e424b5
The
information in this preliminary prospectus supplement is not
complete and may be changed. This preliminary prospectus
supplement and the accompanying prospectus are neither offers to
sell nor solicitations of offers to buy these securities in any
jurisdiction where the offer or sale thereof is not
permitted.
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Filed pursuant to Rule 424(b)(5)
File No. 333-155676
Subject to completion, dated
February 23, 2011
Preliminary prospectus
supplement
(To prospectus, dated
November 25, 2008)
Wyndham Worldwide
Corporation
$
% Notes
due 2021
We are offering $ million
aggregate principal amount of notes.
The notes will bear interest at the rate
of % per year. Interest will be
payable semi-annually
on and of
each year,
commencing ,
2011. The notes will mature on March 1, 2021. We may redeem
some or all of the notes at any time before maturity at the
make-whole price discussed under the caption
Description of notesOptional redemption.
The notes will be our unsecured obligations and will rank
equally in right of payment with all of our other unsubordinated
indebtedness from time to time outstanding.
Investing in the notes involves risks. Please see the
sections entitled Risk Factors beginning on
page 25 of our Annual Report on
Form 10-K
for the year ended December 31, 2010 and in this prospectus
supplement beginning on
page S-8
and the accompanying prospectus beginning on page 4.
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Per note
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Total
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Public offering
price(1)
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%
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$
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Underwriting discount
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%
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$
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Proceeds, before expenses, to us
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%
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$
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(1)
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Plus accrued interest, if any, from
February , 2011, if settlement occurs after
such date.
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The issuer does not intend to apply for listing of the notes
on any securities exchange or for inclusion of the notes in any
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 supplement or the
accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The underwriters expect to distribute the notes in book-entry
form through the facilities of The Depository Trust Company
for the benefit of its direct and indirect participants on or
about February , 2011.
Joint Book-Running
Managers
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BofA Merrill Lynch
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Credit Suisse
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J.P. Morgan
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The date of this prospectus supplement is
February , 2011
Table of
contents
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Page
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Prospectus Supplement
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S-1
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S-3
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S-8
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S-12
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S-12
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S-13
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S-14
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S-17
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S-37
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S-41
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S-42
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S-42
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S-43
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S-43
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Prospectus
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1
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11
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12
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14
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14
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We provide information to you about this offering in two
separate documents. The accompanying prospectus provides general
information about us and the securities we may offer from time
to time. This prospectus supplement describes the specific
details regarding this offering. Additional information is
incorporated by reference in this prospectus supplement. If
S-i
information in this prospectus supplement is inconsistent with
the accompanying prospectus, you should rely on this prospectus
supplement.
We have not authorized anyone to provide any information other
than that contained or incorporated by reference in this
prospectus supplement, the accompanying prospectus or any free
writing prospectus filed by us with the Securities and Exchange
Commission, or the SEC. We have not, and the
underwriters have not, authorized anyone else to provide you
with different or additional information. Neither we nor the
underwriters take any responsibility for, nor can we provide any
assurance as to the reliability of, any different or additional
information that others may give you. We are not, and the
underwriters are not, making an offer to sell these securities
in any jurisdiction where the offer and sale thereof is not
permitted. You should not assume that the information in this
prospectus supplement, the accompanying prospectus, any free
writing prospectus or any document incorporated by reference
herein or therein is accurate as of any date other than their
respective dates. Our business, financial condition, results of
operations and prospects may have changed since those dates.
S-ii
Forward-looking
statements
Forward-looking statements in this prospectus supplement and
documents that are incorporated by reference herein are subject
to known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements or other public statements. These forward-looking
statements are based on various facts and have been derived
utilizing numerous important assumptions and other important
factors, and changes in such facts, assumptions or factors could
cause actual results to differ materially from those in the
forward-looking statements. Forward-looking statements include
the information concerning our future financial performance,
business strategy, projected plans and objectives. Statements
preceded by, followed by or that otherwise include the words
believes, expects,
anticipates, intends,
projects, estimates, plans,
may increase, may fluctuate and similar
expressions or future or conditional verbs such as
should, would, may and
could are generally forward looking in nature and
not historical facts. You should understand that the following
important factors could affect our future results and could
cause actual results to differ materially from those expressed
in such forward-looking statements:
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Adverse developments in general business, economic and political
conditions or any outbreak or escalation of hostilities on a
national, regional or international basis;
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Our inability to access the capital
and/or the
asset-backed markets on a favorable basis;
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Competition in our existing and future lines of business, and
the financial resources of competitors;
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Our failure to comply with laws and regulations and any changes
in laws and regulations, including hospitality, vacation rental
and vacation ownership-related regulations, telemarketing
regulations, privacy policy regulations and state, federal and
international tax laws;
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Seasonal fluctuation in the travel business;
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Local and regional economic conditions that affect the travel
and tourism industry;
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Our failure to complete future acquisitions or to realize
anticipated benefits from completed acquisitions;
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Actions by our franchisees that could harm our business;
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The loss of any of our senior management;
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Pandemics or the threat of pandemics that may negatively affect
the travel industry;
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Terrorist attacks that may negatively affect the travel
industry, result in a disruption in our business and adversely
affect our financial results;
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Risks inherent in operating in foreign countries, including
exposure to local economic conditions, government regulation,
currency restrictions and other restraints, changes in and
application of tax laws, expropriation, political instability
and diminished ability to legally enforce our contractual
rights; and
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S-1
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Our failure to provide fully integrated disaster recovery
technology solutions in the event of a disaster or other
business interruption.
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Other factors not identified above, including the risk factors
described or incorporated by reference in the Risk
factors section of this prospectus supplement or the
accompanying prospectus, may also cause actual results to differ
materially from those projected by our forward-looking
statements. Most of these factors are difficult to anticipate
and are generally beyond our control.
You should consider the areas of risk described above, as well
as those set forth under the heading Risk Factors in
our Annual Report on
Form 10-K
for the year ended December 31, 2010 and in this prospectus
supplement and the accompanying prospectus in connection with
considering any forward-looking statements that may be made by
us and our businesses generally. Except for our ongoing
obligations to disclose material information under the federal
securities laws, we undertake no obligation to release any
revisions to any forward-looking statements, to report events or
to report the occurrence of unanticipated events unless we are
required to do so by law. For any forward-looking statements
contained or incorporated by reference in this prospectus
supplement, we claim the protection of the safe harbor for
forward-looking statements contained in Section 27A of the
Securities Act of 1933, as amended (the Securities
Act) and Section 21E of the Securities Exchange Act
of 1934, as amended (the Exchange Act).
S-2
Summary
The following is a summary of the more detailed information
appearing elsewhere or incorporated by reference in this
prospectus supplement. It does not contain all of the
information that may be important to you. You should read this
prospectus supplement in its entirety and the documents we have
referred you to, including those incorporated herein by
reference, especially the risks of investing in the notes
discussed under Risk Factors, before investing in
these notes. Except as otherwise indicated or unless the context
otherwise requires, Wyndham Worldwide,
we, us, our, the
Company, and our company refer to Wyndham
Worldwide Corporation or any successor thereto and its
subsidiaries on a consolidated basis. Unless otherwise
indicated, information is presented as of December 31,
2010.
Our
company
As one of the worlds largest hospitality companies, we
offer individual consumers and business customers a broad array
of hospitality services and products across various
accommodation alternatives and price ranges through our
portfolio of world-renowned brands. The hospitality industry is
a major component of the travel industry, which is one of the
largest retail industry segments of the global economy. Our
operations are grouped into three segments of the hospitality
industry: lodging, vacation exchange and rentals and vacation
ownership. With more than 20 brands, which include Wyndham
Hotels and Resorts, Ramada, Days Inn, Super 8, Howard
Johnson, Wyndham Rewards, Wingate by Wyndham, Microtel, RCI, The
Registry Collection, ResortQuest, Landal GreenParks, Novasol,
Hoseasons, cottages4you, James Villa Holidays, Wyndham Vacation
Resorts and WorldMark by Wyndham, we have built a significant
presence in most major hospitality markets in the United States
and throughout the rest of the world.
Approximately 60% of our revenues come from fees that we receive
in exchange for providing services. We refer to the businesses
that generate these fees as our
fee-for-service
businesses. We receive fees: (i) in the form of royalties
for use of our brand names; (ii) for providing hotel and
resort management services; (iii) for providing property
management services to vacation ownership resorts; (iv) for
providing vacation exchange and rentals services; and
(v) for providing services under our Wyndham Asset
Affiliation Model (WAAM). The remainder of our
revenues comes primarily from proceeds received from the sale of
vacation ownership interests and related financing.
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Our lodging business, Wyndham Hotel Group, is the worlds
largest hotel company based on number of properties, franchising
in the upscale, midscale, economy and extended stay segments of
the lodging industry and providing hotel management services
globally for full-service hotels. This is predominantly a
fee-for-service
business that provides recurring revenue streams, requires low
capital investment and produces strong cash flow.
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Our vacation exchange and rentals business, Wyndham Exchange
& Rentals, is the worlds largest member-based
vacation exchange network based on the number of vacation
exchange members and the worlds largest global marketer of
serviced vacation rental properties based on the number of
vacation rental properties marketed. Through this business, we
provide vacation exchange services and products and access to
distribution systems and networks to resort developers and
owners of intervals of vacation ownership interests, and we
market vacation rental properties primarily on behalf of
independent owners, vacation ownership developers and other
hospitality providers. This is primarily a
fee-for-service
business that provides stable revenue streams, requires low
capital investment and produces strong cash flow.
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S-3
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Our vacation ownership business, Wyndham Vacation Ownership, is
the worlds largest vacation ownership business based on
the number of resorts, units, owners and revenues. Through our
vacation ownership business, we develop and market vacation
ownership interests to individual consumers, provide consumer
financing in connection with the sale of vacation ownership
interests and provide property management services at resorts.
While the vacation ownership business has historically been
capital intensive, a central strategy for Wyndham Worldwide is
to leverage our scale and marketing expertise to pursue
low-capital requirement,
fee-for-service
business relationships that produce strong cash flow. In 2010,
we introduced our WAAM which offers turn-key solutions for
developers or banks in possession of newly developed inventory,
which we sell for a fee through our extensive sales and
marketing channels.
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Our mission is to increase shareholder value by being the leader
in travel accommodations and welcoming our guests to iconic
brands and vacation destinations through our signature
Count On Me! service. Our strategies to achieve
these objectives are to:
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Increase market share by delivering excellent service to drive
business customer, individual consumer and associate
satisfaction.
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Grow cash flow and operating margins through superior execution
in all of our businesses.
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Rebalance the Wyndham Worldwide portfolio to emphasize our
fee-for-service
business models.
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Attract, retain and develop human capital across our
organization.
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Support and promote Wyndham Green and Wyndham Diversity
initiatives.
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We strive to provide value-added services and products that are
intended to both enhance the travel experience of the individual
consumer and drive revenues to our business customers. The depth
and breadth of our businesses across different segments of the
hospitality industry provide us with the opportunity to expand
our relationships with our existing individual and business
customers in one or more segments of our business by offering
them additional or alternative services and products from our
other segments.
Our lodging, vacation exchange and rentals and vacation
ownership businesses all have both domestic and international
operations. During 2010, we derived 74% of our revenues in the
United States and 26% internationally.
Risk
factors
See the sections entitled Risk Factors in our Annual
Report on
Form 10-K
for the year ended December 31, 2010 and in this prospectus
supplement and the accompanying prospectus for a discussion of
the factors you should consider carefully before deciding to
invest in the notes.
S-4
The
offering
The summary below describes the principal terms of the notes.
Certain of the terms and conditions described below are subject
to important limitations and exceptions. For a more detailed
description of the terms and conditions of the notes, see the
section entitled Description of notes.
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Issuer |
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Wyndham Worldwide Corporation, a Delaware corporation |
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Securities Offered |
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$ million aggregate principal
amount of % notes due 2021. |
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Maturity |
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The notes will mature on March 1, 2021. |
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Interest Rate |
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The notes will bear interest at the rate
of % per year. Interest on the
notes will be payable semi-annually in arrears
on and of
each year
commencing ,
2011. |
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Ranking |
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The notes will be our general unsecured obligations and will
rank equally with all of our existing and future unsubordinated
obligations. As of December 31, 2010, we had approximately
$1,953 million of unsecured indebtedness outstanding,
$141 million of secured indebtedness outstanding, and
$1,650 million of securitized indebtedness outstanding. |
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Holders of any secured indebtedness will have claims that are
prior to your claims as holders of the notes, to the extent of
the value of the assets securing such indebtedness, in the event
of any bankruptcy, liquidation or similar proceeding. |
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The notes will be structurally subordinated to all obligations
of our subsidiaries, including claims with respect to trade
payables. As of December 31, 2010, our direct and indirect
subsidiaries had approximately $141 million of outstanding
indebtedness and other liabilities (excluding intercompany
liabilities and indebtedness under our securitization programs),
all of which are structurally senior to the notes. |
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Further Issues |
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We may create and issue further notes ranking equally and
ratably in all respects with the notes being offered hereby, so
that such further notes will be consolidated and form a single
series with the notes being offered hereby and will have the
same terms. Please see the section entitled Description of
notesFurther issues. |
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Optional Redemption |
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We may redeem all or a portion of the notes at our option at any
time at the make-whole redemption price equal to the
greater of (1) 100% of the aggregate principal amount of
the notes being redeemed, plus accrued and unpaid interest to,
but excluding, the redemption date, and (2) the sum, as
determined by an independent investment banker, of the present
values of the remaining scheduled payments of principal and
interest in respect of the notes being redeemed (exclusive of
any interest accrued to the date of redemption) discounted to
the redemption date on a semi-annual |
S-5
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basis at the treasury rate
plus
basis points, plus accrued and unpaid interest to, but
excluding, the redemption date. Please see the section entitled
Description of notesOptional redemption in
this prospectus supplement. |
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Certain Covenants |
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We will issue the notes under an indenture that will, among
other things, limit our ability to: |
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consolidate, merge or sell all or substantially all
of our assets;
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create liens, except for those created in our
securitization facilities; and
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enter into sale and leaseback transactions.
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All of these limitations will be subject to a number of
important qualifications and exceptions. Please see the section
entitled Description of notes. |
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Repurchase at the Option of the Holders of Notes |
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If we experience specific kinds of change of control and the
ratings on the notes are below investment grade ratings on any
date within a specified period of time following the public
notice of an arrangement that could result in a change of
control, we will be required to offer to purchase the notes at a
price equal to 101% of their principal amount plus accrued and
unpaid interest, if any, to the date of purchase. Please see the
section entitled Description of notesRepurchase at
the option of the holders of notes. |
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Use of Proceeds |
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We intend to use the net proceeds of this offering to reduce our
outstanding indebtedness, including the repurchase of any and
all of the $115,780,000 aggregate principal amount of our
outstanding 3.50% convertible notes due 2012 in a tender offer
and the repayment of borrowings under our revolving credit
facility, and for general corporate purposes. Please see the
section entitled Use of proceeds. |
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Book-entry form |
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The notes will be issued in the form of one or more fully
registered global notes, which will be deposited with, or on
behalf of, The Depository Trust Company (the
Depositary), New York, New York and registered in
the name of Cede & Co., the Depositarys nominee.
Beneficial interests in the global notes will be represented
through book-entry accounts of financial institutions acting on
behalf of beneficial owners as direct and indirect participants
in the Depositary. Investors may elect to hold interests
in the global notes through either the Depositary (in the United
States), or Clearstream Banking Luxembourg S.A. or Euroclear
Bank S.A./N.V. as operator of the Euroclear System (in Europe),
if they are participants in those systems, or indirectly through
organizations that are participants in those systems. |
S-6
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Absence of a public market for the notes |
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The notes are new securities for which there is currently no
established market. Accordingly, we cannot assure you as
to the development or liquidity of any market for the notes. The
underwriters have advised us that they currently intend to make
a market in the notes. However, they are not obligated to do so,
and they may discontinue any market making activities with
respect to the notes without notice to you or us. We do not
intend to apply for a listing of the notes on any securities
exchange or quotation system. |
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Certain United States federal income tax
consequences for
non-United
States holders |
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For a discussion of certain material United States federal
income tax consequences for
non-United
States holders related to the ownership and disposition of the
notes, see Certain material United States federal income
tax considerations for
non-United
States holders. |
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Trustee and paying agent |
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U.S. Bank National Association. |
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Governing Law |
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The notes and the indenture under which they will be issued will
be governed by New York law. |
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Conflicts of Interest |
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Affiliates of certain of the underwriters are holders of our
3.50% convertible notes due 2012 or lenders under our revolving
credit facility. Because more than 5% of the net proceeds of
this offering, not including underwriting compensation, may be
received by affiliates of certain underwriters, to the extent
any one underwriter, together with its affiliates, receives more
than 5% of the net proceeds, such underwriter would be
considered to have a conflict of interest with us in
regards to this offering under Financial Industry Regulatory
Authority, Inc. (FINRA) Rule 5121. For a brief
description of our relationships with certain underwriters, see
Use of proceeds and Conflicts of
interest. |
S-7
Risk
factors
Your investment in the notes involves certain risks. Before
you invest in the notes, in consultation with your own financial
and legal advisers, you should carefully consider, among other
matters, the following discussion of risks relating to the notes
and the discussion of risks relating our business under the
caption Risk factors in the accompanying prospectus
and under the heading Risk Factors in our Annual
Report on
Form 10-K
for the year ended December 31, 2010, which are
incorporated herein by reference. These risk factors may be
amended, supplemented or superseded from time to time by risk
factors contained in other Exchange Act reports that we file
with the SEC, which will be incorporated herein by reference, or
by a post-effective amendment to the registration statement of
which this prospectus supplement forms a part. In addition, new
risks may emerge at any time and we cannot predict such risks or
estimate the extent to which they may affect our financial
performance.
Risks related to
the notes
Our level of
indebtedness could limit cash flow available for our operations
and could adversely affect our ability to service our debt or
obtain additional financing, if necessary.
As of December 31, 2010, our total debt outstanding,
exclusive of debt outstanding under our vacation ownership
securitization program, was approximately $2,094 million.
We intend to use the net proceeds of this offering to reduce our
outstanding indebtedness. Our level of indebtedness could
restrict our operations and make it more difficult for us to
satisfy our obligations under the notes. For example, our level
of indebtedness could, among other things:
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affect our liquidity by limiting our ability to obtain
additional financing for working capital, or limit our ability
to obtain financing for capital expenditures and acquisitions or
make any available financing more costly;
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require us to dedicate all or a substantial portion of our cash
flow to service our debt, which would reduce funds available for
other business purposes, such as capital expenditures, dividends
or acquisitions;
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limit our flexibility in planning for or reacting to changes in
the markets in which we compete;
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place us at a competitive disadvantage relative to our
competitors with less indebtedness;
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render us more vulnerable to general adverse economic and
industry conditions; and
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make it more difficult for us to satisfy our financial
obligations, including those relating to the notes.
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In addition, the indenture governing the notes, our existing
senior credit facility and the terms of the agreements governing
our other outstanding indebtedness contain or will contain
financial and other restrictive covenants that will limit our
ability to engage in activities that may be in our long-term
best interests. Our failure to comply with those covenants could
result in an event of default which, if not cured or waived,
could result in the acceleration of all of our debt, including
the notes.
S-8
Despite current
indebtedness levels, we and certain of our subsidiaries may
incur substantially more debt. This could further exacerbate the
risks associated with our leverage.
The terms of the indenture governing the notes do not prohibit
us or our subsidiaries from incurring additional indebtedness.
If new debt is added to our and our subsidiaries current
debt levels, the related risks that we and they now face could
intensify.
The notes will be
unsecured and rank behind any secured creditors to the extent of
the value of the collateral securing their claims.
As of December 31, 2010, we had $141 million of
secured indebtedness. Holders of any secured indebtedness will
have claims that are prior to your claims as holders of the
notes to the extent of the value of the assets securing such
indebtedness. In the event of any distribution or payment of our
assets in any foreclosure, dissolution,
winding-up,
liquidation, reorganization or other bankruptcy proceeding,
holders of our secured indebtedness will have prior claim to our
assets that constitute their collateral. Holders of the notes
will participate ratably with all holders of our unsecured
indebtedness that is deemed to be of the same class as the
notes. In that event, because the notes will not be secured by
any of our assets, it is possible that our remaining assets
might be insufficient to satisfy your claims in full.
The notes will be
structurally junior to the indebtedness and other liabilities of
our subsidiaries.
You will not have any claim as a creditor against our
subsidiaries and all existing and future indebtedness and other
liabilities, including trade payables, whether secured or
unsecured, of those subsidiaries will be structurally senior to
the notes. Furthermore, in the event of any bankruptcy,
liquidation or reorganization of any of our subsidiaries, the
rights of the holders of notes to participate in the assets of
such subsidiary will rank behind the claims of that
subsidiarys creditors, including trade creditors (except
to the extent we have a claim as a creditor of such subsidiary).
As a result, the notes are structurally subordinated to the
outstanding and other liabilities, including trade payables, of
our subsidiaries. As of December 31, 2010, our subsidiaries
had approximately $141 million of outstanding indebtedness
and other liabilities, (excluding intercompany liabilities and
indebtedness under our securitization programs), all of which
are structurally senior to the notes.
In addition, the indenture permits our subsidiaries to incur
additional indebtedness which would be structurally senior to
the notes and does not contain any limitation on the amount of
other liabilities, such as trade payables, that may be incurred
by our subsidiaries.
Our ability to
service our debt and meet our cash requirements depends on many
factors, some of which are beyond our control.
Our ability to satisfy our obligations will depend on our future
operating performance and financial results, which will be
subject, in part, to factors beyond our control, including
interest rates and general economic, financial and business
conditions. If we are unable to generate sufficient cash flow to
service our debt, we may be required to:
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refinance all or a portion of our debt, including the notes;
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obtain additional financing;
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sell some of our assets or operations;
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S-9
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reduce or delay capital expenditures
and/or
acquisitions; or
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revise or delay our strategic plans.
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If we are required to take any of these actions, it could have a
material adverse effect on our business, financial condition and
results of operations. In addition, we cannot assure you that we
would be able to take any of these actions, that these actions
would enable us to continue to satisfy our capital requirements
or that these actions would be permitted under the terms of our
various debt instruments, including our senior credit facility
and the indenture.
Our failure to
meet the terms of covenants in our existing senior credit
facility may result in an event of default.
Our existing senior credit facility contains covenants customary
for credit facilities of this nature, including requiring us to
meet specified financial ratios and financial tests. Our ability
to borrow under our senior credit facility will depend upon
satisfaction of these covenants. Events beyond our control can
affect our ability to meet those covenants.
These financial covenants consist of a minimum interest coverage
ratio of at least 3.0 times consolidated EBITDA to consolidated
interest expense for the measurement period and a maximum
leverage ratio not to exceed 3.75 times consolidated total
indebtedness to consolidated EBITDA on the measurement date. Our
financial covenant calculations were 7.7 times and
2.0 times as of December 31, 2010, respectively.
Negative covenants in the credit facility include limitations on
indebtedness of material subsidiaries; liens; mergers,
consolidations, liquidations, dissolutions and sales of
substantially all assets; and sale and leasebacks.
If we are unable to meet the terms of our financial covenants,
or if we break any of these covenants, a default could occur
under one or more of these agreements. A default, if not waived
by our lenders, could result in the acceleration of our
outstanding indebtedness and cause our debt to become
immediately due and payable. If acceleration occurs, we would
not be able to repay our debt and it is unlikely that we would
be able to borrow sufficient funds to refinance our debt. Even
if new financing is offered to us, it may not be on terms
acceptable to us.
A downgrade by
Moodys or S&P could restrict our access to the
capital markets and increase our borrowing costs.
A downgrade by Moodys
and/or
S&P could affect our future borrowing
and/or
bonding costs and the availability of such bonding capacity. It
is also possible that asset-backed securities issued pursuant to
our securitization programs could in the future be downgraded by
rating agencies. If our asset-backed securities are downgraded,
our ability to complete other securitization transactions on
acceptable terms could be jeopardized, and we could be forced to
rely on other funding sources which may be more expensive and
less attractive, or such other funding sources may not be
available, which may require us to adjust our business
operations accordingly, including reducing or suspending our
financing to purchasers of vacation ownership interests. In
addition, our inability to access the securitization or debt
markets or utilize other financing vehicles would negatively
affect our liquidity. Please see the section entitled
Managements Discussion and Analysis of Financial
Condition and Results of OperationLiquidity Risk in
our Annual Report on Form
10-K for the
period ended December 31, 2010.
S-10
We may choose to
redeem the notes when prevailing interest rates are relatively
low.
The notes are redeemable at our option and we may choose to
redeem some or all of the notes from time to time, especially
when prevailing interest rates are lower than the rate borne by
the notes. If prevailing rates are lower at the time of
redemption, you would not be able to reinvest the redemption
proceeds in a comparable security at an effective interest rate
as high as the interest rate on the notes being redeemed. Our
redemption right also may adversely affect your ability to sell
your notes as the optional redemption date or period approaches.
Please see the section entitled Description of
notesOptional redemption.
We may not be
able to repurchase the notes upon a change of control.
Upon a change of control, as defined under the indenture
governing the notes, and the notes being rated below investment
grade on any date within a specified period of time following
the public notice of an arrangement that could result in a
change of control, we are required to offer to repurchase all of
the notes then outstanding at a price equal to 101% of the
aggregate principal amount of the notes repurchased, plus
accrued interest. In order to obtain sufficient funds to pay the
purchase price of the outstanding notes, we expect that we would
have to refinance the notes. We may not under these
circumstances be able to refinance the notes on reasonable
terms, if at all. Our failure to offer to purchase all
outstanding notes or to purchase all validly tendered notes
would be an event of default under the indenture governing the
notes. Such an event of default may cause the acceleration of
our other indebtedness. Our future indebtedness may also contain
restrictions on repayment requirements with respect to specified
events or transactions that constitute a change of control under
the indenture. Please see the section entitled Description
of notesRepurchase at the option of the holders of
notes.
We are a holding
company and are dependent on dividends and other distributions
from our subsidiaries.
Wyndham Worldwide is a holding company with limited direct
operations. Our principal assets are the equity interests that
we hold in our operating subsidiaries. As a result, we are
dependent on dividends and other distributions from our
subsidiaries to generate the funds necessary to meet our
financial obligations, including the payment of principal and
interest on our outstanding debt. Our subsidiaries are legally
distinct from us and have no obligation to pay amounts due on
our debt or to make funds available to us for such payment.
An active trading
market for the notes may not develop.
Prior to this offering, there has been no trading market for the
notes. We do not intend to apply for listing of the notes on any
securities exchange or to arrange for quotation on any
interdealer quotation system. We have been informed by the
underwriters that they intend to make a market in the notes
after the offering is completed. However, the underwriters have
no obligation to make a market in the notes and they may cease
their market-making at any time without notice. In addition, the
liquidity of the trading market in the notes, and the market
price quoted for the notes, may be adversely affected by changes
in the overall market for this type of security and by changes
in our financial performance or prospects or in the prospects
for companies in our industry generally. As a result, we cannot
assure you that an active trading market will develop for the
notes. If an active trading market does not develop or is not
maintained, the market price and liquidity of the notes may be
adversely affected. In that case you may not be able to sell
your notes at a particular time or you may not be able to sell
your notes at a favorable price.
S-11
Use of
proceeds
We intend to use the net proceeds of this offering to reduce our
outstanding indebtedness, including the repurchase of any and
all of the $115,780,000 aggregate principal amount of our
outstanding 3.50% convertible notes due 2012 in a tender offer
and the repayment of borrowings under our revolving credit
facility, and for general corporate purposes.
Pending these uses, we intend to invest net proceeds in
interest-bearing, short-term investments.
Current borrowings under our revolving credit facility were used
for general corporate purposes and are approximately
$145 million as of the date of this prospectus supplement.
The borrowings have an interest rate of LIBOR plus
250 basis points. Our revolving credit facility matures in
October 2013.
Affiliates of Credit Suisse Securities (USA) LLC,
J.P. Morgan Securities LLC and Merrill Lynch, Pierce,
Fenner & Smith Incorporated are, and certain other
underwriters may also be, holders of our 3.50% convertible notes
or lenders under our revolving credit facility, and they may
receive more than 5% of the net proceeds of this offering, not
including underwriting compensation, upon repurchase of our
3.50% convertible notes and repayment of borrowings under our
revolving credit facility.
Ratio of earnings
to fixed charges
The following table sets forth our ratio of earnings to fixed
charges for each of the periods indicated:
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Year ended December 31,
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2010
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2009(1)
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2008(1)
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2007(1)
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2006(1)
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Ratio of earnings to fixed charges
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2.85x
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2.70x
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(2)
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3.81x
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4.05x
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(1)
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Ratio computation has been amended
to (i) exclude income from equity investees from the
determination of earnings available to cover fixed charges and
(ii) include capitalized interest within total fixed
charges. For the years ended December 31, 2009, 2007 and
2006, ratio was previously reported as 2.78x, 4.11x and 4.36x,
respectively. For the year ended December 31, 2008, the
Company previously reported that it was deficient to cover fixed
charges by $884 million.
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(2)
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The Company was deficient to cover
fixed charges by $890 million.
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The ratio of earnings to fixed charges is computed by dividing
(i) income/(loss) before income taxes and cumulative effect
of accounting change, less income/(loss) from equity investees,
plus fixed charges and the amortization of capitalized interest,
less capitalized interest, by (ii) fixed charges. Our fixed
charges consist of interest expense on all indebtedness
(including costs related to the early extinguishment of debt and
the amortization of deferred financing costs), capitalized
interest and the portion of operating lease rental expense that
is representative of the interest factor.
S-12
Capitalization
The following table sets forth our cash and cash equivalents,
securitized assets and capitalization as of December 31,
2010 on an actual basis and as adjusted for this offering and
the repurchase of all outstanding 3.50% convertible notes due
2012.
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Actual
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As Adjusted
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As of December 31, 2010
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(in millions)
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Cash and cash equivalents
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$
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156
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$
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Securitized
assets(1)
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$
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2,865
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$
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2,865
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Securitized vacation ownership debt
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$
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1,650
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$
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1,650
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Other debt:
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% Senior unsecured notes (due
March 2021)
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$
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7.375% Senior unsecured notes (due March 2020)
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$
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247
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247
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5.75% Senior unsecured notes (due February 2018)
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247
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247
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6.00% Senior unsecured notes (due December 2016)
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798
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798
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9.875% Senior unsecured notes (due May 2014)
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241
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241
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Revolving credit facility (due October 2013)
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154
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154
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3.50% Convertible notes (due May
2012)(2)
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266
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Vacation rentals capital leases
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115
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115
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Other
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26
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26
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Total other debt
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2,094
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Total debt
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3,744
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Total stockholders equity
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2,917
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2,917
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Total capitalization
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$
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6,661
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$
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(1)
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Represents the portion of gross
vacation ownership contract receivables, securitization
restricted cash and related assets that collateralize our
securitized debt.
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(2)
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Includes debt principal, less
unamortized discount, and a liability related to a bifurcated
conversion feature. During the third and fourth quarters of
2010, we repurchased a portion of our 3.50% convertible notes.
The following table details the components of the convertible
notes:
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December 31, 2010
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(in millions)
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Debt principal
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$
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116
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Unamortized discount
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(12
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)
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Debt less discount
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104
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Fair value of bifurcated conversion feature(*)
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162
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Convertible notes
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$
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266
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(*)
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We also have an asset with a fair
value equal to the bifurcated conversion feature, which
represents cash-settled call options that we purchased
concurrent with the issuance of the 3.50% convertible notes due
2012.
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On February 9, 2011, we
launched a tender offer to purchase any and all of the
$115,780,000 principal aggregate amount of our outstanding 3.50%
convertible notes due 2012. We would need approximately
$290 million to purchase all of the 3.50% convertible notes
due 2012 outstanding as of February 8, 2011 in accordance
with the terms of the offer to purchase, assuming a purchase
price per $1,000 principal amount of 3.50% convertible notes due
2012 of $2,504.87, and assuming that the purchase of 3.50%
convertible notes due 2012 is settled on March 10, 2011. If
some of the holders of the 3.50% convertible notes due 2012 do
not tender and we are unable to purchase all of the outstanding
3.50% convertible notes due 2012 in the tender offer, we will
use the remaining net proceeds of this offering to repay
borrowings under our revolving credit facility.
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S-13
Certain material
United States federal income tax
considerations for
non-United
States holders
The following is a general discussion of certain United States
federal income tax consequences of the ownership and disposition
of the notes. This discussion applies only to a
Non-United
States Holder (as defined below) that acquires the notes
pursuant to this offering at the initial offering price. This
discussion is based upon the United States Internal Revenue Code
of 1986, as amended (the Code), Treasury regulations
and judicial decisions and administrative interpretations
thereof, all as of the date hereof and all of which are subject
to change, possibly with retroactive effect. This discussion is
limited to investors that hold the notes as capital assets for
United States federal income tax purposes. Furthermore, this
discussion does not address all aspects of United States federal
income taxation that may be applicable to investors in light of
their particular circumstances, or to investors subject to
special treatment under United States federal income tax law,
such as banks and other financial institutions, insurance
companies,
tax-exempt
organizations, entities that are treated as partnerships for
United States federal income tax purposes, dealers or traders in
securities or currencies, expatriates, persons whose
functional currency is not the United States dollar
and persons that hold the notes as part of a straddle, hedge,
conversion transaction or other integrated investment.
Furthermore, this discussion does not address any United States
federal estate or gift tax consequences or any state, local or
foreign tax consequences.
The following discussion is for informational purposes only and
is not a substitute for careful tax planning and advice.
Investors considering the purchase of notes should consult their
own tax advisors with respect to the application of the United
States federal income tax laws to their particular situations,
as well as any tax consequences arising under the estate or gift
tax laws or the laws of any state, local or
non-United
States taxing jurisdiction, or under any applicable
tax treaty.
For purposes of this discussion, the term
Non-United
States Holder means a beneficial owner of a note that is,
for United States federal income tax purposes:
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a nonresident alien individual;
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a foreign corporation; or
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a foreign estate or trust.
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The following discussion assumes that no item of income, gain,
deduction or loss derived by a
Non-United
States Holder in respect of a note at any time is effectively
connected with the conduct of a United States trade or business.
Special rules, not discussed herein, may apply to certain
Non-United
States Holders, such as:
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certain former citizens or residents of the United States;
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controlled foreign corporations;
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passive foreign investment companies;
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corporations that accumulate earnings to avoid United States
federal income tax;
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financial institutions, including banks and insurance companies;
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S-14
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investors in pass-through entities that are subject to special
treatment under the Code; and
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Non-United
States Holders that are engaged in the conduct of a United
States trade or business.
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If a partnership (including any entity or arrangement treated as
a partnership for United States federal income tax purposes)
owns notes, the tax treatment of a partner in the partnership
will depend upon the status of the partner and the activities of
the partnership. Partners in a partnership that owns the notes
should consult their tax advisors as to the particular United
States federal income tax consequences applicable to them.
Stated
interest
Subject to the discussion below concerning backup withholding, a
Non-United
States Holder generally will not be subject to United States
federal income or withholding tax on payments of interest on the
notes provided that the
Non-United
States Holder (A) does not actually or constructively own
10% or more of the total combined voting power of all classes of
our voting stock, (B) is not a controlled foreign
corporation related to us directly or constructively through
stock ownership, and (C) satisfies certain certification
requirements. Such certification requirements will be met if
(x) the
Non-United
States Holder provides its name and address, and certifies on
Internal Revenue Service (IRS)
Form W-8BEN
(or a substantially similar form), under penalties of perjury,
that it is not a United States person or (y) a securities
clearing organization or certain other financial institutions
holding the note on behalf of the
Non-United
States Holder certifies on
Form W-8IMY,
under penalties of perjury, that such certification has been
received by it and furnishes us or our paying agent with a copy
thereof. In addition, we or our paying agent must not have
actual knowledge or reason to know that the beneficial owner of
the note is a United States person.
If a
Non-United
States Holder cannot satisfy the requirements outlined above,
then interest on the notes will generally be subject to United
States withholding tax at a 30% rate (or a lower applicable
treaty rate).
Disposition of
the notes
Subject to the discussion below concerning backup withholding, a
Non-United
States Holder will not be subject to United States federal
income tax with respect to gain recognized on the disposition of
the notes unless the
Non-United
States Holder is an individual who is present in the United
States for 183 or more days in the taxable year and certain
other conditions are satisfied. In such case, the
Non-United
States Holder will be subject to a flat 30% tax (or lower
applicable treaty rate) on any capital gain recognized on the
disposition of the notes, which may be offset by certain United
States source capital losses.
Information
reporting and backup withholding tax
We must report annually to the IRS and to a
Non-United
States Holder the amount of interest paid to the
Non-United
States Holder and the amount of tax, if any, withheld with
respect to such interest. The IRS may make this information
available to the tax authorities in the country in which the
Non-United
States Holder is a resident.
In addition, a
Non-United
States Holder may be subject to backup withholding with respect
to interest payments on a note or the proceeds from disposition
of a note, unless, generally, the
S-15
Non-United
States Holder certifies under penalties of perjury (usually on
IRS
Form W-8BEN)
that the
Non-United
States Holder is not a United States person or the
Non-United
States Holder otherwise establishes an exemption.
Additional rules relating to information reporting requirements
and backup withholding tax with respect to the payment of
proceeds from the disposition of a note are as follows:
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If the proceeds are paid to or through the United States office
of a broker, a
Non-United
States Holder generally will be subject to backup withholding
tax and information reporting unless the
Non-United
States Holder certifies under penalties of perjury that it is
not a United States person (usually on an IRS
Form W-8BEN)
or otherwise establishes an exemption.
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If the proceeds are paid to or through a
non-United
States office of a broker that is not a United States person and
does not have one of certain specified United States
connections, a
Non-United
States Holder generally will not be subject to backup
withholding tax or information reporting.
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If the proceeds are paid to or through a
non-United
States office of a broker that is a United States person or
that has one of the specified United States connections, a
Non-United States
Holder generally will be subject to information reporting (but
generally not backup withholding tax) unless the
Non-United
States Holder certifies under penalties of perjury that it is
not a United States person (usually on an IRS
Form W-8BEN)
or otherwise establishes an exemption.
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Any amounts withheld under the backup withholding tax rules will
be allowed as a refund or a credit against the
Non-United
States Holders United States federal income tax liability,
provided the required information is furnished to the IRS.
New legislation
affecting taxation of notes held by or through foreign
entities
Recently enacted legislation generally will impose a withholding
tax of 30% on interest income from the notes and the gross
proceeds of a disposition of the notes paid after
December 31, 2012 to a foreign financial institution,
unless such institution enters into an agreement with the United
States government to collect and provide to the United States
tax authorities substantial information regarding United States
account holders of such institution (which would include certain
equity and debt holders of such institution, as well as certain
account holders that are foreign entities with United States
owners). Absent any applicable exception, this legislation also
generally will impose a withholding tax of 30% on interest
income from the notes and the gross proceeds of a disposition of
the notes paid after December 31, 2012 to a foreign entity
that is not a foreign financial institution unless such entity
provides the withholding agent with a certification identifying
the substantial United States owners of the entity, which
generally includes any United States person who directly or
indirectly owns more than 10% of the entity. Under certain
circumstances, a
non-United
States holder of the notes might be eligible for refunds or
credits of such taxes, and a
non-United
States holder might be required to file a United States federal
income tax return to claim such refunds or credits. This
legislation generally is effective for payments made after
December 31, 2012. The legislation does not generally apply
to payments made on obligations outstanding on March 18,
2012, even if those payments are made after December 31,
2012, although in certain cases the legislation may apply to
these payments. Investors are encouraged to consult with their
own tax advisors regarding the implications of this legislation
on their investment in the notes.
S-16
Description of
notes
The %
notes due 2021 offered hereby (the notes) will be
issued under an indenture, dated as of November 20, 2008,
between Wyndham Worldwide Corporation and U.S. Bank
National Association, as trustee (the Trustee), and
a fifth supplemental indenture thereto, to be dated as of
February , 2011 (together, the
indenture). In this Description of notes,
we, us, our and similar
words refer to Wyndham Worldwide Corporation and not to any of
its subsidiaries.
Because this section is a summary, it does not describe every
aspect of the notes and the indenture. This summary is subject
to, and qualified in its entirety by reference to, all the
provisions of the notes and the indenture, including definitions
of certain terms used therein. You may obtain copies of the
notes and the indenture by requesting them from us or the
Trustee.
General
The notes:
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will be our senior unsecured obligations;
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will rank equally with all of our other senior unsecured
indebtedness from time to time outstanding;
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will be structurally subordinated to all existing and future
obligations of our subsidiaries including claims with respect to
trade payables;
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will initially be limited to
$ million aggregate principal
amount; and
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will be issued in minimum denominations of $2,000 and integral
multiples of $1,000 in excess thereof.
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Principal,
maturity and interest
Each note will bear interest at a rate
of % per year. Interest will be
payable semi-annually in arrears
on and of
each year, beginning
on ,
2011, and will be computed on the basis of a
360-day year
of twelve
30-day
months. Interest on the notes will accrue from and including the
settlement date and will be paid to holders of record on
the or immediately
before the respective interest payment date.
The notes will mature on March 1, 2021. On the maturity
date of the notes, the holders will be entitled to receive 100%
of the principal amount of the notes, subject to a Change of
Control as described under the section entitled
Description of notesRepurchase at the option of the
holders of notes. The notes do not have the benefit of any
sinking fund.
If any interest payment date falls on a day that is not a
business day, then payment of interest may be made on the next
succeeding business day and no interest will accrue because of
such delayed payment. With respect to the notes, when we use the
term business day we mean any day except a Saturday,
a Sunday or a day on which banking institutions in the
applicable place of payment are authorized or obligated by law,
regulation or executive order to close.
S-17
Ranking
The notes will be our general unsecured obligations and will
rank equally with all of our existing and future unsubordinated
obligations. As of December 31, 2010, we had approximately
$1,953 million of unsecured indebtedness outstanding,
$141 million of secured indebtedness outstanding, and
$1,650 million of securitized indebtedness outstanding.
Holders of any secured indebtedness will have claims that are
prior to your claims as holders of the notes, to the extent of
the value of the assets securing such indebtedness, in the event
of any bankruptcy, liquidation or similar proceeding.
We conduct our operations through Subsidiaries. As a result,
distributions or advances from our Subsidiaries are a major
source of funds necessary to meet our debt service and other
obligations. Contractual provisions, laws or regulations, as
well as our Subsidiaries financial condition and operating
requirements, may limit our ability to obtain cash required to
pay our debt service obligations, including payments on the
notes. The notes will be structurally subordinated
to all obligations of our Subsidiaries including claims with
respect to trade payables. This means that in the event of
bankruptcy, liquidation or reorganization of any of our
Subsidiaries, the holders of notes will have no direct claim to
participate in the assets of such Subsidiary but may only
recover by virtue of our equity interest in our Subsidiaries
(except to the extent we have a claim as a creditor of such
subsidiary). As a result all existing and future liabilities of
our Subsidiaries, including trade payables and claims of lessors
under leases, have the right to be satisfied in full prior to
our receipt of any payment as any equity owner of our
Subsidiaries. As of December 31, 2010, our Subsidiaries had
approximately $141 million of indebtedness outstanding and
other liabilities, (excluding debt outstanding under our
vacation ownership securitization program), all of which are
structurally senior to the notes.
Further
issues
The indenture provides that we may issue debt securities (the
debt securities) thereunder from time to time in one
or more series, and permits us to establish the terms of each
series of debt securities at the time of issuance. The indenture
does not limit the aggregate amount of debt securities that may
be issued under the indenture.
The notes will constitute a separate series of debt securities
under the indenture, initially limited to
$ million. Under the
indenture, we may, without the consent of the holders of the
notes, reopen the series and issue additional notes
from time to time in the future but only if such additional
notes are issued as part of a qualified reopening
for United States federal income tax purposes. This means that,
in circumstances where the indenture provides for the holders of
debt securities of any series to vote or take any action, any of
the outstanding notes as well as any respective
additional notes that we may issue by reopening the series,
will vote or take action as a single class.
Optional
redemption
We may redeem all or a portion of the notes at our option at any
time or from time to time as set forth below. We will mail
notice to registered holders of such notes of our intent to
redeem
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at least 30 days and not more than 60 days prior to
the date set for redemption. We may redeem such notes at a
redemption price equal to the greater of:
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100% of the principal amount plus accrued and unpaid interest
to, but excluding, the redemption date; and
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the sum, as determined by an Independent Investment Banker, of
the present values of the remaining scheduled payments of
principal and interest (exclusive of interest accrued to the
date of redemption) discounted to the redemption date on a
semiannual basis (assuming a
360-day year
consisting of twelve
30-day
months) at the Treasury Rate
plus
basis points, plus accrued and unpaid interest to, but
excluding, the date of redemption.
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If money sufficient to pay the redemption price of all of the
notes (or portions thereof) to be redeemed on the redemption
date is deposited with the Trustee or paying agent on or before
the redemption date and certain other conditions are satisfied,
then on and after such redemption date, interest will cease to
accrue on such notes (or such portion thereof) called for
redemption.
Comparable Treasury Issue means the United States
Treasury security selected by an Independent Investment Banker
as having a maturity comparable to the remaining term
(Remaining Life) of the notes to be redeemed that
would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the
remaining term of the notes.
Comparable Treasury Price means, with respect to any
redemption date, (1) the average of the Reference Treasury
Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or
(2) if the Independent Investment Banker obtains fewer than
four such Reference Treasury Dealer Quotations, the average of
all such Quotations or, if only one such Quotation is obtained,
such Quotation.
Independent Investment Banker means an independent
investment banking institution of national standing appointed by
us, which may be one of the Reference Treasury Dealers.
Reference Treasury Dealer means any primary
U.S. government securities dealer in New York City (a
Primary Treasury Dealer) that we select. We have
selected Credit Suisse Securities (USA) LLC, J.P. Morgan
Securities LLC and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, and their respective successors as Primary
Treasury Dealers.
Reference Treasury Dealer Quotation means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Independent Investment
Banker, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Independent Investment Banker
by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption
date.
Treasury Rate means, with respect to any redemption
date, (1) the yield, under the heading which represents the
average for the immediately preceding week, appearing in the
most recently published statistical release designated
H.15(519) or any successor publication which is
published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity
under the caption Treasury Constant Maturities, for
the maturity corresponding to the Comparable Treasury Issue (if
no maturity is within three months before or after the Remaining
Life, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be
determined and the
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Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month),
(2) if the period from the redemption date to the maturity
date of the notes to be redeemed is less than one year, the
weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be
used, or (3) if such release (or any successor release) is
not published during the week preceding the calculation date or
does not contain such yields, the rate per annum equal to the
semiannual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such
redemption date. The Treasury Rate shall be calculated on the
third business day preceding the redemption date.
If we elect to redeem less than all of the notes, and such notes
are at the time represented by a global note, then the
depositary will select by lot the particular notes to be
redeemed. If we elect to redeem less than all of the notes, and
any of such notes are not represented by a global note, then the
Trustee will select the particular notes to be redeemed in a
manner it deems appropriate and fair (and the depositary will
select by lot the particular interests in any global note to be
redeemed).
We may at any time, and from time to time, purchase the notes at
any price or prices in the open market or otherwise.
Repurchase at the
option of the holders of notes
If a Change of Control Triggering Event occurs, unless we have
exercised our right to redeem the notes as described above,
holders of notes will have the right to require us to repurchase
all or any part (equal to $2,000 or an integral multiple of
$1,000 in excess thereof) of their notes pursuant to the offer
described below (the Change of Control Offer) on the
terms set forth in the indenture. In the Change of Control
Offer, we will offer payment in cash equal to 101% of the
aggregate principal amount of notes repurchased plus accrued and
unpaid interest, if any, on the notes repurchased to but not
including the date of purchase (the Change of Control
Payment).
Within 30 days following any Change of Control Triggering
Event, or, at our option, prior to the date of consummation of
any Change of Control, but after public announcement of the
pending Change of Control, we will mail a notice to holders of
notes, with a copy to the Trustee, describing the transaction or
transactions that constitute the Change of Control and offering
to repurchase the notes on the date specified in the notice,
which date will be no earlier than 30 days and no later
than 60 days from the date such notice is mailed (the
Change of Control Payment Date), pursuant to the
procedures required by the indenture and described in such
notice. The repurchase obligation with respect to any notice
mailed prior to the consummation of the Change of Control, shall
be conditioned on the Change of Control Triggering Event
occurring on or prior to the payment date specified in the
notice.
We will comply with the requirements of
Rule 14e-1
under the Exchange Act and any other securities laws and
regulations thereunder to the extent those laws and regulations
are applicable in connection with the repurchase of the notes as
a result of a Change of Control Triggering Event. To the extent
that the provisions of any securities laws or regulations
conflict with the Change of Control provisions of the indenture,
we will comply with the applicable securities laws and
regulations and will not be deemed to have breached our
obligations under the Change of Control provisions of the
indenture by virtue of such conflicts.
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On the Change of Control Payment Date, we will, to the extent
lawful:
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accept for payment all notes or portions of notes properly
tendered pursuant to the Change of Control Offer;
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deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all notes or portions of notes
properly tendered; and
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deliver or cause to be delivered to the Trustee the notes
properly accepted.
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The paying agent will promptly mail to each holder of notes
properly tendered the purchase price for the notes, and the
Trustee will promptly authenticate and mail (or cause to be
transferred by book-entry) to each holder a new note equal in
principal amount to any unpurchased portion of any notes
surrendered; provided that each new note will be in a principal
amount of $2,000 or an integral multiple of $1,000 in excess
thereof.
We will not be required to make an offer to repurchase the notes
upon a Change of Control Triggering Event if a third party makes
such an offer in the manner, at the times and otherwise in
compliance with the requirements for an offer made by us and
such third party purchases all notes properly tendered and not
withdrawn under its offer.
For purposes of the foregoing discussion of a repurchase at the
option of holders, the following definitions are applicable:
Below Investment Grade Rating Event means the notes
are rated below an Investment Grade Rating by each of the Rating
Agencies on any date from the earlier of (1) the occurrence
of a Change of Control or (2) public notice of our
intention to effect a Change of Control, in each case until the
end of the
60-day
period following the earlier of (1) the occurrence of a
Change of Control or (2) public notice of our intention to
effect a Change of Control; provided, however, that if
(i) during such
60-day
period one or more Rating Agencies has publicly announced that
it is considering the possible downgrade of the notes, and
(ii) a downgrade by each of the Rating Agencies that has
made such an announcement would result in a Below Investment
Grade Rating Event, then such
60-day
period shall be extended for such time as the rating of the
notes by any such Rating Agency remains under publicly announced
consideration for possible downgrade to a rating below an
Investment Grade Rating and a downgrade by such Rating Agency to
a rating below an Investment Grade Rating could cause a Below
Investment Grade Rating Event. Notwithstanding the foregoing, a
rating event otherwise arising by virtue of a particular
reduction in rating will not be deemed to have occurred in
respect of a particular Change of Control (and thus will not be
deemed a Below Investment Grade Rating Event for purposes of the
definition of Change of Control Triggering Event) if the rating
agencies making the reduction in rating to which this definition
would otherwise apply do not announce or publicly confirm or
inform the Trustee in writing at our or its request that the
reduction was the result, in whole or in part, of any event or
circumstance comprised of or arising as a result of, or in
respect of, the applicable Change of Control (whether or not the
applicable Change of Control has occurred at the time of the
rating event).
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Change of Control means the occurrence of any of the
following: (1) the direct or indirect sale, transfer,
conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of
all or substantially all of the properties or assets of us and
our Subsidiaries taken as a whole to any person (as
that term is used in Section 13(d)(3) of the Exchange Act)
other than us or one of our Subsidiaries; (2) the adoption
of a plan relating to our liquidation or dissolution;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is
that any person (as defined above) becomes the
beneficial owner, directly or indirectly, of 50% or more of the
total voting power of all shares of our capital stock entitled
to vote generally in elections of directors; or (4) the
first day on which a majority of the members of our board of
directors are not Continuing Directors. Notwithstanding the
foregoing, a transaction will not be deemed to involve a Change
of Control if (1) we become a direct or indirect
wholly-owned subsidiary of a holding company and (2)(A) the
direct or indirect holders of the voting stock of such holding
company immediately following that transaction are substantially
the same as the holders of our voting stock immediately prior to
that transaction or (B) immediately following that
transaction no person (other than a holding company satisfying
the requirements of this sentence) is the beneficial owner,
directly or indirectly, of more than 50% of the voting stock of
such holding company.
Change of Control Triggering Event means the
occurrence of both a Change of Control and a Below Investment
Grade Rating Event.
Continuing Directors means, as of any date of
determination, any member of the Board of Directors of the
Company who (1) was a member of such Board of Directors on
the date of the indenture; or (2) was nominated for
election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or
election.
Investment Grade Rating means a rating equal to or
higher than Baa3 (or the equivalent) by Moodys and
BBB− (or the equivalent) by S&P.
Moodys means Moodys Investors Service,
Inc., and its successors.
Rating Agencies means (1) each of Moodys
and S&P; and (2) if either of Moodys or S&P
ceases to rate the notes or fails to make a rating of the notes
publicly available for reasons outside of our control, a
nationally recognized statistical rating
organization within the meaning of
Rule 15c3-1(c)(2)(vi)(F)
under the Exchange Act, as amended, selected by us (as certified
by a resolution of our board of directors) as a replacement
agency for Moodys or S&P, or both, as the case may be.
S&P means Standard & Poors
Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.
Merger,
consolidation or sale of assets
Under the terms of the indenture, we will be permitted to
consolidate or merge with another entity or to sell all or
substantially all of our assets to another entity, subject to
our meeting all of the following conditions:
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the resulting, surviving or transferee entity (if other than us)
must agree through a supplemental indenture to be legally
responsible for the notes;
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S-22
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immediately following the consolidation, merger, sale or
conveyance, no Event of Default (as defined below) shall have
occurred and be continuing;
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we must deliver a supplemental indenture by which the surviving
entity (if other than us) expressly assumes our obligations
under the indenture; and
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the resulting, surviving or transferee entity is a corporation
or a limited liability company organized and validly existing
under the laws of the United States or any jurisdiction thereof,
Canada, Mexico, Switzerland or any other country that is a
member country of the European Union on the date of the
supplemental indenture.
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In the event that we consolidate or merge with another entity or
sell all or substantially all of our assets to another entity,
the surviving entity will be substituted for us under the
indenture, and we will be discharged from all of our obligations
under the indenture.
Although there is a limited body of case law interpreting the
phrase all or substantially all, there is no precise
established definition of the phrase under applicable law.
Accordingly, in certain circumstances there may be a degree of
uncertainty as to whether a particular transaction would involve
a disposition of all or substantially all of our
assets. As a result, it may be unclear as to whether the merger,
consolidation or sale of assets covenant would apply to a
particular transaction as described above absent a decision by a
court of competent jurisdiction.
Any merger, consolidation or sale of our assets as described
above might be deemed for United States federal income tax
purposes to be an exchange of your notes for new notes,
resulting in recognition of taxable gain or loss for those
purposes, and possibly also adverse withholding or other tax
consequences of holding or disposing of the notes thereafter.
You should consult your tax adviser regarding the United States
federal, state, local, and if applicable,
non-United
States, income and other tax consequences of such an event.
Additional
amounts
All payments made by the Company, including any successor
thereto, on the notes will be made without withholding or
deduction for, or on account of, any present or future taxes,
duties, assessments or governmental charges of whatever nature
(Taxes) unless the withholding or deduction of such
Taxes is then required by law. If, as discussed in
Merger, consolidation or sale of assets, as a
result of or following a merger or consolidation of the Company
with, or a sale by the Company of all or substantially all of
its assets to, an entity that is organized under the laws of a
jurisdiction outside of the United States (a Change in
Domicile), any deduction or withholding is at any time
required for, or on account of, any Taxes imposed or levied by
or on behalf of:
(1) any jurisdiction (other than the United States) from or
through which the Company makes (or, as a result of the
Companys connection with such jurisdiction, is deemed to
make) a payment or delivery on the notes, or any political
subdivision or governmental authority thereof or therein having
the power to tax; or
(2) any other jurisdiction (other than the United States)
in which the Company is organized or otherwise considered to be
a resident or doing business for tax purposes, or any political
subdivision or governmental authority thereof or therein having
the power to tax (each of clauses (1) and (2), a
Relevant Taxing Jurisdiction);
S-23
in respect of any payment or delivery on the notes, then we will
pay (together with such payment or delivery) such additional
amounts (the Additional Amounts) as may be necessary
in order that the net amounts received in respect of such
payment or delivery by each beneficial owner of the notes after
such withholding or deduction (including any such deduction or
withholding from such Additional Amounts), will equal the amount
that would have been received in respect of such payment or
delivery in the absence of such withholding or deduction;
provided, however, that Additional Amounts shall be payable only
to the extent necessary so that the net amount received by the
holder, after taking into account such withholding or deduction,
equals the amount that would have been received by the holder in
the absence of a Change in Domicile; provided, further, that no
such Additional Amounts will be payable with respect to:
(1) any Taxes that would have been imposed absent a Change
in Domicile;
(2) any Taxes that would not have been so imposed but for
the existence of any present or former connection between the
beneficial owner (or between a fiduciary, settlor, beneficiary,
member or shareholder of, or possessor of power over the
relevant beneficial owner, if the relevant beneficial owner is
an estate, nominee, trust or corporation) and the Relevant
Taxing Jurisdiction (including the beneficial owner being a
citizen or resident or national of, or carrying on a business or
maintaining a permanent establishment in, or being physically
present in, the Relevant Taxing Jurisdiction) other than by the
mere ownership or holding of such note or enforcement of rights
thereunder or under the guarantee or the receipt of payments in
respect thereof;
(3) any Taxes that would not have been so imposed if the
beneficial owner had made a declaration of non-residence or any
other claim or filing for exemption to which it is entitled
(provided that (x) such declaration of non-residence or
other claim or filing for exemption is required by the
applicable law of the Relevant Taxing Jurisdiction as a
precondition to exemption from the requirement to deduct or
withhold such Taxes and (y) at least 30 days prior to
the first payment date with respect to which such declaration of
non-residence or other claim or filing for exemption is required
under the applicable law of the Relevant Taxing Jurisdiction,
the relevant beneficial owner at that time has been notified (in
accordance with the procedures set forth in
Notices) by the Company or any other person
through whom payment may be made that a declaration of
non-residence or other claim or filing for exemption is required
to be made);
(4) any note presented for payment (where presentation is
required) more than 30 days after the relevant payment is
first made available for payment to the beneficial owner (except
to the extent that the beneficial owner would have been entitled
to Additional Amounts had the note been presented during such
30 day period);
(5) any Taxes that are payable otherwise than by
withholding from a payment or delivery on the notes;
(6) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, assessment or other governmental charge;
(7) any withholding or deduction imposed on a payment to an
individual that is required to be made pursuant to European
Council Directive 2003/48/ EC on the taxation of savings or any
other directive implementing the conclusions of the ECOFIN
Council meeting of
S-24
26-27 November,
2000 or any law implementing or complying with, or introduced in
order to conform to, such Directive;
(8) any Taxes that could have been avoided by the
presentation (where presentation is required) of the relevant
note to another Paying Agent in a member state of the European
Union.
Such Additional Amounts will also not be payable where, had the
beneficial owner of the note been the holder of the note, it
would not have been entitled to payment of Additional Amounts by
reason of any of clauses (1) to (8) inclusive above.
The Company will (i) make any required withholding or
deduction and (ii) remit the full amount deducted or
withheld to the Relevant Taxing Jurisdiction in accordance with
applicable law. The Company will use reasonable efforts to
obtain certified copies of tax receipts evidencing the payment
of any Taxes so deducted or withheld from each Relevant Taxing
Jurisdiction imposing such Taxes and will provide such certified
copies to each holder. The Company will attach to each certified
copy a certificate stating (x) that the amount of
withholding Taxes evidenced by the certified copy was paid in
connection with payments in respect of the principal amount of
notes then outstanding and (y) the amount of such
withholding Taxes paid per $1,000 principal amount of the notes.
Copies of such documentation will be available for inspection
during ordinary business hours at the office of the trustee by
the holders of the notes upon request and will be made available
at the offices of the Paying Agent.
At least 30 days prior to each date on which any payment
under or with respect to the notes or the guarantee is due and
payable (unless such obligation to pay Additional Amounts arises
shortly before or after the 30th day prior to such date, in
which case it shall be promptly thereafter), if the Company will
be obligated to pay Additional Amounts with respect to such
payment, the Company will deliver to the trustee an
Officers Certificate stating the fact that such Additional
Amounts will be payable, the amounts so payable and will set
forth such other information necessary to enable the trustee to
pay such Additional Amounts to holders on the payment date. Each
such Officers Certificate shall be relied upon until
receipt of a further Officers Certificate addressing such
matters.
Wherever in the Indenture, the notes or this description of the
notes there are mentioned, in any context:
(1) the payment of principal,
(2) purchase prices in connection with a purchase of notes,
(3) interest, or
(4) any other amount payable on or with respect to the
notes,
such reference shall be deemed to include payment of Additional
Amounts as described under this heading to the extent that, in
such context, Additional Amounts are, were or would be payable
in respect thereof.
The foregoing obligations will survive any termination,
defeasance or discharge of the Indenture and will apply mutatis
mutandis to any jurisdiction in which any successor to the
Company is organized or any political subdivision or taxing
authority or agency thereof or therein.
S-25
Limitations on
liens
The indenture provides that we will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, incur, assume
or guarantee any Indebtedness secured by a Lien on any of our or
any of our Subsidiaries capital stock, properties or
assets, unless we secure the notes equally and ratably with the
Indebtedness secured by such Lien for so long as such
Indebtedness is secured. The restrictions do not apply to
Indebtedness that is secured by:
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Liens existing on the date the notes are issued;
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Liens on any property or any Indebtedness of a person existing
at the time the person becomes a Subsidiary (whether by
acquisition, merger or consolidation) which were not incurred in
anticipation thereof;
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Liens in favor of us or our Subsidiaries;
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Liens existing at the time of acquisition of the assets
encumbered thereby which were not incurred in anticipation of
such acquisition;
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purchase money Liens which secure Indebtedness that does not
exceed the cost of the purchased property; and
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Liens on real property acquired after the date on which the
notes are first issued which secure Indebtedness incurred to
acquire such real property or improve such real property so long
as (i) such Indebtedness is incurred on the date of
acquisition of such real property or within 180 days of the
acquisition of such real property; (ii) such Liens secure
Indebtedness in an amount no greater than the purchase price or
improvement price, as the case may be, of such real property so
acquired; and (iii) such Liens do not extend to or cover
any property of ours or any Restricted Subsidiary other than the
real property so acquired.
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The restrictions do not apply to extensions, renewals or
replacements of any Indebtedness secured by the foregoing types
of Liens; so long as the principal amount of Indebtedness
secured thereby shall not exceed the amount of Indebtedness
existing at the time of such extension, renewal or replacement.
Notwithstanding the foregoing restrictions, without securing the
notes as described above, we and the Restricted Subsidiaries
may, directly or indirectly, incur, assume or guarantee any
Indebtedness secured by Liens that this covenant would otherwise
restrict if the sum of (i) the aggregate of all
Indebtedness secured by such Liens and (ii) any
Attributable Debt (as defined below) related to any permitted
sale and leaseback arrangement (see Limitations on
sale and leaseback transactions) does not exceed the
greater of (i) 25% of our total Consolidated Net Worth (as
defined below) and (ii) $300 million.
Limitations on
sale and leaseback transactions
We will covenant in the indenture that neither we nor any
Restricted Subsidiary will enter into any arrangement with any
person to lease a Principal Property (except for any
arrangements that exist on the date the notes are issued or that
exist at the time any person that owns a Principal Property
becomes a Restricted Subsidiary) which has been or is to be sold
by us or the Restricted Subsidiary to such person unless:
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the sale and leaseback arrangement involves a lease for a term
of not more than three years;
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S-26
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the sale and leaseback arrangement is entered into between us
and any Subsidiary or between our Subsidiaries;
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we or the Restricted Subsidiary would be entitled to incur
Indebtedness secured by a Lien on the Principal Property at
least equal in amount to the Attributable Debt permitted
pursuant to the last paragraph under Limitations on
liens without having to secure equally and ratably the
notes;
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the proceeds of the sale and leaseback arrangement are at least
equal to the fair market value (as determined by our Board of
Directors in good faith) of the Principal Property and we apply
within 180 days after the sale an amount equal to the
greater of the net proceeds of the sale or the Attributable Debt
associated with the Principal Property to (i) the
retirement of long-term debt for borrowed money that is not
subordinated to the notes and that is not debt to us or a
Subsidiary, or (ii) the purchase or development of other
comparable property; or
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the sale and leaseback arrangement is entered into within
180 days after the initial acquisition of the Principal
Property subject to the sale and leaseback arrangement.
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Attributable Debt means, with regard to a sale and
leaseback arrangement of a Principal Property, an amount equal
to the lesser of: (a) the fair market value of the
Principal Property (as determined in good faith by our Board of
Directors); or (b) the present value of the total net
amount of rent payments to be made under the lease during its
remaining term, discounted at the rate of interest set forth or
implicit in the terms of the lease, compounded semi-annually.
The calculation of the present value of the total net amount of
rent payments is subject to adjustments to be specified in the
indenture.
Consolidated Net Worth means, as of any date of
determination, all items which in conformity with generally
accepted accounting principles would be included under
stockholders equity on the consolidated balance sheet of
us and our Subsidiaries at such date.
Principal Property means an asset or assets owned by
us or any Restricted Subsidiary having a gross book value in
excess of $50,000,000.
SEC
reports
The indenture provides that any documents or reports that we are
required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act must be filed by us with the trustee
within 15 days after the same are required to be filed with
the SEC (giving effect to any grace period provided by
Rule 12b-25
under the Exchange Act). Documents filed by us with the SEC via
the EDGAR system (or any successor thereto) will be deemed to be
filed with the trustee as of the time such documents are filed
via EDGAR.
Events of
default
Holders of notes will have specified rights if an Event of
Default (as defined below) occurs.
The term Event of Default in respect of the notes
means any of the following:
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we do not pay interest, including any additional interest and
any additional amounts, on any note within 30 days of its
due date;
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S-27
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we do not pay the principal of or any premium on any note,
including any additional amount, when due and payable, at
maturity, or upon acceleration or redemption;
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failure by us to comply with our obligations under
Merger, consolidation or sale of assets;
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we remain in breach of a covenant or warranty in respect of the
indenture or any note (other than a covenant included in the
indenture solely for the benefit of debt securities of another
series) for 60 days after we receive a written notice of
default, which notice must be sent by either the Trustee or
holders of at least 25% in principal amount of the outstanding
notes;
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indebtedness of ours or any of our Restricted Subsidiaries of at
least $50,000,000 in aggregate principal amount is accelerated
which acceleration has not been rescinded or annulled after
30 days notice thereof;
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we or any of our significant subsidiaries (other than any
securitization entity), as defined in Article 1,
Rule 1-02
of
Regulation S-X,
file for bankruptcy, or other events of bankruptcy, insolvency
or reorganization specified in the indenture; or
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a final judgment for the payment of $50 million or more
(excluding any amounts covered by insurance) rendered against us
or any of our significant subsidiaries (other than any
securitization entity), as defined in Article 1,
Rule 1-02
of
Regulation S-X,
which judgment is not discharged or stayed within 60 days
after (i) the date on which the right to appeal thereof has
expired if no such appeal has commenced, or (ii) the date
on which all rights to appeal have been extinguished.
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If an Event of Default with respect to the notes has occurred,
the Trustee or the holders of at least 25% in principal amount
of the notes may declare the entire unpaid principal amount of
(and premium, if any), and all the accrued interest on, such
notes to be due and immediately payable. This is called a
declaration of acceleration of maturity. There is no action on
the part of the Trustee or any holder of the notes required for
such declaration if the Event of Default is the Companys
bankruptcy, insolvency or reorganization. Holders of a majority
in principal amount of the notes may also waive certain past
defaults under the indenture with respect to the notes on behalf
of all of the holders of the notes. A declaration of
acceleration of maturity may be canceled, under specified
circumstances, by the holders of at least a majority in
principal amount of the notes and the Trustee.
Notwithstanding the foregoing, the indenture will provide that,
to the extent we elect, the sole remedy for an Event of Default
relating to (i) our failure to file with the Trustee
pursuant to Section 314(a)(1) of the Trust Indenture
Act of 1939 any documents or reports that we are required to
file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act or (ii) our failure to comply with our
obligations as set forth under SEC reports
above, will after the occurrence of such an Event of Default,
consist exclusively of the right to receive additional interest
on the notes at a rate equal to:
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0.25% per annum of the principal amount of the notes outstanding
for each day during the
60-day
period beginning on, and including, the occurrence of such an
Event of Default during which such Event of Default is
continuing; and
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0.50% per annum of the principal amount of the notes outstanding
for each day during the
120-day
period beginning on, and including, the 61st day following,
and including, the occurrence of such an Event of Default during
which such Event of Default is continuing;
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S-28
provided, however, that in no event shall
additional interest accrue under the terms of the indenture at
an annual rate in excess of 0.50% during the six-month period
beginning on, and including, the date which is six months after
the last date of original issuance of the notes for any failure
to timely file any document or report that we are required to
file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, as applicable (after giving effect to all
applicable grace periods thereunder and other than reports on
Form 8-K).
If we so elect, such additional interest will be payable in the
same manner and on the same dates as the stated interest payable
on the notes. On the 181st day after such Event of Default
(if the Event of Default relating to the reporting obligations
is not cured or waived prior to such 181st day), the notes
will be subject to acceleration as provided above. The
provisions of the indentures described in this paragraph will
not affect the rights of holders of notes in the event of the
occurrence of any other Event of Default. In the event we do not
elect to pay the additional interest following an Event of
Default in accordance with this paragraph, the notes will be
subject to acceleration as provided above.
In order to elect to pay the additional interest as the sole
remedy during the first 180 days after the occurrence of an
Event of Default relating to the failure to comply with the
reporting obligations in accordance with the immediately
preceding paragraph, we must notify all holders of notes and the
Trustee and paying agent of such election prior to the beginning
of such
180-day
period. Upon our failure to timely give such notice, the notes
will be immediately subject to acceleration as provided above.
Except in cases of default, where the Trustee has special
duties, the Trustee is not required to take any action under the
indenture at the request of holders unless the holders offer the
Trustee protection from expenses and liability satisfactory to
the Trustee. If an indemnity satisfactory to the Trustee is
provided, the holders of a majority in principal amount of notes
may direct the time, method and place of conducting any lawsuit
or other formal legal action seeking any remedy available to the
Trustee. The Trustee may refuse to follow those directions in
certain circumstances specified in the indenture. No delay or
omission in exercising any right or remedy will be treated as a
waiver of the right, remedy or Event of Default.
Before holders are allowed to bypass the Trustee and bring a
lawsuit or other formal legal action or take other steps to
enforce their rights or protect their interests relating to the
notes, the following must occur:
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such holders must give the Trustee written notice that an Event
of Default has occurred and remains uncured;
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holders of at least 25% in principal amount of the notes must
make a written request that the Trustee take action because of
the default and must offer the Trustee indemnity satisfactory to
the Trustee against the cost and other liabilities of taking
that action; and
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the Trustee must have failed to take action for 60 days
after receipt of the notice and offer of indemnity.
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Holders are, however, entitled at any time to bring a lawsuit
for the payment of money due on the notes on or after the due
date.
S-29
Modification of
the indenture
The indenture provides that we and the Trustee may, without the
consent of any holders of the debt securities, enter into
supplemental indentures for the purposes, among other things, of:
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curing ambiguities or inconsistencies in the indenture or making
any other provisions with respect to matters or questions
arising under the indenture;
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providing for the assumption by a successor corporation of the
obligations of the Company under the indenture;
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adding guarantees with respect to the notes;
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securing the notes;
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adding to the covenants of the Company for the benefit of the
holders or surrendering any right or power conferred upon the
Company;
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adding additional events of default;
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making any change that does not adversely affect the rights of
any holder;
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changing or eliminating any provisions of the indenture so long
as there are no holders entitled to the benefit of the
provisions;
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complying with any requirement of the SEC in connection with the
qualification of the indenture under the Trust Indenture
Act of 1939; or
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conforming the provisions of the indenture and the notes to the
Description of notes section in this prospectus
supplement.
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With specific exceptions, the indenture or the rights of the
holders of the notes may be modified by us and the Trustee with
the consent of the holders of a majority in aggregate principal
amount of the notes, but no modification may be made without the
consent of the holder of each outstanding note that would:
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extend the maturity of any payment of principal of or any
installment of interest on any notes;
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reduce the principal amount of any note, or the interest,
including additional interest, thereon, or any premium payable
on any note upon redemption thereof;
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change our obligation to pay additional amounts;
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change any place of payment where, or the currency in which, any
note or any premium or interest is denominated as payable;
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change the ranking of the notes;
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impair the right to sue for the enforcement of any payment on or
with respect to any note; or
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reduce the percentage in principal amount of outstanding notes
required to consent to any supplemental indenture, any waiver of
compliance with provisions of the indenture or specific defaults
and their consequences provided for in the indenture, or
otherwise modify the sections in the indenture relating to these
consents.
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S-30
Defeasance and
covenant defeasance
We may elect either (i) to defease and be discharged from
any and all obligations with respect to the debt securities of
any series (except as otherwise provided in the indenture)
(defeasance) or (ii) to be released from our
obligations with respect to certain covenants that are described
in the indenture (covenant defeasance), upon the
deposit with the Trustee, in trust for such purpose, of money
and/or
government obligations that through the payment of principal and
interest in accordance with their terms will provide money in an
amount sufficient, without reinvestment, to pay the principal
of, premium, if any, and interest on the notes to maturity or
redemption, as the case may be, and any mandatory sinking fund
or analogous senior payments thereon. As a condition to
defeasance or covenant defeasance, we must deliver to the
Trustee an opinion of counsel to the effect that the holders of
the notes will not recognize income, gain or loss for United
States federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to United
States federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred. Such opinion
of counsel, in the case of defeasance under clause (i)
above, must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable United States federal
income tax law occurring after the date of the indenture. We may
exercise our defeasance option with respect to debt securities
notwithstanding our prior exercise of our covenant defeasance
option. If we exercise our defeasance option, payment of the
notes may not thereafter be accelerated because of an Event of
Default.
If we exercise our covenant defeasance option, payment of the
notes may not there after be accelerated by reference to any
covenant from which we are released as described under
clause (ii) of the immediately preceding paragraph.
However, if acceleration were to occur for other reasons, the
realizable value at the acceleration date of the money and
government obligations in the defeasance trust could be less
than the principal and interest then due on the notes, in that
the required deposit in the defeasance trust is based upon
scheduled cash flows rather than market value, which will vary
depending upon interest rates and other factors.
The trustee and
transfer and paying agent
U.S. Bank National Association, acting through its
corporate trust office at 100 Wall Street, Suite 1600, New
York, New York 10005, is the Trustee for the notes and is the
transfer and paying agent for the notes. Principal and interest
will be payable, and the notes will be transferable, at the
office of the paying agent. We may, however, pay interest by
check mailed to registered holders of the notes. At the maturity
of the notes, the principal, together with accrued interest
thereon, will be payable in immediately available funds upon
surrender of such notes at the office of the Trustee.
No service charge will be made for any transfer or exchange of
the notes, but we may, except in specific cases not involving
any transfer, require payment of a sufficient amount to cover
any tax or other governmental charge payable in connection with
the transfer or exchange.
Payments of principal of, any premium on, and any interest on
individual notes represented by a global note registered in the
name of a depositary or its nominee will be made to the
depositary or its nominee as the registered owner of the global
note representing the notes. Neither we, the Trustee, any paying
agent, nor the transfer agent for the notes will have any
responsibility or liability for the records relating to or
payments made on account of beneficial
S-31
ownership interests of the global note for the notes or for
maintaining, supervising or reviewing any records relating to
the beneficial ownership interests.
We expect that the depositary for the notes or its nominee, upon
receipt of any payment of principal, premium or interest in
respect of a permanent global note representing the notes, will
immediately credit participants accounts with payments in
amounts proportionate to their beneficial interests in the
principal amount of the global note for the notes as shown on
the records of the depositary or its nominee. We also expect
that payments by participants to owners of beneficial interests
in the global note held through the participants will be
governed by standing instructions and customary practices, as is
now the case with securities held for the accounts of customers
in bearer form or registered in street name. The
payments will be the responsibility of those participants.
In specific instances, we or the holders of a majority of the
then outstanding principal amount of the notes may remove the
Trustee and appoint a successor Trustee. The Trustee may become
the owner or pledgee of the notes with the same rights, subject
to conflict of interest restrictions, it would have if it were
not the Trustee. The Trustee and any successor trustee must be
eligible to act as trustee under Section 310(a)(1) of the
Trust Indenture Act of 1939 and shall have a combined
capital and surplus of at least $50,000,000 and be subject to
examination by federal or state authority. Subject to applicable
law relating to conflicts of interest, the Trustee may also
serve as trustee under other indentures relating to securities
issued by us or our affiliated companies and may engage in
commercial transactions with us and our affiliated companies.
Notices
Notices to holders of debt securities will be given by mail to
the addresses of such holders as they appear in the security
register.
Title
We, the Trustee and any agent of ours may treat the registered
owner of any debt security as the absolute owner thereof
(whether or not the debt security shall be overdue and
notwithstanding any notice to the contrary) for the purpose of
making payment and for all other purposes.
Replacement of
notes
We will replace any mutilated note at the expense of the holders
upon surrender to the Trustee. We will replace notes that become
destroyed, lost or stolen at the expense of the holder upon
delivery to the Trustee of satisfactory evidence of the
destruction, loss or theft thereof. In the event of a destroyed,
lost or stolen note, an indemnity or security satisfactory to us
and the Trustee may be required at the expense of the holder of
the note before a replacement note will be issued.
Governing
law
The indenture and the notes will be governed by, and construed
in accordance with, the laws of the State of New York.
S-32
Book entry,
delivery and form
The notes will be issued in the form of one or more fully
registered global notes (each a global note) which
will be deposited with, or on behalf of, The Depository
Trust Company, New York, New York (the
Depositary) and registered in the name of
Cede & Co., the Depositarys nominee. We will not
issue notes in certificated form except in certain
circumstances. Beneficial interests in the global notes will be
represented through book-entry accounts of financial
institutions acting on behalf of beneficial owners as direct and
indirect participants in the Depositary (the Depositary
Participants). Investors may elect to hold interests in
the global notes through either the Depositary (in the United
States), or Clearstream Banking Luxembourg S.A.
(Clearstream Luxembourg) or Euroclear Bank
S.A./N.V., as operator of the Euroclear System
(Euroclear) (in Europe) if they are participants in
those systems, or indirectly through organizations that are
participants in those systems. Clearstream Luxembourg and
Euroclear will hold interests on behalf of their participants
through customers securities accounts in Clearstream
Luxembourgs and Euroclears names on the books of
their respective depositaries, which in turn will hold such
interests in customers securities accounts in the
depositaries names on the books of the Depositary. At the
present time, Citibank, N.A. acts as U.S. depositary for
Clearstream Luxembourg and JPMorgan Chase Bank acts as
U.S. depositary for Euroclear (the
U.S. Depositaries). Beneficial interests in the
global notes will be held in minimum denominations of $2,000 and
integral multiples of $1,000 in excess thereof. Except as set
forth below, the global notes may be transferred, in whole but
not in part, only to another nominee of the Depositary or to a
successor of the Depositary or its nominee.
The Depositary has advised us 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 Banking Law, a member of the Federal Reserve System, a
clearing corporation within the meaning of the New
York Uniform Commercial Code, and a clearing agency
registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary holds securities that its
participants (Direct Participants) deposit with the
Depositary. The Depositary also facilitates the settlement among
Direct Participants of securities transactions, such as
transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Direct
Participants accounts, thereby eliminating the need for
physical movement of securities certificates. Direct
Participants include securities brokers and dealers (which may
include the underwriters), banks, trust companies, clearing
corporations and certain other organizations. The Depositary is
owned by a number of its Direct Participants and by NYSE
Euronext and the Financial Industry Regulatory Authority, Inc.
Access to the Depositarys book-entry system is also
available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either
directly or indirectly (Indirect Participants). The
rules applicable to the Depositary and its Direct and Indirect
Participants are on file with the SEC.
Clearstream Luxembourg has advised us that it is incorporated
under the laws of Luxembourg as a professional depositary.
Clearstream Luxembourg holds securities for its participating
organizations, known as Clearstream Luxembourg participants, and
facilitates the clearance and settlement of securities
transactions between Clearstream Luxembourg participants through
electronic book-entry changes in accounts of Clearstream
Luxembourg participants, thereby eliminating the need for
physical movement of certificates. Clearstream Luxembourg
provides to Clearstream Luxembourg participants, among other
things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities
lending and borrowing. Clearstream Luxembourg interfaces with
domestic markets in several
S-33
countries. As a professional depositary, Clearstream Luxembourg
is subject to regulation by the Luxembourg Commission for the
Supervision of the Financial Sector, also known as the
Commission de Surveillance du Secteur Financier. Clearstream
Luxembourg participants are recognized financial institutions
around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and
certain other organizations. Indirect access to Clearstream
Luxembourg is also available to others, such as banks, brokers,
dealers and trust companies that clear through, or maintain a
custodial relationship with, a Clearstream Luxembourg
participant either directly or indirectly.
Distributions with respect to the notes held beneficially
through Clearstream Luxembourg will be credited to the cash
accounts of Clearstream Luxembourg participants in accordance
with its rules and procedures, to the extent received by the
U.S. Depositary for Clearstream Luxembourg.
Euroclear has advised us that it was created in 1968 to hold
securities for its participants, known as Euroclear
participants, and to clear and settle transactions between
Euroclear participants and between Euroclear participants and
participants of certain other securities intermediaries through
simultaneous electronic book-entry delivery against payment,
eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and
cash. Euroclear is owned by Euroclear Clearance System Public
Limited Company and operated through a license agreement by
Euroclear Bank S.A./N.V., known as the Euroclear operator. The
Euroclear operator provides Euroclear participants, among other
things, with safekeeping, administration, clearance and
settlement, securities lending and borrowing and related
services. Euroclear participants include banks (including
central banks), securities brokers and dealers and other
professional financial intermediaries and may include the
underwriters.
Indirect access to Euroclear is also available to others that
clear through or maintain a custodial relationship with a
Euroclear participant, either directly or indirectly.
The Euroclear operator is regulated and examined by the Belgian
Banking and Finance Commission.
Securities clearance accounts and cash accounts with the
Euroclear operator are governed by the Terms and Conditions
Governing Use of Euroclear and the related Operating Procedures
of the Euroclear System, and applicable Belgian law,
collectively referred to as the terms and conditions. The terms
and conditions govern transfers of securities and cash within
Euroclear, withdrawals of securities and cash from Euroclear,
and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific
securities clearance accounts. The Euroclear operator acts under
the terms and conditions only on behalf of Euroclear
participants, and has no record of or relationship with persons
holding through Euroclear participants.
Distributions with respect to notes held beneficially through
Euroclear will be credited to the cash accounts of Euroclear
participants in accordance with the terms and conditions, to the
extent received by the U.S. Depositary for Euroclear.
If the Depositary is at any time unwilling or unable to continue
as depositary and a successor depositary is not appointed by us
within 90 days, we will issue the notes in definitive form
in exchange for the entire global note representing such notes.
In addition, we may at any time, and in our sole discretion,
determine not to have the notes represented by the global note
and, in such event, will issue notes in definitive form in
exchange for the global note representing such notes. In any
such instance, an owner of a beneficial interest in the global
note will be
S-34
entitled to physical delivery in definitive form of notes
represented by such global note equal in principal amount to
such beneficial interest and to have such notes registered in
its name.
Title to book-entry interests in the notes will pass by
book-entry registration of the transfer within the records of
Clearstream Luxembourg, Euroclear or the Depositary, as the case
may be, in accordance with their respective procedures.
Book-entry interests in the notes may be transferred within
Clearstream Luxembourg and within Euroclear and between
Clearstream Luxembourg and Euroclear in accordance with
procedures established for these purposes by Clearstream
Luxembourg and Euroclear. Book-entry interests in the notes may
be transferred within the Depositary in accordance with
procedures established for this purpose by the Depositary.
Transfers of book-entry interests in the notes among Clearstream
Luxembourg and Euroclear and the Depositary may be effected in
accordance with procedures established for this purpose by
Clearstream Luxembourg, Euroclear and the Depositary.
Global clearance
and settlement procedures
Initial settlement for the notes will be made in immediately
available funds. Secondary market trading between Depositary
Participants will occur in the ordinary way in accordance with
the Depositarys rules and will be settled in immediately
available funds using the Depositarys
Same-Day
Funds Settlement System. Secondary market trading between
Clearstream Luxembourg participants and Euroclear participants
will occur in the ordinary way in accordance with the applicable
rules and operating procedures of Clearstream Luxembourg and
Euroclear and will be settled using the procedures applicable to
conventional eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or
indirectly through the Depositary, on the one hand, and directly
or indirectly through Clearstream Luxembourg or Euroclear
participants, on the other, will be effected through the
Depositary in accordance with the Depositarys rules on
behalf of the relevant European international clearing system by
its U.S. Depositary; however, such cross-market
transactions will require delivery of instructions to the
relevant European international clearing system by the
counterparty in such system in accordance with its rules and
procedures and within its established deadlines (European time).
The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver
instructions to its U.S. Depositary to take action to
effect final settlement on its behalf by delivering or receiving
the notes in the Depositary, and making or receiving payment in
accordance with normal procedures for
same-day
funds settlement applicable to the Depositary. Clearstream
Luxembourg participants and Euroclear participants may not
deliver instructions directly to their respective
U.S. Depositaries.
Because of time-zone differences, credits of the notes received
in Clearstream Luxembourg or Euroclear as a result of a
transaction with a Depositary Participant will be made during
subsequent securities settlement processing and dated the
business day following the Depositary settlement date. Such
credits, or any transactions in the notes settled during such
processing, will be reported to the relevant Euroclear
participants or Clearstream Luxembourg participants on that
business day. Cash received in Clearstream Luxembourg or
Euroclear as a result of sales of notes by or through a
Clearstream Luxembourg participant or a Euroclear participant to
a Depositary Participant will be received with value on the
business day of settlement in the Depositary but will be
available in the relevant Clearstream Luxembourg or Euroclear
cash account only as of the business day following settlement in
the Depositary.
S-35
Although the Depositary, Clearstream Luxembourg and Euroclear
have agreed to the foregoing procedures in order to facilitate
transfers of securities among participants of the Depositary,
Clearstream Luxembourg and Euroclear, they are under no
obligation to perform or continue to perform such procedures and
they may discontinue the procedures at any time.
Certain
definitions
The following definitions are applicable to the indenture:
Indebtedness of any person means, without
duplication, (i) any obligation of such person for money
borrowed, (ii) any obligation of such person evidenced by
bonds, debentures, notes or other similar instruments and
(iii) any reimbursement obligation of such person in
respect of letters of credit or other similar instruments which
support financial obligations which would otherwise become
Indebtedness.
Lien means any pledge, mortgage, lien, encumbrance
or other security interest.
Restricted subsidiary means a subsidiary of ours
(other than a Securitization entity) which (i) is owned,
directly or indirectly, by us or by one or more of our
subsidiaries, or by us and one or more of our subsidiaries,
(ii) is incorporated under the laws of the United States or
a state thereof and (iii) owns a Principal property.
Principal property has the meaning defined under
Limitations on sale and leaseback transactions
above.
Securitization entity means any Subsidiary or other
person that is engaged solely in the business of effecting asset
securitization transactions and related activities.
Subsidiary of any person means (i) a
corporation a majority of the outstanding voting stock of which
is at the time, directly or indirectly, owned by such person, by
one or more Subsidiaries of such person, or by such person and
one or more Subsidiaries thereof or (ii) any other person
(other than a corporation), including, without limitation, a
partnership or joint venture, in which such person, one or more
Subsidiaries thereof, or such person and one or more
Subsidiaries thereof, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest
entitled to vote in the election of directors, managers or
trustees thereof (or other persons performing similar functions).
S-36
Underwriting
Subject to the terms and conditions contained in an underwriting
agreement, dated as of the date of this prospectus supplement
between us and the underwriters named below, for whom Credit
Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and
Merrill Lynch, Pierce, Fenner & Smith Incorporated are
acting as representatives, we have agreed to sell to each
underwriter, and each underwriter has severally agreed to
purchase from us, the principal amount of notes that appears
opposite its name in the table below:
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Principal
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amount of
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Underwriter
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notes
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Credit Suisse Securities (USA) LLC
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$
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J.P. Morgan Securities LLC
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Merrill Lynch, Pierce, Fenner & Smith
Incorporated
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Total
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$
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The underwriters are offering the notes subject to their
acceptance of the notes from us and subject to prior sale. The
underwriting agreement provides that the obligations of the
several underwriters to pay for and accept delivery of the notes
offered by this prospectus supplement are subject to certain
conditions. The underwriters are obligated to take and pay for
all of the notes offered by this prospectus supplement if any
such notes are taken.
The underwriters initially propose to offer the notes to the
public at the public offering price that appears on the cover
page of this prospectus supplement. In addition, the
underwriters initially propose to offer the notes to certain
dealers at prices that represent a concession not in excess
of % of the principal amount of the
notes. Any underwriter may allow, and any such dealer may
reallow, a concession not in excess
of % of the principal amount of the
notes to certain other dealers. After the initial offering of
the notes, the underwriters may from time to time vary the
offering prices and other selling terms. The underwriters may
offer and sell notes through certain of their affiliates.
The following table shows the underwriting discount that we will
pay to the underwriters in connection with the offering of the
notes:
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Underwriter
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Paid by us
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Per note
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%
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Total
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$
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Expenses associated with this offering to be paid by us, other
than underwriting discounts, are estimated to be approximately
$ .
We have also agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities
Act, or to contribute to payments which the underwriters may be
required to make in respect of any such liabilities.
The notes are a new issue of securities, and there is currently
no established trading market for the notes. We do not intend to
apply for the notes to be listed on any securities exchange or
to arrange for the notes to be quoted on any quotation system.
The underwriters have advised us
S-37
that they intend to make a market in the notes, but they are not
obligated to do so. The underwriters may discontinue any market
making in the notes at any time at their sole discretion.
Accordingly, we cannot assure you that a liquid trading market
will develop for the notes, that you will be able to sell your
notes at a particular time or that the prices you receive when
you sell will be favorable.
In connection with the offering of the notes, the underwriters
may engage in transactions that stabilize, maintain or otherwise
affect the prices of the notes. Specifically, the underwriters
may overallot in connection with the offering of the notes,
creating syndicate short positions. In addition, the
underwriters may bid for and purchase notes in the open market
to cover syndicate short positions or to stabilize the prices of
the notes. Finally, the underwriting syndicate may reclaim
selling concessions allowed for distributing the notes in the
offering of the notes, if the syndicate repurchases previously
distributed notes in syndicate covering transactions,
stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market prices of the notes above
independent market levels. The underwriters are not required to
engage in any of these activities, and may end any of them at
any time.
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a Relevant
Member State), each underwriter has represented and agreed that
with effect from and including the date on which the Prospectus
Directive is implemented in that Relevant Member State (the
Relevant Implementation Date) it has not made and will not make
an offer of notes which are the subject of the offering
contemplated by this prospectus supplement to the public in that
Relevant Member State other than:
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to any legal entity which is a qualified investor as defined in
the Prospectus Directive;
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to fewer than 100 or, if the Relevant Member State has
implemented the relevant provision of the 2010 PD Amending
Directive, 150, natural or legal persons (other than qualified
investors as defined in the Prospectus Directive), as permitted
under the Prospectus Directive, subject to obtaining the prior
consent of the representatives for any such offer; or
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in any other circumstances falling within Article 3(2) of
the Prospectus Directive,
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provided that no such offer of notes shall require us or any
underwriter to publish a prospectus pursuant to Article 3
of the Prospectus Directive.
For the purposes of this provision, the expression an offer of
notes to the public in relation to any notes in any Relevant
Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and
the notes to be offered so as to enable an investor to decide to
purchase or subscribe for the notes, as the same may be varied
in that Member State by any measure implementing the Prospectus
Directive in that Member State, the expression Prospectus
Directive means Directive 2003/71/EC (and amendments thereto,
including the 2010 PD Amending Directive, to the extent
implemented in the Relevant Member State), and includes any
relevant implementing measure in the Relevant Member State and
the expression 2010 PD Amending Directive means Directive
2010/73/EU.
Each underwriter has represented and agreed that:
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it has only communicated or caused to be communicated and will
only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act
2000 (FSMA)) received by it in
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connection with the issue or sale of the notes in circumstances
in which Section 21(1) of the FSMA does not apply to
us; and
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it has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to
the notes in, from or otherwise involving the United Kingdom.
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The notes may not be offered or sold in Hong Kong by means of
any document other than (i) in circumstances which do not
constitute an offer to the public within the meaning of the
Companies Ordinance (Cap. 32, Laws of Hong Kong), or
(ii) to professional investors within the
meaning of the Securities and Futures Ordinance (Cap. 571, Laws
of Hong Kong) and any rules made thereunder, or (iii) in
other circumstances which do not result in the document being a
prospectus within the meaning of the Companies
Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement,
invitation or document relating to the notes may be issued or
may be in the possession of any person for the purpose of issue
(in each case whether in Hong Kong or elsewhere), which is
directed at, or the contents of which are likely to be accessed
or read by, the public in Hong Kong (except if permitted to do
so under the laws of Hong Kong) other than with respect to notes
which are or are intended to be disposed of only to persons
outside Hong Kong or only to professional investors
within the meaning of the Securities and Futures Ordinance (Cap.
571, Laws of Hong Kong) and any rules made thereunder.
The notes have not been and will not be registered under the
Financial Instruments and Exchange Law of Japan (the
FIEL) and each underwriter has agreed that it will
not offer or sell any notes, directly or indirectly, in Japan or
to, or for the benefit of, any resident of Japan (which term as
used herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan),
or to others for re-offering or resale, directly or indirectly,
in Japan or to a resident of Japan, except pursuant to an
exemption from the registration requirements of, and otherwise
in compliance with, the FIEL and any other applicable laws,
regulations and ministerial guidelines of Japan.
The notes may not be offered, sold and delivered directly or
indirectly, or offered or sold to any person for reoffering or
resale, directly or indirectly, in Korea or to any resident of
Korea except pursuant to the applicable laws and regulations of
Korea, including the Korea Securities and Exchange Act and the
Foreign Exchange Transaction Law and the decrees and regulations
thereunder. The notes have not been registered with the
Financial Services Commission of Korea for public offering in
Korea. Furthermore, the notes may not be resold to Korean
residents unless the purchaser of such notes complies with all
applicable regulatory requirements (including but not limited to
government approval requirements under the Foreign Exchange
Transaction Law and its subordinate decrees and regulations) in
connection with the purchase of such notes.
This prospectus supplement and the attached prospectus have not
been registered as a prospectus with the Monetary Authority of
Singapore. Accordingly, this prospectus supplement, the attached
prospectus and any other document or material in connection with
the offer or sale, or invitation for subscription or purchase,
of the notes may not be circulated or distributed, nor may the
notes be offered or sold, or be made the subject of an
invitation for subscription or purchase, whether directly or
indirectly, to persons in Singapore other than (i) to an
institutional investor under Section 274 of the Securities
and Futures Act, Chapter 289 of Singapore (the
SFA), (ii) to a relevant person, or any person
pursuant to Section 275(1A), and in accordance with the
conditions, specified in Section 275 of the SFA or
(iii) otherwise pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
S-39
Where the notes are subscribed or purchased under
Section 275 by a relevant person which is: (a) a
corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or (b) a trust (where the
trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries rights and interest in
that trust shall not be transferable for 6 months after
that corporation or that trust has acquired the notes under
Section 275 except: (1) to an institutional investor
under Section 274 of the SFA or to a relevant person, or
any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA;
(2) where no consideration is given for the transfer; or
(3) by operation of law.
S-40
Conflicts of
interest
From time to time in the ordinary course of their respective
businesses, certain of the underwriters and their affiliates
have engaged in and may in the future engage in commercial
banking, derivatives
and/or
financial advisory, investment banking and other commercial
transactions and services with us and our affiliates for which
they have received or will receive customary fees and
commissions.
As described in Use of proceeds, a portion of the
net proceeds of this offering are intended to be used to reduce
our outstanding indebtedness, including to repurchase any and
all of the $115,780,000 aggregate principal amount of our
outstanding 3.50% convertible notes in a tender offer and to
repay borrowings under our revolving credit facility. Because
more than 5% of the net proceeds of this offering, not including
underwriting compensation, may be received by affiliates of
Credit Suisse Securities (USA) LLC, J.P. Morgan Securities
LLC or Merrill Lynch, Pierce, Fenner & Smith Incorporated,
to the extent any one underwriter, together with its affiliates,
receives more than 5% of the net proceeds, such underwriter
would be considered to have a conflict of interest
with us in regard to this offering under FINRA Rule 5121.
Pursuant to that rule, the appointment of a qualified
independent underwriter is not necessary in connection with the
offering because the offering is of a class of securities that
are investment grade rated. Credit Suisse Securities (USA) LLC,
J.P. Morgan Securities LLC and Merrill Lynch, Pierce,
Fenner & Smith Incorporated will not confirm sales to any
account over which they exercise discretionary authority without
the prior written consent of the account holder.
S-41
Legal
matters
Certain legal matters relating to the offering of the notes will
be passed upon for us by Kirkland & Ellis LLP, New
York, New York and for the underwriters by Davis
Polk & Wardwell LLP, New York, New York.
Independent
registered public accounting firm
The consolidated financial statements of Wyndham Worldwide
Corporation and subsidiaries (the Company),
incorporated in this prospectus supplement by reference from the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2010, and the effectiveness
of the Companys internal control over financial reporting
as of December 31, 2010 have been audited by
Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their report issued on
February 21, 2011, which is incorporated herein by
reference.
S-42
Where you can
find more information
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You can inspect and copy
these reports, proxy statements and other information at the
public reference facilities of the SEC at the SECs Public
Reference Room located at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the Public
Reference Room. The SEC also maintains a web site that contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC
(www.sec.gov). Our internet address is www.WyndhamWorldwide.com.
However, the information on our website is not a part of this
prospectus supplement. In addition, you can inspect reports and
other information we file at the office of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
Incorporation by
reference
Rather than include in this prospectus supplement some of the
information that we include in reports filed with the SEC, we
are incorporating this information by reference, which means
that we are disclosing important information to you by referring
you to another document filed separately with the SEC. Certain
information that Wyndham Worldwide files after the date of this
prospectus supplement with the SEC will automatically update and
supersede this information. Wyndham Worldwide incorporates by
reference into this prospectus supplement the documents listed
below, which we have filed with the SEC under file number
1-32876, and any future filings made with the SEC under
sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
until the completion of this offering. The following documents
contain important information about us and we incorporate them
by reference (other than portions of these documents that are
furnished under Item 2.02 or Item 7.01 of a Current
Report on Form
8-K,
including any exhibits included with such Items):
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Our Annual Report on
Form 10-K
for the year ended December 31, 2010;
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Our Definitive Proxy Statement filed on April 1, 2010;
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Future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date of this prospectus and before the termination of this
offering.
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Any statement contained in a document incorporated or considered
to be incorporated by reference in this prospectus supplement
shall be considered to be modified or superseded for purposes of
this prospectus supplement to the extent that a statement
contained in this prospectus supplement or in any subsequently
filed document that is or is considered to be incorporated by
reference modifies or supersedes such statement. Any statement
that is modified or superseded shall not, except as so modified
or superseded, constitute a part of this prospectus supplement.
S-43
You can obtain any of the documents incorporated by reference in
this prospectus supplement from the SECs website at the
address described above. You may also request a copy of these
filings, at no cost, by writing or telephoning to the address
and telephone number set forth below. We will provide, without
charge, upon written or oral request, a copy of any or all of
the documents that are incorporated by reference into this
prospectus supplement, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as
an exhibit in this prospectus supplement. You should direct
requests for documents to:
Corporate
Secretary
Wyndham Worldwide Corporation
22 Sylvan Way
Parsippany, New Jersey 07054
(973) 753-6000
S-44
PROSPECTUS
WYNDHAM WORLDWIDE
CORPORATION
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
RIGHTS
STOCK PURCHASE
CONTRACTS
STOCK PURCHASE UNITS
We may from time to time offer to sell:
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debt securities;
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shares of our common stock;
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shares of our preferred stock;
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warrants to purchase our debt securities or shares of our common
stock or preferred stock, or other securities;
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rights to purchase our debt securities or shares of our common
stock or preferred stock, or other securities;
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stock purchase contracts to purchase shares of our common stock
or our preferred stock; and
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stock purchase units, each representing ownership of a stock
purchase contract and any of our debt securities, shares or our
common stock or preferred stock, or preferred securities or debt
obligations of third-parties, including U.S. treasury
securities, any other securities described in the applicable
prospectus supplement, or any combination of the foregoing,
securing the holders obligation to purchase shares of our
common stock or preferred stock under the stock purchase
contracts.
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The debt securities may consist of debentures, notes, bonds or
other types of indebtedness. Our common stock is listed on the
New York Stock Exchange and trades under the ticker symbol
WYN. The debt securities, preferred stock, warrants,
rights, stock purchase contracts and stock purchase units may be
convertible or exercisable or exchangeable for common or
preferred stock or other securities of ours.
We may offer and sell these securities to or through one or more
underwriters, dealers and agents, or directly to purchasers, on
a continuous or delayed basis. These securities also may be
resold by securityholders, if so provided in a prospectus
supplement hereto. We will provide specific terms of any
securities to be offered, including the amount, prices and other
terms of the securities and information about any selling
securityholders, in one or more supplements to this prospectus.
You should read this prospectus and any applicable prospectus
supplement carefully before you invest.
Our principal executive offices are located at Seven Sylvan Way,
Parsippany, New Jersey 07054. Our telephone number is
(973) 753-6000.
Investing in these securities involves risks. See the section
entitled Risk Factors in our Quarterly Report on
Form 10-Q
for the fiscal quarter ended September 30, 2008, which is
incorporated by reference herein, and the risk factors included
in our other periodic reports and in prospectus supplements
relating to specific offerings of securities and in other
information that we file with the Securities and Exchange
Commission.
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.
The date of this prospectus is November 25, 2008
TABLE OF
CONTENTS
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i
ABOUT THIS
PROSPECTUS
This prospectus is part of an automatic shelf registration
statement on
Form S-3
that we filed with the Securities and Exchange Commission, or
the SEC, as a well-known seasoned issuer as defined
in Rule 405 under the Securities Act of 1933, as amended
(the Securities Act). By using a shelf registration
statement, we may sell, at any time and from time to time, in
one or more offerings, any combination of the securities
described in this prospectus. As allowed by the SEC rules, this
prospectus does not contain all of the information included in
the registration statement. For further information, we refer
you to the registration statement, including its exhibits.
Statements contained in this prospectus about the provisions or
contents of any agreement or other document are not necessarily
complete. If the SECs rules and regulations require that
an agreement or document be filed as an exhibit to the
registration statement, please see that agreement or document
for a complete description of these matters.
You should read this prospectus and any prospectus supplement
together with any additional information you may need to make
your investment decision. You should also read and carefully
consider the information in the documents we have referred you
to in Where You Can Find More Information below.
Information incorporated by reference after the date of this
prospectus is considered a part of this prospectus and may add,
update or change information contained in this prospectus. Any
information in such subsequent filings that is inconsistent with
this prospectus will supersede the information in this
prospectus or any earlier prospectus supplement. You should rely
only on the information incorporated by reference or provided in
this prospectus and any supplement. We have not authorized
anyone else to provide you with other information.
When used in this prospectus, the terms Wyndham Worldwide
Corporation, the Company, we,
our and us refer to Wyndham Worldwide
Corporation and its consolidated subsidiaries, unless otherwise
specified or the context otherwise requires.
WHERE YOU CAN
FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You can inspect and copy
these reports, proxy statements and other information at the
public reference facilities of the SEC at the SECs Public
Reference Room located at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the Public Reference
Room. The SEC also maintains a web site that contains reports,
proxy and information statements and other information regarding
registrants that file electronically with the SEC
(www.sec.gov). Our internet address is
www.wyndhamworldwide.com. However, the information on our
website is not a part of this prospectus. In addition, you can
inspect reports and other information we file at the office of
the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005.
We have filed a registration statement and related exhibits with
the SEC under the Securities Act. The registration statement
contains additional information about us and the securities we
may issue. You may inspect the registration statement and
exhibits without charge at the office of the SEC at
100 F Street, N.E., Washington, D.C. 20549, and
you may obtain copies from the SEC at prescribed rates.
INCORPORATION BY
REFERENCE
The SEC allows us to incorporate by reference
information into this prospectus, which means that we can
disclose important information to you by referring to those
documents. We hereby incorporate by reference the
documents listed below, which means that we are disclosing
important information to you by referring you to those
documents. The information that we file later with the SEC will
automatically update and in some cases supersede this
1
information (other than portions of these documents that are
either (1) described in paragraph (e) of Item 201
of Registration S-K or paragraphs (d)(1)-(3) and (e)(5) of
Item 407 of
Regulation S-K
promulgated by the SEC or (2) furnished under
Item 2.02 or Item 7.01 of a Current Report on
Form 8-K).
Specifically, we incorporate by reference the following
documents or information filed with the SEC (other than, in each
case, documents or information deemed to have been furnished and
not filed in accordance with SEC rules, unless otherwise
indicated):
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Our Annual Report on
Form 10-K
for the year ended December 31, 2007;
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Our Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2008, June 30, 2008
and September 30, 2008;
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Our Definitive Proxy Statement dated March 17, 2008;
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Our Current Reports on
Form 8-K
filed on March 11, 2008, May 7, 2008, June 3,
2008, June 30, 2008, July 21, 2008, September 3,
2008, November 12, 2008 and November 18, 2008;
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The description of our capital stock contained in our
Information Statement filed as Exhibit 99.2 to
Form 8-K
on July 19, 2006; and
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Future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 , as
amended (the Exchange Act) after the date of this
prospectus and before the termination of this offering.
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You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Corporate Secretary
Wyndham Worldwide Corporation
Seven Sylvan Way
Parsippany, New Jersey 07054
(973) 753-6000
CAUTIONARY
STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
This registration statement includes or incorporates by
reference forward-looking statements, as that term
is defined by the Securities and Exchange Commission in its
rules, regulations and releases. Forward-looking statements are
any statements other than statements of historical fact,
including statements regarding our expectations, beliefs, hopes,
intentions or strategies regarding the future. In some cases,
forward-looking statements can be identified by the use of words
such as intends, projects, may
increase, may fluctuate, expects,
believes, plans,
anticipates, estimates, and similar
expressions or future or conditional verbs such as
should, would, may, and
could. Such statements are generally forward looking
in nature and not historical facts. Forward-looking statements
are subject to risks and uncertainties that could cause actual
results to differ materially from those discussed in, or implied
by, the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, general
economic conditions, our financial and business prospects, our
capital requirements, our financing prospects, our relationships
with associates and those disclosed as risks in the section
entitled Risk Factors in our Quarterly Report on
Form 10-Q
for the fiscal quarter ended September 30, 2008. We caution
readers that any such statements are based on currently
available operational, financial and competitive information,
and they should not place undue reliance on these
forward-looking statements, which reflect managements
opinion only as of the date on which they were made. Except as
required by law, we disclaim any obligation to review or update
these forward-looking statements to reflect events or
circumstances as they occur.
2
RATIO OF EARNINGS
TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed
charges for each of the periods indicated:
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Nine Months
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Ended
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Year Ended December 31,
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September 30, 2008
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2007
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2006
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2005
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2004
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2003
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Ratio of earnings to fixed charges
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3.62
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4.11
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4.36
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7.71
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7.84
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16.73x
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The ratio of earnings to fixed charges is computed by dividing
(i) income before income taxes, minority interest and
cumulative effect of accounting change, plus fixed charges and
the amortization of capitalized interest, less minority interest
in pre-tax income of subsidiaries that have not incurred fixed
charges, and capitalized interest, by (ii) fixed charges.
Our fixed charges consist of interest expense on all
indebtedness (including amortization of deferred financing
costs) and the portion of operating lease rental expense that is
representative of the interest factor.
As of October 31, 2008, no shares of our preferred stock
were issued and outstanding.
3
RISK
FACTORS
Before you invest in any of our securities, in addition to the
other information included or incorporated by reference in this
prospectus and any applicable prospectus supplement, you should
carefully consider the risk factors under the heading Risk
Factors contained in our Quarterly Report on
Form 10-Q
for the fiscal quarter ended September 30, 2008, which are
incorporated herein by reference. These risk factors may be
amended, supplemented or superseded from time to time by risk
factors contained in other Exchange Act reports that we file
with the Commission, which will be subsequently incorporated
herein by reference; by any prospectus supplement accompanying
this prospectus; or by a post-effective amendment to the
registration statement of which this prospectus forms a part. In
addition, new risks may emerge at any time and we cannot predict
such risks or estimate the extent to which they may affect our
financial performance. See Incorporation By
Reference and Cautionary Statement Regarding
Forward-Looking Statements.
USE OF
PROCEEDS
Unless otherwise stated in the prospectus supplement
accompanying this prospectus, we will use the net proceeds from
the sale of any debt securities, common stock, preferred stock,
warrants, rights, stock purchase contracts or stock purchase
units that may be offered hereby for general corporate purposes.
We will not receive any of the proceeds from sales of securities
by selling securityholders, if any, pursuant to this prospectus.
The prospectus supplement relating to an offering will contain a
more detailed description of the use of proceeds of any specific
offering of securities.
DESCRIPTION OF
DEBT SECURITIES
We may offer unsecured debt securities which may be senior or
subordinated and may be convertible or exchangeable. Unless
otherwise specified in the applicable prospectus supplement, our
debt securities will be issued in one or more series under an
indenture to be entered into between us and U.S. Bank
National Association, as trustee. The indenture is filed as an
exhibit to the registration statement of which this prospectus
forms a part.
The following description briefly sets forth certain general
terms and provisions of the debt securities. The particular
terms of the debt securities offered by any prospectus
supplement and the extent, if any, to which these general
provisions may apply to the debt securities, will be described
in the related prospectus supplement. Accordingly, for a
description of the terms of a particular issue of debt
securities, reference must be made to both the applicable
prospectus supplement and to the following description.
Debt
Securities
The aggregate principal amount of debt securities that may be
issued under the indenture is unlimited. The debt securities may
be issued in one or more series as may be authorized from time
to time. Reference is made to the applicable prospectus
supplement for the following terms of the debt securities (if
applicable):
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title and aggregate principal amount;
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whether the securities are subject to subordination and
applicable subordination provisions, if any;
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conversion or exchange into any securities or property;
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percentage or percentages of principal amount at which such
securities will be issued;
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issuance date;
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maturity date(s);
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interest rate(s) or the method for determining the interest
rate(s);
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dates on which interest will accrue or the method for
determining dates on which interest will accrue and dates on
which interest will be payable;
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whether interest will be payable in cash or in additional debt
securities of the same series, or shall accrue and increase the
aggregate principal amount outstanding of such series (including
if the debt securities were originally issued at a discount);
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redemption or early repayment provisions;
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authorized denominations;
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form;
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amount of discount or premium, if any, with which such
securities will be issued;
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whether such securities will be issued in whole or in part in
the form of one or more global securities;
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identity of the depositary(ies) for global securities;
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whether a temporary security is to be issued with respect to
such series and whether any interest payable prior to the
issuance of definitive securities of the series will be credited
to the account of the persons entitled thereto;
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the terms upon which beneficial interests in a temporary global
security may be exchanged in whole or in part for beneficial
interests in a definitive global security or for individual
definitive securities;
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any covenants applicable to the particular debt securities being
issued;
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any defaults and events of default applicable to the particular
debt securities being issued;
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currency, currencies or currency units in which the purchase
price for, the principal of and any premium and any interest on
such securities will be payable;
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securities exchange(s) on which the securities will be listed,
if any;
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our obligation or right to redeem, purchase or repay securities
under a sinking fund, amortization or analogous provision;
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provisions relating to covenant defeasance and legal defeasance
of securities of the series;
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provisions relating to satisfaction and discharge of the
indenture;
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provisions relating to the modification of the indenture both
with and without the consent of holders of debt securities
issued under the indenture;
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provisions, if any, granting special rights upon the occurrence
of specified events;
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any restriction of transferability of the series; and
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additional terms not inconsistent with the provisions of the
indenture.
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In addition, the applicable prospectus supplement will describe
whether any underwriter will act as a market maker for the
securities, and the extent to which a secondary market for the
securities is or is not expected to develop.
5
General
The debt securities may consist of debentures, notes, bonds or
other types of indebtedness. One or more series of debt
securities may be sold at a substantial discount below its
stated principal amount, bearing no interest or interest at a
rate which at the time of issuance is below market rates. One or
more series of debt securities may be variable rate debt
securities that may be exchanged for fixed rate debt securities.
United States federal income tax consequences and special
considerations, if any, applicable to any such series will be
described in the applicable prospectus supplement.
Debt securities may be issued where the amount of principal
and/or
interest payable is determined by reference to one or more
currency or other indices or other formulas. Holders of such
securities may receive a principal amount or a payment of
interest that is greater than or less than the amount of
principal or interest otherwise payable on such dates, depending
upon the value of the applicable currency or other reference
factor. Information as to the methods for determining the amount
of principal or interest, if any, payable on any date, the
currency or other reference factor to which the amount payable
on such date is linked and certain additional United States
federal income tax considerations will be set forth in the
applicable prospectus supplement.
The term debt securities includes debt securities
denominated in U.S. dollars or, if specified in the
applicable prospectus supplement, in any other freely
transferable currency or currency unit.
We expect most debt securities to be issued in fully registered
form without coupons and in denominations of $1,000 and any
integral multiples thereof. Subject to the limitations provided
in the indenture and in the applicable prospectus supplement,
debt securities that are issued in registered form may be
transferred or exchanged at the corporate office of the trustee
or the principal corporate trust office of the trustee, without
the payment of any service charge, other than any tax or other
governmental charge payable in connection therewith.
Global
Securities
The debt securities of a series may be issued in whole or in
part in the form of one or more global securities that will be
deposited with, or on behalf of, a depositary identified in the
applicable prospectus supplement. Global securities will be
issued in registered form and in either temporary or definitive
form. Unless and until it is exchanged in whole or in part for
the individual debt securities, a global security may not be
transferred except as a whole by the depositary for such global
security to a nominee of such depositary or by a nominee of such
depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a
successor of such depositary or a nominee of such successor. The
specific terms of the depositary arrangement with respect to any
debt securities of a series and the rights of and limitations
upon owners of beneficial interests in a global security will be
described in the applicable prospectus supplement.
Governing
Law
The indenture and the debt securities shall be construed in
accordance with and governed by the laws of the State of New
York.
6
DESCRIPTION OF
CAPITAL STOCK
General
The following is a summary of information concerning our capital
stock. The summaries and descriptions below do not purport to be
complete statements of the relevant provisions of our amended
and restated certificate of incorporation or of our amended and
restated by-laws. The summary is qualified in its entirety by
reference to these documents, which you must read for complete
information on our capital stock. Our amended and restated
certificate of incorporation and by-laws are incorporated by
reference to the registration statement of which this prospectus
forms a part as Exhibits 3.1 and 3.2 thereto.
Common
Stock
We are authorized to issue up to 600,000,000 shares of
common stock, par value $0.01 per share. 177,494,808 shares
of our common stock were issued and outstanding as of
October 31, 2008.
Dividends. Subject to prior dividend rights of
the holders of any preferred shares, holders of shares of our
common stock are entitled to receive dividends when, as and if
declared by our Board of Directors out of funds legally
available for that purpose.
Voting Rights. Each share of common stock is
entitled to one vote on all matters submitted to a vote of
stockholders. Holders of shares of our common stock do not have
cumulative voting rights. In other words, a holder of a single
share of common stock cannot cast more than one vote for each
position to be filled on our Board. A consequence of not having
cumulative voting rights is that the holders of a majority of
the shares of common stock entitled to vote in the election of
directors can elect all directors standing for election, which
means that the holders of the remaining shares will not be able
to elect any directors.
Other Rights. In the event of any liquidation,
dissolution or winding up of our company, after the satisfaction
in full of the liquidation preferences of holders of any
preferred shares, holders of shares of our common stock are
entitled to ratable distribution of the remaining assets
available for distribution to stockholders. The shares of our
common stock are not subject to redemption by operation of a
sinking fund or otherwise. Holders of shares of our common stock
are not currently entitled to pre-emptive rights.
Fully Paid. The issued and outstanding shares
of our common stock are fully paid and non-assessable. This
means the full purchase price for the outstanding shares of our
common stock has been paid and the holders of such shares will
not be assessed any additional amounts for such shares. Any
additional shares of common stock that we may issue in the
future will also be fully paid and non-assessable.
Preferred
Stock
We are authorized to issue up to 6,000,000 shares of
preferred stock, par value $0.01 per share. No shares of our
preferred stock were issued and outstanding as of
October 31, 2008.
600,000 shares of our authorized preferred stock have been
designated as Series A Junior Participating Preferred
Stock, a series that was created by resolution of our board of
directors on July 13, 2006 in connection with our adoption
of a stockholder rights plan, which expired according to its
terms on April 24, 2008.
Our Board, without further action by the holders of our common
stock, may issue shares of our preferred stock. Our Board is
vested with the authority to fix by resolution the designations,
preferences and relative, participating, optional or other
special rights, and such qualifications, limitations or
restrictions thereof, including, without limitation, redemption
rights, dividend
7
rights, liquidation preference and conversion or exchange rights
of any class or series of preferred stock, and to fix the number
of classes or series of preferred stock, the number of shares
constituting any such class or series and the voting powers for
each class or series.
The authority possessed by our Board to issue preferred stock
could potentially be used to discourage attempts by
third-parties to obtain control of our company through a merger,
tender offer, proxy contest or otherwise by making such attempts
more difficult or more costly. Our Board may issue preferred
stock with voting rights or conversion rights that, if
exercised, could adversely affect the voting power of the
holders of common stock. There are no current agreements or
understandings with respect to the issuance of preferred stock
and our Board has no present intention to issue any shares of
preferred stock.
Restrictions on
Payment of Dividends
We are incorporated in Delaware and are governed by Delaware
law. Delaware law allows a corporation to pay dividends only out
of surplus, as determined under Delaware law, or, if no such
surplus exists, out the corporations net profits for the
fiscal year in which the dividend is declared
and/or the
preceding fiscal year (provided that such payment will not
reduce capital below the amount of capital represented by all
classes of shares having a preference upon the distribution of
assets).
Anti-takeover
Effects of Our Certificate of Incorporation and By-laws and
Delaware Law
Some provisions of our amended and restated certificate of
incorporation and by-laws and of Delaware law could make the
following more difficult:
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acquisition of us by means of a tender offer;
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acquisition of us by means of a proxy contest or
otherwise; or
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removal of our incumbent officers and directors.
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These provisions, which are summarized below, are expected to
discourage coercive takeover practices and inadequate takeover
bids. The provisions summarized below are also designed to
encourage persons seeking to acquire control of us to first
negotiate with our Board. We believe that the benefits of
increased protection give us the potential ability to negotiate
with the proponent of an unsolicited proposal to acquire or
restructure us and outweigh the disadvantages of discouraging
those proposals because negotiation of the proposals could
result in an improvement of their terms.
Election and
Removal of Directors
Our amended and restated certificate of incorporation and
by-laws provide that our Board is divided into three classes.
The term of the first class of directors expires at our 2010
annual meeting of stockholders, the term of the second class of
directors expires at our 2011 annual meeting of stockholders and
the term of the third class of directors expires at our 2009
annual meeting of stockholders. At each of our annual meetings
of stockholders, the successors of the class of directors whose
term expires at that meeting of stockholders will be elected for
a three-year term, one class being elected each year by our
stockholders. Our amended and restated certificate of
incorporation and by-laws provide that our directors may only be
removed for cause and only by the affirmative vote of the
holders of at least 80% of the voting power of the then
outstanding capital stock entitled to vote generally in the
election of directors. This system of removing directors may
discourage a third party from making a tender offer or otherwise
attempting to obtain control of us because it generally makes it
more difficult for stockholders to replace a majority of our
Board.
8
Size of Board
and Vacancies
Our amended and restated certificate of incorporation and
by-laws provide that our Board may consist of no less than three
and no more than 15 directors. The number of directors on
our Board will be fixed exclusively by our Board, subject to the
minimum and maximum number permitted by our amended and restated
certificate of incorporation and by-laws. Newly created
directorships resulting from any increase in our authorized
number of directors will be filled by a majority of our Board
then in office, provided that a majority of our entire Board, or
a quorum, is present, and any vacancies in our Board resulting
from death, resignation, retirement, disqualification, removal
from office or other cause will be filled generally by the
majority vote of our remaining directors in office, even if less
than a quorum is present.
Elimination of
Stockholder Action by Written Consent
Our amended and restated certificate of incorporation and
by-laws expressly eliminate the right of our stockholders to act
by written consent. Stockholder action must take place at the
annual or a special meeting of our stockholders.
Stockholder
Meetings
Under our amended and restated certificate of incorporation and
by-laws, only our chairman of our Board or our chief executive
officer may call special meetings of our stockholders.
Requirements
for Advance Notification of Stockholder Nominations and
Proposals
Our amended and restated by-laws establish advance notice
procedures with respect to stockholder proposals and nomination
of candidates for election as directors other than nominations
made by or at the direction of our Board or a committee of our
Board.
Delaware
Anti-takeover Law
We are subject to Section 203 of the Delaware General
Corporation Law, as amended (the DGCL), an
anti-takeover law. In general, Section 203 prohibits a
publicly held Delaware corporation from engaging in a business
combination with an interested stockholder for a period of three
years following the date such person becomes an interested
stockholder, unless the business combination or the transaction
in which such person becomes an interested stockholder is
approved in a prescribed manner. Generally, a business
combination includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the
interested stockholder. Generally, an interested
stockholder is a person that, together with affiliates and
associates, owns, or within three years prior to the
determination of interested stockholder status did own, 15% or
more of a corporations voting stock. The existence of this
provision may have an anti-takeover effect with respect to
transactions not approved in advance by our Board and the
anti-takeover effect includes discouraging attempts that might
result in a premium over the market price for the shares of our
common stock.
Supermajority
Voting
Our amended and restated certificate of incorporation provides
that amendments to provisions in the amended and restated
certificate of incorporation relating to the general powers of
our Board, the number, classes and tenure of directors, filling
vacancies on our Board, removal of directors, limitation of
liability of directors, indemnification of directors and
officers, special meetings of stockholders, stockholder action
by written consent, the supermajority amendment provision of the
amended and restated by-laws and the supermajority amendment
provision of the amended and restated certificate of
incorporation will require the affirmative vote of the holders
of at least 80% of the voting power of the shares entitled to
vote generally
9
in the election of directors. Our amended and restated
certificate of incorporation and by-laws provide that amendments
to the by-laws may be made either (i) by the affirmative
vote of the at least a majority of our entire Board or
(ii) by the affirmative vote of the holders of at least 80%
of the voting power of the shares entitled to vote generally in
the election of directors.
No Cumulative
Voting
Our amended and restated certificate of incorporation and
by-laws do not provide for cumulative voting in the election of
directors.
Undesignated
Preferred Stock
The authorization in our amended and restated certificate of
incorporation of undesignated preferred stock makes it possible
for our Board to issue our preferred stock with voting or other
rights or preferences that could impede the success of any
attempt to change control of us. The provision in our amended
and restated certificate of incorporation authorizing such
preferred stock may have the effect of deferring hostile
takeovers or delaying changes of control of our management.
Limitation on
Liability of Directors and Indemnification of Directors and
Officers
Section 145 of the DGCL provides that a corporation may
indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys fees),
judgments, fines and amounts paid in settlement in connection
with any threatened, pending or completed actions, suit or
proceeding, whether civil, criminal, administrative or
investigative, in which such person is made a party by reason of
the fact that the person is or was a director, officer, employee
or agent of the corporation (other than an action by or in the
right of the corporation a derivative
action), if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to
believe such persons conduct was unlawful. A similar
standard is applicable in the case of derivative actions, except
that indemnification only extends to expenses (including
attorneys fees) incurred in connection with the defense or
settlement of such action, and the statute requires court
approval before there can be any indemnification where the
person seeking indemnification has been found liable to the
corporation. The statute provides that it is not exclusive of
other indemnification that may be granted by a
corporations by-laws, disinterested director vote,
stockholder vote, agreement or otherwise.
Our amended and restated certificate of incorporation provides
that no director shall be liable to us or our stockholders for
monetary damages for breach of fiduciary duty as a director,
except to the extent such exemption from liability or limitation
on liability is not permitted under the DGCL, as now in effect
or as amended. Currently, Section 102(b)(7) of the DGCL
requires that liability be imposed for the following:
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any breach of the directors duty of loyalty to our company
or our stockholders;
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any act or omission not in good faith or which involved
intentional misconduct or a knowing violation of law;
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unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the DGCL; and
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any transaction from which the director derived an improper
personal benefit.
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Our amended and restated certificate of incorporation and
by-laws provide that, to the fullest extent authorized or
permitted by the DGCL, as now in effect or as amended, we will
indemnify any person who was or is a party or is threatened to
be made a party to any
10
threatened, pending or completed action, suit or proceeding by
reason of the fact that such person, or a person of whom he or
she is the legal representative, is or was our director or
officer, or by reason of the fact that our director or officer
is or was serving, at our request, as a director, officer,
employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with
respect to employee benefit plans maintained or sponsored by us.
We will indemnify such persons against expenses (including
attorneys fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with
such action if such person acted in good faith and in a manner
reasonably believed to be in our best interests and, with
respect to any criminal proceeding, had no reason to believe
such persons conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that
indemnification only extends to expenses (including
attorneys fees) incurred in connection with the defense or
settlement of such actions, and court approval is required
before there can be any indemnification where the person seeking
indemnification has been found liable to us. Any amendment of
this provision will not reduce our indemnification obligations
relating to actions taken before an amendment.
We maintain policies that insure our directors and officers and
those of our subsidiaries against certain liabilities they may
incur in their capacities as directors and officers. Under these
policies, the insurer, on our behalf, may also pay amounts for
which we have granted indemnification to the directors or
officers.
NYSE
Listing
Our shares of common stock are listed on the NYSE. Our shares
trade under the ticker symbol WYN.
Transfer Agent
and Registrar
The transfer agent and registrar for our common stock is BNY
Mellon Shareowner Services.
DESCRIPTION OF
WARRANTS
We may issue warrants to purchase debt securities, preferred
stock, common stock or other securities. We may issue warrants
independently or together with other securities. Warrants sold
with other securities may be attached to or separate from the
other securities. We will issue warrants under one or more
warrant agreements between us and a warrant agent that we will
name in the applicable prospectus supplement.
The prospectus supplement relating to any warrants we offer will
include specific terms relating to the offering. These terms
will include some or all of the following:
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the title of the warrants;
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the aggregate number of warrants offered;
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the designation, number and terms of the debt securities,
preferred stock, common stock or other securities purchasable
upon exercise of the warrants and procedures by which those
numbers may be adjusted;
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the exercise price of the warrants;
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the dates or periods during which the warrants are exercisable;
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the designation and terms of any securities with which the
warrants are issued;
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if the warrants are issued as a unit with another security, the
date on and after which the warrants and the other security will
be separately transferable;
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if the exercise price is not payable in U.S. dollars, the
foreign currency, currency unit or composite currency in which
the exercise price is denominated;
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any minimum or maximum amount of warrants that may be exercised
at any one time;
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any terms relating to the modification of the warrants;
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any terms, procedures and limitations relating to the
transferability, exchange or exercise of the warrants; and
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any other specific terms of the warrants.
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The description in the applicable prospectus supplement of any
warrants that we may offer will not necessarily be complete and
will be qualified in its entirety by reference to the applicable
warrant agreement, which will be filed with the SEC.
DESCRIPTION OF
RIGHTS
We may issue rights to purchase debt securities, preferred
stock, common stock or other securities. These rights may be
issued independently or together with any other security offered
hereby and may or may not be transferable by the stockholder
receiving the rights in such offering. In connection with any
offering of such rights, we may enter into a standby arrangement
with one or more underwriters or other purchasers pursuant to
which the underwriters or other purchasers may be required to
purchase any securities remaining unsubscribed for after such
offering.
The applicable prospectus supplement will describe the specific
terms of any offering of rights for which this prospectus is
being delivered, including the following:
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the price, if any, per right;
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the exercise price payable for each share of debt securities,
preferred stock, common stock, or other securities upon the
exercise of the rights;
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the number of rights issued or to be issued to each stockholder;
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the number and terms of the shares of debt securities, preferred
stock, common stock, or other securities which may be purchased
per each right;
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the extent to which the rights are transferable;
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any other terms of the rights, including the terms, procedures
and limitations relating to the exchange and exercise of the
rights;
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the date on which the holders ability to exercise the
rights shall commence, and the date on which the rights shall
expire;
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the extent to which the rights may include an over-subscription
privilege with respect to unsubscribed securities; and
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if applicable, the material terms of any standby underwriting or
purchase arrangement entered into by us in connection with the
offering of such rights.
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The description in the applicable prospectus supplement of any
rights that we may offer will not necessarily be complete and
will be qualified in its entirety by reference to the applicable
rights certificate, which will be filed with the SEC.
12
DESCRIPTION OF
STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts
obligating holders to purchase from or sell to us, and
obligating us to sell to or purchase from the holders, a
specified number of shares of common stock, preferred stock or
other securities at a future date or dates, which we refer to in
this prospectus as stock purchase contracts. The price per share
of the securities and the number of shares of the securities may
be fixed at the time the stock purchase contracts are issued or
may be determined by reference to a specific formula set forth
in the stock purchase contracts, and may be subject to
adjustment under anti-dilution formulas. The stock purchase
contracts may be issued separately or as part of units
consisting of a stock purchase contract and our debt securities,
shares of our common stock or preferred stock, or preferred
securities or debt obligations of third parties, including
U.S. treasury securities, any other securities described in
the applicable prospectus supplement, or any combination of the
foregoing, securing the holders obligations to purchase
shares of our common stock or preferred stock under the stock
purchase contracts, which we refer to herein as stock purchase
units. The stock purchase units may require holders to secure
their obligations under the stock purchase contracts in a
specified manner. The stock purchase units also may require us
to make periodic payments to the holders of the stock purchase
contracts or the stock purchase units, as the case may be, or
vice versa, and those payments may be unsecured or pre-funded on
some basis.
The applicable prospectus supplement will describe the terms of
the stock purchase contracts or stock purchase units. This
description is not complete and the description in the
prospectus supplement will not necessarily be complete, and
reference is made to the stock purchase contracts, and, if
applicable, collateral or depositary arrangements relating to
the stock purchase contracts or stock purchase units, which will
be filed with the SEC each time we issue stock purchase
contracts or stock purchase units. If any particular terms of
the stock purchase contracts or stock purchase units described
in the prospectus supplement differ from any of the terms
described herein, then the terms described herein will be deemed
superseded by that prospectus supplement. Material United States
federal income tax considerations applicable to the stock
purchase units and the stock purchase contracts will also be
discussed in the applicable prospectus supplement.
SELLING
SECURITYHOLDERS
If the registration statement of which this prospectus forms a
part is used by selling securityholders for the resale of any
securities registered thereunder pursuant to a registration
rights agreement to be entered into by us with such selling
securityholders or otherwise, information about such selling
securityholders, their beneficial ownership of our securities
and their relationship with us will be set forth in a prospectus
supplement, in a post-effective amendment, or in filings we make
with the SEC under the Exchange Act that are incorporated by
reference to such registration statement.
PLAN OF
DISTRIBUTION
We, or selling securityholders, if applicable, may sell the
securities being offered hereby in one or more of the following
ways from time to time:
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to underwriters for resale to purchasers;
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directly to purchasers; or
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through agents or dealers to purchasers.
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In addition, we may enter into derivative or hedging
transactions with third parties, or sell securities not covered
by this prospectus to third parties in privately negotiated
transactions. In connection with such a transaction, the third
parties may sell securities covered by and pursuant to this
prospectus and an applicable prospectus supplement. If so, the
third party may use securities borrowed from us or others to
settle such sales and may use securities received from us to
close out any related short positions. We may also loan or
pledge securities covered by this prospectus and an applicable
prospectus supplement to third parties, who may sell the loaned
securities or, in an event of default in the case of a pledge,
sell the pledged securities pursuant to this prospectus and the
applicable prospectus supplement.
We will identify the specific plan of distribution, including
any underwriters, dealers, agents or direct purchasers, and
their compensation in a prospectus supplement.
LEGAL
MATTERS
Skadden, Arps, Slate, Meagher & Flom LLP, New York,
New York, or counsel to be identified in the applicable
prospectus supplement, will serve as counsel to Wyndham
Worldwide Corporation.
EXPERTS
The consolidated financial statements of Wyndham Worldwide
Corporation and subsidiaries (the Company),
incorporated in this Prospectus by reference from the
Companys Annual Report on
Form 10-K
and the effectiveness of the Companys internal control
over financial reporting have been audited by
Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their report (which report
expresses an unqualified opinion and includes an explanatory
paragraph relating to the fact that, prior to its separation
from Cendant Corporation (Cendant known as Avis
Budget Group since August 29, 2006), the Company was
comprised of the assets and liabilities used in managing and
operating the lodging, vacation exchange and rental and vacation
ownership businesses of Cendant. Included in Notes 20 and
21 of the consolidated and combined financial statements is a
summary of transactions with related parties. As discussed in
Note 14 to the consolidated and combined financial
statements, in connection with its separation from Cendant, the
Company entered into certain guarantee commitments with Cendant
and has recorded the fair value of these guarantees as of
July 31, 2006. As discussed in Note 1 to the
consolidated and combined financial statements, as of
January 1, 2006, the Company adopted the provisions for
accounting for real estate time-sharing transactions. Also, as
discussed in Note 2 to the consolidated and combined
financial statements, the Company adopted Financial Accounting
Standards Board Interpretation No. 48, Accounting for
Uncertainty in Income Taxes an interpretation of
FASB Statement No. 109 on January 1, 2007.) which is
incorporated herein by reference. Such financial statements have
been so incorporated in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for
the periods ended March 31, 2008 and 2007, June 30,
2008 and 2007, and September 30, 2008 and 2007, which is
incorporated herein by reference, Deloitte & Touche
LLP, an independent registered public accounting firm, have
applied limited procedures in accordance with the standards of
the Public Company Accounting Oversight Board (United States)
for a review of such information. However, as stated in their
reports included in the Companys Quarterly Reports on
Forms 10-Q
for the quarters ended March 31, 2008, June 30, 2008
and September 30, 2008 and incorporated by reference
herein, they did not audit and they do not express an opinion on
that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be
restricted in light of the limited nature of the review
procedures applied. Deloitte & Touche LLP are not
subject to the liability provisions of Section 11 of the
Securities Act of 1933 for their reports on the unaudited
interim financial information because those reports are not
reports or a part of the Registration
Statement prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
14
Wyndham Worldwide
Corporation