full
board. The board of directors has power to amend the by-laws or change the
number of directors comprising the full board.
Omnicom Group Inc. may issue preferred stock in series having whatever
rights and preferences the board of directors may determine without the approval
of its shareholders. One or more series of preferred stock may be made
convertible into common stock at rates determined by the board of directors, and
preferred stock may be given priority over common stock in payment of dividends,
rights on liquidation, voting and other rights.
As of September 30, 2003, Omnicom Group Inc. had a total of $2,339.3
million aggregate principal amount of convertible notes outstanding, including
$847.0 million of senior unsecured debentures with a scheduled maturity in 2031,
$892.0 million of senior unsecured debentures with a scheduled maturity of 2032
and the $600.0 million of senior unsecured debentures with a scheduled maturity
of 2033 being registered pursuant to the registration statement of which this
prospectus is a part. The 2031 notes and the 2032 notes are convertible into
shares of Omnicom Group Inc.'s common stock at a conversion price of $110.01 per
share, subject to adjustment in certain events. The 2033 notes are convertible
into shares of Omnicom Group Inc.'s common stock at a conversion price of
$103.00 per share, subject to adjustment in certain events.
The transfer agent and registrar for the common stock is ChaseMellon
Shareholder Services. The common stock is listed on the New York Stock Exchange
under the symbol "OMC."
FEDERAL INCOME TAX CONSIDERATIONS
This is a summary of material United States federal income tax
considerations relevant to holders of LYONs. This summary is based upon the
Internal Revenue Code of 1986 (which the issuers refer to as the Code), Treasury
Regulations, Internal Revenue Service rulings and judicial decisions now in
effect, all of which are subject to change, possibly with retroactive effect, or
different interpretations. No statutory, regulatory, administrative or judicial
authority directly addresses the treatment of the LYONs or instruments similar
to the LYONs for United States federal income tax purposes. There can be no
assurance that the IRS will not
28
challenge one or more of the conclusions described herein, and the issuers have
not obtained, nor do they intend to obtain, a ruling from the IRS with respect
to the United States federal income tax consequences of acquiring or holding
LYONs nor except as specifically stated below, have the issuers obtained, nor do
they intend to obtain, an opinion of counsel with respect to the tax
consequences of acquiring or holding LYON.
This summary does not purport to deal with all aspects of United States
federal income taxation that may be relevant to a holder, such as a holder
subject to the alternative minimum tax provisions of the Code. Also, it is not
intended to address specific considerations relevant to persons in special tax
situations, such as financial institutions, insurance companies, regulated
investment companies, tax exempt investors, dealers in securities and
currencies, U.S. expatriates or persons holding LYONs as hedges or as positions
in a "straddle," "hedge," "conversion" or other integrated transaction for tax
purposes.
This summary also does not discuss the tax consequences arising under tax
laws other than the federal income tax laws, including the laws of any state,
local or foreign jurisdiction. In addition, this summary is limited to original
purchasers of LYONs who acquire LYONs at their original issue price within the
meaning of the federal income tax laws and who hold the LYONs and common stock
into which the LYONs may be converted as "capital assets" within the meaning of
the federal income tax laws.
Persons considering the purchase, ownership, conversion or other
disposition of LYONs should consult their own tax advisors regarding the federal
income tax consequences to them in their particular circumstances, and
consequences arising under the laws of any state, local or foreign taxing
jurisdiction.
For purposes of this summary, a "U.S. Holder" is a beneficial owner of the
LYONs who or which is:
o a citizen or individual resident of the United States, as defined in
Section 7701(b) of the Code;
o a corporation, including any entity treated as a corporation for
United States federal income tax purposes, created or organized in
or under the laws of the United States, any state thereof or the
District of Columbia;
o an estate if its income is subject to United States federal income
taxation regardless of its source; or
o a trust if (1) a United States court can exercise primary
supervision over its administration and (2) one or more United
States persons have the authority to control all of its substantial
decisions.
Notwithstanding the preceding sentence, certain trusts in existence on
August 20, 1996, and treated as a U.S. Holder prior to such date, may also be
treated as U.S. Holders. A Non-U.S. Holder is a holder of LYONs other than a
U.S. Holder.
Opinion as to Federal Income Tax Treatment
The issuers have been advised by their counsel, Jones Day, that, in their
opinion, the LYONs will be treated as debt instruments that are subject to
United States federal income tax regulations governing contingent payment debt
instruments (which are referred to as the CPDI regulations) for United States
federal income tax purposes. Accordingly, pursuant to the terms of the
indenture, the issuers and each holder of the LYONs agree to treat the LYONs as
debt instruments with original issue discount under the contingent payment
regulations as described below.
Original Issue Discount
Under the CPDI regulations, for United States federal income tax purposes,
U.S. Holders of LYONs are required to accrue interest income on the LYONs,
regardless of whether the holder uses the cash or accrual method of accounting,
in amounts described below for each taxable year the holder holds the LYON.
Accordingly, U.S. Holders may be required to include interest in taxable income
in each year in excess of the accruals on the LYONs for non-tax purposes and in
excess of any contingent cash interest payments actually received in that year.
The CPDI regulations provide that a U.S. Holder must accrue an amount of
ordinary interest income, as original issue discount, for United States federal
income tax purposes for each accrual period prior to and including the maturity
date of the LYONs. The amount required to be accrued equals the sum of the daily
portions of original issue discount with respect to the LYON for each day during
the taxable year or portion of a taxable year on which the holder holds the
LYON, adjusted if necessary as described below. The daily portion is
29
(1) the sum of the issue price of the LYON plus all accrued interest, determined
without regard to any adjustments to interest accruals described below, and
minus the amounts of projected scheduled payments for prior periods at the
beginning of each six-month accrual period (as defined below), multiplied by (2)
the comparable yield to maturity (as defined below) on the LYON, divided by (3)
the number of days in the accrual period. Under these rules, holders may have to
include in gross income increasingly greater amounts of original issue discount
in each successive accrual period. Any amount included in income as original
issue discount will increase a holder's tax basis in the LYON. The issue price
is the initial price at which the LYONs are sold to investors for money.
Based on the advice of their counsel, Jones Day, the issuers treat the
"comparable yield" as the annual yield they would pay, as of the initial issue
date, on a fixed-rate nonconvertible debt security with no contingent payments,
but with terms and conditions otherwise comparable to those of the LYONs.
Accordingly, the issuers take the position that the comparable yield for the
LYONs is 6.71%, compounded semiannually. The specific yield, however, is not
entirely clear. If this determination of the comparable yield were successfully
challenged by the IRS, the redetermined yield could be materially greater or
less than the comparable yield which the issuers have determined.
The issuers are required to furnish annually to the IRS and to certain
noncorporate U.S. Holders information regarding the amount of the original issue
discount on the LYONs attributable to that year. The issuers will calculate and
report original issue discount on the LYONs based upon six-month accrual periods
ending on the maturity day of the LYONs. The issuers are also be required to
furnish to holders a projected schedule of payments which the issuers will use
in computing the amounts of original issue discount on the LYONs. In this
schedule, the issuers will include estimates (for purposes of computing the
original issue discount only) of payments of contingent cash interest that the
issuers will make, and of a payment at maturity, taking into account the
conversion feature and the contingent additional principal. Under the CPDI
regulations, this schedule must produce the comparable yield. The issuers
determination of the comparable yield and the projected schedule of payments is
set forth in the indenture.
For United States federal income tax purposes, a U.S. Holder must use the
comparable yield and the schedule of projected payments in determining its
interest accruals, and the adjustments thereto described below, in respect of
the LYONs, unless such U.S. Holder timely discloses and justifies the use of
other estimates to the IRS. A U.S. Holder that determines its own comparable
yield or schedule of projected payments must also establish that the issuers
comparable yield or schedule of projected payments is unreasonable.
THE COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED PAYMENTS ARE NOT
DETERMINED FOR ANY PURPOSE OTHER THAN FOR THE DETERMINATION OF A U.S. HOLDER'S
INTEREST ACCRUALS AND ADJUSTMENTS THEREOF IN RESPECT OF THE LYONS FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES AND DO NOT CONSTITUTE A PROJECTION OR
REPRESENTATION REGARDING THE ACTUAL AMOUNTS PAYABLE ON THE LYONS.
Adjustments to Interest Accruals on the LYONs
If, during any taxable year, a U.S. Holder receives actual payments with
respect to the LYONs for that taxable year that in the aggregate exceed the
total amount of projected payments for that taxable year, and/or the amount of a
future contingent payment is established in an amount greater than the projected
amount, the U.S. Holder will incur a "positive adjustment" under the CPDI
regulations. If a U.S. Holder receives in a taxable year actual payments with
respect to the LYONs for that taxable year that in the aggregate were less than
the amount of projected payments for that taxable year, and/or the amount of a
future contingent payment is established in an amount less than the projected
amount, the U.S. Holder will incur a "negative adjustment" under the CPDI
regulations. The difference between the positive adjustments and the negative
adjustments for any year is the "net positive adjustment" (if positive) or the
"net negative adjustment" (if negative). The U.S. Holder will treat a "net
positive adjustment" as additional interest income for the taxable year. For
this purpose, the payments in a taxable year include the fair market value of
property received in that year.
A net negative adjustment will (1) reduce the U.S. Holder's interest
income on the LYONs for that taxable year, and (2) to the extent of any excess
after the application of (1), give rise to an ordinary loss to the extent of the
U.S. Holder's interest income on the LYONs during prior taxable years, reduced
to an extent such interest was offset by prior net negative adjustments.
30
Disposition or Conversion
Generally, the sale or exchange of a LYON, or the redemption of a LYON for
cash, will result in taxable gain or loss to a U.S. Holder. As described above,
the issuers' calculation of the comparable yield and the schedule of projected
payments for the LYONs takes into account the receipt of stock upon conversion
and contingent additional principal as contingent payments with respect to the
LYONs. Accordingly, the issuers' intend to treat the receipt of common stock of
Omnicom Group Inc. by a U.S. Holder upon the conversion of a LYON, as well as
any contingent additional principal, as contingent payments under the CPDI
regulations. Pursuant to the issuers' treatment of the LYONs as contingent
payment debt instruments under the CPDI regulations as described above and the
holders' agreement to be bound by the issuers' determination, gain or loss upon
a sale, exchange, redemption or conversion of a LYON will generally be
recognized as ordinary gain or loss, except that loss, if any, realized in
excess of the amount of previously accrued tax original issue discount will be
capital loss. Losses are subject to limitations under the United States federal
income tax laws. It is possible that a deduction for any such capital loss might
be denied under the rules governing recapitalizations. Holders should consult
their tax advisors regarding the deductibility of any such capital loss.
The holder's realized gain or loss will be measured by the difference
between the total value of the consideration received for the LYON (including
the fair market value of Omnicom Group Inc.'s common stock) and the holder's tax
basis in the LYON, as previously adjusted to reflect accrued original issue
discount and the amounts of any projected payments. In general, a holder's tax
basis in any common stock of Omnicom Group Inc. received in exchange for a LYON
(including any fractional shares for which cash is received) will be the fair
market value of the stock at the time of the exchange. The holding period for
common stock received in the exchange will commence on the day following the
date of the exchange. These results may be different, however, if the exchange
of a LYON for Omnicom Group Inc. common stock constitutes a recapitalization.
Holders should consult their tax advisors as to the applicability of the
recapitalization rules to an exchange of a LYON for common stock of Omnicom
Group Inc. and the determination of basis and holding period for such common
stock under thoserules.
Constructive Dividend
If at any time Omnicom Group Inc. makes a distribution of property to
their shareholders that would be taxable to the shareholders as a dividend for
United States federal income tax purposes and, in accordance with the
anti-dilution provisions of the LYONs, the conversion rate of the LYONs is
increased, such increase may be deemed to be the payment of a taxable dividend
to holders of the LYONs.
For example, an increase in the conversion rate in the event of
distributions of evidences of indebtedness or assets of the issuers or in the
event of an extraordinary cash dividend will generally result in deemed dividend
treatment to holders of the LYONs, but generally an increase in the event of
stock dividends or the distribution of rights to subscribe for common stock will
not. However, there will be no deemed dividend treatment for regular cash
dividends because there will be no adjustment therefor under the anti-dilution
provisions of theLYONs.
Treatment of Non-U.S. Holders
Payments of contingent interest made to Non-U.S. Holders will not be
exempt from United States federal income or withholding tax and, therefore,
Non-U.S. Holders will be subject to withholding on such payments of contingent
interest at a rate of 30%, subject to reduction by an applicable treaty or upon
the receipt of a Form W-8ECI from a Non-U.S. Holder claiming that the payments
are effectively connected with the conduct of a United States trade or business.
A Non-U.S. Holder that is subject to the withholding tax should consult its tax
advisors as to whether it can obtain a refund for a portion of the withholding
tax, either on the grounds that some portion of the contingent interests
represents a return of principal under the CPDI regulations, or on some other
grounds.
All other payments on the LYONs made to a Non-U.S. Holder, including a
payment in common stock of Omnicom Group Inc. pursuant to a conversion, and any
gain realized on a sale or exchange of the LYONs (other than gain attributable
to accrued contingent interest payments), will be exempt from United States
income or withholding tax, provided that: (1) such Non-U.S. Holder does not own,
actually or constructively, 10% or more of the total combined voting power of
all classes of Omnicom Group Inc. stock entitled to vote, is not a
31
controlled foreign corporation related, directly or indirectly, to Omnicom Group
Inc. through stock ownership, and is not a bank receiving interest described in
section 881(c)(3)(A) of the Code; (2) the statement requirement set forth in
Section 871(b) or section 881(c) of the Code has been fulfilled with respect to
the beneficial owner, as discussed below; (3) such Non-U.S. holder is not an
individual who is present in the United States for 183 days or more in the
taxable year of disposition, or such individual does not have a "tax home" (as
defined in section 911(d)(3) of the Code) or an office or other fixed place of
business in the United States; (4) such payments and gain are not effectively
connected with the conduct by such Non-U.S. Holder of a trade or business in the
United States; and (5) common stock of Omnicom Group Inc. continues to be
actively traded within the meaning of section 871(b)(4)(C)(v)(1) of the Code
(which, for these purposes and subject to certain exceptions, includes trading
on the NYSE); and (6) Omnicom Group Inc. is not and has not been a U.S. real
property holding corporation ("USRPHC") within the meaning of section 897(c)(2)
of the code. Omnicom Group believes that it is not and never has been a USRPHC,
nor does it anticipate becoming one.
The statement requirement referred to in the preceding paragraph will be
fulfilled if the beneficial owner of a LYON certifies on IRS Form W-8BEN, under
penalties of perjury, that it is not a United States person and provides its
name and address.
If a Non-U.S. Holder of LYONs is engaged in a trade or business in the
United States, and if interest on the LYONs is effectively connected with the
conduct of such trade or business, the Non-U.S. Holder, although exempt from the
withholding tax discussed in the preceding paragraphs, will generally be subject
to regular U.S. federal income tax on interest and on any gain realized on the
sale or exchange of the LYONs in the same manner as if it were a U.S. Holder. In
lieu of the certificate described in the preceding paragraph, such a Non-U.S.
Holder will be required to provide to the withholding agent a properly executed
IRS Form W-8ECI (or successor form) in order to claim an exemption from
withholding tax. In addition, if such a Non-U.S. Holder is a foreign
corporation, such Holder may be subject to a branch profits tax equal to 30% (or
such lower rate provided by an applicable treaty) of its effectively connected
earnings and profits for the taxable year, subject to certain adjustments.
Backup Withholding and Information Reporting
Information reporting will apply to any payments, including a payment of
shares of common stock of Omnicom Group Inc. pursuant to a conversion or of
interest, the issuers may make on, or the proceeds of the sale or other
disposition or retirement, of the LYONs or dividends on shares of common stock
of Omnicom Group Inc. with respect to certain noncorporate holders, and backup
withholding at a rate of 31% may apply unless the recipient of such payment
supplies a taxpayer identification number, certified under penalties of perjury,
as well as certain other information or otherwise establishes an exemption from
backup withholding. Any amount withheld under the backup withholding rules will
be allowable as a credit against the holder's federal income tax, if the
required information is provided to the IRS.
SELLING SECURITYHOLDERS
The LYONs were originally issued by Omnicom Group Inc. and sold by Merrill
Lynch, Pierce, Fenner & Smith Incorporated in transactions exempt from the
registration requirements of the Securities Act to persons reasonably believed
by Merrill Lynch to be "qualified institutional buyers" (as defined by Rule 144A
under the Securities Act). The selling securityholders (which term includes
their transferees, pledgees, donees or successors) may from time to time offer
and sell pursuant to this prospectus any and all of the LYONs and the shares of
common stock of Omnicom Group Inc. issuable upon conversion and/or redemption of
the LYONs.
Set forth below are the names of each selling securityholder, the
principal amount of LYONs that may be offered by such selling securityholder
pursuant to this prospectus and the number of shares of common stock of Omnicom
Group Inc. into which such LYONs are convertible. Unless set forth below, none
of the selling securityholders has had a material relationship with the issuers
or any of their predecessors or affiliates within the past three years.
The following table sets forth certain information received by the issuers
on or prior to February 13, 2004. However, any or all of the LYONs or common
stock listed below may be offered for sale pursuant to this prospectus by the
selling securityholders from time to time. Accordingly, no estimate can be given
as to the amounts of LYONs or common stock of Omnicom Group Inc. that will be
held by the selling securityholders upon consummation of
32
any such sales. In addition, the selling securityholders identified below may
have sold, transferred, or otherwise disposed of all or a portion of their LYONs
since the date on which the information regarding their LYONs was provided, in
transactions exempt from the registration requirements of the Securities Act.
Aggregate
Principal
Amount of
Lyons at Percentage of Common Stock Common Stock
Maturity that Lyons Owned Prior Registered
Name may be Sold Outstanding to Conversion Hereby(1)
-------- ------------- ------------- ------------- ------------
AAM/Zazove Institutional Income
Fund L.P. (BS) ................................. $ 1,000,000 * -- 9,090
AFTRA Health Fund .................................. 475,000 * -- 4,317
AIG/National Union Fire Insurance .................. 255,000 * -- 2,317
AIG SoundShore Holdings Ltd. ....................... 6,451,000 * -- 58,639
AIG SoundShore Opportunity Holding
Fund Ltd. ...................................... 7,328,000 * -- 66,611
AIG SoundShore Strategic Holding Fund Ltd. ......... 4,221,000 * -- 38,368
Allgemeine Pensionskasse Der Swissair Group ........ 700,000 * -- 6,363
Allstate Insurance Company ......................... 1,700,000 * 85,300 15,453
American Country Insurance Company ................. 600,000 * -- 5,454
American Founders Life Insurance Company ........... 100,000 * -- 909
American Pioneer Life Ins. Co. of New York ......... 90,000 * -- 818
American Progressive Life and Health Ins. Co. ......
of New York .................................... 90,000 * -- 818
American Public Entity Excess Pool ................. 60,000 * -- 545
AmWest Surety Insurance Company .................... 270,000 * -- 2,454
Arkansas Pers ...................................... 560,000 * -- 5,090
Arpeggio Fund, L.P. ................................ 1,000,000 * -- 9,090
Attorney's Title Insurance Fund .................... 45,000 * -- 409
Baltimore Life Insurance Company ................... 300,000 * -- 2,727
Bankers Life Insurance Company of New York ......... 65,000 * -- 590
Bay County PERS .................................... 70,000 * -- 636
BCS Life Insurance Company ......................... 650,000 * -- 5,908
Beamtenversigherungskasse Des Kantons Zurich ....... 5,150,000 * -- 46,813
Bear, Stearns & Co., Inc. .......................... 2,500,000 * -- 22,725
BNP PARIBAS ........................................ 65,500,000 7.7% -- 595,395
Boilermakers Blacksmith Pension Trust .............. 710,000 * -- 6,453
Brown & Williamson Tobacco Master
Retirement Trust ............................... 100,000 * -- 909
Buckeye State Mutual Insurance Company ............. 30,000 * -- 272
Catholic Mutual Relief Society of America .......... 500,000 * -- 4,545
Catholic Mutual Relief Society of America
Retirement Plan & Trust ........................ 300,000 * -- 2,727
Catholic Relief Insurance Company of America ....... 600,000 * -- 5,454
Celina Mutual Insurance Company .................... 25,000 * -- 227
Central States Health & Life Company
of Omaha ....................................... 220,000 * -- 1,999
Cheyne Capital Management Limited .................. 5,000,000 * -- 45,450
Chicago Mutual Insurance Company ................... 70,000 * -- 636
Chrysler Insurance Company ......................... 4,000,000 * -- 36,360
The Class IC Company, Ltd. ......................... 2,000,000 * -- 18,180
Colonial Life Insurance Company of Texas ........... 25,000 * -- 227
Commonwealth Dealers - CDLIC ....................... 200,000 * -- 1,818
Concord Life Insurance Company ..................... 140,000 * -- 1,272
Condor Insurance Company ........................... 180,000 * -- 1,636
Conseco Annuity Assurance - Multi-Bucket
Annuity Convertible Bond Fund .................. 4,000,000 * -- 36,360
Continental Assurance Company
Separate Account (E) .......................... 2,800,000 * -- 25,452
33
Aggregate
Principal
Amount of
Lyons at Percentage of Common Stock Common Stock
Maturity that Lyons Owned Prior Registered
Name may be Sold Outstanding to Conversion Hereby(1)
-------- ------------- ------------- ------------- ------------
Continental Casualty Company ....................... $16,200,000 1.9% -- 147,258
Credit Suisse First Boston Corporation ............. 1,200,000 * -- 10,908
CSA Fraternal Life Insurance Company ............... 130,000 * -- 1,181
Cumberland Mutual Fire Insurance Company ........... 220,000 * -- 1,999
Dakota Truck Underwriters .......................... 25,000 * -- 227
Delta Airlines Master Trust ........................ 360,000 * -- 3,272
D.E. Shaw Investments, L.P. (2) .................... 800,000 * -- 7,272
D.E. Shaw Valence, L.P. (3) ........................ 3,200,000 * -- 29,088
Deutsche Bank Securities Inc. ...................... 5,000,000 * -- 45,450
Dexia Money 3M c/o Dexia Banque Privee ............. 10,000,000 1.17% -- 90,900
Dexia Money & Double Alpha
c/o Dexia Banque Privee ........................ 5,000,000 * -- 45,450
Duke Endowment ..................................... 140,000 * -- 1,272
Educators Mutual Life Insurance Company ............ 250,000 * -- 2,272
Farmers Home Mutual Insurance Company .............. 450,000 * -- 4,090
Federated Rural Electric Insurance Exchange ........ 360,000 * -- 3,272
Fidelity Financial Trust: Fidelity Convertible
Securities Fund ................................ 6,000,000 * -- 54,540
First Dakota Indemnity Company ..................... 20,000 * -- 181
First Mercury Insurance Company .................... 620,000 * -- 5,635
First Union National Bank .......................... 21,000,000 2.5% -- 190,890
Forest Alternative Strategies Fund II LP A5M ....... 150,000 * -- 1,363
Forest Fulcrum Fund L.P. ........................... 1,200,000 * -- 10,908
Forest Global Convertible Fund A5 .................. 5,850,000 * -- 53,176
Fort Dearborn Life Insurance Company ............... 250,000 * -- 2,272
F.R. Conut. Sec. Fn ................................ 95,000 * -- 863
Gaia Offshore Master Fund Ltd. ..................... 12,500,000 1.5% -- 113,625
Gemini Sammelstiftung Zur Forderung Der
Personalvor-Sorge .............................. 200,000 * -- 1,818
GLG Global Convertible Fund ........................ 1,650,000 * -- 14,998
GLG Global Convertible Ucits Fund .................. 350,000 * -- 3,181
GLG Market Neutral Fund ............................ 2,500,000 * -- 22,725
Goldman Sachs and Company .......................... 10,550,000 1.2% -- 95,899
Goodville Mutual Casualty Company .................. 50,000 * -- 454
Grain Dealers Mutual Insurance ..................... 160,000 * -- 1,454
Green Tree Perpetual Assurance Company ............. 300,000 * -- 2,727
Guaranty Income Life Insurance Company ............. 450,000 * -- 4,090
Guarantee Trust Life Insurance Company ............. 1,000,000 * -- 9,090
Hamilton Partners Limited .......................... 20,000,000 2.4% -- 181,800
Hannover Life Reassurance Company
of America ..................................... 500,000 * -- 4,545
HFR Master Fund LTD ................................ 200,000 * -- 1,818
HighBridge International LLC ....................... 30,000,000 3.5% -- 272,700
Holy Family Society ................................ 90,000 * -- 818
IL Annuity & Insurance Company ..................... 2,935,000 * -- 26,679
IMF Convertible Fund ............................... 700,000 * -- 6,363
Indiana Lumbermen Mutual Insurance ................. 500,000 * -- 4,545
Integrity Mutual Insurance Company ................. 300,000 * -- 2,727
Investcorp - SAM Fund Ltd. ......................... 3,200,000 * -- 29,088
ISBA Mutual Insurance Company ...................... 225,000 * -- 2,045
Jefferies & Co. Inc. ............................... 9,000,000 1.1% -- 81,810
Jeffries Umbrella Fund Global
Convertible Bonds .............................. 1,220,000 * -- 11,089
Jeffries Umbrella Fund US Convertible Bonds ........ 200,000 * -- 1,818
34
Aggregate
Principal
Amount of
Lyons at Percentage of Common Stock Common Stock
Maturity that Lyons Owned Prior Registered
Name may be Sold Outstanding to Conversion Hereby(1)
-------- ------------- ------------- ------------- ------------
J.P. Morgan Securities, Inc. ....................... $ 39,000,000 4.6% -- 354,510
Kanawha Insurance Company .......................... 250,000 * -- 2,272
KBC Financial Products USA ......................... 2,000,000 * -- 18,180
Landmark Life Insurance Company .................... 60,000 * -- 545
Lebanon Mutual Insurance Company ................... 100,000 * -- 909
LLT Limited ........................................ 400,000 * -- 3,636
Louisiana CCRF ..................................... 100,000 * -- 909
Loyal Christian Benefit Association ................ 80,000 * -- 727
Lyxor Master Fund, c/o Forest Investment
Management L.L.C ............................... 1,600,000 * -- 14,544
Mainstay Convertible Fund .......................... 7,000,000 * -- 63,630
Mainstay VP Convertible Portfolio .................. 1,600,000 * -- 14,544
Marquette Indemnity and Life Insurance Comp ........ 80,000 * -- 727
McMahan Securities Co. L.P. ........................ 100,000 * -- 909
Medico Life Insurance Company ...................... 800,000 * -- 7,272
Medmare Insurance Company .......................... 500,000 * -- 4,545
Merrill Lynch Investment Managers -
Quantitative Advisors .......................... 20,000,000 2.4% -- 181,800
Merrill Lynch, Pierce, Fenner & Smith
Incorporated(4) ................................ 90,475,000 10.6% -- 822,417
Michigan Professional Insurance Exchange ........... 110,000 * -- 999
Mid America Life Insurance Company ................. 100,000 * -- 909
Middle Cities Risk Management Trust ................ 200,000 * -- 1,818
Midwest Security Life .............................. 280,000 * -- 2,545
Morgan Stanley & Co. Incorporated(5) ............... 20,000,000 2.4% -- 181,800
MSC Life ........................................... 50,000 * -- 454
Mutual Protective Insurance Company ................ 1,100,000 * -- 9,999
National Mutual Insurance Company .................. 30,000 * -- 272
NCMIC .............................................. 500,000 * -- 4,545
New Era Life Insurance Company ..................... 300,000 * -- 2,727
New York Life Separate Account #7 .................. 900,000 * -- 8,181
Nomura Securities International, Inc. .............. 15,000,000 1.8% 307,158 136,350
Oak Casualty Insurance Company ..................... 40,000 * -- 363
Ondeo Nalco ........................................ 50,000 * -- 454
Onyx Fund Holdings, LDC ............................ 12,000,000 1.4% -- 109,080
Pacific Life Insurance Company ..................... 1,000,000 * -- 9,090
Pensionskasse Ciba Specialty Chemicals ............. 880,000 * -- 7,999
Pensionskasse Der Antalis AG ....................... 130,000 * -- 1,181
Pensionskasse Der Lonza AG ......................... 200,000 * -- 1,818
Pensionskasse Der Rooknell Automation AG ........... 170,000 * -- 1,545
Pensionskasse Vantico .............................. 200,000 * -- 1,818
Personalfursorgestiftung Der
Gebaudeversigherung Des Kantons Bern ........... 450,000 * -- 4,090
Personalvorsorge Der PV Promea ..................... 250,000 * -- 2,272
PHICO Insurance Company ............................ 600,000 * -- 5,454
Physicians Mutual Insurance Company ................ 600,000 * -- 5,454
Pioneer Insurance Company .......................... 80,000 * -- 727
Premera Blue Cross ................................. 1,500,000 * -- 13,635
Prudential Insurance Co. of America ................ 30,000 * -- 272
R2 Investments, LDC ................................ 122,000,000 14.4% -- 1,108,980
RAM Trading LTD .................................... 15,000,000 1.8% -- 136,350
Republic Mutual Insurance Company .................. 15,000 * -- 136
Rhapsody Fund, LP. ................................. 3,700,000 * -- 33,633
Royal Bank of Canada ............................... 6,000,000 * 95,033 54,540
35
Aggregate
Principal
Amount of
Lyons at Percentage of Common Stock Common Stock
Maturity that Lyons Owned Prior Registered
Name may be Sold Outstanding to Conversion Hereby(1)
-------- ------------- ------------- ------------- ------------
Sagamore Hill Hub Fund Ltd. ........................ $14,500,000 1.7% -- 131,805
Salomon Brothers Asset Management, Inc. ............ 15,000,000 1.8% -- 136,350
Salomon Smith Barney Inc. .......................... 3,000,000 * -- 27,270
SAM Investments LDC ................................ 50,000,000 5.9% -- 454,500
San Diego County Employees
Retirement Association ......................... 2,800,000 * -- 25,452
Southern Farm Bureau Life Insurance ................ 340,000 * -- 3,090
St. Albans Partners Ltd. ........................... 13,000,000 1.5% -- 118,170
Standard Mutual Insurance Company .................. 300,000 * -- 2,727
Starvest Combined Portfolio ........................ 250,000 * -- 2,272
State National Insurance Company ................... 120,000 * -- 1,090
State of Florida Division of Treasury .............. 1,500,000 * -- 13,635
State of Mississippi Health Care Trust Fund ........ 210,000 * -- 1,908
State of Oregon - Equity ........................... 2,500,000 * -- 22,725
Sylvan IMA Ltd., c/o Forest Investment
Management L.L.C ............................... 800,000 * -- 7,272
Texas Builders Insurance Company ................... 120,000 * -- 1,090
Texas Hospital Insurance Exchange .................. 25,000 * -- 227
TQA Master Plus Fund, Ltd. ......................... 1,000,000 * -- 9,090
Transguard Insurance Company of America, Inc. ...... 900,000 * -- 8,181
Tribeca Investments LLC ............................ 25,000,000 2.9% -- 227,250
UBS O'Connor LLC F/B/O UBS Global Equity
Arbitrage Master Ltd ........................... 17,000,000 2.0% -- 154,530
United National Insurance Company .................. 850,000 * -- 7,726
Western Home Insurance Company ..................... 180,000 * -- 1,636
West Virginia Fire Insurance Company ............... 10,000 * -- 90
Westward Life Insurance Company .................... 180,000 * -- 1,636
White River Securities L.L.C ....................... 2,500,000 * -- 22,725
Wisconsin Lawyers Mutual Insurance company ......... 200,000 * -- 1,818
Wisconsin Mutual Insurance Company ................. 140,000 * -- 1,272
World Insurance Company ............................ 250,000 * -- 2,272
(6)(7)
* Less than 1%
----------
(1) Assumes conversion of all of the holder's LYONs at a conversion rate of
9.09 shares of common stock per $1,000 principal amount at maturity of the
LYONs. However, this conversion rate will be subject to adjustment as
described under "Description of the LYONs -- Conversion Rights." As a
result, the amount of common stock of Omnicom Group Inc. issuable upon
conversion of the LYONs may increase or decrease in the future.
(2) Based on information provided to Omnicom Group Inc. by the selling
securityholder, the selling securityholder also beneficially owns an
additional $8,600,000 principal amount at maturity of LYONs, which are
convertible into 78,174 shares of Omnicom Group Inc. common stock. These
additional LYONs, together with the amount of LYONs registered hereby,
represent in the aggregate approximately 1.1% of the total LYONs
outstanding.
(3) Based on information provided to Omnicom Group Inc. by the selling
securityholder, the selling securityholder also beneficially owns an
additional $34,400,000 principal amount at maturity of LYONs, which are
convertible into 312,696 shares of Omnicom Group Inc. common stock. These
additional LYONs, together with the amount of LYONs registered hereby,
represent in the aggregate approximately 4.4% of the total LYONs
outstanding.
(4) Merrill Lynch, Pierce, Fenner & Smith Incorporated was the initial
purchaser in the private placement on February 7, 2001 in which the LYONs
were originally issued. Merrill Lynch has advised Omnicom Group Inc. that
it is not aware of any position, office or directorship relationship that
it has had with Omnicom Group Inc. or its affiliates. However, Merrill
Lynch has advised Omnicom Group Inc. that it may have, from time to time,
acted in a financial investment advisory capacity to Omnicom Group Inc.
(5) Morgan Stanley & Co. Incorporated was the initial purchaser in the
offering of $230,000,000 aggregate principal amount of 2.25% convertible
subordinated debentures due 2013 on January 6, 1998 by Omnicom Group Inc.
(6) Information about other selling securityholders will be set forth in
prospectus supplements, if required.
(7) Assumes that any other holders of LYONs, or any future transferees,
pledgees, donees or successors of or from any such other holders of LYONs,
do not beneficially own any common stock of Omnicom Group Inc. other than
the common stock of Omnicom Group Inc. issuable upon conversion of the
LYONs at the initial conversion rate. The preceding table has been
prepared based upon information furnished to the issuers by the selling
securityholders named in the table. From time to time, additional
information concerning ownership of the LYONs and common stock of Omnicom
Group Inc. may rest with certain holders thereof not named in the
preceding table, with whom the issuers believe they have no affiliation.
Information about the selling securityholders may change from over time.
Any changed information will be set forth in prospectus supplements.
36
PLAN OF DISTRIBUTION
The LYONs and the common stock of Omnicom Group Inc. are being registered
to permit public secondary trading of these securities by the holders thereof
from time to time after the date of this prospectus. Omnicom Group Inc. has
agreed, among other things, to bear all expenses (other than underwriting
discounts and selling commissions) in connection with the registration and sale
of the LYONs and the common stock of Omnicom Group Inc. covered by this
prospectus.
The issuers will not receive any of the proceeds from the sale of LYONs or
the common stock of Omnicom Group Inc. by the selling securityholders. The
issuers have been advised by the selling securityholders that the selling
securityholders may sell all or a portion of the LYONS and common stock of
Omnicom Group Inc. beneficially owned by them and offered hereby from time to
time on any exchange on which the securities are listed on terms to be
determined at the times of such sales. The selling securityholders may also make
private sales directly or through a broker or brokers. Alternatively, any of the
selling securityholders may from time to time offer the LYONs or the common
stock beneficially owned by them through underwriters, dealers or agents, who
may receive compensation in the form of underwriting discounts, commissions or
concessions from the selling securityholders and the purchasers of the LYONs and
the common stock for whom they may act as agent. The aggregate proceeds to the
selling securityholders from the sale of the LYONs or common stock offering by
them hereby will be the purchase price of such LYONs or common stock less
discounts and commissions, if any.
The LYONs and common stock may be sold from time to time in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. These prices will
be determined by the holders of such securities or by agreement between these
holders and underwriters or dealers who may receive fees or commissions in
connection therewith.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the LYONs and the underlying common stock of
Omnicom Group Inc. or otherwise, the selling securityholders may enter into
hedging transactions with broker-dealers. These broker-dealers may in turn
engage in short sales of the LYONs and the underlying common stock in the course
of hedging their positions. The selling securityholders may also sell the LYONs
and underlying common stock short and deliver LYONs and the underlying common
stock to close out short positions, or loan or pledge LYONs and the underlying
common stock to broker-dealers that in turn may sell the LYONs and the
underlying common stock.
To the issuers' knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the LYONs and the underlying common
stock of Omnicom Group Inc. by the selling securityholders. Selling
securityholders may not sell any or all of the LYONs and the underlying common
stock of Omnicom Group Inc. offered by them pursuant to this prospectus. In
addition, the issuers cannot assure you that any such selling securityholder
will not transfer, devise or gift the LYONs and the underlying common stock by
other means not described in this prospectus. In addition, any securities
covered by this prospectus which qualify for sale pursuant to Rule 144 or Rule
144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than
pursuant to this prospectus.
Omnicom Group Inc.'s outstanding common stock is listed for trading on the
New York Stock Exchange.
The selling securityholders and any broker and any broker-dealers, agents
or underwriters that participate with the selling securityholders in the
distribution of the LYONs or the common stock of Omnicom Group Inc. may be
deemed to be "underwriters" within the meaning of the Securities Act, in which
event any commission received by such broker-dealers, agents or underwriters and
any profit on the resale of the LYONs or the common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.
In addition, in connection with any resales of LYONs, any broker-dealer
who acquired the LYONs for its own account as a result of market-making
activities or other trading activities must deliver a prospectus meeting the
requirements of the Securities Act. Broker-dealers may fulfill their prospectus
delivery requirements with respect to the LYONs (other than a resale of an
unsold allotment from the original sale of the outstanding LYONs) with this
prospectus. In addition, until May 27, 2001, all securityholders effecting
transactions in the LYONs may be required to deliver a prospectus and any and
all supplements or amendments thereto.
37
The LYONs were issued and sold on February 7, 2001 and February 16, 2001
in transactions exempt from the registration requirements of the Securities Act
to persons reasonably believed by Merrill Lynch to be "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act). Omnicom Group Inc.
agreed to indemnify Merrill Lynch and each selling securityholder, and each
selling securityholder had agreed to indemnify Omnicom Group Inc., Merrill Lynch
and each other selling shareholder against certain liabilities arising under the
Securities Act.
The selling securityholders and any other persons participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of the LYONs and the underlying common stock by the selling
securityholders and any other such person. In addition, Regulation M of the
Exchange Act may restrict the ability of any person engaged in the distribution
of the LYONs and the underlying common stock to engage in market-making
activities with respect to the particular LYONs and the underlying common stock
being distributed for a period of up to five business days prior to the
commencement of such distribution. This may affect the marketability of the
LYONs and the underlying common stock and the ability of any person or entity to
engage in market-making activities with respect to the LYONs and the underlying
common stock.
Omnicom Group Inc. has agreed to use its best efforts to keep the
registration statement of which this prospectus is a part effective until the
earlier of (i) the sale pursuant to the registration statement of all the
securities registered thereunder and (ii) the expiration of the holding period
applicable to such securities held by persons that are not affiliates of the
issuers under Rule 144(k) under the Securities Act or any successor provision,
subject to certain permitted exceptions in which case Omnicom Group Inc. may
prohibit offers and sales of LYONs and common stock pursuant to the registration
statement to which this prospectus relates.
LEGAL MATTERS
The validity of the LYONs and the shares of common stock of Omnicom Group
Inc. issuable upon conversion of the LYONs has been passed upon for the issuers
by Jones Day, New York, New York.
EXPERTS
The consolidated financial statements and related 2002 financial statement
schedule of Omnicom Group Inc. as of December 31, 2002, and for the year then
ended, have been incorporated by reference herein in reliance upon the report of
KPMG LLP, independent accountants, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Omnicom Group Inc. and
subsidiaries for the years ended December 31, 2000 and 2001 incorporated by
reference herein have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
report. Arthur Andersen has ceased auditing public companies in the United
States and has not consented to their inclusion or incorporation of their report
in the prospectus. Because Arthur Andersen has not consented to the inclusion or
incorporation of their report in the prospectus, it may become more difficult
for you to seek remedies against Arthur Andersen in connection with any material
misstatement or omission that may be contained in Omnicom Group Inc.'s
consolidated financial statements and schedules for such periods. In particular,
and without limitation, you will not be able to recover against Arthur Andersen
under Section 11 of the Securities Act for any untrue statement of a material
fact contained in the financial statements audited by Arthur Andersen or any
omission of a material fact required to be stated in those financial statements.
In June 2002, Omnicom Group Inc.'s Board of Directors, upon the
recommendation of its Audit Committee, determined not to rehire Arthur Andersen
LLP as its independent accountants and authorized the engagement of KPMG LLP to
serve as its independent accountants for 2002. KPMG has not audited the
financial statements that were audited by Arthur Andersen and incorporated
herein by reference.
38
WHERE YOU CAN FIND MORE INFORMATION
Omnicom Group Inc. files annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any document Omnicom Group Inc. files at the Securities
and Exchange Commission's public reference rooms in Washington, D.C., New York,
New York and Chicago, Illinois. You can also request copies of the documents,
upon payment of a duplicating fee, by writing to the Public Reference Section of
the Securities and Exchange Commission. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. These filings with the Securities and Exchange Commission are also
available to the public from the Securities and Exchange Commission's web site
at http://www.sec.gov. Reports, proxy statements and other information filed by
Omnicom Group Inc. may also be inspected at the offices of the New York Stock
Exchange at 20 Broad Street, New York, New York 10005.
Omnicom Group Inc. is incorporating by reference into this prospectus
certain information it files with the Securities and Exchange Commission, which
means that Omnicom Group Inc. is disclosing important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, except for any information superseded
by information contained directly in this prospectus. Information that Omnicom
Group Inc. files later with the Securities and Exchange Commission will
automatically update information in this prospectus. In all cases, you should
rely on the later information over different information included in this
prospectus. Omnicom Group Inc. incorporates by reference into this prospectus
the documents listed below:
o Annual Report on Form 10-K for the year ended December 31, 2002 (SEC
File No. 001-10551);
o Quarterly Report on Form 10-Q for the quarter ended September 30,
2003 (SEC File No. 001-10551);
o Quarterly Report on Form 10-Q for the quarter ended June 30, 2003
(SEC File No. 001-10551);
o Quarterly Report on Form 10-Q for the quarter ended March 31, 2003
(SEC File No. 001-10551);
o Current Report on Form 8-K, dated June 10, 2003 (SEC File No.
001-10551); and
o Current Report on Form 8-K, dated December 2, 2003 (SEC File No.
001-10551);
o The description of its common stock contained in the Registration
Statement on Form 8-A filed with the SEC pursuant to Section 12 of
the Securities Exchange Act of 1934 (SEC File No. 001-10551),
including any subsequently filed amendments and reports updating
such description.
All documents Omnicom Group Inc. files pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus to the end of
the offering of the LYONs and shares of common stock under this prospectus will
also be incorporated by reference in this prospectus from the date of filing of
such documents.
You may request a copy of these filings, or any other documents or other
information referred to in, or incorporated by reference into, this prospectus,
at no cost, by writing or telephoning Omnicom Group Inc. at the following
address:
Michael J. O'Brien, Esq.
Senior Vice President, General Counsel and Secretary
Omnicom Group Inc.
437 Madison Avenue
New York, NY 10022
(212) 415-3600
39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Expenses payable in connection with the distribution of the securities
being registered (estimated except for the registration fee), all of which will
be borne by the issuers, are as follows:
SEC Registration Fee ................... $ --(1)
Legal Fees and Expenses ................ $15,000
Miscellaneous Expenses ................. $50,000
-------
Total .................................. $65,000
----------
(1) A filing fee of $214,094 was previously paid by Omnicom Group Inc. in
respect of the securities being registered hereby under Registation
Statement No. 333-55396.
Item l5. Indemnification of Directors and Officers.
Omnicom Group Inc.
Omnicom Group Inc.'s certificate of incorporation contains a provision
limiting the liability of directors (except for approving statutorily prohibited
dividends, share repurchases or redemptions, distributions of assets on
dissolution or loans to directors) to acts or omissions determined by a
judgement or other final adjudication to have been in bad faith, involving
intentional misconduct or a knowing violation of the law, or resulting in
personal gain to which the director was not legally entitled. Omnicom Group
Inc.'s by-laws provide that an officer or director will be indemnified against
any costs or liabilities, including attorney's fees and amounts paid in
settlement with Omnicom Group Inc.'s consent in connection with any claim,
action or proceeding to the fullest extent permitted by the New York Business
Corporation Law.
Section 722(a) of the New York Business Corporation Law provides that a
corporation may indemnify any officer or director, made, or threatened to be
made, a party to an action other than one by or in the right of the corporation,
including an action by or in the right of any other corporation or other
enterprise, that any director or officer of the corporation served in any
capacity at the request of the corporation, because he was a director or officer
of the corporation, or served such other corporation or other enterprise in any
capacity, against judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys' fees actually and necessarily incurred as a
result of such action, or any appeal therein, if such director or officer acted
in good faith for a purpose he reasonably believed to be in, or in the case of
service for any other corporation or other enterprise, not opposed to, the best
interests of the corporation and in criminal actions in addition had no
reasonable cause to believe that his conduct was unlawful.
Section 722(c) of the New York Business Corporation Law provides that a
corporation may indemnify any officer or director made, or threatened to be
made, a party to an action by or in the right of the corporation by reason of
the fact that he is or was an officer or director of the corporation, or is or
was serving at the request of the corporation as a director or officer of any
other corporation, or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense or settlement of such action, or
in connection with an appeal therein, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for another corporation or other enterprise, not opposed to, the best
interests of the corporation. The corporation may not, however, indemnify any
officer or director pursuant to Section 722(c) in respect of (1) a threatened
action, or a pending action that is settled or otherwise disposed of, or (2) any
claim, issue or matter for which the person shall have been adjudged to be
liable to the corporation, unless and only to the extent that the court in which
the action was brought or, if no action was brought, any court of competent
jurisdiction, determines upon application, that the person is fairly and
reasonably entitled to indemnity for that portion of the settlement and expenses
as the court deems proper.
II-1
Section 723 of the New York Business Corporation Law provides that an
officer or director who has been successful on the merits or otherwise in the
defense of a civil or criminal action of the character set forth in Section 722
is entitled to indemnification as permitted in the section. Section 724 of the
New York Business Corporation Law permits a court to award the indemnification
required by Section 722.
Omnicom Group Inc. has entered into agreements with our directors to
indemnify them for liabilities or costs arising out of any alleged or actual
breach of duty, neglect, errors or omissions while serving as a director.
Omnicom Group Inc. also maintains and pay premiums for directors' and officers'
liability insurance policies.
Omnicom Capital Inc.
Sections 33-770 through 33-776 of the Business Corporation Act of the
State of Connecticut provide that a corporation may indemnify a director or
officer against judgments, fines, penalties, amounts paid in settlement and
reasonable expenses actually incurred by him or her, including attorneys' fees,
for actions brought or threatened to be brought against him or her in his or her
capacity as a director or officer, other than actions brought by or in the right
of the corporation, when it is determined by certain disinterested parties that
he or she acted in good faith in a manner he or she reasonably believed to be in
the corporation's best interest (or in the case of conduct not in his or her
official capacity, at least not opposed to the best interests of the
corporation). In any criminal action or proceeding, it also must be determined
that the director or officer had no reasonable cause to believe that his or her
conduct was unlawful. A director or officer must be indemnified when he or she
is wholly successful on the merits or otherwise in the defense of a proceeding
or in circumstances where a court determines that he or she is fairly and
reasonably entitled to be indemnified. In connection with shareholder derivative
suits, a director or officer may not be indemnified unless he or she is finally
adjudged (a) to have met the relevant standard of conduct described above and(b)
not to have received a financial benefit to which he or she was not entitled,
whether or not he or she was acting in his or her official capacity.
Omnicom Capital maintains and pays premiums for its directors' and
officers' liability insurance policies.
Omnicom Finance Inc.
Section 145 of the General Corporation Law of the State of Delaware
contains provisions permitting (and, in some situations, requiring) Delaware
corporations such as Omnicom Finance to provide indemnification to their
officers and directors for losses and litigation expenses incurred in connection
with, among other things, their service to the corporation in those capacities.
Our certificate of incorporation contains provisions requiring Omnicom Finance
to indemnify and hold harmless its directors, officers and employees to the
fullest extent permitted or required by law. Among other things, these
provisions provide that Omnicom Finance is required to indemnify any person who
is or was a party or is threatened to be made a party to or is otherwise
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact that the
indemnitee is or was acting in an official capacity as Omnicom Finance's
director, officer, employee or agent, or is or was serving at Omnicom Finance's
request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including service with
respect to any employee benefit plan) against all expenses, liabilities and
losses, including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered by the
indemnitee in connection with such proceeding to the fullest extent permitted by
the General Corporation Law of the State of Delaware, as the same exists or may
be amended (but, in the case of any amendment, only to the extent that the
amendment permits Omnicom Finance to provide broader indemnification rights than
law permitted Omnicom Finance to provide prior to the amendment). These
provisions also provide for the advance payment of fees and expenses incurred by
the indemnitee in defense of any such proceeding, subject to reimbursement by
the indemnitee if it is ultimately determined that the indemnitee is not
entitled to be indemnified by Omnicom Finance.
Omnicom Finance maintains and pays premiums for directors' and officers'
liability insurance policies.
II-2
Item 16. Exhibits and Financial Statement Schedules.
Exhibit
Number Description of Exhibit
------- ----------------------
3.1 Certificate of Incorporation of Omnicom Capital Inc. (Exhibit
3.1 to Amendment No. 1 to Registration Statement on Form
S-3 (SEC File No. 333-108611) and incorporated herein by
reference).
3.2 By-laws of Omnicom Capital Inc. (Exhibit 3.2 to Amendment No.
1 to Registration Statement on Form S-3 (SEC File No.
333-108611) and incorporated herein by reference).
3.3 Certificate of Incorporation of Omnicom Finance Inc. (Exhibit
3.3 to Amendment No. 1 to Registration Statement on Form
S-3 (SEC File No. 333-108611) and incorporated herein by
reference).
3.4 By-laws of Omnicom Finance Inc. (Exhibit 3.4 to Amendment No.
1 to Registration Statement on Form S-3 (SEC File No.
333-108611) and incorporated herein by reference).
4.1 Indenture between Omnicom Group Inc. and J.P. Morgan Chase
Bank, formerly known as The Chase Manhattan Bank, dated as of
February 7, 2001.
4.2 Form of Liquid Yield Option Note(TM)due 2031 (Included in
Exhibit 4.1).
4.3 First Supplemental Indenture, dated as of February 13, 2004,
between Omnicom Group Inc., Omnicom Capital Inc., Omnicom
Finance Inc. and JP Morgan Chase Bank, as trustee.
4.4 Registration Rights Agreement, dated as of February 7, 2001,
by and between Omnicom Group Inc. and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (Exhibit
4.3 to Omnicom Group Inc.'s Registration Statement on Form S-3
(SEC File No. 333-55386) and incorporated herein by
reference).
5.1 Opinion of Jones Day.
8.1 Opinion of Jones Day as to certain U.S. federal income tax
considerations.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of KPMG LLP.
23.2 Consent of Jones Day (Included in Exhibits 5.1 and 8.1).
24.1 Power of Attorney.
25.1 Form of T-1 Statement of Eligibility of the Trustee under the
Indenture.
99.1 Letter to SEC pursuant to Temporary Note 3T to Article 3 of
Regulation S-X (Exhibit 99.1 to Omnicom Group Inc.'s Annual
Report on Form 10-K for the year ended December 31, 2001 (SEC
File no. 001-10551) and incorporated herein by reference)
Item 17. Undertakings.
The registrants undertake:
(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 this registration statement (or the most recent
post-effective amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information in this 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 and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and Exchange
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; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement.
II-3
However, paragraphs (1)(i) and (1)(ii) shall 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 registrants
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 such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
The registrants further undertake that, for purposes of determining
any liability under the Securities Act of 1933, each filing of Omnicom
Group Inc.'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
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act, may be permitted to directors, officers or persons
controlling the registrants, pursuant to the provisions described under
Item 15 above or otherwise, the registrants have been advised that in the
opinion of the Securities and Exchange Commission the indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants 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 registrants will, unless in the
opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by them is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
II-4
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-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, in the State of New York on February
13, 2004.
OMNICOM GROUP INC.,
as Registrant
By: /s/ Randall J. Weisenburger
----------------------------
Randall J. Weisenburger
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement on Form S-3 has been signed below by the following
persons in the capacities and on the date indicated.
Signature and Title Date
------------------- ----
* Chairman of the Board and Director February 13, 2004
------------------------------------
Bruce Crawford
* President, Chief Executive Officer February 13, 2004
------------------------------------ and Director (Principal Chief
John D. Wren Executive Officer)
/s/ Randall J. Weisenburger Executive Vice President and February 13, 2004
------------------------------------ Chief Financial Officer
Randall J. Weisenburger (Principal Financial Officer)
* Senior Vice President and Controller February 13, 2004
------------------------------------ (Principal Accounting Officer)
Philip J. Angelastro
* Director February 13, 2004
------------------------------------
Robert Charles Clark
Director
------------------------------------
Leonard S. Coleman, Jr.
* Director February 13, 2004
------------------------------------
Errol M. Cook
* Director February 13, 2004
------------------------------------
Susan S. Denison
Director
------------------------------------
Michael A. Henning
* Director February 13, 2004
------------------------------------
John R. Murphy
* Director February 13, 2004
------------------------------------
John R. Purcell
* Director February 13, 2004
------------------------------------
Linda Johnson Rice
Director
------------------------------------
Gary L. Roubos
*By: /s/ Michael J. O'Brien
------------------------------------------
Michael J. O'Brien
Pursuant to Powers of Attorney filed
herewith or previously with the Securities
and Exchange Commission
II-5
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-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, in the State of New York on February
13, 2004.
OMNICOM CAPITAL INC.,
as Registrant
By: /s/ Dennis E. Hewitt
-----------------------
Dennis E. Hewitt
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement on Form S-3 has been signed below by the following
persons in the capacities and on the date indicated.
Signature and Title Date
------------------- ----
/s/ Dennis E. Hewitt Chief Executive Officer and Director February 13, 2004
------------------------------------ (Principal Executive Officer)
Dennis E. Hewitt
/s/ Eric Huttner Chief Financial Officer and Director February 13, 2004
------------------------------------ (Principal Financial Officer)
Eric Huttner
/s/ Maeve C. Robinson Treasurer and Director February 13, 2004
------------------------------------ (Principal Accounting Officer)
Maeve C. Robinson
/s/ Randall J. Weisenburger Director February 13, 2004
------------------------------------
Randall J. Weisenburger
/s/ Will Lee Director February 13, 2004
------------------------------------
Will Lee
/s/ Michael J. O'Brien Director February 13, 2004
------------------------------------
Michael J. O'Brien
II-6
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-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, in the State of New York on February
13, 2004.
OMNICOM FINANCE INC.,
as Registrant
By: /s/ Dennis E. Hewitt
-----------------------
Dennis E. Hewitt
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement on Form S-3 has been signed below by the following
persons in the capacities and on the date indicated.
Signature and Title Date
------------------- ----
/s/ Randall J. Weisenburger Chief Executive Officer and Director February 13, 2004
------------------------------------ (Principal Executive Officer)
Randall J. Weisenburger
/s/ Dennis E. Hewitt Chief Financial Officer and Director February 13, 2004
------------------------------------ (Principal Financial Officer)
Dennis E. Hewitt
/s/ Philip J. Angelastro Treasurer and Director February 13, 2004
------------------------------------ (Principal Accounting Officer)
Philip J. Angelastro
/s/ Maeve C. Robinson Director February 13, 2004
------------------------------------
Maeve C. Robinson
II-7
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
------- -------------------
4.1 Indenture between Omnicom Group Inc. and J.P. Morgan Chase
Bank, formerly known as The Chase Manhattan Bank, dated as of
February 7, 2001.
4.2 Form of Liquid Yield Option Note(TM)due 2031 (Included in
Exhibit 4.1).
4.3 First Supplemental Indenture, dated as of February 13, 2004,
between Omnicom Group Inc., Omnicom Capital Inc., Omnicom
Finance Inc. and JP Morgan Chase Bank.
5.1 Opinion of Jones Day.
8.1 Opinion of Jones Day as to certain U.S. federal income tax
considerations.
12.1 Computation of Earnings to Fixed Charges.
23.1 Consent of KPMG LLP.
23.2 Consent of Jones Day (Included in Exhibits 5.1 and 8.1).
24.1 Power of Attorney.
25.1 Form of T-1 Statement of Eligibility of the Trustee under the
Indenture.