<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 1999
REGISTRATION NOS. 333-82575
333-82575-01
333-82575-02
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
COX TRUST I
COX COMMUNICATIONS, INC. COX TRUST II
(Exact name of Registrant as specified in its (Exact name of Registrants as specified in their trust agreements)
charter)
DELAWARE
DELAWARE DELAWARE
(State or other jurisdictions of (State or other jurisdictions of
incorporation or organization) incorporation or organization)
58-6395524
58-2112251 58-6395888
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification Nos.)
</TABLE>
1400 LAKE HEARN DRIVE
ATLANTA, GEORGIA 30319
(404) 843-5000
(Address, including zip code, and telephone number, including, area code, of
Registrants' principal executive offices)
------------------------
JIMMY W. HAYES
EXECUTIVE VICE PRESIDENT, FINANCE AND ADMINISTRATION
AND
CHIEF FINANCIAL OFFICER
COX COMMUNICATIONS, INC.
1400 LAKE HEARN DRIVE
ATLANTA, GEORGIA 30319
(404) 843-5000
(Name, address, including zip code and telephone number, including area code, of
agent for service)
------------------------
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
<TABLE>
<S> <C>
STUART A. SHELDON NORMAN D. SLONAKER
THOMAS D. TWEDT MICHAEL J. SCHIAVONE
DOW, LOHNES & ALBERTSON, PLLC BROWN & WOOD LLP
1200 NEW HAMPSHIRE AVENUE, NW ONE WORLD TRADE CENTER
WASHINGTON, D.C. 20036 NEW YORK, NEW YORK 10048
(202) 776-2000 (212) 839-5300
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement, as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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AGGREGATE PROPOSED PROPOSED
TITLE OF EACH AMOUNT MAXIMUM MAXIMUM AMOUNT OF
CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED(1) REGISTERED(1)(2) PER UNIT(2) OFFERING PRICE(2) FEE(3)
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<S> <C> <C> <C> <C>
Class A common stock, par value $1.00 per share....
Preferred Stock, par value $1.00 per share.........
Stock Purchase Contracts of Cox Communications,
Inc...............................................
Stock Purchase Units of Cox Communications, Inc....
Debt Securities of Cox Communications, Inc.........
Trust Preferred Securities of Cox Trust I.......... $8,000,000,000 N/A $8,000,000,000 $2,224,000
Trust Preferred Securities of Cox Trust II.........
Capital Securities of Cox Trust I..................
Capital Securities of Cox Trust II.................
Junior Subordinated Debentures of Cox
Communications, Inc.(4)...........................
Cox Communications, Inc. Guarantees with respect to
the Trust Preferred Securities and Capital
Securities(5)......................................
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Total.............................................. $8,000,000,000 $8,000,000,000 $2,224,000
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</TABLE>
(1) Such indeterminate number or amount of Class A common stock, preferred
stock, stock purchase contracts, stock purchase units, debt securities and
junior subordinated debentures of Cox Communications, Inc., and trust
preferred securities and capital securities of Cox Trust I and Cox Trust II,
as may from time to time be issued at indeterminate prices, with an
aggregate initial offering price not to exceed $8,000,000,000 or the
equivalent thereof in one or more foreign currencies, foreign currency units
or composite currencies. Securities registered hereunder may be sold
separately, together or as units with other securities registered hereunder.
(2) United States dollars or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies estimated in
accordance with Rule 457(o) under the Securities Act of 1933, as amended.
Pursuant to Rule 457(o), which permits the registration fee to be calculated
on the basis of the maximum offering price of all the securities listed, the
table does not specify by each class information as to the amount to be
registered, proposed maximum offering price per unit or proposed maximum
aggregate offering price.
(3) Pursuant to Rule 429 under the Securities Act of 1933, as amended, Cox
Communications, Inc. is carrying forward $2,000,000,000 of securities
previously registered on its Registration Statement on Form S-3, file no.
333-76235, none of which have been sold. The registration fee with respect
to the remaining $1,600,000,000 of securities being registered was
previously paid with the initial filing of this Registration Statement and,
therefore, the registration fee with respect the $4,400,000,000 balance of
securities being registered of $1,223,200 is being paid herewith.
(4) Junior subordinated debentures or senior debt securities may be issued and
sold to Cox Trust I or Cox Trust II in connection with the issuance of trust
preferred securities or capital securities by Cox Trust I or Cox Trust II,
in which event such junior subordinated debentures or senior debt securities
may later be distributed to the holders of trust preferred securities or
capital securities, as the case may be, upon a dissolution and liquidation
of Cox Trust I or Cox Trust II. No separate consideration will be received
for the junior subordinated debentures or senior debt securities of Cox
Communications, Inc. distributed upon any liquidation of Cox Trust I or Cox
Trust II.
(5) Cox Communications, Inc. is also registering under this Registration
Statement all other obligations that it may have with respect to trust
preferred securities and capital securities issued by Cox Trust I and Cox
Trust II. No separate consideration will be received for the Cox
Communications, Inc. Guarantees or any other such obligations.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE
SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PRELIMINARY PROSPECTUS ARE NOT AN OFFER TO SELL THESE SECURITIES
AND THEY ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER AND SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED JULY 28, 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1999)
COX LOGO
9,200,000 SHARES
COX COMMUNICATIONS, INC.
CLASS A COMMON STOCK
------------------------
We are offering and selling 9,200,000 shares of Class A common stock. The
U.S. underwriters are offering 7,360,000 shares in the United States and Canada,
and the international managers are offering 1,840,000 shares outside the United
States and Canada.
The Class A common stock trades on the New York Stock Exchange under the
symbol "COX." On July 26, 1999, the last sale price of the Class A common stock
as reported on the New York Stock Exchange was $38 13/16 per share.
INVESTING IN THE CLASS A COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN
THE "RISK FACTORS" SECTION BEGINNING ON PAGE S-5 OF THIS PROSPECTUS SUPPLEMENT.
------------------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
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<S> <C> <C>
Public offering price...................................... $ $
Underwriting discount...................................... $ $
Proceeds, before expenses, to Cox.......................... $ $
</TABLE>
The U.S. underwriters may also purchase up to an additional 1,104,000
shares from Cox at the public offering price, less the underwriting discount,
within 30 days from the date of this prospectus supplement to cover
over-allotments. The international managers may similarly purchase up to an
aggregate of an additional 276,000 shares from Cox.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The shares of Class A common stock will be ready for delivery in New York,
New York on or about , 1999.
------------------------
Joint Book-Running Managers
MERRILL LYNCH & CO. MORGAN STANLEY DEAN WITTER
----------------------
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
SG COWEN
----------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS , 1999.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary............................... S-2
Cox Communications, Inc................................. S-2
Recent Developments..................................... S-2
The Offering............................................ S-4
Risk Factors................................................ S-5
Use of Proceeds............................................. S-7
Price Range of Class A Common Stock......................... S-7
Dividend Policy............................................. S-7
Capitalization.............................................. S-8
Selected Financial Information and Other Data............... S-9
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. S-11
Certain United States Federal Tax Considerations to Non-U.S.
Holders................................................... S-13
Underwriting................................................ S-17
Legal Matters............................................... S-19
PROSPECTUS
Cox Communications, Inc..................................... 2
The Cox Trusts.............................................. 3
Use of Proceeds............................................. 5
Ratio of Earnings to Fixed Charges.......................... 5
Description of Capital Stock................................ 6
Description of Debt Securities.............................. 9
Description of Junior Subordinated Debentures............... 20
Description of Trust Preferred Securities................... 28
Description of Preferred Securities Guarantees.............. 38
Relationship Among the Trust Preferred Securities, the
Corresponding Junior Subordinated Debentures and the
Preferred Securities Guarantees........................... 41
Description of Capital Securities........................... 42
Description of Capital Securities Guarantees................ 52
Relationship Among the Capital Securities, the Corresponding
Senior Debt Securities and the Capital Securities
Guarantees................................................ 55
Description of Stock Purchase Contracts and Stock Purchase
Units..................................................... 56
Plan of Distribution........................................ 57
Legal Matters............................................... 58
Experts..................................................... 58
Where You Can Find More Information......................... 58
Information Incorporated by Reference....................... 58
</TABLE>
----------------------
FORWARD-LOOKING STATEMENTS
This prospectus supplement includes forward looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We
have based these statements on our current expectations or projections about
future events and on assumptions we have made. These forward-looking statements
are subject to certain risks and uncertainties which could cause actual results
or events to differ materially from those we anticipate or project. Prospective
purchasers should not place undue reliance on these forward-looking statements.
We undertake no obligation to update or revise any forward-looking statements as
a result of new information, future events or otherwise.
----------------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriters have not, authorized any person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not, and the underwriters are
not, making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should assume that the information appearing
in this prospectus supplement and the accompanying prospectus, as well as
information we previously filed with the Securities and Exchange Commission and
incorporated by reference, is accurate as of the date on the front cover of this
prospectus supplement only. Our business, financial condition, results of
operations and prospects may have changed since that date.
Neither Cox nor any of the U.S. underwriters or international managers has
taken or will take action in any jurisdiction to permit a public offering of the
Class A common stock or the possession or distribution of this prospectus
supplement other than in the United States and Canada.
S-1
<PAGE> 4
PROSPECTUS SUPPLEMENT SUMMARY
COX COMMUNICATIONS, INC.
Cox Communications, Inc. is one of the largest broadband communications
companies in the United States, delivering an array of integrated video, voice
and data services to both residential and commercial customers through its
extensive U.S. broadband network operations. Pro forma for Cox's pending cable
system acquisitions, Cox will serve approximately six million customers, making
it the nation's fifth largest cable company. Cox also has substantial
investments in cable television programming, telecommunications, technology and
broadband networks.
Cox's core strategy is to leverage its advanced broadband network by
offering new and advanced communications services to its residential and
commercial customers. We believe that we have a number of advantages that will
allow us to continue to implement this strategy successfully:
- highly clustered and regionally concentrated cable television systems;
- extensive experience and reputation as an industry leader in upgrading
the technological capabilities of its broadband networks; and
- a strong commitment to and reputation for superior customer service.
Cox's current service offerings include:
- multichannel video under the Cox Cable brand;
- high-speed Internet access via Cox@Home;
- local and long-distance telephone under the Cox Digital Telephone brand;
- advanced digital video programming services under the Cox Digital TV
brand; and
- commercial voice and data services via Cox Business Services.
In addition, Cox has sought to utilize its expertise and position as one of
the nation's premier cable television companies to invest in programming,
telecommunications and technology companies which are complementary to Cox's
business strategy. Cox believes that these investments have been vital to Cox's
growth as a communications industry leader.
Cox Enterprises, Inc., a privately-held corporation headquartered in
Atlanta, Georgia and one of the largest media companies in the United States,
owns approximately 72.7% of the outstanding equity of Cox as of June 30, 1999.
In addition to Cox, Cox Enterprises publishes, owns or operates newspapers,
television and radio stations, Internet web sites and Manheim Auctions, the
world's largest auto auction operator.
Cox's principal executive offices are located at 1400 Lake Hearn Drive,
Atlanta, Georgia 30319. Cox's telephone number is (404) 843-5000.
RECENT DEVELOPMENTS
In March 1999, Cox signed a definitive agreement to purchase from First
Commonwealth Communications, Inc. cable television systems serving communities
near Gloucester, New Kent, West Point and King and Queen County, Virginia. The
cable television systems, serving more than 11,000 customers, are contiguous to
Cox's Hampton Roads, Virginia cable operation. Cox expects to complete this
transaction, which is subject to legal and regulatory review, during the third
quarter of 1999.
Also in March 1999, Cox and MediaOne signed a definitive agreement to trade
selected cable television systems in Massachusetts, Rhode Island and
Connecticut. Under the terms of the agreement, Cox would trade its cable
television systems in Massachusetts, serving approximately 54,000 customers, for
MediaOne properties in Enfield, Connecticut and Westerly, Rhode Island, serving
51,000 customers, and cash. Cox expects to complete this transaction, which is
subject to legal and regulatory review, during the third quarter of 1999.
In April 1999, Cox and Media General, Inc. entered into a purchase
agreement pursuant to which Cox will purchase for cash Media General's cable
systems serving more than 260,000 customers in Fairfax County and
Fredericksburg, Virginia. The transaction values the Media General cable systems
at $1.4
S-2
<PAGE> 5
billion. Cox expects to complete this transaction, which is subject to legal and
regulatory review, during the third quarter of 1999.
In May 1999, Cox entered into a definitive agreement to merge with TCA
Cable TV, Inc., a cable television operator serving approximately 883,000
customers in Texas, Arkansas, Louisiana and four other states. Through VPI
Communications Inc., TCA also is a leader in cable advertising sales, providing
turnkey advertising services to 82 multiple system operators representing more
than 3.5 million customers nationwide. Under the terms of the agreement, each
share of TCA common stock will be converted into the right to receive $31.25 in
cash and 0.7418 of a share of Cox Class A common stock. Alternatively, TCA
shareholders can elect to receive $62.50 in cash per TCA share or 1.4836 shares
of Cox Class A common stock per TCA share, subject in each case to proration in
the event that those elections would result in the payment by Cox of more than
$1.6 billion in cash or the issuance of more than 39.6 million shares of Cox
Class A common stock to TCA shareholders. Cox expects to complete this
transaction, which is subject to TCA shareholder and regulatory approvals,
during the third quarter of 1999.
Also in May 1999, Cox transferred its remaining interest in Cox
Communications PCS, L.P. to Sprint Corporation in exchange for 19,058,434 shares
of Sprint's PCS Common Stock-Series 2. Cox PCS is the partnership through which
Sprint conducts its operations in Los Angeles, San Diego and Las Vegas. As a
result of this transaction, Cox recognized a pre-tax gain of $908.4 million.
Concurrently with this transaction, Cox Enterprises transferred its remaining
interest in Cox PCS in exchange for 5,241,070 shares of Sprint's PCS Common
Stock-Series 2.
In July 1999, Cox and AT&T Corp. entered into a definitive agreement to
exchange Cox's AT&T common stock for the stock of AT&T subsidiaries that own
cable television systems that serve approximately 495,000 customers and other
assets, including cash. In return for its 50.3 million shares of AT&T common
stock, Cox will receive the stock of AT&T subsidiaries that own: cable systems
serving Tulsa, Oklahoma (160,000 customers) and Baton Rouge, Louisiana (156,000
customers); a 20% ownership interest in a partnership with TCA Cable TV, Inc.;
Peak Cablevision LLC, which has 117,000 customers in Oklahoma, Arkansas, Utah
and Nevada; and approximately $750 million in other assets, including cash.
Also in July 1999, Cox and Multimedia Cablevision, Inc., a subsidiary of
Gannett Co., Inc., entered into a definitive purchase agreement pursuant to
which Cox will purchase for $2.7 billion in cash Multimedia's cable television
operations serving 522,000 customers in Kansas, Oklahoma and North Carolina. Cox
anticipates that this transaction will generate approximately $350 million in
tax benefits to Cox. Cox expects to complete this transaction, which is subject
to legal and regulatory review, by the end of the first quarter of 2000.
Total revenues for the three months ended June 30, 1999 were $509.9
million, a 28% increase for the three months ended June 30, 1998. Operating cash
flow increased 29% to $195.9 million for the second quarter of 1999. Interest
expense increased $17.7 million to $68.7 million primarily due to an increase in
the total debt outstanding. Equity in net losses of affiliated companies was
$29.6 million primarily due to losses associated with Cox PCS. Net income for
the current quarter was $505.8 million as compared to net loss of $12.2 million
for the second quarter of 1998.
Total revenues for the six months ended June 30, 1999 were $1,008.4
million, a 24% increase over revenues for the six months ended June 30, 1998.
Operating cash flow increased 28% to $384.4 million for the first six months of
1999. Interest expense increased $18.5 million to $122.7 million primarily due
to an increase in the total debt outstanding. Equity in net losses of affiliated
companies was $76.0 million primarily due to losses associated with Cox PCS. Net
income for the first six months of 1999 was $757.0 million as compared to net
loss of $114.2 million for the same period in 1998.
S-3
<PAGE> 6
Concurrently with this offering of Class A common stock, Cox is also
offering 13,000,000 FELINE PRIDES(SM), for an aggregate offering of $650
million, and approximately $1,850 million aggregate principal amount of senior
debt securities. In addition, Cox Trust I, a wholly-owned financing subsidiary
of Cox, is concurrently offering 20,000,000 shares of Trust Originated Preferred
Securities(SM), or TOPrS(SM), for an aggregate offering of $500 million. These
offerings are not conditioned upon one another, and Cox may vary the size or
terminate one or more of these offerings based on market conditions and other
factors.
THE OFFERING
<TABLE>
<S> <C>
Class A common stock offered by Cox(1):
U.S. offering........................... 7,360,000 shares
International offering.................. 1,840,000 shares
----------
Total.............................. 9,200,000 shares
Common stock outstanding after the offerings:
Class A common stock(2)................. 536,748,343 shares
Class C common stock(3)................. 27,597,792 shares
Use of proceeds.............................. The net proceeds from the sale of the Class A common
stock we are offering in this prospectus supplement
will be used to partially fund pending acquisitions,
for capital expenditures, to retire commercial paper
indebtedness and for other general corporate
purposes.
Dividend policy.............................. We have never paid dividends on our stock, and we do
not anticipate paying any cash dividends on our
stock in the foreseeable future.
Risk factors................................. See "Risk Factors" and the other information
included in this prospectus supplement for a
discussion of risks you should carefully consider
before deciding to invest in shares of our Class A
common stock.
New York Stock Exchange symbol............... "COX"
</TABLE>
- ---------------
(1) Excludes 1,104,000 shares of Class A common stock that are subject to
purchase from us upon exercise of the U.S. underwriters' over-allotment
option and 276,000 shares of Class A common stock that are subject to
purchase from us upon exercise of the international managers' over-allotment
option.
(2) Based on the number of shares of Class A common stock outstanding on June
30, 1999. It does not include (a) 10,284,386 shares of Class A common stock
reserved for issuance upon the exercise of outstanding stock options under
our stock option plans, and (b) approximately 4,675,016 shares of Class A
common stock issuable upon conversion of our Series A convertible preferred
stock.
(3) Cox Enterprises owns all of the outstanding Class C common stock.
S-4
<PAGE> 7
RISK FACTORS
Your investment in our Class A common stock will involve certain risks. You
should carefully consider the following discussion of risks, and the other
information included or incorporated by reference in this prospectus supplement
and the accompanying prospectus, before deciding whether an investment in our
Class A common stock is suitable for you.
COX IS CONTROLLED BY A PRINCIPAL STOCKHOLDER WHOSE INTERESTS MAY BE DIFFERENT
THAN YOUR INTERESTS
As of June 30, 1999, Cox Enterprises owned approximately 72.7% of the
outstanding equity and 81.1% of the voting power of Cox. Cox Enterprises
therefore controls substantially all actions to be taken by the Cox
stockholders, including the election of all the directors to the Cox board.
After giving effect to the TCA merger and this offering, assuming that Cox
issues approximately 39.6 million shares pursuant to the TCA merger agreement
and sells 9.2 million shares in this offering, Cox Enterprises will own
approximately 66.8% of the equity and 76.4% of the voting power of Cox. This
voting control may have the effect of discouraging offers to acquire Cox because
the consummation of any such acquisition would require the consent of Cox
Enterprises. The interests of Cox Enterprises, which operates businesses in
other industries, including broadcasting and newspapers, may from time to time
diverge from the interests of other Cox stockholders, particularly with regard
to new business opportunities.
REGULATION OF THE CABLE TELEVISION INDUSTRY
The cable television industry is subject to extensive regulation on the
federal, state and local levels, and many aspects of such regulations are
currently the subject of judicial proceedings and administrative or legislative
proposals. The Cable Television Consumer Protection and Competition Act of 1992,
referred to as the 1992 Cable Act, has significantly expanded the scope of cable
television regulation. In particular, under the 1992 Cable Act, the Federal
Communications Commission adopted regulations that limit Cox's ability to set
rates for basic service and the installation, sale, and lease of equipment used
by subscribers to receive basic service, such as converter boxes and remote
control units, in communities that are not subject to effective competition as
defined by federal law. The FCC's regulations, as they now stand, limit our
ability to increase revenues by increasing rates for regulated services where
franchise authorities have elected to regulate basic cable and equipment rates.
In addition, it is possible that, in accordance with further review by the
franchising authorities, certain future rate reductions or refunds may be
required. We believe that the regulation of the cable television industry,
including the rates charged for regulated services under present FCC rules,
remains a matter of interest to Congress, the FCC and other regulatory
authorities. There can be no assurance as to what, if any, future actions such
legislative and regulatory authorities may take or the effect thereof on us.
Cable communications companies operate under franchises granted by local
authorities that are subject to renewal and renegotiation from time to time.
There can be no assurance as to future franchise renewals.
COMPETITION IN THE CABLE TELEVISION INDUSTRY
Cable communications systems generally operate pursuant to franchises
granted on a non-exclusive basis. In addition, the 1992 Cable Act prohibits
franchising authorities from unreasonably denying requests for additional
franchises and permits franchising authorities to operate cable systems.
Well-financed businesses from outside the cable industry, such as the public
utilities that own certain of the poles on which cable is attached, may become
competitors for franchises or providers of competing services. In addition, we
face competition from other cable television operators. We cannot predict the
extent to which such competition will materialize or, if such competition
materializes, the extent of its effect on us.
The cable television clusters we own compete with other communications and
entertainment media, including conventional off-air television broadcasting
services, newspapers, movie theatres, live sporting events, interactive online
computer services, home video products and direct broadcast satellite, referred
to as DBS, service whereby signals are transmitted by satellite to receiving
facilities located on customer
S-5
<PAGE> 8
premises. Several companies have launched DBS services that compete with us for
multichannel video entertainment customers, as well as online computer services.
The Telecommunication Act of 1996, referred to as the 1996 Telecom Act,
makes it easier for local exchange telephone companies, referred to as LECs, and
others to provide a wide variety of video services competitive with services
provided by cable systems and to provide cable services directly to subscribers.
Various LECs currently are providing video services within and outside their
telephone service areas through a variety of distribution methods, including
both the deployment of broadband wire facilities and the use of wireless
transmission facilities. We cannot predict the likelihood of success of video
service ventures by LECs or the impact on Cox of such competitive ventures.
Other new technologies, including Internet-based services, may become
competitive with services that cable communications systems can offer. The FCC
and some local jurisdictions are considering proposals by various Internet
service providers, referred to as ISPs, to deliver their services directly to
cable operators' customers through access to cable operators' broadband
communications facilities. In June 1999, an ISP petitioned the FCC to issue a
declaratory ruling that ISPs are entitled to access to cable system facilities
under the commercial use channel provisions of the Communications Act of 1934.
In the same month, a federal district court held in connection with
Tele-Communications, Inc.'s application to transfer two franchises to AT&T that
a franchising authority may require access to cable modem services by third
party ISPs as a condition to approval of a franchise transfer. AT&T has appealed
the decision. Although the decision is not binding on other courts and has no
legal effect in other areas of the country, it could support attempts by other
franchising authorities to require cable operators to provide access to third
party ISPs in other circumstances, including franchise renewal. In July, 1999,
the franchising authority for Broward County, Florida, passed an ordinance which
requires cable modem access by ISPs. The ordinance has been challenged in
federal district court. Legislation is pending in the United States House of
Representatives which proposes to require cable operators to open their networks
to unaffiliated ISPs, and a second bill would make it unlawful for a cable
operator to require its cable modem customers to purchase their affiliated
Internet access services as a condition of subscribing to high speed transport
service.
Additionally, legislation is pending in Congress which would facilitate
regional Bell operating companies to provide data services in competition with
ISPs. Neither the states nor the FCC would have the authority to regulate the
rates, charges, terms or conditions of any high-speed data service or Internet
access services or to regulate the facilities used in the provision of such
services.
We cannot predict if such proposals will be adopted, the eventual outcome
of such litigation, or whether such proposals or litigation will have a material
impact on the business and operations of Cox. Moreover, advances in
communications technology as well as changes in the marketplace and the
regulatory and legislative environment are constantly occurring. Thus, it is not
possible to predict the effect that ongoing or future developments might have on
the cable communications industry or on our operations.
S-6
<PAGE> 9
USE OF PROCEEDS
We expect to receive net proceeds from the sale of our Class A common stock
of approximately $ million, after deducting the underwriting discount and
offering expenses. We will use the net proceeds from the sale of our Class A
common stock, the FELINE PRIDES, the TOPrS and our senior debt securities to
partially finance pending acquisitions, for capital expenditures, to retire
commercial paper indebtedness and for other general corporate purposes. The
weighted average interest rate on our commercial paper borrowings as of June 30,
1999 was approximately 5.2%. For a description of pending acquisitions, see
"Prospectus Supplement Summary--Recent Developments."
PRICE RANGE OF CLASS A COMMON STOCK
Our Class A common stock is listed for trading on the New York Stock
Exchange under the symbol "COX." The following table sets forth on a per share
basis the high and low sales prices for consolidated trading in our Class A
common stock as reported on the New York Stock Exchange Composite Tape for the
quarters indicated. All of our Class A common stock market prices have been
adjusted for the two-for-one split of all classes of our capital stock effective
on May 21, 1999.
<TABLE>
<CAPTION>
CLASS A
COMMON STOCK
-----------------
HIGH LOW
------- -------
<S> <C> <C>
1997
First Quarter............................................... $11.625 $ 9.813
Second Quarter.............................................. 13.938 9.063
Third Quarter............................................... 14.094 12.469
Fourth Quarter.............................................. 20.031 13.843
1998
First Quarter............................................... $21.469 $17.188
Second Quarter.............................................. 24.750 20.813
Third Quarter............................................... 28.438 20.750
Fourth Quarter.............................................. 35.375 23.532
1999
First Quarter............................................... $41.282 $32.000
Second Quarter.............................................. 44.438 32.781
Third Quarter through July 26, 1999......................... 39.000 37.750
</TABLE>
As of June 30, 1999, there were 5,021 holders of record of our Class A
common stock. This number excludes beneficial owners of Class A common stock
held in street name.
DIVIDEND POLICY
We have never paid any dividends on our stock, and we do not anticipate
paying any cash dividends on our stock in the foreseeable future. The current
policy of our board of directors is to retain earnings to finance the operations
and expansion of our business. Any future determination to pay dividends will
depend on our results of operations, financial condition, capital requirements,
contractual restrictions and other factors deemed relevant by our board of
directors.
S-7
<PAGE> 10
CAPITALIZATION
The following table sets forth the capitalization of Cox as of March 31,
1999 (i) on a historical basis; (ii) as adjusted to give effect to (a) the
issuance of 9.2 million shares of Class A common stock, for an aggregate
offering of $357.1 million, less offering costs of $12.9 million, (b) the sale
of 13 million FELINE PRIDES securities for an aggregate offering of $650
million, less offering costs of $20.3 million and $19.5 million allocated to the
fair value of forward contracts embedded in these securities, (c) the sale of 20
million TOPrS, for an aggregate offering of $500 million, less offering costs of
$16.3 million and (d) the sale of $1,850 million senior debt securities, less
offering costs of $13.0 million; and (iii) on a pro forma basis to give effect
to the consummation of the pending acquisitions of TCA, the cable television
systems of Media General and certain cable television systems from AT&T.
This table should be read in conjunction with, and is qualified by
reference to, the "Selected Financial Information and Other Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and notes thereto included or incorporated
by reference in this prospectus supplement and the accompanying prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1999
----------------------------------------------------------------------------
PRO FORMA COX
ADJUSTMENTS AS ADJUSTMENTS PRO FORMA
COX FOR THE ADJUSTED FOR FOR THE AND AS
HISTORICAL OFFERINGS THE OFFERINGS ACQUISITIONS ADJUSTED
---------- ------------------ --------------- ------------ ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
CASH............................. $ 90.4 $3,294.6 $ 3,585.0 $(3,261.7) $ 123.3
========= ======== ========= ========= =========
DEBT
Commercial paper............... $ 837.6 $ -- $ 837.6 $ (654.7) $ 182.9
Medium-term notes.............. 463.4 -- 463.4 -- 463.4
Floating Rate Reset Notes due
2009........................ 147.5 -- 147.5 -- 147.5
Notes and Debentures........... 1,615.7 1,837.0 3,452.7 312.0 3,764.7
6.15% Reset Put securities due
August 2033................. 248.2 -- 248.2 -- 248.2
Capitalized lease
obligations................. 70.7 -- 70.7 -- 70.7
Amounts due to Cox
Enterprises................. 112.7 -- 112.7 -- 112.7
--------- -------- --------- --------- ---------
Total debt............. 3,495.8 1,837.0 5,332.8 (342.7) 4,990.1
--------- -------- --------- --------- ---------
MINORITY INTEREST................ -- -- -- 120.5 120.5
COX OBLIGATED CAPITAL SECURITIES
OF SUBSIDIARY TRUST-FELINE
PRIDES......................... -- 610.2 610.2 -- 610.2
COX OBLIGATED PREFERRED
SECURITIES OF SUBSIDIARY
TRUST-TOPRS.................... -- 483.7 483.7 -- 483.7
SHAREHOLDERS' EQUITY
Series A preferred stock --
liquidation preference of
$44.275 per share, par value
$1.00 per share............. 4.8 -- 4.8 -- 4.8
Class A common stock, par value
$1.00 per share............. 527.5 9.2 536.7 39.6 576.3
Class C common stock, par value
$1.00 per share............. 27.6 -- 27.6 -- 27.6
Additional paid-in capital..... 1,879.8 354.5 2,234.3 1,660.4 3,894.7
Retained earnings.............. 1,601.5 -- 1,601.5 953.6 2,555.1
Accumulated other comprehensive
income...................... 2,815.5 -- 2,815.5 (464.5) 2,351.0
--------- -------- --------- --------- ---------
Total shareholders'
equity............... 6,856.7 363.7 7,220.4 2,189.1 9,409.5
--------- -------- --------- --------- ---------
Total capitalization... $10,352.5 $3,294.6 $13,647.1 $ 1,966.9 $15,614.0
========= ======== ========= ========= =========
</TABLE>
S-8
<PAGE> 11
SELECTED FINANCIAL INFORMATION AND OTHER DATA
We are providing the following financial information and other data to aid
you in your analysis of the financial aspects of the transactions as described.
You should read this information in conjunction with the historical consolidated
financial statements of Cox and the related notes contained in our annual,
quarterly and other reports and other information that Cox has filed with the
SEC. All per share amounts reflected below have been restated to reflect Cox's
two-for-one stock split effective on May 21, 1999.
The following selected consolidated financial information for each of the
three years in the period ended December 31, 1998 has been derived from Cox's
audited historical consolidated financial statements and the consolidated
financial information for the three months ended March 31, 1998 and 1999 has
been derived from Cox's unaudited historical consolidated financial statements.
The following selected unaudited pro forma and as adjusted combined condensed
financial information give effect to the offerings and the pending acquisitions
of TCA, the cable television systems of Media General and certain cable
television systems from AT&T, including AT&T's unconsolidated investment in Peak
Cablevision. Pursuant to the purchase agreement, AT&T has agreed to acquire all
of the remaining interest in Peak prior to closing the purchase transaction with
Cox.
Operating cash flow under "Other Operating and Financial Data" is not a
generally accepted accounting principle measure of performance. However,
operating cash flow is a commonly used financial analysis tool for measuring and
comparing cable television companies in several areas such as operating
performance and leverage. Cox defines operating cash flow as operating income
before depreciation and amortization. Operating cash flow should not be
considered as an alternative to net income as an indicator of Cox's performance
or as an alternative to cash flows from operating activities as a measure of
liquidity.
Using the fourth quarter annualized operating cash flow, the multiple of
debt to operating cash flow was 4.6x and 5.1x at December 31, 1997 and 1998,
respectively. In addition, operating cash flow is annualized to calculate the
multiple of debt to operating cash flow for the three months ended March 31,
1998 and 1999.
<TABLE>
<CAPTION>
PRO FORMA
AND AS PRO FORMA
ADJUSTED THREE MONTHS AND AS ADJUSTED
YEAR ENDED ENDED THREE MONTHS
YEAR ENDED DECEMBER 31, DECEMBER 31, MARCH 31, ENDED MARCH 31,
------------------------------ --------------- -------------------- ---------------
1996 1997 1998 1998 1998 1999 1999
-------- -------- -------- --------------- -------- --------- ---------------
(MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS
DATA:
Revenues.............. $1,460.3 $1,610.4 $1,716.8 $2,583.2 $ 415.8 $ 498.5 $693.8
Operating income...... 221.7 205.3 201.4 187.8 43.5 65.2 63.9
Net income (loss)..... (51.6) (136.5) 1,270.7 (1.5) (101.9) 251.2 230.1
Basic net income
(loss) per share.... $ (0.10) $ (0.25) $ 2.33 $ (0.00) $ (0.19) $ 0.45 $ 0.38
Diluted net income
(loss) per share.... (0.10) (0.25) 2.30 (0.00) (0.19) 0.45 0.38
OTHER OPERATING AND
FINANCIAL DATA:
Operating cash flow... $ 556.9 $ 609.8 $ 659.1 $1,028.0 $ 149.1 $ 188.5 $270.4
Operating cash flow
margin.............. 38.1% 37.9% 38.4% 39.8% 35.9% 37.8% 39.0%
Multiple of debt to
operating cash
flow................ 5.2x 5.2x 6.2x -- 5.2x 4.6x 4.6x
Cash flows provided by
operating
activities.......... $ 309.1 $ 554.5 $ 665.5 -- $ 191.5 $ 175.9 --
Cash flows provided by
(used in) investing
activities.......... (552.2) (1,108.0) (1,600.4) -- (124.9) 514.9 --
Cash flows provided by
(used in) financing
activities.......... 246.2 539.3 937.2 -- (64.3) (630.9) --
</TABLE>
S-9
<PAGE> 12
<TABLE>
<CAPTION>
PRO FORMA
AND AS ADJUSTED
DECEMBER 31, MARCH 31, MARCH 31,
------------------------------- --------------------- ---------------
1996 1997 1998 1998 1999 1999
-------- -------- --------- --------- --------- ---------------
(MILLIONS OF DOLLARS) (MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets........ $5,784.6 $6,556.6 $12,878.1 $ 6,623.5 $14,727.0 $21,214.3
Total debt
(including amounts
due to Cox
Enterprises)...... 2,881.0 3,148.8 4,090.8 3,082.9 3,495.8 4,990.1
</TABLE>
The table below includes certain customer data of Cox. A basic service
customer is counted as a home with one or more television sets connected to a
cable television system. New services include Cox Digital Television, Cox@Home
and Cox Digital Telephone. Each basic customer and each new service is a revenue
generating unit. In certain locations, a household may purchase more than one
new service, each of which is counted as a separate revenue generating unit. A
home is deemed to be passed if it can be connected to the distribution system
without any further extension of the distribution plant. Basic penetration
represents basic customers as a percentage of homes passed by cable. Premium
service units include single or multi-channel services offered for a monthly fee
per service.
Cox's customer data excludes basic customers and homes passed related to
TWC Cable Partners, a joint venture owned 50% by Cox and 50% by Time Warner. TWC
operates cable television systems in Staten Island, New York and Fort Walton
Beach, Florida. Cox currently manages the Fort Walton Beach cable television
system which had basic customers of 66,568, 68,586, 71,213 and 72,215,
respectively, at December 31, 1996, 1997 and 1998 and March 31, 1999.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31, 1999
--------------------------------- ----------------------
1996 1997 1998 HISTORICAL PRO FORMA
--------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
CUSTOMER DATA:
Basic customers............................... 3,259,384 3,235,338 3,741,608 3,783,367 5,331,697
New services.................................. -- 18,941 169,731 230,380 301,822
--------- --------- --------- --------- ---------
Revenue Generating Units...................... 3,259,384 3,254,279 3,911,339 4,013,747 5,633,519
Homes passed.................................. 5,016,749 5,023,870 5,923,428 5,952,482 8,233,680
Basic penetration............................. 65.0% 64.4% 63.2% 63.6% 64.8%
Premium service units......................... 2,000,673 1,865,184 2,206,833 2,205,439 3,621,979
</TABLE>
S-10
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with Cox's
historical consolidated statements of income for the three-month period ended
March 31, 1999 and 1998.
THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1998
The results of operations discussed below include the June 1998 acquisition
of the Tucson and Sierra Vista, Arizona cable television system and the October
1998 acquisition of the Las Vegas, Nevada cable television system.
Total revenues for the three months ended March 31, 1999 were $498.5
million, a 20% increase over revenues of $415.8 million for the three months
ended March 31, 1998. Basic customers were 3,783,367, a 2.8% increase over
customers at March 31, 1998 after adjusting for acquisitions made in 1998.
Complete basic revenues for the first quarter of 1999 increased 24% over
1998 to $351.3 million due to basic and digital customer growth at existing
cable television systems, the acquisitions made in 1998 and rate increases
implemented primarily during the fourth quarter of 1998. As of March 31, 1999,
Cox Digital TV had launched in eight markets and had 99,596 customers. The rate
increases are the result of channel additions, increased programming costs and
the pass-through of inflation adjustments.
Premium service revenues for the first quarter of 1999 increased 14% over
1998 to $52.1 million due to the acquisitions made in 1998. Pay-per-view
revenues were $24.4 million, up from $10.4 million for the same period in 1998
due to the acquisitions made in 1998 and the Holyfield/Lewis, Tyson/Botha and De
La Hoya/Quartey national boxing events during the first quarter of 1999.
Advertising revenues increased 46% to $36.4 million due to the acquisitions made
in 1998 and growth in local and national advertising sales during 1999.
Data revenues for the first quarter of 1999 increased to $9.8 million from
$2.8 million primarily as a result of Cox's residential data service, Cox@Home.
As of March 31, 1999, Cox@Home had launched in nine markets with 88,890
customers. Telephony revenues for the first quarter of 1999 increased to $16.2
million from $5.0 million due to growth in both residential and commercial
telephony. As of March 31, 1999, our residential telephone offering had launched
in six markets with 41,894 customers.
Programming costs were $128.8 million for the first quarter of 1999, an
increase of 36% over the same period in 1998 due to basic and digital customer
growth at the existing cable televisions systems, acquisitions made in 1998,
programming rate increases instituted on January 1, 1999 and the channel
additions and pay-per-view events discussed above. Plant operations expenses
increased 19% to $39.1 million due to the acquisitions made in 1998 and
increased maintenance and costs related to new services. Marketing costs
increased 20% to $26.6 million for the first quarter of 1999 due to the
acquisitions made in 1998 and costs associated with rollout of digital video,
high-speed data and telephony services. General and administrative expenses for
the first quarter of 1999 increased 32% to $115.5 million due to the
acquisitions made in 1998 and costs associated with digital video, high-speed
data and telephony services in newly launched markets.
Operating cash flow (operating income before depreciation and
amortization), a non-GAAP measure of performance, is a commonly used financial
analysis tool for measuring and comparing cable television companies in several
areas, such as liquidity, operating performance and leverage. Operating cash
flow increased 26% to $188.5 million for the first quarter of 1999. The
operating cash flow margin (operating cash flow as a percentage of revenues) for
the first quarter of 1999, was 37.8%, an increase from 35.9% in the first
quarter of 1998.
Depreciation was $96.6 million for the first quarter of 1999 compared to
$87.0 million for the same period in 1998 due to the acquisitions made in 1998
and the continued upgrade and rebuild of the broadband network. Amortization was
$26.7 million for the first quarter of 1999 compared to $18.6 million for the
first quarter of 1998 due to the acquisitions made in 1998. Operating income for
the first quarter of 1999 was $65.2 million, an increase of 50% compared to the
same period in 1998.
S-11
<PAGE> 14
Interest expense increased to $54.0 million for the first quarter of 1999
compared to $53.1 million for the same period in 1998 due to an increase in
total debt outstanding and offset by more favorable average interest rates
during 1999. Equity in net losses of affiliated companies was $46.5 million
primarily due to losses associated with Cox PCS. Net gain on investments of
$419.5 million was primarily due to the gain of $433.1 million as a result of
the sale of Telewest Communications plc.
Net income for the first quarter of 1999 was $251.2 million as compared to
a net loss of $101.9 million for the first quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
Uses of Cash
As part of our ongoing strategic plan, we have invested, and will continue
to invest, significant amounts of capital to enhance the reliability and
capacity of our broadband cable network in preparation for the offering of new
services and to make investments in affiliated companies primarily focused on
telephony, programming and communications-related activities.
During the three months ended March 31, 1999, Cox made capital expenditures
of $224.8 million. These expenditures were primarily directed at upgrading and
rebuilding our broadband network for the delivery of high-speed data and
telephony. Capital expenditures for 1999 are expected to range between $925
million and $975 million.
Investments in affiliated companies during the three months ended March 31,
1999 consisted primarily of debt and equity funding to GEMS Television and
NextLink Nevada. Funding requirements for the remainder of 1999 for investments
in affiliated companies are expected to be approximately $11.5 million.
During the three months ended March 31, 1999, net repayments of $350.0
million and $205.9 million were made for revolving credit borrowings and
commercial paper borrowings, respectively.
Sources of Cash
Cox generated $175.9 million from operating activities during the three
months ended March 31, 1999. Proceeds from the sale of investments of $742.6
million related primarily to the sale of Telewest.
Cox Enterprises continues to perform day-to-day cash management services
for Cox with settlements of balances between Cox and Cox Enterprises occurring
periodically bearing interest at 50 basis points above Cox Enterprises' current
commercial paper borrowing rate.
Recently Issued Accounting Pronouncements
In 1998, SFAS No. 133 "Accounting for Derivative Financial Instruments and
Hedging Activities" was issued. This statement requires that all derivatives be
recognized in the statement of financial position as either assets or
liabilities and measured at fair value. In addition, all hedging relationships
must be designated, reassessed and documented pursuant to the provisions of SFAS
No. 133. SFAS No. 133 is effective for fiscal years beginning after June 15,
1999. Management is in the process of assessing the impact of SFAS No. 133 on
the consolidated financial statements.
S-12
<PAGE> 15
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS TO
NON-U.S. HOLDERS
The following is a summary of the material United States federal income,
estate and gift tax consequences of the purchase, ownership and disposition of
the Class A common stock by holders that are Non-U.S. Holders, as that term is
defined below. This summary does not purport to be a complete analysis of all
potential tax effects and is based upon the Internal Revenue Code of 1986, as
amended, existing and proposed regulations promulgated thereunder, published
rulings and court decisions, all as in effect and existing on the date hereof
and all of which are subject to change at any time, which change may be
retroactive or prospective. Unless otherwise specifically noted, this summary
applies only to those persons that hold the Class A common stock as a capital
asset within the meaning of Section 1221 of the Internal Revenue Code.
THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND DOES NOT ADDRESS THE TAX
CONSEQUENCES TO TAXPAYERS WHO ARE SUBJECT TO SPECIAL RULES OR CIRCUMSTANCES.
THIS SUMMARY DOES NOT ADDRESS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE,
MUNICIPALITY, FOREIGN COUNTRY OR OTHER TAXING JURISDICTION. PROSPECTIVE
INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE UNITED STATES
FEDERAL TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF THE CLASS A
COMMON STOCK, INCLUDING THE INVESTOR'S STATUS AS A NON-U.S. HOLDER, AS WELL AS
ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY STATE, MUNICIPALITY,
FOREIGN COUNTRY OR OTHER TAXING JURISDICTION.
GENERAL
For purposes of this discussion, a Non-U.S. Holder is a beneficial owner of
the Class A common stock that is not:
(i) a citizen or individual resident, as defined in Section 7701(b) of
the Internal Revenue Code, of the United States;
(ii) a corporation or partnership, including any entity treated as a
corporation or partnership for United States federal income tax
purposes, created or organized under the laws of the United
States, any State thereof or the District of Columbia unless, in
the case of a partnership, otherwise provided by regulation;
(iii) an estate the income of which is subject to United States federal
income tax without regard to its source; or
(iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one
or more United States persons have the authority to control all
substantial decisions of the trust.
Notwithstanding the preceding sentence, certain trusts in existence on
August 20, 1996, and treated as a U.S. Holder prior to such date, may elect to
continue to be treated as a U.S. Holder.
DIVIDENDS
Dividends, if any, paid to a Non-U.S. Holder will generally be subject to
the withholding of United States federal income tax at the rate of 30% of the
gross amount of such dividends, unless:
- the dividends are effectively connected with the conduct of a trade or
business (or, if an income tax treaty applies, are attributable to a
permanent establishment, as defined therein) within the United States of
the Non-U.S. Holder, and such Non-U.S. Holder furnishes to Cox or its
agent a duly executed Internal Revenue Service Form W-8ECI, or any
successor form; or
- such Non-U.S. Holder is entitled to a reduced withholding tax rate
pursuant to any applicable income tax treaty.
For purposes of determining whether tax will be withheld at a reduced rate
as specified by an income tax treaty, current law permits Cox to presume that
dividends paid to an address in a foreign country are
S-13
<PAGE> 16
paid to a resident of such country absent definite knowledge that such
presumption is not warranted. However, under newly issued U.S. Treasury
regulations, in the case of dividends paid after December 31, 2000, in order to
obtain a reduced rate of withholding under an income tax treaty, a Non-U.S.
Holder generally will be required to furnish to Cox or its agent a duly executed
Internal Revenue Service Form W-8BEN (or any successor form) certifying, under
penalties of perjury, that such Non-U.S. Holder is entitled to benefits under an
income tax treaty. The new regulations also provide special rules for dividend
payments made to foreign intermediaries, U.S. or foreign wholly-owned entities
that are disregarded for U.S. federal income tax purposes and entities that are
treated as fiscally transparent in the United States, the applicable income tax
treaty jurisdiction or both. Prospective investors should consult their tax
advisors concerning the effect, if any, of the adoption of these new U.S.
Treasury regulations on an investment in the Class A common stock. A Non-U.S.
Holder who is eligible for a reduced withholding rate may obtain a refund of any
excess amounts withheld by filing an appropriate claim for a refund with the
Internal Revenue Service.
Dividends paid to a Non-U.S. Holder that are effectively connected with the
conduct of a trade or business (or, if an income tax treaty applies, are
attributable to a permanent establishment, as defined therein) within the United
States of the Non-U.S. Holder will generally be taxed on a net income basis
(that is, after allowance for applicable deductions) at the graduated rates that
are applicable to United States persons. In the case of a Non-U.S. Holder that
is a corporation, such income may also be subject to the United States federal
branch profits tax (which is generally imposed on a foreign corporation upon the
deemed repatriation from the United States of effectively connected earnings and
profits) at a 30% rate, unless the rate is reduced or eliminated by an
applicable income tax treaty and the Non-U.S. Holder is a qualified resident of
the treaty country.
GAIN ON SALE OR OTHER DISPOSITION
A Non-U.S. Holder generally will not be subject to regular United States
federal income or withholding tax on gain recognized on a sale or other
disposition of the Class A common stock, unless:
(i) the gain is effectively connected with the conduct of a trade or
business (or, if an income tax treaty applies, is attributable to a
permanent establishment, as defined therein) within the United States of
the Non-U.S. Holder or of a partnership, trust or estate in which such
Non-U.S. Holder is a partner or beneficiary;
(ii) Cox has been, is or becomes a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue
Code at any time within the shorter of the five-year period preceding such
sale or other disposition or such Non-U.S. Holder's holding period for the
Class A common stock; or
(iii) the Non-U.S. Holder is an individual that:
(a) is present in the United States for 183 days or more in the
taxable year of the sale or other disposition; and
(b) either (I) has a tax home in the United States, as specially
defined for purposes of the United States federal income tax, or (II)
maintains an office or other fixed place of business in the United
States and the gain from the sale or other disposition of the Common
Stock is attributable to such office or other fixed place of business.
A corporation is generally considered to be a United States real property
holding corporation if the fair market value of its United States real property
interests within the meaning of Section 897(c)(1) of the Internal Revenue Code
equals or exceeds 50% of the sum of the fair market value of its worldwide real
property interests plus the fair market value of any other of its assets used or
held for use in a trade or business. Cox believes that it has not been, is not
currently and is not likely to become a United States real property holding
corporation. Further, even if Cox were to become a United States real property
holding corporation, any gain recognized by a Non-U.S. Holder still would not be
subject to U.S. federal income tax if the Class A common stock were considered
to be regularly traded (within the meaning of
S-14
<PAGE> 17
applicable U.S. Treasury regulations) on an established securities market (e.g.,
the New York Stock Exchange, on which Cox's Class A Common Stock will be
listed), and the Non-U.S. Holder did not own, directly or indirectly, at any
time during the five-year period ending on the date of the sale or other
disposition, more than 5% of the Class A common stock.
Gains realized by a Non-U.S. Holder that are effectively connected with the
conduct of a trade or business (or, if an income tax treaty applies, are
attributable to a permanent establishment, as defined therein) within the United
States of the Non-U.S. Holder will generally be taxed on a net income basis
(that is, after allowance for applicable deductions) at the graduated rates that
are applicable to United States persons. In the case of a Non-U.S. Holder that
is a corporation, such income may also be subject to the United States federal
branch profits tax (which is generally imposed on a foreign corporation upon the
deemed repatriation from the United States of effectively connected earnings and
profits) at a 30% rate, unless the rate is reduced or eliminated by an
applicable income tax treaty and the Non-U.S. Holder is a qualified resident of
the treaty country.
Individual Non-U.S. Holders may also be subject to tax pursuant to
provisions of United States federal income tax law applicable to certain United
States expatriates, including former long-term residents of the United States.
FEDERAL ESTATE AND GIFT TAXES
Class A common stock owned or treated as owned by an individual (regardless
of whether such an individual is a citizen or a resident of the United States)
at the date of death will be included in such individual's estate for United
States federal estate tax purposes, unless an applicable estate tax treaty
provides otherwise.
A Non-U.S. Holder will not be subject to United States federal gift tax on
a transfer of Class A common stock, unless such person is an individual
domiciled in the United States or such person is an individual subject to
provisions of United States federal gift tax law applicable to certain United
States expatriates, including certain former long-term residents of the United
States.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Cox must report annually to the Internal Revenue Service and to each
Non-U.S. Holder the amount of dividends paid to, and the tax withheld with
respect to, such Non-U.S. Holder, regardless of whether tax was actually
withheld and whether withholding was reduced by an applicable income tax treaty.
Pursuant to certain income tax treaties and other agreements, that information
may also be made available to the tax authorities of the country in which the
Non-U.S. Holder resides.
United States federal backup withholding (which generally is withholding
tax imposed at the rate of 31% on certain payments to persons not otherwise
exempt who fail to furnish certain identifying information) will generally not
apply to:
- dividends paid to a Non-U.S. Holder that are subject to withholding at
the 30% rate (or that are subject to withholding at a reduced rate under
an applicable income tax treaty); or
- Under current law, dividends paid to a Non-U.S. Holder at an address
outside of the United States (unless the payor has knowledge that the
payee is a United States person).
Under newly issued U.S. Treasury regulations, in the case of dividends paid
after December 31, 2000, a Non-U.S. Holder will generally be subject to backup
withholding, unless certain certification procedures (or in the case of payments
made outside of the United States with respect to an offshore account, certain
documentary evidence procedures) are satisfied, directly or through a foreign
intermediary.
The backup withholding and information reporting requirements will
generally also apply to the gross proceeds paid to a Non-U.S. Holder upon the
sale or other disposition of Class A common stock by or through a United States
office of a United States or foreign broker, unless the Non-U.S. Holder
certifies to the broker under penalties of perjury as to, among other things,
its name, address and status as a Non-
S-15
<PAGE> 18
U.S. Holder by filing the Service's Form W-8BEN (or any successor form) with the
broker, or unless the Non-U.S. Holder otherwise establishes an exemption.
Information reporting requirements (but not backup withholding) will
generally apply to a payment of the proceeds of a sale or other disposition of
Class A common stock effected at a foreign office of (i) a United States broker,
(ii) a foreign broker 50% or more of whose gross income for certain periods is
effectively connected with the conduct of a trade or business within the United
States, (iii) a foreign broker that is a controlled foreign corporation for
United States federal income tax purposes, or (iv) pursuant to newly issued U.S.
Treasury regulations effective after December 31, 2000, a foreign broker that is
(A) a foreign partnership one or more of whose partners are U.S. persons that in
the aggregate hold more than 50% of the income or capital interest in the
partnership at any time during its tax year, or (B) a foreign partnership
engaged at any time during its tax year in the conduct of a trade or business in
the United States, unless the broker has certain documentary evidence in its
records that the holder is a Non-U.S. Holder (and the broker has no knowledge to
the contrary) and certain other conditions are met, or unless the Non-U.S.
Holder otherwise establishes an exemption.
Neither backup withholding nor information reporting will generally apply
to a payment of the proceeds of a sale or other disposition of Class A common
stock effected at a foreign office of a foreign broker not subject to the
preceding paragraph. Prospective investors should consult their tax advisors
concerning the effect, if any, of the adoption of the newly issued U.S. Treasury
regulations on backup withholding and information reporting on an investment in
the Class A common stock.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be refunded or credited against the Non-U.S.
Holder's United States federal income tax liability, provided that the Non-U.S.
Holder files an appropriate claim for a refund with the Internal Revenue
Service.
S-16
<PAGE> 19
UNDERWRITING
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Credit Suisse First Boston Corporation,
Goldman, Sachs & Co., Salomon Smith Barney Inc and SG Cowen Securities
Corporation are acting as U.S. representatives of each of the U.S. underwriters
named below. In a U.S. purchase agreement among Cox and the U.S. underwriters,
Cox has agreed to sell to the U.S. underwriters, and each of the U.S.
underwriters, severally and not jointly, has agreed to purchase from Cox, the
number of shares of Class A common stock shown opposite its name below. The
obligations of the several U.S. underwriters to purchase these shares are
subject to terms and conditions contained in the U.S. purchase agreement.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
U.S. UNDERWRITER ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................
Morgan Stanley & Co. Incorporated...........................
Bear, Stearns & Co. Inc.....................................
Credit Suisse First Boston Corporation......................
Goldman, Sachs & Co.........................................
Salomon Smith Barney Inc....................................
SG Cowen Securities Corporation.............................
---------
Total.......................................... 7,360,000
=========
</TABLE>
Cox has also entered into an international purchase agreement with a group
of international managers outside the United States and Canada, for whom Merrill
Lynch International, Morgan Stanley & Co. International Limited, Bear, Stearns
International Limited, Cazenove & Co., Credit Suisse First Boston (Europe)
Limited, Goldman Sachs International, Salomon Smith Barney Inc. and SG Cowen
Securities Corporation are acting as lead managers. Concurrently with the sale
of 7,360,000 shares of Class A common stock to the U.S. underwriters described
above, Cox has agreed to sell to the international managers, and each of the
international managers, severally and not jointly, has agreed to purchase from
Cox, an aggregate of 1,840,000 shares of Class A common stock. The obligations
of the several international managers to purchase these shares are subject to
terms and conditions contained in the international purchase agreement. The
initial public offering price per share and the total underwriting discount per
share of Class A common stock are identical under the U.S. purchase agreement
and the international purchase agreement.
In the U.S. purchase agreement and the international purchase agreement,
the several U.S. underwriters and the several international managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Class A common stock being sold
pursuant to each such agreement if any of the shares of Class A common stock
being sold pursuant to such agreement are purchased. If there is a default by a
U.S. underwriter or an international manager, the U.S. purchase agreement and
the international purchase agreement provide that the purchase commitments of
non-defaulting U.S. underwriters or the non-defaulting international managers
may be increased or the purchase agreements may be terminated. The closings for
the sale of shares of Class A common stock to be purchased by the U.S.
underwriters and the international managers are conditioned upon one another.
The U.S. representatives have advised Cox that the U.S. underwriters
propose initially to offer the shares of Class A common stock to the public at
the public offering price appearing on the cover page of this prospectus
supplement, and to certain dealers at such price less a concession not in excess
of $ per share of Class A common stock. The U.S. underwriters may
allow, and such dealers may reallow, a discount not in excess of $ per
share of Class A common stock on sales to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.
Cox has granted an option to the U.S. underwriters, exercisable for 30 days
after the date of this prospectus supplement, to purchase up to an aggregate of
1,104,000 additional shares of Class A common
S-17
<PAGE> 20
stock at the initial public offering price appearing on the cover page of this
prospectus supplement, less the underwriting discount. The U.S. underwriters may
exercise this option solely to cover over-allotments, if any, made on the sale
of the Class A common stock offered by this prospectus supplement. To the extent
that the U.S. underwriters exercise this option, each U.S. underwriter will be
obligated, subject to certain conditions, to purchase a pro rata portion, based
upon the number of shares shown opposite its name in the foregoing table of the
additional shares. Cox also has granted an option to the international managers,
exercisable for 30 days after the date of this prospectus supplement, to
purchase up to an aggregate of 276,000 additional shares of Class A common stock
to cover over-allotments, if any, on terms similar to those granted to the U.S.
underwriters.
The following table shows the per share and total public offering price,
underwriting discount to be paid by Cox to the U.S. underwriters and the
international managers and the proceeds before expenses to Cox. This information
is presented assuming either no exercise or full exercise by the U.S.
underwriters and the international managers of their over-allotment options.
<TABLE>
<CAPTION>
WITHOUT WITH
PER SHARE OPTION OPTION
--------- ------- ------
<S> <C> <C> <C>
Public offering price................................... $ $ $
Underwriting discount................................... $ $ $
Proceeds to Cox......................................... $ $ $
</TABLE>
Cox estimates that it will spend approximately $0.4 million for fees and
expenses associated with the offerings of the Class A common stock.
The shares of Class A common stock are being offered by the several U.S.
underwriters and the several international managers, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of legal
matters by their counsel and other conditions. The U.S. underwriters and the
international managers reserve the right to withdraw, cancel or modify this
offer and to reject orders in whole or in part.
Cox, Cox Enterprises and Cox's executive officers and directors have
agreed, subject to certain exceptions, not to directly or indirectly,
- offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of or otherwise dispose of or transfer any
shares of Class A common stock or securities convertible into or
exchangeable or exercisable for or repayable with Class A common stock,
whether now owned or later acquired by the person executing the agreement
or as to which the person executing the agreement acquires the power of
disposition, or file or cause the filing of a registration statement
under the Securities Act of 1933, as amended, with respect to any of the
foregoing, or
- enter into any swap or other agreement or transaction that transfers, in
whole or in part, the economic consequence of ownership of the Class A
common stock whether any such swap or transaction is to be settled by
delivery of Class A common stock or other securities, in cash or
otherwise, in each case, without the prior written consent of Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated for a period of 90 days after the date of this prospectus
supplement. With this consent, Cox, Cox Enterprises and Cox's executive
officers and directors may sell shares before the expiration of the
90-day period without prior notice to the other Class A common
stockholders or to any public market in which the Class A common stock
trades.
The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their activities.
Under the terms of the intersyndicate agreement, the U.S. underwriters and the
international managers are permitted to sell shares of Class A common stock to
each other for purposes of resale at the initial public offering price, less an
amount not greater than the selling concession. Under the terms of the
intersyndicate agreement, the U.S. underwriters and any dealer to whom they sell
shares of Class A common stock will not offer to sell or sell shares of Class A
common stock to persons who are non-U.S. or non-Canadian persons or to persons
they believe intend to resell to
S-18
<PAGE> 21
persons who are non-U.S. or non-Canadian persons, and the international managers
and any dealer to whom they sell shares of Class A common stock will not offer
to sell or sell shares of Class A common stock to U.S. persons or to Canadian
persons or to persons they believe intend to resell to U.S. or Canadian persons,
except in the case of transactions pursuant to the intersyndicate agreement.
Cox has agreed to indemnify the U.S. underwriters and the international
managers against specified liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the U.S. underwriters and
the international managers may be required to make because of those liabilities.
Until the distribution of the Class A common stock is completed, rules of
the Commission may limit the ability of the U.S. underwriters, the international
managers and certain selling group members to bid for and purchase the Class A
common stock. As an exception to these rules, the U.S. representatives are
permitted to engage in certain transactions that stabilize the price of the
Class A common stock. Such transactions consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the Class A common stock.
If the U.S. underwriters or the international managers create a short
position in the Class A common stock in connection with the offerings, i.e., if
they sell more shares of Class A common stock than are set forth on the cover
page of this prospectus supplement, the U.S. representatives may reduce that
short position by purchasing Class A common stock in the open market. The U.S.
representatives may also elect to reduce any short position by exercising all or
part of the over-allotment options described above.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.
Neither Cox nor any of the U.S. underwriters or international managers
makes any representation or prediction as to the direction or magnitude of any
effect that the transactions described above may have on the price of the Class
A common stock. In addition, neither Cox nor any of the U.S. underwriters or
international managers makes any representation that the U.S. representatives
will engage in such transactions or that such transactions, once commenced, will
not be discontinued without notice.
In the ordinary course of business, certain of the U.S. underwriters or
international managers and their affiliates have from time to time provided
investment banking, general financing and banking and financial advisory
services to us and have also acted as representatives of various other
underwriters in connection with public offerings of our securities.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Class A common
stock offered hereby will be passed upon for Cox by Dow, Lohnes & Albertson,
PLLC, Washington, D.C. and for the underwriters by Brown & Wood LLP, New York,
New York.
S-19
<PAGE> 22
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9,200,000 SHARES
(COX LOGO)
COX COMMUNICATIONS, INC.
CLASS A COMMON STOCK
-----------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------
Joint Book-Running Managers
MERRILL LYNCH & CO. MORGAN STANLEY DEAN WITTER
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
SG COWEN
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 23
The information in this preliminary prospectus supplement and the accompanying
preliminary prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and
Exchange Commission is effective. This preliminary prospectus supplement and the
accompanying preliminary prospectus are not an offer to sell these securities
and they are not soliciting an offer to buy these securities in any state where
the offer and sale is not permitted.
[INTERNATIONAL PROSPECTUS SUPPLEMENT COVER PAGE]
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED JULY 28, 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1999)
COX LOGO
9,200,000 SHARES
COX COMMUNICATIONS, INC.
CLASS A COMMON STOCK
----------------------
We are offering and selling 9,200,000 shares of Class A common stock. The
international managers are offering 1,840,000 shares outside the United States
and Canada, and the U.S. underwriters are offering 7,360,000 shares in the
United States and Canada.
The Class A common stock trades on the New York Stock Exchange under the
symbol "COX." On July 26, 1999, the last sale price of the Class A common stock
as reported on the New York Stock Exchange was $38 13/16 per share.
INVESTING IN THE CLASS A COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN
THE "RISK FACTORS" SECTION BEGINNING ON PAGE S-5 OF THIS PROSPECTUS SUPPLEMENT.
----------------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----
<S> <C> <C>
Public offering price...................................... $ $
Underwriting discount...................................... $ $
Proceeds, before expenses, to Cox.......................... $ $
</TABLE>
The international managers may also purchase up to an additional 276,000
shares from Cox at the public offering price, less the underwriting discount,
within 30 days from the date of this prospectus supplement to cover
over-allotments. The U.S. underwriters may similarly purchase up to an aggregate
of an additional 1,104,000 shares from Cox.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The shares of Class A common stock will be ready for delivery in New York,
New York on or about , 1999.
----------------------
Joint Book-Running Managers
MERRILL LYNCH INTERNATIONAL MORGAN STANLEY DEAN WITTER
----------------------
BEAR, STEARNS INTERNATIONAL LIMITED
CAZENOVE & CO.
CREDIT SUISSE FIRST BOSTON
GOLDMAN SACHS INTERNATIONAL
SALOMON SMITH BARNEY INTERNATIONAL
SG COWEN
----------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS , 1999.
<PAGE> 24
[INTERNATIONAL PROSPECTUS SUPPLEMENT UNDERWRITING SECTION]
UNDERWRITING
Merrill Lynch International, Morgan Stanley & Co. International Limited,
Bear, Stearns International Limited, Cazenove & Co., Credit Suisse First Boston
(Europe) Limited, Goldman Sachs International, Salomon Smith Barney Inc and SG
Cowen Securities Corporation are acting as international managers. In an
international purchase agreement among Cox and the international managers, Cox
has agreed to sell to the international managers, and each of the international
managers, severally and not jointly, has agreed to purchase from Cox, the number
of shares of Class A common stock shown opposite its name below. The obligations
of the several international managers to purchase these shares are subject to
terms and conditions contained in the international purchase agreement.
<TABLE>
<CAPTION>
NUMBER OF
MANAGER SHARES
- ------- ---------
<S> <C>
Merrill Lynch International.................................
Morgan Stanley & Co. International Limited..................
Bear, Stearns International Limited.........................
Cazenove & Co...............................................
Credit Suisse First Boston (Europe) Limited.................
Goldman Sachs International.................................
Salomon Smith Barney Inc....................................
SG Cowen Securities Corporation.............................
---------
Total............................................ 1,840,000
=========
</TABLE>
Cox has also entered into an U.S. purchase agreement with a group of U.S.
underwriters in the United States and Canada for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, Bear, Stearns &
Co. Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co., Salomon
Smith Barney Inc and SG Cowen Securities Corporation are acting as U.S.
representatives. Concurrently with the sale of 1,840,000 shares of Class A
common stock to the international managers described above, Cox has agreed to
sell to the U.S. underwriters, and each of the U.S. underwriters, severally and
not jointly, has agreed to purchase from Cox, an aggregate of 7,360,000 shares
of Class A common stock. The obligations of the several U.S. underwriters to
purchase these shares are subject to terms and conditions contained in the U.S.
purchase agreement. The initial public offering price per share and the total
underwriting discount per share of Class A common stock are identical under the
international purchase agreement and the U.S. purchase agreement.
In the international purchase agreement and the U.S. purchase agreement,
the several international managers and the several U.S. underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Class A common stock being sold
pursuant to each such agreement if any of the shares of Class A common stock
being sold pursuant to such agreement are purchased. If there is a default by an
international manager or a U.S. underwriter, the international purchase
agreement and the U.S. purchase agreement provide that the purchase commitments
of non-defaulting international managers or the non-defaulting U.S. underwriters
may be increased or the purchase agreements may be terminated. The closings with
respect to the sale of shares of Class A common stock to be purchased by the
international managers and the U.S. underwriters are conditioned upon one
another.
The lead managers have advised Cox that the international managers propose
initially to offer the shares of Class A common stock to the public at the
public offering price appearing on the cover page of this prospectus supplement,
and to certain dealers at such price less a concession not in excess of
$ per share of Class A common stock. The international managers may
allow, and such dealers may reallow, a discount not in excess of $ per
share of Class A common stock on sales to certain
S-17
<PAGE> 25
other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
Cox has granted an option to the international managers exercisable for 30
days after the date of this prospectus supplement, to purchase up to an
aggregate of 276,000 additional shares of Class A common stock at the initial
public offering price appearing on the cover page of this prospectus supplement,
less the underwriting discount. The international managers may exercise this
option solely to cover over-allotments, if any, made on the sale of the Class A
common stock offered by this prospectus supplement. To the extent that the
international managers exercise this option, the international managers will be
obligated, subject to certain conditions, to purchase a pro rata portion, based
upon the number of shares shown opposite its name in the foregoing table, of the
additional shares. Cox also has granted an option to the U.S. underwriters,
exercisable for 30 days after the date of this prospectus supplement, to
purchase up to an aggregate of 1,104,000 additional shares of Class A common
stock to cover over-allotments, if any, on terms similar to those granted to the
international managers.
The following table shows the per share and total public offering price,
underwriting discount to be paid by Cox to the international managers and the
U.S. underwriters, and the proceeds before expenses to Cox. This information is
presented assuming either no exercise or full exercise by the international
managers and the U.S. underwriters of their over-allotment options.
<TABLE>
<CAPTION>
WITHOUT WITH
PER SHARE OPTION OPTION
--------- ------- ------
<S> <C> <C> <C>
Public offering price................................... $ $ $
Underwriting discount................................... $ $ $
Proceeds to Cox......................................... $ $ $
</TABLE>
Cox estimates that it will spend approximately $0.4 million for fees and
expenses associated with the offerings of the Class A common stock.
The shares of Class A common stock are being offered by the several
international managers and the several U.S. underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of legal
matters by their counsel and other conditions. The international managers and
the U.S. underwriters reserve the right to withdraw, cancel or modify this offer
and to reject orders in whole or in part.
Cox, Cox Enterprises and Cox's executive officers and directors have
agreed, subject to certain exceptions, not to directly or indirectly,
- offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of or otherwise dispose of or transfer any
shares of Class A common stock or securities convertible into or
exchangeable or exercisable for or repayable with Class A common stock,
whether now owned or later acquired by the person executing the agreement
or as to which the person executing the agreement acquires the power of
disposition, or file or cause the filing of a registration statement
under the Securities Act of 1933, as amended, with respect to any of the
foregoing, or
- enter into any swap or other agreement or transaction that transfers, in
whole or in part, the economic consequence of ownership of the Class A
common stock whether any such swap or transaction is to be settled by
delivery of Class A common stock or other securities, in cash or
otherwise, in each case without the prior written consent of Merrill
Lynch International and Morgan Stanley & Co. International Limited for a
period of 90 days after the date of this prospectus supplement. With this
consent, Cox, Cox Enterprises and Cox's executive officers and directors
may sell shares before the expiration of the 90-day period without prior
notice to the other Class A common stockholders or to any public market
in which the Class A common stock trades.
S-18
<PAGE> 26
The international managers and the U.S. underwriters have entered into an
intersyndicate agreement that provides for the coordination of their activities.
Under the terms of the intersyndicate agreement, the international managers and
the U.S. underwriters are permitted to sell shares of Class A common stock to
each other for purposes of resale at the initial public offering price, less an
amount not greater than the selling concession. Under the terms of the
intersyndicate agreement, the international managers and any dealer to whom they
sell shares of Class A common stock will not offer to sell or sell shares of
Class A common stock to persons who are U.S. or Canadian persons or to persons
they believe intend to resell to persons who are U.S. or Canadian persons, and
the U.S. underwriters and any dealer to whom they sell shares of Class A common
stock will not offer to sell or sell shares of Class A common stock to non-U.S.
persons or to non-Canadian persons or to persons they believe intend to resell
to non-U.S. or non-Canadian persons, except in the case of transactions pursuant
to the intersyndicate agreement.
Cox has agreed to indemnify the international managers and the U.S.
underwriters against specified liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the international managers
and the U.S. underwriters may be required to make because of those liabilities.
Until the distribution of the Class A common stock is completed, rules of
the Commission may limit the ability of the international managers and the U.S.
underwriters and certain selling group members to bid for and purchase the Class
A common stock. As an exception to these rules, the U.S. representatives are
permitted to engage in certain transactions that stabilize the price of the
Class A common stock. Such transactions consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the Class A common stock.
If the international managers or the U.S. underwriters create a short
position in the Class A common stock in connection with the offerings, i.e., if
they sell more shares of Class A common stock than are set forth on the cover
page of this prospectus supplement, the U.S. representatives may reduce that
short position by purchasing Class A common stock in the open market. The U.S.
representatives may also elect to reduce any short position by exercising all or
part of the over-allotment options described above.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.
Neither Cox nor any of the international managers or the U.S. underwriters
makes any representation or prediction as to the direction or magnitude of any
effect that the transactions described above may have on the price of the Class
A common stock. In addition, neither Cox nor any of the international managers
or the U.S. underwriters makes any representation that the U.S. representatives
will engage in such transactions or that such transactions, once commenced, will
not be discontinued without notice.
In the ordinary course of business, certain of the international managers
or the U.S. underwriters and their affiliates have from time to time provided
investment banking, general financing and banking and financial advisory
services to us and have also acted as representatives of various other
underwriters in connection with public offerings of our securities.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Class A common
stock offered hereby will be passed upon for Cox by Dow, Lohnes & Albertson,
PLLC, Washington, D.C. and for the underwriters by Brown & Wood, LLP, New York,
New York.
S-19
<PAGE> 27
[INTERNATIONAL PROSPECTUS SUPPLEMENT BACK COVER PAGE]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9,200,000 SHARES
(COX COMMUNICATIONS(R) LOGO)
COX COMMUNICATIONS, INC.
CLASS A COMMON STOCK
-----------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------
Joint Book-Running Managers
MERRILL LYNCH & CO. MORGAN STANLEY DEAN WITTER
BEAR, STEARNS INTERNATIONAL LIMITED
CAZENOVE & CO.
CREDIT SUISSE FIRST BOSTON
GOLDMAN SACHS INTERNATIONAL
SALOMON SMITH BARNEY INTERNATIONAL
SG COWEN
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 28
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. COX AND COX TRUST MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PRELIMINARY PROSPECTUS ARE NOT AN OFFER TO SELL
THESE SECURITIES AND THEY ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED JULY 28, 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1999)
COX LOGO
13,000,000 FELINE PRIDES(SM)
(CONSISTING OF INCOME PRIDES(SM) AND GROWTH PRIDES(SM))
COX COMMUNICATIONS, INC.
% CAPITAL SECURITIES
COX TRUST II
(liquidation amount $50 per capital security)
fully and unconditionally guaranteed to the extent provided in this prospectus
supplement by
Cox Communications, Inc.
----------------------
This is an offering of 13,000,000 FELINE PRIDES(SM) by Cox Communications,
Inc. and separately offered and separately traded % capital
securities of Cox Trust II, a Delaware business trust wholly owned by us. The
FELINE PRIDES consist of units referred to as Income PRIDES and Growth PRIDES.
In addition to the separately offered and separately traded capital securities,
the trust is issuing capital securities that will initially be held as
components of the Income PRIDES and will not be offered or traded separately
from the Income PRIDES, unless and until substitution is made as described in
this prospectus supplement.
We have applied to list the Income PRIDES and the Growth PRIDES on the New
York Stock Exchange under the symbols "COX PrI" and "COX PrG," respectively. The
capital securities will not initially be listed on an exchange.
INVESTING IN THE SECURITIES INVOLVES CERTAIN RISKS WHICH ARE DESCRIBED IN
THE "RISK FACTORS" SECTION OF THIS PROSPECTUS SUPPLEMENT BEGINNING ON PAGE S-12.
----------------------
<TABLE>
<CAPTION>
PER INCOME PER GROWTH PER CAPITAL
PRIDES PRIDES SECURITY TOTAL
---------- ---------- ----------- -----
<S> <C> <C> <C> <C>
Public offering price(1)............... $ $ $ $
Underwriting commission................ $ $ $ $
Proceeds to Cox........................ $ $ $ $(2)
</TABLE>
(1) Plus, as applicable, accumulated distributions, interest and
contract adjustment payments, if any, from , 1999, if
settlement occurs after that date
(2) Before expenses and after deducting $ used to purchase the
treasury securities component of the Growth PRIDES
The underwriters may also purchase up to an additional Income
PRIDES, Growth PRIDES and capital securities within 30 days after
the date of this prospectus supplement to cover over-allotments, if any. The
underwriters must purchase at least as many capital securities as Growth PRIDES.
If these options are exercised in full, the total underwriting commission and
proceeds to Cox (before expenses and after deducting $ used to purchase
the treasury securities component of the Growth PRIDES) will be $ and
$ , respectively.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The securities will be ready for delivery in New York, New York on or about
, 1999.
----------------------
MERRILL LYNCH & CO. MORGAN STANLEY DEAN WITTER
----------------------
BANC OF AMERICA SECURITIES LLC J.P. MORGAN & CO.
----------------------
The date of this prospectus supplement is , 1999.
- ---------------
(SM) Service Mark of Merrill Lynch & Co., Inc.
<PAGE> 29
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary............................... S-2
Cox Communications, Inc. ............................... S-2
Recent Developments..................................... S-2
The Offering -- Q&A..................................... S-4
Explanatory Diagrams.................................... S-8
Risk Factors................................................ S-12
Use of Proceeds............................................. S-19
Price Range of Class A Common Stock......................... S-19
Dividend Policy............................................. S-19
Capitalization.............................................. S-20
Selected Financial Information and Other Data............... S-21
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. S-23
Cox Trust II................................................ S-25
Accounting Treatment........................................ S-26
Description of the FELINE PRIDES............................ S-26
Description of the Purchase Contracts....................... S-30
Provisions of the Contract Purchase Agreement and the Pledge
Agreement................................................. S-39
Description of the Capital Securities....................... S-42
Description of the Guarantee................................ S-54
Description of the Debentures............................... S-57
Effect of Obligations Under the Debentures and the
Guarantee................................................. S-63
Certain United States Federal Income Tax Consequences....... S-64
Plan of Distribution........................................ S-72
Legal Opinions.............................................. S-73
PROSPECTUS
Cox Communications, Inc..................................... 2
The Cox Trusts.............................................. 3
Use of Proceeds............................................. 5
Ratio of Earnings to Fixed Charges.......................... 5
Description of Capital Stock................................ 6
Description of Debt Securities.............................. 9
Description of Junior Subordinated Debentures............... 20
Description of Trust Preferred Securities................... 28
Description of Preferred Securities Guarantees.............. 38
Relationship Among the Trust Preferred Securities, the
Corresponding Junior Subordinated
Debentures and the Preferred Securities Guarantees........ 41
Description of Capital Securities........................... 42
Description of Capital Securities Guarantees................ 52
Relationship Among the Capital Securities, the Corresponding
Senior Debt Securities and
the Capital Securities Guarantees......................... 55
Description of Stock Purchase Contracts and Stock Purchase
Units..................................................... 56
Plan of Distribution........................................ 57
Legal Matters............................................... 58
Experts..................................................... 58
Where You Can Find More Information......................... 58
Information Incorporated by Reference....................... 58
</TABLE>
FORWARD-LOOKING STATEMENTS
This prospectus supplement includes forward-looking statements within the
meaning of Section 21E of the Securities and Exchange Act of 1934, as amended.
We have based these statements on our current expectations or projections about
future events and on assumptions we have made. These forward-looking statements
are subject to certain risks and uncertainties which could cause actual results
or events to differ materially from those we anticipate or project. Prospective
purchasers should not place undue reliance on these forward-looking statements.
We undertake no obligation to update or revise any forward-looking statements as
a result of new information, future events or otherwise.
----------------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriters have not, authorized any person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not, and the underwriters are
not, making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should assume that the information appearing
in this prospectus supplement and the accompanying prospectus, as well as
information we previously filed with the Securities and Exchange Commission and
incorporated by reference, is accurate as of the date on the front cover of this
prospectus supplement only. Our business, financial condition, results of
operations and prospects may have changed since that date.
S-1
<PAGE> 30
PROSPECTUS SUPPLEMENT SUMMARY
You should read the following summary in conjunction with the more detailed
information contained in this prospectus supplement and the accompanying
prospectus. Unless the context otherwise requires, references in this prospectus
supplement to Cox, we, us, and our are to Cox Communications, Inc. and its
consolidated subsidiaries.
COX COMMUNICATIONS, INC.
Cox Communications, Inc. is one of the largest broadband communications
companies in the United States, delivering an array of integrated video, voice
and data services to both residential and commercial customers through its
extensive U.S. broadband network operations. Pro forma for Cox's pending cable
system acquisitions, Cox will serve approximately six million customers, making
it the nation's fifth largest cable company. Cox also has substantial
investments in cable television programming, telecommunications, technology and
broadband networks.
Cox's core strategy is to leverage its advanced broadband network by
offering new and advanced communications services to its residential and
commercial customers. We believe that we have a number of advantages that will
allow us to continue to implement this strategy successfully:
- highly clustered and regionally concentrated cable television systems;
- extensive experience and reputation as an industry leader in upgrading
the technological capabilities of its broadband networks; and
- a strong commitment to and reputation for superior customer service.
Cox's current service offerings include:
- multichannel video under the Cox Cable brand;
- high-speed Internet access via Cox@Home;
- local and long-distance telephone under the Cox Digital Telephone brand;
- advanced digital video programming services under the Cox Digital TV
brand; and
- commercial voice and data services via Cox Business Services
In addition, Cox has sought to utilize its expertise and position as one of
the nation's premier cable television companies to invest in programming,
telecommunications and technology companies which are complementary to Cox's
business strategy. Cox believes that these investments have been vital to Cox's
growth as a communications industry leader.
Cox Enterprises, Inc., a privately-held corporation headquartered in
Atlanta, Georgia and one of the largest media companies in the United States,
owns approximately 72.7% of the outstanding equity of Cox as of June 30, 1999.
In addition to Cox, Cox Enterprises publishes, owns or operates newspapers,
television and radio stations, Internet web sites and Manheim Auctions, the
world's largest auto auction operator.
Cox's principal executive offices are located at 1400 Lake Hearn Drive,
Atlanta, Georgia 30319. Cox's telephone number is (404) 843-5000.
RECENT DEVELOPMENTS
In March 1999, Cox signed a definitive agreement to purchase from First
Commonwealth Communications, Inc. cable television systems serving communities
near Gloucester, New Kent, West Point and King and Queen County, Virginia. The
cable television systems, serving more than 11,000 customers, are contiguous to
Cox's Hampton Roads, Virginia cable operation. Cox expects to complete this
transaction, which is subject to legal and regulatory review, during the third
quarter of 1999.
S-2
<PAGE> 31
Also in March 1999, Cox and MediaOne signed a definitive agreement to trade
selected cable television systems in Massachusetts, Rhode Island and Connecticut
representing a total of 105,000 customers. Under the terms of the agreement, Cox
would trade its cable television systems in Massachusetts, serving approximately
54,000 customers, for MediaOne properties in Enfield, Connecticut and Westerly,
Rhode Island, serving 51,000 customers, and cash. Cox expects to complete this
transaction, which is subject to legal and regulatory review, during third
quarter of 1999.
In April 1999, Cox and Media General, Inc. entered into a purchase
agreement pursuant to which Cox will purchase for cash Media General's cable
systems serving more than 260,000 customers in Fairfax County and
Fredericksburg, Virginia. The transaction values that Media General cable
systems at $1.4 billion. Cox expects to complete this transaction which is
subject to legal and regulatory review, during the third quarter of 1999.
In May 1999, Cox entered into a definitive agreement to merge with TCA
Cable TV, Inc., a cable television operator serving approximately 883,000
customers in Texas, Arkansas, Louisiana and four other states. Through VPI
Communications Inc., TCA also is a leader in cable advertising sales, providing
turnkey advertising services to 82 multiple system operators representing more
than 3.5 million customers nationwide. Under the terms of the agreement, each
share of TCA common stock will be converted into the right to receive $31.25 in
cash and 0.7418 of a share of Cox Class A common stock. Alternatively, TCA
shareholders can elect to receive $62.50 in cash per TCA share or 1.4836 shares
of Cox Class A common stock per TCA share, subject in each case to proration in
the event that those elections would result in the payment by Cox of more than
$1.6 billion in cash or the issuance of more than 39.6 million shares of Cox
Class A common stock to TCA shareholders. Cox expects to complete this
transaction, which is subject to TCA shareholder and regulatory approvals,
during the third quarter of 1999.
Also in May 1999, Cox transferred its remaining interest in Cox
Communications PCS, L.P. to Sprint Corporation in exchange for 19,058,434 shares
of Sprint's PCS Common Stock-Series 2. Cox PCS is the partnership through which
Sprint conducts its operation in Los Angeles, San Diego and Las Vegas. As a
result of this transaction, Cox recognized a pre-tax gain of $908.4 million.
Concurrently with this transaction, Cox Enterprises transferred its remaining
interest in Cox PCS in exchange for 5,241,070 shares of Sprint's PCS Common
Stock-Series 2.
In July 1999, Cox and AT&T Corp. entered into a definitive agreement to
exchange Cox's AT&T common stock for the stock of AT&T subsidiaries that own
cable television systems that serve approximately 495,000 customers and other
assets, including cash. In return for its 50.3 million shares of AT&T stock, Cox
will receive the stock of AT&T subsidiaries that own: cable systems serving
Tulsa, Oklahoma (160,000 customers) and Baton Rouge, Louisiana (156,000
customers); a 20% ownership interest in a partnership with TCA Cable TV Inc.;
Peak Cablevision LLC, which has 117, customers in Oklahoma, Arkansas, Utah and
Nevada; and approximately $750 million in other assets, including cash.
Also in July 1999, Cox and Multimedia Cablevision, Inc., a subsidiary of
Gannett Co., Inc., entered into a definitive purchase agreement pursuant to
which Cox will purchase for $2.7 billion in cash Multimedia's cable television
operations serving 522,000 customers in Kansas, Oklahoma and North Carolina. Cox
anticipates that this transaction will generate approximately $350 million in
tax benefits to Cox. Cox expects to complete this transaction, which is subject
to legal and regulatory review, by the end of the first quarter of 2000.
Total revenues for the three months ended June 30, 1999 were $509.9
million, a 28% increase for the three months ended June 30, 1998. Operating cash
flow increased 29% to $195.9 million for the second quarter of 1999. Interest
expense increased $17.7 million to $68.7 million primarily due to an increase in
the total debt outstanding. Equity in net losses of affiliated companies was
$29.6 million primarily due to losses associated with Cox PCS. Net income for
the current quarter was $505.8 million as compared to net loss of $12.2 million
for the second quarter of 1998.
Total revenues for the six months ended June 30, 1999 were $1,008.4
million, a 24% increase over revenues for the six months ended June 30, 1998.
Operating cash flow increased 28% to $384.4 million for
S-3
<PAGE> 32
the first six months of 1999. Interest expense increased $18.5 million to $122.7
million primarily due to an increase in the total debt outstanding. Equity in
net losses of affiliated companies was $76.0 million primarily due to losses
associated with Cox PCS. Net income for the first six months of 1999 was $757.0
million as compared to net loss of $14.2 million for the same period in 1998.
THE OFFERING -- Q&A
WHAT ARE FELINE PRIDES?
FELINE PRIDES consist of Income PRIDES and Growth PRIDES.
Income PRIDES contain two components:
(1) A purchase contract under which the investor agrees to purchase
shares of our Class A common stock, $1.00 par value per share, on August
16, 2002. The purchase contract also includes unsecured contract adjustment
payments of % of $50 per year paid quarterly.
(2) A capital security under which the investor will be paid % of
$50 per year through and including August 15, 2002 and at the reset rate
after that date, but which will be pledged to us to secure the investor's
obligations under the purchase contract. On August 16, 2002 the investor
will have two options:
- Pay cash to settle the purchase contract for $50 and release the
pledged capital securities, whose rate will have been reset at that
time, or
- Pay cash to settle the purchase contract by allowing the capital
securities to be sold on its behalf in a remarketing process.
Growth PRIDES contain two components:
(1) A purchase contract under which the investor agrees to purchase
shares of our Class A common stock, $1.00 par value per share, on August
16, 2002. The purchase contract also includes unsecured contract adjustment
payments of % of $50 per year paid quarterly.
(2) A zero-coupon treasury security which is a 1/20 undivided
beneficial interest in a zero-coupon U.S. treasury security (CUSIP
No. ) with a principal amount at maturity equal to $1,000 and
maturing on August 15, 2002. The zero-coupon treasury security will be
pledged to us to secure the investor's obligations under the purchase
contract.
WHAT PAYMENTS AM I ENTITLED TO AS A HOLDER OF INCOME PRIDES?
Holders of Income PRIDES will be entitled to receive total cash
distributions at a rate of % of $50 per year, payable quarterly in arrears.
These cash distributions will consist of cumulative cash distributions on the
related capital securities or on the treasury portfolio, as applicable, payable
at the rate of % of $50 per year through and including August 15, 2002, and
contract adjustment payments payable by us at the rate of % of $50 per
year.
WHAT PAYMENTS AM I ENTITLED TO AS A HOLDER OF GROWTH PRIDES?
Holders of Growth PRIDES will be entitled to receive quarterly cash
distributions of contract adjustment payments payable by us at the rate of
% of $50 per year. In addition, original issue discount, referred to as OID
in this prospectus supplement, will accrue on each related treasury security.
WHAT CONTRACT ADJUSTMENT PAYMENTS AM I ENTITLED TO?
Contract adjustment payments will be fixed at a rate per year of % of
$50 per purchase contract in the case of Income PRIDES, and % of $50 per
purchase contract in the case of Growth PRIDES.
S-4
<PAGE> 33
WHAT ARE THE PAYMENT DATES FOR THE SECURITIES?
The current payments described above in respect of the Income PRIDES and
Growth PRIDES will be payable quarterly in arrears on February 16, May 16,
August 16 and November 16 of each year (each, a payment date), commencing
November 16, 1999, to holders of record on the business day preceding the
payment dates. With respect to contract adjustment payments, the payments will
be payable through and including the earlier of August 16, 2002 or the most
recent quarterly date on or before any early settlement of the related purchase
contracts. In the case of capital securities that are components of Income
PRIDES, the payments will be payable through and including the most recent
quarterly date on or before the earlier of August 16, 2002 and the date the
liquidation amounts of the capital securities together with all accumulated and
unpaid distributions are paid in full.
WHAT IS THE SETTLEMENT RATE?
The settlement rate is the number of newly issued shares of Class A common
stock we are obligated to sell and you are obligated to buy upon settlement of a
purchase contract on August 16, 2002.
The settlement rate for each purchase contract will be as follows, subject
to adjustment under the circumstances described under "Description of Purchase
Contracts--Anti-Dilution Adjustments":
(a) If the applicable market value of our Class A common stock is
equal to or greater than $ , the settlement rate will be shares
of our Class A common stock per purchase contract.
(b) If the applicable market value of our Class A common stock is less
than $ but greater than $ , the settlement rate will be equal
to $ divided by the applicable market value.
(c) If the applicable market value is less than or equal to $ ,
the settlement rate, which is equal to $50 divided by $ , will be
shares of our Class A common stock per purchase contract.
WHAT IS REMARKETING?
The capital securities of Income PRIDES holders who have failed to notify
the purchase contract agent on or prior to the fifth business day before August
16, 2002 of their intention to pay cash to satisfy their obligations under the
related purchase contracts will be remarketed on the third business day
immediately preceding August 16, 2002.
The remarketing agent will use its reasonable efforts to remarket those
capital securities (bearing the reset rate) on that date for settlement on
August 16, 2002. The remarketing agent will use its best efforts to obtain a
price of approximately 100.5% of the aggregate stated liquidation amount of
those capital securities, plus any related accumulated and unpaid distributions.
The portion of the proceeds from the remarketing equal to the total stated
liquidation amount of those capital securities will be automatically applied to
satisfy in full those Income PRIDES holders' obligations to purchase our Class A
common stock under the related purchase contracts. The remarketing agent will
deduct as a remarketing fee an amount not exceeding 25 basis points (.25%) of
the aggregate stated liquidation amount of the remarketed capital securities
from any amount of those proceeds in excess of the aggregate stated liquidation
amount of the remarketed capital securities plus any accumulated and unpaid
distributions. The remarketing agent will remit the remaining portion of the
proceeds, if any, for the benefit of that holder.
S-5
<PAGE> 34
WHAT HAPPENS IF THE REMARKETING AGENT DOES NOT SELL THE CAPITAL SECURITIES?
We will exercise our rights as a secured party to dispose of the capital
securities in accordance with applicable law and to satisfy in full, from the
proceeds of that disposition, your obligation to purchase Class A common stock
under the related purchase contracts if
- the remarketing agent cannot remarket the related capital securities of
your Income PRIDES, other than to us, at a price not less than 100% of
the total stated liquidation amount of those capital securities plus
accumulated and unpaid distributions or
- if the remarketing has not occurred because a condition precedent to the
remarketing has not been fulfilled.
IF I AM NOT A PARTY TO A PURCHASE CONTRACT, MAY I STILL PARTICIPATE IN A
REMARKETING OF MY CAPITAL SECURITIES?
Holders of capital securities that are not components of Income PRIDES may
elect, in the manner described below, to have their capital securities
remarketed by the remarketing agent.
BESIDES PARTICIPATING IN A REMARKETING, HOW ELSE WILL MY OBLIGATIONS UNDER THE
PURCHASE CONTRACTS BE SATISFIED?
- through the early delivery of cash to the purchase contract agent in the
manner described below, referred to as early settlement,
- in the case of Income PRIDES, by settling the related purchase contracts
with separate cash on the third business day prior to August 16, 2002
with prior notification to the purchase contract agent, or
- upon the termination of purchase contracts.
WHAT ARE THE CAPITAL SECURITIES?
The capital securities represent undivided beneficial ownership interests
in the assets of the trust.
WHAT DISTRIBUTIONS WILL I RECEIVE ON THE CAPITAL SECURITIES?
Distributions on the capital securities that are components of Income
PRIDES will constitute a portion of the distributions on the Income PRIDES.
Distributions will be payable initially at the annual rate of % of the
liquidation amount of $50 per capital security to, but excluding, August 16,
2002. If any capital securities remain outstanding on and after August 16, 2002,
the distributions on these capital securities will be at the reset rate from
August 16, 2002 to, but excluding, August 16, 2004.
WHEN WILL I RECEIVE DISTRIBUTIONS ON THE CAPITAL SECURITIES?
Distributions will be payable quarterly in arrears on each February 16, May
16, August 16, and November 16, commencing November 16, 1999, to holders of
record on the business day preceding each payment date.
WHAT IS THE RESET RATE?
The reset rate is the interest rate on the debentures, and therefore the
distribution rate on the capital securities, on and after August 16, 2002.
Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity as the reset
agent, will determine the reset rate that the capital securities should bear in
order for a capital security to have an approximate market value of 100.5% of
$50 on the third business day immediately preceding August 16, 2002, except that
we may limit the reset rate to be no higher than the rate on the two-year
benchmark treasury plus 200 basis points (2%) and the reset rate may not exceed
the maximum rate permitted by applicable law.
S-6
<PAGE> 35
WHEN WILL THE INTEREST RATE ON THE DEBENTURES BE RESET?
Unless a tax event redemption has occurred, the interest rate on the
debentures will be reset on the third business day immediately preceding August
16, 2002.
WHEN MAY THE DEBENTURES AND THE TRUST SECURITIES BE REDEEMED?
The debentures and, thus, the trust securities, which include the capital
securities and the common securities representing undivided beneficial interests
in the assets of the trust, are redeemable at our option, in whole but not in
part, upon the occurrence and continuation of a tax event as described in this
prospectus supplement. Following any redemption of debentures and, thus, capital
securities prior to August 16, 2002, investors that own Income PRIDES will own a
portfolio of U.S. treasury securities as a component of their Income PRIDES.
WHAT ARE THE DEBENTURES?
The debentures will be our senior unsecured obligations and will rank
equally among themselves and with all of our other senior unsecured obligations.
WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES RELATED TO THE INCOME
PRIDES, GROWTH PRIDES AND CAPITAL SECURITIES?
Investors that purchase FELINE PRIDES and continue to hold the FELINE
PRIDES may be considered to have received consideration to assume the
obligations under the related purchase contract and to have paid that amount, in
addition to the purchase price, for the related capital securities or treasury
securities, but those investors should consult their tax advisors concerning the
tax consequences associated with the acquisition of the FELINE PRIDES.
A beneficial owner of Income PRIDES and capital securities will include in
gross income its proportionate share of the stated interest on the debentures
when that interest income is paid or accrued in accordance with the beneficial
owner's regular method of tax accounting. We intend to report the contract
adjustment payments as income to holders of FELINE PRIDES, but holders should
consult their tax advisors concerning the possibility that the contract
adjustment payments may be treated as loans, purchase price adjustments, rebates
or option premiums rather than being includible in income on a current basis. A
beneficial owner of Growth PRIDES will be required to include in gross income
any OID with respect to the treasury securities as it accrues on a constant
yield to maturity basis. If a tax event redemption has occurred, a beneficial
owner of Income PRIDES will be required to include in gross income its allocable
share of OID on the treasury portfolio as it accrues on a constant yield to
maturity basis.
S-7
<PAGE> 36
EXPLANATORY DIAGRAMS
The following diagrams demonstrate some of the key features of the purchase
contracts, the Income PRIDES, the Growth PRIDES and the % capital
securities, and the transformation of Income PRIDES into Growth PRIDES and
capital securities. The hypothetical percentages, coupon rates and time periods
below are for illustration only. There can be no assurance that the actual
percentage of shares delivered will be limited by the range of hypothetical
percentages shown. In addition, there can be no assurance that payment rates on
the FELINE PRIDES will be at the levels shown below.
FELINE PRIDES PURCHASE CONTRACT
- Income PRIDES and Growth PRIDES both include a purchase contract under
which the investor agrees to purchase shares of our Class A common stock,
$1.00 par value per share, on August 16, 2002. In addition, the purchase
contracts include unsecured contract adjustment payments shown in the
diagrams on the following pages.
(Purchase Contract Chart)
(1) For each of the percentage categories shown, the percentage of
shares to be delivered at maturity to an investor in Income PRIDES or
Growth PRIDES is determined by dividing the related number of shares to be
delivered, as indicated in the footnote for each category, by an amount
equal to $50 divided by $ .
(2) If the applicable market value of our Class A common stock is less
than or equal to $38.81, the number of shares to be delivered will be
calculated by dividing $50 by $38.81. The applicable market value means the
average of the closing price per share of common stock on each of the
twenty consecutive trading days ending on the third trading day immediately
preceding August 16, 2002.
(3) If the applicable market value of our Class A common stock is
between $38.81 and $47.35, the number of shares to be delivered will be
calculated by dividing $50 by the applicable market value.
(4) If the applicable market value of our Class A common stock is
greater than $47.35, the number of shares to be delivered will be
calculated by dividing $50 by $47.35.
(5) The last reported sales price of our Class A common stock on the
NYSE on July 26, 1999.
S-8
<PAGE> 37
INCOME PRIDES
- Income PRIDES consist of two components as described below:
(Income PRIDES Chart)
- The investor owns the capital security but will pledge it to us to secure
its obligations under the purchase contract.
GROWTH PRIDES
- Growth PRIDES consist of two components as described below:
(Growth PRIDES Chart)
- The investor owns the zero-coupon treasury security but will pledge it to
us to secure its obligations under the purchase contract. A treasury
security is defined as a 1/20th undivided beneficial interest in a
zero-coupon U.S. treasury security (CUSIP No. ) with a
principal amount at maturity equal to $1,000 and maturing on August 15,
2002.
S-9
<PAGE> 38
CAPITAL SECURITIES
- Capital securities have the terms described below:
(Capital Securities Chart)
- The holder of capital securities that are components of Income PRIDES has
an option on August 16, 2002 to either:
- pay cash to settle the purchase contract for $50 and release the pledged
capital securities whose rates have been reset on August 16, 2002 or
- pay cash to settle the purchase contracts by allowing the capital
securities to be included in the remarketing process.
- The holder of capital securities that are separate and not components of
Income PRIDES has the option on August 16, 2002 to either:
- continue to hold the capital securities whose rate has been reset on
August 16, 2002 or
- deliver the capital securities to The Bank of New York, in its capacity
as our custodial agent, to be included in the remarketing process.
TRANSFORMING INCOME PRIDES INTO GROWTH PRIDES AND CAPITAL SECURITIES
- To create a Growth PRIDES, the investor separates an Income PRIDES into
its components -- the purchase contract and the capital security -- and
then combines the purchase contract with a specific zero-coupon treasury
security that matures concurrently with the maturity of the purchase
contract.
- The investor owns the zero-coupon treasury security but will pledge it to
us to secure its obligations under the purchase contract.
- The zero-coupon treasury security together with the purchase contract
constitute a Growth PRIDES. The capital securities, which are no longer a
component of the Income PRIDES, are tradeable as separate securities.
S-10
<PAGE> 39
(Flow Chart)
- The investor can also transform Growth PRIDES and capital securities into
Income PRIDES.
- The transformation of Income PRIDES into Growth PRIDES and capital
securities, and the transformation of Growth PRIDES and capital
securities into Income PRIDES, require minimum amounts of securities.
S-11
<PAGE> 40
RISK FACTORS
Your investment in the FELINE PRIDES will involve risks. You should
carefully consider the following discussion of risks as well as other
information contained in this prospectus supplement and the accompanying
prospectus.
YOU ASSUME THE RISK THAT THE MARKET VALUE OF OUR CLASS A COMMON STOCK MAY
DECLINE
Although as a holder of FELINE PRIDES you will be the beneficial owner of
the related capital securities, treasury portfolio or treasury securities, you
have an obligation under the purchase contract to buy our Class A common stock.
Prior to August 16, 2002, unless you pay cash to satisfy your obligation under
the purchase contract or the purchase contracts are terminated due to our
bankruptcy, insolvency or reorganization, either the proceeds derived from the
remarketing of the capital securities or the principal of the appropriate
applicable ownership interest of the treasury portfolio when paid at maturity,
in the case of Income PRIDES, or the principal of the related treasury
securities when paid at maturity, in the case of Growth PRIDES, will
automatically be used to purchase a specified number of shares of our Class A
common stock on your behalf. We cannot assure you that the market value of the
common stock you will receive on August 16, 2002 will be equal to or greater
than the effective price per share of $ paid by you for our Class A common
stock on the date hereof. As a holder of FELINE PRIDES, if the applicable market
value of the Class A common stock is less than $ , the aggregate market
value of the Class A common stock issued to you under each purchase contract on
August 16, 2002 will be less than the price you paid for the FELINE PRIDES and
the market value per share of that Class A common stock will be less than the
effective price per share paid by you for such Class A common stock on that
date, in which case you will suffer an economic loss as of August 16, 2002.
Accordingly, you assume the risk that the market value of the Class A common
stock may decline, and that decline could be substantial.
THE OPPORTUNITY FOR EQUITY APPRECIATION PROVIDED BY AN INVESTMENT IN THE FELINE
PRIDES IS LESS THAN THAT PROVIDED BY A DIRECT INVESTMENT IN OUR CLASS A COMMON
STOCK
Your opportunity for equity appreciation afforded by investing in the
FELINE PRIDES is less than your opportunity for equity appreciation if you were
to directly invest in our Class A common stock. This opportunity is less because
the market value of the Class A common stock to be received by you under the
purchase contract on August 16, 2002, assuming that the market value is the same
as the applicable market value of such common stock, will only exceed the
effective price per share you paid if the applicable market value of the Class A
common stock exceeds $ , which represents an appreciation of approximately
% over $ . This situation occurs because, in such event, you would
receive on August 16, 2002 only approximately %, the percentage equal to
$ divided by $ , of the shares of Class A common stock that you
would have received if you had made a direct investment in the Class A common
stock on the date hereof. Therefore, you would receive on August 16, 2002 only
approximately % of the appreciation in the value of the Class A common
stock in excess of $ .
THE TRADING PRICES FOR THE FELINE PRIDES WILL BE DIRECTLY AFFECTED BY THE
TRADING PRICES FOR OUR CLASS A COMMON STOCK
The trading prices of Income PRIDES and Growth PRIDES in the secondary
market will be directly affected by the trading prices of our Class A common
stock, the general level of interest rates and our credit quality. It is
impossible to predict whether the price of our Class A common stock or interest
rates will rise or fall. Trading prices of the Class A common stock will be
influenced by our operating results and prospects and by economic, financial and
other factors. In addition, general market conditions can affect the capital
markets generally, therefore affecting the price of our Class A common stock,
including the level of, and fluctuations in, the trading prices of stocks
generally and sales of substantial amounts of Class A common stock by us in the
market after the offering of the FELINE PRIDES or the perception that those
sales could occur. Fluctuations in interest rates may give rise to arbitrage
opportunities based upon changes in the relative value of the Class A common
stock underlying the purchase contracts and of
S-12
<PAGE> 41
the other components of the FELINE PRIDES. The arbitrage could, in turn, affect
the trading prices of the Income PRIDES, Growth PRIDES, capital securities and
Class A common stock.
LIMITED RIGHTS INCLUDING LIMITED VOTING RIGHTS
If you hold capital securities you will not be entitled to vote to appoint,
remove or replace or to increase or decrease the number of trustees of the
trust, and generally will have no voting rights except in limited circumstances.
If you hold FELINE PRIDES you will not be entitled to any rights with respect to
the Class A common stock, including, without limitation, voting rights and
rights to receive any dividends or other distributions on the Class A common
stock. You will only be entitled to rights as a holder of the Class A common
stock if we deliver shares of Class A common stock for FELINE PRIDES on August
16, 2002 or as a result of early settlement and only if the applicable record
date, if any, for the exercise of these rights occurs after that date. For
example, if an amendment is proposed to our certificate of incorporation and the
record date for determining the stockholders of record entitled to vote on that
amendment occurs prior to the delivery, you will not be entitled to vote on that
amendment.
DILUTION OF THE CLASS A COMMON STOCK MAY AFFECT THE SETTLEMENT RATE AND THE
FELINE PRIDES TRADING PRICES
The number of shares of Class A common stock you are entitled to receive
upon the settlement of your purchase contract and the trading prices of Income
PRIDES and Growth PRIDES may be adversely affected due to dilution of our Class
A common stock resulting from the issuance of additional Class A common stock or
other equity interests.
The number of shares of Class A common stock that you are entitled to
receive on August 16, 2002, or as a result of early settlement of a purchase
contract, is subject to adjustment for certain events arising from stock splits
and combinations, stock dividends and other actions by us that modify our
capital structure. We will not adjust the number of shares of Class A common
stock that you are entitled to receive on August 16, 2002, or as a result of
early settlement of a purchase contract, for other events, including most
offerings of Class A common stock for cash by us or in connection with
acquisitions. We are not restricted from issuing additional Class A common stock
during the term of the purchase contracts and have no obligation to consider
your interests for any reason.
If we issue additional shares of Class A common stock, the price of the
Class A common stock may be materially and adversely affected and, because of
the relationship of the number of shares to be received on August 16, 2002 to
the price of the Class A common stock, these events may adversely affect the
trading price of Income PRIDES or Growth PRIDES.
THE SECONDARY MARKET FOR THE FELINE PRIDES MAY BE ILLIQUID
We are unable to predict how Income PRIDES, Growth PRIDES or capital
securities will trade in the secondary market or whether that market will be
liquid or illiquid. There is currently no secondary market for either our Income
PRIDES or our Growth PRIDES. We will apply to list the Income PRIDES and the
Growth PRIDES on the NYSE. The capital securities will not initially be listed;
however, in the event that they are separately traded to a sufficient extent
that applicable exchange listing requirements are met, we will endeavor to cause
those securities to be listed on the exchange on which the Income PRIDES and
Growth PRIDES are then listed. We have been advised by the underwriters that
they presently intend to make a market for the capital securities; however, they
are not obligated to do so and any market making may be discontinued at any
time. There can be no assurance as to the liquidity of any market that may
develop for the Income PRIDES, the Growth PRIDES or the capital securities, your
ability to sell such securities or whether a trading market, if it develops,
will continue. In addition, in the event that you were to substitute treasury
securities for capital securities or capital securities for treasury securities,
thereby converting your Income PRIDES to Growth PRIDES or your Growth PRIDES to
Income PRIDES, as the case may be, the liquidity of Income PRIDES, Growth PRIDES
and capital securities could be adversely affected. There can be no assurance
that our listing application will be
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<PAGE> 42
accepted or, if accepted, that the Income PRIDES or Growth PRIDES will not be
delisted from the NYSE or that trading in the Income PRIDES or Growth PRIDES
will not be suspended as a result of your election to create Income PRIDES or
Growth PRIDES through the substitution of collateral, which could cause the
number of Income PRIDES or Growth PRIDES to fall below the requirement for
listing securities on the NYSE that at least 1,000,000 Income PRIDES or Growth
PRIDES be outstanding at any time.
YOUR RIGHTS TO THE PLEDGED SECURITIES WILL BE SUBJECT TO OUR SECURITY INTEREST
Your rights to the capital securities, treasury portfolio or treasury
securities (collectively, the pledged securities), as applicable, will be
subject to our security interest. Although you will be the beneficial owners of
the applicable pledged securities, those pledged securities will be pledged with
The Bank of New York, in its capacity as our collateral agent, to secure your
obligations under the related purchase contracts. Additionally, notwithstanding
the automatic termination of the purchase contracts, if we become the subject of
a case under the Bankruptcy Code, the delivery of the pledged securities to you
may be delayed by the imposition of the automatic stay of section 362 of the
Bankruptcy Code.
POSSIBLE DISSOLUTION OF THE TRUST DUE TO AN INVESTMENT COMPANY EVENT
The dissolution of the trust due to an investment company event may affect
the Income PRIDES' market prices.
If an investment company event occurs, we will dissolve the trust, except
in the limited circumstances described below, and distribute the debentures to
you in a total principal amount equal to the aggregate stated liquidation amount
of any capital securities that you may hold. We will only dissolve and
distribute the debentures to you if we are unable to avoid the investment
company event within a 90-day period by taking some ministerial action or
pursuing some other reasonable measure that will have no adverse effect on the
trust, us or you, and will involve no material cost to us. In addition, we will
have the right to dissolve the trust at any time.
There can be no assurance as to the impact on the market prices for Income
PRIDES if we dissolve the trust and distribute the debentures to holders of
capital securities in exchange for those capital securities. Because Income
PRIDES will consist of debentures and related purchase contracts if we dissolve
the trust as a result of an investment company event or otherwise, you are also
making an investment decision with regard to the debentures if you purchase
Income PRIDES and should carefully review all the information regarding the
debentures contained in this prospectus supplement.
TAX EVENT REDEMPTION
The occurrence of a tax event redemption, described below, may affect the
market prices of Income PRIDES, due to the substitution of the treasury
portfolio for the redeemed capital securities as collateral for your obligations
under the related purchase contract.
We have the option to redeem the debentures and, thus, the trust
securities, on not less than 30 days or more than 60 days prior written notice,
in whole but not in part, at any time before August 16, 2002 if a tax event
occurs and continues under the circumstances described below. If a tax event
occurs, we may redeem the debentures at a redemption price per debenture equal
to the redemption amount, as defined under "Description of the Debentures--Tax
Event Redemption," plus accrued and unpaid interest. If we redeem all of the
debentures, the trust must redeem all of the trust securities and pay the
redemption price in cash to the holders of the trust securities.
If the tax event redemption occurs before August 16, 2002, the redemption
price payable to you due to liquidation of any interest you may have in the
trust as a holder of Income PRIDES will be distributed to the collateral agent,
who in turn will apply an amount equal to the redemption amount of the
redemption price to purchase the treasury portfolio on your behalf.
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<PAGE> 43
We will substitute the treasury portfolio for the capital securities and
pledge the treasury portfolio with the collateral agent to secure your
obligations to purchase our Class A common stock under the purchase contracts
related to the Income PRIDES. If you do not hold capital securities in the form
of Income PRIDES, you will receive redemption payments directly. There can be no
assurance as to the impact on the market prices for the Income PRIDES if we
substitute the treasury portfolio as collateral in replacement of any capital
securities so redeemed. A tax event redemption will be a taxable event to the
beneficial owners of the capital securities.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE FELINE PRIDES ARE UNCLEAR
No statutory, judicial or administrative authority directly addresses the
treatment of the FELINE PRIDES or instruments similar to the FELINE PRIDES for
United States federal income tax purposes. As a result, some United States
federal income tax consequences of the purchase, ownership and disposition of
FELINE PRIDES are not entirely clear.
THE PURCHASE CONTRACT AGREEMENT WILL NOT BE QUALIFIED UNDER THE TRUST INDENTURE
ACT AND THE OBLIGATIONS OF THE PURCHASE CONTRACT AGENT WILL BE LIMITED
You, as a holder of FELINE PRIDES, will not have the benefits of the
protection of the Trust Indenture Act of 1939.
The purchase contract agreement between us and the purchase contract agent
will not be qualified as an indenture under the Trust Indenture Act and the
purchase contract agent will not be required to qualify as a trustee under the
Trust Indenture Act, although the capital securities constituting a part of the
Income PRIDES will be issued pursuant to the declaration, which will be
qualified under the Trust Indenture Act. Accordingly, if you hold FELINE PRIDES
you will not have the benefit of the protections of the Trust Indenture Act. The
protections generally afforded the holder of a security issued under an
indenture that has been qualified under the Trust Indenture Act include:
- disqualification of the indenture trustee for conflicting interests;
- provisions preventing a trustee that is also a creditor of the issuer
from improving its own credit position at the expense of the security
holders immediately prior to or after a default under the indenture; and
- the requirement that the indenture trustee deliver reports at least
annually with respect to specific matters concerning the indenture
trustee and the securities.
RIGHTS UNDER THE GUARANTEE
Except as described below, you as a holder of capital securities, will not
be able to exercise directly any other rights with respect to the debentures.
The guarantee will be qualified as an indenture under the Trust Indenture
Act. The guarantee trustee, The Bank of New York, will act as indenture trustee
under the guarantee for the purposes of compliance with the provisions of the
Trust Indenture Act. The guarantee trustee will hold the guarantee for your
benefit if you hold any of the capital securities.
If you hold any of the capital securities, the guarantee will guarantee
you, generally on a senior unsecured basis, the payment of the following:
- any accumulated and unpaid distributions that are required to be paid on
the capital securities, to the extent the trust has funds available for
this purpose;
- the redemption price, including all accumulated and unpaid distributions
to the date of redemption, of capital securities that we may have
redeemed upon the occurrence of a tax event redemption, to the extent the
trust has funds available for this purpose; and
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<PAGE> 44
- upon a voluntary or involuntary dissolution of the trust, other than in
connection with the distribution of debentures to you, the lesser of (a)
the total of the liquidation amount and all accumulated and unpaid
distributions on the capital securities to the date of payment to the
extent the trust has funds available for this purpose or (b) the amount
of assets of the trust remaining available for distribution to holders of
the capital securities in liquidation of the trust.
The holders of a majority in liquidation amount of the capital securities
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guarantee trustee or to direct the
exercise of any trust or power conferred upon the guarantee trustee under the
guarantee. Notwithstanding the above, but only under limited circumstances,
holders of the capital securities may institute a legal proceeding directly
against us to enforce their rights under the guarantee without first instituting
a legal proceeding against the trust, the guarantee trustee or any other person
or entity.
If we were to default on our obligation to pay amounts payable on the
debentures or otherwise, the trust would lack funds for the payment of
distributions or amounts payable on redemption of the capital securities or
otherwise, and, in that event, holders of the capital securities would not be
able to rely upon the guarantee for payment of these amounts. Instead, they
would rely on the enforcement
- by the property trustee of its rights as registered holder of the
debentures against us pursuant to the terms of the indenture and the
debentures or
- by that holder of the property trustee's or that holder's own rights
against us to enforce payments on the debentures.
The declaration provides that each holder of capital securities, by its
acceptance, agrees to the provisions of the guarantee and the indenture.
ENFORCEMENT OF SPECIFIC RIGHTS BY HOLDERS OF CAPITAL SECURITIES
Except as described below, you, as holder of capital securities, will not
be able to exercise directly any other rights with respect to the debentures.
If a declaration event of default were to occur and be continuing, holders
of capital securities would rely on the enforcement by the property trustee of
its rights as registered holder of the debentures against us. In addition, the
holders of a majority in liquidation amount of the capital securities would have
the right to direct the time, method, and place of conducting any proceeding for
any remedy available to the property trustee or to direct the exercise of any
trust or power conferred upon the property trustee under the declaration,
including the right to direct the property trustee to exercise the remedies
available to it as the holder of the debentures.
The indenture provides that the debt trustee must give holders of
debentures notice of all defaults or events of default within 30 days after
occurrence. However, except in the cases of a default or an event of default in
payment on the debentures, the debt trustee will be protected in withholding the
notice if its responsible officers in good faith determine that withholding of
the notice is in the interest of such holders.
If the property trustee were to fail to enforce its rights under the
debentures in respect of an indenture event of default after a holder of record
of capital securities had made a written request, such holder of record of
capital securities may, to the extent permitted by applicable law, institute a
legal proceeding against us to enforce the property trustee's rights under the
debentures. In addition, if we were to fail to pay interest or principal on the
debentures on the date that interest or principal is otherwise payable, and this
failure to pay were continuing, holders of capital securities may directly
institute a proceeding for enforcement of payment of the principal of or
interest on the debentures having a principal amount equal to the aggregate
stated liquidation amount of their capital securities (a direct action) after
the respective due date specified in the debentures. In connection with a direct
action, we would have the right under the indenture to set off any payment made
to that holder by us.
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LIMITED RIGHTS OF ACCELERATION
The property trustee, as holder of the debentures, may accelerate payment
of the principal and accrued and unpaid interest on the debentures only upon the
occurrence and continuation of an indenture event of default. An indenture event
of default is generally limited to payment defaults, breaches of specific
covenants and specific events of bankruptcy, insolvency and reorganization
relating to us. Accordingly, there is no right to acceleration upon default of
our payment obligations under the guarantee.
TRADING PRICE OF THE CAPITAL SECURITIES
The capital securities may trade at a price that does not fully reflect the
value of accrued but unpaid interest with respect to the underlying debentures.
If you are an accrual basis taxpayer and dispose of your capital securities
between record dates for payments of distributions you will be required to
include accrued but unpaid interest on the debentures through the date of
disposition in income as ordinary interest income, i.e., interest or, possibly,
OID, and to add that amount to your adjusted tax basis in your proportionate
share of the underlying debentures deemed disposed of. To the extent the selling
price is less than your adjusted tax basis, you will recognize a loss.
COX IS CONTROLLED BY A PRINCIPAL STOCKHOLDER WHOSE INTERESTS MAY BE DIFFERENT
THAN YOUR INTERESTS
As of June 30, 1999, Cox Enterprises owned approximately 72.7% of the
outstanding equity and 81.1% of the voting power of Cox. Cox Enterprises
therefore controls substantially all actions to be taken by the Cox
stockholders, including the election of all the directors to the Cox board.
After giving effect to the TCA merger and this offering, assuming that Cox
issues approximately 39.6 million shares pursuant to the TCA merger agreement
and sells 9.2 million shares in this offering, Cox Enterprises will own
approximately 66.8% of the equity and 76.4% of the voting power of Cox. This
voting control may have the effect of discouraging offers to acquire Cox because
the consummation of any such acquisition would require the consent of Cox
Enterprises. The interests of Cox Enterprises, which operates businesses in
other industries, including broadcasting and newspapers, may from time to time
diverge from the interests of other Cox stockholders, particularly with regard
to new business opportunities.
REGULATION OF THE CABLE TELEVISION INDUSTRY
The cable television industry is subject to extensive regulation on the
federal, state and local levels, and many aspects of such regulations are
currently the subject of judicial proceedings and administrative or legislative
proposals. The Cable Television Consumer Protection and Competition Act of 1992,
referred to as the 1992 Cable Act, has significantly expanded the scope of cable
television regulation. In particular, under the 1992 Cable Act, the Federal
Communications Commission adopted regulations that limit Cox's ability to set
rates for basic service and the installation, sale, and lease of equipment used
by subscribers to receive basic service, such as converter boxes and remote
control units, in communities that are not subject to effective competition as
defined by federal law. The FCC's regulations, as they now stand, limit our
ability to increase revenues by increasing rates for regulated services where
franchise authorities have elected to regulate basic cable and equipment rates.
In addition, it is possible that, in accordance with further review by the
franchising authorities, certain future rate reductions or refunds may be
required. We believe that the regulation of the cable television industry,
including the rates charged for regulated services under present FCC rules,
remains a matter of interest to Congress, the FCC and other regulatory
authorities. There can be no assurance as to what, if any, future actions such
legislative and regulatory authorities may take or the effect thereof on us.
Cable communications companies operate under franchises granted by local
authorities that are subject to renewal and renegotiation from time to time.
There can be no assurance as to future franchise renewals.
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COMPETITION IN THE CABLE TELEVISION INDUSTRY
Cable communications systems generally operate pursuant to franchises
granted on a non-exclusive basis. In addition, the 1992 Cable Act prohibits
franchising authorities from unreasonably denying requests for additional
franchises and permits franchising authorities to operate cable systems.
Well-financed businesses from outside the cable industry, such as the public
utilities that own certain of the poles on which cable is attached, may become
competitors for franchises or providers of competing services. In addition, we
face competition from other cable television operators. We cannot predict the
extent to which such competition will materialize or, if such competition
materializes, the extent of its effect on us.
The cable television clusters we own compete with other communications and
entertainment media, including conventional off-air television broadcasting
services, newspapers, movie theatres, live sporting events, interactive online
computer services, home video products and direct broadcast satellite, referred
to as DBS, service whereby signals are transmitted by satellite to receiving
facilities located on customer premises. Several companies have launched DBS
services that compete with us for multichannel video entertainment customers, as
well as online computer services.
The Telecommunication Act of 1996, referred to as the 1996 Telecom Act,
makes it easier for local exchange telephone companies, referred to as LECs, and
others to provide a wide variety of video services competitive with services
provided by cable systems and to provide cable services directly to subscribers.
Various LECs currently are providing video services within and outside their
telephone service areas through a variety of distribution methods, including
both the deployment of broadband wire facilities and the use of wireless
transmission facilities. We cannot predict the likelihood of success of video
service ventures by LECs or the impact on Cox of such competitive ventures.
Other new technologies, including Internet-based services, may become
competitive with services that cable communications systems can offer. The FCC
and some local jurisdictions are considering proposals by various Internet
service providers, referred to as ISPs, to deliver their services directly to
cable operators' customers through access to cable operators' broadband
communications facilities. In June 1999, an ISP petitioned the FCC to issue a
declaratory ruling that ISPs are entitled to access to cable system facilities
under the commercial use channel provisions of the Communications Act of 1934.
In the same month, a federal district court held in connection with
Tele-Communications, Inc.'s application to transfer two franchises to AT&T that
a franchising authority may require access to cable modem services by third
party ISPs as a condition to approval of a franchise transfer. AT&T has appealed
the decision. Although the decision is not binding on other courts and has no
legal effect in other areas of the country, it could support attempts by other
franchising authorities to require cable operators to provide access to third
party ISPs in other circumstances, including franchise renewal. In July, 1999,
the franchising authority for Broward County, Florida, passed an ordinance which
requires cable modem access by ISPs. The ordinance has been challenged in
federal district court. Legislation is pending in the United States House of
Representatives which proposes to require cable operators to open their networks
to unaffiliated ISPs, and a second bill would make it unlawful for a cable
operator to require its cable modem customers to purchase their affiliated
Internet access services as a condition of subscribing to high speed transport
service.
Additionally, legislation is pending in Congress which would facilitate
regional Bell operating companies to provide data services in competition with
ISPs. Neither the states nor the FCC would have the authority to regulate the
rates, charges, terms or conditions of any high-speed data service or Internet
access services or to regulate the facilities used in the provision of such
services.
We cannot predict if such proposals will be adopted, the eventual outcome
of such litigation, or whether such proposals or litigation will have a material
impact on the business and operations of Cox. Moreover, advances in
communications technology as well as changes in the marketplace and the
regulatory and legislative environment are constantly occurring. Thus, it is not
possible to predict the effect that ongoing or future developments might have on
the cable communications industry or on our operations.
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<PAGE> 47
USE OF PROCEEDS
Substantially all of the proceeds from the sale of the Growth PRIDES will
be used to purchase the underlying treasury securities to be transferred to
holders of the Growth PRIDES, and the remainder will be paid to us. All of the
proceeds from the sale of the capital securities that are not components of
Income PRIDES, all of the proceeds from the sale of the common securities and
substantially all of the proceeds from the sale of the Income PRIDES will be
invested by the trust in our debentures. The remainder of the proceeds from the
sale of the Income PRIDES will be paid to us.
We currently anticipate using all of the net proceeds from the sale of the
debentures (net of purchase of the common securities), the Income PRIDES and the
Growth PRIDES, estimated to be approximately $ million, after deducting the
underwriting commission and other expenses, to partially finance pending
acquisitions, for capital expenditures, to retire commercial paper indebtedness
and for other general corporate purposes. The weighted average interest rate on
our commercial paper borrowings as of June 30, 1999 was approximately 5.2%. For
a description of pending acquisitions, see "Prospectus Supplement
Summary--Recent Developments."
PRICE RANGE OF CLASS A COMMON STOCK
Our Class A common stock is listed for trading on the New York Stock
Exchange under the symbol "COX." The following table sets forth on a per share
basis the high and low sales prices for consolidated trading in our Class A
common stock as reported on the New York Stock Exchange Composite Tape for the
quarters indicated. All of our Class A common stock market prices have been
adjusted for the two-for-one split of all classes of our capital stock effective
on May 21, 1999.
<TABLE>
<CAPTION>
CLASS A
COMMON STOCK
-----------------
HIGH LOW
------- -------
<S> <C> <C>
1997
Quarter ended March 31, 1997................................ $11.625 $ 9.813
Quarter ended June 30, 1997................................. 13.938 9.063
Quarter ended September 30, 1997............................ 14.094 12.469
Quarter ended December 31, 1997............................. 20.031 13.843
1998
Quarter ended March 31, 1998................................ $21.469 $17.188
Quarter ended June 30, 1998................................. 24.750 20.813
Quarter ended September 30, 1998............................ 28.438 20.750
Quarter ended December 31, 1998............................. 35.375 23.532
1999
Quarter ended March 31, 1999................................ $41.282 $32.000
Quarter ended June 30, 1999................................. 44.438 32.781
Third Quarter through July 26, 1999......................... 39.000 37.750
</TABLE>
As of June 30, 1999, there were 5,021 holders of record of our Class A
common stock. This number excludes beneficial owners of Class A common stock
held in street name.
DIVIDEND POLICY
We have never paid any dividends on our stock, and we do not anticipate
paying any cash dividends on our stock in the foreseeable future. The current
policy of our board of directors is to retain earnings to finance the operations
and expansion of our business. Any future determination to pay dividends will
depend on our results of operations, financial condition, capital requirements,
contractual restrictions and other factors deemed relevant by our board of
directors.
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<PAGE> 48
CAPITALIZATION
The following table sets forth the capitalization of Cox as of March 31,
1999 (i) on a historical basis; (ii) as adjusted to give effect to (a) the
issuance of 9.2 million shares of Class A common stock, for an aggregate
offering of $357.1 million, less offering costs of $12.9 million, (b) the sale
of 13 million FELINE PRIDES securities for an aggregate offering of $650
million, less offering costs of $20.3 million and $19.5 million allocated to the
fair value of forward contracts embedded in these securities, (c) the sale of 20
million TOPrS, for an aggregate offering of $500 million, less offering costs of
$16.3 million and (d) the sale of $1,850 million senior debt securities, less
offering costs of $13.0 million; and (iii) on a pro forma basis to give effect
to the consummation of the pending acquisitions of TCA, the cable television
systems of Media General and certain cable television systems from AT&T.
This table should be read in conjunction with, and is qualified by
reference to, the "Selected Financial Information and Other Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and notes thereto included or incorporated
by reference in this prospectus supplement and the accompanying prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1999
----------------------------------------------------------------------------
PRO FORMA COX
ADJUSTMENTS AS ADJUSTMENTS PRO FORMA
COX FOR THE ADJUSTED FOR FOR THE AND AS
HISTORICAL OFFERINGS THE OFFERINGS ACQUISITIONS ADJUSTED
---------- ------------------ --------------- ------------ ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
CASH............................. $ 90.4 $3,294.6 $ 3,585.0 $(3,261.7) $ 123.3
========= ======== ========= ========= =========
DEBT
Commercial paper............... $ 837.6 $ -- $ 837.6 $ (654.7) $ 182.9
Medium-term notes.............. 463.4 -- 463.4 -- 463.4
Floating Rate Reset Notes due
2009........................ 147.5 -- 147.5 -- 147.5
Notes and Debentures........... 1,615.7 1,837.0 3,452.7 312.0 3,764.7
6.15% Reset Put securities due
August 2033................. 248.2 -- 248.2 -- 248.2
Capitalized lease
obligations................. 70.7 -- 70.7 -- 70.7
Amounts due to Cox
Enterprises................. 112.7 -- 112.7 -- 112.7
--------- -------- --------- --------- ---------
Total debt............. 3,495.8 1,837.0 5,332.8 (342.7) 4,990.1
--------- -------- --------- --------- ---------
MINORITY INTEREST................ -- -- -- 120.5 120.5
COX OBLIGATED CAPITAL SECURITIES
OF SUBSIDIARY TRUST-FELINE
PRIDES......................... -- 610.2 610.2 -- 610.2
COX OBLIGATED PREFERRED
SECURITIES OF SUBSIDIARY
TRUST-TOPRS.................... -- 483.7 483.7 -- 483.7
SHAREHOLDERS' EQUITY
Series A preferred stock --
liquidation preference of
$44.275 per share, par value
$1.00 per share............. 4.8 -- 4.8 -- 4.8
Class A common stock, par value
$1.00 per share............. 527.5 9.2 536.7 39.6 576.3
Class C common stock, par value
$1.00 per share............. 27.6 -- 27.6 -- 27.6
Additional paid-in capital..... 1,879.8 354.5 2,234.3 1,660.4 3,894.7
Retained earnings.............. 1,601.5 -- 1,601.5 953.6 2,555.1
Accumulated other comprehensive
income...................... 2,815.5 -- 2,815.5 (464.5) 2,351.0
--------- -------- --------- --------- ---------
Total shareholders'
equity............... 6,856.7 363.7 7,220.4 2,189.1 9,409.5
--------- -------- --------- --------- ---------
Total capitalization... $10,352.5 $3,294.6 $13,647.1 $ 1,966.9 $15,614.0
========= ======== ========= ========= =========
</TABLE>
S-20
<PAGE> 49
SELECTED FINANCIAL INFORMATION AND OTHER DATA
We are providing the following financial information and other data to aid
you in your analysis of the financial aspects of the transactions as described.
You should read this information in conjunction with the historical consolidated
financial statements of Cox and the related notes contained in our annual,
quarterly and other reports and other information that Cox has filed with the
SEC. All per share amounts reflected below have been restated to reflect Cox's
two-for-one stock split effective on May 21, 1999.
The following selected consolidated financial information for each of the
three years in the period ended December 31, 1998 has been derived from Cox's
audited historical consolidated financial statements and the consolidated
financial information for the three months ended March 31, 1998 and 1999 has
been derived from Cox's unaudited historical consolidated financial statements.
The following selected unaudited pro forma and as adjusted combined condensed
financial information give effect to the offerings and the pending acquisitions
of TCA, the cable television systems of Media General and certain cable
television systems from AT&T, including AT&T's unconsolidated investment in Peak
Cablevision. Pursuant to the purchase agreement, AT&T has agreed to acquire all
of the remaining interest in Peak prior to closing the purchase transaction with
Cox.
Operating cash flow under "Other Operating and Financial Data" is not a
generally accepted accounting principle measure of performance. However,
operating cash flow is a commonly used financial analysis tool for measuring and
comparing cable television companies in several areas such as operating
performance and leverage. Cox defines operating cash flow as operating income
before depreciation and amortization. Operating cash flow should not be
considered as an alternative to net income as an indicator of Cox's performance
or as an alternative to cash flows from operating activities as a measure of
liquidity.
Using the fourth quarter annualized operating cash flow, the multiple of
debt to operating cash flow was 4.6x and 5.1x at December 31, 1997 and 1998,
respectively. In addition, operating cash flow is annualized to calculate the
multiple of debt to operating cash flow for the three months ended March 31,
1998 and 1999.
<TABLE>
<CAPTION>
PRO FORMA
AND AS PRO FORMA
ADJUSTED THREE MONTHS AND AS ADJUSTED
YEAR ENDED ENDED THREE MONTHS
YEAR ENDED DECEMBER 31, DECEMBER 31, MARCH 31, ENDED MARCH 31,
------------------------------ --------------- -------------------- ---------------
1996 1997 1998 1998 1998 1999 1999
-------- -------- -------- --------------- -------- --------- ---------------
(MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenues............................ $1,460.3 $1,610.4 $1,716.8 $2,583.2 $ 415.8 $ 498.5 $693.8
Operating income.................... 221.7 205.3 201.4 187.8 43.5 65.2 63.9
Net income (loss)................... (51.6) (136.5) 1,270.7 (1.5) (101.9) 251.2 230.1
Basic net income (loss) per share... $ (0.10) $ (0.25) $ 2.33 $ (0.00) $ (0.19) $ 0.45 $ 0.38
Diluted net income (loss) per
share............................. (0.10) (0.25) 2.30 (0.00) (0.19) 0.45 0.38
OTHER OPERATING AND FINANCIAL DATA:
Operating cash flow................. $ 556.9 $ 609.8 $ 659.1 $1,028.0 $ 149.1 $ 188.5 $270.4
Operating cash flow margin.......... 38.1% 37.9% 38.4% 39.8% 35.9% 37.8% 39.0%
Multiple of debt to operating cash
flow.............................. 5.2x 5.2x 6.2x -- 5.2x 4.6x 4.6x
Cash flows provided by operating
activities........................ $ 309.1 $ 554.5 $ 665.5 -- $ 191.5 $ 175.9 --
Cash flows provided by (used in)
investing activities.............. (552.2) (1,108.0) (1,600.4) -- (124.9) 514.9 --
Cash flows provided by (used in)
financing activities.............. 246.2 539.3 937.2 -- (64.3) (630.9) --
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA
AND AS ADJUSTED
DECEMBER 31, MARCH 31, MARCH 31,
------------------------------- --------------------- ---------------
1996 1997 1998 1998 1999 1999
-------- -------- --------- --------- --------- ---------------
(MILLIONS OF DOLLARS) (MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets......................... $5,784.6 $6,556.6 $12,878.1 $ 6,623.5 $14,727.0 $21,214.3
Total debt (including amounts due to
Cox Enterprises)................... 2,881.0 3,148.8 4,090.8 3,082.9 3,495.8 4,990.1
</TABLE>
S-21
<PAGE> 50
The table below includes certain customer data of Cox. A basic service
customer is counted as a home with one or more television sets connected to a
cable television system. New services include Cox Digital Television, Cox@Home
and Cox Digital Telephone. Each basic customer and each new service is a revenue
generating unit. In certain locations, a household may purchase more than one
new service, each of which is counted as a separate revenue generating unit. A
home is deemed to be passed if it can be connected to the distribution system
without any further extension of the distribution plant. Basic penetration
represents basic customers as a percentage of homes passed by cable. Premium
service units include single or multi-channel services offered for a monthly fee
per service.
Cox's customer data excludes basic customers and homes passed related to
TWC Cable Partners, a joint venture owned 50% by Cox and 50% by Time Warner. TWC
operates cable television systems in Staten Island, New York and Fort Walton
Beach, Florida. Cox currently manages the Fort Walton Beach cable television
system which had basic customers of 66,568, 68,586, 71,213 and 72,215,
respectively, at December 31, 1996, 1997 and 1998 and March 31, 1999.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31, 1999
--------------------------------- ----------------------
1996 1997 1998 HISTORICAL PRO FORMA
--------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
CUSTOMER DATA:
Basic customers............................... 3,259,384 3,235,338 3,741,608 3,783,367 5,331,697
New services.................................. -- 18,941 169,731 230,380 301,822
--------- --------- --------- --------- ---------
Revenue Generating Units...................... 3,259,384 3,254,279 3,911,339 4,013,747 5,633,519
Homes passed.................................. 5,016,749 5,023,870 5,923,428 5,952,482 8,233,680
Basic penetration............................. 65.0% 64.4% 63.2% 63.6% 64.8%
Premium service units......................... 2,000,673 1,865,184 2,206,833 2,205,439 3,621,979
</TABLE>
S-22
<PAGE> 51
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our historical
consolidated financial statements for the three-month period ended March 31,
1999 and 1998.
THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1998
The results of operations discussed below include the June 1998 acquisition
of the Tuscon and Sierra Vista, Arizona cable television system and the October
1998 acquisition of the Las Vegas, Nevada cable television system.
Total revenues for the three months ended March 31, 1999 were $498.5
million, a 20% increase over revenues of $415.8 million for the three months
ended March 31, 1998. Basic customers were 3,783,367, a 2.8% increase over
customers at March 31, 1998 after adjusting for acquisitions made in 1998.
Complete basic revenues for the first quarter of 1999 increased 24% over
1998 to $351.3 million due to basic and digital customer growth at existing
cable television systems, the acquisitions made in 1998 and rate increases
implemented primarily during the fourth quarter of 1998. As of March 31, 1999,
Cox Digital TV had launched in eight markets and had 99,596 customers. The rate
increases are the result of channel additions, increased programming costs and
the pass-through of inflation adjustments.
Premium service revenues for the first quarter of 1999 increased 14% over
1998 to $52.1 million due to the acquisitions made in 1998. Pay-per-view
revenues were $24.4 million, up from $10.4 million for the same period in 1998
due to the acquisitions made in 1998 and the Holyfield/Lewis, Tyson/Botha and De
La Hoya/Quartey national boxing events during the first quarter of 1999.
Advertising revenues increased 46% to $36.4 million due to the acquisitions made
in 1998 and growth in local and national advertising sales during 1999.
Data revenues for the first quarter of 1999 increased to $9.8 million from
$2.8 million primarily as a result of Cox's residential data service, Cox@Home.
As of March 31, 1999, Cox@Home had launched in nine markets with 88,890
customers. Telephony revenues for the first quarter of 1999 increased to $16.2
million from $5.0 million due to growth in both residential and commercial
telephony. As of March 31, 1999, our residential telephone offering had launched
in six markets with 41,894 customers.
Programming costs were $128.8 million for the first quarter of 1999, an
increase of 36% over the same period in 1998 due to basic and digital customer
growth at the existing cable televisions systems, acquisitions made in 1998,
programming rate increases instituted on January 1, 1999 and the channel
additions and pay-per-view events discussed above. Plant operations expenses
increased 19% to $39.1 million due to the acquisitions made in 1998 and
increased maintenance and costs related to new services. Marketing costs
increased 20% to $26.6 million for the first quarter of 1999 due to the
acquisitions made in 1998 and costs associated with rollout of digital video,
high-speed data and telephony services. General and administrative expenses for
the first quarter of 1999 increased 32% to $115.5 million due to the
acquisitions made in 1998 and costs associated with digital video, high-speed
data and telephony services in newly launched markets.
Operating cash flow (operating income before depreciation and
amortization), a non-GAAP measure of performance, is a commonly used financial
analysis tool for measuring and comparing cable television companies in several
areas, such as liquidity, operating performance and leverage. Operating cash
flow increased 26% to $188.5 million for the first quarter of 1999. The
operating cash flow margin (operating cash flow as a percentage of revenues) for
the first quarter of 1999, was 37.8%, an increase from 35.9% in the first
quarter of 1998.
Depreciation was $96.6 million for the first quarter of 1999 compared to
$87.0 million for the same period in 1998 due to the acquisitions made in 1998
and the continued upgrade and rebuild of the broadband network. Amortization was
$26.7 million for the first quarter of 1999 compared to $18.6 million
S-23
<PAGE> 52
for the first quarter of 1998 due to the acquisitions made in 1998. Operating
income for the first quarter of 1999 was $65.2 million, an increase of 50%
compared to the same period in 1998.
Interest expense increased to $54.0 million for the first quarter of 1999
compared to $53.1 million for the same period in 1998 due to an increase in
total debt outstanding and offset by more favorable average interest rates
during 1999. Equity in net losses of affiliated companies was $46.5 million
primarily due to losses associated with Cox PCS. Net gain on investments of
$419.5 million was primarily due to the gain of $433.1 million as a result of
the sale of Telewest Communications plc.
Net income for the first quarter of 1999 was $251.2 million as compared to
a net loss of $101.9 million for the first quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
Uses of Cash
As part of our ongoing strategic plan, we have invested, and will continue
to invest, significant amounts of capital to enhance the reliability and
capacity of our broadband cable network in preparation for the offering of new
services and to make investments in affiliated companies primarily focused on
telephony, programming and communications-related activities.
During the three months ended March 31, 1999, Cox made capital expenditures
of $224.8 million. These expenditures were primarily directed at upgrading and
rebuilding our broadband network for the delivery of high-speed data and
telephony. Capital expenditures for 1999 are expected to range between $925
million and $975 million.
Investments in affiliated companies during the three months ended March 31,
1999 consisted primarily of debt and equity funding to GEMS Television and
NextLink Nevada. Funding requirements for the remainder of 1999 for investments
in affiliated companies are expected to be approximately $11.5 million.
During the three months ended March 31, 1999, net repayments of $350.0
million and $205.9 million were made for revolving credit borrowings and
commercial paper borrowings, respectively.
Sources of Cash
Cox generated $175.9 million from operating activities during the three
months ended March 31, 1999. Proceeds from the sale of investments of $742.6
million related primarily to the sale of Telewest.
Cox Enterprises continues to perform day-to-day cash management services
for Cox with settlements of balances between Cox and Cox Enterprises occurring
periodically bearing interest at fifty basis points above Cox Enterprises,
current commercial paper borrowing rate.
Recently Issued Accounting Pronouncements
In 1998, SFAS No. 133 "Accounting for Derivative Financial Instruments and
Hedging Activities" was issued. This statement requires that all derivatives be
recognized in the statement of financial position as either assets or
liabilities and measured at fair value. In addition, all hedging relationships
must be designated, reassessed and documented pursuant to the provisions of SFAS
No. 133. SFAS No. 133 is effective for fiscal years beginning after June 15,
1999. Management is in the process of assessing the impact of SFAS No. 133 on
the consolidated financial statements.
S-24
<PAGE> 53
COX TRUST II
Cox Trust II is a statutory business trust formed under Delaware law
according to (1) a declaration of trust, executed by the sponsor and some of the
trustees and (2) the filing of a certificate of trust with the Secretary of
State of the State of Delaware on July 21, 1999. This declaration will be
amended and restated in its entirety substantially in the form filed as an
exhibit to the registration statement of which this prospectus supplement and
the accompanying prospectus form a part. The declaration will be qualified as an
indenture under the Trust Indenture Act.
Although upon issuance of the capital securities, a holder of Income PRIDES
will be the beneficial owner of the related capital securities, those capital
securities will be pledged with the collateral agent to secure the obligations
of the holders under the related purchase contracts. We will directly or
indirectly acquire common securities in an aggregate liquidation amount equal to
3% of the total capital of the trust.
The trust exists for the exclusive purposes of
(a) issuing the trust securities representing undivided beneficial
ownership interests in the assets of the trust,
(b) investing the proceeds of the trust securities in the debentures,
and
(c) engaging in only those activities necessary, appropriate,
convenient or incidental to the purposes specified in (a) and (b) above.
The trust has a term of approximately seven years, but may dissolve earlier
as provided in the declaration.
The number of the trustees is initially five. Three of the trustees (the
administrative trustees) are persons who are our employees or officers or who
are affiliated with us. Under the declaration, the fourth trustee will be a
financial institution that is unaffiliated with us. This trustee will serve as
property trustee under the declaration and as indenture trustee for the purposes
of compliance with the provisions of the Trust Indenture Act (the property
trustee). Initially, The Bank of New York, a New York banking corporation, will
be the property trustee until removed or replaced by the holder of the common
securities. The fifth trustee will be a financial institution that is
unaffiliated with us and that is resident in the State of Delaware (the Delaware
trustee) for purposes of the Delaware Business Trust Act (the Trust Act).
Initially, The Bank of New York (Delaware), a Delaware banking corporation, will
be the Delaware trustee until removed or replaced by the holder of the common
securities. For purposes of compliance with the provisions of the Trust
Indenture Act, The Bank of New York will also act as the guarantee trustee.
The property trustee will hold title to the debentures for the benefit of
the holders of the trust securities and the property trustee will have the power
to exercise all rights, powers and privileges under the indenture as the holder
of the debentures. In addition, the property trustee will maintain exclusive
control of a segregated noninterest bearing bank account (the property account)
to hold all payments made in respect of the debentures for the benefit of the
holders of the trust securities. The property trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the trust securities out of funds from the property account. The
guarantee trustee will hold the guarantee for the benefit of the holders of the
capital securities.
We, as the direct or indirect holder of all the common securities, will
have the right to appoint, remove or replace any trustee and to increase or
decrease the number of trustees. However, the number of trustees shall be at
least two, at least one of which shall be an administrative trustee. We will pay
all fees and expenses related to the trust and the offering of the trust
securities.
The rights of the holders of the capital securities, including economic
rights, rights to information and voting rights, are provided in the
declaration, the Trust Act and the Trust Indenture Act.
The office of the Delaware trustee currently is The Bank of New York
(Delaware), 23 White Clay Center, Route 273, Newark, Delaware 19711. The
principal place of business of the trust shall be c/o Cox Communications, Inc.,
1400 Lake Hearn Drive, Atlanta, Georgia 30319 and its telephone number shall be
(404) 343-5000.
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<PAGE> 54
ACCOUNTING TREATMENT
The financial statements of the trust will be reflected in our consolidated
financial statements, with the capital securities shown on our balance sheet
under the caption "Cox-obligated capital securities of subsidiary trusts." The
financial statement footnotes to our consolidated financial statements will
reflect that the sole asset of the trust will be the debentures. Distributions
on the capital securities will be reflected as a charge to our consolidated
income, identified as minority interest, whether paid or accrued.
The present value of the FELINE PRIDES contract adjustment payments are
initially charged to equity, with an offsetting credit to liabilities.
Subsequent contract adjustment payments are allocated between this liability
account and interest expense based on a constant rate calculation over the life
of the transaction.
The FELINE PRIDES purchase contracts are forward transactions in our Class
A common stock. Upon settlement of a purchase contract, we will receive $50 on
that purchase contract and will issue the requisite number of shares of Class A
common stock. The $50 we receive will be credited to shareholders' equity
allocated between the Class A common stock and paid-in-capital accounts.
Before the issuance of shares of Class A common stock upon settlement of
the purchase contracts, the FELINE PRIDES will be reflected in our earnings per
share calculations using the treasury stock method. Under this method, the
number of shares of Class A common stock used in calculating earnings per share
is deemed to be increased by the excess, if any, of the number of shares
issuable upon settlement of the purchase contracts over the number of shares
that could be purchased by us in the market, at the average market price during
the period, using the proceeds receivable upon settlement. Consequently, we
anticipate that there will be no dilutive effect on our earnings per share
except during periods when the average market price of our Class A common stock
is above $ .
DESCRIPTION OF THE FELINE PRIDES
The summaries of the provisions of documents described below are not
necessarily complete, and in each instance reference is made to the copies of
those documents, including the definitions of terms, which are filed as exhibits
to the registration statement of which this prospectus supplement and the
accompanying prospectus form a part. Wherever particular sections of, or terms
defined in, those documents are referred to in this prospectus supplement, those
sections or defined terms are incorporated by reference.
Each FELINE PRIDES will be issued under the purchase contract agreement
between us and the purchase contract agent. The FELINE PRIDES will consist of
units referred to as Income PRIDES, and units referred to as Growth
PRIDES.
Each Income PRIDES will initially consist of a unit comprised of
(a) a purchase contract under which
(1) the holder will purchase from us on August 16, 2002, for an
amount in cash equal to $50, a number of newly issued shares of our
Class A common stock equal to the settlement rate described below and
(2) we will pay the holder contract adjustment payments at the rate
of % of $50 per year paid quarterly and
(b) beneficial ownership of a % capital security, having a stated
liquidation amount per capital security equal to $50, representing an
undivided beneficial ownership interest in the assets of the trust, which
will consist solely of the debentures, or
(1) in the case of a distribution of the debentures upon the
dissolution of the trust as a result of an investment company event, as
described below, or otherwise, debentures having a principal amount
equal to $50 or
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<PAGE> 55
(2) upon the occurrence of a tax event redemption prior to August
16, 2002, the appropriate applicable ownership interest in the treasury
portfolio. Applicable ownership interest means, with respect to an
Income PRIDES and the U.S. treasury securities in the treasury
portfolio, (A) a 1/20, or 5%, undivided beneficial ownership interest in
a $1,000 principal or interest amount of a principal or interest strip
in a U.S. treasury security which matures on or prior to August 15, 2001
and (B) for each scheduled interest payment date on the debentures that
occurs after the tax event redemption date, a % undivided beneficial
ownership interest in a $1,000 face amount of the U.S. treasury security
which is a principal or interest strip maturing on that date.
Each Growth PRIDES will initially consist of a unit comprised of
(a) a purchase contract under which
(1) the holder will purchase from us on August 16, 2002, for an
amount in cash equal to $50, a number of newly issued shares of our
Class A common stock equal to the settlement rate described below and
(2) we will pay the holder contract adjustment payments at the rate
of % of $50 per year and
(b) a 1/20 undivided beneficial interest in a zero-coupon U.S.
treasury security.
The purchase price of each Income PRIDES and Growth PRIDES will generally
be allocated between the related purchase contract and the related capital
security, in the case of Income PRIDES, or interest in a treasury security, in
the case of Growth PRIDES, in proportion to their respective fair market values
at the time of purchase. We will take the position that the entire purchase
price of a FELINE PRIDES will be allocated to the related capital security or
interest in a treasury security, and that no amount will be allocated to the
related purchase contract. This position generally will be binding on each
beneficial owner of each Income PRIDES, but not on the IRS. As long as FELINE
PRIDES are in the form of Income PRIDES or Growth PRIDES, the related capital
securities or the appropriate applicable ownership interest of the treasury
portfolio or treasury securities, as applicable, will be pledged to the
collateral agent to secure your obligation to purchase our Class A common stock
under the related purchase contracts.
SUBSTITUTION OF PLEDGED SECURITIES
Each holder of an Income PRIDES, unless a tax event redemption has
occurred, will have the right, at any time on or prior to the fifth business day
immediately preceding August 16, 2002, to substitute for the related capital
securities held by the collateral agent treasury securities in an aggregate
principal amount at maturity equal to the aggregate stated liquidation amount of
those capital securities.
The treasury securities will be pledged with the collateral agent to secure
the holder's obligation to purchase our Class A common stock under the related
purchase contracts. Because treasury securities are issued in integral multiples
of $1,000, holders of Income PRIDES may make the substitution only in integral
multiples of 20 Income PRIDES. However, if a tax event redemption has occurred
prior to August 16, 2002, and the treasury portfolio has become a component of
the Income PRIDES, holders of Income PRIDES may make those substitutions only in
integral multiples of 160,000 Income PRIDES, but obtaining the release of the
treasury portfolio, rather than the capital securities, at any time on or prior
to the second business day immediately preceding August 16, 2002.
FELINE PRIDES with respect to which treasury securities have been
substituted for the related capital securities or the appropriate applicable
ownership interest of the treasury portfolio, as the case may be, as collateral
to secure that holder's obligation under the related purchase contracts will be
referred to as Growth PRIDES.
S-27
<PAGE> 56
To create 20 Growth PRIDES, unless a tax event redemption has occurred, you
must
(a) deposit with the collateral agent a treasury security having a
principal amount at maturity of $1,000 and
(b) transfer 20 Income PRIDES to the purchase contract agent
accompanied by a notice stating that you have deposited a treasury security
with the collateral agent and are requesting that the purchase contract
agent instruct the collateral agent to release to you the 20 capital
securities relating to the 20 Income PRIDES.
If contract adjustment payments are at a higher rate for Growth PRIDES than
for Income PRIDES, you will also be required to deliver cash in an amount equal
to the excess of the contract adjustment payments that would have accrued since
the last payment date through the date of substitution on the Growth PRIDES
being created by you, over the contract adjustment payments that have accrued
over the same period on the related Income PRIDES.
Upon that deposit and the receipt of an instruction from the purchase
contract agent, the collateral agent will effect the release of the related 20
capital securities from the pledge under the pledge agreement free and clear of
our security interest to the purchase contract agent, which will
(a) cancel the 20 Income PRIDES,
(b) transfer to you the 20 related capital securities and
(c) deliver to you 20 Growth PRIDES.
The treasury security will be substituted for the capital securities and
will be pledged with the collateral agent to secure your obligation to purchase
our Class A common stock under the related purchase contracts. The related
capital securities released to you will trade separately from the resulting
Growth PRIDES. Contract adjustment payments will be payable by us on those
Growth PRIDES on each payment date from the later of , 1999 and the
last payment date on which contract adjustment payments were paid. In addition,
OID for United States federal income tax purposes will accrue on the related
treasury securities. Distributions on any capital securities, up to but not
including August 16, 2002, including after a substitution of collateral
resulting in the creation of Growth PRIDES, will continue to be payable
quarterly by the trust at the rate of % of $50 per year.
Each holder of a Growth PRIDES, unless a tax event redemption has occurred,
will have the right, at any time on or prior to the fifth business day
immediately preceding August 16, 2002, to substitute for the related treasury
securities held by the collateral agent capital securities in an aggregate
stated liquidation amount equal to the aggregate principal amount at stated
maturity of those treasury securities, thereby creating Income PRIDES.
The capital securities will be pledged with the collateral agent to secure
the holder's obligation to purchase our Class A common stock under the related
purchase contract. Because treasury securities are issued in integral multiples
of $1,000, holders of Growth PRIDES may make those substitutions only in
integral multiples of 20 Growth PRIDES. However, if a tax event redemption has
occurred and the treasury portfolio has become a component of the Income PRIDES,
holders of Growth PRIDES may make that substitution only in integral multiples
of 160,000 Growth PRIDES, at any time on or prior to the second business day
immediately preceding August 16, 2002.
To create 20 Income PRIDES, unless a tax event redemption has occurred, you
must
(a) deposit with the collateral agent 20 capital securities and
(b) transfer 20 Growth PRIDES certificates to the purchase contract
agent accompanied by a notice stating that you had deposited 20 capital
securities with the collateral agent and are requesting that the purchase
contract agent instruct the collateral agent to release to you the treasury
security relating to those Growth PRIDES.
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<PAGE> 57
Upon the deposit and receipt of an instruction from the purchase contract
agent, the collateral agent will effect the release of the related treasury
security from the pledge under the pledge agreement free and clear of our
security interest to the purchase contract agent, which will
(a) cancel the 20 Growth PRIDES,
(b) transfer to you the related treasury security and
(c) deliver to you 20 Income PRIDES.
The substituted capital securities will be pledged with the collateral
agent to secure your obligation to purchase our Class A common stock under the
related purchase contacts. Cumulative cash distributions, payable quarterly at a
rate of % of $50 per year on those Income PRIDES, will be payable by us on
those Income PRIDES on each payment date from the later of , 1999 and
the last payment date on which those cumulative cash distributions, if any, were
paid.
Holders who elect to substitute pledged securities, creating or recreating
Growth PRIDES or Income PRIDES, shall be responsible for any fees or expenses
payable in connection with substitution.
RECREATING INCOME PRIDES OR GROWTH PRIDES
On or prior to the fifth business day immediately preceding August 16,
2002, a holder of Growth PRIDES or Income PRIDES may, unless a tax event
redemption has occurred, recreate Income PRIDES or Growth PRIDES by
(a) depositing with the collateral agent 20 capital securities or a
treasury security and
(b) transferring 20 Growth PRIDES or Income PRIDES, as applicable, to
the purchase contract agent accompanied by a notice stating that the Growth
PRIDES or Income PRIDES holder has deposited 20 capital securities or a
treasury security with the collateral agent and requesting that the
purchase contract agent instruct the collateral agent to release to that
holder the related treasury security or capital securities, as applicable.
Upon the deposit and receipt of instructions from the purchase contract
agent, the collateral agent will effect the release of the related treasury
security or capital securities, as applicable, from the pledge of the pledge
agreement free and clear of our security interest to the purchase contract
agent, which will
(a) cancel the 20 Growth PRIDES or Income PRIDES, as applicable,
(b) transfer to you the treasury security or capital securities, as
applicable, and
(c) deliver to you 20 Income PRIDES or 20 Growth PRIDES, as
applicable.
If, however, a tax event redemption has occurred prior to August 16, 2002
and the treasury portfolio has become a component of the Income PRIDES, holders
of Growth PRIDES or Income PRIDES, as applicable, may make those substitutions
(by using, in the case of the Growth PRIDES, the appropriate applicable
ownership interest of the treasury portfolio rather than the capital securities)
at any time on or prior to the second business day immediately preceding August
16, 2002, but only in integral multiples of 160,000 Growth PRIDES or Income
PRIDES, as applicable.
If contract adjustment payments are at a higher rate for Growth PRIDES than
for Income PRIDES, holders of Income PRIDES wishing to recreate Growth PRIDES
will also be required to deliver cash in an amount equal to the excess of the
contract adjustment payments that would have accrued since the last payment date
through the date of substitution on the Growth PRIDES being recreated by those
holders, over the contract adjustment payments that have accrued over the same
time period on the related Income PRIDES.
The substituted capital securities, the appropriate applicable ownership
interest of the treasury portfolio or a treasury security will be pledged with
the collateral agent to secure your obligation to purchase our Class A common
stock under the related purchase contracts.
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CURRENT PAYMENTS
Holders of Income PRIDES are entitled to receive aggregate cash
distributions at a rate of % of $50 per year from and after ,
1999 through and including August 15, 2002, payable quarterly in arrears. The
quarterly payments on the Income PRIDES will consist of
(a) cumulative cash distributions on the related capital securities or
the treasury portfolio, as applicable, payable at the rate of % of $50
per year and
(b) contract adjustment payments payable by us at the rate of %
of $50 per year.
Each holder of Growth PRIDES will be entitled to receive quarterly contract
adjustment payments payable by us at the rate of % of $50 per year. In
addition, OID will accrue on the related treasury securities.
The ability of the trust to make the quarterly distributions on the capital
securities is solely dependent upon the receipt of corresponding interest
payments from us on the debentures.
Our obligations with respect to the debentures will be senior and unsecured
and will rank equally in right of payment with all of our other senior unsecured
indebtedness. Our obligations with respect to the contract adjustment payments
will be subordinated and junior in right of payment to our senior indebtedness.
VOTING AND OTHER RIGHTS
Holders of capital securities, in that capacity, will not be entitled to
vote to appoint, remove or replace, or to increase or decrease the number of
administrative trustees and will generally have no voting rights except in
limited circumstances. Holders of purchase contracts relating to the Income
PRIDES or Growth PRIDES, in that capacity, will have no voting or other rights
in respect of our Class A common stock.
LISTING OF THE SECURITIES
We will apply to list the Income PRIDES and the Growth PRIDES on the NYSE
under the symbols "COX PrI" and "COX PrG," respectively. If capital securities
are separately traded to a sufficient extent that the applicable listing
requirements are satisfied, we will endeavor to cause such securities to be
listed on the exchange on which the Income PRIDES and Growth PRIDES are then
listed, including, if applicable, the NYSE.
NYSE SYMBOL OF COMMON STOCK
Our Class A common stock is listed on the NYSE under the symbol "COX."
MISCELLANEOUS
We or our affiliates may from time to time purchase any of the securities
offered in this prospectus supplement which are then outstanding by tender, in
the open market or by private agreement.
DESCRIPTION OF THE PURCHASE CONTRACTS
GENERAL
Each purchase contract underlying a FELINE PRIDES, unless earlier
terminated, or earlier settled at your option, will obligate you to purchase,
and us to sell, on August 16, 2002, for an amount in cash equal to $50, a number
of newly issued shares of our Class A common stock equal to the settlement rate.
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The settlement rate, which is the number of newly issued shares of our
Class A common stock issuable upon settlement of a purchase contract on August
16, 2002, will be calculated for the FELINE PRIDES, subject to adjustment under
certain circumstances, as follows:
(a) if the applicable market value is equal to or greater than the
threshold appreciation price of $ , which is % above $ , the
last reported sale price of the Class A common stock on ,
1999, the settlement rate, which is equal to $50 divided by $ , will be
; accordingly, if, between the date of this prospectus supplement and
the period during which the applicable market value is measured, the market
price for the Class A common stock increases to an amount that is higher
than $ , the aggregate market value of the shares of Class A common
stock issued upon settlement of each purchase contract, assuming that this
market value is the same as the applicable market value of the Class A
common stock, will be higher than $50, and if the market price equals
$ , the aggregate market value of those shares, assuming that this
market value is the same as the applicable market value of the Class A
common stock, will equal $50;
(b) if the applicable market value is less than $ but greater than
$ , the settlement rate will be equal to $50 divided by the applicable
market value; accordingly, if the market price for the Class A common stock
increases between the date of this prospectus supplement and the period
during which the applicable market value is measured but that market price
is less than $ , the aggregate market value of the shares of Class A
common stock issued upon settlement of each purchase contract, assuming
that this market value is the same as the applicable market value of the
Class A common stock, will equal $ ; and
(c) if the applicable market value is less than or equal to $ ,
the settlement rate, which is equal to $50 divided by $ , will be
; accordingly, if the market price for the Class A common stock
decreases between the date of this prospectus supplement and the period
during which the applicable market value is measured, the aggregate market
value of the shares of Class A common stock issued upon settlement of each
purchase contract, assuming that the market value is the same as the
applicable market value of the Class A common stock, will be less than $50,
and if the market price stays the same, the aggregate market value of those
shares, assuming that this market value is the same as the applicable
market value of the Class A common stock, will equal $50.
The applicable market value means the average of the closing prices per
share of Class A common stock on each of the twenty consecutive trading days
ending on the third trading day immediately preceding August 16, 2002.
The closing price of the Class A common stock on any date of determination
means the closing sale price or, if no closing price is reported, the last
reported sale price of the Class A common stock on the NYSE on that date. If the
Class A common stock is not listed for trading on the NYSE on any date, the
closing price of the Class A common stock on any date of determination means the
closing sales price as reported in the composite transactions for the principal
U.S. securities exchange on which the Class A common stock is so listed, or if
the Class A common stock is not so listed on a U.S. national or regional
securities exchange, as reported by the Nasdaq stock market, or, if the Class A
common stock is not so reported, the last quoted bid price for the Class A
common stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization or, if that bid price is not available,
the market value of the Class A common stock on that date as determined by a
nationally recognized independent investment banking firm retained by us for
this purpose.
A trading day is a day on which the Class A common stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Class A common stock.
No fractional shares of Class A common stock will be issued by us pursuant
to the purchase contracts. In place of fractional shares otherwise issuable,
calculated on an aggregate basis, in respect of
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the purchase contracts you are settling, you will be entitled to receive an
amount of cash equal to the fractional share times the applicable market value.
On the business day immediately preceding August 16, 2002, unless
(a) you have settled the related purchase contracts prior to August
16, 2002 through the early delivery of cash to the purchase contract agent,
in the manner described under "--Early Settlement,"
(b) in the case of Income PRIDES, you have settled the related
purchase contracts with separate cash on the business day immediately
preceding August 16, 2002 having given prior notice in the manner described
under "--Notice to Settle with Cash,"
(c) you have had the capital securities related to your purchase
contracts remarketed in the manner described in this prospectus supplement,
or
(d) an event described under "--Termination" below has occurred, then
(1) in the case of Income PRIDES, unless a tax event redemption has occurred, we
will exercise our rights as a secured party to dispose of the capital securities
in accordance with applicable law and (2) in the case of Growth PRIDES or Income
PRIDES, if a tax event redemption has occurred, the principal amount of the
related treasury securities or the appropriate applicable ownership interest of
the treasury portfolio, as applicable, when paid at maturity, will automatically
be applied to satisfy in full your obligation to purchase Class A common stock
under the related purchase contracts. The Class A common stock will then be
issued and delivered to you or your designee, upon presentation and surrender of
the certificate evidencing the FELINE PRIDES and payment by you of any transfer
or similar taxes payable in connection with the issuance of the Class A common
stock to any person other than you. Where a holder of either Income PRIDES or
Growth PRIDES effects the early settlement of the related purchase contracts
through the delivery of cash or, in the case of Income PRIDES, settles the
related purchase contracts with cash on the business day immediately preceding
August 16, 2002, the related capital securities or treasury securities, as the
case may be, will be released to the holder as described in this prospectus
supplement. The funds received by the collateral agent on the business day
immediately preceding August 16, 2002, upon cash settlement of a purchase
contract, will be promptly invested in overnight permitted investments and paid
to us on August 16, 2002. Any funds received by the collateral agent in respect
of the interest earned from the overnight investment in permitted investments
will be distributed to the purchase contract agent for payment to the holders.
Prior to the date on which shares of Class A common stock are issued in
settlement of purchase contracts, the Class A common stock underlying the
related purchase contracts will not be deemed to be outstanding for any purpose
and the holders of those purchase contracts will not have any voting rights,
rights to dividends or other distributions, rights or privileges of a
stockholder of Cox by virtue of holding the purchase contracts.
As a holder of an Income PRIDES or Growth PRIDES, you will, by acceptance
and under the terms of the purchase contract agreement and the related purchase
contracts, be deemed to have
(a) irrevocably agreed to be bound by the terms of the related
purchase contracts and the pledge agreement for so long as you remain a
holder of that FELINE PRIDES and
(b) duly appointed the purchase contract agent as your
attorney-in-fact to enter into and perform the related purchase contracts
on your behalf and in your name.
In addition, as a beneficial owner of Income PRIDES or Growth PRIDES, you,
by acceptance of the interest, will be deemed to have agreed to treat for United
States federal, state and local income and franchise tax purposes,
(a) yourself as the owner of the related capital securities, the
appropriate applicable ownership interest of the treasury portfolio or the
treasury securities, as the case may be, and
(b) the debentures as indebtedness that we have issued.
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REMARKETING
Under the remarketing agreement and subject to the terms of the remarketing
underwriting agreement between the remarketing agent, the purchase contract
agent, us and the trust, unless a tax event redemption has occurred, the capital
securities of Income PRIDES holders who have failed to notify the purchase
contract agent on or prior to the fifth business day immediately preceding
August 16, 2002 of their intention to settle the related purchase contracts with
separate cash on the business day immediately preceding August 16, 2002, will be
remarketed on the third business day immediately preceding August 16, 2002.
The remarketing agent will use its reasonable efforts to remarket those
capital securities on that date at a price of approximately 100.5% of the
aggregate stated liquidation amount of those capital securities, plus
accumulated and unpaid distributions. The portion of the proceeds from that
remarketing equal to the aggregate stated liquidation amount of those capital
securities will automatically be applied to satisfy in full those Income PRIDES
holders' obligations to purchase Class A common stock under the related purchase
contracts. In addition, after deducting as the remarketing fee an amount not
exceeding 25 basis points (.25%) of the aggregate stated liquidation amount of
the remarketed capital securities from any amount of those proceeds in excess of
the aggregate stated liquidation amount of the remarketed capital securities
plus any accumulated and unpaid distributions, the remarketing agent will remit
the remaining portion of the proceeds, if any, for the benefit of that holder.
Income PRIDES holders whose capital securities are so remarketed will not
otherwise be responsible for the payment of any remarketing fee.
If, despite using its reasonable efforts, the remarketing agent cannot
remarket the related capital securities of those holders of Income PRIDES at a
price not less than 100% of the aggregate stated liquidation amount of those
capital securities plus accumulated and unpaid distributions, or if the
remarketing does not occur because a condition precedent to the remarketing has
not been fulfilled, and thus resulting in a failed remarketing, we will exercise
our rights as a secured party to dispose of the capital securities in accordance
with applicable law and satisfy in full, from the proceeds of that disposition,
that holder's obligation to purchase Class A common stock under the related
purchase contracts. However, if we exercise those rights as a secured creditor,
any accumulated and unpaid distributions on those capital securities will be
paid in cash by us to the holders of record of those capital securities. We will
cause a notice of the failed remarketing to be published on the second business
day immediately preceding August 16, 2002 by publication in a daily newspaper in
the English language of general circulation in The City of New York, which is
expected to be The Wall Street Journal. In addition, we will request, not later
than ten nor more than 15 calendar days prior to the remarketing date, that the
depository notify its participants holding capital securities, Income PRIDES and
Growth PRIDES of the remarketing and of the procedures that must be followed if
a capital security holder wishes to exercise its right to put its capital
security to us as described in this prospectus supplement. If required by
applicable law we will endeavor to ensure that a registration statement with
regard to the full amount of the capital securities to be remarketed shall be
effective in a form that will enable the remarketing agent to rely on it in
connection with the remarketing process. It is currently anticipated that
Merrill Lynch, Pierce, Fenner & Smith Incorporated will be the remarketing
agent.
EARLY SETTLEMENT
A holder of Income PRIDES may settle the related purchase contracts (unless
a tax event redemption has occurred) on or prior to the fifth business day
immediately preceding August 16, 2002 by presenting and surrendering the FELINE
PRIDES certificate evidencing those Income PRIDES at the offices of the purchase
contract agent. The holder should also present the form of election to settle
early on the reverse side of that certificate completed and executed as
indicated, accompanied by payment to us in immediately available funds of an
amount equal to $50 times the number of purchase contracts being settled.
However, if a tax event redemption has occurred prior to August 16, 2002 and the
treasury portfolio has become a component of the Income PRIDES, holders of those
Income PRIDES may settle early only in integral multiples of 160,000 Income
PRIDES, and the related appropriate applicable
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ownership interest of the treasury portfolio, at any time on or prior to the
second business day immediately preceding August 16, 2002.
A holder of Growth PRIDES may settle the related purchase contracts on or
prior to the second business day immediately preceding August 16, 2002 by
presenting and surrendering the FELINE PRIDES certificate evidencing the Growth
PRIDES at the offices of the purchase contract agent with the form of election
to settle early on the reverse side of that certificate completed and executed
as indicated, accompanied by payment to us in immediately available funds of an
amount equal to $50 times the number of purchase contracts being settled.
So long as the FELINE PRIDES are evidenced by one or more global security
certificates deposited with the depositary, procedures for early settlement will
also be governed by standing arrangements between the depositary and the
purchase contract agent.
Upon early settlement of the purchase contracts related to any Income
PRIDES or Growth PRIDES:
(a) as a holder of FELINE PRIDES, you will receive newly issued
shares of Class A common stock per Income PRIDES or Growth PRIDES,
regardless of the market price of the Class A common stock on the date of
the early settlement. The number of newly issued shares of Class A common
stock in both cases will be subject to adjustment under the circumstances
described in "--Anti-Dilution Adjustments" below;
(b) the capital securities, the appropriate applicable ownership
interest of the treasury portfolio or the treasury securities, related to
the Income PRIDES or Growth PRIDES, as applicable, will then be transferred
to you free and clear of our security interest;
(c) your right to receive future contract adjustment payments will
terminate; and
(d) no adjustment will be made to or for you on account of any amounts
accrued in respect of contract adjustment payments.
If the purchase contract agent receives a FELINE PRIDES certificate,
accompanied by the completed election to settle early form and the requisite
amount of immediately available funds, from you by 5:00 p.m., New York City
time, on a business day, that day will be considered the early settlement date.
If the purchase contract agent receives those documents after 5:00 p.m., New
York City time, on a business day or at any time on a day that is not a business
day, the next business day will be considered the settlement date.
Upon early settlement of purchase contracts in the manner described above,
presentation and surrender of the FELINE PRIDES certificate evidencing the
related Income PRIDES or Growth PRIDES and payment of any transfer or similar
taxes payable by the holder in connection with the issuance of the related Class
A common stock to any person other than the holder of the Income PRIDES or
Growth PRIDES, we will cause the shares of Class A common stock being purchased
to be issued, and the related capital securities, the appropriate applicable
ownership interest of the treasury portfolio or the treasury securities, as the
case may be, securing those purchase contracts to be released from the pledge
under the pledge agreement and transferred, within three business days following
the settlement date, to you or your designee.
NOTICE TO SETTLE WITH CASH
If you want to settle the purchase contract underlying a FELINE PRIDES with
separate cash on the business day immediately preceding August 16, 2002, you
must notify the purchase contract agent by presenting and surrendering the
FELINE PRIDES certificate evidencing those FELINE PRIDES. You must present the
certificates at the offices of the purchase contract agent with the form of
"Notice to Settle by Separate Cash" on the reverse side of the certificate
completed and executed as indicated. You must present the documents on or prior
to 5:00 p.m., New York City time, on the second business day immediately
preceding August 16, 2002 if you are a Growth PRIDES holder or if you are an
Income
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PRIDES holder and a tax event redemption has occurred. If you are an Income
PRIDES holder, you must present the document on the fifth business day
immediately preceding August 16, 2002.
If you have given notice of your intention to settle the related purchase
contract with separate cash but failed to deliver the cash on the business day
immediately preceding August 16, 2002, then we will exercise our right as a
secured party to dispose of, in accordance with applicable law, the related
capital securities, the applicable ownership interest of the treasury portfolio
or the treasury securities, as the case may be, to satisfy in full from the
proceeds of that disposition your obligation to purchase Class A common stock
under the related purchase contract.
CONTRACT ADJUSTMENT PAYMENTS
Contract adjustment payments will be fixed at a rate per year of % of
$50 per purchase contract in the case of Income PRIDES, and at a rate per year
of % of $50 per purchase contract in the case of Growth PRIDES. Contract
adjustment payments that are not paid when due will continue to accrue at the
rate per year of % compounded quarterly, until paid. Contract adjustment
payments payable for any period will be computed on the basis of a 360-day year
of twelve 30-day months. Contract adjustment payments will accrue
from , 1999 and will be payable quarterly in arrears on February
16, May 16, August 16, and November 16 of each year, commencing November 16,
1999.
Contract adjustment payments will be payable to the holders of purchase
contracts as they appear on the books and records of the purchase contract agent
on the relevant record dates.
As long as the Income PRIDES or Growth PRIDES remain in book-entry only
form, the record dates will be one business day prior to the relevant payment
dates. Those distributions will be paid through the purchase contract agent who
will hold amounts received in respect of the contract adjustment payments for
your benefit relating to those Income PRIDES or Growth PRIDES. Subject to any
applicable laws and regulations, each of those payments will be made as
described under "--Book-Entry System." If the Income PRIDES or Growth PRIDES do
not remain in book-entry only form, we shall have the right to select relevant
record dates, which shall be more than one business day but less than 60
business days prior to the relevant payment dates.
If any date on which contract adjustment payments are to be made on the
purchase contracts related to the Income PRIDES or Growth PRIDES is not a
business day, then payment of the contract adjustment payments payable on that
date will be made on the next succeeding day which is a business day, and no
interest or payment will be paid in respect of the delay. However, if that
business day is in the next succeeding calendar year, that payment shall be made
on the immediately preceding business day, in each case with the same force and
effect as if made on that payment date. A business day shall mean any day other
than Saturday, Sunday or any day on which banking institutions and trust
companies in New York City in the State of New York are permitted or required by
any applicable law to close.
Our obligations with respect to contract adjustment payments will be
subordinated and junior in right of payment to our obligations under any senior
indebtedness.
ANTI-DILUTION ADJUSTMENTS
The formula for determining the settlement rate will be subject to
adjustment, without duplication, upon the occurrence of events, including:
(a) the payment of dividends and distributions of our Class A common
stock on our Class A common stock;
(b) the issuance to all holders of our Class A common stock of rights,
warrants or options, other than any dividend reinvestment or share purchase
plans, entitling them, for a period of up to 45 days, to subscribe for or
purchase our Class A common stock at less than the current market price;
(c) subdivisions, splits and combinations of our Class A common stock;
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(d) distributions to all holders of our Class A common stock of our
evidences of indebtedness, shares of capital stock, securities, cash or
property, excluding any dividend or distribution covered by clause (a) or
(b) above and any dividend or distribution paid exclusively in cash;
(e) distributions consisting exclusively of cash to all holders of our
Class A common stock in an aggregate amount that, together with
- other all-cash distributions made within the preceding 12 months and
- any cash and the fair market value, as of the expiration of the tender
or exchange offer referred to below, of consideration payable in
respect of any tender or exchange offer by us or a subsidiary of ours
for our Class A common stock concluded within the preceding 12 months,
exceeds 15% of our aggregate market capitalization on the date of that
distribution; the aggregate market capitalization being the product of
the current market price of the Class A common stock multiplied by the
number of shares of Class A common stock then outstanding; and
(f) the successful completion of a tender or exchange offer made by us
or any subsidiary of ours for our Class A common stock which involves an
aggregate consideration that, together with
- any cash and the fair market value of consideration payable in respect
of any tender or exchange offer by us or a subsidiary of ours for our
Class A common stock concluded within the preceding 12 months and
- the aggregate amount of any all-cash distributions to all holders of
our Class A common stock made within the preceding 12 months, exceeds
15% of our aggregate market capitalization on the expiration of the
tender or exchange offer.
The current market price per share of Class A common stock on any day means
the average of the daily closing prices for the five consecutive trading days
selected by us commencing not more than 30 trading days before, and ending not
later than, the earlier of the day in question and the day before the ex date
with respect to the issuance or distribution requiring that computation. For
purposes of this paragraph, the term ex date, when used with respect to any
issuance or distribution, shall mean the first date on which the Class A common
stock trades regular way on that exchange or in that market without the right to
receive the issuance or distribution.
In the case of reclassifications, consolidations, mergers, sales or
transfers of assets or other transactions pursuant to which our Class A common
stock is converted into the right to receive securities, cash or property, each
purchase contract then outstanding would, without the consent of the holders of
the related Income PRIDES or Growth PRIDES, become a contract to purchase only
the kind and amount of securities, cash and property receivable upon
consummation of the transaction by a holder of the number of shares of Class A
common stock which would have been received by the holder of the related Income
PRIDES or Growth PRIDES immediately prior to the date of consummation of that
transaction if that holder had then settled that purchase contract.
If at any time (1) we make a distribution of property to our Class A common
stockholders which would be taxable to those stockholders as a dividend for
United States federal income tax purposes, which includes generally
distributions of our evidences of indebtedness or assets, but generally not
stock dividends or rights to subscribe to capital stock and (2) according to the
settlement rate adjustment provisions of the purchase contract agreement, the
settlement rate is increased, that increase may give rise to a taxable dividend
to holders of FELINE PRIDES.
In addition, we may make increases to the settlement rate as our board of
directors deems advisable to avoid or diminish any income tax to holders of our
capital stock resulting from any dividend, distribution of capital stock,
distribution of rights to acquire capital stock or from any event treated
similarly for income tax purposes or for any other reasons.
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Adjustments to the settlement rate will be calculated to the nearest
1/10,000th of a share. No adjustment in the settlement rate shall be required
unless that adjustment would require an increase or decrease of at least one
percent in the settlement rate. However, any adjustments which by reason of the
above are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
We will be required, within ten business days following the adjustment of
the settlement rate, to provide written notice to the purchase contract agent of
the occurrence of that event and a statement specifying in reasonable detail the
method by which the adjustment to the settlement rate was determined and the
revised settlement rate.
Each adjustment to the settlement rate will result in a corresponding
adjustment to the number of shares of Class A common stock issuable upon early
settlement of a purchase contract.
TERMINATION OF PURCHASE CONTRACTS
The purchase contracts, our related rights and obligations and those of the
holders of the FELINE PRIDES, including the right to receive accrued contract
adjustment payments and the right and obligation to purchase Class A common
stock, will automatically terminate upon the occurrence of particular events of
our bankruptcy, insolvency or reorganization.
Upon termination, the collateral agent will release the related capital
securities or the appropriate applicable ownership interest of the treasury
portfolio and the treasury securities held by it to the purchase contract agent
for distribution to the holders. The release will be subject in the case of the
treasury portfolio to the purchase contract agent's disposition of the subject
securities for cash and the payment of the cash to the holders to the extent
that the holders would otherwise have been entitled to receive less than $1,000
principal amount at maturity of any security. Upon termination, however, the
release and distribution may be subject to a delay. If we become the subject of
a case under the Bankruptcy Code, a delay may occur as a result of the automatic
stay under the Bankruptcy Code and continue until the automatic stay has been
lifted. We expect any delay to be limited.
PLEDGED SECURITIES AND PLEDGE AGREEMENT
The capital securities related to the Income PRIDES, or the treasury
portfolio if a tax event redemption has occurred prior to August 16, 2002 and
the treasury securities related to the Growth PRIDES (collectively, the pledged
securities) will be pledged to the collateral agent, for our benefit. According
to the pledge agreement, the pledged securities will secure the obligations of
holders of FELINE PRIDES to purchase our Class A common stock under the related
purchase contracts. Your rights to the related pledged securities will be
subject to our security interest created by the pledge agreement. You will not
be permitted to withdraw the pledged securities related to the Income PRIDES or
Growth PRIDES from the pledge arrangement except
(a) to substitute treasury securities for the related capital
securities or the appropriate applicable ownership interest of the treasury
portfolio,
(b) to substitute capital securities or the appropriate applicable
ownership interest of the treasury portfolio for the related treasury
securities or
(c) upon the termination or early settlement of the related purchase
contracts.
Subject to the security interest and the terms of the purchase contract
agreement and the pledge agreement, (1) each holder of Income PRIDES, unless a
tax event redemption has occurred, will be entitled through the purchase
contract agent and the collateral agent to all of the proportional rights and
preferences of the related capital securities, including distribution, voting,
redemption, repayment and liquidation rights and (2) each holder of Growth
PRIDES or Income PRIDES, if a tax event redemption has occurred, will retain
beneficial ownership of the related treasury securities or the appropriate
applicable
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ownership interest of the treasury portfolio, pledged in respect of the related
purchase contracts. We will have no interest in the pledged securities other
than our security interest.
Except as described in "Description of the Purchase Contracts--General,"
the collateral agent will, upon receipt of distributions on the pledged
securities, distribute those payments to the purchase contract agent, which will
in turn distribute them, together with contract adjustment payments received
from us, to the persons in whose names the related Income PRIDES or Growth
PRIDES are registered at the close of business on the record date immediately
preceding the date of the distribution.
BOOK-ENTRY SYSTEM
The Depository Trust Company will act as securities depositary for the
FELINE PRIDES. The FELINE PRIDES will be issued only as fully-registered
securities registered in the name of Cede & Co. (the depositary's nominee). One
or more fully-registered global security certificates, representing the total
aggregate number of FELINE PRIDES, will be issued and deposited with the
depositary and will bear a legend regarding the restrictions on exchanges and
registration of transfer referred to below.
The laws of some jurisdictions require that some purchasers of securities
take physical delivery of securities in definitive form. Those laws may impair
the ability to transfer beneficial interests in the FELINE PRIDES so long as the
FELINE PRIDES are represented by global security certificates.
The depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934.
The depositary holds securities that its participants deposit with the
depositary. The depositary also facilitates the settlement among participants of
securities transactions, including transfers and pledges, in deposited
securities through electronic computerized book-entry changes in participants'
accounts, thus eliminating the need for physical movement of securities
certificates. Direct participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. The
depositary is owned by a number of its direct participants and by the NYSE, the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc., collectively referred to as participants. Access to the
depositary system is also available to others, including securities brokers and
dealers, banks and trust companies that clear transactions through or maintain a
direct or indirect custodial relationship with a direct participant either
directly or indirectly, collectively referred to as indirect participants. The
rules applicable to the depositary and its participants are on file with the
Securities and Exchange Commission.
No FELINE PRIDES represented by global security certificates may be
exchanged in whole or in part for FELINE PRIDES registered, and no transfer of
global security certificates in whole or in part may be registered, in the name
of any person other than the depositary or any nominee of the depositary,
unless, however, the depositary has notified us that it is unwilling or unable
to continue as depositary for the global security certificates, has ceased to be
qualified to act as required by the purchase contract agreement or there is a
continuing default by us in respect of our obligations under one or more
purchase contracts. All FELINE PRIDES represented by one or more global security
certificates or any portion of them will be registered in those names as the
depositary may direct.
As long as the depositary or its nominee is the registered owner of the
global security certificates, the depositary or that nominee will be considered
the sole owner and holder of the global security certificates and all FELINE
PRIDES represented by those certificates for all purposes under the FELINE
PRIDES and the purchase contract agreement. Except in the limited circumstances
referred to above, owners of beneficial interests in global security
certificates will not be entitled to have the global security certificates or
the FELINE PRIDES represented by those certificates registered in their names,
will not receive or be entitled to receive physical delivery of FELINE PRIDES
certificates in exchange and will not be
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considered to be owners or holders of the global security certificates or any
FELINE PRIDES represented by those certificates for any purpose under the FELINE
PRIDES or the purchase contract agreement. All payments on the FELINE PRIDES
represented by the global security certificates and all related transfers and
deliveries of capital securities, treasury portfolio, treasury securities and
Class A common stock will be made to the depositary or its nominee as their
holder.
Ownership of beneficial interests in the global security certificates will
be limited to participants or persons that may hold beneficial interests through
institutions that have accounts with the depositary or its nominee. Ownership of
beneficial interests in global security certificates will be shown only on, and
the transfer of those ownership interests will be effected only through, records
maintained by the depositary or its nominee with respect to participants'
interests or by the participant with respect to interests of persons held by the
participants on their behalf.
Procedures for settlement of purchase contracts on August 16, 2002 or upon
early settlement will be governed by arrangements among the depositary,
participants and persons that may hold beneficial interests through participants
designed to permit the settlement without the physical movement of certificates.
Payments, transfers, deliveries, exchanges and other matters relating to
beneficial interests in global security certificates may be subject to various
policies and procedures adopted by the depositary from time to time.
Neither we or any of our agents, nor the purchase contract agent or any of
its agents will have any responsibility or liability for any aspect of the
depositary's or any participant's records relating to, or for payments made on
account of, beneficial interests in global security certificates, or for
maintaining, supervising or reviewing any of the depositary's records or any
participant's records relating to those beneficial ownership interests.
The information in this section concerning the depositary and its
book-entry system has been obtained from sources that we and the trust believe
to be reliable, but neither we nor the trust take responsibility for its
accuracy.
PROVISIONS OF THE CONTRACT PURCHASE
AGREEMENT AND THE PLEDGE AGREEMENT
OVERVIEW
Distributions on the FELINE PRIDES will be payable, purchase contracts and
documents related to them will be settled and transfers of the FELINE PRIDES
will be registrable at the office of the purchase contract agent in the Borough
of Manhattan, The City of New York. In addition, in the event that the FELINE
PRIDES do not remain in book-entry form, payment of distributions on the FELINE
PRIDES may be made, at our option, by check mailed to the address of the person
entitled to it as shown on the security register.
Shares of our Class A common stock will be delivered on August 16, 2002 or
earlier upon early settlement or, if the purchase contracts have terminated, the
related pledged securities will be delivered potentially after a delay as a
result of the imposition of the automatic stay under the Bankruptcy Code, in
either case upon presentation and surrender of the FELINE PRIDES certificate at
the office of the purchase contract agent. We expect any delay to be limited.
If you fail to present and surrender the FELINE PRIDES certificate
evidencing the Income PRIDES or Growth PRIDES to the purchase contract agent on
August 16, 2002, the shares of Class A common stock issuable in settlement of
the related purchase contract will be registered in the name of the purchase
contract agent. The shares of Class A common stock, together with any related
distributions, will be held by the purchase contract agent as agent for your
benefit, until the FELINE PRIDES certificate is presented and surrendered or you
provide satisfactory evidence that the certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the purchase
contract agent and us.
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If the purchase contracts have terminated prior to August 16, 2002, the
related pledged securities have been transferred to the purchase contract agent
for distribution to you and you fail to present and surrender the FELINE PRIDES
certificate evidencing your Income PRIDES or Growth PRIDES to the purchase
contract agent, the related pledged securities delivered to the purchase
contract agent and related payments shall be held by the purchase contract agent
as agent for your benefit, until the FELINE PRIDES certificate is presented or
you provide the evidence and indemnity described above.
The purchase contract agent will have no obligation to invest or to pay
interest on any amounts held by the purchase contract agent pending
distribution.
No service charge will be made for any registration of transfer or exchange
of the FELINE PRIDES, except for any related tax or other governmental charge
that may be imposed.
MODIFICATION
The purchase contract agreement and the pledge agreement will contain
provisions permitting us and the purchase contract agent or collateral agent
with the consent of the holders of not less than a majority of the purchase
contracts at the time outstanding, to modify the terms of the purchase
contracts, the purchase contract agreement and the pledge agreement. However,
we, the purchase contract agent or collateral agent may not, without the consent
of the holder of each outstanding purchase contract,
(a) change any payment date,
(b) change the amount or type of pledged securities related to the
purchase contract, impair the right of the holder of any pledged securities
to receive distributions on the pledged securities except for the rights of
holders of Income PRIDES to substitute treasury securities for the related
capital securities or treasury portfolio or the rights of holders of Growth
PRIDES to substitute capital securities or treasury portfolio for the
related treasury securities or otherwise adversely affect the holder's
rights in or to those pledged securities,
(c) change the place or currency of payment or reduce any contract
adjustment payments,
(d) impair the right to institute suit for the enforcement of the
purchase contract,
(e) reduce the amount of Class A common stock purchasable under the
purchase contract, increase the price to purchase Class A common stock on
settlement of the purchase contract, change the purchase contract
settlement date or otherwise adversely affect the holder's rights under the
purchase contract or
(f) reduce the above-stated percentage of outstanding purchase
contracts the consent of whose holders is required for the modification or
amendment of the provisions of the purchase contracts, the purchase
contract agreement or the pledge agreement.
However, if any amendment or proposal referred to above would adversely affect
only the Income PRIDES or the Growth PRIDES, then only the affected class of
holder will be entitled to vote on that amendment or proposal and that amendment
or proposal shall not be effective except with the consent of the holders of not
less than a majority of that class.
NO CONSENT TO ASSUMPTION
You, by your acceptance of the Income PRIDES or Growth PRIDES, will, under
the terms of the purchase contract agreement and the Income PRIDES or Growth
PRIDES, be deemed expressly to have withheld any consent to the assumption,
i.e., affirmance, of the related purchase contracts by us or our trustee if we
become the subject of a case under the Bankruptcy Code.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
We will covenant in the purchase contract agreement that we will not merge
or consolidate with any entity or sell, assign, transfer, lease or convey all or
substantially all of our properties and assets to any
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person, firm or corporation unless we are the continuing corporation or the
successor corporation is a corporation organized under the laws of the United
States of America or one of its states or the District of Columbia and that
corporation expressly assumes our obligations under the purchase contracts, the
debentures, the purchase contract agreement and the pledge agreement, and we are
not or the successor corporation is not, immediately after such merger,
consolidation, sale, assignment, transfer, lease or conveyance, in default in
the performance of any of these obligations.
TITLE
We, the purchase contract agent and the collateral agent may treat the
registered owner of any FELINE PRIDES as its absolute owner for the purpose of
making payment and settling the related purchase contracts and for all other
purposes.
REPLACEMENT OF FELINE PRIDES CERTIFICATES
In the case that physical certificates have been issued, we will replace
any mutilated FELINE PRIDES certificate at the expense of the holder upon
surrender of that certificate to the purchase contract agent. We will replace
any FELINE PRIDES certificates that become destroyed, lost or stolen at the
expense of the holder upon delivery to us and the purchase contract agent of
satisfactory evidence of its destruction, loss or theft. In the case of a
destroyed, lost or stolen FELINE PRIDES certificate, an indemnity satisfactory
to the purchase contract agent and us may be required at the expense of the
holder of the FELINE PRIDES evidenced by that certificate before a replacement
will be issued.
Notwithstanding the above, we will not be obligated to issue any Income
PRIDES or Growth PRIDES on or after August 16, 2002, after early settlement or
after the purchase contracts have terminated. The purchase contract agreement
will provide that, in place of the delivery of a replacement FELINE PRIDES
certificate following August 16, 2002, the purchase contract agent, upon
delivery of the evidence and indemnity described above, will deliver the Class A
common stock issuable pursuant to the purchase contracts included in the Income
PRIDES or Growth PRIDES evidenced by that certificate. If the purchase contracts
have terminated prior to August 16, 2002, the purchase contract agent will
transfer the principal amount of the pledged securities included in the Income
PRIDES or Growth PRIDES evidenced by that certificate.
GOVERNING LAW
The purchase contract agreement, the pledge agreement and the purchase
contracts will be governed by, and construed in accordance with, the laws of the
State of New York.
INFORMATION CONCERNING THE PURCHASE CONTRACT AGENT
We will appoint a purchase contract agent, which will act as your agent.
The purchase contract agreement will not obligate the purchase contract agent to
exercise any discretionary actions in connection with a default under the terms
of the Income PRIDES and Growth PRIDES or the purchase contract agreement.
The purchase contract will contain provisions limiting the liability of the
purchase contract agent. The purchase contract agreement will contain provisions
under which the purchase contract agent may resign or be replaced. That
resignation or replacement would be effective upon the appointment of a
successor.
INFORMATION CONCERNING THE COLLATERAL AGENT
The Bank of New York will be the collateral agent. The collateral agent
will act solely as our agent and will not assume any obligation or relationship
of agency or trust for or with you except for the obligations owed by a pledgee
of property to the owner under the pledge agreement and applicable law.
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The pledge agreement will contain provisions limiting the liability of the
collateral agent. The pledge agreement will contain provisions under which the
collateral agent may resign or be replaced. That resignation or replacement
would be effective upon the appointment of a successor.
The Bank of New York maintains commercial banking relationships with us.
MISCELLANEOUS
The purchase contract agreement will provide that we will pay all fees and
expenses related to
(a) the offering of the FELINE PRIDES,
(b) the retention of the collateral agent and
(c) the enforcement by the purchase contract agent of the rights of
the holders of the FELINE PRIDES.
Should you elect to substitute the related pledged securities, creating
Growth PRIDES or Income PRIDES or recreating Income PRIDES or Growth PRIDES, you
shall be responsible for any fees or expenses payable in connection with that
substitution, as well as any commissions, fees or other expenses incurred in
acquiring the pledged securities to be substituted, and we shall not be
responsible for any of those fees or expenses.
DESCRIPTION OF THE CAPITAL SECURITIES
The capital securities will be issued according to the terms of the
declaration. The declaration will be qualified as an indenture under the Trust
Indenture Act. The property trustee, The Bank of New York, an independent
trustee, will act as indenture trustee for the capital securities under the
declaration for purposes of compliance with the provisions of the Trust
Indenture Act. The terms of the capital securities will include those stated in
the declaration and those made part of the declaration by the Trust Indenture
Act. The following summary of provisions of the capital securities and the
declaration is not necessarily complete, and reference is made to the copy of
the declaration including the definitions, which is filed as an exhibit to the
registration statement of which this prospectus supplement and the accompanying
prospectus form a part, the Trust Act and the Trust Indenture Act. Whenever
particular defined terms are referred to in this prospectus supplement, those
defined terms are incorporated in this prospectus supplement by reference. The
following description of the terms of the capital securities supplements and, to
the extent inconsistent with, replaces the description of the general terms of
the capital securities contained in the accompanying prospectus, which we
request that you read.
OVERVIEW
The declaration authorizes the administrative trustees to issue on behalf
of the trust the trust securities, which represent undivided beneficial
ownership interests in the assets of the trust. We will own directly or
indirectly all of the common securities. The common securities rank on a parity,
and related payments will be made on a proportionate basis, with the capital
securities. However, upon the occurrence and during the continuance of an
indenture event of default, the rights of the holders of the common securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the capital securities. The declaration does not permit the issuance by the
trust of any securities other than the trust securities or the incurrence of any
indebtedness by the trust.
Under the declaration, the property trustee will own the debentures
purchased by the trust for the benefit of the holders of the trust securities.
The payment of distributions out of money held by the trust, and payments upon
redemption of the capital securities or liquidation of the trust, are guaranteed
by us to the extent described under "Description of the Guarantee." The
guarantee, when taken together with our obligations under the debentures and the
indenture and our obligations under the declaration, including the obligations
to pay costs, expenses, debts and liabilities of the trust other than with
respect to the capital
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securities, provides a full and unconditional guarantee of amounts due on the
capital securities. The Bank of New York, the guarantee trustee, will hold the
guarantee for the benefit of the holders of the capital securities. The
guarantee does not cover payment of distributions when the trust does not have
sufficient available funds to pay those distributions. In that case, except in
the limited circumstances in which the holder may take direct action, the remedy
of a holder of capital securities is to vote to direct the property trustee to
enforce the property trustee's rights under the debentures.
DISTRIBUTIONS
Distributions on the capital securities will be fixed initially at a rate
per year of % of the stated liquidation amount of $50 per capital security.
Distributions on the capital securities that remain outstanding on and after
August 16, 2002 will be reset on the third business day immediately preceding
August 16, 2002. Distributions in arrears for more than one quarter will bear
interest at the rate of % per year through and including August 15, 2002
and at the reset rate afterwards, compounded quarterly. The term distribution as
used here includes any interest payable unless otherwise stated. The amount of
distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months.
Distributions on the capital securities will be cumulative and will accrue
from , 1999 and will be payable quarterly in arrears on
February 16, May 16, August 16, and November 16 of each year, commencing
November 16, 1999, when, as and if funds are available for payment.
Distributions will be made by the property trustee, except as otherwise
described below.
The trust must pay distributions on the capital securities on the dates
payable to the extent that it has funds available in the property account for
the payment of those distributions. The trust's funds available for distribution
to you as a holder of the capital securities will be limited to payments
received from us on the debentures. We guarantee the payment of distributions
out of moneys held by the trust to the extent specified under "Description of
the Guarantee."
Distributions on the capital securities will be payable to holders,
including the collateral agent, as they appear on the books and records of the
trust on the relevant record dates. As long as the capital securities remain in
book-entry only form, the record dates will be one business day prior to the
relevant payment dates. Distributions will be paid through the property trustee,
who will hold amounts received in respect of the debentures in the property
account for your benefit. Subject to any applicable laws and regulations and the
provisions of the declaration, each payment will be made as described under
"--Book-Entry Only Issuance--The Depository Trust Company" below. With respect
to capital securities not in book-entry form, the administrative trustees shall
have the right to select relevant record dates, which shall be more than one
business day but less than 60 business days prior to the relevant payment dates.
If any date on which distributions on the capital securities are to be made
is not a business day, payment of the distributions payable on that date will be
made on the next succeeding day that is a business day, without any interest or
other payment in respect of any delay, but if that business day is in the next
succeeding calendar year, the payment shall be made on the immediately preceding
business day, in each case with the same force and effect as if made on that
record date.
MARKET RATE RESET
The applicable quarterly distribution rate on the capital securities and
the interest rate on the related debentures that remain outstanding on and after
August 16, 2002 will be reset on the third business day immediately preceding
August 16, 2002 to the reset rate.
The reset rate will be equal to the sum of the reset spread and the rate on
the two-year benchmark treasury in effect on the third business day immediately
preceding August 16, 2002 and will be determined by the reset agent as the rate
the capital securities should bear for a capital security to have an approximate
market value on the third business day immediately preceding August 16, 2002 of
100.5% of $50. However, we may limit the reset rate to be no higher than the
rate on the two-year benchmark
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treasury on August 16, 2002 plus 200 basis points (2%). The market value of the
capital securities may be less than 100.5% if the reset spread is limited to a
maximum of 2%.
The two-year benchmark treasury shall mean direct obligations of the United
States, which may be obligations traded on a when-issued basis only, having a
maturity comparable to the remaining term to maturity of the capital securities,
as agreed upon by us and the reset agent. The rate for the two-year benchmark
treasury will be the bid side rate displayed at 10:00 A.M., New York City time,
on the third business day immediately preceding August 16, 2002 in the Telerate
system. If the Telerate system is (a) no longer available on the third business
day immediately preceding August 16, 2002 or (b) in the opinion of the reset
agent, after consultation with us, no longer an appropriate system from which to
obtain that rate, another nationally recognized quotation system as, in the
opinion of the reset agent, after consultation with the us, is appropriate. If
that rate is not so displayed, the rate for the two-year benchmark treasury
shall be, as calculated by the reset agent, the yield to maturity for the
two-year benchmark treasury, expressed as a bond equivalent on the basis of a
year of 365 or 366 days, and applied on a daily basis. It shall be computed by
taking the arithmetic mean of the secondary market bid rates, as of 10:30 A.M.,
New York City time, on the third business day immediately preceding August 16,
2002, of three leading United States government securities dealers selected by
the reset agent, after consultation with us. These dealers may include the reset
agent or its affiliate.
We currently anticipate that Merrill Lynch, Pierce, Fenner & Smith
Incorporated will be the investment banking firm acting as the reset agent.
On the tenth business day immediately preceding August 16, 2002, the
two-year benchmark treasury to be used to determine the reset rate on August 16,
2002, will be selected. On that date, the reset agent will establish the reset
spread to be added to the rate on the two-year benchmark treasury in effect on
the third business day immediately preceding August 16, 2002, and we will
announce the reset spread and the two-year benchmark treasury. We will cause a
notice of the reset spread and the two-year benchmark treasury to be published
on the business day following the reset announcement date by publication in a
daily newspaper in the English language of general circulation in The City of
New York, which is expected to be The Wall Street Journal. We will request, not
later than seven nor more than 15 calendar days prior to the reset announcement
date, that the depositary notify its participants holding capital securities,
Income PRIDES or Growth PRIDES of the reset announcement date and of the
procedures that must be followed if any owner of FELINE PRIDES wants to settle
the related purchase contract with cash on the business day immediately
preceding August 16, 2002.
OPTIONAL REMARKETING
Under the remarketing agreement and subject to the terms of the remarketing
underwriting agreement, on or prior to the fifth business day immediately
preceding August 16, 2002, but no earlier than the payment date immediately
preceding August 16, 2002, holders of capital securities which are not
components of Income PRIDES may elect to have their capital securities
remarketed by delivering their capital securities along with a notice of such
election to the custodial agent. The custodial agent will hold these capital
securities in an account separate from the collateral account in which the
pledged securities will be held. Holders of capital securities electing to have
their capital securities remarketed will also have the right to withdraw that
election on or prior to the fifth business day immediately preceding August 16,
2002.
On the fourth business day immediately preceding August 16, 2002, the
custodial agent will deliver these separate capital securities to the
remarketing agent for remarketing. The remarketing agent will use its reasonable
efforts to remarket these capital securities on that date at a price of
approximately 100.5% of the aggregate stated liquidation amount of these capital
securities, plus accumulated and unpaid distributions. The portion of the
proceeds from that remarketing equal to the aggregate stated liquidation amount
of these capital securities will automatically be remitted by the remarketing
agent to the custodial agent for the benefit of the holders of these capital
securities. In addition, after deducting as the remarketing fee an amount not
exceeding 25 basis points (.25%) of the aggregate stated liquidation
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amount of the remarketed securities from any amount of those proceeds in excess
of the aggregate stated liquidation amount of the remarketed capital securities
plus any accumulated and unpaid distributions, the remarketing agent will remit
to the custodial agent any remaining portion of the proceeds for the benefit of
that holder.
If, despite using its reasonable efforts, the remarketing agent cannot
remarket the related capital securities of these holders at a price not less
than 100% of the aggregate stated liquidation amount of the capital securities
plus accumulated and unpaid distributions, or if the remarketing has not
occurred because a condition precedent to the remarketing has not been
fulfilled, and thus resulting in a failed remarketing, the remarketing agent
will promptly return these capital securities to the custodial agent to release
to these holders. We will cause a notice of the failed remarketing to be
published on the second business day immediately preceding August 16, 2002 by
publication in a daily newspaper in the English language of general circulation
in The City of New York, which is expected to be The Wall Street Journal. In
addition, we will request, not later than ten nor more than 15 calendar days
prior to the remarketing date, that the depository notify its participants
holding capital securities, Income PRIDES and Growth PRIDES of the remarketing
and of the procedures that must be followed if a capital security holder wishes
to exercise its right to put its capital security to us. We will endeavor to
ensure that a registration statement with regard to the full amount of the
capital securities to be remarketed shall be effective in a form as will enable
the remarketing agent to rely on it in connection with the remarketing process.
We currently anticipate that Merrill Lynch, Pierce, Fenner & Smith Incorporated
will be the remarketing agent.
OPTIONAL REDEMPTION
The debentures are redeemable at our option, in whole but not in part, on
not less than 30 days nor more than 60 days prior written notice, upon the
occurrence and continuation of a tax event under the circumstances described
under "Description of the Debentures--Tax Event Redemption." If we redeem the
debentures upon the occurrence and continuation of a tax event, the proceeds
from that repayment shall simultaneously be applied on a proportionate basis to
redeem capital securities having an aggregate stated liquidation amount equal to
the aggregate principal amount of the debentures so redeemed at a redemption
price, per capital security, equal to the redemption amount plus accrued and
unpaid interest to the date of that redemption. Those proceeds will be payable
in cash to the holders of the capital securities. If a tax event redemption
occurs prior to August 16, 2002, the redemption price payable to the collateral
agent, in liquidation of the Income PRIDES holders' interests in the trust, will
be simultaneously applied by the collateral agent to purchase the treasury
portfolio on behalf of the holders' of the Income PRIDES. The treasury portfolio
will be pledged with the collateral agent to secure the obligation of Income
PRIDES holders' to purchase Class A common stock under the related purchase
contracts.
If a failed remarketing has occurred, holders of trust securities and
holders of debentures following the distribution of the debentures upon a
dissolution of the trust, after August 16, 2002, will have the right,
- in the case of trust securities, to require the trust to put to us the
related debentures, or
- in the case of the debentures, to put the debentures directly to us on
September 1, 2002, upon at least three business days' prior notice, at a
price per debenture equal to $50, plus accrued and unpaid interest.
Upon our repurchase of those debentures from the trust
- the proceeds from the repurchase shall simultaneously be applied, in the
case of the trust securities, to redeem the trust securities of the
holder in an aggregate stated liquidation amount equal to the aggregate
principal amount of the debentures so repurchased and
- any accumulated and unpaid distributions with respect to those trust
securities will be paid to such holder in cash.
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REDEMPTION PROCEDURES
If the trust gives a notice of redemption, which will be irrevocable, in
respect of all of the capital securities, then, by 12:00 noon, New York City
time, on the redemption date, the trust will irrevocably deposit with the
depositary, the purchase contract agent or the collateral agent, as applicable,
funds sufficient to pay the redemption price, but only if we have paid to the
property trustee sufficient amount of cash in connection with the related
redemption or maturity of the debentures. The trust will give the depositary,
the purchase contract agent or the collateral agent irrevocable instructions and
authority to pay the redemption price to the holders of the capital securities
called for redemption.
If notice of redemption has been given and funds deposited as required,
then, immediately prior to the close of business on the date of the deposit,
distributions will cease to accumulate and all rights of holders of those
capital securities called for redemption will cease, except for the right of the
holders of those capital securities to receive the redemption price without
interest on the redemption price.
If any date fixed for redemption of capital securities is not a business
day, then payment of the redemption price payable on that date will be made on
the next succeeding day that is a business day, without any interest or other
payment in respect of any delay, except that if the business day falls in the
next calendar year, the payment will be made on the immediately preceding
business day.
DISTRIBUTION OF THE DEBENTURES
Investment company event means that the trust has received an opinion from
independent counsel experienced in practice under the Investment Company Act of
1940, referred to as the 1940 Act, that, as a result of the occurrence of a
change in law or regulation or a written change in interpretation or application
of law or regulation by any legislative body, court, governmental agency or
regulatory authority, which change in 1940 Act law becomes effective on or after
the date of this prospectus supplement, there is more than an insubstantial risk
that the trust is or will be considered an investment company that is required
to be registered under the 1940 Act.
If, at any time, an investment company event shall occur and be continuing,
the trust shall be dissolved. As a result, debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accumulated and unpaid distributions on, the trust securities
would be distributed to the holders of the trust securities in liquidation of
the holders' interests in the trust on a proportionate basis within 90 days
following the occurrence of the investment company event. However, the
dissolution and distribution shall be conditioned on us being unable to avoid
the investment company event within a 90-day period either by taking some
ministerial action or by pursuing some other similar reasonable measure that
will have no adverse effect on the trust, us or the holders of the trust
securities and will involve no material cost. If an investment company event
occurs, debentures distributed to the collateral agent in liquidation of
holders' interests in the trust would be pledged, in place of the capital
securities, to secure Income PRIDES holders' obligations to purchase Class A
common stock under the purchase contracts.
We will have the right at any time to dissolve the trust and, after
satisfaction of liabilities of creditors of the trust as provided by applicable
law, to cause the debentures to be distributed to the holders of the trust
securities. As of the date of any distribution of debentures upon dissolution of
the trust,
- the capital securities will no longer be deemed to be outstanding,
- the depositary or its nominee, as the record holder of the capital
securities, will receive a registered global certificate or certificates
representing the debentures to be delivered upon the distribution and
- any certificates representing capital securities not held by the
depositary or its nominee will be deemed to represent debentures having
an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of,
and accrued and
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unpaid interest equal to accumulated and unpaid distributions on, those
capital securities until the certificates are presented to us or our
agent for transfer or reissuance.
Debentures distributed to the collateral agent in liquidation of the
interest of the holders of the capital securities in the trust would be
substituted for the capital securities and pledged to secure Income PRIDES
holders' obligations to purchase our Class A common stock under the purchase
contracts.
We cannot predict the market prices for either the capital securities or
the debentures that may be distributed in exchange for the capital securities if
a dissolution of the trust were to occur. Accordingly, the capital securities or
the debentures that an investor may receive if a dissolution of the trust were
to occur may trade at a discount to the price that the investor paid to purchase
the capital securities forming a part of the Income PRIDES offered here.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In case of a voluntary or involuntary dissolution of the trust, unless a
tax event redemption has occurred, the then holders of the capital securities
will be entitled to receive out of the assets of the trust, after satisfaction
of liabilities to creditors, debentures in an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an interest rate identical
to the distribution rate of, and accrued and unpaid interest equal to
accumulated and unpaid distributions on, the capital securities on a
proportionate basis in exchange for those capital securities.
The holders of the common securities will be entitled to receive
distributions upon any such dissolution proportionately with the holders of the
capital securities. However, if a declaration event of default has occurred and
is continuing, the capital securities shall have a preference over the common
securities with regard to those distributions.
Under the declaration, the trust shall dissolve upon the first to occur of
(1) on , 2006, the expiration of the term of the trust,
(2) upon our bankruptcy or the bankruptcy of the holder of the common
securities,
(3) upon our filing of a certificate of dissolution or its equivalent
or the revocation of our charter and the expiration of 90 days after the
date of revocation without its reinstatement,
(4) after the receipt by the property trustee of written direction
from us to dissolve the trust or the filing of a certificate of dissolution
or its equivalent with respect to the trust,
(5) upon the distribution of debentures,
(6) upon the occurrence and continuation of a tax event redemption,
(7) upon the entry of a decree of a judicial dissolution of the holder
of the common securities, us or the trust or
(8) the redemption of all of the trust securities of the trust.
DECLARATION EVENTS OF DEFAULT
An event of default under the indenture constitutes an event of default
under the declaration with respect to the trust securities. However, under the
declaration, the holder of the common securities will be deemed to have waived
any declaration event of default with respect to the common securities until all
declaration events of default with respect to the capital securities have been
cured, waived or otherwise eliminated. Until any declaration events of default
with respect to the capital securities have been so cured, waived or otherwise
eliminated, the property trustee will be deemed to be acting solely on behalf of
the holders of the capital securities. Only the holders of the capital
securities will have the right to direct the property trustee with respect to
particular matters under the declaration and, therefore, the indenture. If a
declaration event of default with respect to the capital securities is waived by
holders of capital
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securities, the waiver will also constitute the waiver of the declaration event
of default with respect to the common securities without any further act, vote
or consent of the holders of the common securities.
If the property trustee fails to enforce its rights under the debentures in
respect of an indenture event of default after a holder of record of capital
securities has made a written request, that holder of record of capital
securities may, to the fullest extent permitted by applicable law, institute a
legal proceeding against us to enforce the property trustee's rights under the
debentures without first proceeding against the property trustee or any other
person or entity. Notwithstanding the above, if a declaration event of default
has occurred and is continuing and that event is attributable to our failure to
pay interest or principal on the debentures on the date that interest or
principal is otherwise payable, then you, as a holder of capital securities, may
directly institute a proceeding after the respective due date specified in the
debentures for enforcement of payment (a direct action) to you directly of the
principal of or interest on the debentures having a principal amount equal to
the aggregate liquidation amount of your capital securities. In connection with
the direct action, we shall have the right under the indenture to set off any
payment made to you. The holders of capital securities will not be able to
exercise directly any other remedy available to the holders of the debentures.
Upon the occurrence of a declaration event of default, the property
trustee, as the sole holder of the debentures, will have the right under the
indenture to declare the principal of and interest on the debentures to be
immediately due and payable. We and the trust are each required to file annually
with the property trustee an officer's certificate as to our compliance with all
conditions and covenants under the declaration.
VOTING RIGHTS
Except as described here, under the Trust Act and the Trust Indenture Act
and under "Description of the Guarantee--Modification of the Guarantee;
Assignment," and as otherwise required by law and the declaration, the holders
of the capital securities will have no voting rights.
Subject to the requirement of the property trustee obtaining a tax opinion
in specific circumstances provided below, the holders of a majority in aggregate
stated liquidation amount of the capital securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the property trustee, or direct the exercise of any trust or power conferred
upon the property trustee under the declaration, including the right to direct
the property trustee, as holder of the debentures, to
(1) exercise the remedies available under the indenture with respect
to the debentures,
(2) waive any past indenture event of default that is waivable under
the indenture,
(3) exercise any right to rescind or annul a declaration that the
principal of all the debentures shall be due and payable or
(4) consent to any amendment, modification or termination of the
indenture or the debentures where that consent shall be required. However,
where a consent or action under the indenture would require the consent or
act of holders of more than a majority in principal amount of the affected
debentures (a super-majority), only the holders of at least the
super-majority in aggregate stated liquidation amount of the capital
securities may direct the property trustee to give the consent or take the
action.
The property trustee shall notify all holders of the capital securities of
any notice of default received from the debt trustee with respect to the
debentures. The notice shall state that the indenture event of default also
constitutes a declaration event of default. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy, the property
trustee shall not take any of the actions described in clauses (1), (2) or (3)
above unless the property trustee has obtained an opinion of tax counsel
experienced in those matters that, as a result of the action, the trust will not
fail to be classified as a grantor trust for United States federal income tax
purposes.
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If the consent of the property trustee, as the holder of the debentures, is
required under the indenture with respect to any amendment, modification or
termination of the indenture or the debentures, the property trustee shall
request the direction of the holders of the capital securities and the common
securities with respect to that amendment, modification or termination. The
indenture trustee shall vote with respect to that amendment, modification or
termination as directed by a majority in stated liquidation amount of the
capital securities and the common securities voting together as a single class.
However, where a consent under the indenture would require the consent of a
super-majority, the property trustee may only give that consent at the direction
of the holders of at least the proportion in stated liquidation amount of the
capital securities and the common securities which the relevant super-majority
represents of the aggregate principal amount of the debentures outstanding. The
property trustee shall not take any action in accordance with the directions of
the holders of the capital securities and the common securities unless the
property trustee has obtained an opinion of tax counsel experienced in those
matters that, as a result of the action, the trust will not fail to be
classified as a grantor trust for United States federal income tax purposes.
A waiver of an indenture event of default will constitute a waiver of the
corresponding declaration event of default.
Any required approval or direction of holders of capital securities may be
given at a separate meeting of holders of capital securities convened for that
purpose, at a meeting of all of the holders of trust securities or according to
written consent. The administrative trustees will cause a notice of any meeting
at which holders of capital securities are entitled to vote, or of any matter
upon which action by written consent of those holders is to be taken, to be
mailed to each holder of record of capital securities. Each notice will include
a statement specifying the following information:
- the date of the meeting or the date by which the action is to be taken;
- a description of any resolution proposed for adoption at the meeting on
which the holders are entitled to vote or of the matter upon which
written consent is sought; and
- instructions for the delivery of proxies or consents.
No vote or consent of the holders of capital securities will be required
for the trust to cancel capital securities or distribute debentures in
accordance with the declaration.
Notwithstanding that holders of capital securities are entitled to vote or
consent under any of the circumstances described above, any capital securities
that are owned at that time by us or any entity directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
us, shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if those capital securities were not outstanding.
The procedures by which holders of capital securities may exercise their
voting rights are described below.
Holders of the capital securities will have no rights to appoint or remove
the trustees, who may be appointed, removed or replaced solely by us as the
indirect or direct holder of all of the common securities.
MODIFICATION OF THE DECLARATION
The declaration may be modified and amended if approved by the
administrative trustees and, in some circumstances, the property trustee or the
Delaware trustee or us. However, if any proposed amendment provides for, or the
administrative trustees otherwise propose to effect,
(1) any action that would adversely affect the powers, preferences or
special rights of the trust securities, whether by way of amendment to the
declaration or otherwise or
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(2) the dissolution of the trust other than according to the terms of
the declaration,
then the holders of the trust securities voting together as a single class will
be entitled to vote on that amendment or proposal, and that amendment or
proposal shall not be effective except with the approval of at least a majority
in such stated liquidation amount of the affected trust securities. If any
amendment or proposal referred to in clause (1) above would adversely affect
only the capital securities or the common securities, then only the affected
class will be entitled to vote on that amendment or proposal and that amendment
or proposal shall not be effective except with the approval of a majority in
stated liquidation amount of that class of securities. In addition, the
declaration may be amended without the consent of the holders of the trust
securities to, among other things, cause the trust to continue to be classified
as a grantor trust for United States federal income tax purposes.
Notwithstanding the above, no amendment or modification may be made to the
declaration if that amendment or modification would
(1) cause the trust to be classified as other than a grantor trust for
United States federal income tax purposes,
(2) reduce or otherwise adversely affect the powers of the property
trustee or
(3) cause the trust to be deemed an investment company which is
required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below or as described in "Liquidation Distribution Upon Dissolution."
The trust may, with the consent of the administrative trustees and without
the consent of the holders of the trust securities, consolidate, amalgamate,
merge with or into, or be replaced by a trust organized as under the laws of any
state except that
(1) if the trust is not the surviving entity, the successor entity
either (x) expressly assumes all of the obligations of the trust under the
trust securities or (y) substitutes for the trust securities other
securities having substantially the same terms as the trust securities (the
successor securities). The successor securities must rank the same as the
trust securities with respect to distributions and payments upon
liquidation, redemption and otherwise,
(2) we expressly acknowledge a trustee of the successor entity
possessing the same powers and duties as the property trustee as the holder
of the debentures,
(3) if the capital securities are listed, any successor securities
will be listed upon notification of issuance, on any national securities
exchange or with another organization on which the capital securities are
then listed or quoted,
(4) the merger, consolidation, amalgamation or replacement does not
cause the capital securities, including any successor securities, to be
downgraded by any nationally recognized statistical rating organization,
(5) the merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the holders of
the trust securities, including any successor securities, in any material
respect other than with respect to any dilution of the holders' interest in
the new entity,
(6) the successor entity has a purpose substantially identical to that
of the trust,
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(7) prior to the merger, consolidation, amalgamation or replacement,
we have received an opinion of a nationally recognized independent counsel
to the trust experienced in those matters that,
- the merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the holders
of the trust securities, including any successor securities, in any
material respect other than with respect to any dilution of the
holders' interest in the new entity,
- following the merger, consolidation, amalgamation or replacement,
neither the trust nor the successor entity will be required to
register as an investment company under the 1940 Act and
- following the merger, consolidation, amalgamation or replacement, the
trust or the successor entity will continue to be classified as a
grantor trust for United States federal income tax purposes, and
(8) we guarantee the obligations of the successor entity under the
successor securities at least to the extent provided by the guarantee and
the common securities guarantee.
Notwithstanding the above, the trust shall not, except with the consent of
holders of 100% in stated liquidation amount of the trust securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if that consolidation, amalgamation, merger or replacement would
cause the trust or the successor entity to be classified as other than a grantor
trust for United States federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
If the capital securities are issued as one or more fully-registered global
capital securities certificates representing the total aggregate number of
capital securities, the depositary will act as securities depositary for any
capital securities that are held separately from the Income PRIDES. In that
case, the capital securities will be issued only as fully-registered securities
registered in the name of Cede & Co., the depositary's nominee. However, under
some circumstances, the administrative trustees with our consent may decide not
to use the system of book-entry transfers through the DTC with respect to the
capital securities. In that case, certificates of the capital securities will be
printed and delivered to the holders.
The laws of some jurisdictions require that some purchasers of securities
take physical delivery of securities in definitive form. These laws may impair
the ability to transfer beneficial interests in the global capital securities as
represented by a global certificate.
Purchases of capital securities within the depositary's system must be made
by or through direct participants, which will receive a credit for the capital
securities on the depositary's records. The beneficial ownership interest of
each actual purchaser of each capital security is in turn to be recorded on the
direct and indirect participants' records. Beneficial owners will not receive
written confirmation from the depositary of their purchases, but beneficial
owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owners purchased capital
securities. Transfers of ownership interests in the capital securities are to be
accomplished by entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates representing
their ownership interests in the capital securities, except if use of the
book-entry system for the capital securities is discontinued.
To facilitate subsequent transfers, all the capital securities deposited by
participants with the depositary will be registered in the name of the
depositary's nominee, Cede & Co. The deposit of capital securities with the
depositary and their registration in the name of Cede & Co. cause no change in
beneficial ownership. The depositary has no knowledge of the actual beneficial
owners of the capital securities. The depositary's records reflect only the
identity of the direct participants to whose accounts those capital securities
are credited, which may or may not be the beneficial owners. The participants
will remain responsible for keeping account of their holdings on behalf of their
customers.
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So long as the depositary or its nominee is the registered owner or holder
of a global certificate, the depositary or the nominee will be considered the
sole owner or holder of the capital securities represented for all purposes
under the declaration and the capital securities. No beneficial owner of an
interest in a global certificate will be able to transfer that interest except
in accordance with the depositary applicable procedures, in addition to those
provided for under the declaration.
The depositary has advised us that it will take any action permitted to be
taken by a holder of capital securities, including the presentation of capital
securities for exchange, only at the direction of one or more participants to
whose account the depositary's interests in the global certificates are credited
and only in respect of the portion of the stated liquidation amount of capital
securities as to which such participant or participants has or have given such
directions. However, if there is a declaration event of default under the
capital securities, the depositary will exchange the global certificates for
certificated securities, which it will distribute to its participants.
Conveyance of notices and other communications by the depositary to direct
participants and indirect participants and by direct participants and indirect
participants to beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in force from
time to time.
Although voting with respect to the capital securities is limited, in those
cases where a vote is required, neither the depositary nor Cede & Co. will
itself consent or vote with respect to capital securities. Under its usual
procedures, the depositary would mail an omnibus proxy to the trust as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
capital securities are credited on the record date. The direct participants are
identified in a listing attached to the omnibus proxy. We and the trust believe
that the arrangements among the depositary, direct and indirect participants,
and beneficial owners will enable the beneficial owners to exercise rights
equivalent in substance to the rights that can be directly exercised by a record
holder of a beneficial interest in the trust.
Distribution payments on the capital securities issued in the form of one
or more global certificates will be made to the depositary in immediately
available funds. The depositary's practice is to credit direct participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on the depositary's records unless the depositary has reason to
believe that it will not receive payments on that payment date. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in street name. Those payments will be
the responsibility of the participant and not of the depositary, the trust or
us, subject to any statutory or regulatory requirements to the contrary that may
be in force from time to time. Payment of distributions to the depositary is the
responsibility of the trust, disbursement of such payments to direct
participants is the responsibility of the depositary, and disbursement of those
payments to the beneficial owners is the responsibility of direct and indirect
participants.
Except as provided here, a beneficial owner in a global capital security
certificate will not be entitled to receive physical delivery of capital
securities. Accordingly, each beneficial owner must rely on the procedures of
the depositary to exercise any rights under the capital securities.
Although the depositary has agreed to the above procedure to facilitate
transfer of interests in the global certificates among participants, the
depositary is under no obligation to perform or continue to perform these
procedures and these procedures may be discontinued at any time. Neither us, nor
the trust or any trustee will have any responsibility for the performance by the
depositary or its participants or indirect participants under the rules and
procedures governing the depositary. The depositary may discontinue providing
its services as securities depositary with respect to the capital securities at
any time by giving reasonable notice to the trust. Under these circumstances, if
a successor securities depositary is not obtained, capital securities
certificates are required to be printed and delivered to holders. Additionally,
the administrative trustees, with our consent, may decide to discontinue use of
the system of book-entry transfers through the depositary or any successor
depositary, with respect to the capital securities. In that
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case, certificates for the capital securities will be printed and delivered to
holders. In each of the above circumstances, we will appoint a paying agent with
respect to the capital securities.
The information in this section concerning the depositary and the
depositary's book-entry system has been obtained from sources that we and the
trust believe to be reliable, but neither we nor the trust take responsibility
for its accuracy.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
Payments in respect of the capital securities represented by the global
certificates shall be made to the depositary. The depositary shall credit the
relevant accounts at the depositary on the applicable distribution dates. In the
case of certificated securities, those payments shall be made by check mailed to
the address of the holder entitled to it as that address appears on the
register. The paying agent shall be permitted to resign as paying agent upon 30
days prior written notice to the trustees. If The Bank of New York shall no
longer be the paying agent, the administrative trustees shall appoint a
successor to act as paying agent, which shall be a bank or trust company.
The Bank of New York will act as registrar, transfer agent and paying agent
for the capital securities.
Registration of transfers of capital securities will be made without charge
by or on behalf of the trust. However, payment shall be made and any indemnity
as the trust or we may require shall be given in respect of any tax or other
government charge which may be imposed in relation to it.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, prior to the occurrence of a default with respect to
the trust securities and after the curing of any defaults that may have
occurred, undertakes to perform only those duties that are specified in the
declaration. The property trustee, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to those provisions, the property trustee is under no
obligation to exercise any of the powers vested in it by the declaration at the
request of any holder of capital securities, unless offered reasonable indemnity
by that holder against the costs, expenses and liabilities which it might incur.
The holders of capital securities will not be required to offer an indemnity in
the case that those holders, by exercising their voting rights, direct the
property trustee to take any action it is empowered to take under the
declaration following a declaration event of default. The property trustee also
serves as trustee under the guarantee.
The property trustee maintains commercial banking relationships with us.
GOVERNING LAW
The declaration and the capital securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The administrative trustees are authorized and directed to operate the
trust in a way that the trust will not be required to register as an "investment
company" under the 1940 Act or be characterized as other than a grantor trust
for United States federal income tax purposes. We are authorized and directed to
conduct our affairs so that the debentures will be treated as our indebtedness
for United States federal income tax purposes. In this connection, we and the
administrative trustees are authorized to take any action not inconsistent with
applicable law, the declaration, the certificate of trust of the trust or our
certificate of incorporation, that we and the administrative trustees determine
in our discretion to be necessary or desirable to achieve that end, as long as
that action does not adversely affect the interests of the holders of the
capital securities or vary its terms.
Holders of the capital securities have no preemptive or similar rights.
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DESCRIPTION OF THE GUARANTEE
Provided below is a summary of information concerning the guarantee which
will be executed and delivered by us for the benefit of the holders from time to
time of capital securities. The guarantee will be qualified as an indenture
under the Trust Indenture Act. The Bank of New York will act as the guarantee
trustee for the purposes of compliance with the provisions of the Trust
Indenture Act. The terms of the guarantee will be those provided in the
guarantee and those made part of the guarantee by the Trust Indenture Act. The
following summary is not necessarily complete, and reference is made to the copy
of the form of guarantee, including the definitions, which is filed as an
exhibit to the registration statement of which this prospectus supplement and
the accompanying prospectus form a part, and to the Trust Indenture Act.
Whenever particular defined terms of the guarantee are referred to in this
prospectus supplement, these defined terms are incorporated by reference in this
prospectus supplement. The following description of the terms of the guarantee
supplements and, to the extent inconsistent with, replaces the description of
the general terms of the capital securities guarantees contained in the
accompanying prospectus, which we request that you read. The guarantee will be
held by the guarantee trustee for the benefit of the holders of the capital
securities.
OVERVIEW
Under the guarantee, we will irrevocably and unconditionally agree, to the
extent provided there, to pay in full on a senior basis, to the holders of the
capital securities issued by the trust, the guarantee payments. We shall pay the
guarantee payments as and when due, regardless of any defense, right of set-off
or counterclaim which the trust may have or assert. We shall make these payments
except
to the extent paid by the trust. The following payments or distributions with
respect to capital securities issued by the trust to the extent not paid by or
on behalf of the trust, will be subject to the guarantee, without duplication:
(a) any accrued and unpaid distributions which are required to be paid
on the capital securities, to the extent the trust shall have funds
available;
(b) the redemption price, including all accumulated and unpaid
distributions to the date of redemption, of capital securities in respect
of which the related debentures have been redeemed by us upon the
occurrence of a tax event redemption, to the extent the trust shall have
funds available; and
(c) upon a voluntary or involuntary dissolution of the trust, other
than in connection with the distribution of debentures to the holders of
capital securities, the lesser of
- the aggregate of the stated liquidation amount and all accrued and
unpaid distributions on the capital securities to the date of payment,
to the extent the trust has funds available, and
- the amount of assets of the trust remaining available for distribution
to holders of the capital securities in liquidation of the trust.
Our obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by us to the holders of capital securities or by
causing the trust to pay those amounts to the holders.
The guarantee will be a full and unconditional guarantee on a senior basis
with respect to the capital securities issued by the trust, but will not apply
to any payment of distributions except to the extent the trust shall have funds
available. If we do not make interest payments on the debentures purchased by
the trust, the trust will not pay distributions on the capital securities and
will not have funds available.
The guarantee, when taken together with our obligations under the
debentures, the indenture, and the declaration, will have the effect of
providing a full and unconditional guarantee on a senior unsecured basis by us
of payments due on the capital securities.
We have also agreed separately to irrevocably and unconditionally guarantee
the obligations of the trust with respect to the common securities to the same
extent as the guarantee. However, in the case of
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an indenture event of default, holders of capital securities shall have priority
over holders of common securities with respect to distributions and payments on
liquidation, redemption or otherwise.
COX'S GUARANTEE COVENANTS
In the guarantee, we will covenant that, so long as any capital securities
issued by the trust remain outstanding, if there shall have occurred any event
that would constitute an event of default under the guarantee or the
declaration, then
(a) we shall not declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of our capital stock, other than
- purchases or acquisitions of our capital stock in connection with the
satisfaction of our obligations under any employee or agent benefit
plans or under any contract or security outstanding on the date of
that event requiring us to purchase our capital stock,
- as a result of a reclassification of our capital stock or the exchange
or conversion of one class or series of our capital stock for another
class or series of our capital stock,
- the purchase of fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of our capital stock
or the security being converted or exchanged,
- dividends or distributions in our capital stock (or rights to acquire
capital stock) or repurchases or redemptions of capital stock solely
from the issuance or exchange of capital stock or
- redemptions or repurchases of any rights outstanding under a
shareholder rights plan;
(b) We shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities issued by us
that rank junior to the debentures; and
(c) We shall not make any guarantee payments with respect to the above
other than according to the guarantee or the common securities guarantee.
MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of capital securities, in which case no vote will be required, the
guarantee may be amended only with the prior approval of the holders of not less
than a majority in stated liquidation amount of the outstanding capital
securities issued by the trust. All guarantees and agreements contained in the
guarantee shall bind the successors, assigns, receivers, trustees and our
representatives and shall inure to the benefit of the holders of the capital
securities then outstanding.
TERMINATION
The guarantee will terminate
(a) upon distribution of the debentures held by the trust to the
holders of the capital securities,
(b) upon full payment of the redemption price of all the capital
securities in the case that we repurchase all of the debentures upon the
occurrence of a tax event redemption or
(c) upon full payment of the amounts payable in accordance with the
declaration upon liquidation of the trust.
The guarantee will continue to be effective, or will be reinstated, if at
any time any holder of capital securities must return payment of any sums paid
under the capital securities or the guarantee.
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EVENTS OF DEFAULT
An event of default under the guarantee will occur upon our failure to
perform any of our payment or other obligations under the guarantee.
The holders of a majority in stated liquidation amount of the capital
securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guarantee trustee in respect of the
guarantee or to direct the exercise of any trust or power conferred upon the
guarantee trustee under the guarantee. If the guarantee trustee fails to enforce
the guarantee, any holder of capital securities may institute a legal proceeding
directly against us to enforce the holder's rights under the guarantee, without
first instituting a legal proceeding against the trust, the guarantee trustee or
any other person or entity. We waive any right or remedy to require that any
action be brought first against the trust or any other person or entity before
proceeding directly against us.
STATUS OF THE GUARANTEE
The guarantee will constitute our senior unsecured obligation and will rank
equally with all of our other senior unsecured obligations.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, prior to the occurrence of a default with respect to
the guarantee, undertakes to perform only those duties that are specified in the
guarantee. The guarantee trustee, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. According to these provisions, the guarantee trustee is under no
obligation to exercise any of the powers vested in it by the guarantee at the
request of any holder of capital securities, unless offered reasonable indemnity
against the costs, expenses and liabilities which it might incur. However, this
shall not relieve the guarantee trustee, upon the occurrence of an event of
default under the guarantee, from exercising the rights and powers vested in it
by the guarantee.
GOVERNING LAW
The guarantee will be governed by and construed in accordance with the
internal laws of the State of New York.
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DESCRIPTION OF THE DEBENTURES
Provided below is a description of the specific terms of the debentures in
which the trust will invest the proceeds from the issuance and sale of the trust
securities. The following description is not necessarily complete, and reference
is made to the indenture, dated as of June 27, 1995, between us and The Bank of
New York, as debt trustee, which is incorporated by reference as an exhibit to
the registration statement of which this prospectus supplement and the
accompanying prospectus form a part, and to the Trust Indenture Act. Certain
capitalized terms used here are defined in the indenture. The debentures
constitute debt securities as described in the accompanying prospectus. The
following description of the terms of the debentures supplements and, to the
extent inconsistent with, replaces the description of the general terms of the
debt securities contained in the accompanying prospectus, which we request that
you read. Reference in this prospectus supplement to the debentures refers to
the % senior debentures due 2004.
Under specific circumstances involving the dissolution of the trust,
debentures may be distributed to the holders of the trust securities in
liquidation of the trust.
OVERVIEW
The debentures will be senior and unsecured and will rank equally in right
of payment with all of our other senior unsecured indebtedness. The debentures
will be issued as a separate series of debt securities under the indenture,
limited to $ (or up to $ , if the underwriters' over-allotment
option is exercised in full) in aggregate principal amount.
The debentures will not be subject to a sinking fund provision. Unless a
tax event redemption has occurred prior to August 16, 2002 the entire principal
amount of the debentures will mature and become due and payable, together with
any accrued and unpaid interest thereon including compound interest and expenses
and taxes of the trust, if any, on August 16, 2004.
We will have the right at any time to dissolve the trust and cause the
debentures to be distributed to the holders of the trust securities. If
debentures are distributed to holders of trust securities in liquidation of the
holders' interests in the trust, those debentures will initially be issued as a
global security.
As described in this prospectus supplement, under specific limited
circumstances, debentures may be issued in certificated form in exchange for a
global security. In the case that debentures are issued in certificated form,
these debentures will be in denominations of $50 and integral multiples of $50
and may be transferred or exchanged at the offices described below. Payments on
debentures issued as a global security will be made to the depositary, a
successor depositary or, in the case that no depositary is used, to a paying
agent for the debentures. In the case that debentures are issued in certificated
form, principal and interest will be payable, the transfer of the debentures
will be registrable and debentures will be exchangeable for debentures of other
denominations of a like aggregate principal amount, at the corporate trust
office or agency of the property trustee in New York, New York. However, at our
option, payment of interest may be made by check mailed to the address of the
entitled holder or by wire transfer to an account appropriately designated by
the entitled holder. Notwithstanding the above, so long as the holder of any
debentures is the property trustee, the payment of principal and interest on the
debentures held by the property trustee will be made at the place and to the
account as may be designated by the property trustee.
The indenture does not contain provisions that afford holders of the
debentures protection in case we are involved in a highly leveraged transaction
or other similar transaction that may adversely affect those holders.
INTEREST
Each debenture shall initially bear interest at the rate of % per year
from the original date of issuance, payable quarterly in arrears on February 16,
May 16, August 16 and November 16 of each year, commencing November 16, 1999.
Each debenture shall bear interest to the person in whose name that
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debenture is registered, subject to certain exceptions, at the close of business
on the business day next preceding that interest payment date.
The applicable interest rate on the debentures and the distribution rate on
the related capital securities outstanding on and after August 16, 2002 will be
reset on the third business day immediately preceding August 16, 2002 to the
reset rate. The reset rate will be equal to the sum of the reset spread and the
rate on the two-year benchmark treasury in effect on the third business day
immediately preceding August 16, 2002. The reset rate will be determined by the
reset agent as the rate the capital securities should bear in order for a
capital security to have an approximate market value on the third business day
immediately preceding August 16, 2002 of 100.5% of $50. However, we may limit
the reset rate to be no higher than the rate on the two-year benchmark treasury
on the third business day immediately preceding August 16, 2002 plus 200 basis
points (2%). The market value of the capital securities may be less than 100.5%
if the reset spread is limited to a maximum of 2%.
On the reset announcement date, the two-year benchmark treasury will be
selected and the reset agent will establish the reset spread to be added to the
rate on the two-year benchmark treasury in effect on the third business day
immediately preceding August 16, 2002. On that date, we will announce the reset
spread and the two-year benchmark treasury. We will cause a notice of the reset
spread and the two-year benchmark treasury to be published on the business day
following the reset announcement date by publication in a daily newspaper in the
English language of general circulation in The City of New York, which is
expected to be The Wall Street Journal. If debentures shall not remain in
book-entry only form, we shall have the right to select record dates, which
shall be more than fifteen business days but less than 60 business days prior to
the interest payment date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year consisting of twelve 30-day months. The amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed will be computed on the basis of the actual number of days elapsed
in that 90-day period. In the case that any date on which interest is payable on
the debentures is not a business day, then payment of the interest payable on
that date will be made on the next succeeding day that is a business day.
However, no interest or other payment shall be paid in respect of the delay but
if that business day is in the next succeeding calendar year, then that payment
shall be made on the immediately preceding business day, in each case with the
same force and effect as if made on that date.
TAX EVENT REDEMPTION
If a tax event shall occur and be continuing, we may, at our option, redeem
debentures in whole but not in part at any time prior to August 16, 2002. The
redemption price shall equal, for each debenture, the redemption amount plus
accrued and unpaid interest, including compound interest and expenses and taxes
of the trust, if any, to the date of redemption. If, following the occurrence of
a tax event, we exercise our option to redeem the debentures, then the proceeds
of that redemption will be applied to redeem trust securities having a
liquidation amount equal to the principal amount of debentures to be paid, in
accordance with their terms, at the redemption price. The redemption price will
be payable in cash to the holders of the trust securities. If a tax event
redemption occurs prior to August 16, 2002, the redemption price payable in
liquidation of the Income PRIDES holders' interest in the trust will be
distributed to the collateral agent. The collateral agent will apply an amount
equal to the redemption amount of the redemption price to purchase the treasury
portfolio on behalf of the holders of Income PRIDES and remit any remaining
portion of the redemption price to the purchase contract agent for payment to
the holders of those Income PRIDES. The treasury portfolio will be substituted
for the capital securities and will be pledged with the collateral agent to
secure the Income PRIDES holders' obligation to purchase our Class A common
stock under the purchase contracts. However, if the tax event redemption occurs
after August 16, 2002, the treasury portfolio will not be purchased.
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Tax event means the receipt by the trust of an opinion of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of
(a) any amendment to, or change, including any announced prospective
change in, the laws or any regulations of the United States or any
political subdivision or taxing authority or which affects taxation,
(b) any amendment to or change in an interpretation or application of
these laws or regulations by any legislative body, court, governmental
agency or regulatory authority or
(c) any interpretation or pronouncement that provides for a position
with respect to these laws or regulations that differs from the generally
accepted position on the date the trust securities are issued,
which amendment or change is effective or which interpretation or pronouncement
is announced on or after the date of issuance of the trust securities under the
declaration, there is more than an insubstantial risk that
(a) interest payable by us on the debentures would not be deductible,
in whole or in part, by us for United States federal income tax purposes or
(b) the income of the trust would be subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
Treasury portfolio means, with respect to the applicable principal amount
of debentures
(a) if the tax event redemption date occurs prior to August 16, 2002,
a portfolio of zero-coupon U.S. treasury securities consisting of
- interest or principal strips of U.S. treasury securities which mature
on or prior to August 15, 2002, in an aggregate amount equal to the
applicable principal amount and
- with respect to each scheduled interest payment date on the debentures
that occurs after the tax event redemption date, interest or principal
strips of U.S. treasury securities which mature on or prior to that
date in an aggregate amount equal to the aggregate interest payment
that would be due on the applicable principal amount of the debentures
on that date, and
(b) if the tax event redemption date occurs after August 16, 2002, a
portfolio of zero-coupon U.S. treasury securities consisting of
- principal or interest strips of U.S. treasury securities which mature
on or prior to August 15, 2004 in an aggregate amount equal to the
applicable principal amount and
- with respect to each scheduled interest payment date on the debentures
that occurs after the tax event redemption date, interest or principal
strips of the U.S. treasury securities which mature on or prior to
that date in an aggregate amount equal to the aggregate interest
payment that would be due on the applicable principal amount of the
debentures on that date.
Applicable principal amount means either
- if the tax event redemption date occurs prior to August 16, 2002, the
aggregate principal amount of the debentures corresponding to the
aggregate stated liquidation amount of the capital securities which are
components of Income PRIDES on that tax event redemption date or
- if the tax event redemption occurs on or after August 16, 2002, the
aggregate principal amount of the debentures corresponding to the
aggregate stated liquidation amount of the capital securities outstanding
on that tax event redemption date.
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Redemption amount means for each debenture, the product of
- the principal amount of that debenture and
- a fraction whose numerator is the treasury portfolio purchase price and
whose denominator is the applicable principal amount.
Treasury portfolio purchase price means the lowest aggregate price quoted
by a primary U.S. government securities dealer in New York City to the quotation
agent on the third business day immediately preceding the tax event redemption
date for the purchase of the treasury portfolio for settlement on the tax event
redemption date.
Quotation agent means
- Merrill Lynch Government Securities, Inc. and its respective successors;
however, if they cease to be a primary treasury dealer, we shall
substitute another primary treasury dealer, and
- any other primary treasury dealer selected by us.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each registered holder of debentures to be
redeemed at its registered address. Unless we default in payment of the
redemption price, on and after the redemption date interest shall cease to
accrue on the redeemed debentures.
PUT OPTION
If a failed remarketing has occurred, holders of debentures, including the
property trustee and following the distribution of the debentures upon a
dissolution of the trust those debenture holders, will have the right to put
their debentures to us on September 1, 2002, upon at least three business days'
prior notice at a price per debenture equal to $50, plus any accrued and unpaid
interest. Upon our repurchase of those debentures, the proceeds from the
repurchase shall simultaneously be applied to redeem, in the case of trust
securities, any outstanding capital securities of those holders having an
aggregate stated liquidation amount equal to the aggregate principal amount of
the debentures so repurchased plus accumulated and unpaid distributions.
EXPENSES AND TAXES OF THE TRUST
In the indenture, we, as borrower, have agreed to pay all debts and other
obligations, other than with respect to the trust securities, and all costs and
expenses of the trust. These include the costs and expenses relating to the
organization of the trust, the fees and expenses of the trustees and the costs
and expenses relating to the operation of the trust and any and all related
taxes costs and expenses, other than United States withholding taxes, to which
the trust might become subject. We also have agreed in the indenture to execute
those additional agreements as may be necessary or desirable to give full effect
to the above.
INDENTURE EVENTS OF DEFAULT
If any indenture event of default shall occur and be continuing, the
property trustee, as the holder of the debentures, will have the right to
declare the principal of and the interest on the debentures, including any
compound interest and expenses and taxes of the trust, if any, and any other
amounts payable under the indenture, to be due and payable and to enforce its
other rights as a creditor with respect to the debentures.
The following are events of default under the indenture with respect to the
debentures:
- failure to pay interest on the debentures when due, continued for a
period of 30 days;
- failure to pay the principal of or premium, if any, on the debentures
when due and payable on August 16, 2004, upon redemption or otherwise;
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- failure to comply with our obligations under "Description of Debt
Securities--Certain Covenants--Mergers or Sales of Assets" in the
accompanying prospectus;
- failure to comply, within 60 days after notice provided in accordance
with the terms of the indenture, with any of our other covenants or
agreements contained in the indenture with respect to the debentures,
including our obligations under the covenants described under
"Description of Debt Securities--Certain Covenants--Limitation on Liens,"
"--Limitation on Indebtedness of Restricted Subsidiaries" or
"--Designation of Subsidiaries" in the accompanying prospectus, provided
that this provision does not apply to defaults in covenants for which the
indenture specifically provides otherwise;
- Indebtedness of ours or any restricted subsidiary is not paid within any
applicable grace period after final maturity or is accelerated by its
holders because of a default and the total amount of such Indebtedness
unpaid or accelerated exceeds 5% of the aggregate outstanding principal
amount of all Indebtedness of ours and the restricted subsidiaries; and
- certain events of bankruptcy, insolvency or reorganization of us or a
restricted subsidiary.
Except as described in the second to last sentence of this paragraph, if an
event of default occurs and is continuing with respect to the debentures, the
debt trustee or the holders of at least 25% in principal amount of the
outstanding debentures may declare the principal of and accumulated but unpaid
interest on all the debentures to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an event of
default relating to specific events of our bankruptcy, insolvency or
reorganization occurs and is continuing, the principal of and interest on all
the debentures will become and be immediately due and payable without any
declaration or other act on the part of the debt trustee or any holders of the
debentures. In addition, in the case of the debentures held by the trust, if an
event of default has occurred and is continuing, and that event is attributable
to our failure to pay interest or principal, then a holder of capital securities
may directly institute a proceeding against us for payment. Under some
circumstances, the holders of a majority in principal amount of the outstanding
debentures may rescind any acceleration and its consequences.
Subject to the provisions of the indenture relating to the duties of the
debt trustee, if an event of default occurs and is continuing, the debt trustee
will be under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders of the debentures,
unless those holders have offered to the debt trustee reasonable indemnity or
security against any loss, liability or expense. Except to enforce the right to
receive payment of principal or interest when due, no debenture holder may
pursue any remedy with respect to the indenture or the debentures unless:
- That holder has previously given the debt trustee notice that an event of
default is continuing;
- Holders of at least 25% in principal amount of the outstanding debentures
have requested the debt trustee to pursue the remedy;
- Those holders have offered the debt trustee reasonable security or
indemnity against any loss, liability or expense;
- The debt trustee has not complied with such request within 60 days of
receiving it with an offer of security or indemnity; and
- The holders of a majority in principal amount of the outstanding
debentures have not given the debt trustee a direction inconsistent with
such request within such 60-day period.
Subject to some restrictions, the holders of a majority in principal amount
of the outstanding debentures are given the right to 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 debt trustee. The debt
trustee, however, may refuse to follow any direction that conflicts with law or
the indenture or that the debt trustee determines is unduly prejudicial to the
rights of any other debenture holder, or that would involve the debt trustee in
personal liability.
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The indenture provides that if a default occurs and is continuing with
respect to the debentures and is known to the debt trustee, the debt trustee
must mail notice of the default within 90 days after it occurs to each holder of
the debentures. Except in the case of a default in the payment of principal of
or interest on any debenture, the debt trustee may withhold notice if and so
long as a committee of its trust officers determines that withholding notice is
in the interests of the holders of the debentures. In addition, we must deliver
to the debt trustee, within 120 days after the end of each fiscal year, an
officer's certificate indicating whether the signers thereof know of any default
that occurred during the previous year. We also are required to deliver to the
debt trustee, within 30 days after its occurrence, written notice of any events
which would constitute certain defaults, their status and what action we are
taking or propose to take.
Prior to the acceleration of the maturity of the debentures, the holders of
a majority in aggregate principal amount of the outstanding debentures may on
behalf of all the debentures waive any past default or event of default, except:
- A default in the payment of the principal of or interest on any of the
debentures; and
- A default that cannot be waived without the consent of each holder
affected.
A waiver will serve to end such default, to cure any event of default, and to
restore us, the debt trustee and holders of the affected debentures to their
former positions and rights. No such waiver will extend to any subsequent or
other default.
An indenture event of default also constitutes a declaration event of
default. The holders of capital securities in some circumstances have the right
to direct the property trustee to exercise its rights as the holder of the
debentures. Notwithstanding the above, if an event of default has occurred and
is continuing and that event is attributable to our failure to pay interest or
principal on the debentures on the date that interest or principal is otherwise
payable, we acknowledge that a holder of capital securities may directly
institute a proceeding for enforcement of payment to that holder directly of the
principal of and interest on the debentures having a principal amount equal to
the aggregate stated liquidation amount of the capital securities of that holder
after the respective due date specified in the debentures. In connection with
that action, we shall have the right under the indenture to set-off any payment
made to that holder by us. The holders of capital securities will not be able to
exercise directly any other remedy available to the holders of the debentures.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of capital securities in connection with the
involuntary or voluntary dissolution of the trust, the debentures will be issued
in the form of one or more global certificates (each, a global security)
registered in the name of the depositary or its nominee. Except under the
limited circumstances described below, debentures represented by the global
security will not be exchangeable for, and will not otherwise be issuable as,
debentures in certificated form. The global securities described above may not
be transferred except by the depositary to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the depositary
or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in certificated form. These laws
may impair the ability to transfer beneficial interests in a global security.
Except as provided below, owners of beneficial interests in a global
security will not be entitled to receive physical delivery of debentures in
certificated form and will not be considered its holders for any purpose under
the indenture. No global security representing debentures shall be exchangeable,
except for another global security of like denomination and tenor to be
registered in the name of the depositary or its nominee or to a successor
depositary or its nominee. Accordingly, each beneficial owner must rely on the
procedures of the depositary or if that person is not a participant, on the
procedures of the participant through which that person owns its interest to
exercise any rights of a holder under the indenture.
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THE DEPOSITARY
If debentures are distributed to holders of capital securities in
liquidation of those holders' interests in the trust, the depositary will act as
securities depositary for the debentures. As of the date of this prospectus, the
description of the depositary's book-entry system and the depositary's practices
as they relate to purchases, transfers, notices and payments with respect to the
capital securities apply in all material respects to any debt obligations
represented by one or more global securities held by the depositary. We may
appoint a successor to the depositary or any successor depositary if the
depositary or a successor depositary is unable or unwilling to continue as a
depositary for the global securities.
Neither us nor the trust, the property trustee, any paying agents, any of
our other agents or the debt trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a global security for the debentures or for
maintaining, supervising or reviewing any records relating to those beneficial
ownership interests.
A global security shall be exchangeable for debentures registered in the
names of persons other than the depositary or its nominee only if
(1) the depositary notifies us that it is unwilling or unable to
continue as a depositary for that global security and we do not appoint an
eligible successor depositary within 90 days,
(2) the depositary at any time ceases to be a clearing agency
registered under the Exchange Act at which time the depositary is required
to be so registered to act as a depositary and we do not appoint an
eligible successor depositary within 90 days or
(3) we, in our sole discretion, determine that the global security
shall be so exchangeable.
Any global security that is exchangeable according to the preceding
sentence shall be exchangeable for debentures registered in those names as the
depositary shall direct. It is expected that these instructions will be based
upon directions received by the depositary from its participants with respect to
ownership of beneficial interests in the global security.
GOVERNING LAW
The indenture and the debentures will be governed by, and construed in
accordance with, the internal laws of the State of New York.
MISCELLANEOUS
We will pay all fees and expenses related to
(1) the offering of the trust securities and the debentures,
(2) the organization, maintenance and dissolution of the trust,
(3) the retention of the trustees and
(4) the enforcement by the property trustee of the rights of the
holders of the capital securities.
EFFECT OF OBLIGATIONS UNDER THE
DEBENTURES AND THE GUARANTEE
As provided in the declaration, the sole purpose of the trust is to issue
the trust securities evidencing undivided beneficial interests in the assets of
the trust, and to invest the proceeds from the issuance and sale in the
debentures and engage in only other necessary or incidental activities.
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As long as payments of interest and other payments are made when due on the
debentures, those payments will be sufficient to cover distributions and
payments due on the trust securities because of the following factors:
- the aggregate principal amount of debentures will be equal to the sum of
the aggregate stated liquidation amount of the trust securities;
- the interest rate and the interest and other payment dates on the
debentures will match the distribution rate and distribution and other
payment dates for the trust securities;
- we shall pay, and the trust shall not be obligated to pay, directly or
indirectly, all costs, expenses, debts, and obligations of the trust,
other than with respect to the trust securities; and
- the declaration further provides that the trustees shall not take or
cause or permit the trust to, among other things, engage in any activity
that is not consistent with the purposes of the trust.
Payments of distributions, to the extent funds are available, and other
payments due on the capital securities, to the extent funds therefor are
available, are guaranteed by us as to the extent provided under "Description of
the Guarantee." If we do not make interest payments on the debentures purchased
by the trust, the trust will not have sufficient funds to pay distributions on
the capital securities. The guarantee does not apply to any payment of
distributions unless and until the trust has sufficient funds for the payment of
such distributions.
If we fail to make interest or other payments on the debentures when due,
taking account of any extension period, the declaration provides a mechanism
enabling the holders of the capital securities to direct the property trustee to
enforce its rights under the indenture. If the property trustee fails to enforce
its rights under the indenture in respect of an indenture event of default, a
holder of record of capital securities may, to the fullest extent permitted by
applicable law, institute a legal proceeding against us to enforce the property
trustee's rights under the indenture without first instituting any legal
proceeding against the property trustee or any other person or entity.
Notwithstanding the above, if a declaration event of default has occurred
and is continuing and that event is attributable to our failure to pay interest
or principal on the debentures on the date that interest or principal is
otherwise payable, then a holder of capital securities may directly institute a
proceeding against us for payment. We, under the guarantee, acknowledge that the
guarantee trustee shall enforce the guarantee on behalf of the holders of the
capital securities. If we fail to make payments under the guarantee, the
guarantee provides a mechanism enabling the holders of the capital securities to
direct the guarantee trustee to enforce its rights under the guarantee.
Notwithstanding the above, if we fail to make a payment under the guarantee, any
holder of capital securities may institute a legal proceeding directly against
us to enforce its rights under the guarantee without first instituting a legal
proceeding against the trust, the guarantee trustee, or any other person or
entity.
The guarantee, when taken together with our obligations under the
debentures and the indenture and its obligations under the declaration,
including its obligations to pay costs, expenses, debts and liabilities of the
trust, other than with respect to the trust securities, has the effect of
providing a full and unconditional guarantee of amounts due on the capital
securities.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In this section, we summarize certain of the material United States federal
income tax consequences of purchasing, holding and disposing of FELINE PRIDES,
capital securities and Class A common stock acquired under a purchase contract.
Except where we state otherwise, this summary deals only with FELINE PRIDES,
capital securities and Class A common stock held as capital assets (as defined
in the Internal Revenue Code of 1986, as amended) by a U.S. Holder (as defined
below) who purchases Income
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PRIDES, Growth PRIDES or capital securities for cash at their original offering
price upon original issuance.
We do not address all of the tax consequences that may be relevant to a
U.S. Holder. We also do not address any of the tax consequences to holders that
are Non-U.S. Holders (as defined below) or to holders that may be subject to
special tax treatment such as financial institutions, real estate investment
trusts, personal holding companies, tax-exempt organizations, regulated
investment companies, insurance companies, S corporations, brokers and dealers
in securities or currencies and certain U.S. expatriates. Further, we do not
address:
- the United States federal income tax consequences to shareholders in, or
partners or beneficiaries of, an entity that is a holder of FELINE
PRIDES, capital securities or Class A common stock;
- the United States federal estate, gift or alternative minimum tax
consequences of the purchase, ownership or disposition of FELINE PRIDES,
capital securities or Class A common stock;
- persons who hold FELINE PRIDES, capital securities or common stock in a
straddle or as part of a hedging, conversion, constructive sale or other
integrated transaction or whose functional currency is not the United
States dollar; or
- any state, local or foreign tax consequences of the purchase, ownership
or disposition of FELINE PRIDES, capital securities or Class A common
stock.
Accordingly, you should consult your own tax advisor regarding the tax
consequences of purchasing, owning and disposing of FELINE PRIDES, capital
securities or Class A common stock in light of your own circumstances.
A U.S. Holder is a beneficial owner of FELINE PRIDES, capital securities or
Class A common stock who or which is:
- a citizen or individual resident of the United States, as defined in
Section 7701(b) of the Internal Revenue Code;
- a corporation or partnership, including any entity treated as a
corporation or partnership for United States federal income tax purposes,
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia unless, in the case of a partnership,
Treasury regulations are enacted that provide otherwise;
- an estate if its income is subject to United States federal income
taxation regardless of its source; or
- a trust if (1) a United States court can exercise primary supervision
over its administration and (2) one or more United States persons have
the authority to control all of its substantial decisions.
Notwithstanding the preceding sentence, certain trusts in existence on August
20, 1996, and treated as a U.S. Holder prior to such date, may elect to continue
to be treated as U.S. Holder.
A Non-U.S. Holder is a FELINE PRIDES, capital securities or Class A common
stock holder other than a U.S. Holder. Prospective investors that are not United
States persons within the meaning of Section 7701(a)(30) of the Internal Revenue
Code are urged to consult their own tax advisors regarding the United States
federal income tax consequences of an investment in FELINE PRIDES or capital
securities, including potential application of United States withholding taxes.
This summary is based on the Internal Revenue Code, Treasury regulations
(proposed and final) issued under the Internal Revenue Code, and administrative
and judicial interpretations thereof, all as they currently exist as of the date
of this prospectus supplement. These income tax laws and regulations, however,
may change at any time, possibly on a retroactive basis. Any such changes may
affect this summary.
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No statutory, administrative or judicial authority directly addresses the
treatment of FELINE PRIDES or instruments similar to FELINE PRIDES for United
States federal income tax purposes. No rulings have been sought or are expected
to be sought from the IRS with respect to any of the United States federal
income tax consequences discussed below, and no assurance can be given that the
IRS will not take contrary positions. As a result, no assurance can be given
that the IRS will agree with the tax consequences described herein.
The trust will be provided with an opinion of Dow, Lohnes & Albertson,
PLLC, tax counsel to Cox and the trust, referred to as Tax Counsel, regarding
certain United States federal income tax matters discussed below. An opinion of
Tax Counsel, however, is not binding on the IRS, and no assurance can be given
that the IRS will not take contrary positions.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE FELINE PRIDES OR CAPITAL SECURITIES IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.
FELINE PRIDES
Allocation of Purchase Price. A U.S. Holder's acquisition of FELINE PRIDES
will be treated as an acquisition of a unit consisting of two components -- in
the case of an Income PRIDES, the capital security and the purchase contract
constituting such Income PRIDES and, in the case of a Growth PRIDES, the
treasury securities interest and the purchase contract comprising such Growth
PRIDES. The purchase price of each FELINE PRIDES will be allocated between the
two components in proportion to their respective fair market values at the time
of purchase. Such allocation will establish the U.S. Holder's initial tax basis
in the capital security or treasury securities interest and the purchase
contract. We will report the fair market value of each capital security and
treasury security interest so that the entire purchase price of a FELINE PRIDES
will be allocable to the capital security or treasury securities interest, as
the case may be, and no amount will be allocable to the purchase contract. This
position will be binding upon each U.S. Holder (but not on the IRS) unless such
U.S. Holder explicitly discloses a contrary position on a statement attached to
such U.S. Holder's timely filed United States federal income tax return for the
taxable year in which a FELINE PRIDES is acquired. Thus, absent such disclosure,
a U.S. Holder should allocate the purchase price for a FELINE PRIDES in
accordance with the foregoing. The remainder of this discussion assumes that
this allocation of purchase price will be respected for United States federal
income tax purposes. A different allocation could affect the timing and
character of income to a U.S. Holder.
Ownership of Capital Securities or Treasury Securities. A U.S. Holder will
be treated as owning the capital securities or treasury securities constituting
a part of the Income PRIDES or Growth PRIDES, respectively. We and, by acquiring
FELINE PRIDES, each U.S. Holder agree to treat such U.S. Holder as the owner,
for United States federal, state and local income and franchise tax purposes, of
the capital securities or treasury securities constituting a part of the FELINE
PRIDES beneficially owned by such U.S. Holder. The remainder of this summary
will assume that U.S. Holders of FELINE PRIDES will be treated as the owners of
the capital securities or Treasury Securities constituting a part of such FELINE
PRIDES for United States federal, state and local income and franchise tax
purposes. The United States federal income tax consequences of owning the
capital securities or treasury securities are discussed below (see "--Capital
Securities," "--Treasury Securities" and "--Tax Event Redemption of Capital
Securities.").
CAPITAL SECURITIES
Classification of the Trust. In connection with the issuance of the FELINE
PRIDES, Tax Counsel will render a legal opinion generally to the effect that,
under the current law and assuming full compliance
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with the terms of the declaration, the indenture and certain other documents,
and based on certain facts and assumptions described in the opinion, the trust
will be classified for United States federal income tax purposes as a grantor
trust and will not be subject to tax as an association (or publicly traded
partnership) taxable as a corporation. Accordingly, for United States federal
income tax purposes, each U.S. Holder of capital securities will be treated as
owning an undivided beneficial ownership interest in the debentures.
Accordingly, each such U.S. Holder will be required to include in gross income,
as ordinary income, for United States federal income tax purposes, its pro rata
share of the interest income or OID, if any, paid or accrued on the debentures.
See "--Interest Income and Original Issue Discount."
Classification of the Debentures. We, the trust and, by acquiring Income
PRIDES or capital securities, each U.S. Holder, agree to treat the debentures as
indebtedness for all United States tax purposes. In connection with the issuance
of the debentures, Tax Counsel will render a legal opinion generally to the
effect that under the current law and assuming full compliance with the terms of
the indenture and certain other documents, and based on certain facts and
assumptions described in the opinion, the debentures will be classified as
indebtedness for United States federal income tax purpose.
Interest Income and Original Issue Discount. The debentures should be
treated as "reset bonds" under applicable Treasury regulations, and interest on
the debentures should not constitute contingent interest for purposes of the OID
rules. Under the Treasury regulations applicable to reset bonds, the debentures
should be treated, solely for purposes of calculating the accrual of OID, as
maturing on the day immediately preceding the purchase contract settlement date
for an amount equal to 100.5% of the Stated Amount, referred to as the Reset
Amount, and as having been reissued on the purchase contract settlement date for
the Reset Amount. If the amount of the initial purchase price for the FELINE
PRIDES allocated to the capital securities is less than the Reset Amount, as is
anticipated, the Debentures should be treated as having been issued with OID
equal to the difference between the reset amount and the amount so allocated to
the capital securities, unless such difference is less than three-fourths of
one-percent of the Reset Amount, as would likely occur, in which case the
debentures would not be treated as having been issued with OID.
If the debentures were, however, treated as issued with OID, a U.S. Holder
would be required to include such OID in income on an economic accrual basis
over the period between the issue date and the day immediately preceding the
purchase contract settlement date regardless of such U.S. Holder's method of tax
accounting. Consequently, each U.S. Holder (including those using the cash basis
of accounting) would be required to include OID in its gross income even though
we would not actually make current cash payments with respect to such OID. Any
amount of OID included in a U.S. Holder's gross income would increase such U.S.
Holder's tax basis in its capital securities. In addition, a U.S. Holder will
include stated interest on the debentures in income as ordinary income when paid
to the trust or accrued, in accordance with such U.S. Holder's regular method of
accounting, whether or not such U.S. Holder is required to accrue OID.
U.S. Holders that are corporations will not be entitled to a dividends
received deduction with respect to any income recognized with respect to the
capital securities.
Distribution of Debentures to U.S. Holders of Capital Securities. A
distribution by the trust of the debentures as described under the caption
"Description of the Capital Securities--Liquidation Distribution Upon
Dissolution" would be non-taxable to U.S. Holders. In such event, a U.S. Holder
would have an aggregate tax basis in the debentures received in the liquidation
equal to the aggregate tax basis such U.S. Holder had in its capital securities
surrendered therefor, and the holding period of such debentures would include
the period during which such U.S. Holder had held the capital securities. Also,
a U.S. Holder would continue to include interest or OID, if any, in respect of
debentures received from the trust in the manner described under "--Interest
Income and Original Issue Discount."
Sales, Exchanges or Other Dispositions of Capital Securities. In general,
gain or loss will be recognized by a U.S. Holder on a sale, exchange, redemption
or other taxable disposition (collectively, a disposition) of a capital security
(including a redemption for cash or the remarketing thereof) in an amount equal
to the difference between the amount realized by the U.S. Holder on the
disposition of the
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capital securities and the U.S. Holder's adjusted tax basis in the capital
security. Selling expenses incurred by a U.S. Holder, including the remarketing
fee, will reduce the amount of gain or increase the amount of loss recognized by
such U.S. Holder upon the sale, exchange or other disposition of the capital
securities. Gain or loss realized by a U.S. Holder on a disposition of a capital
security may be long-term capital gain depending on the holding period of the
capital securities. Such amount realized, however, will be taxable as ordinary
interest income to the extent that it is characterized as a payment in respect
of accrued but unpaid interest on such U.S. Holder's allocable share of the
debentures that such U.S. Holder has not previously included in gross income.
Capital gains of individuals are eligible for reduced rates of taxation
depending upon the holding period of such capital assets. The deductibility of
capital losses is subject to limitations.
TREASURY SECURITIES
Original Issue Discount. A U.S. Holder of Growth PRIDES will be required
to treat the treasury securities interest comprising the Growth PRIDES as an
interest in a bond originally issued on the date such Growth PRIDES is purchased
and having OID equal to the excess of the stated amount of the Growth PRIDES
over the purchase price of the Growth PRIDES. A U.S. Holder will be required to
include such OID in income on an economic accrual basis over the period between
the issue date of the Growth PRIDES and the day immediately preceding the
purchase contract settlement date, regardless of such U.S. Holder's method of
tax accounting. Amounts of OID included in a U.S. Holder's gross income will
increase such U.S. Holder's tax basis in its treasury securities interest.
Sales, Exchanges or Other Dispositions of Treasury Securities. In the
event that a U.S. Holder obtains the release of treasury securities by
delivering capital securities to the collateral agent, gain or loss will be
recognized by the U.S. Holder on a subsequent sale, exchange or other taxable
disposition of the treasury securities in an amount equal to the difference
between the amount realized by the U.S. Holder on such disposition and the U.S.
Holder's adjusted tax basis in the treasury securities. Such gain or loss may be
long-term capital gain or loss depending on the holding period of the treasury
securities. Capital gains of individuals are eligible for reduced rates of
taxation depending upon the holding period of such capital assets. The
deductibility of capital losses is subject to limitations.
PURCHASE CONTRACTS
Income From Contract Adjustment Payments; Delivery of Cash. There is no
direct authority addressing the treatment, under current law, of the contract
adjustment payments, or the delivery of cash in respect of excess accrued
contract adjustment payments (if any) by a U.S. Holder of Income PRIDES or
Growth PRIDES upon the creation of Growth PRIDES or Income PRIDES, respectively,
and such treatment is, therefore, unclear. Contract adjustment payments may
constitute taxable income to a U.S. Holder of FELINE PRIDES when received or
accrued, in accordance with the U.S. Holder's method of tax accounting. To the
extent Cox is required to file information returns with respect to contract
adjustment payments, it intends to report such payments as taxable income to
each U.S. Holder.
U.S. Holders should consult their own tax advisors concerning the treatment
of contract adjustment payments and the delivery of cash upon creation of Growth
PRIDES, including the possibility that any contract adjustment payment may be
treated as a loan, purchase price adjustment, rebate or payment analogous to an
option premium, rather than being includible in income on a current basis, and
that the delivery of cash upon creation of Growth PRIDES or Income PRIDES may be
treated as an offset to contract adjustment payments or as a purchase price
adjustment. The treatment of contract adjustment payments and the delivery of
cash upon creation of Growth PRIDES or Income PRIDES could affect a U.S.
Holder's tax basis in a purchase contract or Class A common stock received under
a purchase contract or the amount realized by a U.S. Holder upon the sale or
disposition of a FELINE PRIDES or the termination of a purchase contract. See
"--Acquisition of Class A Common Stock under a Purchase Contract," "--Sale or
Disposition of FELINE PRIDES" and "--Termination of Purchase Contract."
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Acquisition of Class A Common Stock Under a Purchase Contract. A U.S.
Holder of FELINE PRIDES generally will not recognize gain or loss on the
purchase of Class A common stock under a purchase contract, except with respect
to any cash paid in lieu of a fractional share of Class A common stock. Subject
to the following discussion, a U.S. Holder's aggregate initial tax basis in the
Class A common stock received under a purchase contract generally should equal
the purchase price paid for such Class A common stock plus such U.S. Holder's
tax basis in the purchase contract, if any, less the portion of such purchase
price and tax basis allocable to the fractional share. Payments of contract
adjustment payments that have been received in cash by a U.S. Holder but not
included in income by such U.S. Holder should reduce such U.S. Holder's tax
basis in the purchase contract or the Class A common stock to be received
thereunder. Payments in cash that have been made by a U.S. Holder to create
Growth PRIDES or Income PRIDES but not offset against payments of contract
adjustment payments may increase such U.S. Holder's tax basis in the purchase
contract or the Class A common stock to be received thereunder (see "--Income
from Contract Adjustment Payments; Delivery of Cash" above). The holding period
for Class A common stock received under a purchase contract will commence on the
day after the acquisition of such Class A common stock.
Ownership of Class A Common Stock Acquired Under the Purchase
Contract. Any dividend on Class A common stock paid by us out of its current or
accumulated earnings and profits (as determined for United States federal income
tax purposes) will be includible in income by a U.S. Holder when received. Any
such dividend will be eligible for the dividends received deduction if received
by an otherwise qualifying corporate U.S. Holder that meets the holding period
and other requirements for the dividends received deduction.
Upon a disposition of common stock, a U.S. Holder generally will recognize
capital gain or loss equal to the difference between the amount realized and
such U.S. Holder's adjusted tax basis in the common stock. Such gain or loss may
be long-term capital gain or loss depending on the holding period of the common
stock. Capital gains of individuals are eligible for reduced rates of taxation
depending upon the holding period of such capital assets. The deductibility of
capital losses is subject to limitations.
Early Settlement of Purchase Contract. A U.S. Holder of FELINE PRIDES will
not recognize gain or loss on the receipt of such U.S. Holder's proportionate
share of capital securities or treasury securities upon early settlement of a
purchase contract and will have the same tax basis in such capital securities or
treasury securities as before such early settlement.
Termination of Purchase Contract. If a purchase contract terminates, a
U.S. Holder of FELINE PRIDES will recognize gain or loss equal to the difference
between the amount realized (if any) upon such termination and such U.S.
Holder's adjusted tax basis, if any, in the purchase contract at the time of
such termination. Payments of contract adjustment payments received by a U.S.
Holder but not included in income by such U.S. Holder should either reduce such
U.S. Holder's tax basis in the purchase contract or result in an amount realized
on the termination of the purchase contract. Any contract adjustment payments
included in a U.S. Holder's income but not paid should increase such U.S.
Holder's tax basis in the purchase contract. Payments in cash that have been
made by a U.S. Holder to create Growth PRIDES or Income PRIDES but not offset
against payments of contract adjustment payments may increase such U.S. Holder's
tax basis in the purchase contract or result in a deduction on the termination
of the purchase contract (see "--Income from Contract Adjustment Payments;
Delivery of Cash" above).
Any such gain or loss may be long-term capital gain or loss depending upon
the holding period of the purchase contract. Capital gains of individuals are
eligible for reduced rates of taxation depending upon the holding period of such
capital assets. The deductibility of capital losses is subject to limitations. A
U.S. Holder will not recognize gain or loss on the receipt of such U.S. Holder's
proportionate share of the capital securities, treasury securities or treasury
portfolio upon termination of the purchase contract and will have the same tax
basis in such capital securities, treasury securities or treasury portfolio as
before such distribution.
Adjustment to Settlement Rate. U.S. Holders of FELINE PRIDES might be
treated as receiving a constructive distribution from us if (i) the settlement
rate is adjusted and as a result of such adjustment
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the proportionate interest of U.S. Holders of FELINE PRIDES in our assets or
earnings and profits is increased and (ii) the adjustment is not made pursuant
to a bona fide, reasonable anti-dilution formula. An adjustment in the
settlement rate would not be considered made pursuant to such a formula if the
adjustment were made to compensate a U.S. Holder for certain taxable
distributions with respect to the common stock. Thus, under certain
circumstances, an increase in the settlement rate might give rise to a taxable
dividend to U.S. Holders of FELINE PRIDES even though such U.S. Holders would
not receive any cash related thereto.
SUBSTITUTION OF TREASURY SECURITIES TO CREATE OR RECREATE GROWTH PRIDES
A U.S. Holder of an Income PRIDES that delivers treasury securities to the
collateral agent in substitution for capital securities generally will not
recognize gain or loss upon the delivery of such treasury securities or the
release of the capital securities to such U.S. Holder. Such U.S. Holder will
continue to take into account items of income or deduction otherwise includible
or deductible, respectively, by such U.S. Holder with respect to such treasury
securities and capital securities. Such U.S. Holder's tax basis in the treasury
securities, the capital securities and the purchase contract will not be
affected by such delivery and release.
SUBSTITUTION OF CAPITAL SECURITIES TO CREATE OR RECREATE INCOME PRIDES
A U.S. Holder of a Growth PRIDES that delivers capital securities to the
collateral agent in substitution for treasury securities generally will not
recognize gain or loss upon the delivery of such capital securities or the
release of the treasury securities to the U.S. Holder. Such U.S. Holder will
continue to take into account items of income or deduction otherwise includible
or deductible, respectively, by such U.S. Holder with respect to such treasury
securities and capital securities. Such U.S. Holder's tax basis in the treasury
securities, the capital securities and the purchase contract will not be
affected by such delivery and release.
TAX EVENT REDEMPTION OF CAPITAL SECURITIES
A tax event redemption will be a taxable event for U.S. Holders of capital
securities. In general, gain or loss will be recognized by a U.S. Holder in an
amount equal to the difference between the redemption price (whether paid
directly to such U.S. Holder or applied by the collateral agent to the purchase
of the treasury portfolio on behalf of holders of Income PRIDES) and the U.S.
Holder's adjusted tax basis in the capital securities. Gain or loss realized by
a U.S. Holder upon a tax event redemption will be capital gain or loss and may
be long-term capital gain or loss depending upon the holding period of the
capital securities. Such amount realized, however, will be taxable as ordinary
interest income to the extent that it is characterized as a payment in respect
of accrued but unpaid interest not previously included in gross income. Capital
gains of individuals are eligible for reduced rates of taxation depending upon
the holding period of such capital assets. The deductibility of capital losses
is subject to limitations.
Ownership of Treasury Portfolio. Cox, the trust and, by acquiring Income
PRIDES, each U.S. Holder agree to treat such U.S. Holder as the owner, for
United States federal, state and local income and franchise tax purposes, of the
applicable ownership interest of the treasury portfolio constituting a part of
the Income PRIDES beneficially owned by such U.S. Holder in the event of a tax
redemption prior to the purchase contract settlement date. Each U.S. Holder will
include in income any amount earned on its pro rata portion of the treasury
portfolio for all United States federal, state and local income and franchise
tax purposes. Based on such agreement, the remainder of this summary assumes
that U.S. Holders of Income PRIDES will be treated as the owners of the
applicable ownership interest of the treasury portfolio constituting a part of
such Income PRIDES for United States federal, state and local income and
franchise tax purposes.
Interest Income and Original Issue Discount. The treasury portfolio will
consist of stripped U.S. treasury securities. Following a tax redemption prior
to the purchase contract settlement date, a U.S. Holder of Income PRIDES will be
required to treat its pro rata portion of each treasury security in
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the treasury portfolio as a bond that was originally issued on the date the
collateral agent acquired the relevant treasury securities and will include OID
in income over the life of the treasury securities in an amount equal to the
U.S. Holder's pro rata portion of the excess of the amounts payable on such
treasury securities over the value of the treasury securities at the time the
collateral agent acquires them on behalf of holders of Income PRIDES. The amount
of such excess will constitute only a portion of the total amounts payable in
respect of the treasury portfolio. Consequently, a substantial portion of each
scheduled interest payment to U.S. Holders will be treated as a tax-free return
of the U.S. Holder's investment in the treasury portfolio and will not be
considered current income for federal income tax purposes.
A U.S. Holder, whether on the cash or accrual method of tax accounting,
will be required to include OID (other than OID on short-term treasury
securities as defined below) in income for federal income tax purposes as it
accrues on a constant yield to maturity basis. See "--Interest Income and
Original Issue Discount" above. In the case of any treasury security with a
maturity of one year or less from the date it is purchased (a short-term U.S.
Treasury security), in general only accrual basis taxpayers will be required to
include OID in income as it is accrued. Unless such an accrual basis U.S. Holder
elects to accrue the OID on a short-term treasury security according to the
constant-yield-to-maturity method, such OID will be accrued on a straight-line
basis.
Tax Basis of the Treasury Portfolio. A U.S. Holder's initial tax basis in
such U.S. Holder's applicable ownership interest of the treasury portfolio will
equal such U.S. Holder's pro rata portion of the amount paid by the collateral
agent for the treasury portfolio. A U.S. Holder's tax basis in the treasury
portfolio will be increased by the amount of OID included in income with respect
thereto and decreased by the amount of cash received in respect of the treasury
portfolio.
SALE OR DISPOSITION OF FELINE PRIDES
Upon a sale or other disposition of FELINE PRIDES, a U.S. Holder will be
treated as having sold, exchanged or disposed of the purchase contract and the
capital securities, treasury portfolio or, in the case of Growth PRIDES, the
treasury securities, that constitute such FELINE PRIDES and generally will have
gain or loss equal to the difference between the portion of the proceeds to such
U.S. Holder allocable to the purchase contract and the capital securities,
treasury portfolio or treasury securities, as the case may be, and such U.S.
Holder's respective adjusted tax bases in the purchase contract and the capital
securities, treasury portfolio or treasury securities. Such gain or loss
generally will be capital gain or loss. Capital gain or loss may be long-term
capital gain or loss depending on the holding period of the FELINE PRIDES.
Notwithstanding the above, to the extent that such U.S. Holder is treated as
having received an amount with respect to accrued interest on the capital
securities, such amount will be treated as ordinary interest income to the
extent not previously included in income. Similarly, to the extent that such
U.S. Holder is treated as having received an amount with respect to accrued
contract adjustment payments, such amount may be treated as ordinary income to
the extent not previously included in income. Capital gains of individuals are
eligible for reduced rates of taxation depending upon the holding period of such
capital assets. The deductibility of capital losses is subject to limitations.
If the disposition of FELINE PRIDES occurs when the purchase contract has
negative value, the U.S. Holder should be considered to have received additional
consideration for the capital securities, treasury portfolio or treasury
securities in an amount equal to such negative value and to have paid such
amount to be released from the U.S. Holder's obligation under the purchase
contract. U.S.
Holders should consult their tax advisors regarding a disposition of the FELINE
PRIDES at a time when the purchase contract has negative value.
Payments to a U.S. Holder of contract adjustment payments that have not
previously been included in the income of such U.S. Holder should either reduce
such U.S. Holder's tax basis in the purchase contract or result in an increase
in the amount realized on the disposition of the purchase contract. Any contract
adjustment payments included in a U.S. Holder's income but not paid should
increase such U.S. Holder's tax basis in the purchase contract. Payments in cash
that have been made by a U.S. Holder to create Growth PRIDES or Income PRIDES
but not offset against payments of contract adjustment payments
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may increase such U.S. Holder's tax basis in the purchase contract or result in
a decrease in the amount realized on the disposition of the purchase contract
(see "--Income from Contract Adjustment Payments; Delivery of Cash" above).
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Payments under the FELINE PRIDES, capital securities or Class A common
stock acquired under a purchase contract, the proceeds received with respect to
a fractional share of Class A common stock upon the settlement of a purchase
contract, and the sale of FELINE PRIDES, capital securities or Class A common
stock acquired under a purchase contract, may be subject to information
reporting and United States federal backup withholding tax at the rate of 31% if
the U.S. Holder thereof fails to supply an accurate taxpayer identification
number or otherwise fails to comply with applicable United States information
reporting or certification requirements. Any amounts so withheld will be allowed
as a credit against such U.S. Holder's United States federal income tax
liability.
PLAN OF DISTRIBUTION
Subject to the terms and conditions contained in the underwriting agreement
among Cox, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley &
Co. Incorporated, Banc of America Securities LLC and J.P. Morgan Securities Inc.
(together, the underwriters), we have agreed to sell to each of the
underwriters, and each of the underwriters has severally agreed to purchase from
us, the number of Income PRIDES, Growth PRIDES and capital securities set forth
opposite its name below. In the underwriting agreement, the underwriters have
agreed, subject to the terms and conditions set forth therein, to purchase all
of the Income PRIDES, Growth PRIDES and capital securities offered hereby if any
of those Income PRIDES, Growth PRIDES or capital securities are purchased.
<TABLE>
<CAPTION>
NUMBER NUMBER OF NUMBER OF
OF INCOME GROWTH CAPITAL
UNDERWRITER PRIDES PRIDES SECURITIES
- ----------- --------- --------- ----------
<S> <C> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith...................
Incorporated
Morgan Stanley & Co. Incorporated.......................
Banc of America Securities LLC..........................
J.P. Morgan Securities Inc..............................
------- ------- -------
Total......................................
======= ======= =======
</TABLE>
The underwriters have advised us that they propose initially to offer the
Income PRIDES, Growth PRIDES and capital securities to the public at the
respective public offering prices set forth on the cover page of this prospectus
supplement, and to certain dealers at such prices less a concession not in
excess of $ per Income PRIDES, $ per Growth PRIDES and $ per capital
security. The underwriters may allow, and such dealers may reallow, a discount
not in excess of $ per Income PRIDES, $ per Growth PRIDES and $ per
capital security to certain other dealers. After the initial public offering,
the public offering prices, concessions and discounts may be changed.
The underwriters have options to purchase up to an additional
Income PRIDES, Growth PRIDES and capital securities at the
respective public offering prices set forth on the cover page of this prospectus
supplement less underwriting commissions; provided, however, that the
underwriters must purchase at least as many capital securities as Growth PRIDES.
The underwriters can exercise these options for a period of 30 days after the
date of this prospectus supplement. If the underwriters exercise these options,
each underwriter will have a firm commitment, subject to some conditions, to
purchase approximately the same percentage of any additional Income PRIDES,
Growth PRIDES and capital securities as the percentage of the Income PRIDES,
Growth PRIDES and capital securities initially offered that such underwriter has
agreed to purchase. The underwriters may exercise these options only to cover
over-allotments, if any, made on the sale of Income PRIDES, Growth PRIDES and
capital securities offered hereby.
S-72
<PAGE> 101
Each of the Income PRIDES, Growth PRIDES and capital securities are a new
issue of securities with no established trading market. We will apply to list
the Income PRIDES and the Growth PRIDES on the NYSE. However, we do not intend
to apply for listing of the capital securities on a national securities
exchange. We have been advised by the underwriters that they intend to make a
market in the securities, but they are not obligated to do so and may
discontinue market-making at any time without notice. We can provide no
assurance as to the liquidity of, or any trading market for, the securities.
Until the distribution of the securities is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters and
any selling group members to bid for and purchase the securities or shares of
our Class A common stock. As an exception to these rules, the underwriters are
permitted to engage in certain transactions that stabilize the price of the
securities or our Class A common stock. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
securities or our Class A common stock.
If the underwriters create a short position in the securities in connection
with the offering, i.e., if they sell more securities than are set forth on the
cover page of this prospectus supplement, the underwriters may reduce that short
position by purchasing securities in the open market. The underwriters may also
elect to reduce any short position by exercising all or part of the
over-allotment options described above.
The underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase securities in the open
market to reduce the underwriters' short position or to stabilize the price of
the securities, they may reclaim the amount of the selling concession from any
selling group members who sold those securities as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security and our Class A
common stock to be higher than it might be in the absence of such purchases. The
imposition of a penalty bid might also have an effect on the price of a security
if it were to discourage resales of the security.
Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the securities or our Class A common
stock. In addition, neither we nor any of the underwriters make any
representation that the underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or if
indemnification is not allowed, to contribute to payments the underwriters may
be required to make because of those liabilities.
This prospectus supplement, as amended or supplemented, may be used by the
remarketing agent for remarketing or upon early settlement or cash settlement of
the purchase contracts.
In the ordinary course of business, certain of the underwriters and their
affiliates have from time to time provided investment banking and financial
advisory services to us and have also acted as representatives of various other
underwriters in connection with public offerings of our Class A common stock and
debt securities.
We estimate that we will spend $0.8 million for fees and expenses
associated with the offering of the securities.
LEGAL OPINIONS
The validity of the purchase contracts, the Class A common stock issuable
upon their settlement and the debentures will be passed upon for us by Dow,
Lohnes & Albertson, PLLC, Washington, D.C. Several matters of Delaware law with
respect to the validity of the capital securities offered here will be passed
upon for us and for the trust by Richards, Layton & Finger, P.A., Wilmington,
Delaware. Certain matters will be passed upon for the underwriters by Brown &
Wood LLP.
S-73
<PAGE> 102
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Cox Logo
13,000,000 FELINE PRIDES(SM)
COX COMMUNICATIONS, INC.
% CAPITAL SECURITIES
COX TRUST II
-----------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN & CO.
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 103
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. COX AND THE COX TRUSTS MAY NOT SELL THESE SECURITIES UNTIL THE
SECURITIES AND EXCHANGE COMMISSION DECLARES THE REGISTRATION STATEMENT
EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 28, 1999
PROSPECTUS
$8,000,000,000
COX COMMUNICATIONS, INC.
CLASS A COMMON STOCK
PREFERRED STOCK
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
DEBT SECURITIES
COX TRUST I
COX TRUST II
TRUST PREFERRED SECURITIES
CAPITAL SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED
TO THE EXTENT PROVIDED IN THIS PROSPECTUS BY
COX COMMUNICATIONS, INC.
------------------------
This prospectus is part of a shelf registration statement which Cox and the
Cox Trusts have filed with the Securities and Exchange Commission. Under the
shelf registration statement, Cox may offer shares of Class A common stock, par
value $1.00 per share, shares of preferred stock, par value $1.00 per share,
stock purchase contracts to purchase shares of Class A common stock, stock
purchase units and unsecured debentures, notes, bonds or other evidences of
indebtedness, and the Cox Trusts may offer trust preferred securities or capital
securities, all of which securities combined will have an aggregate initial
public offering price of $8.0 billion, including the U.S. dollar equivalent if
the initial public offering is denominated in one or more foreign currencies,
foreign currency units or composite currencies.
Under the shelf registration process, Cox and the Cox Trusts may sell the
securities from time to time in one or more separate offerings, in amounts, at
prices and on terms to be determined at the time of sale. Cox's debt securities
may be issuable in global form, in registered form without coupons attached, or
in bearer form with or without coupons attached.
Cox's Class A common stock is listed on the New York Stock Exchange under
the symbol "COX."
This prospectus provides a general description of the securities Cox and
the Cox Trusts may offer. Each time Cox sells shares of a particular series of
preferred stock, a particular series of debt securities, stock purchase
contracts or stock purchase units, or a Cox Trust sells trust preferred
securities or capital securities, it will provide a prospectus supplement which
will contain the specific terms of the securities being offered at that time.
Unless otherwise specified in the prospectus supplement, the debt securities
will be senior debt securities of Cox.
The prospectus supplement may add, update or change information contained
in this prospectus. You should read both this prospectus and the prospectus
supplement in conjunction with the additional information described under the
headings "Where You Can Find More Information" and "Information Incorporated by
Reference."
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this prospectus is , 1999.
<PAGE> 104
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Cox Communications, Inc..................................... 2
The Cox Trusts.............................................. 3
Use of Proceeds............................................. 5
Ratio of Earnings to Fixed Charges.......................... 5
Description of Capital Stock................................ 6
Description of Debt Securities.............................. 9
Description of Junior Subordinated Debentures............... 20
Description of Trust Preferred Securities................... 28
Description of Preferred Securities Guarantees.............. 38
Relationship Among the Trust Preferred Securities, the
Corresponding Junior Subordinated Debentures and the
Preferred Securities Guarantees........................... 41
Description of Capital Securities........................... 42
Description of Capital Securities Guarantees................ 52
Relationship Among the Capital Securities, the Corresponding
Senior Debt Securities and the Capital Securities
Guarantees................................................ 55
Description of Stock Purchase Contracts and Stock Purchase
Units..................................................... 56
Plan of Distribution........................................ 57
Legal Matters............................................... 58
Experts..................................................... 58
Where You Can Find More Information......................... 58
Information Incorporated by Reference....................... 58
</TABLE>
---------------------------
FORWARD-LOOKING STATEMENTS
This prospectus supplement includes forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We
have based these statements on our current expectations or projections about
future events and on assumptions we have made. These forward-looking statements
are subject to certain risks and uncertainties which could cause actual results
or events to differ materially from those we anticipate or project. Prospective
purchasers should not place undue reliance on these forward-looking statements.
We undertake no obligation to update or revise any forward-looking statements as
a result of new information, future events or otherwise.
---------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus supplement. Neither Cox nor the
Cox Trusts has authorized anyone else to provide you with different information.
Cox and the Cox Trusts are offering these securities only in states where the
offer is permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents. Cox's business, financial condition,
results of operations and prospects may have changed since that date.
1
<PAGE> 105
COX COMMUNICATIONS, INC.
Cox is one of the largest broadband communications companies in the United
States. Cox has extensive broadband network operations in the United States as
well as investments in cable television programming, telecommunications, and
technology and broadband networks.
Cox's basic strategy is to leverage its advanced broadband network by
offering new and advanced communications services to both residences and
businesses. We believe that we have a number of advantages that will allow us to
implement this strategy successfully, including:
- ownership of highly clustered and regionally concentrated cable
television systems; and
- a strong commitment to and reputation for superior customer service.
These services include:
- multichannel video;
- digital video;
- high-speed Internet access;
- local and long-distance telephone services; and
- commercial local exchange carrier operations.
Cox also has invested in programming, telecommunications and technology
companies that complement its business strategy. Cox believes that its
investments have been vital to its growth into a communications industry leader.
Cox Enterprises, Inc., a privately held corporation based in Georgia and
one of the largest media companies in the U.S., controls approximately 72.7% of
the outstanding equity of Cox as of June 30, 1999. In addition to Cox, Cox
Enterprises publishes, owns or operates newspapers, television and radio
stations, Internet web site and Manheim Auctions, the world's largest auto
auction operator.
Cox's principal executive offices are located at 1400 Lake Hearn Drive,
Atlanta, Georgia 30319. Its telephone number is (404) 843-5000.
2
<PAGE> 106
THE COX TRUSTS
Each Cox Trust is a statutory business trust created under Delaware law
pursuant to:
1. a declaration of trust executed by Cox, as sponsor for the Cox
Trust, and by the initial trustees of such Cox Trust; and
2. the filing of a certificate of trust with the Delaware Secretary of
State.
Each Cox Trust exists for the exclusive purposes of:
- issuing and selling either capital securities or trust preferred
securities representing undivided beneficial interests in the assets
of such Cox Trust and trust common securities representing undivided
beneficial interests in the assets of such Cox Trust;
- using the proceeds from the sale of such trust securities to acquire a
series of corresponding senior debt securities or junior subordinated
debentures of Cox; and
- engaging in only those other activities necessary, advisable or
incidental to these purposes.
Cox's senior debt securities or junior subordinated debentures, as the case may
be, will be the sole assets of a Cox Trust and, accordingly, payments under the
corresponding senior debt securities or junior subordinated debentures will be
the sole revenues of that Cox Trust.
All of the trust common securities of a Cox Trust will be owned by Cox and
will rank equally, and payments will be made on trust common securities pro
rata, with the capital securities or the trust preferred securities, as the case
may be, of such Cox Trust, except that upon the occurrence and continuance of an
event of default under the applicable declaration of trust resulting from an
event of default under the applicable indenture, the rights of Cox as the trust
common securities holder to payments in respect of distributions and payments
upon liquidation, redemption or otherwise will be subordinated to the rights of
the holders of capital securities or trust preferred securities, as the case may
be, of such Cox Trust. See "Description of Trust Preferred
Securities--Subordination of Trust Common Securities" and "Description of
Capital Securities--Subordination of Trust Common Securities." Cox will acquire
trust common securities of each Cox Trust in an aggregate liquidation amount
equal to at least 3% of the total capital of that Cox Trust. Each Cox Trust will
terminate on the date specified in the applicable prospectus supplement, but may
dissolve earlier as provided in the applicable declaration of trust.
Each Cox Trust's business and affairs are conducted by its trustees who are
appointed by Cox as the trust common securities holder. Unless otherwise
specified in the applicable prospectus supplement, the issuer trustees for each
Cox Trust will be The Bank of New York, as property trustee, The Bank of New
York (Delaware), as Delaware trustee, and three individual trustees, which are
referred to as administrative trustees, who are officers or employees of Cox.
The Bank of New York, as property trustee, will act as sole indenture trustee
under each declaration of trust. The Bank of New York will also act as indenture
trustee under any capital securities guarantee, any preferred securities
guarantee, the senior debt indenture and the junior subordinated debenture
indenture. See "Description of Capital Securities Guarantees," "Description of
Preferred Securities Guarantees," "Description of Debt Securities" and
"Description of Junior Subordinated Debentures." The trust common securities
holder of a Cox Trust or, if an event of default under the declaration of trust
has occurred and is continuing, the holders of a majority in liquidation amount
of the capital securities or the trust preferred securities, as the case may be,
of such Cox Trust will be entitled to appoint, remove or replace such Cox
Trust's property trustee and the Delaware trustee. In no event will the holders
of capital securities or trust preferred securities have the right to vote to
appoint, remove or replace the administrative trustees; such voting rights will
be vested exclusively in Cox as the trust common securities holder. The duties
and obligations of the trustees will be governed by the applicable declaration
of trust.
3
<PAGE> 107
Cox, as issuer of the corresponding senior debt securities or junior
subordinated debentures, will pay all fees, expenses, debts and obligations,
other than payments in respect of trust securities, related to each Cox Trust
and the offering of the capital securities or trust preferred securities, as the
case may be, and will pay, directly or indirectly, all ongoing costs, expenses
and liabilities of each Cox Trust, other than payments in respect of trust
securities.
The principal executive office of each Cox Trust is c/o Cox Communications,
Inc., 1400 Lake Hearn Drive, Atlanta, Georgia 30319.
4
<PAGE> 108
USE OF PROCEEDS
Unless otherwise stated in the accompanying prospectus supplement, Cox
intends to use the net proceeds from the sale of any offered securities for
general corporate purposes, which may include additions to working capital,
repayment or redemption of existing indebtedness and financing of capital
expenditures and acquisitions. Cox may borrow additional funds from time to time
from public and private sources on both a long-term and short-term basis and may
sell commercial paper to fund its future capital and working capital
requirements in excess of internally generated funds.
The proceeds from the sale of either capital securities or trust preferred
securities by a Cox Trust will be invested in either senior debt securities or
junior subordinated debentures of Cox. Except as may otherwise be described in
the related prospectus supplement, Cox expects to use the net proceeds from the
sale of such senior debt securities or junior subordinated debentures to the
applicable Cox Trust for general corporate purposes. Any specific allocation of
the proceeds to a particular purpose that has been made at the date of any
prospectus supplement will be described therein.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
Cox for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
- --------------------------------- -------------------
1994 1995 1996 1997 1998 1998 1999
- ---- ---- ---- ---- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C>
3.1x 2.8x 1.5x 2.0x 12.3x 0.9x 8.8x
</TABLE>
Earnings for the years ended December 31, 1995, 1996, 1997 and 1998 and for
the three months ended March 31, 1999 include $188.8 million, $4.6 million,
$116.6 million, $2.5 billion and $419.5 million, respectively, of net investment
gains.
For purposes of this computation, earnings are defined as income before
income taxes and, excluding losses and undistributed earnings on equity method
investments, minority interests and fixed charges excluding capitalized
interest. Fixed charges are the sum of:
- interest cost including capitalized interest;
- estimated interest component of rent expense; and
- dividends on subsidiary preferred stock.
While Cox has a series of preferred stock outstanding, the holders of such
preferred stock are entitled to dividends only when, and to the extent that,
Cox's board of directors declares such dividends. Cox's board has never declared
a dividend on its preferred stock and does not intend to do so in the
foreseeable future. Accordingly, the data in the above table also represents
Cox's combined ratio of earnings to fixed charges and preferred stock dividends
for the periods presented.
5
<PAGE> 109
DESCRIPTION OF CAPITAL STOCK
The following description of Cox's capital stock sets forth general terms
and provisions of the particular issuance of capital stock to which any
prospectus supplement may relate and reflects a two-for-one stock split
effective on May 21, 1999. The prospectus supplement will describe the
particular terms of any sale of capital stock and the extent, if any, to which
such general provisions will not apply to such sale. The following description
also sets forth selected provisions of Cox's certificate of incorporation, as
amended, and bylaws. This description is a summary only and is qualified in its
entirety by Cox's certificate of incorporation and bylaws, which are
incorporated as exhibits to the registration statement of which this prospectus
is a part.
Cox's certificate of incorporation authorizes it to issue 650,000,000
shares of Class A common stock, 60,000,000 shares of Class C common stock and
10,000,000 shares of preferred stock.
As of June 30, 1999, there were outstanding 527,548,343 shares of Class A
common stock and 27,597,792 shares of Class C common stock. In addition,
10,284,386 shares of Class A common stock were reserved for issuance pursuant to
Cox's employee benefit plans, 27,597,792 shares of Class A common stock were
reserved for issuance to the holders of Class C common stock and approximately
4,675,016 shares of Class A common stock were reserved for issuance to the
holders of Cox's Series A preferred stock according to the terms outlined under
"Series A Convertible Preferred Stock" below.
COMMON STOCK
Except with respect to voting, transfer and convertibility, shares of Class
A common stock and shares of Class C common stock are identical in all respects.
Class A common stockholders are entitled to one vote per share, while Class C
common stockholders are entitled to ten votes per share. The shares of Class C
common stock are subject to significant transfer restrictions.
Voting. The Class A common stockholders and the Class C common
stockholders vote together as a single class on all actions, except that the
affirmative vote of the holders of a majority of outstanding shares of Class A
common stock and Class C common stock voting separately as a class is required:
- to approve any amendment to Cox's certificate of incorporation that would
alter or change the powers, preferences or special rights of such class
in a way that adversely affects the holders of such class; and
- to approve such other matters as may require a class vote under the
Delaware General Corporation Law.
Dividends and Other Distributions. Each share of common stock is equal in
respect of dividends and other distributions in cash, stock or property,
including distributions upon Cox's liquidation or a sale of all or substantially
all of Cox's assets. However, in the case of dividends or other distributions
payable on either class of common stock in shares of such stock, including
distributions pursuant to stock splits or dividends, only Class A common stock
will be distributed with respect to outstanding Class A common stock and only
Class C common stock will be distributed with respect to outstanding Class C
common stock. Neither of the Class A common stock nor the Class C common stock
will be split, divided or combined unless each other class is proportionately
split, divided or combined.
Cox has never declared or paid cash dividends on its Class A common stock
and currently intends to retain any future earnings for use in developing and
operating its businesses. Accordingly, Cox does not expect to pay cash dividends
on the Class A common stock in the foreseeable future.
Restrictions on Transfer of Class C Common Stock; Convertibility of Class C
Common Stock into Class A Common Stock. Cox Holdings, Inc. and Cox DNS, Inc.
hold all of the shares of Class C common stock currently outstanding. Cox
Holdings and Cox DNS are wholly owned subsidiaries of Cox Enterprises. Shares of
the Class C common stock are convertible at any time, or from time to time, at
the Class C stock holder's option, into Class A common stock on a
share-for-share basis. Shares of Class C
6
<PAGE> 110
common stock will be converted automatically into shares of Class A common stock
on a share-for-share basis:
- at any time Cox's board of directors and the holders of a majority of the
shares of Class C common stock then outstanding approve conversion of all
shares of Class C common stock into Class A common stock;
- if the Class A common stock is precluded from trading on any national
securities exchange or national quotation system as a result of the Class
C common stock's existence;
- upon election by Cox's board of directors in connection with their
approval of any sale or lease of all or substantially all of Cox's assets
or any merger, consolidation, liquidation or dissolution of Cox; or
- upon election by Cox's board of directors, after the board has determined
there has been a material adverse change in the outstanding Class A
common stock's liquidity, marketability or market value due to its
exclusion from a national exchange or quotation system or due to federal
or state legal requirements, in either case because of the Class C common
stock's existence.
Liquidation, Dissolution or Winding Up. In the event of any liquidation,
dissolution or winding up of Cox, whether voluntary or not, the Class A common
stock holders and the Class C common stock holders shall be entitled to share
ratably, according to their respective interests, in Cox's assets which remain
after payment, or provision of payment, of Cox's debts and other liabilities and
the preferential amounts due to the holders of any stock ranking prior to the
common stock in the distribution of assets.
PREFERRED STOCK
Cox may issue preferred stock with such designations, powers, preferences
and other rights and qualifications, limitations and restrictions as Cox's board
of directors may authorize, without further action by Cox's shareholders,
including but not limited to:
- the distinctive designation of each series and the number of shares that
will constitute the series;
- the voting rights, if any, of shares of the series;
- the dividend rate on the shares of the series, any restriction,
limitation or condition upon the payment of dividends, whether dividends
will be cumulative and the dates on which dividends are payable;
- the prices at which, and the terms and conditions on which, the shares of
the series may be redeemed, if the shares are redeemable;
- the purchase or sinking fund provisions, if any, for the purchase or
redemption of shares in the series;
- any preferential amount payable upon shares of the series in the event of
the liquidation, dissolution or winding up of Cox or the distribution of
its assets; and
- the prices or rates of conversion at which, and the terms and conditions
on which, the shares of such series may be converted into other
securities, if such shares are convertible.
SERIES A CONVERTIBLE PREFERRED STOCK
In October 1998, Cox completed the acquisition of a cable television system
located in Las Vegas, Nevada, and certain related businesses previously owned by
Prime South Diversified, Inc. Cox issued shares of Series A preferred stock as
part of the consideration for the acquisition.
Dividends. Series A preferred stock holders are entitled to dividends only
when, and to the extent that, Cox's board of directors declares such dividends.
7
<PAGE> 111
Voting. Series A preferred stock holders are entitled to one vote per
share, and such holders vote together with the holders of Class A common stock
and Class C common stock on all matters upon which the Class A common stock and
Class C common stock holders are entitled to vote.
Conversion. Shares of the Series A preferred stock are convertible into
shares of Class A common stock at the preferred stockholders' option only after
October 1, 2003, a change in control of Cox or notification of liquidation,
whichever event occurs first. Shares of the Series A preferred stock are
convertible into shares of Class A common stock according to a formula based
upon 20.0% of the fair value of Cox's Las Vegas cable system and the average
closing price of the Class A common stock over a specified ten-day period.
Shares of the Series A preferred stock will convert automatically into shares of
Class A common stock, if the Las Vegas cable system makes a distribution on its
capital stock or upon the sale of all or substantially all of Cox's assets,
according to the formula described above. Cox anticipates that appreciation
realized upon conversion of the Series A preferred stock into Class A common
stock will be accounted for as contingent purchase price in accordance with APB
Opinion No. 16, "Business Combinations."
TRANSFER AGENT
The transfer agent and registrar for the Class A common stock is First
Chicago Trust Company of New York.
8
<PAGE> 112
DESCRIPTION OF DEBT SECURITIES
GENERAL
The following description of the terms of the debt securities sets forth
selected general terms and provisions of the particular issuance of debt
securities to which any prospectus supplement may relate. The prospectus
supplement will describe the particular terms of any debt securities and the
extent, if any, to which such general provisions will not apply to those debt
securities.
The debt securities will be issued from time to time in series under an
indenture, dated as of June 27, 1995, between Cox and The Bank of New York, as
trustee. A copy of the indenture is incorporated by reference as an exhibit to
the registration statement of which this prospectus is a part.
The indenture does not limit the aggregate principal amount of debt
securities Cox may issue, and the indenture provides that Cox may issue debt
securities from time to time in one or more series. The following summary of
selected provisions of the indenture and the debt securities does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the indenture, including the definitions of selected terms
which it contains as well as those terms which the Trust Indenture Act of 1939,
as amended, requires be incorporated.
Cox refers you to the prospectus supplement for the following terms and
other possible terms of each series of debt securities in respect of which this
prospectus is being delivered, to the extent such terms are applicable to such
debt securities:
- the classification, specific designation, date, aggregate principal
amount, purchase price and denomination of the debt securities;
- currency or units based on or relating to currencies in which such debt
securities are denominated and/or in which principal, premium, if any,
and/or interest will or may be payable;
- the formula, if any, upon which Cox may determine from time to time the
principal amount of debt securities outstanding;
- any date of maturity, which may be fixed or extendible;
- the interest rate or rates or the method by which the interest rate or
rates will be determined, if any;
- the dates on which any interest will be payable, Cox's right, if any, to
extend or defer the interest period and the duration of extensions or
deferrals;
- the place or places where the principal of, premium, if any, and interest
on the debt securities will be payable;
- any repayment, redemption, prepayment or sinking fund provisions and any
provisions related to the purchase of debt securities at the option of
the holders;
- whether the debt securities will be issuable in global form, and, if so,
the identity of the depositary, or in registered and/or bearer form and,
if bearer securities are issuable, any restrictions applicable to the
exchange of one form for another and to the offer, sale and delivery of
bearer securities;
- the terms, if any, on which debt securities may be converted into or
exchanged for stock or other securities of Cox or other entities or for
cash, any specific terms relating to the adjustment of the conversion or
exchange terms, and the period during which debt securities may be so
converted or exchanged;
- any applicable United States federal income tax consequences, including
whether and under what circumstances Cox will pay additional amounts on
debt securities held by a person who is not a U.S. person, as defined in
the prospectus supplement, in respect of any tax, assessment or
9
<PAGE> 113
governmental charge withheld or deducted and, if so, whether Cox will
have the option to redeem debt securities rather than pay such additional
amounts;
- the subordination provisions, if any, relating to the debt securities;
and
- any other specific terms of the debt securities, including any additional
events of default or covenants provided for with respect to debt
securities, and any terms which may be required by or advisable under
applicable laws or regulations.
Holders may present debt securities for exchange, and holders of registered
debt securities may present them for transfer, in the manner, at the places and
subject to the restrictions set forth in the debt securities and the prospectus
supplement. Cox will provide these services without charge, other than any tax
or other governmental charge payable in that connection, but subject to the
limitations provided in the indenture. Debt securities in bearer form and the
coupons, if any, pertaining to such debt securities will be transferable by
delivery.
Debt securities will bear interest at a fixed rate or a floating rate. Debt
securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any discounted debt securities or to certain debt
securities issued at par, which are treated as having been issued at a discount
for United States federal income tax purposes, will be described in the
accompanying prospectus supplement.
Cox may issue debt securities from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on any
interest payment date, to be determined by reference to one or more currency
exchange rates, commodity prices, equity indices or other factors. Holders of
these debt securities may receive a payment of principal on any principal
payment date, or a payment of interest on any interest payment date, that is
greater or less than the amount of principal or interest otherwise payable on
those dates, depending upon the value of the applicable currency, commodity,
equity index or other factor on those dates. Information as to the methods Cox
will use to determine the amount of principal or interest payable on any date,
the currencies, commodities, equity indices or other factors to which the amount
payable on that date is linked and certain additional tax considerations will be
set forth in the applicable prospectus supplement.
Unless Cox indicates otherwise in the accompanying prospectus supplement,
the debt securities will be issued only in fully registered form, without
coupons, in denominations of $1,000 and any integral multiples of $1,000. Unless
Cox specifies otherwise in the prospectus supplement, the principal amount of
the debt securities will be payable at the corporate trust office of the trustee
in New York, New York. Holders may present the debt securities for transfer or
exchange at that office unless Cox specifies otherwise in the prospectus
supplement, subject to the limitations provided in the indenture and without any
service charge, but Cox may require payment of a sum sufficient to cover any tax
or other governmental charges payable.
CONCERNING THE TRUSTEE
The Bank of New York is the trustee under the indenture and has been
appointed by Cox as registrar and paying agent with regard to the debt
securities. The trustee is a depositary for funds and performs other services
for, and transacts other banking business with, Cox in the normal course of
business.
RANKING
Unless Cox specifies otherwise in a prospectus supplement for a particular
series of debt securities, all series of debt securities will be senior
indebtedness of Cox and will be direct, unsecured obligations, ranking equally
with all of Cox's other unsecured and unsubordinated obligations.
Cox conducts most of its operations through its subsidiaries. Therefore,
Cox's rights and the rights of Cox's creditors, including debt securities
holders, to participate in the assets of any subsidiary upon such
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subsidiary's liquidation or recapitalization will be subject to the prior claims
of the subsidiary's creditors, except to the extent Cox may be a creditor with
recognized claims against the subsidiary.
CERTAIN COVENANTS
The indenture contains covenants, including, among others, the following:
Limitation on liens. Cox will not, and will not permit any restricted
subsidiary to, create, incur or assume any lien, other than permitted liens on
restricted property incurred to secure the payment of Indebtedness of Cox or any
restricted subsidiary, if, immediately after the creation, incurrence or
assumption of such lien, the aggregate outstanding principal amount of all
Indebtedness of Cox and its restricted subsidiaries that is secured by liens
other than permitted liens on restricted property would exceed the greater of:
- $200 million or
- 15% of the aggregate outstanding principal amount of all Indebtedness of
Cox and the restricted subsidiaries, whether or not so secured,
unless effective provision is made such that, at Cox's determination, the debt
securities together with any other Indebtedness of equal ranking, whether then
existing or later created, are secured equally and ratably with, or prior to,
such Indebtedness, but only for as long as such Indebtedness is so secured.
Limitation on Indebtedness of restricted subsidiaries. Cox will not permit
any restricted subsidiary to incur any Indebtedness if, immediately after the
incurrence or assumption of such Indebtedness, the aggregate outstanding
principal amount of all indebtedness of the restricted subsidiaries would exceed
the greater of:
- $200 million; or
- 15% of the aggregate outstanding principal amount of all Indebtedness of
Cox and the restricted subsidiaries;
provided that, in any event, a restricted subsidiary may incur Indebtedness to
extend, renew or replace its own Indebtedness to the extent that the principal
amount of the Indebtedness so incurred does not exceed the level of the
principal amount of the Indebtedness immediately prior to such extension,
renewal or replacement plus any premium, accrued and unpaid interest or
capitalized interest payable on the previous amount.
Designation of subsidiaries. Cox may designate a restricted subsidiary as
an unrestricted subsidiary or designate an unrestricted subsidiary as a
restricted subsidiary at any time, provided that:
- immediately after giving effect to such designation, the restricted
group's leverage ratio is not greater than 7:1 and Cox and the restricted
subsidiaries are in compliance with the "Limitation on liens" and
"Limitation on Indebtedness of restricted subsidiaries" covenants; and
- Cox delivers an officers' certificate with respect to such designation,
to the trustee, within 75 days after the end of Cox's fiscal quarter in
which it made such designation, or, in the case of a designation made
during the last fiscal quarter of Cox's fiscal year, within 120 days
after the end of such fiscal year. The officers' certificate shall state
the effective date of such designation.
Mergers or sales of assets. The indenture provides that Cox may not merge
with or into or consolidate with another entity or lease, convey or transfer all
or substantially all of its assets to another entity unless either:
- Cox is the surviving corporation; or
- the resulting, surviving or transferee entity is a corporation organized
under the laws of a state of the United States or the District of
Columbia and expressly assumes all of Cox's obligations under the debt
securities and the indenture; and
- immediately after and giving effect to such transaction, no event of
default has occurred.
The indenture does not contain any provisions affording debt securities
holders any additional protection in the event that Cox enters into a
highly-leveraged transaction.
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DEFINITIONS
Indebtedness means, without duplication, with respect to any entity:
- any indebtedness of such entity for borrowed money or evidenced by a
note, debenture or similar instrument, including a purchase money
obligation which was given in connection with the acquisition of any
property or assets, including securities;
- any guarantee by such entity of any indebtedness of others as described
in the preceding clause; and
- any amendment, extension, renewal or refunding of any such indebtedness
or guarantee.
The term Indebtedness excludes:
- any indebtedness of Cox or of any its restricted subsidiaries to Cox or
another restricted subsidiary;
- any guarantee by Cox or any restricted subsidiary of indebtedness of Cox
or another restricted subsidiary;
- trade accounts payable; and
- letters of credit, performance bonds and similar obligations issued in
favor of governmental or franchising authorities as a term of a cable
television franchise or other governmental franchise, license, permit or
authorization held by such entity or any of its subsidiaries.
Leverage ratio with respect to the restricted group means, as of the date
of and after giving effect to any designation of an unrestricted subsidiary as a
restricted subsidiary, or any designation of a restricted subsidiary as an
unrestricted subsidiary, in each case in accordance with the "Designation of
subsidiaries" covenant, the ratio of:
- the aggregate outstanding principal amount of all Indebtedness of the
restricted group as of such date;
to
- the product of four times the restricted group cash flow for the most
recent full fiscal quarter for which financial information is available
on such date.
Permitted liens means:
1. Any lien which arises out of a judgment or award against Cox or any
restricted subsidiary, with respect to which Cox or such restricted
subsidiary, at the time, shall be prosecuting an appeal or proceeding
for review, or with respect to which the period within which such
appeal or proceeding for review may be initiated shall not have
expired, and with respect to which:
- Cox or such restricted subsidiary shall have secured a stay of
execution pending such appeal or proceeding for review; or
- Cox or such restricted subsidiary shall have posted a bond or
established adequate reserves, in accordance with generally
accepted accounting principles, for the payment of such judgment or
award;
2. Any lien upon any real or personal property or interest in such
property belonging to Cox or a restricted subsidiary and existing at
the time the property or interest was acquired, or securing payment
of Indebtedness which Cox or the restricted subsidiary incurred to
finance some or all of the purchase price of, or cost of construction
of or improvements on, any such property or interest therein;
provided that:
- the outstanding principal amount of the Indebtedness secured by
such lien does not at any time exceed 100% of the greater of the
purchase price for or the fair value of such real or personal
property or interest;
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- such lien does not encumber or constitute a charge against any
other restricted property owned by the restricted group, except
that in the case of construction or improvement, the lien may
extend to unimproved real property on which the property so
constructed or the improvement is located; and
- the indebtedness secured by such lien would be permitted to be
incurred under the covenant described under "Limitation on
Indebtedness of restricted subsidiaries;" and
3. Any lien representing the extension, renewal or replacement, or
successive extensions, renewals or replacements, of liens referred to
in paragraph (2) above, provided that the principal of the
Indebtedness thus secured does not exceed
- the principal of the Indebtedness secured immediately prior to such
extension, renewal or replacement,
plus
- any accrued and unpaid interest or capitalized interest payable;
and such extension, renewal or replacement shall be limited to
- all or a part of the property or interest subject to the lien so
extended, renewed or replaced,
plus
- improvements and construction on such property.
The outstanding principal amount of Indebtedness secured by a lien
permitted by paragraph (2) or (3) above or, if less, the fair value of the
property or interest thus secured, shall be included in the calculation of the
aggregate outstanding principal amount of Indebtedness secured by liens on
restricted property, for purposes of determining whether a lien, other than a
permitted lien, may be incurred in compliance with the covenant described under
"Limitation on liens."
Principal property means, as of any date of determination, any property or
assets which any restricted subsidiary owns other than:
- any such property which, in the good faith opinion of Cox's board of
directors, is not of material importance to the business conducted by Cox
and its restricted subsidiaries taken as a whole; and
- any shares of any class of stock or any other security of any
unrestricted subsidiary.
Restricted group means, as of any date of determination, Cox and the
restricted subsidiaries as of such date and after giving effect to any
designation being made on such date in accordance with the "Designation of
subsidiaries" covenant.
Restricted group cash flow for any period means the restricted group's net
income for such period,
plus
the sum, without duplication, of the aggregate of each of the following
items of Cox and the restricted subsidiaries for such period, to the extent
taken into account as charges to restricted group net income for such period:
- interest expense;
- income tax expense;
- depreciation and amortization expense and other noncash charges;
- extraordinary items; and
- after-tax losses on sales of assets outside of the ordinary course of
business, which otherwise are not included in extraordinary items in
accordance with generally accepted accounting principles;
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minus
the sum, without duplication, of the aggregate of each of the following
items of Cox and the restricted subsidiaries for such period, to the extent
taken into account as credits to restricted group net income for such period:
- noncash credits;
- extraordinary items; and
- after-tax gains on sales of assets outside of the ordinary course of
business, which otherwise are not included in extraordinary items in
accordance with generally accepted accounting principles.
For purposes of this definition:
- Restricted group net income for any period means the aggregate of the net
income or loss of Cox and its restricted subsidiaries for such period,
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that the net income or loss of any entity
accounted for by the equity method of accounting, and the net income or
loss of any unrestricted subsidiary, shall be excluded. However, the net
income of any such entity or unrestricted subsidiary shall be included to
the extent of the amount of dividends or distributions such entity or
unrestricted subsidiary pays to Cox or a restricted subsidiary during
such period; and
- if Cox or any restricted subsidiary consummated any acquisition or
disposition of assets during the period for which restricted group cash
flow is being calculated, or consummated any acquisition or disposition
of assets subsequent to such period and on or prior to the date as of
which the leverage ratio is to be determined, then, in each such case,
the restricted group cash flow for such period shall be calculated on a
pro forma basis, instead of as a pooling of interests, if applicable, as
if such acquisition or disposition had occurred at the beginning of such
period.
Restricted property means, as of any date of determination, any principal
property and any shares of stock of a restricted subsidiary which Cox or a
restricted subsidiary owns.
DEFAULTS
An event of default with respect to debt securities of any series is
defined in the indenture as:
1. a default in the payment of interest when due on the debt securities
of that series which continues for 30 days;
2. a default in the payment of principal of any debt security of that
series when due, whether at its stated maturity, upon redemption,
upon required repurchase, by declaration or otherwise;
3. Cox's failure to comply with its obligations under "-- Certain
Covenants -- Mergers or sales of assets" above;
4. Cox's failure to comply, within 60 days after notice provided in
accordance with the terms of the indenture, with any of its other
covenants or agreements contained in the indenture with respect to
that series of debt securities, including its obligations under the
covenants described above under "-- Certain Covenants -- Limitation
on liens," "-- Limitation on Indebtedness of restricted subsidiaries"
or "-- Designation of subsidiaries," provided that this provision
does not apply to defaults in covenants for which the indenture
specifically provides otherwise;
5. Indebtedness of Cox or any restricted subsidiary is not paid within
any applicable grace period after final maturity or is accelerated by
its holders because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds 5% of the aggregate
outstanding principal amount of all Indebtedness of Cox and the
restricted subsidiaries;
6. certain events of bankruptcy, insolvency or reorganization of Cox or
a restricted subsidiary;
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7. failure to make a sinking fund payment when due on the debt
securities of that series; or
8. any other events of default specified for that series of debt
securities.
Except as described in the second to last sentence of this paragraph, if an
event of default occurs and is continuing with respect to a particular series of
debt securities, the trustee or the holders of at least 25% in principal amount
of the outstanding debt securities of such series may declare the principal of
and accrued but unpaid interest on all the debt securities of such series to be
due and payable. Upon such a declaration, such principal and interest shall be
due and payable immediately. If an event of default relating to specific events
of bankruptcy, insolvency or reorganization of Cox occurs and is continuing, the
principal of and interest on all the debt securities will become and be
immediately due and payable without any declaration or other act on the part of
the trustee or any holders of the debt securities. Under some circumstances, the
holders of a majority in principal amount of the outstanding debt securities of
a series may rescind any acceleration and its consequences with respect to the
debt securities of that series.
Subject to the provisions of the indenture relating to the duties of the
trustee, if an event of default occurs and is continuing, the trustee will be
under no obligation to exercise any of its rights or powers under the indenture
at the request or direction of any of the holders of the debt securities of any
series, unless such holders have offered to the trustee reasonable indemnity or
security against any loss, liability or expense. Except to enforce the right to
receive payment of principal, premium, if any, or interest when due, no debt
security holder may pursue any remedy with respect to the indenture or the debt
securities of its series unless:
- that holder has previously given the trustee notice that an event of
default is continuing;
- holders of at least 25% in principal amount of the outstanding debt
securities of such series have requested the trustee to pursue the
remedy;
- those holders have offered the trustee reasonable security or indemnity
against any loss, liability or expense;
- the trustee has not complied with such request within 60 days of
receiving it with an offer of security or indemnity; and
- the holders of a majority in principal amount of the outstanding debt
securities of such series have not given the trustee a direction
inconsistent with such request within such 60-day period.
Subject to some restrictions, the holders of a majority in principal amount
of the outstanding debt securities of any series are given the right to 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.
The trustee, however, may refuse to follow any direction that conflicts with law
or the indenture or that the trustee determines is unduly prejudicial to the
rights of any other holder of a debt security of the same series, or that would
involve the trustee in personal liability.
The indenture provides that if a default occurs and is continuing with
respect to a particular series of debt securities and is known to the trustee,
the trustee must mail notice of the default within 90 days after it occurs to
each holder of the debt securities of such series. Except in the case of a
default in the payment of principal of, premium, if any, or interest on any debt
security, the trustee may withhold notice if and so long as a committee of its
trust officers determines that withholding notice is in the interests of the
holders of the debt securities of such series. In addition, Cox must deliver to
the trustee, within 120 days after the end of each fiscal year, an officers'
certificate indicating whether the signers thereof know of any default that
occurred during the previous year. Cox also is required to deliver to the
trustee, within 30 days after its occurrence, written notice of any events which
would constitute certain defaults, their status and what action Cox is taking or
proposes to take.
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Prior to the acceleration of the maturity of the debt securities of any
series, the holders of a majority in aggregate principal amount of the
outstanding debt securities of that series may on behalf of all the debt
securities and any related coupons of that series waive any past default or
event of default, except:
- a default in the payment of the principal of, and premium, if any, or
interest on, any of the debt securities or in the payment of any related
coupon; and
- a default that cannot be waived without the consent of each holder
affected.
A waiver will serve to end such default, to cure any event of default, and to
restore Cox, the trustee and holders of the affected debt securities to their
former positions and rights. No such waiver will extend to any subsequent or
other default.
AMENDMENTS AND WAIVERS
Subject to specific exceptions, the indenture may be amended with respect
to a series of debt securities with the consent of the holders of a majority in
principal amount then outstanding of the debt securities of that series,
including consents obtained in connection with a tender offer or exchange for
the debt securities. Any past default or compliance with any provisions also may
be waived with such a consent of the holders of a majority in principal amount
then outstanding of the debt securities of such series. However, without the
consent of each holder of an outstanding debt security of that series, no
amendment may, among other things:
- reduce the amount of debt securities of that series whose holders must
consent to an amendment;
- reduce the rate of, or extend the time for, payment of interest on any
debt security of that series;
- reduce the principal of or extend the stated maturity of any debt
security of that series;
- reduce the premium payable upon the redemption of any debt security of
that series, or change the time at which any debt security of that series
may or shall be redeemed;
- make any debt securities of that series payable in a currency other than
that stated in the debt securities of such series;
- release any security that may have been granted in respect of the debt
securities; or
- make any change (1) affecting the rights of holders of a majority in
principal amount of the outstanding debt securities of that series to
direct the time, method and place of conducting proceedings for any
remedy available to the trustee, (2) in the amendment provisions which
requires each holder's consent, or (3) in the waiver provisions.
Without the consent of any of the debt securities holders, Cox and the
trustee may amend the indenture:
- to cure any ambiguity, omission, defect or inconsistency;
- to provide for the assumption by a successor entity of Cox's obligations
under the indenture;
- to provide for uncertificated debt securities in addition to or in place
of certificated debt securities;
- to add guarantees with respect to the debt securities;
- to secure the debt securities;
- to add to the covenants for the benefit of holders of all or any series
of the debt securities and to make a default of that additional covenant
an event of default under the indenture for all or any series of debt
securities;
- to surrender any right or power conferred upon Cox;
- to convey, transfer, assign, mortgage or pledge any property to or with
the trustee, or to make such other provisions in regard to matters or
questions arising under the indenture as shall not adversely affect the
interests of any holders of debt securities;
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- to make any change that does not adversely affect the rights of any debt
securities holder;
- to provide for a successor or separate trustee with respect to the debt
securities of one or more series; or
- to comply with any SEC requirement in connection with the qualification
of the indenture under the Trust Indenture Act.
The indenture does not require the debt securities holders to give consent
approving of the particular form of any proposed amendment. It is sufficient if
such consent approves the substance of the proposed amendment.
After an amendment under the indenture becomes effective, Cox is required
to mail to holders of the debt securities of the affected series a notice
briefly describing such amendment. However, Cox's failure to give such notice to
all holders of the debt securities of such series, or any defect in such notice,
will not impair or affect the validity of the amendment.
DEFEASANCE
Cox at any time may terminate all its obligations with respect to a
particular series of debt securities, and under the indenture, with respect to
the legal defeasance of such series, except for specific obligations including:
- those respecting the defeasance trust;
- to register the transfer or exchange of the debt securities;
- to replace mutilated, destroyed, lost or stolen debt securities; and
- to maintain a registrar and paying agent in respect of the debt
securities.
Cox at any time may terminate its obligations with respect to a series of
debt securities under the covenants described under "-- Certain Covenants,"
other than the covenants described under "-- Mergers or sales of assets," and
any other restrictive covenants described in the accompanying prospectus
supplement relating to that series, as well as the operation of the
cross-acceleration provision and the bankruptcy provisions described under
"-- Defaults" above.
Cox may exercise its legal defeasance option notwithstanding its prior
exercise of the covenant defeasance option. If Cox exercises its legal
defeasance option with respect to a particular series of debt securities,
payment of the debt securities of that series may not be accelerated because of
an event of default with respect thereto. If Cox exercises its covenant
defeasance option with respect to a particular series of debt securities,
payment of the debt securities of such series may not be accelerated because of
an event of default as specified in paragraphs (4), (5) or (6) under
"-- Defaults" above, with respect to restricted subsidiaries only, or paragraph
(8) above, except to the extent that any of the agreements or covenants
referenced in such paragraphs remain applicable.
In order to exercise either defeasance option with respect to a particular
series of debt securities, Cox must deposit irrevocably in trust, with the
trustee, money or U.S. Government obligations, which trust will be known as the
defeasance trust. Through the payment of interest and principal on the debt
securities in accordance with their terms the defeasance trust will provide
money in an amount sufficient to pay all the principal, including any mandatory
sinking fund payments, of, premium, if any, on, and interest on the debt
securities of that series, to redemption or maturity, as the case may be. Cox
also must comply with other specified conditions, including delivery to the
trustee of an opinion of counsel to the effect that:
- holders of the debt securities of that series will not recognize income
gain or loss for United States federal income tax purposes as a result of
such deposit and defeasance;
- holders of the debt securities of that series will be subject to United
States federal income tax on the same amount, in the same manner and at
the same times as would have been the case if such deposit and defeasance
had not occurred;
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- in the case of legal defeasance only, that opinion of counsel must be
based on a ruling of the Internal Revenue Service or other change in
applicable federal income tax law; and
- the creation of the defeasance trust will not violate the Investment
Company Act of 1940, as amended.
In addition, Cox must deliver to the trustee an officers' certificate
stating that Cox did not make such deposit with the intent of preferring the
debt securities holders over other of Cox's creditors, or with the intent of
defeating, hindering, delaying or defrauding its creditors or the creditors of
others.
TRANSFER
Holders may transfer or exchange the debt securities in accordance with the
indenture. Unless Cox indicates otherwise in the applicable prospectus
supplement, Cox will issue the debt securities in registered form and they will
be transferable only upon the surrender of such debt securities for registration
of transfer. Cox may require payment of a sum sufficient to cover any tax,
assessment or other governmental charge payable in connection with certain
transfers or exchanges. Cox is not required to transfer or exchange any debt
security selected for redemption. In addition, Cox is not required to transfer
or exchange any debt security for a period of 15 days before a selection of debt
securities to be redeemed or before any interest payment date.
GOVERNING LAW
The indenture provides that it and the debt securities will be governed by,
and construed in accordance with, the laws of the State of New York without
giving effect to applicable principles of conflicts of law to the extent that
the application of the law of another jurisdiction would be required thereby.
GLOBAL SECURITIES
Cox may issue the registered debt securities of a series in the form of one
or more fully registered global securities which will be deposited with a
depositary, or with a nominee for the depositary, as identified in the
prospectus supplement relating to such series. A registered global security will
be registered in the name of the depositary or its nominee. If registered debt
securities are issued in global form, one or more registered global securities
will be issued in a denomination or aggregate denominations equal to the portion
of the aggregate principal amount of outstanding registered debt securities of
the series to be represented by those registered global securities. Unless and
until it is exchanged in whole for debt securities in definitive registered
form, a registered global security may not be transferred except as a whole by
the depositary:
- to its nominee;
- by its nominee to such depositary or another such nominee; or
- by the depositary or any of its nominees to a successor of that
depositary or the successor's nominee.
The specific terms of the depositary arrangement with respect to any
portion of a series of debt securities to be represented by a registered global
security will be described in the prospectus supplement relating to such series.
Cox anticipates that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in a registered global security will be
limited to persons, who will be referred to as participants, who have accounts
with the depositary for such registered global security, or persons that may
hold interests through participants. Upon the issuance of a registered global
security, the depositary will credit the participants' accounts, on its
book-entry registration and transfer system, with the respective principal
amounts of the debt securities represented by such registered global security
and beneficially owned by those participants. The accounts to be credited shall
be designated by any dealers,
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underwriters or agents participating in the distribution of those debt
securities, or by Cox if it offers and sells such debt securities directly.
Ownership of beneficial interests in such registered global security will be
shown on, and the transfer of those ownership interests will be effected only
through, records maintained by the depositary with respect to participants'
interests, and on the records of participants with respect to interests of
persons holding through participants. The laws of some states may require that
some purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability of those purchasers to own,
transfer or pledge beneficial interests in registered global securities.
So long as the depositary for a registered global security, or its nominee,
is the registered owner of that registered global security, that depositary or
that nominee, as the case may be, will be considered the sole owner or holder of
the debt securities represented by such registered global security for all
purposes under the indenture. Except as set forth below, owners of beneficial
interests in a registered global security will not be entitled to have the debt
securities registered in their names, will not receive or be entitled to receive
physical delivery of such debt securities in definitive form and will not be
considered the owners or holders of the debt securities under the indenture.
Accordingly, each person owning a beneficial interest in a registered global
security must rely on the procedures of the depositary for such registered
global security and, if such person is not a participant, on the procedures of
the participant through which that person owns its interest, to exercise any
rights a holder possesses under the indenture. Cox understands that under
existing industry practices, if Cox requests any action of holders or if an
owner of a beneficial interest in a registered global security desires to give
or take any action which a holder is entitled to give or take under the
indenture, as the case may be, the depositary for such registered global
security would authorize the participants holding the relevant beneficial
interests to give or take that action, and such participants would authorize
beneficial owners owning through such participants to give or take that action
or would otherwise act upon the instructions of beneficial owners holding
through them.
Principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee will be made to such depositary or its nominee, as the
case may be, as the registered owner of such registered global security. None of
Cox, the trustee, the registrar or any other agent of Cox, of the trustee or of
the registrar will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in such registered global security, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Cox expects that the depositary for any debt securities represented by a
registered global security, or its nominee, upon receipt of any payment of
principal, premium or interest in respect of the registered global security,
will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests as shown on the records
of such depositary or its nominee. Cox also expects that payments by
participants to owners of beneficial interests in the registered global security
held through such participants will be governed by standing customer
instructions and customary practices, and will be the responsibility of those
participants, as is now the case with the securities held for the accounts of
customers in bearer form or registered in street name.
If the depositary for any debt securities represented by a registered
global security is at any time unwilling or unable to continue as depositary, or
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, and Cox does not appoint a successor depositary registered as
a clearing agency under the Exchange Act within 90 days, Cox will issue such
debt securities in definitive form in exchange for such registered global
security. In addition, Cox may at any time and in its sole discretion determine
not to have any of the debt securities of a series represented by one or more
registered global securities and, in such event, will issue such debt securities
in definitive form in exchange for all of the registered global securities
representing such debt securities. Any debt securities issued in definitive form
in exchange for a registered global security will be registered in such name or
names as the depositary shall instruct the trustee or the registrar. Cox expects
that such instructions, with respect to ownership of beneficial interests in the
registered global security, will be based upon directions received by the
depositary from participants.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
GENERAL
The junior subordinated debentures will be issued in one or more series
under a junior subordinated debenture indenture, as supplemented from time to
time, between Cox and The Bank of New York, as the debenture trustee. The junior
subordinated debenture indenture has been qualified under the Trust Indenture
Act, and is subject to, and governed by, the Trust Indenture Act and is included
as an exhibit to the registration statement of which this prospectus is a part.
This summary of certain terms and provisions of the junior subordinated
debentures and the junior subordinated debenture indenture does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
all of the provisions of such junior subordinated debentures and the junior
subordinated debenture indenture, including the definitions therein of certain
terms, and those terms made a part of the junior subordinated debenture
indenture by the Trust Indenture Act.
The applicable prospectus supplement will describe the specific terms of
each series of junior subordinated debentures offered thereby, including:
- the specific title and designation, aggregate principal amount, including
any limit on the principal amount, purchase price and denominations of
those junior subordinated debentures;
- the date or dates on which the principal of those junior subordinated
debentures is payable or the method of determining the same, if
applicable;
- the rate or rates, which may be fixed or variable, at which those junior
subordinated debentures will bear interest, if any, or the method of
determining the same, if applicable;
- the date or dates from which interest, if any, shall accrue or the method
of determining the same, if applicable, the interest payment dates, if
any, on which interest will be payable or the manner of determining the
same, if applicable, and the record dates for the determination of
holders to whom interest is payable on those junior subordinated
debentures;
- the duration of the maximum consecutive period that Cox may elect to
defer payments of interest on those junior subordinated debentures;
- any redemption, repayment or sinking fund provisions;
- whether those junior subordinated debentures are convertible into or
exchangeable for Class A common stock or other securities or rights of
Cox or other issuers, or a combination of the foregoing and, if so, the
applicable conversion or exchange terms and conditions;
- any applicable material United States federal income tax consequences;
and
- any other specific terms pertaining to those junior subordinated
debentures, whether in addition to, or modification or deletion of, the
terms described herein.
RANKING
Each series of junior subordinated debentures will rank equally with all
other series of junior subordinated debentures to be issued by Cox and sold to
other trusts or other entities to be established by Cox that are similar to the
Cox Trusts and will be unsecured and will rank subordinate and junior in right
of payment, to the extent and in the manner set forth in the junior subordinated
debenture indenture, to all senior indebtedness of Cox as defined in the junior
subordinated debenture indenture. The junior subordinated debenture indenture
will not limit the amount of secured or unsecured debt, including senior
indebtedness, that may be incurred by Cox or its subsidiaries. See
"-- Subordination." As of June 30, 1999, the aggregate principal amount of
senior indebtedness as defined in the junior subordinated debenture indenture
was approximately $3.5 billion.
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FORM, REGISTRATION AND TRANSFER
The junior subordinated debentures will be issued in fully registered form.
Until any dissolution of the applicable Cox Trust, the junior subordinated
debentures will be held in the name of the property trustee in trust for the
benefit of the holders of the related trust securities. If the junior
subordinated debentures are distributed to the holders of the related trust
securities, the junior subordinated debentures will be issued to such holders in
the same form as the trust securities were held. Accordingly, any depositary
arrangements for such junior subordinated debentures are expected to be
substantially similar to those in effect for the trust preferred securities. See
"Description of Trust Preferred Securities -- Global Trust Preferred
Securities."
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment
of principal of and premium, if any, on and interest on the junior subordinated
debentures will be made at the office of the debenture trustee in The City of
New York or at the office of such paying agent or paying agents as Cox may
designate from time to time, except that at the option of Cox payment of any
interest may be made, except in the case of a global certificate representing
junior subordinated debentures, by:
1. check mailed to the address of the person entitled thereto as such
address shall appear in the applicable securities register for
junior subordinated debentures or
2. transfer to an account maintained by the person entitled thereto as
specified in such securities register, provided that proper
transfer instructions have been received by the relevant record
date.
Payment of any interest on any junior subordinated debenture will be made to the
person in whose name such junior subordinated debenture is registered at the
close of business on the record date for such interest, except in the case of
defaulted interest. Cox may at any time designate additional paying agents or
rescind the designation of any paying agent; provided, however, Cox will at all
times be required to maintain a paying agent in each place of payment for the
junior subordinated debentures.
Any moneys deposited with the debenture trustee or any paying agent, or
then held by Cox in trust, for the payment of the principal of and premium, if
any, on or interest on any junior subordinated debentures and remaining
unclaimed for two years after such principal and premium, if any, or interest
has become due and payable shall, at the request of Cox, be repaid to Cox and
the holder of such junior subordinated debentures shall thereafter look, as a
general unsecured creditor, only to Cox for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no debenture event of default has occurred and is continuing,
Cox will have the right under the junior subordinated debenture indenture to
defer the payment of interest on the junior subordinated debentures at any time
or from time to time up to the maximum period specified in the applicable
prospectus supplement for the deferral of interest. Each of these deferral
periods is referred to in this prospectus as an extension period. An extension
period must end on an interest payment date and may not extend beyond the stated
maturity of such junior subordinated debentures. At the end of an extension
period, Cox must pay all interest then accrued and unpaid, together with
interest on the accrued and unpaid interest, to the extent permitted by
applicable law. During an extension period, interest will continue to accrue and
holders of junior subordinated debentures, and holders of the related trust
securities that are outstanding, will be required to accrue such deferred
interest income for United States federal income tax purposes prior to the
receipt of cash attributable to such income, regardless of the method of
accounting used by the holders.
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Prior to the termination of any extension period, Cox may extend such
extension period, provided that such extension does not
- cause such extension period to exceed the maximum extension period,
- end on a date other than an interest payment date, or
- extend beyond the stated maturity of the related junior subordinated
debentures.
Upon the termination of any extension period, or any extension of the related
extension period, and the payment of all amounts then due, Cox may begin a new
extension period, subject to the limitations described above. No interest shall
be due and payable during an extension period except at the end thereof. Cox
must give the debenture trustee notice of its election to begin or extend an
extension period at least five business days prior to the earlier of:
- the date cash distributions on the related trust securities would have
been payable except for the election to begin or extend such extension
period or
- the date the applicable Cox Trust is required to give notice to any
securities exchange or to holders of its trust preferred securities of
the record date or the date cash distributions are payable, but in any
event not less than five business days prior to such record date.
The debenture trustee shall give notice of Cox's election to begin or
extend an extension period to the holders of the trust preferred securities.
Subject to the foregoing limitations, there is no limitation on the number of
times that Cox may begin or extend an extension period.
RESTRICTIONS ON CERTAIN PAYMENTS
Cox will covenant that if at any time:
1. there shall have occurred any event of which Cox has actual
knowledge that is, or with the giving of notice or the lapse of
time, or both, would be, a debenture event of default;
2. Cox shall be in default with respect to any of its payment
obligations under the preferred securities guarantee; or
3. Cox shall have given notice of its election to exercise its right
to begin or extend an extension period as provided in the junior
subordinated debenture indenture and shall not have rescinded such
notice, and such extension period, or any extension thereof, shall
have commenced and be continuing,
then it will not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of Cox's
capital stock;
- make any payment of principal of or premium, if any, on or interest on or
repay or repurchase or redeem any debt securities of Cox, including other
junior subordinated debentures, that rank equally with or junior in right
of payment to the junior subordinated debentures; or
- make any guarantee payments with respect to any guarantee by Cox of the
debt securities of any subsidiary of Cox, including under any guarantees
to be issued by Cox with respect to securities of other Cox trusts or
entities to be established by Cox similar to the Cox Trusts, if such
guarantee ranks equally with or junior in right of payment to the junior
subordinated debentures
other than:
- dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, Class A common stock and Class C
common stock of Cox;
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- any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant thereto;
- payments under the preferred securities guarantee;
- as a result of reclassification of Cox's capital stock or the exchange
or conversion of one class or series of Cox's capital stock for another
class or series of Cox's capital stock;
- the purchase of fractional interests in shares of Cox's capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged; and
- purchases of Class A and Class C common stock related to the issuance of
Class A and Class C common stock or rights under any of Cox's benefit
plans for its directors, officers, or employees or any of Cox's dividend
reinvestment plans.
So long as the trust securities remain outstanding, Cox also will covenant:
- to maintain 100% direct or indirect ownership of the related trust common
securities, provided that any permitted successor of Cox under the junior
subordinated debenture indenture may succeed to Cox's ownership of such
trust common securities;
- to use its best efforts to cause each Cox Trust
- to remain a business trust, except in connection with the distribution
of junior subordinated debentures to the holders of related trust
securities in liquidation of such Cox Trust, the conversion, exchange or
redemption of all of such trust securities, or certain mergers,
consolidations or amalgamations, each as permitted by the declaration of
trust,
- to otherwise continue to be classified as a grantor trust for United
States federal income tax purposes;
- to use its reasonable best efforts to cause each holder of its trust
securities to be treated as owning an undivided beneficial interest in
the related junior subordinated debentures; and
- not to cause, as sponsor of the Cox Trusts, or to permit, as the trust
common securities holder, the dissolution, liquidation or winding-up of
any Cox Trust, except as provided in the declaration of trust.
MODIFICATION OF JUNIOR SUBORDINATED DEBENTURE INDENTURE
From time to time, Cox and the debenture trustee may, without the consent
of the holders of the junior subordinated debentures, amend, waive or supplement
the junior subordinated debenture indenture for specified purposes, including,
among other things, curing ambiguities or adding provisions, provided that any
such action does not materially adversely affect the interests of the holders of
the junior subordinated debentures, and maintaining the qualification of the
junior subordinated debenture indenture under the Trust Indenture Act. The
junior subordinated debenture indenture will permit Cox and the debenture
trustee, with the consent of the holders of a majority in principal amount of
all outstanding junior subordinated debentures affected thereby, to modify the
junior subordinated debenture indenture in a manner affecting the rights of the
holders of junior subordinated debentures; provided, however, that no such
modification may, without the consent of the holder of each outstanding junior
subordinated debenture so affected:
- change the stated maturity or reduce the principal of any such junior
subordinated debentures;
- change the interest rate or the manner of calculation of the interest
rate or extend the time of payment of interest on any such junior
subordinated debentures except pursuant to Cox's right under the junior
subordinated debenture indenture to defer the payment of interest as
provided therein (see "-- Option to Extend Interest Payment Date");
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- change any of the conversion, exchange or redemption provisions
applicable to any such junior subordinated debentures;
- change the currency in respect of which payments of principal of or any
premium or interest on any such junior subordinated debentures are to be
made;
- change the right of holders of trust securities to bring a direct action
in respect of any required payments or conversion or exchange rights;
- impair or affect the right of any holder of any such junior subordinated
debentures to institute suit for the payment of the principal thereof or
premium, if any, or interest thereon or for the conversion or exchange of
any such junior subordinated debentures in accordance with their terms;
- change the subordination provisions adversely to the holders of the
junior subordinated debentures; or
- reduce the percentage of principal amount of junior subordinated
debentures the holders of which are required to consent to any such
modification of the junior subordinated debenture indenture.
DEBENTURE EVENTS OF DEFAULT
The following described events with respect to any series of junior
subordinated debentures will constitute a debenture event of default, whatever
the reason for such debenture event of default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, unless such event is specifically deleted
or modified in or pursuant to the supplemental indenture, board resolution or
officers' certificate establishing the terms of such series pursuant to the
junior subordinated debenture indenture:
1. failure for 30 days to pay any interest on that series of junior
subordinated debentures when due, subject to any permitted
deferral; provided that, during any extension period for such
series of junior subordinated debentures, failure to pay interest
on such series of junior subordinated debentures will not
constitute a debenture event of default; or
2. failure to pay any principal of or premium, if any, on that series
of junior subordinated debentures when due, whether at maturity,
upon any redemption, by declaration of acceleration of maturity or
otherwise; or
3. if applicable, failure by Cox to deliver the required securities or
other rights upon an appropriate conversion or exchange election by
holders of that series of junior subordinated debentures or the
related trust preferred securities; or
4. failure to observe or perform any other agreement or covenant
contained in the junior subordinated debenture indenture in respect
of that series of junior subordinated debentures for 90 days after
written notice to Cox from the debenture trustee or the holders of
at least 25% in aggregate outstanding principal amount of that
series of junior subordinated debentures; or
5. certain events in bankruptcy, insolvency or reorganization of Cox.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debentures of any series have, subject to certain
exceptions, the right to direct the time, method and place of conducting any
proceeding for any remedy available to the debenture trustee in respect of such
junior subordinated debentures. The debenture trustee or the holders of at least
25% in aggregate outstanding principal amount of the junior subordinated
debentures of any series may declare the principal of and any accrued interest
on such junior subordinated debentures due and payable immediately upon a
debenture event of default, other than a debenture event of default referred to
in paragraph (5) above, which shall result in the immediate acceleration of the
junior subordinated debentures. The holders of a majority in aggregate
outstanding principal amount of the junior subordinated debentures of any series
may annul such
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declaration and waive the default in respect of such junior subordinated
debentures if the default, other than the non-payment of the principal and
interest of the junior subordinated debentures which has become due solely by
such acceleration, has been cured and a sum sufficient to pay all matured
installments of interest and premium, if any, and principal due otherwise than
by acceleration has been deposited with the debenture trustee.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debentures of any series may, on behalf of the holders of
all of the junior subordinated debentures of such series, waive any past
default, except:
- a default in the payment of the principal of or premium, if any, on or
interest on the junior subordinated debentures, unless that default has
been cured and a sum sufficient to pay all matured installments of
interest and premium, if any, and principal due otherwise than by
acceleration has been deposited with the debenture trustee; or
- a default in respect of a covenant or provision which under the junior
subordinated debenture indenture cannot be modified or amended without
the consent of the holder of each outstanding junior subordinated
debenture of such series.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
To the extent any action under the junior subordinated debenture indenture
is entitled to be taken by the holders of at least a specified percentage of
junior subordinated debentures, holders of the corresponding trust preferred
securities may take such action if such action is not taken by the property
trustee of the related Cox Trust. Notwithstanding the foregoing, if a debenture
event of default has occurred and is continuing and is attributable either to:
- the failure of Cox to pay the principal of or premium, if any, on or
interest on the junior subordinated debentures on the due date or
- the failure by Cox to deliver the required securities or other rights
upon an appropriate conversion or exchange right election,
a holder of the related trust preferred securities may institute a legal
proceeding directly against Cox for enforcement of payment to such holder of the
principal of or premium, if any, on or interest on such junior subordinated
debentures having a principal amount equal to the liquidation amount of the
trust preferred securities held by such holder or for enforcement of such
conversion or exchange rights, as the case may be, which is referred to as a
direct action. Cox may not amend the junior subordinated debenture indenture to
remove the foregoing right to bring a direct action without the prior written
consent of the holders of all of the trust preferred securities outstanding. If
the right to bring a direct action is removed, the applicable Cox Trust may
become subject to the reporting obligations under the Exchange Act.
Notwithstanding any payments made to a holder of trust preferred securities by
Cox in connection with a direct action, Cox shall remain obligated to pay the
principal of and premium, if any, on and interest on the related junior
subordinated debentures, and Cox shall be subrogated to the rights of the holder
of such trust preferred securities with respect to payments on the trust
preferred securities to the extent of any payments made by Cox to such holder in
any direct action.
The holders of the trust preferred securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the related junior subordinated debentures unless an
event of default has occurred and is continuing under the applicable declaration
of trust. See "Description of Trust Preferred Securities -- Events of Default;
Notice."
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
Cox shall not consolidate with or merge into any other person or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to any person, and no person shall consolidate with or merge into
Cox or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to Cox, unless:
- in case Cox consolidates with or merges into another person or conveys or
transfers its properties and assets as an entirety or substantially as an
entirety to any person, the successor person is organized under the laws
of the United States or any State or the District of Columbia, and such
successor person expressly assumes Cox's obligations under the junior
subordinated debentures and the preferred securities guarantee;
- immediately after giving effect thereto, no debenture event of default,
and no event which, after notice or lapse of time or both, would become a
debenture event of default, shall have occurred and be continuing; and
- certain other conditions as prescribed in the junior subordinated
debenture indenture are met.
SATISFACTION AND DISCHARGE
The junior subordinated debenture indenture will cease to be of further
effect, except as to Cox's obligations to pay all other sums due pursuant to the
junior subordinated debenture indenture and to provide the required officers'
certificates and opinions of counsel, and Cox will be deemed to have satisfied
and discharged the junior subordinated debenture indenture, when, among other
things, all junior subordinated debentures not previously delivered to the
debenture trustee for cancellation
- have become due and payable, or
- will become due and payable at maturity or upon redemption within one
year, or
- if redeemable at the option of Cox, are to be called for redemption
within one year under arrangements satisfactory to the debenture trustee
for the giving of notice of redemption by the debenture trustee in the
name, and at the expense, of Cox,
and Cox deposits or causes to be deposited with the debenture trustee funds, in
trust, for the purpose and in an amount sufficient to pay and discharge the
entire indebtedness on the junior subordinated debentures not previously
delivered to the debenture trustee for cancellation, for the principal and
premium, if any, and interest to the date of the deposit or to the stated
maturity thereof, as the case may be.
SUBORDINATION
The junior subordinated debentures will rank subordinate and junior in
right of payment to all senior indebtedness to the extent provided in the junior
subordinated debenture indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of Cox, the holders of senior indebtedness
will first be entitled to receive payment in full of such senior indebtedness
before the holders of junior subordinated debentures will be entitled to receive
or retain any payment in respect thereof.
In the event of the acceleration of the maturity of junior subordinated
debentures, the holders of all senior indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of such
senior indebtedness before the holders of junior subordinated debentures will be
entitled to receive or retain any payment in respect of the junior subordinated
debentures.
No payments on account of principal or premium, if any, or interest in
respect of the junior subordinated debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to senior
indebtedness, or an event of default with respect to any senior indebtedness
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resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
Indebtedness shall mean:
1. every obligation of Cox for money borrowed;
2. every obligation of Cox evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses;
3. every reimbursement obligation of Cox with respect to letters of credit,
banker's acceptances or similar facilities issued for the account of
Cox;
4. every obligation of Cox issued or assumed as the deferred purchase price
of property or services, excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business;
5. every capital lease obligation of Cox which generally accepted
accounting principles require to be classified and accounted for as a
capital lease on Cox's balance sheet;
6. all indebtedness of Cox, whether incurred on or prior to the date of the
date of the junior subordinated debenture indenture or thereafter
incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements;
7. letters of credit, performance bonds and similar obligations issued in
favor of governmental or franchising authorities as a term of a cable
television franchise or other governmental franchise, license, permit or
authorization held by such entity or any of its subsidiaries;
8. every obligation of the type referred to in paragraphs (1) through (7)
of another person and all dividends of another person the payment of
which, in either case, Cox has guaranteed or is responsible or liable
for, directly or indirectly, as obligor or otherwise; and
9. obligations of the type referred to in paragraphs (1) through (8) of
another person secured by any lien on any property or asset of Cox,
whether or not such obligation is assumed by Cox; and all deferrals,
renewals, extensions and refundings of, and amendments, modifications
and supplements to, any of the foregoing obligations.
Indebtedness ranking on a parity with the junior subordinated debentures
shall mean
1. Indebtedness, whether outstanding on the date of execution of the
junior subordinated debenture indenture or thereafter created,
assumed or incurred, to the extent such Indebtedness specifically
by its terms ranks equally with and not prior to the junior
subordinated debentures in the right of payment upon the happening
of the dissolution, winding-up, liquidation or reorganization of
Cox, and
2. all other debt securities, and guarantees in respect of those debt
securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with Cox that is a financing
vehicle of Cox, which is referred to as a financing entity, in
connection with the issuance by such financing entity of equity
securities or other securities guaranteed by Cox pursuant to an
instrument that ranks equally with or junior in right of payment to
the preferred securities guarantee.
The securing of any Indebtedness otherwise constituting indebtedness ranking on
a parity with the junior subordinated debentures shall not prevent such
Indebtedness from constituting indebtedness ranking on a parity with the junior
subordinated debentures.
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Indebtedness ranking junior to the junior subordinated debentures shall
mean any Indebtedness, whether outstanding on the date of execution of the
junior subordinated debenture indenture or thereafter created, assumed or
incurred, to the extent such Indebtedness by its terms ranks junior to and not
equally with or prior to:
- the junior subordinated debentures; and
- any other Indebtedness ranking equally with the junior subordinated
debentures in right of payment upon the happening of the dissolution,
winding-up, liquidation or reorganization of Cox.
The securing of any Indebtedness otherwise constituting indebtedness ranking
junior to the junior subordinated debentures shall not be deemed to prevent such
Indebtedness from constituting Indebtedness ranking junior to the junior
subordinated debentures.
Senior indebtedness shall mean all Indebtedness, whether outstanding on the
date of execution of the junior subordinated debenture indenture or thereafter
created, assumed or incurred, except indebtedness ranking on a parity with the
junior subordinated debentures or indebtedness ranking junior to the junior
subordinated debentures.
GOVERNING LAW
The junior subordinated debenture indenture and the junior subordinated
debentures will be governed by and construed in accordance with the laws of the
State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The debenture trustee shall be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to the foregoing, the debenture trustee will not be under
any obligation to exercise any of the powers vested in it by the junior
subordinated debenture indenture at the request of any holder of junior
subordinated debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby. The
debenture trustee will not be required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
the debenture trustee reasonably believes that repayment or adequate indemnity
is not reasonably assured to it.
DESCRIPTION OF TRUST PREFERRED SECURITIES
The trust preferred securities will be issued by a Cox Trust under the
declaration of trust of such Cox Trust and will represent beneficial interests
in the assests of such Cox Trust. The holders of such beneficial interests will
be entitled to a preference over the trust common securities of such Cox Trust
with respect to the payment of distributions and amounts payable on redemption
of the trust preferred securities or the liquidation of such Cox Trust under the
circumstances described under "-- Subordination of Trust Common Securities." The
declaration of trust has been qualified under the Trust Indenture Act and is
subject to, and governed by, the Trust Indenture Act. This summary of certain
terms and provisions of the trust preferred securities and the declaration of
trust does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all of the provisions of such trust preferred
securities and such declaration of trust, including the definitions therein of
certain terms, and those made a part of such declaration of trust by the Trust
Indenture Act.
Reference is made to the applicable prospectus supplement for a description
of the specific terms of the trust preferred securities offered thereby,
including:
- the particular Cox Trust issuing such trust preferred securities;
- the specific designation, number and purchase price of such trust
preferred securities;
- the annual distribution rate or method of calculation of the distribution
rate for such trust preferred securities and, if applicable, the dates
from which and upon which such distributions shall
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accumulate and be payable and the record dates therefor, and the maximum
extension period for which such distributions may be deferred;
- the liquidation amount per trust preferred security which shall be paid
out of the assets of such Cox Trust to the holders thereof upon voluntary
or involuntary dissolution, winding-up and liquidation of such Cox Trust;
- the obligation or right, if any, of such Cox Trust to purchase or redeem
its trust preferred securities and the price or prices at which, the date
or dates on which or period or periods within which and the terms and
conditions upon which, such trust preferred securities shall or may be
purchased or redeemed, in whole or in part, pursuant to such obligation
or right;
- the terms and conditions, if any, upon which such trust preferred
securities may be converted or exchanged, in addition to the
circumstances described herein, into other securities or rights, or a
combination of the foregoing, including the name of the issuer of such
securities or rights, the initial conversion or exchange price or rate
per trust preferred security and the date or dates on which or period or
periods within which such conversion or exchange may be effected;
- if applicable, any securities exchange upon which such trust preferred
securities shall be listed;
- whether such trust preferred securities are issuable in book-entry form
only and, if so, the identity of the depositary and disclosure relating
to the depositary arrangements; and
- any other rights, preferences, privileges, limitations or restrictions of
such trust preferred securities consistent with the declaration of trust
or with law which may differ from those described in this prospectus.
Certain material United States federal income tax considerations applicable to
any offering of trust preferred securities will also be described in the
applicable prospectus supplement.
GENERAL
The trust preferred securities of a Cox Trust will rank equally, and
payments will be made thereon pro rata, with the trust common securities of that
Cox Trust except as described under "-- Subordination of Trust Common
Securities." The proceeds from the sale of trust preferred securities and trust
common securities by a Cox Trust will be used by such Cox Trust to purchase an
aggregate principal amount of junior subordinated debentures of Cox equal to the
aggregate liquidation amount of such trust preferred securities and trust common
securities. Legal title to such junior subordinated debentures will be held by
the property trustee of the Cox Trust for the benefit of the holders of the
related trust securities. In addition, Cox will execute a preferred securities
guarantee for the benefit of the holders of the related trust preferred
securities. The preferred securities guarantee will not guarantee payment of
distributions or amounts payable on redemption of the trust preferred securities
or liquidation of a Cox Trust when such Cox Trust does not have funds legally
available for the payment thereof. See "Description of Preferred Securities
Guarantees."
The revenue of a Cox Trust available for distribution to holders of its
trust preferred securities will be limited to payments received under the
related junior subordinated debentures which such Cox Trust purchased with the
proceeds from the sale of its trust securities. If Cox fails to make a required
payment in respect of such junior subordinated debentures, the applicable Cox
Trust will not have sufficient funds to make the related payments, including
distributions, in respect of its trust preferred securities. Each of the Cox
Trusts is a separate legal entity and the assets of one are not available to
satisfy the obligations of any other.
DEFERRAL OF DISTRIBUTIONS
So long as no debenture event of default has occurred and is continuing,
Cox will have the right to defer the payment of interest on the junior
subordinated debentures at any time or from time to time for up to the maximum
extension period specified in the applicable prospectus supplement, provided
that an
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extension period must end on an interest payment date and may not extend beyond
the stated maturity of such junior subordinated debentures. If Cox elects to
exercise such right, distributions on the related trust preferred securities
will be deferred during any such extension period. Distributions to which
holders of the trust preferred securities are entitled during any extension
period will continue to accumulate additional distributions thereon. Cox has no
current intention to exercise its right to defer payments of interest on the
junior subordinated debentures Cox may issue and, accordingly, distributions on
the related trust preferred securities.
REDEMPTION
Upon the repayment at the stated maturity or redemption, in whole or in
part, prior to the stated maturity of the junior subordinated debentures, the
proceeds from such repayment or redemption shall be applied by the property
trustee to redeem an aggregate liquidation amount of the related trust
securities equal to the aggregate principal amount of such junior subordinated
debentures so repaid or redeemed, upon not less than 30 nor more than 60 days
prior written notice, at a redemption price equal to such aggregate liquidation
amount plus accumulated distributions to the redemption date. Any redemption of
trust securities shall be made and the applicable redemption price shall be
payable on the redemption date only to the extent that the applicable Cox Trust
has funds legally available for the payment thereof. See "-- Subordination of
Trust Common Securities."
If less than all of the junior subordinated debentures are to be redeemed
prior to the stated maturity thereof, then the proceeds of such redemption shall
be used to redeem the related trust securities on a pro rata basis among the
trust preferred securities and the trust common securities of the applicable Cox
Trust except as described under "-- Subordination of Trust Common Securities."
If less than all of the trust preferred securities held in book-entry form, if
any, are to be redeemed, such trust preferred securities will be redeemed in
accordance with the procedures of The Depository Trust Company. See "-- Global
Trust Preferred Securities."
REDEMPTION PROCEDURES
If a Cox Trust gives a notice of redemption in respect of its trust
preferred securities, then, by 12:00 noon, New York City time, on the redemption
date, to the extent funds are legally available,
- with respect to trust preferred securities held by The Depository Trust
Company or its nominee, the property trustee will deposit, or cause the
paying agent to deposit, irrevocably with The Depository Trust Company
funds sufficient to pay the applicable redemption price, and
- with respect to trust preferred securities held in certificated form, the
property trustee will irrevocably deposit with the paying agent funds
sufficient to pay the applicable redemption price and will give such
paying agent irrevocable instructions and authority to pay the applicable
redemption price to the holders thereof upon surrender of their
certificates evidencing the trust preferred securities.
If notice of redemption shall have been given and funds irrevocably
deposited as required, then, upon the date of such deposit, all rights of the
holders of the trust preferred securities called for redemption will cease,
except the right of such holders to receive the applicable redemption price, but
without interest thereon, and such trust preferred securities will cease to be
outstanding. In the event that any redemption date is not a business day, then
the applicable redemption price payable on that date will be paid on the next
succeeding day that is a business day, without any interest or other payment in
respect of any such delay, with the same force and effect as if made on that
date. In the event that payment of the applicable redemption price is improperly
withheld or refused and not paid either by the applicable Cox Trust or by
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Cox pursuant to the preferred securities guarantee as described under
"Description of Preferred Securities Guarantees,"
- distributions on the related trust preferred securities will continue to
accumulate from the redemption date originally established by such Cox
Trust to the date such applicable redemption price is actually paid, and
- the actual payment date will be the redemption date for purposes of
calculating the applicable redemption price.
Subject to applicable law, including, without limitation, United States
federal securities law, Cox or its subsidiaries may at any time and from time to
time purchase outstanding trust preferred securities by tender, in the open
market or by private agreement.
LIQUIDATION OF A COX TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
Cox will have the right at any time to dissolve a Cox Trust and cause the
related junior subordinated debentures to be distributed to the holders of the
trust securities of such Cox Trust in liquidation of such Cox Trust after
satisfaction, or reasonable provision for satisfaction, of liabilities to
creditors of such Cox Trust as required by applicable law. Such right is subject
to Cox having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of the trust preferred
securities of such Cox Trust.
The applicable Cox Trust shall automatically dissolve upon the first to
occur of:
1. certain events of bankruptcy, dissolution or liquidation of Cox;
2. the distribution of the related junior subordinated debentures to
the holders of the trust securities of such Cox Trust, if Cox, as
sponsor, has given written direction to the property trustee to
dissolve such Cox Trust, which direction is optional and, except as
described above, wholly within the discretion of Cox, as sponsor;
3. the redemption of all of the trust securities of such Cox Trust;
4. expiration of the term of such Cox Trust; and
5. the entry of an order for the dissolution of such Cox Trust by a
court of competent jurisdiction.
If a dissolution occurs as described in paragraph (1), (2), (4) or (5)
above, the applicable Cox Trust shall be liquidated by the issuer trustees as
expeditiously as the issuer trustees determine to be possible by distributing,
after satisfaction, or reasonable provision for satisfaction, of liabilities to
creditors of such Cox Trust as provided by applicable law, to the holders of the
trust securities and the related junior subordinated debentures, unless such
distribution is determined by the property trustee not to be practicable, in
which event such holders will be entitled to receive out of the assets of such
Cox Trust legally available for distribution to holders, after satisfaction of
liabilities to creditors of such Cox Trust as provided by applicable law, an
amount equal to the aggregate of the liquidation amount per trust security
specified in the applicable prospectus supplement plus accumulated distributions
thereon to the date of payment. If the liquidation distribution can be paid only
in part because the applicable Cox Trust has insufficient assets legally
available to pay in full the aggregate liquidation distribution, then the
amounts payable directly by such Cox Trust on its trust securities shall be paid
on a pro rata basis, except that if a debenture event of default has occurred
and is continuing, the trust preferred securities of such Cox Trust shall have a
priority over the trust common securities of such Cox Trust in respect of such
amounts. See "-- Subordination of Trust Common Securities."
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After a date is fixed for any distribution of junior subordinated
debentures to holders of the related trust securities:
- such trust securities will no longer be deemed to be outstanding;
- each registered global certificate, if any, representing such trust
securities will be exchanged for a registered global certificate
representing the junior subordinated debentures to be delivered upon such
distribution; and
- any trust securities in certificated form will be deemed to represent
junior subordinated debentures having a principal amount equal to the
liquidation amount of such trust securities, and bearing accrued interest
in an amount equal to the accumulated distributions on such trust
securities until such certificates are presented to the administrative
trustees or their agent for cancellation, whereupon Cox will issue to
such holder, and the debenture trustee will authenticate, junior
subordinated debentures in certificated form.
There can be no assurance as to the market prices for the trust preferred
securities or the junior subordinated debentures that may be distributed in
exchange for such trust preferred securities if a dissolution and liquidation of
the applicable Cox Trust were to occur. Accordingly, the trust preferred
securities that an investor may purchase, or the junior subordinated debentures
that the investor may receive on dissolution and liquidation of the applicable
Cox Trust, may trade at a discount to the price that the investor paid to
purchase such trust preferred securities.
SUBORDINATION OF TRUST COMMON SECURITIES
Payment of distributions on, and the applicable redemption price of, trust
securities shall be made pro rata among the trust preferred securities and the
trust common securities of the applicable Cox Trust based on their respective
liquidation amounts; provided, however, that if on any distribution date or
redemption date a debenture event of default has occurred and is continuing, no
payment of any distribution on, or applicable redemption price of, any of the
trust common securities of the applicable Cox Trust, and no other payment on
account of the redemption, liquidation or other acquisition of such trust common
securities, shall be made unless payment in full in cash of all accumulated
distributions on all of the outstanding trust preferred securities of such Cox
Trust for all distribution periods terminating on or prior thereto, or in the
case of payment of the applicable redemption price, the full amount of such
redemption price, shall have been made or provided for, and all funds available
to the property trustee shall first be applied to the payment in full in cash of
all distributions on, or applicable redemption price of, such trust preferred
securities then due and payable.
Upon the occurrence and continuance of an event of default under the
declaration of trust, Cox, as the trust common securities holder of the
applicable Cox Trust, will be deemed to have waived any right to act with
respect to such event of default until the effect of such event of default shall
have been cured, waived or otherwise eliminated. Until any such event of default
has been so cured, waived or otherwise eliminated, the property trustee shall
act solely on behalf of the holders of the trust preferred securities of such
Cox Trust and not on behalf of Cox as the trust common securities holder, and
only the holders of such trust preferred securities will have the right to
direct the property trustee to act on their behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of an event of default under the junior subordinated
debenture indenture will constitute an event of default under the declaration of
trust. Within ten business days after the occurrence of an event of default
under the declaration of trust actually known to the property trustee, the
property trustee shall transmit notice of such event of default to the holders
of the trust preferred securities of the applicable Cox Trust, the
administrative trustees and Cox, as sponsor, unless such event of default shall
have been cured or waived.
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For a discussion of the limited circumstances in which holders of trust
preferred securities may bring a direct action against Cox, see "Description of
Junior Subordinated Debentures -- Enforcement of Certain Rights by Holders of
Trust Preferred Securities."
REMOVAL OF TRUSTEES
Unless a debenture event of default has occurred and is continuing, any
issuer trustee may be removed at any time by Cox as the trust common securities
holder of the applicable Cox Trust. If a debenture event of default has occurred
and is continuing, the property trustee and the Delaware trustee may be removed
at such time only by the holders of a majority in liquidation amount of the
outstanding trust preferred securities of the applicable Cox Trust. In no event
will the holders of the trust preferred securities have the right to vote to
appoint, remove or replace the administrative trustees, which voting rights are
vested exclusively in Cox as the trust common securities holder. No resignation
or removal of an issuer trustee, and no appointment of a successor trustee,
shall be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the applicable declaration of trust.
MERGER OR CONSOLIDATION OF TRUSTEES
Any person into which the property trustee, the Delaware trustee or any
administrative trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such issuer trustee shall be a party, or
any person succeeding to all or substantially all the corporate trust business
of such issuer trustee, shall be the successor of such issuer trustee under the
declaration of trust, provided such person shall be otherwise qualified and
eligible.
MERGERS, CONVERSIONS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF A COX
TRUST
The applicable Cox Trust may not merge with or into, convert into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
corporation or other person, except as described below or as otherwise described
under "-- Liquidation a Cox Trust and Distribution of Junior Subordinated
Debentures." A Cox Trust may, at the request of Cox, as sponsor, with the
consent of the administrative trustees but without the consent of the holders of
its trust preferred securities, merge with or into, convert into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to a trust organized as
such under the laws of any State; provided that:
- such successor entity either
- expressly assumes all of the obligations of such Cox Trust with respect
to the trust securities of such Cox Trust, or
- substitutes for the trust securities of such Cox Trust other securities
having substantially the same terms as such trust securities so long as
the successor securities rank the same as such trust securities rank in
priority with respect to distributions and payments upon liquidation,
redemption and otherwise;
- Cox expressly appoints a trustee of such successor entity possessing the
same powers and duties as the property trustee with respect to the
related junior subordinated debentures;
- the successor securities are listed, or any successor securities will be
listed upon notification of issuance, on each national securities
exchange or other organization on which the trust securities of such Cox
Trust are then listed, if any;
- such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the trust securities,
including any successor securities, of such Cox Trust or the
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related junior subordinated debentures to be downgraded or placed under
surveillance or review by any nationally recognized statistical rating
organization;
- such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the trust securities,
including any successor securities, of such Cox Trust in any material
respect, other than any dilution of such holders' interests in the new
entity;
- such successor entity has a purpose substantially identical to that of
such Cox Trust;
- prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, Cox has received an opinion
from independent counsel to such Cox Trust experienced in such matters to
the effect that
- such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the trust securities,
including any successor securities, of such Cox Trust in any material
respect, other than any dilution of such holders' interests in the new
entity, and
- following such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither such Cox Trust nor
such successor entity will be required to register as an investment
company under the Investment Company Act of 1940, as amended; and
- Cox or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of
such successor entity under the successor securities at least to the
extent provided by the preferred securities guarantee and the common
securities guarantee for the benefit of the owner of the common
securities of such Cox Trust.
Notwithstanding the foregoing, such Cox Trust shall not, except with the consent
of each holder of its trust securities, consolidate, amalgamate, merge with or
into, or be replaced by or convey, transfer or lease its properties and assets
as an entirety or substantially as an entirety to any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause such Cox Trust or the successor entity not to be classified as
a grantor trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF A DECLARATION OF TRUST
Except as provided below and under "-- Mergers, Conversions,
Consolidations, Amalgamations or Replacements of a Cox Trust" and "Description
of Preferred Securities Guarantees -- Amendments and Assignment" and as
otherwise required by law and the applicable declaration of trust, the holders
of trust preferred securities will have no voting rights.
The declaration of trust may be amended from time to time by Cox, the
property trustee and the administrative trustees, without the consent of the
holders of the trust securities of the applicable Cox Trust,
- to cure any ambiguity, correct or supplement any provisions in such
declaration of trust that may be inconsistent with any other provision,
or to make any other provisions with respect to matters or questions
arising under such declaration of trust, which shall not be inconsistent
with the other provisions of such declaration of trust, or
- to modify, eliminate or add to any provisions of such declaration of
trust to such extent as shall be necessary to ensure that such Cox Trust
will be classified for United States federal income tax purposes as a
grantor trust at all times that any of its trust securities are
outstanding or to ensure that such Cox Trust will not be required to
register as an investment company under the Investment Company Act;
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provided, however, that in each case, such action shall not adversely affect in
any material respect the interests of the holders of such trust securities.
A declaration of trust may be amended by the issuer trustees and Cox
- with the consent of holders of a majority in liquidation amount of the
outstanding trust securities of the applicable Cox Trust, and
- upon receipt by the issuer trustees of an opinion of counsel experienced
in such matters to the effect that such amendment or the exercise of any
power granted to the issuer trustees in accordance with such amendment
will not affect such Cox Trust's status as a grantor trust for United
States federal income tax purposes or such Cox Trust's exemption from
status as an investment company under the Investment Company Act;
provided, however, that, without the consent of each holder of such trust
securities, such declaration of trust may not be amended to:
- change the distribution rate or manner of calculation of the distribution
rate, amount, timing or currency or otherwise adversely affect the method
of any required payment;
- change the purpose of the applicable Cox Trust;
- authorize the issuance of any additional beneficial interests in such Cox
Trust;
- change the conversion, exchange or redemption provisions;
- change the conditions precedent for Cox to elect to dissolve such Cox
Trust and distribute the related junior subordinated debentures to the
holders of such trust securities;
- change the liquidation distribution or other provisions relating to the
distribution of amounts payable upon the dissolution and liquidation of
such Cox Trust;
- affect the limited liability of any holder of such trust securities; or
- restrict the right of a holder of such trust securities to institute suit
for the enforcement of any required payment on or after the due date
therefor or for the conversion or exchange of such trust securities in
accordance with their terms.
So long as any junior subordinated debentures are held by the property
trustee, the issuer trustees shall not:
- direct the time, method and place of conducting any proceeding for any
remedy available to such trustee, or execute any trust or power conferred
on the trustee, with respect to the junior subordinated debentures;
- waive certain past defaults under the junior subordinated debenture
indenture;
- exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of such junior subordinated debentures; or
- consent to any amendment, modification or termination of the junior
subordinated debenture indenture or such junior subordinated debentures
where such consent shall be required, without, in each case, obtaining
the prior approval of the holders of a majority in liquidation amount of
all outstanding trust preferred securities of the applicable Cox Trust;
provided, however, that where a consent under the junior subordinated debenture
indenture would require the consent of each holder affected thereby, no such
consent shall be given by the property trustee without the prior approval of
each holder of the related trust preferred securities. The issuer trustees shall
not revoke any action previously authorized or approved by a vote of the holders
of trust preferred securities except by subsequent vote of such holders. The
property trustee shall notify each holder of trust preferred securities of any
notice of default with respect to the related junior subordinated debentures. In
addition to obtaining approvals of holders of trust preferred securities
referred to above, prior to taking any of the
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foregoing actions, the issuer trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the applicable Cox Trust will not
be classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
Any required approval of holders of trust preferred securities may be given
at a meeting of such holders convened for such purpose or pursuant to written
consent. The administrative trustees will cause a notice of any meeting at which
holders of trust preferred securities are entitled to vote to be given to each
holder of record of trust preferred securities in the manner set forth in the
applicable declaration of trust.
Notwithstanding that holders of trust preferred securities are entitled to
vote or consent under any of the circumstances referred to above, any trust
preferred securities that are owned by Cox or any affiliate of Cox shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
GLOBAL TRUST PREFERRED SECURITIES
If specified in the applicable prospectus supplement, trust preferred
securities may be represented by one or more global certificates deposited with,
or on behalf of, The Depository Trust Company, or other depositary identified in
such prospectus supplement, or a nominee thereof, in each case for credit to an
account of a participant in The Depository Trust Company or other depositary.
The identity of the depositary and the specific terms of the depositary
arrangements with respect to the trust preferred securities to be represented by
one or more global certificates will be described in the applicable prospectus
supplement. However, unless otherwise specified in the applicable prospectus
supplement, The Depository Trust Company will be the depositary and the
depositary arrangements described with respect to the debt securities will apply
to such trust preferred securities as well, except all references to Cox shall
include the Cox Trusts and all references to the applicable indenture will refer
to the applicable declaration of trust. See "Description of Debt
Securities -- Global Securities."
PAYMENT AND PAYING AGENT
Payments in respect of any global certificate representing trust preferred
securities shall be made to Cede & Co. as nominee of The Depository Trust
Company, or other applicable depositary or its nominee, which shall credit the
relevant accounts at The Depository Trust Company or such other depositary on
the applicable payment dates, while payments in respect of trust preferred
securities in certificated form shall be made by check mailed to the address of
the holder entitled thereto as such address shall appear on the register. The
paying agent shall initially be the property trustee and any co-paying agent
chosen by the property trustee and acceptable to the administrative trustees and
Cox. The paying agent shall be permitted to resign as paying agent upon 30 days
prior written notice to the property trustee, the administrative trustees and
Cox. In the event that the property trustee shall no longer be the paying agent,
the administrative trustees shall appoint a successor, which shall be a bank or
trust company acceptable to the administrative trustees and Cox, to act as
paying agent.
REGISTRAR AND TRANSFER AGENT
The property trustee will act as registrar and transfer agent for the trust
preferred securities.
Registration of transfers of trust preferred securities will be effected
without charge by or on behalf of the applicable Cox Trust, but upon payment of
any tax or other governmental charges that may be imposed in connection with any
transfer or exchange. A Cox Trust will not be required to register or cause to
be registered the transfer of its trust preferred securities after they have
been converted, exchanged, redeemed or called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, other than during the occurrence and continuance of
an event of default under the applicable declaration of trust, will undertake to
perform only such duties as are specifically set forth in such declaration of
trust and, during the continuance of such event of default, must exercise the
same
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degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to the foregoing, the property
trustee will not be under any obligation to exercise any of the powers vested in
it by such declaration of trust at the request of any holder of the related
trust securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no such event of
default has occurred and is continuing and the property trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
such declaration of trust or is unsure of the application of any provision of
such declaration of trust, and the matter is not one on which holders of trust
preferred securities or trust common securities are entitled under such
declaration of trust to vote, then the property trustee shall take such action
as is directed by Cox and if not so directed, shall take such action as it deems
advisable and in the best interests of the holders of the related trust
securities and will have no liability except for its own bad faith, negligence
or willful misconduct.
MISCELLANEOUS
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the applicable Cox Trust in such a way that:
- such Cox Trust will not be deemed to be an investment company required to
be registered under the Investment Company Act;
- such Cox Trust will be classified as a grantor trust for United States
federal income tax purposes; and
- the related junior subordinated debentures will be treated as
indebtedness of Cox for United States federal income tax purposes.
Cox and the administrative trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of the applicable Cox
Trust or the applicable declaration of trust, that the administrative trustees
determine in their discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the interests of the
holders of the related trust securities.
Holders of trust preferred securities will not have any preemptive or
similar rights.
A Cox Trust may not borrow money, issue debt, execute mortgages or pledge
any of its assets.
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DESCRIPTION OF PREFERRED SECURITIES GUARANTEES
A preferred securities guarantee will be executed and delivered by Cox
concurrently with the issuance by a Cox Trust of its trust preferred securities
for the benefit of the holders from time to time of such trust preferred
securities and will be held for such holders by The Bank of New York, as
preferred securities guarantee trustee. Each preferred securities guarantee has
been qualified as an indenture under the Trust Indenture Act and is subject to,
and governed by, the Trust Indenture Act. This summary of certain terms and
provisions of a preferred securities guarantee does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all of the
provisions of such preferred securities guarantee, including the definitions
therein of certain terms, and those made a part of such preferred securities
guarantee by the Trust Indenture Act.
GENERAL
Cox will irrevocably agree to pay in full, to the extent set forth herein,
the guarantee payments to the holders of the related trust preferred securities,
as and when due, regardless of any defense, right of set-off or counterclaim
that the applicable Cox Trust may have or assert other than the defense of
payment. The following payments, which are referred to as guarantee payments,
with respect to trust preferred securities, to the extent not paid by or on
behalf of the applicable Cox Trust, will be subject to the preferred securities
guarantee:
- any accumulated distributions required to be paid on such trust preferred
securities, to the extent that such Cox Trust has funds legally available
therefor at such time;
- the applicable redemption price with respect to such trust preferred
securities called for redemption, to the extent that such Cox Trust has
funds legally available therefor at such time; or
- upon a voluntary or involuntary dissolution and liquidation of such Cox
Trust, other than in connection with the distribution of the related
junior subordinated debentures to holders of such trust preferred
securities or the redemption, conversion or exchange of the trust
preferred securities, the lesser of
- the amounts due upon the dissolution and liquidation of such Cox Trust,
to the extent that such Cox Trust has funds legally available therefor
at the time, and
- the amount of assets of such Cox Trust remaining available for
distribution to holders of its trust preferred securities after
satisfaction of liabilities to creditors of such Cox Trust as required
by applicable law.
Cox's obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by Cox to the holders of the trust preferred
securities entitled thereto or by causing the applicable Cox Trust to pay such
amounts to such holders.
Cox will, through the preferred securities guarantee, the declaration of
trust, the related junior subordinated debentures and junior subordinated
debenture indenture, taken together, fully, irrevocably and unconditionally
guarantee all of the applicable Cox Trust's obligations under its trust
preferred securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of a Cox
Trust's obligations under its trust preferred securities.
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RANKING
Unless otherwise specified in the applicable prospectus supplement, each
preferred securities guarantee will constitute an unsecured obligation of Cox
and will rank
- subordinate and junior in right of payment to all other liabilities of
Cox, including all senior debt securities, any subordinated debt
securities and the junior subordinated debentures, except those made
ratable or subordinate by their terms, and
- senior to all capital stock now or hereafter issued by Cox and to any
guarantee now or hereafter entered into by Cox in respect of any of its
capital stock.
The declaration of trust will provide that each holder of trust preferred
securities by acceptance thereof agrees to the subordination provisions and
other terms of the related preferred securities guarantee. The preferred
securities guarantee will rank subordinate to, or equally with, all other
guarantees to be issued by Cox with respect to securities of other trusts or
other entities to be established by Cox that are similar to a Cox Trust.
The preferred securities guarantees will not limit the amount of secured or
unsecured debt, including senior indebtedness as defined in the junior
subordinated debenture indenture, that may be incurred by Cox or any of its
subsidiaries.
PREFERRED SECURITIES GUARANTEE OF PAYMENT
Each preferred securities guarantee will constitute a guarantee of payment
and not of collection. In other words, the guaranteed party may institute a
legal proceeding directly against Cox to enforce its rights under such preferred
securities guarantee without first instituting a legal proceeding against any
other person or entity. A preferred securities guarantee will not be discharged
except by payment of the related preferred securities guarantee payments in full
to the extent not paid by the applicable Cox Trust or upon distribution of its
trust preferred securities to the holders of the related junior subordinated
debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the related trust preferred securities, in which case
no approval will be required, the applicable preferred securities guarantee may
not be amended without the prior approval of the holders of a majority of the
liquidation amount of such outstanding trust preferred securities. The manner of
obtaining any such approval will be as set forth under "Description of Trust
Preferred Securities -- Voting Rights; Amendment of a Declaration of Trust." All
guarantees and agreements contained in a preferred securities guarantee shall
bind the successors, assigns, receivers, trustees and representatives of Cox and
shall inure to the benefit of the holders of the related trust preferred
securities then outstanding.
EVENTS OF DEFAULT
An event of default under a preferred securities guarantee will occur upon
the failure of Cox to perform any of its payment or other obligations
thereunder, provided that, except with respect to a default in respect of any
preferred securities guarantee payment, Cox shall have received notice of such
default and shall not have cured such default within 60 days of such receipt.
The holders of a majority in liquidation amount of the related trust preferred
securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the preferred securities
guarantee trustee in respect of the applicable preferred securities guarantee or
to direct the exercise of any trust or power conferred upon the preferred
securities guarantee trustee under such preferred securities guarantee.
If the preferred securities guarantee trustee fails to enforce a preferred
securities guarantee, any holder of the related trust preferred securities may
institute a legal proceeding directly against Cox to enforce its rights under
such preferred securities guarantee without first instituting a legal proceeding
against the applicable Cox Trust, the preferred securities guarantee trustee or
any other person or entity.
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TERMINATION
A preferred securities guarantee will terminate and be of no further force
and effect upon:
- full payment of the applicable redemption price of the related trust
preferred securities;
- full payment of all amounts due upon the dissolution and liquidation of
the applicable Cox Trust; or
- the conversion or exchange of all of the related trust preferred
securities, whether upon distribution of junior subordinated debentures
to the holders of such trust preferred securities or otherwise.
A preferred securities guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the related trust
preferred securities must restore payment of any sums paid under such trust
preferred securities or such preferred securities guarantee.
GOVERNING LAW
Each preferred securities guarantee will be governed by and construed in
accordance with the laws of the State of New York.
INFORMATION CONCERNING THE PREFERRED SECURITIES GUARANTEE TRUSTEE
The preferred securities guarantee trustee, other than during the
occurrence and continuance of a default by Cox in performance of a preferred
securities guarantee, will undertake to perform only such duties as are
specifically set forth in the preferred securities guarantee and, during the
continuance of such default, must exercise the same degree of care and skill as
a prudent person would exercise or use in the conduct of his or her own affairs.
Subject to the foregoing, the preferred securities guarantee trustee will not be
under any obligation to exercise any of the powers vested in it by a preferred
securities guarantee at the request of any holder of the related trust preferred
securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby.
LIMITED PURPOSE OF COX TRUST
The trust preferred securities will represent preferred beneficial
interests in the applicable Cox Trust, and each Cox Trust exists for the sole
purpose of issuing and selling its trust securities, using the proceeds from the
sale of its trust securities to acquire the related junior subordinated
debentures of Cox and engaging in only those other activities necessary,
advisable or incidental thereto.
RIGHTS UPON DISSOLUTION
Unless the junior subordinated debentures are distributed to holders of the
related trust securities, upon any voluntary or involuntary dissolution and
liquidation of the applicable Cox Trust, after satisfaction of the liabilities
of creditors of such Cox Trust as required by applicable law, the holders of
such trust securities will be entitled to receive, out of assets held by such
Cox Trust, the liquidation distribution in cash. See "Description of Trust
Preferred Securities -- Liquidation of a Cox Trust and Distribution of Junior
Subordinated Debentures." Upon any voluntary or involuntary liquidation or
bankruptcy of Cox, the property trustee, as holder of the junior subordinated
debentures, would be a creditor of Cox, subordinated in right of payment to all
senior indebtedness as set forth in the junior subordinated debenture indenture,
but entitled to receive payment in full of principal and premium, if any, and
interest in respect of such junior subordinated debentures, before any
stockholders of Cox receive payments or distributions.
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RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE PREFERRED SECURITIES GUARANTEES
Full and Unconditional Guarantee. Cox will irrevocably guarantee payments
of distributions and other amounts due on the trust preferred securities to the
extent the applicable Cox Trust has funds available for the payment of the
distributions as and to the extent set forth under "Description of Preferred
Securities Guarantees." Taken together, Cox's obligations under the junior
subordinated debentures, the securities resolution, the junior subordinated
debenture indenture, the declaration of trust and the preferred securities
guarantee agreement provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of distributions and other amounts due on
the trust preferred securities. No single document standing alone or operating
in conjunction with fewer than all of the other documents constitutes the full
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
applicable Cox Trust's obligations under the trust preferred securities.
If and to the extent that Cox does not make payments on the junior
subordinated debentures, the applicable Cox Trust will not pay distributions or
other amounts due on its trust preferred securities. A preferred securities
guarantee does not cover payment of distributions when such Cox Trust does not
have sufficient funds to pay the distributions. In that event, the remedy for a
holder of trust preferred securities is to institute a legal proceeding directly
against Cox for enforcement of payment of the distributions to such holder.
Sufficiency of Payments. As long as all payments are made when due on the
junior subordinated debentures, those payments will be sufficient to cover
distributions and other payments due on the trust preferred securities. This is
primarily because:
- the aggregate principal amount of the junior subordinated debentures will
be equal to the sum of the aggregate stated liquidation amount of the
trust preferred securities and trust common securities;
- the interest rate and interest and other payment dates on the junior
subordinated debentures will match the distribution rate and distribution
and other payment dates for the trust preferred securities;
- Cox, as borrower, has promised to pay any and all costs, expenses and
liabilities of the applicable Cox Trust except such Cox Trust's
obligations under its trust preferred securities; and
- the declaration of trust provides that the applicable Cox Trust will not
engage in any activity that is not consistent with the limited purposes
of such Cox Trust.
Cox has the right to set-off any payment Cox is otherwise required to make
under the junior subordinated debenture indenture if and to the extent Cox has
already made, or is concurrently making, a payment under the applicable
preferred securities guarantee agreement.
Enforcement Rights of Holders of Trust Preferred Securities. A holder of a
trust preferred security may institute a legal proceeding directly against Cox
to enforce its rights under the applicable preferred securities guarantee
agreement without first instituting a legal proceeding against the preferred
securities guarantee trustee, the applicable Cox Trust or anyone else.
Cox's default or event of default under any other senior or subordinated
indebtedness would not necessarily constitute a trust event of default. However,
in the event of payment defaults under, or acceleration of, Cox's senior or
subordinated indebtedness, the subordination provisions of the applicable
securities resolution will provide that no payments may be made in respect of
the junior subordinated debentures until the senior or subordinated indebtedness
has been paid in full or any payment default thereunder has been cured or
waived. Cox's failure to make required payments on any junior subordinated
debentures would constitute a trust event of default.
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Limited Purpose of a Cox Trust. The applicable Cox Trust's trust preferred
securities evidence undivided beneficial ownership interests in the assets of
the applicable Cox Trust, and each Cox Trust exists for the sole purposes of
issuing its trust preferred securities and trust common securities, investing
the proceeds in junior subordinated debentures and engaging in only those other
activities necessary, convenient or incidental to those purposes. A principal
difference between the rights of a holder of a trust preferred security and a
holder of a corresponding junior subordinated debenture is that a holder of a
junior subordinated debenture is entitled to receive from Cox the principal
amount of and interest accrued on the corresponding junior subordinated
debentures, while a holder of trust preferred securities is entitled to receive
distributions from the applicable Cox Trust, or from Cox under the preferred
securities guarantee agreement, if and to the extent the applicable Cox Trust
has funds available for the payment of the distributions.
Rights Upon Dissolution. Upon any voluntary or involuntary dissolution of
a Cox Trust involving the liquidation of the junior subordinated debentures, the
holders of the trust preferred securities will be entitled to receive the
liquidation distribution in cash, out of assets of such Cox Trust and after
satisfaction of creditors of such Cox Trust as provided by applicable law. If
Cox becomes subject to any voluntary or involuntary liquidation or bankruptcy,
the property trustee, as holder of the junior subordinated debentures, would be
one of Cox's junior subordinated creditors. The property trustee would be
subordinated in right of payment to all of Cox's senior indebtedness and
subordinated indebtedness, but it would be entitled to receive payment in full
of principal and interest before Cox's stockholders receive payments or
distributions. Cox is the guarantor under the preferred securities guarantee
agreements and pursuant to the junior subordinated debenture indenture, as
borrower, has agreed to pay all costs, expenses and liabilities of the
applicable Cox Trust other than the applicable Cox Trust's obligations to the
holders of the trust preferred securities. Accordingly, in the event of Cox's
liquidation or bankruptcy the positions of a holder of trust preferred
securities and of a holder of junior subordinated debentures are expected to be
substantially the same relative to Cox's other creditors and to Cox's
stockholders.
DESCRIPTION OF CAPITAL SECURITIES
The capital securities will be issued by a Cox Trust under a declaration of
trust and will represent beneficial interests in such Cox Trust. The holders of
such beneficial interests will be entitled to a preference over the trust common
securities of such Cox Trust with respect to the payment of distributions and
amounts payable on redemption of the capital securities or the liquidation of
such Cox Trust under the circumstances described under "-- Subordination of
Trust Common Securities." The declaration of trust has been qualified under the
Trust Indenture Act and is subject to, and governed by, the Trust Indenture Act.
This summary of certain terms and provisions of the capital securities and the
declaration of trust does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all of the provisions of such capital
securities and such declaration of trust, including the definitions therein of
certain terms, and those made a part of such declaration of trust by the Trust
Indenture Act.
Reference is made to the applicable prospectus supplement for a description
of the specific terms of the capital securities offered thereby, including:
- the particular Cox Trust issuing such capital securities;
- the specific designation, number and purchase price of such capital
securities;
- the annual distribution rate or method of calculation of the distribution
rate for such capital securities and, if applicable, the dates from which
and upon which such distributions shall accumulate and be payable and the
record dates therefor, and the maximum extension period for which such
distributions may be deferred;
- the liquidation amount per capital security which shall be paid out of
the assets of such Cox Trust to the holders thereof upon voluntary or
involuntary dissolution, winding-up and liquidation of such Cox Trust;
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- the obligation or right, if any, of such Cox Trust to purchase or redeem
its capital securities and the price or prices at which, the date or
dates on which or period or periods within which and the terms and
conditions upon which, such capital securities shall or may be purchased
or redeemed, in whole or in part, pursuant to such obligation or right;
- the terms and conditions, if any, upon which such capital securities may
be converted or exchanged, in addition to the circumstances described
herein, into other securities or rights, or a combination of the
foregoing, including the name of the issuer of such securities or rights,
the initial conversion or exchange price or rate per capital security and
the date or dates on which or period or periods within which such
conversion or exchange may be effected;
- if applicable, any securities exchange upon which such capital securities
shall be listed;
- whether such capital securities are issuable in book-entry form only and,
if so, the identity of the depositary and disclosure relating to the
depositary arrangements; and
- any other rights, preferences, privileges, limitations or restrictions of
such capital securities consistent with the declaration of trust or with
law which may differ from those described in this prospectus.
Certain material United States federal income tax considerations applicable to
any offering of capital securities will also be described in the applicable
prospectus supplement.
GENERAL
The capital securities of a Cox Trust will rank equally, and payments will
be made thereon pro rata, with the trust common securities of that Cox Trust
except as described under "-- Subordination of Trust Common Securities." The
proceeds from the sale of capital securities and trust common securities by a
Cox Trust will be used by such Cox Trust to purchase an aggregate principal
amount of senior debt securities of Cox equal to the aggregate liquidation
amount of such capital securities and trust common securities. Legal title to
such senior debt securities will be held by the property trustee of the Cox
Trust for the benefit of the holders of the related trust securities. In
addition, Cox will execute a capital securities guarantee for the benefit of the
holders of the related capital securities. The capital securities guarantee will
not guarantee payment of distributions or amounts payable on redemption of the
capital securities or liquidation of a Cox Trust when such Cox Trust does not
have funds legally available for the payment thereof. See "Description of
Capital Securities Guarantees."
The revenue of a Cox Trust available for distribution to holders of its
capital securities will be limited to payments received under the related senior
debt securities which such Cox Trust purchased with the proceeds from the sale
of its trust securities. If Cox fails to make a required payment in respect of
such senior debt securities, the applicable Cox Trust will not have sufficient
funds to make the related payments, including distributions, in respect of its
capital securities. Each of the Cox Trusts is a separate legal entity and the
assets of one are not available to satisfy the obligations of any other.
DEFERRAL OF DISTRIBUTIONS
If so specified in the related prospectus supplement, so long as no event
of default with respect to the senior debt securities has occurred and is
continuing, Cox will have the right to defer the payment of interest on the
senior debt securities, at any time or from time to time, for up to the maximum
extension period specified in such prospectus supplement, provided that an
extension period must end on an interest payment date and may not extend beyond
the stated maturity of such senior debt securities. If Cox elects to exercise
such right, distributions on the related capital securities will be deferred
during any such extension period. Distributions to which holders of the capital
securities are entitled during any extension period will continue to accumulate
additional distributions thereon.
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REDEMPTION
Upon the repayment at the stated maturity or redemption, in whole or in
part, prior to the stated maturity of the senior debt securities, the proceeds
from such repayment or redemption shall be applied by the property trustee to
redeem an aggregate liquidation amount of the related securities equal to the
aggregate principal amount of such senior debt securities so repaid or redeemed,
upon not less than 30 nor more than 60 days prior written notice, at a
redemption price equal to such aggregate liquidation amount plus accumulated
distributions to the redemption date. Any redemption of trust securities shall
be made and the applicable redemption price shall be payable on the redemption
date only to the extent that the applicable Cox Trust has funds legally
available for the payment thereof. See "-- Subordination of Trust Common
Securities."
If less than all of the senior debt securities are to be redeemed prior to
the stated maturity thereof, then the proceeds of such redemption shall be used
to redeem the related trust securities on a pro rata basis among the capital
securities and the trust common securities of the applicable Cox Trust except as
described under "-- Subordination of Trust Common Securities." If less than all
of the capital securities held in book-entry form, if any, are to be redeemed,
such capital securities will be redeemed in accordance with the procedures of
The Depository Trust Company. See "-- Global Capital Securities."
REDEMPTION PROCEDURES
If a Cox Trust gives a notice of redemption in respect of its capital
securities, then, by 12:00 noon, New York City time, on the redemption date, to
the extent funds are legally available,
- with respect to capital securities held by The Depository Trust Company
or its nominee, the property trustee will deposit, or cause the paying
agent to deposit, irrevocably with The Depository Trust Company funds
sufficient to pay the applicable redemption price, and
- with respect to capital securities held in certificated form, the
property trustee will irrevocably deposit with the paying agent funds
sufficient to pay the applicable redemption price and will give such
paying agent irrevocable instructions and authority to pay the applicable
redemption price to the holders thereof upon surrender of their
certificates evidencing the capital securities.
If notice of redemption shall have been given and funds irrevocably
deposited as required, then, upon the date of such deposit, all rights of the
holders of the capital securities called for redemption will cease, except the
right of such holders to receive the applicable redemption price, but without
interest thereon, and such capital securities will cease to be outstanding. In
the event that any redemption date is not a business day, then the applicable
redemption price payable on that date will be paid on the next succeeding day
that is a business day, without any interest or other payment in respect of any
such delay, with the same force and effect as if made on that date. In the event
that payment of the applicable redemption price is improperly withheld or
refused and not paid either by the applicable Cox Trust or by Cox pursuant to
the capital securities guarantee as described under "Description of Capital
Securities Guarantees,"
- distributions on the related capital securities will continue to
accumulate from the redemption date originally established by such Cox
Trust to the date such applicable redemption price is actually paid, and
- the actual payment date will be the redemption date for purposes of
calculating the applicable redemption price.
Subject to applicable law, including, without limitation, United States
federal securities law, Cox or its subsidiaries may at any time and from time to
time purchase outstanding capital securities by tender, in the open market or by
private agreement.
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LIQUIDATION OF A COX TRUST AND DISTRIBUTION OF SENIOR DEBT SECURITIES
Cox will have the right at any time to dissolve a Cox Trust and cause the
related senior debt securities to be distributed to the holders of the trust
securities of such Cox Trust in liquidation of such Cox Trust after
satisfaction, or reasonable provision for satisfaction, of liabilities to
creditors of such Cox Trust as required by applicable law. Such right is subject
to Cox having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of the capital securities of
such Cox Trust.
The applicable Cox Trust shall automatically dissolve upon the first to
occur of:
1. certain events of bankruptcy, dissolution or liquidation of Cox;
2. the distribution of the related senior debt securities to the
holders of the trust securities of such Cox Trust, if Cox, as
sponsor, has given written direction to the property trustee to
dissolve such Cox Trust, which direction is optional and, except as
described above, wholly within the discretion of Cox, as sponsor;
3. the conversion, exchange or redemption of all of the trust
securities of such Cox Trust;
4. expiration of the term of such Cox Trust; and
5. the entry of an order for the dissolution of such Cox Trust by a
court of competent jurisdiction.
If a dissolution occurs as described in paragraph (1), (2), (4) or (5)
above, the applicable Cox Trust shall be liquidated by the issuer trustees as
expeditiously as the issuer trustees determine to be possible by distributing,
after satisfaction, or reasonable provision for satisfaction, of liabilities to
creditors of such Cox Trust as provided by applicable law, to the holders of the
trust securities and the related senior debt securities, unless such
distribution is determined by the property trustee not to be practicable, in
which event such holders will be entitled to receive out of the assets of such
Cox Trust legally available for distribution to holders, after satisfaction of
liabilities to creditors of such Cox Trust as provided by applicable law, an
amount equal to the aggregate of the liquidation amount per trust security
specified in the applicable prospectus supplement plus accumulated distributions
thereon to the date of payment. If the liquidation distribution can be paid only
in part because the applicable Cox Trust has insufficient assets legally
available to pay in full the aggregate liquidation distribution, then the
amounts payable directly by such Cox Trust on its trust securities shall be paid
on a pro rata basis, except that if an event of default with respect to the
senior debt securities has occurred and is continuing, the capital securities of
such Cox Trust shall have a priority over the trust common securities of such
Cox Trust in respect of such amounts. See "-- Subordination of Trust Common
Securities."
After a date is fixed for any distribution of senior debt securities to
holders of the related trust securities:
- such trust securities will no longer be deemed to be outstanding;
- each registered global certificate, if any, representing such trust
securities will be exchanged for a registered global certificate
representing the senior debt securities to be delivered upon such
distribution; and
- any trust securities in certificated form will be deemed to represent
senior debt securities having a principal amount equal to the liquidation
amount of such trust securities, and bearing accrued interest in an
amount equal to the accumulated distributions on such trust securities
until such certificates are presented to the administrative trustees or
their agent for cancellation, whereupon Cox will issue to such holder,
and the trustee will authenticate, senior debt securities in certificated
form.
There can be no assurance as to the market prices for the capital
securities or the senior debt securities that may be distributed in exchange for
such capital securities if a dissolution and liquidation of
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the applicable Cox Trust were to occur. Accordingly, the capital securities that
an investor may purchase, or the senior debt securities that the investor may
receive on dissolution and liquidation of the applicable Cox Trust, may trade at
a discount to the price that the investor paid to purchase such capital
securities.
SUBORDINATION OF TRUST COMMON SECURITIES
Payment of distributions on, and the applicable redemption price of, trust
securities shall be made pro rata among the capital securities and the trust
common securities of the applicable Cox Trust based on their respective
liquidation amounts; provided, however, that if on any distribution date or
redemption date an event of default with respect to the senior debt securities
has occurred and is continuing, no payment of any distribution on, or applicable
redemption price of, any of the trust common securities of the applicable Cox
Trust, and no other payment on account of the redemption, liquidation or other
acquisition of such trust common securities, shall be made unless payment in
full in cash of all accumulated distributions on all of the outstanding capital
securities of such Cox Trust for all distribution periods terminating on or
prior thereto, or in the case of payment of the applicable redemption price, the
full amount of such redemption price, shall have been made or provided for, and
all funds available to the property trustee shall first be applied to the
payment in full in cash of all distributions on, or applicable redemption price
of, such capital securities then due and payable.
Upon the occurrence and continuance of an event of default under the
declaration of trust, Cox, as the trust common securities holder of the
applicable Cox Trust, will be deemed to have waived any right to act with
respect to such event of default until the effect of such event of default shall
have been cured, waived or otherwise eliminated. Until any such event of default
has been so cured, waived or otherwise eliminated, the property trustee shall
act solely on behalf of the holders of the capital securities of such Cox Trust
and not on behalf of Cox as the trust common securities holder, and only the
holders of such capital securities will have the right to direct the property
trustee to act on their behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of an event of default under the indenture relating to the
senior debt securities will constitute an event of default under the declaration
of trust. Within ten business days after the occurrence of an event of default
under the declaration of trust actually known to the property trustee, the
property trustee shall transmit notice of such event of default to the holders
of the capital securities of the applicable Cox Trust, the administrative
trustees and Cox, as sponsor, unless such event of default shall have been cured
or waived.
The applicable prospectus supplement will contain a discussion of the
limited circumstances in which holders of capital securities may bring a direct
action against Cox.
REMOVAL OF TRUSTEES
Unless an event of default with respect to the senior debt securities has
occurred and is continuing, any issuer trustee may be removed at any time by Cox
as the trust common securities holder of the applicable Cox Trust. If such an
event of default has occurred and is continuing, the property trustee and the
Delaware trustee may be removed at such time only by the holders of a majority
in liquidation amount of the outstanding capital securities of the applicable
Cox Trust. In no event will the holders of the capital securities have the right
to vote to appoint, remove or replace the administrative trustees, which voting
rights are vested exclusively in Cox as the trust common securities holder. No
resignation or removal of an issuer trustee, and no appointment of a successor
trustee, shall be effective until the acceptance of appointment by the successor
trustee in accordance with the provisions of the applicable declaration of
trust.
MERGER OR CONSOLIDATION OF TRUSTEES
Any person into which the property trustee, the Delaware trustee or any
administrative trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person
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resulting from any merger, conversion or consolidation to which such issuer
trustee shall be a party, or any person succeeding to all or substantially all
the corporate trust business of such issuer trustee, shall be the successor of
such issuer trustee under the applicable declaration of trust, provided such
person shall be otherwise qualified and eligible.
MERGERS, CONVERSIONS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF A COX
TRUST
The applicable Cox Trust may not merge with or into, convert into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
corporation or other person, except as described below or as otherwise described
under "-- Liquidation of a Cox Trust and Distribution of Senior Debt
Securities." A Cox Trust may, at the request of Cox, as sponsor, with the
consent of the administrative trustees but without the consent of the holders of
its capital securities, merge with or into, convert into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to a trust organized as
such under the laws of any State; provided that:
- such successor entity either
- expressly assumes all of the obligations of such Cox Trust with respect
to the trust securities of such Cox Trust, or
- substitutes for the trust securities of such Cox Trust other securities
having substantially the same terms as such trust securities so long as
the successor securities rank the same as such trust securities rank in
priority with respect to distributions and payments upon liquidation,
redemption and otherwise;
- Cox expressly appoints a trustee of such successor entity possessing the
same powers and duties as the property trustee with respect to the
related senior debt securities;
- such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the trust securities,
including any successor securities, of such Cox Trust or the related
senior debt securities to be downgraded or placed under surveillance or
review by any nationally recognized statistical rating organization;
- such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the trust securities,
including any successor securities, of such Cox Trust in any material
respect, other than any dilution of such holders' interests in the new
entity;
- such successor entity has a purpose substantially identical to that of
such Cox Trust;
- prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, Cox has received an opinion
from independent counsel to such Cox Trust experienced in such matters to
the effect that
- such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the trust securities,
including any successor securities, of such Cox Trust in any material
respect, other than any dilution of such holders' interests in the new
entity, and
- following such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither such Cox Trust nor
such successor entity will be required to register as an investment
company under the Investment Company Act of 1940, as amended; and
- Cox or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of
such successor entity under the successor securities at least to the
extent provided by the capital securities guarantee and the common
securities guarantee for the benefit of the owner of the common
securities of such Cox Trust.
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Notwithstanding the foregoing, such Cox Trust shall not, except with the consent
of each holder of its trust securities, consolidate, amalgamate, merge with or
into, or be replaced by or convey, transfer or lease its properties and assets
as an entirety or substantially as an entirety to any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause such Cox Trust or the successor entity not to be classified as
a grantor trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF A DECLARATION OF TRUST
Except as provided below and under "-- Mergers, Conversions,
Consolidations, Amalgamations or Replacements of a Cox Trust" and "Description
of Capital Securities Guarantee -- Amendments and Assignment" and as otherwise
required by law and the declaration of trust, the holders of capital securities
will have no voting rights.
The declaration of trust may be amended from time to time by Cox, the
property trustee and the administrative trustees, without the consent of the
holders of the trust securities of the applicable Cox Trust,
- to cure any ambiguity, correct or supplement any provisions in the
declaration of trust that may be inconsistent with any other provision,
or to make any other provisions with respect to matters or questions
arising under the declaration of trust, which shall not be inconsistent
with the other provisions of such declaration of trust, or
- to modify, eliminate or add to any provisions of such declaration of
trust to such extent as shall be necessary to ensure that such Cox Trust
will be classified for United States federal income tax purposes as a
grantor trust at all times that any of its trust securities are
outstanding or to ensure that such Cox Trust will not be required to
register as an investment company under the Investment Company Act;
provided, however, that in each case, such action shall not adversely affect in
any material respect the interests of the holders of such trust securities.
A declaration of trust may be amended by the issuer trustees and Cox
- with the consent of holders of a majority in liquidation amount of the
outstanding trust securities of the applicable Cox Trust, and
- upon receipt by the issuer trustees of an opinion of counsel experienced
in such matters to the effect that such amendment or the exercise of any
power granted to the issuer trustees in accordance with such amendment
will not affect such Cox Trust's status as a grantor trust for United
States federal income tax purposes or such Cox Trust's exemption from
status as an investment company under the Investment Company Act;
provided, however, that, without the consent of each holder of such trust
securities, such declaration of trust may not be amended to:
- change the distribution rate or manner of calculation of the distribution
rate, amount, timing or currency or otherwise adversely affect the method
of any required payment;
- change the purpose of the applicable Cox Trust;
- authorize the issuance of any additional beneficial interests in such Cox
Trust;
- change the conversion, exchange or redemption provisions;
- change the conditions precedent for Cox to elect to dissolve such Cox
Trust and distribute the related senior debt securities to the holders of
such trust securities;
- change the liquidation distribution or other provisions relating to the
distribution of amounts payable upon the dissolution and liquidation of
such Cox Trust;
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- affect the limited liability of any holder of such trust securities; or
- restrict the right of a holder of such trust securities to institute suit
for the enforcement of any required payment on or after the due date
therefor or for the conversion or exchange of such trust securities in
accordance with their terms.
So long as any senior debt securities are held by the property trustee, the
issuer trustees shall not:
- direct the time, method and place of conducting any proceeding for any
remedy available to the trustee under the indenture, or execute any trust
or power conferred on such trustee, with respect to the senior debt
securities;
- waive certain past defaults under the indenture;
- exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of such senior debt securities; or
- consent to any amendment, modification or termination of the indenture or
such senior debt securities where such consent shall be required,
without, in each case, obtaining the prior approval of the holders of a
majority in liquidation amount of all outstanding capital securities of
the applicable Cox Trust;
provided, however, that where a consent under the indenture would require the
consent of each holder affected thereby, no such consent shall be given by the
property trustee without the prior approval of each holder of the related
capital securities. The issuer trustees shall not revoke any action previously
authorized or approved by a vote of the holders of capital securities except by
subsequent vote of such holders. The property trustee shall notify each holder
of capital securities of any notice of default with respect to the related
senior debt securities. In addition to obtaining approvals of holders of capital
securities referred to above, prior to taking any of the foregoing actions, the
issuer trustees shall obtain an opinion of counsel experienced in such matters
to the effect that the applicable Cox Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
Any required approval of holders of capital securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The property trustee will cause a notice of any meeting at which
holders of capital securities are entitled to vote to be given to each holder of
record of capital securities in the manner set forth in the applicable
declaration of trust.
Notwithstanding that holders of capital securities are entitled to vote or
consent under any of the circumstances referred to above, any capital securities
that are owned by Cox or any affiliate of Cox shall, for purposes of such vote
or consent, be treated as if they were not outstanding.
GLOBAL CAPITAL SECURITIES
If specified in the applicable prospectus supplement, capital securities
may be represented by one or more global certificates deposited with, or on
behalf of, The Depository Trust Company, or other depositary identified in such
prospectus supplement, or a nominee thereof, in each case for credit to an
account of a participant in The Depository Trust Company or other depositary.
The identity of the depositary and the specific terms of the depositary
arrangements with respect to the capital securities to be represented by one or
more global certificates will be described in the applicable prospectus
supplement. However, unless otherwise specified in the applicable prospectus
supplement, The Depository Trust Company will be the depositary and the
depositary arrangements described with respect to the debt securities will apply
to such capital securities as well, except all references to Cox shall include
the Cox Trusts and all references to the indenture will refer to the applicable
declaration of trust. See "Description of Debt Securities -- Global Securities."
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PAYMENT AND PAYING AGENT
Payments in respect of any global certificate representing capital
securities shall be made to Cede & Co. as nominee of The Depository Trust
Company, or other applicable depositary or its nominee, which shall credit the
relevant accounts at The Depository Trust Company or such other depositary on
the applicable payment dates, while payments in respect of capital securities in
certificated form shall be made by check mailed to the address of the holder
entitled thereto as such address shall appear on the register. The paying agent
shall initially be the property trustee and any co-paying agent chosen by the
property trustee and acceptable to the administrative trustees and Cox. The
paying agent shall be permitted to resign as paying agent upon 30 days prior
written notice to the property trustee, the administrative trustees and Cox. In
the event that the property trustee shall no longer be the paying agent, the
administrative trustees shall appoint a successor, which shall be a bank or
trust company acceptable to the administrative trustees and Cox, to act as
paying agent.
REGISTRAR AND TRANSFER AGENT
The property trustee will act as registrar and transfer agent for the
capital securities.
Registration of transfers of capital securities will be effected without
charge by or on behalf of the applicable Cox Trust, but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. A Cox Trust will not be required to register or cause to
be registered the transfer of its capital securities after they have been
converted, exchanged, redeemed or called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, other than during the occurrence and continuance of
an event of default under the declaration of trust, will undertake to perform
only such duties as are specifically set forth in the declaration of trust and,
during the continuance of such event of default, must exercise the same degree
of care and skill as a prudent person would exercise or use in the conduct of
his or her own affairs. Subject to the foregoing, the property trustee will not
be under any obligation to exercise any of the powers vested in it by such
declaration of trust at the request of any holder of the related trust
securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no such event of default has
occurred and is continuing and the property trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
declaration of trust or is unsure of the application of any provision of the
declaration of trust, and the matter is not one on which holders of capital
securities or trust common securities are entitled under the declaration of
trust to vote, then the property trustee shall take such action as is directed
by Cox and if not so directed, shall take such action as it deems advisable and
in the best interests of the holders of the related trust securities and will
have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the applicable Cox Trust in such a way that:
- such Cox Trust will not be deemed to be an investment company required to
be registered under the Investment Company Act;
- such Cox Trust will be classified as a grantor trust for United States
federal income tax purposes; and
- the related senior debt securities will be treated as indebtedness of Cox
for United States federal income tax purposes.
Cox and the administrative trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of the applicable Cox
Trust or the declaration of trust, that the administrative
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trustees determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially adversely affect the
interests of the holders of the related trust securities.
Holders of capital securities will not have any preemptive or similar
rights.
A Cox Trust may not borrow money, issue debt, execute mortgages or pledge
any of its assets.
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DESCRIPTION OF CAPITAL SECURITIES GUARANTEES
A capital securities guarantee will be executed and delivered by Cox
concurrently with the issuance by a Cox Trust of capital securities for the
benefit of the holders from time to time of such capital securities and will be
held for such holders by The Bank of New York, as capital securities guarantee
trustee. Each capital securities guarantee has been qualified as an indenture
under the Trust Indenture Act and is subject to, and governed by, the Trust
Indenture Act. This summary of certain terms and provisions of the capital
securities guarantee does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of such capital
securities guarantee, including the definitions therein of certain terms, and
those made a part of such capital securities guarantee by the Trust Indenture
Act.
GENERAL
Cox will irrevocably agree to pay in full on a senior basis, to the extent
set forth herein, the guarantee payments to the holders of the related capital
securities, as and when due, regardless of any defense, right of set-off or
counterclaim that the applicable Cox Trust may have or assert other than the
defense of payment. The following payments, which are referred to as guarantee
payments, with respect to capital securities, to the extent not paid by or on
behalf of the applicable Cox Trust, will be subject to the capital securities
guarantee:
- any accumulated distributions required to be paid on such capital
securities, to the extent that such Cox Trust has funds legally available
therefor at such time;
- the applicable redemption price with respect to such capital securities
called for redemption, to the extent that such Cox Trust has funds
legally available therefor at such time; or
- upon a voluntary or involuntary dissolution and liquidation of such Cox
Trust, other than in connection with the distribution of the related
senior debt securities to holders of such capital securities or the
redemption, conversion or exchange of the capital securities, the lesser
of
- the amounts due upon the dissolution and liquidation of such Cox Trust,
to the extent that such Cox Trust has funds legally available therefor
at the time, and
- the amount of assets of such Cox Trust remaining available for
distribution to holders of its capital securities after satisfaction of
liabilities to creditors of such Cox Trust as required by applicable
law.
Cox's obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by Cox to the holders of the capital securities
entitled thereto or by causing the applicable Cox Trust to pay such amounts to
such holders.
Cox will, through the capital securities guarantee, the declaration of
trust, the related senior debt securities and the indenture, taken together,
fully, irrevocably and unconditionally guarantee all of the applicable Cox
Trust's obligations under its capital securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of a Cox Trust's obligations under its capital securities.
RANKING
Each capital securities guarantee will constitute an unsecured obligation
of Cox and will rank equally in right of payment with all other senior
indebtedness of Cox.
CAPITAL SECURITIES GUARANTEE OF PAYMENT
The capital securities guarantee will constitute a guarantee of payment and
not of collection. In other words, the guaranteed party may institute a legal
proceeding directly against Cox to enforce its rights
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under such capital securities guarantee without first instituting a legal
proceeding against any other person or entity. A capital securities guarantee
will not be discharged except by payment of the related capital securities
guarantee payments in full to the extent not paid by the applicable Cox Trust or
upon distribution of its capital securities to the holders of the related senior
debt securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the related capital securities, in which case no
approval will be required, a capital securities guarantee may not be amended
without the prior approval of the holders of a majority of the liquidation
amount of such outstanding capital securities. The manner of obtaining any such
approval will be as set forth under "Description of Capital Securities -- Voting
Rights; Amendment of a Declaration of Trust." All guarantees and agreements
contained in a capital securities guarantee shall bind the successors, assigns,
receivers, trustees and representatives of Cox and shall inure to the benefit of
the holders of the related capital securities then outstanding.
EVENTS OF DEFAULT
An event of default under a capital guarantee will occur upon the failure
of Cox to perform any of its payment or other obligations thereunder, provided
that, except with respect to a default in respect of any capital securities
guarantee payment, Cox shall have received notice of such default and shall not
have cured such default within 60 days of such receipt. The holders of a
majority in liquidation amount of the related capital securities will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the capital securities guarantee trustee in respect of the
applicable capital securities guarantee or to direct the exercise of any trust
or power conferred upon the capital securities guarantee trustee under such
capital securities guarantee.
If the capital securities guarantee trustee fails to enforce a capital
securities guarantee, any holder of the related capital securities may institute
a legal proceeding directly against Cox to enforce its rights under such capital
securities guarantee without first instituting a legal proceeding against the
applicable Cox Trust, the capital securities guarantee trustee or any other
person or entity.
TERMINATION
A capital securities guarantee will terminate and be of no further force
and effect upon:
- full payment of the applicable redemption price of the related capital
securities;
- full payment of all amounts due upon the dissolution and liquidation of
the applicable Cox Trust; or
- the conversion or exchange of all of the related capital securities,
whether upon distribution of senior debt securities to the holders of
such capital securities or otherwise.
A capital securities guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the related capital
securities must restore payment of any sums paid under such capital securities
or such capital securities guarantee.
GOVERNING LAW
Each capital securities guarantee will be governed by and construed in
accordance with the laws of the State of New York.
INFORMATION CONCERNING THE CAPITAL SECURITIES GUARANTEE TRUSTEE
The capital securities guarantee trustee, other than during the occurrence
and continuance of a default by Cox in performance of a capital securities
guarantee, will undertake to perform only such duties as are specifically set
forth in the capital securities guarantee and, during the continuance of such
default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his
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or her own affairs. Subject to the foregoing, the capital securities guarantee
trustee will not be under any obligation to exercise any of the powers vested in
it by a capital securities guarantee at the request of any holder of the related
capital securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
LIMITED PURPOSE OF COX TRUST
The capital securities will represent preferred beneficial interests in the
applicable Cox Trust, and each Cox Trust exists for the sole purpose of issuing
and selling its trust securities, using the proceeds from the sale of its trust
securities to acquire the related senior debt securities of Cox and engaging in
only those other activities necessary, advisable or incidental thereto.
RIGHTS UPON DISSOLUTION
Unless the senior debt securities are distributed to holders of the related
trust securities, upon any voluntary or involuntary dissolution and liquidation
of the applicable Cox Trust, after satisfaction of the liabilities of creditors
of such Cox Trust as required by applicable law, the holders of such trust
securities will be entitled to receive, out of assets held by such Cox Trust,
the liquidation distribution in cash. See "Description of Capital
Securities -- Liquidation of a Cox Trust and Distribution of Senior Debt
Securities."
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RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE CORRESPONDING SENIOR DEBT SECURITIES
AND THE CAPITAL SECURITIES GUARANTEES
Full and Unconditional Guarantee. Cox will irrevocably guarantee payments
of distributions and other amounts due on the capital securities to the extent
the applicable Cox Trust has funds available for the payment of the
distributions as and to the extent set forth under "Description of Capital
Securities Guarantees." Taken together, Cox's obligations under the senior debt
securities, the securities resolution, the indenture, the declaration of trust
and the capital securities guarantee agreement provide, in the aggregate, a
full, irrevocable and unconditional guarantee of payments of distributions and
other amounts due on the capital securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes the full guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional
guarantee of the applicable Cox Trust's obligations under the capital
securities.
If and to the extent that Cox does not make payments on the senior debt
securities, the applicable Cox Trust will not pay distributions or other amounts
due on its capital securities. A capital securities guarantee does not cover
payment of distributions when such Cox Trust does not have sufficient funds to
pay the distributions. In that event, the remedy for a holder of trust preferred
securities is to institute a legal proceeding directly against Cox for
enforcement of payment of the distributions to such holder.
Sufficiency of Payments. As long as all payments are made when due on the
senior debt securities, those payments will be sufficient to cover distributions
and other payments due on the capital securities. This is primarily because:
- the aggregate principal amount of the senior debt securities will be
equal to the sum of the aggregate stated liquidation amount of the
capital securities and trust common securities;
- the interest rate and interest and other payment dates on the senior debt
securities will match the distribution rate and distribution and other
payment dates for the capital securities;
- Cox, as borrower, has promised to pay any and all costs, expenses and
liabilities of the applicable Trust except such Cox Trust's obligations
under its capital securities; and
- the declaration of trust will provides that the applicable Cox Trust will
not engage in any activity that is not consistent with the limited
purposes of such Cox Trust.
Cox has the right to set-off any payment Cox is otherwise required to make
under the indenture if and to the extent Cox has already made, or is
concurrently making, a payment under the capital securities guarantee agreement.
Enforcement Rights of Holders of Capital Securities. A holder of a capital
security may institute a legal proceeding directly against Cox to enforce its
rights under the applicable capital securities guarantee agreement without first
instituting a legal proceeding against the capital securities guarantee trustee,
the applicable Cox Trust or anyone else.
Limited Purpose of a Cox Trust. The applicable Cox Trust's capital
securities evidence undivided beneficial ownership interests in the assets of
the applicable Cox Trust, and the applicable Cox Trust exists for the sole
purposes of issuing its capital securities and trust common securities,
investing the proceeds in senior debt securities and engaging in only those
other activities necessary, convenient or incidental to those purposes. A
principal difference between the rights of a holder of a trust preferred
security and a holder of a corresponding senior debt security is that a holder
of a senior debt security is entitled to receive from Cox the principal amount
of and interest accrued on the corresponding senior debt security, while a
holder of capital securities is entitled to receive distributions from the
applicable Cox Trust, or from Cox under the capital securities guarantee
agreement, if and to the extent the applicable Cox Trust has funds available for
the payment of the distributions.
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Rights Upon Dissolution. Upon any voluntary or involuntary dissolution of
a Cox Trust involving the liquidation of the senior debt securities, the holders
of the capital securities will be entitled to receive the liquidation
distribution in cash, out of assets of such Cox Trust and after satisfaction of
creditors of such Cox Trust as provided by applicable law. If Cox becomes
subject to any voluntary or involuntary liquidation or bankruptcy, the property
trustee, as holder of the debt securities, would be one of Cox's creditors. Cox
is the guarantor under the capital securities guarantee agreements and pursuant
to the indenture, as borrower, has agreed to pay all costs, expenses and
liabilities of the applicable Cox Trust other than the applicable Cox Trust's
obligations to the holders of the capital securities. Accordingly, in the event
of Cox's liquidation or bankruptcy the positions of a holder of capital
securities and of a holder of senior debt securities are expected to be
substantially the same relative to Cox's other creditors and to Cox's
stockholders.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
Cox may issue stock purchase contracts, representing contracts obligating
holders to purchase from Cox, and Cox to sell to the holders, a specified number
of shares of Class A common stock at a future date or dates. The price per share
of Class A common stock may be fixed at the time the stock purchase contracts
are issued or may be determined by reference to a specific formula set forth in
the stock purchase contracts. The stock purchase contracts may be issued
separately or as a part of units, which are referred to as stock purchase units,
consisting of a stock purchase contract and, as security for the holder's
obligations to purchase the Class A common stock under stock purchase contracts,
either:
- senior debt securities, subordinated debt securities or junior
subordinated debt securities of Cox,
- debt obligations of third parties, including U.S. Treasury securities, or
- preferred securities or capital securities of a Cox Trust.
The stock purchase contracts may require Cox to make periodic payments to
the holders of the stock purchase units or vice versa, and such payments may be
unsecured or prefunded on some basis. The stock purchase contracts may require
holders to secure their obligations thereunder in a specified manner and in
certain circumstances Cox may deliver newly issued prepaid stock purchase
contracts, which are referred to as prepaid securities, upon release to a holder
of any collateral securing such holder's obligations under the original stock
purchase contract.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units and, if applicable, prepaid
securities. The description in the prospectus supplement will not purport to be
complete and will be qualified in its entirety by reference to the stock
purchase contracts, the collateral arrangements and depositary arrangements, if
applicable, relating to such stock purchase contracts or stock purchase units
and, if applicable, the prepaid securities and the document pursuant to which
such prepaid securities will be issued.
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PLAN OF DISTRIBUTION
Cox and the Cox Trusts may sell securities to one or more underwriters or
dealers for public offering and sale by them, or it may sell the securities to
investors directly or through agents. The accompanying prospectus supplement
will set forth the terms of the offering and the method of distribution and will
identify any firms acting as underwriters, dealers or agents in connection with
the offering, including:
- the name or names of any underwriters;
- the purchase price of the securities and the proceeds to Cox or the Cox
Trusts from the sale;
- any underwriting discounts and other items constituting underwriters'
compensation;
- any public offering price;
- any discounts or concessions allowed or reallowed or paid to dealers; and
- any securities exchange or market on which the securities offered in the
prospectus supplement may be listed.
Only those underwriters identified in such prospectus supplement are deemed
to be underwriters in connection with the securities offered in the prospectus
supplement.
Cox and the Cox Trusts may distribute the securities from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
prices determined as the prospectus supplement specifies. Cox may sell
securities through forward contracts or similar arrangements. In connection with
the sale of the securities, underwriters, dealers or agents may be deemed to
have received compensation from Cox in the form of underwriting discounts or
commissions and also may receive commissions from securities purchasers for whom
they may act as agent. Underwriters may sell the securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters or commissions from the
purchasers for whom they may act as agent. Some of the underwriters, dealers or
agents who participate in the securities distribution may engage in other
transactions with, and perform other services for, Cox and its subsidiaries in
the ordinary course of business.
Any underwriting or other compensation which Cox pays to underwriters or
agents in connection with the securities offering, and any discounts,
concessions or commissions which underwriters allow to dealers, will be set
forth in the prospectus supplement. Underwriters, dealers and agents
participating in the securities distribution may be deemed to be underwriters,
and any discounts and commissions they receive and any profit they realize on
the resale of the securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters and their controlling
persons, dealers and agents may be entitled, under agreements entered into with
Cox and the Cox Trusts, to indemnification against and contribution toward
specific civil liabilities, including liabilities under the Securities Act.
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LEGAL MATTERS
Dow, Lohnes & Albertson, PLLC, of Washington, D.C., and Richards, Layton &
Finger, P.A., of Wilmington, Delaware, will pass upon the validity of the
securities offered in the applicable prospectus supplement for Cox and the Cox
Trusts, respectively. Unless otherwise specified in the applicable prospectus
supplement, Brown & Wood LLP, of New York, New York, will pass upon certain
matters for any underwriters.
EXPERTS
The consolidated financial statements of Cox and Cox Communications PCS,
L.P. and subsidiaries incorporated in this prospectus by reference from Cox's
Annual Report on Form 10-K for the year ended December 31, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference into this prospectus, and
have been so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
The consolidated financial statements of TCA Cable TV, Inc. as of and for
the year ended October 31, 1998 have been incorporated by reference in this
prospectus in reliance on the report of KPMG LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Cox is subject to the informational requirements of the Exchange Act and
files reports, proxy statements and other information with the SEC. Cox's SEC
filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You also may read and copy any document Cox files at the
SEC's public reference rooms in Washington, D.C., New York and Chicago or obtain
copies of such materials by mail. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms and their copy charges, as well as the
Public Reference Section's charges for mailing copies of the documents Cox has
filed.
You can also inspect and copy any of Cox's SEC filings at the offices of
the New York Stock Exchange, Inc., located at 20 Broad Street, New York, New
York, 10005.
INFORMATION INCORPORATED BY REFERENCE
Cox files periodic reports with the SEC. SEC rules permit Cox to
incorporate these filings by reference into this prospectus. By incorporating
Cox's SEC filings by reference, the following documents are made a part of this
prospectus:
- Cox's annual report on Form 10-K for the year ended December 31, 1998;
- Cox's quarterly report on Form 10-Q for the quarter ended March 31, 1998;
- Amendment no. 1 to Cox's current report on Form 8-K, dated July 7, 1999;
- Amendment no. 1 to Cox's current report on Form 8-K, dated May 12, 1999;
- Cox's current report on Form 8-K, dated July 27, 1999;
- Cox's current report on Form 8-K, dated July 7, 1999;
- Cox's current report on Form 8-K, dated May 17, 1999;
- Cox's current report on Form 8-K, dated May 12, 1999;
- Cox's current report on Form 8-K, dated April 22, 1999;
- Cox's current report on Form 8-K, dated January 8, 1999;
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- Cox's definitive proxy statement for the 1999 annual meeting of
stockholders, dated March 29, 1999; and
- Cox's registration statement on Form 8-A.
All documents which Cox will file with the SEC, pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, after the date of the initial filing of
the registration statement and prior to the termination of the securities
offering shall be deemed to be incorporated by reference in, and to be a part
of, this prospectus from the date such documents are filed. Cox's SEC file
number for Exchange Act documents is 1-6590. Cox will provide without charge, to
any person who receives a copy of this prospectus and the accompanying
prospectus supplement, upon such recipient's written or oral request, a copy of
any document this prospectus incorporates by reference, other than exhibits to
such incorporated documents, unless such exhibits are specifically incorporated
by reference in such incorporated document. Requests should be directed to:
Dallas S. Clement,
Vice President and Treasurer
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Telephone: (404) 843-5000
Any statement contained in this prospectus or in a document incorporated by
reference in, or deemed to be incorporated by reference in, this prospectus
shall be deemed to be modified or superseded, for purposes of this prospectus,
to the extent that a statement contained in
- the prospectus,
- the accompanying prospectus supplement, or
- any other subsequently filed document which also is incorporated by
reference in, or is deemed to be incorporated by reference in, this
prospectus,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
Cox has not included or incorporated by reference separate financial
statements of the Cox Trusts into this prospectus. Cox does not consider such
financial statements to be material to holders of the trust preferred securities
of the Cox Trusts because:
- all of the voting securities of the Cox Trusts will be owned, directly or
indirectly, by Cox, a reporting company under the Exchange Act;
- each of the Cox Trusts is a special purpose entity, has no operating
history, has no independent operations and is not engaged in, and does
not propose to engage in, any activity other than issuing securities
representing undivided beneficial interests in the assets of such Cox
Trust and investing the proceeds thereof in junior subordinated
debentures issued by Cox; and
- Cox's obligations described in this prospectus and in any accompanying
prospectus supplement under the declaration of trust of a Cox Trust, the
preferred securities guarantee issued by Cox with respect to the trust
preferred securities issued by such Cox Trust, the debt securities or
junior subordinated debentures of Cox purchased by the Cox Trusts and the
applicable indenture pursuant to which such debt securities or junior
subordinated debentures are issued, taken together, constitute direct
obligations of Cox and a full and unconditional guarantee of the trust
preferred securities of each such Cox Trust.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the expenses of issuance and distribution of the
securities registered hereunder on Form S-3, other than underwriting discounts
and commissions. All amounts except the registration fee are estimated.
<TABLE>
<S> <C>
Registration fee............................................ $2,224,000
Rating Agency fees.......................................... 50,000
Legal fees and expenses..................................... 100,000
Accounting fees and expenses................................ 50,000
Printing and engraving expenses............................. 70,000
Trustee's fees.............................................. 60,000
New York Stock Exchange listing fee......................... 250,000
Miscellaneous............................................... 26,000
----------
Total............................................. $2,830,000
==========
All of the above expenses have been or will be paid by Cox.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the DGCL (providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions), or (iv) for any
transaction from which a director derived an improper personal benefit. Cox's
Amended Certificate of Incorporation contains a provision which eliminates the
liability of directors to the extent permitted by Section 102(b)(7) of the DGCL.
Reference is made to Section 145 of the DGCL, which provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation (a "derivative action")),
if they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement or otherwise. The
Amended Certificate of Incorporation of Cox provides that Cox shall indemnify
its directors and officers to the fullest extent permitted by Delaware law.
Each declaration of trust provides that no trustee, affiliate of any
trustee or any officers, directors, stockholders, members, partners, employees,
representatives or agents of any trustee or any employee or agent of a Cox Trust
or its affiliates, each referred to as an indemnified person, shall be liable,
responsible or accountable in damages or otherwise to any employee or agent of a
Cox Trust or its affiliates or any officers, directors, stockholders, employees,
representatives or agents of Cox or its affiliates, or to any holders of trust
securities of a Cox Trust for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such indemnified person in good
faith on behalf of a Cox Trust and in a
II-1
<PAGE> 164
manner such indemnified person reasonably believed to be within the scope of the
authority conferred on such indemnified person by the declaration of trust of a
Cox Trust or by law, except that an indemnified person shall be liable for any
such loss, damage or claim incurred by reason of such indemnified person's gross
negligence (or, in the case of the property trustee of a Cox Trust, negligence)
or willful misconduct with respect to such acts or omissions. The declaration of
trust also provides that, to the fullest extent permitted by applicable law, Cox
shall indemnify and hold harmless each indemnified person from and against any
loss, damage or claim incurred by such indemnified person by reason of any act
or omission performed or omitted by such indemnified person in good faith on
behalf of a Cox Trust and in a manner such indemnified person reasonably
believed to be within the scope of authority conferred on such indemnified
person by the declaration of trust, except that no indemnified person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such indemnified person by reason of gross negligence (or, in the case of the
property trustee of a Cox Trust, negligence) or willful misconduct with respect
to such acts or omissions. Each declaration of trust further provides that to
the fullest extent permitted by applicable law, expenses (including legal fees)
incurred by an indemnified person in defending any claim, demand, action, suit
or the final disposition of such claim, demand, action, suit or proceeding
shall, from time to time, be advanced by Cox prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by Cox of an
undertaking by or on behalf of the indemnified person to repay such amount if it
shall be determined that the indemnified person is not entitled to be
indemnified pursuant to the declaration of trust.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<C> <C> <S>
*1.1 -- Forms of Underwriting Agreements.
3.1 -- Amended Certificate of Incorporation of Cox Communications,
Inc. (incorporated by reference to Exhibit 3.1 to Cox's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.)
3.2 -- Certificate of Amendment to Certificate of Incorporation of
Cox Communications, Inc. (incorporated by reference to
Exhibit 3.3 to Cox's Form 10-Q filed with the Commission on
May 14, 1997.)
3.3 -- Bylaws of Cox Communications, Inc. (incorporated by
reference to Exhibit 3.2 to Cox's Registration Statement on
Form S-4, File No. 33-80152.)
3.4 -- Certificate of Designations of Powers, Preferences and
Rights of the Series A Convertible Preferred Stock of Cox
Communications, Inc. (incorporated by reference to Exhibit
3.1 to Cox's Form 8-K/A filed with the Commission on October
15, 1998.)
3.5 -- Amendment to Amended Certificate of Incorporation of Cox
Communications, Inc. (incorporated by reference to Exhibit
3.3 to Cox's Registration Statement on Form S-4, File No.
333-82419.)
4.1 -- Indenture dated as of June 27, 1995 between Cox
Communications, Inc. and The Bank of New York, as trustee,
relating to the debt securities (previously filed as an
exhibit to Cox's Registration Statement on Form S-1 (File
No. 33-99116) and incorporated herein by this reference).
4.2 -- Form of Indenture for Junior Subordinated Debentures of Cox
Communications, Inc.
**4.3 -- Certificate of Trust of Cox Trust I.
4.4 -- Certificate of Trust of Cox Trust II.
4.5 -- Form of Preferred Securities Guarantee Agreement for Cox
Trust I.
***4.6 -- Form of Capital Securities Guarantee Agreement for Cox Trust
II.
**4.7 -- Declaration of Trust of Cox Trust I.
4.8 -- Declaration of Trust of Cox Trust II.
</TABLE>
II-2
<PAGE> 165
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<C> <C> <S>
4.9 -- Form of Amended and Restated Declaration of Trust for Cox
Trust I.
***4.10 -- Form of Amended and Restated Declaration of Trust for Cox
Trust II.
4.11 -- Form of Preferred Security Certificate of Cox Trust I
(incorporated by reference to Exhibit A-1 of Exhibit 4.9).
***4.12 -- Form of Capital Security Certificate of Cox Trust II
(incorporated by reference to Exhibit A-1 of Exhibit 4.10).
*4.13 -- Form of Purchase Contract Agreement.
*4.14 -- Form of Remarketing Agreement.
*4.15 -- Form of Pledge Agreement.
***5.1 -- Opinion of Dow, Lohnes & Albertson, PLLC.
5.2 -- Opinion of Richards, Layton & Finger, P.A.
***8.1 -- Opinion of Dow, Lohnes & Albertson, PLLC as to certain
federal income tax matters.
12.1 -- Statement setting forth computation of ratio of earnings to
fixed charges.
**23.1 -- Consent of Deloitte & Touche LLP, Atlanta, Georgia.
**23.2 -- Consent of Deloitte & Touche LLP, Kansas City, Missouri.
***23.3 -- Consent of Dow, Lohnes & Albertson, PLLC (contained in their
opinion filed as Exhibit 5.1).
23.4 -- Consent of Richards, Layton & Finger, P.A. (contained in
their opinion filed as Exhibit 5.2).
**24.1 -- Powers of Attorney for Cox Communications, Inc.
**24.2 -- Powers of Attorney for Cox, as Sponsor, to sign the
Registration Statement on behalf of Cox Trust I (included in
Exhibit 4.7).
24.3 -- Powers of Attorney for Cox, as Sponsor, to sign the
Registration Statement on behalf of Cox Trust II (included
in Exhibit 4.8).
25.1 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York, as trustee under the
indenture.
25.2 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York (Delaware), as trustee
under the Junior Subordinated Debenture Indenture.
25.3 -- Form T-1 Statement of Eligibility for The Bank of New York,
as property trustee and The Bank of New York (Delaware), as
Delaware trustee under the Amended and Restated Trust
Agreement for Cox Trust I.
25.4 -- Form T-1 Statement of Eligibility for The Bank of New York,
as guarantee trustee under the Preferred Securities
Guarantee Agreement for Cox Trust I.
25.5 -- Form T-1 Statement of Eligibility for The Bank of New York,
as property trustee and The Bank of New York (Delaware), as
Delaware trustee under the Amended and Restated Trust
Agreement for Cox Trust II.
25.6 -- Form T-1 Statement of Eligibility for the Bank of New York,
as guarantee trustee under the Preferred Securities
Guarantee Agreement for Cox Trust II.
</TABLE>
- ---------------
* To be filed by post-effective amendment or by a Current Report on Form 8-K.
** Previously filed.
*** To be filed by pre-effective amendment.
II-3
<PAGE> 166
ITEM 17. UNDERTAKINGS.
Each Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(c) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (a) and
(b) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by a Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended, that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of a Registrant's annual report
pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of a Registrant pursuant to the foregoing provisions,
or otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by a Registrant of expenses incurred or
paid by a director, officer or controlling person of a Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, such Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
II-4
<PAGE> 167
Each Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by such Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 168
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cox
Communications, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia, on July 27, 1999.
COX COMMUNICATIONS, INC.
By: /s/ JAMES O. ROBBINS
------------------------------------
James O. Robbins
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to the Registration Statement has been signed below by the
following persons on behalf of Cox Communications, Inc. and in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board of July 27, 1999
- ----------------------------------------------------- Directors
James C. Kennedy
/s/ JAMES O. ROBBINS President and Chief Executive July 27, 1999
- ----------------------------------------------------- Officer, Director
James O. Robbins
* Executive Vice President, Finance July 27, 1999
- ----------------------------------------------------- and Administration, and Chief
Jimmy W. Hayes Financial Officer (Principal
Financial Officer)
* Vice President, Mergers and July 27, 1999
- ----------------------------------------------------- Acquisitions and Chief
John M. Dyer Accounting Officer (Principal
Accounting Officer)
* Director July 27, 1999
- -----------------------------------------------------
David E. Easterly
* Director July 27, 1999
- -----------------------------------------------------
Robert F. Erburu
* Director July 27, 1999
- -----------------------------------------------------
Robert C. O'Leary
</TABLE>
* POWER OF ATTORNEY
James O. Robbins, by signing his name hereto, does sign this document on
behalf of each of the persons indicated above for whom he is attorney-in-fact
pursuant to a power of attorney duly executed by such person and filed with the
Securities and Exchange Commission.
By: /s/ JAMES O. ROBBINS
------------------------------------
James O. Robbins
President and Chief Executive
Officer
II-6
<PAGE> 169
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cox Trust I and
Cox Trust II each certify that they have reasonable grounds to believe that they
meet all the requirements for filing on Form S-3 and have duly caused this
Amendment to the Registration Statement to be signed on their behalf by the
undersigned, thereunto duly authorized in the City of Atlanta, State of Georgia,
on July 27, 1999.
COX TRUST I
By: Cox Communications, Inc.,
as Sponsor
By: /s/ JAMES O. ROBBINS
------------------------------------
Name: James O. Robbins
Title: President and Chief
Executive Officer
COX TRUST II
By: Cox Communications, Inc.,
as Sponsor
By: /s/ JAMES O. ROBBINS
------------------------------------
Name: James O. Robbins
Title: President and Chief
Executive Officer
II-7
<PAGE> 1
EXHIBIT 4.2
COX COMMUNICATIONS, INC., AS ISSUER
AND
THE BANK OF NEW YORK, AS TRUSTEE
INDENTURE
DATED AS OF , 1999
JUNIOR SUBORDINATED DEBENTURES
<PAGE> 2
<TABLE>
<CAPTION>
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
Section 1.01 Definitions.....................................................................................1
Section 1.02 Other Definitions...............................................................................6
Section 1.03 Incorporation by Reference of TIA...............................................................7
Section 1.04 Rules of Construction...........................................................................7
Section 1.05 Acts of Holders and Holders of Preferred Securities.............................................7
ARTICLE 2
THE DEBENTURES
Section 2.01 Amount Unlimited; Issuable in Series............................................................8
Section 2.02 Payment of Principal and Interest..............................................................11
Section 2.03 Execution, Authentication and Delivery.........................................................12
Section 2.04 Registrar and Paying and Conversion Agents.....................................................14
Section 2.05 Paying Agent to Hold Money in Trust............................................................15
Section 2.06 Debentureholder Lists..........................................................................16
Section 2.07 Transfer and Exchange..........................................................................16
Section 2.08 Replacement Debentures.........................................................................17
Section 2.09 Outstanding Debentures; Determinations of Holders' Action......................................17
Section 2.10 Temporary Debentures...........................................................................18
Section 2.11 Book-Entry System..............................................................................18
Section 2.12 Cancellation...................................................................................20
Section 2.13 CUSIP Numbers..................................................................................20
ARTICLE 3
REDEMPTION
Section 3.01 Redemption; Notice to Trustee..................................................................20
Section 3.02 Selection of Debentures to be Redeemed.........................................................20
Section 3.03 Notice of Redemption...........................................................................22
Section 3.04 Effect of Notice of Redemption.................................................................22
Section 3.05 Deposit of Redemption Price....................................................................22
Section 3.06 Debentures Redeemed in Part....................................................................22
ARTICLE 4
COVENANTS
Section 4.01 Payment of Principal, Premium and Interest.....................................................22
Section 4.02 Prohibition Against Dividends, etc.............................................................23
Section 4.03 SEC Reports....................................................................................24
Section 4.04 Compliance Certificates........................................................................24
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
Section 4.05 Further Instruments and Acts...................................................................24
Section 4.06 Payment of Expenses of each Trust..............................................................25
Section 4.07 Ownership of Common Securities.................................................................25
Section 4.08 Statement by Officers as to Default............................................................25
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01 When the Company May Merge, Etc................................................................25
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..............................................................................26
Section 6.02 Acceleration...................................................................................28
Section 6.03 Other Remedies.................................................................................28
Section 6.04 Waiver of Past Defaults........................................................................29
Section 6.05 Control by Holders.............................................................................29
Section 6.06 Limitation on Suits............................................................................29
Section 6.07 Unconditional Right of Holders to Receive Principal, Premium and Interest......................30
Section 6.08 Direct Action Right of Holders of Trust Preferred Securities...................................30
Section 6.09 Collection Suits by the Trustee................................................................31
Section 6.10 Trustee May File Proofs of Claim...............................................................31
Section 6.11 Priorities.....................................................................................32
Section 6.12 Undertaking for Costs..........................................................................32
ARTICLE 7
THE TRUSTEE
Section 7.01 Duties and Responsibilities of the Trustee.....................................................33
Section 7.02 Rights of the Trustee..........................................................................34
Section 7.03 Not Responsible for Recitals or Issuances of Debentures........................................35
Section 7.04 May Hold Securities............................................................................35
Section 7.05 Notice of Defaults.............................................................................35
Section 7.06 Reports by Trustee to Holders..................................................................36
Section 7.07 Compensation and Indemnity.....................................................................36
Section 7.08 Eligibility; Disqualification..................................................................37
Section 7.09 Resignation and Removal; Appointment of Successor..............................................37
Section 7.10 Acceptance of Appointment by Successor.........................................................39
Section 7.11 Successor Trustee by Merger....................................................................40
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
<S> <C> <C>
Section 8.01 Satisfaction and Discharge of Indenture........................................................40
Section 8.02 Application by Trustee of Funds Deposited for Payment of Debentures............................41
Section 8.03 Repayment of Moneys Held by Paying Agent.......................................................41
Section 8.04 Return of Moneys Held by the Trustee and Paying Agent Unclaimed for Two Years..................41
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Holders.............................................42
Section 9.02 Supplemental Indentures With Consent of Holders................................................43
Section 9.03 Compliance with Trust Indenture Act............................................................44
Section 9.04 Revocation and Effect of Consents, Waivers and Actions.........................................44
Section 9.05 Notation on or Exchange of Debentures..........................................................45
Section 9.06 Execution of Supplemental Indentures...........................................................45
Section 9.07 Effect of Supplemental Indentures..............................................................45
ARTICLE 10
SUBORDINATION
Section 10.01 Debentures Subordinated to Senior Indebtedness.................................................45
Section 10.02 Priority and Payment of Proceeds in Certain Events:
Remedies Standstill............................................................................46
Section 10.03 Payments which May Be Made Prior to Notice.....................................................47
Section 10.04 Rights of Holders of Senior Indebtedness Not to Be Impaired....................................47
Section 10.05 Trustee May Take Action to Effectuate Subordination............................................47
Section 10.06 Subrogation....................................................................................48
Section 10.07 Obligations of Company Unconditional; Reinstatement............................................48
Section 10.08 Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice........................50
Section 10.09 Right of Trustee to Hold Senior Indebtedness...................................................50
Section 10.10 Notice to Trustee..............................................................................50
Section 10.11 Reliance on Judicial Order or Certificate of Liquidating Agent.................................50
Section 10.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.......................................50
ARTICLE 11
SINKING FUNDS
Section 11.01 Applicability of Article.......................................................................51
Section 11.02 Satisfaction of Sinking Fund Payments with Debentures..........................................51
Section 11.03 Redemption of Debentures for Sinking Fund......................................................51
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
ARTICLE 12
MEETINGS OF DEBENTUREHOLDERS
<S> <C> <C>
Section 12.01 Purposes for Which Meetings May Be Called......................................................52
Section 12.02 Call, Notice and Place of Meetings.............................................................52
Section 12.03 Persons Entitled to Vote at Meetings...........................................................54
Section 12.04 Quorum; Action.................................................................................54
Section 12.05 Determination of Voting Rights; Conduct and Adjournment
of Meetings....................................................................................55
Section 12.06 Counting Votes and Recording Action of Meetings................................................55
ARTICLE 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls...................................................................55
Section 13.02 Notices........................................................................................56
Section 13.03 Communication by Holders with Other Holders....................................................57
Section 13.04 Certificate and Opinion as to Conditions Precedent.............................................57
Section 13.05 Statements Required in Certificate or Opinion..................................................58
Section 13.06 Severability Clause............................................................................58
Section 13.07 Rules by Trustee, Paying Agent and Registrar...................................................58
Section 13.08 Legal Holidays.................................................................................58
Section 13.09 Governing Law..................................................................................58
Section 13.10 No Recourse Against Others.....................................................................58
Section 13.11 Successors and Assigns.........................................................................59
Section 13.12 Counterparts...................................................................................59
Section 13.13 No Adverse Interpretation of Other Agreements..................................................59
Section 13.14 Table of Contents, Headings, Etc...............................................................59
Section 13.15 Holders of Preferred Securities as Third Party Beneficiaries...................................59
Section 13.16 Benefits of the Indenture......................................................................59
</TABLE>
iv
<PAGE> 6
Cox Communications, Inc. Indenture
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
----------- -------
<S> <C> <C> <C>
ss.3 10(a)(1) ..................................................... 2.03; 7.08
(a)(2) ..................................................... 2.03; 7.08
(a)(3) ..................................................... Not Applicable
(a)(4) ..................................................... Not Applicable
(a)(5) ..................................................... Not Applicable
(b) ..................................................... 7.08; 7.09
(c) ..................................................... Not Applicable
ss.311(a) ..................................................... Not Applicable
(b) ..................................................... Not Applicable
(c) ..................................................... Not Applicable
ss.312(a) ..................................................... 2.06
(b) ..................................................... 13.03
(c) ..................................................... 13.03
ss.313(a) ..................................................... 7.06
(b)(1) ..................................................... Not Applicable
(b)(2) ..................................................... Not Applicable
(c) ..................................................... 7.06
(d) ..................................................... 7.06
ss.314(a) ..................................................... 4.03; 4.04
(b) ..................................................... Not Applicable
(c)(1) ..................................................... 2.03; 13.04; 13.05
(c)(2) ..................................................... 2.03; 13.04; 13.05
(c)(3) ..................................................... Not Applicable
(d) ..................................................... Not Applicable
(e) ..................................................... 13.05
..................................................... Not Applicable
ss.315(a) ..................................................... 7.01(b); 7.02
(b) ..................................................... 7.02; 7.04; 13.02
(c) ..................................................... 7.01(a); 7.02
(d) ..................................................... 7.01(c); 7.02
(e) ..................................................... 6.12
ss.316(a)(1)(A) ..................................................... 6.05
(a)(1)(B) ..................................................... 6.02; 6.04
(a)(2) ..................................................... Not Applicable
(a)(last
sentence) ..................................................... 2.09
(b) ..................................................... 6.07
(c) ..................................................... 1.05
ss.317(a)(1) ..................................................... 6.09
(a)(2) ..................................................... 6.10
(b) ..................................................... 2.05
ss.318(a) ..................................................... 13.01
(b) ..................................................... Not Applicable
(c) ..................................................... 13.01
</TABLE>
- --------------------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Indenture.
v
<PAGE> 7
INDENTURE, dated as of , 1999, by and between Cox Communications,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware, or any successor thereto (the "Company"), and The Bank of New York, a
New York banking corporation, as trustee (the "Trustee").
WHEREAS, the Company may from time to time create or establish one or
more statutory business trusts for the purpose of issuing undivided beneficial
interests in the assets thereof (the "Trust Securities") and using the proceeds
thereof to acquire the Company's Debentures (as hereinafter defined).
WHEREAS, all things necessary to make the Debentures, when duly issued
and executed by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid and binding
agreement of the Company, enforceable in accordance with its terms, have been
done.
NOW THEREFORE:
Each of the Company and the Trustee, intending to be legally bound
hereby, agrees as follows for the benefit of the other party and for the equal
and ratable benefit of the Holders (as hereinafter defined) of the securities
issued hereunder:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
"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. When used with respect to any Person,
"control" means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board of Directors" means either the Board of Directors of the Company
or the Executive Committee of such Board or any other committee of such Board
duly authorized to act generally or in any particular respect for the Company
hereunder.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or the Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee, (ii) a copy of a unanimous written
consent of the Board of Directors or (iii) a certificate signed by the
authorized officer or officers to whom the Board of Directors has delegated its
authority, and in each case, delivered to the Trustee.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banking institutions and trust companies in The City of New York are
authorized or required by law, regulation or executive order to close.
<PAGE> 8
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) corporate stock or similar interests in other types of
entities.
"Common Stock" means the Class A common stock, par value $1.00 per
share, of the Company and the Class C common stock, par value $1.00 per share,
of the Company collectively, unless the context otherwise requires.
"Company Order" means a written request or order signed in the name of
the Company by an Officer of the Company and delivered to the Trustee.
"Debentureholder" or "Holder" means a Person in whose name a Debenture
is registered on the Registrar's books.
"Debentures" shall mean any of the junior subordinated debentures of
any series issued, authenticated and delivered under this Indenture.
"Default" means any event which is, or after notice or passage of time,
or both, would be, an Event of Default pursuant to Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period," with respect to any series of Debentures, means any
period during which the Company elects to extend the interest payment period on
such series of Debentures pursuant to Section 4.01(b); provided that an
Extension Period (or any extension thereof) must end on an Interest Payment Date
for such Debentures and may not extend beyond the Stated Maturity Date or the
Redemption Date of any Debenture of such series.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board.
"Guarantee" means each guarantee agreement executed by the Company with
respect to the Preferred Securities issued by any Trust pursuant to which the
Company irrevocably and unconditionally agrees to pay the guarantee payments
under any such guarantee agreement to the holders of such Preferred Securities.
"Indebtedness" means, without duplication, (i) every obligation of the
Company for money borrowed; (ii) every obligation of the Company evidenced by
bonds, debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or businesses;
(iii) every reimbursement obligation of the Company with respect to letters of
credit, banker's acceptances or similar facilities issued for the account of the
Company; (iv) every obligation of the Company issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising
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<PAGE> 9
in the ordinary course of business); (v) every Capital Lease Obligation of the
Company; (vi) all indebtedness of the Company, whether incurred on or prior to
the date of this Indenture or thereafter incurred, for claims in respect of
derivative products, including interest rate, foreign exchange rate and
commodity forward contracts, options and swaps and similar arrangements; (vii)
letters of credit, performance bonds and similar obligations issued in favor of
governmental or franchising authorities as a term of a cable television
franchise or other governmental franchise, license, permit or authorization held
by the Company or any of its affiliates; (viii) every obligation of the type
referred to in clauses (i) through (vii) of another Person and all dividends of
another Person the payment of which, in either case, the Company has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise; and (ix) obligations of the type referred to in clauses (i) through
(viii) of another Person secured by any lien on any property or asset of the
Company (whether or not such obligation is assumed by the Company); and all
deferrals, renewals, extensions and refundings of, and amendments, modifications
and supplements to, any of the foregoing obligations.
"Indebtedness Ranking on a Parity with the Debentures" means (i)
Indebtedness, whether outstanding on the date of execution of this Indenture or
thereafter created, assumed or incurred, to the extent such Indebtedness
specifically by its terms ranks pari passu with and not prior to the Debentures
in the right of payment upon the happening of the dissolution, winding-up,
liquidation or reorganization of the Company and (ii) all other debt securities,
and guarantees in respect of those debt securities, issued to any other trust,
or a trustee of such trust, partnership or other entity affiliated with the
Company that is a financing vehicle of the Company (a "financing entity") in
connection with the issuance by such financing entity of equity securities or
other securities guaranteed by the Company pursuant to an instrument that ranks
pari passu with or junior in right of payment to the Guarantees. The securing of
any Indebtedness otherwise constituting Indebtedness Ranking on a Parity with
the Debentures shall not be deemed to prevent such Indebtedness from
constituting Indebtedness Ranking on a Parity with the Debentures.
"Indebtedness Ranking Junior to the Debentures" means any Indebtedness,
whether outstanding on the date of execution of this Indenture or thereafter
created, assumed or incurred, to the extent such Indebtedness by its terms ranks
junior to and not pari passu with or prior to the Debentures (and any other
Indebtedness Ranking on a Parity with the Debentures) in right of payment upon
the happening of the dissolution, winding-up, liquidation or reorganization of
the Company. The securing of any Indebtedness otherwise constituting
Indebtedness Ranking Junior to the Debentures shall not be deemed to prevent
such Indebtedness from constituting Indebtedness Ranking Junior to the
Debentures.
"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.
"Interest Payment Date," when used with respect to the Debentures of
any series, means the stated maturity of any installment of interest on the
Debentures of that series.
"Issue Date," with respect to a series of Debentures, means the date on
which the Debentures of such series are originally issued.
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<PAGE> 10
"Office" or "Agency," with respect to any Debentures, means an office
or agency of the Company maintained or designated in a Place of Payment for such
Debentures pursuant to Section 2.04 or any other office or agency of the Company
maintained or designated for such Debentures pursuant to Section 2.04 or, to the
extent designated or required by Section 2.04 in lieu of such office or agency,
the Corporate Trust Office of the Trustee.
"Officer" means, with respect to any corporation, any Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
such corporation.
"Officer's Certificate" means a certificate signed by the Chief
Executive Officer, the Chief Financial Officer, the President, a Vice President,
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, that complies with the requirements of Sections 13.04 and 13.05
and is delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Company, or any other counsel who shall be reasonably acceptable
to the Trustee and provided that the General Counsel and the Assistant General
Counsel of the Company shall be deemed to be reasonably acceptable to the
Trustee, containing the applicable information specified in Sections 13.04 and
13.05.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, and interest on the Debentures of any series
on behalf of the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Predecessor Debentures" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and for purposes of this definition, any
Debenture authenticated and delivered under Section 2.08 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Debenture shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Debenture.
"Preferred Securities" means the preferred securities of a Trust,
representing undivided beneficial interests in the assets of such Trust.
"Record Date," with respect to any series of the Debentures, means the
Regular Record Date, the Special Record Date or any date set to determine the
Holders of Debentures of such series entitled to vote, consent, make a request
or exercise any other right associated with such Debentures.
"Redemption Date," with respect to the Debentures of any series to be
redeemed, means the date specified for the redemption thereof in accordance with
the terms thereof and pursuant to Article 3 of this Indenture.
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<PAGE> 11
"Redemption Price," with respect to the Debentures of any series to be
redeemed, means the price at which such Debenture is to be redeemed in
accordance with the terms thereof and pursuant to Article 3 of this Indenture.
"Regular Record Date," with respect to an Interest Payment Date for the
Debentures of a series, means the date specified for such Debentures for the
determination of Holders entitled to receive the payment of interest on such
Interest Payment Date.
"Responsible Officer" shall mean, 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 shall have direct responsibility for the
administration of this Indenture.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, amended.
"Security Exchange," when used with respect to the Debentures of any
series which are held as assets of a Trust pursuant to the Trust Agreement of
such Trust, means the distribution of the Debentures of such series by such
Trust to the holders of the Trust Securities of such Trust in exchange for such
Trust Securities upon certain events described in the applicable Trust Agreement
of such Trust.
"Senior Indebtedness" means all Indebtedness, whether outstanding on
the date of execution of this Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Debentures or
Indebtedness Ranking Junior to the Debentures.
A "series" of Debentures means all Debentures denoted as part of the
same series authorized by or pursuant to a particular Board Resolution or a
supplemental indenture.
"Special Record Date" for the payment of any Defaulted Interest on the
Debentures of any series means the date determined pursuant to Section 2.02.
"Stated Maturity Date," with respect to the Debentures of any series,
means the date specified for such Debentures as the date on which the principal
of such Debenture is due and payable.
"Subsidiary" means any corporation, association, partnership, trust,
limited liability company or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, trustees or the
governing individuals or body thereof is at the time owned or controlled,
directly or indirectly, by (i) the Company, (ii) the Company and one or more
Subsidiaries, or (iii) one or more Subsidiaries.
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<PAGE> 12
"TIA" means the Trust Indenture Act of 1939, as amended and as in
effect on the date of this Indenture; provided, however, that if such Act is
amended after such date, TIA means, to the extent required by any such
amendment, such Act as so amended.
"Trust" means any statutory business trust created or established by
the Company to issue Trust Securities and to use the proceeds from the sale
thereof to purchase Debentures.
"Trust Agreement" means the Amended and Restated Trust Agreement for a
Trust, among the Company, as sponsor, The Bank of New York, as Property Trustee,
the Delaware Trustee named therein and the Administrative Trustees named
therein, as the same may be amended and modified from time to time.
"Trust Securities" means the undivided beneficial interests in the
assets of a Trust.
"Trustee" means the Person named as "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, and if
at any time there is more than one such Person, "Trustee" as used with respect
to Debentures of any series shall mean the Trustee with respect to Debentures of
that series.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of
which (other than directors' qualifying shares) is owned by the Company or
another Wholly Owned Subsidiary.
SECTION 1.02 OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Act"....................................................... 1.05
"Bankruptcy Law"............................................ 6.01
"Conversion Agent".......................................... 2.04
"Custodian"................................................. 6.01
"Defaulted Interest"........................................ 2.02
"Depository"................................................ 2.11
"Direct Action"............................................. 6.08
"Event of Default".......................................... 6.01
"Global Debenture".......................................... 2.11
"Legal Holiday"............................................. 13.08
"Notice of Default"......................................... 6.01
"Property Trustee".......................................... 3.01
"Register".................................................. 2.04
"Registrar"................................................. 2.04
"Successor"................................................. 5.01
</TABLE>
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<PAGE> 13
SECTION 1.03 INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
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:
"indenture securities" means the Debentures.
"indenture security holder" means a Debentureholder or Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Debentures.
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) each capitalized term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including, without limitation;
(e) words in the singular include the plural, and words in the plural
include the singular; and
(f) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
SECTION 1.05 ACTS OF HOLDERS AND HOLDERS OF PREFERRED SECURITIES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders or by holders of Preferred Securities may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
or holders of Preferred Securities, as applicable, in person or by an 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,
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<PAGE> 14
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 or holders of Preferred Securities
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.
Without limiting the generality of this Section, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a Depository that
is a Holder of a Global Debenture, may make, give or take, by a proxy, or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in or pursuant to
this Indenture to be made, given or taken by Holders, and a Depository that is a
Holder of a Global Debenture may provide its proxy or proxies to the beneficial
owners of interests in any such Global Debenture through such Depository's
standing instructions and customary practices.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Debentures shall be proved by the Register.
(d) Any Act of the Holder of any Debenture shall bind every future
Holder of the same Debenture and the Holder of every Debenture issued upon the
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
Debenture.
(e) If the Company solicits from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company
may, at its option, by or pursuant to a resolution of its Board of Directors,
fix in advance a Record Date for the determination of Holders entitled to give
such 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 action may be given before or after such Record Date, but only
Holders of record at the close of business on such Record Date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of outstanding Debentures have authorized or agreed or consented to
such Act, and for that purpose the outstanding Debentures shall be computed as
of such Record Date.
ARTICLE 2
THE DEBENTURES
SECTION 2.01 AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Debentures which may be authenticated
and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series in an amount not to
exceed the aggregate principal amount of Debentures of that series from time to
time authorized by or
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<PAGE> 15
pursuant to a Board Resolution, or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series.
With respect to any Debentures of each series to be authenticated and
delivered hereunder, there shall be established in or pursuant to a Board
Resolution, and set forth in an Officer's Certificate, or established in one or
more indentures supplemental hereto:
(a) the title of the Debentures of the series (which shall distinguish
the Debentures of the series from all other Debentures);
(b) any limit upon the aggregate principal amount of the Debentures of
that series which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Debentures of that series);
(c) Stated Maturity Date or Dates, which may be serial and the
Company's option, if any, to change the Stated Maturity Date or Dates;
(d) the rate or rates (which may be fixed or variable) at which the
Debentures of the series shall bear interest or the manner of calculation of
such rate or rates, if any;
(e) the basis upon which interest shall be computed if other than a
360-day year composed of twelve 30-day months;
(f) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner of
determination and frequency of such Interest Payment Dates and the Regular
Record Dates therefor;
(g) the right, if any, to extend the interest payment periods and the
duration of any such Extension Period, including the maximum consecutive period
during which interest payment periods may be extended;
(h) Issue Date or Dates;
(i) authorized denominations;
(j) the place or places for the payment of principal and premium, if
any, and interest;
(k) the date or dates on which or the period or periods within which,
the price or prices at which, and the terms and conditions upon which,
Debentures of the series may be redeemed, in whole or in part, at the option of
the Company;
(l) the obligation, if any, of the Company to redeem or purchase
Debentures of the series pursuant to any sinking fund or analogous provisions
(including payments made in cash in anticipation of future sinking fund
obligations) or at the option of a Holder and the date or dates on which or the
period or periods within which, the price or prices at which, and the terms and
conditions upon which, Debentures of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
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<PAGE> 16
(m) the form of the Debentures of the series, including the form of the
Certificate of Authentication for such series;
(n) the right or obligation of any Holder or the Company or the
applicable Trust to convert or exchange any Debenture into other securities of
the Company or such Trust and the terms and conditions of any such conversion or
exchange and, if so provided, the terms and conditions upon which such
conversion or exchange will be effected, including, the conversion or exchange
price, the conversion or exchange date(s) or period(s), provisions as to whether
conversion or exchange will be at the option of the Holder or the Company or
such Trust, the events requiring adjustment of the conversion or exchange price
and provisions affecting conversion or exchange in the event of redemption of
the Debenture of any series and any deletions from or modifications or additions
to this Indenture to permit or to facilitate the issuance of such convertible or
exchangeable Debentures or the administration thereof;
(o) whether the Debentures are issuable as a Global Debenture and, in
such case, the identity of the Depository for such series;
(p) any and all other terms with respect to such series (which terms
shall not be inconsistent with the terms of this Indenture); and
(q) the name of the applicable Trust (which shall distinguish such
statutory business trust from all other Trusts) to which the Debentures of such
series are to be deposited as assets and the date of its Trust Agreement.
The Debentures of any series and the Trustee's Certificate of
Authentication to be borne by such Debentures shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution and as set forth in an Officer's Certificate,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Debentures of that series may be listed, or to
conform to usage.
All Debentures of any one series shall be substantially identical
except as may otherwise be provided by the Company in or pursuant to the Board
Resolution and set forth in the Officer's Certificate or in any indenture or
indentures supplemental hereto pertaining to such series of Debentures. The
terms of the Debentures of any series may provide, without limitation, that the
Debentures shall be authenticated and delivered by the Trustee on original issue
from time to time upon telephonic or written order of persons designated in the
Officer's Certificate or supplemental indenture (telephonic instructions to be
promptly confirmed in writing by such person) and that such persons are
authorized to determine, consistent with such Officer's Certificate or any
applicable supplemental indenture, such terms and conditions of the Debentures
of such series as are specified in such Officer's Certificate or supplemental
indenture. All Debentures of any one series need not be issued at the same time
and, unless otherwise so provided by the Company, a series may be reopened for
issuances of additional Debentures of such series or to establish additional
terms of such series of Debentures.
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<PAGE> 17
If any of the terms of the Debentures of any series shall be
established by action taken by or pursuant to a Board Resolution, the Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the
Officer's Certificate setting forth the terms of such series.
SECTION 2.02 PAYMENT OF PRINCIPAL AND INTEREST.
Unless otherwise specified pursuant to Section 2.01(e), interest on the
Debentures shall be computed on the basis of a 360-day year composed of twelve
30-day months.
Unless otherwise provided with respect to a series of Debentures,
(a) the principal and Redemption Price of and interest on each
Debenture shall be payable in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts;
(b) the principal and Redemption Price of any Debenture and interest
payable on the Stated Maturity Date (if other than an Interest Payment Date) or
Redemption Date shall be payable upon surrender of such Debenture at the Office
or Agency of any Paying Agent therefor; and
(c) interest on any Debenture shall be paid on each Interest Payment
Date therefor to the Holder thereof at the close of business on the Record Date
therefor, such interest to be payable by check mailed to the address of the
Person entitled thereto as such address appears on the Register; provided
however, that (i) at the written request of any Holder of at least $100,000,000
aggregate principal amount of Debentures received by the Registrar not later
than the Regular Record Date for such Interest Payment Date, interest accrued on
such Debentures will be payable by wire transfer within the continental United
States in immediately available funds to the bank account number of such Holder
specified in such request and entered on the Register by the Registrar and (ii)
payments made in respect of Global Debentures shall be made in immediately
available funds to the Depository.
Except as specified pursuant to Section 2.01 or Section 4.01(b),
interest on any Debenture which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Debenture (or one or more Predecessor Debentures) is registered at the
close of business on the Regular Record Date for such interest. Any interest on
any Debenture which is payable, but is not punctually paid or duly provided for,
on any Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
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 (i) and (ii)
below:
(i) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) 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, not less than 15 Business Days prior to the date of the proposed
payment, notify the Trustee and the Paying Agent in writing of the
amount of Defaulted Interest proposed to be paid on each Debenture and
the date of the proposed payment, and at the same time the
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<PAGE> 18
Company shall deposit with the Paying Agent 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 Paying Agent
for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as provided in this clause. The
Special Record Date for the payment of such Defaulted Interest shall be
the close of business not more than 15 nor less than 10 days prior to
the date of the proposed payment. The Trustee shall, in the name and at
the expense of the Company, cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
given to the Holders thereof, 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 given, such
Defaulted Interest shall be paid to the Persons in whose names the
Debentures (or their respective Predecessor Debentures) are registered
at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (ii).
(ii) The Company may make payment of any Defaulted Interest on
the Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee and the Paying Agent
of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Paying Agent.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debenture shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Debenture.
If any convertible Debenture of any series is converted after any
Regular Record Date and on or prior to the next succeeding Interest Payment Date
(other than any Debenture with respect to which the Stated Maturity Date is
prior to such Interest Payment Date), interest that is due on such Interest
Payment Date shall be payable on such Interest Payment Date notwithstanding such
conversion, and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Person in whose name that Debenture is registered at
the close of business on such Regular Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Debenture
that is converted, interest shall not be payable if the Regular Record Date is
after the date of conversion of such Debenture.
SECTION 2.03 EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Debentures shall be executed on behalf of the Company by its
Chief Executive Officer, its Chief Financial Officer, its President or one of
its Vice Presidents, its Treasurer or one of its Assistant Treasurers under its
corporate seal imprinted or reproduced thereon and attested by its Secretary or
one of its Assistant Secretaries. The signature of any such Officer on the
Debentures may be manual or facsimile.
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(b) Debentures bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Debentures or
did not hold such offices at the date of such Debentures.
(c) No Debenture shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Debenture
a Certificate of Authentication duly executed by the Trustee by manual signature
of a Responsible Officer, and such Certificate of Authentication upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and made available for delivery hereunder.
(d) The Trustee shall authenticate and deliver Debentures of a series,
for original issue, at one time or from time to time in accordance with the
Company Order referred to below, upon receipt by the Trustee of:
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith shall determine that such action would expose the Trustee to personal
liability to existing Holders.
(i) a Board Resolution as required by Section 2.01;
(ii) a Company Order requesting the authentication and delivery of
such Debentures and stating the identity of the applicable Trust and
the aggregate liquidation amount of the Trust Securities to be issued
by such Trust concurrently with such Debentures;
(iii) an Officer's Certificate or, unless previously delivered, a
supplemental indenture hereto setting forth the form of such Debentures
and, except as set forth in a Board Resolution, establishing the terms
thereof;
(iv) such Debentures, executed on behalf of the Company in
accordance with clause (a) of this Section;
(v) an Opinion of Counsel to the effect that:
(1) the form or forms of such Debentures have been duly
authorized by the Company and have been established in
conformity with the provisions of this Indenture;
(2) such Debentures, when authenticated and delivered by the
Trustee and issued and delivered by the Company in the manner
and subject to any conditions specified in such Opinion of
Counsel, will have been duly issued under this Indenture and
will constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by this Indenture,
and enforceable in accordance with their terms, subject, as to
enforcement to laws relating to or affecting generally the
enforcement of creditors' rights, including, without
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limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(3) that any supplemental indenture referred to in clause
(iii) above has been duly authorized, executed and delivered
by the Company and is a valid instrument legally binding upon
the Company, enforceable in accordance with its terms, subject
as to enforcement to laws relating to or affecting creditors'
rights, including without limitation, bankruptcy and
insolvency laws and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and
(4) that all consents, approvals and orders of any commission,
governmental authority or agency required in connection with
the issuance and delivery of such Debentures have been
obtained; and
(vi) an Officer's Certificate certifying that no Default or Event
of Default has occurred and is continuing.
(e) The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee may appoint an authenticating agent. Each authenticating
agent shall be acceptable to the Company and, except as provided in or pursuant
to this Indenture, shall at all times be a corporation that would be permitted
by the TIA to act as trustee under an indenture qualified under the TIA, is
authorized under applicable law and by its charter to act as an authenticating
agent and has a combined capital and surplus (computed in accordance with
Section 310(a)(2) of the TIA) of at least $50,000,000. If at any time an
authenticating agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section. An authenticating agent may authenticate
Debentures whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by an authenticating
agent. The Trustee shall pay any authenticating agent appointed by the Trustee
reasonable compensation for its services and the Trustee shall be reimbursed for
such payment by the Company pursuant to Section 7.07. The provisions set forth
in Sections 7.02, 7.03 and 7.07 shall be applicable to any authenticating agent.
(f) If all the Debentures of any series are not to be issued at one
time, it shall not be necessary to deliver an Opinion of Counsel and an
Officer's Certificate at the time of issuance of each Debenture, but such
opinion and certificate, with appropriate modifications, shall be delivered at
or before the time of issuance of the first Debenture of such series. After any
such first delivery, any separate request by the Company that the Trustee
authenticate Debentures of such series for original issue will be deemed to be a
certification by the Company that all conditions precedent provided for in this
Indenture relating to authentication and delivery of such Debentures continue to
have been complied with.
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SECTION 2.04 REGISTRAR AND PAYING AND CONVERSION AGENTS.
The Company shall maintain or cause to be maintained, in The City of
New York, an Office or Agency where the Debentures may be presented for
registration of transfer or for exchange ("Registrar"), a Paying Agent at whose
Office the Debentures may be presented or surrendered for payment, a Conversion
Agent at whose Office the Debentures may be presented and surrendered in the
event of a conversion or exchange ("Conversion Agent"), and an Office or Agency
where notices and demands to or upon the Company in respect of the Debentures
and this Indenture may be served. The Registrar shall keep a register (the
"Register") of the Debentures and of their transfer and exchange. The Company
may have one or more co-Registrars and one or more additional Paying Agents and
Conversion Agents. The term Registrar includes any additional registrar, the
term Paying Agent includes any additional paying agent and the term Conversion
Agent includes any additional conversion agent.
Unless otherwise specified in or pursuant to this Indenture or the
Debentures, the Trustee shall be the initial Registrar for each series of
Debentures. The Company shall have the right to remove and replace with or
without cause from time to time the Registrar for any series of Debentures;
provided that no such removal or replacement shall be effective until a
successor Registrar with respect to such series of Debentures shall have been
appointed by the Company and shall have accepted such appointment by the
Company. In the event that the Trustee shall not be or shall cease to be
Registrar with respect to a series of Debentures, it shall have the right to
examine the Register for such series at all reasonable times. There shall be
only one Register for each series of Debentures.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-Registrar (if not the Company or
the Trustee or an Affiliate of the Trustee). The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall give
prompt written notice to the Trustee and to the Holders of any change of
location of such Office or Agency. If at any time the Company shall fail to
maintain or cause to be maintained 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 hereof. 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 agent for service. of notices or
demands, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Company or any Affiliate of
the Company may act as Paying Agent, Registrar, Conversion Agent or co-Registrar
or agent for service of notices and demands.
The Company may also from time to time designate one or more other
Offices or Agencies where the Debentures may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice to the Trustee and to the Holders of any
such designation or rescission and of any change in location of any such other
Office or Agency.
SECTION 2.05 PAYING AGENT TO HOLD MONEY IN TRUST.
Except as otherwise provided herein, prior to or on each due date of
the principal of and premium, if any, and interest on any Debenture, the Company
shall deposit with the Paying Agent a sum of money sufficient to pay such
principal, premium, if any, and interest so
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becoming due. The Company shall require each Paying Agent (other than the
Trustee or the Company) to agree in writing that such Paying Agent shall hold in
trust for the benefit of Holders or the Trustee all money held by the Paying
Agent for the payment of principal of and premium, if any, and interest on the
Debentures 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 request of the Trustee, pay to the Trustee all
money so held in trust and account for any money disbursed by it. The Company at
any time may require the Paying Agent to pay all money held by it to the Trustee
and to account for any money disbursed by it. Upon doing so, the Paying Agent
shall have no further liability for the money so paid over to the Trustee. If
the Company, a Subsidiary or an Affiliate of either of them acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund.
SECTION 2.06 DEBENTUREHOLDER 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
Debentureholders. If the Trustee is not the Registrar, the Company shall cause
to be furnished to the Trustee on or before the Record Date for each Interest
Payment Date and at such other times as the Trustee may request in writing,
within five Business Days of such request, a list, in such form as the Trustee
may reasonably require of the names and addresses of Debentureholders.
SECTION 2.07 TRANSFER AND EXCHANGE.
When Debentures are presented to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Debentures of the same series of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
reasonable requirements for such transactions are met. To permit registrations
of transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Debentures, all at the Registrar's request.
Every Debenture presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by the Holder or his attorney duly
authorized in writing.
The Company shall not require payment of a service charge for any
registration of transfer or exchange of Debentures, 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 the transfer
or exchange of Debentures from the Debentureholder requesting such transfer or
exchange (other than any exchange of a temporary Debenture for a definitive
Debenture not involving any change in ownership).
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (a) any Debenture for a period beginning at
the opening of business 15 days before the mailing of a notice of redemption of
Debentures and ending at the close of business on the day of such mailing or (b)
any Debenture selected, called or being called for redemption,
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except, in the case of any Debenture to be redeemed in part, the portion thereof
not to be redeemed.
SECTION 2.08 REPLACEMENT DEBENTURES.
If (a) any mutilated Debenture is surrendered to the Company or the
Trustee, or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debenture, and there is
delivered to the Company and the Trustee such Debenture or indemnity as may
reasonably be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Debenture has been
acquired by a bona fide purchaser, the Company shall execute in exchange for any
such mutilated Debenture, or in lieu of any such destroyed, lost or stolen
Debenture, a new Debenture of the same series and of like tenor and principal
amount, bearing a number not contemporaneously outstanding, and the Trustee
shall authenticate and make such new Debenture available for delivery.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, or is about to be redeemed by the
Company pursuant to Article 3, the Company in its discretion may, instead of
issuing a new Debenture, pay or purchase such Debenture, as the case may be.
Upon the issuance of any new Debentures under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the reasonable fees and expenses of the Trustee) in
connection therewith.
Every new Debenture issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Debenture shall constitute an original
additional contractual obligation of the Company (whether or not the mutilated,
destroyed, lost or stolen Debenture shall be at any time enforceable) and shall
be entitled to all benefits of this Indenture equally and ratably with any and
all other Debentures 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 Debentures.
SECTION 2.09 OUTSTANDING DEBENTURES; DETERMINATIONS OF HOLDERS' ACTION.
Debentures outstanding at any time are all the Debentures authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those mutilated, destroyed, lost or stolen Debentures referred to
in Section 2.08, those redeemed by the Company pursuant to Article 3, and those
described in this Section as not outstanding. A Debenture does not cease to be
outstanding because the Company or a Subsidiary or Affiliate thereof holds the
Debenture; provided, however, that in determining whether the Holders of the
requisite principal amount of Debentures have given or concurred in any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Debentures owned by the Company or a Subsidiary or Affiliate (other than any
Trust so long as any of the Preferred Securities of such Trust are outstanding)
shall be disregarded and deemed not to be outstanding.
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Subject to the foregoing, only Debentures outstanding at the time of
such determination shall be considered in any such determination (including
determinations pursuant to Articles 3, 6 and 9).
If a Debenture is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee receives proof reasonably satisfactory to it that
the replaced Debenture is held by a bona fide purchaser.
If the Paying Agent (other than the Company) holds, in accordance with
this Indenture, at the Stated Maturity Date or on a Redemption Date, money
sufficient to pay the Debentures payable on that date, then immediately on the
Stated Maturity Date or such Redemption Date, as the case may be, such
Debentures shall cease to be outstanding, and interest, if any, on such
Debentures shall cease to accrue.
SECTION 2.10 TEMPORARY DEBENTURES.
The Company may execute temporary Debentures, and upon the Company's
Order, the Trustee shall authenticate and make such temporary Debentures
available for delivery. Temporary Debentures shall be printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
in the same series and principal amount and of like tenor as the definitive
Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the Officers of the
Company executing such Debentures may determine, as conclusively evidenced by
their execution of such Debentures. Such temporary Debentures may be in global
form.
Except in the case of temporary Debentures in global form, which shall
be exchanged in accordance with the provisions thereof, after the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures of the same series upon surrender of the temporary
Debentures at the Office or Agency of the Company designated for such purpose
pursuant to Section 2.04, without charge to the Holders thereof. Upon surrender
for cancellation of any one or more temporary Debentures, the Company shall
execute a like principal amount of definitive Debentures of the same series of
authorized denominations, and the Trustee, upon receipt of a Company Order,
shall authenticate and make such Debentures available for delivery in exchange
therefor. Until so exchanged, the temporary Debentures shall in all respects be
entitled to the same benefits under this Indenture as definitive Debentures.
SECTION 2.11 BOOK-ENTRY SYSTEM.
In order to utilize a book-entry-only system for all or any portion of
the Debentures of any series, all or a portion of the Debentures of any series
may be issued in the form of one or more fully registered Debentures of the same
series for the aggregate principal amount of such Debentures (a "Global
Debenture"), which Global Debenture shall be registered in the name of the
depository (the "Depository") selected by the Company or in the name of such
Depository's nominee. Each Global Debenture shall be delivered by the Trustee to
the Depository or pursuant to the Depository's instruction and shall bear a
legend substantially to the following effect: "This Debenture may be
transferred, in whole but not in part, only to another nominee of the Depository
or to a successor Depository or to a nominee of such successor Depository."
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Notwithstanding any other provision of this Section or of Section 2.07,
a Global Debenture may be transferred in whole but not in part and in the manner
provided in Section 2.07, only by a nominee of the Depository for such series,
or by the Depository or any such nominee of a successor Depository for such
series selected or approved by the Company or to a nominee of such successor
Depository.
If (a) at any time the Depository for Global Debentures of any series
of Debentures notifies the Company that it is unwilling or unable to continue as
Depository for such Global Debentures or if at any time the Depository for such
Global Debentures shall no longer be a clearing agency registered or in good
standing under the Exchange Act or other applicable statute or regulation, and a
successor Depository for such Global Debentures is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, (b) the Company determines in its sole
discretion, that the Debentures of any series shall no longer be represented by
one or more Global Debentures and delivers to the Trustee an Officer's
Certificate evidencing such determination or (c) a Default or an Event of
Default occurs and is continuing, then the provisions of this Section shall no
longer apply to the Debentures of such series. In such event, the Company will
execute and the Trustee, upon receipt of an Officer's Certificate evidencing
such determination by the Company, will authenticate and deliver Debentures of
such series and of like tenor in definitive registered form, in authorized
denominations, and in aggregate principal amount equal to the principal amount
of the Global Debentures of such series in exchange for such Global Debentures.
Upon the exchange of Global Debentures for such Debentures in definitive
registered form without coupons, in authorized denominations, the Global
Debentures shall be canceled by the Trustee. Such Debentures in definitive
registered form issued in exchange for Global Debentures pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Debentures to the Persons in whose names such Debentures are so registered.
Except as provided above or as provided in any supplemental indenture,
owners of beneficial interests in a Global Debenture shall not be entitled to
receive physical delivery of Debentures in definitive form and will not be
considered the Holders thereof for any purpose under this Indenture.
Members of or participants in the Depository shall have no rights under
this Indenture with respect to any Global Debenture held on their behalf by the
Depository, and such Depository or its 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 Holder of such Global Debentures 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 Depository
or impair, as between the Depository and its members or participants, the
operation of customary practices governing exercise of the rights of a Holder of
any Debenture, including without limitation the granting of proxies or other
authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under this Indenture.
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SECTION 2.12 CANCELLATION.
All Debentures surrendered for payment, redemption, registration of
transfer, exchange or conversion or for credit against any sinking fund payment
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by the Trustee. The Company may at any
time deliver to the Trustee for cancellation any Debentures previously
authenticated and made available for delivery hereunder which the Company may
have acquired in any manner whatsoever, and all Debentures so delivered shall be
promptly canceled by the Trustee. The Company may not reissue or issue new
Debentures to replace Debentures it has paid or delivered to the Trustee for
cancellation. No Debentures shall be authenticated in lieu of or in exchange for
any Debentures canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Debentures held by the Trustee shall
be destroyed by the Trustee, and the Trustee shall deliver a certificate of
destruction to the Company.
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
SECTION 3.01 REDEMPTION; NOTICE TO TRUSTEE.
(a) The Company may redeem the Debentures of any series issued
hereunder on and after the dates and in accordance with the terms established
for such series pursuant to Section 2.01.
(b) If any or all of the Debentures are to be redeemed pursuant to this
Section, the Company shall deliver to the Trustee no more than 60 and no less
than 45 days prior to the Redemption Date a Company Order specifying the series
and principal amount of Debentures to be redeemed and the Redemption Date and
Redemption Price for such Debentures. Such Company Order shall be accompanied by
a Board Resolution authorizing such redemption. If the Debentures of a series
are held by a Trust, the Company shall also deliver a copy of such Company Order
to the property trustee for such Trust (the "Property Trustee").
SECTION 3.02 SELECTION OF DEBENTURES TO BE REDEEMED.
If less than all the outstanding Debentures of a series are to be
redeemed at any time, the Trustee shall select the Debentures of such series to
be redeemed by lot or by any other method the Trustee considers fair and
appropriate. The Trustee shall make the selection at least 30 but not more than
60 days before the Redemption Date from outstanding Debentures of such series
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not previously called for redemption. Provisions of this Indenture that apply to
Debentures called for redemption also apply to portions of Debentures called for
redemption. The Trustee shall notify the Company promptly of the Debentures or
portions of Debentures to be redeemed.
SECTION 3.03 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before the Redemption Date,
the Trustee, in the Company's name and at the Company's expense, shall mail or
cause to be mailed a notice of redemption by first-class mail, postage prepaid,
to each Holder of Debentures to be redeemed at such Holder's last address as it
appears in the Register.
The notice of redemption shall identify the Debentures to be redeemed,
the provision of the Debentures or this Indenture pursuant to which the
Debentures called for redemption are being redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the name and address of the Paying Agent;
(d) that payment of the Redemption Price of Debentures called for
redemption will be made only upon surrender of such Debentures to the Paying
Agent;
(e) if fewer than all the outstanding Debentures of any series are to
be redeemed, the identification and principal amounts of the particular
Debentures to be redeemed and that, on and after the Redemption Date, upon
surrender of such Debentures, a new Debenture or Debentures of the same series
and of like tenor and in a principal amount equal to the unredeemed portion
thereof will be issued;
(f) that, unless the Company defaults in paying the Redemption Price of
the Debentures called for redemption, including accrued interest thereon to the
Redemption Date, interest will cease to accrue on such Debentures on and after
the Redemption Date;
(g) that the redemption is for a sinking fund, if such is the case;
(h) in the case of Debentures of any series that are convertible or
exchangeable into Capital Stock, the conversion or exchange price or rate, the
date or dates on which or the period or periods during which the right to
convert or exchange the principal of the Debentures of such series to be
redeemed will commence or terminate and the place or places where such
Debentures may be surrendered for conversion or exchange; and
(i) the CUSIP numbers, if any.
Any notice of redemption given in the manner provided herein shall be
conclusively presumed to have been given, whether or not such notice is actually
received. Failure to mail any notice or defect in the mailed notice or the
mailing thereof in respect of any Debenture shall not affect the validity of the
redemption of any other Debenture.
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SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
After notice of redemption has been given, Debentures called for
redemption shall become due and payable on the Redemption Date at the Redemption
Price and from and after the Redemption Date (unless the Company shall default
in the payment of the Redemption Price and accrued interest), such Debentures
shall cease to bear interest. Upon the later of the Redemption Date and the date
such Debentures are surrendered to the Paying Agent, such Debentures shall be
paid at the Redemption Price, plus accrued interest to the Redemption Date,
provided that installments of interest on Debentures with an Interest Payment
Date which is on or prior to the Redemption Date shall be payable to the Holders
of such Debentures, registered as such at the close of business on the Regular
Record Dates therefor according to their terms and provisions.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate is the Paying Agent, shall
segregate and hold in trust or cause such Affiliate to segregate and hold in
trust) money sufficient to pay the Redemption Price of, and accrued interest on,
all Debentures to be redeemed on that Redemption Date. The Paying Agent shall
return to the Company any money in excess of the amount sufficient to pay the
Redemption Price of, and accrued interest on, all Debentures to be redeemed and
any interest accrued on the amount deposited pursuant to this Section.
SECTION 3.06 DEBENTURES REDEEMED IN PART.
Upon surrender of a Debenture that is redeemed in part, the Trustee
shall authenticate for the Holder a new Debenture of the same series and in a
principal amount equal to the unredeemed portion of such Debenture.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
(a) The Company shall pay the principal of and premium, if any, and
interest (including interest accruing during any Extension Period and/or on or
after the filing of a petition in bankruptcy or reorganization relating to the
Company, whether or not a claim for post-filing interest is allowed in such
proceeding) on the Debentures on or prior to the dates and in the manner
provided in such Debentures or pursuant to this Indenture. An installment of
principal, premium, if any, or interest shall be considered paid on the
applicable due date if on such date the Trustee or the Paying Agent holds, in
accordance with this Indenture, money sufficient to pay all of such installment
then due. With respect to any Debenture, the Company shall pay interest on
overdue principal and interest on overdue installments of interest (including
interest accruing during any Extension Period and/or on or after the filing of a
petition in bankruptcy or reorganization relating to the Company, whether or not
a claim for post-filing interest is allowed in such proceeding), to the extent
lawful, at the rate accruing on such Debenture, compounded with the same
frequency as interest is payable on such Debentures. Interest on overdue
interest shall accrue from the date such amounts become overdue.
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(b) Notwithstanding the provisions of Section 4.01 (a) or any other
provision herein to the contrary, the Company shall have the right, as provided
in an Officer's Certificate or supplemental indenture issued pursuant to Section
2.01, in its sole and absolute discretion at any time and from time to time
while the Debentures of any series are outstanding, so long as no Event of
Default with respect to such series of Debentures has occurred and is
continuing, to defer payments of interest by extending the interest payment
period for such series of Debentures for the maximum consecutive period, if any,
specified for such series of Debentures, provided that such Extension Period
must end on an Interest Payment Date and shall not extend beyond the Stated
Maturity Date or Redemption Date of any Debenture of such series, and provided
further that at the end of each Extension Period the Company shall pay all
interest then accrued and unpaid (together with interest thereon to the extent
permitted by applicable law at the rate accruing on such Debentures). Prior to
the termination of an Extension Period, the Company may shorten or may further
extend the interest payment period for such series of Debentures, provided that
such Extension Period together with all such previous and further extensions may
not exceed the maximum consecutive period specified for such series of
Debentures, end on a date other than an Interest Payment Date or extend beyond
the Stated Maturity Date or Redemption Date of any Debenture of such series. The
Company shall give the Trustee notice of the Company's election to begin an
Extension Period for any series of Debentures and any shortening or extension
thereof at least five Business Days prior to: (i) the date notice of payment of
interest on such Debentures is required to be given to any national securities
exchange on which the related Preferred Securities, if any, or Debentures are
then listed or other applicable self-regulatory organization or (ii) the date of
the notice of the record or payment date of the related distribution on the
Preferred Securities issued by the Trust which is the Holder of the Debentures
of such series, but in any event not less than five Business Days prior to the
Record Date fixed by the Company for the payment of such interest. The Company
shall give or cause the Trustee to give notice (a form of which shall be
provided by the Company to the Trustee) of the Company's election to begin an
Extension Period to the Holders by first class mail, postage prepaid.
SECTION 4.02 PROHIBITION AGAINST DIVIDENDS, ETC.
The Company shall not (a) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's Capital Stock or (b) make any payment of principal of or
premium, if any, or interest on or repay or repurchase or redeem any debt
securities of the Company (including Debentures) that rank pari passu with or
junior in right of payment to the Debentures or (c) make any guarantee payments
with respect to any guarantee by the Company of the debt securities of any
Subsidiary of the Company (including any Guarantee) if such guarantee ranks pari
passu or junior in right of payment to the Debentures (other than (i) dividends
or distributions in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Common Stock of the Company, (ii) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (iii) payments under any
Guarantee, (iv) as a result of a reclassification of the Company's Capital Stock
or the exchange or conversion of one class or series of the Company's Capital
Stock for another class or series of the Company's Capital Stock, including,
without limitation, the conversion of the Company's Class C common stock or the
Company's Series A convertible preferred stock into shares of the Company's
Class A common
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stock, (v) the purchase of fractional interests in shares of the Company's
Capital Stock pursuant to the conversion or exchange provisions of such Capital
Stock or the security being converted or exchanged, and (vi) purchases of Common
Stock related to the issuance of Common Stock or rights under any of the
Company's benefit plans for its directors, officers or employees or any of the
Company's dividend reinvestment plans): (X) during any Extension Period, (Y) if
at such time there shall have occurred and is continuing any Default or Event of
Default, or (Z) if the Company shall be in default with respect to its payment
or other obligations under any Guarantee.
SECTION 4.03 SEC REPORTS.
The Company shall file with the Trustee, within 15 days after it files
them with the SEC, copies of its annual report 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. If the Company
is not subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the Trustee such 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 are specified in
Section 13 or 15(d) of the Exchange Act. The Company shall also comply with the
provisions of Section 314(a) of the TIA.
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 Officer's Certificates).
SECTION 4.04 COMPLIANCE CERTIFICATES.
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each of the Company's fiscal years, an Officer's Certificate stating
whether or not the signer knows of any Default or Event of Default. Such
certificate shall contain a certification from the Principal Executive Officer,
Principal Financial Officer or Principal Accounting Officer of the Company as to
his or her knowledge of the Company's compliance with all conditions and
covenants under this Indenture. For purposes of this Section, such compliance
shall be determined without regard to any period of grace or requirement of
notice provided under this Indenture. If such Officer does know of such a
Default or Event of Default, the Officer's Certificate shall describe any such
Default or Event of Default, and its status. Such Officer's Certificate need not
comply with Sections 13.04 and 13.05.
(b) The Company shall deliver to the Trustee any information reasonably
requested by the Trustee in connection with the compliance by the Trustee or the
Company with the TIA.
SECTION 4.05 FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company shall 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.
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SECTION 4.06 PAYMENT OF EXPENSES OF EACH TRUST.
The Company covenants for the benefit of the Holders of each series of
Debentures to pay all of the obligations, costs and expenses of such Trust
(other than payments in respect of Trust Securities) in accordance with the
provisions of its Trust Agreement and to pay the taxes of such Trust in
accordance with the provisions of its Trust Agreement in order to permit such
Trust to make distributions on and redemptions of its Preferred Securities in
accordance with such Trust Agreement.
SECTION 4.07 OWNERSHIP OF COMMON SECURITIES.
So long as the Trust Securities of each Trust remain outstanding, the
Company hereby covenants (a) to maintain 100% direct or indirect ownership of
the common securities issued by such Trust (it being understood that any
permitted successor of the Company under this Indenture may succeed to the
Company's ownership of such common securities), (b) to use its best efforts to
cause each Trust (i) to remain a business trust, except in connection with the
distribution of Debentures to the holders of related Trust Securities in
liquidation of such Trust, the conversion, exchange or redemption of all of such
Trust Securities, or certain mergers, consolidations or amalgamations, each as
permitted by the applicable Trust Agreement, and (ii) to otherwise continue to
be classified as a grantor trust for United States federal income tax purposes,
(c) to use its reasonable best efforts to cause each holder of each Trust's
Trust Securities to be treated as owning an undivided beneficial interest in the
related Debentures and (d) not to cause, as sponsor of each Trust, or to permit,
as holder of the common securities, the dissolution, liquidation or winding-up
of any Trust, except as provided in the applicable Trust Agreement.
SECTION 4.08 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company shall deliver to the Trustee, as soon as possible and in
any event within five Business Days after the Company becomes aware of the
occurrence of any Event of Default or an event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officer's Certificate
setting forth the details of such Event of Default or default and the action
which the Company proposes to take with respect thereto.
ARTICLE 5 SUCCESSOR CORPORATION
SECTION 5.01 WHEN THE COMPANY MAY MERGE, ETC.
The Company may not consolidate with or merge with or into, or sell,
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety (either in one transaction or a series of
transactions) to, any Person, and no Person shall consolidate with or merge into
the Company or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to the Company, unless:
(a) the Person formed by or surviving such consolidation or merger or
to which such sale, conveyance, transfer or lease shall have been made (the
"Successor") if other than the Company (i) is organized and existing under the
laws of the United States of America or any
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state thereof or the District of Columbia, and (ii) shall expressly assume by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Debentures, this Indenture and the Guarantees;
(b) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Person or any
Subsidiary as a result of such transaction as having been incurred by such
Person or such Subsidiary at the time of such transaction), no Default or Event
of Default shall have occurred and be continuing; and
(c) the Company delivers to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
conveyance, transfer or lease and such supplemental indenture comply with this
Indenture.
The Successor will be the successor to the Company, and will be
substituted for, and may exercise every right and power and become the obligor
on the Debentures with the same effect as if the Successor had been named as the
Company herein but, in the case of a sale, conveyance, transfer or lease of all
or substantially all of the assets of the Company, the predecessor Company will
not be released from its obligation to pay the principal of and premium, if any,
and interest on the Debentures.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
"Event of Default," wherever used herein with respect to Debentures of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
unless such event is specifically deleted or modified in or pursuant to the
supplemental indenture, Board Resolution or Officer's Certificate establishing
the terms of such series pursuant to this Indenture:
(a) default in the payment, when due, of interest on any Debenture of
that series and the default continues for a period of 30 days; provided, that
during any Extension Period for the Debentures of that series, failure to pay
interest on the Debentures of that series shall not constitute a Default or
Event of Default hereunder, or
(b) default in the payment of the principal of or premium, if any, on
any Debenture of such series when it becomes due, whether at maturity, upon any
redemption, by declaration of acceleration of maturity or otherwise; or
(c) default in the deposit of any sinking fund payment when and as due
by the terms of a Debenture of such series; or
(d) default in the performance or breach of any covenant or agreement
of the Company in this Indenture (other than a covenant or agreement a default
in the performance or the breach of which is elsewhere in this Section
specifically dealt with or which has been
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expressly included in this Indenture solely for the benefit of a series of
Debentures), and continuance of such breach or default for a period of 90 days
after receipt by the Company of a "Notice of Default"; or
(e) a court of competent jurisdiction enters:
(i) a decree or order for relief in respect of the Company in an
involuntary proceeding under any applicable Bankruptcy Law and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(ii) a decree or order adjudging the Company to be insolvent, or
approving a petition seeking reorganization, arrangement, adjustment or
composition of the Company and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(iii) a final and non-appealable order appointing a Custodian of the
Company or of any substantial part of the property of the Company, or
ordering the winding up or liquidation of the affairs of the Company;
or
(f) the Company pursuant to or within the meaning of any Bankruptcy
Law: (i) commences a voluntary case or proceeding; (ii) consents to the entry of
an order for relief against it in an involuntary case or proceeding; (iii) files
a petition or answer or consent seeking reorganization or relief or consents to
such filing or to the appointment of or taking possession by a Custodian of it
or for all or substantially all of its property, and such Custodian is not
discharged within 60 days; (iv) makes a general assignment for the benefit of
its creditors; or (v) admits in writing its inability to pay its debts generally
as they become due; or
(g) if applicable, failure by the Company to deliver the required
securities or other rights upon an appropriate conversion or exchange election
by Holders of the Debentures or the related Preferred Securities; or
(h) any other Event of Default provided in or pursuant to this
Indenture with respect to Debentures of such series.
The term "Bankruptcy Law" means Title 11 of the United States Code, or
any similar federal or state bankruptcy, insolvency, reorganization or other law
for the relief of debtors. "Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator, custodian or similar official under any Bankruptcy
Law.
A Default under clause (d) above is not an Event of Default until (i)
the Trustee provides a "Notice of Default" to the Company or the Holders of at
least 25% in aggregate principal amount of the Debentures of that series at the
time outstanding or, if that series of Debentures is held by a Trust, the
holders of at least 25% in aggregate liquidation amount of the outstanding
Preferred Securities of that Trust provide a "Notice of Default" to the Company
and the Trustee and (ii) the Company does not cure such Default within the time
specified in clause (d) 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."
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SECTION 6.02 ACCELERATION.
If any Event of Default with respect to the Debentures of any series
other than an Event of Default under clause (e) or (f) of Section 6.01 occurs
and is continuing, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Debentures of that series then outstanding may declare
the principal of, and any accrued interest on, all the Debentures of that series
due and payable immediately, provided that in the case of a series of Debentures
then held by a Trust, if upon an Event of Default with respect to the Debentures
of that series the Trustee has, or the Holders of at least 25% in aggregate
principal amount of the Debentures of that series then outstanding have, failed
to declare the principal of, and any accrued interest on, the Debentures of that
series to be immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of the outstanding Preferred Securities of that
Trust shall have such right by a notice in writing to the Company and the
Trustee. If an Event of Default specified in clause (e) or (f) of Section 6.01
occurs, the principal of, and any accrued interest on, all the Debentures shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Debentureholders.
The foregoing paragraph, however, is subject to the condition that if,
at any time after the principal of the Debentures of that series shall have been
so declared due and payable, and before any judgment or decree for the payment
of the moneys due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all the Debentures of that series and
the principal of and premium, if any, on all Debentures of that series which
shall have become due otherwise than by acceleration (with interest upon such
principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate accruing on the Debentures of that series to the date of such payment or
deposit) and the amount payable to the Trustee under Section 7.07, and any and
all Defaults under the Indenture, other than the nonpayment of principal of and
interest on Debentures of that series which shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.04, then and
in every such case the Holders of at least a majority in aggregate principal
amount of the Debentures of that series then outstanding (subject to, in the
case of any series of Debentures held as assets of a Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of the
holders of the Preferred Securities and the Common Securities of such Trust as
may be required under the Trust Agreement of such Trust), by written notice to
the Company and to the Trustee, may rescind and annul such declaration and its
consequences with respect to that series of Debentures; but no such rescission
and annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon.
SECTION 6.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may, in
its own name or as trustee of an express trust, institute, pursue and prosecute
any proceeding, including without limitation, any action at law or suit in
equity or other judicial or administrative proceeding to collect the payment of
principal of or premium, if any, or interest on the Debentures of the series
that is in default, to enforce the performance of any provision of the
Debentures of that series or this Indenture or to obtain any other available
remedy.
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The Trustee may maintain a proceeding even if it does not possess any
of the Debentures or does not produce any of the Debentures in the proceeding. A
delay or omission by the Trustee, any Debentureholder or the holders of
Preferred Securities in exercising any right or remedy accruing upon an Event of
Default shall not impair such right or remedy or constitute a waiver of, or
acquiescence in, such Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
If a Default or Event of Default with respect to a series of Debentures
has occurred and is continuing, the Holders of at least a majority in aggregate
principal amount of the Debentures of that series at the time outstanding, or,
if that series of Debentures is held by a Trust, the holders of at least a
majority in aggregate liquidation amount of the Preferred Securities of that
Trust, in each case by notice to the Trustee and the Company, may waive an
existing Default or Event of Default and its consequences except a Default or
Event of Default in the payment of the principal of or premium, if any, or
interest on any Debenture of that series (unless such Event of Default has been
cured and a sum sufficient to pay all matured installments of interest and
premium, if any and principal due otherwise than by acceleration has been
deposited with the Trustee) or a default in respect of a covenant or provision
which under this Indenture cannot be modified or amended without the consent of
the holder of each outstanding Debenture of that series. When a Default or Event
of 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 Event of Default or
impair any consequent right.
SECTION 6.05 CONTROL BY HOLDERS.
The Holders of at least a majority in aggregate principal amount of the
Debentures of a series or, if that series of Debentures is held by a Trust, the
holders of at least a majority in aggregate liquidation amount of the Preferred
Securities of that Trust, 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, in respect of such series of
Debentures. 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 Debentureholders or may
involve the Trustee in personal liability. The Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction,
including withholding notice to the Holders of the Debentures of continuing
default (except in the payment of the principal of (other than any mandatory
sinking fund payment) or premium, if any, or interest on any Debentures) if the
Trustee considers it in the interest of the Holders of the Debentures to do so.
SECTION 6.06 LIMITATION ON SUITS.
Except as provided in Section 6.07 or 6.08, no Holder of Debentures of
any series or holder of Preferred Securities of the Trust which is the Holder of
that series of Debentures may pursue any remedy with respect to this Indenture
or the Debentures unless:
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(a) the Holders of Debentures of such series or the holders of such
Preferred Securities give to the Trustee written notice stating that an Event of
Default with respect to the corresponding Debentures of such series has occurred
and is continuing;
(b) the Holders of at least 25% in aggregate principal amount of the
outstanding Debentures of that series or the holders of at least 25% in
aggregate liquidation amount of such Preferred Securities make a written request
to the Trustee to pursue a remedy;
(c) the Holders of Debentures of such series or the holders of such
Preferred Securities provide to the Trustee reasonable security and indemnity
against any loss, liability or expense satisfactory to the Trustee;
(d) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security and indemnity; and
(e) during such 60 day period, the Holders of at least a majority in
aggregate principal amount of the Debentures of that series or the holders of at
least a majority in aggregate liquidation amount of such Preferred Securities do
not give the Trustee a direction inconsistent with the request, it being
understood and intended that no one or more of such Holders shall have any right
in any manner whatever by virtue of, or by availing of, any provision of this
Indenture or any Debenture to affect, disturb or prejudice the rights of any
other such Holders, or to obtain or seek to obtain priority or preference over
any other of such Holders or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 6.07 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of
any Debenture shall have the right which is absolute and unconditional to
receive payment of the principal of, premium, if any, and (subject to Section
2.02) interest on such Debenture on the respective due dates expressed in such
Debenture (or, in the case of redemption, on the Redemption Date) and to convert
or exchange such Debentures in accordance with its terms, if applicable, and to
institute suit for the enforcement of such payment or conversion or exchange,
and such right shall not be impaired without the consent of such Holder.
SECTION 6.08 DIRECT ACTION RIGHT OF HOLDERS OF TRUST PREFERRED SECURITIES.
If an Event of Default has occurred and is continuing and is
attributable either to (a) the failure of the Company to pay the principal of or
premium, if any, or interest on the Debentures on the due date therefor or (b)
the failure by the Company to deliver the required securities or other rights
upon an appropriate conversion or exchange right election, and an event of
default has occurred and is continuing under the applicable Trust Agreement, a
holder of the related Preferred Securities, in lieu of any action that may
otherwise be taken hereunder as a Holder of Debentures, may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or premium, if any, or interest on such Debentures
having a principal amount equal to the liquidation amount of the Preferred
Securities held by such holder or for enforcement of such conversion or exchange
rights, as the case may be (a "Direct Action"). Notwithstanding anything
contained herein to the contrary, the Company may
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not amend this Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Preferred
Securities outstanding. Notwithstanding any payments made to a holder of
Preferred Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and premium, if any, or
interest on the related Debentures, and the Company shall be subrogated to the
rights of the holder of such Preferred Securities with respect to payments on
the Preferred Securities to the extent of any payments made by the Company to
such holder in any Direct Action.
SECTION 6.09 COLLECTION SUITS BY THE TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any interest on any Debenture
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of the principal of or premium, if
any, on any Debenture on the Stated Maturity Date or Redemption Date thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holder of such Debenture, the whole amount then due and payable on such
Debenture for principal, premium, if any, and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium, if any, and on any overdue interest, at the rate or rates
prescribed therefor in such. Debenture and in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Debenture and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Debenture, wherever
situated.
If an Event of Default with respect to Debentures of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Debentures of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or such Debentures or in aid of the
exercise of any power granted herein, or to enforce any other remedy available
under this Indenture or by law.
SECTION 6.10 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 its properties or assets, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise:
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(a) to file and prove a claim for the whole amount of the principal of
and premium, if any, and interest on the Debentures 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 of Debentures 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 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 of a
Debenture any plan of reorganization, arrangement, adjustment or composition
affecting the Debentures 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 6.11 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall,
subject to Article 10, pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders of Debentures in respect of which or for
the benefit of which such money has been collected
for amounts due and unpaid on such Debentures for the
principal thereof or premium, if any, or interest, if
any, thereon ratably, without preference or priority
of any kind, according to such amounts due and
payable on such Debentures; and
THIRD: the balance, if any, to the Company.
Except as otherwise set forth in the Debentures, the Trustee may fix a
Record Date and payment date for any payment to Debentureholders pursuant to
this Section.
SECTION 6.12 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 does not apply to a suit by
the Trustee, a suit by a Holder of Debentures or holder of Preferred Securities
pursuant to Section 6.07 or 6.08 or a suit by Holders of Debentures of more than
10% in aggregate principal amount of the outstanding Debentures of any series
or, if a series of
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Debentures is held by a Trust, the holders of more than 10% in aggregate
liquidation amount of the Preferred Securities of that Trust.
ARTICLE 7
THE TRUSTEE
SECTION 7.01 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.
(a) If an Event of Default occurs and is continuing with respect to the
Debentures of any series, the Trustee shall exercise the rights and powers
vested in it by this Indenture with respect to that series 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 his or her own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Debentures of any series, (i) the Trustee need perform only those duties
with respect to that series that are specifically set forth in this Indenture or
the TIA and no others; and (ii) 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.
However, in the case of any 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 shall not be required to
confirm or investigate the accuracy of mathematical calculations or other facts
stated therein).
(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:
(i) this clause (c) does not limit the effect of Section 7.01(b);
(ii) 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
(iii) 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.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to Section 7.01 (a), (b), (c) and (e) and Section 7.02.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives security and indemnity reasonably satisfactory to it
against any loss, liability or expense (including reasonable counsel fees).
(f) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur personal liability in the performance
of any of its duties or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
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Indenture or indemnity reasonably satisfactory to the Trustee against such risk
or liability is not reasonably assured to it.
(g) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall not be
liable for interest on any money held by it hereunder except as otherwise agreed
with the Company.
SECTION 7.02 RIGHTS OF THE TRUSTEE.
Subject to Sections 315(a) through 315(d) of 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, coupon or other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Order (in each case, other than delivery of
any Debenture to the Trustee for authentication and delivery pursuant to Section
2.03 which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) 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
shall be herein specifically prescribed) may, in the absence of negligence or
bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by or pursuant to this Indenture at the request or
direction of any of the Holders of Debentures of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) 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,
coupon 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, during business hours and upon
reasonable notice, the books, records and premises of the Company, personally or
by agent or attorney at the reasonable cost of the Company;
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(g) 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;
(h) 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; and
(i) 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.
SECTION 7.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCES OF DEBENTURES.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Debentures. The Trustee shall not be accountable for the
Company's use of the proceeds from the Debentures, and the Trustee shall not be
responsible for any statement in this Indenture or the Debentures or any report
or certificate issued by the Company hereunder or any registration statement
relating to the Debentures (other than the Trustee's Certificate of
Authentication and the Trustee's Statement of Eligibility on Form T-1), or the
determination as to which beneficial owners are entitled to receive any notices
hereunder.
SECTION 7.04 MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 7.05 NOTICE OF DEFAULTS.
If a Default occurs and is continuing with respect to the Debentures of
any series and if it is known to the Trustee, the Trustee shall mail to each
Holder of a Debenture of that series notice of the Default within 90 days after
it becomes known to the Trustee unless such Default shall have been cured or
waived. Except in the case of a Default described in Section 6.01 (a), (b) or
(g), the Trustee may withhold such notice if and so long, as a committee of
Responsible Officers in good faith determines that the withholding of such
notice is in the interests of the Holders of the Debentures of that series. The
Trustee shall not be charged with knowledge of any Default unless a Responsible
Officer assigned to the Corporate Trust Department of the Trustee shall have
actual knowledge of the Default. The second sentence of this Section shall be in
lieu of the proviso to TIA Section 315(b). Said proviso is hereby expressly
excluded from this Indenture, as permitted by the TIA.
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SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each September 1, beginning with the September 1
next following the date of this Indenture, the Trustee shall mail to each
Debentureholder, and such other holders that have submitted their names to the
Trustee for such purpose, a brief report dated as of such September 1 in
accordance with and to the extent required under TIA Section 313.
A copy of each report at the time of its mailing to Debentureholders
shall be filed with the Company, the SEC and any securities exchange on which
the Debentures are listed. The Company agrees to promptly notify the Trustee
whenever the Debentures become listed on any securities exchange and of any
listing, thereof.
SECTION 7.07 COMPENSATION AND INDEMNITY.
The Company covenants and agrees:
(a) to pay to the Trustee from time to time such compensation as shall
be agreed in writing between the Company and the Trustee for all services
rendered by it hereunder (which compensation shall not be limited 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 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, and advances of its agents and counsel), including all reasonable
expenses and advances incurred or made by the Trustee in connection with any
Default or Event of Default or any membership on any creditors' committee,
except any such expense or advance as may be attributable to its negligence,
willful misconduct or bad faith; and
(c) to the fullest extent permitted by law, to indemnify each of the
Trustee, or any predecessor Trustee, its officers, employees, directors and
shareholders, for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than taxes based upon,
measured by or determined by the income of the Trustee or any predecessor
Trustee), incurred without negligence or willful misconduct on its part, arising
out of or in connection with the acceptance or administration of this trust,
including the reasonable costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.
Before, after or during an Event of Default with respect to the
Debentures of a series, the Trustee shall have a claim and lien prior to the
Debentures of that series as to all property and funds held by it hereunder for
any amount owing it for its fees and expenses or any predecessor Trustee
pursuant to this Section, except with respect to funds held by the Trustee or
any Paying Agent in trust for the payment of principal of or premium, if any, or
interest on Debentures pursuant to Section 2.05 or Section 8.01.
The Company's payment and indemnity obligations pursuant to this
Section are not subject to Article 10 of this Indenture and shall survive the
discharge of this Indenture. When the Trustee renders services or incurs
expenses after the occurrence of a Default specified in Section
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6.01, the compensation for services and expenses are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 7.08 ELIGIBILITY; DISQUALIFICATION.
(a) The Trustee shall at all times satisfy the requirements of the TIA
Sections 310(a)(1) and 310(a)(2). The Trustee (or any Affiliate thereof which
has unconditionally guaranteed the obligations of the Trustee hereunder) shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recently published annual report of condition. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
(b) The Trustee shall comply with TIA Section 310(b). In determining
whether the Trustee has conflicting interests as defined in TIA Section
310(b)(1), the provisions contained in the proviso to TIA Section 310(b)(1) and
the Trustee's Statement of Eligibility on Form T-1 shall be deemed incorporated
herein.
SECTION 7.09 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 7.10.
(b) The Trustee may resign at any time with respect to the Debentures
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 7.10 shall
not have been delivered to the Trustee within 60 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Debentures of such series.
(c) If the Trustee has or shall acquire any conflicting interest, as
defined in Section 310(b) of the TIA, with respect to the Debentures of any
series, it shall, within 90 days after ascertaining it has such conflicting
interest, either eliminate the conflicting interest or resign with respect to
the Debentures of that series in the manner set forth in this Section.
(d) The Trustee may be removed at any time with respect to the
Debentures of any series by Act of the Holders of at least a majority in
principal amount of the outstanding Debentures of such series, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of removal, the Trustee being removed may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Securities of such series.
(e) If at any time:
(i) the Trustee shall fail to comply with clause (c) of this
Section after written request therefor by the Company or by any Holder
of a Debenture who has been a bona fide Holder of a Debenture for at
least six months, or
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(ii) the Trustee shall cease to be eligible under Section 7.08(a)
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged bankrupt or insolvent, or a receiver of Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case,
(1) the Company by a Board Resolution may remove the Trustee with
respect to all Debentures, or (2) subject to Section 6.12, any Holder
of a Debenture who has been a bona fide Holder of a Debenture for at
least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Debentures of such series and the
appointment of a successor Trustee or Trustees.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Debentures of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Debentures of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debentures of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Debentures of any particular series) and shall comply with
the applicable requirements of Section 7.10. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Debentures of any series shall be
appointed by Act of the Holders of at least a majority in principal amount of
the outstanding Debentures of such series, notice of such appointment shall be
delivered to the Company and the retiring Trustee. The successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 7.10, become the successor Trustee
with respect to the Debentures of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Debentures of any series shall have been so appointed by the Company or
the Holders of Debentures and accepted appointment in the manner required by
Section 7.10, any Holder of a Debenture who has been a bona fide Holder of a
Debenture of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Debentures of such
series.
(g) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debentures of any series and each appointment
of a successor Trustee with respect to the Debentures of any series in the
manner provided in Section 13.02. Each notice shall include the name of the
successor Trustee with respect to the Debentures of such series and the address
of its Corporate Trust Office.
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SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Debentures, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and deeds of the Trustee with respect to the Debentures of that or those
series which the appointment of such successor Trustee relates, (ii) if the
retiring Trustee is not retiring with respect to all Debentures, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Debentures of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (iii) shall
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees as co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debentures of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Debentures of
that or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
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SECTION 7.11 SUCCESSOR TRUSTEE BY MERGER.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 8.01 SATISFACTION AND DISCHARGE OF INDENTURE.
Upon the direction of the Company by a Company Order, this Indenture
shall cease to be of further effect with respect to any series of Debentures as
specified in such Company Order, and the Trustee, on receipt of a Company Order,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series, when
(a) either
(i) all Debentures of such series theretofore authenticated and
delivered (other than (1) Debentures of such series which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.08, and (2) Debentures of such series for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 8.04) have been
delivered to the Trustee for cancellation; or
(ii) all Debentures of such series not theretofore delivered to the
Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at their stated maturity
within one year, or
(3) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (1), (2) or (3) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for
such purpose, (a) cash (which may be held in an interest bearing
account insured by the Federal Deposit Insurance Corporation) in an
amount, or (b) U.S. Government Obligations, maturing as to principal
and interest at such times and in such amounts as will ensure the
availability of cash, or (c) a combination thereof, in an amount
sufficient to pay and discharge the entire indebtedness
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on such Debentures not theretofore delivered to the Trustee for
cancellation, including the principal of, and premium, if any, and
interest on such Debentures, to the date of such deposit (in the case
of Debentures which have become due and payable) or to the Stated
Maturity Date or Redemption Date thereof, as the case may be; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the outstanding Debentures of such
series.
In the event there are Debentures of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Debentures of such series as to which it is Trustee and if the other conditions
thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture, with
respect to any series of Debentures, the obligations of the Company to the
Trustee under Section 7.07 and, if money shall have been deposited with the
Trustee pursuant to clause (a)(ii) of this Section, the following obligations of
the Company and the Trustee with respect to the Debentures of such series, shall
survive: (i) the rights of registration of transfer and exchange of Debentures
of such series, (ii) the replacement of apparently mutilated, defaced,
destroyed, lost or stolen Debentures of such series, (iii) the rights of the
Holders of the Debentures of such series to receive payments of the principal of
and premium, if any, interest on the Debentures of such series, (iv) the rights
of the Holders of the Debentures of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them, (v) the obligation of the Company to maintain an Office or Agency for
payments on and registration of transfer of the Debentures of such series, (vi)
the rights, obligations and immunities of the Trustee hereunder, and (vii) any
rights to convert or exchange the Debentures of such series into other
securities or rights in accordance with their terms.
SECTION 8.02 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
DEBENTURES.
Subject to Section 8.04, all moneys deposited with the Trustee pursuant
to Section 8.01 shall be held in trust and applied by it to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent), to the Holders of the Debentures of the series for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest, but such money
need not be segregated from other funds except to the extent required by law.
SECTION 8.03 REPAYMENT OF MONEYS HELD BY PAYING AGENT.
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under this Indenture shall, upon demand
of the Company, be repaid to it or paid to the Trustee, and thereupon such
Paying Agent shall be released from all further liability with respect to such
moneys.
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SECTION 8.04 RETURN OF MONEYS HELD BY THE TRUSTEE AND PAYING AGENT
UNCLAIMED FOR TWO YEARS.
Any moneys deposited with or paid to the Trustee or any Paying Agent
for the payment of the principal of and premium, if any, or interest on the
Debentures of any series and not applied but remaining unclaimed for two years
after the date when such principal, premium, if any, or interest shall have
become due and payable shall, unless otherwise required by mandatory provisions
of applicable escheat or abandoned or unclaimed property law, be repaid to the
Company by the Trustee or such Paying Agent, and the Holders of such Debentures
shall, unless otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property laws, thereafter look only to the Company for
any payment which such Holder may be entitled to collect as a general unsecured
creditor, and all liability of the Trustee or any Paying Agent with respect to
such moneys shall thereupon cease.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
From time to time, when authorized by a resolution of the Board of
Directors, the Company and the Trustee, without notice to or the consent of any
Holders of the Debentures, may amend or supplement this Indenture:
(a) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company contained
herein and in the Debentures; or
(b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Debentures (as shall be specified in such
supplemental indenture or indentures) or to surrender any right or power herein
conferred upon the Company; provided, however, that in respect of any such
additional covenant, or restriction or condition on the Company, such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate, enforcement upon such default
or may limit the remedies available to the Trustee upon such default; or
(c) to add any additional Events of Default with respect to all or any
series of Debentures (as shall be specified in such supplemental indenture); or
(d) to change or eliminate any of the provisions of this Indenture,
provided, that any such change or elimination shall become effective only when
there is no Debenture outstanding of any series created prior to the execution
of such supplemental indenture which is entitled to the benefit of such
provision; or
(e) to establish the form or terms of Debentures of any series as
permitted by Section 2.01 or, in lieu of any such supplemental indenture, the
Company may provide the Trustee with an Officer's Certificate with respect to
the form or terms of such Debentures; or
(f) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Debentures of one or more series, and
to add to or change
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any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee;
or
(g) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be defective or inconsistent
with any other provision herein or in any supplemental indenture, or to make any
other provisions with respect to matters or questions arising under this
Indenture, which shall not adversely affect the interests of the Holders of
Debentures of any series then outstanding in any material respect; or
(h) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Debentures as herein set forth; or
(i) to maintain qualification of this Indenture under the TIA; or
(j) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Debentures provided that any such action shall not
adversely affect the interests of any Holder of a Debenture of such series or
any other Debenture in any material respect.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture in any manner not
permitted by Section 9.01 or may waive future compliance by the Company with any
provisions of this Indenture with the consent of the Holders of at least a
majority in aggregate principal amount of the Debentures of each series affected
thereby then outstanding (and, in the case of any series of Debentures held as
assets of a Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such Trust as may be required under the Trust Agreement
of such Trust). Such an amendment or waiver may not, without the consent of each
Holder of any Debenture affected thereby:
(a) reduce the principal amount of such Debentures;
(b) reduce the percentage of the principal amount of such Debentures
the Holders of which must consent to an amendment of this Indenture or a waiver;
(c) change (i) the stated maturity of the principal of or the interest
on such Debentures, except in connection with any Extension Period, (ii) the
rate of interest (or the manner of calculation thereof) on such Debentures, or
(iii) the duration of the maximum consecutive period that payments of interest
on such Debentures may be deferred;
(d) change adversely to the Holders the redemption, conversion or
exchange provisions applicable to such Debentures, if any;
(e) change the currency in respect of which the payments on such
Debentures are to be made;
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(f) make any change in Article 10 that adversely affects the rights of
the Holders of the Debentures or any change to any other Section hereof that
adversely affects their rights under Article 10; or
(g) change Section 6.07 or 6.08;
provided that, in the case of the outstanding Debentures of a series then held
by a Trust, no such amendment shall be made that adversely affects the holders
of the Preferred Securities of that Trust, and no waiver of any Event of Default
with respect to the Debentures of that series or compliance with any covenant
under this Indenture shall be effective, without the prior consent of the
holders of at least a majority of the aggregate liquidation amount of the
outstanding Preferred Securities of that Trust or the holder of each such
Preferred Security, as applicable.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Debentures, or which modifies
the rights of the Holders of Debentures of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Debentures of any other series.
It shall not be necessary for the consent of the Holders of Debentures
or holders of Preferred Securities under this Section to approve the particular
form of any proposed amendment, but it shall be sufficient if such consent
approves the substance thereof.
If certain Holders agree to defer or waive certain obligations of the
Company hereunder with respect to Debentures held by them, such deferral or
waiver shall not affect the rights of any other Holder to receive the payment or
performance required hereunder in a timely manner.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment or
waiver. Any failure of the Company to mail such notices, or any defect therein,
shall not, however, in any way impair or affect the validity of such amendment
or waiver.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article 9 shall
comply with the TIA.
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SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment, waiver or other action by Holders becomes
effective, a consent, waiver or any other action by a Holder of a Debenture
hereunder is a continuing consent by the Holder and every subsequent Holder of
that Debenture or portion of the Debenture that evidences the same obligation as
the consenting Holder's Debenture, even if notation of the consent, waiver or
action is not made on such Debenture. However, any such Holder or subsequent
Holder may revoke the consent, waiver or action as to such Holder's Debenture or
portion of the Debenture if the Trustee receives the notice of revocation before
the consent of the requisite aggregate principal amount of such Debentures then
outstanding has been obtained and not revoked. After an amendment, waiver or
action becomes effective, it shall bind every Holder of the Debentures of the
related series, except as provided in Section 9.02.
The Company may, but shall not be obligated to, fix a Record Date for
the purpose of determining the Persons entitled to consent to any amendment or
waiver. If a Record Date is fixed, then, notwithstanding the first two sentences
of the immediately preceding paragraph, only Holders of Debentures or holders of
Preferred Securities, as applicable, on such Record Date or their duly
designated proxies, and only those Persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be such after such Record Date. No such
consent shall be valid or effective for more than 90 days after such Record
Date.
SECTION 9.05 NOTATION ON OR EXCHANGE OF DEBENTURES.
Debentures of the related series authenticated and made available for
delivery after the execution of any supplemental indenture pursuant to this
Article 9 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 Debentures so modified 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 made available for delivery by the Trustee in exchange for
outstanding Debentures.
SECTION 9.06 EXECUTION OF SUPPLEMENTAL INDENTURES.
The Trustee shall execute any supplemental indenture authorized
pursuant to this Article 9 if the supplemental indenture does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, execute it. In executing such supplemental
indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officer's Certificate and Opinion of Counsel
stating that such supplemental indenture is authorized or permitted by this
Indenture.
SECTION 9.07 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article 9,
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 Debentures of the related series theretofore or thereafter authenticated and
made available for delivery hereunder shall be bound thereby.
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ARTICLE 10
SUBORDINATION
SECTION 10.01 DEBENTURES SUBORDINATED TO SENIOR INDEBTEDNESS.
Notwithstanding the provisions of Section 6.11 or any other provision
herein or in any Debenture, the Company and the Trustee and, by their acceptance
thereof, the Holders of the Debentures (a) covenant and agree that all payments
by the Company of the principal of and premium, if any, and interest on the
Debentures (other than Debentures which have been discharged pursuant to Article
8 or Debentures that provide for a sinking fund pursuant to Article 11) shall be
subordinated in accordance with the provisions of this Article 10 to the prior
payment in full, in cash or cash equivalents, of all amounts payable on, under
or in connection with Senior Indebtedness, and (b) acknowledge that holders of
Senior Indebtedness are or shall be relying on this Article 10. Nothing herein
or in any Debenture is intended to or shall limit the amount of Senior
Indebtedness the Company may incur.
SECTION 10.02 PRIORITY AND PAYMENT OF PROCEEDS IN CERTAIN EVENTS: REMEDIES
STANDSTILL.
(a) Upon any payment or distribution of assets or securities of the
Company, as the case may be, of any kind or character, whether in cash, property
or securities, upon any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether voluntary or involuntary,
or in bankruptcy, insolvency, receivership or other proceedings, all amounts
payable on, under or in connection with Senior Indebtedness (including any
interest accruing on such Senior Indebtedness subsequent to the commencement of
a bankruptcy, insolvency, receivership or similar proceeding) shall first be
paid in full in cash, or payment provided for in cash or cash equivalents,
before the Holders or the Trustee on behalf of the Holders or the holders of
Preferred Securities shall be entitled to receive from the Company any payment
of principal of or premium, if any, or interest on the Debentures or
distribution of any assets or securities.
(b) No direct or indirect payment by or on behalf of the Company of
principal of or premium, if any, or interest on the Debentures (other than
Debentures which have been discharged pursuant to Article 8 or Debentures that
provide for a sinking fund pursuant to Article 11), whether pursuant to the
terms of the Debentures or upon acceleration or otherwise, shall be made if, at
the time of such payment, there exists (i) a default in the payment of all or
any portion of any Senior Indebtedness and the Trustee has received written
notice thereof from the Company, from holders of Senior Indebtedness or from any
trustee, representative or agent therefor, or (ii) any other default affecting
Senior Indebtedness as a result of which the maturity of Senior Indebtedness has
been accelerated and the Trustee has received written notice from the Company,
from holders of Senior Indebtedness or from any trustee, representative or agent
therefor, and such default shall not have been cured or waived by or on
behalf-of the holders of such Senior Indebtedness.
(c) If, notwithstanding the foregoing provisions prohibiting such
payment or distribution, the Trustee or any Holder shall have received any
payment on account of the principal of or premium, if any, or interest on the
Debentures when such payment is prohibited by this Section and before all
amounts payable on, under or in connection with Senior Indebtedness are paid in
full in cash or cash equivalents, then and in such event (subject to the
provisions of Section 10.08) such payment or distribution shall be received and
held in trust for the holders of Senior Indebtedness and, at the written
direction of the trustee, representative or
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agent for the holders of the Senior Indebtedness, shall be paid to the holders
of the Senior Indebtedness remaining unpaid to the extent necessary to pay such
Senior Indebtedness in full in cash or cash equivalents.
Upon any payment or distribution of assets or securities referred to in
this Article 10, the Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, and upon a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making any such payment or distribution, delivered to the
Trustee for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
10.
SECTION 10.03 PAYMENTS WHICH MAY BE MADE PRIOR TO NOTICE.
Nothing in this Article 10 or elsewhere in this Indenture shall prevent
(a) the Company, except under the conditions described in Section 10.02, from
making payments of principal of or premium, if any, or interest on the
Debentures or from depositing with the Trustee any monies for such payments, or
(b) the application by the Trustee of any monies deposited with it for the
purpose of making such payments of principal of or premium, if any, or interest
on the Debentures, to the Holders entitled thereto, unless at least two Business
Days prior to the date when such payment would otherwise (except for the
prohibitions contained in Section 10.02) become due and payable, the Trustee
shall have received the written notice provided for in Section 10.02(b)(i) or
(ii).
SECTION 10.04 RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT TO BE IMPAIRED.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time or in any way be
prejudiced or impaired by any act or failure to act in good faith by any such
holder, or by any noncompliance by the Company with the terms and provisions and
covenants herein regardless of any knowledge thereof any such holder may have or
otherwise be charged with.
The provisions of this Article 10 are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior Indebtedness.
Notwithstanding anything to the contrary in this Article 10, to the extent any
Holders or the Trustee have paid over or delivered to any holder of Senior
Indebtedness any payment or distribution received on account of the principal of
or premium, if any, or interest on the Debentures to which any other holder of
Senior Indebtedness shall be entitled to share in accordance with Section 10.02,
no holder of Senior Indebtedness shall have a claim or right against any Holders
or the Trustee with respect to any such payment or distribution or as a result
of the failure to make payments or distributions to such other holder of Senior
Indebtedness.
SECTION 10.05 TRUSTEE MAY TAKE ACTION TO EFFECTUATE SUBORDINATION.
Each Holder of a Debenture, by his acceptance thereof, authorizes and
directs the Trustee on his behalf to take such action as may be required by the
trustee, representative or agent for
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holders of Senior Indebtedness or by the Company to effectuate, as between the
holders of Senior Indebtedness and the Holders, the subordination as provided in
this Article 10 and appoints the Trustee his attorney-in-fact for any and all
such purposes.
SECTION 10.06 SUBROGATION.
Upon the payment in full, in cash or cash equivalents, of all Senior
Indebtedness, any Holder shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of assets of the
Company in respect of such Senior Indebtedness until the Debentures shall be
paid in full; and for the purposes of such subrogation, no payments or
distributions to holders of such Senior Indebtedness of any cash property or
securities to which such Holders of the Debentures would be entitled except for
this Article 10, and no payment pursuant to this Article 10 to holders of such
Senior Indebtedness by such Holders of the Debentures, shall, as between the
Company, its creditors other than holders of such Senior Indebtedness and such
Holders of the Debentures, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness, it being understood that the provisions of
this Article 10 are solely for the purpose of defining the relative rights of
the holders of such Senior Indebtedness, on the one hand, and such Holders of
the Debentures, on the other hand.
If any payment or distribution to which Holders of Debentures would
otherwise have been entitled but for the provisions of this Article 10 shall
have been applied, pursuant to this Article 10, to the payment of all Senior
Indebtedness, then and in such case such Holders of the Debentures shall be
entitled to receive from the holders of such Senior Indebtedness at the time
outstanding any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount sufficient to pay, in cash or cash
equivalents, all such Senior Indebtedness in full.
SECTION 10.07 OBLIGATIONS OF COMPANY UNCONDITIONAL; REINSTATEMENT.
Nothing in this Article 10 or elsewhere in this Indenture or in any
Debenture is intended to or shall impair, as between the Company and Holders of
the Debentures, the obligations of the Company, which are absolute and
unconditional, to pay to such Holders the principal of and premium, if any, and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of such Holders of the Debentures and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or any Holder of Debentures or holder of Preferred
Securities, as applicable, from exercising all remedies otherwise permitted by
applicable law under this Indenture, subject to the rights, if any, under this
Article 10 of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
The failure to make a scheduled payment of principal of or premium, if
any, or interest on the Debentures by reason of Section 10.02 shall not be
construed as preventing the occurrence of a Default or an Event of Default under
Section 6.01; provided, however, that if (a) the conditions preventing the
making of such payment no longer exist, and (b) such Holders of the Debentures
are made whole with respect to such omitted payments, the Default or Event of
Default relating
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thereto (including any failure to pay any accelerated amounts) shall be
automatically waived, and the provisions of the Indenture shall be reinstated as
if no such Event of Default had occurred.
SECTION 10.08 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE
OF NOTICE.
The Trustee or Paying Agent shall not be charged with the knowledge of
the existence of any default in the payment of all or a portion of any Senior
Indebtedness or any other default affecting Senior Indebtedness as a result of
which the maturity of the Senior Indebtedness has been accelerated, unless and
until the Trustee or Paying Agent shall have received written notice thereof
from the Company or one or more holders of Senior Indebtedness or from any
trustee, representative or agent therefor; and, prior to the receipt of any such
written notice, the Trustee or Paying Agent may conclusively assume that no such
facts exist.
Unless at least two Business Days prior to the date when by the terms
of this Indenture any monies are to be deposited by the Company with the Trustee
or any Paying Agent for any purpose (including, without limitation, the payment
of the principal of or premium, if any, or interest on any Debenture), the
Trustee or Paying Agent shall have received with respect to such monies the
notice provided for in Section 10.02, the Trustee or Paying Agent shall have
full power and authority to receive and apply such monies to the purpose for
which they were received. Neither of them shall be affected by any notice to the
contrary, which may be received by either on or after such second Business Day.
The foregoing shall not apply to the Paying Agent if the Company is acting as
Paying Agent. Nothing in this Section shall limit the right of the holders of
Senior Indebtedness to recover payments as contemplated by Section 10.02. The
Trustee or Paying Agent shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of such
Senior Indebtedness (or a trustee, representative or agent on behalf of such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee, representative or agent on behalf of any such holder.
The Trustee shall not be deemed to have any duty to the holders (and shall be
fully protected in relying upon such notice) of Senior Indebtedness.
SECTION 10.09 RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.
The Trustee and any Paying Agent shall be entitled to all of the rights
set forth in this Article 10 in respect of any Senior Indebtedness at any time
held by them to the same extent as any other holder of such Senior Indebtedness,
and nothing in this Indenture shall be construed to deprive the Trustee or any
Paying Agent of any of its rights as such holder.
SECTION 10.10 NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Failure to give such notice shall not
affect the subordination of the Securities to Senior Indebtedness.
Notwithstanding the provisions of this or any other provision of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any facts
which would prohibit the making of any payment to or by the Trustee in respect
of the Securities, unless and until the Trustee shall have received written
notice thereof at the address specified in Section 13.02 from the Company or a
holder of Senior Indebtedness or from any trustee or agent
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therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 7.01, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if a Responsible
Officer of the Trustee shall not have received, at least three Business Days
prior to the date upon which by the terms hereof any such money may become
payable for any purpose (including, without limitation, the payment of the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price or interest, if any, as
the case may be, in respect of any Security), the notice with respect to such
money provided for in this Section 10.10, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date.
Subject to the provisions of Section 7.01, the Trustee shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself or itself to be a holder of Senior Indebtedness (or
a trustee or agent on behalf of such holder) to establish that such notice has
been given by a holder of Senior Indebtedness (or a trustee or agent on behalf
of any such holder). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the benefit
of such Person pursuant to the terms of this Indenture pending judicial
determination as to the rights of such Person to receive such payment.
SECTION 10.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 7.01, and the
Holders of the Debentures shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, liquidating trustee, Custodian, receiver, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Debentures, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed theron and all other facts pertinent thereto or to this Article.
SECTION 10.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
the Trustee shall in good faith mistakenly pay over or distribute to Holders of
Debentures or to the Company or to any other Person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled
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by virtue of this Article or otherwise. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article and no
implied covenants or obligations with respect to holders of Senior Indebtedness
shall be read into this Indenture against the Trustee.
Nothing in this Article shall apply to claims of or payments to, the
Trustee under or pursuant to Section 7.07.
ARTICLE 11
SINKING FUNDS
SECTION 11.01 APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Debentures of a series, except as otherwise permitted or
required in or pursuant to this Indenture or any Debenture of such series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Debentures of such series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Debentures of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 11.02. Each sinking fund payment shall be applied to the
redemption of Debentures of any series as provided for by the terms of
Debentures of such series and this Indenture.
SECTION 11.02 SATISFACTION OF SINKING FUND PAYMENTS WITH DEBENTURES.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Debentures of any series to be made pursuant to the
terms of such Debentures (a) deliver outstanding Debentures of such series
(other than any of such Debentures previously called for redemption or any of
such Debentures in respect of which cash shall have been released to the
Company), and (b) apply as a credit Debentures of such series which have been
redeemed either at the election of the Company pursuant to the terms of such
series of Debentures or through the application of permitted optional sinking
fund payments pursuant to the terms of such Debentures, provided that such
series of Debentures have not been previously so credited. Such Debentures shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Debentures for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
If as a result of the delivery or credit of Debentures of any series in lieu of
cash payments pursuant to this Section, the principal amount of Debentures of
such series to be redeemed in order to exhaust the aforesaid cash payment shall
be less than $100,000, the Trustee need not call Debentures of such series for
redemption, except upon a Company Order, and such cash payment shall be held by
the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment on Debentures of such series, provided, however, that the Trustee or
such Paying Agent shall at the request of the Company from time to time pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company
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to the Trustee of Debentures of that series purchased by the Company having an
unpaid principal amount equal to the cash payment requested to be released to
the Company.
SECTION 11.03 REDEMPTION OF DEBENTURES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for any
series of Debentures, the Company shall deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Debentures of that series pursuant to Section 11.02, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Debentures to be so credited and not
theretofore delivered. If such Officer's Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days before each such sinking fund payment date the Trustee
shall select the Debentures to be redeemed upon such sinking fund payment date
in the manner specified in Section 302 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 303. Such notice having been duly given, the
redemption of such Debentures shall be made upon the terms and in the manner
stated in Sections 304 and 306.
ARTICLE 12
MEETINGS OF DEBENTUREHOLDERS
SECTION 12.01 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Debentures of any series may be called at any
time and from time to time pursuant to this Article 12 to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Debentures of such series.
SECTION 12.02 CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of Debentures
of any series for any purpose specified in Section 12.01, to be held at such
time and at such place in the Borough of Manhattan, The City of New York, or in
such other place as the Trustee shall determine. Notice of every meeting of
Holders of Debentures of any series, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 13.02, not less than
20 nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, by or pursuant to a Board
Resolution, or the Holders of at least 25% in principal amount of the
outstanding Debentures of any series shall have requested the Trustee to call a
meeting of the Holders of Debentures of such series for any purpose specified in
Section 12.01, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed
notice of such meeting within 20 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Debentures of such series in the
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amount above specified, as the case may be, may determine the time and the place
for such meeting and may call such meeting for such purposes by giving notice
thereof as provided in clause (a) of this Section.
SECTION 12.03 PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Debentures of any
series, a Person shall be (a) a Holder of one or more outstanding Debentures of
such series, or (b) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more outstanding Debentures of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Debentures of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 12.04 QUORUM; ACTION.
The Persons entitled to vote at least a majority in principal amount of
the outstanding Debentures of a series shall constitute a quorum for a meeting
of Holders of Debentures of such series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of at least 66-2/3% in
principal amount of the outstanding Debentures of a series, the Persons entitled
to vote such percentage in principal amount of the outstanding Debentures of
such series shall constitute a quorum. In the absence of a quorum within 30
minutes after the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Debentures of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 12.02(a), except that such notice need be given
only once not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the principal amount
of the outstanding Debentures of such series which shall constitute a quorum.
Except as limited by the proviso to Section 9.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted only by the affirmative vote of the Holders
of at least a majority in principal amount of the outstanding Debentures of that
series; provided, however, that, except as limited by the proviso to Section
9.02, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action which this Indenture or any
supplemental indenture expressly provides may be made, given or taken by the
Holders of a specified percentage in principal amount of the outstanding
Debentures of a series may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the affirmative vote
of the Holders of such specified percentage in principal amount of the
outstanding Debentures of such series.
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Any resolution passed or decision taken at any meeting of Holders of
Debentures of any series duly held in accordance with this Section shall be
binding on all the Holders of Debentures of such series, whether or not such
Holders were present or represented at the meeting.
SECTION 12.05 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Debentures of a series in regard to proof of the holding of
Debentures of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Debentures shall be proved in the manner specified in Section 1.05 and the
appointment of any proxy shall be proved in the manner specified in Section
1.05. Such regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the proof
specified in Section 1.05 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Debentures as provided in Section 12.02(b), in which
case the Company or the Holders of Debentures of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote at least a majority in principal amount of
the outstanding Debentures of such series represented at the meeting.
(c) At any meeting each Holder of a Debenture of such series or proxy
shall be entitled to one vote for each $25 principal amount of the outstanding
Debentures of such series held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Debenture
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote, except as
a Holder of a Debenture of such series or proxy.
(d) Any meeting of Holders of Debentures of any series duly called
pursuant to Section 12.02 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote at least a majority in principal amount
of the outstanding Debentures of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 12.06 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders of
Debentures of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Debentures of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the outstanding Debentures of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the
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secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Debentures of any series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 12.02 and, if applicable, Section 12.04. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company, and another to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by operation of Section 318(c) of the TIA, the imposed duties
shall control. The provisions of Sections 310 to 317, inclusive, of the TIA that
impose duties on any Person (including provisions automatically deemed included
in an indenture unless the indenture provides that such provisions are excluded)
are a part of and govern this Indenture, except as, and to the extent, they are,
expressly excluded from this Indenture, as permitted by the TIA.
SECTION 13.02 NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing and delivered, telecopied or mailed by
first-class mail, postage prepaid, addressed as follows:
if to the Company:
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Facsimile No.: (404) 847-6336
Attention: Dallas S. Clement
with a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, NW
Suite 800
Washington, D.C. 20036
Facsimile No.: (202) 776-2222
Attention: Stuart A. Sheldon
if to the Trustee:
55
<PAGE> 62
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Administration
The Company or the Trustee, by giving notice to the other, may
designate additional or different addresses for subsequent notices of
communications. The Company shall notify the holder, if any, of Senior
Indebtedness of any such additional or different addresses of which the Company
receives notice from the Trustee.
Any notice or communication given to a Debentureholder shall be mailed
or delivered to the Debentureholder at the Debentureholder's address as it
appears on the Register of the Registrar and shall be sufficiently given if
mailed within the time prescribed.
Failure to give a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is given in the manner provided
above, it is duly given, whether or not received by the addressee.
If the Company gives a notice or communication to the Debentureholders,
it shall deliver a copy to the Trustee and each Registrar, Paying Agent or
co-Registrar.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Debentureholders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 13.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Debentureholders may communicate pursuant to Section 312(b) of the TIA
with other Debentureholders with respect to their rights under this Indenture or
the Debentures. The Company, the Trustee, the Registrar, the Paying Agent and
anyone else shall have the protection Section 312(c) of the TIA.
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:
(a) an Officer's Certificate (complying with Section 13.05) stating
that, in the opinion of such Officer, all conditions precedent to the taking of
such action have been complied with; and
(b) if applicable, an Opinion of Counsel (complying with Section 13.05)
stating that, in the opinion of such counsel all such conditions precedent to
the taking of such action have been complied with.
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SECTION 13.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(a) a statement that each Person making such Officer's Certificate or
Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officer's
Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such Person, such Person
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
(d) a statement that, in the opinion of such Person, such covenant or
condition has been complied with; provided, however, that with respect to
matters of fact not involving any legal conclusion, an Opinion of Counsel may
rely on an Officer's Certificate or certificates of public officials.
SECTION 13.06 SEVERABILITY CLAUSE.
If any provision in this Indenture or in the Debentures 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 AND REGISTRAR.
The Trustee may make reasonable rules for action by or a meeting of
Debentureholders. The Registrar and Paying Agent may make reasonable rules for
their functions.
SECTION 13.08 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 to be taken on such date shall be taken on the next succeeding day that
is not a Legal Holiday, and if such action is a payment in respect of the
Debentures, unless otherwise specified pursuant to Section 2.01 no principal,
premium, if any, or interest shall accrue in respect of such payment for the
intervening period.
SECTION 13.09 GOVERNING LAW.
This Indenture and the Debentures shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles of conflicts of laws.
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SECTION 13.10 NO RECOURSE AGAINST OTHERS.
No director, officer, employee or stockholder, as such, of the Company
shall have any liability for any obligations of the Company under the Debentures
or this Indenture or for any claim based on, in respect of or by reason of such
obligations. By accepting a Debenture, each Debentureholder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issuance and sale of the Debentures.
SECTION 13.11 SUCCESSORS AND ASSIGNS.
All agreements of the Company in this Indenture and Debentures shall
bind its successors and assigns. All agreements of the Trustee in this Indenture
shall bind its successors and assigns.
SECTION 13.12 COUNTERPARTS.
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. Any signed copy shall be sufficient proof of this Indenture.
SECTION 13.13 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 13.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.15 HOLDERS OF PREFERRED SECURITIES AS THIRD PARTY BENEFICIARIES.
The Company hereby acknowledges that, to the extent specifically set
forth herein, prior to a Security Exchange with respect to the Debentures of any
series held as assets of a Trust, the holders of the Preferred Securities of
such Trust shall expressly be third party beneficiaries of this Indenture. The
Company further acknowledges that, prior to a Security Exchange with respect to
Debentures of any series held as assets of a Trust, if an Event of Default has
occurred and is continuing and is attributable to (i) the failure of the Company
to pay the principal of or premium, if any, or interest on the Debentures or
(ii) the failure by the Company to deliver the required securities or other
rights upon an appropriate conversion or exchange right election, any holder of
the Preferred Securities of such Trust may institute a Direct Action against the
Company.
SECTION 13.16 BENEFITS OF THE INDENTURE.
Except as otherwise expressly provided herein with respect to holders
of Senior Indebtedness and holders of Preferred Securities, nothing in this
Indenture or in the Debentures, express or implied, shall give to any Person,
other than the parties hereto and their successors
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hereunder and the Holders of the Debentures, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
[remainder of page intentionally left blank]
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SIGNATURES
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.
COX COMMUNICATIONS, INC.
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK,
AS TRUSTEE
By:
-----------------------------------
Name:
Title
<PAGE> 1
EXHIBIT 4.4
CERTIFICATE OF TRUST
OF
COX TRUST II
THIS CERTIFICATE OF TRUST of Cox Trust II (the "Trust"),
dated as of July 21, 1999, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801, et seq.) (the "Act").
(i) Name. The name of the business trust being formed
hereby is Cox Trust II.
(ii) Delaware Trustee. The name and business address of
the trustee of the Trust in the State of Delaware are The Bank of New York
(Delaware), White Clay Center, Route 273, Newark, Delaware 19711, Attention:
Corporate Trust Administration.
(iii) Effective Date. This Certificate of Trust shall be
effective as of its filing with the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned, being the trustees of
the Trust, have duly executed this Certificate of Trust in accordance with
Section 3811(a)(1) of the Act as of the date first above written.
THE BANK OF NEW YORK, as trustee
By: /s/ Robert A. Massimillo
--------------------------------------
Name: ROBERT A. MASSIMILLO
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE), as trustee
By: /s/ Walter N. Gitlin
--------------------------------------
Name: WALTER N. GITLIN
Title: Authorized Signatory
<PAGE> 1
EXHIBIT 4.5
==============================================================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
COX COMMUNICATIONS, INC.
Dated as of ____________ ___, 1999
==============================================================================
<PAGE> 2
TABLE OF CONTENTS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation........................................................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................................................... 5
SECTION 2.2 Lists of Holders of Securities........................................................... 5
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee.................................... 6
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee............................... 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent......................................... 6
SECTION 2.6 Events of Default; Waiver................................................................ 6
SECTION 2.7 Event of Default; Notice................................................................. 6
SECTION 2.8 Conflicting Interests.................................................................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee.......................... 7
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee................................. 9
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities Guarantee............... 11
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility..................................... 11
SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities Guarantee Trustee.......... 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee............................................................................... 13
SECTION 5.2 Waiver of Notice and Demand............................................................. 13
SECTION 5.3 Obligations Not Affected................................................................ 13
SECTION 5.4 Rights of Holders....................................................................... 14
SECTION 5.5 Guarantee of Payment.................................................................... 14
SECTION 5.6 Subrogation............................................................................. 14
SECTION 5.7 Independent Obligations................................................................. 15
</TABLE>
i
<PAGE> 3
<TABLE>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
<S> <C> <C>
SECTION 6.1 Limitation of Transactions.............................................................. 15
SECTION 6.2 Ranking................................................................................. 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................................................. 16
ARTICLE VIII
EXCULPATION, INDEMNIFICATION AND COMPENSATION
SECTION 8.1 Exculpation............................................................................. 16
SECTION 8.2 Indemnification......................................................................... 17
SECTION 8.3 Compensation............................................................................ 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.................................................................. 17
SECTION 9.2 Amendments.............................................................................. 18
SECTION 9.3 Notices................................................................................. 18
SECTION 9.4 Benefit................................................................................. 19
SECTION 9.5 Governing Law........................................................................... 19
</TABLE>
ii
<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of ____________ ___, 1999, is executed and
delivered by Cox Communications, Inc., a Delaware corporation (the
"Guarantor"), and The Bank of New York, a New York banking corporation, as
trustee (the "Preferred Securities Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Cox Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Agreement"), dated as of ______________ ___, 1999, among the trustees of
the Issuer, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
authorized to issue up to _____________ preferred securities, having an
aggregate Liquidation Amount of $ _____________, such preferred securities
being designated the ____% Trust Originated Preferred Securities (collectively,
the "Preferred Securities").
WHEREAS, as an incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay
to the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein.
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") with substantially
identical terms to this Preferred Securities Guarantee, for the benefit of the
holders of the Common Securities (as defined herein), except that if an event
of default under the Agreement has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated, to the extent and in the manner set
forth in the Common Securities Guarantee, to the rights of holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby
acknowledges shall benefit the Guarantor, the Guarantor executes and delivers
this Preferred Securities Guarantee for the benefit of the Holders.
<PAGE> 5
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) terms defined in the Agreement as at the date of
execution of this Preferred Securities Guarantee have the
same meaning when used in this Preferred Securities
Guarantee unless otherwise defined in this Preferred
Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this
Preferred Securities Guarantee as modified, supplemented
or amended from time to time;
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of
this Preferred Securities Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee,
unless otherwise defined in this Preferred Securities
Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
day on which banking institutions or trust companies in The City of New York
are authorized or required by law, regulation or executive order to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred
Securities Guarantee Trustee for the conduct of corporate trust business, at
which matters related to this Preferred Securities Guarantee Trustee shall, at
any particular time, be principally administered, which
2
<PAGE> 6
office at the date of execution of this Agreement is located at 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the ____% Junior Subordinated Deferrable Interest
Debentures due _____, held by the Property Trustee (as defined in the
Agreement) of the Issuer.
"Event of Default" means a default by the Guarantor in respect of
any of its payment or other obligations under this Preferred Securities
Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Agreement) that are required to be paid on such Preferred
Securities, to the extent the Issuer has funds legally available therefor at
such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), to the extent
the Issuer has funds legally available therefor at such time, with respect to
any Preferred Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution and liquidation of the Issuer (other than
in connection with the distribution of the Debentures to holders of the
Preferred Securities or the redemption of the Preferred Securities as provided
in the Agreement), the lesser of (a) the aggregate of the Liquidation Amount
and all accumulated and unpaid Distributions on the Preferred Securities to the
date of payment, to the extent the Issuer has funds legally available therefor
at such time, and (b) the amount of assets of the Issuer remaining available
for distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution"). If an event of default under the Agreement has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities or any guarantee payment under
any Other Common Securities Guarantees shall be made until the Holders of
Preferred Securities shall be paid in full the Guarantee Payments to which they
are entitled under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Securities Guarantee
Trustee, any Affiliate of the Preferred Securities Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Preferred Securities
Guarantee Trustee.
"Indenture" means the Junior Subordinated Debentures Indenture,
dated as of _______________ ___, 1999, between Cox Communications, Inc., as
issuer (the "Debenture Issuer"), and The Bank of New York, as trustee, pursuant
to which the Debentures are to be issued to the Property Trustee of the Issuer.
"Liquidation Amount" means $25 per Preferred Security.
3
<PAGE> 7
"List of Holders" has the meaning set forth in Section 2.2.
"Majority in Liquidation Amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the aggregate
Liquidation Amount (including the amount payable on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President, a Vice
President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary. Any Officer's Certificate delivered with respect to compliance with
a condition or covenant provided for in this Preferred Securities Guarantee
shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by such officer in rendering the Officer's
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" in the Common Securities Guarantee.
" Other Debentures" means all junior subordinated debentures issued
by the Guarantor from time to time and sold to trusts established by the
Guarantor, in each case similar to the Issuer.
"Other Guarantees" means all guarantees issued by the Guarantor with
respect to preferred securities similar to the Preferred Securities issued by
other trusts established by the Guarantor, in each case similar to the Issuer.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities Guarantee Trustee" means The Bank of New York,
a New York banking corporation, until a Successor Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Preferred Securities Guarantee and thereafter means each
such Successor Preferred Securities Guarantee Trustee.
4
<PAGE> 8
"Responsible Officer" means, with respect to the Preferred
Securities Guarantee Trustee, any officer within the Corporate Trust Office of
the Preferred Securities Guarantee Trustee, including any vice-president, any
assistant vice-president, any assistant secretary, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Securities
Guarantee Trustee customarily performing functions similar to those performed
by any of the above-designated officers and also means, with respect to a
particular corporate trust matter, any other officer of the Preferred
Securities Guarantee Trustee to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor Preferred Securities Guarantee Trustee" means a successor
Preferred Securities Guarantee Trustee possessing the qualifications to act as
Preferred Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means, collectively, the Common Securities and
the Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions.
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Securities Guarantee
Trustee (unless the Preferred Securities Guarantee Trustee is otherwise the
registrar of the Preferred Securities) with a list, in such form as the
Preferred Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of Holders"), (i)
within 14 days after each record date for payment of Distributions, as of such
record date and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Securities
Guarantee Trustee, provided that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Preferred Securities
Guarantee Trustee by the Guarantor. The Preferred Securities Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Preferred Securities Guarantee Trustee shall comply with
its obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
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<PAGE> 9
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee
Within 60 days after September 1 of each year, commencing September
1, 1999, the Preferred Securities Guarantee Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Preferred Securities Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Preferred Securities Guarantee
Trustee is for informational purposes only and the Preferred Securities
Guarantee Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Preferred Securities Guarantee Trustee is entitled
to rely exclusively on Officer's Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such evidence of compliance with any conditions precedent, if any,
provided for in this Preferred Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in Liquidation Amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to this Preferred
Securities Guarantee, mail by first class postage prepaid, to all Holders of
the Preferred Securities, notices of all defaults actually known to a
Responsible Officer of the Preferred Securities Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided, that,
except in the case of default in the payment of any Guarantee Payment, the
Preferred Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive
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committee, or a trust committee of directors and/or Responsible Officers of the
Preferred Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Preferred
Securities.
(b) The Preferred Securities Guarantee Trustee shall not
be deemed to have knowledge of any Event of Default unless the Preferred
Securities Guarantee Trustee shall have received written notice, or a
Responsible Officer of the Preferred Securities Guarantee Trustee shall have
obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Indenture shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Securities Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Securities Guarantee Trustee shall not
transfer this Preferred Securities Guarantee to any Person except a Holder of
Preferred Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Preferred Securities Guarantee Trustee on acceptance by such
Successor Preferred Securities Guarantee Trustee of its appointment to act as
Successor Preferred Securities Guarantee Trustee. The right, title and interest
of the Preferred Securities Guarantee Trustee shall automatically vest in any
Successor Preferred Securities Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Preferred Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Securities Guarantee Trustee has occurred and is
continuing, the Preferred Securities Guarantee Trustee shall enforce this
Preferred Securities Guarantee for the benefit of the Holders of the Preferred
Securities. In such event, any moneys collected shall first be paid to the
Preferred Securities Guarantee Trustee for amounts due under Section 8.3 and
then to the Holders of the Preferred Securities.
(c) The Preferred Securities Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Securities Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Preferred Securities Guarantee
Trustee, the Preferred Securities Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Preferred
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Securities Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Securities Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, its own bad
faith, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred
Securities Guarantee Trustee shall be determined solely by the
express provisions of this Preferred Securities Guarantee, and the
Preferred Securities Guarantee Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Preferred Securities Guarantee, and
no implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Securities
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Securities Guarantee Trustee, the Preferred Securities
Guarantee Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Preferred
Securities Guarantee Trustee and conforming to the requirements of
this Preferred Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Securities
Guarantee Trustee, the Preferred Securities Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Preferred Securities Guarantee
(but shall not be required to confirm or investigate the accuracy of
mathematical calculations or other facts stated therein);
(ii) the Preferred Securities Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer of the
Preferred Securities Guarantee Trustee, unless it shall be proved that the
Preferred Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred Securities Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a Majority in
Liquidation Amount of the Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Preferred
Securities Guarantee Trustee, or exercising any trust or power conferred upon
the Preferred Securities Guarantee Trustee under this Preferred Securities
Guarantee; and
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(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Securities Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers, if the
Preferred Securities Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Preferred Securities Guarantee or if
indemnity reasonably satisfactory to the Preferred Securities Guarantee Trustee
against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Securities Guarantee Trustee may conclusively
rely, and shall be fully 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, sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee may be sufficiently evidenced by an Officer's
Certificate;
(iii) whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Securities Guarantee Trustee shall deem it desirable
that a matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Securities Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of negligence
or bad faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered by
the Guarantor;
(iv) the Preferred Securities Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument
(including any financing or any continuation statement or any filing under tax
or securities laws) or any re-recording, refiling or registration thereof;
(v) the Preferred Securities Guarantee Trustee may consult with
counsel of its selection, and the advice or written opinion of such counsel
with respect to legal matters or advice within the scope of such expert's area
of expertise shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees. The
Preferred Securities Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Preferred Securities
Guarantee from any court of competent jurisdiction;
(vi) the Preferred Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at
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the request or direction of any Holder, unless such Holder shall have provided
to the Preferred Securities Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Preferred Securities Guarantee Trustee, against
the reasonable costs, expenses (including reasonable attorneys' fees and
expenses and the reasonable expenses of the Preferred Securities Guarantee
Trustee's agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Preferred Securities Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall be
taken to relieve the Preferred Securities Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights and
powers vested in it by the terms of this Preferred Securities Guarantee;
(vii) the Preferred Securities Guarantee 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 Preferred Securities Guarantee
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) the Preferred Securities Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the Preferred
Securities Guarantee 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;
(ix) any action taken by the Preferred Securities Guarantee
Trustee or its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Securities Guarantee Trustee or
its agents alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the
Preferred Securities Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Preferred Securities Guarantee, both of
which shall be conclusively evidenced by the Preferred Securities Guarantee
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Preferred Securities
Guarantee the Preferred Securities Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Preferred Securities Guarantee Trustee (A) may
request instructions from the Holders of a Majority in Liquidation Amount of
the Preferred Securities, (B) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and (C) shall
be protected in conclusively relying on or acting in accordance with such
instructions;
(xi) except as otherwise expressly provided by this Preferred
Securities Guarantee, the Preferred Securities Guarantee Trustee shall not be
under any obligation to take any action that is discretionary under the
provisions of this Preferred Securities Agreement; and
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(xii) the Preferred Securities Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in good
faith, without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Preferred
Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Preferred Securities Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities
Guarantee
The recitals contained in this Preferred Securities Guarantee shall
be taken as the statements of the Guarantor, and the Preferred Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Preferred Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Securities
and Exchange Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
(b) If at any time the Preferred Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Preferred
Securities Guarantee Trustee shall immediately resign in the manner and with
the effect set out in Section 310(b) of the Trust Indenture Act.
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(c) If the Preferred Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Securities Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Preferred Securities Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor
except during the occurrence and continuance of an Event of Default.
(b) The Preferred Securities Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Preferred
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Preferred
Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Securities Guarantee Trustee shall hold office
until a Successor Preferred Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Securities
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Preferred Securities Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed
by such Successor Preferred Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Preferred Securities Guarantee Trustee.
(d) If no Successor Preferred Securities Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery of an instrument of removal or resignation, the
Preferred Securities Guarantee Trustee resigning or being removed may petition
any court of competent jurisdiction for appointment of a Successor Preferred
Securities Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Preferred Securities
Guarantee Trustee.
(e) No Preferred Securities Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Preferred Securities Guarantee
Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Securities Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Preferred Securities
Guarantee Trustee all amounts due to the Preferred Securities Guarantee Trustee
accrued to the date of such termination, removal or resignation.
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full,
on a subordinated basis, to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders. The
Guarantor will honor all obligations, if any, relating to the conversion of the
Preferred Securities into securities of the Guarantor as set forth in the
Agreement and the Indenture.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization,
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arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor;
it being the intent of this Section 5.3 that the obligations of the Guarantor
with respect to the Guarantee Payments shall be absolute and unconditional
under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred Securities
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Securities Guarantee
Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Securities Guarantee Trustee fails to
enforce this Preferred Securities Guarantee, any Holder of Preferred Securities
may institute a legal proceeding directly against the Guarantor to enforce the
rights of such Holder under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Securities
Guarantee Trustee or any other person or entity. The Guarantor waives any right
or remedy to require that any action be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.
Notwithstanding the foregoing, if the Guarantor has failed to make a
required Guarantee Payment, a Holder of Preferred Securities may directly
institute a proceeding against the Guarantor for enforcement of this Preferred
Securities Guarantee for such Guarantee Payment.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not
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(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Preferred Securities Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Preferred Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, the
Guarantor shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Guarantor's capital stock (which includes common and preferred stock) or
(ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Guarantor (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee
by the Guarantor of the debt securities of any subsidiary of the Guarantor
(including Other Guarantees) if such guarantee ranks pari passu or junior in
right of payment to the Debentures (other than (a) dividends or distributions
in shares of, or options, warrants or rights to subscribe for or purchase
shares of, common stock of the Guarantor, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Preferred Securities Guarantee, (d) as a result of a reclassification of the
Guarantor's capital stock or the exchange or the conversion of one class or
series of the Guarantor's capital stock for another class or series of the
Guarantor's capital stock, including, without limitation, the conversion of the
Class C common stock or the Series A convertible preferred stock into shares of
the Class A common stock of the Guarantor, (e) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance of common
stock or rights under any of the Guarantor's benefit plans for its directors,
officers or employees or any of the Guarantor's dividend reinvestment plans) if
at such time (i) there shall have occurred any event of which the Guarantor has
actual knowledge that is, or with the giving of notice or the lapse of time, or
both, would be an Event of Default, (ii) the Guarantor shall be in default with
respect to its payment obligations under this Preferred Securities Guarantee or
(iii) the Guarantor shall have given notice of its election of the exercise
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of its right to extend the interest payment period pursuant to Section 4.01(b)
of the Indenture and shall not have rescinded such notice, and any such
extension shall have commenced and be continuing.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all other liabilities of the Guarantor except any liabilities
(including the Other Guarantees, the Common Securities Guarantee and the Other
Common Securities Guarantees) that may be pari passu or junior expressly by
their terms, and (ii) senior to the Guarantor's capital stock now or hereafter
issued by the Guarantor, if any, and with any guarantee now or hereafter
entered into by the Guarantor in respect of any of the Guarantor's capital
stock. The foregoing subordination shall not apply to amounts payable under
Article VIII.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate and be of no
further force and effect upon (i) full payment of the Redemption Price of all
Preferred Securities, or (ii) liquidation of the Issuer, the full payment of
the amounts payable in accordance with the Agreement or the distribution of the
Debentures to the Holders of all of the Preferred Securities. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
of Preferred Securities must restore payment of any sums paid under the
Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
EXCULPATION, INDEMNIFICATION AND COMPENSATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage, liability, expense or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Preferred Securities Guarantee or
by law, except that this provision shall not be deemed to modify Section
3.1(d).
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any
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other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence, willful misconduct or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the reasonable costs
and expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Preferred Securities Guarantee or the resignation or
removal of the Preferred Securities Guarantee Trustee.
The Preferred Securities Guarantee Trustee will not claim or exact
any lien or charge on any Guarantee Payments as a result of any amount due to
it under this Preferred Securities Guarantee.
SECTION 8.3 Compensation
The Guarantor agrees:
(a) to pay to the Preferred Securities Guarantee Trustee from
time to time such compensation as shall be agreed in writing between the
Company and the Preferred Securities Guarantee Trustee for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(b) to reimburse the Preferred Securities Guarantee Trustee upon
its request for reasonable expenses, disbursements and advances incurred or
made by the Preferred Securities Guarantee Trustee in accordance with any
provision of this Preferred Securities Guarantee (including the reasonable
compensation and the expenses and advances of its agents and counsel), except
any such expense or advance as may be attributable to its negligence, willful
misconduct or bad faith.
Subject to Section 8.2, the Preferred Securities Guarantee Trustee
shall have a claim and lien prior to the Preferred Securities holders as to all
property and funds held by it hereunder for any amount owing to it or any
predecessor Preferred Securities Guarantee Trustee for fees and expenses
pursuant to this Article.
17
<PAGE> 21
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
Except in connection with any merger or consolidation of the
Guarantor with or into another entity permitted by the Indenture or any sale,
transfer or lease of the Guarantor's assets to another entity permitted by the
Indenture, the Guarantor may not assign its rights or delegate its obligations
under this Preferred Securities Guarantee.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no approval of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of a Majority in Liquidation Amount of the
outstanding Preferred Securities (including the amount payable on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined). The provisions of Section
12.2 of the Agreement with respect to meetings of Holders of the Securities
apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee
at the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders of the Common Securities):
Cox Trust I
c/o Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Attention: _________________
Administrative Trustee
Telecopy: ___________________
(b) If given to the Preferred Securities Guarantee Trustee, at the
Preferred Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Preferred Securities Guarantee Trustee may give
notice of to the Holders of the Preferred Securities):
18
<PAGE> 22
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-5939
Telecopier: (212) 815-5915
(c) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Attention: __________________
Telecopy: ___________________
(d) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 9.6 Counterparts
The parties may sign any number of copies of this Preferred
Securities Guarantee. Each signed copy shall be an original, but all of them
together represent the same agreement. Any signed copy shall be sufficient
proof of this Preferred Securities Guarantee.
19
<PAGE> 23
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
COX COMMUNICATIONS, INC.,
as Guarantor
By:
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Preferred
Securities Guarantee Trustee
By:
---------------------------------------
Name:
Title:
<PAGE> 1
DECLARATION OF TRUST
OF
COX TRUST II
THIS DECLARATION OF TRUST is made as of July 21, 1999 (this
"Declaration of Trust"), by and among Cox Communications, Inc., a Delaware
corporation, as sponsor (the "Sponsor"), The Bank of New York, as trustee (the
"Property Trustee"), and The Bank of New York (Delaware), as trustee (the
"Delaware Trustee") (the Property Trustee and the Delaware Trustee being
hereinafter jointly referred to as the "Trustees"). The Sponsor and the
Trustees hereby agree as follows:
1. The trust created hereby shall be known as Cox Trust II (the
"Trust"), in which name the Trustees or the Sponsor, to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over
to the Trust the sum of $10. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12
of the Delaware Code, 12 Del. C. ss. 3801, et seq. (the "Business Trust Act"),
and that this document constitute the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate
of trust with the Delaware Secretary of State in accordance with the provisions
of the Business Trust Act.
3. An amended and restated Declaration of Trust satisfactory to
each party to it, in such form as the parties thereto may approve, will be
entered into to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred or Capital Securities and Common
Securities referred to therein. Prior to the execution and delivery of such
amended and restated Declaration of Trust, the Trustees shall not have any duty
or obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior to
such execution and delivery any licenses, consents or approvals required by
applicable law or otherwise. Notwithstanding the foregoing, the Trustees may
take all actions deemed proper as are necessary to effect the transactions
contemplated herein.
4. The Sponsor, as sponsor of the Trust, is hereby authorized, in
its discretion, (i) to prepare and file with the Securities and Exchange
Commission (the "Commission") and to execute, in the case of the 1933 Act
Registration Statement and 1934 Act Registration Statement (as herein defined),
on behalf of the Trust, (a) a Registration Statement (the "1933 Act
Registration Statement"), including all pre-effective and post-effective
amendments thereto, relating to the registration under the Securities Act of
1933, as amended (the "1933 Act"), of the Preferred or Capital Securities of
the Trust, (b) any preliminary prospectus or prospectus or supplement thereto
relating to the Preferred or Capital Securities of the Trust required to be
filed pursuant to the 1933 Act, and (c) a Registration Statement on Form 8-A or
other appropriate form (the "1934 Act Registration Statement"), including all
pre-effective and post-effective amendments thereto, relating to the
registration of the Preferred or Capital Securities of the Trust under the
Securities Exchange Act of 1934, as amended; (ii) if and at such time as
determined by the Sponsor, to file with the New York Stock Exchange or other
exchange, or the National Association of Securities Dealers ("NASD"), and
execute on behalf of the Trust a listing
<PAGE> 2
application and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
or Capital Securities of the Trust to be listed on the New York Stock Exchange
or such other exchange, or the NASD's Nasdaq National Market; (iii) to file and
execute on behalf of the Trust, such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents that shall be necessary or desirable to register the
Preferred or Capital Securities of the Trust under the securities or "Blue Sky"
laws of such jurisdictions as the Sponsor, on behalf of the Trust, may deem
necessary or desirable; (iv) to execute and deliver letters or documents to, or
instruments for filing with, a depository relating to the Preferred or Capital
Securities of the Trust; and (v) to execute, deliver and perform on behalf of
the Trust an underwriting agreement with one or more underwriters relating to
the offering of the Preferred or Capital Securities of the Trust.
In the event that any filing referred to in this Section 4 is
required by the rules and regulations of the Commission, the New York Stock
Exchange or other exchange, NASD, or state securities or "Blue Sky" laws to be
executed on behalf of the Trust by the Trustees, the Trustees, in their
capacity as trustees of the Trust, are hereby authorized to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing, it
being understood that the Trustees, in their capacity as trustees of the Trust,
shall not be required to join in any such filing or execute on behalf of the
Trust any such document unless required by the rules and regulations of the
Commission, the New York Stock Exchange or other exchange, NASD, or state
securities or "Blue Sky" laws.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of trustees of the Trust initially shall be two and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Sponsor which may
increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware. Subject to the foregoing, the Sponsor is entitled to
appoint or remove without cause any trustee of the Trust at any time. Any
trustee of the Trust may resign upon thirty days' prior notice to the Sponsor.
7. This Declaration of Trust shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
conflict of laws principles).
8. The Sponsor hereby agrees to indemnify the Trustees and any of
the officers, directors, employees and agents of the Trustees (the "Indemnified
Persons") for, and to hold each Indemnified Person harmless against, any
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
COX COMMUNICATIONS, INC.,
as Sponsor
By: /s/ Jimmy W. Hayes
---------------------------------
Name: Jimmy W. Hayes
Title: Executive Vice President,
Finance and Administration
and Chief Financial Officer
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ Robert A. Massimillo
---------------------------------
Name: Robert A. Massimillo
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Walter N. Gitlin
---------------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
3
<PAGE> 1
EXHIBIT 4.9
=============================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
COX TRUST I
Dated as of ____________ ___, 1999
=============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
INTERPRETATION AND DEFINITIONS
<S> <C> <C>
SECTION 1.1 Definitions............................................................... 2
<CAPTION>
ARTICLE II
TRUST INDENTURE ACT
<S> <C> <C>
SECTION 2.1 Trust Indenture Act; Application.......................................... 8
SECTION 2.2 Lists of Holders of Securities............................................ 9
SECTION 2.3 Reports by the Property Trustee........................................... 9
SECTION 2.4 Periodic Reports to Property Trustee...................................... 9
SECTION 2.5 Evidence of Compliance with Conditions Precedent.......................... 9
SECTION 2.6 Events of Default; Waiver................................................. 10
SECTION 2.7 Event of Default; Notice.................................................. 11
<CAPTION>
ARTICLE III
ORGANIZATION
<S> <C> <C>
SECTION 3.1 Name...................................................................... 12
SECTION 3.2 Office.................................................................... 12
SECTION 3.3 Purpose................................................................... 12
SECTION 3.4 Authority................................................................. 12
SECTION 3.5 Title to Property of the Trust............................................ 13
SECTION 3.6 Powers and Duties of the Administrative Trustees.......................... 13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees...................... 15
SECTION 3.8 Powers and Duties of the Property Trustee................................. 16
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee............... 19
SECTION 3.10 Certain Rights of Property Trustee........................................ 20
SECTION 3.11 Delaware Trustee.......................................................... 22
SECTION 3.12 Execution of Documents.................................................... 23
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.................... 23
SECTION 3.14 Duration of Trust......................................................... 23
SECTION 3.15 Mergers................................................................... 23
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE IV
SPONSOR
<S> <C> <C>
SECTION 4.1 Sponsor's Purchase of Common Securities................................... 25
SECTION 4.2 Responsibilities of the Sponsor........................................... 26
SECTION 4.3 Right to Proceed.......................................................... 26
<CAPTION>
ARTICLE V
TRUSTEES
<S> <C> <C>
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee............................. 26
SECTION 5.2 Delaware Trustee.......................................................... 27
SECTION 5.3 Property Trustee; Eligibility............................................. 27
SECTION 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally................................................ 28
SECTION 5.5 Administrative Trustees................................................... 28
SECTION 5.6 Delaware Trustee.......................................................... 29
SECTION 5.7 Appointment, Removal and Resignation of Trustees.......................... 29
SECTION 5.8 Vacancies among Trustees.................................................. 31
SECTION 5.9 Effect of Vacancies....................................................... 31
SECTION 5.10 Meetings.................................................................. 31
SECTION 5.11 Delegation of Power....................................................... 32
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business............... 32
SECTION 5.13 Compensation.............................................................. 32
<CAPTION>
ARTICLE VI
DISTRIBUTIONS
<S> <C> <C>
SECTION 6.1 Distributions............................................................. 33
<CAPTION>
ARTICLE VII
ISSUANCE OF SECURITIES
<S> <C> <C>
SECTION 7.1 General Provisions Regarding Securities................................... 33
SECTION 7.2 Execution and Authentication.............................................. 34
SECTION 7.3 Form and Dating........................................................... 34
SECTION 7.4 Registrar and Paying Agent................................................ 36
SECTION 7.5 Paying Agent to Hold Money in Trust....................................... 36
SECTION 7.6 Replacement Securities.................................................... 36
SECTION 7.7 Outstanding Preferred Securities.......................................... 37
SECTION 7.8 Preferred Securities in Treasury.......................................... 37
SECTION 7.9 Temporary Securities...................................................... 37
SECTION 7.10 Cancellation.............................................................. 37
SECTION 7.11 CUSIP Numbers............................................................. 38
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
ARTICLE VIII
DISSOLUTION OF TRUST
<S> <C> <C>
SECTION 8.1 Dissolution of Trust...................................................... 38
<CAPTION>
ARTICLE IX
TRANSFER OF INTERESTS
<S> <C> <C>
SECTION 9.1 Transfer of Securities.................................................... 39
SECTION 9.2 Transfer Procedures and Restrictions...................................... 40
SECTION 9.3 Deemed Security Holders................................................... 43
SECTION 9.4 Book Entry Interests...................................................... 43
SECTION 9.5 Notices to Clearing Agency................................................ 43
SECTION 9.6 Appointment of Successor Clearing Agency.................................. 44
<CAPTION>
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
<S> <C> <C>
SECTION 10.1 Liability................................................................. 44
SECTION 10.2 Exculpation............................................................... 44
SECTION 10.3 Fiduciary Duty............................................................ 45
SECTION 10.4 Indemnification........................................................... 45
SECTION 10.5 Outside Businesses........................................................ 48
<CAPTION>
ARTICLE XI
ACCOUNTING
<S> <C> <C>
SECTION 11.1 Fiscal Year............................................................... 49
SECTION 11.2 Certain Accounting Matters................................................ 49
SECTION 11.3 Banking................................................................... 49
SECTION 11.4 Withholding............................................................... 50
<CAPTION>
ARTICLE XII
AMENDMENTS AND MEETINGS
<S> <C> <C>
SECTION 12.1 Amendments................................................................ 50
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent................................................. 52
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
<S> <C> <C>
SECTION 13.1 Representations and Warranties of Property Trustee........................ 53
SECTION 13.2 Representations and Warranties of Delaware Trustee........................ 54
<CAPTION>
ARTICLE XIV
MISCELLANEOUS
<S> <C> <C>
SECTION 14.1 Notices................................................................... 55
SECTION 14.2 Governing Law............................................................. 56
SECTION 14.3 Intention of the Parties.................................................. 57
SECTION 14.4 Headings.................................................................. 57
SECTION 14.5 Successors and Assigns.................................................... 57
SECTION 14.6 Partial Enforceability.................................................... 57
SECTION 14.7 Counterparts.............................................................. 57
<S> <C> <C>
Term of Preferred Securities and Common Securities................................................. I-1
EXHIBIT A-1....... Form of Preferred Security Certificate.................................... A1-1
EXHIBIT A-2....... Form of Common Security Certificate....................................... A2-1
EXHIBIT B......... Specimen Debenture........................................................ B-1
EXHIBIT C......... Underwriting Agreement.................................................... C-1
</TABLE>
iv
<PAGE> 6
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Agreement
------------------- ---------
<S> <C>
310(a)................................................................. 5.3(a)
310(b)................................................................. 5.3(c)
310(c)................................................................. Inapplicable
311(a) and (b)......................................................... 5.3(c)
311(c)................................................................. Inapplicable
312(a)................................................................. 2.2(a)
312(b)................................................................. 2.2(b)
313.................................................................... 2.3
314(a)................................................................. 2.4
314(b)................................................................. Inapplicable
314(c)................................................................. 2.5
314(d)................................................................. Inapplicable
314(e)................................................................. 1.1, 2.5
314(f)................................................................. Inapplicable
315(a)................................................................. 3.9(b)
315(b)................................................................. 2.7(a)
315(c)................................................................. 3.9(a)
315(d)................................................................. 3.9(b)
316(a) and (b)......................................................... 2.6 and
Annex I
316(c)................................................................. 3.6(f)
317(a)................................................................. 3.8(h)
317(b)................................................................. 3.8(i)
---------------
</TABLE>
*This Cross-Reference Table does not constitute part of the Agreement
and shall not affect the interpretation of any of its terms or
provisions.
v
<PAGE> 7
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
COX TRUST I
AMENDED AND RESTATED DECLARATION OF TRUST (the "Agreement")
dated and effective as of __________ ___, 1999 by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to time,
of undivided beneficial interests in the assets of the Trust (as defined herein)
to be issued pursuant to this Agreement;
WHEREAS, the Trustees and the Sponsor established Cox Trust I
(the "Trust"), a trust created under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of July 7, 1999 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on July 7, 1999, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (each as hereinafter defined) and engaging in only those
activities necessary, advisable or incidental thereto;
WHEREAS, the parties hereto desire to amend and restate each
and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust continue as a business trust under the Business Trust Act, that
the Original Declaration be amended and restated in its entirety as provided
herein and that this Agreement constitute the governing instrument of such
business trust, the Trustees declare that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Agreement and, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties, intending to be legally bound hereby, agree as follows:
<PAGE> 8
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Agreement but not
defined in the preamble above or elsewhere herein have the
respective meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Agreement has the
same meaning throughout;
(c) all references to "the Agreement" or "this
Agreement" are to this Agreement and each Annex and Exhibit hereto,
as modified, supplemented or amended from time to time;
(d) all references in this Agreement to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of
and Annexes and Exhibits to this Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act (as
defined herein) has the same meaning when used in this Agreement
unless otherwise defined in this Agreement or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Administrative Trustee" has the meaning set forth in
Section 5.1.
"Affiliate" has the same meaning as given to that term in
Rule 405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
"Agreement" means this Amended and Restated Declaration of
Trust, dated as of ____________ ___, 1999, including Annex I and all the
exhibits hereto.
"Authorized Officer" of a Person means any other Person that
is authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
Preferred Security Certificate registered in the name of a Clearing Agency or
its nominee, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
2
<PAGE> 9
"Business Day" means any day other than a Saturday, Sunday or
other day on which banking institutions in The City of New York are authorized
or required by law, regulation or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a global certificate and which
shall undertake to effect book-entry transfers and pledges of the Preferred
Securities.
"Closing Time" means the Closing Time as defined in the
Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if at any time after the
execution of this Agreement such Commission is not existing and performing the
duties now assigned to it under applicable federal securities laws, then the
body performing such duties at such time.
"Common Securities" has the meaning specified in Section
7.1(a).
"Common Securities Guarantee" means the Common Securities
Guarantee Agreement, dated as of ___________ ___, 1999 of the Sponsor in
respect of the Common Securities.
"Company Indemnified Person" means (a) any Administrative
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or
agents of any Administrative Trustee or any Affiliate of any Administrative
Trustee; or (d) any officer, employee or agent of the Trust or its Affiliates;
provided that the term "Company Indemnified Person" shall not include any
Fiduciary Indemnified Person.
"Corporate Trust Office" means the office of the Property
Trustee for the conduct of corporate trust business at which matters related to
this Agreement shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at 101
Barclay Street, Floor 21 West, New York, New York 10286, Attention: Corporate
Trust Administration.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
3
<PAGE> 10
"Debenture Issuer" means Cox Communications, Inc., a Delaware
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer
of the Debentures under the Indenture.
"Debentures" means the _____% Junior Subordinated Deferrable
Interest Debentures due ________ of the Debenture Issuer issued pursuant to the
Indenture.
"Debenture Trustee" means The Bank of New York, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Default" means an event, act or condition that with notice
of lapse of time, or both, would constitute an Event of Default.
"Definitive Preferred Securities" has the meaning set forth
in Section 7.3(a).
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" means, with respect to the Securities, an
Event of Default (as defined in the Indenture) that has occurred and is
continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Preferred Security" has the meaning set forth in
Section 7.3(a).
"Holder" means a Person in whose name a Security or Successor
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Junior Subordinated Debentures
Indenture dated as of ___________ ___, 1999, between the Debenture Issuer and
the Debenture Trustee relating to the Debenture Issuer's junior subordinated
debentures as amended or supplemented from time to time.
4
<PAGE> 11
"Investment Company" means an investment company as defined
in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" means that the Trust has received
an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" under the Investment Company Act that is required to be registered
under this law, which change becomes effective on or after the date of this
Agreement.
"Legal Action" has the meaning set forth in Section 3.6(h).
"Like Amount" has the meaning set forth in Section 3 of
Annex I hereto.
"Liquidation Amount" has the meaning set forth in Section 2
of Annex I hereto.
"List of Holders" has the meaning set forth in Section 2.2(a)
"Majority in Liquidation Amount" means, with respect to the
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holders of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggregate Liquidation
Amount (including the amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the
relevant class.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the Chief Financial Officer,
the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary. Any Officers' Certificate
delivered by the Trust shall be signed by at least one Administrative Trustee.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
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(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Option Closing Date" means the date of closing of any sale
of Option Preferred Securities (as defined in the Underwriting Agreement) or,
if such term is not defined in the Underwriting Agreement, the date of closing
of any sale of securities to the underwriters named in such Underwriting
Agreement solely to cover over-allotments.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of the Sponsor, and who shall be reasonably acceptable to
the Property Trustee, provided, that the General Counsel or Assistant General
Counsel of the Sponsor shall be deemed to be reasonably acceptable to the
Trustee.
"Participants" has the meaning specified in Section 7.3(a).
"Paying Agent" has the meaning specified in Section 7.4.
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in Section
7.1(a).
"Preferred Securities Guarantee" means the Preferred
Securities Guarantee Agreement dated as of ___________ ___, 1999 of the Sponsor
in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to
a Book Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Property Trustee" has the meaning set forth in Section
5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any other Person
that owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
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"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee
with direct responsibility for the administration of this Agreement, including
any vice-president, any assistant vice-president, any assistant secretary, any
assistant treasurer or other officer of the Corporate Trust Office of the
Property Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer of the Property Trustee to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Securities" or "Trust Securities" means the Common
Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities
Guarantee and the Preferred Securities Guarantee.
"Special Event" means a Tax Event or an Investment Company
Event.
"Sponsor" means Cox Communications, Inc., a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.7(b)(ii).
"Successor Entity" has the meaning set forth in Section
3.15(b)(i).
"Successor Property Trustee" has the meaning set forth in
Section 3.8(f)(ii).
"Successor Securities" has the meaning set forth in Section
3.15(b)(i)(B).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event" means the receipt by the Administrative Trustees
and the Debenture Issuer of an Opinion of Counsel from counsel experienced in
such matters to the effect that, as a result of 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 as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of this Agreement, there is more
than an insubstantial risk that (i) the Trust is, or will be within 90 days of
the date of such opinion, subject to United States Federal income tax with
respect to income received or accrued on the Debentures, (ii) the interest
payable by the Debenture Issuer on the Debentures is not, or within 90 days of
the date of such opinion will not be, deductible by the Debenture Issuer, in
whole or in part, for United States Federal income tax purposes, or (iii) the
Trust is, or will be within 90 days of the date of such opinion, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.
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"10% in Liquidation Amount" means, with respect to the
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holders of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate Liquidation
Amount (including the amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the
relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Agreement as a trustee, so long as such Person shall continue as Trustee of the
Trust in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Agreement in order for this
Agreement to be qualified under the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Agreement
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
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SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide the Property Trustee, unless the Property
Trustee is Registrar for the Securities, (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither
the Sponsor nor the Administrative Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee
by the Sponsor and the Administrative Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Property Trustee. The Property Trustee shall preserve,
in as current a form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity), provided that the Property Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Property Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after September 1 of each year, commencing September
1, 1999, the Property Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by ss. 313 of the Trust Indenture Act,
if any, in the form and in the manner provided by ss. 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of
ss. 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as are required by ss. 314 of the Trust Indenture Act (if any) and
the compliance certificate required by ss. 314 of the Trust Indenture Act in
the form, in the manner and at the times required by ss. 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent provided for in this Agreement that relate to any of
the matters set forth in ss. 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to ss. 314(c)(1) of the
Trust Indenture Act may be given in the form of an Officers' Certificate.
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SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Agreement shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in aggregate principal amount of the holders of the
Debentures (a "Super Majority") to be waived under the Indenture,
the Event of Default under the Agreement may only be waived by the
vote of the Holders of at least the proportion in aggregate
Liquidation Amount of the Preferred Securities that the relevant
Super Majority represents of the aggregate principal amount of the
Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Agreement and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Agreement, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the
Preferred Securities or impair any right consequent thereon. Any waiver by the
Holders of the Preferred Securities of an Event of Default with respect to the
Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of any such Event of Default with respect to the
Common Securities for all purposes of this Agreement without any further act,
vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture (except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under the Agreement as provided below in this
Section 2.6(b)), the Event of Default under the Agreement shall also
not be waivable; or
(ii) requires the consent or vote of a Super Majority to
be waived, except where the Holders of the Common Securities are
deemed to have waived such Event of Default under the Agreement as
provided below in this Section 2.6(b), the Event of Default under
the Agreement may only be waived by the vote of the Holders of at
least the proportion in aggregate Liquidation Amount of the Common
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
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provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated,
and until such Events of Default have been so cured, waived or otherwise
eliminated, the Property Trustee will be deemed to be acting solely on behalf
of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Agreement and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Agreement, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Agreement. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Agreement and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of any default with respect to the Securities, transmit by mail,
first class postage prepaid, to the Holders of the Securities and to the
Sponsor, notices of all such defaults actually known to a Responsible Officer
of the Property Trustee, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this Section 2.7(a)
being hereby defined to be a Default as defined in the Indenture, not including
any periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures, the
Property Trustee shall be protected in withholding such notice if and so long
as a committee of Responsible Officers of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Property Trustee shall not be deemed to have actual
knowledge of any default except:
(i) a default under Sections 6.01(a) and 6.01(b) of the
Indenture; or
(ii) any default as to which the Property Trustee shall
have received written notice or of which a Responsible Officer of
the Property Trustee charged with the administration of the
Agreement shall have actual knowledge.
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(c) Within ten Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Property Trustee, the
Property Trustee shall transmit notice of such Event of Default to the Holders
of the Preferred Securities, the Administrative Trustees and the Sponsor,
unless such Event of Default shall have been cured, waived or otherwise
eliminated. The Sponsor and the Administrative Trustees shall file annually
with the Property Trustee a certification as to whether or not they are in
compliance with all the conditions and covenants applicable to them under this
Agreement.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Cox Trust I" as such name may be modified from
time to time by the Administrative Trustees following written notice to the
Delaware Trustee, the Property Trustee and the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Cox
Communications, Inc., 1400 Lake Hearn Drive, Atlanta, Georgia 30319. On ten
Business Days' prior written notice to the Delaware Trustee, the Property
Trustee and the Holders of Securities, the Administrative Trustees may
designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities, (b) use the proceeds from the sale of the Securities to
acquire the Debentures in an aggregate principal amount equal to the aggregate
Liquidation Amount of such Securities, and (c) except as otherwise limited
herein, to engage in only those other activities necessary, advisable or
incidental thereto, including without limitation, those activities specified in
Sections 3.6, 3.8, 3.9, 3.10, 3.11 and/or 3.12.
SECTION 3.4 Authority.
Subject to the limitations provided in this Agreement and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by one or more of the Administrative Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust and an
action taken by the Property Trustee on behalf of the Trust in accordance with
its powers shall constitute the act of and serve to bind the Trust. In dealing
with the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Agreement.
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SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Agreement, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive power, duty and
authority, and are hereby authorized and directed, to cause the Trust to engage
in the following activities:
(a) to execute, deliver, issue and sell the Preferred Securities
and the Common Securities in accordance with this Agreement; provided, however,
that (i) the Trust may issue no more than one series of Preferred Securities
and no more than one series of Common Securities, (ii) there shall be no
interests in the Trust other than the Securities, and (iii) the issuance of
Securities shall be limited to a simultaneous issuance of both Preferred
Securities and Common Securities at the Closing Time and the Option Closing
Date, if any;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
Preferred Securities in any State in which the Sponsor has
determined to qualify or register such Preferred Securities for
sale;
(ii) at the direction of the Sponsor, execute and file an
application, prepared by the Sponsor, to the New York Stock Exchange
or any other national stock exchange or the Nasdaq National Market
for listing or quotation of the Preferred Securities;
(iii) execute and deliver letters, documents, or
instruments with DTC and other Clearing Agencies relating to the
Preferred Securities;
(iv) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor, relating to the registration of
the Preferred Securities under Section 12(b) or 12(g) of the
Exchange Act, as the case may be; and
(v) execute and file any agreement, certificate or other
document which such Administrative Trustee deems necessary or
appropriate in connection with the issuance and sale of the
Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of
the Preferred Securities and the Holders of Common Securities;
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(d) to cause the Trust to enter into and to execute and deliver
on behalf of the Trust such agreements (including the Underwriting Agreement)
and arrangements as may be necessary or desirable in connection with the sale
of Preferred Securities to the underwriters thereof and the consummation
thereof, and to take all action, and exercise all discretion, as may be
necessary or desirable in connection with the consummation thereof;
(e) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event;
(f) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of ss.316(c) of the Trust Indenture Act,
Distributions, voting rights and redemptions, and to issue relevant notices to
the Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
(g) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the
Securities;
(h) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(i) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(j) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(k) to give the certificate required by ss. 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Administrative Trustee;
(l) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(m) to act as, or appoint another Person to act as, Registrar for
the Securities or to appoint a Paying Agent for the Securities as provided in
Section 7.4 except for such time as such power to appoint a Paying Agent is
vested in the Property Trustee;
(n) to give prompt written notice to the Property Trustee and to
Holders of the Securities of any notice received from the Debenture Issuer of
its election to defer payments of interest on the Debentures by extending the
interest payment period under the Indenture;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust
was created;
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(p) to take any action (provided that such action does not
materially adversely affect the interests of Holders), not inconsistent with
this Agreement or with applicable law, that the Administrative Trustees
determine in their discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including, but not
limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified for United States
Federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure
that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States Federal income tax purposes;
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust; and
(r) to execute and deliver and record, file or register, as
applicable, all documents, certificates, agreements or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary, advisable or incidental to the foregoing.
The Administrative Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant to
this Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust and the Trustees (including the Property Trustee
and the Delaware Trustee) shall not, and the Administrative Trustees shall
cause the Trust not to, engage in any activity other than as required or
authorized by this Agreement. In particular, the Trust shall not:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this Agreement and of
the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust
purpose or execute any mortgage in respect of, or pledge, any Trust
property;
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(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other
than the Securities;
(vii) so long as any Debentures are held by the Property
Trustee, the Trustees shall not (A) direct the time, method and
place of conducting any proceeding with respect to any remedy
available to the Debenture Trustee, or exercise any trust or power
conferred upon the Debenture Trustee with respect to the Debentures,
(B) waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul a declaration of acceleration
of the maturity of the principal of the Debentures, or (D) consent
to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required, without, in
each case, obtaining (1) the prior approval of the Holders of a
Majority in Liquidation Amount of all outstanding Securities;
provided, however, that where a consent under the Indenture would
require the consent of each holder of Debentures affected thereby,
no such consent shall be given by the Property Trustee without the
prior approval of each Holder of Securities and (2) an Opinion of
Counsel delivered to the Trust from tax counsel experienced in such
matters to the effect that the Trust will not be classified as an
association taxable as a corporation for United States Federal
income tax purposes on account of such action;
(viii) revoke any action previously authorized or approved
by a vote of the Holders of Preferred Securities except by
subsequent vote of such Holders;
(ix) revoke any action previously authorized or approved
by a vote of the Holders of Common Securities except by subsequent
vote of such Holders; or
(x) undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States
Federal income tax purposes as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held
of record in the name of the Property Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Property Trustee to the Debentures shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 5.7.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
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(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee Account") in the name
of and under the exclusive control of the Property Trustee on behalf
of the Holders of the Securities and, upon the receipt of payments
of funds made in respect of the Debentures held by the Property
Trustee, deposit such funds into the Property Trustee Account and
make payments or cause the Paying Agent to make payments to the
Holders of the Preferred Securities and Holders of the Common
Securities from the Property Trustee Account in accordance with
Section 6.1. Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Agreement. The
Property Trustee Account shall be an account that is maintained with
a banking institution the rating on whose long-term unsecured
indebtedness is at least equal to the rating assigned to the
Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule
436(g)(2) under the Securities Act, which as of the date hereof is
rated BB by Standard & Poor's Ratings Services and Ba2 by Moody's
Investors Service, Inc. If the ratings specified above are changed,
the Sponsor shall inform the Property Trustee of any new ratings
assigned to the Preferred Securities;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures
are redeemed or mature;
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the
Securities, engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the
Debentures to Holders of Securities upon the occurrence of certain
events; and
(iv) take such ministerial action as may be requested by
the Administrative Trustees in connection with the winding up of the
affairs of or liquidation of the Trust in accordance with this
Agreement and the preparation, execution and filing of a certificate
of cancellation or other appropriate certificates with the Secretary
of State of the State of Delaware and other appropriate governmental
authorities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of this Agreement and the Securities.
(e) Subject to Section 3.9, the Property Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Agreement or the Trust
Indenture Act and, if the Property Trustee shall have failed to take such Legal
Action, the Holders of the Preferred Securities in at least an aggregate
Liquidation Amount equal to the specified percentage of Holders of Debentures
entitled to take such Legal Action may, to the fullest extent permitted by law,
take such Legal Action without first proceeding against the Property Trustee or
the Trust; provided, however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the
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Debenture Issuer to pay the principal of or premium, if any, or interest on the
Debentures on the date such principal, premium, if any, or interest is
otherwise payable (or in the case of redemption, on the redemption date), then
a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or premium, if any,
or interest on the Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Preferred Securities of such Holder on or after the
respective due date specified in the Debentures (a "Direct Action"). Except as
provided in the preceding sentence, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the holders of
the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities and this Agreement; or
(ii) a successor Property Trustee has been appointed and
has accepted that appointment in accordance with Section 5.7 (a
"Successor Property Trustee").
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer
of the Property Trustee occurs and is continuing, the Property Trustee shall,
for the benefit of Holders of the Securities, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms of
the Securities and this Agreement.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in ss. 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with ss. 317(b) of the Trust Indenture Act. Any such
additional Paying Agent may be removed with or without cause by the Property
Trustee at any time the Property Trustee remains as Paying Agent and a
successor Paying Agent or additional Paying Agents may be (but are not required
to be) appointed at any time by the Property Trustee while the Property Trustee
is acting as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.
Notwithstanding anything expressed or implied to the contrary in
this Agreement or any Annex or Exhibit hereto, the Property Trustee must
exercise the powers set forth in this Section 3.8 in a manner that is
consistent with the purposes and functions of the Trust set out in Section 3.3.
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SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Agreement and in the Securities and no implied covenants or
obligations shall be read into this Agreement against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) of which a Responsible Officer of the Property Trustee
has actual knowledge, the Property Trustee shall exercise such of the rights
and powers vested in it by this Agreement, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, its own bad faith or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Agreement and in the Securities and the Property
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in
this Agreement and in the Securities, and no implied
covenants or obligations shall be read into this Agreement
against the Property Trustee; and
(B) in the absence of bad faith on the part of
the Property Trustee, the Property Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
opinions furnished to the Property Trustee and conforming to
the requirements of this Agreement; provided, however, that
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Agreement (but shall not
be required to confirm or investigate the accuracy of
mathematical calculations or other facts stated therein);
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a Majority
in Liquidation Amount of the Securities relating to the time, method
and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Agreement;
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(iv) no provision of this Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Agreement or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Debentures and
the Property Trustee Account shall be to deal with such property in
a similar manner as the Property Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Agreement and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree in writing with the Sponsor. Money held by the Property
Trustee need not be segregated from other funds held by it except in
relation to the Property Trustee Account maintained by the Property
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Sponsor with their respective duties under this Agreement, nor shall
the Property Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall
be fully 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, sent or presented by
the proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Agreement may be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Agreement,
the Property Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and
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conclusively rely upon an Officers' Certificate which, upon receipt
of such request, shall be promptly delivered by the Sponsor or the
Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to
any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any re-recording, refiling or registration
thereof;
(v) the Property Trustee may consult with counsel or
other experts of its selection and the advice or opinion of such
counsel and experts with respect to legal matters or advice within
the scope of such experts' area of expertise shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion, such counsel may be counsel
to the Sponsor or any of its Affiliates, and may include any of its
employees; and the Property Trustee shall have the right at any time
to seek instructions concerning the administration of this Agreement
from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Property Trustee in respect of the time, method or
place of conducting any proceeding for any remedy available to the
Property Trustee or the exercise of any trust or power conferred on
the Property Trustee under this Agreement;
(vii) the Property 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
Property Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly
or by or through agents, custodians, nominees or attorneys and the
Property 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;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority
of the Property Trustee to so act or as to its compliance with any
of the terms and provisions of this Agreement, both of which shall
be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
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(x) whenever in the administration of this Agreement the
Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request instructions
from the Holders of the Securities which instructions may only be
given by the Holders of the same proportion in Liquidation Amount of
the Securities as would be entitled to direct the Property Trustee
under the terms of the Securities in respect of such remedy, right
or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on, or acting in
accordance with, such instructions;
(xi) except as otherwise expressly provided by this
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Agreement; and
(xii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by
this Agreement.
(b) No provision of this Agreement shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
(c) It is expressly understood and agreed by the parties hereto
that in fulfilling its obligations as Property Trustee hereunder on behalf of
the Trust, (i) any agreements or instruments executed or delivered by The Bank
of New York are executed and delivered not in its individual capacity but
solely as Property Trustee under this Agreement in the exercise of the powers
and authority conferred and vested in it, (ii) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as representations, warranties, covenants, undertakings and
agreements by The Bank of New York in its individual capacity but is made and
intended for the purpose of binding only the Trust, and (iii) under no
circumstances (except with respect to funds delivered to it relating to
payments in respect of the Securities) shall The Bank of New York in its
individual capacity be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Agreement except if such breach or failure is due to any negligence, bad faith
or willful misconduct of the Property Trustee.
SECTION 3.11 Delaware Trustee.
(a) Notwithstanding any other provision of this Agreement other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Administrative Trustees or the Property Trustee
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described in this Agreement (except as required under the Business Trust Act).
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss.3807 of the
Business Trust Act.
(b) It is expressly understood and agreed by the parties hereto
that in fulfilling its obligations as Delaware Trustee hereunder on behalf of
the Trust, (i) any agreements or instruments executed or delivered by The Bank
of New York (Delaware) are executed and delivered not in its individual
capacity but solely as Delaware Trustee under this Agreement in the exercise of
the powers and authority conferred and vested in it, (ii) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as representations, warranties, covenants,
undertakings and agreements by The Bank of New York (Delaware) in its
individual capacity but is made and intended for the purpose of binding only
the Trust, and (iii) under no circumstances shall The Bank of New York
(Delaware) in its individual capacity be personally liable for the payment of
any indebtedness or expenses of the Trust or be liable for the breach or
failure of any obligation, representation, warranty, or covenant made or
undertaken by the Trust under this Agreement except if such breach or failure
is due to any gross negligence, bad faith or willful misconduct of the Delaware
Trustee.
SECTION 3.12 Execution of Documents.
Except as otherwise required by the Business Trust Act or applicable
law, each Administrative Trustee, individually, is authorized to execute and
deliver on behalf of the Trust any documents, agreements, instruments or
certificates that the Administrative Trustees have the power and authority to
execute and deliver pursuant to this Agreement.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Agreement and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Agreement or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of Article
VIII hereof, shall have existence until ______________________.
SECTION 3.15 Mergers.
(a) The Trust may not merge with or into, convert into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
Person, except as described in Section 3.15(b) and (c) and except with respect
to the distribution of all Debentures to Holders of Securities pursuant to
Section 8.1(a)(iii).
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(b) The Trust may, at the request of the Sponsor, with the
consent of the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees and without the consent of the Holders
of the Securities, the Delaware Trustee or the Property Trustee, merge with or
into, convert into, consolidate, amalgamate, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations
of the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as the
Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Securities rank
with respect to Distributions and payments upon liquidation,
redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as the
Property Trustee with respect to the Debentures;
(iii) the Successor Securities (excluding any securities
substituted for any Common Securities) are listed, quoted or
included for trading, or any Successor Securities will be listed,
quoted or included for trading, upon notification of issuance, on
any national securities exchange or with any other organization on
which the Preferred Securities are then listed, quoted or included;
(iv) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
cause the Preferred Securities (including any Successor Securities)
or the Debentures to be downgraded or placed under surveillance or
review by any nationally recognized statistical rating organization
that publishes a rating on the Preferred Securities or the
Debentures;
(v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the
Holders of the Securities (including the holders of any Successor
Securities) in any material respect (other than with respect to any
dilution of the interests of such Holders or holders, as the case
may be, in the Successor Entity);
(vi) the Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the
Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the
effect that:
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(A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including
the holders of any Successor Securities) in any material
respect (other than with respect to any dilution of the
interests of such Holders or holders, as the case may be,
in the Successor Entity); and
(B) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Trust nor the Successor
Entity, if any, will be required to register as an
Investment Company; and
(viii) the Sponsor or any permitted successor or assignee
owns all of the common securities of the Successor Entity and
guarantees the obligations of the Successor Entity under the
Successor Securities at least to the extent provided by the
Preferred Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in Liquidation Amount of the Securities,
merge with or into, convert into, consolidate, amalgamate, or be replaced by,
or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other Person or permit any other Person to
merge with or into, consolidate, amalgamate, or replace it if such merger,
conversion, consolidation, amalgamation, replacement, conveyance, transfer or
lease would cause the Trust or the Successor Entity, if any, not to be
classified as a grantor trust for United States Federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time and on any Option Closing Date, the Sponsor will
purchase all of the Common Securities then issued by the Trust, in an amount
equal to at least 3% of the total capital of the Trust, at the same time as the
Preferred Securities are issued and sold. The aggregate Liquidation Amount of
Common Securities at any time shall not be less than 3% of the total capital of
the Trust.
For so long as the Preferred Securities remain outstanding, the
Sponsor covenants (i) to maintain, directly or indirectly, 100% ownership of
the Common Securities; provided, however, that any permitted successor of the
Sponsor under the Indenture may succeed to the Sponsor's interest in the Common
Securities, (ii) to use its best efforts to cause the Trust (a) to remain a
statutory business trust, except in connection with a distribution of
Debentures to the Holders of Securities in liquidation of the Trust, the
redemption of all the Securities, or certain mergers, consolidations or
amalgamations, each as permitted by this Agreement, and not to voluntarily
dissolve, wind up, liquidate or be terminated, except as permitted by this
Agreement, and (b) to otherwise continue to be classified as a grantor trust
for United States federal income tax purposes, (iii) to use its best efforts to
ensure that the Trust shall not be an Investment
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Company for purposes of the Investment Company Act, (iv) to use its best
efforts to cause each Holder of Securities to be treated as owning an undivided
beneficial interest in the Debentures and (v) to take no action which would
cause the dissolution, liquidation or winding up of the Trust, except as
otherwise provided in this Agreement.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issuance and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust, execute and file with the
Commission the registration statement on Form S-3 pertaining to the Preferred
Securities, including any amendments thereto and to register the Preferred
Securities Guarantee related thereto;
(b) to determine the jurisdictions in which to take appropriate
action to qualify or register for sale all or part of the Preferred Securities
and to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such jurisdictions;
(c) if deemed necessary or advisable by the Sponsor, to prepare
for filing by the Trust an application to the New York Stock Exchange or any
other national stock exchange or the Nasdaq National Market for listing or
quotation of the Preferred Securities;
(d) to prepare for filing by the Trust, execute and file with the
Commission a registration statement on Form 8-A, including any amendments
thereto, relating to the registration of the Preferred Securities under Section
12(b) or 12(g) of the Exchange Act, as the case may be, including any
amendments thereto; and
(e) to negotiate the terms of, execute, enter into and deliver
the Underwriting Agreement providing for the sale of the Preferred Securities.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of Preferred
Securities to bring one or more Direct Actions under the circumstances
specified in this Agreement.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
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(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee shall be a Person meeting the
requirements of Section 5.2 (the "Delaware Trustee"); (2) there shall be at
least one Trustee who is an employee or officer of, or is affiliated with the
Sponsor (an "Administrative Trustee"); and (3) one Trustee shall be the
Property Trustee for so long as this Agreement is required to qualify as an
indenture under the Trust Indenture Act, and such Trustee may also serve as
Delaware Trustee if it meets the applicable requirements. Notwithstanding the
above, unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust's property
may at the time be located, the Holders of a Majority in Liquidation Amount of
the Common Securities acting as a class at a meeting of the Holders of the
Common Securities, and the Administrative Trustees shall have power to appoint
one or more Persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of the Trust's property, or to act as separate
trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or
Persons in such capacity any property, title, right or power deemed necessary
or desirable, subject to the provisions of this Agreement. In case an Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
For so long as required by the Business Trust Act, the Delaware
Trustee shall be:
(a) a natural person who is a resident of the State of Delaware;
or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided, however, if the Property Trustee has
its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Property Trustee shall also be the
Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an indenture trustee under the
Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision
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or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then
for the purposes of this Section 5.3(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Agreement for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-5092
Telecopier: (212) 815-5915
SECTION 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
James O. Robins
Jimmy W. Hayes
Dallas S. Clement
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c/o Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Telephone: (404) 843-5000
Telecopier: (404) 847-6336
(a) Except as expressly set forth in this Agreement and except
if a meeting of the Administrative Trustees is called with respect to any
matter over which the Administrative Trustees have power to act, any power of
the Administrative Trustees may be exercised by, or with the consent of, any
one such Administrative Trustee.
(b) Unless otherwise determined by the Administrative Trustees,
and except as otherwise required by the Business Trust Act or applicable law,
any Administrative Trustee acting alone is authorized to execute on behalf of
the Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Administration
Telephone: (212) 815-5092
Telecopier: (212) 815-5915
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and
be continuing after the issuance of any Securities, by vote of the
Holders of a Majority in Liquidation Amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities; and
(iii) if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, with respect to the
Property Trustee or the Delaware Trustee, by vote of Holders of a
Majority in Liquidation Amount of the Preferred Securities voting
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as a class at a meeting of Holders of the Preferred Securities (it
being understood that in no event will the Holders of the Preferred
Securities have the right to vote, appoint, remove or replace the
Administrative Trustees, which voting rights are exclusively vested
in the Holder of the Common Securities).
(b) (i) The Trustee that acts as Property Trustee shall not
be removed in accordance with Section 5.7(a) until a Successor Property Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Property Trustee and delivered to the Administrative
Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
removed Delaware Trustee, the Property Trustee (if the removed
Delaware Trustee is not also the Property Trustee), the Administrative
Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until
his successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the other Trustees, the Sponsor and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is specified
therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor, the Delaware Trustee (if the
resigning Property Trustee is not also the Delaware Trustee)
and the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the
Trust, the Property Trustee (if the resigning Delaware Trustee is not
also the Property Trustee), the Sponsor and the resigning Delaware
Trustee.
(d) The Holders of the Common Securities or, if an Event of
Default shall have occurred and be continuing after the issuance of the
Securities, the Holders of the Preferred Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or
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Successor Property Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed,
as applicable, may petition any court of competent jurisdiction for appointment
of a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to dissolve, terminate or annul the Trust or to
terminate this Agreement. Whenever a vacancy in the number of Administrative
Trustees shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 5.7, the Administrative
Trustees in office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Agreement.
SECTION 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile or
electronic mail, with a hard copy by overnight courier) not less than 24 hours
before such meeting. Notice of any telephonic meetings of the Administrative
Trustees or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile or electronic mail, with a hard
copy by overnight courier) not less than 24 hours before a meeting. Notices
shall contain a brief statement of the time, place and anticipated purposes of
the meeting. The presence (whether in person, by telephone or by video
transmission) of an Administrative Trustee at a
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meeting shall constitute a waiver of notice of such meeting except where an
Administrative Trustee attends a meeting for the express purpose of objecting
to the transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Agreement, any
action of the Administrative Trustees may be taken at a meeting by vote of a
majority of the Administrative Trustees present (whether in person, by
telephone or by video transmission) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the
unanimous written consent of the Administrative Trustees. In the event there is
only one Administrative Trustee, any and all action of such Administrative
Trustee shall be evidenced by a written consent of such Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or amendment
thereto filed with the Commission; and
(b) The Administrative Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of this
Agreement.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee
or any Administrative Trustee that is not a natural person, as the case may be,
may be merged, converted or consolidated; and any Person resulting from any
merger, conversion or consolidation to which the Property Trustee or the
Delaware Trustee, as the case may be, shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Property Trustee or the Delaware Trustee, as the case may be, shall be the
successor of the Property Trustee or the Delaware Trustee, as the case may be,
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, however, such successor
shall notify the Sponsor and the Trust promptly of its succession.
SECTION 5.13 Compensation.
The Sponsor agrees:
(a) to pay to the Property Trustee and the Delaware Trustee from
time to time such compensation as shall be agreed in writing between the
Company and the Property Trustee and the Delaware Trustee, respectively, for
all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust); and
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(b) to reimburse the Property Trustee and the Delaware Trustee upon
their request for reasonable expenses, disbursements and advances incurred or
made by the Property Trustee or the Delaware Trustee, respectively, in
accordance with any provision of this Agreement (including the reasonable
compensation and the expenses and advances of its agents and counsel), except
any such expense or advance as may be attributable to their gross negligence
(or, in the case of the Property Trustee, negligence), willful misconduct or
bad faith.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the respective terms and preferences set forth herein and in Annex I. If and to
the extent that the Debenture Issuer makes a payment of interest (including any
compounded interest and additional interest), premium and/or principal on the
Debentures held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a distribution (a "Distribution")
of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust
issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Annex I (the "Preferred Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Agreement, the Securities so issued shall be validly issued, fully paid and
non-assessable.
(d) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Agreement, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Agreement.
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SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such Administrative
Trustee before the Securities so signed shall be delivered by the Trust, such
Securities nevertheless may be delivered as though the Person who signed such
Securities had not ceased to be such Administrative Trustee; and any Securities
may be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of this Agreement any such
person was not an Administrative Trustee.
(b) One Administrative Trustee shall sign the Preferred
Securities for the Trust by manual or facsimile signature.
A Preferred Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Agreement. A Common Security shall be valid upon
execution by an Administrative Trustee without any act of the Property Trustee.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue.
The aggregate number of Preferred Securities outstanding at any
time shall not exceed the number set forth in the terms in Annex I hereto
except as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Securities. An authenticating
agent may authenticate Preferred Securities whenever the Property Trustee may
do so. Each reference in this Agreement to authentication by the Property
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Property Trustee hereunder with respect to the Sponsor or an
Affiliate.
SECTION 7.3 Form and Dating.
The Preferred Securities and the Property Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Agreement.
The Securities may be in definitive or global form and may be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to an Administrative Trustee, as evidenced by the
execution thereof. The Securities may have letters, CUSIP or other numbers,
notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange or quotation system rule,
agreements to which the Trust is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Trust). An
Administrative Trustee, at the direction of the Sponsor, shall furnish any such
legend not contained in Exhibits A-1 or A-2 to the Property Trustee in writing.
Each Preferred Security shall be dated the date of
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its authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part
of the terms of this Agreement and to the extent applicable, the Property
Trustee and the Sponsor, by their execution and delivery of this Agreement,
expressly agree to such terms and provisions and to be bound thereby.
The following four paragraphs shall apply only to any Global
Preferred Securities:
The Preferred Securities shall be issued in the form of one or
more permanent global Securities in definitive, fully registered form without
Distribution coupons with the appropriate global legends set forth in Exhibit
A-1 hereto (a "Global Preferred Security"), which shall be deposited on behalf
of the purchasers of the Preferred Securities represented thereby with the
Property Trustee, as custodian for the Clearing Agency, and registered in the
name of the Clearing Agency or a nominee of the Clearing Agency, duly executed
by an Administrative Trustee on behalf of the Trust and authenticated by the
Property Trustee as hereinafter provided. The number of Preferred Securities
represented by the Global Preferred Security may from time to time be increased
or decreased by adjustments made on the records of the Property Trustee and the
Clearing Agency or its nominee as hereinafter provided. The Holder of a Global
Preferred Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through
Participants, to take any action which such Holder is entitled to take under
this Agreement or the Securities.
An Administrative Trustee shall execute and the Property Trustee
shall, in accordance with this Section 7.3, authenticate and make available for
delivery initially one or more Global Preferred Securities that (i) shall be
registered in the name of Cede & Co. or other nominee of such Clearing Agency
and (ii) shall be delivered by the Property Trustee to such Clearing Agency or
pursuant to such Clearing Agency's written instructions or held by the Property
Trustee as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Agreement with respect to any
Global Preferred Security held on their behalf by the Clearing Agency or by the
Property Trustee as the custodian of the Clearing Agency or under such Global
Preferred Security, and the Clearing Agency may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Global Preferred Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Clearing Agency or impair, as between the Clearing Agency and its
Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in
any Global Preferred Security.
Except as provided in Section 9.2, owners of beneficial
interests in a Global Preferred Security will not be entitled to receive
physical delivery of Preferred Securities in definitive form ("Definitive
Preferred Securities").
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SECTION 7.4 Registrar and Paying Agent.
The Trust shall maintain in the Borough of Manhattan, The City of
New York, (i) an office or agency where Preferred Securities may be presented
for registration of transfer ("Registrar") and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer. The Trust may appoint the Registrar and the Paying Agent and may
appoint one or more co-registrars and one or more additional paying agents in
such other locations as it shall determine. The term "Registrar" includes any
additional registrar and the term "Paying Agent" includes any additional paying
agent. The Administrative Trustees may change any Registrar or Paying Agent
without prior notice to any Holder. The Administrative Trustees shall notify
the Property Trustee of the name and address of any Agent not a party to this
Agreement. If the Trust fails to appoint or maintain another entity as
Registrar or Paying Agent, the Property Trustee shall act as such, and as
Paying Agent the Property Trustee shall have the rights set forth in Section
3.8(i). The Trust or any of its Affiliates may act as Registrar or Paying
Agent. The Trust shall act as Registrar and Paying Agent for the Common
Securities.
Any Paying Agent shall be permitted to resign as Paying Agent
upon 30 days' prior written notice to the Property Trustee, the Administrative
Trustees and the Sponsor. In the event that the Property Trustee shall no
longer be the Paying Agent, the Trust shall appoint a successor Paying Agent
(which shall be a bank or trust company acceptable to the Sponsor) to act as
Paying Agent.
The Trust initially appoints the Property Trustee as Registrar
and Paying Agent for the Preferred Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of liquidation amounts or Distributions on the Securities and
will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment
over to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
If a Holder of a Security claims that a Security owned by it has
been lost, destroyed or wrongfully taken or if such Security is mutilated and
is surrendered to the Trust or, in the case of the Preferred Securities, to the
Property Trustee, an Administrative Trustee shall execute and the Property
Trustee shall authenticate and make available for delivery a
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replacement Security if the Property Trustee's and the Trust's requirements, as
the case may be, are met. An indemnity bond must be provided by the Holder
which, in the judgment of the Property Trustee, is sufficient to protect the
Trustees, the Sponsor or any authenticating agent from any loss which any of
them may suffer if a Security is replaced. The Trust may charge such Holder for
its expenses in replacing a Security.
Every replacement Security is an additional beneficial interest in
the Trust.
SECTION 7.7 Outstanding Preferred Securities.
The Preferred Securities outstanding at any time are all the
Preferred Securities authenticated by the Property Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased
Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the
terms of this Agreement, they cease to be outstanding and Distributions thereon
shall cease to accumulate.
A Preferred Security does not cease to be outstanding because the
Trust, the Sponsor or an Affiliate of the Sponsor holds such Preferred
Security.
SECTION 7.8 Preferred Securities in Treasury.
In determining whether the Holders of the required amount of
Preferred Securities have concurred in any direction, waiver or consent,
Preferred Securities owned by the Trust, the Sponsor or an Affiliate of the
Sponsor, as the case may be, shall be disregarded and deemed not to be
outstanding, except that for the purposes of determining whether the Property
Trustee shall be fully protected in relying on any such direction, waiver or
consent, only Preferred Securities which a Responsible Officer of the Property
Trustee actually knows are so owned shall be so disregarded.
SECTION 7.9 Temporary Securities.
Until Definitive Securities are ready for delivery, the
Administrative Trustees may prepare and, in the case of the Preferred
Securities, the Property Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of Definitive
Securities but may have variations that the Trust considers appropriate for
temporary Securities. Without unreasonable delay, the Administrative Trustees
shall prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate Definitive Securities in exchange for temporary
Securities.
SECTION 7.10 Cancellation.
The Trust at any time may deliver Preferred Securities to the
Property Trustee for cancellation. The Registrar and Paying Agent shall forward
to the Property Trustee any
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Preferred Securities surrendered to them for registration of transfer,
redemption, exchange or payment. The Property Trustee shall promptly cancel all
Preferred Securities surrendered for registration of transfer, redemption,
exchange, payment, replacement or cancellation and shall dispose of cancelled
Preferred Securities as the Trust directs, provided that the Property Trustee
shall not be obligated to destroy Preferred Securities. The Trust may not issue
new Preferred Securities to replace Preferred Securities that it has paid or
redeemed or that have been delivered to the Property Trustee for cancellation
or that any Holder has exchanged.
SECTION 7.11 CUSIP Numbers.
The Trust, in issuing the Preferred Securities, may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of
Preferred Securities; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Preferred 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 Preferred Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Sponsor will promptly notify the
Property Trustee of any change in the CUSIP numbers.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall automatically dissolve upon the first to
occur of the following events:
(i) the bankruptcy of the Sponsor;
(ii) (A) the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor or (B) the
revocation of the Sponsor's charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iii) the distribution of a Like Amount of the Debentures
to the Holders of the Securities, provided that the Property Trustee
has received written notice from the Sponsor directing the Property
Trustee to dissolve the Trust (which direction is optional and,
except as otherwise expressly provided herein, within the discretion
of the Sponsor), and provided, further, that such dissolution is
conditioned on the receipt by the Administrative Trustees' receipt
of an opinion of an independent tax counsel experienced in such
matters (a "No Recognition Opinion") to the effect that the Holders
of the Securities will not recognize any gain or loss for United
States Federal income tax purposes as a result of the dissolution of
the Trust and the distribution of the Debentures;
(iv) the entry of a decree of judicial dissolution of the
Trust by a court of competent jurisdiction;
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(v) the redemption of all of the Securities and the payment to
the Holders of any and all amounts necessary therefor, all in accordance
with the terms of the Securities; or
(vi) the expiration of the term of the Trust provided in
Section 3.14.
(b) As soon as is practicable upon completion of winding up of
the Trust following the occurrence of an event referred to in Section 8.1(a),
the Administrative Trustees shall terminate the Trust by filing a certificate
of cancellation with the Secretary of State of the State of Delaware in
accordance with the Business Trust Act.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Agreement and in the
terms of the Securities. To the fullest extent permitted by law, any transfer
or purported transfer of any Security not made in accordance with this
Agreement shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) To the fullest extent permitted by law, the Sponsor may not
transfer the Common Securities except for any transfer (whether voluntarily or
by operation of law) permitted under Article 5 of the Indenture.
(d) The Administrative Trustees shall provide for the
registration of Securities and of the transfer of Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other
governmental charges that may be imposed in relation to it. Upon surrender for
registration of transfer of any Securities, the Administrative Trustees shall
cause one or more new Securities to be issued in the name of the designated
transferee or transferees. Every Security surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Administrative Trustees duly executed by the Holder
or such Holder's attorney duly authorized in writing. Each Security surrendered
for registration of transfer shall be canceled by the Administrative Trustees.
A transferee of a Security shall be entitled to the rights and subject to the
obligations of a Holder hereunder upon the receipt by such transferee of a
Security. By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Agreement.
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SECTION 9.2 Transfer Procedures and Restrictions
(a) Transfer and Exchange of Definitive Preferred Securities.
When Definitive Preferred Securities are presented to the Registrar:
(x) to register the transfer of such Definitive Preferred
Securities; or
(y) to exchange such Definitive Preferred Securities which
became mutilated, destroyed, defaced, stolen or lost, for an equal
liquidation amount of Definitive Preferred Securities,
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 Definitive Preferred Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form reasonably satisfactory to the Property Trustee and the Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
(b) Transfer of a Definitive Preferred Security for a Beneficial
Interest in a Global Preferred Security. Upon receipt by the Property Trustee
of a Definitive Preferred Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Property Trustee, together
with written instructions directing the Property Trustee to make, or to direct
the Clearing Agency to make, an adjustment on its books and records with
respect to the Global Preferred Security to reflect an increase in the
Liquidation Amount of the Preferred Securities represented by such Global
Preferred Security, then the Property Trustee shall cancel such Definitive
Preferred Security and cause, or direct the Clearing Agency to cause, the
aggregate Liquidation Amount of Preferred Securities represented by the
appropriate Global Preferred Security to be increased accordingly. If no Global
Preferred Securities are then outstanding, an Administrative Trustee shall
execute on behalf of the Trust and the Property Trustee shall authenticate,
upon written order of any Administrative Trustee, a Global Preferred Security
representing an appropriate Liquidation Amount of Preferred Securities.
(c) Transfer and Exchange of Global Preferred Securities.
Subject to Section 9.2(d), the transfer and exchange of Global Preferred
Securities or beneficial interests therein shall be effected through the
Clearing Agency in accordance with this Agreement and the procedures of the
Clearing Agency therefor.
(d) Transfer of a Beneficial Interest in a Global Preferred
Security for a Definitive Preferred Security.
(i) A Global Preferred Security deposited with the Clearing
Agency or with the Property Trustee as custodian for the Clearing
Agency pursuant to Section 7.3 shall be transferred to the beneficial
owners thereof in the form of Definitive Preferred Securities only if
such transfer complies with Section 9.2(c) and (1) the Clearing Agency
notifies the Trust that it is unwilling or unable to continue as
Clearing Agency for such Global Preferred Security or if at any time
such Clearing Agency ceases to be a "clearing agency" registered under
the Exchange Act and, in each case, a clearing agency is not appointed
by the Sponsor within 90 days of receipt of such notice or of becoming
aware
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of such condition, (2) a Default or an Event of Default has occurred
and is continuing or (3) the Trust at its sole discretion elects to
cause the issuance of Definitive Preferred Securities.
(ii) Any Global Preferred Security that is transferable to
the beneficial owners thereof in the form of Definitive Preferred
Securities pursuant to this Section 9.2(d) shall be surrendered by the
Clearing Agency to the Property Trustee located in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Property Trustee
shall authenticate and make available for delivery, upon such transfer
of each portion of such Global Preferred Security, an equal aggregate
Liquidation Amount of Securities of authorized denominations in the
form of Definitive Preferred Securities. Any portion of a Global
Preferred Security transferred pursuant to this Section shall be
registered in such names as the Clearing Agency shall direct.
In the event of the occurrence of any of the events specified in
clause (i) above, the Administrative Trustees will promptly make available to
the Property Trustee a reasonable supply of Definitive Preferred Securities in
fully registered form without Distribution coupons.
(e) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Agreement (other than
the provisions set forth in subsection (d) of this Section 9.2), a Global
Preferred Security may not be transferred as a whole except by the Clearing
Agency to a nominee of the Clearing Agency or another nominee of the Clearing
Agency or by the Clearing Agency or any such nominee to a successor Clearing
Agency or a nominee of such successor Clearing Agency.
(f) Cancellation or Adjustment of Global Preferred Security. At
such time as all beneficial interests in a Global Preferred Security have
either been exchanged for Definitive Preferred Securities to the extent
permitted by this Agreement or redeemed, repurchased or canceled in accordance
with the terms of this Agreement, such Global Preferred Security shall be
returned to the Clearing Agency for cancellation or retained and canceled by
the Property Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Preferred Security is exchanged for Definitive Preferred
Securities, Preferred Securities represented by such Global Preferred Security
shall be reduced and an adjustment shall be made on the books and records of
the Property Trustee (if it is then the custodian for such Global Preferred
Security) with respect to such Global Preferred Security, by the Property
Trustee or the Securities Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of
Preferred Securities.
(i) To permit registrations of transfers and exchanges,
an Administrative Trustee shall execute and the Property Trustee
shall authenticate Definitive Preferred Securities and Global
Preferred Securities at the Registrar's request in accordance with
the terms of this Agreement.
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(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the
Trust or the Sponsor may require) in respect of any tax or other
governmental charge that may be imposed in relation to it.
(iii) The Registrar shall not be required to register the
transfer of or exchange of (a) Preferred Securities during a period
beginning at the opening of business 15 days before the day of mailing
of a notice of redemption or any notice of selection of Preferred
Securities for redemption and ending at the close of business on the
day of such mailing; or (b) any Preferred Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Preferred Security being redeemed in part.
(iv) All Preferred Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Agreement shall
evidence the same security and shall be entitled to the same benefits
under this Agreement as the Preferred Securities surrendered upon such
registration of transfer or exchange.
(h) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred Security, a
Participant in the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its nominee or of
any Participant thereof, with respect to any ownership interest in the
Preferred Securities or with respect to the delivery to any
Participant, beneficial owner or other Person (other than the Clearing
Agency) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Preferred
Securities. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Preferred Securities
shall be given or made only to or upon the order of the Holders (which
shall be the Clearing Agency or its nominee in the case of a Global
Preferred Security). The rights of beneficial owners in any Global
Preferred Security shall be exercised only through the Clearing Agency
subject to the applicable rules and procedures of the Clearing Agency.
The Property Trustee may conclusively rely and shall be fully
protected in relying upon information furnished by the Clearing Agency
or any agent thereof with respect to its Participants and any
beneficial owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Agreement or
under applicable law with respect to any transfer of any interest in
any Preferred Security (including any transfers between or among
Clearing Agency Participants or beneficial owners in any Global
Preferred Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Agreement, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
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SECTION 9.3 Deemed Security Holders.
The Trust, the Trustees, the Registrar and the Paying Agent may
treat the Person in whose name any Security shall be registered on the books
and records of the Trust as the sole owner and Holder of such Security for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Security on the part of any Person other than such Holder,
regardless of any notice to the contrary.
SECTION 9.4 Book Entry Interests.
Global Preferred Securities shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Preferred Securities, except as
provided in Section 9.2. Unless and until Definitive Preferred Securities have
been issued to the Preferred Security Beneficial Owners pursuant to Section
9.2:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal
with the Clearing Agency for all purposes of this Agreement
(including the payment of Distributions on the Global Preferred
Securities and receiving approvals, votes or consents hereunder) as
the Holder of the Preferred Securities and the sole holder of the
Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Agreement, the provisions of
this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or
the Participants, including receiving and transmitting payments of
Distributions on the Global Certificates to such Participants. DTC
will make book entry transfers among the Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required to be given by a Trustee under this Agreement, such Trustee
shall give all such notices and communications specified herein to be given to
the Holders of Global Preferred Securities to the Clearing Agency and shall
have no notice obligations to the Preferred Security Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to the Preferred Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Agreement, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not
be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Agreement or by law,
except that this provision shall not be deemed to modify Section 3.9(b).
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
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SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Agreement shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Agreement. The provisions of
this Agreement, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Person and any Indemnified Person; or
(ii) whenever this Agreement or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Agreement or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person is
permitted or required to make a decision:
(i) in its "sole discretion" or "discretion" or under a grant
of similar authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Agreement or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the
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Trust) by reason of the fact that he is or was a Company Indemnified
Person against expenses (including reasonable attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
Company Indemnified Person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including reasonable
attorneys' fees and expenses) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or
matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such Company Indemnified Person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery
or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person
shall be successful on the merits or otherwise (including dismissal of
an action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in
the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) and (ii). Such determination shall
be made (1) by the Administrative Trustees by a majority vote of a
Quorum consisting of such Administrative Trustees who were not parties
to such action, suit or proceeding, (2) if such a Quorum is not
obtainable, or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.
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(v) Expenses (including reasonable attorneys' fees and
expenses) incurred by a Company Indemnified Person in defending a
civil, criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (i) and (ii) of this Section
10.4(a) shall be paid by the Sponsor in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Sponsor as authorized in this
Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Sponsor if a determination is reasonably and promptly made
(1) by the Administrative Trustees by a majority vote of a Quorum of
disinterested Administrative Trustees, (2) if such a Quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (3) by the Common Security Holder of the Trust,
that, based upon the facts known to the Administrative Trustees,
counsel or the Common Security Holder at the time such determination
is made, such Company Indemnified Person acted in bad faith or in a
manner that such Person did not believe to be in or not opposed to the
best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Administrative
Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty
to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may
be entitled under any agreement, vote of stockholders or
disinterested directors of the Sponsor or Preferred Security Holders
of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a)
shall be deemed to be provided by a contract between the Sponsor and
each Company Indemnified Person who serves in such capacity at any
time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any Person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
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(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as
to a Person who has ceased to be a Company Indemnified Person and
shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) To the fullest extent permitted by law, the Sponsor agrees to
indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any
Affiliate of the Property Trustee and the Delaware Trustee, and (iv) any
officers, directors, shareholders, members, partners, employees,
representatives, custodians, nominees or agents of the Property Trustee and the
Delaware Trustee (each of the Persons in (i) through (iv) being referred to as
a "Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any and all loss, liability, damage, claim or expense
including taxes (other than taxes based on the income of such Fiduciary
Indemnified Person) incurred without gross negligence (or, in the case of the
Property Trustee, negligence), willful misconduct or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. With respect to the
Property Trustee, this provision shall not be deemed to modify Section 3.9(b)
or the Trust Indenture Act. The obligation to indemnify as set forth in this
Section 10.4(b) shall survive the resignation or removal of the Property
Trustee or the Delaware Trustee and the satisfaction and discharge of this
Agreement.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 5.3(c)) may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Securities shall have no rights by virtue of this
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. No Covered
Person, the Sponsor, the Delaware Trustee, or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the
Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the
Delaware Trustee and the Property Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Covered Person,
the Delaware Trustee and the Property Trustee may engage or be interested in
any financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States Federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly prepared
and delivered to each of the Holders of Securities, any annual United States
Federal income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees
shall endeavor to deliver all such information statements within 30 days after
the end of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared
and filed with the appropriate taxing authority, an annual United States
Federal income tax return, on a Form 1041 or such other form required by United
States Federal income tax law, and any other annual income tax returns required
to be filed by the Administrative Trustees on behalf of the Trust with any
state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
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SECTION 11.4 Withholding.
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States Federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably
be requested by the Administrative Trustees to assist them in determining the
extent of, and in fulfilling, the Trust's withholding obligations. The
Administrative Trustees shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay
over any amounts to any authority with respect to Distributions or allocations
to any Holder, the amount withheld shall be deemed to be a Distribution in the
amount of the withholding to the Holder. In the event of any claim of excess
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from
actual Distributions made, the Trust may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Agreement or by any
applicable terms of the Securities, this Agreement may only be amended by a
written instrument approved and executed by:
(i) the Sponsor and the Administrative Trustees (or, if there are
more than two Administrative Trustees, a majority of the Administrative
Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee;
and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this Agreement (including
the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first received:
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(A) an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by,
and conforms to, the terms of this Agreement (including the
terms of the Securities); and
(B) an Opinion of Counsel that such amendment
is permitted by, and conforms to, the terms of this
Agreement (including the terms of the Securities) and
that all conditions precedent to the execution and
delivery of such amendment have been satisfied; and
(iii) to the extent the result of such amendment would:
(A) cause the Trust to fail to be classified for
purposes of United States Federal income taxation as a
grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act.
(c) At such time after the Trust has issued any Securities
that remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of the Securities may be effected only
with such additional requirements as may be set forth in the terms of such
Securities; provided, however, that, without the consent of each Holder of the
Securities, this Agreement may not be amended to (i) change the Distribution
rate (or manner of calculation of the Distribution rate), amount, timing or
currency or otherwise adversely affect the method of any required payment, (ii)
change the purposes of the Trust, (iii) authorize the issuance of any
additional beneficial interests in the Trust, (iv) change the redemption
provisions, (v) change the conditions precedent for the Sponsor to elect to
dissolve the Trust and distribute the Debentures to the Holders of the
Securities, (vi) change the Liquidation Distribution or other provisions
relating to the distribution of amounts payable upon the dissolution and
liquidation of the Trust, (vii) affect the limited liability of any Holder of
the Securities or (viii) restrict the right of a Holder of the Securities to
institute suit for the enforcement of any required payment on or after the due
date therefor (or in the case of redemption, on the Redemption Date).
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of
the Holders of a Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under
Article V to increase or decrease the number of, and to appoint and remove,
Trustees shall not be amended without the consent of the Holders of a Majority
in Liquidation Amount of the Common Securities.
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(g) Notwithstanding Section 12.1(c), this Agreement may be
amended by the Sponsor and the Trustees without the consent of the Holders of
the Securities to:
(i) cure any ambiguity, correct or supplement any provision
in this Agreement that may be inconsistent with any other provision of
this Agreement or make any other provisions with respect to matters or
questions arising under this Agreement not inconsistent with any other
provisions of this Agreement;
(ii) modify, eliminate or add to any provisions of this
Agreement to such extent as shall be necessary to ensure that the
Trust will be classified for United States Federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or
to ensure that the Trust will not be required to register as an
Investment Company under the Investment Company Act;
provided, however, that, in each case, such action shall not adversely affect
in any material respect the interests of the Holders of the Securities, and any
such amendments of this Agreement shall become effective when notice thereof is
given to the Holders of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Agreement, the
terms of the Securities or the rules of any stock exchange or quotation system
or market on which the Preferred Securities are listed or admitted for trading.
The Administrative Trustees shall call a meeting of the Holders of such class
if directed to do so by the Holders of at least 10% in Liquidation Amount of
the Securities of such class. Such direction shall be given by delivering to
the Administrative Trustees one or more notices in a writing stating that the
signing Holders of Securities wish to call a meeting and indicating the general
or specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the security certificates
held by the Holders of Securities exercising the right to call a meeting and
only those Securities specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.
(b) Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Agreement or the rules of any
stock exchange or quotation system or market on which the Preferred Securities
are listed or admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by the Holders
of Securities owning not less than the minimum amount of Securities in
Liquidation Amount that would be necessary to authorize or take such action at
a meeting at which all Holders of Securities having a right to vote thereon
were present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders of Securities entitled to vote who have
not consented in writing.
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(c) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least seven days and not
more than 60 days before the date of such meeting. The Administrative
Trustees may specify that any written ballot submitted to the Security
Holders for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Administrative
Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after
the expiration of eleven months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Securities executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the
Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Agreement, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange or quotation system or market on which the
Preferred Securities are then listed or trading, otherwise provides,
the Administrative Trustees, in their sole discretion, shall establish
all other provisions relating to meetings of Holders of Securities,
including notice of the time, place or purpose of any meeting at which
any matter is to be voted on by any Holders of Securities, waiver of
any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person
or by proxy or any other matter with respect to the exercise of any
such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Agreement, and
each Successor Property Trustee represents and warrants, as applicable, to the
Trust and the Sponsor at the time of the Successor Property Trustee's
acceptance of its appointment as Property Trustee that:
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(a) the Property Trustee is a banking corporation, a national
banking association or a bank or trust company, duly organized, validly
existing and in good standing under the laws of the United States or a State of
the United States, as the case may be, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, this Agreement;
(b) the execution, delivery and performance by the Property
Trustee of the Agreement have been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Agreement has been duly
executed and delivered by the Property Trustee under New York law and
constitutes a legal, valid and binding obligation of the Property Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of this Agreement by
the Property Trustee do not conflict with or constitute a breach of the charter
or by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration
with or notice to, any federal or New York State banking authority is required
for the execution, delivery or performance by the Property Trustee of this
Agreement.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Agreement, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) the Delaware Trustee is a banking corporation, a national
banking association or a bank or trust company, duly organized, validly
existing and in good standing under the laws of the United States or the State
of Delaware, as the case may be, with corporate power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
this Agreement;
(b) the execution, delivery and performance by the Delaware
Trustee of this Agreement have been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. This Agreement has been duly
executed and delivered by the Delaware Trustee under Delaware law and
constitutes a legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
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(c) the execution, delivery and performance of this Agreement by
the Delaware Trustee do not conflict with or constitute a breach of the charter
or by-laws of the Delaware Trustee;
(d) no consent, approval or authorization of, or registration
with or notice to, any Federal or Delaware banking authority governing the
trust powers of the Delaware Trustee is required for the execution, delivery or
performance by the Delaware Trustee of this Agreement; and
(e) the Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware, and is a Person that
satisfies for the Trust Section 3807(a) of the Business Trust Act.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Agreement shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative Trustees
at the Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
Cox Trust I
c/o Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Attention: Dallas S. Clement
Telephone: (404) 843-5677
Telecopier: (404) 847-6336
With a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, NW
Suite 800
Washington, D.C. 20036
Facsimile No.: (202) 776-2222
Attention: Stuart A. Sheldon
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
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The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Telephone: (212) 815-5092
Telecopier: (212) 815-5915
(c) if given to the Property Trustee, at the Property Trustee's
mailing address set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-5092
Telecopier: (212) 815-5915
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Attention: Dallas S. Clement
Telephone: (404) 843-5677
Telecopier: (404) 847-6336
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws, except that the rights, limitations of rights,
obligations, duties and immunities of the Property Trustee shall be governed by
and construed in accordance with the laws of the State of New York.
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SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States Federal income tax purposes as a grantor trust.
The provisions of this Agreement shall be interpreted to further this intention
of the parties.
SECTION 14.4 Headings.
The Table of Contents, Cross-Reference Table and Headings contained
in this Agreement are inserted for convenience of reference only and do not
affect the interpretation of this Agreement or any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Agreement any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Agreement by the Sponsor and
the Trustees shall bind and inure to the benefit of their respective successors
and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Agreement, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Agreement may contain more than one counterpart of the
signature page and this Agreement may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned have caused this Amended
and Restated Declaration of Trust to be executed as of the day and year first
above written.
James O. Robins, not in his individual capacity but
solely as Administrative Trustee of the Trust
----------------------------------------------
Jimmy W. Hayes, not in his individual capacity but
solely as Administrative Trustee of the Trust
----------------------------------------------
Dallas S. Clement, not in his individual capacity but
solely as Administrative Trustee of the Trust
----------------------------------------------
THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity but solely as Delaware
Trustee of the Trust
By:
-------------------------------------------
Name:
Title:
THE BANK OF NEW YORK, not in its individual
capacity but solely as Property Trustee of the Trust
By:
-------------------------------------------
Name:
Title:
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COX COMMUNICATIONS, INC.,
as Sponsor of the Trust
By:
-------------------------------------------
Name:
Title:
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ANNEX I
TERMS OF
______% PREFERRED SECURITIES
________% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Trust
Agreement of the Trust, dated as of __________ ___, 1999 (as amended from time
to time, the "Agreement"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities (collectively, the "Securities") are set forth below (each
capitalized term used but not defined herein has the meaning set forth in the
Agreement or, if not defined in such Agreement, as defined in the Indenture):
1. Designation and Number.
(a) Preferred Securities. Up to ___________ Preferred
Securities of the Trust, with an aggregate liquidation amount with respect to
the assets of the Trust of ________________________ dollars
($_____________________), and with a Liquidation Amount with respect to the
assets of the Trust of $ per security, are hereby designated for the
purposes of identification only as "_____% Preferred Securities" (the "Preferred
Securities"). The certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Agreement, with such changes and
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice or to conform to the rules of any stock exchange or quotation
system on which the Preferred Securities are listed or quoted.
(b) Common Securities. Up to ____________ Common
Securities of the Trust with an aggregate Liquidation Amount with respect to the
assets of the Trust of ________________________________dollars
($________________), and with a Liquidation Amount with respect to the assets of
the Trust of $ per security, are hereby designated for the purposes of
identification only as "_____% Common Securities" (the "Common Securities"). The
certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Agreement, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions on each Security will be payable at a
rate per annum of ____% (the "Distribution Rate") of the liquidation amount of
$ per Security (the "Liquidation Amount"), such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarterly period will bear additional
distributions thereon compounded quarterly at the applicable periodic
Distribution Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes any such additional distributions
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds legally available therefor.
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(b) Distributions on the Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or, if no Distributions have been paid, from and including ___________ ___,
1999, to but excluding the related Distribution Date or Redemption Date (each
defined below) and will be payable quarterly in arrears on __________,
____________, _____________ and ____________of each year, commencing _________,
1999 (each, a "Distribution Date"), except as otherwise described below. The
amount of Distributions payable for any Distribution Period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. The
distributions payable for any partial period will be computed on the basis of
the actual number of days elapsed in such period. "Distribution Period" means
the period from and including the immediately preceding Distribution Date (or
___________ ___, 1999 in the case of the first Distribution Period) to but
excluding the applicable Distribution Date or Redemption Date. If a
Distribution Date is not a Business Day, then such Distribution will be made on
the next succeeding Business Day. However, if the next succeeding Business Day
is in the next succeeding calendar year, such distribution will be made on the
immediately preceding Business Day.
As long as no Event of Default has occurred and is continuing
under the Indenture, the Debenture Issuer has the right under the Indenture to
defer payments of interest on the Debentures by extending the interest payment
period at any time and from time to time for a period not exceeding 20
consecutive quarterly periods (each quarterly period as to which quarterly
interest payments have been deferred is referred to herein as an "Extension
Period"), provided that an Extension Period must end on an Interest Payment
Date for the Debentures and may not extend beyond the Stated Maturity Date or
date of earlier redemption for the Debentures. As a consequence of such
deferral, Distributions on the Securities will also be deferred during an
Extension Period. Despite such deferral, quarterly Distributions will continue
to accumulate with additional interest thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is
then accruing on the Debentures) at the Distribution Rate then in effect,
compounded quarterly during any Extension Period. Prior to the termination of
an Extension Period, the Debenture Issuer may further defer payments of
interest by further extending such Extension Period; provided that an Extension
Period, together with all such previous and further extensions, may not exceed
20 consecutive quarterly periods, must end on an Interest Payment Date for the
Debentures and may not extend beyond the Stated Maturity Date or date of
earlier redemption for the Debentures. At the end of an Extension Period, all
accumulated and unpaid Distributions (but only to the extent payments are made
in respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds legally available therefor) will be payable to the
Holders as they appear on the books and records of the Trust on the record date
immediately preceding the end of the Extension Period. Upon the termination of
any Extension Period (or any extension thereof) and the payment of all amounts
then due, the Debenture Issuer may commence a new Extension Period, subject to
the foregoing requirements.
(c) Distributions on a Distribution Date will be payable
to the Holders thereof as they appear on the books and records of the Trust on
the day immediately preceding such Distribution Date. If the Preferred
Securities are ever issued in the form of Definitive Preferred Securities, the
record date for the payment of Distributions shall be the 15th day of the
calendar month in which the Distribution Date occurs, even if that day is not a
Business Day. The
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relevant record dates for the Common Securities shall be the same as the record
dates for the Preferred Securities. Distributions payable on any Securities
that are not punctually paid or duly provided for on any Distribution Date, as
a result of the Debenture Issuer having failed to make a payment under the
Debentures, will cease to be payable to the Holder on the relevant record date,
and such defaulted Distributions will instead be payable to the Person in whose
name such Securities are registered on the Special Record Date or other
specified date determined in accordance with the Indenture.
(d) In the event that there is any money or other property held
by or for the Trust that is not accounted for hereunder, such property shall be
distributed on a Pro Rata (as defined herein) basis among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any dissolution of the Trust, the Trust shall be
liquidated by the Administrative Trustees as expeditiously as the Administrative
Trustees determine to be possible by distributing, after satisfaction (or
reasonable provision for satisfaction) of liabilities to creditors of the Trust
as provided by applicable law, to the Holders of the Securities a Like Amount
(as defined below) of the Debentures, unless such distribution is determined by
the Property Trustee not to be practicable, in which event such Holders will be
entitled to receive out of the assets of the Trust legally available for
distribution to Holders, after satisfaction (or reasonable provision for
satisfaction) of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the Liquidation Amount of $ per
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount is referred to herein as the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal
amount of Debentures to be paid in accordance with their terms and (ii) with
respect to a distribution of Debentures upon the dissolution of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Securities of the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in
part, at stated maturity or date of earlier redemption (either at the option of
the Debenture Issuer or pursuant to a Special Event, as described below), the
proceeds from such repayment shall be simultaneously applied by the Property
Trustee to redeem a Like Amount of the Securities at a redemption price equal
to (i) in the case of the repayment of the Debentures at stated maturity, the
Maturity Redemption Price (as defined below), (ii) in the case of the optional
redemption of the Debentures upon the occurrence, prior to ______________, and
continuation of a Special Event, the Special Event Redemption Price (as defined
below) and (iii) in the case of the optional
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redemption of the Debentures other than as a result of the occurrence and
continuance of a Special Event, the Optional Redemption Price (as defined
below). The Maturity Redemption Price, the Special Event Redemption Price and
the Optional Redemption Price are referred to collectively as the "Redemption
Price" and the date fixed for redemption of the Securities is referred to
herein as the "Redemption Date". Holders will be given not less than 30 nor
more than 60 days' prior written notice of such redemption. Any redemption of
Securities shall be made, and the applicable Redemption Price shall be payable,
on the Redemption Date, and only to the extent that the Trust has funds legally
available for the payment thereof.
(b) (i) The "Maturity Redemption Price" shall mean a
price equal to 100% of the Liquidation Amount of the Securities to be redeemed
plus accumulated and unpaid Distributions thereon, if any, to the date of
redemption.
(ii) In the case of an optional redemption other than as a result
of the occurrence and continuance of a Special Event, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Preferred Securities will be redeemed on a Pro Rata basis and the Preferred
Securities to be redeemed will be determined as described in Section 4(f)(ii)
below. Upon the entry of an order for the dissolution of the Trust by a court
of competent jurisdiction, the Debentures thereafter will be subject to
optional repayment, in whole, but not in part, on or after __________________.
The Debenture Issuer shall have the right (subject to the conditions
in the Indenture) to redeem the Debentures in whole or in part at any time on
or after ____________________, and, simultaneous with such redemption, to cause
a Like Amount of the Securities to be redeemed by the Trust at the Optional
Redemption Price on a Pro Rata basis. "Optional Redemption Price" shall mean a
price equal to 100% of the Liquidation Amount of Securities to be redeemed plus
accumulated and unpaid Distributions thereon, if any, to the date of
redemption.
(c) If at any time a Special Event occurs prior to
_______________ and is continuing, the Debenture Issuer shall have the right
(subject to the conditions set forth in the Indenture) to redeem the Debentures
in whole, but not in part, within the 90 days following the occurrence of such
Special Event (the "90 Day Period"), and, simultaneous with such redemption, to
cause a Like Amount of the Securities to be redeemed by the Trust at the
Special Event Redemption Price on a Pro Rata basis.
"Investment Company Act Event" means that the Trust has
received an opinion of counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" under the Investment Company Act that is required to be registered
under this law, which change becomes effective on or after _____________ ___,
1999.
"Tax Event" shall occur upon receipt by the Administrative Trustees
and the Debenture Issuer of an Opinion of Counsel from counsel experienced in
such matters to the effect that, as a result of 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
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authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of the Agreement, there is more than
an insubstantial risk that (i) the Trust is, or will be within 90 days of the
date of such opinion, subject to United States federal income tax with respect
to income received or accrued on the Debentures, (ii) the interest payable by
the Debenture Issuer on the Debentures is not, or within 90 days of the date of
such opinion will not be, deductible by the Debenture Issuer, in whole or in
part, for United States federal income tax purposes, or (iii) the Trust is, or
will be within 90 days of the date of such opinion, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Special Event" means a Tax Event or an Investment Company Event.
"Special Event Redemption Price" shall mean a price equal to 100% of
the Liquidation Amount of Securities to be redeemed plus accumulated and unpaid
Distributions thereon, if any, to the date of such redemption.
(d) On and from the date fixed by the Administrative
Trustees for any distribution of Debentures and liquidation of the Trust: (i)
the Securities will no longer be deemed to be outstanding, (ii) the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee), as the
Holder of the Preferred Securities, will receive a registered global
certificate or certificates representing the Debentures to be delivered upon
such distribution and (iii) any certificates representing Securities not held
by the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) will be deemed to represent beneficial interests in Debentures until
such certificates are presented to the Debenture Issuer or its agent for
transfer or reissue.
(e) The Trust may not redeem fewer than all the
outstanding Securities unless all accumulated and unpaid Distributions have
been paid on all Securities for all Distribution periods terminating on or
before the Redemption Date.
(f) The procedure with respect to redemptions or
distributions of Debentures shall be as follows:
(i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by an Administrative
Trustee on behalf of the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days
before the date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for redemption of the
Debentures. For purposes of the calculation of the date of redemption
or exchange and the dates on which notices are given pursuant to this
Section 4(f)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to
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any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed on a Pro Rata basis from each Holder of Preferred Securities,
it being understood that, in respect of Preferred Securities
registered in the name of and held of record by the Clearing Agency or
its nominee (or any successor Clearing Agency or its nominee) or any
nominee, the distribution of the proceeds of such redemption will be
made to the Clearing Agency and disbursed by such Clearing Agency in
accordance with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust
gives a Redemption/Distribution Notice (which notice will be
irrevocable), then (A) with respect to Global Preferred Securities
representing Preferred Securities issued in book-entry form, by 12:00
noon, New York City time, on the Redemption Date, provided that the
Debenture Issuer has paid the Property Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures by 10:00 a.m., New York City time, on the stated maturity
date or the date of earlier redemption, as the case requires, the
Property Trustee will deposit irrevocably with the Clearing Agency or
its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to such
Preferred Securities and will give the Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the relevant
Participants, and (B) with respect to Definitive Preferred Securities
and Common Securities, provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Property Trustee
will pay the relevant Redemption Price to the Holders of such
Securities by check mailed to the address of such Holder appearing on
the books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, then immediately prior to the close of business
on the date of such deposit, or on the Redemption Date, as applicable,
Distributions will cease to accumulate on the Securities so called for
redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on
such Redemption Price, and such Securities shall cease to be
outstanding.
(iv) Payment of accumulated and unpaid Distributions on
the Redemption Date will be subject to the rights of Holders of
Securities on the close of business on a record date in respect of a
Distribution Date occurring on or prior to such Redemption Date.
(v) Neither the Administrative Trustees nor the Trust
shall be required to register or cause to be registered the transfer
of (i) any Securities beginning on the opening of business 15 days
before the day of mailing of a notice of redemption or any notice of
selection of Securities for redemption or (ii) any Securities selected
for redemption except the unredeemed portion of any Security being
redeemed. If a Redemption Date is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding Business Day, and no interest or other
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<PAGE> 72
payment in respect of any such delay will accumulate for the period to
but excluding such Business Day. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not
paid either by the Property Trustee or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accumulate from the original redemption
date to the actual date of payment, in which case the actual payment
date will be considered the Redemption Date for purposes of
calculating the Redemption Price.
(vi) Redemption/Distribution Notices shall be sent by the
Property Trustee on behalf of the Trust to (A) in respect of the
Preferred Securities, the Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee) if the Global Preferred
Securities have been issued or, if Definitive Preferred Securities
have been issued, to the Holders thereof, and (B) in respect of the
Common Securities, to the Sponsor.
(vii) Subject to the foregoing and applicable law
(including, without limitation, United States Federal securities laws
and banking laws), the Sponsor or any of its subsidiaries may at any
time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law or the Agreement, the Holders of the Preferred
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding with respect to any remedy available to the Debenture
Trustee, or exercise any trust or power conferred upon the Debenture Trustee,
with respect to the Debentures, (ii) waive any past default that is waivable
under the Indenture, (iii) exercise any right to rescind or annul a declaration
of acceleration of the maturity of the principal of the Debentures, or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required, without, in each case,
obtaining (1) the prior approval of the Holders of a Majority in Liquidation
Amount of all outstanding Preferred Securities; provided, however, that where a
consent under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior approval of each Holder of the Preferred Securities
and (2) an Opinion of Counsel delivered to the Trust from tax counsel
experienced in such matters to the effect that the Trust will not be classified
as an association taxable as corporation for United States Federal income tax
purposes on account of such action.
Notwithstanding anything to the contrary contained herein, if an Event
of Default under the Agreement has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay principal of or
premium, if any, or interest on the Debentures on the date such principal,
premium, if any, or interest is otherwise payable (or, in the case of
redemption, on the Redemption Date), then a Holder of Preferred Securities may
directly institute a proceeding against the Debenture Issuer for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on a
Like Amount of Debentures (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such a Direct
I-7
<PAGE> 73
Action, (i) the rights of the Common Securities Holder will be subordinated to
the rights of Holders of Preferred Securities with respect to payments made or
required to be made by the Debenture Issuer in such Direct Action and (ii) the
Debenture Issuer shall remain obligated to pay the principal of, premium, if
any, or interest on such Debentures, and the Debenture Issuer shall be
subrogated to the rights of such Holder of Preferred Securities to the extent
of any payment made by the Debenture Issuer to such Holder in such Direct
Action.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities or pursuant to
written consent. The Property Trustees will cause a notice of any meeting at
which Holders of Preferred Securities are entitled to vote to be mailed to each
Holder of record of Preferred Securities. Each such notice will include a
statement setting forth (i) the date of such meeting, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities, or to
distribute the Debentures, in accordance with the Agreement and these terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b) and 7 as
otherwise required by law or the Agreement, the Holders of the Common
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding with respect to any remedy available to the Debenture
Trustee, or exercise any trust or power conferred upon the Debenture Trustee,
with respect to the Debentures, (ii) waive any past default that is waivable
under the Indenture, (iii) exercise any right to rescind or annul a declaration
of acceleration of the maturity of the principal of the Debentures or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required, without, in each case,
obtaining (1) the prior approval of the Holders of a Majority in Liquidation
Amount of all outstanding Common Securities; provided, however, that where a
consent under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior approval of the Common Securities Holder and (2) an
Opinion of Counsel delivered to the Trust from tax counsel experienced in such
matters to the effect that the Trust will not be classified as an association
taxable as a corporation for United States Federal income tax purposes on
account of such action.
Notwithstanding anything to the contrary contained herein, if an Event
of Default under the Agreement has occurred and is continuing and such event is
attributable to the failure of the
I-8
<PAGE> 74
Debenture Issuer to pay principal of or premium, if any, or interest on the
Debentures on the date such principal, premium, if any, or interest is
otherwise payable (or, in the case of redemption, on the Redemption Date), then
a Holder of Common Securities may institute a Direct Action against the
Debenture Issuer for enforcement of payment to such Holder of the principal of
or premium, if any, or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection with such a
Direct Action, (i) the rights of the Common Securities Holder will be
subordinated to the rights of Holders of Preferred Securities with respect to
payments made or required to be made by the Debenture Issuer in such Direct
Action and (ii) the Debenture Issuer shall remain obligated to pay the
principal of, premium, if any, or interest on such Debentures, and the
Debenture Issuer shall be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Debenture Issuer to such
Holder in such Direct Action.
Any approval or direction of Holder(s) of Common Securities may be
given at a separate meeting of Holder(s) of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which Holder(s) of Common Securities are entitled to vote to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holder(s) are
entitled to vote and (iii) instructions for the delivery of proxies.
No vote or consent of the Holder(s) of the Common Securities will be
required for the Trust to redeem and cancel Common Securities, or to distribute
the Debentures, in accordance with the Agreement and these terms of the
Securities.
7. Amendments to Agreement.
In addition to the requirements set out in Section 12.1 of the
Agreement, the Agreement may be amended from time to time by the Sponsor and
the Trustees with (i) the consent of Holders of a Majority in Liquidation
Amount of all outstanding Securities, and (ii) receipt by the Trustees of an
opinion of counsel experienced in such matters to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
United States Federal income tax purposes or the Trust's exemption from status
as an Investment Company under the Investment Company Act; provided, however,
that, without the consent of each Holder of the Securities, the Agreement may
not be amended to (i) change the Distribution Rate (or manner of calculation of
the Distribution Rate), amount, timing or currency or otherwise adversely
affect the method of any required payment, (ii) change the purposes of the
Trust, (iii) authorize the issuance of any additional beneficial interests in
the Trust, (iv) change the redemption provisions, (v) change the conditions
precedent for the Sponsor to elect to dissolve the Trust and distribute the
Debentures to the Holders of the Securities, (vi) change the Liquidation
Distribution or other provisions relating to the distribution of amounts
payable upon the dissolution and liquidation of the Trust, (vii) affect the
limited liability of any Holder of the Securities or (viii) restrict the right
of a Holder of the Securities to institute suit for the enforcement of any
required payment on or after the due date therefor (or, in the case of
redemption, on the Redemption Date).
I-9
<PAGE> 75
8. Pro Rata.
A reference herein to any payment, distribution or treatment as being
"Pro Rata" shall mean pro rata to each Holder of Securities according to the
aggregate Liquidation Amount of the Securities held by such Holder in relation
to the aggregate Liquidation Amount of all Securities outstanding unless, in
relation to a payment, an Event of Default under the Agreement has occurred and
is continuing, in which case any funds legally available to make such payment
shall be paid first to each Holder of the Preferred Securities pro rata
according to the aggregate Liquidation Amount of Preferred Securities held by
such Holder relative to the aggregate Liquidation Amount of all Preferred
Securities outstanding, and only after satisfaction of all amounts owed to the
Holders of the Preferred Securities, to each Holder of Common Securities pro
rata according to the aggregate Liquidation Amount of Common Securities held by
such Holder relative to the aggregate Liquidation Amount of all Common
Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu with the Common Securities
and payment thereon shall be made Pro Rata with the Common Securities, except
that, if an Event of Default under the Agreement occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and other payments to
which they are entitled at such time.
10. Acceptance of Securities Guarantees and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, the Common Securities Guarantee and the Indenture, including the
subordination provisions therein.
11. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar
rights to subscribe for any Option Preferred Securities of the Trust.
12. Miscellaneous.
These terms constitute a part of the Agreement.
The Sponsor will provide a copy of the Agreement, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
I-10
<PAGE> 76
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT:
THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF
THE AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") OR A NOMINEE OF THE DEPOSITORY.
THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE AGREEMENT AND NO TRANSFER OF THIS
PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
A1-1
<PAGE> 77
<TABLE>
<S> <C>
Certificate Number Number of Preferred
Securities
- ------------------ -------------------------------
CUSIP NO.
------------------
</TABLE>
Certificate Evidencing Preferred Securities
of
COX TRUST I
______% Trust Originated Preferred Securities(SM)
(liquidation amount $ per Preferred Security)
COX TRUST I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of __________ securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated as the _____% Trust Originated Preferred Securities (liquidation
amount $ per Preferred Security) (the "Preferred Securities"). The
Preferred Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended
and Restated Trust Agreement of the Trust dated as of ____________ ___, 1999,
as the same may be amended from time to time (the "Agreement"), including the
designation of the terms of the Preferred Securities as set forth in Annex I to
the Agreement. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Agreement. The Sponsor will provide a
copy of the Agreement, the Preferred Securities Guarantee and the Indenture to
a Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the Agreement
and is entitled to the benefits thereunder and to the benefits of the Preferred
Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States Federal
income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
A1-2
<PAGE> 78
IN WITNESS WHEREOF, the Trust has executed this certificate this.
Dated:
COX TRUST I
By:
------------------------------------
Name:
Title: Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Agreement.
Dated:
THE BANK OF NEW YORK,
as Property Trustee
By:
------------------------------------
Authorized Signatory
A1-3
<PAGE> 79
[FORM OF REVERSE OF PREFERRED SECURITY]
Distributions on this Preferred Security will be payable at a rate per
annum of _____% (the "Distribution Rate") of the Liquidation Amount of $
per Preferred Security (the "Liquidation Amount"), such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions not paid when due will themselves accumulate distributions at the
annual rate of _____% (to the extent permitted by law). The term
"Distributions", as used herein, includes any such additional distributions
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds on hand legally available therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from and including the most recent date on which Distributions have
been paid or, if no Distributions have been paid, from and including the date
of issuance, to but excluding the related Distribution Date (as defined herein)
or any date fixed for redemption (a "Redemption Date"), and will be payable
quarterly in arrears on ___________, ____________, ________________ and
______________ of each year (each, a "Distribution Date"), commencing June 30,
1999, except as otherwise described below and in the Agreement. The amount of
Distributions payable for any quarterly period shall be computed on the basis
of a 360-day year consisting of twelve 30-day months. The Distributions payable
for any partial period will be computed on the basis of the actual number of
days elapsed in such period. "Distribution Period" means the period from and
including the immediately preceding Distribution Date (or __________ ___, 1999,
in the case of the first Distribution Period) to but excluding the applicable
Distribution Date or Redemption Date. If a Distribution Date is not a Business
Day, then such Distribution will be made on the next succeeding Business Day,
except if such Business Day is in the next calendar year, such Distribution
will be made on the immediately preceding Business Day.
As long as no Event of Default has occurred and is continuing under
the Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding 20 consecutive
periods (each, an "Extension Period"), provided that an Extension Period must
end on an interest payment date for the Debentures and may not extend beyond
the stated maturity date or redemption date for the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate with additional
distributions thereon (to the extent permitted by law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Distribution Rate then in effect compounded quarterly during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further extensions, may not exceed 20 consecutive quarterly
periods, must end on an interest payment date for the Debentures and may not
extend beyond the stated maturity date or redemption date of the Debentures. At
the end of the Extension Period, all accumulated and unpaid Distributions (but
only to the extent payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds
A1-4
<PAGE> 80
available therefor) will be payable to the Holders as they appear on the books
and records of the Trust on the record date immediately preceding the end of
the Extension Period. Upon the termination of any Extension Period (or any
extension period thereof) and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the foregoing
requirements.
Subject to other conditions set forth in the Agreement and the
Indenture, the Property Trustee may, at the direction of the Sponsor, dissolve
the Trust at any time and cause the Debentures to be distributed to the Holders
of the Preferred Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Preferred
Securities to be redeemed by the Trust.
These Preferred Securities shall be redeemable as provided in the
Agreement.
A1-5
<PAGE> 81
ASSIGNMENT
---------------------
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
____________________________________________________________agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
-------------------------------
Signature: -------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee**:
-----------------------------------------
- ---------------------------------
** Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A1-6
<PAGE> 82
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS CERTIFICATE IS NOT TRANSFERABLE SUBJECT
TO THE TERMS OF THE AGREEMENT (AS DEFINED HEREIN)
<TABLE>
<S> <C>
Certificate Number Number of Common Securities
- ---------------------------- -----------------------------
</TABLE>
Certificate Evidencing Common Securities
of
COX TRUST I
_____% Common Securities
(liquidation amount $ per Common Security)
COX TRUST I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cox Communications, Inc.
(the "Holder") is the registered owner of __________ securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the _____% Common Securities (liquidation amount $ per Common
Security) (the "Common Securities"). The Common Securities are not transferable.
The designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated Trust
Agreement of the Trust dated as of ________________ ___, 1999, as the same may
be amended from time to time (the "Agreement"), including the designation of the
terms of the Common Securities as set forth in Annex I to the Agreement.
Capitalized terms used but not defined herein shall have the meaning given them
in the Agreement. The Sponsor will provide a copy of the Agreement, the Common
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Agreement
and is entitled to the benefits thereunder and to the benefits of the Common
Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States Federal
income tax purposes, the Debentures as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Debentures.
A2-1
<PAGE> 83
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______, ____.
COX TRUST I
By:
------------------------------------
Name:
Title: Administrative Trustee
A2-2
<PAGE> 84
[FORM OF REVERSE OF SECURITY]
Distributions on each Common Security will be payable at a rate per
annum of _____% (the "Distribution Rate") of the Liquidation Amount of $
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarterly period will bear additional distributions thereon compounded
quarterly at the applicable periodic Distribution Rate (to the extent permitted
by applicable law). The term "Distributions", as used herein, includes any such
additional distributions unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds legally
available therefor.
Distributions on the Common Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from ____________ ___, 1999, to but
excluding the related Distribution Date (as defined herein) or any date fixed
for redemption (a "Redemption Date"), and will be payable quarterly in arrears
on _____________, _______________, ________________ and _______________ of each
year, commencing June 30, 1999 (each, a "Distribution Date"), except as
otherwise described below and in the Agreement. The amount of Distributions
payable for any Distribution Period will be computed on the basis of a 360-day
year consisting of twelve 30-day months. The Distributions payable for any
partial period will be computed on the basis of the actual number of days
elapsed in such period. "Distribution Period" means the period from and
including the immediately preceding Distribution Date (or ___________ ___,
1999, in the case of the first Distribution Period) to but excluding the
applicable Distribution Date or Redemption Date. If a Distribution Date is not
a Business Day, then such Distribution Date and the first day of the
Distribution Period commencing on such Distribution Date will be the next
succeeding Business Day and no interest or other payment in respect of any such
delay shall accumulate for the period to but excluding such Business Day.
However, if the next succeeding Business Day is in the next calendar year,
payment of Distributions will be made on the immediately preceding Business
Day.
As long as no Event of Default has occurred and is continuing under
the Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding 20 consecutive
quarterly periods (each, an "Extension Period"), provided that an Extension
Period must end on an interest payment date for the Debentures and may not
extend beyond the stated maturity date or redemption date for the Debentures.
As a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accumulate with
additional interest thereon (to the extent permitted by applicable law but not
at a rate greater than the rate at which interest is then accruing on the
Debentures) at the Distribution Rate then in effect compounded quarterly during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that
A2-3
<PAGE> 85
such Extension Period, together with all such previous and further extensions,
may not exceed 20 consecutive quarterly periods, must end on an interest
payment date for the Debentures and may not extend beyond the Maturity Date or
Redemption Date of the Debentures. At the end of the Extension Period, all
accumulated and unpaid Distributions (but only to the extent payments are made
in respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds legally available therefor) will be payable to the
Holders as they appear on the books and records of the Trust on the record date
immediately preceding the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the foregoing
requirements.
The Common Securities shall be redeemable as provided in the
Agreement.
A2-4
<PAGE> 1
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger, P.A.]
July 27, 1999
Cox Trust I
Cox Trust II
c/o Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Re: Cox Trust I
Cox Trust II
Ladies and Gentlemen:
We have acted as special Delaware counsel for Cox Communications,
Inc., a Delaware corporation (the "Company"), Cox Trust I, a Delaware business
trust ("Cox I"), and Cox Trust II, a Delaware business trust ("Cox II"), in
connection with the matters set forth herein. At your request, this opinion is
being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of Cox I, dated as of July 7, 1999
(the "Cox I Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on July 7, 1999;
(b) The Declaration of Trust of Cox I, dated as of July 7, 1999,
among the Company, as sponsor, and The Bank of New York, a New York banking
corporation ("BONY"), and The Bank of New York (Delaware), a Delaware banking
corporation ("BONY (Delaware)"), as trustees of Cox I;
(c) The Certificate of Trust of Cox II, dated as of July 21, 1999
(the "Cox II Certificate"), as filed in the office of the Secretary of State on
July 21, 1999;
<PAGE> 2
Cox Trust I
Cox Trust II
July 27, 1999
Page 2
(d) The Declaration of Trust of Cox II, dated as of July 21,
1999, among the Company, as sponsor, and BONY and BONY (Delaware), as trustees
of Cox II;
(e) The Registration Statement (the "Initial Registration
Statement") on Form S-3 (Registration Nos. 333-82575 and 333-82575-01), as
filed by the Company, Cox I and others as set forth therein with the Securities
and Exchange Commission (the "SEC") on July 9, 1999, as amended by
Pre-Effective Amendment No. 1 to the Initial Registration Statement, as
proposed to be filed by the Company, Cox I, Cox II and others as set forth
therein with the SEC on or about July 27, 1999 ("Amendment No. 1"), including a
preliminary prospectus (the "Prospectus"), relating to the Trust Originated
Preferred Securities of Cox I representing undivided beneficial interests in
the assets of Cox I (each, a "Cox I Preferred Security" and collectively, the
"Cox I Preferred Securities") and the Trust Originated Preferred Securities of
Cox II representing undivided beneficial interests in the assets of Cox II
(each, a "Cox II Preferred Security" and collectively, the "Cox II Preferred
Securities") (the Initial Registration Statement, as amended by Amendment No.
1, is hereinafter referred to as the "Registration Statement");
(f) A form of Amended and Restated Trust Agreement of Cox I, to
be entered into among the Company, as sponsor, the trustees of Cox I named
therein, and the holders, from time to time, of undivided beneficial interests
in Cox I (including Annex I and Exhibits A-1 and A- 2 thereto) (the "Cox I
Agreement"), attached as an exhibit to the Registration Statement;
(g) A form of Amended and Restated Trust Agreement of Cox II, to
be entered into among the Company, as sponsor, the trustees of Cox II named
therein, and the holders, from time to time, of undivided beneficial interests
in Cox II (including Annex I and Exhibits A-1 and A-2 thereto) (the "Cox II
Agreement");
(h) A Certificate of Good Standing for Cox I, dated July 27,
1999, obtained from the Secretary of State; and
(i) A Certificate of Good Standing for Cox II, dated July 27,
1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Cox I Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
<PAGE> 3
Cox Trust I
Cox Trust II
July 27, 1999
Page 3
additional matters recited or assumed herein, all of which we have assumed to
be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Cox I
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of Cox I, and that the Cox I Agreement and the Cox I
Certificate are in full force and effect and have not been amended, and no
amendment of the Cox I Agreement or the Cox I Certificate is pending or has
been proposed, (ii) that the Cox II Agreement constitutes the entire agreement
among the parties thereto with respect to the subject matter thereof, including
with respect to the creation, operation and termination of Cox II, and that the
Cox II Agreement and the Cox II Certificate are in full force and effect and
have not been amended, and no amendment of the Cox II Agreement or the Cox II
Certificate is pending or has been proposed, (iii) except to the extent
provided in paragraphs 1 and 4 below, the due creation or due organization or
due formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iv) the legal capacity of
natural persons who are parties to the documents examined by us, (v) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (vi)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vii) the receipt by each Person to whom a Cox I
Preferred Security is to be issued by Cox I (collectively, the "Cox I Preferred
Security Holders") of a certificate evidencing the Cox I Preferred Security and
the payment for the Cox I Preferred Security acquired by it, in accordance with
the Cox I Agreement and the Registration Statement, (viii) that the Cox I
Preferred Securities are issued and sold to the Cox I Preferred Security
Holders in accordance with the Cox I Agreement and the Registration Statement,
(ix) the receipt by each Person to whom a Cox II Preferred Security is to be
issued by Cox II (collectively, the "Cox II Preferred Security Holders") of a
certificate evidencing the Cox II Preferred Security and the payment for the
Cox II Preferred Security acquired by it, in accordance with the Cox II
Agreement and the Registration Statement, and (x) that the Cox II Preferred
Securities are issued and sold to the Cox II Preferred Security Holders in
accordance with the Cox II Agreement and the Registration Statement. We have
not participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating
<PAGE> 4
Cox Trust I
Cox Trust II
July 27, 1999
Page 4
thereto. Our opinions are rendered only with respect to Delaware laws and
rules, regulations and orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. Cox I has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
ss. 3801, et seq (the "Act").
2. The Cox I Preferred Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of Cox I.
3. The Cox I Preferred Security Holders, as beneficial owners
of Cox I, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the Cox I
Preferred Security Holders may be obligated to make payments as set forth in
the Cox I Agreement.
4. Cox II has been duly created and is validly existing in good
standing as a business trust under the Act.
5. The Cox II Preferred Securities will represent valid and,
subject to the qualifications set forth in paragraph 6 below, fully paid and
nonassessable undivided beneficial interests in the assets of Cox II.
6. The Cox II Preferred Security Holders, as beneficial owners
of Cox II, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the Cox II
Preferred Security Holders may be obligated to make payments as set forth in
the Cox II Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under Section
7 of the Securities Act of 1933, as amended, or the rules and regulations of
the SEC thereunder. Except as stated above, without our prior written consent,
this opinion may not be furnished or quoted to, or relied upon by, any other
Person for any purpose.
<PAGE> 5
Cox Trust I
Cox Trust II
July 27, 1999
Page 5
Very truly yours,
/s/Richards, Layton & Finger, P.A.
<PAGE> 1
EXHIBIT 12.1
COX COMMUNICATIONS, INC.
STATEMENT SETTING FORTH COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Year ended December 31
1998 1997 1996 1995 1994
----------------------------------------------------------------------
(Dollars in Millions)
<S> <C> <C> <C> <C> <C>
Earnings available for Fixed Charges:
- -------------------------------------
Income (loss) before income taxes and minority interest $ 1,207.7 $ (136.5) $ (51.6) $ 103.8 $ 26.6
Income tax expense (benefit) 822.8 (53.5) 23.0 99.9 25.7
Equity in net losses of affiliated companies 547.2 404.4 170.4 79.7 43.9
Fixed Charges (see below), excluding capitalized interest 233.2 213.9 157.9 143.3 55.7
--------------------------------------------------------------------
Total $ 2,873.9 $ 428.3 $ 299.7 $ 426.7 $ 151.9
====================================================================
Fixed Charges:
- -------------------------------------
Interest expense $ 223.3 $ 202.1 $ 146.1 $ 132.3 $ 46.1
Capitalized interest 0.0 0.1 43.2 14.2 0.1
Interest component of rentals charged to income 9.9 8.5 5.1 4.3 2.9
Dividends on subsidiary preferred stock 0.0 0.0 0.0 0.0 0.0
---------------------------------------------------------------------
Total fixed charges including capitalized interest $ 233.2 $ 210.7 $ 194.4 $ 150.8 $ 49.1
=====================================================================
Ratio of earnings to fixed charges 12.3 x 2.0 x 1.5 x 2.8 x 3.1 x
<CAPTION>
Three Months Ended March 31
1999 1998
--------------------------------
(Dollars in Millions)
<S> <C> <C>
Earnings available for Fixed Charges:
- -------------------------------------
Income (loss) before income taxes and minority interest $ 251.2 $ (101.9)
Income tax expense (benefit) 144.0 (48.2)
Equity in net losses of affiliated companies 46.5 141.8
Fixed Charges (see below), excluding capitalized interest 56.8 55.4
-------------------------------
Total $ 498.5 $ 47.1
===============================
Fixed Charges:
- -------------------------------------
Interest expense $ 54.0 $ 53.1
Capitalized interest 0.0 0.0
Interest component of rentals charged to income 2.8 2.3
Dividends on subsidiary preferred stock 0.0 0.0
--------------------------------
Total fixed charges including capitalized interest $ 56.8 $ 55.4
================================
Ratio of earnings to fixed charges 8.8 x 0.9 x
</TABLE>
<PAGE> 1
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
</TABLE>
-------------
COX COMMUNICATIONS, INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware 58-2112251
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1400 Lake Hearn Drive
Atlanta, Georgia 30319
(Address of principal executive offices) (Zip code)
</TABLE>
-------------
Debt Securities
(Title of the indenture securities)
===============================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 16th day of July, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
------------------------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
<PAGE> 4
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
In Thousands
<S> <C>
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency
and coin ......................................... $ 4,508,742
Interest-bearing balances .......................... 4,425,071
Securities:
Held-to-maturity securities ........................ 836,304
Available-for-sale securities ...................... 4,047,851
Federal funds sold and Securities purchased
under agreements to resell ......................... 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income..................................39,349,679
LESS: Allowance for loan and
lease losses...............................603,025
LESS: Allocated transfer risk
reserve.....................................15,906
Loans and leases, net of unearned income,
allowance, and reserve ........................... 38,730,748
Trading Assets ........................................ 1,571,372
Premises and fixed assets (including
capitalized leases) ................................ 685,674
Other real estate owned ............................... 10,331
Investments in unconsolidated subsidiaries
and associated companies ............................ 182,449
Customers' liability to this bank on
acceptances outstanding ............................. 1,184,822
Intangible assets ..................................... 1,129,636
Other assets .......................................... 2,632,309
------------
Total assets .......................................... $ 61,688,578
============
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices ................................ $ 25,731,036
Noninterest-bearing.......................10,252,589
Interest-bearing..........................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ........................... 18,756,302
Noninterest-bearing..........................111,386
Interest-bearing..........................18,644,916
Federal funds purchased and Securities sold under
agreements to repurchase ........................... 3,276,362
Demand notes issued to the U.S.Treasury ............... 230,671
Trading liabilities ................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less ........ 1,154,502
With remaining maturity of more than one year
through three years .............................. 465
With remaining maturity of more than three years ... 31,080
Bank's liability on acceptances executed and
outstanding ........................................ 1,185,364
Subordinated notes and debentures ..................... 1,308,000
Other liabilities ..................................... 2,743,590
------------
Total liabilities ..................................... 55,971,865
============
EQUITY CAPITAL
Common stock .......................................... 1,135,284
Surplus ............................................... 764,443
Undivided profits and capital reserves ................ 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities ...................... 44,106
Cumulative foreign currency translation adjustments ... (34,817)
------------
Total equity capital .................................. 5,716,713
------------
Total liabilities and equity capital .................. $ 61,688,578
============
</TABLE>
<PAGE> 6
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni
Alan R. Griffith Directors
Gerald L. Hassell
<PAGE> 1
EXHIBIT 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
</TABLE>
-------------
COX COMMUNICATIONS, INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware 58-2112251
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1400 Lake Hearn Drive
Atlanta, Georgia 30319
(Address of principal executive offices) (Zip code)
</TABLE>
-------------
Junior Subordinated Debentures
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO
THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 16th day of July, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
---------------------------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
<PAGE> 4
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
In Thousands
<S> <C>
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency
and coin ......................................... $ 4,508,742
Interest-bearing balances .......................... 4,425,071
Securities:
Held-to-maturity securities ........................ 836,304
Available-for-sale securities ...................... 4,047,851
Federal funds sold and Securities purchased
under agreements to resell ......................... 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income..................................39,349,679
LESS: Allowance for loan and
lease losses...............................603,025
LESS: Allocated transfer risk
reserve.....................................15,906
Loans and leases, net of unearned income,
allowance, and reserve ........................... 38,730,748
Trading Assets ........................................ 1,571,372
Premises and fixed assets (including
capitalized leases) ................................ 685,674
Other real estate owned ............................... 10,331
Investments in unconsolidated subsidiaries
and associated companies ........................... 182,449
Customers' liability to this bank on
acceptances outstanding ............................ 1,184,822
Intangible assets ..................................... 1,129,636
Other assets .......................................... 2,632,309
------------
Total assets .......................................... $ 61,688,578
============
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices ................................ $ 25,731,036
Noninterest-bearing.......................10,252,589
Interest-bearing..........................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ........................... 18,756,302
Noninterest-bearing..........................111,386
Interest-bearing..........................18,644,916
Federal funds purchased and Securities sold under
agreements to repurchase ........................... 3,276,362
Demand notes issued to the U.S.Treasury ............... 230,671
Trading liabilities ................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less ........ 1,154,502
With remaining maturity of more than one year
through three years .............................. 465
With remaining maturity of more than three years ... 31,080
Bank's liability on acceptances executed and
outstanding ........................................ 1,185,364
Subordinated notes and debentures ..................... 1,308,000
Other liabilities ..................................... 2,743,590
------------
Total liabilities ..................................... 55,971,865
============
EQUITY CAPITAL
Common stock .......................................... 1,135,284
Surplus ............................................... 764,443
Undivided profits and capital reserves ................ 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities ...................... 44,106
Cumulative foreign currency translation adjustments ... (34,817)
------------
Total equity capital .................................. 5,716,713
------------
Total liabilities and equity capital .................. $ 61,688,578
============
</TABLE>
<PAGE> 6
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni
Alan R. Griffith Directors
Gerald L. Hassell
<PAGE> 1
EXHIBIT 25.3
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
---------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
</TABLE>
---------------
COX TRUST I
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware 58-6395524
State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1400 Lake Hearn Drive
Atlanta, Georgia 30319
(Address of principal executive offices) (Zip code)
</TABLE>
---------------
Trust Preferred Securities
(Title of the indenture securities)
===============================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 22nd day of July, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
-------------------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
<PAGE> 4
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........... $ 4,508,742
Interest-bearing balances .................................... 4,425,071
Securities:
Held-to-maturity securities .................................. 836,304
Available-for-sale securities ................................ 4,047,851
Federal funds sold and Securities purchased under
agreements to resell ......................................... 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income ...........................................39,349,679
LESS: Allowance for loan and
lease losses ........................................603,025
LESS: Allocated transfer risk
reserve ..............................................15,906
Loans and leases, net of unearned income,
allowance, and reserve ..................................... 38,730,748
Trading Assets .................................................. 1,571,372
Premises and fixed assets (including capitalized
leases) ...................................................... 685,674
Other real estate owned ......................................... 10,331
Investments in unconsolidated subsidiaries and
associated companies ......................................... 182,449
Customers' liability to this bank on acceptances
outstanding .................................................. 1,184,822
Intangible assets ............................................... 1,129,636
Other assets .................................................... 2,632,309
------------
Total assets .................................................... $ 61,688,578
============
LIABILITIES
Deposits:
In domestic offices .......................................... $ 25,731,036
Noninterest-bearing ................................10,252,589
Interest-bearing ...................................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ..................................... 18,756,302
Noninterest-bearing ...................................111,386
Interest-bearing ...................................18,644,916
Federal funds purchased and Securities sold under
agreements to repurchase ..................................... 3,276,362
Demand notes issued to the U.S. Treasury ........................ 230,671
Trading liabilities ............................................. 1,554,493
Other borrowed money:
With remaining maturity of one year or less .................. 1,154,502
With remaining maturity of more than one year
through three years ........................................ 465
With remaining maturity of more than three years ............. 31,080
Bank's liability on acceptances executed and
outstanding .................................................. 1,185,364
Subordinated notes and debentures ............................... 1,308,000
Other liabilities ............................................... 2,743,590
------------
Total liabilities ............................................... 55,971,865
============
EQUITY CAPITAL
Common stock .................................................... 1,135,284
Surplus ......................................................... 764,443
Undivided profits and capital reserves .......................... 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities ................................ 44,106
Cumulative foreign currency translation adjustments
(34,817)
------------
Total equity capital ............................................ 5,716,713
------------
Total liabilities and equity capital ............................ $ 61,688,578
============
</TABLE>
<PAGE> 5
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni
Alan R. Griffith Directors
Gerald L. Hassell
<PAGE> 1
EXHIBIT 25.4
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
-------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
</TABLE>
-------------
COX COMMUNICATIONS, INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware 58-2112251
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1400 Lake Hearn Drive
Atlanta, Georgia 30319
(Address of principal executive offices) (Zip code)
</TABLE>
-------------
Guarantee of Trust Preferred Securities of
Cox Trust I
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of 2 Rector Street, New York,
the State of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 16th day of July, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
---------------------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
<PAGE> 4
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........... $ 4,508,742
Interest-bearing balances .................................... 4,425,071
Securities:
Held-to-maturity securities .................................. 836,304
Available-for-sale securities ................................ 4,047,851
Federal funds sold and Securities purchased under
agreements to resell ......................................... 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income ...........................................39,349,679
LESS: Allowance for loan and
lease losses ........................................603,025
LESS: Allocated transfer risk
reserve ..............................................15,906
Loans and leases, net of unearned income,
allowance, and reserve ..................................... 38,730,748
Trading Assets .................................................. 1,571,372
Premises and fixed assets (including capitalized
leases) ...................................................... 685,674
Other real estate owned ......................................... 10,331
Investments in unconsolidated subsidiaries and
associated companies ......................................... 182,449
Customers' liability to this bank on acceptances
outstanding .................................................. 1,184,822
Intangible assets ............................................... 1,129,636
Other assets .................................................... 2,632,309
------------
Total assets .................................................... $ 61,688,578
============
LIABILITIES
Deposits:
In domestic offices .......................................... $ 25,731,036
Noninterest-bearing ............................... 10,252,589
Interest-bearing ...................................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ..................................... 18,756,302
Noninterest-bearing ...................................111,386
Interest-bearing ...................................18,644,916
Federal funds purchased and Securities sold under
agreements to repurchase ..................................... 3,276,362
Demand notes issued to the U.S.Treasury ......................... 230,671
Trading liabilities ............................................. 1,554,493
Other borrowed money:
With remaining maturity of one year or less .................. 1,154,502
With remaining maturity of more than one year
through three years ........................................ 465
With remaining maturity of more than three years ............. 31,080
Bank's liability on acceptances executed and
outstanding .................................................. 1,185,364
Subordinated notes and debentures ............................... 1,308,000
Other liabilities ............................................... 2,743,590
------------
Total liabilities ............................................... 55,971,865
============
EQUITY CAPITAL
Common stock .................................................... 1,135,284
Surplus ......................................................... 764,443
Undivided profits and capital reserves .......................... 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities ................................ 44,106
Cumulative foreign currency translation adjustments
(34,817)
------------
Total equity capital ............................................ 5,716,713
------------
Total liabilities and equity capital ............................ $ 61,688,578
============
</TABLE>
<PAGE> 5
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni
Alan R. Griffith Directors
Gerald L. Hassell
<PAGE> 1
EXHIBIT 25.5
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
-----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-----------------------
COX TRUST II
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1400 Lake Hearn Drive
Atlanta, Georgia 30319
(Address of principal executive offices) (Zip code)
-----------------------
Trust Preferred Securities
(Title of the indenture securities)
===============================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 22nd day of July, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
-----------------------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
<PAGE> 4
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
Dollar Amounts
In Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................................... $ 4,508,742
Interest-bearing balances ............................................................. 4,425,071
Securities:
Held-to-maturity securities ........................................................... 836,304
Available-for-sale securities ......................................................... 4,047,851
Federal funds sold and Securities purchased under
agreements to resell .................................................................. 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............39,349,679
LESS: Allowance for loan and
lease losses............603,025
LESS: Allocated transfer risk
reserve........................15,906
Loans and leases, net of unearned income,
allowance, and reserve .............................................................. 38,730,748
Trading Assets ........................................................................... 1,571,372
Premises and fixed assets (including capitalized
leases) ............................................................................... 685,674
Other real estate owned .................................................................. 10,331
Investments in unconsolidated subsidiaries and
associated companies .................................................................. 182,449
Customers' liability to this bank on acceptances
outstanding ........................................................................... 1,184,822
Intangible assets ........................................................................ 1,129,636
Other assets ............................................................................. 2,632,309
-----------
Total assets ............................................................................. $61,688,578
===========
</TABLE>
<PAGE> 5
<TABLE>
LIABILITIES
<S> <C>
Deposits:
In domestic offices ................................................................... $25,731,036
Noninterest-bearing.....................10,252,589
Interest-bearing........................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .............................................................. 18,756,302
Noninterest-bearing........................111,386
Interest-bearing........................18,644,916
Federal funds purchased and Securities sold under
agreements to repurchase .............................................................. 3,276,362
Demand notes issued to the U.S. Treasury ................................................. 230,671
Trading liabilities ...................................................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less ........................................... 1,154,502
With remaining maturity of more than one year
through three years ................................................................. 465
With remaining maturity of more than three years ...................................... 31,080
Bank's liability on acceptances executed and
outstanding ........................................................................... 1,185,364
Subordinated notes and debentures ........................................................ 1,308,000
Other liabilities ........................................................................ 2,743,590
-----------
Total liabilities ........................................................................ 55,971,865
===========
EQUITY CAPITAL
Common stock ............................................................................. 1,135,284
Surplus .................................................................................. 764,443
Undivided profits and capital reserves ................................................... 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities ......................................................... 44,106
Cumulative foreign currency translation adjustments
(34,817)
-----------
Total equity capital ..................................................................... 5,716,713
-----------
Total liabilities and equity capital ..................................................... $61,688,578
===========
</TABLE>
<PAGE> 6
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni
Alan R. Griffith Directors
Gerald L. Hassell
- -----------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 25.6
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
-------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------
COX COMMUNICATIONS, INC.
(Exact name of obligor as specified in its charter)
Delaware 58-2112251
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1400 Lake Hearn Drive
Atlanta, Georgia 30319
(Address of principal executive offices) (Zip code)
-------------
Guarantee of Trust Preferred Securities of
Cox Trust II
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 22nd day of July, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
-----------------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
<PAGE> 4
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
In Thousands
<S> <C>
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency
and coin .............................................. $ 4,508,742
Interest-bearing balances .............................. 4,425,071
Securities:
Held-to-maturity securities ............................ 836,304
Available-for-sale securities .......................... 4,047,851
Federal funds sold and Securities purchased
under agreements to resell ............................. 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income ............................................... 39,349,679
LESS: Allowance for loan and
lease losses ......................................... 603,025
LESS: Allocated transfer risk
reserve .............................................. 15,906
Loans and leases, net of unearned income,
allowance, and reserve ............................... 38,730,748
Trading Assets ............................................ 1,571,372
Premises and fixed assets (including
capitalized leases) .................................. 685,674
Other real estate owned ................................... 10,331
Investments in unconsolidated subsidiaries
and associated companies ............................... 182,449
Customers' liability to this bank on
acceptances outstanding ................................ 1,184,822
Intangible assets ......................................... 1,129,636
Other assets .............................................. 2,632,309
-----------
Total assets .............................................. $61,688,578
===========
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices .................................... $25,731,036
Noninterest-bearing .................................... 10,252,589
Interest-bearing ....................................... 15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ............................... 18,756,302
Noninterest-bearing .................................... 111,386
Interest-bearing ....................................... 18,644,916
Federal funds purchased and Securities sold
under agreements to repurchase ......................... 3,276,362
Demand notes issued to the U.S.Treasury ................... 230,671
Trading liabilities ....................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or
less ................................................. 1,154,502
With remaining maturity of more than one
year through three years ............................. 465
With remaining maturity of more than
three years .......................................... 31,080
Bank's liability on acceptances executed and
outstanding ............................................ 1,185,364
Subordinated notes and debentures ......................... 1,308,000
Other liabilities ......................................... 2,743,590
-----------
Total liabilities ......................................... 55,971,865
===========
EQUITY CAPITAL
Common stock .............................................. 1,135,284
Surplus ................................................... 764,443
Undivided profits and capital reserves .................... 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities .......................... 44,106
Cumulative foreign currency translation
adjustments ............................................ (34,817)
-----------
Total equity capital ...................................... 5,716,713
-----------
Total liabilities and equity capital ...................... $61,688,578
===========
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<PAGE> 6
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and to the best
of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true and correct.
Thomas A. Reyni
Alan R. Griffith Directors
Gerald L. Hassell
