EXHIBIT 4.2
[Conformed]
PRIDE INTERNATIONAL, INC.
AND
MARINE MIDLAND BANK,
TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF APRIL 24, 1998
TO
INDENTURE DATED AS OF APRIL 1, 1998
ZERO COUPON CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2018
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Terms Defined in the Original Indenture..............2
SECTION 1.2 Certain Definitions..................................2
ARTICLE TWO
THE DEBENTURES
SECTION 2.1 Debentures Form......................................5
SECTION 2.2 Designation and Amount...............................6
SECTION 2.3 Accrual of Original Issue Discount; Interest.........7
SECTION 2.4 Denominations........................................7
SECTION 2.5 Place of Payment.....................................7
ARTICLE THREE
DEFAULTS AND REMEDIES
SECTION 3.1 Additional Event of Default..........................8
SECTION 3.2 Rights of Holders to Receive Payment.................8
ARTICLE FOUR
SUPPLEMENTAL INDENTURES
SECTION 4.1 Additional Restrictions on Supplemental Indentures...8
ARTICLE FIVE
REDEMPTION AND PURCHASES
SECTION 5.1 Redemption...........................................9
SECTION 5.2 Selection of Debentures to be Redeemed..............10
SECTION 5.3 Deposit of Redemption Price.........................10
SECTION 5.4 Purchase............................................10
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ARTICLE SIX
CONVERSION
SECTION 6.1 Conversion..........................................23
ARTICLE SEVEN
SPECIAL TAX EVENT CONVERSION
SECTION 7.1 Special Tax Event Conversion........................34
ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.1 Governing Law.......................................35
SECTION 8.2 Trustee's Disclaimer................................35
SECTION 8.3 Interest Limitations................................36
EXHIBIT A FORM OF DEBENTURE..................................A-1
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FIRST SUPPLEMENTAL INDENTURE dated as of April 24, 1998 between
PRIDE INTERNATIONAL, INC., a Louisiana corporation (the "Company"), and MARINE
MIDLAND BANK, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has executed and delivered to the Trustee an
Indenture, dated as of April 1, 1998 (the "Original Indenture" and as
supplemented by this First Supplemental Indenture, the "Indenture"), providing
for the issuance by the Company from time to time of its unsecured subordinated
debentures, notes or other evidences of indebtedness (the "Securities"),
issuable in one or more series;
WHEREAS, Section 901(5) of the Original Indenture permits the
execution of supplemental indentures without the consent of any Holders to
establish the form and terms of any series of Securities;
WHEREAS, Section 901(4) of the Original Indenture permits the
execution of supplemental indentures without the consent of any Holders to
change or eliminate any provision of the Original Indenture with respect to any
series of Securities when there is no Security of such series Outstanding;
WHEREAS, Sections 901(2) and 901(3) of the Original Indenture permit
the execution of supplemental indentures without the consent of any Holders to
add to the covenants of the Company for the benefit of, and to add any
additional Events of Default with respect to, all or any series of Securities;
WHEREAS, Section 301 of the Original Indenture provides that the
Company may enter into supplemental indentures to establish certain terms and
provisions of a series of Securities issued pursuant to the Original Indenture;
WHEREAS, the Company has duly authorized and desires to cause to be
issued pursuant to the Original Indenture and this First Supplemental Indenture
a series of Securities to be designated the "Zero Coupon Convertible
Subordinated Debentures Due 2018" (the "Debentures");
WHEREAS, the Company, pursuant to the foregoing authority, proposes
in and by this First Supplemental Indenture to supplement and amend the Original
Indenture insofar as it will apply to the Debentures in certain respects; and
WHEREAS, all things necessary have been done to make the Debentures,
when executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
First Supplemental Indenture a valid agreement of the Company, in accordance
with their and its terms.
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NOW, THEREFORE, the Company and the Trustee hereby agree that the
following provisions supplement the Original Indenture solely with respect to
the series of Securities that consists of the Debentures:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 TERMS DEFINED IN THE ORIGINAL INDENTURE.
Each capitalized term used but not defined in this First
Supplemental Indenture shall have the meaning assigned to such term in the
Original Indenture.
SECTION 1.2 CERTAIN DEFINITIONS.
The following definitions are hereby added to, or substituted in
lieu of definitions contained in, Section 101 of the Indenture, but only with
respect to the Debentures issued in accordance with the provisions hereof:
"Capital Stock" means any and all shares, interests, partnership
interests, participations or other equivalents in the equity interest
(however designated) in such Person and any rights (other than debt
securities convertible into an equity interest), warrants or options to
acquire an equity interest in such Person.
"Change in Control" means (i) a determination by the Company that
any person or group (as defined for purposes of Rules 13d-3 and 13d-5
promulgated under the Exchange Act, whether or not applicable) has become
the direct or indirect beneficial owner (as defined for purposes of Rules
13d-3 and 13d-5 promulgated under the Exchange Act, whether or not
applicable) of more than 50% of the Voting Stock of the Company; (ii) the
Company is merged with or into or consolidated with another Person and,
immediately after giving effect to the merger or consolidation, less than
50% of the outstanding voting securities entitled to vote generally in the
election of directors or persons who serve similar functions of the
surviving or resulting entity are then beneficially owned (within the
meaning of Rules 13d-3 and 13d-5 promulgated under the Exchange Act,
whether or not applicable) in the aggregate by (x) the shareholders of the
Company immediately prior to such merger or consolidation, or (y) if a
record date has been set to determine the shareholders of the Company
entitled to vote on such merger or consolidation, the shareholders of the
Company as of such record date; (iii) the Company, either individually or
in conjunction with one or more Subsidiaries, sells, conveys, transfers or
leases, or the Subsidiaries sell, convey, transfer or lease, all or
substantially all of the assets of the Company and the Subsidiaries, taken
as a whole (either in one transaction or a series of related
transactions), including Capital Stock of the Subsidiaries, to any Person
(other than a Wholly Owned Subsidiary); (iv) the liquidation or
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dissolution of the Company; or (v) the first day on which a majority of
the individuals who constitute the Board of Directors are not Continuing
Directors.
"Common Stock" means Common Stock, no par value, of the Company as
it exists on the date of this First Supplemental Indenture or any other
Capital Stock of the Company into which such Common Stock shall be
reclassified or changed.
"Continuing Director" means an individual who (i) is a member of the
Board of Directors and (ii) either (a) was a member of the Board of
Directors on the Issue Date or (b) whose nomination for election or
election to the Board of Directors was approved by the vote of at least
662/3% of the directors then still in office who were either directors on
the Issue Date or whose election or nomination for election was previously
so approved.
"Conversion Agent" means an office or agency where Debentures may be
presented for conversion pursuant to the terms and conditions of this
First Supplemental Indenture.
"Issue Date" of any Debenture means the date on which the Debenture
was originally issued or deemed issued as set forth on the face of the
Debenture.
"Issue Price" of any Debenture means, in connection with the
original issuance of such Debenture, the initial issue price at which the
Debenture is sold as set forth on the face of the Debenture.
"Legal Holiday" means a day that is not a Business Day in the Place
of Payment for the Debentures.
"Market Price" means the average of the Sale Price of the Common
Stock for the five Trading Day period ending on and including the third
Trading Day prior to the applicable Purchase Date, appropriately adjusted
to take into account the actual occurrence, during the seven Trading Days
preceding such Purchase Date, of any event described in Section 1506, 1507
or 1508; SUBJECT, HOWEVER, to the conditions set forth in Sections 1509
and 1510.
"Original Issue Discount" of any Debenture means the difference
between the Issue Price and the Principal Amount at Maturity of the
Debenture as set forth on the face of the Debenture.
"Paying Agent" means an office or agency where Debentures may be
presented for purchase or payment.
"Principal Amount at Maturity" means, with respect to any Debenture,
the principal amount due at the maturity thereof as set forth on the face
of the Debenture.
"Sale Price" of a single share of Common Stock on any Trading Day
means the closing per share sale price for the Common Stock (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
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average bid and average ask prices) on such Trading Day as reported in
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 National Association of Securities Dealers Automated Quotation
System.
"Subsidiary" means, with respect to any Person, (i) any corporation
more than 50% of the outstanding Voting Stock of which is owned, directly
or indirectly, by such Person, or by one or more other Subsidiaries of
such Person, or by such Person and one or more other Subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity,
more than 50% of the outstanding partnership or similar interests of which
is owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person and (iii) any limited partnership of which
such Person or any Subsidiary of such Person is a general partner.
"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 the date of this First Supplemental Indenture, as a
result of (a) any amendment to, or change (including any prospective
change) in, the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or therein or (b)
any amendment to, or change in, an interpretation or application of such
laws 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 the date of this First
Supplemental Indenture, there is more than an insubstantial risk that
interest (including Original Issue Discount) payable on the Debentures
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.
"Trading Day" means each day on which the securities exchange or
quotation system which is used to determine the Sale Price is open for
trading or quotation.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders
thereof (whether at all times or at the times that such class of Capital
Stock has voting power by reason of the happening of any contingency) to
vote in the election of members of the board of directors or comparable
body of such Person.
"Wholly Owned Subsidiary" means, with respect to the Company, any
Subsidiary of the Company to the extent (i) all of the Capital Stock or
other ownership interests in such Subsidiary, other than any director's
qualifying shares mandated by applicable law, is owned directly or
indirectly by the Company or (ii) such Subsidiary is organized in a
foreign jurisdiction and is required by the applicable laws and
regulations of such foreign jurisdiction to be partially owned by the
government of such foreign jurisdiction or individual or
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corporate citizens of such foreign jurisdiction in order for such
Subsidiary to transact business in such foreign jurisdiction, PROVIDED
that the Company, directly or indirectly, owns the remaining Capital Stock
or ownership interest in such Subsidiary and, by contract or otherwise,
controls the management and business of such Subsidiary and derives the
economic benefits of ownership of such Subsidiary to substantially the
same extent as if such Subsidiary were a wholly owned Subsidiary.
The following terms are defined in the places indicated:
TERM DEFINED IN SECTION
Average Sale Price 1501
Change in Control Purchase Date 1111 (a)
Change in Control Purchase Notice 1111 (c)
Change in Control Purchase Price 1111 (a)
Company Notice 1110 (e)
Company Notice Date 1110 (e)
Conversion Date 1502
Conversion Rate 1501
Xxxxxxxx Xxx 0000 (d)
Ex-Dividend Time 1501
Extraordinary Cash Dividend 1508
Global Debentures 2.1
Interest Payment Date 1601
Option Exercise Date 1601
Over-Allotment Option 2.2 (b)
Purchase Date 1110 (a)
Purchase Notice 1110 (a)
Purchase Price 1110 (a)
Regular Record Date 1601
Restated Principal Amount 1601
Securities Xxx 0000 (d)
Tax Event Date 1601
Time of Determination 1501
ARTICLE TWO
THE DEBENTURES
SECTION 2.1 DEBENTURES FORM.
The Debentures shall be substantially in the form of EXHIBIT A
hereto, which is a part of this First Supplemental Indenture, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Original Indenture and this First
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Supplemental Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers of the Company executing
such Debentures, as evidenced by their execution of the Debentures.
The Debentures will initially be issued in permanent global form,
substantially in the form of EXHIBIT A hereto (the "Global Debentures"). Each
Global Debenture shall represent such of the Outstanding Debentures as shall be
specified therein and shall provide that it shall represent the aggregate amount
of Outstanding Debentures from time to time endorsed thereon and that the
aggregate amount of Outstanding Debentures represented thereby may from time to
time be reduced to reflect exchanges and redemptions. Any endorsement of a
Global Debenture to reflect the amount, or any increase or decrease in the
amount, of Outstanding Debentures represented thereby shall be made by the
Trustee in accordance with written instructions or such other written form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in the Global
Debenture.
The Company initially appoints The Depository Trust Company and the
Trustee to act as Depositary and Securities Custodian, respectively, with
respect to the Global Debentures.
The Company initially appoints the Trustee to act as Paying Agent
with respect to the Debentures.
SECTION 2.2 DESIGNATION AND AMOUNT.
(a) The Debentures shall be entitled the "Zero Coupon Convertible
Subordinated Debentures Due 2018" of the Company.
(b) The Trustee shall authenticate and deliver Debentures for
original issue in an aggregate Principal Amount at Maturity of up to
$511,431,000 upon Company Order for the authentication and delivery of
Debentures, without any further action by the Company; PROVIDED, HOWEVER, that
in the event the Company sells any Debentures pursuant to the over-allotment
option (the "Over-Allotment Option") granted pursuant to the Underwriting
Agreement dated April 20, 1998 between the Company, Xxxxx Xxxxxx Inc. and Xxxxxx
Xxxxxxx & Co. Incorporated, then the Trustee shall authenticate and deliver
Debentures for original issue in an aggregate Principal Amount at Maturity of up
to $511,431,000 plus up to $76,714,000 aggregate Principal Amount at Maturity of
Debentures sold pursuant to the Over-Allotment Option upon Company Order for the
authentication and delivery of Debentures, without any further action by the
Company. The aggregate Principal Amount at Maturity of Debentures that may be
authenticated and delivered under the Indenture may not exceed the amount set
forth in the foregoing sentence, subject to the proviso therein, except for
Debentures authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Debentures pursuant to Xxxxxxx 000, 000, 000,
000, 000 xx 0000 of the Indenture.
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(c) The Company may not issue new Debentures to replace Debentures
that it has paid or delivered to the Trustee for cancellation or that any Holder
has converted pursuant to Article Fifteen.
SECTION 2.3 ACCRUAL OF ORIGINAL ISSUE DISCOUNT; INTEREST.
The Debentures shall be Original Issue Discount Securities. Original
Issue Discount shall accrue with respect to the Debentures at the rate set forth
in paragraph 1 of the Debentures, commencing on the Issue Date of the
Debentures. Except as provided in Article Sixteen, there shall be no periodic
payments of interest on the Debentures. In case of an Event of Default, the
principal amount of the Debentures that may be declared due and payable shall be
the Issue Price plus accrued Original Issue Discount (or if the Debentures have
been converted to semiannual coupon notes following a Tax Event, the Restated
Principal Amount, plus accrued and unpaid interest) to and including the date of
such default or declaration, as the case may be.
SECTION 2.4 DENOMINATIONS.
The Debentures shall be in fully registered form without coupons in
denominations of $1,000 of Principal Amount at Maturity or any integral multiple
thereof.
SECTION 2.5 PLACE OF PAYMENT.
The Place of Payment for the Debentures shall be the Borough of
Manhattan, The City of New York. Section 1002 of the Indenture is hereby
amended, but only with respect to the Debentures issued in accordance with the
provisions hereof, by replacing the first sentence thereof with the following:
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency of the Trustee, Security Registrar, Paying
Agent and Conversion Agent where Debentures may be presented or
surrendered for payment, where Debentures may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served.
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ARTICLE THREE
DEFAULTS AND REMEDIES
SECTION 3.1 ADDITIONAL EVENT OF DEFAULT.
The following Event of Default is hereby added to Section 501 of the
Indenture, but only with respect to the Debentures issued in accordance with the
provisions hereof:
(8) the Company (i) defaults in the payment of the Principal Amount
at Maturity, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price or Change in Control Purchase Price with respect to
any Debenture when the same becomes due and payable at its Stated
Maturity, upon redemption, upon declaration, when due for purchase by the
Company or otherwise, or (ii) defaults in the delivery of shares of Common
Stock (or cash in lieu of fractional interests in shares of Common Stock)
in accordance with the terms hereof when such Common Stock or cash is
required to be delivered upon conversion of a Debenture and such default
in this clause (ii) is not remedied for a period of 10 days.
SECTION 3.2 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Section 508 of the Indenture is hereby deleted in its entirety and
the following is substituted in lieu thereof, but only with respect to the
Debentures issued in accordance with the provisions hereof:
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PAYMENTS.
Notwithstanding any other provision in this Indenture, the Holder of
any Debenture shall have the right, which is absolute and unconditional,
(a) to receive payment of the Principal Amount at Maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Change
in Control Purchase Price or interest, if any, in respect of the
Debentures held by such Holder on or after the respective due dates
expressed in the Debentures or any Redemption Date, (b) to convert such
Debentures in accordance with Article Fifteen or (c) to institute suit for
the enforcement of any such payment on or after such respective dates or
the right to convert, and such rights shall not be impaired or adversely
affected without the consent of such Holder.
ARTICLE FOUR
SUPPLEMENTAL INDENTURES
SECTION 4.1 ADDITIONAL RESTRICTIONS ON SUPPLEMENTAL INDENTURES.
A new Section 907 is hereby added to Article Nine of the Indenture,
but only with respect to the Debentures issued in accordance with the provisions
hereof, as follows:
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SECTION 907. SUPPLEMENTAL INDENTURE WITHOUT CONSENT OF HOLDERS OF
DEBENTURES.
Notwithstanding Section 902, without the consent of each Holder
affected, an amendment or supplement to this Indenture or the Debentures
may not:
(1) make any change to the Principal Amount at Maturity of the
Debentures whose Holders must consent to an amendment or supplement;
(2) make any change in the rate of accrual in connection with
Original Issue Discount, reduce the rate of interest referred to in
paragraph 1 of the Debentures, reduce the rate of interest referred to in
Section 1601 upon the occurrence of a Tax Event or extend the time for
payment of Original Issue Discount or interest, if any, on any Debenture;
(3) reduce the Principal Amount at Maturity, Conversion Rate or the
Issue Price of or extend the Stated Maturity of any Debenture;
(4) reduce the Redemption Price, Purchase Price or Change in Control
Purchase Price of any Debenture or extend the date on which the Purchase
Price or Change in Control Purchase Price of any Debenture is payable;
(5) make any Debenture payable in money or securities other than
that stated in the Debenture;
(6) make any change that adversely affects the right to convert any
Debenture (including the right to receive cash in lieu of Common Stock);
(7) make any change that adversely affects the right to require the
Company to purchase the Debentures in accordance with the terms thereof
and this Indenture (including the right to receive cash if the Company has
elected to pay cash upon such purchase); or
(8) make any change to the provisions of the Indenture relating to
the purchase of the Debentures at the option of the Holder pursuant to
Sections 1110 and 1111 which change would result in a violation of
applicable federal or state securities laws (including positions of the
Commission under applicable no-action letters), whether as a result of the
exercise or performance of any rights or obligations under such provisions
or otherwise.
ARTICLE FIVE
REDEMPTION AND PURCHASES
SECTION 5.1 REDEMPTION.
(a) There shall be no sinking fund for the retirement of the
Debentures.
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(b) The Company, at its option, may redeem the Debentures in
accordance with the provisions of paragraphs 5 and 7 of the Debentures.
(c) The notice of redemption provided for in Section 1104 of the
Indenture shall also state (1) the Conversion Rate; (2) the name and address of
the Conversion Agent; (3) that Debentures called for redemption may be converted
at any time before the close of business on the Redemption Date; (4) that
Holders who want to convert Debentures must satisfy the requirements set forth
in paragraph 8 of the Debentures and (5) that, unless the Company defaults in
making payment of such Redemption Price, Original Issue Discount on Debentures
called for redemption and interest, if any, will cease to accrue on and after
the Redemption Date.
SECTION 5.2 SELECTION OF DEBENTURES TO BE REDEEMED.
Section 1103 of the Indenture is hereby amended, but only with
respect to the Debentures issued in accordance with the provisions hereof, to
add the following at the end of such Section:
If any Debenture selected for partial redemption is thereafter
surrendered for conversion in part before termination of the
conversion right with respect to the portion of the Debenture so
selected, the converted portion of such Debenture shall be deemed
(so far as may be), solely for purposes of determining the aggregate
Principal Amount at Maturity of Debentures to be redeemed by the
Company, to be the portion selected for redemption. Debentures that
have been converted during a selection of Debentures to be redeemed
may be treated by the Trustee as outstanding for the purpose of such
selection. Nothing in this Section 1103 shall affect the right of
any Holder to convert any Debenture pursuant to Article Fifteen
before the termination of the conversion right with respect thereto.
SECTION 5.3 DEPOSIT OF REDEMPTION PRICE.
Section 1105 of the Indenture is hereby amended, but only with
respect to the Debentures issued in accordance with the provisions hereof, to
add the following at the end of such Section:
The Trustee or the Paying Agent shall as promptly as practicable
return to the Company any money, with interest, if any, thereon (subject
to the provisions of Section 601(a)), not required for that purpose
because of the conversion of Debentures pursuant to Article Fifteen. If
such money is held by the Company in trust and is not required for such
purpose, it shall be discharged from such trust.
SECTION 5.4 PURCHASE.
New Sections 1109 through 1117 are hereby added to Article Eleven of
the Indenture, but only with respect to the Debentures issued in accordance with
the provisions hereof, as follows:
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SECTION 1109. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Debentures, the Company
may arrange, in lieu of redemption, for the purchase and conversion of any
Debentures called for redemption by an agreement with one or more
investment bankers or other purchasers to purchase all or a portion of
such Debentures by paying to the Trustee in trust for the Holders whose
Debentures are to be so purchased, on or before the close of business on
the Redemption Date, an amount that, together with any amounts deposited
with the Trustee by the Company for the redemption of such Debentures, is
not less than the Redemption Price, together with interest, if any,
accrued to the Redemption Date of such Debentures. Notwithstanding
anything to the contrary contained in this Article Eleven, the obligation
of the Company to pay the Redemption Price of such Debentures, including
all accrued interest, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers, but no
such agreement shall relieve the Company of its obligation to pay such
Redemption Price and such accrued interest, if any, until such amount is
so paid by such purchasers. If such an agreement is entered into, any
Debentures not duly surrendered for conversion by the Holders thereof may,
at the option of the Company, be deemed, to the fullest extent permitted
by law, acquired by such purchasers from such Holders and (notwithstanding
anything to the contrary contained in Article Fifteen) surrendered by such
purchasers for conversion, all as of immediately prior to the close of
business on the Redemption Date, subject to payment of the above amount as
aforesaid. The Trustee shall hold and pay to the Holders whose Debentures
are selected for redemption any such amount paid to it for purchase and
conversion in the same manner as it would moneys deposited with it by the
Company for the redemption of Debentures. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Debentures shall increase or
otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in the Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any
loss, liability or expense arising out of or in connection with any such
arrangement for the purchase and conversion of any Debentures between the
Company and such purchasers, including the costs and expenses incurred by
the Trustee in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under the Indenture.
SECTION 1110. PURCHASE OF DEBENTURES AT OPTION OF THE HOLDER.
(a) GENERAL. Debentures shall be purchased by the Company pursuant
to paragraph 6 of the Debentures as of April 24, 2003, April 24, 2008 and
April 24, 2013 (each, a "Purchase Date"), at the purchase price specified
therein (each, a "Purchase Price"), at the option of the Holder thereof,
upon:
(1) delivery to the Paying Agent at the office of the Paying
Agent or to the office or agency referred to in Section 1002 by the
Holder of a written notice of purchase (a "Purchase Notice") at any
time from the opening of business on the date
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that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date stating:
(A) the certificate number of the Debenture which the
Holder will deliver to be purchased,
(B) the portion of the Principal Amount at Maturity of
the Debenture which the Holder will deliver to be purchased,
which portion must be $1,000 or an integral multiple thereof,
(C) that such Debenture shall be purchased on the
Purchase Date pursuant to the terms and conditions specified
in the Indenture and in paragraph 6 of the Debentures, and
(D) if the Company elects pursuant to Section 1110(b) to
pay the Purchase Price on such Purchase Date, in whole or in
part, in shares of Common Stock, but such portion of the
Purchase Price to be paid in Common Stock is ultimately to be
paid in cash because any condition in Section 1110(d) is not
satisfied, such Holder elects (i) to withdraw such Purchase
Notice as to some or all of the Debentures to which it relates
(stating the Principal Amount at Maturity and certificate
numbers of the Debentures as to which such withdrawal shall
relate), or (ii) to receive cash in respect of the Purchase
Price for all Debentures subject to such Purchase Notice; and
(2) delivery of such Debenture prior to, on or after the
Purchase Date (together with all necessary endorsements) to the
Paying Agent at the offices of the Paying Agent or to the office or
agency referred to in Section 1002, such delivery 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 1110 only if the Security so delivered conforms in all
respects to the description thereof in the related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written
notice of withdrawal delivered by such Holder pursuant to the terms of
Section 1112, fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 1110(a)(1) above, such Holder
shall be deemed to have elected to receive cash in respect of the Purchase
Price otherwise payable in Common Stock.
The Company shall purchase from the Holder thereof, pursuant to this
Section 1110, a portion of a Debenture if the Principal Amount at Maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of
the Indenture that apply to the purchase of all of a Debenture also apply
to the purchase of such portion of such Debenture.
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Any purchase by the Company contemplated pursuant to the provisions
hereof shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date
and the time of delivery of the Debenture.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent or the office or agency referred to in
Section 1002 the Purchase Notice contemplated by this Section 1110(a)
shall have the right to withdraw at any time prior to the close of
business on the Purchase Date such Purchase Notice by delivery of a
written notice of withdrawal to the Paying Agent or such office or agency
in accordance with Section 1112.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Purchase Notice or written notice of withdrawal thereof.
(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE.
The Debentures to be purchased pursuant to Section 1110(a) may be paid
for, at the election of the Company, in cash or Common Stock, or in any
combination of cash and Common Stock, subject to the conditions set forth
in this Section 1110. The Company shall designate, in the notice from the
Company delivered pursuant to Section 1110(e), whether the Company will
purchase the Debentures for cash or Common Stock, and, if a combination
thereof, the percentages of the Purchase Price of Debentures in respect of
which it will pay in cash or Common Stock; PROVIDED that the Company will
pay cash for fractional shares of Common Stock. For purposes of
determining the existence of potential fractional interests, all
Debentures 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 Debentures are purchased pursuant to this
Section 1110 shall receive the same percentage of cash or Common Stock in
payment of the Purchase Price for such Debentures, except (i) as provided
in Section 1110(d) with regard to the payment of cash in lieu of
fractional shares of Common Stock and (ii) in the event that the Company
is unable to purchase the Debentures of a Holder or Holders for Common
Stock because any necessary qualifications or registrations of the Common
Stock under applicable state securities laws cannot be obtained, the
Company may purchase the Debentures of such Holder or Holders for cash.
The Company may not change its election with respect to the consideration
(or components or percentages of components thereof) to be paid once the
Company has given notice thereof to Holders except pursuant to this
Section 1110(b) or Section 1110(d).
At least five Business Days before the Company Notice Date (as
defined below), the Company shall deliver an Officer's Certificate to the
Trustee specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by Section 1110(e);
(iii) that the conditions to such manner of payment set forth
in Section 1110(d) have or will be complied with; and
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(iv) whether the Company desires the Trustee to give the
notice required by Section 1110(e).
(c) PURCHASE WITH CASH. On the Purchase Date, at the option of the
Company, the Principal Amount at Maturity of the Debentures in respect of
which a Purchase Notice pursuant to Section 1110(a) has been given, or a
specified percentage thereof, may be purchased by the Company with cash
equal to the aggregate Purchase Price of such Debentures.
(d) PAYMENT BY COMMON STOCK. On each Purchase Date, at the option of
the Company, the Principal Amount at Maturity of the Debentures in respect
of which a Purchase Notice pursuant to Section 1110(a) has been given, or
a specified percentage thereof, may be purchased by the Company by the
issuance of a number of shares of Common Stock equal to the quotient
obtained by dividing (i) 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 of such Debentures
in cash by (ii) the Market Price of a share of Common Stock, subject to
the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in
payment of the Purchase Price. Instead, the Company will 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, with
one-half cent being rounded upward. It is understood that if a Holder
elects to have more than one Debenture purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Debentures to be
purchased.
Upon payment of Common Stock pursuant to the terms hereof, that
portion of accrued Original Issue Discount (or interest, if the Company
has exercised its option provided for in Section 1601) attributable to the
period from the Issue Date (or, if the Company has exercised the option
provided for in Section 1601, the later of (x) the date of such exercise
and (y) the date on which interest was last paid) to the Purchase Date
with respect to the purchased Debenture shall not be cancelled,
extinguished or forfeited, but rather shall be deemed paid in full to the
Holder through the delivery of the Common Stock (together with any cash
payment in lieu of fractional shares of Common Stock) in exchange for the
Debenture being purchased pursuant to the terms hereof, and the fair
market value of such Common Stock (together with any cash payments in lieu
of fractional shares of Common Stock) shall be treated as issued, to the
extent thereof, first in exchange for the Original Issue Discount accrued
through the Purchase Date, and the balance, if any, of the fair market
value of such shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Debenture being
purchased pursuant to the provisions hereof.
The Company's right to exercise its election to purchase the
Debentures pursuant to this Section 1110 through the issuance of shares of
Common Stock shall be conditioned upon:
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(i) the Company's not having given notice of an election to
pay entirely in cash and its giving of timely notice of election to
purchase all or a specified percentage of the Debentures with Common
Stock as provided herein;
(ii) the registration of the shares of Common Stock to be
issued in respect of the payment of the Purchase Price under the
Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in
each case if required for the initial issuance thereof;
(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 Officer's Certificate
and an Opinion of Counsel, each stating that (A) the terms of the
issuance of the Common Stock are in conformity with this Indenture
and (B) the shares of Common Stock to be issued by the Company in
payment of the Purchase Price in respect of Debentures have been
duly authorized and, when issued and delivered pursuant to the terms
of this Indenture in payment of the Purchase Price in respect of the
Debentures, will be validly issued, fully paid and nonassessable and
shall be free of any preemptive rights and any lien or adverse claim
(provided that such Opinion of Counsel may state that, insofar as it
relates to the absence of such preemptive rights, liens and adverse
claims, it is given upon the best knowledge of such counsel), and,
in the case of such Officer's Certificate, that conditions (i), (ii)
and (iii) above have been satisfied and, in the case of such Opinion
of Counsel, that conditions (ii) and (iii) above have been
satisfied.
Such Officer's Certificate shall also set forth the number of shares
of Common Stock to be issued for each $1,000 Principal Amount at Maturity
of Debentures and the Sale Price of a share of Common Stock on each of the
seven Business Days prior to the Purchase Date. The Company may elect to
pay in Common Stock only if the information necessary to calculate the
Market Price is reported in THE WALL STREET JOURNAL or another Authorized
Newspaper. If such conditions are not satisfied prior to or on the
Purchase Date and the Company has elected to purchase the Debentures
pursuant to this Section 1110 through the issuance of shares of Common
Stock, the Company shall pay, without further notice, the Purchase Price
in cash.
(e) NOTICE OF ELECTION. The Company shall send notices of its
election (the "Company Notice") to purchase with cash or Common Stock or
any combination thereof to the Holders (and to beneficial owners as
required by applicable law) in the manner provided in Section 107. The
Company Notice shall be sent to Holders (and to beneficial owners as
required by applicable law) on a date not less than 20 Business Days prior
to the Purchase Date (such date not less than 20 Business Days prior to
the Purchase Date being herein referred to as the "Company Notice Date").
Such notices shall state the manner of payment elected and shall contain
the following information:
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In the event the Company has elected to pay the Purchase Price (or
any specified percentage thereof) with Common Stock, the notice shall:
(1) state that each Holder will receive Common Stock with a
Market Price determined as of a specified date prior to the Purchase
Date equal to such specified percentage of the Purchase Price of the
Debentures held by such Holder (except for any cash amount to be
paid in lieu of fractional shares);
(2) set forth the method of calculating the Market Price; and
(3) state that because the Market Price will be determined
prior to the 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 notice shall include a form of Purchase Notice to
be completed by the Holder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the
Conversion Agent and of the office or agency referred to in Section
1002;
(iii) that Debentures as to which a Purchase Notice has been
given may be converted into Common Stock at any time prior to the
close of business on the applicable Purchase Date only if the
applicable Purchase Notice has been withdrawn in accordance with the
terms of this Indenture;
(iv) that Debentures must be surrendered to the Paying Agent
or to the office or agency referred to in Section 1002 to collect
payment;
(v) that the Purchase Price for any Debenture as to which a
Purchase Notice has been given and not withdrawn will be paid
promptly following the later of the Purchase Date and the time of
surrender of such Debenture as described in clause (iv) above;
(vi) the procedures the Holder must follow to exercise rights
under Section 1110 and a brief description of those rights;
(vii) briefly, the conversion rights of the Debentures and
that Holders who want to convert Debentures must satisfy the
requirements set forth in paragraph 8 of the Debentures; and
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(viii)the procedures for withdrawing a Purchase Notice
(including, without limitation, for a conditional withdrawal
pursuant to the terms of Section 1110(a)(1)(D) or Section 1112).
At the Company's written request, the Trustee shall give such notice
in the Company's name and at the Company's expense; PROVIDED, HOWEVER,
that in all cases the text of such notice shall be prepared by the
Company.
Upon determination of the actual number of shares of Common Stock to
be issued for each $1,000 Principal Amount at Maturity of Debentures, the
Company will publish such determination in THE WALL STREET JOURNAL or
other Authorized Newspaper and furnish the Trustee with an affidavit of
publication.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered
upon purchase of the Debentures shall be newly issued shares or treasury
shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.
The Company shall use reasonable efforts to list or cause to have
quoted any shares of Common Stock to be issued to purchase Debentures on
the principal national securities exchange or over-the-counter or other
domestic market on which any other shares of Common Stock are then listed
or quoted. The Company will promptly inform the Trustee in writing of any
such listing.
(g) PROCEDURE UPON PURCHASE. The Company shall deposit cash (in
respect of a cash purchase under Section 1110(c) or for fractional
interests, as applicable) or shares of Common Stock, or any combination
thereof, as applicable, at the time and in the manner as provided in
Section 1113, sufficient to pay the aggregate Purchase Price of all
Debentures to be purchased pursuant to this Section 1110. As soon as
practicable after the later of the Purchase Date and the date such
Debentures are surrendered to the Paying Agent or at the office or agency
referred to in Section 1002, 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 issuable in payment of the
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 of such Common Stock on the Business Day following
the related Purchase Date. Subject to Section 1110(d), no payment or
adjustment will be made for dividends on the Common Stock the record date
for which occurred prior to the Purchase Date.
(h) TAXES. If a Holder of a Debenture 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
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a sum sufficient to pay any tax which will be due, as set forth in an
Officer's Certificate, 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 1111. PURCHASE OF DEBENTURES AT OPTION OF THE HOLDER UPON
CHANGE IN CONTROL.
(a) If on or prior to April 24, 2003 there shall have occurred a
Change in Control, Debentures shall be purchased, at the option of the
Holder thereof, by the Company at the purchase price specified in
paragraph 6 of the Debentures (the "Change in Control Purchase Price"), on
the date that is 35 Business Days after the occurrence of the Change in
Control (the "Change in Control Purchase Date"), subject to satisfaction
by or on behalf of the Holder of the requirements set forth in Section
1111(c).
(b) Within 15 Business Days after the Change in Control, the Company
shall (i) mail a written notice of such Change in Control by first-class
mail to the Trustee and to each Holder (and to beneficial owners if
required by applicable law) and (ii) cause a copy of such notice to be
published in THE WALL STREET JOURNAL or other Authorized Newspaper. The
notice shall include a form of Change in Control Purchase Notice to be
completed by the Holder and shall state:
(1) the events causing a Change in Control and the date such
Change in Control is deemed to have occurred for purposes of this
Section 1111;
(2) the date by which the Change in Control Purchase Notice
pursuant to this Section 1111 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the
Conversion Agent and the office or agency referred to in Section
1002;
(6) the Conversion Rate and any adjustments thereto;
(7) that Debentures with respect to which a Change in Control
Purchase Notice has been given by the Holder may be converted into
Common Stock (or, in lieu thereof, cash, if the Company shall so
elect) at any time prior to the close of business on the Change in
Control Purchase Date only if the Change in Control Purchase Notice
has been withdrawn by the Holder in accordance with the terms of
this Indenture;
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(8) that Debentures must be surrendered to the Paying Agent or
the office or agency referred to in Section 1002 to collect payment;
(9) that the Change in Control Purchase Price for any
Debenture as to which a Purchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Change in
Control Purchase Date and the time of surrender of such Debenture as
described in clause (8) above;
(10) the procedures the Holder must follow to exercise rights
under this Section 1111 and a brief description of those rights;
(11) briefly, the conversion rights of the Debentures; and
(12) the procedures for withdrawing a Change in Control
Purchase Notice.
(c) A Holder may exercise its rights specified in Section 1111(a)
upon delivery of a written notice of purchase (a "Change in Control
Purchase Notice") to the Paying Agent or to the office or agency referred
to in Section 1002 at any time prior to the close of business on the
Change in Control Purchase Date, stating:
(1) the certificate number of the Debenture which the Holder
will deliver to be purchased;
(2) the portion of the Principal Amount at Maturity of the
Debenture which the Holder will deliver to be purchased, which
portion must be $1,000 or an integral multiple thereof; and
(3) that such Debenture shall be purchased on the Change in
Control Purchase Date pursuant to the terms and conditions specified
in paragraph 6 of the Debentures.
Receipt of the Debenture by the Paying Agent prior to, on or after
the Change in Control Purchase Date (together with all necessary
endorsements), at the offices of the Paying Agent or to the office or
agency referred to in Section 1002 shall be a condition to the receipt by
the Holder of the Change in Control Purchase Price therefor; PROVIDED,
HOWEVER, that such Change in Control Purchase Price shall be so paid
pursuant to this Section 1111 only if the Debenture so delivered to the
Paying Agent or such office or agency shall conform in all respects to the
description thereof set forth in the related Change in Control Purchase
Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 1111, a portion of a Debenture if the Principal Amount at Maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to the purchase of all of a Debenture also apply
to the purchase of such portion of such Debenture.
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Any purchase by the Company contemplated pursuant to the provisions
of this Section 1111 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of
the Change in Control Purchase Date and the date such Debentures are
surrendered to the Paying Agent or at the office or agency referred to in
Section 1002.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent or to the office or agency referred to in
Section 1002 the Change in Control Purchase Notice contemplated by this
Section 1111(c) shall have the right to withdraw such Change in Control
Purchase Notice at any time prior to the close of business on the Change
in Control Purchase Date by delivery of a written notice of withdrawal to
the Paying Agent or to such office or agency in accordance with Section
1112.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 1112. EFFECT OF PURCHASE NOTICE OR CHANGE IN CONTROL
PURCHASE NOTICE.
Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 1110(a) or Section 1111(c),
as applicable, the Holder of the Debenture in respect of which such
Purchase Notice or Change in Control Purchase Notice, as the case may be,
was given shall (unless such Purchase Notice or Change in Control Purchase
Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled to receive solely the Purchase Price or Change in
Control Purchase Price, as the case may be, with respect to such
Debenture. Such Purchase Price or Change in Control Purchase Price shall
be paid to such Holder promptly following the later of (x) the Business
Day following the Purchase Date or the Change in Control Purchase Date, as
the case may be, with respect to such Debenture (provided the conditions
in Section 1110(a) or Section 1111(c), as applicable, have been satisfied)
and (y) the time of delivery of such Debenture to the Paying Agent or to
the office or agency referred to in Section 1002 by the Holder thereof in
the manner required by Section 1110(a) and (g) or Section 1111(c), as
applicable. Debentures in respect of which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been given by the Holder
thereof may not be converted into shares of Common Stock on or after the
date of the delivery of such Purchase Notice or Change in Control Purchase
Notice, as the case may be, unless such Purchase Notice or Change in
Control Purchase Notice, as the case may be, has first been validly
withdrawn as specified in the following two paragraphs.
A Purchase Notice or Change in Control 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 or to the office or agency
referred to in Section 1002 at any time prior to the close of business on
the Purchase Date or the Change in Control Purchase Date, as the case may
be, specifying:
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(1) the certificate number of the Debenture in respect of
which such notice of withdrawal is being submitted;
(2) the Principal Amount at Maturity of the Debenture with
respect to which such notice of withdrawal is being submitted; and
(3) the Principal Amount at Maturity, if any, of such
Debenture which remains subject to the original Purchase Notice or
Change in Control Purchase Notice, as the case may be, and which has
been or will be delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the
form set forth in the preceding paragraph or may be in the form of (i) a
conditional withdrawal contained in a Purchase Notice pursuant to the
terms of Section 1110(a)(1)(D) or (ii) a conditional withdrawal containing
the information set forth in Section 1110(a)(1)(D) and 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 Debentures pursuant to Section
1110 (other than through the issuance of Common Stock in payment of the
Purchase Price, including cash in lieu of fractional shares of Common
Stock) or Section 1111 if there has occurred (prior to, on or after, as
the case may be, the giving, by the Holders of such Debentures, of the
required Purchase Notice or Change in Control Purchase Notice, as the case
may be) and is continuing an Event of Default (other than a default in the
payment of the Purchase Price or Change in Control Purchase Price, as the
case may be, with respect to such Debentures). The Paying Agent will
promptly return to the respective Holders thereof any Debentures (x) with
respect to which a Purchase Notice or Change in Control Purchase Notice,
as the case may be, has been withdrawn in compliance with this Indenture,
or (y) held by it during the continuance of an Event of Default (other
than a default in the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, with respect to such Debentures) in
which case, upon such return, the Purchase Notice or Change in Control
Purchase Notice with respect thereto shall be deemed to have been
withdrawn.
SECTION 1113. DEPOSIT OF PURCHASE PRICE OR CHANGE IN CONTROL
PURCHASE PRICE.
Prior to 3:00 p.m. (local time in The City of New York) on the
Business Day following the Purchase Date or the Change in Control Purchase
Date, as the case may be, the Company shall deposit with the Trustee or
with the Paying Agent (or, if the Company is acting as Paying Agent, shall
segregate and hold in trust as provided in Section 1103) an amount of cash
in immediately available funds or securities, if expressly permitted
hereunder, sufficient to pay the aggregate Purchase Price or Change in
Control Purchase Price, as the case may be, of all the Debentures or
portions thereof which are to be purchased as of the Purchase Date or
Change in Control Purchase Date, as the case may be.
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SECTION 1114. DEBENTURES PURCHASED IN PART.
Any Debenture which is to be purchased only in part shall be
surrendered at the office of the Paying Agent or the office or agency
referred to in Section 1002 (with, if the Company or the Trustee so
requires, due endorsement, or a written instrument of transfer in form
satisfactory to the Company and the Trustee executed by the Holder 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 Debenture, without service charge, a new Debenture or Debentures, of
any authorized denomination as requested by such Holder in aggregate
Principal Amount at Maturity equal to, and in exchange for, the portion of
the Principal Amount at Maturity of the Debenture so surrendered which is
not purchased.
SECTION 1115. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE
OF DEBENTURES.
In connection with any offer to purchase or purchase of Debentures
under Section 1110 or 1111, the Company shall (i) comply with Rule 13e-4
and Rule 14e-1 under the Exchange Act, if applicable, (ii) file the
related Schedule 13E-4 (or any successor schedule, form or report) under
the Exchange Act, if applicable, and (iii) otherwise comply with all
Federal and state securities laws regulating the offer and delivery of
shares of Common Stock upon purchase of the Debentures (including
positions of the Commission under applicable no-action letters) so as to
permit the rights and obligations under Sections 1110 and 1111 to be
exercised in the time and in the manner specified in Sections 1110 and
1111.
SECTION 1116. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company, upon
written request, any cash or shares of Common Stock, together with
interest on such cash as hereinafter provided and dividends on such shares
of Common Stock, if any (subject to the provisions of Section 601(a)),
held by them for the payment of a Purchase Price or Change in Control
Purchase Price, as the case may be, of the Debentures that remain
unclaimed as provided in paragraph 12 of the Debentures; PROVIDED,
HOWEVER, that to the extent that the aggregate amount of cash or shares of
Common Stock deposited by the Company pursuant to Section 1113 exceeds the
aggregate Purchase Price or Change in Control Purchase Price, as the case
may be, of the Debentures or portions thereof to be purchased, then
promptly after the Business Day following the Purchase Date or Change in
Control Purchase Date, as the case may be, the Trustee shall return any
such excess to the Company together with interest as hereinafter provided
or dividends, if any, thereon (subject to the provisions of Section
601(a)). Any cash deposited with the Trustee or with the Paying Agent
pursuant to Section 1113 hereof shall be invested by the Trustee or Paying
Agent, as applicable, in short-term obligations of, or fully guaranteed
by, the United States of America, or commercial paper rated A-1 or better
by Standard and Poor's or P-1 or better by Xxxxx'x Investors Service, Inc.
as specifically directed in writing by the Company. Interest earned on
such investments shall be repaid to the Company pursuant to this Section
1116. Except as provided for in this Section 1116, the Trustee shall be
under no liability for interest on any money received by it pursuant to
this Indenture.
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SECTION 1117. OUTSTANDING DEBENTURES.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a
Change in Control Purchase Date, or at Stated Maturity, money or, if
permitted by the terms hereof, including, without limitation, Section
1110, securities sufficient to pay the Debentures payable on that date,
then on and after that date such Debentures shall cease to be Outstanding
and Original Issue Discount and interest, if any (including, if such
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, interest on such notes), on such Debentures
shall cease to accrue and all other rights of the Holder shall terminate
(other than the right to receive the applicable Redemption Price, Purchase
Price or Change in Control Purchase Price, as the case may be, upon
delivery of the Debenture in accordance with the terms of this Indenture);
PROVIDED that if such Debentures are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made.
If a Debenture is converted in accordance with Article Fifteen, then
from and after the Conversion Date such Debenture shall cease to be
Outstanding and Original Issue Discount and interest, if any (including,
if such Debentures have been converted to semiannual coupon notes
following the occurrence of a Tax Event, interest on such notes), shall
cease to accrue on such Debenture.
ARTICLE SIX
CONVERSION
SECTION 6.1 CONVERSION.
A new Article Fifteen is hereby added to the Indenture, but only
with respect to the Debentures issued in accordance with the provisions hereof,
as follows:
ARTICLE FIFTEEN
CONVERSION
SECTION 1501. CONVERSION PRIVILEGE.
A Holder of a Debenture may convert such Debenture into shares of
Common Stock at any time during the period stated in paragraph 8 of the
Debentures. The number of shares of Common Stock issuable upon conversion
of a Debenture per $1,000 of Principal Amount at Maturity thereof (the
"Conversion Rate") shall be that set forth in paragraph 8 in the
Debentures, subject to adjustment as herein set forth.
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A Holder may convert a portion of the Principal Amount at Maturity
of a Debenture if the portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to conversion of all of a
Debenture also apply to conversion of a portion of a Debenture.
"Average Sale Price" means the average of the Sale Prices of the
Common Stock for the shorter of:
(i) 30 consecutive Trading Days ending on the last full
Trading Day prior to the Time of Determination with respect to the
rights, options, warrants or distribution in respect of which the
Average Sale Price is being calculated, or
(ii) the period (x) commencing on the date next succeeding the
first public announcement of (a) the issuance of rights, options or
warrants or (b) the distribution, in each case, in respect of which
the Average Sale Price is being calculated and (y) proceeding
through the last full Trading Day prior to the Time of Determination
with respect to the rights, warrants or distribution in respect of
which the Average Sale Price is being calculated, or
(iii) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time with respect to the next preceding
(a) issuance of rights, warrants, or options or (b) distribution, in
each case, for which an adjustment is required by the provisions of
Section 1506(4), 1507 or 1508 and (y) proceeding through the last
full Trading Day prior to the Time of Determination with respect to
the rights, warrants, or options or distribution in respect of which
the Average Sale Price is being calculated.
If the Ex-Dividend Time (or in the case of a subdivision,
combination or reclassification, the effective date with respect thereto)
with respect to a dividend, subdivision, combination or reclassification
to which Section 1506(1), (2), (3) or (5) applies occurs during the period
applicable for calculating "Average Sale Price" pursuant to the definition
in the preceding sentence, "Average Sale Price" shall be calculated for
such period in a manner determined in good faith by the Board of Directors
to reflect the impact of such dividend, subdivision, combination or
reclassification on the Sale Price of the Common Stock during such period.
"Time of Determination" means the time and date of the earlier of
(i) the determination of stockholders entitled to receive rights,
warrants, or options or a distribution, in each case, to which Sections
1507 and 1508 apply and (ii) the time ("Ex-Dividend Time") immediately
prior to the commencement of "ex-dividend" trading for such rights,
options, warrants or distribution on the New York Stock Exchange or such
other national or regional exchange or market on which the shares of the
Common Stock are then listed or quoted.
-24-
SECTION 1502. CONVERSION PROCEDURE.
To convert a Debenture into Common Stock, a Holder must satisfy the
requirements in paragraph 8 of the Debentures. The date on which the
Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). The Company shall deliver to the Holder no later than
the seventh Business Day following the Conversion Date, 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 1503.
The Person in whose name the certificate is registered shall be
treated as a shareholder of record on and after the Conversion Date;
PROVIDED, HOWEVER, that no surrender of a Debenture 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; PROVIDED FURTHER, that such conversion shall be at the
Conversion Rate in effect on the date that such Debenture shall have been
surrendered for conversion, as if the stock transfer books of the Company
had not been closed. Upon conversion of a Debenture, such Person shall no
longer be a Holder of such Debenture.
Holders may surrender a Debenture for conversion by means of
book-entry delivery in accordance with paragraph 8 of the Debentures and
the regulations of the applicable book-entry facility.
No payment or adjustment will be made for dividends on any Common
Stock except as provided in this Article Fifteen. On conversion of a
Debenture, that portion of accrued Original Issue Discount (or interest,
if the Company has exercised its option provided for in Section 1601)
attributable to the period from the Issue Date (or, if the Company has
exercised the option provided for in Section 1601, the later of (x) the
date of such exercise and (y) the date on which interest was last paid) to
the Conversion Date with respect to the converted Debenture shall not be
cancelled, 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 any cash payment in lieu of fractional shares of Common
Stock) in exchange for the Debenture being converted pursuant to the terms
hereof, and the fair market value of such Common Stock (together with any
cash payment in lieu of fractional shares of Common Stock) shall be
treated as issued, to the extent thereof, first in exchange for the
Original Issue Discount accrued through the Conversion Date, and the
balance, if any, of such fair market value of such shares of Common Stock
(and any such cash payment) shall be treated as issued in exchange for the
Issue Price of the Debenture being converted pursuant to the provisions
hereof.
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If the Holder converts more than one Debenture at the same time, the
number of shares of Common Stock issuable upon the conversion shall be
computed based on the total Principal Amount at Maturity of the Debentures
converted.
Upon surrender of a Debenture that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Debenture in an authorized denomination equal in Principal
Amount at Maturity to the unconverted portion of the Debenture
surrendered.
If the last day on which a Debenture may be converted is a Legal
Holiday in a place where the Conversion Agent is located, the Debenture
may be surrendered to such Conversion Agent on the next succeeding day
that is not a Legal Holiday.
SECTION 1503. FRACTIONAL SHARES.
The Company will not issue a fractional share of Common Stock upon
conversion of a Debenture. Instead, the Company will 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 1/1,000th of a share
by multiplying the Sale Price, on the last Trading Day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
SECTION 1504. TAXES ON CONVERSION.
If a Holder converts a Debenture, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of
shares of Common Stock upon such conversion. The Holder, however, shall
pay any such tax that 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 will 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.
SECTION 1505. COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any Debentures 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 Debentures into shares of Common Stock.
All shares of Common Stock delivered upon conversion of the
Debentures 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.
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The Company will endeavor promptly to comply with all Federal and
state securities laws regulating the offer and delivery of shares of
Common Stock upon conversion of Debentures, if any, and will list or cause
to have quoted such shares of Common Stock on each national securities
exchange or in the over-the-counter market or such other market on which
the Common Stock is then listed or quoted.
SECTION 1506. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
If, after the Issue Date, the Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) pays a dividend or makes a distribution on its Common
Stock in shares of its Capital Stock (other than Common Stock or
rights, warrants or options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares
of its Capital Stock (other than rights, warrants or options for its
Capital Stock),
then the conversion privilege and the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the Holder of a
Debenture thereafter converted may receive the number of shares or other
units of Capital Stock of the Company that such Holder would have owned
immediately following such action if such Holder had converted the
Debenture immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or
reclassification.
If after an adjustment a Holder of a Debenture upon conversion of
such Debenture may receive shares or other units of two or more classes or
series of Capital Stock of the Company, the Conversion Rate shall
thereafter be subject to adjustment upon the occurrence of an action taken
with respect to any such class or series of Capital Stock as is
contemplated by this Article Fifteen with respect to the Common Stock, on
terms comparable to those applicable to Common Stock in this Article
Fifteen.
-27-
SECTION 1507. ADJUSTMENT FOR RIGHTS ISSUE.
If, after the Issue Date, the Company distributes any rights,
warrants or options to all holders of its Common Stock entitling them, for
a period expiring within 60 days after the record date for such
distribution, to purchase shares of Common Stock or securities convertible
into Common Stock at a price per share less than the Sale Price as of the
Time of Determination, the Conversion Rate shall be adjusted in accordance
with the formula:
(O + N)
R1 = R x ---------------
(O + (N x P)/M)
where:
R1 = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record
date for the distribution to which this Section 1507 is being
applied.
N = the number of additional shares of Common Stock offered pursuant
to the distribution.
P = the offering price per share of such additional shares.
M = the Average Sale Price, minus, in the case of (i) a distribution
to which Section 1506(4) applies or (ii) a distribution to which
Section 1508 applies, for which, in each case, (x) the record
date shall occur on or before the record date for the
distribution to which this Section 1507 applies and (y) the Ex-
Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 1507
applies, the fair market value (on the record date for the
distribution to which this Section 1507 applies) of the
(1) Capital Stock of the Company distributed in respect of
each share of Common Stock in such Section 1506(4)
distribution, and
(2) assets of the Company or debt securities or any rights,
warrants or options to purchase securities of the
Company distributed in respect of each share of Common
Stock in such Section 1508 distribution.
The Board of Directors shall determine fair market values for the purposes
of this Section 1507.
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The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the rights,
warrants or options to which this Section 1507 applies.
No adjustment shall be made under this Section 1507 if the
application of the formula stated above in this Section 1507 would result
in a value of R1 that is equal to or less than the value of R.
SECTION 1508. ADJUSTMENT FOR OTHER DISTRIBUTIONS.
If, after the Issue Date, the Company distributes to all holders of
its Common Stock any of its assets or debt securities or any rights,
warrants or options to purchase securities of the Company (including
securities or cash, but excluding (x) distributions of Capital Stock
referred to in Section 1506 and distributions of rights, warrants or
options referred to in Section 1507 and (y) cash dividends or other cash
distributions that are paid out of consolidated current net income or
earnings retained in the business as shown on the books of the Company,
unless such cash dividends or other cash distributions are Extraordinary
Cash Dividends), the Conversion Rate shall be adjusted, subject to the
provisions of the last paragraph of this Section 1508, in accordance with
the formula:
M
R1 = R x -----
M - F
where:
R1 = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution
to which Section 1506(4) applies for which (i) the record date
shall occur on or before the record date for the distribution
to which this Section 1508 applies and (ii) the Ex-Dividend
Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 1508
applies, the fair market value (on the record date for the
distribution to which this Section 1508 applies) of any
Capital Stock of the Company distributed in respect of each
share of Common Stock in such Section 1506(4) distribution.
F = the fair market value (on the record date for the distribution
to which this Section 1508 applies) of the assets, securities,
rights, warrants or options to be distributed in respect of
each share of Common Stock in the distribution to which this
Section 1508 is being applied (including, in the case of cash
dividends or other cash distributions giving rise to an
adjustment, all such cash distributed concurrently).
-29-
The Board of Directors shall determine fair market values for the purposes
of this Section 1508.
The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the
distribution to which this Section 1508 applies.
For purposes of this Section 1508, the term "Extraordinary Cash
Dividend" shall mean any cash dividend with respect to the Common Stock
the amount of which, together with the aggregate amount of cash dividends
on the Common Stock to be aggregated with such cash dividend in accordance
with the provisions of this paragraph, equals or exceeds the threshold
percentages set forth in item (i) or (ii) below:
(i) If, upon the date prior to the Ex-Dividend Time with
respect to a cash dividend on the Common Stock, the aggregate amount
of such cash dividend together with the amounts of all cash
dividends on the Common Stock with Ex-Dividend Times occurring in
the 85 consecutive day period ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds 12.5% of the average of
the Sale Prices during the period beginning on the date after the
first such Ex-Dividend Time in such period and ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the
period for calculating the average of the Sale Prices shall be the
period commencing 85 days prior to the date prior to the Ex-Dividend
Time with respect to the cash dividend to which this provision is
being applied), such cash dividend together with each other cash
dividend with an Ex-Dividend Time occurring in such 85-day period
shall be deemed to be an Extraordinary Cash Dividend and for
purposes of applying the formula set forth above in this Section
1508, the value of "F" shall be equal to (w) the aggregate amount of
such cash dividend together with the amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (x)
the aggregate amount of such other cash dividends with Ex-Dividend
Times occurring in such period for which a prior adjustment in the
Conversion Rate was previously made under this Section 1508.
(ii) If upon the date prior to the Ex-Dividend Time with
respect to a cash dividend on the Common Stock, the aggregate amount
of such cash dividend, together with the amounts of all cash
dividends on the Common Stock with Ex-Dividend Times occurring in
the 365-consecutive-day period ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds 25% of the average of
the Sale Prices during the period beginning on the date after the
first such Ex-Dividend Time in such period and ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the
period for calculating the average of the Sale Prices shall be the
period commencing 365 days prior to the date prior to
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the Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied), such cash dividend together with each
other cash dividend with an Ex-Dividend Time occurring in such
365-day period shall be deemed to be an Extraordinary Cash Dividend
and for purposes of applying the formula set forth above in this
Section 1508, the value of "F" shall be equal to (y) the aggregate
amount of such cash dividend together with amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (z)
the aggregate amount of such other cash dividends with Ex-Dividend
Times occurring in such period for which a prior adjustment in the
Conversion Rate was previously made under this Section 1508.
In making the determinations required by items (i) and (ii) above,
the amount of cash dividends paid on a per share basis and the average of
the Sale Prices, in each case during the period specified in item (i) or
(ii) above, as applicable, shall be appropriately adjusted to reflect the
occurrence during such period of any event described in Section 1506.
In the event that, with respect to any distribution to which this
Section 1508 would otherwise apply, the difference "M-F" as defined in the
above formula is less than $1.00 or "F" is equal to or greater than "M,"
then the adjustment provided by this Section 1508 shall not be made and in
lieu thereof the provisions of Section 1514 shall apply to such
distribution.
SECTION 1509. 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% (E.G., if
the Conversion Rate is 4, an increase or decrease of .04 (1% of 4)) in the
Conversion Rate. Any adjustments that are not made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Article Fifteen shall be made to the
nearest cent or to the nearest 1/1,000th of a share, as the case may be,
with one-half of a cent and 5/10,000ths of a share being rounded upwards.
SECTION 1510. WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for a transaction referred to in Section
1506, 1507, 1508 or 1514 if Holders are to participate in the transaction
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.
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.
-31-
To the extent the Debentures become convertible into cash pursuant
to the terms of Section 1508 or 1514, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.
Notwithstanding any provision to the contrary in this Indenture, no
adjustment shall be made in the Conversion Rate to the extent, but only to
the extent, such adjustment results in the following quotient being less
than the par value of the Common Stock: (i) the Issue Price plus accrued
Original Issue Discount as of the date such adjustment would otherwise be
effective divided by (ii) the Conversion Rate as so adjusted.
SECTION 1511. NOTICE OF ADJUSTMENT.
Whenever the Conversion Rate is adjusted, the Company shall file
with the Trustee and the Conversion Agent a notice of such adjustment and
a certificate from the Company's independent public accountants briefly
stating the facts requiring the adjustment and the manner of computing it.
The Conversion Agent will promptly mail such notice to Holders at the
Company's expense. The certificate shall 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.
SECTION 1512. VOLUNTARY INCREASE.
The Company from time to time may increase the Conversion Rate by
any amount and for any period of time; PROVIDED that such period is not
less than 20 Business Days. Whenever the Conversion Rate is increased, the
Company shall mail to Holders and file with the Trustee and the Conversion
Agent a notice of the increase. The Company shall mail the notice at least
15 days before the date the increased Conversion Rate takes effect. The
notice shall state the increased Conversion Rate and the period it will be
in effect.
A voluntary increase of the Conversion Rate does not change or
adjust the Conversion Rate otherwise in effect for purposes of Section
1506, 1507 or 1508.
SECTION 1513. NOTICE OF CERTAIN TRANSACTIONS.
If:
(1) the Company takes any action that would require an
adjustment in the Conversion Rate pursuant to Section 1506, 1507 or
1508 (unless no adjustment is to occur pursuant to Section 1510); or
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 1514; or
(3) there is a liquidation or dissolution of the Company,
-32-
then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend
or distribution of the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, binding share
exchange, transfer, liquidation or dissolution. The Company shall file and
mail the notice at least 15 days before such date. Failure to file or mail
the notice or any defect in it shall not affect the validity of the
transaction.
SECTION 1514. REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS.
If the Company is a party to a transaction subject to Section 801
(other than a sale of all or substantially all of the assets of the
Company in a transaction in which the holders of Common Stock immediately
prior to such transaction do not receive securities, cash or other assets
of the Company or any other person) or a merger or binding share exchange
that reclassifies or changes its outstanding Common Stock, the person
obligated to deliver securities, cash or other assets upon conversion of
Debentures shall enter into a supplemental indenture. If the issuer of
securities deliverable upon conversion of Debentures is an Affiliate of
the successor Company, that issuer shall join in the supplemental
indenture.
The supplemental indenture shall provide that the Holder of a
Debenture may convert it into the kind and amount of securities, cash or
other assets which such Holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such Holder
had converted the Debenture immediately before the effective date of the
transaction, assuming (to the extent applicable) that such Holder (i) was
not a constituent Person or an Affiliate of a constituent Person to such
transaction; (ii) made no election with respect thereto; and (iii) was
treated alike with the plurality of non-electing Holders. The supplemental
indenture shall provide for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in this
Article Fifteen. The successor Company shall mail to Holders a notice
briefly describing the supplemental indenture.
If this Section 1514 applies, neither Section 1506 nor 1507 shall
apply.
If the Company makes a distribution to all holders of its Common
Stock of any of its assets, or debt securities or any rights, warrants or
options to purchase securities of the Company that, but for the provisions
of the last paragraph of Section 1508, would otherwise result in an
adjustment in the Conversion Rate pursuant to the provisions of Section
1508, then, from and after the record date for determining the holders of
Common Stock entitled to receive the distribution, a Holder of a Debenture
that converts such Debenture in accordance with the provisions of this
Indenture shall upon such conversion be entitled to receive, in addition
to the shares of Common Stock into which the Debenture is convertible, the
kind and amount of securities, cash or other assets comprising the
distribution that such Holder would have received if such Holder had
converted the Debenture immediately prior to the record date for
determining the holders of Common Stock entitled to receive the
distribution.
SECTION 1515. COMPANY DETERMINATION FINAL.
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Any determination that the Company or the Board of Directors must
make pursuant to this Article Fifteen is conclusive.
SECTION 1516. TRUSTEE'S ADJUSTMENT DISCLAIMER.
The Trustee has no duty to determine when an adjustment under this
Article Fifteen should be made, how it should be made or what it should
be. The Trustee has no duty to determine whether a supplemental indenture
under Section 1514 need be entered into or whether any provisions of any
supplemental indenture are correct. The Trustee shall not be accountable
for and makes no representation as to the validity or value of any
securities or assets issued upon conversion of Debentures. The Trustee
shall not be responsible for the Company's failure to comply with this
Article Fifteen. Each Conversion Agent (other than the Company or an
Affiliate of the Company) shall have the same protection under this
Section 1516 as the Trustee.
SECTION 1517. SIMULTANEOUS ADJUSTMENTS.
If this Article Fifteen requires adjustments to the Conversion Rate
under more than one of Sections 1506(4), 1507 or 1508, and the 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 1506, second, the provisions of Section 1508 and,
third, the provisions of Section 1507.
SECTION 1518. SUCCESSIVE ADJUSTMENTS.
After an adjustment to the Conversion Rate under this Article
Fifteen, any subsequent event requiring an adjustment under this Article
Fifteen shall cause an adjustment to the Conversion Rate as so adjusted.
ARTICLE SEVEN
SPECIAL TAX EVENT CONVERSION
SECTION 7.1 SPECIAL TAX EVENT CONVERSION.
A new Article Sixteen is hereby added to the Indenture, but only
with respect to the Debentures issued in accordance with the provisions hereof,
as follows:
ARTICLE SIXTEEN
SPECIAL TAX EVENT CONVERSION
SECTION 1601. OPTIONAL CONVERSION TO SEMIANNUAL COUPON NOTE UPON
TAX EVENT.
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From and after the date (the "Tax Event Date") of the occurrence of
a Tax Event, at the option of the Company, interest in lieu of future
Original Issue Discount shall accrue at 4.75% per annum on a principal
amount per Debenture (the "Restated Principal Amount") equal to the Issue
Price plus Original Issue Discount accrued to the date immediately prior
to the Tax Event Date or the date on which the Company exercises the
option described herein, whichever is later (such date, the "Option
Exercise Date"). Such interest shall accrue from the Option Exercise Date
and shall be payable semiannually on April 24 and October 24 of each year
(each an "Interest Payment Date") to holders of record at the close of
business on March 31 or September 30 (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 12 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 mail a written
notice of such Tax Event by first-class mail to the Trustee.
ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.1 GOVERNING LAW.
This First Supplemental Indenture and the Debentures shall be deemed
to be contracts made and to be performed entirely in the State of New York, and
for all purposes shall be governed and construed in accordance with the laws of
said State without regard to the conflicts of laws rules of said State. This
First Supplemental Indenture may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument.
SECTION 8.2 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this First Supplemental Indenture,
or for or in respect of the recitals contained herein, all of which recitals are
made by the Company solely. To the extent permitted by the provisions of Article
Six of the Indenture, the Trustee shall not be answerable or accountable for
anything whatsoever in connection with this First Supplemental Indenture except
for its own wilful misconduct or negligence.
SECTION 8.3 INTEREST LIMITATIONS.
Anything in this First Supplemental Indenture, the Original
Indenture or any Debenture to the contrary notwithstanding, the Company shall
never be required to pay unearned interest on any Debenture and shall never be
required to pay interest on such Debenture at a rate in excess of the Highest
Lawful Rate (as defined below), and if the effective rate of interest which
would otherwise be payable under this First Supplemental Indenture, the Original
Indenture and such Debenture would exceed the Highest Lawful Rate, or if the
Holder of such Debenture shall receive any unearned interest or shall receive
monies or other consideration that are deemed to constitute interest which would
increase the effective rate of interest payable by the Company under this First
-35-
Supplemental Indenture, the Original Indenture and such Debenture to a rate in
excess of the Highest Lawful Rate, then (i) the amount of interest which would
otherwise be payable by the Company under this First Supplemental Indenture, the
Original Indenture and such Debenture shall be reduced to the amount allowed
under applicable law, and (ii) any unearned interest paid by the Company or any
interest paid by the Company in excess of the Highest Lawful Rate shall, at the
option of the Holder of such Debenture, be either refunded to the Company or
credited on the principal of such Debenture. It is further agreed that, without
limitation of the foregoing, all calculations of the rate of interest contracted
for, charged or received by any Holder under the Debenture held by it, or under
this First Supplemental Indenture or the Original Indenture, shall be made, to
the extent permitted by applicable usury laws (now or hereafter enacted), by
amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Debentures all interest (and other consideration deemed to
constitute interest) at any time contracted for, charged or received by such
Holder in connection therewith. If at any time and from time to time (i) the
amount of interest payable to any Holder on any date shall be computed at the
Highest Lawful Rate pursuant to this Section 8.3 and (ii) in respect of any
subsequent interest computation period the amount of interest otherwise payable
to such Holder would be less than the amount of interest payable to such Holder
computed at the Highest Lawful Rate, then the amount of interest payable to such
Holder in respect of such subsequent interest computation period shall continue
to be computed at the Highest Lawful Rate until the total amount of interest
payable to such Holder shall equal the total amount of interest which would have
been payable to such Holder if the total amount of interest had been computed
without giving effect to this Section 8.3. For purposes of this Section 8.3,
"Highest Lawful Rate" means the maximum non-usurious rate of interest permitted
by applicable law, which the parties intend shall be the laws of the State of
New York; PROVIDED that, to the extent the Highest Lawful Rate is determined by
reference to the laws of the State of Texas, the Highest Lawful Rate shall be
the indicated (weekly) rate ceiling as defined in Texas Revised Civil Statutes,
Article 5069-1.04, as amended, at the applicable time in effect.
-36-
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and attested as of the day and year
first above written.
PRIDE INTERNATIONAL, INC.
By:/S/XXXX X. XXXXXX
Xxxx X. XxXxxx
Vice President and Chief Financial Officer
Attest:
/S/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
Secretary
MARINE MIDLAND BANK,
as Trustee
By:/S/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Vice President
Attest:
/S/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
Vice President
-37-
EXHIBIT A
[FORM OF FACE OF DEBENTURE]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF
PRINCIPAL AMOUNT OF THIS DEBENTURE IS $608.94, THE ISSUE DATE IS APRIL 24, 1998
AND THE YIELD TO MATURITY IS 4.75% (COMPUTED ON A SEMIANNUAL BOND EQUIVALENT
BASIS).
PRIDE INTERNATIONAL, INC.
Zero Coupon Convertible Subordinated
Debenture Due 2018
CUSIP No.
No.
Issue Date: April 24, 1998
Issue Price: $391.06
Original Issue Discount: $608.94
(for each $1,000 Principal
Amount at Maturity)
Pride International, Inc., a Louisiana corporation, promises to pay
to ______________ or registered assigns, the Principal Amount at Maturity of
________________ Dollars on April 24, 2018.
This Debenture shall not bear interest except as specified on the
other side of this Debenture. Original Issue Discount will accrue as specified
on the other side of this Debenture. This Debenture is convertible as specified
on the other side of this Debenture. All capitalized terms used herein without
definition shall have the respective meanings assigned thereto in the Indenture
referred to on the other side of this Debenture.
Additional provisions of this Debenture are set forth on the other
side of this Debenture.
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Dated: PRIDE INTERNATIONAL, INC.
[SEAL] By:
Name:
Title:
ATTEST:
Name:
Title:
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
MARINE MIDLAND BANK,
as Trustee
By:____________________________
Authorized Signatory
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[FORM OF REVERSE SIDE OF DEBENTURE]
Zero Coupon Convertible Subordinated
Debenture Due 2018
[Unless and until it is exchanged in whole or in part for Debentures
in definitive form, this Debenture may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company, a New York corporation ("DTC"), shall
act as the Depositary until a successor shall be appointed by the Company.
Unless this certificate is presented by an authorized representative of DTC to
the Company 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 therein.]*
1. INTEREST
This Debenture shall not bear interest except as specified in this
paragraph or in paragraph 9 hereof. If the Principal Amount at Maturity hereof
or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 502 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 5 hereof,
upon the date set for payment of a Purchase Price or Change in Control Purchase
Price pursuant to paragraph 6 hereof or upon the Stated Maturity of this
Debenture) or if shares of Common Stock (or cash in lieu of fractional shares)
in respect of a conversion of this Debenture in accordance with the terms of
Article Fifteen of the Indenture is not delivered when due, then in each such
case the overdue amount shall bear interest at the rate of 4.75% 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.
Original Issue Discount (the difference between the Issue Price and
the Principal Amount at Maturity of the Debenture), in the period during which a
Debenture remains outstanding, shall accrue at 4.75% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of 12 30-day months,
commencing on the Issue Date of this Debenture, and shall cease to accrue on the
earlier of (a) the date on which the Principal Amount at Maturity hereof or any
portion of such Principal Amount at Maturity becomes due and payable and (b) any
Redemption Date, Conversion Date, Change in Control Purchase Date, Purchase Date
or other date on which
--------
*This paragraph should be added only if the Debenture is issued in global
form.
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such Original Issue Discount (or, if such Debentures have been converted to
semiannual coupon notes following the occurrence of a Tax Event, interest on
such notes) shall cease to accrue in accordance with Section 1117 of the
Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, Pride
International, Inc. (the "Company") will make payments in respect of any
Debenture to the Persons in whose name that Debenture is registered at the close
of business on the Business Day preceding the Redemption Date or Stated
Maturity, as the case may be, or at the close of business on a Purchase Date,
Change in Control Purchase Date or Conversion Date, as the case may be. Holders
must surrender Debentures to a Paying Agent to collect such payments in respect
of the Debentures. The Company will pay cash amounts in money of The United
States of America that at the time of payment is legal tender for payment of
public and private debts. The Company will make such cash payments (i) by wire
transfer of immediately available funds with respect to Debentures held in
book-entry form or (ii) by check payable in such money mailed to a Holder's
registered address with respect to any certificated Debentures.
3. PAYING AGENT, CONVERSION AGENT AND SECURITY REGISTRAR
Initially, Marine Midland Bank, as trustee (the "Trustee"), will act
as Paying Agent, Conversion Agent and Security Registrar. The Company may
appoint and change any Paying Agent, Conversion Agent, Security Registrar or
co-registrar without notice, other than notice to the Trustee, PROVIDED that the
Company shall maintain in the Borough of Manhattan, The City of New York, an
office or agency of the Security Registrar, Paying Agent or Conversion Agent.
The Company or any of its Subsidiaries or any of their Affiliates may act as
Paying Agent, Conversion Agent, Registrar or co-registrar.
4. INDENTURE
This Debenture is one of a duly authorized series of Securities of
the Company, designated as its Zero Coupon Convertible Subordinated Debentures
Due 2018, issued under an Indenture dated as of April 1, 1998, as amended and
supplemented by a First Supplemental Indenture dated as of April 24, 1998 (as so
amended and supplemented, the "Indenture"), between the Company and the Trustee.
The terms of the Debentures include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended and in effect on the date of the Indenture (the "Trust Indenture Act"),
except as provided in the Indenture. Capitalized terms used herein or on the
face hereof and not defined herein have the meanings ascribed thereto in the
Indenture. The Debentures are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of those
terms.
The Debentures are unsecured, subordinated, general obligations of
the Company limited to an aggregate Principal Amount at Maturity specified in
Section 2.2(b) of the Indenture. The Indenture does not limit other indebtedness
of the Company, secured or unsecured, including Senior Indebtedness.
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5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Debentures. The Debentures are
redeemable for cash as a whole at any time, or from time to time in part, at the
option of the Company at the Redemption Prices set forth below, PROVIDED that
the Debentures are not redeemable prior to April 24, 2003.
The table below shows the Redemption Prices of a Debenture per
$1,000 Principal Amount at Maturity on the dates shown below and at Stated
Maturity, which prices reflect the accrued Original Issue Discount calculated
through each such date. The Redemption Price of a Debenture redeemed between
such dates would include an additional amount reflecting the additional Original
Issue Discount accrued from and including the next preceding date in the table
to and including the actual Redemption Date.
ACCRUED ORIGINAL
DEBENTURE ISSUE DISCOUNT REDEMPTION
ISSUE PRICE AT 4.75% PRICE
REDEMPTION DATE (1) (2) (1) + (2)
--------------- ------- ------- ---------
April 24, 2003...................... $391.06 $103.46 $494.52
April 24, 2004...................... 391.06 127.23 518.29
April 24, 2005...................... 391.06 152.14 543.20
April 24, 2006...................... 391.06 178.25 569.31
April 24, 2007...................... 391.06 205.61 596.67
April 24, 2008...................... 391.06 234.29 625.35
April 24, 2009...................... 391.06 264.34 655.40
April 24, 2010...................... 391.06 295.85 686.91
April 24, 2011...................... 391.06 328.86 719.92
April 24, 2012...................... 391.06 363.46 754.52
April 24, 2013...................... 391.06 399.73 790.79
April 24, 2014...................... 391.06 437.74 828.80
April 24, 2015...................... 391.06 477.57 868.63
April 24, 2016...................... 391.06 519.32 910.38
April 24, 2017...................... 391.06 563.08 954.14
April 24, 2018...................... 391.06 608.94 1,000.00
If converted to a semiannual coupon note following the occurrence of
a Tax Event, this Debenture will be redeemable at the Restated Principal Amount
plus interest accrued and unpaid from and including the date of such conversion
to, but excluding, the Redemption Date; PROVIDED that in no event will this
Debenture be redeemable prior to April 24, 2003.
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6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER
Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Debentures
held by such Holder on the following Purchase Dates and at the following
Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery of a
Purchase Notice containing the information set forth in the Indenture, at any
time from the opening of business on the date that is 20 Business Days prior to
the Purchase Date until the close of business on the Purchase Date and upon
delivery of the Debentures to the Paying Agent by the Holder as set forth in the
Indenture. Such Purchase Price may be paid, at the option of the Company, in
cash or by the issuance and delivery of shares of Common Stock of the Company,
or in any combination thereof.
PURCHASE DATE PURCHASE PRICE
April 24, 2003 $494.52
April 24, 2008 625.35
April 24, 2013 790.79
If prior to a Purchase Date this Debenture has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from, and including, the date of conversion to, but excluding, the
Purchase Date.
Subject to the terms and conditions of the Indenture, if any Change
in Control occurs on or prior to April 24, 2003, the Company shall, at the
option of the Holder, purchase all Debentures for which a Change in Control
Purchase Notice shall have been delivered as provided in the Indenture and not
withdrawn, on the date that is 35 Business Days after the occurrence of such
Change in Control, for a Change in Control Purchase Price equal to the Issue
Price plus accrued Original Issue Discount through and including the Change in
Control Purchase Date, which Change in Control Purchase Price shall be paid in
cash. If prior to a Change in Control Purchase Date this Debenture has been
converted to a semiannual coupon note following the occurrence of a Tax Event,
the Change in Control Purchase Price shall be equal to the Restated Principal
Amount plus accrued and unpaid interest from, and including, the date of
conversion to, but excluding, the Change in Control Purchase Date.
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture
prior to the close of business on the Purchase Date or Change in Control
Purchase Date, as the case may be.
If cash sufficient to pay the Purchase Price or Change in Control
Purchase Price of all Debentures or portions thereof to be purchased as of the
Purchase Date or the Change in Control Purchase Date, as the case may be, is
deposited with the Paying Agent on the Business Day following the Purchase Date
or the Change in Control Purchase Date, as the case may be, Original
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Issue Discount (or interest upon conversion to semiannual coupon notes following
the occurrence of a Tax Event) ceases to accrue on such Debentures (or portions
thereof) on and after such date, and the Holders thereof shall have no other
rights as such (other than the right to receive the Purchase Price or Change in
Control Purchase Price, as the case may be, upon surrender of such Debenture).
7. NOTICE OF REDEMPTION
Notice of redemption will be given in the manner provided in the
Indenture not less than 30 days nor more than 60 days prior to the Redemption
Date. If money sufficient to pay the Redemption Price of all Debentures (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to or on the Redemption Date, from and after such Redemption
Date, Original Issue Discount and interest, if any (including, if such
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, interest on such notes), ceases to accrue on such
Debentures or portions thereof. Debentures in denominations larger than $1,000
of Principal Amount at Maturity may be redeemed in part but only in integral
multiples of $1,000 of Principal Amount at Maturity.
8. CONVERSION
Subject to the next two succeeding sentences, a Holder of a
Debenture may convert it into Common Stock of the Company at any time before the
close of business on April 24, 2018; PROVIDED, HOWEVER, that if a Debenture is
called for redemption, the Holder may convert it at any time before the close of
business on the Redemption Date. The number of shares of Common Stock to be
delivered upon conversion of a Debenture into Common Stock per $1,000 of
Principal Amount at Maturity shall be equal to the Conversion Rate. A Debenture
in respect of which a Holder has delivered a Purchase Notice or Change in
Control Purchase Notice exercising the option of such Holder to require the
Company to purchase such Debenture may be converted only if the notice of
exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 13.794 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. The Company will 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
1601 of the Indenture to have interest in lieu of Original Issue Discount accrue
on the Debenture following a Tax Event, 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, Debentures 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 Debentures to be redeemed on a date within such period) must be
accompanied by payment of an amount equal to the interest thereon that the
registered Holder is to receive. Except where Debentures surrendered for
conversion must be accompanied by payment as described above, no interest on
converted Debentures will be payable by the Company on any Interest Payment Date
subsequent to the date of conversion.
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To convert a Debenture a Holder must (i) complete and manually sign
the conversion notice on the back of the Debenture (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion Agent
(or the office or agency referred to in Section 1002 of the Indenture) or, if
applicable, complete and deliver to The Depository Trust Company ("DTC" or the
"Depositary," which term includes any successor thereto) the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program, (ii) surrender the Debenture to a Conversion Agent by
physical or book-entry delivery (which is not necessary in the case of
conversion pursuant to the Depositary's book-entry conversion program), (iii)
furnish appropriate endorsements and transfer documents if required by the
Conversion Agent, the Company or the Trustee and (iv) pay any transfer or
similar tax, if required. Book-entry delivery of a Debenture to the Conversion
Agent may be made by any financial institution that is a participant in the
Depositary; conversion through the Depositary's book-entry conversion program is
available for any security that is held in an account maintained at the
Depositary by any such participant.
A Holder may convert a portion of a Debenture if the Principal
Amount at Maturity of such portion is $1,000 or an integral multiple of $1,000.
No payment or adjustment will be made for dividends on the Common Stock, except
as provided in the Indenture. On conversion of a Debenture, that portion of
accrued Original Issue Discount (or interest, if the Company has exercised its
option provided for in paragraph 9 hereof) attributable to the period from the
Issue Date (or, if the Company has exercised the option referred to in paragraph
9 hereof, the later of (x) the date of such exercise and (y) the date on which
interest was last paid) to the Conversion Date with respect to the converted
Debenture shall not be cancelled, 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 any cash payment in lieu of fractional shares of Common
Stock) in exchange for the Debenture being converted pursuant to the terms
hereof, and the fair market value of such Common Stock (together with any cash
payment in lieu of fractional shares of Common Stock) shall be treated as
issued, to the extent thereof, first in exchange for the Original Issue Discount
accrued through the Conversion Date, and the balance, if any, of such fair
market value of such shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Debenture being
converted pursuant to the provisions hereof.
The Conversion Rate will be adjusted for (i) dividends or
distributions on Common Stock payable in Common Stock or other Capital Stock of
the Company, (ii) subdivisions, combinations or certain reclassifications of
Common Stock, (iii) distributions to all holders of Common Stock of certain
rights, warrants or options to purchase Common Stock or securities convertible
into Common Stock for a period expiring within 60 days after the applicable
record date for such distribution at a price per share less than the Sale Price
at the Time of Determination and (iv) distributions to such holders of assets or
debt securities of the Company or certain rights, warrants or options to
purchase securities of the Company (excluding certain cash dividends or other
cash distributions). However, no adjustment need be made if Holders may
participate in the transaction or in certain other cases. The Company from time
to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding
share exchange of the type specified in the Indenture, or certain transfers of
all or substantially all of its assets to another Person, or in certain other
circumstances described in the Indenture, the right to convert a Debenture
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into Common Stock may be changed into a right to convert it into the kind and
amount of securities, cash or other assets that the Holder would have received
if the Holder had converted such Holder's Debentures immediately prior to such
transaction.
9. TAX EVENT
From and after the date (the "Tax Event Date") of the occurrence of
a Tax Event, at the option of the Company, interest in lieu of future Original
Issue Discount shall accrue at 4.75% per annum on a principal amount per
Debenture (the "Restated Principal Amount") equal to the Issue Price plus
Original Issue Discount accrued to the date immediately prior to the Tax Event
Date or the date on which the Company exercises the option described herein,
whichever is later (such date, the "Option Exercise Date"). Such interest shall
accrue from the Option Exercise Date and shall be payable semiannually on April
24 and October 24 of each year (each an "Interest Payment Date") to Holders of
record at the close of business on March 31 or September 30 (each a "Regular
Record Date") immediately preceding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year composed of 12 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.
Interest on any Debenture 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 Debenture 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. The Company will make such payments (i) by wire transfer of
immediately available funds with respect to Debentures held in book-entry form
or (ii) by check payable in such money mailed to a Holder's registered address
with respect to any certificated Debentures.
Except as otherwise specified with respect to the Debentures, any
interest on any Debenture that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company as provided for in Section 307 of
the Indenture.
10. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Debentures called for redemption, unless surrendered for
conversion before the Redemption Date, may be deemed to be purchased from the
Holders of such Debentures at an amount not less than the Redemption Price,
together with accrued interest, if any, to the Redemption Date, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Debentures from the Holders and to make payment for such
Debentures to the Trustee in trust for such Holders.
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Debentures are in fully registered form, without coupons, in
minimum denominations of $1,000 Principal Amount at Maturity or in integral
multiples thereof. A Holder may register a transfer or exchange of Debentures in
accordance with the Indenture. The Security
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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 Security Registrar need not register the
transfer or exchange of any Debentures selected for redemption (except, in the
case of a Debenture to be redeemed in part, the portion of the Debenture not to
be redeemed) or any Debentures in respect of which a Purchase Notice or Change
in Control Purchase Notice has been given and not withdrawn (except, in the case
of a Debenture to be purchased in part, the portion of the Debenture not to be
purchased) or any Debentures for a period of 15 days before a selection of
Debentures to be redeemed.
12. PERSONS DEEMED OWNERS
The registered Holder of this Debenture may be treated as the owner
of this Debenture for all purposes.
13. UNCLAIMED MONEY FOR SECURITIES
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of any amount with respect to the
Debentures and remaining unclaimed for three years after such amounts have
become due and payable shall be paid to the Company on Company Request (unless
otherwise required by mandatory provisions of the applicable escheat or
abandoned or unclaimed property law), or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Debenture shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in The Borough of Manhattan, The
City of New York, and in such other Authorized Newspapers as the Trustee shall
deem appropriate, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will
(unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law) be repaid to the Company.
14. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Debentures may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Debentures at the time Outstanding and (ii) certain defaults or noncompliance
with certain provisions may be waived with the written consent of the Holders of
a majority in aggregate Principal Amount at Maturity of the Debentures at the
time Outstanding. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company and the Trustee may amend or
supplement the Indenture or the Debentures in certain respects set forth in the
Indenture.
15. DEFAULTS AND REMEDIES
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Under the Indenture, Events of Default include (i) if the Debentures
have been converted to semiannual coupon notes following the occurrence of a Tax
Event, default in the payment of interest that continues for a period of 30
days; (ii) default in the payment of the Principal Amount at Maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to any
Debenture when the same becomes due and payable; (iii) default in the delivery
of shares of Common Stock (or cash in lieu of fractional interests in shares of
Common Stock) in accordance with the terms of the Indenture when such Common
Stock or cash is required to be delivered following conversion of a Debenture
and such default is not remedied for a period of 10 days; (iv) default in the
performance or breach of any covenant of the Company in the Indenture or the
Debentures, subject to notice and lapse of time; or (v) certain events of
bankruptcy, insolvency or reorganization of the Company. If an Event of Default
occurs and is continuing, either the Trustee or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Debentures at the time Outstanding
may declare all the Debentures to be due and payable immediately. The principal
amount of the Debentures that may be declared due and payable in such event
shall be the Issue Price plus accrued Original Issue Discount (or if the
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, the Restated Principal Amount, plus accrued and
unpaid interest) on the Debentures to and including the date of default or the
date of declaration, as the case may be. Certain events of bankruptcy or
insolvency are Events of Default that will result in the Debentures becoming due
and payable immediately upon the occurrence of such Events of Default.
As set forth in, and subject to the provisions of, the Indenture, no
Holder of any Debenture shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Indenture, or for the appointment of
a receiver or trustee, or for any other remedy thereunder, unless certain
conditions set forth in the Indenture have been satisfied. The Trustee may
refuse to enforce the Indenture or the Debentures unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority in
aggregate Principal Amount at Maturity of the Outstanding Debentures shall have
the right to direct the time, method and place of conducting certain
proceedings, or exercising any trust or power conferred on the Trustee.
16. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Trust Indenture Act,
the Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Debentures and may otherwise deal with the
Company with the same rights it would have if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer, director or
employee of the Company or the Trustee or of any predecessor or successor of the
Company or the Trustee with respect to the Company's obligations on the
Debentures or the obligations of the Company or the Trustee under the Indenture
or any certificate or other writing delivered in connection therewith.
18. SUBORDINATION
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Indebtedness evidenced by the Debentures is subordinated, to the
extent and in the manner provided in the Indenture, to the prior payment in full
of all Senior Indebtedness of the Company, whether outstanding at the date of
the Indenture or thereafter created, incurred, assumed or guaranteed. There is
no restriction under the Indenture on the Company's incurring additional
indebtedness, including Senior Indebtedness. The Company, and each Holder by
accepting a Debenture, agrees to the subordination provided in the Indenture and
that the subordination provisions are for the benefit of the holders of Senior
Indebtedness.
Each Holder of a Debenture by his acceptance hereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
the Indenture and to protect the rights of the Holders of the Debentures
pursuant to the Indenture, and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
of the Company), the filing of a claim for the unpaid balance of his Debentures
in the form required in said proceedings and cause said claim to be approved.
19. AUTHENTICATION
This Debenture shall not be valid until an authorized signatory of
the Trustee manually signs the Certificate of Authentication on the other side
of this Debenture.
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 UNIF TRANS MIN ACT (=Uniform
Transfers to Minors Act).
21. GOVERNING LAW
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
22. INTEREST LIMITATIONS
Anything in this Debenture or in the Indenture to the contrary
notwithstanding, the Company shall never be required to pay unearned interest on
this Debenture and shall never be required to pay interest on this Debenture at
a rate in excess of the Highest Lawful Rate.
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The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture which has in it the text of this
Debenture in larger type. Requests may be made to:
Pride International, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
I or we assign and transfer this Debenture to
(Insert assignee's soc.
sec. or tax ID no.)
_____________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________ agent to transfer this Debenture on the
books of the Company. The agent may substitute another to act for him.
CONVERSION NOTICE
To convert this Debenture into Common Stock of the Company, check the box:
To convert only part of this Debenture, state the Principal Amount at Maturity
to be converted (which must be $1,000 or an integral multiple of $1,000):
$
If you want the share certificate made out in another Person's name, fill in the
form below:
(Insert other Person's
soc. sec. or tax ID no.)
_________________________________________________________
(Print or type other Person's name, address and zip code)
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Date: Your Signature: _________________________________
(Sign exactly as your name appears
on the face of this Debenture)
Signature Guarantee:
(Participant in a Recognized Signature
Guaranty Medallion Program)
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SCHEDULE OF EXCHANGES OF DEFINITIVE DEBENTURES*
The following exchanges of a part of this Global Debenture for
Definitive Debentures have been made:
PRINCIPAL AMOUNT
AMOUNT OF AMOUNT OF AT MATURITY OF THIS
DECREASE IN INCREASE IN GLOBAL DEBENTURE SIGNATURE OF
PRINCIPAL AMOUNT AT PRINCIPAL AMOUNT AT FOLLOWING AUTHORIZED OFFICER
MATURITY OF THIS MATURITY OF THIS SUCH DECREASE OF TRUSTEE OR
DATE OF EXCHANGE GLOBAL DEBENTURE GLOBAL DEBENTURE (OR INCREASE) SECURITY CUSTODIAN
---------------- ---------------- ---------------- --------------- ------------------
----------------
* To be included in a Global Debenture.
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