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EXHIBIT 4.3
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MASCO CORPORATION
ZERO COUPON CONVERTIBLE SENIOR NOTES DUE 2031
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FIRST SUPPLEMENTAL INDENTURE
DATED AS OF JULY 20, 2001
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BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
TRUSTEE
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ARTICLE ONE
Scope of Supplemental Indenture; General
ARTICLE TWO
Certain Definitions
ARTICLE THREE
Covenants
Section 3.01. Reports to Holders of Notes......................................................11
ARTICLE FOUR
REDEMPTION AND CONVERSIONS
Section 4.01. Optional Redemption by the Company...............................................11
Section 4.02. Purchase at Option of the Holder upon a Fundamental Change.......................13
Section 4.03. Purchase of Notes at the Option of the Holder; Payment of Purchase Price or
Fundamental Change Purchase Price in Stock....................................14
Section 4.04. Further Conditions for Purchase at the Option of Holders upon a Fundamental
Change and Purchase of Notes at the Option of the Holder......................22
Section 4.05. Conversion of Notes..............................................................25
Section 4.06. Adjustments to Conversion Rate...................................................27
Section 4.07. Miscellaneous Provisions Relating to Conversion..................................32
Section 4.08. Optional Conversion to Semi-Annual Cash Pay Note upon Tax Event..................36
Section 4.09. Calculation of Original Issue Discount for U.S. Federal Income Tax Purposes......36
Section 4.10. Payment of Interest..............................................................37
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ARTICLE FIVE
Miscellaneous
Section 5.01. No Adverse Interpretation of Other Agreements....................................39
Section 5.02. No Recourse Against Others.......................................................39
Section 5.03. Successors and Assigns...........................................................39
Section 5.04. Duplicate Originals..............................................................39
Section 5.05. Severability.....................................................................40
Exhibit A Form of Note
Exhibit B Projected Payment Schedule
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FIRST SUPPLEMENTAL INDENTURE dated as of July 20, 2001
("Supplemental Indenture"), to the Indenture dated as of February 12, 2001 (as
amended, modified or supplemented from time to time in accordance therewith, the
"Indenture"), by and among MASCO CORPORATION., a Delaware corporation (the
"Company") and BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the holders of Notes (as defined
herein):
WHEREAS, the Company and the Trustee have duly authorized the
execution and delivery of the Indenture to provide for the issuance from time to
time of senior debt securities (the "Securities") to be issued in one or more
series as in the Indenture provided;
WHEREAS, the Company desires and has requested the Trustee to
join it in the execution and delivery of this Supplemental Indenture in order to
establish and provide for the issuance by the Company of a series of Securities
designated as its Zero Coupon Convertible Senior Notes Due 2031 in the aggregate
principal amount at maturity of up to $1,901,360,000, substantially in the form
attached hereto as Exhibit A (the "Notes"), on the terms set forth herein;
WHEREAS, Section 2.01 of the Indenture provides that a
supplemental indenture may be entered into by the Company and the Trustee for
such purpose provided certain conditions are met;
WHEREAS, the conditions set forth in the Indenture for the
execution and delivery of this Supplemental Indenture have been complied with;
and
WHEREAS, all things necessary to make this Supplemental
Indenture a valid agreement of the Company and the Trustee, in accordance with
its terms, and a valid amendment of, and supplement to, the Indenture have been
done;
NOW, THEREFORE:
In consideration of the premises and the purchase and
acceptance of the Notes by the holders thereof, the Company covenants and agrees
with the Trustee, for the equal and ratable benefit of the holders, that the
Indenture is supplemented and amended, to the extent expressed herein, as
follows:
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ARTICLE ONE
SCOPE OF SUPPLEMENTAL INDENTURE; GENERAL
The changes, modifications and supplements to the Indenture
effected by this Supplemental Indenture shall be applicable only with respect
to, and govern the terms of, the Notes, which shall be limited in aggregate
principal amount to $1,654,183,000 (or up to $1,901,360,000 if the
over-allotment option is exercised pursuant to the Underwriting Agreement) in
one series, and shall not apply to any other Securities that may be issued under
the Indenture unless a supplemental indenture with respect to such other
Securities specifically incorporates such changes, modifications and
supplements. Pursuant to this Supplemental Indenture, there is hereby created
and designated a series of Securities under the Indenture entitled "Zero Coupon
Convertible Senior Notes Due 2031." The Notes shall be in the form of Exhibit A
hereto. The Notes may bear an appropriate legend regarding original issue
discount for federal income tax purposes.
The aggregate Principal Amount of the Notes shall be payable
on the Final Maturity Date unless the Accreted Value or the Restated Principal
Amount has been earlier repaid or the Notes have been converted in accordance
with this Supplemental Indenture.
The Notes shall be issued at an Issue Price of $394.45 per
$1,000 Principal Amount. Except as provided for in Sections 4.08 and 4.10 and
paragraphs 1, 5 and 9 of the Notes, there shall be no periodic payments of
interest on the Notes. The calculation of the Accreted Value in the period
during which each Note remains outstanding shall be on a semi-annual bond
equivalent basis using a 360-day year composed of twelve 30-day months, and such
accrual shall commence on the Issue Date of the Notes. In the event of the
maturity, conversion, purchase by the Company at the option of a Holder or
redemption of a Note, Accreted Value, if any, shall cease to accrue on such
Note, under the terms and subject to the conditions of this Supplemental
Indenture.
The Notes shall be payable and may be presented for payment,
purchase, conversion, registration of transfer and exchange, without service
charge, at the office of the Company maintained for such purpose in New York,
New York, which shall initially be the office or agency of the Trustee.
ARTICLE TWO
CERTAIN DEFINITIONS
The following terms have the meanings set forth below in this
Supplemental Indenture. Capitalized terms used but not defined herein have the
meanings ascribed to such
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terms in the Indenture. To the extent terms defined herein differ from the
Indenture, the terms defined herein will govern.
"Accreted Conversion Price" as of any date means the price
determined by dividing (x) the Accreted Value at such date, by (y) the
Conversion Rate at such date.
"Accreted Value" means, at any date of determination, (1)
prior to such time as the Notes are converted to Cash Pay Notes, the sum of (x)
the Issue Price of the Notes and (y) the portion of the excess of the Principal
Amount of the Notes over the Issue Price which shall have been amortized by the
Company in accordance with GAAP through such date, such amount to be so
amortized on a daily basis and compounded semi-annually on each July 20 and
January 20 at the rate of 3.125% per annum from the Issue Date through the date
of determination computed on the basis of a 360-day year of twelve 30-day months
and (2) at or after such time as the Notes are converted to Cash Pay Notes, the
Restated Principal Amount.
"Affiliate" means, when used with reference to a specified
Person, any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Person specified.
"Bid Agent" means a bid solicitation agent appointed by the
Company to act in such capacity pursuant to paragraph 3 of the Notes.
"Capital Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated)
of or in such Person's capital stock or other equity interests, and options,
rights or warrants to purchase such capital stock or other equity interests,
whether now outstanding or issued after the Issue Date, including, without
limitation, all Preferred Stock.
"Cash" has the meaning provided in Section 4.03.
"Cash Dividends" has the meaning assigned thereto in Exhibit A
hereto.
"Cash Pay Notes" means the Notes, after they have been
converted to semi-annual cash pay Notes following the occurrence of a Tax Event.
"Common Equity" of any Person means Capital Stock of such
Person that is generally entitled to (i) vote in the election of directors of
such Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management or policies of such Person.
"Common Stock" means the common stock of the Company, par
value $1.00 per share, as it exists on the Issue Date and any shares of any
class or classes of capital stock
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of the Company resulting from any reclassification or reclassifications thereof
and which have no preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding-up
of the Company and which are not subject to redemption by the Company; provided,
however, that if at any time there shall be more than one such resulting class,
the shares of each such class then so issuable on conversion of Notes shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Common Stock Record Date" means, with respect to any
dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of shareholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
"Company Notice" has the meaning provided in Section 4.03.
"Company Notice Date" has the meaning provided in Section
4.03.
"Continuing Director" means a director who either was a
member of the Board of Directors of the Company on the date of this Supplemental
Indenture or who became a director of the Company subsequent to such date and
whose election, or nomination for election by the Company's stockholders, was
duly approved by a majority of the Continuing Directors on the Board of
Directors of the Company at the time of such approval, either by a specific vote
or by approval of the proxy statement issued by the Company on behalf of the
entire Board of Directors of the Company in which such individual is named as
nominee for director.
"control", when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Conversion Agent" means the office or agency designated by
the Company where Notes may be presented for conversion.
"Conversion Date" has the meaning provided in Section 4.05.
"Conversion Rate" has the meaning provided in Section 4.05.
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"Default" means any event, act or condition that is, or after
notice or the passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section
4.10.
"Distributed Securities" has the meaning provided in Section
4.06.
"Dollars" and "$" mean United States Dollars.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.
"Expiration Time" has the meaning provided in Section 4.06.
"Fair Market Value" means, with respect to any asset, the
price (after taking into account any liabilities relating to such assets) that
would be negotiated in an arm's-length transaction for cash between a willing
seller and a willing and able buyer, neither of which is under any compulsion to
complete the transaction, as such price is determined in good faith by the Board
of Directors of the Company or a duly authorized committee thereof, as evidenced
by a resolution of such Board or committee.
"Final Maturity" or "Final Maturity Date" means July 20, 2031.
"Five-Day Period" has the meaning assigned thereto in Exhibit
A hereto.
"Fundamental Change" shall be deemed to have occurred at such
time after the Issue Date as:
(1) any sale, lease or other transfer (in one transaction or a
series of transactions) of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to any Person (other than a
Subsidiary); provided, however, that a transaction where the Holders of
all classes of Common Equity of the Company immediately prior to such
transaction own, directly or indirectly, more than 50% of all classes
of Common Equity of such Person immediately after such transaction
shall not be a Fundamental Change;
(2) a "person" or "group" (within the meaning of Section 13(d)
of the Exchange Act (other than the Company)) becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of Common
Equity of the Company representing more than 50% of the voting power of
the Common Equity of the Company;
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(3) Continuing Directors cease to constitute at least a
majority of the Board of Directors of the Company; or
(4) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; provided,
however, that a liquidation or dissolution of the Company which is part
of a transaction that does not constitute a Fundamental Change under
the proviso contained in clause (1) above shall not constitute a
Fundamental Change.
A Fundamental Change will not be deemed to have occurred, however, if either:
(I) the Sale Price for (a) any 10 trading days within the 20
consecutive Trading Days ending immediately before the Fundamental Change, and
(b) at least five Trading Days within the 10 consecutive trading days ending
immediately before the Fundamental Change shall equal or exceed 105% of the
Accreted Value divided by the Conversion Rate, or
(II) both
(a) at least 90% of the consideration (excluding cash payments
for fractional shares) in the transaction or transactions constituting
the Fundamental Change consists of shares of Common Equity with full
voting rights traded on a national securities exchange or quoted on the
Nasdaq Stock Market (or which will be so traded or quoted when issued
or exchanged in connection with such Fundamental Change) (such
securities being referred to as "Publicly Traded Securities") and as a
result of such transaction or transactions the Notes become convertible
solely into such Publicly Traded Securities and
(b) the consideration in the transaction or transactions
constituting the Fundamental Change consists of cash, Publicly Traded
Securities or a combination of cash and Publicly Traded Securities with
an aggregate fair market value (which, in the case of Publicly Traded
Securities, shall be equal to the average closing price of such
Publicly Traded Securities during the five consecutive Trading Days
commencing with the Trading Day following consummation of the
transaction or transactions constituting the Fundamental Change) of at
least 105% of the Accreted Conversion Price.
"Fundamental Change Purchase Date" has the meaning provided in
Section 4.02(a).
"Fundamental Change Purchase Notice" has the meaning provided
in Section 4.02(b).
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"Fundamental Change Purchase Notice" has the meaning provided
in Section 4.02(b).
"Fundamental Change Purchase Price" has the meaning provided
in Section 4.02(a).
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect on the date of this
Supplemental Indenture.
"Holder" means the Person in whose name a Note is registered
in the books of the Registrar for the Notes.
"Indenture" has the meaning provided in the Recitals.
"Interest Payment Date" has the meaning specified in Section
4.08.
"Investment Grade" shall mean BBB- or higher by S&P or Baa3 or
higher by Moody's or the equivalent of such ratings by S&P or Moody's.
"Issue Date" means the date on which the Notes that constitute
the Firm Securities (as defined in the Underwriting Agreement) are originally
issued under this Supplemental Indenture. The Issue Date for the Additional
Securities (as defined in the Underwriting Agreement) shall be deemed to be the
same as the Issue Date of the Firm Securities.
"Issue Price" of the Notes means, in connection with the
original issuance of the Notes, the initial issue price at which the Notes were
issued as set forth on the face of the Notes.
"Market Price" means, on any date, the average of the Sale
Prices of the Common Stock for the 20 Trading Day period ending on the third
Business Day (if the third Business Day prior to the applicable Purchase Date is
a Trading Day, or if not, then on the last Trading Day prior to such third
Business Day) prior to such date, appropriately adjusted to take into account
the occurrence, during the period commencing on the first of such Trading Days
during such 20 Trading Day period and ending on such date, of certain events
with respect to the Common Stock that would result in an adjustment of the
Conversion Rate under this Supplemental Indenture.
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"Marketable Securities" means (a) equity securities that are
listed on the New York Stock Exchange, the American Stock Exchange or The Nasdaq
National Market and (b) debt securities that are rated by a nationally
recognized rating agency, listed on the New York Stock Exchange or the American
Stock Exchange or covered by at least two reputable market makers.
"Moody's" means Xxxxx'x Investors Service, Inc. or any
successor to its debt rating business.
"Note Price" has the meaning assigned thereto in Exhibit A
hereto.
"Notes" has the meaning provided in the Recitals.
"Notice" shall mean, except where expressly otherwise noted
herein, the publication of relevant information on Bloomberg or the Company's
web site or by any other electronic means of publication reasonably calculated
by the Company to constitute notice.
"Option Exercise Date" has the meaning specified in Section
4.08.
"Paying Agent" means the Trustee or any successor paying
agent.
"Preferred Stock" of any Person means all Capital Stock of
such Person which has a preference in liquidation or with respect to the payment
of dividends.
"Principal Amount" of a Note means the principal amount of
such Note at Final Maturity.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person, whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Publicly Traded Securities" has the meaning provided in the
definition of "Fundamental Change."
"Purchase Date" has the meaning provided in Section 4.03.
"Purchase Notice" has the meaning provided in Section 4.03.
"Purchase Price" has the meaning provided in Section 4.03.
"Purchased Shares" has the meaning provided in Section 4.06.
"Rating Agencies" shall mean (1) S&P and (2) Moody's.
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"Redemption Date" when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Supplemental Indenture.
"Redemption Price" when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Supplemental Indenture.
"Registrar" means Bank One Trust Company, National Association
or any successor registrar of the Notes.
"Regular Record Date" has the meaning specified in Section
4.08.
"Restated Principal Amount" has the meaning specified in
Section 4.08.
"S&P" means Standard and Poor's Ratings Group or any successor
to its debt rating business.
"Sale Price" of the Common Stock on any date means the closing
sale price per share (or, if no closing sale price is reported, the average of
the bid and ask prices or, if more than one in either case, the average of the
average bid and average ask prices) on such date as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national or regional securities exchange, as reported by the Nasdaq Stock
Market.
"Special Record Date" has the meaning specified in Section
4.10.
"Stated Maturity", when used with respect to any Note or any
installment of semi-annual or contingent interest thereon, means the date
specified in such Note as the fixed date on which an amount equal to the
Principal Amount of such Note or such installment of semi-annual or contingent
interest is due and payable.
"Successor" has the meaning set forth in Section 3.07.
"Supplemental Indenture" has the meaning provided in the
Preamble.
"Tax Event" means that the Company shall have received an
opinion from independent tax counsel experienced in such matters to the effect
that, on or after July 13, 2001, as a result of:
(a) any amendment to, or change (including any announced
prospective change) in, the laws, rules or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein or
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(b) any amendment to, or change in, an interpretation or
application of such laws, rules or regulations by any legislative body, court,
governmental agency or regulatory authority,
in each case which amendment or change is enacted,
promulgated, issued or announced or which interpretation is issued or announced
or which action is taken, on or after July 13, 2001, there is more than an
insubstantial risk that interest (including original issue discount or
contingent interest, if any) payable on the Notes either (i) would not be
deductible on a current accrual basis or (ii) would not be deductible under any
other method, in either case in whole or in part, by the Company (by reason of
deferral, disallowance, or otherwise) for United States Federal income tax
purposes.
"Tax Event Date" has the meaning specified in Section 4.08.
"Trading Day" means (x) if the applicable security is listed
or admitted for trading on the New York Stock Exchange or another national
security exchange, a day on which the New York Stock Exchange or other national
security exchange is open for business or (y) if the applicable security is
quoted on the NASDAQ National Market, a day on which trades may be made thereon
or (z) if the applicable security is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"Trustee" means the party named as such above until a
successor replaces such party in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"Twenty-Day Average Price" means the average of the Sale
Prices of the Common Stock for each Trading Day in the 20 Trading Day period
ending on the last Trading Day prior to the applicable Conversion Date,
appropriately adjusted to take into account the occurrence, during such 20
Trading Day period, of any event requiring adjustment of the Conversion Rate
under this Supplemental Indenture.
"Underwriting Agreement" means that certain underwriting
agreement relating to the Notes by and among Masco Corporation and Xxxxxxx Xxxxx
Barney Inc. dated as of July 12, 2001.
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ARTICLE THREE
COVENANTS
Section 3.01. Reports to Holders of Notes.
The Company will file with the Commission the annual reports
and the information, documents and other reports required to be filed pursuant
to Section 13 or 15(d) of the Exchange Act. The Company will file with the
Trustee and mail to each Holder of record of Notes such reports, information and
documents within 15 days after it files them with the Commission. In the event
that the Company is no longer subject to these periodic requirements of the
Exchange Act, it will nonetheless continue to file reports with the Commission
and the Trustee and mail such reports to each Holder of Notes as if it were
subject to such reporting requirements. Regardless of whether the Company is
required to furnish such reports to its stockholders pursuant to the Exchange
Act, the Company will cause its consolidated financial statements and a
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" written report, similar to those that would have been required to
appear in annual or quarterly reports, to be delivered to Holders of Notes.
ARTICLE FOUR
REDEMPTION AND CONVERSIONS
Section 4.01. Optional Redemption by the Company.
(a) Right to Redeem; Notice to Trustee. The Company, at its
option, may redeem the Notes in accordance with the provisions of paragraphs 6
and 8 of the Notes. If the Company elects to redeem Notes pursuant to paragraph
6 of the Notes, it shall notify the Trustee in writing of the Redemption Date,
the Principal Amount of Notes to be redeemed, the Redemption Price and the
amount of contingent interest, if any, payable on the Redemption Date. The
Company shall give the Notice to the Trustee provided for in this Section
4.01(a) at least 30 days but not more than 60 days before the Redemption Date.
(b) Selection of Notes to Be Redeemed. If any Note selected
for partial redemption is thereafter surrendered for conversion in part before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed (so far as may be),
solely for purposes of determining the aggregate Principal Amount of Notes to be
redeemed by the Company, to be the portion selected for redemption. Notes which
have been converted during a selection of Notes to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection. Nothing in this
Section 4.01(b) shall affect the right of any Holder to convert any Note
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pursuant to Sections 4.05, 4.06 and 4.07 before the termination of the
conversion right with respect thereto.
(c) Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall provide Notice of redemption
to the Trustee and to each Holder of Notes to be redeemed.
The Notice shall identify the Notes to be redeemed and shall
state:
(i) the Redemption Date;
(ii) the Redemption Price and, to the extent known at the time
of such Notice, the amount of contingent interest, if any, payable on
the Redemption Date;
(iii) the then current Conversion Rate;
(iv) the name and address of the Paying Agent and the
Conversion Agent;
(v) that Notes called for redemption must be presented and
surrendered to the Paying Agent to collect the Redemption Price and
contingent interest, if any;
(vi) that the Notes called for redemption may be converted at
any time before the close of business on the Redemption Date;
(vii) that Holders who wish to convert Notes must comply with
the procedures in paragraph 9 of the Notes;
(viii) that, unless the Company defaults in making payment of
such Redemption Price and contingent interest, if any, Accreted Value
and interest (including contingent interest), if any, on the Notes
called for redemption will cease to accrue on and after the Redemption
Date and the only remaining right of the Holder will be to receive
payment of the Redemption Price upon presentation and surrender to the
Paying Agent of the Notes;
(ix) if fewer than all the outstanding Notes are to be
redeemed, the certificate number and Principal Amounts at Final
Maturity of the particular Notes to be redeemed; and
(x) the CUSIP number or numbers for the Notes called for
redemption.
At the Company's request, the Trustee shall give the Notice of
redemption in the Company's name and at the Company's expense.
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(d) Effect of Notice of Redemption. Once Notice of redemption
is given, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price (together with accrued and unpaid contingent
interest, if any) stated in the Notice, except for Notes that are converted in
accordance with the provisions of Sections 4.05, 4.06 and 4.07. Upon
presentation and surrender to the Paying Agent, Notes called for redemption
shall be paid at the Redemption Price (together with accrued contingent
interest, if any).
(e) Sinking Fund. There shall be no sinking fund provided for
the Notes.
(f) Deposit of Redemption Price. On or before 11:00 a.m. (New
York City time) on the Redemption Date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company or an Affiliate of the
Company is acting as the Paying Agent, shall segregate and hold in trust) an
amount of money sufficient to pay the aggregate Redemption Price of, and any
accrued and unpaid contingent interest with respect to, all the Notes to be
redeemed on that date other than the Notes or portions thereof called for
redemption which on or prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted. The Trustee and the Paying
Agent shall, as promptly as practicable, return to the Company any money not
required for that purpose because of conversion of the Notes in accordance with
the provisions of Sections 4.05, 4.06 and 4.07. If such money is then held by
the Company or a Subsidiary in trust and is not required for such purpose, it
shall be discharged from such trust.
Section 4.02. Purchase at Option of the Holder upon a Fundamental Change.
(a) If a Fundamental Change shall occur at any time prior to
July 20, 2002, each Holder of Notes shall have the right, at such Holder's
option, to require the Company to purchase such Holder's Notes on the date (the
"Fundamental Change Purchase Date") (or if such date is not a Business Day, the
next succeeding Business Day) that is 95 days after the date of the Fundamental
Change. The Notes shall be purchased in integral multiples of $1,000 of
Principal Amount. The Company shall purchase such Notes for Cash at a price (the
"Fundamental Change Purchase Price") equal to the Accreted Value on the
Fundamental Change Purchase Date or for shares of Common Stock as set forth in
Section 4.03. No Notes may be purchased at the option of the Holders due to a
Fundamental Change if there has occurred and is continuing an Event of Default
other than an Event of Default that is cured by the payment of the Purchase
Price of all such Notes.
(b) The Company, or at its request (which must be received by
the Trustee at least three Business Days (or such lesser period as agreed to by
the Trustee) prior to the date the Trustee is requested to give such Notice as
described below) the Trustee in the name of and at the expense of the Company,
shall mail to all Holders of record of the Notes a Notice (a "Fundamental Change
Purchase Notice") of the occurrence of a Fundamental Change and of
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the purchase right arising as a result thereof, including the information
required by Section 4.03(f), on or before the 30th day after the occurrence of
such Fundamental Change. The Company shall promptly furnish to the Trustee a
copy of such Notice.
(c) For a Note to be so purchased at the option of the Holder,
the Paying Agent must receive such Note with the form entitled "Fundamental
Change Purchase Notice" on the reverse thereof duly completed, together with
such Note duly endorsed for transfer, on or before the 60th day after the
Fundamental Change Purchase Notice is delivered; provided, however, if the Notes
are in book-entry form such transfer shall be made in accordance with the
customary practices of the depository. All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Note for
redemption shall be determined by the Company, whose determination shall be
final and binding.
Section 4.03. Purchase of Notes at the Option of the Holder; Payment of
Purchase Price or Fundamental Change Purchase Price in
Stock.
(a) Purchase of Notes at the Option of the Holder. On each of
July 20, 2002, January 20, 2005, January 20, 2007, July 20, 2011, July 20, 2016,
July 20, 2021 and July 20, 2026 (each, a "Purchase Date"), at the purchase price
specified in paragraph 7 of the Notes (each, a "Purchase Price"), a Holder of
Notes shall have the option to require the Company to purchase any outstanding
Notes, upon:
(i) delivery to the Paying Agent by the Holder of a written
Notice of purchase (a "Purchase Notice") at any time from the opening
of business on the date that is 30 Business Days prior to a Purchase
Date until the close of business on such Purchase Date, stating:
(A) if certificated, the certificate numbers of the
Notes which the Holder shall deliver to be purchased;
(B) the portion of the Principal Amount of the Notes
which the Holder shall deliver to be purchased, which portion
must be $1,000 in Principal Amount or a multiple thereof;
(C) that such Notes shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified
in paragraph 7 of the Notes and in this Supplemental
Indenture; and
(D) if the Company elects, pursuant to a Company
Notice, to pay the Purchase Price to be paid as of such
Purchase Date, in whole or in part, in Common Stock but such
portion of the Purchase Price shall ultimately be payable to
such Holder in Cash because any of the conditions to the
payment of
18
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the Purchase Price in Common Stock are not satisfied prior to
or on the Purchase Date, as set forth in Section 4.03(d),
whether such Holder elects (x) to withdraw such Purchase
Notice as to some or all of the Notes to which such Purchase
Notice relates (stating the Principal Amount and certificate
numbers, if the Notes are in certificated form, of the Notes
as to which such withdrawal shall relate), or (y) to receive
Cash in respect of the entire Purchase Price for all Notes (or
portions thereof) to which such Purchase Notice relates; and
(ii) delivery or book-entry transfer of such Note to the Paying
Agent prior to, on or after the Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent, such
delivery or transfer being a condition to receipt by the Holder of the
Purchase Price therefor; provided, however, that such Purchase Price
shall be so paid pursuant to this Section 4.03 only if the Note so
delivered or transferred to the Paying Agent shall conform in all
respects to the description thereof in the related Purchase Notice.
(b) Procedures. If a Holder, in such Holder's Purchase Notice
or Fundamental Change Purchase Notice (and in any written notice of withdrawal
of a portion of a Holder's Notes previously submitted for purchase pursuant to a
Purchase Notice or Fundamental Change Purchase Notice, the portion that remains
subject to the Purchase Notice or Fundamental Change Purchase Notice), fails to
indicate such Holder's choice with respect to the election regarding a
conditional withdrawal pursuant to the terms of clause (D) of Section 4.03(a)(i)
or the penultimate paragraph of the Fundamental Change Purchase Notice such
Holder shall be deemed to have elected to receive Cash in respect of all Notes
subject to such Purchase Notice or Fundamental Change Purchase Notice in the
circumstances set forth in such clause (D) and penultimate paragraph.
The Company shall purchase from the Holder thereof, pursuant
to this Section 4.03, a portion of a Note if the Principal Amount of such
portion is $1,000 or a multiple of $1,000 if so requested by the Holder.
Provisions of this Supplemental Indenture that apply to the purchase of all of a
Note also apply to the purchase of such portion of such Note.
Any purchase by the Company contemplated pursuant to the
provisions of Section 4.02 or this Section 4.03 shall be consummated by the
delivery of the consideration to be received by the Holder (together with
accrued and unpaid contingent interest, if any) promptly following the later of
the Purchase Date and the time of delivery or book-entry transfer of the Note.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice or Fundamental Change
Purchase Notice contemplated by
19
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Section 4.02 or this Section 4.03(a) shall have the right at any time prior to
the close of business on the Purchase Date or Fundamental Change Purchase Date
to withdraw such Purchase Notice or Fundamental Change Purchase Notice (in whole
or in part) by delivery of a written notice of withdrawal to the Paying Agent in
accordance with Section 4.04(a).
The Paying Agent shall promptly notify the Company of the
receipt by it of any Purchase Notice or Fundamental Change Purchase Notice or
written notice of withdrawal thereof.
(c) Company's Right to Elect Manner of Payment of Purchase
Price. The Company may elect with respect to any Purchase Date or Fundamental
Change Purchase Date to pay the Purchase Price or Fundamental Change Purchase
Price in respect of the Notes to be purchased pursuant to Section 4.02 or
Section 4.03(a) as of such Purchase Date or Fundamental Change Purchase Date, in
U.S. legal tender ("Cash") or Common Stock, or in any combination of Cash and
Common Stock, subject to the conditions set forth in Sections 4.03(d) and (e);
provided, however, that any Purchase Price paid on July 20, 2002 pursuant to
Section 4.03(a) must be paid fully in Cash. The Company shall designate, in the
Company Notice delivered pursuant to Section 4.03(f), whether the Company shall
purchase the Notes for Cash or Common Stock, or, if a combination thereof, the
percentages of the Purchase Price or Fundamental Change Purchase Price of Notes
in respect of which it shall pay in Cash and/or Common Stock; provided that the
Company shall pay Cash for fractional interests in Common Stock. For purposes of
determining the existence of potential fractional interests, all Notes subject
to purchase by the Company held by a Holder shall be considered together (no
matter how many separate certificates are to be presented). Each Holder whose
Notes are purchased pursuant to this Section 4.03 shall receive the same
percentage of Cash and/or Common Stock in payment of the Purchase Price or
Fundamental Change Purchase Price for such Notes, except (i) as provided in
Section 4.03(e) with regard to the payment of Cash in lieu of fractional
interests in Common Stock and (ii) in the event that the Company is unable to
purchase the Notes of a Holder or Holders for Common Stock because any necessary
qualifications or registrations of the Common Stock under applicable federal or
state securities laws cannot be obtained, the Company may purchase the Notes of
such Holder or Holders for Cash. Once the Company has given its Company Notice
to Holders, the Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be paid
except pursuant to this Section 4.03(c) or Section 4.03(e).
At least five Business Days before the Company Notice Date,
the Company shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by Section 4.03(f);
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(iii) if the Company elects to pay the Purchase Price or
Fundamental Change Purchase Price, or a specified percentage thereof,
in Common Stock, that the conditions to such manner of payment set
forth in Section 4.03(e) have been or shall be complied with; and
(iv) whether the Company desires the Trustee to give the
Company Notice required by Section 4.03(f).
(d) Purchase with Cash. At the option of the Company, the
Purchase Price or Fundamental Change Purchase Price of Notes in respect of which
a Purchase Notice or Fundamental Change Purchase Notice pursuant to Section 4.02
or Section 4.03(a) has been given, or a specified percentage thereof, may be
paid by the Company with Cash equal to the aggregate Purchase Price or
Fundamental Change Repurchase Price, or such specified percentage thereof, as
the case may be, of such Notes.
(e) Payment by Issuance of Common Stock. At the option of the
Company, subject to Section 4.03(c), the Purchase Price of Notes in respect of
which a Purchase Notice pursuant to Section 4.03(a) or Fundamental Change
Purchase Notice has been given, or a specified percentage thereof, may be paid
by the Company by the issuance of a number of shares of Common Stock equal to
the quotient obtained by dividing (x) the amount of Cash to which the Holders
would have been entitled had the Company elected to pay all or such specified
percentage, as the case may be, of the Purchase Price or Fundamental Change
Purchase Price of such Notes in Cash by (y) the Market Price of a share of
Common Stock, subject to the next succeeding paragraph.
The Company shall not issue a fractional share of Common Stock
in payment of the Purchase Price or Fundamental Change Purchase Price. Instead
the Company shall pay Cash for the current market value of the fractional share.
The current market value of a fraction of a share shall be determined by
multiplying the Market Price by such fraction and rounding the product to the
nearest whole cent. It is understood that if a Holder elects to have more than
one Note purchased, the number of shares of Common Stock shall be based on the
aggregate amount of Notes to be purchased.
The Company's right to exercise its election to purchase the
Notes pursuant to Section 4.02 or Section 4.03 through the issuance of shares of
Common Stock shall be conditioned upon:
(i) the Company having given timely Notice in accordance with
Section 4.03(f) of its election to purchase all or a specified
percentage of the Notes with Common Stock as provided herein;
21
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(ii) (A) (1) the registration of the shares of Common Stock to
be issued in respect of the payment of the specified percentage of the
Purchase Price or Fundamental Change Purchase Price under the
Securities Act of 1933 or (2) the issuance of the shares of Common
Stock in an action which is exempt from the registration requirements
of the Securities Act of 1933 and which will not result in such shares
of Common Stock being deemed "restricted securities" under the
Securities Act of 1933 or otherwise and (B) the registration of the
shares of Common Stock under the Exchange Act, to the extent required
thereby;
(iii) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption
from such qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate
and an Opinion of Counsel each stating that (A) the terms of the
issuance of the Common Stock are in conformity with this Supplemental
Indenture and (B) the shares of Common Stock to be issued by the
Company in payment of the specified percentage of the Purchase Price or
Fundamental Change Purchase Price in respect of Notes have been duly
authorized and, when issued and delivered pursuant to the terms of this
Supplemental Indenture in payment of the specified percentage of the
Purchase Price or Fundamental Change Purchase Price in respect of
Notes, shall be validly issued, fully paid and nonassessable, and, to
the best of such counsel's knowledge, free from preemptive rights, and
in the case of such Officers' Certificate, stating that conditions (i),
(ii) and (iii) above have been satisfied and, in the case of such
Opinion of Counsel, stating that condition (ii) has been satisfied.
Such Officers' Certificate shall also set forth the number of
shares of Common Stock to be issued for each $1,000 Principal Amount of Notes
and the Sale Price of a share of Common Stock on each Trading Day during the
period during which the Market Price is calculated and ending on the Purchase
Date or Fundamental Change Purchase Date. The Company may elect to pay the
Purchase Price or Fundamental Change Purchase Price (or any portion thereof) in
Common Stock only if the information necessary to calculate the Market Price is
publicly reported. If any of the conditions set forth in this Section 4.03(e)
are not satisfied with respect to a Holder or Holders prior to or on the
Purchase Date or Fundamental Change Repurchase Date and the Company elected to
purchase the Notes to be purchased as of such Purchase Date or Fundamental
Change Repurchase Date pursuant to Section 4.02 or this Section 4.03 through the
issuance of shares of Common Stock, the Company shall pay the entire Purchase
Price or Fundamental Change Purchase Price in respect of such Notes of such
Holder or Holders in Cash.
22
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Upon determination of the actual number of shares of Common
Stock which the Holder of each $1,000 Principal Amount of the Notes shall
receive, the Company shall provide Notice of such determination.
(f) Notice of Election. The Company's Notices of election to
purchase with Cash or Common Stock, or any combination thereof (each a "Company
Notice"), shall be sent to the Holders (and to beneficial owners if required by
applicable law) at their addresses shown in the Note register maintained by the
Registrar, and delivered to the Trustee, not less than 30 Business Days prior to
the Purchase Date (the "Company Notice Date") or on or before the 30th day after
the occurrence of the Fundamental Change, as the case may be. Such Company
Notices shall state the manner of payment elected and shall contain the
following information.
In the event the Company has elected to pay a Purchase Price
or Fundamental Change Purchase Price (or a specified percentage thereof) with
Common Stock, the Company Notice shall:
(i) state that each Holder shall receive Common Stock in
respect of the specified percentage of the Purchase Price or
Fundamental Change Purchase Price of the Notes held by such Holder
(except any Cash amount to be paid in lieu of fractional shares);
(ii) state that the total number of shares of Common Stock to
be issued to Holders will be equal to the quotient obtained by dividing
(x) the amount of cash to which the Holders would have been entitled
had the Company elected to pay all or such specified percentage, as the
case may be, of the Purchase Price or Fundamental Change Purchase Price
of such Notes in cash by (y) the Market Price of a share of Common
Stock;
(iii) set forth the method of calculating the Market Price of
the Common Stock; and
(iv) state that because the Market Price of Common Stock will
be determined prior to the Purchase Date or Fundamental Change Purchase
Date, Holders will bear the market risk with respect to the value of
the Common Stock to be received from the date such Market Price is
determined to the Purchase Date.
In any case, each Company Notice shall include a form of
Purchase Notice or Fundamental Change Repurchase Notice to be completed by a
Holder and shall state:
(i) the Purchase Price, the Fundamental Change Purchase Price,
the Conversion Rate and, to the extent known at the time of such
Notice, the amount of
23
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contingent interest, if any, that will be payable with respect to the
Notes on the Purchase Date;
(ii) the name and address of the Paying Agent and the
Conversion Agent;
(iii) that Notes as to which a Purchase Notice or Fundamental
Change Purchase Notice has been given may be converted only if the
applicable Purchase Notice has been withdrawn in accordance with the
terms of this Supplemental Indenture;
(iv) that Notes must be surrendered to the Paying Agent to
collect payment of the Purchase Price or Fundamental Change Purchase
Price and contingent interest, if any;
(v) that the Purchase Price or Fundamental Change Purchase
Price for any Note as to which a Purchase Notice has been given and not
withdrawn, together with any accrued contingent interest payable with
respect thereto, shall be paid promptly following the later of the
Purchase Date or Fundamental Change Purchase Date and the time of
surrender of such Note as described in (iv);
(vi) the procedures the Holder must follow under Section 4.02
and Section 4.03;
(vii) briefly, the conversion rights of the Notes;
(viii) that, unless the Company defaults in making payment of
such Purchase Price or Fundamental Change Purchase Price and contingent
interest, if any, Accreted Value and interest (including contingent
interest), if any, on Notes covered by any Purchase Notice or
Fundamental Change Purchase Notice (or interest, if the Notes have been
converted into Cash Pay Notes pursuant to Section 4.08 of this
Supplemental Indenture, if any) will cease to accrue on and after the
Purchase Date or the Fundamental Change Purchase Date, as the case may
be;
(ix) the CUSIP or ISIN number of the Notes; and
(x) the procedures for withdrawing a Purchase Notice or
Fundamental Change Purchase Notice (including, without limitation, for
a conditional withdrawal pursuant to the terms of Section 4.03(a)(i)(D)
or the penultimate paragraph of the Fundamental Change Purchase
Notice).
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At the Company's request and at the Company's expense, the
Trustee shall give the Company Notice in the Company's name; provided, however,
that, in all cases, the text of the Company Notice shall be prepared by the
Company.
(g) Covenants of the Company. All shares of Common Stock
delivered upon conversion or purchase of the Notes shall be newly issued shares
or treasury shares, shall be fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
The Company shall cause to have listed or quoted all such
shares of Common Stock on each United States national securities exchange or
over-the-counter or other domestic market on which the Common Stock is then
listed or quoted.
(h) Procedure upon Purchase. On or before 11:00 a.m. (New York
City time) on the Purchase Date or Fundamental Change Purchase Date, the Company
shall deposit with the Paying Agent Cash (in respect of a Cash purchase under
Section 4.03(d) or for fractional interests or contingent interest, as
applicable), or shares of Common Stock, or a combination thereof, as applicable,
sufficient to pay the aggregate Purchase Price or Fundamental Change Purchase
Price of, and any accrued and unpaid interest with respect to, the Notes to be
purchased pursuant to this Section 4.03. Payment of the Purchase Price or
Fundamental Change Purchase Price for such Note shall be made as soon as
practicable following the later of the Purchase Date or Fundamental Change
Purchase Date or the time of book-entry transfer or delivery of such Note. If
the Company is delivering Common Stock, the Company shall deliver to each Holder
entitled to receive Common Stock, through the Paying Agent, a certificate for
the number of full shares of Common Stock, as applicable, issuable in payment of
such Purchase Price or Fundamental Change Purchase Price and Cash in lieu of any
fractional interests. The Person in whose name the certificate for Common Stock
is registered shall be treated as a holder of record following the Purchase Date
or Fundamental Change Purchase Date. Subject to Section 4.03(e), no payment or
adjustment shall be made for dividends on the Common Stock the Common Stock
Record Date for which occurred on or prior to the Purchase Date or Fundamental
Change Purchase Date. If the Paying Agent holds, in accordance with the terms of
the Indenture, money or securities sufficient to pay the Purchase Price or
Fundamental Change Purchase Price of such Note on the Business Day following the
Purchase Date or Fundamental Change Purchase Date, then, on and after such date,
such Note shall cease to be outstanding and Accreted Value on such Note shall
cease to accrue, whether or not book-entry transfer of such Note is made or such
Note is delivered to the Paying Agent, and all other rights of the Holder shall
terminate (other than the right to receive the Purchase Price or Fundamental
Change Purchase Price upon delivery or transfer of the Note).
25
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(i) Taxes. If a Holder of a Note is paid in Common Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
such issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which shall be due because the shares of Common Stock are to be issued in a
name other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
Section 4.04. Further Conditions for Purchase at the Option of Holders
upon a Fundamental Change and Purchase of Notes at the
Option of the Holder.
(a) Effect of Purchase Notice or Fundamental Change Purchase
Notice. Upon receipt by the Company of the Purchase Notice or Fundamental Change
Purchase Notice specified in Section 4.03(a) or Section 4.02(c), as applicable,
the Holder of the Note in respect of which such Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, was given shall (unless such
Purchase Notice or Fundamental Change Purchase Notice is withdrawn as specified
in the following two paragraphs) thereafter be entitled to receive solely the
Purchase Price or Fundamental Change Purchase Price, as the case may be, and any
accrued and unpaid contingent interest, if any, with respect to such Note. Such
Purchase Price or Fundamental Change Purchase Price and contingent interest, if
any, shall be paid to such Holder promptly following the later of (x) the
Purchase Date or the Fundamental Change Purchase Date, as the case may be, with
respect to such Note (provided the conditions in Section 4.03(a) or Section
4.02(c), as applicable, have been satisfied) and (y) the time of delivery or
book-entry transfer of such Note to the Paying Agent by the Holder thereof in
the manner required by Section 4.03(a) or Section 4.02(c), as applicable. Notes
in respect of which a Purchase Notice or Fundamental Change Purchase Notice, as
the case may be, has been given by the Holder thereof may not be converted for
shares of Common Stock on or after the date of the delivery of such Purchase
Notice (or Fundamental Change Purchase Notice, as the case may be), unless such
Purchase Notice (or Fundamental Change Purchase Notice, as the case may be) has
first been validly withdrawn as specified in the following two paragraphs.
A Purchase Notice or Fundamental Change Purchase Notice, as
the case may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent at any time prior to the close of
business on the Purchase Date or the Fundamental Change Purchase Date, as the
case may be, to which it relates specifying:
26
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(a) if certificated, the certificate number of the Notes in
respect of which such notice of withdrawal is being submitted;
(b) the Principal Amount of the Notes with respect to which
such notice of withdrawal is being submitted; and
(c) the Principal Amount, if any, of the Notes which remain
subject to the original Purchase Notice or Company Fundamental Change
Notice, as the case may be, and which has been or shall be delivered
for purchase by the Company.
A written notice of withdrawal of a Purchase Notice or
Fundamental Change Purchase Notice may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
4.03(a)(i)(D) or a Fundamental Change Purchase Notice pursuant to the
penultimate paragraph thereof or (ii) a conditional withdrawal containing the
information set forth in the preceding paragraph and contained in a written
notice of withdrawal delivered to the Paying Agent as set forth in the preceding
paragraph.
There shall be no purchase of any Notes pursuant to Section
4.02 or Section 4.03 (other than through the issuance of Common Stock in payment
of the Purchase Price or Fundamental Purchase Price, including Cash in lieu of
any fractional shares) or redemption pursuant to Section 4.02 if there has
occurred prior to, on or after, as the case may be, the giving, by the Holders
of such Notes, of the required Purchase Notice (or Fundamental Change Purchase
Notice, as the case may be) and is continuing an Event of Default (other than an
Event of Default that is cured by the payment of the Purchase Price or
Fundamental Change Purchase Price, as the case may be, and any accrued and
unpaid contingent interest with respect to such Notes). The Paying Agent will
promptly return to the respective Holders thereof any Notes (x) with respect to
which a Purchase Notice or Fundamental Change Purchase Notice, as the case may
be, has been withdrawn in compliance with this Supplemental Indenture, or (y)
held by it during the continuance of an Event of Default (other than an Event of
Default that is cured by the payment of the Purchase Price or Fundamental Change
Purchase Price, as the case may be, and any accrued and unpaid contingent
interest with respect to such Notes) in which case, upon such return, the
Purchase Notice or Fundamental Change Purchase Notice with respect thereto shall
be deemed to have been withdrawn.
(b) Deposit of Purchase Price or Fundamental Change Purchase
Price. On or before 11:00 a.m. (New York City time) on a Purchase Date or a
Fundamental Change Purchase Date, as the case may be, the Company shall deposit
with the Trustee or with the Paying Agent (or, if the Company or an Affiliate of
the Company is acting as the Paying Agent, shall segregate and hold in trust) an
amount of money and/or Common Stock, if permitted hereunder, sufficient to pay
the aggregate Purchase Price or Fundamental Change Purchase Price, as the case
may be, of, and any accrued and unpaid contingent interest, with
27
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respect to, all the Notes or portions thereof which are to be purchased as of
such Purchase Date or Fundamental Change Redemption Date, as the case may be.
(c) Notes Purchased in Part. Any Note that is to be purchased
only in part shall be surrendered at the office of the Paying Agent (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Note, without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder in aggregate
Principal Amount equal to, and in exchange for, the portion of the Principal
Amount of the Note so surrendered which is not purchased or redeemed.
(d) Covenant to Comply with Securities Laws upon Purchase of
Notes. In connection with any offer to purchase Notes under Section 4.02 or
4.03, the Company shall (i) comply with Rules 13e-4 and 14e-1 (which terms, as
used herein, include any successor provision thereto) under the Exchange Act, if
applicable; (ii) file the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act, if applicable; and (iii) otherwise comply
with all federal and state securities laws so as to permit the rights and
obligations under Sections 4.02 and 4.03 to be exercised in the time and in the
manner specified in Sections 4.02 and 4.03.
(e) Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any Cash or shares of Common Stock that remain
unclaimed as provided in paragraph 14 of the Notes, together with interest that
the Trustee has agreed to pay, if any, or dividends, if any, paid thereon while
such shares are held by the Trustee or the Paying Agent, held by them for the
payment of a Purchase Price or Fundamental Change Purchase Price, as the case
may be, or contingent interest, if any; provided, however, that to the extent
that the aggregate amount of Cash or shares of Common Stock deposited by the
Company pursuant to Section 4.04(b) exceeds the aggregate Purchase Price or
Fundamental Change Purchase Price, as the case may be, of, and any accrued and
unpaid contingent interest with respect to, the Notes or portions thereof which
the Company is obligated to purchase as of the Purchase Date or Fundamental
Change Purchase Date, as the case may be, then promptly after the Business Day
following the Purchase Date or Fundamental Change Purchase Date, as the case may
be, the Trustee and the Paying Agent shall return any such excess to the Company
together with interest that the Trustee has agreed to pay, if any, or dividends,
if any, paid thereon while such Cash or shares are held by the Trustee or the
Paying Agent.
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Section 4.05. Conversion of Notes.
(a) Right to Convert. A Holder of a Note may convert such Note
for Common Stock at any time during which the conditions stated in paragraph 9
of the Notes are met. The number of shares of Common Stock issuable upon
conversion of a Note per $1,000 of Principal Amount (the "Conversion Rate")
shall be that set forth in paragraph 9 in the Notes, subject to adjustment as
herein set forth.
A Holder may convert a portion of the Principal Amount of a
Note if the portion is $1,000 or a multiple of $1,000. Provisions of this
Supplemental Indenture that apply to conversion of all of a Note also apply to
conversion of a portion of a Note.
(b) Conversion Procedures. To convert a Note a Holder must
satisfy the requirements in paragraph 9 of the Notes. The date on which the
Holder of Notes satisfies all those requirements is the conversion date (the
"Conversion Date"). As soon as practicable, but in no event later than the fifth
Business Day following the Conversion Date the Company shall deliver to the
Holder, through the Conversion Agent, a certificate for the number of full
shares of Common Stock issuable upon the conversion and Cash in lieu of any
fractional share determined pursuant to Section 4.05(c). The Person in whose
name the certificate is registered shall be treated as a stockholder of record
on and after the Conversion Date; provided, however, that no surrender of a Note
on any date when the stock transfer books of the Company shall be closed shall
be effective to constitute the Person or Persons entitled to receive the shares
of Common Stock upon such conversion as the record holder or holders of such
shares of Common Stock on such date, but such surrender shall be effective to
constitute the Person or Persons entitled to receive such shares of Common Stock
as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
such conversion shall be at the Conversion Rate in effect on the date that such
Note shall have been surrendered for conversion, as if the stock transfer books
of the Company had not been closed. Upon conversion of a Note, such Person shall
no longer be a Holder of such Note.
No payment or adjustment shall be made for dividends on or
other distributions with respect to any Common Stock except as provided in
Section 4.06. On conversion of a Note, that portion of Accreted Value (or
interest, if the Company has exercised its option to convert the Notes to Cash
Pay Notes pursuant to Section 4.08) attributable to the period from the Issue
Date of the Note to the Conversion Date and accrued contingent interest with
respect to the converted Note shall not be canceled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the Holder thereof through
delivery of the Common Stock (together with the Cash payment, if any, in lieu of
fractional shares) in exchange for the Note being converted.
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If a Holder converts more than one Note at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the total Principal Amount of the Notes converted.
Upon surrender of a Note that is converted in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Note in an authorized denomination equal in Principal Amount (or
the Restated Principal Amount, if applicable) to the unconverted portion of the
Note surrendered.
If the last day on which a Note may be converted is a legal
holiday in a place where a Conversion Agent is located, the Note may be
surrendered to that Conversion Agent on the next succeeding day that it is not a
legal holiday.
(c) Cash Payments in Lieu of Fractional Shares. The Company
shall not issue a fractional share of Common Stock upon conversion of a Note.
Instead the Company shall deliver Cash for the current market value of the
fractional share. The current market value of a fractional share shall be
determined to the nearest 1/10,000th of a share by multiplying the Sale Price of
a full share of Common Stock on the Trading Day immediately preceding the
Conversion Date by the fractional amount and rounding the product to the nearest
whole cent.
(d) Taxes on Conversion. If a Holder converts a Note, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which shall be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulations.
(e) Company to Provide Stock. The Company shall, prior to
issuance of any Notes hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Notes.
All shares of Common Stock delivered upon conversion of the
Notes shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
The Company shall endeavor promptly to comply with all federal
and state securities laws regulating the order and delivery of shares of Common
Stock upon the
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conversion of Notes, if any, and shall cause to have listed or quoted all such
shares of Common Stock on each United States national securities exchange or
over-the-counter or other domestic market on which the Common Stock is then
listed or quoted.
Section 4.06. Adjustments to Conversion Rate.
The Conversion Rate shall be adjusted from time to time by the
Company as follows:
(a) In case the Company shall (i) pay a dividend, or make a
distribution, in shares of Common Stock or other capital stock, on
Common Stock; (ii) subdivide its outstanding Common Stock into a
greater number of shares; or (iii) combine its outstanding Common Stock
into a smaller number of shares, the Conversion Rate in effect
immediately prior thereto shall be adjusted so that the holder of any
Note thereafter surrendered for conversion shall be entitled to receive
the number of shares of Common Stock which such holder would have owned
or have been entitled to receive after the happening of any of the
events described above had such Note been converted immediately prior
to the happening of such event. If any dividend or distribution of the
type described in clause (i) above is not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate which
would then be in effect if such dividend or distribution had not been
declared. An adjustment made pursuant to this Section 4.06 shall become
effective immediately after the Common Stock Record Date in the case of
a dividend and shall become effective immediately after the effective
date in the case of subdivision or combination.
(b) In case the Company shall issue rights or warrants to all
holders of any class or series of its Common Stock entitling them (for
a period expiring within 60 days after the date fixed for determination
of stockholders entitled to receive such rights or warrants) to
subscribe for or purchase Common Stock at a price per share less than
the Sale Price per share of Common Stock on the day preceding the date
of announcement of the Common Stock Record Date for the determination
of stockholders entitled to receive such rights or warrants, the
Conversion Rate in effect immediately prior thereto shall be adjusted
so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the date
of the issuance of such rights or warrants by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants plus the number of
additional shares of Common Stock offered for subscription or purchase,
and of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or warrants
plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such Sale Price.
Such adjustment shall be made
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successively whenever any such rights or warrants are issued, and shall
become effective immediately after the opening of business on the day
following the Common Stock Record Date for the determination of the
stockholders entitled to receive such rights or warrants. To the extent
that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then
be in effect if such Common Stock Record Date for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less
than such Sale Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the
value of such consideration, if other than cash, to be determined by
the Board of Directors.
(c) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock (excluding any
distribution in connection with the liquidation, dissolution or winding
up of the Company, whether voluntary or involuntary) any evidences of
its indebtedness or assets (other than Cash) or rights or warrants to
subscribe for or purchase any of its securities (excluding those
referred to in Section 4.06(b)) (any of the foregoing hereinafter in
this Section 4.06(c) called the "Distributed Securities"), then, the
Conversion Rate shall be adjusted so that the same shall equal the
Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the date of such distribution by a fraction of
which the numerator shall be the Market Price per share of the Common
Stock on the Common Stock Record Date mentioned below, and the
denominator shall be the Sale Price per share of the Common Stock on
such Common Stock Record Date less the fair market value on such Common
Stock Record Date (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a certificate filed
with the Trustee) of the Distributed Securities so distributed
applicable to one share of Common Stock. Such adjustment shall become
effective immediately after the Common Stock Record Date for the
determination of stockholders entitled to receive such distribution.
Notwithstanding the foregoing, in the event (a) the then fair market
value (as so determined) of the portion of the Distributed Securities
so distributed applicable to one share of Common Stock is equal to or
greater than the Market Price of the Common Stock on the Common Stock
Record Date or (b) such Market Price exceeds the fair market value of
such Distributed Securities by less than $1.00, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Holder
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shall have the right to receive upon conversion the amount of
Distributed Securities such Holder would have received had such Holder
converted each Note on such Common Stock Record Date. In the event that
such distribution is not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate which would then be in effect
if such distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of
this Section 4.06(c) by reference to the actual or when issued trading
market for any securities, it must in doing so consider the prices in
such market on the same day used in computing the Sale Price of the
Common Stock.
Notwithstanding the foregoing provisions of this Section
4.06(c), no adjustment shall be made thereunder for any distribution of
Distributed Securities if the Company makes proper provision so that
each Holder of a Note who converts such Note (or any portion thereof)
after the Common Stock Record Date for such distribution shall be
entitled to receive upon such conversion, in addition to the shares of
Common Stock issuable upon such conversion, the amount and kind of
Distributed Securities that such Holder would have been entitled to
receive if such Holder had, immediately prior to such Common Stock
Record Date, converted such Note for Common Stock; provided that, with
respect to any Distributed Securities that are convertible,
exchangeable or exercisable, the foregoing provision shall only apply
to the extent (and so long as) the Distributed Securities receivable
upon conversion of such Note would be convertible, exchangeable or
exercisable, as applicable, without any loss of rights or privileges
for a period of at least 60 days following conversion of such Note.
Upon conversion of the Notes the Holders shall receive, in
addition to the Common Stock issuable upon such conversion, any rights
issued under any future stockholder rights plan the Company implements
(notwithstanding the occurrence of an event causing such rights to
separate from the Common Stock at or prior to the time of conversion).
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of any class of its Common Stock Cash
(excluding any Cash that is distributed upon a merger or consolidation
to which Section 4.07(f) applies) in an aggregate amount that, combined
together with (i) the aggregate amount of any other such distributions
to all holders of any class of its Common Stock made exclusively in
Cash within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to this
Section 4.06(d) has been made, and (ii) the aggregate of any Cash plus
the fair market value of other consideration (as so determined by the
Board of Directors, whose determination shall be conclusive, and
described in a certificate filed with the Trustee) payable in respect
of any tender offer
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by the Company for all or any portion of any class of its Common Stock
concluded within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section
4.06(e) has been made, exceeds 10% of the product of the Sale Price on
the day preceding the date of declaration of such dividend or
distribution times the number of shares of Common Stock outstanding on
such date, then, and in each such case, immediately after the close of
business on such date, the Conversion Rate shall be increased so that
the same shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the Common Stock Record
Date by a fraction of which the numerator shall be such Sale Price of
the Common Stock and the denominator shall be such Sale Price of the
Common Stock less the amount of Cash and the fair market value (as so
determined) of such other consideration so distributed (and not
excluded as provided above) applicable to one share of Common Stock,
such increase to be effective immediately prior to the opening of
business on the day following the Common Stock Record Date; provided,
however, that no adjustment will be made in respect of any such
dividends and distributions that are paid during any period for which
we are paying contingent interest to Holders; provided, further, that,
if the portion of the cash so distributed applicable to one share of
Common Stock is (i) equal to or greater than the Market Price of the
Common Stock on the day preceding the date of declaration of such
dividend or distribution or (ii) the Market Price of the Common Stock
on the day preceding the date of declaration of such dividend or
distribution is greater than the fair market value of the consideration
distributed pursuant to Section 4.06(e) by less than $1.00, then, in
lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder shall have the right to receive upon conversion, in
addition to the shares of Common Stock, Cash and other consideration
the Holder would have received had such Holder converted such Note
immediately prior to such Common Stock Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then be in effect if
such dividend or distribution had not been declared. If any adjustment
is required to be made as set forth in this Section 4.06(d) as a result
of a distribution that is a quarterly dividend, such adjustment shall
be based upon the amount by which such distribution exceeds the amount
of the quarterly cash dividend permitted to be excluded pursuant
hereto. If an adjustment is required to be made as set forth in this
Section 4.06(d) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount
of the distribution.
(e) In case a tender offer made by the Company or any of its
subsidiaries for all or any portion of any class of its Common Stock
expires and such tender offer (as amended upon the expiration thereof)
requires the payment to stockholders (based on the acceptance (up to
any maximum specified in the terms of the tender offer) of Purchased
Shares) of an aggregate consideration having a fair market value (as
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determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors)
that, combined together with (a) the aggregate of the Cash plus the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Board of Directors), as of the expiration of such tender offer, of
consideration payable in respect of any other tender offers, by the
Company or any of its subsidiaries for all or any portion of any class
of its Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to this Section 4.06(e) has been made, and (b) the aggregate
amount of any distributions to all holders of the Common Stock made
exclusively in Cash within 12 months preceding the expiration of such
tender offer and in respect of which no adjustment pursuant to Section
4.06(d) has been made (except as excluded by the first parenthetical
phrase thereof), exceeds 10% of the product of the Market Price
(determined as provided herein) as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender offer (as
it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares) at the Expiration Time,
then, and in each such case, immediately prior to the opening of
business on the day after the date of the Expiration Time, the
Conversion Rate shall be increased so that the same shall equal the
Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction of which the
numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based
on the acceptance (up to an maximum specified in the terms of the
tender or exchanged offer) of all shares validly tendered or exchanged
and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time and the
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
on the Expiration Time multiplied by the Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, such
increase (if any) to become effective immediately prior to the opening
of business on the day following the Expiration Time. If the Company is
obligated to purchase shares pursuant to any such tender offer, but the
Company is permanently prevented by applicable law from effecting any
such purchases or all such purchases are rescinded, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be
in effect if such tender offer had not been made.
(f) For purposes of this Section 4.06, the number of shares of
Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu
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of fractions of shares of Common Stock. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
Section 4.07. Miscellaneous Provisions Relating to Conversion.
(a) When Adjustment May be Deferred. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate then in effect; provided that any
adjustment that would otherwise be required to be made shall be carried forward
and taken into account in any subsequent adjustment. Except as stated in Section
4.06, the Conversion Rate will not be adjusted for the issuance of Common Stock
or any securities convertible into or exchangeable for Common Stock or carrying
the right to purchase any of the foregoing. Any adjustments that are made shall
be carried forward and taken into account any subsequent adjustment. All
calculations under Sections 4.05, 4.06 and 4.07 shall be made to the nearest
cent or to the nearest 1/10,000th of a share, as the case may be.
(b) When No Adjustment Required. No adjustment need be made
for rights to purchase Common Stock pursuant to a Company plan for reinvestment
of dividends or interest. No adjustment need be made for a change in the par
value or no par value of the Common Stock. To the extent the Notes become
convertible into cash, assets, property or securities (other than capital stock
of the Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest shall not accrue on the Cash.
No adjustment need be made for a transaction referred to in
Section 4.06(a), (b), (c), (d) or (e) if Holders are to participate in the
transaction without conversion on a basis and with Notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock participate in the transaction and the Holder
is not economically harmed by such transaction and the failure to make an
adjustment. Such participation by Holders may include participation in the
transaction upon conversion of their Note by the Holder provided that an
adjustment shall be made at such time as the Holder is not entitled to
participate on the basis described in the prior sentence.
(c) Notice of Adjustment. Whenever the Conversion Rate is
adjusted, the Company shall promptly provide to Holders a Notice of the
adjustment. The Company shall file with the Trustee and the Conversion Agent
such Notice. The certificate shall, absent manifest error, be conclusive
evidence that the adjustment is correct. Neither the Trustee nor any Conversion
Agent shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring inspection
thereof.
(d) Voluntary Increase. The Company may make such increases in
the Conversion Rate, in addition to those required by Section 4.06, as the Board
of Directors
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considers to be advisable to avoid or diminish any income tax to holders of
Common Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. To the extent permitted by applicable law, the
Company may from time to time increase the Conversion Rate by any amount for any
period of time if the period is at least 20 days, the increase is irrevocable
during the period and the Board of Directors shall have made a determination
that such increase would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Rate is so increased,
the Company shall mail to Holders and file with the Trustee and the Conversion
Agent a Notice of such increase. Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such certificate
except to exhibit the same to any holder desiring inspection thereof. The
Company shall mail the Notice at least 15 days before the date the increased
Conversion Rate takes affect. The Notice shall state the increased Conversion
Rate and the period it shall be in effect.
(e) Notice to Holders Prior to Certain Actions. In case:
(i) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in
the Conversion Rate pursuant to Section 4.06;
(ii) the Company shall authorize the granting to all or
substantially all the Holders of its Common Stock of rights or warrants
to subscribe for or purchase any share of any class or any other rights
or warrants to purchase Common Stock;
(iii) of any reclassification or reorganization of the Common
Stock of the Company (other than a subdivision or combination of its
outstanding Common Stock, or a change in par value, or from par value
to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which
approval of any shareholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of the Company;
or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
the Company shall cause to be filed with the Trustee and to be provided to
Holders of Notes, as promptly as possible but in any event at least 15 days
prior to the applicable date hereinafter specified, a Notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, or rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is
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expected to become effective or occur, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. Failure to give such Notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up.
(f) Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occur, namely (i) any reclassification or change
of outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination); (ii) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including Cash) with respect to or in exchange for such Common Stock; or (iii)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including Cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture,
providing that each Note shall be convertible into the kind and amount of shares
of stock and other securities or property or assets (including Cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Notes immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 4.07(f).
The Company shall cause Notice of the execution of such
supplemental indenture to be provided to Holders of Notes, within 20 days after
execution thereof. Failure to deliver such Notice shall not affect the legality
or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 4.07(f) applies to any event or occurrence,
Section 4.06 shall not apply.
(g) Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Notes to either calculate the Conversion Rate or determine whether
any facts exist which may require any adjustment of the Conversion Rate, or with
respect to the nature or extent or calculation of any such adjustment when made,
or with respect to the method employed, or herein or in any
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supplemental indenture provided to be employed, in making the same and shall be
protected in relying upon an Officer's Certificate with respect to the same. The
Trustee and any other Conversion Agent shall not be accountable with respect to
the validity or value (or the kind or amount) of any shares of Common Stock, or
of any securities or property, which may at any time be issued or delivered upon
the conversion of any Note and the Trustee and any other Conversion Agent make
no representations with respect thereto. Subject to the provisions of Article
Seven of the Indenture, neither the Trustee nor any Conversion Agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
Cash upon the surrender of any Note for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Company contained
in this Section. Without limiting the generality of the foregoing, neither the
Trustee nor any Conversion Agent shall be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
entered into pursuant to Section 4.07(f) relating either to the kind or amount
of shares of stock or securities or property (including Cash) receivable by
Holders upon the conversion of their Notes after any event referred to in such
Section 4.07(f) or to any adjustment to be made with respect thereto, but,
subject to the provisions of Article Seven of the Indenture, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officer's Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
(h) Simultaneous Adjustments. In the event that Sections 4.05,
4.06 or 4.07 require adjustments to the Conversion Rate under more than one of
Section 4.06(a), (b), (c) or (d), and the Common Stock Record Dates for the
distributions giving rise to such adjustments shall occur on the same date, then
such adjustments shall be made by applying, first, the provisions of Section
4.06(c), second, the provisions of Section 4.06(d), third, the provisions of
Section 4.06(a), and fourth, the provisions of Section 4.06(b).
(i) Successive Adjustments. After an adjustment to the
Conversion Rate under Sections 4.05, 4.06 or 4.07, any subsequent event
requiring an adjustment under Sections 4.05, 4.06 or 4.07 shall cause an
adjustment to the Conversion Rate as so adjusted.
(j) General Considerations. Whenever successive adjustments to
the Conversion Rate are called for pursuant to Sections 4.05, 4.06 or 4.07, such
adjustments shall be made to the Sale Price or Market Price as may be necessary
or appropriate to effectuate the intent of Sections 4.05, 4.06 or 4.07 and to
avoid unjust or inequitable results as determined in good faith by the Board of
Directors.
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Section 4.08. Optional Conversion to Semi-Annual Cash Pay Note upon Tax
Event.
From and after (i) the date (the "Tax Event Date") of the
occurrence of a Tax Event and (ii) the date the Company exercises its option set
forth in this 4.08, whichever is later (the "Option Exercise Date"), at the
option of the Company, cash interest in lieu of future Accreted Value shall
accrue at the rate of 3.125% per annum on a restated principal amount per $1,000
original Principal Amount (the "Restated Principal Amount") equal to its
Accreted Value on the Option Exercise Date and shall be payable semi-annually on
July 20 and January 20 of each year (each an "Interest Payment Date") to holders
of record at the close of business on July 1 and January 1 (each a "Regular
Record Date") immediately preceding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months and
will accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the Option Exercise Date. Within 15 days of the
occurrence of a Tax Event, the Company shall deliver a written Notice of such
Tax Event by facsimile and first-class mail to the Trustee and within 15 days of
their exercise of such option the Company shall deliver a written Notice of the
Option Exercise Date by facsimile and first-class mail to the Trustee and
provide Notice to the Holders of the Notes. From and after the Option Exercise
Date, (i) the Company shall be obligated to pay at Maturity or upon a Redemption
Date, Purchase Date or Fundamental Change Purchase Date, in lieu of the
Principal Amount or Accreted Value, as applicable, of a Note, the Restated
Principal Amount thereof plus accrued and unpaid interest and (ii) contingent
interest shall cease to accrue on the Notes. Notes authenticated and delivered
after the Option Exercise Date may, and shall if required by the Trustee, bear a
notation in a form approved by the Trustee as to the conversion of the Notes to
Cash Pay Notes.
Section 4.09. Calculation of Original Issue Discount for U.S. Federal
Income Tax Purposes.
The Company agrees, and each Holder and any beneficial holder
of a Note by its purchase thereof shall be deemed to agree, to treat (in the
absence of an administrative determination or judicial ruling to the contrary),
for United States federal income tax purposes, the Notes as debt instruments
that are subject to Section 1.1275-4(b) of the Treasury Regulations. For United
States federal income tax purposes, the Company shall accrue interest with
respect to outstanding Notes as original issue discount according to the
"noncontingent bond method," set forth in Section 1.1275-4(b) of the Treasury
Regulations, based on a comparable yield of 8.125% compounded semi-annually and
the projected payment schedule attached hereto as Exhibit B. The Company shall
file with the Trustee promptly at the end of each calendar year: (i) a written
Notice specifying the amount of original issue discount for United States
federal income tax purposes (including daily rates and accrual periods) accrued
on outstanding Notes as of the end of such year and (ii) such
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other specific information relating to such original issue discount as may then
be relevant under the Internal Revenue Code of 1986, as amended from time to
time, including the amount of any adjustment made under the noncontingent bond
method to account for the amount of any difference between the amount of an
actual payment and the amount of a projected payment.
The Company acknowledges and agrees, and each Holder and any
beneficial holder of a Note by its purchase thereof shall be deemed to
acknowledge and agree, that (i) the comparable yield means the annual yield the
Company would pay, as of the Issue Date, on a fixed-rate cash pay nonconvertible
debt security with no contingent payments, but with terms and conditions
otherwise comparable to those of the Notes; (ii) the schedule of projected
payments attached hereto as Exhibit B is determined on the basis of the
comparable yield and an assumption of linear growth of the stock price and a
constant dividend yield; (iii) the comparable yield and the schedule of
projected payments are not determined for any purpose other than for the
determination of interest accruals and adjustments thereof in respect of the
Notes for United States federal income tax purposes; and (iv) the comparable
yield and the schedule of projected payments do not constitute a projection or
representation regarding the future stock price or the amounts payable on the
Notes.
Section 4.10. Payment of Interest.
(a) Paying Agent To Hold Money in Trust. Prior to 11:00 a.m.
(New York City time) on any applicable Interest Payment Date, the Company shall
deposit with the Paying Agent (or if the Company or a Subsidiary is acting as
Paying Agent, segregate and hold in trust for the benefit of the Persons
entitled thereto) a sum sufficient to pay semi-annual or contingent interest
when due. The Company shall require each Paying Agent (other than the Trustee)
to agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal or interest on the Notes and shall notify the Trustee of any default
by the Company in making any such payment. If the Company or a Subsidiary acts
as Paying Agent, it shall segregate the money held by it as Paying Agent and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
(b) Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Company
shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at
least five Business Days before each Interest Payment Date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Holders.
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(c) Payment of Interest; Interest Rights Preserved. (i)
Semi-annual or contingent interest on any Note that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Note is registered at the close of business on
the Regular Record Date or accrual date, as the case may be, for such interest
at the office or agency of the Company maintained for such purpose. Each
installment of semi-annual or contingent interest on any Note shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States. In the case of a Global Note, semi-annual or contingent
interest payable on any applicable payment date will be paid to the depository,
with respect to that portion of such Global Note held for its account by Cede &
Co. for the purpose of permitting such party to credit the interest received by
it in respect of such Global Note to the accounts of the beneficial owners
thereof.
(ii) Except as otherwise specified with respect to the Notes,
any semi-annual or contingent interest on any Note that is payable, but is not
punctually paid or duly provided for, within 30 days following any applicable
payment date (herein called "Defaulted Interest", which term shall include any
accrued and unpaid interest that has accrued on such defaulted amount in
accordance with paragraph 1 of the Notes), shall forthwith cease to be payable
to the registered Holder thereof on the relevant Regular Record Date or accrual
date, as the case may be, by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (A) or (B) below.
(A) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes are registered at the
close of business on a date for the payment of such Defaulted Interest
(the "Special Record Date"), which shall be fixed in the following
manner: The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Note and the date of
the proposed payment (which shall not be less than 20 days after such
Notice is received by the Trustee), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the Notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Notes at his address as it appears on the
list of Holders maintained pursuant to this Supplemental Indenture not
less than 10 days
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prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Notes are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (B).
(B) Alternatively, the Company may make payment of any
Defaulted Interest on the Notes in any other lawful manner not
inconsistent with the requirements of any Notes exchange on which such
Notes may be listed, and upon such Notice as may be required by such
exchange, if, after Notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 4.10, each
Note delivered under this Supplemental Indenture upon registration of transfer
of or in exchange for or in lieu of any other Note shall carry the rights to
semi-annual or contingent interest accrued and unpaid to, and to accrue, which
were carried by such other Note.
ARTICLE FIVE
MISCELLANEOUS
Section 5.01. No Adverse Interpretation of Other Agreements.
This Supplemental Indenture may not be used to interpret
another indenture, loan or debt agreement of the Company or a Subsidiary. Any
such indenture, loan or debt agreement may not be used to interpret this
Supplemental Indenture.
Section 5.02. No Recourse Against Others.
All liability described in paragraph 18 of the Notes of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
Section 5.03. Successors and Assigns.
All covenants and agreements of the Company in this
Supplemental Indenture and the Notes shall bind its successors and assigns. All
agreements of the Trustee in this Supplemental Indenture shall bind its
successors and assigns.
Section 5.04. Duplicate Originals.
The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
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Section 5.05. Severability.
In case any one or more of the provisions contained in this
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Supplemental
Indenture or of the Notes.
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SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
MASCO CORPORATION
By:
----------------------------------
Name:
Title:
45
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BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee
By:
---------------------------------
Name:
Title:
46
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
47
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MASCO CORPORATION
ZERO COUPON CONVERTIBLE SENIOR NOTE DUE 2031
No. CUSIP:
----------------------- ISIN:
Issue Date: July 20, 2001
Issue Price: $394.45
(for each $1,000 Principal
Amount at Final Maturity)
Masco Corporation, a Delaware corporation, promises to pay to
__________ or registered assigns, on July 20, 2031 the Principal Amount of
__________ Dollars ($__________).
This Note shall not bear periodic interest except as specified
on the other side of this instrument. This Note shall accrete as specified on
the other side of this Note. This Note is convertible as specified on the other
side of this Note.
Additional provisions of this Note are set forth on the other
side of this Note.
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-3-
IN WITNESS WHEREOF, Masco Corporation has caused this
instrument to be duly executed.
MASCO CORPORATION
By:
----------------------------------
Name:
Title:
Attest:
By:
---------------------------------
Name:
Title:
Dated:
Bank One Trust Company, National
Association as Trustee, certifies that this is
one of the Securities referred to in the within
mentioned Indenture
Date:
By:
---------------------------------
Name:
Title:
49
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[FORM OF REVERSE SIDE OF GLOBAL SECURITY]
MASCO CORPORATION
ZERO COUPON CONVERTIBLE SENIOR NOTE DUE 2031
1. INTEREST
This Note shall not bear periodic interest, except as
specified in this paragraph and in paragraphs 5 and 10 hereof. If the Principal
hereof or any portion of such Principal is not paid when due (whether upon
acceleration pursuant to the Indenture, upon the date set for payment of the
Redemption Price pursuant to paragraph 6 hereof, upon the date set for payment
of a Purchase Price or Fundamental Change Purchase Price pursuant to paragraph 7
hereof or upon the Final Maturity of this Note) or if interest (including
contingent interest, if any) due hereon or any portion of such interest is not
paid when due in accordance with paragraph 5 or 10 hereof, then in each such
case the overdue amount shall bear interest at the rate of 3.125% per annum,
compounded semiannually (to the extent that the payment of such interest shall
be legally enforceable), which interest shall accrue from the date such overdue
amount was due to the date payment of such amount, including interest thereon,
has been made or duly provided for. All such interest shall be payable on
demand. The accrual of such interest on overdue amounts shall be in lieu of, and
not in addition to, the continued accretion.
The Notes shall increase in Accreted Value commencing on the
Issue Date.
"Accreted Value" means, at any date of determination, (1)
prior to such time as this Note is converted to a Cash Pay Note, the sum of (x)
the Issue Price of this Note and (y) the portion of the excess of the Principal
Amount of this Note over the Issue Price which shall have been amortized by the
Company in accordance with GAAP through such date, such amount to be so
amortized on a daily basis and compounded semi-annually on each July 20 and
January 20 at the rate of 3.125% per annum from the Issue Date through the date
of determination compounded on the basis of a 360-day year and twelve 30-day
months and (2) at or after such time as this Note is converted to a Cash Pay
Note, its Restated Principal Amount.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, the
Company shall make payments in respect of the Notes to the Persons who are
registered Holders of Notes at the close of business on the Business Day
preceding the Redemption Date or Final Maturity, as the case may be, or at the
close of business on a Purchase Date or Fundamental Change Purchase Date, as the
case may be. Holders must surrender Notes to a Paying Agent to collect such
payments in respect of the Notes. The Company shall pay cash amounts in money of
the
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United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may make such cash payments by check
payable in such money.
3. PAYING AGENT, CONVERSION AGENT, BID AGENT AND
REGISTRAR
Initially, Bank One Trust Company, National Association (the
"Trustee"), shall act as Paying Agent, Conversion Agent, Bid Agent and
Registrar. The Company may appoint and change any Paying Agent, Conversion
Agent, Bid Agent, Registrar or co-registrar without Notice, other than Notice to
the Trustee except that the Company will maintain at least one Paying Agent in
the State of New York, City of New York, Borough of Manhattan, which shall
initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Bid Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Notes under an Indenture dated as of
February 12, 2001 between the Company and Trustee, as supplemented by a
Supplemental Indenture relating to the Notes between the Company and Trustee
dated July 20, 2001 (together, the "Indenture"). The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 ("TIA") as in effect on the date of the
Indenture. The Notes are subject to all such terms, and Holders are referred to
the Indenture and the Act for a statement of them. Capitalized terms not defined
herein have the meanings given to those terms in the Indenture.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and the applicable Authorizing
Resolution or supplemental indenture. Requests may be made to: Masco
Corporation, 00000 Xxx Xxxx Xxxx, Xxxxxx Xxxxxxxx, 00000, Attention: Xxxxxx
Xxxxxx.
5. CONTINGENT INTEREST
Subject to the accrual and Common Stock Record Date provisions
specified in this paragraph 5, the Company shall pay contingent interest to the
Holders during any six-month period (a "Contingent Interest Period") from
January 20 to July 19 and from July 20 to January 19, commencing January 20,
2007, if the average Note Price for the Five-Day Period with respect to such
Contingent Interest Period equals 120% or more of the Accreted Value of such
Note to the Trading Day immediately preceding the first day of the relevant
Contingent Interest Period.
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The amount of contingent interest payable per $1,000 Principal
Amount hereof in respect of any Contingent Interest Period shall equal the
greater of (x) Cash Dividends paid by the Company per share of Common Stock
during that Contingent Interest Period multiplied by the number of shares of
Common Stock into which $1,000 Principal Amount hereof is convertible pursuant
to paragraph 9 hereof as of the accrual date for such contingent interest and
(y) 0.125% of the average Note Price for the Five-Day Period with respect to
such Contingent Interest Period.
Contingent interest, if any, will accrue and be payable to
Holders as of the Common Stock Record Date for the related Cash Dividend or, if
no Cash Dividend is paid by the Company during a Contingent Interest Period, to
Holders as of the 15th day preceding the last day of the relevant Contingent
Interest Period. Such payments shall be paid on the payment date of the related
Cash Dividend or, if no Cash Dividend is paid by the Company during a Contingent
Interest Period, on the last day of the relevant Contingent Interest Period. In
addition, on any Purchase Date, Fundamental Change Purchase Date or Redemption
Date that occurs during a Contingent Interest Period for which a Holder is
entitled to contingent interest pursuant to clause (y) of the preceding
paragraph, contingent interest will be payable to such Holder in an amount equal
to the amount that would have been otherwise payable to such Holder on the last
day of such Contingent Interest Period divided by the actual number of days from
the first day of such Contingent Interest Date to the Purchase Date, Fundamental
Change Purchase Date or Redemption Date, as the case may be, using a 360-day
year composed of twelve 30-day months.
"Five-Day Period" means, with respect to any Contingent
Interest Period, the five Trading Days ending on the second Trading Day
immediately preceding the first day of such Contingent Interest Period;
provided, however, if the Company shall have declared a Cash Dividend on its
Common Stock that is payable during such Contingent Interest Period but for
which the Common Stock Record Date for determining stockholders entitled thereto
precedes the first day of such Contingent Interest Period, then "Five-Day
Period" means, with respect to such Contingent Interest Period, the five Trading
Days ending on the second Trading Day immediately preceding such Common Stock
Record Date.
"Cash Dividends" means all cash dividends on the Common Stock
(whether regular, periodic, extraordinary, special, nonrecurring or otherwise)
as declared by the Company's Board of Directors as part of its cash dividend
payment practices.
"Note Price" means, as of any date of determination, the
average of the secondary market bid quotations per Note obtained by the Bid
Agent for $10 million Principal Amount of Notes at approximately 4:00 p.m. (New
York City time) on such determination date from three recognized securities
dealers in The City of New York (none of which shall be an Affiliate of the
Company) selected by the Company; provided, however, if (a) at least three
52
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such bids are not obtained by the Bid Agent or (b) in the Company's reasonable
judgment, the bid quotations are not indicative of the secondary market value of
the Notes as of such determination date, then the Note Price for such
determination date shall equal (i) the Conversion Rate in effect as of such
determination date multiplied by (ii) the average Sale Price of Common Stock for
the five Trading Days ending on such determination date, appropriately adjusted
to take into account the occurrence, during the period commencing on the first
of such Trading Days during such five Trading Day period and ending on such
determination date, of any event described in Section 4.06(a), 4.06(b) or
4.06(c) (subject to the conditions set forth in Sections 4.07(a) and 4.07(b)) of
the Indenture.
Upon determination that Holders will be entitled to receive
contingent interest which may become payable during a Contingent Interest
Period, on or prior to the first day of such Contingent Interest Period, the
Company shall issue a press release and publish such information on its web site
at xxx.xxxxx.xxx, if such web site exists.
6. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Notes. Between July 20,
2002 and January 25, 2007 the Company may only redeem the Notes for cash, in
whole but not in part, if the Sale Price of Common Stock is equal to or greater
than the below specified percentage of the Accreted Conversion Price in effect
for at least 20 Trading Days in any consecutive 30-Trading Day period. The
Company will give holders not less than 30-days' nor more than 60-days' Notice
of redemption. The table below shows ranges of dates between July 20, 2002 and
January 25, 2007 and the percentage of the Accreted Conversion Price Common
Stock must attain within the specified date range before the Company may redeem
the Notes.
PERCENTAGE OF ACCRETED CONVERSION PRICE
THAT COMMON STOCK PRICE MUST ATTAIN FOR
REDEMPTION DATE RANGE 20 OF 30 TRADING DAYS
--------------------- ---------------------------------------
July 20, 2002 through July 19, 2003 150%
July 20, 2003 through July 19, 2004 140%
July 20, 2004 through January 24, 2007 130%
The table below shows what the Accreted Value of a Note would
be on July 20, 2002, and at specified dates thereafter prior to maturity and at
Final Maturity. The Accreted Value, in dollars, of a Note per $1,000 Principal
Amount redeemed between such dates shall include an additional amount reflecting
the increase in Accreted Value since the next preceding date in the table to but
excluding the actual Redemption Date.
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INCREASE IN ACCRETED REDEMPTION
REDEMPTION DATE ISSUE PRICE(1) VALUE AT 3.125% (2) PRICE (1+2)
--------------- -------------- ------------------- -----------
July 20, 2002 $394.45 $ 12.42 $406.88
July 20, 2003 $394.45 $ 25.24 $419.69
July 20, 2004 $394.45 $ 38.46 $432.91
January 20, 2005 $394.45 $ 45.22 $439.67
July 20, 2005 $394.45 $ 52.09 $446.54
July 20, 2006 $394.45 $ 66.15 $460.61
January 20, 2007 $394.45 $ 73.35 $467.80
July 20, 2007 $394.45 $ 80.66 $475.11
July 20, 2008 $394.45 $ 95.62 $490.08
July 20, 2009 $394.45 $111.06 $505.51
July 20, 2010 $394.45 $126.98 $521.43
July 20, 2011 $394.45 $143.40 $537.85
July 20, 2012 $394.45 $160.34 $554.79
July 20, 2013 $394.45 $177.81 $572.27
July 20, 2014 $394.45 $195.83 $590.29
July 20, 2015 $394.45 $214.43 $608.88
July 20, 2016 $394.45 $233.60 $628.06
July 20, 2017 $394.45 $253.38 $647.84
July 20, 2018 $394.45 $273.78 $668.24
July 20, 2019 $394.45 $294.83 $689.28
July 20, 2020 $394.45 $316.54 $710.99
July 20, 2021 $394.45 $338.93 $733.39
July 20, 2022 $394.45 $362.03 $756.48
July 20, 2023 $394.45 $385.85 $780.31
July 20, 2024 $394.45 $410.43 $804.88
July 20, 2025 $394.45 $435.78 $830.23
July 20, 2026 $394.45 $461.92 $856.38
July 20, 2027 $394.45 $488.90 $883.35
July 20, 2028 $394.45 $516.72 $911.17
July 20, 2029 $394.45 $545.41 $939.87
July 20, 2030 $394.45 $575.01 $969.47
July 20, 2031 $394.45 $605.55 $1,000
If this Note has been converted to Cash Pay Notes, the
Redemption Price will be equal to the Restated Principal Amount plus accrued and
unpaid interest from the date of such conversion to the Redemption Date; but in
no event will this Note be redeemable before July 20, 2002.
In addition to the Redemption Price payable with respect to
all Notes or portions thereof to be redeemed as of a Redemption Date, the
Holders of such Notes (or portions thereof) shall be entitled to receive accrued
and unpaid contingent interest, if any, with respect thereto, which contingent
interest shall be paid in cash on the Redemption Date.
7. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER;
PURCHASE AT THE OPTION OF THE HOLDER UPON A
FUNDAMENTAL CHANGE
Subject to the terms and conditions of the Indenture, a Holder
of Notes shall have the option to require the Company to purchase the Notes held
by such Holder on the following Purchase Dates and at the following Purchase
Prices per $1,000 Principal Amount, plus, in the case of purchases after July
20, 2007, accrued and unpaid contingent interest, if any, upon delivery of a
Purchase Notice containing the information set forth in the Indenture,
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from the opening of business on the date that is 30 Business Days prior to such
Purchase Date until the close of business on such Purchase Date and upon
delivery of the Notes to the Paying Agent by the Holder as set forth in the
Indenture. For any Purchase Date after July 20, 2002, such Purchase Prices may
be paid, at the option of the Company, in cash or by the issuance and delivery
of shares of Common Stock, or in any combination thereof. The Company will pay
the Purchase Price for any purchase on July 20, 2003 only in cash.
The purchase price of a Note will be:
o $406.88 per Note on July 20, 2002;
o $439.67 per Note on January 20, 2005;
o $467.80 per Note on January 20, 2007;
o $537.85 per Note on July 20, 2011, plus accrued and unpaid
contingent interest, if any;
o $628.06 per Note on July 20, 2016, plus accrued and unpaid
contingent interest, if any;
o $733.39 per Note on July 20, 2021, plus accrued and unpaid
contingent interest, if any; and
o $856.38 per Note on July 20, 2026, plus accrued and unpaid
contingent interest, if any.
Notes in denominations larger than $1,000 of Principal Amount
may be purchased in part, but only in multiples of $1,000 of Principal Amount.
If prior to a Purchase Date this Note has been converted to a
Cash Pay Note, the Purchase Price will be equal to the Restated Principal Amount
plus accrued and unpaid interest from the date of conversion to the Purchase
Date.
If a Fundamental Change shall occur at any time prior to July
20, 2002, each Holder shall have the right, at such Holder's option and subject
to the terms and conditions of the Indenture, to require the Company to purchase
such Holder's Notes on the Business Day that is 95 days after the date of the
Fundamental Change for a Fundamental Change Purchase Price equal to Accreted
Value to the Fundamental Change Purchase Date. If, prior to the Fundamental
Change Purchase Date, the Notes were converted to Cash Pay Notes, the
Fundamental Change Purchase Price will be equal to the Restated Principal Amount
plus accrued and unpaid interest from the date of conversion to the Fundamental
Change Purchase Date, which Fundamental Change Purchase Price shall be paid at
the option of the Company in cash or by the issuance and delivery of shares of
Common Stock or in any combination thereof. Notes in denominations larger than
$1,000 of Principal Amount may be redeemed in part in connection with a
Fundamental Change, but only in multiples of $1,000 of Principal Amount.
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In addition to the Purchase Price or Fundamental Change
Purchase Price, as the case may be, payable with respect to all Notes or
portions thereof to be purchased as of the Purchase Date or the Fundamental
Change Purchase Date, as the case may be, the Holders of such Notes (or portions
thereof) shall be entitled to receive accrued and unpaid contingent interest, if
any, with respect thereto, which contingent interest shall be paid in cash
promptly following the later of the Purchase Date or the Fundamental Change
Purchase Date, as the case may be, and the time of delivery of such Notes to the
Paying Agent pursuant to the Indenture.
Holders have the right to withdraw any Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, by delivery to the
Paying Agent of a written notice of withdrawal in accordance with the provisions
of the Indenture.
If cash (and/or Common Stock if permitted under the Indenture)
sufficient to pay a Fundamental Change Purchase Price or cash (and/or Common
Stock if permitted under the Indenture) sufficient to pay a Purchase Price, as
the case may be, of, together with any accrued and unpaid contingent interest
with respect to all Notes or portions thereof to be purchased as of the Purchase
Date or the Fundamental Change Purchase Date, as the case may be, is deposited
with the Paying Agent on the Business Day following the Purchase Date or the
Fundamental Change Purchase Date, as the case may be, such Notes will cease to
accrete and interest (including contingent interest), if any, will cease to
accrue on such Notes (or portions thereof) on and after such date, and the
Holder thereof shall have no other rights as such (other than the right to
receive the Purchase Price or Fundamental Change Purchase Price, as the case may
be, and accrued and unpaid contingent interest, if any, upon surrender or such
Note).
8. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY
Notice of redemption at the option of the Company shall be
mailed at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Notes to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of, together with any accrued and unpaid
contingent interest with respect to, all Notes (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Paying Agent prior to or
on the Redemption Date, on and after such date Accreted Value and interest
(including contingent interest), if any, ceases to accrue on such Notes or
portions thereof. Notes in denominations larger than $1,000 Principal Amount may
be redeemed in part but only in multiples of $1,000 or Principal Amount.
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9. CONVERSION
A Holder of a Note may convert this Note for Common Stock at
any time on or before the close of business on July 20, 2021 if at least one of
the following conditions is satisfied:
(a) the Twenty-Day Average Price on the Conversion Date is at
least a specified percentage of the Accreted Conversion Price, such
percentage beginning at 120% for the first year and declining 1/3% on
July 20 each year thereafter, reaching 1101/3% for the year beginning
July 20, 2030 and declining to 110% at Final Maturity;
(b) the credit rating assigned to the Notes by either Xxxxx'x
Investors Service, Inc. or Standard & Poor's Ratings Services is
reduced to below "Investment Grade" where Investment Grade shall mean a
rating of BBB- or higher in the case of Standard & Poor's Ratings
Services, or a rating of Baa3 or higher in the case of Xxxxx'x
Investors Service, Inc.;
(c) the Notes have been called for redemption by the Company,
at any time prior to the close of business on the Business Day prior to
the Redemption Date; or
(d) the Company elects (i) to distribute to all holders of
Common Stock rights entitling them to purchase, for a period expiring
within 60 days after the date of such distribution, Common Stock at
less than the Sale Price at the time of such distribution, (ii) to
distribute to all holders of Common Stock assets, debt, securities or
rights to purchase securities of the Company, which distribution has a
per share value as determined by the Company's Board of Directors
exceeding 15% of the Sale Price of the Common Stock on the day
preceding the declaration date for such distribution, or (iii) in the
event the Company is a party to a consolidation, merger or binding
share exchange pursuant to which the Common Stock would be converted
into cash, securities or other property, at any time from and after the
date which is 15 days prior to the date the Company announces the
anticipated effective time until 15 days after the actual effective
date of such transaction.
In the case of the foregoing clauses (d)(i) and (ii), the
Company must notify the Holders of Notes at least 20 days prior to the
Ex-Dividend Date for such distribution. Once the Company has given such Notice,
Holders may surrender their Notes for conversion at any time thereafter until
the earlier of the close of business on the Business Day prior to the
Ex-Dividend Date or the Company's announcement that such distribution will not
take place.
If this Note is called for redemption, the Holder may convert
it at any time before the close of business on the last Business Day prior to
the Redemption Date. A Note in respect of which a Holder has delivered a notice
of exercise of the option to require the
57
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Company to purchase such Note or to purchase such Note in the event of a
Fundamental Change may be converted only if the notice of exercise is withdrawn
in accordance with the terms of the Indenture.
The initial Conversion Rate is 12.7243 shares of Common Stock
per Note with a $1,000 Principal Amount, subject to adjustment in certain events
described in the Indenture. The Company shall deliver cash or a check in lieu of
any fractional share of Common Stock.
In the event the Company exercises its option pursuant to
Section 4.08 of the Indenture to convert the Notes to Cash Pay Notes, the Holder
will be entitled on conversion to receive the same number of shares of Common
Stock such Holder would have received if the Company had not exercised such
option. If the Company exercises such option, Notes surrendered for conversion
during the period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the opening of business of such Interest
Payment Date (except Notes with respect to which the Company has mailed a Notice
of redemption) must be accompanied by payment of an amount equal to the interest
thereon that the registered Holder is to receive. Except where Notes surrendered
for conversion are so surrendered after a Regular Record Date but prior to the
opening of business on the corresponding Interest Payment Date (in which case
such converting Holder shall receive a final interest payment on such Interest
Payment Date, which interest payment may be repayable to the Company upon
conversion as described in this paragraph), no interest on converted Notes will
be payable by the Company on any Interest Payment Date subsequent to the date of
conversion.
[Notes surrendered for conversion during the period from the
close of business on any date on which contingent interest accrues to the
opening of business on the date on which such contingent interest is payable
(except Notes with respect to which the Company has mailed a Notice of
redemption) must be accompanied by payment of an amount equal to the contingent
interest with respect thereto that the registered Holder is to receive. Except
where Notes surrendered for conversion are so surrendered during the period from
the close of business on any date on which contingent interest accrues to the
opening of business on the date on which such contingent interest is payable (in
which case such converting Holder shall receive a final contingent interest
payment on the date such contingent interest is payable, which contingent
interest payment may been repayable to the Company upon conversion as described
in this paragraph), no contingent interest on converted Notes will accrue after
the date of conversion.]
To convert this Note a Holder must (1) complete and manually
sign the conversion notice on the back of this Note (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion Agent
at the office maintained by the Conversion Agent for such purpose, (2) surrender
this Note to the Conversion Agent, (3)
58
-13-
furnish appropriate endorsements and transfer documents if required by the
Conversion Agent, the Company or the Trustee and (4) pay any transfer or similar
tax, if required.
A Holder may convert a portion of this Note only if the
Principal Amount of such portion is $1,000 or a multiple of $1,000. No payment
or adjustment shall be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of this Note, that portion of Accreted Value
(or, interest, if the Company has exercised its option provided for in paragraph
10 hereof) attributable to the period from the Issue Date (or, if the Company
has exercised the option referred to in paragraph 10 hereof, the later of (x)
the date of such exercise and (y) the date on which interest was last paid) to
the Conversion Date and (except as provided below) accrued contingent interest
with respect to the converted portion of this Note shall not be canceled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through the delivery of the Common Stock (together with any cash
payment in lieu of fractional shares) in exchange for the portion of this Note
being converted pursuant to the terms hereof; and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for Accreted Value (or interest, if the Company has exercised its
option provided for in paragraph 10 hereof) accrued through the Conversion Date
and accrued contingent interest, and the balance, if any, of such fair market
value of such Common Stock (and any such cash payment) shall be treated as
issued in exchange for the Issue Price of the Note being converted pursuant to
the provisions hereof.
10. TAX EVENT
(a) From and after (i) the date (the "Tax Event Date") of the
occurrence of a Tax Event and (ii) the date the Company exercises such option,
whichever is later (the "Option Exercise Date"), at the option of the Company,
all of the Notes will cease to accrete, and cash interest shall accrue at the
rate of 3.125% per annum on the restated principal amount (the "Restated
Principal Amount"), equal to the Accreted Value on the Option Exercise Date, and
shall be payable semiannually on July 20 and January 20 of each year (each an
"Interest Payment Date") to holders of record at the close of business on July 1
or January 1 (each a "Regular Record Date") immediately preceding such Interest
Payment Date. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months and will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the Option
Exercise Date.
(b) Interest on any Note that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Note is registered at the close of business on the
Regular Record Date for such interest at the office or agency of the Company
maintained for such purpose. Each installment of interest on
59
-14-
any Note shall be paid in same-day funds by transfer to an account maintained by
the payee located inside the United States.
(c) From and after the Option Exercise Date, contingent
interest provided for in paragraph 5 hereof shall cease to accrue on this Note.
11. DEFAULTED INTEREST
Except as otherwise specified with respect to the Notes, any
Defaulted Interest on any Note shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date or accrual date,
as the case may be, by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company as provided for in Section 4.10(b)(ii) of
the Indenture.
12. DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are in registered form, without coupons, in
denominations of $1,000 of Principal Amount and multiplies of $1,000. A Holder
may transfer or convert Notes in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not transfer or exchange any
Notes selected for redemption (except, in the case of a Note to be redeemed in
part, the portion of the Note not to be redeemed) or any Notes in respect of
which a Purchase Notice or Fundamental Change Purchase Notice has been given and
not withdrawn (except, in the case of a Note to be purchased in part, the
portion of the Note not to be purchased) or any Notes for a period of 15 days
before any selection of Notes to be redeemed.
13. PERSONS DEEMED OWNERS
The registered Holder of this Note may be treated as the owner
of this Note for all purposes.
14. UNCLAIMED MONEY OR PROPERTY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent will pay the money back to
the Company at its request. After that, Holders entitled to the money must look
to the Company for payment unless an abandoned property law designates another
person.
15. AMENDMENT; SUPPLEMENT; WAIVER
Subject to certain exceptions, the Indenture or the Notes may
be amended or supplemented with the consent of the Holders of at least a
majority in Principal Amount of the
60
-15-
outstanding Notes and any past default or compliance with any provision relating
to the Notes may be waived in a particular instance with the consent of the
Holders of a majority in Principal Amount of the outstanding Notes. Without the
consent of any Holder, the Company and the Trustee may amend or supplement the
Indenture or the Notes to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to create a Series and establish its terms, or to make any other change,
provided such action does not adversely affect the rights of any Holder.
16. SUCCESSOR CORPORATION
When a successor corporation assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor corporation
will be released from those obligations.
17. TRUSTEE DEALINGS WITH THE COMPANY
Bank One Trust Company, National Association, the Trustee
under the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its affiliates,
and may otherwise deal with the Company or its affiliates, as if it were not
Trustee. [VERIFY]
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
19. AUTHENTICATION
This Note shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Note.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
61
-16-
FORM OF CONVERSION NOTICE
To: Masco Corporation
The undersigned registered holder of this Note hereby
exercises the option to convert this Note, or portion hereof (which is $1,000
Principal Amount or a multiple thereof) designated below, for shares of Common
Stock of Masco Corporation in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares, if any, issuable and
deliverable upon such conversion, together with any check for cash deliverable
upon such conversion, and any Notes representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this Note
not converted are to be issued in the name of a Person other than the
undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto.
This notice shall be deemed to be an irrevocable exercise of
the option to convert this Note.
Dated:
---------------------------------------
---------------------------------------
Signature(s)
Fill in for registration of shares if
to be delivered, and Notes if to
be issued other than to and in the
name of registered holder:
Principal Amount
to be converted (if less than all):
62
-17-
--------------------------------------------
(Name)
$__,000
--------------------------------------------
(Street Address)
Social Security or Other
-------------------------------------------- Taxpayer Number
(City, state and zip code)
Please print name and address
63
-18-
FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
To: Masco Corporation
The undersigned registered holder of this Note hereby
acknowledges receipt of a Notice from Masco Corporation (the "Company") as to
the occurrence of a Fundamental Change with respect to the Company and requests
and instructs the Company to purchase this Note, or the portion hereof (which is
$1,000 Principal Amount or a multiple thereof) designated below, in accordance
with the terms of the Indenture referred to in this Note and directs that the
check in payment for this Note or the portion thereof (or, if the Company elects
in accordance with Section 4.03(c) of the Indenture, Common Stock) and any Notes
representing any unrepurchased principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below. If any portion of this Note not repurchased is to be issued in the name
of a Person other than the undersigned, the undersigned shall pay all transfer
taxes payable with respect thereto.
Dated:
-----------------------------
Signature(s)
Fill in for registration of shares if
to be delivered, and Notes if
to be issued other than to and
In the name of registered holder:
---------------------------------------
(Name)
---------------------------------------
(Street Address)
---------------------------------------
(City, state and zip code)
Please print name and address
Principal Amount to be purchased (if
less than all): $__,000
64
-19-
If the Company has elected to pay the Fundamental Change
Purchase Price, in whole or in part, in Common Stock but such portion of the
Fundamental Change Purchase Price shall ultimately be payable in Cash because
any of the conditions to the payment of the Fundamental Change Purchase Price in
Common Stock are not satisfied I elect [check one]:
__ to withdraw such Purchase Notice as to the Notes to which
such Fundamental Change Purchase Notice relates in the Principal Amount
of $_____,000, with certificate numbers _________, or
__ to receive Cash in respect of the entire Fundamental Change
Purchase Price for all Notes (or portions thereof) to which such
Purchase Notice relates Social Note or Other Taxpayer Number.
65
-20-
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form
below:
I or we assign and transfer this Note to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address, and zip code)
and irrevocably appoint
--------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your signature:
------------ --------------------------------------
(Sign exactly as your name appears on the other side
of this Note)
Signature Guarantee:
-----------------------------------------------------------
Signature must be guaranteed by participant in a recognized
Signature Guarantee Medallion Program (or other signature
guarantor program reasonably acceptable to the Trustee)
66
EXHIBIT B
PROJECTED PAYMENT SCHEDULE*
Semi-annual Period Ending Projected Payment Per Note
------------------------- --------------------------
July 20, 2003 $
January 20, 2004 $
July 20, 2004 $
January 20, 2005 $
July 20, 2005 $
January 20, 2006 $
July 20, 2006 $
January 20, 2007 $
July 20, 2007 $
January 20, 2008 $
July 20, 2008 $
January 20, 2009 $
July 20, 2009 $
January 20, 2010 $
July 20, 2010 $
January 20, 2011 $
July 20, 2011 $
January 20, 2012 $
July 20, 2012 $
January 20, 2013 $
July 20, 2013 $
January 20, 2014 $
July 20, 2014 $
January 20, 2015 $
July 20, 2015 $
January 20, 2016 $
July 20, 2016 $
January 20, 2017 $
July 20, 2017 $
January 20, 2018 $
July 20, 2018 $
January 20, 2019 $
July 20, 2019 $
January 20, 2020 $
July 20, 2020 $
January 20, 2021 $
July 20, 2021 $
January 20, 2022 $
July 20, 2022 $
January 20, 2023 $
July 20, 2024 $
January 20, 2025 $
July 20, 2025 $
January 20, 2026 $
July 20, 2026 $
January 20, 2027 $
July 20, 2027 $
January 20, 2028 $
July 20, 2028 $
January 20, 2029 $
July 20, 2029 $
January 20, 2030 $
July 20, 2030 $
January 20, 2031 $
*The comparable yield means the annual yield the Company would pay, as of the
Issue Date, on a fixed-rate cash-pay nonconvertible debt security with no
contingent payments but with terms and conditions otherwise comparable to those
of the Notes. The schedule of projected payments is determined on the basis of
the comparable yield and an assumption of linear growth of the Company's stock
price and a constant dividend yield. The comparable yield and the schedule of
projected payments are not determined for any purpose other than for the
determination of interest accruals and adjustment thereof in respect of the
Notes for United States federal income tax purposes. The comparable yield and
the schedule of projected payments do not constitute a projection or
representation regarding the future stock price or the amounts payable on the
Notes.
