<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-82575
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE NOT
AN OFFER TO SELL THESE SECURITIES AND ARE NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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<S> <C> <C>
SUBJECT TO COMPLETION, (COX COMMUNICATIONS
PRELIMINARY PROSPECTUS SUPPLEMENT DATED APRIL 10, 2000 LOGO)
</TABLE>
PROSPECTUS SUPPLEMENT
(To prospectus dated August 9, 1999)
$
COX COMMUNICATIONS, INC.
EXCHANGEABLE SUBORDINATED DISCOUNT DEBENTURES DUE 2020
(EXCHANGEABLE FOR SHARES OF SPRINT PCS STOCK OR CASH WITH AN EQUAL VALUE)
----------------------
We have summarized below the terms of the debentures. For more detail, you
should read "Description of Debentures" in this prospectus supplement.
- ISSUE PRICE; INTEREST; YIELD TO MATURITY. The issue price of each
debenture will be $ (or % of the $1,000 original principal amount
at maturity). We will make cash interest payments on the debentures to
you at $ per debenture per year (or a rate of % per year of the
issue price) payable semiannually on April and October of each year,
beginning October , 2000. The accrual of original issue discount
and cash interest payments on each debenture represents a yield to
maturity of % per year (computed on a semiannual bond equivalent
basis) calculated from April , 2000.
- ADJUSTED PRINCIPAL AMOUNT. We refer to the issue price of each
debenture, plus accrued and unpaid original issue discount, as the
adjusted principal amount. The adjusted principal amount will be reduced
by the amount of any special cash payments and any cash reorganization
event distributions, but will never be less than zero.
- EXCHANGEABILITY OF DEBENTURES AT YOUR OPTION. Each debenture will be
exchangeable, at your option, at any time. In the event you exercise this
exchange option before April , 2002, you will receive cash equal to the
value of the reference property then attributable to that debenture. In
the event you exercise your exchange option on or after April , 2002,
we may deliver to you, at our election, reference property, cash or a
combination of both. The reference property initially attributable to
each debenture will be shares of Sprint Corporation's PCS
common stock -- Series 1, par value $1.00 per share, which we refer to as
Sprint PCS stock. The reference property will be adjusted to add or
substitute certain cash, property and other securities distributed on or
in respect of securities constituting reference property. If a cash
reorganization event occurs, we will distribute cash to you and the
reference property will be adjusted accordingly. The reference property
will not be adjusted as a result of any increases or decreases in the
adjusted principal amount or for accruals or payments of cash interest.
Upon exchange, you will not receive any cash representing accrued and
unpaid original issue discount or accrued and unpaid cash interest. Any
such accrued and unpaid original issue discount and accrued and unpaid
cash interest will be deemed paid by the reference property you received
upon exchange.
- REDEMPTION OF DEBENTURES AT OUR OPTION. We may, at our option, redeem
some or all of the debentures for cash at any time on or after April ,
2005 at a redemption price equal to the then adjusted principal amount
plus any accrued and unpaid cash interest to but excluding the date of
redemption.
- PURCHASE OF DEBENTURES BY US AT YOUR OPTION. On April , 2005, April
, 2010 and April , 2015 only, you may require us to purchase some or
all of your debentures at a purchase price per debenture equal to the
adjusted principal amount plus any accrued and unpaid cash interest to
but excluding each purchase date. We will have the right to pay you the
purchase price in cash, reference property or a combination of both.
- SPECIAL CASH PAYMENTS AT OUR OPTION AND MANDATORY CASH REORGANIZATION
EVENT DISTRIBUTIONS. At any time, we may elect to pay all or part of the
adjusted principal amount of the debentures through a special cash
payment, provided that the adjusted principal amount will never be less
than zero. In addition, we will make a cash reorganization event
distribution following a cash reorganization event in respect of the
reference property.
- OPTIONAL INCREASE IN SEMIANNUAL CASH INTEREST PAYMENTS. On and after
April , 2005, we may irrevocably elect to increase semiannual cash
interest payments to an amount that represents a yield to maturity of %
per year on the adjusted principal amount of the debentures at the
effective date of our election. On and after the effective date of our
election, original issue discount will cease to accrue on the debentures.
- MATURITY. The debentures will mature on April , 2020. At maturity you
will be entitled to receive the adjusted principal amount of your
debentures plus any accrued and unpaid cash interest.
- RANKING OF DEBENTURES. The debentures will be unsecured, subordinated
obligations of ours ranking junior in right of payment to all of our
existing and future senior indebtedness. As of December 31, 1999, we had
outstanding approximately $6.3 billion of debt and obligations of
subsidiary trusts that are senior, or effectively senior, to the
debentures.
- LISTING. We will apply to list the debentures on the New York Stock
Exchange. The Sprint PCS stock is currently listed on the NYSE under the
symbol "PCS." On April 7, 2000, the last reported sales price of the
Sprint PCS stock on the NYSE was $59 13/16.
INVESTING IN THE DEBENTURES INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK
FACTORS" SECTION BEGINNING ON PAGE S-8.
----------------------
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PROCEEDS,
UNDERWRITING BEFORE
DISCOUNT AND EXPENSES,
PRICE TO PUBLIC(1) COMMISSIONS TO COX
------------------ ------------ ----------------
<S> <C> <C> <C>
Per debenture............................................ $ $ $
Total.................................................... $ $ $
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(1) Plus accrued original issue discount and accrued cash interest from April
, 2000, if settlement occurs after that date
The underwriters may also purchase up to an additional $ aggregate
original principal amount at maturity of debentures from us at the public
offering price, less the underwriting discount, within 30 days from the date of
this prospectus supplement to cover over-allotments. In addition, we will
directly offer up to $ aggregate original principal amount at maturity of
debentures to satisfy our obligations under the Top Up Right Agreement described
in this prospectus supplement.
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 debentures will be ready for delivery in book-entry form only on or
about April , 2000.
Joint-Book Running Managers
CREDIT SUISSE FIRST BOSTON MERRILL LYNCH & CO.
----------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS APRIL , 2000.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
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PAGE
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<S> <C>
Prospectus Supplement Summary............................... S-3
Cox Communications, Inc................................ S-3
Recent Developments.................................... S-4
The Offering........................................... S-5
Risk Factors................................................ S-8
Sprint Corporation.......................................... S-12
Price Range and Dividend History of the Sprint PCS Stock.... S-13
Use of Proceeds............................................. S-13
Ratio of Earnings to Fixed Charges.......................... S-13
Description of Debentures................................... S-14
Certain United States Federal Income Tax Considerations..... S-35
Underwriting................................................ S-39
Notice to Canadian Residents................................ S-41
PROSPECTUS
Cox Communications, Inc..................................... 2
The Cox Trusts.............................................. 3
Use of Proceed.............................................. 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>
---------------------------
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. References to "you" and "your" refer to
prospective investors in the debentures prior to the sale of the debentures and
to holders of the debentures after the sale of the debentures.
FORWARD-LOOKING STATEMENTS
This prospectus supplement includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and 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 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 SEC and incorporated by reference in this prospectus
supplement, 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-2
<PAGE> 3
PROSPECTUS SUPPLEMENT SUMMARY
You should read the following information together with the information
contained or incorporated by reference in other parts of this prospectus
supplement and in the accompanying prospectus. This summary contains a brief
description of our business and highlights selected information from this
prospectus supplement and the accompanying prospectus to help you understand the
debentures. You should carefully read this prospectus supplement and the
accompanying prospectus to understand fully the terms of the debentures, as well
as the tax and other considerations that may be important to you in making a
decision about whether to invest in the debentures. You should pay special
attention to the "Certain United States Federal Income Tax Considerations"
section of this prospectus supplement to determine whether an investment in the
debentures is appropriate for you.
COX COMMUNICATIONS, INC.
Cox Communications, Inc. is one of the nation's largest broadband
communications companies with U.S. broadband network operations and investments
in cable television programming networks, telecommunications and technology, and
broadband networks. Cox serves 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 business strategy is to utilize the technological capabilities of its
advanced broadband network, its strong locally and regionally clustered cable
television systems and its longstanding commitment to superior customer service
to provide an array of entertainment and communications services to both
residential and commercial customers in its markets. Today, these services
primarily include analog and digital video, high-speed Internet access and local
and long-distance telephone. Additional services could include video on demand,
Internet to the television, targeted advertising and other types of interactive
and e-commerce applications.
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 and
telecommunications and technology companies which are complementary to Cox's
business strategy. Cox believes that these investments have contributed to the
growth of its broadband communications business and that its leadership position
in broadband communications has facilitated the growth of these investments. Cox
seeks to utilize insights gained from the integrated operations of its cable
television systems and related programming and telecommunications and technology
investments to continue its leadership in the broadband communications industry
by anticipating and capitalizing upon long-term industry trends.
Cox is an indirect 67.4% owned subsidiary of Cox Enterprises, Inc., which
we refer to as CEI. CEI, a privately-held corporation headquartered in Atlanta,
Georgia, is one of the largest diversified media companies in the United States
with consolidated revenues in 1999 of approximately $6.1 billion. CEI, which has
a 102-year history in the media and communications industry, publishes 16 daily
newspapers and owns or operates 13 television stations in addition to its
interest in Cox. Through its indirect majority-owned subsidiary, Cox Radio,
Inc., CEI owns or operates 76 radio broadcast stations pending closing of
previously announced transactions. Through Manheim Auctions, CEI is also the
world's largest operator of wholesale auto auctions.
Cox's principal executive offices are located at 1400 Lake Hearn Drive,
Atlanta, Georgia 30319. Cox's telephone number is (404) 843-5000.
S-3
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RECENT DEVELOPMENTS
In November 1999, Cox issued 14,375,000 exchangeable subordinated
debentures due 2029, which we refer to as PRIZES, for aggregate proceeds of
approximately $1.3 billion, less offering costs of approximately $35.0 million.
The PRIZES bear interest at a rate of 7.75% per year through November 2002, and
2% per year thereafter. PRIZES are exchangeable for cash based on the market
value of Sprint PCS stock.
In December 1999, Cox sold 3.9 million shares of its Sprint PCS stock
pursuant to Rule 144 under the Securities Act, and in January and February 2000,
Cox sold an additional 16.1 million shares. All Sprint PCS share amounts in this
prospectus supplement reflect the 2-for-1 stock dividend paid by Sprint on
February 4, 2000 to shareholders of record on January 14, 2000.
In January 2000, Cox completed its acquisition of cable television systems
serving 522,000 customers in Kansas, Oklahoma and North Carolina from Multimedia
Cablevision, Inc. for $2.7 billion.
In March 2000, Cox issued $275.0 million aggregate principal amount of 3%
Exchangeable Subordinated Debentures due 2030, which we refer to as Premium
PHONES, for proceeds of $269.5 million, net of underwriting discounts. Prior to
March 14, 2002, the Premium PHONES are exchangeable at the holders' option for
cash in an amount based on the trading price of the underlying reference shares,
which are initially 16.28 shares of Sprint PCS stock for each $1,000 principal
amount. On or after that date, the Premium PHONES can be exchanged by the
holders for, at Cox's election, cash or the underlying reference shares or a
combination of both.
Also in March 2000, Cox and AT&T Corp. completed the exchange of Cox's 50.3
million shares of AT&T common stock for the stock of AT&T subsidiaries that own
cable television systems serving approximately 495,000 customers and certain
other assets and liabilities, including cash. In return for its 50.3 million
shares of AT&T common stock, Cox received: cable television systems serving
Tulsa, Oklahoma (160,000 customers) and Baton Rouge, Louisiana (156,000
customers); the remaining 20% ownership in a partnership in which Cox acquired
an 80% interest through its merger with TCA Cable TV, Inc.; Peak Cablevision
LLC, which has 117,000 customers in Oklahoma, Arkansas, Utah and Nevada; and
approximately $750.0 million in other assets, including cash.
Also in March 2000, Cox sold its entire interest in Flextech plc and
received net proceeds of approximately $522.3 million. Flextech is a cable and
satellite television programming company based in the United Kingdom.
Also in March 2000, Cox redeemed all $525.0 million aggregate principal
amount outstanding of its Floating Rate Notes due August 15, 2000.
Also in March 2000, Cox repaid $500.0 million borrowed under a bridge loan
in January 2000.
S-4
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THE OFFERING
Issuer........................ Cox Communications, Inc.
Securities offered............ $ aggregate original principal amount
at maturity ($ aggregate original
principal amount at maturity if the
underwriters exercise their over-allotment
option in full and we are required to issue
debentures pursuant to the Top Up Right
Agreement) of debentures due April , 2020.
Each debenture will have an issue price of
$ and an original principal amount at
maturity of $1,000, which we also refer to as
the authorized minimum denomination. The
principal amount of the debentures is subject
to adjustment from time to time as described in
this prospectus supplement.
Cash interest payments........ We will make cash interest payments on the
debentures at $ per year per debenture (at
the rate of % per year on the issue price
of each debenture) on April and October of
each year, beginning October , 2000. Cash
interest payments are subject to adjustment as
described in this prospectus supplement, but
will not be reduced below $ per year per
debenture.
Yield to maturity............. The accrual of original issue discount and cash
interest payments represent a yield to maturity
of % per year (computed on a semiannual bond
equivalent basis) calculated from April ,
2000.
Adjusted principal amount..... We refer to the issue price of each debenture,
plus accrued and unpaid original issue
discount, as the adjusted principal amount. The
adjusted principal amount will initially equal
the issue price and is subject to increase as a
result of the accrual of original issue
discount. The adjusted principal amount will be
subject to decrease by the amount of any
special cash payments and any cash
reorganization event distributions. The
adjusted principal amount will never be less
than zero.
Maturity...................... The debentures will mature on April , 2020.
At maturity you will be entitled to receive the
adjusted principal amount of the debentures
plus any accrued and unpaid cash interest.
Exchangeability of debentures
at your option................ Each debenture will be exchangeable, at your
option, at any time, unless previously redeemed
or otherwise purchased by us. In the event you
exercise your exchange option prior to April
, 2002, you will receive cash equal to the
value of the reference property attributable to
that debenture. In the event you exercise your
exchange option on or after April , 2002, we
may deliver to you, at our election, reference
property, cash or a combination of both. The
reference property initially attributable to
each debenture will be shares of Sprint
PCS stock. The reference property will be
adjusted to add or substitute certain cash,
property and other securities distributed on or
in respect of securities constituting reference
property. If a cash reorganization event occurs
in respect of the reference property, we will
distribute cash to you and the reference
property will be adjusted accordingly. The
reference property will not be adjusted as a
result of any other increases or decreases in
the adjusted
S-5
<PAGE> 6
principal amount or for accruals or payment of
cash interest in respect of the debentures.
No later than two business days following the
date on which you have satisfied all conditions
to the exercise of your exchange right we will
inform you of our election to deliver reference
property, cash or a combination of both. You
may not withdraw your exchange notice if we
elect to pay cash or a combination of reference
property and cash in lieu of delivering
reference property.
Upon exchange of any debentures, you will not
receive a cash payment representing any accrued
and unpaid original issue discount or accrued
and unpaid cash interest. Any such accrued and
unpaid original issue discount and accrued and
unpaid cash interest will be deemed paid by the
reference property you receive upon exchange.
Ranking....................... The debentures will be unsecured, subordinated
obligations of ours ranking junior in right of
payment to all of our existing and future
senior indebtedness. As of December 31, 1999,
we had outstanding approximately $6.3 billion
of debt and obligations of subsidiary trusts
that are senior, or effectively senior, to the
debentures.
Redemption of debentures at
our option.................... We may not redeem the debentures before
April , 2005. On and after April , 2005, we
may, at our option, redeem some or all of the
debentures for cash at any time and from time
to time at a redemption price per debenture
equal to the adjusted principal amount plus any
accrued and unpaid cash interest to but
excluding the date of redemption.
Sinking fund.................. None.
Purchase of debentures by us
at your option................ We will purchase any debenture, at your option,
on April , 2005, April , 2010 and April ,
2015 only, for a purchase price per debenture
equal to the adjusted principal amount plus any
accrued and unpaid cash interest to but
excluding each purchase date. We will have the
right to pay you the purchase price in cash,
reference property or a combination of both.
Special cash payments at our
option and mandatory cash
reorganization event
distributions............... At any time, we may elect to pay all or part of
the adjusted principal amount of the debentures
through a special cash payment. In addition, we
will make a cash reorganization event
distribution upon the occurrence of a cash
reorganization event in respect of the
reference property. However, the adjusted
principal amount will never be less than zero.
Option to increase semiannual
cash interest payments........ At any time on and after April , 2005, we may
irrevocably elect to increase semiannual cash
interest payments to an amount that
S-6
<PAGE> 7
represents a yield to maturity of % per year
on the adjusted principal amount of the
debentures at the effective date of our
election, in lieu of future accrual of original
issue discount.
United States federal income
tax considerations............ Pursuant to the terms of the indenture, we and
each holder of the debentures agree to treat
the debentures as indebtedness of ours for
United States federal income tax purposes.
Accordingly, you will be required to include,
in your income, interest with respect to the
debentures.
Each debenture will constitute a contingent
payment debt instrument. As a result, you will
be required to include amounts in income, as
ordinary income in advance of the receipt of
the cash attributable thereto. The amount of
interest income required to be included by you
for each year may be in excess of the cash
payments you receive. Any gain recognized by
you on the sale or exchange of a debenture will
be ordinary interest income; any loss will be
ordinary loss to the extent of the interest
previously included in income, and thereafter,
capital loss. A summary of the United States
federal income tax consequences of ownership of
the debentures is described in this prospectus
supplement under "Certain United States Federal
Income Tax Considerations."
Top up right.................. Our sale of the debentures is subject to a Top
Up Right Agreement dated May 26, 1998 among
France Telecom S.A., Deutsche Telekom AG,
Tele-Communications, Inc., Comcast Corporation
and us. In accordance with this agreement, we
are obligated to directly offer up to an
additional $ aggregate original
principal amount at maturity of debentures to
France Telecom and Deutsche Telekom.
Use of proceeds............... We estimate that the net proceeds from the
offering will be approximately
$ , after deducting the
underwriting discount and estimated offering
expenses payable by us ($ ,
assuming the underwriters exercise their over-
allotment option in full). If France Telecom
and Deutsche Telekom purchase all of the
debentures offered by us to them pursuant to
the Top Up Right Agreement, we will receive
approximately $ of additional
proceeds. We intend to use the net proceeds
from the sale of the debentures for our general
corporate purposes.
Listing of debentures......... We will apply to list the debentures on the
NYSE.
NYSE symbol for Sprint PCS
stock......................... The Sprint PCS stock is currently listed on the
NYSE under the symbol "PCS."
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RISK FACTORS
You should consider carefully, in addition to the other information
contained in this prospectus supplement and the accompanying prospectus, the
following factors before purchasing the debentures.
YOUR RETURN WILL BE AFFECTED BY THE PERFORMANCE OF THE SPRINT PCS STOCK
Each debenture will be exchangeable for (1) cash in an amount based on the
reference property value, or (2) on and after April , 2002, at the option of
Cox, the reference property, cash or a combination of reference property and
cash. The reference property initially attributable to each debenture will be
shares of Sprint PCS stock. The reference property will be adjusted to
add or substitute certain cash, property and other securities distributed on or
in respect of securities constituting reference property, or on or with respect
to any security into which those securities may be converted or exchanged. The
reference property attributable to each debenture will be reduced in the event
of a cash reorganization event by the amount of the cash reorganization event
distribution made in respect of each debenture. See "Description of
Debentures -- Reference Property Adjustments." The reference property will not
be adjusted as a result of any other changes in the adjusted principal amount.
It is impossible to predict whether the price of the Sprint PCS stock will
rise or fall. Trading prices of the Sprint PCS stock will be influenced by
Sprint's operating results and by complex and interrelated political, economic,
financial and other factors that can affect the capital markets generally, the
NYSE and the market segments of which Sprint is a part. In addition, the stock
market in general, and the stocks of telecommunications and technology companies
like Sprint in particular, have experienced significant volatility. These broad
market and industry fluctuations may adversely affect the trading price of the
Sprint PCS stock.
We may, but are not required to, hold a number of shares of the Sprint PCS
common stock -- Series 2, $1.00 par value per share, equal to the reference
property attributable to the debentures outstanding until exchange, maturity,
repurchase or redemption of the debentures and to deliver those shares upon
exchange or repurchase or sell those shares to raise the proceeds to pay the
amount due upon exchange, maturity, repurchase or redemption of the debentures.
Although we cannot assure you that any sales of the Series 2 Sprint PCS stock
will not adversely affect the market for the Sprint PCS stock or the amount due
upon exchange, maturity, repurchase or redemption of the debentures, we have no
reason to believe that any of these sales will have this effect.
You should read Sprint's publicly available documents for a discussion of
the risks and uncertainties associated with Sprint, its PCS Group and the Sprint
PCS stock. In particular, you should note that under its Articles of
Incorporation, Sprint may be able to take action that would benefit its FON
Group and disadvantage its PCS Group. The number of shares of Sprint PCS stock
constituting reference property for the debentures will not adjust for these
actions.
FLUCTUATIONS IN THE MARKET VALUE OF THE DEBENTURES AND THE SPRINT PCS STOCK MAY
AFFECT OUR REPORTED EARNINGS
Applicable accounting rules require us to record any increase or decrease
in the market value of the debentures that results from changes in the market
value of Sprint PCS stock to our statement of operations. Any increase or
decrease in the market value of the debentures will be recorded as subtractions
from, or additions to, our reported net income. A significant increase in the
market value of Sprint PCS stock would significantly decrease our reported net
income. Similarly, a significant decrease in the market value of Sprint PCS
stock would significantly increase our reported net income. These increases and
decreases will be reported in our statement of operations, will be non-cash in
nature and will be reflected on our balance sheet as increases and decreases in
long-term debt or other long-term liabilities.
We currently record our investment in the Sprint PCS stock at its fair
value, with changes in fair value recorded in other comprehensive income.
Although we are not required to do so under the indenture, while the debentures
remain outstanding we may hold shares of Sprint PCS stock at least equal to the
S-8
<PAGE> 9
reference property attributable to the debentures outstanding. If we do so,
changes in the market value of these shares of Sprint PCS stock would
approximately offset any changes in long-term debt or other long-term
liabilities, resulting in no material effect on our reported stockholders'
equity.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 133 ("SFAS 133"), Accounting for Derivative Instruments
and Hedging Activities, which is required to be adopted in all fiscal quarters
of all fiscal years beginning after June 15, 2000 (January 1, 2001 for us). SFAS
133 will require us to split the value of the debentures into a debt component
and a derivative component. Any changes in the fair value of the derivative
component will be reflected as an increase or decrease in our reported net
income. At the date of initial adoption, SFAS 133 provides us a one-time ability
to transfer any of our available-for-sale securities, including shares of Sprint
PCS stock, to the trading category. Although we are not required to hold Sprint
PCS shares equal to the reference property attributable to the debentures
outstanding, if we do so and if we elect to make this transfer from available-
for-sale to trading, changes in the fair value of the shares of Sprint PCS stock
so transferred will be reflected as an increase or decrease in our reported net
income. Changes in the market value of the Sprint PCS stock should at least
partially offset changes in the fair value of the derivative component of the
debentures; however, there may be periods with significant non-cash increases or
decreases to our net income pertaining to the debentures and the related shares
of Sprint PCS stock.
SPRINT HAS NO OBLIGATIONS WITH RESPECT TO THE DEBENTURES
We are not affiliated with Sprint, other than as a holder of the Series 2
Sprint PCS stock and as a holder of preferred stock and warrants convertible
into shares of Series 2 PCS stock. As of the date of this prospectus supplement,
we do not have any material non-public information concerning Sprint. Although
we have no reason to believe the information concerning Sprint included or
referred to in this prospectus supplement is not reliable, neither we nor the
underwriters warrant that events have not occurred, which are not yet publicly
disclosed by Sprint, that would affect either the accuracy or completeness of
the information concerning Sprint included or referred to in this prospectus
supplement. Sprint is not involved in the offering of the debentures and has no
obligation with respect to the debentures, including any obligation to take our
interests (other than as a holder of the Sprint PCS stock) or your interests
into consideration for any reason or under any circumstance.
Pursuant to a merger agreement between MCI WorldCom, Inc. and Sprint,
Sprint would be merged with and into MCI WorldCom, Inc. Under this planned
merger, holders of Sprint PCS stock would receive one new share of WorldCom PCS
tracking stock and 0.116025 shares of MCI WorldCom stock for each share of
Sprint PCS stock. Under the anti-dilution provisions of the debentures, the
reference property (or the amount of cash in lieu of reference property) you
will receive upon exchange, maturity, repurchase or redemption of debentures, as
the case may be, will reflect this exchange of Sprint PCS stock for WorldCom PCS
stock and MCI WorldCom stock. This merger is subject to many conditions,
including regulatory approvals, and may never occur. Even if it does occur, the
ratio by which holders of Sprint PCS stock receive new stock may be different
from the ratio currently contemplated in the agreement.
Sprint will not receive any of the proceeds of the offering of the
debentures and is not responsible for, and has not participated in, determining
the timing of, prices for or quantities of the debentures offered hereby. Sprint
is not involved with the administration, marketing or trading of the debentures
nor in the preparation of this prospectus supplement and has no obligations with
respect to the amount to be paid to holders of the debentures upon exchange,
maturity or redemption. Holders of the debentures will not be entitled to any
rights with respect to the Sprint PCS stock other than indirectly pursuant to
the express terms of the debentures.
POSSIBLE ILLIQUIDITY OF THE SECONDARY MARKET FOR THE DEBENTURES
The debentures are a new issue of securities with no established trading
market. We cannot predict how the debentures will trade in the secondary market
or whether such market will be liquid.
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We will apply to have the debentures listed on the NYSE. We cannot assure
you that the NYSE will list the debentures.
The underwriters have advised us that they presently intend to make a
market in the debentures after completion of this offering. However, they are
under no obligation to do so and may discontinue any market-making activities at
any time without any notice.
We cannot assure the liquidity of the trading market for the debentures or
that an active public market for the debentures will develop. If an active
public trading market for the debentures does not develop, the trading price and
liquidity of the debentures may be adversely affected. If the debentures are
traded, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities, our
performance and other factors.
THE REFERENCE PROPERTY ATTRIBUTABLE TO THE DEBENTURES WILL NOT ADJUST FOR SOME
DILUTIVE TRANSACTIONS INVOLVING THE REFERENCE PROPERTY
If specific dilutive or anti-dilutive events occur with respect to the
reference property, the number and type of reference property that will be used
to calculate the amount of cash or securities or other property you will receive
upon exchange, maturity, repurchase or redemption of the debentures will be
adjusted to reflect such events. These adjustments will not take into account
various other events, such as the payment of cash dividends on reference
securities that do not constitute extraordinary cash dividends, the payment of
interest on any reference securities that evidence indebtedness and offerings of
the reference securities that constitute reference property by a reference
company, each of which may adversely affect the price of the reference
securities and may adversely affect the trading price and market value of the
debentures. We cannot assure you that a reference company will not make
offerings of the reference securities or other securities that constitute
reference property or enter into such business acquisitions in the future. In
particular, you should note that Sprint may be able to take actions that would
benefit its FON Group and disadvantage its PCS Group. The number of shares of
Sprint PCS stock that constitute reference property will not adjust for these
actions.
THE DEBENTURES ARE UNSECURED, SUBORDINATED OBLIGATIONS THAT ARE SUBJECT TO
EXISTING AND FUTURE ADDITIONAL INDEBTEDNESS
Neither the debentures nor the indenture under which the debentures will be
issued will limit our or our subsidiaries' ability to incur additional
indebtedness, or to grant liens on assets to secure indebtedness, to pay
dividends or to repurchase shares of capital stock. The indenture does not
contain any provisions specifically intended to protect holders of the
debentures in the event of a sudden and significant decline in our credit
quality or a highly leveraged transaction involving us, including a change of
control, or other similar transaction that may adversely affect holders of the
debentures.
The debentures are subordinated obligations of ours and are not secured by
any of our assets, including the shares of the Sprint PCS stock that we
currently own.
Our obligations under the debentures are subordinated. The subordination
provisions in the indenture provide that we may not make payment on the
debentures during the continuance beyond any applicable grace period of any
default in payment in respect of our indebtedness ranking senior to the
debentures. At December 31, 1999, we had outstanding approximately $6.3 billion
of debt and obligations of subsidiary trusts that are senior, or effectively
senior, to the debentures. In addition, we had approximately $1.3 billion of
subordinated indebtedness ranking equally with the debentures outstanding as of
December 31, 1999, and we issued $275.0 million original principal amount of
additional subordinated indebtedness in March 2000.
YOU MAY REALIZE POTENTIALLY ADVERSE TAX CONSEQUENCES BY PURCHASING THE
DEBENTURES
If you are considering purchasing the debentures, you should reach an
investment decision only after consulting with your advisors as to the
suitability of an investment in the debentures in light of your
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particular circumstances. You should also consider the tax consequences of
investing in the debentures. The amount of interest income required to be
included by you for each year may be in excess of the interest payments you
actually receive. As a result, you will be required to include amounts in income
as ordinary income in advance of the receipt of the related cash. Any gain
recognized by you on the sale or exchange of the debentures will be ordinary
interest income; any loss will be ordinary loss to the extent of the interest
previously included in income, and thereafter, capital loss. See "Certain United
States Federal Income Tax Considerations."
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SPRINT CORPORATION
According to publicly available documents, Sprint is a domestic and
international long distance communications provider through its FON Group and a
domestic wireless mobile phone services provider through its PCS Group. Sprint's
PCS Group operates a digital PCS wireless network in the United States. Sprint's
PCS stock is a "tracking stock" intended to reflect the performance of Sprint's
domestic wireless personal communications services operations, while its FON
stock is a "tracking stock" intended to reflect the performance of all of
Sprint's other operations. The reference property initially attributable to each
debenture will be comprised of Sprint PCS stock and not Sprint FON Group stock.
Sprint is required to file reports and other information with the SEC. Copies of
these reports and other information may be inspected and copied at the SEC
offices specified under "Where to Find More Information" on page 58 of the
accompanying prospectus.
You should read Sprint's publicly available documents for a discussion of
the risks and uncertainties associated with Sprint, its PCS Group and the Sprint
PCS stock. In particular, you should note that under its Articles of
Incorporation, Sprint may be able to take action that would benefit its FON
Group and disadvantage its PCS Group. The reference property attributable to the
debentures will not be adjusted for these actions.
This prospectus supplement relates only to the debentures we are offering
and does not relate to the Sprint PCS stock or other securities of Sprint. All
disclosures contained in this prospectus supplement regarding Sprint are derived
from the publicly available documents. We have not participated in the
preparation of Sprint's documents nor made any due diligence inquiry with
respect to the information provided in those documents. The underwriters have
not made any due diligence inquiry with respect to the information provided in
Sprint's documents in connection with the offering of the debentures. Neither we
nor the underwriters represent that Sprint's publicly available documents or any
other publicly available information regarding Sprint are accurate or complete.
We, our affiliates and the underwriters do not make any representation to
you as to the performance of Sprint, the Sprint PCS stock or any other
securities of Sprint.
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PRICE RANGE AND DIVIDEND HISTORY OF THE SPRINT PCS STOCK
The Sprint PCS stock is listed and traded on the NYSE under the symbol
"PCS."
The following table sets forth, for the calendar quarters indicated (ended
March 31, June 30, September 30 and December 31), the range of high and low sale
prices of the Sprint PCS stock as reported on the NYSE Composite Tape since its
listing on November 23, 1998. To date, Sprint has never paid a cash dividend on
its Sprint PCS stock.
<TABLE>
<CAPTION>
SPRINT PCS STOCK
-----------------
HIGH LOW
----- ----
<S> <C> <C>
1998:
Fourth quarter (beginning November 23).................... $11 11/16 $ 7 1/32
1999:
First quarter............................................. 24 5/32 10 7/16
Second quarter............................................ 30 3/8 20 3/4
Third quarter............................................. 39 1/8 26 15/32
Fourth quarter............................................ 57 7/32 33 13/32
2000:
First quarter............................................. 66 15/16 42 9/16
Second quarter (through April 7).......................... 66 55 3/16
</TABLE>
Historical prices have been adjusted for a 2-for-1 stock dividend, which
was paid on February 4, 2000. The last reported sale price on the NYSE of one
share of Sprint PCS stock on April 7, 2000 was $59 13/16.
USE OF PROCEEDS
We estimate that the net proceeds from the offering, after deducting the
underwriting commission and estimated offering expenses payable by us, will
be ($ , assuming the underwriters exercise their
over-allotment option in full). If France Telecom and Deutsche Telekom purchase
all of the debentures offered by us pursuant to the Top Up Right Agreement, we
will receive approximately $ million of additional proceeds. We will
use the net proceeds from the sale of the debentures for our general corporate
purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated:
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
2.7x 1.5x 2.0x 12.3x 5.9x
</TABLE>
Earnings for the years ended December 31, 1995, 1996, 1997, 1998 and 1999
include $188.8 million, $4.6 million, $116.6 million, $2.5 billion and $1.6
billion, respectively, of net gain on sale and exchange of cable television
systems and 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 we have a series of preferred stock outstanding, the holders of such
preferred stock are entitled to dividends only when, and to the extent that, our
board of directors declares such dividends. Our board has never declared a
dividend on our preferred stock and does not intend to do so in the foreseeable
future. Accordingly, the data in the above table also represents our combined
ratio of earnings to fixed charges and preferred stock dividends for the periods
presented.
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DESCRIPTION OF DEBENTURES
The following description of the debentures (referred to as the debt
securities in the accompanying prospectus) supplements and, to the extent
inconsistent with, supersedes the general terms of the debt securities in the
accompanying prospectus. The terms of the debentures include those stated in the
indenture dated as of June 27, 1995, as supplemented by a third supplemental
indenture, executed by Cox and The Bank of New York, as trustee, under which the
debentures will be issued and those terms made part of the indenture by
reference to the Trust Indenture Act of 1939, as amended. The debentures are
subject to those terms, and you should read the indenture and the Trust
Indenture Act for a statement of them. Although we have summarized selected
provisions of the indenture below, this summary is not complete and is qualified
in its entirety by reference to the indenture. A copy of the indenture has been
filed as an exhibit to the registration statement we have filed with the SEC
that provides for the offering of senior and subordinated debt securities.
The indenture does not limit the aggregate principal amount of indebtedness
which may be issued under it. The indenture also provides that debt securities
may be issued from time to time in one or more series. The debentures constitute
a separate series of debt securities under the indenture.
GENERAL
The debentures will be unsecured, subordinated obligations of Cox initially
limited to $ aggregate original principal amount at maturity ($
aggregate original principal amount at maturity if the underwriters exercise
their over-allotment option in full and we are required to issue debentures
pursuant to the Top Up Right Agreement) and will mature on April , 2020. At
maturity, you will be entitled to receive the adjusted principal amount of each
debenture plus any accrued and unpaid cash interest.
We refer to the issue price of each debenture, plus accrued and unpaid
original issue discount and less certain cash payments, if applicable, as
described in this paragraph, as the adjusted principal amount. The adjusted
principal amount will initially equal the issue price and will increase as a
result of the accrual of original issue discount. The adjusted principal amount
will decrease by the amount of any special cash payments and any cash
reorganization event distributions. In the event we make a special cash payment
or a cash reorganization event distribution in excess of all original issue
discount then accrued on the debentures, the adjusted principal amount will be
reduced below the issue price. However, the adjusted principal amount will never
be less than zero. As a result of any reduction of the adjusted principal
amount, the amount due at maturity or upon earlier redemption or purchase by us
of your debentures will be reduced.
Our sale of the debentures is subject to the Top Up Right Agreement. Of the
$ aggregate original principal amount at maturity of debentures eligible for
issuance, $ aggregate original principal amount at maturity of debentures
are being offered through the underwriters (including the debentures subject to
the underwriters' over-allotment option) and $ aggregate original principal
amount at maturity of debentures are being directly offered by us to France
Telecom and Deutsche Telekom under the Top Up Right Agreement. We currently
beneficially own approximately 127.1 million shares of Sprint's Series 2 PCS
stock, which amount includes shares issuable upon the exercise or conversion of
our warrants and preferred stock. The Series 2 Sprint PCS stock converts
automatically into Sprint PCS stock in a number of situations, including
generally upon a sale by us of the Series 2 Sprint PCS stock. Our sales of the
Series 2 Sprint PCS stock and any other securities convertible or exchangeable
into Series 2 Sprint PCS stock are also subject to the Top Up Right Agreement.
Under this agreement and subject to a number of exceptions, we generally must
offer France Telecom and Deutsche Telekom the right to purchase a portion,
approximately 18%, of any Series 2 Sprint PCS stock or any such securities
exchangeable for shares of Sprint PCS stock that we sell.
The indenture will permit us to "reopen" this series of debentures and
issue additional securities of this series without the consent of holders of the
debentures.
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We are offering the debentures at a substantial discount from their
principal amount at maturity. See "Certain United States Federal Income Tax
Considerations -- Accrual of Interest on the Debentures." The debentures will
pay cash interest at the rate of % per year on the issue price of each
debenture (or $ per year per debenture) semiannually on April and October
of each year, beginning October , 2000 to holders of record on the April
and October , (whether or not a business day) preceding each interest
payment date and at maturity or earlier redemption or purchase by us. Changes in
the adjusted principal amount will not affect the amount of such semiannual
interest payments. Interest payable at maturity, or upon any earlier date of
redemption or purchase, will be payable to the person to whom principal shall be
payable on that date. The calculation of the accrual of original issue discount
(initially the difference between the issue price and the original principal
amount at maturity of a debenture) and accrued cash interest in the period
during which a debenture remains outstanding will be on a semiannual bond
equivalent basis using a 360-day year composed of twelve 30-day months; each
such accrual will begin on the initial issue date of the debentures. In the
event of the maturity, exchange, purchase by us at the option of a holder or
redemption of a debenture, original issue discount and cash interest will cease
to accrue on such debenture, under the terms and subject to the conditions of
the indenture. The accrual of original issue discount may cease and cash
interest payments may be adjusted in certain other circumstances described under
"-- Special Cash Payments at Our Option" and "-- Option to Increase Semiannual
Cash Interest Payments". We may not reissue or resell a debenture that has
matured or been exchanged, purchased by us at the option of a holder, redeemed
or otherwise cancelled (except for registration of transfer, exchange or
replacement of a debenture).
If any payment on the debentures is to be made on a day that is not a
business day, that payment will be made on the next business day, without
interest or any other payment being made on account of the delay. A business day
means any day that is not a Saturday, Sunday or legal holiday on which banking
institutions or trust companies in The City of New York are authorized or
obligated by law or regulation to close.
The debentures will be issued in fully registered form, without coupons, in
denominations of $1,000 original principal amount at maturity (also referred to
as the authorized minimum denomination) and integral multiples thereof (without
regard to any adjustments to the adjusted principal amount which we may make as
described in this prospectus supplement).
Neither the debentures nor the indenture will limit our or our
subsidiaries' ability to incur additional indebtedness, or to grant liens on
assets to secure indebtedness, to pay dividends or to repurchase shares of
capital stock. The indenture covenants described in the accompanying prospectus
under "Description of Debt Securities -- Certain Covenants -- Limitations on
liens" and "-- Limitations on Indebtedness of restricted subsidiaries" will not
apply to the debentures. The indenture does not contain any provisions
specifically intended to protect holders of the debentures in the event of a
sudden and significant decline in our credit quality or a highly leveraged
transaction involving us or other similar transactions, including a change in
control, that may adversely affect holders of the debentures.
We will make payments in respect of the debentures through the trustee to
the depositary, as the registered holder of the debentures. See
"-- Book-entry -- only issuance -- The Depository Trust Company" below. We will
not have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the global
debentures registered in the name of the depositary or its nominee, or for
maintaining, supervising or reviewing any records relating to those beneficial
ownership interests.
If the debentures at some date are reissued in certificated,
fully-registered form ("certificated debentures"), we will make payments in
respect of the debentures to the registered holders thereof. We will make
payments due on the maturity date in immediately available funds upon
presentation and surrender by the holder of a certificated debentures at the
office or agency maintained by us for this purpose in the Borough of Manhattan,
The City of New York, which is expected to be the office of the trustee at 101
Barclay Street, New York, N.Y. 10286. We will pay cash interest and any other
payments due on a certificated debenture on any payment date other than the
maturity date by check mailed to the
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address of the holder entitled to the payment as his address shall appear in our
security register. Any interest or additional payment due and not punctually
paid or duly provided for on a certificated debenture on any payment date other
than the maturity date will cease to be payable to the holder of that debenture
as of the close of business on the related record date and may either be paid
(1) to the person in whose name the certificated debenture is registered at the
close of business on a special record date for the payment of the defaulted
interest or additional payment that is fixed by us, written notice of which will
be given to the holders of the debentures not less than 30 calendar days prior
to the special record date, or (2) at any time in any other lawful manner.
All moneys paid by us to the trustee or any paying agent for the payment of
any amount due on any certificated debentures which remain unclaimed for two
years after the payment or making thereof may be repaid or returned to us and,
thereafter, the holder of the debentures may look only to us for payment.
Each debenture sold initially will be issued in book-entry form (a
"book-entry debenture"). Each book-entry debenture will be represented by one or
more global debentures in fully registered form, registered in the name of The
Depository Trust Company, which we refer to as DTC or the depositary, or its
nominee. Beneficial interests in the global debentures will be shown on, and
transfers thereof will be effected only through, records maintained by DTC and
its participants. See "-- Book-entry only issuance -- The Depository Trust
Company." Book-entry debentures may be transferred or exchanged only through the
depositary. See "-- Book-entry only issuance -- The Depository Trust Company."
Registration of transfer or exchange of certificated debentures will be made at
the office or agency maintained by us for this purpose in the Borough of
Manhattan, The City of New York, currently the office of the trustee at 101
Barclay Street, New York, N.Y. 10286. Neither we nor the trustee will charge a
service charge for any registration of transfer or exchange of debentures, but
we may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with the transfer or
exchange (other than exchanges pursuant to the indenture not involving any
transfer).
EXCHANGEABILITY OF DEBENTURES AT YOUR OPTION
At any time, you may exchange a debenture for the reference property then
attributable to that debenture; provided, however, that if a debenture is called
for redemption, you may exchange it at any time before the close of business on
the related redemption date. Upon exchange of a debenture, we may elect to
deliver reference property or an amount of cash or a combination of both,
determined as described below. Upon any exchange that occurs before April ,
2002, you will receive this amount only in cash. If you have delivered a
purchase notice as described below under "-- Purchase of Debentures at the
Option of the Holder" exercising your option to require us to purchase a
debenture, you must withdraw such notice by written notice of withdrawal
delivered by you to the trustee before the close of business on the related
purchase date in accordance with the terms of the indenture. You may exchange a
portion of your debentures by reference to the authorized minimum denomination
and so long as such portion is an authorized minimum denomination or an integral
multiple thereof.
The reference property initially attributable to each debenture will be
shares of Sprint PCS stock. Such reference property will be adjusted
from time to time, as described below under "-- Reference Property Adjustments,"
to add or substitute certain distributions of cash, property and other
securities on or in respect of securities constituting reference property, or on
or with respect to any security into which those securities may be converted or
exchanged. In addition, the reference property attributable to each debenture
will be reduced in the event of a cash reorganization event by the amount of the
cash reorganization event distribution made in respect of each debenture. These
adjustments will not take into account various other events, such as the payment
on reference securities of cash dividends that do not constitute an
extraordinary cash dividend, the payment of interest on any reference securities
that evidence indebtedness and offerings of the reference securities that
constitute reference property by a reference company that may adversely affect
the price of the reference securities and may adversely affect the trading price
and market value of the debentures. The reference property will not be adjusted
as a result of any changes in the adjusted principal amount due to any accrual
or payment of original issue discount or
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cash interest or any reduction of the adjusted principal amount as a result of a
special cash payment. We refer to securities constituting part of the reference
property at any time as reference securities.
No fractional units of any reference security will be delivered if we
deliver reference property in exchange for debentures. In lieu of any fractional
unit otherwise deliverable in respect of all debentures being exchanged by you,
you will be entitled to receive an amount in cash equal to the value of such
fractional unit based on the closing price per unit of such reference security
on the trading day immediately preceding the exchange date. To the extent
practicable, we will deliver fractional interests of any reference property
other than cash or a reference security if we deliver reference property in
exchange for debentures. If such delivery is not practicable, in lieu of
delivering such fractional interest otherwise deliverable in respect of all
debentures being exchanged by you, you will be entitled to receive an amount in
cash equal to the value of such fractional interest based on the fair market
value (as determined by a nationally recognized independent investment banking
firm retained by us for this purpose) as of the trading day immediately
preceding the exchange date of such reference property other than cash or a
reference security.
The "closing price" of any reference security on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of that reference security (regular way) on the NYSE on
that date or, if that reference security is not listed for trading on the NYSE
on that date, as reported in the composite transactions for the principal United
States securities exchange on which that reference security is so listed, or if
that reference security is not so listed on a United States national or regional
securities exchange, as reported by the Nasdaq National Market, or, if that
reference security is not so reported, the last quoted bid price for that
reference security in the over-the-counter market as reported by the National
Quotation Bureau or similar organization. In the event that no such quotation is
available for any day, our board of directors will be entitled to determine the
closing price on the basis of those quotations that it in good faith considers
appropriate. To the extent that trading of reference securities continues past
4:00 p.m., New York City time, "closing price" shall be deemed to refer to the
price at the time that is then customary for determining the trading day's index
levels for stocks traded on the primary national securities exchange or
automated quotation system on which the reference securities are then traded or
quoted. A "trading day" means a day on which the reference security, the closing
price of which is being determined, (1) 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 (2) 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 that reference security.
So long as the debentures are represented by one or more global securities
registered in the name of DTC or its nominee, exchanges may be effected only
through DTC's Automated Tender Offer Program, which we refer to as ATOP. If the
debentures are at some date reissued in certificated form, to exercise your
exchange right, you must:
- complete and manually sign the exchange notice on the back of the
debenture and deliver that notice to the trustee at the office maintained
by the trustee for this purpose;
- surrender the debentures to be exchanged to the trustee;
- if required, furnish appropriate endorsement and transfer documents; and
- if required, pay all transfer or similar taxes.
Pursuant to the indenture, the date on which all of the foregoing
requirements have been satisfied is the "exchange date" with respect to the
debentures delivered for exchange.
Upon exchange of a debenture, you will not receive any cash payment
representing accrued and unpaid original issue discount or accrued and unpaid
cash interest. Our delivery to you of the reference property (or cash or a
combination of reference property and cash in the applicable amount as described
below) into which the debenture is exchangeable (together with a cash payment,
if any, in lieu of any fractional units or interests) will satisfy our
obligation to pay the adjusted principal amount of the
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debenture at maturity, including any accrued and unpaid original issue discount
and accrued and unpaid cash interest attributable to the period from the issue
date to the exchange date. Thus, the accrued and unpaid original issue discount
and accrued and unpaid cash interest will be deemed to be paid in full rather
than cancelled, extinguished or forfeited.
In lieu of delivering reference property upon notice or exchange of any
debentures, we may elect to pay you an amount in cash, or a combination of
reference property and cash, per debenture equal to the reference property value
attributable to one debenture on the trading day immediately prior to the
exchange date; provided that, if such payment of cash is not permitted pursuant
to the provisions of the indenture or otherwise, we will deliver reference
property (and cash in lieu of fractional units or interests) as set forth above.
Upon exchange of any debentures, we will inform you through the trustee of our
election to deliver reference property or to pay cash, or a combination of
reference property and cash, in lieu of delivery of such reference property no
later than two business days following the exchange date. You may not withdraw
your exchange notice if we elect to pay cash, or a combination of reference
property and cash, in lieu of delivering reference property. If we elect to
deliver reference property, cash or a combination of reference property and
cash, we will deliver that reference property or make a cash payment to you
through the trustee no later than the tenth business day following the exchange
date.
We may not pay cash upon exchange of any debenture (other than cash in lieu
of fractional units or interests) if there has occurred and is continuing an
event of default described under "-- Events of Default; Notice and Waiver" below
(other than a default in such payment on such debenture).
As used herein, the term "reference property value" means the sum of:
- for any portion of the reference property consisting of cash, the amount
of such cash;
- for any portion of the reference property consisting of property other
than cash or reference securities, the fair market value (as determined
by a nationally recognized independent investment banking firm retained
by us for this purpose) as of the trading day immediately prior to the
exchange date of such property or such other date of determination; and
- for any portion of the reference property consisting of a reference
security, an amount equal to the closing price per unit of such reference
security on the trading day immediately prior to the exchange date or
such other date of determination multiplied by the number of units of
such reference security constituting part of the reference property.
REDEMPTION OF DEBENTURES AT THE OPTION OF COX
No sinking fund is provided for the debentures. We may not redeem the
debentures before April , 2005. On and after that date, we may redeem the
debentures for cash at our option, as a whole at any time or in part from time
to time, at the redemption prices specified below by providing you notice of any
such redemption on a date not less than 20 nor more than 60 days prior to the
date of such redemption. Any such redemption must be by reference to the
authorized minimum denomination or integral multiples thereof.
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The table below shows redemption prices per $1,000 original principal
amount at maturity of debentures on April , 2005, at each April thereafter
prior to maturity and at maturity on April , 2020, which prices equal the
issue price plus accrued and unpaid original issue discount (calculated based on
the constant-yield method) plus accrued and unpaid cash interest to but
excluding each such date. The redemption price of a debenture redeemed between
such dates would include an additional amount reflecting the additional original
issue discount and cash interest accrued from the previous April in the table,
to but excluding the redemption date.
<TABLE>
<CAPTION>
(4)
(1) (2) (3) REDEMPTION
DEBENTURE ACCRUED ORIGINAL CASH INTEREST PRICE
REDEMPTION DATE ISSUE PRICE ISSUE DISCOUNT AT % PER ANNUM (1) + (2) + (3)
- --------------- ----------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
April , 2005.................. $ $ $ $
April , 2006.................. $ $ $ $
April , 2007.................. $ $ $ $
April , 2008.................. $ $ $ $
April , 2009.................. $ $ $ $
April , 2010.................. $ $ $ $
April , 2011.................. $ $ $ $
April , 2012.................. $ $ $ $
April , 2013.................. $ $ $ $
April , 2014.................. $ $ $ $
April , 2015.................. $ $ $ $
April , 2016.................. $ $ $ $
April , 2017.................. $ $ $ $
April , 2018.................. $ $ $ $
April , 2019.................. $ $ $ $
April , 2020.................. $ $ $ $
</TABLE>
We have assumed for purposes of calculating the redemption prices shown in
the table that prior to the applicable redemption date we will not have
exercised our right to make special cash payments as described under "-- Special
Cash Payments at Our Option" or our option to increase semiannual cash interest
payments in lieu of the accrual of original issue discount on the debentures as
described under "-- Option to Increase Semiannual Cash Interest Payments" or
paid any cash reorganization event distributions as described under "Mandatory
Cash Distribution on Debentures Upon a Cash Reorganization Event." If we make
these elections, any accrued original issue discount paid in cash prior to the
applicable redemption date would reduce the adjusted principal amount and,
therefore, the redemption price, and if we elect to increase semiannual payments
of interest payable in cash in lieu of the accrual of original issue discount,
the adjusted principal amount thereafter would not be increased by any accrual
of original issue discount. The redemption price of the debentures would also be
reduced by the amount of any cash reorganization event distributions.
If fewer than all of the outstanding debentures are to be redeemed, the
trustee shall select the debentures to be redeemed in the authorized minimum
denomination or integral multiples thereof by lot, pro rata or by another method
the trustee considers fair and appropriate. If a portion of a holder's
debentures is selected for partial redemption and such holder exchanges a
portion of such debentures prior to such redemption, such exchanged portion
shall be deemed, solely for purposes of determining the aggregate principal
amount at maturity of debentures to be redeemed by Cox, to be of the portion
selected for redemption.
We will be required to give notice of redemption on a date not less than 20
days nor more than 60 days prior to any redemption date to all holders of
debentures to be redeemed at their addresses shown in the security register for
the debentures stating, among other things, the redemption date, the redemption
price and the consideration that we will deliver upon any exchange of debentures
occurring between the date of that notice and the redemption date.
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<PAGE> 20
Payment of the redemption price of a debenture is conditioned upon delivery
or book-entry transfer of such debenture (together with necessary endorsements)
to the paying agent at any time (whether prior to, on or after the date of
redemption) after notice of redemption is given. Payment of the redemption price
for such debenture will be made by the delivery of cash on the redemption date
or at the time of delivery or transfer of such debenture. If the paying agent
holds, in accordance with the terms of the indenture, money sufficient to pay
the redemption price of such debenture on the redemption date, then on such
redemption date, such debenture will cease to be outstanding and original issue
discount, if applicable, and interest on such debenture will cease to accrue,
whether or not such debenture is delivered to the paying agent, and all other
rights of the holder, including the holder's right to exchange a debenture for
reference property, shall terminate and lapse (other than the right to receive
the redemption price upon delivery of the debenture).
PURCHASE OF DEBENTURES AT THE OPTION OF THE HOLDER
On April , 2005, April , 2010 and April , 2015, which
we refer to as purchase dates, we will become obligated to purchase, at the
option of the holder, any outstanding debenture for which a written notice has
been delivered by the holder to the paying agent or an office or agency
maintained by us for such purpose in the Borough of Manhattan, The City of New
York, at any time from the opening of business on the date that is 20 business
days preceding the purchase date until the close of business on the purchase
date and for which a purchase notice has not been withdrawn, subject to certain
additional conditions set forth in part in the following paragraphs.
The table below shows the purchase price (representing the issue price plus
accrued and unpaid original issue discount (calculated based on a constant yield
method) accrued and unpaid cash interest to but excluding the purchase date) of
each $1,000 principal amount at maturity of debentures as of the specified
purchase date:
<TABLE>
<CAPTION>
PURCHASE DATE PURCHASE PRICE
- ------------- --------------
<S> <C>
April , 2005.............................................. $
April , 2010.............................................. $
April , 2015.............................................. $
</TABLE>
We have assumed for purposes of calculating the purchase prices shown in
the table that prior to the applicable purchase date we will not have exercised
our right to make any special cash payment or our option to increase semiannual
cash interest payments in lieu of the accrual of original issue discount on the
debentures or paid any cash reorganization event distributions. If we make these
elections, any accrued original discount paid in cash prior to the applicable
purchase date would reduce the adjusted principal amount and, therefore the
purchase price, and if we elect to increase semiannual payments of interest
payable in cash in lieu of the accrual of original issue discount, the adjusted
principal amount thereafter would not be increased by any accrual of original
issue discount. The purchase price of the debentures would also be reduced by
the amount of any cash reorganization event distributions.
At our option, we may elect to pay the purchase price in cash or reference
property, or any combination of both. For a discussion of the treatment for U.S.
federal income tax purposes, see "United States Federal Income Tax
Considerations."
If we elect to pay the purchase price, in whole or in part, in reference
property, the amount of reference property to be delivered in respect of the
specified percentage of the purchase price to be paid in reference property
shall be allocated among holders pro rata and shall be equal to the dollar
amount of such specified percentage of the purchase price based upon the mean of
the reference property values of the reference property on the three trading
days ending on the second trading day immediately preceding the purchase date.
However, we will not deliver any fractional units of reference property in
payment, in whole or in part, of the purchase price. Instead, we will pay cash
for all fractional units of reference property based upon the reference property
value described above. Each holder of debentures will receive
S-20
<PAGE> 21
the same percentage of cash or reference property on the purchase date, except
as described above for fractional units.
We are required to give notice on a date not less than 20 business days
prior to the purchase date to all holders of debentures at their addresses shown
in the security register for the debentures (and to beneficial owners as
required by applicable law) stating, among other things, the purchase price,
whether we will pay the purchase price of the debentures in cash or reference
property or a combination of both and the procedures that holders must follow to
require us to purchase debentures from such holders.
The purchase notice given by any holder electing to require us to purchase
debentures shall state, among other things:
- if applicable, the certificate number(s) of the debentures to be
delivered by such holder for purchase;
- the portion of the principal amount at maturity of debentures to be
purchased, which portion must be in reference to the authorized minimum
denomination or an integral multiple thereof;
- that such debentures are to be purchased by us pursuant to the applicable
provisions of the debentures; and
- if we elect, pursuant to our notice of purchase to holders, to pay a
specified percentage of the purchase price in reference property but that
specified percentage is ultimately paid in cash because we determine that
the reference property is not deliverable to holders, that the holder
elects (a) to withdraw its purchase notice as to some or all of the
debentures to which it relates (stating the principal amount at maturity
and certificate numbers of the debentures as to which that withdrawal
relates) or (b) to receive cash in respect of the purchase price of all
debentures subject to that purchase notice.
If you fail to indicate your choice with respect to your election described
in the fourth bullet above in the purchase notice, you will be deemed to have
elected to receive cash for the specified percentage of the purchase price that
was to have been paid in reference property.
Upon determination of the reference property value deliverable in
connection with any purchase by us of the debentures, we will publish the
reference property value in The Wall Street Journal or another daily newspaper
of national circulation.
We will comply with the provisions of any tender offer rules under the
Exchange Act which may then be applicable, and will file any schedule required
thereunder in connection with any offer by us to purchase debentures at the
option of holders.
Any purchase notice may be withdrawn by the holder by a written notice of
withdrawal delivered to the paying agent prior to the close of business on the
purchase date. The notice of withdrawal shall state the principal amount at
maturity as to which the withdrawal notice relates (which shall be the
authorized minimum denomination or an integral multiple thereof if the notice
relates to less than the entire principal amount at maturity of debentures
originally subject to the purchase notice) and, if applicable, the certificate
number(s) of the debentures as to which the withdrawal notice relates and the
principal amount at maturity, if any, which remains subject to the purchase
notice.
Payment or delivery of the purchase price for a debenture for which a
purchase notice has been delivered and not validly withdrawn is conditioned upon
delivery or book-entry transfer of such debenture (together with necessary
endorsements) to the paying agent at any time (whether prior to, on or after the
purchase date) after delivery of such purchase notice. Payment or delivery of
the purchase price for such debenture will be made promptly following the tenth
business day following the purchase date. If the paying agent holds, in
accordance with the terms of the indenture, money or securities sufficient to
pay the purchase price of such debenture on the tenth business day following the
purchase date, then, on and after such purchase date, such debenture will cease
to be outstanding and original issue discount and cash interest on such
debenture will cease to accrue and will be deemed paid, whether or not such
debenture is
S-21
<PAGE> 22
delivered to the paying agent, and all other rights of the holder shall
terminate (other than the right to receive the purchase price upon delivery of
such debenture).
Our ability to purchase debentures with cash may be limited by the terms of
our existing borrowing agreements. No debentures may be purchased pursuant to
the provisions described above if there has occurred and is continuing an Event
of Default described under "--Event of Default; Notice and Waiver" below (other
than a default in the payment or delivery of the purchase price with respect to
such debentures).
SPECIAL CASH PAYMENTS AT OUR OPTION
At any time, we may elect, upon not less than 20 days prior written notice
in the manner provided in the indenture, to make one or more special payments in
cash, pro rata to holders of debentures of record on the 15th day (whether or
not a business day) immediately preceding the effective date of an election
(which shall be the payment date), of all or part of the adjusted principal
amount of the debentures, to but excluding the effective date of our election.
Any notice of election shall state, among other things:
- the amount of the related special cash payment;
- the related payment date (which must be a business day);
- the related record date; and
- the adjusted principal amount of the debentures after giving effect to
the related special cash payment.
The adjusted principal amount of each debenture will be reduced by the
amount of the special cash payment made in respect of each debenture, except
that in no event will the adjusted principal amount of a debenture be reduced to
less than zero. Consequently, as a result of this adjustment, the amount due at
maturity or upon earlier redemption or purchase by us of your debentures will be
reduced. Any such reduction will not affect the $ cash interest per
year payable semiannually on the debentures. However, in the event that the
adjusted principal amount is reduced to zero, no other cash interest shall
continue to accrue in respect of the debentures and holders shall not be
entitled to any further payments of any adjusted principal amount, but otherwise
the rights of the holders, including the rights to exchange their debentures for
reference property, shall not be impaired.
Special cash payments will not constitute a redemption of the debentures,
in whole or in part, but will represent payment of accrued original issue
discount and, to the extent the special cash payment amount exceeds the amount
of accrued original issue discount, will represent a payment of the issue price
in whole or in part.
OPTION TO INCREASE SEMIANNUAL CASH INTEREST PAYMENTS
On and after April , 2005, we may irrevocably elect to increase
semiannual cash interest payments on the debentures to an amount that represents
a total yield to maturity of % per year on the adjusted principal
amount of the debentures at the effective date of our election, which must be an
interest payment date for regular cash interest payments, in lieu of future
accrual of original issue discount. These cash interest payments will accrue
from the effective date of our election and be payable semiannually on each
interest payment date. On and after the effective date of our election, original
issue discount will cease to accrue on the debentures.
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<PAGE> 23
Upon not less than 20 days notice prior to the first day of the semiannual
interest period for which such increase will be effective, we will notify you of
our election. Any notice of election shall state, among other things:
- the interest rate per year on the debentures;
- the interest payment dates;
- the related record dates; and
- the adjusted principal amount of the debentures.
Our exercise of this option could alter the timing of income recognition by
holders of the debentures with respect to these semiannual payments. See
"Certain United States Federal Income Tax Considerations."
MANDATORY CASH DISTRIBUTION ON DEBENTURES UPON A CASH REORGANIZATION EVENT
A "cash reorganization event" is any event that results in the reference
property consisting 80% or more of cash. As soon as practicable following the
date of a cash reorganization event, we will distribute all of the reference
property consisting of cash (which we refer to as a cash reorganization event
distribution) to the holders of the debentures. Prior to the date of the cash
reorganization event to the extent practicable, and in any event not later than
five business days thereafter, we will provide the trustee, for prompt
dissemination to the holders, written notice of the cash reorganization event
and establish the payment date for the cash reorganization event distribution
and the related record date which shall be the 15th calendar day (whether or not
a business day) preceding the payment date. Subject to the subordination
provisions of the indenture, we will pay the cash reorganization event
distribution on the payment date pro rata to the holders of record.
The notice regarding the cash reorganization event shall state, among other
things:
- the date of such cash reorganization event and, briefly, the events
causing such cash reorganization event;
- the amount of the cash reorganization event distribution;
- a brief description of the remaining reference property and the adjusted
principal amount of the debentures after giving effect to the cash
reorganization event distribution;
- the related payment date; and
- the related record price.
The adjusted principal amount of each debenture and the reference property
will be reduced by the amount of the cash reorganization event distribution paid
in respect of such debenture, except that in no event will the adjusted
principal amount of a debenture be reduced to less than zero. Consequently, as a
result of this adjustment, the amount due at maturity or upon earlier redemption
or purchase by us of your debentures will be reduced. Any such reduction will
not affect the $ per debenture per year semiannual cash interest payment on
the debentures. In the event that the adjusted principal amount is reduced to
zero, no other interest would continue to accrue in respect of the debentures
and holders would not be entitled to any further payments of any adjusted
principal amount, but otherwise the rights of the holders, including the right
to exchange their debentures for any remaining reference property, as adjusted
to reflect the cash reorganization event distribution, would not be impaired.
Cash reorganization event distributions will not constitute a redemption of
the debentures, in whole or in part, but will represent payment of accrued
original issue discount and, to the extent such distribution amount exceeds the
amount of accrued original issue discount, will represent a payment of the issue
price in whole or in part.
S-23
<PAGE> 24
REFERENCE PROPERTY ADJUSTMENTS
The reference property is subject to adjustment if an issuer of a reference
security (which we refer to as a reference company):
(1) subdivides or splits the outstanding units of such reference
security into a greater number of units;
(2) combines the outstanding units of such reference security into a
smaller number of such units or other units;
(3) issues or exchanges by reclassification or conversion of units of
such reference security any units of another security;
(4) issues rights or warrants to all holders of such reference
security entitling them, for a period expiring prior to the 15th calendar
day following the maturity date of the debentures, to subscribe for or
purchase any of its securities or other property (other than rights to
purchase units of such reference security pursuant to a plan for the
reinvestment of dividends or interest);
(5) pays a dividend or makes a distribution to all holders of such
reference security of cash, securities or other property (excluding any
cash dividend on any reference security consisting of capital stock that
does not constitute an extraordinary cash dividend (as we define below),
excluding any payment of interest on any reference security consisting of
an evidence of indebtedness and excluding any dividend or distribution
referred to in clauses (1) through (4) above) or issues to all holders of
such reference security rights or warrants to subscribe for or purchase any
of its securities or other property (other than rights or warrants referred
to in clause (4) above) (we refer to any of the cash, securities or other
property or rights or warrants described in this clause (5) as the
distributed assets).
In the case of the events referred to in clauses (1), (2) and (3) above,
the reference property will be adjusted to add or substitute the number of units
of such reference security and other security which a holder of units of such
reference security would have owned or been entitled to receive immediately
following any such event had such holder held, immediately prior to such event,
the number of units of such reference security constituting part of the
reference property immediately prior to such event. Each such adjustment will
become effective immediately after the effective date for such subdivision,
split, combination, reclassification or conversion, as the case may be. Each
such adjustment shall be made successively.
In the case of the event referred to in clause (4) above, the reference
property will be adjusted to add an amount in cash equal to the fair market
value (determined as described below), as of the fifth business day (except as
provided below) following the date on which such rights or warrants are received
by securityholders entitled thereto (which we refer to as the receipt date), of
each such right or warrant multiplied by the product of
- the number of such rights or warrants issued for each unit of such
reference security, and
- the number of units of such reference security constituting part of the
reference property on the date of issuance of such rights or warrants,
immediately prior to such issuance,
without interest thereon. For purposes of clause (4), the fair market value of
each such right or warrant will be the quotient of (a) the highest net bid, as
of approximately 10:00 A.M., New York City time, on the fifth business day
following the receipt date (for settlement three business days later), by a
recognized securities dealer in The City of New York (which may include one of
the underwriters) selected by us or on our behalf (from three, or such fewer
number of dealers as may be providing such bids, such recognized dealers
selected by us or on our behalf), for the purchase by such quoting dealer of the
number of rights or warrants (which we refer to as the Aggregate Number) that a
holder of such reference security would receive if such holder held, as of the
record date for determination of stockholders entitled to receive such rights or
warrants, a number of units of such reference security equal to the product of
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<PAGE> 25
(1) the aggregate number of outstanding debentures as of such record date and
(2) the number of units of such reference security constituting part of the
reference property attributable to one debenture, divided by (b) the Aggregate
Number. Each such adjustment will become effective on the fifth business day
following the receipt date of such rights or warrants. If for any reason we are
unable to obtain the required bid on the fifth business day following the
receipt date, we will attempt to obtain such bid at successive intervals of
three months thereafter and on the third trading day prior to any exchange date
until we are able to obtain the required bid. From the date of issuance of such
rights or warrants until we obtain the required bid, the reference property will
include the number of such rights or warrants issued for each unit of such
reference security multiplied by the number of units of such reference security
constituting part of the reference property on the date of issuance of such
rights or warrants, immediately prior to such issuance, and such rights or
warrants constituting part of the reference property will be deemed for all
purposes to have a fair market value of zero.
In the case of the event referred to in clause (5) above, the reference
property will be adjusted to add, from and after such dividend, distribution or
issuance, (a) in respect of that portion, if any, of the distributed assets
consisting of cash, the amount of such distributed assets consisting of cash
received for each unit of such reference security multiplied by the number of
units of such reference security constituting part of the reference property on
the date of such dividend, distribution or issuance, immediately prior to such
dividend, distribution or issuance, without interest thereon, plus (b) in
respect of that portion, if any, of distributed assets which are other than
cash, the number or amount of each type of distributed assets other than cash
received with respect to each unit of such reference security multiplied by the
number of units of such reference security constituting part of the reference
property on the date of such dividend, distribution or issuance, immediately
prior to such dividend, distribution or issuance.
An "extraordinary cash dividend" means, with respect to any consecutive
12-month period, the amount, if any, by which the aggregate amount of all cash
dividends on any reference security consisting of capital stock occurring in
such 12-month period (or, if that reference security was not outstanding at the
commencement of such 12-month period, occurring in such shorter period during
which that reference security was outstanding) exceeds on a per share basis 10%
of the average of the closing prices per share of that reference security over
such 12-month period (or such shorter period during which that reference
security was outstanding); provided that, for purposes of the foregoing
definition, the amount of cash dividends paid on a per share basis will be
appropriately adjusted to reflect the occurrence during such period of any stock
dividend or distribution of shares of capital stock of the issuer of such
reference security or any subdivision, split, combination or reclassification of
shares of that reference security.
In the event of a cash reorganization event, the reference property
attributable to each debenture will be reduced by the amount of the cash
reorganization event distribution paid in respect of each debenture.
In the event of
- any consolidation or merger of a reference company with or into another
entity (other than a merger or consolidation in which the reference
company is the continuing corporation and in which the reference company
common stock outstanding immediately prior to the merger or consolidation
is not exchanged for cash, securities or other property of the reference
company or another entity),
- any statutory exchange of securities of the reference company with
another entity (other than in connection with a merger or acquisition and
other than a statutory exchange of securities in which the reference
company is the continuing corporation and in which the reference company
common stock outstanding immediately prior to the statutory exchange is
not exchanged for cash, securities or other property of the reference
company or another entity or
- any liquidation, dissolution or winding up of the reference company
(excluding any distribution in such event referred to in clause (5)
above) (we refer to any such event described in the bullets above as a
merger event),
the reference property will be adjusted to substitute, from and after the
effective date for such merger event, in lieu of the number of units of such
reference security constituting part of the reference property
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<PAGE> 26
immediately prior to the effective date for such merger event, the amount or
number of any cash, securities and other property owned or received in such
merger event with respect to each unit of such reference security multiplied by
the number of units of such reference security constituting part of the
reference property immediately prior to the effective date for such merger
event.
For purposes of the foregoing:
- a conversion or redemption by Sprint of all shares of Sprint PCS stock
pursuant to Article Sixth, Section 7.1 of its Articles of Incorporation
shall be deemed a consolidation or merger, with the Sprint PCS Group
deemed to be the reference company, with Sprint deemed to be the
surviving entity if Sprint FON stock or any other common stock of Sprint
is issued in exchange for the Sprint PCS stock or with the relevant
acquiror of the Sprint PCS Group assets deemed to be the surviving entity
if common stock other than Sprint FON stock is issued in exchange for the
Sprint PCS stock; and
- a redemption by Sprint pursuant to Article Sixth, Section 7.2 of its
Articles of Incorporation of all of the outstanding shares of Sprint PCS
stock in exchange for common stock of one or more wholly owned
subsidiaries that collectively hold all of the assets and liabilities
attributed to its PCS Group shall be deemed a statutory exchange of
shares of Sprint PCS stock for shares of common stock of the relevant
subsidiary or subsidiaries.
Pursuant to the planned merger between MCI WorldCom, Inc. and Sprint,
holders of Sprint PCS stock would receive one share of a new WorldCom PCS
tracking stock and 0.116025 shares of MCI WorldCom stock for each share of
Sprint PCS stock. If the merger occurs, immediately after the merger the
reference property attributable to each debenture would consist of
shares of WorldCom PCS tracking stock and shares of MCI WorldCom
stock, assuming no other reference property adjustments have been required from
the date of this prospectus supplement to the consummation of the merger.
A "reference share offer" means any tender offer or exchange offer made for
30% or more of the outstanding shares of a class or series of reference
securities constituting capital stock of a reference company or any
consolidation, merger or statutory exchange of a class or series of reference
securities constituting capital stock of a reference company in which an
election is given to holders of such reference securities as to the
consideration to be received in the transaction. A reference share offer shall
include a conversion or redemption by Sprint of less than all shares of Sprint
PCS stock pursuant to Article Sixth, Section 7.1 of its Articles of
Incorporation.
If a reference share offer is made, the reference property attributable to
each debenture will be adjusted to (1) include, from and after the expiration of
such reference share offer, the average transaction consideration deemed to be
received by a holder of one reference security in the reference share offer
multiplied by the number of such reference securities attributable to each
debenture immediately prior to the expiration of such reference share offer and
(2) reduce the number of such reference securities attributable to each
debenture immediately prior to the expiration of such reference share offer by
the reference security proportionate reduction (as defined below).
The average transaction consideration deemed to be received by a holder of
one reference security in a reference share offer will be equal to (a) the
aggregate consideration actually paid or distributed to all holders of such
reference securities that participated in the reference share offer, divided by
(b) the total number of reference securities outstanding immediately prior to
the expiration of the reference share offer and entitled to participate in that
reference share offer.
The "reference security proportionate reduction" means a proportionate
reduction in the number of reference securities which are the subject of the
applicable reference share offer and included in the reference property
attributable to each debenture calculated in accordance with the following
formula:
<TABLE>
<C> <S> <C>
X
where: R =
---
N
</TABLE>
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<PAGE> 27
R = the fraction by which the number of reference securities of the class
or series of reference securities subject to the reference share offer
and attributable to each debenture will be reduced.
X = the aggregate number of reference securities of the class or series of
reference securities subject to the reference share offer surrendered
and accepted in the reference share offer.
N = the aggregate number of reference securities of the class or series of
reference securities subject to the reference share offer outstanding
immediately prior to the expiration of the reference share offer.
CALCULATIONS IN RESPECT OF THE DEBENTURES
We will be responsible for making all calculations called for under the
debentures. These calculations include, but are not limited to, determination
of:
- the amount of cash payable in lieu of any fractional units of or
interests in reference property;
- the reference property value of any reference property otherwise
deliverable upon exchange or purchase at the option of the holder;
- the average transaction consideration in a reference security offer;
- the composition of the reference property;
- the amount of any cash reorganization event distribution;
- the amount of accrued and unpaid cash interest payable upon redemption or
purchase of debentures by us; and
- the adjusted principal amount.
We will make all these calculations in good faith and, absent manifest
error, our calculations are final and binding on holders of the debentures. We
will provide a schedule of our calculations to the trustee and the trustee is
entitled to rely upon the accuracy of our calculations without independent
verification.
SUBORDINATION OF DEBENTURES
The debentures are unsecured, subordinated obligations of Cox ranking
junior in right of payment to all of our senior indebtedness (as we define
below). This means that we may not pay the adjusted principal amount at
maturity, issue price, cash interest, accrued original issue discount or any
cash reorganization event distribution with respect to the debentures and may
not exchange, purchase, redeem or otherwise retire any debentures (collectively,
"pay the debentures") if:
- any principal, premium, if any, or interest in respect of senior
indebtedness is not paid within any applicable grace period (including at
maturity); or
- any other default on senior indebtedness occurs and the maturity of such
senior indebtedness is accelerated in accordance with its terms;
unless, in either case, the default has been cured or waived and any such
acceleration has been rescinded or such senior indebtedness has been paid in
full in cash. During the continuance of any default (other than a default
described in the bullet points above) with respect to any senior indebtedness
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, we may not pay
the debentures for a period (a "Payment Blockage Period") commencing upon the
receipt by us and the trustee of written notice of such default from the
representative of any designated senior indebtedness specifying an election to
effect a Payment Blockage Period (a "Blockage Notice") and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated (1) by
written notice to the trustee and us from the person or persons who gave such
Blockage Notice, (2) by repayment in full in cash of
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such designated senior indebtedness or (3) because the default giving rise to
such Blockage Notice is no longer continuing). Notwithstanding the provisions
described in the immediately preceding sentence, but subject to the provisions
described in the second sentence of this paragraph, unless the holders of such
designated senior indebtedness or their representative have accelerated the
maturity of such designated senior indebtedness, we may resume payments on the
debentures after the end of such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to any number of issues of senior
indebtedness during such period.
Upon any payment or distribution of our assets to creditors upon a total or
partial liquidation or dissolution or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to us or our property,
the holders of our senior indebtedness will be entitled to receive payment in
full in cash of such senior indebtedness before you are entitled to receive any
payment on the debentures, and until the senior indebtedness is paid in full,
any payment or distribution to which you would otherwise be entitled but for the
subordination provisions of the indenture will be made to holders of senior
indebtedness as their interests may appear.
Because of this subordination, if we become insolvent, our creditors who
hold senior indebtedness may receive more, ratably, than holders of the
debentures.
After all senior indebtedness is paid in full, the holders of the
debentures and other equally subordinated indebtedness will assume rights
similar to the holders of senior indebtedness to receive any remaining payments
or distributions applicable to senior indebtedness until all amounts owing on
the debentures and other equally subordinated indebtedness are paid in full.
"Senior indebtedness" means the principal of, premium, if any, and interest
on, and any other payment due pursuant to, any of the following, whether
outstanding on the date the debentures are issued or incurred by us in the
future:
- all of our indebtedness for money borrowed, including any indebtedness
secured by a mortgage or other lien which is (1) given to secure all or
part of the purchase price of property subject to the mortgage or lien,
whether given to the vendor of that property or to another lender or (2)
existing on property at the time we acquire it;
- all of our indebtedness evidenced by notes, other debentures, bonds or
other securities sold by us for money;
- all of our lease obligations which are capitalized on our books in
accordance with generally accepted accounting principles;
- all indebtedness of others of the kinds described in the first two bullet
points above and all lease obligations of others of the kind described in
the third bullet point above that we, in any manner, assume or guarantee
or that we in effect guarantee through an agreement to purchase, whether
that agreement is contingent or otherwise; and
- all renewals, extensions or refundings of indebtedness of the kinds
described in the first, second or fourth bullet point above and all
renewals or extensions of leases of the kinds described in the third or
fourth bullet point above;
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing it or the assumption
or guarantee relating to it expressly provides that such indebtedness, lease,
renewal, extension or refunding is not superior in right of payment to the
PRIZES, the Premium PHONES and the debentures. Our senior debt securities issued
under the indenture constitute senior indebtedness for purposes of the
debentures.
"Senior indebtedness" does not include:
- any indebtedness of ours or of any restricted subsidiary of ours to us or
another restricted subsidiary;
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- any guarantee by us or any restricted subsidiary of indebtedness of ours
or another restricted subsidiary;
- any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including guarantees thereof or instruments
evidencing such liabilities);
- 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 us or any of our subsidiaries; and
- debt securities issued under the indenture and designated pursuant to the
indenture as subordinated to senior indebtedness.
Unless otherwise specified at the time of issuance in the terms of such
debt securities designated as subordinated to senior indebtedness, such
subordinated debt securities rank equally with the debentures. At the date of
this prospectus supplement, we have outstanding 14,375,000 PRIZES and 275,000
Premium PHONES, each of which rank equally with the debentures.
"Designated senior indebtedness" means any senior indebtedness which, at
the date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof, are committed to
lend up to, at least $50.0 million and is specifically designated by us in the
instrument evidencing or governing such senior indebtedness as "designated
senior indebtedness" for purposes of the indenture and has been designated as
"designated senior indebtedness" for purposes of the indenture in an officers'
certificate received by the trustee.
The debentures do not limit our ability or that of our subsidiaries to
incur additional indebtedness, including indebtedness that ranks senior in
priority of payment to the debentures. As of December 31, 1999, we had
outstanding approximately $6.3 billion of debt and obligations of subsidiary
trusts that are senior, or effectively senior, to the debentures. In addition,
we had approximately $1.3 billion of subordinated indebtedness ranking equally
with the debentures outstanding as of December 31, 1999, and we issued $275.0
million original principal amount of additional subordinated indebtedness in
March 2000.
EVENTS OF DEFAULT; NOTICE AND WAIVER
In the case of one or more of the following events of default (whatever the
reason for such event of default 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 order, rule or regulation of an administrative or governmental
body) shall have occurred and be continuing:
(a) Cox's failure to pay the adjusted principal amount, issue price,
accrued original issue discount, redemption price or purchase price, any
cash reorganization event distribution with respect to any debenture, when
the same becomes due and payable; or
(b) Cox's failure to pay cash interest with respect to any debenture,
when the same becomes due and payable, and continuance of such default for
30 days; or
(c) Cox's failure to deliver reference property (or cash in lieu
thereof) when such reference property is required to be delivered (or such
cash is required to be paid) following an exchange of a debenture or to pay
cash in lieu of any fractional unit or interest, and continuance of such
default for 10 business days; or
(d) Cox's failure to comply, within 60 days after notice provided in
accordance with the terms of the indenture, with any of the other terms,
covenants or agreements contained in the indenture with respect to the
debentures; provided, however, that the covenants described in the
accompanying prospectus under "Description of Debt Securities -- Certain
Covenants -- Limitation on liens" and "-- Limitation on Indebtedness of
restricted subsidiaries" will not apply to the debentures and, provided,
further, that this provision does not apply to defaults in other covenants
for which the indenture specifically provides otherwise; or
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(e) failure by Cox or any restricted subsidiary to pay indebtedness of
Cox or such restricted subsidiary within any applicable grace period after
final maturity or if such indebtedness 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 its restricted subsidiaries; or
(f) certain events of bankruptcy, insolvency or reorganization of Cox
or a restricted subsidiary;
then the trustee or the holders of no less than 25% in original principal amount
at maturity of the outstanding debentures may declare:
- in the case of an event of default specified in clauses (a) and (b)
above, the adjusted principal amount and accrued and unpaid cash interest
to but excluding the date of default to be immediately due and payable;
- in the case of an event of default specified in clause (c) above, the
greater of (1) the adjusted principal amount and accrued and unpaid cash
interest to but excluding the date of default and (2) the reference
property value of the reference property to be delivered upon exchange as
if the exchange date were the date of default to be immediately due and
payable; and
- in the case of an event of default specified in clause (d) or (e) above,
the adjusted principal amount and accrued and unpaid cash interest to but
excluding the date of declaration to be immediately due and payable.
In the case of an event of default specified in clause (f) above, the
adjusted principal amount of the debentures plus accrued and unpaid cash
interest to the occurrence of such event shall automatically become and be
immediately due and payable. Under such circumstances, the holders of a majority
of the outstanding aggregate original principal amount at maturity of the
debentures may rescind any such acceleration and its consequences with respect
to the debentures. Interest shall accrue and be payable on demand upon a default
in the payment of the adjusted principal amount, issue price, accrued original
issue discount, accrued and unpaid cash interest, cash reorganization event
distributions, redemption price or purchase price or in the delivery by Cox of
reference property to be delivered upon any exchange of debentures (or payment
in cash in lieu of fractional shares) or cash in lieu thereof, in each case to
the extent that the payment of such interest shall be legally enforceable.
Upon receipt by us and the trustee of a Blockage Notice, the subordination
provisions of the indenture preclude any payment being made to holders of
debentures until the earlier of (i) 179 days thereafter and (ii) termination of
the related Payment Blockage Period, but only if such payment is then otherwise
permitted under the terms of the indenture. See "-- Subordination of Debentures"
above.
The indenture provides that if a default occurs and is continuing with
respect to debentures 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 debentures.
Except in the case of a default in the payment of the adjusted principal amount,
issue price, accrued original issue discount, accrued cash interest, cash
reorganization event distributions, redemption price or purchase price or in the
delivery of the reference property to be delivered upon any exchange of
debentures (or payment in cash in lieu of any fractional units or interests) or
the payment of cash or a combination of reference property and cash in lieu
thereof, in each case, when due, 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 debentures. In addition, we 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. We are also 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 we are taking or
propose to take.
Subject to some restrictions, the holders of a majority in original
principal amount at maturity 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
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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 debentures, or that would involve the
trustee in personal liability.
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 debentures, 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
the adjusted principal amount, issue price, accrued original issue discount,
cash interest, cash reorganization event distributions, redemption price or
purchase price or to receive delivery of the reference property to be delivered
upon any exchange of debentures (or payment in cash in lieu of fractional units
or interests) or the payment of cash or a combination of reference property and
cash in lieu thereof, in each case when due, no holder may pursue any remedy
with respect to the indenture or the debentures unless:
- that holder has previously given the trustee notice that an event of
default is continuing;
- holders of at least 25% in original principal amount at maturity of the
outstanding debentures 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 original principal amount at maturity of the
outstanding debentures have not given the trustee a direction
inconsistent with such request within such 60-day period.
The right of any holder:
- to receive payment of the adjusted principal amount at maturity, issue
price, accrued original issue discount, cash interest, cash
reorganization event distributions, redemption price or repurchase price,
in respect of the debentures held by such holder on or after the
respective due dates expressed in the debentures or as of any redemption
or purchase date;
- to exchange such debentures; or
- to bring suit for the enforcement of any such payment on or after such
respective dates or the right to exchange;
shall not be impaired or adversely affected without such holder's consent.
The holders of a majority in aggregate original principal amount at
maturity of debentures at the time outstanding may waive any existing default
and its consequences except:
- any default in any payment on the debentures;
- any default with respect to the exchange rights of the debentures; or
- any default in respect of certain covenants or provisions in the
indenture which may not be modified without consent of the holder of each
debenture as described in "-- Modification" below.
When a default is waived, it is deemed cured and shall cease to exist, but
no such waiver shall extend to any subsequent or other default or impair any
consequent right.
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MODIFICATION
Modification and amendment of the indenture or the debentures may be
effected by us and the trustee with the consent of the holders of not less than
a majority in aggregate original principal amount at maturity of the debentures
then outstanding. However, without the consent of each holder affected thereby,
no amendment may, among other things:
- reduce the adjusted principal amount payable at maturity, the redemption
price or the purchase price with respect to any debenture (other than in
connection with our option to make special cash payments described under
"-- Special Cash Payments at Our Option," our option to increase
semiannual cash interest payments in lieu of the accrual of original
issue discount on the debentures as described under "-- Option to
Increase Semiannual Cash Interest Payments" and our payment of any cash
reorganization event distribution as described under "-- Mandatory Cash
Distribution in Debentures Upon a Cash Reorganization Event"), or extend
the stated maturity (except as provided in the debenture) of any
debenture or alter the manner or rate of accrual of original issue
discount or cash interest, or make any debenture payable in money or
property other than that stated in the debenture;
- reduce the percentage of the original principal amount at maturity of
debentures the holders of which must consent to an amendment or any
waiver under the indenture or modify the indenture provisions relating to
such amendments or waivers;
- make any change that adversely affects the right to exchange any
debenture or the right to require us to purchase a debenture;
- modify the provisions of the indenture relating to the subordination of
the debentures in a manner adverse to the holders of the debentures; or
- impair the right to institute suit for the enforcement of any payment
with respect to, or exchange of, the debentures. No change that adversely
affects the rights of any holder of our senior indebtedness under the
subordination provisions of the indenture may be made unless the
requisite holders of senior indebtedness consent to such change pursuant
to the terms of such senior indebtedness.
Without the consent of any holder of debentures, we and the trustee may
amend the indenture to:
- cure any ambiguity, defect or inconsistency, provided, however, that such
amendment does not materially adversely affect the rights of any holder;
- provide for the assumption by a successor to us of our obligations under
the indenture;
- provide for uncertificated debentures in addition to certificated
debentures, as long as such uncertificated debentures are in registered
form for United States federal income tax purposes;
- make any change that does not adversely affect the rights of any holder
of debentures;
- make any change to comply with any requirement of the SEC in connection
with the qualification of the indenture under the Trust Indenture Act; or
- add to our covenants or obligations under the indenture or surrender any
right, power or option conferred by the indenture upon us.
DISCHARGE OF THE INDENTURE
We may satisfy and discharge our obligations under the indenture by
delivering to the trustee for cancellation all outstanding debentures or by
depositing with the trustee, the paying agent or the exchange agent, if
applicable, after the debentures have become due and payable, whether at stated
maturity, or any redemption date, or any purchase date, upon exchange or
otherwise, cash, reference property or a combination thereof, as the case may
be, sufficient to pay all of the outstanding debentures and paying all other
sums payable under the indenture by us.
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LIMITATIONS OF CLAIMS IN BANKRUPTCY
If a bankruptcy proceeding is commenced with respect to Cox, under Title 11
of the United States Code, the claim of the holder of a debenture may be limited
to the issue price of the debenture plus that portion of the original issue
discount or cash interest that is deemed to have accrued from the date of issue
to the commencement of the proceeding and is unpaid.
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The debentures will be represented by one or more global securities that
will be deposited with and registered in the name of DTC or its nominee. This
means that we will not issue certificates to you for the debentures. Each global
security will be issued to DTC which will keep a computerized record of its
participants (for example, a broker) whose clients have purchased the
debentures. Each participant will then keep a record of its clients. Unless it
is exchanged in whole or in part for a certificated security, a global security
may not be transferred. However, DTC, its nominees and their successors may
transfer a global security as a whole to one another.
Beneficial interests in a global security will be shown on, and transfers
of the global security will be made only through, records maintained by DTC and
its participants. DTC has provided us with the following information: DTC 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 United States Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the provisions of Section 17A of the Exchange Act. DTC holds
securities that its participants (which we refer to as direct participants)
deposit with DTC. DTC also records the settlement among direct participants of
securities transactions, such as transfers and pledges, in deposited securities
through computerized records for direct participants' accounts. This eliminates
the need to exchange certificates. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and other
organizations.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
direct participant. The rules that apply to DTC and its participants are on file
with the SEC.
DTC is owned by a number of its direct participants and by the NYSE, the
American Stock Exchange and the National Association of Securities Dealers, Inc.
When you purchase any of the debentures through the DTC system, the
purchases must be made by or through a direct participant, who will receive
credit for the debentures on DTC's records. Because you do not actually own the
debentures, you are the beneficial owner. Your ownership interest will only be
recorded on the direct (or indirect) participants' records. DTC has no knowledge
of your individual ownership of the debentures. DTC's records only show the
identity of the direct participants and the amount of the debentures held by or
through them. You will not receive a written confirmation of your purchase or
sale or any periodic account statement directly from DTC. You will receive these
from your direct (or indirect) participant. As a result, the direct (or
indirect) participants are responsible for keeping accurate account of the
holdings of their customers like you.
Payments on the debentures will be wired to DTC's nominee. We will treat
DTC's nominee as the owner of the global security for all purposes. Accordingly,
we, the trustee and any paying agent will have no direct responsibility or
liability to pay amounts due on the global security to you or any other
beneficial owners in the global security.
Any redemption notices will be sent by us directly to DTC, who will in turn
inform the direct participants, who will then contact you as a beneficial
holder.
It is DTC's current practice, upon receipt of any payment of distributions
or liquidation amount, to credit direct participants' accounts on the payment
date based on their holdings of beneficial interests in the global securities as
shown on DTC's records. In addition, DTC's current practice is to assign any
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consenting or voting rights to direct participants whose accounts are credited
with the debentures on a record date by using an omnibus proxy. Payments by
participants to owners of beneficial interests in the global securities, and
voting by participants, will be based on the customary practices between the
participants and owners of beneficial interests, as is the case with the
debentures held for the account of customers registered in "street name."
However, payments will be the responsibility of the participants and not of DTC,
us or the trustee.
Debentures represented by a global security will be exchangeable for
certificated securities with the same terms in authorized denominations only if:
- DTC is unwilling or unable to continue as depositary or if DTC ceases to
be a clearing agency registered under applicable law and a successor
depositary is not appointed by us within 90 days; or
- we decide to discontinue use of the book-entry transfer system through
DTC (or any successor depositary).
If the book-entry-only system is discontinued, the trustee will keep the
registration books for the debentures at its corporate office and follow the
practices and procedures discussed above.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
In this section, we summarize certain of the material United States federal
income tax consequences of purchasing, holding and disposing of debentures.
Except where we state otherwise, this summary deals only with debentures held as
capital assets (as defined in the Internal Revenue Code of 1986, as amended,
(which we refer to as the Code)) by a U.S. Holder (as defined below) who
purchases debentures 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 debentures;
- the United States federal estate, gift or alternative minimum tax
consequences of the purchase, ownership or disposition of debentures;
- persons who hold debentures 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;
- any state, local or foreign tax consequences of the purchase, ownership
or disposition of debentures; or
- any federal, state, local or foreign tax consequences of owning or
disposing of the Sprint PCS stock.
Accordingly, you should consult your own tax advisor regarding the tax
consequences of purchasing, owning and disposing of debentures and the Sprint
PCS stock in light of your own circumstances.
A U.S. Holder is a beneficial owner of debentures who or which is:
- a citizen or individual resident of the United States, as defined in
Section 7701(b) of the 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 also be
treated as U.S. Holders.
A Non-U.S. Holder is a debenture holder other than a U.S. Holder. We urge
prospective investors that are Non-U.S. Holders to consult their own tax
advisors regarding the United States federal income tax consequences of an
investment in debentures, including potential application of United States
withholding taxes.
This summary is based on the Code, Treasury regulations (proposed and
final) issued under the Code, and administrative and judicial interpretations
thereof, all as they currently exist as of the date of this prospectus
supplement and any of which 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 the debentures or instruments similar to the debentures for United
States federal income tax purposes. No rulings have been sought or are expected
to be sought from the Internal Revenue Service (which we refer to as 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 characterizations and the tax consequences described below.
WE URGE PROSPECTIVE INVESTORS TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF DEBENTURES AND THE SPRINT PCS STOCK 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.
ACCRUAL OF INTEREST ON THE DEBENTURES
Pursuant to the terms of the indenture, we and each holder of the
debentures agree, for United States federal income tax purposes, to treat the
debentures as debt instruments that are subject to the special regulations
governing contingent payment debt instruments, which we refer to as the CPDI
regulations. Pursuant to these regulations, U.S. Holders of the debentures will
be required to accrue interest income on the debentures, in the amounts
described below, regardless of whether the U.S. Holder uses the cash or accrual
method of tax accounting. Accordingly, U.S. Holders will be required to include
interest in taxable income in each year in excess of any interest payments
actually received in that year.
The CPDI regulations provide that a U.S. Holder must accrue an amount of
ordinary interest income, as original issue discount, for each accrual period
prior to and including the debentures' maturity date that equals:
(a) the product of (i) the debentures' adjusted issue price (as
defined below) as of the beginning of the accrual period; and (ii) the
debentures' comparable yield to maturity (as defined below) adjusted for
the length of the accrual period;
(b) divided by the number of days in the accrual period; and
(c) multiplied by the number of days during the accrual period that
the U.S. Holder held the debentures.
A debenture's issue price is the first price to the public at which a
substantial amount of the debentures is sold, excluding sales to bond houses,
brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers. Its adjusted issue price is the
debenture's issue price increased by any interest income previously accrued,
determined without regard to any adjustments to interest accruals described
below, and decreased by the amount of any projected payments, as defined below,
with respect to the debentures.
The term "comparable yield" means the annual yield we would pay, as of the
issue date, on a fixed-rate debt security with no contingent payments, but with
terms and conditions otherwise comparable to those of the debentures. We have
determined that the debentures' comparable yield is %, compounded
semiannually.
The CPDI regulations require that we provide to U.S. Holders, solely for
United States federal income tax purposes, a schedule of the projected amounts
of payments, which we refer to as projected payments, on the debentures. This
schedule must produce the comparable yield. Based on our determination of the
comparable yield, the debentures' schedule of projected payments, assuming a
principal amount of $ or with respect to each integral multiple thereof,
consists of:
- a payment of $ on October , 2000; plus
- a payment of stated interest equal to $ on all other
interest payment dates thereafter; plus
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- a payment of a projected amount at the maturity date of the debentures,
excluding the stated interest on the debentures payable on such date,
equal to $ .
For United States federal income tax purposes, a U.S. Holder must use the
comparable yield and the schedule of projected payments in determining its
interest accruals, and the adjustments thereto described below, in respect of
the debentures, unless such U.S. Holder timely discloses and justifies the use
of other estimates to the IRS.
THE COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED PAYMENTS ARE NOT
PROVIDED FOR ANY PURPOSE OTHER THAN THE DETERMINATION OF U.S. HOLDERS' INTEREST
ACCRUALS AND ADJUSTMENTS THEREOF IN RESPECT OF THE DEBENTURES FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES AND DO NOT CONSTITUTE A PROJECTION OR REPRESENTATION
REGARDING THE ACTUAL AMOUNTS PAYABLE ON THE DEBENTURES.
Amounts treated as interest under the CPDI regulations are treated as
original issue discount for all purposes of the Code.
ADJUSTMENTS TO INTEREST ACCRUALS ON THE DEBENTURES
If, during any taxable year, a U.S. Holder receives actual payments with
respect to the debentures for that taxable year (including, in the case of the
taxable year which includes the maturity date of the debentures, the amount of
cash and the fair market value of the Sprint PCS stock, if any, received at
maturity) that in the aggregate exceed the total amount of projected payments
for that taxable year, the U.S. Holder will incur a "net positive adjustment"
under the CPDI regulations equal to the amount of such excess. The U.S. Holder
will treat a "net positive adjustment" as additional interest income for the
taxable year. For this purpose, the payments in a taxable year include the fair
market value of property received in that year.
If a U.S. Holder receives in a taxable year actual payments with respect to
the debentures for that taxable year that in the aggregate were less than the
amount of projected payments for that taxable year, the U.S. Holder will incur a
"net negative adjustment" under the CPDI regulations equal to the amount of such
deficit. This adjustment will (a) reduce the U.S. Holder's interest income on
the debentures for that taxable year, and (b) to the extent of any excess after
the application of (a), give rise to an ordinary loss to the extent of the U.S.
Holder's interest income on the debentures during prior taxable years, reduced
to the extent such interest was offset by prior net negative adjustments.
SALE, EXCHANGE OR REDEMPTION OF THE DEBENTURES
Generally, the sale, exchange or redemption of the debentures (including an
exchange of the debentures for the Sprint PCS stock, exchanges at the U.S.
Holder's option and redemptions by us, prior to the debentures' maturity date)
will result in taxable gain or loss to the U.S. Holder equal to the difference
between (a) the amount of cash plus the fair market value of any other property
received by the U.S. Holder, including the fair market value of any Sprint PCS
stock received, and (b) the U.S. Holder's adjusted tax basis in the debentures.
A U.S. Holder's adjusted tax basis in the debentures equals the holder's
original basis in the debentures:
- increased by the interest income previously included by the U.S. Holder
with respect to the debentures, determined without regard to any
adjustments to interest accruals described above; and
- decreased by the amount of all prior projected payments with respect to
the debentures.
Any gain upon sale or exchange of the debentures will be ordinary interest
income. Any loss will be ordinary loss to the extent of the interest previously
included in income by the U.S. Holder with respect to the debentures and,
thereafter, capital loss. The distinction between capital loss and ordinary loss
is potentially significant in several respects. For example, limitations apply
to a U.S. Holder's ability to offset capital losses against ordinary income.
S-37
<PAGE> 38
TAX BASIS AND HOLDING PERIOD OF THE SPRINT PCS STOCK
U.S. Holders that receive Sprint PCS stock upon exchange of the debentures
will have an initial tax basis in such stock equal to the fair market value of
such stock on the date of such exchange. The holding period for such stock will
commence on the day following the date of such exchange.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Payments of principal, premium, if any, and interest (including original
issue discount) on, and the proceeds of disposition of, the debentures 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.
PROPOSED TAX CHANGES
President Clinton's fiscal year 2001 revenue proposals propose tax law
changes that would, if enacted, among other things, generally deny to corporate
issuers, such as us, a federal income tax deduction for interest paid or accrued
(including original issue discount) with respect to instruments with
characteristics similar to the debentures. Although such proposed tax law
changes to date have not been enacted into law, there can be no assurance that
such changes will not be enacted after the date hereof and consequently
adversely affect, possibly on a retroactive basis, whether we can deduct, for
United States federal income purposes, the interest (including original issue
discount) paid or accrued with respect to the debentures.
S-38
<PAGE> 39
UNDERWRITING
Credit Suisse First Boston Corporation and Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "underwriters") have severally agreed, subject to the
terms and conditions of the purchase agreement, to purchase from us the
respective aggregate principal amounts at maturity of the debentures set forth
after their respective names below at a purchase price equal to the public
offering price set forth on the cover of this prospectus supplement, less an
underwriting discount of % of the aggregate original issue price of the
debentures.
<TABLE>
<CAPTION>
ORIGINAL
PRINCIPAL AMOUNT
UNDERWRITER AT MATURITY
- ----------- ----------------
<S> <C>
Credit Suisse First Boston Corporation...................... $
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... $
----------
Total.......................................... $
==========
</TABLE>
The underwriters have advised us that they propose initially to offer the
debentures to the public at the public offering price set forth on the cover of
this prospectus supplement. After the initial public offering, the public
offering price may be changed.
We have agreed to indemnify the underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute with respect to payments which the underwriters may be required
to make.
The underwriters are offering the debentures, subject to prior sale, when,
as and if issued to and accepted by the underwriters, subject to approval of
legal matters by its counsel, including the validity of the debentures, and
other conditions contained in the purchase agreement, such as the receipt by the
underwriters of officer's certificates and legal opinions. The underwriters
reserve the right to withdraw, cancel or modify offers to the public and to
reject orders in whole or in part.
The expenses of the offering, not including the underwriting discount, are
estimated to be $ and are payable by Cox.
We have granted an option to the underwriters to purchase up to $
aggregate principal amount at maturity of the debentures at the public offering
price on the cover of this prospectus supplement, less the underwriting
discount. The underwriters may exercise this option for 30 days from the date of
this prospectus supplement solely to cover over-allotments.
The following table shows the per debenture and total original principal
amount at maturity, public offering price, underwriting discount and proceeds
before expenses to us assuming either no exercise or full exercise by the
underwriters of their over-allotment option (but without regard to our
obligation to offer additional debentures to satisfy our obligations under the
Top Up Right Agreement).
<TABLE>
<CAPTION>
ORIGINAL UNDERWRITING PROCEEDS, BEFORE
PRINCIPAL AMOUNT AT PUBLIC OFFERING DISCOUNT EXPENSES, TO
MATURITY PRICE AND COMMISSIONS COX
------------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Per Debenture...................... $ $ $ $
Without Option..................... $ $ $ $
With Option........................ $ $ $ $
</TABLE>
We have agreed that for 45 days after the date of this prospectus
supplement we will not directly or indirectly offer, sell, offer to sell, grant
any option for the sale of or otherwise dispose of any securities convertible
into, exchangeable for or repayable with shares of Sprint PCS stock, without the
prior written consent of the underwriters. However, this restriction shall not
affect our ability to issue additional debentures to satisfy our obligations
under the Top Up Right Agreement or take any of these actions in connection with
any exchanges, redemption or repurchase of the PRIZES, the Premium PHONES or the
debentures or in connection with any reference share offer with respect to such
securities.
S-39
<PAGE> 40
Before this offering, there has been no established public trading market
for the debentures.
We will apply to list the debentures on the NYSE. Any listing of the
debentures will not ensure that a liquid trading market will develop for the
debentures.
The underwriters advised us that they intend to make a market in the
debentures. However, the underwriters are not obligated to do so and may
discontinue market making at any time without notice. We cannot give any
assurance about the liquidity of the trading market for the debentures.
In connection with the sale of the debentures, SEC rules permit the
underwriters to engage in transactions that stabilize the price of the
debentures. These transactions may include purchases for the purpose of fixing
or maintaining the price of the debentures. The underwriters may also engage in
transactions with respect to the Sprint PCS stock for the purpose of stabilizing
the price of the debentures.
The underwriters may create a short position in the debentures in
connection with the offering. That means that the underwriters may sell a larger
number of the debentures than is shown on the cover page of this prospectus
supplement. If the underwriters create a short position, they may purchase
debentures in the open market to reduce the short position.
If the underwriters purchase debentures to stabilize the price or to reduce
their short position, the price of the debentures could be higher than it might
be if they had not made such purchases. The underwriters make no representation
or prediction about any effect that these purchases may have on the price of the
debentures.
Neither we nor the underwriters make any representations or prediction as
to the direction or magnitude of any effect that the transactions described
above may have on the price of the debentures or the Sprint PCS stock. In
addition, neither we nor the underwriters make any representations that the
underwriters will engage in these transactions or that these transactions, once
commenced, will not be discontinued without notice.
The underwriters and their respective affiliates have in the past and may
in the future engage in transactions with, or perform services for, us or our
affiliates in the ordinary course of their businesses.
S-40
<PAGE> 41
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the debentures in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of debentures are effected. Accordingly, any resale of the debentures or
the underlying common stock in Canada must be made in accordance with applicable
securities laws which will vary depending on the relevant jurisdiction, and
which may require resales to be made in accordance with available statutory
exemptions or pursuant to a discretionary exemption granted by the applicable
Canadian securities regulatory authority. Purchasers are advised to seek legal
advice prior to any resale of the debentures or the underlying common stock.
REPRESENTATIONS OF PURCHASERS
Each purchaser of debentures in Canada who receives a purchase confirmation
will be deemed to represent to us and the dealer from whom such purchase
confirmation is received that (i) such purchaser is entitled under applicable
provincial securities laws to purchase such debentures without the benefit of a
prospectus qualified under such securities laws, (ii) where required by law,
that such purchaser is purchasing as principal and not as agent and (iii) such
purchaser has reviewed the text above under "Resale Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of debentures to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
debentures acquired by such purchaser pursuant to this offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one such report
must be filed in respect of debentures acquired on the same date and under the
same prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of debentures should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the debentures
in their particular circumstances and with respect to the eligibility of the
debentures for investment by the purchaser under relevant Canadian legislation.
S-41
<PAGE> 42
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 August 9, 1999.
<PAGE> 43
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> 44
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> 45
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> 46
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> 47
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> 48
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> 49
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.
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<PAGE> 50
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.
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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
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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 assets 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 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. and
subsidiaries 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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<PAGE> 101
- 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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$
(COX COMMUNICATIONS LOGO)
EXCHANGEABLE SUBORDINATED DISCOUNT DEBENTURES DUE 2020
(EXCHANGEABLE FOR SHARES OF SPRINT PCS STOCK OR CASH WITH AN EQUAL VALUE)
-----------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------
Joint-Book Running Managers
CREDIT SUISSE FIRST BOSTON MERRILL LYNCH & CO.
APRIL , 2000
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