EXHIBIT 4.2
EXECUTION COPY
MARRIOTT INTERNATIONAL, INC.
Liquid Yield Option (TM) Notes
due 2021
(Zero Coupon-Senior)
____________________________________________________________
INDENTURE
Dated as of May 8, 2001
____________________________________________________________
THE BANK OF NEW YORK
TRUSTEE
____________________________________________________________
(TM) Trademark of Xxxxxxx Xxxxx & Co., Inc.
CROSS REFERENCE TABLE*
TIA Section Indenture Section
310(a)(1)............................................ 7.10
(a)(2)............................................ 7.10
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(b)............................................... 7.08; 7.10
(c)............................................... N.A.
311(a)............................................... 7.11
(b)............................................... 7.11
(c)............................................... N.A.
312(a)............................................... 2.05
(b)............................................... 13.03
(c)............................................... 13.03
313(a)............................................... 7.06
(b)(1)............................................ N.A.
(b)(2)............................................ 7.06
(c)............................................... 13.02
(d)............................................... 7.06
314(a)............................................... 4.02; 4.03; 13.02
(b)............................................... N.A.
(c)(1)............................................ 13.04
(c)(2)............................................ 13.04
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 13.05
(f)............................................... N.A.
315(a)............................................... 7.01
(b)............................................... 7.05; 13.02
(c)............................................... 7.01
(d)............................................... 7.01
(e)............................................... 6.11
316(a) (last sentence)............................... 2.08
(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(a)(2)............................................ N.A.
(b)............................................... 6.07
317(a)(1)............................................ 6.08
(a)(2)............................................ 6.09
(b)............................................... 2.04
318(a)............................................... 13.01
N.A. means Not Applicable.
_____________________________
* Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of the Indenture.
TABLE OF CONTENTS*
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.............................................................. 1
SECTION 1.02 Other Definitions........................................................ 6
SECTION 1.03 Incorporation by Reference of Trust Indenture Act........................ 8
SECTION 1.04 Rules of Construction.................................................... 8
SECTION 1.05 Acts of Holders.......................................................... 8
ARTICLE 2
THE SECURITIES
SECTION 2.01 Form and Dating.......................................................... 9
SECTION 2.02 Execution and Authentication............................................. 11
SECTION 2.03 Registrar, Paying Agent, Conversion Agent and Bid Solicitation
Agent.................................................................... 12
SECTION 2.04 Paying Agent to Hold Money and Securities in Trust....................... 12
SECTION 2.05 Securityholder Lists..................................................... 12
SECTION 2.06 Transfer and Exchange.................................................... 13
SECTION 2.07 Replacement Securities................................................... 14
SECTION 2.08 Outstanding Securities; Determinations of Holders' Action................ 15
SECTION 2.09 Temporary Securities..................................................... 15
SECTION 2.10 Cancellation............................................................. 16
SECTION 2.11 Persons Deemed Owners.................................................... 16
SECTION 2.12 Global Securities........................................................ 16
SECTION 2.13 CUSIP Numbers............................................................ 21
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 Right to Redeem; Notices to Trustee...................................... 21
SECTION 3.02 Selection of Securities to Be Redeemed................................... 22
SECTION 3.03 Notice of Redemption..................................................... 22
SECTION 3.04 Effect of Notice of Redemption........................................... 23
SECTION 3.05 Deposit of Redemption Price.............................................. 23
SECTION 3.06 Securities Redeemed in Part.............................................. 23
SECTION 3.07 Conversion Arrangement on Call for Redemption............................ 24
SECTION 3.08 Purchase of Securities at Option of the Holder........................... 25
SECTION 3.09 Purchase of Securities at Option of the Holder upon Change in
Control.................................................................. 31
_____________________________________
* Note: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
i
SECTION 3.10 Effect of Purchase Notice or Change in Control Purchase Notice........... 34
SECTION 3.11 Deposit of Purchase Price or Change in Control Purchase Price............ 35
SECTION 3.12 Securities Purchased in Part............................................. 35
SECTION 3.13 Covenant to Comply with Securities Laws upon Purchase of Securities...... 36
SECTION 3.14 Repayment to the Company................................................. 36
SECTION 3.15 Notices from Trustee to Beneficial Owners................................ 36
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities.................................................... 36
SECTION 4.02 SEC and Other Reports.................................................... 37
SECTION 4.03 Compliance Certificate................................................... 37
SECTION 4.04 Further Instruments and Acts............................................. 37
SECTION 4.05 Maintenance of Office or Agency.......................................... 37
SECTION 4.06 Delivery of Certain Information.......................................... 38
SECTION 4.07 Calculation of Original Issue Discount................................... 38
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets................................. 39
SECTION 5.02 Successor Company Substituted............................................. 39
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default........................................................ 40
SECTION 6.02 Acceleration............................................................. 41
SECTION 6.03 Other Remedies........................................................... 42
SECTION 6.04 Waiver of Past Defaults.................................................. 42
SECTION 6.05 Control by Majority...................................................... 42
SECTION 6.06 Limitation on Suits...................................................... 42
SECTION 6.07 Rights of Holders to Receive Payment..................................... 43
SECTION 6.08 Collection Suit by Trustee............................................... 43
SECTION 6.09 Trustee May File Proofs of Claim......................................... 43
SECTION 6.10 Priorities............................................................... 44
SECTION 6.11 Undertaking for Costs.................................................... 44
SECTION 6.12 Notice of Defaults....................................................... 45
SECTION 6.13 Waiver of Stay, Extension or Usury Laws.................................. 45
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee........................................................ 45
SECTION 7.02 Rights of Trustee........................................................ 46
SECTION 7.03 Individual Rights of Trustee............................................. 48
SECTION 7.04 Trustee's Disclaimer..................................................... 48
ii
SECTION 7.05 Notice of Defaults....................................................... 48
SECTION 7.06 Reports by Trustee to Holders............................................ 48
SECTION 7.07 Compensation and Indemnity............................................... 49
SECTION 7.08 Replacement of Trustee................................................... 49
SECTION 7.09 Successor Trustee by Merger.............................................. 50
SECTION 7.10 Eligibility; Disqualification............................................ 50
SECTION 7.11 Preferential Collection of Claims Against Company........................ 50
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Securities...................................... 50
SECTION 8.02 Repayment to the Company.................................................. 51
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders............................................... 51
SECTION 9.02 With Consent of Holders.................................................. 52
SECTION 9.03 Compliance with Trust Indenture Act...................................... 53
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions................... 53
SECTION 9.05 Notation on or Exchange of Securities.................................... 53
SECTION 9.06 Trustee to Sign Supplemental Indentures.................................. 53
SECTION 9.07 Effect of Supplemental Indentures........................................ 53
ARTICLE 10
SPECIAL TAX EVENT CONVERSION
SECTION 10.01 Optional Conversion to Semiannual Coupon Notes upon Tax Event............ 54
ARTICLE 11
CONVERSION
SECTION 11.01 Conversion Privilege..................................................... 54
SECTION 11.02 Conversion Procedure..................................................... 56
SECTION 11.03 Fractional Shares........................................................ 58
SECTION 11.04 Taxes on Conversion...................................................... 58
SECTION 11.05 Company to Provide Stock................................................. 58
SECTION 11.06 Adjustment for Change in Capital Stock................................... 58
SECTION 11.07 Adjustment for Rights Issue.............................................. 59
SECTION 11.08 Adjustment for Other Distributions....................................... 60
SECTION 11.09 When Adjustment May Be Deferred.......................................... 63
SECTION 11.10 When No Adjustment Required.............................................. 63
SECTION 11.11 Notice of Adjustment..................................................... 63
SECTION 11.12 Voluntary Increase....................................................... 64
SECTION 11.13 Notice of Certain Transactions........................................... 64
SECTION 11.14 Reorganization of Company; Special Distributions......................... 64
SECTION 11.15 Company Determination Final.............................................. 65
iii
SECTION 11.16 Trustee's Adjustment Disclaimer.......................................... 65
SECTION 11.17 Simultaneous Adjustments................................................. 65
SECTION 11.18 Successive Adjustments................................................... 65
SECTION 11.19 Rights Issued in Respect of Common Stock Issued upon Conversion.......... 65
ARTICLE 12
SECTION 12.01 Interest Payments........................................................ 66
SECTION 12.02 Defaulted Interest....................................................... 66
SECTION 12.03 Interest Rights Preserved................................................ 67
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls............................................. 67
SECTION 13.02 Notices.................................................................. 67
SECTION 13.01 Trust Indenture Act Controls............................................. 67
SECTION 13.03 Communication by Holders with Other Holders.............................. 68
SECTION 13.04 Certificate and Opinion as to Conditions Precedent....................... 68
SECTION 13.05 Statements Required in Certificate or Opinion............................ 69
SECTION 13.06 Separability Clause...................................................... 69
SECTION 13.07 Rules by Trustee, Paying Agent, Conversion Agent, Bid
Solicitation Agent and Registrar......................................... 69
SECTION 13.08 Calculations............................................................. 69
SECTION 13.09 Legal Holidays........................................................... 69
SECTION 13.10 GOVERNING LAW............................................................ 70
SECTION 13.11 No Recourse Against Others............................................... 70
SECTION 13.12 Successors............................................................... 70
SECTION 13.13 Multiple Originals....................................................... 70
EXHIBITS
--------
Exhibit A-1 Form of Face of Global Security
Exhibit A-2 Form of Certificated Security
Exhibit B-1 Transfer Certificate
Exhibit B-2 Form of Letter to be Delivered by Accredited Investors
ANNEX Projected Payment Schedule
-----
iv
INDENTURE dated as of May 8, 2001 between MARRIOTT INTERNATIONAL,
INC., a corporation incorporated under the laws of the State of Delaware (the
"Company"), and THE BANK OF NEW YORK, a New York banking corporation (the
"Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's Liquid Yield
Option(TM) Notes due 2021 (Zero Coupon - Senior) ("Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
-----------
"144A Global Security" means a permanent Global Security in the form
--------------------
of the Security attached hereto as Exhibit A-1, and that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A under the Securities Act.
"Affiliate" of any specified person means any other person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
when used with respect to any specified person means the power to direct or
cause the direction of the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or
---------------------
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Bankruptcy Law" means Title 11, United States Code, or any similar
--------------
Federal or state law for the relief of debtors.
"Board of Directors" means either the board of directors of the
------------------
Company or any duly authorized committee of such board.
"Business Day" means each day of the year other than a Saturday or a
------------
Sunday or other day on which banking institutions in The City of New York are
required or authorized to close.
"Capitalized Lease Obligations" of any person means the obligations of
-----------------------------
such person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Capital Stock" for any corporation means any and all shares,
-------------
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
"Certificated Securities" means Securities that are in the form of the
-----------------------
Securities attached hereto as Exhibit A-2.
"Common Stock" shall mean the shares of Class A Common Stock, par
------------
value $0.01, of the Company as it exists on the date of this Indenture (together
with the associated stock purchase rights under the Amended and Restated Rights
Agreement described in Section 11.19) or any other shares of Capital Stock of
the Company into which the Common Stock shall be reclassified or changed.
"Company" means the party named as the "Company" in the first
-------
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means a written request or order
--------------- -------------
signed in the name of the Company by any two Officers.
"Consolidated Net Assets" means the total amount of assets of the
-----------------------
Company and its Subsidiaries (less applicable depreciation, amortization and
other valuation reserves), after deducting therefrom all current liabilities of
the Company and its Subsidiaries (other than intercompany liabilities and the
current portion of long-term Debt and Capitalized Lease Obligations), all as set
forth on the latest consolidated balance sheet of the Company prepared in
accordance with GAAP.
"Corporate Trust Office" means the principal office of the Trustee at
----------------------
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Administration, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as a successor Trustee may designate from time to
time by notice to the Holders and the Company).
"Custodian" means any receiver, trustee, assignee, liquidator,
---------
custodian or similar official under any Bankruptcy Law.
"Debt" means with respect to the Company at any date, without
----
duplication, obligations (other than nonrecourse obligations) for borrowed money
or evidenced by bonds, debentures, notes or similar instruments.
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"GAAP" means generally accepted accounting principles in the United
----
States as in effect on the date hereof.
2
"Global Securities" means Securities that are in the form of the
-----------------
Securities attached hereto as Exhibit A-1, and to the extent that such
Securities are required to bear the Legend required by Section 2.06, such
Securities will be in the form of a 144A Global Security.
"Holder" or "Securityholder" means a person in whose name a Security
------ --------------
is registered on the Registrar's books.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Institutional Accredited Investor Security" means a Security in the
------------------------------------------
form of the Security attached hereto as Exhibit A-2, representing Securities
sold to Institutional Accredited Investors.
"Issue Date" of any Security means the date on which the Security was
----------
originally issued or deemed issued as set forth on the face of the Security.
"Issue Price" of any Security means, in connection with the original
-----------
issuance of such Security, the initial issue price at which the Security is sold
as set forth on the face of the Security.
"Officer" means either the Chairman or Vice Chairman of the Board, the
-------
President, any Vice President, the Treasurer, the Secretary, any Assistant
Treasurer or Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
---------------------
information specified in Sections 13.04 and 13.05, (i) signed in the name of the
Company by either its Chairman of the Board, Vice Chairman of the Board,
President, any Vice President, Treasurer, any Assistant Treasurer, Controller,
or any Assistant Controller, and (ii) attested to by its Secretary or any
Assistant Secretary, and delivered to the Trustee. An Officers' Certificate
given pursuant to Section 4.03 shall be signed by the principal executive,
financial or accounting Officer of the Company.
"Opinion of Counsel" means a written opinion containing the
------------------
information specified in Sections 13.04 and 13.05, from legal counsel. The
counsel may be an employee of, or counsel to, the Company or other counsel
designated by the Company and reasonably acceptable to the Trustee.
"Original Issue Discount" of any Security means the difference between
-----------------------
the Issue Price and the Principal Amount at Maturity of the Security as set
forth on the face of the Security.
"person" or "Person" means any individual, corporation, limited
------ ------
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, or government or any agency or political
subdivision thereof.
3
"Principal Amount at Maturity" of a Security means the principal
----------------------------
amount at maturity as set forth on the face of the Security.
"Principal Property" means (i) a parcel of improved or unimproved real
------------------
estate or other physical facility or depreciable asset of the Company or a
Subsidiary, the net book value of which on the date of determination exceeds 2%
of Consolidated Net Assets and (ii) any group of parcels of real estate, other
physical facilities, and/or depreciable assets of the Company and/or its
Subsidiaries, the net book value of which, when sold in one or a series of
related Sale and Lease-Back Transactions or securing Debt issued in respect of
such Principal Properties, on the date of determination exceeds 2% of the
Consolidated Net Assets. For purposes of the foregoing, "related Sale and
Lease-Back Transactions" refers to any two or more such contemporaneous
transactions, which are on substantially similar terms with substantially the
same parties.
"Redemption Date" or "redemption date" means the date specified for
--------------- ---------------
redemption of the Securities in accordance with the terms of the Securities and
this Indenture.
"Redemption Price" or "redemption price" shall have the meaning set
---------------- ----------------
forth in paragraph 6 of the Securities.
"Regular Cash Dividends" means quarterly or other periodic cash
----------------------
dividends on the Company's Common Stock as declared by the Company's Board of
Directors as part of its cash dividend payment practices and that are not
designated by them as extraordinary or special or other nonrecurring dividends.
"Responsible Officer" means, when used with respect to the Trustee,
-------------------
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject and who, in each case, shall have direct responsibility for
the administration of this Indenture.
"Restricted Security" means a Security required to bear the
-------------------
restrictive Legend set forth in the form of Security set forth in Exhibits A-1
and A-2 of this Indenture.
"Restricted Subsidiary" means any Subsidiary organized and existing
---------------------
under the laws of the United States of America and the principal business of
which is carried on within the United States of America (x) which owns or is a
lessee pursuant to a capital lease of any property of the type described in
clause (i) of the definition of Principal Property or (y) in which the
investment of the Company and all its Subsidiaries exceeds 5% of Consolidated
Net Assets as of the date of such determination other than, in the case of
either clause (x) or (y), (i) Subsidiaries of which the principal business is
the Company's timeshare or senior living services businesses, (ii) each
Subsidiary the major part of whose business consists of finance, banking,
credit, leasing, insurance, financial services or other similar operations, or
any combination thereof and, (iii) each Subsidiary formed or acquired after the
date hereof for the purpose of developing new
4
assets or acquiring the business or assets of another person and which does not
acquire all or any substantial part of the business or assets of the Company or
any Restricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
---------
provision), as it may be amended from time to time.
"Sale Price" of Capital Stock on any date means the closing per share
----------
sale price (or, if no closing sale price is reported, the average of the bid and
ask prices or, if more than one in either case, the average of the average bid
and the average ask prices) on such date as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated. In the absence of such quotation, the Company
shall be entitled to determine the Sale Price on the basis of such quotations as
it considers appropriate.
"SEC" means the Securities and Exchange Commission.
---
"Securities" means any of the Company's Liquid Yield OptionTM Notes
----------
due 2021 (Zero Coupon-Senior), as amended or supplemented from time to time,
issued under this Indenture.
"Securityholder" or "Holder" means a person in whose name a Security
-------------- ------
is registered on the Registrar's books.
"Significant Subsidiary" shall have the meaning set forth in Rule 1-02
----------------------
of Regulation S-X under the Securities Act of 1933, as amended.
"Special Record Date" means, for the payment of any Defaulted
-------------------
Interest, the date fixed by the Trustee pursuant to Section 12.02.
"Stated Maturity" means, when used with respect to any Security, or
---------------
any installment of semiannual or contingent interest thereon, the date specified
in such Security as the fixed date on which an amount equal to the Principal
Amount at Maturity of such Security or such installment of semiannual or
contingent interest is due and payable.
"Subsidiary" means (i) a corporation, a majority of whose Capital
----------
Stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more Subsidiaries of the Company or by the Company and one or more
Subsidiaries of the Company, (ii) a partnership in which the Company or a
Subsidiary of the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other person (other than a corporation
or partnership) in which the Company, a Subsidiary of the Company or the Company
and one or more Subsidiaries of the Company, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such person.
5
"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 May 3, 2001, as a result of (a) any amendment to, or change (including any
announced 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 May 3, 2001, there is more than an
insubstantial risk that interest (including Original Issue Discount and
contingent interest, if any) payable on the Securities 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.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date
---
of this Indenture; provided, however, that in the event the TIA is amended after
-------- -------
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"trading day" means a day during which trading in securities generally
-----------
occurs on the New York Stock Exchange or, if the Common Stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the Common Stock is then listed or, if the Common
Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"Trustee" means the party named as the "Trustee" in the first
-------
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
SECTION 1.02 Other Definitions.
-------------------------------------
Defined in
Term Section
---- -------
"Act".................................... 1.05(a)
"Agent Members".......................... 2.12(e)
"Amended and Restated Rights Agreement".. 11.19
"Associate".............................. 3.09(a)
"Average Sale Price"..................... 11.01
"beneficial owner"....................... 3.09(a)
"Bid Solicitation Agent"................. 2.03
"cash"................................... 3.08(b)
"Change in Control"...................... 3.09(a)
"Change in Control Purchase Date"........ 3.09(a)
"Change in Control Purchase Notice"...... 3.09(c)
6
"Change in Control Purchase Price"............... 3.09(a)
"Company Notice"................................. 3.08(e)
"Company Notice Date"............................ 3.08(c)
"Contingent Interest Period"..................... Exhibit A-1
"Conversion Agent"............................... 2.03
"Conversion Date"................................ 11.02
"Conversion Rate"................................ 11.01
"Defaulted Interest"............................. 12.02
"Depositary"..................................... 2.01(a)
"DTC"............................................ 2.01(a)
"Event of Default"............................... 6.01
"Exchange Act"................................... 3.08(d)
"Ex-Dividend Date"............................... 11.08(b)
"Ex-Dividend Time"............................... 11.01
"Extraordinary Cash Dividend".................... 11.08(a)
"Five-Day Period"................................ Exhibit A-1
"Institutional Accredited Investors"............. 2.01(b)
"Interest Payment Date".......................... 10.01
"Legal Holiday".................................. 13.08
"Legend"......................................... 2.06(f)
"LYON Market Price".............................. Exhibit A-1
"Market Price"................................... 3.08(d)
"Measurement Period"............................. 11.08(a)
"noncontingent bond method"...................... 4.07
"Notice of Default".............................. 6.01
"Option Exercise Date"........................... 10.01
"Option Exercise Date"........................... 10.01
"Paying Agent"................................... 2.03
"Legend"......................................... 2.06(f)
"Purchase Date".................................. 3.08(a)
"Purchase Notice"................................ 3.08(a)
"Purchase Price"................................. 3.08(a)
"QIB"............................................ 2.01(a)
"Quarterly Period"............................... Exhibit A-1
"Registrar"...................................... 2.03
"Regular Record Date"............................ 10.01
"Relevant Cash Dividends......................... 11.08(a)
"Restated Principal Amount"...................... 10.01
"Rights"......................................... 11.19
"Rights Agreement"............................... 11.19
"Rule 144A Information".......................... 4.06
"Securities Act"................................. 3.08(d)
"Series A Junior Preferred Stock"................ 11.19
"Successor Company".............................. 5.01
"Tax Event Date"................................. 10.01
"Time of Determination".......................... 11.01
7
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
----------------------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction. Unless the context otherwise
------------------------------------
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with United States generally accepted accounting
principles as in effect from time to time;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the plural
include the singular.
SECTION 1.05 Acts of Holders. (a) Any request, demand,
------------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by their agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
8
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to such officer
the execution thereof. Where such execution is by a signer acting in a
capacity other than such signer's individual capacity, such certificate or
affidavit shall also constitute sufficient proof of such signer's
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the register
maintained by the Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a resolution of the Board of
Directors, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders for purposes of determining whether Holders
of the requisite proportion of outstanding Securities have authorized or agreed
or consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
--------
or consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
ARTICLE 2
THE SECURITIES
SECTION 2.01 Form and Dating. The Securities and the Trustee's
------------------------------
certificate of authentication shall be substantially in the form of Exhibits A-1
and A-2, which are a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage (provided
that any such notation, legend or endorsement required by usage is in a form
acceptable to the Company). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated
the date of its authentication.
9
(a) 144A Global Securities. Securities offered and sold within the
----------------------
United States to qualified institutional buyers as defined in Rule 144A
("QIBs") in reliance on Rule 144A shall be issued, initially in the form of
a 144A Global Security, which shall be deposited with the Trustee at its
Corporate Trust Office, as custodian for the Depositary and registered in
the name of The Depository Trust Company ("DTC") or the nominee thereof
(such depositary, or any successor thereto, and any such nominee being
hereinafter referred to as the "Depositary"), duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
Principal Amount at Maturity of the 144A Global Securities may from time to
time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary as hereinafter provided.
(b) Institutional Accredited Investor Securities. Except as provided
--------------------------------------------
in this Section 2.01, or in Sections 2.06 or 2.12, owners of beneficial
interests in Global Securities will not be entitled to receive physical
delivery of Certificated Securities. Securities offered and sold within the
United States to institutional accredited investors as defined in Rule
501(a)(1), (2), (3) and (7) under the Securities Act ("Institutional
Accredited Investors") shall be issued, initially in the form of an
Institutional Accredited Investor Security, duly executed by the Company
and authenticated by the Trustee as hereinafter provided.
(c) Global Securities in General. Each Global Security shall
----------------------------
represent such of the outstanding Securities as shall be specified therein
and each shall provide that it shall represent the aggregate Principal
Amount at Maturity of outstanding Securities from time to time endorsed
thereon and that the aggregate Principal Amount at Maturity of outstanding
Securities represented thereby may from time to time be increased or
decreased, as appropriate, to reflect exchanges, redemptions and
conversions.
Any adjustment of the aggregate Principal Amount at Maturity of a
Global Security to reflect the amount of any increase or decrease in the
aggregate Principal Amount at Maturity of outstanding Securities represented
thereby shall be made by the Trustee in accordance with instructions given by
the Holder thereof as required by Section 2.12 hereof and shall be made on the
records of the Trustee and the Depositary.
(d) Book-Entry Provisions. This Section 2.01(d) shall apply only to
---------------------
Global Securities deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(d), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
10
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS, IN WHOLE
BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF."
(e) Certificated Securities. Securities not issued as interests in
-----------------------
the Global Securities will be issued in certificated form substantially in
the form of Exhibit A-2 attached hereto.
SECTION 2.02 Execution and Authentication. The Securities shall be
------------------------------------------
executed on behalf of the Company by any Officer. The signature of the Officer
on the Securities may be manual or by facsimile.
Securities bearing the manual or facsimile signatures of an individual
who was at the time of the execution of the Securities the proper Officer of the
Company shall bind the Company, notwithstanding that such individual has ceased
to hold such office prior to the authentication and delivery of such Securities
or did not hold such office at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized Officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original
issue in an aggregate Principal Amount at Maturity of up to $410,000,000
($470,000,000 aggregate Principal Amount at Maturity if the over-allotment
option is exercised in full within 30 days from the Issue Date) upon a Company
Order without any further action by the Company. The aggregate Principal Amount
at Maturity of Securities outstanding at any time may not exceed the amount set
forth in the foregoing sentence, except as provided in Section 2.07.
The Securities shall be issued only in registered form without coupons
and only in denominations of $1,000 of Principal Amount at Maturity and any
integral multiple thereof.
11
SECTION 2.03 Registrar, Paying Agent, Conversion Agent and Bid
----------------------------------------------------------------
Solicitation Agent. The Company shall maintain an office or agency where
------------------
Securities may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities may be presented for
purchase or payment ("Paying Agent") and an office or agency where Securities
may be presented for conversion ("Conversion Agent"). The Company shall also
appoint a bid solicitation agent (the "Bid Solicitation Agent") to act pursuant
to paragraph 5 of the Securities. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents. The term Paying Agent includes any additional paying agent,
including any named pursuant to Section 4.05. The term Conversion Agent includes
any additional conversion agent, including any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar or co-registrar, Paying Agent, Conversion Agent or Bid Solicitation
Agent (other than the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent. The Company shall notify the Trustee
of the name and address of any such agent. If the Company fails to maintain a
Registrar, Paying Agent, Conversion Agent or Bid Solicitation Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07. The Company or any Subsidiary or an Affiliate of
either of them may act as Paying Agent, Registrar, Conversion Agent or co-
registrar. None of the Company or any Subsidiary or any Affiliate of either of
them may act as Bid Solicitation Agent.
The Company initially appoints the Trustee as Registrar, Conversion
Agent, Paying Agent and Bid Solicitation Agent (provided, however, that the
--------- --------
Trustee shall have the right to delegate the responsibilities of Bid
Solicitation Agent to such other person, as the Trustee deems fit and proper) in
connection with the Securities.
SECTION 2.04 Paying Agent to Hold Money and Securities in Trust.
-----------------------------------------------------------------
Except as otherwise provided herein, not later than 10:00 a.m., New
York City time, on each due date of payments in respect of any Security, the
Company shall deposit with the Paying Agent a sum of money (in immediately
available funds if deposited on the due date) or Common Stock sufficient to make
such payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money and Common
Stock held by the Paying Agent for the making of payments in respect of the
Securities and shall notify the Trustee of any default by the Company in making
any such payment. At any time during the continuance of any such default, the
Paying Agent shall, upon the written request of the Trustee, forthwith pay to
the Trustee all money and Common Stock so held in trust. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money and Common Stock held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money and Common Stock held by it to the Trustee and to account for any
funds and Common Stock disbursed by it. Upon doing so, the Paying Agent shall
have no further liability for the money or Common Stock.
SECTION 2.05 Securityholder Lists. The Trustee shall preserve in
-----------------------------------
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall cause to be
12
furnished to the Trustee at least semiannually on May 1 and November 1 a
listing of Securityholders dated within 15 days of the date on which the list is
furnished and at such other times as the Trustee may request in writing a list
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders.
SECTION 2.06 Transfer and Exchange. Subject to Section 2.12 hereof,
------------------------------------
(a) upon surrender for registration of transfer of any Security,
together with a written instrument of transfer satisfactory to the Registrar,
duly executed by the Securityholder or duly authorized in writing by such
Securityholder's attorney, at the office or agency of the Company designated
Registrar or co-registrar pursuant to Section 2.03, the Company shall execute,
and the Trustee, at the written direction of the Company, shall authenticate and
deliver in the name of the designated transferee or transferees, one or more new
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount at Maturity. The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the registration of transfer or exchange
of the Securities from the Securityholder requesting such registration of
transfer or exchange.
At the option of the Holder, Certificated Securities may be exchanged
for other Securities of any authorized denomination or denominations, of a like
aggregate Principal Amount at Maturity, upon surrender of the Securities to be
exchanged, together with a written instrument of transfer satisfactory to the
Registrar, duly executed by the Securityholder or duly authorized in writing by
such Securityholder's attorney, at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee, upon receipt of a Company Order, shall authenticate and deliver, the
Securities, which the Holder making the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as
a Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a
Global Security shall be limited to transfers of such Global Security, in whole
or in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
13
(d) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon registration
of transfer or exchange of Securities.
(e) No Registrar shall be required to make registrations of transfer
or exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the registration of transfer,
exchange or replacement of Securities subject to restrictions on transfer and
bearing the legends set forth on the form of Security attached hereto as
Exhibits A-1 and A-2 setting forth such restrictions (collectively, the
"Legend"), or if a request is made to remove the Legend on a Security, the
Securities so issued shall bear the Legend, or the Legend shall not be removed,
as the case may be, unless there is delivered to the Company and the Registrar
such satisfactory evidence, which shall include an Opinion of Counsel, as may be
reasonably required by the Company and the Registrar, that neither the Legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Rule 144 under the
Securities Act or that such Securities are not "restricted" within the meaning
of Rule 144 under the Securities Act. Upon (i) provision of such satisfactory
evidence, or (ii) notification by the Company to the Trustee and Registrar of
the sale of such Security pursuant to a registration statement that is effective
at the time of such sale, the Trustee, upon receipt of a Company Order, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently held by
an Affiliate of the Company, the Legend shall be reinstated by the Company.
SECTION 2.07 Replacement Securities. If (a) any mutilated Security
-------------------------------------
is surrendered to the Trustee, or (b) the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute, and the Trustee,
upon receipt of a Company Order, shall authenticate and deliver, in exchange for
any such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and Principal Amount at Maturity, bearing
a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, the
Company may require the Holder thereof to pay a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of
14
the Company, whether or not the mutilated, destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08 Outstanding Securities; Determinations of Holders'
-----------------------------------------------------------------
Action. Securities outstanding at any time are all the Securities authenticated
------
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those mutilated, destroyed, lost or stolen, those paid pursuant to
Section 2.07 and those described in this Section 2.08 as not outstanding. A
Security does not cease to be outstanding because the Company or an Affili ate
thereof holds the Security; provided, however, that in determining whether the
-------- -------
Holders of the requisite Principal Amount at Maturity of Securities have given
or concurred in any request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at the time
of such determination shall be considered in any such determination (including,
without limitation, determinations pursuant to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following the Purchase Date or a Change
in Control Purchase Date, or on Stated Maturity, money or securities, if
permitted hereunder, sufficient to pay Securities payable on that date, then
immediately after such Redemption Date, Purchase Date, Change in Control
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and Original Issue Discount and interest (including
contingent interest), if any, on such Securities shall cease to accrue; provided
--------
that if such Securities 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 Security is converted in accordance with Article 11, then from
and after the time of conversion on the Conversion Date, such Security shall
cease to be outstanding and Original Issue Discount and interest (including
contingent interest), if any, shall cease to accrue on such Security.
SECTION 2.09 Temporary Securities. Pending the preparation of
------------------------------------
definitive Securities, the Company may execute, and upon receipt of a Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially
15
of the tenor of the definitive Securities in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee, upon receipt of
a Company Order, shall authenticate and deliver in exchange therefor a like
Principal Amount at Maturity of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.10 Cancellation. All Securities surrendered for payment,
---------------------------
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 11. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of by
the Trustee in accordance with the Trustee's customary procedure.
SECTION 2.11 Persons Deemed Owners. Prior to due presentment of a
-----------------------------------
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of the Security or the payment of any Redemption Price, Purchase Price
or Change in Control Purchase Price in respect thereof, and interest (including
contingent interest, if any) thereon, for the purpose of conversion and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 2.12 Global Securities. (a) Notwithstanding any other
-------------------------------
provisions of this Indenture or the Securities, (A) transfers of a Global
Security, in whole or in part, shall be made only in accordance with Section
2.06 and Section 2.12(a)(i) below, (B) transfer of a beneficial interest in a
Global Security for a Certificated Security shall comply with Section 2.06 and
Section 2.12(a)(ii) below, and (C) transfers of a Certificated Security shall
comply with Section 2.06 and Section 2.12(a)(iii) and (iv) below.
(i) Transfer of Global Security. A Global Security may not be
---------------------------
transferred, in whole or in part, to any Person other than the
Depositary or a nominee or any
16
successor thereof, and no such transfer to any such other Person may
be registered; provided that this clause (i) shall not prohibit any
--------
transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a
Security to any Person shall be effective under this Indenture or the
Securities unless and until such Security has been registered in the
name of such Person. Nothing in this Section 2.12(a)(i) shall prohibit
or render ineffective any transfer of a beneficial interest in a
Global Security effected in accordance with the other provisions of
this Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
-------------------------------------------------------------
Security for a Certificated Security. A beneficial interest in a
------------------------------------
Global Security may not be exchanged for a Certificated Security
except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a transfer of a beneficial interest in a
Global Security in accordance with Applicable Procedures for a
Certificated Security in the form satisfactory to the Trustee,
together with:
(a) so long as the Securities are Restricted Securities,
certification, in the form set forth in Exhibit B-1, and, if
requested by the Company or the Registrar, certification in the
form set forth in Exhibit B-2, that such beneficial interest in
the Global Security is being transferred to an Institutional
Accredited Investor in accordance with subparagraphs (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act;
(b) written instructions to the Trustee to make, or direct the
Registrar to make, an adjustment on its books and records with
respect to such Global Security to reflect a decrease in the
aggregate Principal Amount at Maturity of the Securities
represented by the Global Security, such instructions to contain
information regarding the Depositary account to be credited with
such decrease; and
(c) if the Company or Registrar so requests, an Opinion of Counsel
or other evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the Legend.
the Trustee shall cause, or direct the Registrar to cause, in
accordance with the standing instructions and procedures existing
between the Depositary and the Registrar, the aggregate Principal
Amount at Maturity of Securities represented by the Global Security to
be decreased by the aggregate Principal Amount at Maturity of the
Certificated Security to be issued, shall authenticate and deliver
such Certificated Security and shall debit or cause to be debited to
the account of the Person specified in such instructions a beneficial
interest in the Global Security equal to the Principal Amount at
Maturity of the Certificated Security so issued.
(iii) Transfer and Exchange of Certificated Securities. When
------------------------------------------------
Certificated Securities are presented to the Registrar with a request:
17
(x) to register the transfer of such Certificated Securities; or
(y) to exchange such Certificated Securities for an equal
Principal Amount at Maturity of Certificated Securities of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met;
provided, however, that the Certificated Securities surrendered for
-------- -------
registration of transfer or exchange:
(a) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing; and
(b) so long as such Securities are Restricted Securities, such
Securities are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act or
pursuant to clause (A), (B) or (C) below, and are accompanied by
the following additional information and documents, as
applicable:
(A) if such Certificated Securities are being delivered to
the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect; or
(B) if such Certificated Securities are being transferred
to the Company, a certification to that effect; or
(C) if such Certificated Securities are being transferred
pursuant to an exemption from registration, (i) a certification
to that effect (in the form set forth in Exhibit B-1 and B-2, if
applicable) and (ii) if the Company or Registrar so requests, an
Opinion of Counsel or other evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the
Legend.
(iv) Restrictions on Transfer of a Certificated Security for a
---------------------------------------------------------
Beneficial Interest in a Global Security. A Certificated Security may
----------------------------------------
not be exchanged for a beneficial interest in a Global Security except
upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Certificated Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
(a) so long as the Securities are Restricted Securities,
certification, in the form set forth in Exhibit B-1, that
such Certificated Security is being transferred to a QIB in
accordance with Rule 144A; and
18
(b) written instructions directing the Trustee to make, or to
direct the Registrar to make, an adjustment on its books and
records with respect to such Global Security to reflect an
increase in the aggregate Principal Amount at Maturity of
the Securities represented by the Global Security, such
instructions to contain information regarding the Depositary
account to be credited with such increase,
then the Trustee shall cancel such Certificated Security and cause, or
direct the Registrar to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Registrar, the aggregate Principal Amount at Maturity of Securities
represented by the Global Security to be increased by the aggregate
Principal Amount at Maturity of the Certificated Security to be
exchanged, and shall credit or cause to be credited to the account of
the Person specified in such instructions a beneficial interest in the
Global Security equal to the Principal Amount at Maturity of the
Certificated Security so cancelled. If no Global Securities are then
outstanding, the Company shall execute, and the Trustee, upon receipt
of a Company Order, shall authenticate, a new Global Security in the
appropriate Principal Amount at Maturity.
Any Security issued in exchange for a Global Security or any portion
thereof shall be a Global Security; provided that any such Security so issued
that is registered in the name of a Person other than the Depositary or a
nominee thereof shall not be a Global Security.
(b) Subject to the succeeding paragraph, every Security shall be
subject to the restrictions on transfer provided in the Legend including the
delivery of an Opinion of Counsel, if so provided. Whenever any Restricted
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the form set
forth in Exhibit B-1, dated the date of such surrender and signed by the Holder
of such Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability
of any Security shall cease and terminate when such Security has been sold
pursuant to an effective registration statement under the Securities Act or
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or, if earlier, upon the expiration of the holding
period applicable to sales thereof under Rule 144(k) under the Securities Act
(or any successor provision). Any Security as to which such restrictions on
transfer shall have expired in accordance with their terms or shall have
terminated may, upon a surrender of such Security for exchange to the Registrar
in accordance with the provisions of this Section 2.12 (accompanied, in the
event that such restrictions on transfer have terminated by reason of a transfer
in compliance with Rule 144 or any successor provision, by an Opinion of Counsel
having substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and the Registrar
and in form acceptable to the Company, to the effect that the transfer of such
Security has been made in compliance with
19
Rule 144 or such successor provision), be exchanged for a new Security, of like
tenor and aggregate Principal Amount at Maturity, which shall not bear the
restrictive Legend. The Company shall inform the Trustee of the effective date
of any registration statement registering the Securities under the Securities
Act. The Trustee and the Registrar shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
Opinion of Counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12, the
term "transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.
(e) The provisions of clauses (1), (2), (3) and (4) below shall apply
only to Global Securities:
(1) Notwithstanding any other provisions of this Indenture or
the Securities, except as provided in Section 2.12(a)(ii), a
Global Security shall not be exchanged in whole or in part for a
Security registered in the name of any Person other than the
Depositary or one or more nominees thereof; provided that a
--------
Global Security may be exchanged for Securities registered in the
names of any person designated by the Depositary in the event
that (i) the Depositary has notified the Company that it is
unwilling or unable to continue as Depositary for such Global
Security or such Depositary has ceased to be a "clearing agency"
registered under the Exchange Act, and a successor Depositary is
not appointed by the Company within 90 days; (ii) the Company
decides to discontinue use of the system of book-entry transfer
through the Depositary or (iii) an Event of Default has occurred
and is continuing with respect to the Securities. Any Global
Security exchanged pursuant to clause (i) above shall be so
exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (iii) above may be exchanged in
whole or from time to time in part as directed by the Depositary.
(2) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully registered
form, without interest coupons, shall have an aggregate Principal
Amount at Maturity equal to that of such Global Security or
portion thereof to be so exchanged, shall be registered in such
names and be in such authorized denominations as the Depositary
shall designate and shall bear the applicable legends provided
for herein. Any Global Security to be exchanged in whole shall be
surrendered by the Depositary to the Trustee, as Registrar. With
regard to any Global Security to be exchanged in part, either
such Global Security shall be so surrendered for exchange or, if
the Trustee is acting as custodian for the Depositary or its
nominee with respect to such Global Security, the Principal
Amount at Maturity thereof shall be reduced, by an amount equal
to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon
any such surrender or adjustment, the Trustee shall authenticate
and deliver the
20
Security issuable on such exchange to or upon the order of the
Depositary or an authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the
registered Holder may grant proxies and otherwise authorize any
Person, including Agent Members (as defined below) and persons
that may hold interests through Agent Members, to take any action
which a holder is entitled to take under this Indenture or the
Securities.
(4) In the event of the occurrence of any of the events
specified in clause (1) above, the Company will promptly make
available to the Trustee a reasonable supply of Certificated
Securities in definitive, fully registered form, without interest
coupons.
(5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on
whose behalf Agent Members may act shall have any rights under
this Indenture with respect to any Global Security registered in
the name of the Depositary or any nominee thereof, or under any
such Global Security, and the Depositary or such nominee, as the
case may be, may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner and
holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or such nominee, as the
case may be, or impair, as between the Depositary, its Agent
Members and any other person on whose behalf an Agent Member may
act, the operation of customary practices of such Persons
governing the exercise of the rights of a holder of any Security.
SECTION 2.13 CUSIP Numbers. The Company in issuing the Securities may
---------------------------
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
--------
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 Right to Redeem; Notices to Trustee. The Company, at its
-------------------------------------------------
option, may redeem the Securities in accordance with the provisions of
paragraphs 6 and 8 of the Securities. If the Company elects to redeem Securities
pursuant to paragraph 6 of the Securities,
21
it shall notify the Trustee in writing of the Redemption Date, the Principal
Amount at Maturity of Securities to be redeemed, the Redemption Price and the
amount of contingent interest, if any, payable on the Redemption Date.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 by a Company Order, at least 40 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee).
SECTION 3.02 Selection of Securities to Be Redeemed. If less than all
----------------------------------------------------
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by any other method the Trustee considers fair
and appropriate (so long as such method is not prohibited by the rules of any
stock exchange on which the Securities are then listed). The Trustee shall make
the selection at least 30 days but not more than 60 days before the Redemption
Date from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the Principal Amount at Maturity
of Securities that have denominations larger than $1,000.
Securities and portions of them the Trustee selects shall be in
Principal Amounts at Maturity of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.
SECTION 3.03 Notice of Redemption. At least 30 days but not more than
----------------------------------
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first-class mail, postage prepaid, to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price and, to the extent known at the time of such
notice, the amount of contingent interest, if any, payable on the
Redemption Date;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any
time before the close of business on the second Business Day immediately
preceding the Redemption Date;
22
(6) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 9 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and contingent interest, if
any;
(8) if fewer than all the outstanding Securities are to be redeemed,
the certificate number and Principal Amounts at Maturity of the particular
Securities to be redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price and contingent interest, if any, Original Issue Discount
and interest (including contingent interest), if any, on Securities called
for redemption will cease to accrue on and after the Redemption Date;
(10) the CUSIP number of the Securities; and
(11) any other information the Company wants to present.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided that the
--------
Company makes such request at least three Business Days prior to the date such
notice of redemption must be mailed.
SECTION 3.04 Effect of Notice of Redemption. Once notice of
------------------------------
redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price (together with accrued
contingent interest, if any) stated in the notice, except for Securities which
are converted in accordance with the terms of this Indenture. Upon surrender to
the Paying Agent, such Securities shall be paid at the Redemption Price
(together with accrued contingent interest, if any) stated in the notice.
SECTION 3.05 Deposit of Redemption Price. Prior to 10:00 a.m. (New
---------------------------
York City time), on the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of
them is the Paying Agent, shall segregate and hold in trust) money sufficient to
pay the Redemption Price of, and any accrued and unpaid contingent interest with
respect to, all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which on or prior thereto have been
delivered by the Company to the Trustee for cancellation or have been converted.
The Paying Agent shall as promptly as practicable return to the Company any
money, not required for that purpose because of conversion of Securities
pursuant to Article 11. If such money is then held by the Company in trust and
is not required for such purpose, it shall be discharged from such trust.
SECTION 3.06 Securities Redeemed in Part. Upon surrender of a
------------------------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount at Maturity to the unredeemed portion of
the Security surrendered.
23
SECTION 3.07 Conversion Arrangement on Call for Redemption. In
------------------------------------------------------------
connection with any redemption of Securities, the Company may arrange, in lieu
of redemption, for the purchase and conversion of any Securities called for
redemption by an agreement with one or more investment banks or other purchasers
to purchase such Securities by paying to the Trustee in trust for the
Securityholders, on or prior to 10:00 a.m. New York City time on the Redemption
Date, an amount that, together with any amounts deposited with the Trustee by
the Company for the redemption of such Securities, is not less than the
Redemption Price of such Securities. Notwithstanding anything to the contrary
contained in this Article 3, the obligation of the Company to pay the Redemption
Price of, and any accrued and unpaid contingent interest with respect to, such
Securities shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is entered into, any
Securities 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 11) 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 Securities 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
Securities. Without the Trustee's prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this 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 Securities 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 this Indenture.
24
SECTION 3.08 Purchase of Securities at Option of the Holder.
-------------------------------------------------------------
(a) General. Holders may require the Company to purchase any
-------
outstanding Security for which a written purchase notice has been properly
delivered by the Holder and not withdrawn, subject to certain additional
conditions. Holders may submit their Securities for purchase to the Paying Agent
at any time from the opening of business on the date that is 20 Business Days
prior to such Purchase Date until the close of business on such Purchase Date.
The Securities shall be purchased by the Company pursuant to paragraph 7 of the
Securities as of May 8, 2002, May 8, 2004, May 8, 2011 and May 8, 2016 (each, a
"Purchase Date"), at the purchase price of $867.42 per $1,000 of Principal
Amount at Maturity as of May 8, 2002, of $880.50 per $1,000 of Principal Amount
at Maturity as of May 8, 2004, of $927.87 per $1,000 of Principal Amount at
Maturity as of May 8, 2011 and of $963.26 per $1,000 of Principal Amount at
Maturity as of May 8, 2016 (each, a "Purchase Price", as applicable), at the
option of the Holder thereof, upon:
(i) delivery to the Paying Agent, by the Holder of a written notice
of purchase (a "Purchase Notice") no later than the close of business
on the Purchase Date stating:
(A) the certificate numbers of the Holder's Securities which
will be delivered for purchase,
(B) the portion of the Principal Amount at Maturity of the
Securities which the Holder will deliver to be purchased, which
portion must be a Principal Amount at Maturity of $1,000 or an
integral multiple thereof,
(C) that such Securities shall be purchased pursuant to the
terms and conditions specified in paragraph 7 of the Securities
and in this Indenture, and
(D) in the event the Company elects, pursuant to Section
3.08(b), to pay the Purchase Price to be paid as of such Purchase
Date, in whole or in part, in shares of Common Stock but such
portion of the Purchase Price shall ultimately be payable to such
Holder entirely in cash because any of the conditions to payment
of the Purchase Price in Common Stock is not satisfied prior to
the close of business on such Purchase Date, as set forth in
Section 3.08(d), whether such Holder elects (i) to withdraw such
Purchase Notice as to some or all of the Securities to which such
Purchase Notice relates (stating the Principal Amount at Maturity
and certificate numbers of the Securities as to which such
withdrawal shall relate), or (ii) to receive cash in respect of
the entire Purchase Price for all Securities (or portions
thereof) to which such Purchase Notice relates; and
(ii) delivery of such Security to the Paying Agent at any time after
delivery of the Purchase Notice to the Paying Agent (together with all
necessary endorsements) at the offices of the Paying Agent, such
delivery being a condition to receipt by the Holder of the Purchase
Price therefor; provided, however, that
-------- -------
25
such Purchase Price shall be so paid pursuant to this Section 3.08
only if the Security so delivered to the Paying Agent shall conform in
all respects to the description thereof in the related Purchase
Notice, as determined by the Company.
If a Holder, in such Xxxxxx's Purchase Notice and in any written
notice of withdrawal delivered by such Holder pursuant to the terms of Section
3.10, fails to indicate such Xxxxxx's choice with respect to the election set
forth in clause (D) of Section 3.08(a)(i), such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price for all Securities
subject to such Purchase Notice in the circumstances set forth in such clause
(D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security 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 Security also apply to the
purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by the Holder (together with accrued and unpaid contingent interest,
if any) promptly following the later of the Purchase Date and the time of
delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 3.08(a)
shall have the right to withdraw such Purchase Notice at any time prior to the
close of business on the Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.10.
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
------------------------------------------------------------
Securities to be purchased pursuant to Section 3.08(a) may be paid for, at the
election of the Company, in U.S. legal tender ("cash") or Common Stock, or in
any combination of cash and Common Stock, subject to the conditions set forth in
Sections 3.08(c) and (d). The Company shall designate, in the Company Notice
delivered pursuant to Section 3.08(e), whether the Company will purchase the
Securities for cash or Common Stock, or, if a combination thereof, the
percentages of the Purchase Price of Securities in respect of which it will pay
in cash or Common Stock; provided that the Company will pay cash for fractional
--------
interests in Common Stock. For purposes of determining the existence of
potential fractional interests, all Securities 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 Securities are
purchased pursuant to this Section 3.08 shall receive the same percentage of
cash or Common Stock in payment of the Purchase Price for such Securities,
except (i) as provided in Section 3.08(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 Securities 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 Securities of such Holder or Holders for cash. The Company may not change
its election with respect to the consideration (or
26
components or percentages of components thereof) to be paid once the Company has
given its Company Notice to Securityholders, except pursuant to this Section
3.08(b) or pursuant to Section 3.08(d) in the event of a failure to satisfy,
prior to the close of business on the Purchase Date, any condition to the
payment of the Purchase Price, in whole or in part, in Common Stock.
At least three Business Days before the Company Notice Date, the
Company shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.08(e),
(iii) if the Company elects to pay the Purchase Price, or a specified
percentage thereof, in Common Stock, that the conditions to such
manner of payment set forth in Section 3.08(d) have been or will be
complied with, and
(iv) whether the Company desires the Trustee to give the Company
Notice required by Section 3.08(e).
(c) Purchase with Cash. On each Purchase Date, at the option of the
------------------
Company, the Purchase Price of Securities in respect of which a Purchase Notice
pursuant to Section 3.08(a) has been given, or a specified percentage thereof,
may be paid by the Company with cash equal to the aggregate Purchase Price of
such Securities. If the Company elects to purchase Securities with cash, the
Company Notice, as provided in Section 3.08(e), shall be sent to Holders (and to
beneficial owners as required by applicable law) not less than 20 Business Days
prior to such Purchase Date (the "Company Notice Date").
(d) Payment by Issuance of Common Stock. On each Purchase Date, at
-----------------------------------
the option of the Company, the Purchase Price of Securities in respect of which
a Purchase Notice pursuant to Section 3.08(a) has been given, or a specified
percentage thereof, may be paid by the Company by the issuance of a number of
shares of Common Stock equal to the quotient obtained by dividing (i) the amount
of cash to which the Securityholders 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 Securities 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. It is understood that if a
Holder elects to have more than one Security purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Securities to be
purchased.
If the Company elects to purchase the Securities by the issuance of
shares of Common Stock, the Company Notice, as provided in Section 3.08(e),
shall be sent to the Holders (and to beneficial owners as required by applicable
law) not later than the Company Notice Date.
27
The Company's right to exercise its election to purchase the
Securities pursuant to Section 3.08 through the issuance of shares of Common
Stock shall be conditioned upon:
(i) the Company's not having given its Company Notice of an election
to pay entirely in cash and its giving of timely Company Notice of
election to purchase all or a specified percentage of the Securities
with Common Stock as provided herein;
(ii) the shares of Common Stock having been admitted for listing or
admitted for listing subject to notice of issuance on the principal
United States securities exchange on which the Common Stock is then
listed or, if the Common Stock is not then listed on a national or
regional securities exchange, as quoted on the National Association of
Securities Dealers Automated Quotation System;
(iii) 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"), or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), in each case, if
required;
(iv) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(v) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of
the Common Stock are in conformity with this Indenture and (B) the
shares of Common Stock to be issued by the Company in payment of the
Purchase Price in respect of Securities 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 Securities, will be
validly issued, fully paid and non-assessable and, to the best of such
counsel's knowledge, free from preemptive rights, and, in the case of
such Officers' Certificate, stating that conditions (i), (ii), (iii)
and (iv) above and the condition set forth in the second succeeding
sentence have been satisfied and, in the case of such Opinion of
Counsel, stating that conditions (ii), (iii) and (iv) above have been
satisfied.
Such Officers' Certificate shall also set forth the number of shares
of Common Stock to be issued for each $1,000 Principal Amount at Maturity of
Securities and the Sale Price of a share of Common Stock on each trading day
during the period for which the Market Price is calculated. The Company may pay
the Purchase Price (or any portion thereof) in Common Stock only if the
information necessary to calculate the Market Price is published in The Wall
Street Journal or another daily newspaper of national circulation or in any
other comparable medium should such newspapers no longer be in wide circulation.
If the foregoing conditions are not satisfied with respect to a Holder or
Holders prior to the close of business on the Purchase Date and the Company has
elected to purchase the Securities pursuant to this Section 3.08 through the
issuance of shares of Common Stock, the Company shall pay the entire Purchase
Price of the Securities of such Holder or Holders in cash.
28
The "Market Price" of the Common Stock means the average of the Sale
Prices of the Common Stock for the five trading day period ending on the third
Business Day prior to the applicable Purchase Date (or if such Business Day is
not a trading day, then on the last trading day prior to such Business Day),
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of such trading days during such five trading day period
and ending on such Purchase Date, of any event described in Section 11.06, 11.07
or 11.08; subject, however, to the conditions set forth in Sections 11.09 and
11.10.
(e) Notice of Election. The Company's notice of election to
------------------
purchase with cash or Common Stock or any combination thereof shall be sent to
the Holders (and to beneficial owners as required by applicable law) in the
manner provided in Section 13.02 at the time specified in Section 3.08(c) or
(d), as applicable (the "Company Notice"). Such Company Notice shall state the
manner of payment elected and shall contain the following information:
In the event the Company has elected to pay the Purchase Price (or a
specified percentage thereof) with Common Stock, the Company 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 Securities held by
such Holder (except any cash amount to be paid in lieu of fractional
shares);
(2) set forth the method of calculating the Market Price of the
Common Stock; and
(3) state that because the Market Price of Common Stock 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 Company Notice shall include a form of Purchase
Notice to be completed by a Securityholder and shall state:
(i) the Purchase Price, the Conversion Rate and, to the extent known
at the time of such notice, the amount of contingent interest, if any,
that will be accrued and payable with respect to the Securities as of
the Purchase Date;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Securities as to which a Purchase Notice has been given
may be converted pursuant to Article 11 hereof only if the applicable
Purchase Notice has been withdrawn in accordance with the terms of
this Indenture;
(iv) that Securities must be surrendered to the Paying Agent to
collect payment of the Purchase Price and contingent interest, if any;
(v) that the Purchase Price for any Security as to which a Purchase
Notice has been given and not withdrawn, together with any accrued
contingent interest
29
payable with respect thereto, will be paid promptly following the
later of the Purchase Date and the time of surrender of such Security
as described in clause (iv) above;
(vi) the procedures the Holder must follow to exercise rights under
Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Securities;
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms
of Section 3.08(a)(1)(D) or Section 3.10);
(ix) that, unless the Company defaults in making payment of such
Purchase Price and contingent interest, if any, Original Issue
Discount and interest (including contingent interest), if any, on
Securities surrendered for purchase will cease to accrue on and after
the Purchase Date; and
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such Company Notice
in the Company's name and at the Company's expense; provided, however, that, in
-------- -------
all cases, the text of such Company 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 Securities, the
Company will publish such information on its website on the World Wide Web (or
its successor media).
(f) Covenants of the Company. All shares of Common Stock delivered
------------------------
upon purchase of the Securities 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.
(g) Procedure upon Purchase. The Company shall deposit cash (in
-----------------------
respect of a cash purchase under Section 3.08(c) or for fractional interests or
contingent interest, as applicable) or shares of Common Stock, or a combination
thereof, as applicable, at the time and in the manner as provided in Section
3.11, sufficient to pay the aggregate Purchase Price of, and any accrued and
unpaid contingent interest with respect to, all Securities to be purchased
pursuant to this Section 3.08. As soon as practicable after the later of the
Purchase Date or the date such Securities are surrendered to the Paying Agent or
at the office or agency referred to, 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 shares of Common Stock on the Business Day following the Purchase
Date. Subject to Section 3.08(d), no payment or adjustment will be made for
dividends on the Common Stock the record date for which occurred on or prior to
the Purchase Date.
30
(h) Taxes. If a Holder of a Security is paid in Common Stock, the
-----
Company shall pay any documentary, stamp or similar issue or transfer tax due on
such issue of shares of Common Stock. However, the Holder shall pay any such
tax which is due because the Holder requests the shares of Common Stock to be
issued in a name other than the Holder's name. The Paying Agent may refuse to
deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Paying Agent receives a sum sufficient to
pay any tax which will be due because the shares of Common Stock are to be
issued in a name other than the Holder's name. Nothing herein shall preclude
any income tax withholding required by law or regulations.
SECTION 3.09 Purchase of Securities at Option of the Holder upon
----------------------------------------------------------------
Change in Control. (a) If on or prior to May 8, 2004 there shall have occurred a
-----------------
Change in Control, all or a portion of the Securities of any Holder shall be
purchased by the Company, at the option of such Holder, at a purchase price
specified in paragraph 7 of the Securities (the "Change in Control Purchase
Price"), as of the date that is 35 Business Days after the occurrence of such
Change in Control or such longer time as may be required for the SEC to review
and clear any applicable schedules or filings (the "Change in Control Purchase
Date"), subject to satisfaction by or on behalf of the Holder of the
requirements set forth in Section 3.09(c).
A "Change in Control" shall be deemed to have occurred at such time as
either of the following events shall occur:
(i) There shall be consummated any share exchange, consolidation or
merger of the Company pursuant to which the Common Stock would be
converted into cash, securities or other property, in each case other
than a share exchange, consolidation or merger of the Company in which
the holders of the Common Stock immediately prior to the share
exchange, consolidation or merger have, directly or indirectly, at
least a majority of the total voting power in the aggregate of all
classes of Capital Stock of the continuing or surviving corporation
immediately after the share exchange, consolidation or merger; or
(ii) There is a report filed on Schedule 13D or TO (or any successor
schedule, form or report) pursuant to the Exchange Act, disclosing
that any person, other than the Company, including its Affiliates or
Associates (for the purposes of this Section 3.09 only, as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act), has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule
or regulation promulgated under the Exchange Act) of 50% or more of
the aggregate voting power of the Common Stock or other capital stock
into which the Common Stock is reclassified or changed; provided,
--------
however, that a person shall not be deemed beneficial owner of, or to
-------
own beneficially, (A) any securities tendered pursuant to a tender or
exchange offer made by or on behalf of such person or any of such
person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange thereunder, or (B) any securities if
such beneficial ownership (1) arises solely as a result of a revocable
proxy delivered in response to a proxy or consent solicitation made
pursuant to the applicable rules
31
and regulations under the Exchange Act, and (2) is not also then
reportable on Schedule 13D (or any successor schedule) under the
Exchange Act.
Notwithstanding the foregoing provisions of this Section 3.09, a Change in
Control shall not be deemed to have occurred by virtue of the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit plan
of the Company or any Subsidiary, or any person holding Common Stock for or
pursuant to the terms of any such employee benefit plan, filing or becoming
obligated to file a report under or in response to Schedule 13D or Schedule TO
(or any successor schedule, form or report) under the Exchange Act disclosing
beneficial ownership by it of shares of Common Stock, whether in excess of 50%
or otherwise.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
(b) Within 15 Business Days after the occurrence of a Change in
Control, the Company shall mail a written notice of Change in Control by first-
class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law). In addition, the Company shall cause a copy of
such notice of Change in Control to be published in The Wall Street Journal or
another daily newspaper of national circulation or in any other comparable
medium should such newspapers no longer be in wide circulation. The notice
shall include a form of Change in Control Purchase Notice to be completed by the
Securityholder and shall state:
(1) briefly, the events causing a Change in Control and the date of
such Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price and, to the extent known at
the time of such notice, the amount of contingent interest, if any,
that will be accrued and payable with respect to the Securities as of
the change in Control Purchase Date;
(5) the name and address of the Paying Agent and the Conversion
Agent;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase Notice
has been given by a Holder may be converted pursuant to Article 11
hereof only if the Change in Control Purchase Notice has been
withdrawn in accordance with the terms of this Indenture;
(8) that Securities must be surrendered to the Paying Agent to
collect payment of the Change in Control Purchase Price and contingent
interest, if any;
32
(9) that the Change in Control Purchase Price for any Security as to
which a Change in Control Purchase Notice has been duly given and not
withdrawn, together with any accrued contingent interest payable with
respect thereto, will be paid promptly following the later of the
Change in Control Purchase Date and the time of surrender of such
Security as described in clause (8) above;
(10) briefly, the procedures the Holder must follow to exercise rights
under this Section 3.09;
(11) briefly, the conversion rights of the Securities;
(12) the procedures for withdrawing a Change in Control Purchase
Notice;
(13) that, unless the Company defaults in making payment of such
Change in Control Purchase Price and contingent interest, if any,
Original Issue Discount and interest (including contingent interest),
if any, on Securities surrendered for purchase will cease to accrue on
and after the Change in Control Purchase Date; and
(14) the CUSIP number of the Securities.
(c) A Holder may exercise its rights specified in Section 3.09(a)
hereof upon delivery of a written notice of purchase (a "Change in Control
Purchase Notice") to the Paying Agent at any time prior to the close of business
on the Change in Control Purchase Date, stating:
(1) the certificate number of the Security which the Holder will
deliver to be purchased;
(2) the portion of the Principal Amount at Maturity of the Security
which the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof; and
(3) that such Security shall be purchased pursuant to the terms and
conditions specified in paragraph 7 of the Securities.
The delivery of such Security to the Paying Agent at any time after
the delivery to the Paying Agent of the Change in Control Purchase Notice
(together with all necessary endorsements) at the offices of the Paying Agent
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 3.09 only if the Security so
delivered to the Paying Agent 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 3.09, a portion of a Security 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 Security also apply to the
purchase of such portion of such Security.
33
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the consideration to
be received by the Holder (together with accrued and unpaid contingent interest,
if any) promptly following the later of the Change in Control Purchase Date and
the time of delivery of the Security to the Paying Agent in accordance with this
Section 3.09.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.09(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
in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Change in Control Purchase Notice or written withdrawal thereof.
The Company shall not be required to comply with this Section 3.09 if
a third party mails a written notice of Change in Control in the manner, at the
times and otherwise in compliance with this Section 3.09 and repurchases all
Securities for which a Change in Control Purchase Notice shall be delivered and
not withdrawn.
SECTION 3.10 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 3.08(a) or Section 3.09(c), as
applicable, the Holder of the Security 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, and any accrued and unpaid contingent interest, with respect to such
Security. Such Purchase Price or Change in Control Purchase Price and contingent
interest, if any, shall be paid to such Holder, subject to receipts of funds
and/or securities by the Paying Agent, promptly following the later of (x) the
Purchase Date or the Change in Control Purchase Date, as the case may be, with
respect to such Security (provided the conditions in Section 3.08(a) or Section
3.09(c), as applicable, have been satisfied) and (y) the time of delivery of
such Security to the Paying Agent by the Holder thereof in the manner required
by Section 3.08(a) or Section 3.09(c), as applicable. Securities 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 pursuant to
Article 11 hereof 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 in accordance with the Purchase Notice or Change
in Control Purchase Notice, as the case may be, 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:
34
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted,
(2) the Principal Amount at Maturity of the Security with respect to
which such notice of withdrawal is being submitted, and
(3) the Principal Amount at Maturity, if any, of such Security 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
3.08(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 3.08(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 Securities pursuant to Section 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including cash in lieu of fractional shares) or 3.09 if there has
occurred (prior to, on or after, as the case may be, the giving, by the Holders
of such Securities, 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, and any accrued and unpaid contingent
interest with respect to such Securities). The Paying Agent will promptly return
to the respective Holders thereof any Securities (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, and any
accrued and unpaid contingent interest with respect to such Securities) 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 3.11 Deposit of Purchase Price or Change in Control Purchase
--------------------------------------------------------------------
Price. Prior to 10:00 a.m. (New York City time) 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 or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an
amount of money (in immediately available funds if deposited on such Business
Day) or Common Stock, if permitted hereunder, sufficient to pay the aggregate
Purchase Price or Change in Control Purchase Price, as the case may be, of, and
any accrued and unpaid contingent interest with respect to, all the Securities
or portions thereof which are to be purchased as of the Purchase Date or Change
in Control Purchase Date, as the case may be.
SECTION 3.12 Securities Purchased in Part. Any Security which is to
-----------------------------------------
be purchased only in part shall be surrendered at the office of the Paying Agent
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in
35
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Xxxxxx's attorney duly authorized in writing) and the Company
shall execute, and the Trustee, upon receipt of a Company Order, shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, 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 Security so
surrendered which is not purchased.
SECTION 3.13 Covenant to Comply with Securities Laws upon Purchase of
---------------------------------------------------------------------
Securities. In connection with any offer to purchase or purchase of Securities
----------
under Section 3.08 or 3.09 hereof, the Company shall comply with and make
filings in accordance with applicable securities laws.
SECTION 3.14 Repayment to the Company. The Trustee and the Paying
------------------------
Agent shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in paragraph 14 of the Securities, together with interest
or dividends, if any, thereon (subject to the provisions of Section 7.01(f)),
held by them for the payment of the Purchase Price or Change in Control Purchase
Price, as the case may be, or contingent interest, if any; provided, however,
-------- -------
that to the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 3.11 exceeds the aggregate Purchase
Price or Change in Control Purchase Price, as the case may be, of, and the
accrued and unpaid contingent interest with respect to, the Securities or
portions thereof which the Company is obligated to purchase as of the Purchase
Date or Change in Control Purchase Date, as the case may be, 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 or dividends, if any, thereon (subject to the provisions
of Section 7.01(f)).
SECTION 3.15 Notices from Trustee to Beneficial Owners.
------------------------------------------------------
Notwithstanding anything in this Indenture to the contrary, the Trustee shall
mail any notices to beneficial owners only to the extent that addresses for such
mailing are provided to the Trustee in writing by the Company no less than 10
days before the deadline for such mailing.
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities. The Company shall promptly make
----------------------------------
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Principal Amount,
Issue Price, accrued Original Issue Discount, Redemption Price, Purchase Price,
Change in Control Purchase Price, contingent interest and interest, if any,
shall be considered paid on the applicable date due if on such date the Trustee
or the Paying Agent holds, in accordance with this Indenture, cash or
securities, if expressly permitted hereunder, sufficient to pay all such amounts
then due.
The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the per annum rate of interest set forth in paragraph 1 of
the Securities, compounded semi-annually, which interest on overdue amounts (to
the extent payment of such interest shall
36
be legally enforceable) shall accrue from the date such overdue amounts were
originally due and payable.
SECTION 4.02 SEC and Other Reports. The Company shall file with the
----------------------------------
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual and
quarterly reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act (or any such successor provisions
thereto). In the event the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act (or any such
successor provisions thereto), it shall continue to provide the Trustee with
reports containing substantially the same information as would have been
required to be filed with the SEC had the Company continued to have been subject
to such reporting requirements, and the Trustee shall make any such reports
available to Securityholders upon request. In such event, such reports shall be
provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements. The
Company also shall comply with the other provisions of TIA Section 314(a), to
the extent such provisions are applicable.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03 Compliance Certificate. (a) The Company shall deliver
-----------------------------------
to the Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 28, 2001) an Officers'
Certificate, stating whether or not, to the knowledge of the signer, the Company
has complied with all conditions and covenants on its part contained in this
Indenture and, if the signer has obtained knowledge of any default by the
company in the performance, observance or fulfillment of any such condition or
covenant, specifying each such default and the nature thereof. For the purpose
of this Section 4.03, compliance shall be determined without regard to any grace
period or requirement of notice provided pursuant to the terms of this
Indenture.
(b) The Company shall file with the Trustee written notice of the
occurrence of any Default or Event of Default within five Business Days of
its becoming aware of such Default or Event of Default.
SECTION 4.04 Further Instruments and Acts. Upon request of the
-----------------------------------------
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.05 Maintenance of Office or Agency. The Company will
--------------------------------------------
maintain in the Borough of Manhattan, The City of New York, in such location as
may be required by the rules of any securities exchange or quotation system on
which the Securities may from time to time be listed, an office or agency where
Securities may be presented or
37
surrendered for payment, where Securities 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 Securities and this Indenture
may be served. The office of the Trustee in The City of New York, at which at
any particular time its corporate trust business shall be principally
administered, which office on the date hereof is located at 000 Xxxxxxx Xxxxxx,
Xxxxx 00 Xxxx, Xxx Xxxx, Xxx Xxxx 00000, shall be such office or agency for all
of the aforesaid purposes unless the Company shall maintain some other office or
agency for such purposes and shall give prompt written notice to the Trustee of
the location, and any change of location, of such other office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
-------- -------
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes.
SECTION 4.06 Delivery of Certain Information. At any time when the
---------------------------------------------
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial holder of Securities or shares of Common
Stock issued upon conversion thereof, the Company will promptly furnish or cause
to be furnished Rule 144A Information (as defined below) to such Holder or any
beneficial holder of Securities or holder of shares of Common Stock issued upon
conversion of Securities, or to a prospective purchaser of any such security
designated by any such holder, as the case may be, to the extent required to
permit compliance by such Holder or holder with Rule 144A under the Securities
Act in connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act.
SECTION 4.07 Calculation of Original Issue Discount. The Company
----------------------------------------------------
agrees, and each Holder and any beneficial holder of a Security by its purchase
thereof shall be deemed to agree, to treat, for United States federal income tax
purposes, the Securities as Debt instruments that are subject to Section 1.1275-
4(b) of the Treasury Regulations. For United States federal income tax purposes,
the Company shall accrue interest with respect to outstanding Securities as
original issue discount according to the "noncontingent bond method," set forth
in section 1.1275-4(b) of the Treasury Regulations, using a comparable yield of
8.26 percent compounded semiannually, and the projected payment schedule set
forth in the Annex to this Indenture. The Company agrees, and each Holder and
any beneficial owner of a Security by its purchase thereof shall be deemed to
agree, to treat the payment and receipt of Common Stock upon a conversion of a
Security, or upon a redemption of a Security where the Company elects to pay in
Common Stock, as a contingent payment under Treasury Regulation section 1.1275-
4(b). The Company shall file with the Trustee promptly following the end of each
calendar year (i) a written notice specifying the amount of original issue
discount for United States federal income tax purposes (including daily rates
and accrual periods) accrued on outstanding Securities as of the end of such
year and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from
38
time to time, including the amount of any adjustment made under the
noncontingent bond method to account for the amount of any difference between
the amount of an actual payment and the amount of a projected payment.
The Company acknowledges and agrees, and each Holder and any beneficial
holder of a Security by its purchase thereof shall be deemed to acknowledge and
agree, that (i) the comparable yield and the schedule of projected payments are
determined on the basis of an assumption of linear growth of the stock price and
a constant dividend yield and are not determined for any purpose other than for
the determination of interest accruals and adjustments thereof in respect of the
Securities for United States federal income tax purposes and (ii) the comparable
yield and the schedule of projected payments do not constitute a projection or
representation regarding the amounts payable on the Securities.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets. So long as
-------------------------------------------------------
any Securities shall be outstanding, the Company shall not consolidate with or
merge into any other corporation or other person or convey, transfer or lease
its properties and assets substantially as an entirety to any person (such
successor corporation or person, as the case may be, shall in this Article 5 be
referred to as the "Successor Company"), unless
(1) the Successor Company shall be organized and existing under the
laws of the United States of America or any State or the District of
Columbia, and shall expressly assume by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the principal of and premium, if any, and
interest, if any, on all the Securities and the performance of every
covenant of this Indenture and in the Securities on the part of the Company
to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 5.02 Successor Company Substituted. Upon any consolidation
-------------------------------------------
with or merger into any other corporation or other person, or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety in accordance with Section 5.01, the Successor Company or person
formed by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such Successor Company or person had been named as
the Company
39
herein, and thereafter, except in the case of a lease, the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default. An "Event of Default" occurs if:
------------------------------- ----------------
(1) the Company defaults in the payment of any contingent interest or
of interest which becomes payable after the Securities have been converted
to semiannual coupon notes following the occurrence of a Tax Event, which
default, in either case, continues for a period of 30 days;
(2) the Company defaults in the payment of the Principal Amount at
Maturity (or if the Securities have been converted to semiannual coupon
notes following the occurrence of a Tax Event, the Restated Principal
Amount), Issue Price, accrued Original Issue Discount (or if the Securities
have been converted to semiannual coupon notes following the occurrence of
a Tax Event, accrued and unpaid interest), Redemption Price, Purchase Price
or Change in Control Purchase Price on any Security when the same becomes
due and payable at its Stated Maturity, upon redemption, upon declaration,
when due for purchase by the Company or otherwise, whether or not such
payment shall be prohibited by this Indenture;
(3) the Company fails to comply with any of its agreements in the
Securities or this Indenture and such failure continues for 60 days after
receipt by the Company of a Notice of Default;
(4) (a) the Company or any Restricted Subsidiary fails to make any
payment by the end of the applicable grace period after maturity of Debt in
an aggregate principal amount in excess of $100 million and such failure
continues or (b) Debt is accelerated because of a default with respect to
such Debt without such Debt having been discharged or such acceleration
having been cured, waived, rescinded or annulled, in the case of (a) above,
for a period of 10 days after written notice specifying such default or
defaults to the Company by the Trustee or to the Company and the Trustee by
the Holders of not less than 25% in aggregate Principal Amount at Maturity
of the Securities then outstanding; provided, however, that if any such
--------- -------
failure or acceleration referred to in (a) or (b) above shall cease or be
cured, waived, rescinded or annulled, then the Event of Default by reason
thereof shall be deemed not to have occurred;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in
an involuntary case or proceeding or the commencement of any case
against it;
40
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such petition or the appointment
of or taking possession by a Custodian;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
proceeding, or adjudicates the Company insolvent or bankrupt;
(B) appoints a Custodian of the Company or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days.
A Default under clause (3) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default
within the time specified in clause (3) above after receipt of such notice. Any
such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the giving of notice and the lapse of time or both would become an Event of
Default under clause (3) or clause (4), its status and what action the Company
is taking or proposes to take with respect thereto.
SECTION 6.02 Acceleration. If an Event of Default (other than an Event
-------------------------
of Default specified in Section 6.01(4) or (5)) occurs and is continuing, unless
the Principal Amount of all the Securities shall have already become due and
payable, either the Trustee by notice to the Company, or the Holders of at least
25% in aggregate Principal Amount of the Securities at the time outstanding by
notice to the Company and the Trustee, may declare the Issue Price and accrued
Original Issue Discount to the date of declaration, and any accrued and unpaid
interest (including contingent interest) to the date of such declaration, on all
the Securities to be immediately due and payable, whereupon such Issue Price and
accrued Original Issue Discount, and such accrued and unpaid interest (including
contingent interest), if any, shall be due and payable immediately; provided
--------
that, if an Event of Default specified in Section 6.01(4) or (5) occurs and is
continuing, the Issue Price and accrued Original Issue Discount on all the
41
Securities to the date of the occurrence of such Event of Default shall become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Securityholders. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder) may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the Issue Price and accrued Original Issue Discount
that have become due solely as a result of acceleration and if all amounts due
to the Trustee under Section 7.07 have been paid. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03 Other Remedies. If an Event of Default occurs and is
----------------------------
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price and accrued Original Issue Discount (or if the Securities
have been converted to semiannual coupon notes following a Tax Event, the
Restated Principal Amount, plus accrued interest) on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults. The Holders of a majority in
-------------------------------------
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (a) an Event of Default described
in Section 6.01(1) or 6.01(2), (b) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Securityholder
affected or (c) a Default under Article 11. When a Default is waived, it is
deemed cured and shall cease to exist, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.05 Control by Majority. The Holders of a majority in
---------------------------------
aggregate Principal Amount of the Securities at the time outstanding may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability unless the Trustee shall have been provided with
reasonable security or indemnity against such liability satisfactory to the
Trustee.
SECTION 6.06 Limitation on Suits. A Securityholder may not pursue
---------------------------------
any remedy with respect to this Indenture or the Securities unless:
42
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or indemnity
against any loss, liability or expense, which security or indemnity shall
be reasonably satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security or indemnity;
and
(5) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.
SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding
--------------------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of the Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Change in Control Purchase Price, contingent
interest or interest, if any, in respect of the Securities held by such Holder,
on or after the respective due dates expressed in the Securities or any
Redemption Date, and to convert the Securities in accordance with Article 11 or
to bring suit for the enforcement of any such payment on or after such
respective dates or the right to convert, shall not be impaired or affected
adversely without the consent of each such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default
----------------------------------------
described in Section 6.01(1) or 6.01(2) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount owing with respect to the Securities and the
amounts provided for in Section 7.07.
SECTION 6.09 Trustee May File Proofs of Claim. In case of the
----------------------------------------------
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Change in Control
Purchase Price, contingent interest or interest, if any, in respect of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of any such amount) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Change
43
in Control Purchase Price, contingent interest or interest, if any, and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant
------------------------
to this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase
Price, contingent interest or interest, if any, as the case may be,
ratably, without preference or priority of any kind, according to such
amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit initiated by the Trustee, a suit by a Holder pursuant
to Section 6.07 or a suit by Holders of more than 10% in aggregate Principal
Amount of the Securities at the time outstanding.
44
SECTION 6.12 Notice of Defaults. The Trustee shall, within 90 days
--------------------------------
after the occurrence of any Default, mail to all Holders of Securities, as the
names and addresses of such Holders appear on the books of registry of the
Company, notice of all Defaults of which the Trustee shall be aware, unless such
Defaults shall have been cured or waived before the giving of such notice;
provided that, except in the case of a Default described in Section 6.01(1) or
--------
6.01(2), the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors or Trust Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of Securities.
SECTION 6.13 Waiver of Stay, Extension or Usury Laws. The Company
-----------------------------------------------------
covenants (to the extent it may lawfully do so) that it shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law, wherever
enacted, now or at any time hereafter in force, that would prohibit or forgive
the Company from paying all or any portion of the Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Change in
Control Purchase Price or contingent interest, if any, in respect of the
Securities, or interest on any such amounts, as contemplated herein, or that may
affect the covenants or the performance of this Indenture or the Securities; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee. (a) If an Event of Default has
-------------------------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture, but in case of any such certificates or opinions
which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture, but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated
therein.
45
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
(acting in any capacity hereunder) shall be under no liability for interest on
any money received by it hereunder unless otherwise agreed in writing with the
Company.
SECTION 7.02 Rights of Trustee. Subject to its duties and
-------------------------------
responsibilities under the provisions of Section 7.01, and, except as expressly
excluded from this Indenture pursuant to said Section 7.01, under the TIA,
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, conclusively rely upon an Officers' Certificate;
46
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(d) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith which it believes to be
authorized or within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(f) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity satisfactory to it against the costs, expenses and liabilities
which may be incurred therein or thereby;
(g) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a resolution of the
Board of Directors;
(h) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any
47
person authorized to sign an Officers' Certificate, including any person
specified as so authorized in any such certificate previously delivered and not
superseded.
SECTION 7.03 Individual Rights of Trustee. The Trustee in its
------------------------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion
Agent, Bid Solicitation Agent or co-registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer. The Trustee makes no
----------------------------------
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use or application of
the proceeds from the Securities, it shall not be responsible for any statement
in the registration statement for the Securities under the Securities Act or in
the Indenture or the Securities (other than its certificate of authentication),
or the determination as to which beneficial owners are entitled to receive any
notices hereunder.
SECTION 7.05 Notice of Defaults. If a Default occurs and if it is
--------------------------------
known to the Trustee, the Trustee shall give to each Securityholder notice of
the Default within 90 days after it occurs unless such Default shall have been
cured or waived before the giving of such notice. Except in the case of a
Default described in Section 6.01(1) or (2), the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
The second sentence of this Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have
knowledge of a Default unless a Responsible Officer of the Trustee has received
written notice of such Default.
SECTION 7.06 Reports by Trustee to Holders. Within 60 days after
-------------------------------------------
each May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May 15
that complies with TIA Section 313(a), if required by such Section 313(a). The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to promptly notify the Trustee
whenever the Securities become listed on any securities exchange and of any
delisting thereof.
48
SECTION 7.07 Compensation and Indemnity. The Company agrees:
-----------------------------------------
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee or any predecessor, Trustee and their
agents for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including attorney's fees and expenses and taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee)) incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim (whether asserted
by the Company or any Holder or any other Person) or liability in connection
with the acceptance, exercise or performance of any of its powers or duties
hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal
Amount at Maturity, Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price, contingent interest or
interest, if any, as the case may be, on particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(5) or (6), the expenses
including the reasonable charges and expenses of its counsel, are intended to
constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee. The Trustee may resign by so
-------------------------------------
notifying the Company; provided, however, no such resignation shall be effective
-------- -------
until a successor Trustee has accepted its appointment pursuant to this Section
7.08. The Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding may remove the Trustee by so notifying the
Trustee and the Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
49
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07.
If a successor Xxxxxxx does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
SECTION 7.09 Successor Trustee by Xxxxxx. If the Trustee
------------------------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at
--------------------------------------------
all times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The
Trustee (or its parent holding company) shall have a combined capital and
surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition. Nothing herein contained shall prevent the Trustee
from filing with the Commission the application referred to in the penultimate
paragraph of TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
----------------------------------------------------------------
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Securities. When (i) the
---------------------------------------------------
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits with
the Trustee cash or, if expressly permitted by the terms
50
of the Securities or the Indenture, Common Stock sufficient to pay all amounts
due and owing on all outstanding Securities (other than Securities replaced
pursuant to Section 2.07), and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to Section
7.07, cease to be of further effect. The Trustee shall join in the execution of
a document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.02 Repayment to the Company. The Trustee and the Paying
--------------------------------------
Agent shall return to the Company upon written request any money or securities
held by them for the payment of any amount with respect to the Securities that
remains unclaimed for two years, subject to applicable unclaimed property law.
After return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person and the Trustee and the Paying
Agent shall have no further liability to the Securityholders with respect to
such money or securities for that period commencing after the return thereof.
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders. The Company and the
-----------------------------------------
Trustee may amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
provided, however, that such amendment does not materially adversely
-----------------
affect the rights of any Securityholder.
(2) to comply with Article 5 or Section 11.14;
(3) to secure the Company's obligations under the Securities and this
Indenture;
(4) to add to the Company's covenants for the benefit of the
Securityholders or to surrender any right or power conferred upon the
Company; or
(5) to make any change to comply with the TIA, or any amendment
thereto, or to comply with any requirement of the SEC in connection
with the qualification of the Indenture under the TIA, or as necessary
in connection with the registration of the Securities under the
Securities Act.
Notwithstanding the foregoing, no amendment contemplated pursuant to
clause (1), (3), (4) or (5) of the preceding paragraph may be made without the
written consent of the Holders of at least a majority in aggregate Principal
Amount at Maturity of Securities at the time outstanding if such amendment may
materially and adversely affect the interests of the Holders.
51
SECTION 9.02 With Consent of Holders. With the written consent of
----------------------------------------
the Holders of at least a majority in aggregate Principal Amount at Maturity of
the Securities at the time outstanding, the Company and the Trustee may amend
this Indenture or the Securities. However, without the consent of each
Securityholder affected, an amendment to this Indenture or the Securities may
not:
(1) make any change to the provisions of this Indenture that relate
to modifying or amending this Indenture;
(2) make any Security payable in money or securities other than that
stated in the Security or as set forth in Article 11 hereof;
(3) make any change in the manner of calculation or rate of accrual in
connection with Original Issue Discount, make any change in the manner
of calculation of, or that adversely affects the right to receive,
contingent interest, reduce the rate of interest referred to in
paragraph 1 of the Securities, reduce the rate of interest referred to
in Section 10.01 upon the occurrence of a Tax Event, or extend the
time for payment of Original Issue Discount, contingent interest or
interest, if any, on any Security;
(4) reduce the Principal Amount at Maturity, Restated Principal Amount
or the Issue Price of or change the Stated Maturity of any Security;
(5) reduce the Redemption Price, Purchase Price, Change in Control
Purchase Price or any amounts due with respect to any Security;
(6) reduce the amount of principal payable upon acceleration of
maturity of the Security, following a default;
(7) change the place or currency of payment on any Security;
(8) reduce the percentage of holders of Securities whose consent is
needed to modify or amend the indenture;
(9) make any change in Section 6.04, Section 6.07 or this Section
9.02, except to increase any percentage set forth therein;
(10) make any change that adversely affects the right to convert any
Security;
(11) make any change that adversely affects the right to require the
Company to purchase the Securities in accordance with the terms
thereof and this Indenture; or
(12) impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the Securities.
52
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03 Compliance with Trust Indenture Act. Every
--------------------------------------------------
supplemental indenture executed pursuant to this Article shall comply with the
TIA.
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions.
---------------------------------------------------------------------
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Security hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Xxxxxx's Security,
even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment, waiver or
action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.
SECTION 9.05 Notation on or Exchange of Securities. Securities
----------------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
SECTION 9.06 Trustee to Sign Supplemental Indentures. The Trustee
------------------------------------------------------
shall sign any supplemental indenture authorized pursuant to this Article 9 if
the amendment contained therein does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign such supplemental indenture. In signing such supplemental indenture
the Trustee shall be entitled to receive, and (subject to the provisions of
Section 7.01) shall be fully protected in relying upon, an Officers' Certificate
and an Opinion of Counsel stating that such amendment is authorized or permitted
by this Indenture.
SECTION 9.07 Effect of Supplemental Indentures. Upon the execution
------------------------------------------------
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
53
ARTICLE 10
SPECIAL TAX EVENT CONVERSION
SECTION 10.01 Optional Conversion to Semiannual Coupon Notes upon Tax
---------------------------------------------------------------------
Event. From and after (i) 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 the rate of 0.75% per annum on a Restated
Principal Amount, per $1,000 original Principal Amount at Maturity (the
"Restated Principal Amount") equal to the Issue Price plus Original Issue
Discount accrued through the Tax Event Date or the date on which the Company
exercises the option provided for in this Section 10.01, whichever is later (the
"Option Exercise Date") and shall be payable semiannually on May 8 and November
8 of each year (each an "Interest Payment Date") to Holders of record at the
close of business on the April 23 or October 23 (each a "Regular Record Date")
immediately preceding such Interest Payment Date. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months and will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from the Option Exercise Date. Within 15 days of the occurrence of a
Tax Event, the Company shall deliver a written notice of such Tax Event by
facsimile and first-class mail to the Trustee and within 15 days of its exercise
of such option the Company shall deliver a written notice of the Option Exercise
Date by facsimile and first-class mail to the Trustee and by first class mail to
the Holders of the Securities. From and after the Option Exercise Date, (i) the
Company shall be obligated to pay at Stated Maturity, in lieu of the Principal
Amount at Maturity of a Security, the Restated Principal Amount thereof, (ii)
"Issue Price and accrued Original Issue Discount," "Issue Price plus Original
Issue Discount" or similar words, as used herein, shall mean Restated Principal
Amount plus accrued and unpaid interest with respect to any Security and (iii)
contingent interest shall cease to accrue on the Securities. Securities
authenticated and delivered after the Option Exercise Date may, and shall if
required by the Trustee, bear a notation in a form approved by the Trustee as to
the conversion of the Securities to semiannual coupon notes.
ARTICLE 11
CONVERSION
SECTION 11.01 Conversion Privilege. A Holder of a Security may
-----------------------------------
convert such Security into Common Stock at any time during the period stated in
paragraph 9 of the Securities. The number of shares of Common Stock issuable
upon conversion of a Security per $1,000 of Principal Amount at Maturity thereof
(the "Conversion Rate") shall be that set forth in paragraph 9 of the
Securities, subject to adjustment as herein set forth.
The Holders' right to convert Securities into shares of Common Stock
is subject to the Company's right to elect instead to pay such Holder the amount
of cash set forth in the next succeeding sentence, in lieu of delivering such
shares of Common Stock; provided, however, that if an Event of Default (other
than a default in a cash payment upon conversion of the Securities) shall have
occurred and be continuing, the Company shall deliver shares of Common Stock
(and cash in lieu of fractional shares of Common Stock) in accordance with this
Article 11, whether or not the Company has delivered a notice pursuant to
Section 3.04 to the
54
effect that the Securities would be paid in cash. The amount of cash to be paid
pursuant to Section 11.02 for each $1,000 of Principal Amount at Maturity of a
Security upon conversion shall be equal to the Average Sale Price of the Common
Stock for the five consecutive trading days immediately following (i) the date
of the Company's notice of its election to deliver cash upon conversion, if the
Company shall not have given a notice of redemption pursuant to Section 3.04, or
(ii) the Conversion Date, in the case of a conversion following such a notice of
redemption specifying an intent to deliver cash upon all future conversions, in
either case multiplied by the Conversion Rate in effect on such Conversion Date.
The Company shall not pay cash in lieu of delivering shares of Common Stock upon
the conversion of any Security pursuant to the terms of this Article 11 (other
than cash in lieu of fractional shares pursuant to Section 11.03) if there has
occurred (prior to, on or after, as the case may be, the Conversion Date or the
date on which the Company delivers its notice of whether such Security shall be
converted into shares of Common Stock or cash pursuant to Section 11.02) and is
continuing an Event of Default (other than a default in a cash payment upon
conversion of such Securities).
A Holder may convert a portion of the Principal Amount at Maturity of
a Security 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 Security also
apply to conversion of a portion of a Security.
"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,
warrants or options 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, warrants or options
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 options or distribution in respect of which
the Average Sale Price is being calculated (excluding days within such
period, if any, which are not trading days), 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 11.06(4),
11.07 or 11.08 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 (excluding days within such period, if
any, which are not trading days).
In the event that 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 11.06(1), (2), (3) or (5) applies occurs
during the period applicable for calculating "Average Sale Price" pursuant to
the
55
definition in the preceding sentence, "Average Sale Price" shall be calculated
for such period in a manner determined 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 Section 11.07 or 11.08 applies
and (ii) the time ("Ex-Dividend Time") immediately prior to the commencement of
"ex-dividend" trading for such rights, warrants or options or distribution on
the New York Stock Exchange or such other principal national or regional
exchange or market on which the Common Stock is then listed or quoted.
SECTION 11.02 Conversion Procedure. To convert a Security, a Holder
-----------------------------------
must satisfy the requirements in paragraph 9 of the Securities. The date on
which the Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). The Conversion Agent shall notify the Company of the
Conversion Date within one Business Day of the Conversion Date. Within two
Business days following the Conversion Date, the Company shall deliver to the
applicable Holder, through the Conversion Agent, written notice of whether such
Security shall be converted into shares of Common Stock or paid in cash, unless
the Company shall have delivered such notice previously pursuant to Section
3.04. If the Company shall have notified the Holder that all of such Security
shall be converted into shares of common stock, the Company shall deliver to the
Holder, through the Conversion Agent, no later than the fifth Business Day
following the Conversion Date, 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 11.03. Except as provided in the last
sentence in the second paragraph of Section 11.01, if the Company shall have
notified the Holder that all or a portion of such Security shall be paid in
cash, the Company shall deliver to the Holder surrendering such Security the
amount of cash payable with respect to such Security no later than the tenth
Business Day following such Conversion Date, together with 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 11.03. Except as
provided in the last sentence in the second paragraph of Section 11.03, the
Company may not change its election with respect to the consideration to be
delivered upon conversion of a Security once the Company has notified the Holder
in accordance with this paragraph. If shares of Common Stock are delivered as
consideration, then the Person in whose name the certificate representing such
shares is registered shall be treated as a stockholder of record on and after
the Conversion Date; provided, however, that no surrender of a Security on any
date when the stock transfer books of the Company shall be closed shall be
effective to constitute the person or persons entitled to receive the shares of
Common Stock upon such conversion as the record holder or holders of such shares
of Common Stock on such date, but such surrender shall be effective to
constitute the person or persons entitled to receive such shares of Common Stock
as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
such conversion shall be at the Conversion Rate in effect on the date that such
Security shall have been surrendered for conversion, as if the stock transfer
books of the Company had not been closed. Upon conversion of a Security, such
person shall no longer be a Holder of such Security.
56
No payment or adjustment will be made for accrued interest or dividends on,
or other distributions with respect to, any Common Stock except as provided in
this Article 11. On conversion of a Security, that portion of accrued Original
Issue Discount (and original issue discount, as computed for United States
federal income tax purposes pursuant to Section 1.275-4(b) of the Treasury
Regulations) attributable to the period from the Issue Date to, but excluding,
the Conversion Date and (except as provided below) that portion of accrued cash
interest attributable to the period from the last Interest Payment Date (or, if
no Interest Payment Date has occurred, from the Issue Date) to, but excluding,
the Conversion Date (or, if the Company has exercised the option provided for in
Section 10.01, that portion of accrued interest attributable to the period from
the later of (x) the date of such exercise and (y) the most recent Interest
Payment Date following the date of such exercise to, but excluding, the
Conversion Date) with respect to the converted Security 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 the cash
payment, if any, in lieu of fractional shares) and/or cash, if any, in exchange
for the Security being converted pursuant to the provisions hereof; and such
cash, if any, and/or the fair market value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares) shall be
treated as delivered pro rata, to the extent thereof, first in exchange for
Original Issue Discount (and original issue discount, as computed for United
States federal income tax purposes pursuant to Section 1.275-4(b) of the
Treasury Regulations) and cash interest (or interest, if the Company has
exercised its option provided for in Section 10.01) accrued to, but excluding,
the Conversion Date, and the balance, if any, of such cash and/or the fair
market value of such Common Stock (together with any such cash payment in lieu
of fractional shares) shall be treated as delivered in exchange for the Issue
Price of the Security being converted pursuant to the provisions hereof.
Notwithstanding the foregoing, accrued but unpaid cash interest will be payable
upon conversion of Securities made concurrently with or after acceleration of
Securities following an Event of Default.
If the Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable or cash paid upon the conversion shall
be based on the total Principal Amount at Maturity of the Securities converted.
Securities surrendered for conversion by a Holder during the period
from the close of business on any Regular Record Date to the opening of business
on the next Interest Payment Date, except for Securities to be redeemed on a
date within this period or on the next Interest Payment Date, must be
accompanied by payment of an amount equal to the interest that the Holder is to
receive on the Securities surrendered for conversion. Except where Securities
surrendered for exchange must be accompanied by payment as described above, the
Company will not pay interest on any Interest Payment Date subsequent to the
Conversion Date.
If the last day on which a Security may be converted is a Legal
Holiday, the Security may be surrendered on the next succeeding day that is not
a Legal Holiday.
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security in an authorized denomination equal in Principal Amount at Maturity
to the unconverted portion of the Security surrendered.
57
SECTION 11.03 Fractional Shares. The Company will not issue a
--------------------------------
fractional share of Common Stock upon conversion of a Security. 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 of the Common Stock,
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 11.04 Taxes on Conversion. If a Holder converts a Security,
----------------------------------
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon the conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which 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 11.05 Company to Provide Stock. The Company shall, prior to
---------------------------------------
issuance of any Securities under this Article 11, 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
Securities.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
The Company 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 Securities, 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 11.06 Adjustment for Change in Capital Stock. If, after the
-----------------------------------------------------
Issue Date of the Securities, the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock or other Capital 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
58
(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 Security
thereafter converted may receive the number of shares of Capital Stock of the
Company which such Holder would have owned immediately following such action if
such Holder had converted the Security 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 Security upon conversion of such
Security may receive shares of two or more classes 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 of Capital Stock as
is contemplated by this Article 11 with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article 11.
SECTION 11.07 Adjustment for Rights Issue. If after the Issue Date
------------------------------------------
of the Securities, 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 at a price per share less than the Sale Price of the Common Stock as of
the Time of Determination, the Conversion Rate shall be adjusted in accordance
with the formula:
R' = R x (O + N)
--------------
(O + (N x P)/M)
where:
R' = 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 11.07 is being applied.
N = the number of additional shares of Common Stock offered pursuant to
the distribution.
P = the offering price per share of the additional shares.
M = the Average Sale Price, minus, in the case of (i) a distribution to
which Section 11.06(4) applies or (ii) a distribution to which
Section 11.08 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 11.07 applies and (y) the Ex-Dividend Time shall
59
occur on or after the date of the Time of Determination for the
distribution to which this Section 11.07 applies, the fair market
value (on the record date for the distribution to which this Section
11.07 applies) of the
(1) Capital Stock of the Company distributed in respect of each share
of Common Stock in such Section 11.06(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 11.08
distribution.
The Board of Directors shall determine fair market values for the
purposes of this Section 11.07.
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 11.07 applies. If all of the shares of
Common Stock subject to such rights, warrants or options have not been issued
when such rights, warrants or options expire, then the Conversion Rate shall
promptly be readjusted to the Conversion Rate which would then be in effect had
the adjustment upon the issuance of such rights, warrants or options been made
on the basis of the actual number of shares of Common Stock issued upon the
exercise of such rights, warrants or options.
No adjustment shall be made under this Section 11.07 if the
application of the formula stated above in this Section 11.07 would result in a
value of R' that is equal to or less than the value of R.
SECTION 11.08 Adjustment for Other Distributions.
-------------------------------------------------
(a) If, after the Issue Date of the Securities, the Company
distributes to all holders of its Common Stock any of its assets excluding
distributions of Capital Stock or equity interests referred to in Section
11.08(b), or evidences of indebtedness of the Company 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 11.06 and
distributions of rights, warrants or options referred to in Section 11.07 and
(y) cash dividends or other cash distributions that are paid out of consolidated
current net earnings 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 Section 11.08(c), in accordance with the formula:
R' = R x M
-----
M-F
where:
R' = the adjusted Conversion Rate.
60
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution to which
Section 11.06(4) applies, for which (i) the record date shall occur on
or before the record date for the distribution to which this Section
11.08(a) 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 11.08(a) applies, the fair market value (on the record
date for the distribution to which this Section 11.08(a) applies) of
any Capital Stock of the Company distributed in respect of each share
of Common Stock in such Section 11.06(4) distribution.
F = the fair market value (on the record date for the distribution to which
this Section 11.08(a) 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 11.08(a) is
being applied (including, in the case of cash dividends or other cash
distributions giving rise to an adjustment, all such cash distributed
concurrently).
The Board of Directors shall determine fair market values for the
purposes of this Section 11.08(a).
The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the distribution
to which this Section 11.08(a) applies.
For purposes of this Section 11.08(a), 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 percentage set
forth in item (i) below. For purposes of item (i) below, the "Measurement
Period" with respect to a cash dividend on the Common Stock shall mean the 365
consecutive day period ending on the date prior to the Ex-Dividend Time with
respect to such cash dividend, and the "Relevant Cash Dividends" with respect to
a cash dividend on the Common Stock shall mean the cash dividends on the Common
Stock with Ex-Dividend Times occurring in the Measurement Period.
(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 Relevant Cash Dividends
equals or exceeds on a per share basis 10% of the Sale Price of the
Common Stock on the last trading day preceding the date of declaration
by the Board of Directors of the cash dividend with respect to which
this provision is being applied, then such cash dividend together with
all Relevant Cash Dividends, shall be deemed to be an Extraordinary
Cash Dividend and for purposes of applying the formula set forth above
in this Section 11.08(a), the value of "F" shall be equal to (y) the
aggregate amount of such cash dividend together with the amount of all
Relevant Cash Dividends, minus (z) the aggregate amount of all
Relevant Cash Dividends for
61
which a prior adjustment in the Conversion Rate was previously made
under this Section 11.08(a).
In making the determinations required by item (i) above, the amount of
cash dividends paid on a per share basis and the amount of any
Relevant Cash Dividends specified in item (i) above, shall be
appropriately adjusted to reflect the occurrence during such period of
any event described in Section 11.06.
(b) If, after the Issue Date of the Securities, the Company pays a
dividend or makes a distribution to all holders of its Common Stock consisting
of Capital Stock of any class or series, or similar equity interests, of or
relating to a Subsidiary or other business unit of the Company, the Conversion
Rate shall be adjusted in accordance with the formula:
R' = R x (1 + F/M)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the average of the Post-Distribution Prices of the Common Stock for
the 10 trading days commencing on and including the fifth trading day after the
date on which "ex-dividend trading" commences for such dividend or distribution
on the principal United States exchange or market which such securities are then
listed or quoted (the "Ex-Dividend Date").
F = the fair market value of the securities distributed in respect of each
share of Common Stock for which this Section 11.08(b) shall mean the number of
securities distributed in respect of each share of Common Stock multiplied by
the average of the Post-Distribution Prices of those securities distributed for
the 10 trading days commencing on and including the fifth trading day after the
Ex-Dividend Date.
"Post-Distribution Price" of Capital Stock or any similar equity interest
on any date means the closing per unit sale price (or, if no closing sale price
is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on such
date for trading of such units on a "when issued" basis without due bills (or
similar concept) as reported in the composite transactions for the principal
United States securities exchange on which such Capital Stock or equity interest
is traded or, if the Capital Stock or equity interest, as the case may be, is
not listed on a United States national or regional securities exchange, as
reported by the National Association of Securities Dealers Automated Quotation
System or by the National Quotation Bureau Incorporated; provided that if on any
date such units have not traded on a "when issued" basis, the Post-Distribution
Price shall be the closing per unit sale price (or, if no closing sale price is
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and the average ask prices) on such date
for trading of such units on a "regular way" basis without due bills (or similar
concept) as reported in the composite transactions for the principal United
States securities exchange on which such Capital Stock or equity interest is
traded or, if the Capital
62
Stock or equity interest, as the case may be, is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated. In the absence of such quotation, the Company
shall be entitled to determine the Post-Distribution Price on the basis of such
quotations, which reflect the post-distribution value of the Capital Stock or
equity interests as it considers appropriate.
(c) In the event that, with respect to any distribution to which
Section 11.08(a) would otherwise apply, the difference "M-F" as defined in the
formula set forth in Section 11.08(a) is less than $1.00 or "F" is equal to or
greater than "M", then the adjustment provided by Section 11.08(a) shall not be
made and in lieu thereof the provisions of Section 11.14 shall apply to such
distribution.
SECTION 11.09 When Adjustment May Be Deferred. No adjustment in the
----------------------------------------------
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article 11 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 11.10 When No Adjustment Required. No adjustment need be made
------------------------------------------
for a transaction referred to in Section 11.06, 11.07, 11.08, 11.14 or 11.19 if
Securityholders 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. Such participation by Securityholders may include participation
upon conversion provided that an adjustment shall be made at such time as the
Securityholders are no longer entitled to participate.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Securities become convertible pursuant to this
Article 11 into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.
SECTION 11.11 Notice of Adjustment. Whenever the Conversion Rate is
-----------------------------------
adjusted, the Company shall promptly mail to Securityholders a notice of the
adjustment. The Company shall file with the Trustee and the Conversion Agent
such notice and a certificate from the Company's independent public accountants
briefly stating the facts requiring the adjustment and the manner of computing
it. 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.
63
SECTION 11.12 Voluntary Increase. The Company from time to time may
---------------------------------
increase the Conversion Rate by any amount for any period of time. Whenever the
Conversion Rate is increased, the Company shall mail to Securityholders 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 11.06, 11.07 or
11.08.
SECTION 11.13 Notice of Certain Transactions. If:
---------------------------------------------
(1) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 11.06, 11.07 or 11.08 (unless
no adjustment is to occur pursuant to Section 11.10); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 11.14; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or 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 11.14 Reorganization of Company; Special Distributions. If
---------------------------------------------------------------
the Company is a party to a transaction subject to Section 5.01 (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 which reclassifies or changes the
outstanding Common Stock, the person obligated to deliver securities, cash or
other assets upon conversion of Securities shall enter into a supplemental
indenture. If the issuer of securities deliverable upon conversion of Securities
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 Security
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
Security 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 11. The successor Company shall mail to Securityholders a
notice briefly describing the supplemental indenture.
64
If this Section applies, neither Section 11.06 nor 11.07 applies.
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 Section
11.08(c), would otherwise result in an adjustment in the Conversion Rate
pursuant to the provisions of Section 11.08, then, from and after the record
date for determining the holders of Common Stock entitled to receive the
distribution, a Holder of a Security that converts such Security 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 Security 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 Security immediately prior to the record date for determining the
holders of Common Stock entitled to receive the distribution.
SECTION 11.15 Company Determination Final. Any determination that the
------------------------------------------
Company or the Board of Directors must make pursuant to Section 11.03, 11.06,
11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is conclusive.
SECTION 11.16 Trustee's Adjustment Disclaimer. The Trustee has no
----------------------------------------------
duty to determine when an adjustment under this Article 11 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 11.14 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 Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 11. Each Conversion Agent shall have the same protection under this
Section 11.16 as the Trustee.
SECTION 11.17 Simultaneous Adjustments. In the event that this
---------------------------------------
Article 11 requires adjustments to the Conversion Rate under more than one of
Sections 11.06(4), 11.07 or 11.08, 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 11.06,
second, the provisions of Section 11.08 and, third, the provisions of Section
11.07.
SECTION 11.18 Successive Adjustments. After an adjustment to the
-------------------------------------
Conversion Rate under this Article 11, any subsequent event requiring an
adjustment under this Article 11 shall cause an adjustment to the Conversion
Rate as so adjusted.
SECTION 11.19 Rights Issued in Respect of Common Stock Issued upon
-------------------------------------------------------------------
Conversion. Each share of Common Stock issued upon conversion of Securities
----------
pursuant to this Article 11 shall be entitled to receive such number of shares
of Series A Junior Preferred Stock of the Company that is specified in the
Company's Amended and Restated Shareholder Rights Agreement, dated as of August
9, 1999, in relation to each share of Common Stock. Each share of Common Stock
issued upon conversion of the Securities pursuant to this Article 11 shall be
further entitled to such number of shares of Common Stock or preferred stock
purchase rights, as the case may be (together with the right to receive shares
of Series A Junior Preferred Stock, the "Rights"), if any, that all shares of
Common Stock are entitled to receive and the certificates representing the
Common Stock issued upon such conversion shall bear such legends, if any, in
65
each case as may be provided by the terms of any shareholder rights agreement
adopted by the Company, as the same may be amended from time to time (in each
case, a "Rights Agreement"). Provided that such Rights Agreement requires that
each share of Common Stock issued upon conversion of Securities at any time
prior to the distribution of separate certificates representing the Rights be
entitled to receive such Rights, then, notwithstanding anything else to the
contrary in this Article 11, there shall not be any adjustment to the conversion
privilege or Conversion Rate as a result of the issuance of Rights, the
distribution of separate certificates representing the Rights, the exercise or
redemption of such Rights in accordance with any such Rights Agreement, or the
termination or invalidation of such Rights.
ARTICLE 12
PAYMENT OF INTEREST
SECTION 12.01 Interest Payments. Semiannual or contingent interest on
--------------------------------
any Security that is payable, and is punctually paid or duly provided for, on
any applicable payment date shall be paid to the person in whose name that
Security is registered at the close of business on the Regular Record Date or
accrual date, as the case may be, for such interest at the office or agency of
the Company maintained for such purpose. Each installment of semiannual or
contingent interest on any Security shall be paid in same-day funds by transfer
to an account maintained by the payee located inside the United States. In the
case of a permanent Global Security, semiannual or contingent interest payable
on any applicable payment date will be paid to the Depositary, with respect to
that portion of such permanent Global Security held for its account by Cede &
Co. for the purpose of permitting such party to credit the interest received by
it in respect of such permanent Global Security to the accounts of the
beneficial owners thereof.
SECTION 12.02 Defaulted Interest. Except as otherwise specified with
---------------------------------
respect to the Securities, any semiannual or contingent interest on any Security
that is payable, but is not punctually paid or duly provided for, within 30 days
following any applicable payment date (herein called "Defaulted Interest", which
term shall include any accrued and unpaid interest that has accrued on such
defaulted amount in accordance with paragraph 1 of the Securities), shall
forthwith cease to be payable to the registered Holder thereof on the relevant
Regular Record Date or accrual date, as the case may be, by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Securities are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the
proposed payment (which shall not be less than 20 days after such
notice is received by the Trustee), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the
66
persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities at
his address as it appears on the list of Securityholders maintained
pursuant to Section 2.05 not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the persons in whose names
the Securities are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
SECTION 12.03 Interest Rights Preserved. Subject to the foregoing
----------------------------------------
provisions of this Article 12 and Section 2.06, each Security delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu of
any other Security shall carry the rights to semiannual and contingent interest
accrued and unpaid, and to accrue, which were carried by such other Security.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls. If any provision of this
-------------------------------------------
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02 Notices. Any request, demand, authorization, notice,
----------------------
waiver, consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows or transmitted
by facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
67
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Treasury Department 52/924.11
with a copy to:
Assistant General Counsel
Corporate Finance
Department 52/923.23
Facsimile No. (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx,
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. 000-000-0000
Facsimile No. 000-000-0000
Attention: Corporate Trust Administration
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Securityholder shall be mailed
to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders,
it shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent, Bid Solicitation Agent or co-registrar.
SECTION 13.03 Communication by Holders with Other Holders.
----------------------------------------------------------
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent, the Bid Solicitation Agent and anyone else shall have the
protection of TIA Section 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
-----------------------------------------------------------------
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
68
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
--------
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05 Statements Required in Certificate or Opinion. Each
------------------------------------------------------------
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
SECTION 13.06 Separability Clause. In case any provision in this
----------------------------------
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 13.07 Rules by Trustee, Paying Agent, Conversion Agent, Bid
--------------------------------------------------------------------
Solicitation Agent and Registrar. The Trustee may make reasonable rules for
--------------------------------
action by or a meeting of Securityholders. The Registrar, Conversion Agent, the
Bid Solicitation Agent and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.08 Calculations. The calculation of the Purchase Price,
---------------------------
Change in Control Purchase Price, Conversion Rate, Market Price, Sale Price of
the Common Stock and each other calculation to be made hereunder shall be the
obligation of the Company. All calculations made by the Company as contemplated
pursuant to this Section 13.08 shall be final and binding on the Company and the
Holders absent manifest error. The Trustee, Paying Agent, Conversion Agent and
Bid Solicitation Agent shall not be obligated to recalculate, recompute or
confirm any such calculations.
SECTION 13.09 Legal Holidays. A "Legal Holiday" is any day other than
-----------------------------
a Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no Original Issue Discount or interest, if any, shall
accrue for the intervening period.
69
SECTION 13.10 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES WILL
----------------------------
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK .
SECTION 13.11 No Recourse Against Others. A director, officer,
-----------------------------------------
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 13.12 Successors. All agreements of the Company in this
-------------------------
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 13.13 Multiple Originals. The parties may sign any number of
---------------------------------
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
70
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
MARRIOTT INTERNATIONAL, INC.
By: _______________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By: ___________________________
Name:
Title:
EXHIBIT A-1
MARRIOTT INTERNATIONAL, INC.
Liquid Yield Option(TM) Note due 2021
(Zero Coupon-Senior)
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THIS
SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS MAY 8, 2001, AND
THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 8.26%
PER ANNUM. THE HOLDER OF THIS SECURITY MAY OBTAIN THE PROJECTED PAYMENT
SCHEDULE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: MARRIOTT
INTERNATIONAL, INC., 00000 XXXXXXXX XXXX, XXXXXXXX, XX 00000, ATTENTION:
TREASURY DEPARTMENT 52/924.11
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF, THE ISSUANCE OF THE XXXXX UPON THE EXERCISE OF THE
OVER-ALLOTMENT OPTION, AND THE LAST DATE ON WHICH MARRIOTT INTERNATIONAL, INC.
(THE "COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
[THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.]
A-1-2
MARRIOTT INTERNATIONAL, INC.
Liquid Yield Option(TM) Note due 2021
(Zero Coupon-Senior)
No. R CUSIP: 571903 AA
Issue Date: May 8, 2001 Original Issue Discount: $139.05
Issue Price: $860.95 (for each $1,000 Principal
(for each $1,000 Principal Amount at Maturity)
Amount at Maturity)
MARRIOTT INTERNATIONAL, INC., a corporation incorporated under the laws of
the State of Delaware, promises to pay to Cede & Co. or registered assigns, the
Principal Amount at Maturity of ________________($ ) on May 8, 2021.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: _____________ MARRIOTT INTERNATIONAL, INC.
By:
___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture
(as defined on the other side of
this Security).
By: ___________________________
Authorized Signatory
Dated: ________________________
A-1-3
FORM OF REVERSE SIDE OF LYON
Liquid Yield Option(TM) Note due 2021
(Zero Coupon-Senior)
1. Interest.
This Security shall not bear interest, except as specified in this paragraph
or in paragraph 5 or 11 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 6.02 of the Indenture, upon the date set
for payment of the Redemption Price pursuant to paragraph 6 hereof, upon the
date set for payment of the Purchase Price or Change in Control Purchase Price
pursuant to paragraph 7 hereof or upon the Stated Maturity of this Security) or
if interest (including contingent interest, if any) due hereon or any portion of
such interest is not paid when due in accordance with paragraph 5 or 11 hereof,
then in each such case the overdue amount shall, to the extent permitted by law,
bear interest at the rate of 0.75% per annum, compounded semiannually, which
interest shall accrue from the date such overdue amount was originally due to
the date payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable on demand. The accrual of
such interest on overdue amounts shall be in lieu of, and not in addition to,
the continued accrual of Original Issue Discount.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Security), in the period during which a
Security remains outstanding, shall accrue at 0.75% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months,
from the Issue Date of this Security.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Principal Amount at Maturity, Restated Principal Amount,
Issue Price plus accrued Original Issue Discount, Redemption Price, Purchase
Price, Change in Control Purchase Price and interest, if any, to Holders who
surrender Securities to a Paying Agent to collect such payments in respect of
the Securities. The Company will pay any cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may make such cash payments by check payable
in such money.
3. Paying Agent, Conversion Agent, Registrar and Bid Solicitation Agent.
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent, Conversion Agent, Registrar and Bid
Solicitation Agent. The Company may appoint and change any Paying Agent,
Conversion Agent, Registrar or co-registrar or Bid Solicitation Agent without
notice, other than notice to the Trustee except that the Company will maintain
at least one Paying Agent in the State of New York, City of New York, Borough of
Manhattan, which shall initially be an office or agency of the Trustee. The
Company or any of its Subsidiaries or any of their Affiliates may act as Paying
Agent, Conversion Agent, Registrar or
A-1-4
co-registrar. None of the Company, any of its Subsidiaries or any of their
Affiliates shall act as Bid Solicitation Agent.
4. Indenture.
The Company issued the Securities under an Indenture dated as of May 8,
2001 (the "Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.
The Securities are general unsecured and unsubordinated obligations of the
Company limited to $410,000,000 aggregate Principal Amount at Maturity
($470,000,000 aggregate Principal Amount at Maturity if the over-allotment
option is exercised in full within 30 days from the Issue Date), subject to
Section 2.07 of the Indenture. The Indenture does not limit other indebtedness
of the Company, secured or unsecured.
5. Contingent Interest.
Subject to the accrual and record date provisions specified in this
paragraph 5, the Company shall pay contingent interest to the Holders during any
six-month period (a "Contingent Interest Period") from May 9 to November 8 and
from November 9 to May 8, commencing May 9, 2004, if the average LYON Market
Price for the Five-Day Period with respect to such Contingent Interest Period
equals 120% or more of the sum of the Issue Price of a Security and Original
Issue Discount accrued thereon to the day immediately preceding the first day of
the relevant Contingent Interest Period.
The amount of contingent interest payable per $1,000 Principal Amount at
Maturity hereof in respect of any Quarterly Period within a Contingent Interest
Period shall equal the greater of (i) Regular Cash Dividends paid by the Company
per share of Common Stock during that Quarterly Period multiplied by the number
of shares of Common Stock into which $1,000 Principal Amount at Maturity hereof
is convertible pursuant to paragraph 9 hereof as of the accrual date for such
contingent interest or (ii) $.06 multiplied by such number of shares.
Contingent interest, if any, will accrue and be payable to Holders as of
the record date for the related Regular Cash Dividend or, if no Regular Cash
Dividend is paid by the Company during a Quarterly Period, to Holders as of the
15/th/ day preceding the last day of the relevant Contingent Interest Period.
Such payments shall be paid on the payment date of the related Regular Cash
Dividend or, if no Regular Cash Dividend is paid by the Company during any
Quarterly Period, on the last day of the relevant Contingent Interest Period.
Original Issue Discount will continue to accrue at .75% per annum whether or not
contingent interest is paid.
"Five-Day Period" means, with respect to any Contingent Interest Period,
the five trading days ending on the second trading day immediately preceding the
first day of such Contingent Interest Period; provided, however, if the Company
shall have declared a Regular Cash Dividend on its Common Stock that is payable
during such Contingent Interest Period but for which the
A-1-5
record date for determining stockholders entitled thereto precedes the first day
of such Contingent Interest Period, then "Five-Day Period" shall mean, with
respect to such Contingent Interest Period, the five trading days ending on the
second trading day immediately preceding such record date.
"Regular Cash Dividends" means quarterly or other periodic cash dividends
on the Company's Common Stock as declared by the Company's Board of Directors as
part of its cash dividend payment practices and that are not designated by them
as extraordinary or special or other nonrecurring dividends.
"LYON Market Price" means, as of any date of determination, the average of
the secondary market bid quotations per $1,000 Principal Amount at Maturity
obtained by the Bid Solicitation Agent for $10 million Principal Amount at
Maturity of Securities at approximately 4:00 p.m., New York City time, on such
determination date from three recognized securities dealers in The City of New
York (none of which shall be an Affiliate of the Company) selected by the
Company; provided, however, if (a) at least three such bids are not obtained by
the Bid Solicitation Agent or (b) in the Company's reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Securities as
of such determination date, then the LYON Market Price for such determination
date shall equal (i) the Conversion Rate in effect as of such determination date
multiplied by (ii) the average Sale Price of the Common Stock for the five
trading days ending on such determination date, appropriately adjusted to take
into account the occurrence, during the period commencing on the first of such
trading days during such five trading day period and ending on such
determination date, of any event described in Section 11.06, 11.07 or 11.08
(subject to the conditions set forth in Sections 11.09 and 11.10) of the
Indenture.
The term "Quarterly Period" shall mean, with respect to any Contingent
Interest Period, any quarterly period within such Contingent Interest Period
extending from May 8 to August 7, August 8 to November 7, November 8 to February
7, or from February 8 to May 7.
Upon determination that Holders will be entitled to receive contingent
interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Company shall
issue a press release and publish such information on its web site on the World
Wide Web or successor media.
6. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are
redeemable for cash as a whole at any time, or in part from time to time, at the
option of the Company at the Redemption Prices set forth below, provided that
--------
the Securities are not redeemable at the option of the Company prior to May 8,
2004.
The table below shows Redemption Prices of a Security per $1,000 Principal
Amount at Maturity on the dates shown below and at Stated Maturity, which prices
reflect accrued Original Issue Discount calculated to each such date. The
Redemption Price of a Security redeemed between such dates shall include an
additional amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table.
A-1-6
(1) (2) (3)
LYON Accrued Original Redemption Price
Redemption Date Issue Price Issue Discount (1) + (2)
--------------- ----------- -------------- ---------
May 8, 2004.......................... $860.95 $ 19.55 $ 880.50
May 8, 2005.......................... $860.95 $ 26.17 $ 887.12
May 8, 2006.......................... $860.95 $ 32.84 $ 893.79
May 8, 2007.......................... $860.95 $ 39.55 $ 900.50
May 8, 2008.......................... $860.95 $ 46.32 $ 907.27
May 8, 2009.......................... $860.95 $ 53.14 $ 914.09
May 8, 2010.......................... $860.95 $ 60.00 $ 920.95
May 8, 2011.......................... $860.95 $ 66.92 $ 927.87
May 8, 2012.......................... $860.95 $ 73.90 $ 934.85
May 8, 2013.......................... $860.95 $ 80.92 $ 941.87
May 8, 2014.......................... $860.95 $ 88.00 $ 948.95
May 8, 2015.......................... $860.95 $ 95.13 $ 956.08
May 8, 2016.......................... $860.95 $102.31 $ 963.26
May 8, 2017.......................... $860.95 $109.55 $ 970.50
May 8, 2018.......................... $860.95 $116.84 $ 977.79
May 8, 2019.......................... $860.95 $124.19 $ 985.14
May 8, 2020.......................... $860.95 $131.59 $ 992.54
At Stated Maturity................... $860.95 $139.05 $1,000.00
If this Security has been converted to a semiannual coupon note following
the occurrence of a Tax Event, the Redemption Price will be equal to the
Restated Principal Amount, plus accrued and unpaid interest from the date of
such conversion through the Redemption Date; but in no event will this Security
be redeemable before May 8, 2004.
In addition to the Redemption Price payable with respect to all Securities
or portions thereof to be redeemed as of a Redemption Date, the Holders of such
Securities (or portions thereof) shall be entitled to receive accrued and unpaid
contingent interest, if any, with respect thereto, which contingent interest
shall be paid in cash on the Redemption Date.
7. Purchase by the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities 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 such
Purchase Date until the close of business on such Purchase Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in the
Indenture.
Purchase Date Purchase Price
------------- --------------
A-1-7
May 8, 2002 $867.42
May 8, 2004 $880.50
May 8, 2011 $927.87
May 8, 2016 $963.26
The Purchase Price (equal to the Issue Price plus accrued Original Issue
Discount to the Purchase Date) may be paid, at the option of the Company, in
cash, in shares of Common Stock or in any combination thereof.
If prior to a Purchase Date this Security 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 the date of conversion to the Purchase Date.
At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase all or a portion of
the Securities held by such Holder as of a date no later than 35 Business Days
after the occurrence of a Change in Control of the Company occurring on or prior
to May 8, 2004 for a Change in Control Purchase Price equal to the Issue Price
plus accrued Original Issue Discount to 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 Security 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 the date of conversion to the Change in Control Purchase
Date.
A third party may make the offer and purchase of the Securities in lieu of
the Company in accordance with the Indenture.
In addition to the Purchase Price or Change in Control Purchase Price, as
the case may be, payable with respect to all Securities or portions thereof to
be purchased as of the Purchase Date or the Change in Control Purchase Date, as
the case may be, the Holders of such Securities (or portions thereof) shall be
entitled to receive accrued and unpaid contingent interest, if any, with respect
thereto, which contingent interest shall be paid in cash promptly following the
later of the Purchase Date or the Change in Control Purchase Date, as the case
may be and the time of delivery of such Securities to the Paying Agent pursuant
to the Indenture.
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.
If cash (and/or securities if permitted under the Indenture) sufficient to
pay the Purchase Price or Change in Control Purchase Price, as the case may be,
together with any accrued and unpaid contingent interest, of all Securities or
portions thereof to be purchased as of the Purchase Date or the Change in
Control Purchase Date,
A-1-8
as the case may be, Original Issue Discount and interest (including contingent
interest), if any, shall cease to accrue on such Securities (or portions
thereof) immediately after such Purchase Date or Change in Control Purchase
Date, as the case may be, and the Holder 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, and accrued and unpaid contingent interest,
if any, upon surrender of such Security).
8. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
the Holder's registered address. If money sufficient to pay the Redemption Price
of, and accrued and unpaid contingent interest, if any, with respect to, all
Securities (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent prior to or on the Redemption Date, immediately
after such Redemption Date, Original Issue Discount and interest (including
contingent interest), if any, shall cease to accrue on such Securities or
portions thereof. Securities 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.
9. Conversion.
Subject to the next two succeeding sentences, a Holder of a Security may
convert it into Common Stock of the Company at any time before the close of
business on May 8, 2021. If the Security is called for redemption, the Holder
may convert it only until the close of business on the second business day
immediately preceding the Redemption Date. A Security 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
Security may be converted only if such notice of exercise is withdrawn in
accordance with the terms of the Indenture.
The initial Conversion Rate is 13.5285 shares of Common Stock per $1,000
Principal Amount at Maturity, subject to adjustment upon occurrence of certain
events described in the Indenture. The Company will deliver cash in lieu of any
fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section 10.01 of
the Indenture to have interest in lieu of Original Issue Discount accrue on the
Security 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, Securities 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 on such Interest Payment Date (except Securities
with respect to which the Company has mailed a notice of redemption) must be
accompanied by payment of an amount equal to the interest thereon that the
registered Holder is to receive. Except where Securities surrendered for
conversion must be accompanied by payment as described above, no interest on
converted Securities will be payable by the Company on any Interest Payment Date
subsequent to the date of conversion.
A-1-9
Securities surrendered for conversion during the period from the close of
business on any date on which contingent interest accrues to the opening of
business on the date on which such contingent interest is payable (except
Securities with respect to which the Company has mailed a notice of redemption)
must be accompanied by payment of an amount equal to the contingent interest
with respect thereto that the registered Holder is to receive. Except where
Securities surrendered for conversion must be accompanied by payment as
described above, no contingent interest on converted Securities will accrue
after the date of conversion.
To convert a Security, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
A Holder may convert a portion of a Security 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 Security, that portion of accrued original
issue discount, as computed for United States federal income tax purposes
pursuant to Section 1.1275-4(b) of the Treasury Regulations, (or interest if the
Company has exercised its option provided for in paragraph 11 hereof)
attributable to the period from the Issue Date (or, if the Company has exercised
the option referred to in paragraph 11 hereof, the later of (x) the date of such
exercise and (y) the date on which interest was last paid) through the
Conversion Date and (except as provided below) accrued contingent interest with
respect to the converted Security shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through the delivery of the Common Stock (together with the cash payment, if
any, in lieu of fractional shares) in exchange for the Security being converted
pursuant to the terms hereof; and the fair market value of such shares of Common
Stock (together with any such cash payment in lieu of fractional shares) shall
be treated as issued, to the extent thereof, first in exchange for original
issue discount, as computed for United States federal income tax purposes
pursuant to Section 1.1275-4(b) of the Treasury Regulations, (or interest, if
the Company has exercised its option provided for in paragraph 11 hereof)
accrued through the Conversion Date and accrued contingent interest, and the
balance, if any, of such fair market value of such Common Stock (and any such
cash payment) shall be treated as issued in exchange for the Issue Price of the
Security being converted pursuant to the provisions hereof.
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days at less than the Sale Price at the Time of
Determination; and distributions to such holders of assets or Debt securities of
the Company or certain rights to purchase securities of the Company (excluding
certain cash dividends or distributions). However, no adjustment need be made if
Securityholders may participate in the transaction or in certain other cases.
The Company from time to time may voluntarily increase the Conversion Rate.
A-1-10
In the event that the Company declares a dividend or distribution described
in Section 11.07 of the Indenture, or a dividend or a distribution described in
Section 11.08 of the Indenture where the fair market value of such dividend or
distribution per share of Common Stock, as determined in the Indenture, exceeds
15% of the Sale Price of the Common Stock on the day preceding the date of
declaration for such dividend or distribution, the Company shall give notice to
the Holders, which shall not be less than 20 days prior to the Ex-Dividend Date
for such dividend or distribution.
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into the
kind and amount of securities, cash or other assets of the Company or another
person which the Holder would have received if the Holder had converted its
Securities immediately prior to the transaction.
10. Conversion Arrangement on Call for Redemption.
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment banks or other purchasers who may
agree with the Company to purchase such Securities from the Holders, to convert
them into Common Stock of the Company and to make payment for such Securities to
the Trustee in trust for such Holders.
11. Tax Event
(a) From and after (i) the date (the "Tax Event Date") of the occurrence
of a Tax Event and (ii) the date the Company exercises the option provided for
in this paragraph 11, whichever is later (the "Option Exercise Date"), at the
option of the Company, interest in lieu of future Original Issue Discount shall
accrue at the rate of .75% per annum on a principal amount per Security (the
"Restated Principal Amount") equal to the Issue Price plus Original Issue
Discount accrued through the Option Exercise Date and shall be payable
semiannually on May 8 and November 8 of each year (each an "Interest Payment
Date") to Holders of record at the close of business on the April 23 or October
23 (each a "Regular Record Date") immediately preceding such Interest Payment
Date. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months and will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the Option Exercise Date.
(b) Interest on any Security 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 Security is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose. Each installment of interest on any Security shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States.
(c) From and after the Option Exercise Date, contingent interest provided
for in paragraph 5 hereof shall cease to accrue on this Security.
A-1-11
12. Defaulted Interest.
Except as otherwise specified with respect to the Securities, any Defaulted
Interest on any Security shall forthwith cease to be payable to the registered
Holder thereof on the relevant Regular Record Date or accrual date, as the case
may be, by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company as provided for in Section 12.02 of the Indenture.
13. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not transfer
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities 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
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.
13. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
14. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property laws. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person.
15. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount at Maturity of the Securities at
the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, to comply with Article 5 or Section 11.14 of
the Indenture, to secure the Company's obligations under this Security, to add
to the Company's covenants for the benefit of the Securityholders or to
surrender any right or power conferred, to comply with any requirement
A-1-12
of the SEC in connection with the qualification of the Indenture under the TIA
or as necessary in connection with the registration of the Securities under the
Securities Act.
16. Defaults and Remedies.
Under the Indenture, Events of Default include (i) default in the payment
of contingent interest or of interest when the same becomes due and payable or
of interest which becomes due or payable upon exercise by the Company of its
option provided for in paragraph 11 hereof, which default in either case
continues for 30 days; (ii) default in payment of the Principal Amount at
Maturity (or, if the Securities have been converted to semiannual coupon notes
following a Tax Event, the Restated Principal Amount), Issue Price plus accrued
Original Issue Discount, Redemption Price, Purchase Price or Change in Control
Purchase Price, as the case may be, in respect of the Securities when the same
becomes due and payable at its Stated Maturity, upon redemption, upon
declaration, when due for purchase by the Company or otherwise, whether or not
such payment shall be prohibited by the Indenture; (iii) failure by the Company
to comply with other agreements in the Indenture (other than those referred to
in clause (i) above) or the Securities, subject to notice and lapse of time;
(iv)(a) failure by the Company or any Restricted Subsidiary to make any payment
by the end of the applicable grace period after maturity of Debt in an aggregate
principal amount in excess of $100 million and continuance of such failure or
(b) the acceleration of Debt because of a default with respect to such Debt
without such Debt having been discharged or such acceleration having been cured,
waived, rescinded or annulled, in the case of (a) above, for a period of 10 days
after written notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of not less than 25% in aggregate Principal Amount at
Maturity of the Securities then outstanding; provided, however, that if any such
--------- -------
failure or acceleration referred to in (a) or (b) above shall cease or be cured,
waived, rescinded or annulled, then the Event of Default by reason thereof shall
be deemed not to have occurred; and (v) certain events of bankruptcy or
insolvency. If an Event of Default occurs and is continuing, the Trustee, or the
Holders of at least 25% in aggregate Principal Amount at Maturity of the
Securities at the time outstanding, may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default, which will result in the Securities becoming due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to it. Subject to certain limitations, Holders of a majority in aggregate
Principal Amount at Maturity of the Securities at the time outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of amounts specified in clause (i) or (ii) above) if it determines
that withholding notice is in their interests.
17. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may
A-1-13
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
18. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
19. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. GOVERNING LAW.
THE INDENTURE AND THIS SECURITY WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
----------------------
A-1-14
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Corporate Secretary
Marriott International, Inc.
Marriott Drive
Washington, D.C. 20058
Telephone No. (000) 000-0000
Attention: Department 52/862
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill in the To convert this Security into Common
form below: Stock of the Company, check the box:
I or we assign and transfer this [_]
Security to
____________________________________ To convert only part of this Security,
____________________________________ state the Principal Amount at Maturity
to be converted (which must be $1,000 or
(Insert assignee's soc. sec. or tax an integral multiple of $1,000):
ID no.)
____________________________________ $__________________________
____________________________________
____________________________________ If you want the stock certificate made
(Print or type assignee's name, out in another person's name, fill in
address and zip code) the form below:
________________________________________
and irrevocably appoint ________________________________________
(Insert other person's soc. sec. or
_____________________ agent to tax ID no.)
transfer this Security on the books
of the Company. The agent may ________________________________________
substitute another to act for him. ________________________________________
________________________________________
________________________________________
(Print or type other person's name,
address and zip code)
________________________________________________________________________________
Date: _____________________ Your Signature:___________________________________
________________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
EXHIBIT A-2
[FORM OF CERTIFICATED SECURITY]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THIS
SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS MAY 8, 2001, AND
THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 8.26%
PER ANNUM. THE HOLDER OF THIS SECURITY MAY OBTAIN THE PROJECTED PAYMENT
SCHEDULE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: MARRIOTT
INTERNATIONAL, INC., 00000 XXXXXXXX XXXX, XXXXXXXX, XX 00000, ATTENTION:
TREASURY DEPARTMENT 52/924.11
[INCLUDE IF SECURITY IS A CERTIFICATED SECURITY TO BE HELD BY AN
INSTITUTIONAL ACCREDITED INVESTOR--IN CONNECTION WITH ANY TRANSFER, THE HOLDER
WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOLLOWING RESTRICTIONS.]
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF, THE ISSUANCE OF THE XXXXX UPON THE EXERCISE OF THE
OVER-ALLOTMENT OPTION, AND THE LAST DATE ON WHICH THE MARRIOTT INTERNATIONAL,
INC. (THE "COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHTS PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
[THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.]
A-2-2
MARRIOTT INTERNATIONAL, INC.
Liquid Yield Option(TM) Note due 2021
(Zero Coupon-Senior)
No. R CUSIP: 571903 AA
Issue Date: May 8, 2001 Original Issue Discount: $139.05
Issue Price: $860.95 (for each $1,000 Principal
(for each $1,000 Principal Amount at Maturity)
Amount at Maturity)
MARRIOTT INTERNATIONAL, INC., a corporation incorporated under the laws of
the State of Delaware, promises to pay to Cede & Co. or registered assigns, the
Principal Amount at Maturity of ________________($ ) on May 8, 2021.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: _____________ MARRIOTT INTERNATIONAL, INC.
By:
----------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture
(as defined on the other side of
this Security).
By: ___________________________
Authorized Signatory
Dated: ________________________
A-2-3
EXHIBIT B-1
Transfer Certificate
In connection with any transfer of any of the Securities within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "Securities
Act") (or any successor provision), the undersigned registered owner of this
Security hereby certifies with respect to $__________ Principal Amount at
Maturity of the above-captioned securities presented or surrendered on the date
hereof (the "Surrendered Securities") for registration of transfer, or for
exchange or conversion where the securities issuable upon such exchange or
conversion are to be registered in a name other than that of the undersigned
registered owner (each such transaction being a "transfer"), that such transfer
complies with the restrictive legend set forth on the face of the Surrendered
Securities for the reason checked below:
[_] A transfer of the Surrendered Securities is made to the Company or
any subsidiaries; or
[_] The transfer of the Surrendered Securities complies with Rule 144A
under the U.S. Securities Act of 1933, as amended (the "Securities
Act"); or
[_] The transfer of the Surrendered Securities is to an institutional
accredited investor, as described in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to an
effective registration statement under the Securities Act, or
[_] The transfer of the Surrendered Securities is pursuant to an
offshore transaction in accordance with Rule 904 of Regulation S
under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to another
available exemption from the registration requirement of the
Securities Act.
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE:_____________________ ___________________________________________
Signature(s)
(If the registered owner is a corporation, partnership or
fiduciary, the title of the Person signing on behalf of
such registered owner must be stated.)
EXHIBIT B-2
Form of Letter to be Delivered by Accredited Investors
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Treasurer Department 52/924.11
The Bank of New York
000 Xxxxxxx Xxxxxx,
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Dear Sirs:
We are delivering this letter in connection with the proposed transfer of
$________ Principal Amount at Maturity of the Liquid Yield Option(TM) Notes due
2021 ("XXXXx") of Marriott International, Inc. (the "Company"), which are
convertible into shares of the Company's Class A Common Stock, par value $.01
per share (the "Common Stock").
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2) or (3) under
the Securities Act (an "Institutional Accredited Investor");
(ii) the purchase of XXXXx by us is for our own account or for the
account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment discretion
or (B) we are a "bank," within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(a)(5)(A) of the Securities Act that is acquiring
XXXXx as fiduciary for the account of one or more institutions for which we
exercise sole investment discretion;
(iii) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing XXXXx; and
(iv) we are not acquiring XXXXx with a view to distribution thereof
or with any present intention of offering or selling XXXXx or the Common
Stock issuable upon
conversion thereof, except as permitted below; provided that the
disposition of our property and property of any accounts for which we are
acting as fiduciary shall remain at all times within our control.
We understand that the XXXXx were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the XXXXx and the shares of Common
Stock (the "Securities") issuable upon conversion thereof have not been
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any XXXXx, that if in the future we
decide to resell or otherwise transfer such Securities prior to the date (the
"Resale Restriction Termination Date") which is two years after the later of the
original issuance of the XXXXx and the last date on which the Company or an
affiliate of the Company was the owner of the Security, such Securities may be
resold or otherwise transferred only (i) to The Company or any subsidiary
thereof, or (ii) for as long as the XXXXx are eligible for resale pursuant to
Rule 144A, to a person it reasonably believes is a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) that purchases for its
own account or for the account of a qualified institutional buyer to which
notice is given that the transfer is being made in reliance on Rule 144A, or
(iii) to an Institutional Accredited Investor that is acquiring the Security for
its own account, or for the account of such Institutional Accredited Investor
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act, or (iv)
pursuant to another available exemption from registration under the Securities
Act (if applicable), or (v) pursuant to a registration statement which has been
declared effective under the Securities Act and, in each case, in accordance
with any applicable securities laws of any State of the United States or any
other applicable jurisdiction and in accordance with the legends set forth on
the Securities. We further agree to provide any person purchasing any of the
Securities other than pursuant to clause (v) above from us a notice advising
such purchaser that resales of such securities are restricted as stated herein.
We understand that the trustee or the transfer agent, as the case may be, for
the Securities will not be required to accept for registration of transfer any
Securities pursuant to (iii) or (iv) above except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that any Securities will be in the
form of definitive physical certificates and that such certificates will bear a
legend reflecting the substance of this paragraph other than certificates
representing Securities transferred pursuant to clause (v) above.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
__________________________________
(Name of Purchaser)
By:_______________________________
Name:
Title:
Address:
ANNEX A
Projected Payment Schedule*
Quarterly Period Ending Projected Payment per LYON
----------------------- --------------------------
June 1, 2001 --
September 1, 2001 --
December 1, 2001 --
March 1, 2002 --
June 1, 2002 --
September 1, 2002 --
December 1, 2002 --
March 1, 2003 --
June 1, 2003 --
September 1, 2003 --
December 1, 2003 --
March 1, 2004 --
June 1, 2004 --
September 1, 2004 --
December 1, 2004 --
March 1, 2005 --
June 1, 2005 --
September 1, 2005 --
December 1, 2005 --
March 1, 2006 --
June 1, 2006 --
September 1, 2006 --
December 1, 2006 --
March 1, 2007 --
June 1, 2007 1.4053
September 1, 2007 1.4374
December 1, 2007 1.4702
March 1, 2008 1.5038
June 1, 2008 1.5381
September 1, 2008 1.5732
December 1, 2008 1.6091
_______________________
* The comparable yield and the schedule of projected payments are determined on
the basis of an assumption of linear growth of the stock price and a constant
dividend yield and are not determined for any purpose other than for the
determination of interest accruals and adjustments thereof in respect of the
Securities for United States federal income tax purposes. The comparable yield
and the schedule of projected payments do not constitute a projection or
representation regarding the amounts payable on Securities.
March 1, 2009 1.6458
June 1, 2009 1.6834
September 1, 2009 1.7218
December 1, 2009 1.7611
March 1, 2010 1.8013
June 1, 2010 1.8424
September 1, 2010 1.8845
December 1, 2010 1.9275
March 1, 2011 1.9715
June 1, 2011 2.0165
September 1, 2011 2.0625
December 1, 2011 2.1096
March 1, 2012 2.1577
June 1, 2012 2.2070
September 1, 2012 2.2574
December 1, 2012 2.3089
March 1, 2013 2.3616
June 1, 2013 2.4155
September 1, 2013 2.4706
December 1, 2013 2.5270
March 1, 2014 2.5847
June 1, 2014 2.6437
September 1, 2014 2.7040
December 1, 2014 2.7657
March 1, 2015 2.8289
June 1, 2015 2.8934
September 1, 2015 2.9595
December 1, 2015 3.0270
March 1, 2016 3.0961
June 1, 2016 3.1668
September 1, 2016 3.2391
December 1, 2016 3.3130
March 1, 2017 3.3886
June 1, 2017 3.4659
September 1, 2017 3.5450
December 1, 2017 3.6260
March 1, 2018 3.7087
June 1, 2018 3.7934
September 1, 2018 3.8799
December 1, 2018 3.9685
March 1, 2019 4.0591
June 1, 2019 4.1517
September 1, 2019 4.2465
December 1, 2019 4.3434
March 1, 2020 4.4425
June 1, 2020 4.5439
September 1, 2020 4.6476
December 1, 2020 4.7537
March 1, 2021 4.8622
May 8, 2021 3,958.2000
